On August 31, 2021, FERC denied Cross-Sound Cable Company, LLC’s (“Cross-Sound Cable”) application for incentive rate treatment to create a regulatory asset to recover costs incurred between 2016 and 2021 to comply with Interconnection Reliability Operating Limits (“IROL”) Critical Infrastructure Protection (“IROL-CIP”) costs under Schedule 17 of the ISO-New England (“ISO-NE”) Tariff.
Continue Reading FERC Denies Cross-Sound Cable Company’s Application for Incentive Rate Treatment to Comply with IROL-CIP Costs

On July 9, 2021, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied in part and granted in part a petition for review of FERC’s orders accepting revisions to PJM Interconnection, L.L.C.’s (“PJM”) Forward Capacity Market (“FCM”). The Petition was filed by the Delaware Division of the Public Advocate, Maryland Office of the People’s Counsel, and the Office of the People’s Counsel for the District of Columbia (“Petitioners”). The Court upheld FERC’s use of a Combustion Turbine (“CT”) plant as the Reference Resource in approving the net Cost of New Entry (“net CONE”) calculation, and found that FERC’s approval of a 10 percent adder on Reference Resource’s assumed energy market offer was arbitrary and capricious. The Court remanded the case for proceedings consistent with its decision on the 10 percent adder.
Continue Reading D.C. Circuit Upholds Use of Combustion Turbine as Reference Resource in PJM Capacity Market, Finds 10% Net CONE Adder Arbitrary and Capricious

On June 23, 2021, FERC accepted in part and rejected in part the New York Independent System Operator’s (“NYISO”) February 2021 proposal to revise its process for procuring operating reserves throughout the New York Control Area (“NYCA”). FERC accepted NYISO’s proposed revisions to its Operating Reserves Demand Curve (“ORDC”), including revisions to certain shortage pricing values, subject to a compliance filing providing at least two weeks’ notice of the actual effective date of the revisions. NYISO subsequently submitted that compliance filing on June 29, 2021 noting an effective date of July 13, 2021. The June 23 order also rejected NYISO’s proposal to establish a process for procuring reserves in excess of quantities required by minimum reliability standards, without prejudice to NYISO submitting a more specific proposal in the future.
Continue Reading FERC Accepts NYISO Operating Reserve Pricing Proposal, Rejects Proposal for Procuring Supplemental Reserves

On June 17, 2021, FERC issued an order providing guidance on the means by which sellers in the Western Electricity Coordinating Council (“WECC”) market can demonstrate that sales made above the $1,000/MWh soft price cap were just and reasonable.  This guidance has been provided for sellers with pending justification filings, which have been granted 30 days to amend or supplement their filings accordingly, as well as any sellers making prospective justification filings.
Continue Reading FERC Provides Guidance on Justification Filings for Sales Above the WECC Soft Price Cap

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