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On August 31, 2016, FERC conditionally approved Arizona Public Service Company’s (“APS”) request to amend its market-based rate tariff to facilitate APS’ participation in the western Energy Imbalance Market (“EIM”) administered by the California Independent System Operator Corporation (“CAISO”). Another western utility, Puget Sound Energy (“PSE”) is also expected to join the EIM. With respect to its market-based rate authorization to participate in the EIM, PSE filed a Non-Material Change in Status on March 9 in Docket ER10-2374-010. FERC has not yet acted on this submittal. On October 1, 2016, APS and PSE are expected to begin participating in the EIM alongside existing members—PacifiCorp, and NV Energy—to form a six-balancing authority area EIM footprint. 

On September 7, 2016, FERC accepted the New York Independent System Operator Inc.’s (“NYISO”) proposed revisions to Attachment Y of its Open Access Transmission Tariff (“OATT”) to modify its Public Policy Transmission Planning Process. Additionally, FERC clarified its requirement that NYISO establish a cost allocation methodology for the transmission portion of an “Other Public Policy Project” that is selected during the regional transmission planning process consistent with Order No. 1000.

On September 1, 2016, the Commission granted a petition for waiver filed by the California Independent System Operator Corporation (“CAISO”) requesting permission to treat the Bay Area Rapid Transit District (“BART”) as a Load-Serving Entity (“LSE”) for purposes of eligibility for Congestion Revenue Rights (“CRRs”) and resource adequacy responsibilities under the CAISO Open Access Transmission Tariff (“Tariff”).

On August 25 and 26, 2016, the California Independent System Operator Corporation (“CAISO”) filed Readiness Certifications with the Commission for Puget Sound Energy, Inc. (“PSE”) and Arizona Public Service Company (“APS”), respectively, signaling that PSE and APS are ready to begin participation in the Energy Imbalance Market (“EIM”) administered by the CAISO. According to the CAISO, the expanded, six-Balancing Authority Area (“BAA”) EIM is scheduled to commence on October 1, 2016.

On August 26, 2016, FERC established a proceeding to determine whether transmission owners in the footprint of the PJM Interconnection L.L.C. (“PJM”) are complying with the requirements of Order No. 890. This proceeding follows a November 2015 technical conference in which several PJM transmission customers and other parties suggested that PJM stakeholders are unable to meaningfully participate in the transmission planning process for certain PJM projects, in contravention of Order No. 890’s planning requirements.

On July 21, 2016, FERC issued an order in a proceeding on remand from the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”). In its order, FERC acknowledged that it had committed legal error by accepting, without refund commitment, proposed revisions to the Southwest Power Pool Inc.’s (“SPP”) Open Access Transmission Tariff (“Tariff”) implementing a formula rate for Tri-County Electric Cooperative Inc. (“Tri-County”), and had failed to correct this legal error on rehearing. To remedy its error, FERC directed SPP to bill Tri-County for certain amounts collected under Tri-County’s formula rate, and issue refunds to ratepayers.

On July 27, 2016, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) accepted a compliance filing from ISO New England (“ISO-NE”) that establishes a ten-percent materiality threshold before ISO-NE will mitigate a retirement bid in its annual Forward Capacity Auction (“FCA”). In an April 2016 order, FERC previously accepted a set of proposed revisions to ISO-NE’s Transmission, Markets, and Services Tariff (“Tariff”) regarding capacity market power and FCA prices on the condition that the ISO include a price mitigation threshold for retirement bids (see April 18, 2016, edition of the WER).

On July 21, 2016, FERC issued a final rule (“Order No. 828”) modifying the pro forma Small Generator Interconnection Agreement (“SGIA”) to require newly interconnecting small generators to “ride-through” voltage and frequency variations rather than having those generators disconnect from the larger transmission system. With this final rule, FERC obligates new small generators—those less than 20 MW—to have comparable ride-through capabilities as those currently imposed on their large-scale counterparts through the pro forma Large Generator Interconnection Agreement (“LGIA”). 

On July 21, 2016, the U.S. District Court for the District of Massachusetts (“District Court”) determined that review of a FERC-issued penalty for alleged market manipulation must be treated as an “ordinary civil action” requiring de novo review and finding against FERC’s arguments to the contrary. The District Court further ordered in its decision, FERC v. Maxim Power Corp., et al., that in the corresponding civil action—to determine whether to affirm FERC’s prior penalty assessment against the owners and operators of a power plant in Pittsfield, Massachusetts (“Maxim”) and one of their employees (together, “Respondents”)—the Respondents will be entitled to the full discovery of an ordinary civil case, and the proceeding can be decided by a jury, if necessary. 

On July 21, 2016, FERC issued a declaratory order related to a qualifying facility’s (“QF”) right to sell its capacity and energy pursuant to a legally enforceable obligation under the Public Utilities Regulatory Policies Act of 1978 (“PURPA”). Specifically, FERC held that: (1) regardless of whether a QF has previously sold its renewable energy credits (“RECs”) under a separate contract, a QF has the right to sell its output pursuant to a legally enforceable obligation (“LEO”), and (2) regardless of whether a QF has participated in a request for proposal, a QF has the right to obtain a LEO.