On March 30, 2018, FERC issued an order establishing a technical conference and partially granting one of two complaints against various changes to the PJM Interconnection, L.L.C. (“PJM”) frequency regulation market.  In partially granting one complaint, FERC found that PJM’s tariff is unjust and unreasonable in so far as it omits the methodology for calculating certain regulation-related cost curves, as well as the parameters governing certain regulation market signals.  In the forthcoming technical conference, FERC intends to consider both: (1) whether PJM’s recent frequency regulation market changes hamper the full participation of storage resources, for example, to provide regulation services, and (2) whether PJM’s regulation market design as a whole is consistent with prior FERC precedent.

On April 2, 2018, FERC denied a complaint alleging that the interconnection process under Midcontinent Independent System Operator, Inc.’s (“MISO”) tariff was unjust and unreasonable because certain wind generators were experiencing delays in the process, such that those customers would not receive a Generator Interconnection Agreement (“GIA”) in time to receive Federal Production Tax Credit (“PTC”) benefits.  In doing so, FERC found that there was no evidence that MISO was not making reasonable efforts to meet interconnection deadlines, as required by its tariff.  FERC added that prior precedent does not require MISO to ensure wind generators receive their GIA in time to receive full PTC benefits.

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.

On March 28, 2018, FERC partially accepted the Midcontinent Independent System Operator, Inc.’s (“MISO”) Order No. 831 compliance filing (“March 28 Order”).  In Order Nos. 831 and 831-A, FERC required Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to amend their respective tariff provisions governing existing offer caps on incremental energy offers, which FERC determined was necessary to: (1) avoid suppressing Locational Marginal Prices (“LMPs”) below the marginal cost of production; and (2) fully compensate generation resources for the costs incurred to serve load (see November 21, 2016 edition of the WER). 

On March 29, 2018, FERC issued an order accepting proposed modifications to the methodology used to evaluate the availability of resource adequacy (“RA”) resources and resulting charges and payments under the Resource Adequacy Availability Incentive Mechanism (“RAAIM”) administered by the California Independent Operator Corporation (“CAISO”).  In the order, FERC agreed that CAISO’s proposal addressed identified problems such as overweighting certain types of resource adequacy capacity and discouraging parties from providing other types of capacity.

 On March 29, 2018, FERC issued an order granting a limited tariff waiver request by the California Independent System Operator Corporation (“CAISO”) relating to participation requirements for certain demand response resources in the California Public Utilities Commission’s (“CPUC”) Demand Response Auction Mechanism (“DRAM”) with delivery obligations between April-October in 2018 and 2019.  The waiver, which was necessitated by recent changes in CAISO’s resource adequacy program, will allow CPUC-identified DRAM resources to meet their contractual and regulatory obligations.  In granting the waiver, however, FERC stated that DRAM contracts executed after the date of the order and that do not conform with current CAISO requirements should not be eligible for the waiver.

On March 23, 2018, FERC accepted ISO New England Inc.’s (“ISO-NE”) filing to terminate a portion of the Capacity Supply Obligation (“CSO”) for a wind-powered electric generation facility (the “Disputed Portion”) owned by Blue Sky West, LLC (“Blue Sky West”).  Despite protests from Blue Sky West, FERC approved the requested termination, effective March 1, 2018.

On March 20, 2018, FERC extended the time for entities to submit reply comments to the filings submitted by the Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) in the new grid resiliency proceeding.  Several trade associations requested additional time to respond to the “significant” comments that the RTOs/ISOs submitted to FERC, pertaining to the resilience of the bulk power system in their regions.

On March 16, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) affirmed FERC’s (1) reduction in NorthWestern Corporation’s (“NorthWestern”) Schedule 3 regulation service rate by removing “regulation-down” capacity from the rate’s numerator and increasing the denominator to the full nameplate capacity of NorthWestern’s generating facility and (2) decision to order NorthWestern to refund customers the difference between NorthWestern’s proposed rate and FERC’s approved rate.

On March 15, 2018, FERC denied the West Virginia Department of Environmental Protection’s (“West Virginia DEP”) and the West Virginia Division of Natural Resources’ (collectively, “West Virginia”) request for rehearing of FERC’s issuance of original licenses for two hydroelectric projects to be constructed, owned, and operated by FFP Missouri 15, LLC and FFP Missouri 16, LLC (collectively, “FFP”).  Specifically, FERC found that West Virginia waived its certification authority under section 401 of the Clean Water Act (“CWA”) by failing to act on the application within one year of receipt.