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On October 11, 2016, FERC issued an order on the refund liability of Midwest Generation, LLC (“Midwest”) for violating FERC-approved settlement agreement terms regarding reactive supply and voltage control service. Of note, although FERC approved Midwest’s total refund obligation calculation of over $3.6 million, it declined to exercise its primary jurisdiction over whether Midwest should be responsible to pay the portion of this obligation that accrued before the utility’s debts were discharged in an April 2014 bankruptcy proceeding. Instead, FERC directed Midwest to pay the refund amounts that accrued following the bankruptcy proceeding, which totaled around $1.7 million.

On October 7, 2016, FERC rejected Midcontinent Independent System Operator, Inc.’s (“MISO”) submitted revisions (“Compliance Revisions”) to Schedule 2 for Reactive Supply and Voltage Control from Generation or Other Sources Service of its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to comply with FERC’s June 16, 2016 order to show cause (“Show Cause Order”). Going forward, MISO must amend its Compliance Revisions and resubmit within sixty days.

On October 13, 2016, FERC found that the M2 Milestone Payment in the Midcontinent Independent System Operator, Inc. (“MISO”) interconnection process should apply to all interconnection customers, including generators external to MISO that want to participate in MISO’s capacity and energy markets through network resource interconnection service—External Network Resource Interconnection Service (“E-NRIS”) and Network Resource Interconnection Service-only (“NRIS-only”) customers. The M2 Milestone Payment is a payment that interconnection customers entering the final phase of MISO’s interconnection process are required to make to MISO, and is used to help alleviate the costs of necessary network upgrades and restudies that are shifted to other interconnection customers in the event that an interconnection customer withdraws from the interconnection queue.

On October 3, 2016, FERC denied La Paloma Generating Company, LLC’s (“La Paloma”) complaint (“Complaint”) requesting that FERC order the California Independent System Operator Corporation (“CAISO”) to designate the portion of La Paloma’s generating capacity that is not currently designated as resource adequacy capacity as reliability must-run (“RMR”) units.

On September 30, 2016, FERC granted a Southwest Power Pool, Inc. (“SPP”) petition for waiver of certain provisions of the SPP Open Access Transmission Tariff (“Tariff”) in order to provide the option of a payment plan to entities affected by SPP’s delayed implementation of a revenue crediting process for transmission upgrades.

On September 30, 2016, FERC accepted the change in status filing submitted by Puget Sound Energy, Inc. (“Puget”) and certain affiliated generators. The filing informed FERC that Puget intended to join the Energy Imbalance Market (“EIM”) administered by the California Independent System Operator Corporation (“CAISO”) beginning on October 1, 2016. FERC accepted the change in status filing and authorized Puget to transact at market-based rates (“MBR”) in the EIM, based on Puget’s market power analysis submitted (and supplemented) as part of the change in status filing.

On October 3, 2016, FERC clarified that Order No. 827’s reactive power requirements for newly interconnecting non-synchronous generators do not apply to all existing non-synchronous generators making upgrades that require interconnection requests. FERC further clarified that, instead, transmission providers may propose changes to their tariffs to define “newly interconnecting non-synchronous generators” to include repowering an existing generator. 

On September 26, 2016, the Commission approved revisions to the California Independent System Operator Corporation (“CAISO”) Open Access Transmission Tariff (“Tariff”) that create a new product in the CAISO real-time market for “flexible ramping”—meaning a generation resource’s ability to rapidly change its output, upward or downward, to respond to a change in forecasted net load. While the Commission approved the new product, which will replace CAISO’s existing “flexible ramping constraint,” effective October 1, 2016, the CAISO subsequently requested on September 28, 2016 that the Commission suspend the effectiveness of the Tariff revisions for one month, until November 1, 2016. That request remains pending before the Commission.

On September 27, 2016, FERC issued an order denying a request for a limited tariff waiver filed by the Midcontinent Independent System Operator Inc. (“MISO”). MISO filed its request to waive certain eligibility requirements for participation in MISO’s price volatility make-whole payment program as part of an attempt to compensate Entergy Arkansas, Inc. (“Entergy Arkansas”) for insufficient revenue returns following several manual re-dispatches of two Entergy Arkansas nuclear units in 2014. In its order, FERC rejected MISO’s request, indicating that generators are ineligible for the program when their units do not meet the flexibility requirements, and that waiver of such requirements was not appropriate in this case.

On September 26, 2016, FERC approved a settlement between FERC’s Office of Enforcement (“Enforcement”) and Maxim Power Corp. (“Maxim”), Maxim Power (USA), Inc., Maxim Power (USA) Holding Company Inc., Pawtucket Power Holding Company, LLC, and Pittsfield Generating Company, LP (“Pittsfield”; collectively, the “Respondents”) requiring Maxim to make a disgorgement payment of $4 million to ISO New England Inc. (“ISO-NE”) and a civil monetary payment of $4 million. The settlement resolves FERC’s petition to enforce penalties against Maxim for market manipulation based on misrepresentation of fuel prices in the District Court of Massachusetts (the “District Court”), which had ordered the parties to participate in a full civil trial, as well as Enforcement’s separate non-public investigation into Maxim for market manipulation based on falsely inflating its recurring Energy charge (the “Investigation”).