On November 17, 2022, FERC approved an application authorizing Commonwealth LNG, LLC (“Commonwealth”) to site, construct, and operate a liquified natural gas (“LNG”) export terminal in Cameron Parish, Louisiana. The LNG facility’s authorization drew concurring opinions from four of the Commissioners.
On November 2, 2022, FERC denied a complaint brought by the Iowa Coalition for Affordable Transmission (“ICAT”) alleging that ITC Midwest, LLC’s (“ITC Midwest”) capital structure, with a targeted 60%-40% equity-to-debt ratio, is unjust and unreasonable. FERC found that ICAT failed to demonstrate that ITC Midwest’s use of its actual capital structure to determine its equity ratio is unjust and unreasonable and that ICAT’s reliance on prior FERC precedent was misplaced. Given these findings, FERC declined to address ICAT’s arguments for a 53% equity ratio.…
On August 31, 2022, FERC issued two orders regarding two proposals to revise the Midcontinent Independent System Operator’s (“MISO”) resource adequacy requirements. In the first order, FERC accepted MISO’s proposal to move to seasonal resource adequacy requirements rather than a single requirement based on the summer peak. MISO proposed this seasonal resource adequacy construct to address significant increases in emergency events that occur year-round, driven by factors including generation retirements, reliance on intermittent resources, outages resulting from extreme weather events, and declining excess reserve margin. MISO will implement the new seasonal resource adequacy construct in the next Planning Resource Auction (“Auction”) to be held in April 2023. In the second order, FERC rejected MISO’s proposal to require a Minimum Capacity Obligation for participants in MISO’s Auction (“MCO Proposal”).
Continue Reading FERC Approves MISO Seasonal Resource Adequacy Requirements but Rejects Minimum Capacity Obligation
On July 28, 2022, FERC proposed changes to its Uniform System of Accounts (“USofA”) in response to the growth of non-hydro renewable generation such as wind, solar, and storage and to codify accounting for renewable energy credits (“RECs”). FERC’s Notice of Proposed Rulemaking (“NOPR”) follows a Notice of Inquiry issued in January 2021 seeking comment on the appropriate accounting treatment for certain renewable energy assets (see January 28, 2021 edition of the WER). Comments on the NOPR are due 45 days from its publication in the Federal Register.
Continue Reading FERC Proposes Revised Accounting Rules to Address Renewables
On June 16, FERC issued a Notice of Proposed Rulemaking (NOPR) focused on updating procedures for interconnecting large generating facilities (20MW and above) and small generating facilities (under 20MW). The NOPR proposes significant updates to FERC’s pro forma interconnection procedures, which were first established in the early 2000s. In the intervening years, however, the nation’s generation fleet has evolved, new technologies have emerged, and interconnection wait-times have steadily increased. The NOPR proposes various reforms to help address growing interconnection queue backlogs and process delays. Comments are due 100 days after the NOPR’s publication in the Federal Register. Reply comments are due 130 days after publication in the Federal Register.
Below is a summary of the primary reforms outlined in the NOPR, which fall into three broad categories: (1) implement a first-ready, first-served cluster study process; (2) increase the speed of interconnection queue processing; and (3) incorporate technological advancements into the interconnection process. FERC’s proposed reforms are discussed further in the full summary, linked below.
Continue Reading Summary of FERC Interconnection NOPR
On May 19, 2022, FERC staff released its 2022 Summer Energy Market and Reliability Assessment (“Summer Assessment”). The Summer Assessment forecasts “higher than average” temperatures for the summer, which are expected to have a significant impact on demand for electricity, amid a continuation of extreme drought conditions in the West, and coming on the heels of the retirement of thousands of megawatts of baseload conventional resources.
Continue Reading FERC Staff Releases Annual Assessment Signaling Higher Energy Prices and Ongoing Operational Challenges During Extreme Weather Events
On April 29, 2022, the FERC rejected Midcontinent Independent System Operator Inc.’s (“MISO”) proposed tariff revisions that sought to “extend” MISO Transmission Owners’ option to self-fund transmission upgrades so as to apply to Necessary Upgrades to support the connection of Merchant High Voltage Direct Current (“MHVDC”) transmission into MISO. FERC found that MISO failed to show its proposal was just and reasonable because MISO argued that Network Upgrades and Necessary Upgrades were functionally identical yet only proposed to extend the self-funding option traditionally applied to Network Upgrades without also extending other funding options and protections for customers.
Continue Reading FERC Rejects MISO Proposal for Transmission Owners to Self-fund Necessary Upgrades to Connect Merchant HVDC Lines
On April 5, 2022, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to the Consolidated Transmission Owners Agreement (“CTOA”) aimed at improving effectiveness and efficiency in decision-making among the 18 transmission owners currently eligible to vote on PJM business. Despite a protest arguing that the proposal would disenfranchise non-traditional transmission owners, FERC found that the proposed revisions “rebalance the CTOA voting rules to better align with individual PJM Transmission Owners’ economic stakes in the transmission system.”…
Continue Reading FERC Approves New Voting Rules for PJM Transmission Owners
On March 24, 2022, FERC denied a petition filed by Irradiant Partners, LP (“Irradiant” or “Petitioner”) seeking waiver of the Commission’s Qualifying Facility (“QF”) filing requirement for its acquisition and recertification of 185 QFs. The Commission held that the recertification requirement—even at this scale—was not unduly burdensome, citing mitigating factors and emphasizing the particular importance of having up-to-date ownership information to assist FERC in monitoring for discrimination.
Continue Reading FERC Denies Request for Waiver of Recertification Filing Requirement for Acquirer of 185 Qualifying Facilities