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On February 23, 2018, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) changes to its tariff and Reliability Assurance Agreement (“RAA”) to revise Reliability Pricing Model (“RPM”) capacity market rules in order to accommodate greater participation from seasonal resources.  Specifically, FERC approved changes related to: (1) resource aggregation for submitting combined capacity market sell offers; (2) granting winter-period interconnection rights; and (3) demand response resource measurement and verification for seasonal resources.  However, FERC separately responded to complaints that the RPM does not adequately accommodate seasonal resources by directing FERC staff to establish a technical conference to explore whether further changes are needed to permit seasonal resource participation.

In dual orders issued on February 28, 2018, FERC affirmed that the current resource adequacy requirements of the Midcontinent Independent System Operator, Inc. (“MISO”) remain just and reasonable, and simultaneously rejected an earlier MISO filing that would have imposed additional resource adequacy program changes.  The rejection of MISO’s earlier filing came after the United States Court of Appeals for the D.C. Circuit (“D.C. Circuit”) granted FERC a voluntary remand to reconsider its previous conditional acceptance in light of NRG Power Marketing, LLC. v. FERC (“NRG”).

On February 28, 2018, FERC accepted ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s (“NEPOOL”) tariff revisions to replace the capacity market’s existing bilateral contracting mechanism with a new mechanism, the Annual Reconfiguration Transaction (“ART”).  According to ISO-NE, the ART provides an alternative method to achieve the equivalent of a Capacity Supply Obligation (“CSO”) Bilateral while also accounting for a resource’s impact on reliability. 

On February 20, 2018, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) proposal to, among other things, (1) eliminate biddable points at zone nodes, certain generator nodes, certain aggregate nodes, and individual load zones for Increment Offers (“INCs”) and Decrement Bids (“DECs”) and instead align the eligible trading points for INCs and DECs with nodes where generation, load, or interchange transactions are settled, or at trading hubs where forward positions can be taken; and (2) allow trading of Up-to-Congestion transactions (“UTCs”) at hubs, residual metered load, and interfaces, but not at individual nodes.

On February 21, 2018, FERC accepted PJM Interconnection, L.L.C.’s (“PJM”) Order No. 825 compliance filing, subject to condition.  In Order No. 825, FERC directed each regional transmission organization (“RTO”) and independent system operator (“ISO”) to align settlement and dispatch intervals, and modify certain rules regarding when shortage pricing is triggered.

On February 14, 2018, FERC accepted a suite of system functionality enhancements to the Energy Imbalance Market (“EIM”) proposed by the California Independent System Operator Corporation (“CAISO”).  The enhancements, which became effective the following day, included automated matching of import/export schedule changes between resources inside and outside the EIM, as well as allowing EIM entities to use CAISO’s settlement process to address base energy transfer differences.  As CAISO explained in its proposal, the requested enhancements will improve the EIM overall, as well as facilitate the entrance of Powerex Corp. and Idaho Power Company into the market on April 4, 2018.

On February 15, 2018, FERC issued a notice that staff will hold a technical conference on April 10-11, 2018 to discuss the participation of distributed energy resources (“DER”) in markets operated by Regional Transmission Organizations and Independent System Operators.  As FERC stated in the notice, the two-day conference will host…

In response to concerns regarding the changing nature of the nation’s energy supply portfolio and the emergence of promising energy storage technologies, the Commission in recent years issued several notices of inquiry, notices of proposed rulemaking, and policy statements regarding various energy storage and ancillary service supply issues.  Additionally, the Commission considered but ultimately declined to pursue the Department of Energy-initiated rulemaking on grid resiliency and reliability.  On February 15, 2018, however, the Commission took concrete action by issuing a pair of Final Rules, addressing (i) storage participation in regional markets; and (ii) the provision of primary frequency response, a critical grid support service.

On February 2, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) remanded FERC’s decision denying complaints that the ISO New England, Inc.’s (“ISO-NE”) rules locking in prices for new entrants to ISO-NE’s Forward Capacity Market (“FCM”) result in price suppression and discriminatory rates for existing suppliers.  In doing so, the D.C. Circuit held that FERC did not adequately explain why its prior decision to reject a similar proposal did not apply to ISO-NE’s rules.

On February 5, 2018, FERC conditionally accepted a proposal by the PJM Interconnection, L.L.C. (“PJM”) to amend its Open Access Transmission Tariff (“OATT”) and Amended and Restated Operating Agreement (“Operating Agreement”) to accommodate additional pseudo-tied and dynamically scheduled resources into the PJM region.  FERC accepted the proposal and provided an effective date of November 9, 2017, provided that PJM submits a compliance filing addressing FERC’s limited concerns in the order.