The California Independent System Operator Corp. (“CAISO”) is moving forward on a slate of proposals which are intended to enhance grid reliability.  These proposals include addressing issues related to generation retirement, entering into a specific reliability must-run contract, modifications to incentives related to the resource adequacy program, as well as adjusting the compensation given to its Board of Governors (the “Board”).  On November 2, 2017, the Board approved the four proposals, and CAISO will file any resulting tariff related changes with FERC at a later date.  

On November 3, 2017, FERC largely denied rehearing requests from a group of generation developers (“Generation Developers”) regarding the Midcontinent Independent System Operator, Inc.’s (“MISO”) revisions to its Generator Interconnection Procedures (“GIP”) and its pro forma Generator Interconnection Agreement (“GIA”).  With the exception of one issue, FERC otherwise rejected the Generation Developers requests that FERC reconsider prior MISO revisions regarding the efficiency and timeliness of MISO’s generator interconnection queue process contained in Attachment X of its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”).

On October 20, 2017, FERC approved the California Independent System Operator Corporation’s (“CAISO”) proposal to revise tariff language as it relates to the procurement and cost allocation of black start capability.  Under the proposed changes, black start capability will be redefined as a reliability service instead of an ancillary service, with costs for black start services to be allocated to the participating transmission owner in the service area the resource is located.  The revisions will go into effect on November 1, 2017.

On October 31, 2017, FERC accepted proposed revisions to the ISO New England, Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) to incorporate a methodology for interconnection request cluster studies, which were filed by ISO-NE, the New England Power Pool Participants Committee, and the Participating Transmission Owners Administrative Committee on behalf of the Participating Transmission Owners (collectively, the “Filing Parties”).  Under the new revisions, which became effective on November 1, 2017, interconnection requests for resources located in the same electrical part of the ISO-NE system and that meet certain other criteria, will be studied together, as opposed to individually.  As part of the stakeholder discussions preceding the filing, ISO-NE developed a strategic infrastructure study to identify the transmission upgrades needed to interconnect remotely-located wind resources in Maine, which will serve as the first cluster study to proceed under the newly-accepted methodology.

On November 1, 2017, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied a petition from the Sierra Club challenging the Department of Energy’s (“DOE”) approval of liquified natural gas (“LNG”) exports from three facilities.  In doing so, the D.C. Circuit rejected arguments made by the Sierra Club that the DOE did not properly fulfill its obligations under the National Environmental Policy Act (“NEPA”) and the Natural Gas Act (“NGA”).

On November 2, 2017, the U.S. Senate confirmed the nominations of Kevin McIntyre and Richard Glick to join FERC.  McIntyre will serve as Chairman once he is officially sworn in.  Together, McIntyre and Glick will fill the five-member Commission board for the first time since October 2015.

On October 25, 2017, FERC conditionally accepted the Midcontinent Independent System Operator, Inc.’s (“MISO”) December 16, 2016 proposed revisions to the MISO Tariff, which were designed to improve the efficiency of MISO’s process for charging interconnection customers for “Quarterly Operating Limit” studies.  FERC directed MISO to provide additional clarity in its proposed Tariff language and submit a compliance filing within thirty days.

On October 25, 2017, FERC issued an order explaining the market consequences when a resource loses certain participation rights in the New York Independent System Operator, Inc. (“NYISO”) Installed Capacity (“ICAP”) market.  The order on clarification, which was requested by NRG Power Marketing LLC and GenON Energy Management, LLC (collectively, “NRG”), followed a January 27, 2017 decision in which FERC largely accepted NYISO’s proposed revisions to its Market Administration and Control Area Services Tariff (“Tariff”) to correct a pricing inefficiency in its ICAP market design.  As FERC clarified in this most recent order, when a capacity resource loses its ability to participate in NYISO’s ICAP market, certain benefits or discounts tied to that participation ability—here, a so-called “Locality Exchange Factor”—fall away.

On October 23, 2017, FERC approved San Diego Gas & Electric Company’s (“SDG&E”) and Sempra Gas & Power Marketing, LLC’s (“Sempra”; collectively, “Applicants”) request for authorization for SDG&E to purchase Resource Adequacy capacity at market-based rates from its affiliate, Sempra, pursuant to a competitive solicitation process.  In doing so, FERC concluded that the solicitation did not unduly favor Sempra and thus satisfied FERC’s concerns regarding affiliate abuse.

On October 25, 2017, FERC released a final report regarding whether its policies materially burden the development and use of domestic energy resources (“Final Report”).  While FERC concluded that most agency actions are not materially burdensome or are necessary to administer its statutory mandates, FERC recommended certain changes to licensing processes, exemption processes, and determinations on deficient applications for hydropower resources.