On February 20, 2018, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) proposal to, among other things, (1) eliminate biddable points at zone nodes, certain generator nodes, certain aggregate nodes, and individual load zones for Increment Offers (“INCs”) and Decrement Bids (“DECs”) and instead align the eligible trading points for INCs and DECs with nodes where generation, load, or interchange transactions are settled, or at trading hubs where forward positions can be taken; and (2) allow trading of Up-to-Congestion transactions (“UTCs”) at hubs, residual metered load, and interfaces, but not at individual nodes.

On February 21, 2018, FERC accepted PJM Interconnection, L.L.C.’s (“PJM”) Order No. 825 compliance filing, subject to condition.  In Order No. 825, FERC directed each regional transmission organization (“RTO”) and independent system operator (“ISO”) to align settlement and dispatch intervals, and modify certain rules regarding when shortage pricing is triggered.

On February 14, 2018, FERC accepted a suite of system functionality enhancements to the Energy Imbalance Market (“EIM”) proposed by the California Independent System Operator Corporation (“CAISO”).  The enhancements, which became effective the following day, included automated matching of import/export schedule changes between resources inside and outside the EIM, as well as allowing EIM entities to use CAISO’s settlement process to address base energy transfer differences.  As CAISO explained in its proposal, the requested enhancements will improve the EIM overall, as well as facilitate the entrance of Powerex Corp. and Idaho Power Company into the market on April 4, 2018.

On February 15, 2018, FERC issued a notice that staff will hold a technical conference on April 10-11, 2018 to discuss the participation of distributed energy resources (“DER”) in markets operated by Regional Transmission Organizations and Independent System Operators.  As FERC stated in the notice, the two-day conference will host…

In an order issued February 15, 2018 (“February 15 Order”), FERC found that several transmission owners participating in the PJM Interconnection, L.L.C. (“PJM”) market have been acting inconsistently with FERC Order No. 890, and that certain terms and conditions in PJM’s Open Access Transmission Tariff (“OATT”) are unjust and unreasonable.  In particular, FERC concluded that the PJM transmission owners’ planning processes ran afoul of the coordination and transparency principles in Order No. 890 by allowing the incumbent transmission owners to bypass input and, effectively, competition, from other transmission planning stakeholders.  FERC ordered the transmission owners to revise the OATT and Operating Agreement in compliance with Order No. 890.

In response to concerns regarding the changing nature of the nation’s energy supply portfolio and the emergence of promising energy storage technologies, the Commission in recent years issued several notices of inquiry, notices of proposed rulemaking, and policy statements regarding various energy storage and ancillary service supply issues.  Additionally, the Commission considered but ultimately declined to pursue the Department of Energy-initiated rulemaking on grid resiliency and reliability.  On February 15, 2018, however, the Commission took concrete action by issuing a pair of Final Rules, addressing (i) storage participation in regional markets; and (ii) the provision of primary frequency response, a critical grid support service.

On February 12, 2018, the White House issued its proposed framework for an infrastructure bill to Congress.  Notably, the White House’s infrastructure plan proposes to (1) establish a firm deadline of 21 months for lead agencies to complete their National Environmental Policy Act (“NEPA”) reviews and an additional 3 months thereafter to approve or deny a permit (i.e., a decision on an interstate natural gas pipeline project or hydropower license application must be made within 2 years of the application); and (2) amend the Clean Water Act (“CWA”) to set a deadline for a state agency to determine whether a CWA section 401 certificate application is complete.

On February 2, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) remanded FERC’s decision denying complaints that the ISO New England, Inc.’s (“ISO-NE”) rules locking in prices for new entrants to ISO-NE’s Forward Capacity Market (“FCM”) result in price suppression and discriminatory rates for existing suppliers.  In doing so, the D.C. Circuit held that FERC did not adequately explain why its prior decision to reject a similar proposal did not apply to ISO-NE’s rules.

On February 5, 2018, FERC conditionally accepted a proposal by the PJM Interconnection, L.L.C. (“PJM”) to amend its Open Access Transmission Tariff (“OATT”) and Amended and Restated Operating Agreement (“Operating Agreement”) to accommodate additional pseudo-tied and dynamically scheduled resources into the PJM region.  FERC accepted the proposal and provided an effective date of November 9, 2017, provided that PJM submits a compliance filing addressing FERC’s limited concerns in the order.

On February 2, 2018, FERC conditionally granted FirstEnergy Service Company (“FirstEnergy”) a limited waiver of certain market-based rate affiliate restrictions to allow for the establishment of a centralized regional transmission organization (“RTO”) interface group.  The affiliate restrictions protect captive customers from potential harm if a franchised public utility interacts with its affiliates in ways that would transfer benefits to the affiliate to the detriment of the captive customer.  FERC granted the waiver to FirstEnergy, with the condition that it must keep sufficient records to permit the Commission to audit whether FirstEnergy’s representations that it would not harm captive customers are true.