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On December 2, 2020, FERC clarified that when an entity with passive equity holdings in a company later wants to assume operational responsibilities over the company, the entity must obtain authorization under Federal Power Act (“FPA”) section 203 prior to the assumption of operational management responsibilities. FERC’s December 2 order on rehearing modified the discussion in a May 29, 2020 order in the proceedings approving Tenaska Lotus Holdings, LLC’s (“Tenaska Lotus”) assumption of rights as operations manager of 41MB 8me, LLC (“Project Company”) (together, “Applicants”), a 51 MW solar facility in California.
Continue Reading FERC Clarifies FPA Section 203 Authorization Requirements Prior to Acquisition of a Utility’s Operational Management Responsibilities

On October 30, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) proposed revisions to the ISO-NE tariff to resolve long-term fuel security concerns in the New England region. FERC found that ISO-NE’s proposed solutions would substantially increase consumer costs without meaningfully improving fuel security in the region, and offered guidance on how ISO-NE might develop a just and reasonable approach to address its fuel security concerns.
Continue Reading FERC Rejects ISO-NE’s Long-Term Fuel Security Proposal

On October 27, 2020, FERC accepted Midcontinent Independent System Operator, Inc.’s (“MISO’s”) proposal to require conventional, non-intermittent capacity resources with Energy Resource Interconnection Service (“ERIS”) to secure firm transmission service in the amount of the resource’s full Installed Capacity (“ICAP”) in order to meet its capacity market deliverability requirements. In addition, if a capacity resource obtains firm transmission service in an amount less than the resource’s full ICAP, MISO will prorate the amount of capacity credits that resource receives.
Continue Reading MISO Beefs Up Deliverability Requirements for Conventional Capacity Resources

On October 15, 2020, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to revise its regulations implementing the Public Utility Regulatory Policies Act of 1978 (“PURPA”) to permit Solid Oxide Fuel Cell systems with integrated natural gas reformation equipment to be certified as cogeneration qualifying facilities (“QFs”). FERC proposed the changes in response to what it termed the “technical evolution of cogeneration,” and in response to Bloom Energy Corporation’s (“Bloom Energy”) petitioning FERC for such revisions.
Continue Reading FERC Proposes PURPA Amendments to Permit Solid Oxide Fuel Cell Systems to Qualify as Cogenerators

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 4, 2020, FERC rejected the New York Independent System Operator, Inc.’s (“NYISO”) proposed revisions to its buyer-side mitigation (“BSM”) rules that sought to prioritize storage, wind, solar, and other zero-emitting resources (“Public Policy Resources”) in NYISO’s Installed Capacity (“ICAP”) Market, rather than prioritizing new resources purely on a least-cost basis. While NYISO argued the state’s carbon and nitrogen oxide emissions reduction goals mean that a resource’s cost structure is no longer the best predictor of whether it will ultimately be developed, FERC held that NYISO’s proposal was unduly discriminatory because it prioritized Public Policy Resources over other non-Public Policy Resources. The decision sparked a dissent from Commissioner Richard Glick, who characterized FERC’s order as appearing to stake out the “radical” position that it is improper for NYISO to design its Tariff in a way that acknowledges state public policies, and a departure from FERC precedent focused on balancing the effects of state policies with measures to address how those policies affect capacity market prices.
Continue Reading FERC Rejects NYISO Buyer-Side Mitigation Proposal Aimed at Clean Energy Transition

On July 17, 2020, FERC issued three orders relating to the executed cost-of-service agreement (“Mystic Agreement”) among Constellation Mystic Power, LLC (“Mystic”), Exelon Generation Company, LLC (“Exelon”), and ISO New England Inc. (“ISO-NE”).  The Mystic Agreement provides for cost-of-service compensation to Mystic for the continued operation of two gas-fired generating units.  In the first two orders, FERC addressed requests for rehearing of its 2018 orders accepting the Mystic Agreement (the “July 2018 Order” and the “December 2018 Order”), including its conclusion that Mystic should recover from ratepayers 91% of the operating costs of the Everett Marine Terminal (“Everett”), a non-jurisdictional liquified natural gas import terminal.  In its third order, FERC accepted in part a Mystic compliance filing submitted in response to the December 2018 Order.  Commissioner Glick issued dissents to each of the July 17 orders.  Commissioner Glick concluded that FERC was forcing consumers to pay the full cost of service for Mystic in order to “bail out” Everett, and that each of the orders exceeded FERC’s jurisdiction under the Federal Power Act (“FPA”).
Continue Reading Divided FERC Permits Mystic to Recover Operating Costs of Non-Jurisdictional LNG Terminal

On July 22, 2020, FERC approved a mitigation proposal that Sun Jupiter Holdings, LLC (“Sun Jupiter”) and El Paso Electric Company (“El Paso”) (together, “Applicants”) submitted in response to FERC’s March 30, 2020 order (“March 2020 Order”) conditioning approval of Sun Jupiter’s merger with and into El Paso and requiring the Applicants to address the transaction’s adverse impact on competition in certain circumstances. FERC also dismissed, on procedural grounds, United States Senators Jeffrey A. Merkley (D-OR), Edward J. Markey (D-MA), and Bernard Sanders (D-VT) (collectively, “Senators”) request for rehearing, and denied Public Citizen, Inc.’s  (“Public Citizen”) request for rehearing of FERC’s March 2020 Order.
Continue Reading FERC Approves Sun Jupiter’s and El Paso’s Mitigation Proposal, Dismisses U.S. Senators’ and Public Citizen’s Requests for Rehearing

On July 16, 2020, FERC dismissed a petition for declaratory order by the New England Ratepayers Association (“NERA”) that asked FERC to assert jurisdiction over net metering, finding that the petition failed to identify a specific controversy or harm that warranted a generic response from FERC. NERA’s petition had requested that FERC declare: (1) that all flows of electricity from behind-the-meter generators under state net metering programs back to the interconnected utility are wholesale sales subject to FERC’s exclusive jurisdiction, and (2) such sales should be priced in accordance with the requirements of the Federal Power Act (“FPA”) or the Public Utility Regulatory Policies Act (“PURPA”). Commissioners Bernard L. McNamee and James Danly issued separate concurring opinions, noting that though NERA’s petition was procedurally unsound, the issues raised could be addressed on the merits in a different proceeding.
Continue Reading FERC Declines Request to Assert Jurisdiction over Net Metering