Reliability

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On June 16, 2022, FERC issued two Notice of Proposed Rulemakings (“NOPRs”) aimed at improving the reliability of the bulk power system against threats of extreme weather. The NOPRs build on the June 2021 Technical Conference on Climate Change, Extreme Weather, and Electric System Reliability, which revealed an industry-wide need to assess current vulnerabilities of the transmission system to weather-related risks.

On May 27, 2022, a divided FERC ultimately agreed to allow ISO New England Inc. (“ISO-NE”) to sunset its current minimum offer price rule (“MOPR”) as part of its capacity market. During the next two capacity auctions, ISO-NE will permit a specified quantity of resources to enter the market without being subject to buyer-side market power mitigation review.  Thereafter, ISO-NE will replace the current MOPR with a reformed buyer-side market power mitigation construct (the “MOPR Reforms”). Each of the five commissioners wrote separately, with Chairman Richard Glick, Commissioners Allison Clements and Willie Phillips, and Commissioner Mark Christie writing in concurrence and Commissioner James Daly writing in dissent.

On November 26, 2021, FERC issued a notice stating that it would not review a Notice of Penalty filed by the North American Electric Reliability Corporation (“NERC”) against Ohio Valley Electric Corporation (“OVEC”). FERC’s November 26 notice effectively approves a $300,000 settlement between OVEC and the regional reliability entity, ReliabilityFirst Corporation (“RF”), for violations of NERC reliability standards FAC-003-4 R2 and FAC-003-4 R6, which address vegetation management. The settlement followed a 4.5-hour outage to one of OVEC’s 345 kV transmission lines in September 2018 that resulted when contact with a cedar tree growing in close proximity tripped the line out of service. OVEC neither admitted nor denied the violations, but agreed to the assessed $300,000 penalty.

On November 16, 2021, staff from FERC, the North American Electric Reliability Corporation (“NERC”), and certain Regional Reliability Entities issued a final report on the 2021 winter storms that severely impacted the bulk electric systems in Texas and the South Central United States. The report recommended, among other things, strengthening regulations and the grid for cold weather preparedness and enhancing coordination between natural gas and electric systems to prevent winter blackouts.

On October 25, the North American Electric Reliability Corporation (NERC) released a report regarding the lessons learned from the electric industry’s response to the novel coronavirus (COVID-19) pandemic. NERC’s report described the industry’s response and provided possible solutions and paths for the industry’s future based on its findings.

On September 23, 2021, the Federal Energy Regulatory Commission (“FERC”) and the North American Electric Reliability Corporation (“NERC”) Staff released their report and recommendations regarding the 2021 Winter Freeze during the September Open Meeting at FERC. In this joint review, Staff reviewed what happened during the freeze, what caused the failure, and outlined various recommendations to prevent similar events in the future.

On July 15, 2021, FERC issued an Advance Notice of Proposed Rulemaking (“ANOPR”) to solicit comments on potential reforms for electric regional transmission planning, cost allocation, and generator interconnection processes. Through public comment, the Commission seeks input on how transmission and interconnection planning and cost allocation procedures can be reformed to facilitate additional renewable energy integration and adjust for increasing demands on the grid. Comments on the ANOPR and replies to Comments are due 75 days and 105 days, respectively, after the ANOPR’s publication in the Federal Register. Following these filings, the Commission may consider whether to issue a formal Notice of Proposed Rulemaking, which would precede any final rule on these issues.

On February 18, 2021, FERC issued two orders terminating the proceedings stemming from the Department of Energy’s (“DOE”) Proposed Rule on Grid Reliability and Resilience (“Proposed Rule”). FERC previously established rulemaking proceedings in Docket No. RM18-1-000 to consider the proposed rule, which was submitted to FERC by the DOE in September 2017 pursuant to the Department of Energy Organization Act section 403 (“DOE Proposed Rulemaking Proceeding”). FERC terminated the DOE Proposed Rulemaking Proceeding on January 8, 2018 (see January 17, 2018 issue of the WER), instead opening an inquiry proceeding in Docket No. AD18-7-000 (“Inquiry Proceeding”) to evaluate the resilience of the bulk power system in the regions operated by regional transmission organizations (“RTOs”) and independent system operators (“ISOs”). On February 18, 2021, FERC: 1) issued an order on rehearing that sustained its decision to terminate the DOE Proposed Rulemaking Proceeding in Docket No. RM18-1-000; and 2) terminated the Inquiry Proceeding in Docket No. AD18-7-000.  Commissioner Neil Chatterjee issued a dissenting opinion in the order terminating the Inquiry Proceeding.

On February 18, 2021, FERC denied a rehearing request for an order it issued in October of 2020 that stated that payments received under the Commercial System Distribution Load Relief Programs (“CSRPs”) may not be excluded from the offer floors for Special Case Resources’ (“SCR”) calculation under the New York Independent System Operator, Inc.’s (“NYISO”) buyer-side market power mitigation (“BSM”) rules. Although FERC denied the request for rehearing, FERC modified and set aside the October 2020 Order in part, finding that the identified CSRPs should be excluded from the calculation of SCR offer floors in NYISO. Commissioners Clements and Christie issued concurring opinions.

On January 20, 2021, President Joseph Biden issued Executive Order No. 13990 (“Executive Order”), which, among other things, suspended Executive Order 13920, “Securing the United States Bulk-Power System” (“Executive Order 13920”) until April 20, 2021 and directed all executive departments and agencies to review and take action to address all actions taken during former-President Donald Trump’s tenure in office that conflict with President Biden’s stated goals of improving public health, environmental protection, reducing greenhouse gas emissions, bolstering resilience to the impacts of climate change, and confronting the climate crisis.