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On February 16, 2023, FERC approved two new extreme cold weather Reliability Standards—EOP-011-3 (Emergency Operations) and EOP-012-1 (Extreme Cold Weather Preparedness and Operations)—filed by the North American Electric Reliability Corporation (“NERC”) and aimed at implementing the recommendations resulting from a joint inquiry into the circumstances surrounding Winter Storm Uri. However, FERC also directed modifications to EOP-012-1 to address what FERC characterized as concerns over the Standard’s applicability, ambiguity, lack of objective measures and deadlines, and prolonged, indefinite compliance periods. The new Reliability Standards constitute the first phase of NERC’s effort to implement the recommendations resulting from the joint inquiry into the 2021 winter storm. NERC stated that it will address the remaining recommendations in the second phase of the project.Continue Reading FERC Approves Extreme Cold Weather Reliability Standards in Response to Winter Storm Uri

On January 31, 2023, the Federal Energy Regulatory Commission (“Commission” or “FERC”) granted Great River Energy’s (“GRE”) requested incentive rate treatment for GRE’s investment in the Iron Range Project and Big Stone Project (collectively, “Projects”). Notwithstanding FERC’s approval, Commissioner Christie’s separate concurrence highlighted persistent concerns over the Commission’s incentive rate treatment policy.Continue Reading FERC Commissioner Christie Renews Concerns Over Transmission Rate Incentives in MISO Transmission Expansion Plan Order

On January 27, 2023, FERC approved the Midcontinent Independent System Operator, Inc. (“MISO”) Transmission Owners’ (“TOs”) proposal to terminate reactive power charges and compensation under MISO’s Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”), effective December 1, 2022.  As a result, MISO will no longer charge transmission customers for reactive power service within the standard power range, and no generators, whether affiliated with the MISO TOs or not, will receive compensation for providing reactive power service within the standard power factor range.  Nevertheless, FERC’s determination does not affect MISO generators’ ongoing obligation to provide reactive power.  If MISO directs a generator to provide reactive power outside of the standard power factor range, the generator will be compensated based on existing mechanisms already included in MISO’s Tariff.  Continue Reading FERC Allows MISO Transmission Owners to Retroactively Terminate Reactive Power Compensation Back to December 2022

On January 23, 2023, FERC set New York Power Authority’s (“NYPA”) proposed revisions to its Formula Rate Template for hearing, including changing NYPA’s allocation methodology for administrative and general (“A&G”) costs to a multi-factor, modified Massachusetts method (“Massachusetts Method”). In doing so, FERC found that NYPA had not supported its claim that the Massachusetts Method is appropriate for its specific circumstances and organizational structure or how the change would affect rates. FERC also conditionally accepted proposed changes to NYPA’s Formula Rate Protocols implementing transmission rate incentives and cost containment mechanisms for the Smart Path Connect Project.Continue Reading FERC Sets NYPA Formula Rate Changes for Hearing, Including Proposed Template Utilizing “Massachusetts Method” for A&G Cost Allocation.

On January 19, 2023, FERC established that a facility’s classification as transmission or distribution under criteria established in the Southwest Power Pool, Inc.’s (“SPP”) Open Access Transmission Tariff (“Tariff”) can be overcome in a challenge at the Commission if the protestors provide sufficient evidence to call into question the classification under the Tariff criteria. FERC found that once protestors present evidence that the facilities are distribution under FERC’s seven-factor test, the burden of proof shifts back to the filing transmission provider and transmission owner seeking a specific classification under Section 205 of the Federal Power Act to demonstrate its proposed classification under FERC’s seven-factor test. FERC found that GridLiance High Plains, LLC (“GridLiance”), as the applicable transmission owner, failed to carry this burden to demonstrate its facilities at issue were transmission facilities after such a challenge.Continue Reading FERC Affirms Burden of Persuasion Rests on Proponents of Transmission Asset Classifications under FERC’s Seven-Factor Test, Notwithstanding Tariff Classifications

On January 19, 2023, FERC issued an order upholding its decision to exercise primary jurisdiction over emergency energy sales between Southwest Power Pool, Inc. (“SPP”) and Associated Electric Cooperative, Inc. (“AECI”) during Winter Storm Uri and FERC’s decision that SPP properly compensated AECI pursuant to its Open Access Transmission Tariff (“Tariff”).Continue Reading On Rehearing, FERC Upholds Jurisdiction over AECI Emergency Energy Transactions in SPP Market During Winter Storm Uri

On December 16, 2022, FERC again rejected the Midcontinent Independent System Operator Inc. (“MISO”) proposal for Transmission Owners to self-fund Necessary Upgrades to connect Merchant High Voltage Direct Current (“HVDC”) transmission lines into MISO and addressed arguments on rehearing. Commissioner Danly dissented and Commissioner Christie concurred in separate statements. Chairman Glick did not participate.Continue Reading On Rehearing FERC Again Rejects MISO Proposal for Transmission Owners to Self-Fund Necessary Upgrades to Connect Merchant HVDC Lines

On December 15, 2022, FERC issued an order accepting Arizona Public Service Company’s (“APS”) revisions to its Open Access Transmission Tariff (“Tariff”) that would allow APS to begin using the Flowgate Methodology for calculating Available Transfer Capability (“ATC”) instead of its current Rated System Path Methodology. In addition, FERC denied APS’s request to waive the requirement to post its Total Transfer Capability (“TTC”) values on the Open Access Same Time Information System (“OASIS”).Continue Reading FERC Accepts Arizona Public Service Company’s Proposal to Adopt Flowgate ATC Methodology and Denies Its Request to Waive TTC Posting Requirements

On December 15, 2022, FERC issued a Notice of Proposed Rulemaking (“NOPR”) seeking to revise its regulations governing applications for permits to site electric transmission facilities under § 216 of the Federal Power Act (“FPA”). Specifically, the NOPR seeks to: (1) revise Section 50.6 of FERC’s regulations to reflect the Infrastructure Investment and Jobs Act’s (“IIJA”) amendments to the FPA § 216; (2) eliminate the required one-year delay before the commencement of FERC’s pre-filing process; (3) supplement the existing landowner and stakeholder participation provisions in Part 50 of its regulations; and (4) revise the timing of the required Project Participation Plan (“Plan”) in the pre-filing application process.Continue Reading FERC Issues Proposed Rule Implementing FPA Amendments in Infrastructure Investment and Jobs Act

On November 18, 2022, FERC accepted a September 19, 2022 proposal from the California Independent System Operator (“CAISO”) to correct “excessively high” payments being made to electric storage resources that are forced to discharge to meet state of charge requirements when providing ancillary services. The proposal also aims to encourage those resources to reflect opportunity costs through their ancillary services bids rather than energy bids.Continue Reading FERC Accepts CAISO Proposal to Correct Payment Overcollections by Storage Resources