Reliability

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On July 13, 2018, pursuant to section 205 of the Federal Power Act (“FPA”), FERC accepted and set for hearing a cost-of-service agreement between Constellation Mystic Power, LLC (“Mystic”), Exelon Generation Company, LLC (“Exelon”), and ISO New England Inc. (“ISO-NE”) providing cost-of-service compensation to Mystic for continued operation of two gas-fired generating units (“Mystic 8 and 9”) to ensure fuel security in New England.  Commissioners Powelson and Glick dissented.

On July 2, 2018, FERC denied ISO New England Inc.’s (“ISO-NE”) request for waiver of its Transmission, Markets, and Services Tariff (“Tariff”) and instituted a Federal Power Act (“FPA”) section 206 proceeding because, according to FERC, the Tariff may be unjust and unreasonable.  Specifically, ISO-NE requested waiver of certain provisions in its Tariff in order to delay the retirement of two generating units owned by Exelon Generation Company, LLC (“Exelon”) for fuel security purposes.  FERC denied the waiver request and preliminarily found that the Tariff did not sufficiently address specific regional fuel security concerns. 

Three recent FERC staff decisions (“Decisions”) confirm that, for purposes of establishing the mandatory licensing requirements under the Federal Power Act (“FPA”), groundwater is not a “non-navigable Commerce Clause stream.”  Thus, a hydropower project—and particularly a closed-loop pumped storage project—that uses only groundwater as its water source will not require FERC licensing if the project does not trigger other jurisdictional tests under the FPA.

On May 17, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to approve Reliability Standard TPL-007-2 (Transmission System Planned Performance for Geomagnetic Disturbance Events) submitted by the North American Electric Corporation (“NERC”).  Geomagnetic disturbance (“GMD”) events result from charged particles ejected from the sun that interact with and cause changes in the earth’s magnetic fields, impacting flows on electric power systems and potentially causing voltage instability and equipment failure.

On May 4, 2018, FERC approved the joint petition filed by the North American Electric Reliability Corporation (“NERC”), Midwest Reliability Organization (“MRO”), and SERC Reliability Corporation (“SERC”) (collectively “Petitioners”) requesting FERC approvals for the dissolution of the Southwest Power Pool Regional Entity (“SPP RE”), and the transfer of the registered entities within the SPP RE footprint to MRO and SERC (“Joint Petition”).

On May 1, 2018, FERC staff held a technical conference on local transmission planning within the California Independent System Operator Corporation (“CAISO”) footprint.  The conference comes at a time when two California utilities, Pacific Gas and Electric Company (“PG&E”) and Southern California Edison Company (“SCE”), have transmission planning issues before the Commission, and also following FERC’s recent order addressing compliance with Order No. 890 in the PJM Interconnection, L.L.C. (“PJM”) region (see February 20, 2018 edition of the WER).

On May 2, 2018, staff from FERC, the North American Electric Reliability Corporation (“NERC”), and the NERC Regional Entities (the “Joint Study Team”), issued a joint report titled “FERC-NERC-Regional Entity Joint Review of Restoration and Recovery Plans” (“Joint Report”), which evaluated blackstart resources and planning by a representative sample of nine volunteer utilities registered with NERC (the “Participants”).  According to the Joint Report, the Participants verified that they currently have sufficient blackstart resources in their system restoration plans, as well as comprehensive strategies for mitigating against loss of any additional blackstart resources going forward.  The Joint Report also made a number of recommendations for users, owners, or operators of the bulk-power system (“Registered Entities”) and others responsible for system restoration.

In two orders concurrently issued on April 17, 2018, FERC reaffirmed its jurisdiction over the participation of energy efficiency resources (“EERs”) in wholesale electricity markets and accepted an EER-related tariff filing from PJM Interconnection, L.L.C. (“PJM”).  In one order, FERC denied rehearing and granted clarification of a December 1, 2017 order (“Declaratory Order”) asserting jurisdiction over EERs, rejecting claims that FERC had overstepped its “directly affects” jurisdiction under the Federal Power Act (“FPA”), and in the second order, FERC applied that understanding to find PJM’s proposal to integrate EERs into PJM’s wholesale markets just and reasonable.

On April 3, 2018, FERC pre-approved numerous utilities’ request to enter into certain future transmission system related transactions in the event of a catastrophic grid reliability event (“Triggering Event”).  As a result, participant-utilities in the Regional Equipment Sharing for Transmission Outage Restoration Agreement (“RESTORE Agreement”) are eligible to purchase certain replacement transmission system equipment (the “Proposed Transactions”) from other participant-utilities if there is a Triggering Event that impacts transmission service capabilities.  In addition, FERC also granted the utility-applicants’ (“Applicants’”) request for waiver of certain affiliate purchase restrictions in the event that qualifying transactions between affiliates becomes necessary.