On May 19, 2021, FERC issued an order dismissing requests for rehearing of an order directing briefing (“Briefing Order”) about the operation of Algonquin Gas Transmission, LLC’s  Atlantic Bridge project after finding that requesting parties were not “aggrieved” under court precedent interpreting Section 19(a) of the Natural Gas Act (“NGA”).  Commissioner James Danly wrote separately in dissent explaining his view that FERC’s request for briefing means that the determinations made in the Atlantic Bridge certificate order are no longer settled and that the certificate order is in fact no longer final.  
Continue Reading FERC Maintains Order Directing Briefing Long After Authorizing Gas Facilities to Begin Operations, Prompting Dissent from Commissioner Danly

On April 30, 2021, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) submission of two proposals to revise its Tariff to amend provisions for its Energy Imbalance Market (“EIM”). In its first set of EIM enhancements, CAISO proposed to require EIM participants to settle deviations in their base schedules through CAISO’s market at a common location and price, eliminating EIM participants’ option to settle deviations in their base schedules bilaterally. In its second set of EIM enhancements, CAISO proposed to allow EIM participants the option not to have CAISO settle unaccounted for energy within an EIM participant’s balancing authority area (“BAA”), which results in a charge or credit to the affected EIM entity and can cause potential cost shifting in an EIM entity’s unaccounted for energy settlement. FERC accepted CAISO’s first proposal to be effective May 1, 2021, and the second set to be effective October 1, 2021.
Continue Reading FERC Accepts Proposed Enhancements to CAISO Energy Imbalance Market

On April 15, 2021, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to supplement the March 2020 NOPR regarding its electric transmission incentive policy under Federal Power Act (“FPA”) section 219 (see March 23, 2020 edition of the WER). While FERC’s March 2020 NOPR proposed to provide all utilities that turn over their wholesale transmission facilities to a Regional Transmission Organization (“RTO”) a fixed 100 basis-point increase in return on equity (“ROE”) (“RTO Participation Incentive”), the Supplemental NOPR proposes instead to codify its current practice of granting a 50 basis-point RTO Participation Incentive for utilities that join an RTO. In addition, FERC proposes that a utility will only be eligible for the incentive for the first three years after transferring operational control of its facilities to an RTO. The Supplemental NOPR also seeks comment on whether the RTO participation adder should be available solely to utilities that join an RTO voluntarily, and if so, how FERC should determine that the decision to join was voluntary. Commissioner Mark Christie issued a separate concurring statement, and Commissioners Neil Chatterjee and James Danly each issued separate dissenting statements.
Continue Reading FERC Proposes Reforms to RTO Participation Incentive in Supplemental NOPR

On March 30, 2021, FERC accepted the New York Independent System Operator’s (“NYISO”) proposed Co-located Storage Resource (“CSR”) Participation Model to enable energy storage resources (“ESRs”) paired with wind or solar resources to share a common point of injection and participate in the NYISO-administered markets. FERC’s order accepted revisions to NYISO’s Energy and Ancillary Services (“E&AS”) market rules, its metering rules, its Interconnection Process, its Installed Capacity Market participation rules, and its market power mitigation measures to accommodate the interconnection and participation of an ESR that is co-located with a wind or solar resource. Chairman Glick issued a concurring statement addressing NYISO’s application of existing buyer-side market power rules to co-located ESR and intermittent resources, urging NYISO “to move expeditiously to replace those rules with a model that moves beyond the minimum offer price rule as a means for mediating the interaction between state policies and wholesale markets.”
Continue Reading FERC Accepts NYISO Co-Located Storage Resource Participation Model

On March 18, 2021, FERC granted two consolidated complaints alleging that the default offer cap in PJM Interconnection, L.L.C.’s (“PJM”) capacity market is unjust and unreasonable because the Expected Performance Assessment Intervals input, set at a value of 360 12-minute intervals (30 hours), is too high. Ultimately, FERC found that the default offer cap is “incorrectly calibrated,” rendering PJM and its Market Monitor unable to ensure competitive market outcomes. FERC ordered additional briefing on a replacement rate, but concluded that PJM’s capacity auction for the 2022-2023 delivery year, scheduled for May 2021, should go forward under the current rules.
Continue Reading FERC Grants Complaints, Directs Further Briefing on PJM Capacity Market Default Offer Cap

FERC is hosting a number of workshops and technical conferences over the next several months. These include the Resource Adequacy technical conference; Listening Tour for the Office of Public Participation; workshop on compliance with Order No. 860; conference on Electrification and the Grid; and a technical conference on the threats climate change poses to the grid.  Read on for more information about each.
Continue Reading Upcoming FERC Workshops and Technical Conferences

On February 18, 2021, FERC took action in a multi-year dispute over the PJM Interconnection’s capacity market pricing rule known as the Minimum Offer Price Rule (or, “MOPR”) by vacating a single troublesome footnote from its last order, making way for PJM to move ahead with its annual capacity auction after years of delay. The U.S. Court of Appeals for the Seventh Circuit will soon take up a host of appeals of FERC’s decisions on the controversial MOPR.
Continue Reading In PJM MOPR Proceeding, FERC Vacates Footnote Prompting Danly Dissent

On January 19, 2021, FERC issued a Notice of Inquiry (“NOI”) seeking comments on the appropriate accounting and reporting treatment for certain renewable energy assets and for the purchase, generation and use of renewable energy credits (“REC”). Specifically, FERC requested input on the potential creation of new, non-hydro renewable technology accounts within the Uniform System of Accounts (“USofA”), the potential reporting requirements for such accounts, and how the creation of such accounts may impact formula rates. FERC also asked for comments on whether to codify the accounting treatment of the purchase, generation, and use of RECs. Initial comments are due March 27, 2021, with reply comments due April 26, 2021.
Continue Reading FERC Issues Notice of Inquiry on Accounting Treatment of Renewable Energy Assets

On December 21, 2020, FERC modified its previous cost-of-service compensation decisions allowing Constellation Mystic Power, LLC (“Mystic”) to continue operating two gas-fired generation facilities (“Mystic 8 and 9”) fueled exclusively by an affiliate, Everett Marine Terminal (“Everett”), which, like Mystic, is owned by Exelon Generation Company, LLC (“Exelon”). Commissioner Richard Glick dissented, reiterating his belief that FERC has exceeded its jurisdiction to “bail out” the liquified natural gas (“LNG”) import terminal.
Continue Reading FERC Alters Mystic’s Cost-of-Service Agreement; Commissioner Glick Dissents Again

On December 17, 2020, FERC issued a Notice of Proposed Rulemaking proposing to revise its regulations to establish incentives for public utilities to make certain cybersecurity investments that go beyond the current requirements of the Critical Infrastructure Protection (“CIP”) Reliability Standards established by the North American Electric Reliability Corporation (“NERC”) (“Cybersecurity NOPR”). Specifically, FERC proposed rules to allow regulated entities to:

  1. receive incentive-based rate treatment for the voluntary implementation of: (i) certain NERC CIP Reliability Standards to facilities that are not currently subject to those requirements (“NERC CIP Incentives Approach”), and/or (ii) certain security controls included in the National Institute of Standards and Technology Framework (“NIST Framework Approach”);
  2. request a return-on-equity adder of two hundred (200) basis points for making eligible cybersecurity capital investments; and
  3. defer cost recovery of certain cybersecurity costs that are generally expensed as incurred, and treat such costs as regulatory assets that may be included in transmission rate base.


Continue Reading FERC Issues Notice of Proposed Rulemaking on Cybersecurity Investment Incentives