Electricity Grid

Recently, the three sitting Commissioners of the Federal Energy Regulatory Commission (FERC) convened thirty industry experts at a virtual Technical Conference on state adoption of carbon pricing and its implementation in organized, wholesale electricity markets managed by regional transmission organizations (RTOs) or independent system operators (ISOs).  Public interest was high, with more than 2,000 computers across the country logged on to the discussion, which stretched over nine hours.  Although no carbon pricing measures have been filed by RTO/ISOs for consideration by FERC, the sense of the Technical Conference was that proposals from states or from RTO/ISOs acting on their own initiative are right around the corner, irrespective of the election outcomes in November.
Continue Reading FERC Takes Close Look at Carbon Pricing

The FERC approved a final rule that will enable distributed energy resource (DER) aggregators to compete in organized wholesale electricity markets.  DERs are located on the distribution system or behind the customer meter and include electric storage resources, intermittent generation, distributed generation, demand response, energy efficiency, thermal storage, and electric vehicles and their charging equipment.  Aggregators will now be able to aggregate multiple small DERs as a single resource to compete in the markets, smoothing the way for many more of such resources to enter the wholesale market.
Continue Reading FERC Opens Electricity Markets to Distributed Resource Aggregators

The Federal Energy Regulatory Commission (FERC) approved tariff terms for a Regional Transmission Operator (RTO) to treat electric storage resources as transmission facilities under certain circumstances.  Previously, FERC approved only one case-specific proposal to treat storage as transmission.  Treatment as a transmission facility provides additional deployment opportunities for storage resources and allows cost recovery through cost-of service transmission rates instead of relying entirely on energy market revenues.  Commissioner James Danly, however, dissented from the tariff order, preferring to maintain the bright line between generation and transmission previously established by FERC.
Continue Reading Electric Storage May Be Treated as Transmission

The FERC recently issued a final rule (Order No. 872) revising its regulations implementing the Public Utility Regulatory Policies Act of 1978 (PURPA), which encourages the development of certain renewable and cogeneration facilities.  PURPA, and FERC’s rules implementing it, establish benefits to those facilities by obligating electric utilities to purchase electricity from them.  As discussed in a prior post to this blog, FERC considered reforming its regulations due in part to changes in the electric power industry over the last several decades.
Continue Reading FERC Revises PURPA Rules

The Federal Energy Regulatory Commission (FERC) recently signaled that it is exploring ways to improve the cybersecurity of the U.S. electricity grid.  On June 18, 2020, FERC issued a Notice of Inquiry (NOI) regarding whether some of its reliability standards regarding cybersecurity must be enhanced and whether the focus of its standards must change due to the threat of a coordinated cyberattack targeting geographically distributed generation resources.  On June 18, 2020, FERC also issued a staff paper that suggests a framework for providing incentives in transmission rates for cybersecurity investments.

These FERC actions may presage regulatory actions that could have material operational and cost implications for all grid participants.  Accordingly, FERC is seeking comments on both documents with deadlines of August 24, 2020 for the NOI and August 17, 2020 for the staff paper.  Major grid participants would be well advised to evaluate the NOI and staff paper and consider responding to FERC’s request for comments.
Continue Reading FERC Requests Comments on Grid Cybersecurity Initiatives

The Federal Energy Regulatory Commission (FERC) has scheduled a conference on September 30, 2020 regarding carbon pricing in organized wholesale electricity markets.  According to the conference notice, the purpose is to discuss “considerations related to state adoption of mechanisms to price carbon dioxide emissions…in regions with FERC-jurisdictional organized wholesale electricity markets.”  This conference should be of significant interest to a wide range of market participants and their investors, plus consumers of electricity, state policymakers and other diverse interests.
Continue Reading FERC Carbon Pricing Conference Set

State regulation of net metering may be a thing of the past if a recent petition filed by the New England Ratepayers Association (“NERA”) with the Federal Energy Regulatory Commission (“FERC”) is granted.  NERA’s petition requests that FERC (1) find that there is exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter (such as rooftop solar facilities), and (2) order that the rates for such sales be priced in accordance with the Public Utility Regulatory Policies Act of 1978 (“PURPA”) or the Federal Power Act (“FPA”), as applicable.
Continue Reading A Sale Is A Sale: NERA Asks FERC To Regulate Net-Metering

A diverse group of stakeholders filed a request with the Federal Energy Regulatory Commission (FERC) to convene a public conference to discuss integrating carbon pricing into U.S. organized regional wholesale electricity energy markets.  The group says it is not asking FERC to direct carbon pricing but instead to gather a wide range of stakeholders to discuss the technical and implementation issues raised by incorporating carbon pricing policies into the organized wholesale markets operated by Regional Transmission Organizations (RTOs).
Continue Reading FERC Carbon Pricing Conference Urged

The Federal Energy Regulatory Commission (FERC) has announced two conferences to address issues raised by the increasing deployment of electric storage resources and their use in electricity markets.  One conference will address a proposal by a Regional Transmission Operator (RTO) to treat an electric storage facility as a transmission-only resource if it can resolve specific transmission issues.  The second conference will discuss issues raised by hybrid resources, i.e., a storage resources paired with a generation resources.  These conferences should be of interest to a wide range of electricity market participants, including utilities, generation companies, customers and investors in storage and other electricity resources.
Continue Reading FERC Conferences to Address Electric Storage Issues

The Federal Energy Regulatory Commission (FERC) has proposed substantial changes to its policies for awarding ratemaking incentives for new transmission investment.  The most fundamental change is that FERC would no longer award incentives based on a proposed project’s risks and challenges but would instead award them based on its economic and reliability benefits.  In addition, the incentive for a higher return on equity for project investment would be potentially more generous than under the current policy.  FERC’s proposal should be of interest to utilities, transmission-only companies, market participants who pay transmission rates, customers and investors interested in developing transmission projects.
Continue Reading FERC Considering Changes to Transmission Incentives