On October 30, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) proposed revisions to the ISO-NE tariff to resolve long-term fuel security concerns in the New England region. FERC found that ISO-NE’s proposed solutions would substantially increase consumer costs without meaningfully improving fuel security in the region, and offered guidance on how ISO-NE might develop a just and reasonable approach to address its fuel security concerns.
Continue Reading FERC Rejects ISO-NE’s Long-Term Fuel Security Proposal

On October 26, 2020, FERC issued an order on rehearing sustaining its previous order in which it accepted PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to the PJM Operating Agreement related to the Regional Transmission Expansion Plan (“RTEP”) that allow project developers to submit voluntary binding cost commitment proposals and that specify PJM’s methodology for considering the cost-effectiveness of such proposals. FERC disagreed with arguments raised by certain PJM transmission owners that the revisions would usurp FERC’s authority, that they lacked specificity, and that the revisions were not submitted in compliance with the procedural requirements of PJM’s Operating Agreement.
Continue Reading FERC Affirms PJM’s Voluntary Binding Cost Commitment Requirements Related to RTEP

On October 15, 2020, FERC issued an order sustaining, with modifications, its previous denial of a complaint that claimed New York Independent System Operator, Inc.’s (“NYISO”) buyer-side market (“BSM”) power mitigation rules were unjust, unreasonable and unduly discriminatory. FERC upheld its previous determination that the application of BSM rules to electric storage resources (“ESRs”) does not inappropriately interfere with state policies and that the complainants failed to show that NYISO’s existing rate was unjust and unreasonable because it over-mitigates electric storage resources. FERC’s order sparked a dissent from Commissioner Glick who argued that the majority’s order was arbitrary and capricious, and that BSM power mitigation should only apply to buyers with market power.
Continue Reading FERC Upholds Prior Decision Applying NYISO Buyer-Side Market Power Mitigation Rules to Electric Storage Resources

On October 7, 2020, FERC affirmed its prior determination that certain demand response resources participating in the New York Independent System Operator, Inc. (“NYISO”) capacity markets—termed Special Case Resources (“SCRs”)—should be subject to an offer floor, and required revenues from some retail-level demand response programs to be included in the offer floor calculations. Specifically, FERC: 1) addressed requests for rehearing of its February 2020 Order directing NYISO to apply its buyer-side mitigation (“BSM”) rules to all SCRs that participate in NYISO’s Installed Capacity (“ICAP”) market; 2) accepted NYISO’s compliance filing clarifying the offer floor price calculation for SCRs and directed NYISO to submit a further compliance filing; and 3) found, on the basis of a paper hearing established in the February 2020 Order, that payments received under the Distribution Load Relief Programs (“DLRP”) qualify for exclusion from the calculation of SCR offer floors, but that payments received under the Commercial System Distribution Load Relief Programs (“CSPRs”) do not. Commissioner Richard Glick issued a strenuous dissenting opinion to FERC’s order.
Continue Reading FERC Subjects NYISO Demand Response Resources to Buyer-Side Mitigation Rules

On September 17, 2020, FERC addressed the American Wind Energy Association’s (“AWEA”) request for rehearing of a December 2019 order finding that Generator Interconnection Agreements (“GIAs”), Facilities Construction Agreements (“FCAs”) and Multi-Party Facilities Construction Agreements (“MPFCAs”) entered into between June 24, 2015 and August 31, 2018 (“the interim period”) should be revised to allow Midcontinent Independent System Operator, Inc. (“MISO”) transmission owners and affected system operators to unilaterally elect to provide the initial funding for interconnection-related network upgrades. FERC’s September 17 order modified the discussion in the December 2019 order but continued to reach the same result. The order also accepted MISO’s proposed tariff sheets allowing transmission owners and affected system operators to elect transmission owner initial funding for network upgrades for GIAs, FCAs, and MPFCAs that became effective during the interim period. Commissioner Richard Glick issued a dissenting opinion in which he concluded that FERC’s order failed to meaningfully address concerns of undue discrimination and ignored evidence that allowing transmission owners and affected system operators to retroactively elect to self-fund network upgrades would result in substantial harm to interconnection customers and could lead to project terminations.
Continue Reading FERC Upholds Orders on Transmission Owner Funding for Network Upgrades in MISO

On September 16, 2020, the United States Senate Committee on Energy and Natural Resources (“Committee”) held a hearing to consider Allison Clements’ and Mark C. Christies’ pending FERC nominations as FERC Commissioners. Ms. Clements is slated to join the Commission for a term expiring June 24, 2024, and Mr. Christie is set to join for a term expiring June 30, 2025.

Continue Reading Senate Committee Holds Hearing to Consider Pending FERC Nominations

On September 4, 2020, FERC rejected the New York Independent System Operator, Inc.’s (“NYISO”) proposed revisions to its buyer-side mitigation (“BSM”) rules that sought to prioritize storage, wind, solar, and other zero-emitting resources (“Public Policy Resources”) in NYISO’s Installed Capacity (“ICAP”) Market, rather than prioritizing new resources purely on a least-cost basis. While NYISO argued the state’s carbon and nitrogen oxide emissions reduction goals mean that a resource’s cost structure is no longer the best predictor of whether it will ultimately be developed, FERC held that NYISO’s proposal was unduly discriminatory because it prioritized Public Policy Resources over other non-Public Policy Resources. The decision sparked a dissent from Commissioner Richard Glick, who characterized FERC’s order as appearing to stake out the “radical” position that it is improper for NYISO to design its Tariff in a way that acknowledges state public policies, and a departure from FERC precedent focused on balancing the effects of state policies with measures to address how those policies affect capacity market prices.
Continue Reading FERC Rejects NYISO Buyer-Side Mitigation Proposal Aimed at Clean Energy Transition

On July 22, 2020, FERC approved a mitigation proposal that Sun Jupiter Holdings, LLC (“Sun Jupiter”) and El Paso Electric Company (“El Paso”) (together, “Applicants”) submitted in response to FERC’s March 30, 2020 order (“March 2020 Order”) conditioning approval of Sun Jupiter’s merger with and into El Paso and requiring the Applicants to address the transaction’s adverse impact on competition in certain circumstances. FERC also dismissed, on procedural grounds, United States Senators Jeffrey A. Merkley (D-OR), Edward J. Markey (D-MA), and Bernard Sanders (D-VT) (collectively, “Senators”) request for rehearing, and denied Public Citizen, Inc.’s  (“Public Citizen”) request for rehearing of FERC’s March 2020 Order.

Continue Reading FERC Approves Sun Jupiter’s and El Paso’s Mitigation Proposal, Dismisses U.S. Senators’ and Public Citizen’s Requests for Rehearing

On July 16, 2020, FERC responded to a petition for declaratory order filed by a group of merchant generators (“Petitioners”) requesting that the Commission provide guidance and clarification on six areas of its cost-based reactive power ratemaking policy. While FERC declined to address five of Petitioners’ specific requests, explaining that it would address them in another ongoing reactive rate proceeding, FERC established paper hearing procedures on a single question: “what proxies, if any, may be used by merchant generators for reactive power service ratemaking purposes other than the use of the capital structure and the cost of capital of the interconnected utility.”
Continue Reading FERC to Consider Merchant Cost of Capital for Reactive Power Rates

On July 10, 2020, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an opinion resolving jurisdictional challenges under the Federal Power Act (“FPA”) of FERC’s electric storage resource (“ESR”) participation rule, holding that the challenges “fail to show that Order Nos. 841 and 841-A run afoul of the [FPA’s] jurisdictional bifurcation or that they are otherwise arbitrary and capricious” because they do not include a state opt-out provision.
Continue Reading D.C. Circuit Upholds FERC Storage Rule’s Lack of a State Opt-Out