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Today was a big day for the solar power industry at the Federal Energy Regulatory Commission (FERC).

In its monthly open meeting, FERC announced two decisions that significantly impact the industry — one involving PURPA and the other related to PJM’s Minimum Offer Price Rule (MOPR).

First, FERC reversed its Broadview Solar decision issued in…

Yesterday, the Federal Energy Regulatory Commission (FERC) issued Order No. 872 and implemented the largest overhaul to FERC’s regulations affecting Qualifying Facilities (QFs) in more than a decade.  The order itself is 491 pages in length and there remain plenty of details to unpack in its implementation (including future proceedings to come at the FERC…

On Friday, July 10, 2020, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) upheld the Federal Energy Regulatory Commission’s (“FERC”) Order Nos. 841 and 841A, which established a framework for electric storage resources’ (“ESRs”) participation in wholesale markets. The D.C. Circuit rejected the petitioners’ arguments that FERC exceeded its jurisdictional boundaries and…

On April 2, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) took several additional actions in response to the COVID-19 pandemic.  These actions supplemented FERC’s previous actions on March 19.  In addition to the actions identified below, Chairman Chatterjee highlighted two additional procedural options for obtaining more formal enforcement or compliance-related guidance: standards of conduct waivers and no-action letters.  Two FERC staff task forces were created to expeditiously process standards of conduct waiver requests and no-action letters, and contact information is available for the appropriate staff on FERC’s website: here, here, and here.
Continue Reading FERC Takes Additional Actions to Address Coronavirus Pandemic

On March 19, 2020, the Federal Energy Regulatory Commission (FERC or the Commission) announced several updates to their operations in response to the Coronavirus pandemic.  Chairman Chatterjee held a press conference and stated that FERC is fully functioning via the telework process and expects to continue to be able to complete its work considering matters…

In February 2018, as part of its efforts to remove barriers for electric storage resources, the Federal Energy Regulatory Commission (FERC) issued its final rule on electric storage participation in organized markets (Order No. 841).  Order No. 841 directed Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) to revise their tariffs to establish a…

The Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued two orders on July 18, 2019 revising the requirements applicable to market-based rate (“MBR”) sellers.  The first, Order No. 861, lightens the regulatory requirements for MBR sellers in certain RTO/ISO-administered markets by eliminating the requirement to submit indicative screens in the horizontal market power analysis in initial MBR applications, triennial updates, and change-in-status notices.  The second, Order No. 860, may also lighten regulation by reducing the amount of ownership information MBR sellers must report to the Commission, but also imposes new reporting requirements, including submissions to a relational database that will be maintained by FERC Staff to link MBR sellers and their affiliates.

Order No. 861

Order No. 861 eliminates the requirement that MBR sellers in RTO/ISO-administered energy, ancillary services, and capacity markets subject to FERC-approved RTO/ISO market monitoring and mitigation submit indicative horizontal market power screens.  Instead, a seller may include a statement in its filing that it is relying on FERC-approved market monitoring and mitigation to mitigate any potential market power.  With the exception of MBR sellers making capacity sales in CAISO and SPP, discussed below, this will lighten regulation on MBR sellers in ISOs/RTOs by eliminating the requirement to submit indicative screens in their initial MBR applications, triennial updates, and change-in-status notices.

The exemption will not apply to MBR sellers making capacity sales in CAISO or SPP, because CAISO and SPP do not have an RTO/ISO-administered capacity market.  In addition, the Commission determined that MBR capacity sellers in CAISO and SPP can no longer rely on the rebuttable presumption that FERC-approved RTO/ISO market monitoring and mitigation is sufficient to address horizontal market power concerns for their capacity sales in CAISO and SPP.  Therefore, SPP and CAISO capacity sellers must still submit indicative screens and, now, any seller that fails the indicative screens must submit a delivered price test or other evidence that it lacks market power in the capacity markets.  CAISO and SPP sellers will be able to rely on Order No. 861’s exemption for their sales of energy and ancillary services.

The order is effective September 24, 2019 and FERC Staff announced that the new rules will be applicable to triennial reviews for the Northeast region due in December 2019 and June 2020.Continue Reading FERC Issues Orders Revising Requirements for Market-Based Rate Sellers

The Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an order on May 1, 2019 denying rehearing of its orders asserting concurrent jurisdiction with a bankruptcy court over wholesale power contracts.

In January, prior to Pacific Gas & Electric (“PG&E”) filing for bankruptcy, NextEra Energy, Inc. and Exelon Corporation both filed complaints and petitions for declaratory orders from FERC, requesting that the Commission find that PG&E could not abrogate, amend, or reject in a bankruptcy proceeding any rates, terms, and conditions of its FERC-jurisdictional wholesale power contracts without first obtaining approval from the Commission.  The Commission quickly issued a brief order holding that a party to a FERC-jurisdictional wholesale power contract must obtain approval from both the bankruptcy court and the Commission  to reject a contract and modify the filed rate, respectively.  PG&E then filed its petition for bankruptcy and initiated an adversarial proceeding against FERC, requesting preliminary and injunctive relief.  That matter has continued to play out in the Northern District of California and there has not yet been a resolution by the bankruptcy court.  Meanwhile, PG&E requested rehearing of the Commission’s decision.  The Commission’s order on rehearing offers a more in-depth analysis of its jurisdiction.

The order first highlights the distinct roles that FERC and a bankruptcy court play in evaluating wholesale power contracts.  While FERC’s role is to protect the public interest, the bankruptcy court’s role is to provide a path to rehabilitate debtors.  The Commission held that the existence of bankruptcy proceedings does not alter its obligation, and exclusive authorization, to consider whether wholesale rates are just and reasonable. 
Continue Reading FERC Reaffirms Concurrent Jurisdiction Over PPAs in Bankruptcy

The Federal Energy Regulatory Commission (“FERC”) issued a Notice of Proposed Rulemaking (“NOPR”) on December 20 proposing changes to its regulations regarding the horizontal market power analysis required for market-based rate (“MBR”) sellers.  The proposed rulemaking picks up on an earlier effort in Order No. 816 to ease the regulatory burden on MBR sellers in RTO/ISO markets.  The current proposal would eliminate the need for certain MBR sellers to submit indicative screens with their initial MBR application, triennial updates, and change in status notices.  The exemption would apply to all MBR sellers in RTO/ISO markets with RTO/ISO-administered energy, ancillary service, and capacity markets subject to FERC-approved RTO/ISO market monitoring and mitigation.  For RTO/ISO markets that lack an RTO/ISO-administered capacity market (that would be CAISO and SPP), MBR sellers would be exempt from the requirement to submit indicative screens if their MBR authority is limited to sales of energy and/or ancillary services.  FERC also proposed eliminating the rebuttable presumption that FERC-approved RTO/ISO market monitoring and mitigation is sufficient to address horizontal market power concerns for capacity sales in CAISO and SPP.

Background

MBR sellers are currently required to submit two indicative screens, a pivotal supplier screen and a wholesale market share screen, in their initial MBR applications, change in status notices, and any updated market power analyses. Passage of both screens creates a rebuttable presumption that the seller does not have horizontal market power.  If a seller fails either screen, it is presumed to have horizontal market power.  To rebut the presumption of market power, the seller must present evidence through a delivered price test or other means to show that it does not possess market power.  However, sellers in an RTO/ISO market who fail the screens have an alternative.  They may instead rely on FERC-approved RTO/ISO market monitoring and mitigation to address market power concerns.  In 2014, FERC issued a NOPR proposing to eliminate the indicative screen requirement for those RTO/ISO sellers because it yielded little practical benefit due to their ability to rely on RTO/ISO market monitoring and mitigation.  FERC decided not to act on that proposal in Order No. 816 but stated that it may consider the issue in the future.

The Current NOPR

In the current NOPR, FERC states that the indicative screens provide marginal additional market power protections given that FERC has found that RTO/ISO market monitoring and mitigation adequately mitigate a seller’s market power and FERC has access to other data regarding horizontal market power. FERC notes that all RTOs/ISOs have mitigation provisions for energy offers.  While not all RTOs/ISOs have market power mitigation provisions for ancillary services, concerns about market power in ancillary service offers are mitigated through the mitigation of energy offers, since ancillary service prices are based on the opportunity cost of not generating energy.  Finally, ISO-NE, NYISO, PJM, and MISO all have capacity markets with FERC-approved market power mitigation.
Continue Reading FERC Issues NOPR to Eliminate Horizontal Market Screens for Certain MBR Sellers