Transmission

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On July 7, 2023, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an opinion rejecting petitioner Hecate Energy Green County 3 LLC’s (“Hecate”) claim that the New York Independent System Operator (“NYISO”) tariff did not contain sufficient detail to put it on notice that NYISO would assess network upgrade costs resulting from non-jurisdictional projects.  Instead, the Court agreed with FERC that because its tariff gave “fair notice,” NYISO “had not impermissibly adopted a practice that was not in its tariff.”

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.

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.

On March 3, 2023, the House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate Change, and Grid Security Subcommittee Chair Jeff Duncan (R-SC) sent a letter to Acting FERC Chairman Willie Phillips and Commissioners asking the Commission to respond to a series of questions related to FERC’s authority as it relates to two policy statements issued in February 2022 and a Notice of Proposed Rulemaking (“NOPR”) issued in December 2022. The two policy statements concern Greenhouse Gas (“GHG”) emissions of natural gas infrastructure projects (see February 18, 2022 Troutman Pepper Insights; February 23, 2022 edition of the WER). The NOPR would require applicants proposing to build electric transmission infrastructure to prepare Environmental Justice Public Engagement Plans.

On March 16, 2023, FERC granted a petition declaring that, should it issue orders pursuant to Sections 210 and 211 of the Federal Power Act (“FPA”), which would be required for a prospective project to interconnect Puerto Rico’s transmission system to the U.S. mainland bulk electric system, such orders would “not render Puerto Rico’s electric utilities ‘public utilities’ under section 201(e) of the FPA. However, FERC reserved the right to make a fact-specific determination at the time any application for such interconnection is sought and further affirmed that, regardless of “public utility” status, FERC would retain jurisdiction over Puerto Rico’s electric utilities pursuant to sections 210, 211, 211A, 212, and 215 of the FPA.

On February 21, 2023, FERC accepted PJM Interconnection, L.L.C.’s (“PJM”) proposed tariff revisions governing the Locational Deliverability Area Reliability Requirement (“LDA Reliability Requirement”) calculation, effective December 24, 2022, and applicable to the 2024/2025 Base Residual Auction (“BRA”), which was in progress at the time that PJM submitted its filing. Specifically, FERC accepted tariff changes that would allow PJM, during the BRA process, to exclude Planned Generation Capacity Resources from the LDA Reliability Requirement calculation if the addition of such resources materially increases the reliability requirement and such resources do not participate in the capacity auction. The February 21 Order also dismissed as moot a complaint filed by PJM challenging the justness and reasonableness of the existing LDA Reliability Requirement. Finally, the February 21 Order stated that FERC would soon convene a forum to examine the functioning of the PJM capacity market. Commissioner Danly issued a separate dissenting statement.

On January 31, 2023, the Federal Energy Regulatory Commission (“Commission” or “FERC”) granted Great River Energy’s (“GRE”) requested incentive rate treatment for GRE’s investment in the Iron Range Project and Big Stone Project (collectively, “Projects”). Notwithstanding FERC’s approval, Commissioner Christie’s separate concurrence highlighted persistent concerns over the Commission’s incentive rate treatment policy.

On January 27, 2023, FERC approved the Midcontinent Independent System Operator, Inc. (“MISO”) Transmission Owners’ (“TOs”) proposal to terminate reactive power charges and compensation under MISO’s Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”), effective December 1, 2022.  As a result, MISO will no longer charge transmission customers for reactive power service within the standard power range, and no generators, whether affiliated with the MISO TOs or not, will receive compensation for providing reactive power service within the standard power factor range.  Nevertheless, FERC’s determination does not affect MISO generators’ ongoing obligation to provide reactive power.  If MISO directs a generator to provide reactive power outside of the standard power factor range, the generator will be compensated based on existing mechanisms already included in MISO’s Tariff.  

On December 16, 2022, FERC again rejected the Midcontinent Independent System Operator Inc. (“MISO”) proposal for Transmission Owners to self-fund Necessary Upgrades to connect Merchant High Voltage Direct Current (“HVDC”) transmission lines into MISO and addressed arguments on rehearing. Commissioner Danly dissented and Commissioner Christie concurred in separate statements. Chairman Glick did not participate.