Capacity Market FERC ISO-NE MISO PJM West

More Recent FERC Decisions: Week of May 9th, 2016

May 13, 2016

By Tim Murphy, Program Assistant, Sustainable FERC Project & John Moore, Senior Attorney, Sustainable FERC Project

FERC approves tariff changes, allowing western EIM expansion

April 29th, 2016 – In a step forward to growing Western power markets, FERC authorized Arizona Public Service and Puget Sound Energy to begin participating in the energy imbalance market this fall. Energy imbalance markets pool electricity generation within a region and dispatch resources in very short time intervals, which in turn decreases required reserve levels, increase the economic efficiency of the region’s power markets, and reduce renewable integration costs. In FERC’s APS and Puget Sound decisions, FERC allowed the utilities to generate their resources outside of their normal footprints, as long as they remotely connect to their balancing authority areas. The current energy imbalance market includes CAISO, PacifiCorp, and NV Energy, covering parts of seven states.

FERC orders ISO-NE to clarify composite offer rules for capacity auctions

May 2nd, 2016 –FERC denied Dominion Services’ request for a rerun of ISO-New England’s capacity auction held in February of 2016. However, FERC ordered ISO-NE to resolve a discrepancy in its tariff that prohibited Dominion’s new capacity from entering into the capacity auction. Dominion had argued that ISO-NE’s tariff did not call for composite offers between new capacity and existing capacity at the same resource generator in order to make the new capacity eligible to participate in the auction. ISO-NE, in contrast, had argued that three separate provisions in its tariff disqualified Dominion’s additional capacity from entering the auction. FERC’s decision requires NE-ISO 60  to submit a new compliance filing with new tariff language in 60 days.

FERC reaffirms MISO’s cost recovery rules for “reliability must run” power plants, rejects calls for data transparency

May 3rd, 2016 – Rejecting all requests for rehearing, FERC affirmed earlier orders allocating costs for keeping several Michigan power plants on line for reliability while MISO and others identify permanent solutions allowing the plants to retire. (The three plants are the 431 MW Presque Isle, 25 MW Escanaba, and 40 MW White Pines plants. Escanaba has since closed). Earlier FERC orders had required MISO to reform its cost allocation process to ensure that the costs are allocated to the customers actually benefitting from the power plants (and whose demand would trigger reliability problems in the absence of those plants). FERC reaffirmed MISO’s new cost allocation process. However, FERC rejected calls for MISO to release the data underlying MISO’s SSR compensation rates. Separately, FERC ordered MISO to submit a refund report within 45 days of the order explaining how MISO would refund those utilities that were overcharged under MISO’s earlier, unlawful cost allocation process.

FERC denies nearly all appeals in the challenging of PJM’s capacity market overhaul

May 10th, 2016 – FERC denied nearly all appeals (in FERC-speak, rehearing requests) challenging various aspects of its approval of PJM’s capacity market overhaul on May 10, the evening prior to the start of PJM’s main annual capacity auction. This is unfortunate because PJM’s capacity market rule changes limit (and will soon largely exclude) participation by variable renewable and demand-side resources. As demonstrated by last year’s series of auctions (which implemented the first phase of PJM’s rule changes), the new rules have and will continue to increase prices for electricity consumers — to the tune of billions of dollars. PJM justified its expensive rule changes on reliability grounds, but as Chairman Bay pointed out in a very strong dissent – it’s unclear whether consumers will be getting the reliability they are paying for.

For more background on PJM’s capacity market changes and our involvement, please see this series of blogs: