On April 24, 2020, FERC largely upheld an earlier-issued order imposing additional transparency obligations on Midcontinent Independent System Operator, Inc. (“MISO”), Southwest Power Pool, Inc. (“SPP”), and PJM Interconnection, L.L.C. (“PJM”) (collectively, “RTOs”) regarding the RTOs’ Affected Systems study processes. FERC declined to require holistic alignment of the RTOs’ interconnection study processes, but clarified that, in subsequent compliance filings, the Commission will scrutinize whether each RTO applies the Energy Resource Interconnection Service (“ERIS”) or Network Resource Interconnection Service (“NRIS”) modeling standards in a just and reasonable manner.
Continue Reading FERC Denies Rehearing, Partially Grants Clarification on MISO, SPP, and PJM Affected System Study Coordination Order

On April 27, 2020, FERC granted renewable energy company Goldman Sachs Renewable Power Marketing, LLC (“GSRPM”) authority to make wholesale sales of energy, capacity, and ancillary services at market-based rates. However, FERC also found GSRPM to be affiliated with the investment bank Goldman Sachs Group, Inc. (“Goldman Sachs”). On the basis of that finding, FERC concluded that GSRPM would be subject to enhanced reporting requirements as a Category 2 Seller in the northwest region of the United States. The order reflects FERC’s increasing interest in the disclosure of corporate structure for purposes of affiliation determinations in market-based rate applications.
Continue Reading FERC Finds Renewable Project Company to be Affiliated with Goldman Sachs Investment Bank for Purposes of Market-Based Rate Analysis

On March 27, 2020, FERC denied NorthWestern Corporation’s (“NorthWestern” or the Company) petition for a declaratory order regarding Qualifying Facility (“QF”) avoided cost pricing during times of excess generation. In its petition, NorthWestern asked the Commission to determine that (1) when excess generation occurs, QF pricing should be set to zero, and (2) nothing in the Public Utilities Regulatory Policies Act (“PURPA”), including the rule against non-discrimination in avoided cost pricing, permits establishing a rate in excess of the utility’s avoided cost. In exercising its discretion to deny the petition, FERC did not reject NorthWestern’s request on the merits, but rather, stated that whether avoided energy costs can be zero depends on the facts of the case, and that NorthWestern had failed to provide sufficient information to support its request.

Continue Reading FERC Declines Opportunity to Weigh in on Zero Avoided Cost Pricing under PURPA

On March 6, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s proposed revisions to the ISO-NE Tariff intended to eliminate ISO-NE’s ability to retain a resource for local transmission reliability needs if that resource has been previously retained for fuel security purposes (“Proposed Tariff Revisions”). FERC found that the Tariff Revisions were not just and reasonable because they would limit ISO-NE’s ability to address potential future transmission reliability issues without alternative transmission solutions yet being in place.
Continue Reading FERC Rejects ISO-NE Tariff Revisions Preventing Further Retention of Retained Fuel Security Resources

On February 12, 2020, the U.S. International Trade Commission (“ITC”) issued a notice stating that it will investigate and report on the potential economic effects of renewable energy commitments, including the role of renewable energy imports, in Massachusetts and the broader New England region as requested by the Committee on Ways and Means of the U.S. House of Representatives (“Committee”). The ITC intends to send the report to the Committee by January 25, 2021.
Continue Reading U.S. International Trade Commission to Investigate Impacts of Renewable Energy Imports in New England

On February 14, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s (together with ISO-NE, the “Filing Parties”) proposed revisions to the ISO-NE tariff intended to allow for the termination of ISO-NE’s Fuel Security Reliability Retention Mechanism (“Fuel Security Mechanism”) at the end of Forward Capacity Auction (“FCA”) 14 – one year earlier than currently provided in the tariff. The Fuel Security Mechanism allows ISO-NE to retain resources for fuel security that seek to retire in FCAs 13, 14, or 15 and was initially implemented following ISO-NE’s 2018 petition for waiver seeking to retain two retiring Mystic Units through FCA 15 (“Mystic Units”). FERC rejected the filing because ISO-NE had not yet submitted its proposed long-term solutions to address fuel security concerns and because it found that that ISO-NE’s proposed interim solutions were inadequate. FERC Commissioner Richard Glick dissented from the order, arguing the majority lacked a reasoned basis to find that ISO-NE’s filing was not just and reasonable.
Continue Reading FERC Rejects ISO-NE’s Proposed Early Sunsetting Revisions to Fuel Security Mechanism

On February 20, 2020, FERC issued Order No. 861-A, granting certain clarifications about, and denying rehearing of, FERC’s sweeping market-based rate reforms in Order No. 861 (see July 24, 2019 edition of the WER). In Order No. 861-A, FERC held that sellers of capacity located in the California Independent System Operator Corporation (“CAISO”) market must continue to submit indicative screens in order to obtain authorization to make capacity sales at market-based rates. FERC also affirmed that capacity sellers located in CAISO may not rely on a rebuttable presumption that the Capacity Procurement Mechanism (“CPM”) adequately mitigates these sellers’ horizontal market power. FERC issued Order No. 861-A in response to requests for rehearing and clarification from CAISO and Pacific Gas & Electric Company (“PG&E”).
Continue Reading FERC Affirms Market-Based Rate Rule, Requires Capacity Sellers in CAISO to Submit Indicative Screens to Obtain Market-Based Rate Authority

On January 29, 2020, thirty-six Democratic members of the U.S. House of Representatives (“Representatives”) signed a letter expressing their concern about FERC’s December 19, 2019 Order (“Order”) directing PJM Interconnection, L.L.C (“PJM”) to apply its Minimum Offer Price Rule (“MOPR”) to all state-subsidized capacity resources (see December 20, 2019 edition of the WER). According to the Representatives, the Order “nullif[ies]” state energy preferences, prohibits states from pursuing their policy goals, increases consumer costs by forcing them to buy duplicative capacity, runs contrary to FERC’s duty to ensure energy markets are truly competitive, and places deregulated markets at risk. The Representatives requested that the Commission provide a response to each concern discussed in the letter.

Continue Reading House Democrats Express Concern over FERC’s PJM MOPR Order

On January 9, 2020, FERC rejected Constellation Mystic Power, LLC’s (“Mystic”) proposed amendment to its cost-of-service agreement (“Mystic Agreement”) with ISO New England Inc. (“ISO-NE”) that would have provided Mystic the option to unilaterally retire Mystic Generating Station units 8 and 9 (“Mystic Generators”).  FERC found that giving Mystic the option to retire the Mystic Generators early would pose an unacceptable risk to reliability.  Commissioner Glick concurred in part and dissented in part.
Continue Reading FERC Rejects Proposed Unilateral Termination Amendment Related to Mystic Generators