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FERC approved new changes to the CAISO tariff on February 19, 2019, with a retroactive effective date of November 27, 2018, that will impact projects in the CAISO’s generator interconnection queue. These changes are the result of a several month stakeholder initiative to enhance the interconnection process and follow a history of reforms intended to…

The CAISO is proposing several changes to the Resource Adequacy framework that will be relevant to generators both within and outside of California. CAISO is in the initial stages of developing their policy changes and it is a good time to voice concerns or offer suggestions before the changes are solidified.  We expect more than…

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

In February, FERC issued Order 841, Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators (the “Order”), requiring RTOs and ISOs to establish new market participation rules for energy storage that recognize the physical and operational characteristics of these resources. While the Order set forth some minimal requirements that…

Stoel Rives’ Energy Team has been monitoring and providing summaries of key energy-related bills introduced by California legislators since the beginning of the 2017-2018 Legislative Session. Legislators have been busy moving bills through the legislative process since reconvening from the Summer Recess. For any bill not identified as a two-year bill, the deadline for each house to pass the bill and present it to the Governor for signature or veto was September 15, 2017. Below is a summary and status of bills we have been following.

An enrolled bill is one that has been through the proof-reading process and is sent to the Governor to take action. A two-year bill is a bill taken out of consideration during the first year of a regular legislative session, with the intent of taking it up again during the second half of the session.

  • Of particular note here is SB 100, California’s pitch for 100 percent renewable energy, failed to move to the next stage of the process and is kicked to next year.
  • Our next blog post, after October 15, will provide an update on whether those bills sent to Governor Brown were signed or vetoed.

Continue Reading Updates to Energy Related Bills in the 2017-2018 California Legislative Session

On April 4, 2017 (NextEra Desert Center Blythe, LLC v. FERC, Case No. 16-1003 (“NextEra”)), the DC Circuit issued a decision remanding back to the Federal Energy Regulatory Commission (“FERC”) orders denying NextEra Desert Center Blythe, LLC’s (“NextEra”) complaint against the California Independent System Operator Corporation (“CAISO”) regarding the allocation of congestion revenue rights (“CRRs”) under the CAISO tariff. The DC Circuit’s ruling was narrow, based on finding ambiguity in the relevant contract and tariff provisions where FERC determined there was none. The court’s decision highlights the importance of addressing potential regulatory cost recovery options in a FERC-jurisdictional contract.
Continue Reading Generator Receives Another Shot at Obtaining CAISO Congestion Revenue Rights

The East Kern Wind Resource Area (EKWRA)–it’s a mouthful–and it’s also a hotbed for renewable energy development and the location of a fight over millions of dollars among Southern California Edison (SCE), the California ISO, and independent power developers (IPPs).  Late last week, the Federal Energy Regulatory Commission (FERC) scored that fight in favor of…