On February 2, 2015, FERC submitted its Fiscal Year (“FY”) 2016 Budget Request for $319,800,000.  This amount is approximately five percent above the FY 2015 Budget Request.  In requesting its budget, FERC sets out its three primary goals: (1) supporting just and reasonable rates, terms, and conditions (“Goal 1”); (2) promoting safe, reliable, secure and efficient infrastructure (“Goal 2”); and (3) mission support through organizational excellence (“Goal 3”). 

On January 22, 2015, the Commission conditionally approved Southwest Power Pool’s (“SPP”) proposed “Market-to-Market” coordination protocols with the Midcontinent Independent System Operator (“MISO”), and, among other things, made determinations on several key issues relating to the protocols that were examined during a technical conference held in September.

On January 16, 2015, FERC issued a notice inviting parties to submit post-technical workshop comments regarding price formation in both the energy and ancillary services markets that are operated by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”).  Previously, FERC Staff conducted a series of technical workshops on September 8, October 28, and December 9, 2014, exploring these same price formation issues (see Sept. 15, 2014 edition of the WER).  FERC’s January notice invites parties to respond to specific questions that will further explore the topics that had been covered in the 2014 workshop series.

On January 22, 2015, FERC issued a proposed policy statement to clarify FERC’s policy regarding the use of hold harmless commitments in Federal Power Act section 203 applications.  Under the proposed policy statement, applicants will still be required to demonstrate that the proposed transaction does not have an adverse effect on rates, but FERC will define with greater specificity what costs will be considered transaction-related costs and how hold harmless commitments will apply.

On January 16, 2015, FERC approved PJM Interconnection LLC’s (“PJM”) request to raise its cap on cost-based energy offers from $1,000/MWh to $1,800/MWh for the winter season.  According to PJM, the increase is designed to ensure that generators can recover all their costs in the event of severe cold during the 2014/2015 winter.  PJM’s requested increase was based on last winter’s highest cost-based offer of $1,725/MWh.

On January 9, 2015, FERC accepted proposed modifications to the ISO New England Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) designed to fully integrate demand response into ISO-NE’s wholesale energy and reserve markets.  The Commission’s action comes several months after the D.C. Circuit’s ruling in Electric Power Supply Association v. FERC in which it vacated FERC Order No. 745—the foundational order in which the Commission required organized wholesale energy markets administered by a Regional Transmission Organization or Independent System Operator to compensate demand response resources at the market price for energy (see May 27, 2014 edition of the WER).

On January 6, 2015, FERC announced the dates of four technical conferences to discuss implications of different compliance approaches to the Environmental Protection Agency’s Clean Power Plan.  The technical conferences will focus on issues related to electric reliability, wholesale electric markets and operation, and energy infrastructure.