On March 24, 2015, the Commission denied Wisconsin Power and Light Company’s (“WPL”) request for waiver of certain provisions of the Midcontinent Independent System Operator’s (“MISO”) Open Access Transmission, Energy and Operating Reserve Markets Tariff (the “MISO Tariff”) dealing with annual capacity obligations. Despite denying WPL’s request, the Commission noted that it was concurrently issuing a separate order to modify the MISO Tariff which would, according to the Commission, provide WPL with the relief it sought.
FERC News
FERC Approves in Part and Denies in Part NERC’s Risk-Based Registration Initiative
On March 19, 2015, the Commission approved in part and denied in part NERC’s Risk-Based Registration (“RBR”) initiative—an initiative aimed at focusing compliance resources on areas that have the greatest impact on the reliability of the Bulk Electric System (“BES”).
FERC Approves Blanket Waiver of Tariff Requirements for an Interconnection Customer’s Interconnection Facilities
On March 19, 2015, FERC issued Order No. 807, which eliminated Open Access Transmission Tariff (“OATT”) requirements, Open Access Same-Time Information System requirements, and the Standards of Conduct requirements, under certain conditions, for the ownership, operation, and control of an Interconnection Customer’s Interconnection Facilities (“ICIF”). FERC stated that the waiver is designed to relieve the burden on ICIF owners while still maintaining the rights of third parties to seek access to available ICIF excess capacity.
FERC Proposes to Revise Exhibit Submission Requirements for Evidentiary Hearings
On March 19, 2015, FERC issued a Notice of Proposed Rulemaking (“NOPR”) that would eliminate the current requirement that participants in a FERC trial-type evidentiary hearing must provide paper copies of all evidentiary exhibits. Instead, FERC proposes to remove this requirement under the NOPR, stating that it will create a more efficient exhibit filing process through direct electronic submission of all exhibits.
U.S. Supreme Court: Notice-and-Comment Procedures Not Needed when Federal Agencies Modify Interpretive Rules
On March 9, 2015, the United States Supreme Court (the “Court”) issued its ruling in Nikols v. Mortgage Bankers Association, holding that federal agencies do not need to issue notice-and-comment procedures when amending or repealing an “interpretive” rule. The impact of this ruling means that federal agencies, including FERC, may modify or repeal their interpretative orders and policy statements without providing notice or a public comment period.
FERC Rejects Illinois Municipal Electricity Agency Waiver from PJM Capacity Rules
On March 9, 2015, FERC rejected the Illinois Municipal Electric Agency’s (“Illinois MEA”) waiver from PJM Interconnection, L.L.C.’s (“PJM”) capacity rules for the 2018/2019 delivery year. As a result, the Illinois MEA cannot use a majority of generation located outside of the Commonwealth Edison Locational Delivery Area (“ComEd LDA”) to meet its capacity obligations of load located within the ComEd LDA.
FERC Approves Algonquin’s AIM Pipeline Project
On March 3, 2015, FERC approved Algonquin Gas Transmission, LLC’s (“Algonquin”) request to construct and operate its Algonquin Incremental Market Project (“AIM”) in New England. As proposed, AIM is a 37-mile pipeline that, along with associated compression facilities, would deliver 342,000 dth/day from existing receipt points in New York to Connecticut, Massachusetts and Rhode Island. In approving the project, FERC dismissed protesters’ environmental concerns, holding that the majority of AIM’s environmental impacts could be reduced through Algonquin’s mitigation plans.
FERC Approves Revisions to Regional Reliability Standards
On March 3, 2015, the Commission approved revisions to two regional Reliability Standards for the Western Electricity Coordinating Council (“WECC”) region, VAR-002-WECC-2 (Automatic Voltage Regulators) and VAR-501-WECC-2 (Power System Stabilizer), along with their associated violation severity levels, violation risk factors, and implementation plans.
FERC Conditionally Approves PJM’s “Multi-Driver” Transmission Planning Process
On February 20, 2015, the Commission conditionally approved PJM Interconnection, L.L.C.’s (“PJM”) proposed modifications to the PJM Operating Agreement (“OA”) and the PJM Open Access Transmission Tariff (“OATT”) to allow for the planning and selection of “Multi-Driver” projects—i.e., transmission enhancements or expansions that address a combination of reliability, market efficiency, and public policy objectives—in the PJM Regional Transmission Expansion Plan (“RTEP”). Additionally, the Commission approved an associated cost allocation method proposed by the PJM Transmission Owners for the newly adopted process. Currently, PJM’s process selects projects based on one factor, but does not have a procedure in place for selecting projects based on a combination of factors.
FERC Rejects PJM’s Request to Compensate Retiring Generators to Remain In-Service
On February 20, 2015, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) proposed tariff revisions to enter into out-of-market capacity contracts to address resource adequacy concerns for the 2015/2016 delivery year because the proposal was “unreasonably vague and ill-defined.” As such, FERC denied PJM’s requested authority to compensate retiring generators to remain in-service. FERC did, however, accept a separate but related resource adequacy waiver request that would allow PJM to retain 2,000 megawatts (“MW”) of capacity that PJM would have otherwise been required to release during the 2015/2016 delivery year.