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On March 1, 2023, FERC partially approved ISO New England’s (“ISO-NE”) proposed tariff revisions in compliance with Order No. 2222, which removed barriers to the participation of distributed energy resource (“DER”) aggregations in the capacity, energy, and ancillary services markets operated by Regional Transmission Organizations and Independent System Operators (“RTO/ISO”). In the order, FERC directed ISO-NE to revise its proposal regarding small utility opt-in requirements, capacity market participation, information and data requirements, and metering and telemetry system requirements. Commissioner Christie dissented from the order arguing that ISO-NE’s proposed metering and telemetry requirements for DER aggregations are reasonable and should be encouraging RTO/ISOs to adopt rigorous measurement and verification (“M&V”) measures, not undercutting them. Commissioner Danly concurred with a separate statement, expressing how this decision underscores his original concerns with Order No. 2222, namely that FERC is interfering in managing RTO activities that, in his view, should be under state jurisdiction. Commissioner Clements also concurred with a separate statement urging ISO-NE to make its proposal open to all DERs, such as behind-the-meter DERs.…

Continue Reading FERC Partially Accepts ISO-NE Order No. 2222 Compliance Filing, but Expresses Concern that Proposal Could Create Undue Barrier to DERs

On February 14, 2023, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) upheld FERC’s March 2021 order granting Broadview Solar, LLC’s (“Broadview”) hybrid solar and battery project qualifying facility (“QF”) status (see March 25, 2021 edition of the WER) based on FERC’s interpretation of the Public Utility Regulatory Policies Act of 1978 (“PURPA”). Specifically, the D.C. Circuit determined, among other things, that FERC’s interpretation that a QF owner can use the MW net output at the point of interconnection in determining whether a facility meets the 80 MW statutory maximum for small power production facility QF status under PURPA was reasonable.…

Continue Reading D.C. Circuit Upholds FERC Interpretation of PURPA Size Limitation Based on “Send out” to Point of Interconnection

On November 17, 2022, FERC issued three orders intended to address the reliability impacts of the rapid integration of inverter-based resources (“IBRs”), including solar, wind, fuel cell, and battery storage resources, on the Bulk-Power System (“BPS”). Specifically, in the first proceeding, FERC directed the North American Electric Reliability Corporation (“NERC”) to develop a plan to register the entities that own and operate IBRs so that NERC may monitor their compliance with NERC’s Reliability Standards. In the second proceeding, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to direct NERC to develop new or modified Reliability Standards that address reliability gaps related to IBRs. Lastly, in the final proceeding, FERC approved revisions to two of NERC’s Reliability Standards.…

Continue Reading FERC Issues Proposals Regarding Inverter-Based Resources to Improve Grid Reliability

On November 17, 2022, FERC granted a petition for declaratory order (“Petition”) filed by Ameresco, Inc. (“Ameresco”) and its subsidiaries (collectively with Ameresco, “the Ameresco Companies”) requesting exemption from certain “books and records” requirements under the Commission’s Public Utility Holding Company Act of 2005 (“PUHCA”) regulations because its ownership of certain grid-charged battery storage subsidiaries might otherwise have caused Ameresco to lose its automatic “books and records” exemption under PUHCA. FERC granted the Petition, notwithstanding the fact that some of the storage subsidiaries would not otherwise qualify for the non-traditional utility “books and records” exemption, because the “Ameresco Companies’ books, accounts, memoranda, and other records are not relevant to the jurisdictional rates of Ameresco Companies.”…

Continue Reading FERC Finds PUHCA Exemptions Appropriate for Holding Company Ownership of Grid-Charging Storage Facilities Selling at Retail

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 December 17, 2021, FERC affirmed a Public Utility Regulatory Policies Act of 1978 (“PURPA”) qualifying facility (“QF”) self-certification for the Shields Valley Solar Facility (“Shields Valley”), a hybrid solar and battery project relying on inverters to limit its net power production capacity.  In doing so, FERC reiterated its finding in its Broadview Solar rehearing order that a QF owner can use MW net output at the point of interconnection, taking into account inverter losses and other components to produce electricity, in determining whether a facility meets the 80 MW statutory maximum for QF status.  Commissioner James Danly wrote separately in dissent explaining his view that Shields Valley plainly exceeds the statutory capacity limit for a QF.
Continue Reading FERC Affirms QF Self-Certification for a Hybrid Solar and Battery Project, Prompting Dissent from Commissioner Danly

On November 30, 2021, FERC issued and order accepting a California Independent System Operator Corporation (“CAISO”) tariff filing designed to clarify its market rules for hybrid and co-located resources. CAISO proposed two areas of revisions: 1) enhancing market participation for hybrid and co-located resources; and 2) allowing for the use of multiple aggregate capability constraints by co-located resources at a single generating facility in CAISO. Commissioner James Danly wrote separately questioning whether hybrid resources should continue to be exempted from CAISO’s resource adequacy requirements, but agreed the revisions were just and reasonable. …
Continue Reading FERC Accepts CAISO Tariff Changes for Co-located and Hybrid Resources

On October 26, 2021, FERC issued an order accepting a California Independent System Operator Corporation (“CAISO”) tariff filing designed to improve CAISO’s markets by optimizing the performance of storage and demand response resources. CAISO proposed three distinct tariff revisions: (1) creating biddable state of charge parameters for energy storage; (2) applying market power mitigation to energy storage; and (3) enabling demand response resources to specify maximum daily run times.
Continue Reading FERC Accepts CAISO Proposal Regarding Storage and Demand Response Resources

On March 19, 2021, FERC set aside a September 1, 2020 order (“September Order”) that had upended 40 years’ worth of FERC precedent regarding how to determine the 80MW threshold for small power production qualifying facilities (“QFs”) under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). Specifically, FERC rejected the September Order’s denial of QF status to a hybrid photovoltaic solar and storage facility owned by Broadview Solar LLC (“Broadview”) as a result of the facility’s 160 MW gross capacity, as opposed to the facility’s 80 MW maximum net output or “send out.” After further consideration, FERC explained that it had erred by departing from and overturning its longstanding “send out” precedent. Commissioner Danly dissented, arguing that the September Order correctly applied PURPA in relying on gross power production capacity.
Continue Reading FERC Reverses September 2020 Order, Reinstating Long-Standing “Send Out” Test for Small Power Production QF 80MW Threshold

On March 18, 2021, FERC issued Order No. 2222-A, setting aside its finding in Order No. 2222 that demand response resource participation in heterogeneous distributed energy resource (“DER”) aggregations are subject to the opt-out and opt-in requirements of Order Nos. 719 and 719-A, as well as clarifying other requirements in Order No. 2222 concerning Qualifying Facility (“QF”) interconnection policies, restrictions to avoid double-counting services, and information sharing and criteria for the distribution utility review process. Concurrent with Order No. 2222-A, FERC also issued a Notice of Inquiry (“NOI”) seeking comment on whether to revise its more than a decade-old regulations requiring Regional Transmission Organizations and Independent System Operators (“RTO/ISO”) not to accept bids from an aggregator of retail customers (“ARC”) where the relevant electric retail regulatory authority (“RERRA”) prohibits such customers’ demand response resources from being bid into organized markets (“Demand Response Opt-Out”). Specifically, the NOI applies only to regulations where an ARC aggregates the demand response of the customers of utilities that distributed more than four million megawatt-hours in the previous fiscal year and is intended to examine whether changing circumstances warrant revision of the Demand Response Opt-Out and whether the RTO/ISO market would benefit from including currently barred Demand Response Opt-Out resources.
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Continue Reading FERC to Allow Distributed Energy Resource Aggregations in Wholesale Electric Markets to Include Demand Response Resources