On October 30, 2023, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) revisions to its wheeling tariff provisions. The revised provisions allow external load serving entities to obtain, in advance, on a monthly and daily basis, rights to transmit electricity (also known as “wheeling”) through self-schedule priorities equal to the scheduling priority of CAISO demand. The revised provisions also update CAISO’s calculation of Available Transfer Capability (“ATC”).

On October 13, 2023, PJM Interconnection, L.L.C. (“PJM”) submitted two filings with FERC proposing revisions to its Open Access Transmission Tariff (“Tariff”) and its “Reliability Assurance Agreement” (“RAA”) designed to improve resource adequacy and grid reliability. PJM requested the Commission to accept both filings concurrently, with an effective date of December 12, 2023, so that PJM may implement the proposed reforms for the upcoming Base Residual Auction (“BRA”) associated with the 2025/2026 Delivery Year.

On October 20, 2023, the U.S. Department of Energy (“DOE”) released the National Transmission Needs Study, a triennial report that assesses electric transmission capacity constraints and congestion on a national scale. While similar to previously issued triennial reports, the 2021 Bipartisan Infrastructure Law expanded the study’s scope to also consider anticipated future transmission constraints and congestion. The study assessed needs through 2040 and revealed a pressing need for additional transmission infrastructure to promote reliability in the face of a shifting resource mix, with the largest benefits stemming from increases to interregional transfer capacity.

On October 19, 2023, FERC issued a Notice of Proposed Rule Making (“NOPR”) proposing various changes to its Electric Quarterly Report (“EQR”) filing requirements. According to FERC, the proposed changes are designed to update the data collection process, improve data quality, increase market transparency, decrease costs of preparing necessary data for submission, and streamline compliance with future filing requirements. The following is a summary of the primary reforms proposed.

On October 19, 2023, FERC accepted ISO New England Inc.’s (“ISO-NE”) proposal to allow electric storage facilities to be planned and operated as transmission-only assets (“SATOAs”) to address system needs identified in the regional system planning process. FERC determined that the ISO-NE’s proposal established a just and reasonable framework for electric storage resources to be considered a transmission asset for regional planning purposes and thus be eligible for cost-based rate recovery.

On October 19, 2023, FERC issued a final rule directing the North American Reliability Corporation (“NERC”) to develop or modify reliability standards to address reliability concerns attributable to inverter-based resources (“IBRs”)—i.e., solar photovoltaic, wind, fuel cell, and battery storage resources. FERC explained that the current reliability standards were designed for a grid mostly comprised of synchronous resources, where all generators are operating at the same frequency across the grid. In recent years, there has been a substantial increase in renewable generation, such as wind and solar, which is largely nonsynchronous, meaning generators that do not operate at the same frequency as the synchronized grid. Nonsynchronous resources are often programmed to trip offline during system disturbances, resulting in the potential loss of significant amounts of generation at one time. FERC issued this order in response to the “unprecedented proportion of nonsynchronous resources” expected to connect to the grid in the coming years and the “material impact” of IBRs on the Bulk Power System, including at least 12 documented events where IBRs responded “unexpectedly and adversely” to normally cleared line faults and the largest IBR-related disturbance NERC has ever recorded. The rule directs NERC to submit the updated standards by November 4, 2026.

On September 29, 2023, FERC approved Tennessee Gas Pipeline Company, L.L.C.’s (“TGP”) proposal to lease intrastate capacity from Kinder Morgan Texas Pipeline LLC (“Kinder Morgan”) to offer a new hourly transportation “PowerServe” service. According to the parties’ joint application, PowerServe will offer increased flexibility to shippers serving gas-fired power generation facilities that backstop renewable energy sources. Commissioner Danly concurred in part and dissented in part with a separate statement that has not been issued at the time of this article.

On September 21, 2023, the Commission found that J.P. Morgan Investment Management Inc. (“J.P. Morgan Investment”) is an affiliate of Mankato Energy Center, LLC and Mankato Energy Center II, LLC (“Mankato Companies”) through their upstream owner, IIF US Holding 2 LP (“IIF US Holding 2”) because there is liable to be an absence of arm’s-length bargaining in transactions between Mankato Companies and J.P. Morgan Investment.  In doing so, FERC considered, among other things, the power delegated by IIF US Holding 2 to J.P. Morgan Investment, which serves as IIF US Holding 2’s investment advisor.  Commissioner Danly concurred in the result in a separate statement, and Chairman Willie Phillips concurred in a separate statement.

On September 21, 2023, the Commission issued separate orders on show cause proceedings finding that the existing tariffs of the California Independent System Operator Corporation (“CAISO”), ISO New England Inc. (“ISO-NE”), and the New York Independent System Operator, Inc. (“NYISO”) remain just and reasonable as to their collateral requirements for financial transmission rights (“FTR”) market participants. On the contrary, the Commission continued to find that Southwest Power Pool, Inc.’s (“SPP”) tariff appears to be unjust, unreasonable, and unduly discriminatory and therefore directed further briefing on a list of specific questions or for SPP to explain what changes to its tariff it believes would remedy the concerns identified by the Commission, within 60 days of the order.

On September 21, 2023, the Commission approved, in part, PJM Interconnection L.L.C.’s (“PJM”) proposed tariff revisions regarding the calculation of the Financial Transmission Right (“FTR”) credit requirement (“September Order”). PJM’s revisions, among other things, would calculate collateral based on a historical simulation model (“HSIM”) instead of a historical value model. FERC accepted the proposal with the exception of PJM’s proposed 97% confidence interval in the HSIM model, and instead required PJM to use a 99% confidence interval.