On March 28, 2024, the Midcontinent Independent System Operator, Inc. (“MISO”) submitted a filing to the Federal Energy Regulatory Commission (“FERC”) proposing revisions to its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to implement a direct loss of load (“DLOL”) based accreditation methodology.  The DLOL methodology will be used to accredit resources for MISO’s annual Planning Resource Auction and to determine a load serving entity’s resource adequacy for each season during the applicable year.  According to MISO, the proposal will better account for how different resources bolster grid reliability during stress periods.  MISO requests that the tariff revisions take effect on September 1, 2024.

We are pleased to publish our latest white paper, entitled “Driving Change: Scaling Up EVs in the U.S.” The report highlights the challenges of expanding electric vehicles (EVs) and EV battery manufacturing in the U.S. Outdated infrastructure and divergent state and federal environmental regulatory structures are identified as key hurdles.

On March 21, 2024, FERC issued a Notice of Inquiry (“NOI”) seeking additional information on whether the Commission should continue to allow interstate pipelines to package “high value” capacity with non-contiguous and operationally unrelated parcels of capacity in a single auction or open season, thus requiring interested bidders to bid on both segments of capacity.  Initial comments on the NOI are due by June 20, 2024.

On March 21, 2024, FERC proposed to prohibit transmission providers from being compensated through their transmission rates charges for reactive power that is within the standard power factor range from generating facilities.  Similarly, FERC proposed to revise both the large generator interconnection agreement (“LGIA”) and small generator interconnection agreement (“SGIA”) to remove the requirement that a transmission provider pay an interconnection customer for reactive power within the standard power factor range if the transmission provider pays its own or affiliated generators for the same service.  If the Notice of Proposed Rulemaking (“NOPR”) becomes final as proposed, transmission providers would only be required to pay an interconnection customer for reactive power when the transmission provider asks the interconnection customer to operate its facility outside the standard power factor range set forth in its interconnection agreement.

On March 21, 2024, the Senate Committee on Energy and Natural Resources held a hearing to consider President Biden’s three recent nominations to the Federal Energy Regulatory Commission (“FERC” or “Commission”): (1) David Rosner for the term expiring June 30, 2027; (2)Lindsay S. See for the term expiring June 30, 2028; and (3)Judy W. Chang for the term expiring June 30, 2029.Rosner is an energy industry analyst at FERC and led efforts related to the Commission’s rulemaking on energy storage resources, electric transmission, offshore wind integration, fuel security, and natural gas-electric coordination. See is the Solicitor General of West Virginia, and manages West Virginia’s civil and criminal appellate dockets, with a focus on regulatory and administrative law matters. Chang is an energy economics and policy analyst and was the former Undersecretary of Energy and Climate Solutions for Massachusetts, where she set policies for the Commonwealth’s energy sector.

Executive Summary

On March 21, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 2023-A (Final Rule), which reaffirmed aspects of Order No. 2023 — the Commission’s landmark order updating its generator interconnection procedures. As detailed further in this summary, the Commission largely upheld Order No. 2023, including some of the more controversial aspects of the order, such as penalties and the transmission capacity “heat map,” and provided further clarity on other aspects.

On February 15, 2024, FERC approved two new extreme cold weather Reliability Standards EOP-011-4 (Emergency Operations) and TOP-002-5 (Operations Planning).

This approval is the culmination of a joint inquiry and November 2021 report (“Report”) among FERC, the North American Electric Reliability Corporation (“NERC”), and regional entity staff into a February 2021 cold weather reliability event that affected Texas and the South-Central United States, which was the largest controlled firm load shed event in U.S. history.  The Report recommended reliability standard enhancements to improve extreme cold weather operations, preparedness, and coordination.

At the February 15, 2024, FERC open meeting and in four orders issued the same day, FERC established a new policy governing its issuance of preliminary permits under section 4(f) of the Federal Power Act (“FPA”), pursuant to which it will not issue preliminary permits for projects located on Tribal lands if the Tribe on whose land the project is proposed to be located opposes the permit. FERC explained that this policy change is based on the agency’s commitment to ensuring that Tribal concerns and interests are considered whenever FERC’s actions or decisions have the potential to adversely affect Tribes or Tribal trust resources. To avoid future permit denials, FERC emphasized that potential applicants should fully inform Tribes about proposed projects on their lands before filing the permit application.

On January 30, 2024, FERC approved, subject to condition, PJM’s proposal to reform its Reliability Pricing Model, including resource adequacy risk modeling, capacity accreditation, testing requirements for capacity resources, and the Capacity Performance stop loss (“Modeling Enhancements Filing”). In that same order, FERC approved PJM’s proposal to replace its previously effective average Effective Load Carrying Capability (“ELCC”) capacity accreditation method with a marginal approach, effective December 12, 2023. The order directed PJM to submit a compliance filing to make certain revisions to its proposal, which PJM subsequently submitted on February 16, 2024. Additionally, on February 6, 2024, FERC rejected a companion PJM proposal to modify the rules governing its Market Seller Offer Cap and Capacity Performance construct and adopt a forward-looking Energy and Ancillary Service (“EAS”) offset for purposes of calculating the Minimum Offer Price Rule (“MOPR”) and offer cap.

On December 19, 2023, the U.S. Court of Appeals for the Sixth Circuit (“Sixth Circuit”), in Electric Power Supply Association; PJM Power Providers Group v. FERC, held that the former Chair of the Federal Energy Regulatory Commission (“FERC”), Richard Glick, exceeded his authority when he reinstated market design features including a stepped demand curve and an $850/MWh price ceiling for the PJM Interconnection, L.L.C. (“PJM”) Reserve Market, without the backing of his colleagues.  This ruling was made by a split Sixth Circuit.  In addition, on February 7, the Sixth Circuit denied Petitioners’ request for panel rehearing of the opinion.