On January 31, 2020, FERC filed its brief in the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) responding to consolidated petitions challenging Order No. 841. Order No. 841—the agency’s 2018 rulemaking that established a regulatory framework for Electric Storage Resources (“ESRs”) including grid-level batteries—is widely hailed as the legal lynchpin for the very recent, significant penetration by ESRs into the U.S. electricity resource mix. Accordingly, the D.C. Circuit proceeding has been closely watched by industry stakeholders as the petitioners seek to vacate important parts of the rule facilitating ESR participation in wholesale markets.

Petitions for review were filed in July 2019 by: (1) the National Association of Regulatory Utility Commissioners (“NARUC” or “State Commissions”); and (2) jointly by the American Public Power Association, National Rural Electric Cooperative Association, Edison Electric Institute, and American Municipal Power, Inc. (“Utility Petitioners”). The Transmission Access Policy Study Group also filed a brief as intervenor in support of petitioners.

On January 23, 2020, FERC accepted New York Independent System Operator, Inc.’s (“NYISO”) proposed revisions to its Tariffs to allow the aggregation of resources, including distributed energy resources (“DERs”), for purposes of participation in the NYISO markets. FERC found that NYISO’s proposed aggregation model (“Aggregation Participation Model”) provided a just and reasonable and not unduly discriminatory framework for such participation.

On January 24, 2020, FERC issued its rehearing order on several different issues regarding the recovery of costs associated with the abandoned Potomac-Appalachian Transmission Highline Project (“PATH”). Previously, in January 2017, FERC reduced PATH’s return on equity (“ROE”) during its abandonment phase from 10.4 to 8.11 percent, and denied PATH’s recovery of expenditures related to certain public relations activities. On rehearing, FERC:

  1. Upheld its prior determination that the project’s abandonment significantly reduced its risk profile;
  2. Declined to address PATH’s arguments that FERC erred in reducing its ROE to 8.11 percent, and instead established a paper hearing addressing whether and how FERC’s proposed revised base ROE methodology should apply; and
  3. Reversed its prior denial for PATH to recover expenditures related to public information campaigns about the benefits and licensing of the project.

On Tuesday, January 28, Democratic leadership from the House Energy and Commerce Committee, and Environment and Climate Change and Energy Subcommittees released legislative text of the draft “Climate Leadership and Environmental Action for our Nation’s (“CLEAN”) Future Act, which aims for the United States to achieve a “100 percent clean economy” no later than 2050.

On January 23, 2020, FERC concluded that a “pricing and dispatch mismatch problem” needs to be resolved before PJM Interconnection, L.L.C. (“PJM”) can revise the fast-start provisions in its Tariff, as previously directed by FERC on April 18, 2019.  Because PJM currently has a stakeholder process addressing the pricing and dispatch mismatch, FERC placed PJM’s fast-start pricing filing in abeyance until July 31, 2020 to allow PJM and its stakeholders the opportunity to fully consider any necessary changes. 

At FERC’s monthly meeting held on January 23, 2020, Commissioner Bernard L. McNamee announced he will not seek reappointment as commissioner after his current term ends on June 30, 2020. Commissioner McNamee indicated that he will serve through the end of his term or later, if needed to help maintain a quorum at FERC in 2020.

On January 10, 2020, FERC issued two separate orders approving Stipulation and Consent Agreements (“Agreements”) between the Office of Enforcement (“Enforcement”) and Emera Energy Incorporated (“Emera Energy”) and Exelon Generation Company, LLC (“Exelon”), respectively. Both Agreements relate to alleged violations of ISO New England Inc.’s (“ISO-NE”) Tariff. Specifically, with respect to Emera Energy, FERC alleged that Emera Energy violated the Tariff’s requirement that evidence supporting Fuel Price Adjustment Requests (“FPA Requests”) must reflect an arm’s length transaction. With respect to Exelon, FERC alleged that Exelon misreported the type and quantity of start-up fuel used by its Mystic 7 generating unit (“Mystic 7”). In both cases, FERC found that the Agreements were in the public interest and the Enforcement investigations were resolved on fair and equitable terms.

On January 14, 2019, FERC issued a letter order accepting, as of October 15, 2019, Midcontinent Independent System Operator’s (“MISO”) proposal to implement a “Fast First” Automatic Generation Control (“AGC”) framework that, as MISO argues, would deploy fast-ramping generation resources more efficiently.  MISO explained that the Fast First AGC framework would better utilize and incentivize fast-ramping resources, including energy storage resources (“ESRs”), for frequency regulation.  MISO stated that, with increased supply-side volatility on its system due to integration of intermittent renewable resources, new AGC signals were needed for better system control and to better utilize the fast response rate of fast-ramping resources.

On January 9, 2020, FERC rejected Constellation Mystic Power, LLC’s (“Mystic”) proposed amendment to its cost-of-service agreement (“Mystic Agreement”) with ISO New England Inc. (“ISO-NE”) that would have provided Mystic the option to unilaterally retire Mystic Generating Station units 8 and 9 (“Mystic Generators”).  FERC found that giving Mystic the option to retire the Mystic Generators early would pose an unacceptable risk to reliability.  Commissioner Glick concurred in part and dissented in part.

On January 14, 2020, FERC accepted revisions to ISO New England, Inc.’s (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”), which update ISO-NE’s Financial Assurance Policy, which aims to ensure that resources achieve commercial operation by the time their relevant Capacity Commitment Period begins.  The revisions alter the methodology used to calculate the financial assurances requirements for resources that have cleared the Forward Capacity Auction (“FCA”) but have not yet achieved commercial operation (“Non-Commercial Resources”), basing it on the Net Cost of New Entry (“Net CONE”) value associated with the FCA, rather than the starting and clearing prices of the FCA.