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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

On November 4, 2016, FERC issued an order denying a complaint filed by HORUS Central Valley Solar 1, LLC and HORUS Central Valley Solar 2, LLC (jointly, “HORUS”) against the California Independent System Operator Corporation (“CAISO”). In the complaint, HORUS requested that the Commission prevent CAISO from imposing interconnection procedures and study requirements in addition to those already imposed on HORUS by the Western Area Power Administration (“WAPA”). In denying the complaint, FERC reaffirmed its existing policy that generators must obtain transmission service at or beyond the point where facility ownership changes, as well as beyond the interconnection point with the wider integrated grid. Because HORUS sought to connect to WAPA-owned interconnection facilities, and those facilities in turn interconnected with CAISO, HORUS was required to comply with both WAPA’s and CAISO’s interconnection procedures.
Continue Reading FERC Upholds Applicability of CAISO Interconnection Procedures for Third-Parties Directly Interconnecting to WAPA-Owned Facilities

On November 4, 2016, the U.S. Court of Appeals for the D.C. Circuit (the “D.C. Circuit”) rejected Sierra Club’s arguments that FERC’s environmental review under the National Environmental Policy Act of 1969 (“NEPA”) of Cheniere Energy Inc.’s (“Cheniere”) Corpus Christi, Texas liquefied natural gas (“LNG”) export project (the “Corpus Christi Project”) was inadequate. Notably, the D.C. Circuit held that FERC does not have to address the indirect environmental effects of anticipated exports of LNG in its NEPA review because the U.S. Department of Energy (the “DOE”) has sole authority to approve the export of natural gas.
Continue Reading D.C. Circuit Denies Review, Upholds FERC Approval of Corpus Christi LNG Facility

On November 4, 2016, FERC conditionally accepted revisions to the Southwest Power Pool, Inc.’s (“SPP”) Open Access Transmission Tariff (“Tariff”) designed to clarify and consolidate SPP’s processes regarding “out-of-merit” energy, which refers to energy that is specifically dispatched to address operational situations that cannot be resolved by market systems. The Tariff revisions are effective August 10, 2016.
Continue Reading FERC Accepts SPP Tariff Revisions for “Out-of-Merit” Energy Processes