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On December 16, 2021, the Federal Energy Regulatory Commission (Commission or FERC) issued a final rule amending its regulations governing the dam safety of FERC-licensed hydroelectric projects under the Federal Power Act (FPA).  FERC’s final rule follows its July 16, 2020 Notice of Proposed Rulemaking (NOPR) (see July 21, 2020 edition of the WER), which FERC issued following the 2017 spillway incident at the Oroville Dam and the May 2020 dam failures at the Edenville Dam and Sanford Dam in central Michigan.

The Commission explained that its final rule accomplished four objectives that are essential to improving its dam safety program under part 12 of its regulations.  First, it implements the two-tiered inspection program set forth in the NOPR, which will include a comprehensive assessment and a periodic inspection, each of which will be performed at a 10-year interval.  The comprehensive assessment will be more in-depth than the current part 12 inspections, will formally incorporate the existing Potential Failure Mode Analysis process, and will also require a semi-quantitative risk analysis.  The periodic inspection will be narrower in scope and primarily focused on performance of project works between comprehensive assessments.  This two-tier structure retains FERC’s current five-year interval between part 12 inspections at each Commission-licensed project and is consistent with the Federal Emergency Management Agency’s (FEMA) recommendation that “formal” inspections be conducted every five years.  FERC’s rule explained that this two-tier inspection scheme is similar to those used by the Bureau of Reclamation and the Army Corps of Engineers.…
Continue Reading FERC Finalizes Revisions to Dam Safety Regulations

Summary of NOPR

On September 19, 2019, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) proposing to revise its regulations implementing Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) in light of changes in the energy industry since 1978.[1]…
Continue Reading Executive Summary of FERC’s Notice of Proposed Rulemaking regarding the Public Utility Regulatory Policies Act of 1978

On August 9, 2019, the Federal Energy Regulatory Commission (“FERC”) ruled that hundreds of millions of dollars of ongoing and future investments by Chelan County Public Utility District (“Chelan PUD”) in the Rock Island Hydroelectric Project qualified as early-action investments under the new section 36(c) of the Federal Power Act (“FPA”).  Accordingly, FERC will consider these significant investments when the Rock Island Project undergoes relicensing of its FERC license prior to the 2028 expiration of the license.
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Continue Reading FERC Approves First-Ever Determination on Early-Action Investment Credit Under Section 36 of the Federal Power Act

On December 6, 2016, FERC issued an order partially denying and partially granting a complaint brought by a coalition of transmission customers (“Coalition”) of the Midcontinent Independent System Operator, Inc. (“MISO”). The Coalition argued that MISO misapplied portions of its open access transmission tariff (“OATT” or “Tariff”) regarding the 2016/2017 planning year resource auction. Although the Commission rejected the Coalition’s argument that MISO utilized an unjust and unreasonable methodology for calculating Sub-Regional Export and Import constraints for the 2016/2017 auction, FERC found that prospective application of those methodologies was no longer just and reasonable, and directed MISO to modify its Tariff accordingly.…
Continue Reading FERC Partially Denies and Grants Customer Complaint Regarding MISO Planning Auction and Sub-Regional Export and Import Constraints

On November 30, 2016, FERC issued an order accepting tariff revisions filed by Public Service Company of Colorado (“PSCo”) regarding penalty charges for energy imbalance and generator imbalance services under Schedules 4 and 9 of PSCo’s open access transmission tariff (“OATT”). FERC found the revisions, which PSCo filed to address the influx of variable wind generation on its system, to provide incentives for accurate scheduling from transmission customers.…
Continue Reading FERC Approves PSCo Tariff Revisions Regarding Energy and Generator Imbalance Penalty Charges

On November 29, 2016, FERC granted Midcontinent Independent System Operator, Inc’s. (“MISO”) request for waiver of (1) the $1,000/MWh energy offer price cap (“Offer Cap”) on incremental energy offers in MISO’s day-ahead and real-time energy markets established in its Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”), and (2) the process that MISO’s Independent Market Monitor (“Market Monitor”) uses to establish reference levels for generation resources in MISO. Going forward, MISO resources will be allowed to include costs above the $1000/MWh Offer Cap in their supply offers from December 1, 2016, through April 30, 2017.
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Continue Reading FERC Grants Waiver of MISO Offer Cap for Winter 2016-2017

On November 17, 2016, FERC issued a final rule amending and clarifying its regulations to implement provisions of the Fixing America’s Surface Transportation Act (the “FAST Act”) regarding the designation, protection, and sharing of Critical Energy/Electric Infrastructure Information (“CEII”). In doing so, FERC established criteria and procedures for the designation of CEII, prohibited unauthorized disclosure of CEII, created sanctions for the unauthorized disclosure of CEII by FERC personnel, and permitted the voluntary sharing of CEII among appropriate entities.…
Continue Reading FERC Adopts FAST Act Provisions on Critical Infrastructure Information

On November 17, 2016, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to amend its regulations to require each Regional Transmission Organization and Independent System Operator (“RTO/ISO”) to revise its tariff to: (i) establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, accommodates their participation in organized wholesale electric markets; and (ii) define distributed energy resource aggregators as a type of market participant that can participate in organized wholesale electric markets under the participation model that best accommodates the physical and operational characteristics of its distributed energy resource aggregation. FERC stated that it was taking this action “to remove barriers to the participation of electric storage resources and distributed energy resource aggregations” in RTO/ISO markets, pursuant to its statutory obligation under the Federal Power Act (“FPA”) to ensure that RTO/ISO tariffs are just and reasonable and not unduly discriminatory or preferential.…
Continue Reading FERC Issues NOPR Proposing to Better-Integrate Electricity Storage into Organized Wholesale Markets

On November 17, 2016, FERC issued Order No. 831, revising its regulations regarding incremental energy offer caps imposed by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”). As a result, RTOs and ISOs will be required to cap each resource’s “incremental energy offer”—the portion of an energy resource’s supply market offer that can vary depending on output or demand levels—at the higher of $1,000/megawatt-hour (“MWh”) or that resource’s verified actual or expected cost-based incremental energy offer. RTOs and ISOs must also cap verified cost-based incremental energy offers at $2,000/MWh when calculating locational marginal prices (“LMP”). According to FERC, Order No. 831 will reduce the likelihood that offer caps will suppress LMPs below the marginal cost of production, as well as ensure fair compensation for generators and more efficient resource dispatching from grid operators.…
Continue Reading FERC Revises Offer Caps in Regional Wholesale Electricity Markets

On November 17, 2016, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed modifications to its pro forma interconnection agreements that would require new generating facilities to install and enable primary frequency response equipment as a condition of interconnection. FERC explained that the proposed modifications are intended to address industry-wide reliability concerns related to declining frequency response performance.…
Continue Reading FERC Issues NOPR Proposing to Include Primary Frequency Response Provisions in Pro Forma Generation Interconnection Agreements