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.

Continue Reading FERC to Allow Distributed Energy Resource Aggregations in Wholesale Electric Markets to Include Demand Response Resources

On January 19, 2021, FERC directed Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to submit informational reports regarding four hybrid resources issues: (1) terminology; (2) interconnection; (3) market participation; and (4) capacity valuation. Specifically, FERC directed that each RTO or ISO file a report within 180 days from the order providing:  (1) a description of its current practices related to these four issues; (2) an update on the status of any ongoing efforts to develop reforms related to the four issues; and (3) responses to the specific requests for information contained in the January 19, 2021 order. FERC’s request for reports follows a technical conference focusing on technical and market issues raised by hybrid resources (see April 14, 2020 edition of the WER) and a Notice Inviting Post-Technical Conference Comments.
Continue Reading FERC Directs Informational Reports on Hybrid Resources from RTOs and ISOs Following Technical Conference

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 September 30, 2020, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) proposals to: 1) permit electric vehicle charging stations to participate in CAISO’s demand response program separately from their host facilities (“EV Proposal”); and 2) incentivize behind-the-meter energy storage in CAISO’s demand response programs to “load shift” by consuming energy during over supply conditions and returning that energy to the system during times of need (“Load Shifting Proposal”). FERC held that CAISO’s proposals would enhance its demand response programs, which compensate load, storage, and generation resources for curtailing their demand in response to CAISO’s instructions. FERC also found that the proposals would ensure that CAISO’s policies keep pace with rapidly evolving electric vehicle and behind-the-meter storage technologies, and would permit these resources to participate in the CAISO market under rules that capture their unique characteristics and benefits.
Continue Reading FERC Accepts CAISO Rules Enhancing Demand Response Program for Electric Vehicle Charging Stations and Behind-the-Meter Energy Storage Resources

On September 17, 2020, FERC issued a final rule (“Order No. 2222”) amending its regulations to require Regional Transmission Organizations and Independent System Operators (“RTO/ISO”) to revise their tariffs to facilitate the participation of distributed energy resource (“DER”) aggregations in organized wholesale electric markets. In the order, FERC found current RTO/ISO DER aggregation market rules to be unjust and unreasonable, established new definitions for DERs and DER aggregations, and detailed RTO/ISO tariff revisions that will allow DER aggregations to participate in RTO/ISO markets. Commissioner Danly dissented from the order, contending that FERC was overextending its jurisdictional authority and that, through the order, FERC was imprudently encouraging “resource development by fiat.” RTO/ISOs are required to file the tariff changes needed to comply with Order No. 2222 within two hundred seventy (270) days of publication of the order in the Federal Register.
Continue Reading FERC Opens Door for Participation of Distributed Energy Resource Aggregations in Wholesale Electric Markets

On September 1, 2020, FERC issued an order overturning 40 years of Public Utility Regulatory Policies Act of 1978 (“PURPA”) precedent and revoking the qualifying facility (“QF”) status of Broadview Solar, LLC (“Broadview Solar”) after finding that it could not rely on inverters to meet PURPA’s statutory size limit. In a separate QF matter, the Supreme Court of the State of Montana (“Montana Supreme Court”) issued an opinion on August 24, 2020 finding the Montana Public Service Commission (“Montana Commission”) unlawfully set solar QF standard-offer rates by failing to consider carbon offsets and undervaluing solar QFs’ capacity contribution. Both cases will have substantial impacts for QF developers.   
Continue Reading FERC and Montana Supreme Court Issuances Bring Big Regulatory Shakeups to the PURPA Regulatory Landscape

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

On April 22, 2020, FERC accepted tariff revisions from Southwest Power Pool, Inc. (“SPP”) to comply with a October 17, 2019 order accepting in part SPP’s Order No. 841 compliance proposal (the “October Order”). FERC also directed SPP to submit a further compliance filing to specifically exempt run-of-the-river hydroelectric, wind, and solar resources from the continuous minimum run-time requirement under SPP’s Resource Adequacy tariff provisions and Planning Criteria.
Continue Reading FERC Accepts SPP Resource Adequacy Compliance Filing, Subject to Further Compliance