On June 15, 2023, FERC issued Order No. 895, adopting new regulations permitting regional transmission organizations (“RTO”) and independent system operators (“ISO”) to share, amongst each other, credit-related information of their market participants, and requiring RTOs/ISOs to adopt tariff or similar rules for providing credit-related information sharing in order to better assess market participants’ credit risks.Continue Reading FERC Adopts Regulations to Permit Credit-Related Information Sharing
On June 13, 2023, the House of Representatives Subcommittee on Energy, Climate, and Grid Security held a hearing on the “Oversight of FERC: Adhering to a Mission of Affordable and Reliable Energy for America.” The hearing focused on reliability and the transition from fossil fuel generation to renewable resources.Continue Reading House Subcommittee Holds FERC Oversight Hearing on Improving Reliability Through Energy Expansion, Interregional Transmission, and Backing Renewables with Fossil Fuels
On May 4, 2023, the Senate Energy and Natural Resources Committee hosted all four FERC Commissioners for an oversight hearing to focus on reliability in the face of (1) cyber-attacks, (2) coal and natural gas plant retirements, (3) severe weather, and (4) subsidies, climate policies, and market signals that encourage more intermittent resources to come online.Continue Reading FERC Commissioners Answer to Senate Committee on Fleet Transformation and Other Pressing Issues
On April 19, 2023, FERC announced it would hold a forum to discuss the PJM Interconnection, L.L.C. (“PJM”) capacity market. The Commissioner-led forum is scheduled for Thursday, June 15, 2023. There will be three panels to discuss the current state of the PJM capacity market, potential improvements, and related proposals to address resource adequacy.Continue Reading FERC to Convene Forum on PJM Capacity Market
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
On October 20, 2022, the Federal Energy Regulatory Commission (“FERC”) issued an Order rejecting a request by the California Public Utilities Commission (“CPUC”) seeking a rehearing of a Justification Order. FERC’s Order declining rehearing comes after an October 7, 2020 filing where Tri-State Generation and Transmission Association, Inc. (“Tri-State”) filed its justification for spot market sales that exceeded the Western Electricity Coordinating Council (“WECC”) soft price cap of $1,000/MWh during the summer months of 2020. On May 20, 2022, the Commission issued an order finding that Tri-State had sufficient justification for certain spot market sales above the soft price cap but had not justified amounts charged above the relevant index price. Ultimately, the Commission rejected the CPUC’s rehearing request.Continue Reading FERC Affirms Use of Certain Price Indices for Justifying Prices above WECC Soft Price Cap
On September 22, 2022, FERC denied a complaint filed on October 14, 2020 by Cricket Valley Energy Center LLC and Empire Generating Company, LLC. Complainants alleged that the New York Independent System Operator, Inc.’s (“NYISO’s”) capacity market offer floor rules—termed buyer-side market power mitigation rules (“BSM Rules”)—were unjust and unduly discriminatory because they failed to address price suppression in NYISO’s installed capacity (“ICAP”) spot market auctions. Complainants requested that FERC require NYISO to implement a minimum offer price rule (“MOPR”) that applies to all new and existing resources that receive out-of-market subsidies, with few or no exceptions. In denying the complaint, FERC relied on a May 2022 order accepting changes to NYISO’s BSM Rules to automatically exclude wind, solar, hydroelectric, geothermal, fuel cells that do not use fossil fuel, and demand response resources from adhering to an offer floor when bidding into NYISO’s capacity market. Commissioner James Danly issued a dissenting statement and Commissioner Mark Christie issued a concurring statement.Continue Reading FERC Denies Complaint Requesting Broadly-Applicable MOPR in NYISO
On August 26, 2022, Commissioner James Danly issued a statement in the FERC docket addressing PJM Interconnection, L.L.C.’s (“PJM”) replacement, focused Minimum Offer Price Rule (“Focused MOPR”). Commissioner Danly argued that the FERC Solicitor’s Office should not have filed its brief defending the Focused MOPR in the United States Court of Appeals for the Third Circuit (“Third Circuit”), and that doing so violated the Department of Energy Organization Act (“DOE Organization Act”) and the Administrative Procedure Act (“APA”). Following the statement, on September 7, 2022, certain Petitioners in the Third Circuit appeal proceedings filed a motion to strike FERC’s brief. Their motion argues that FERC’s brief should not have been filed because the Commission never voted to accept the Focused MOPR, and that filing the brief violates both the DOE Organization Act and constitutional limitations on the authority of executive officials. The Third Circuit has not yet acted on the motion.
Continue Reading Commissioner Danly Issues Statement Objecting to FERC Brief Defending MOPR in Third Circuit Appeal Proceedings; Third Circuit Petitioners Move to Strike FERC’s Brief
On August 31, 2022, FERC issued two orders regarding two proposals to revise the Midcontinent Independent System Operator’s (“MISO”) resource adequacy requirements. In the first order, FERC accepted MISO’s proposal to move to seasonal resource adequacy requirements rather than a single requirement based on the summer peak. MISO proposed this seasonal resource adequacy construct to address significant increases in emergency events that occur year-round, driven by factors including generation retirements, reliance on intermittent resources, outages resulting from extreme weather events, and declining excess reserve margin. MISO will implement the new seasonal resource adequacy construct in the next Planning Resource Auction (“Auction”) to be held in April 2023. In the second order, FERC rejected MISO’s proposal to require a Minimum Capacity Obligation for participants in MISO’s Auction (“MCO Proposal”).
Continue Reading FERC Approves MISO Seasonal Resource Adequacy Requirements but Rejects Minimum Capacity Obligation
On July 28, 2022, FERC issued a show cause order indicating that several regional transmission organization (“RTO”) and independent system operator (“ISO”) tariffs appear to be unjust and unreasonable because they lack certain credit risk management practices. FERC also issued a related Notice of Proposed Rulemaking (“NOPR”) to allow all market operators to share credit-related information among themselves so that they can more accurately assess market participants’ credit risks. Both actions aim to improve credit risk management in organized wholesale electric power markets.
Continue Reading FERC Issues Show Cause Order and NOPR on Credit Risk