Setting the return on equity (ROE) that utility stockholders may earn from providing certain services, primarily electric transmission and pipeline services, is a fundamental aspect of FERC’s cost-of-service regulatory regime.[1] FERC has used the same basic method to determine ROE since the 1980s but recently made some reforms that applied to a few electric transmission … Continue Reading
FERC has approved a final rule that sets a $10 million threshold for requiring FERC prior approval of public utility mergers and consolidations and requires public utilities to simply notify FERC of mergers and consolidations with a value over $1 million but less than $10 million. The changes place mergers and consolidations under the same … Continue Reading
FERC recently proposed to streamline its market power rules so that generators in markets operated by Regional Transmission Organizations and Independent System Operators would no longer need to demonstrate a lack of horizontal market power in order to charge flexible market-based rates. Instead, FERC will rely on the existing market monitoring and mitigation measures approved … Continue Reading
Carbon pricing is seen by many as an effective means of reducing carbon dioxide (CO2) emissions from electricity generation. California and several Eastern states have enacted “cap and trade” emission allowance programs, which have forced generators in those states to pay a price for their CO2 emissions. With the Obama Administration’s Clean Power Plan not … Continue Reading
A recent amendment to the Federal Power Act (FPA) that will become effective March 27, 2019 sets a $10 million threshold for requiring Federal Energy Regulatory Commission (FERC) prior approval of public utility mergers and consolidations. That amendment also calls for FERC to adopt a rule requiring public utilities to simply notify FERC of mergers … Continue Reading
Taking another step toward a comprehensive policy on the participation of electric storage resources and other distributed electric resources (DERs) in wholesale markets run by independent grid operators, FERC has requested additional comments on its proposal regarding aggregating DERs and their potential effects on the bulk power system. FERC’s request follows up on a technical … Continue Reading
Under the Natural Gas Act (NGA), FERC certificates the construction and operation of pipelines to transport natural gas in interstate commerce if they are “required by the present or future public convenience and necessity.” For almost two decades, FERC has used a 1999 policy statement’s guidelines to evaluate whether new pipelines meet that statutory standard. … Continue Reading
FERC has approved a final rule requiring generating facilities that interconnect to the grid to provide primary frequency response.[1] Primary frequency response actions are needed to stop extraordinary deviations from the grid’s target frequency that could cause grid instability. The North American Electric Reliability Corporation, the group responsible for grid reliability standards, said that “(f)requency … Continue Reading
In November 2016, FERC issued a Notice of Proposed Rulemaking (NOPR) that would require new generating facilities to install and operate equipment that provides primary frequency response service to the grid. Based on some of the comments received on the NOPR, FERC issued a request for supplemental comments. The reliable operation of the alternating current … Continue Reading
With two new Commissioners confirmed by the Senate and sworn in, FERC’s seven-month period without a quorum is over and it can get back to business. And with another two nominations now before the Senate with a hearing scheduled for September 7, the agency should be at full strength within the next few months and … Continue Reading
Electric storage resources such as batteries and flywheels are shaping the grid of the future. The ability of these resources to absorb and discharge electricity gives the resources operational flexibility that allows them to provide a variety of services to help keep the power grid in balance. Energy storage installations in the U.S. grew 100% in … Continue Reading
A previous post on this blog reported a complaint by an electric storage resource owner that FERC must reform a Regional Transmission Organization’s (RTO’s) tariff with respect to the treatment of storage batteries. In response, FERC issued an Order that requires the RTO to adopt rules that allow storage resources to participate in all of … Continue Reading
One factor driving the grid of the future is the change in the nation’s electric generator resource mix, such as the retirement of traditional baseload generation and an increasing proportion of variable energy resources, such as wind and solar. This evolution has raised concern that the capability to provide “primary frequency response,” a critical grid … Continue Reading
Electricity storage resources are shaping the grid of the future. Large-scale batteries and flywheels are now able to provide services to grid operators to help keep the bulk power system in balance. Electric storage resources’ ability to absorb and discharge electricity provides them with significant operational flexibility, and they can be designed to provide a … Continue Reading
The Federal Energy Regulatory Commission (FERC) recently launched an initiative that could result in significant changes to the standards used for analyzing whether mergers and acquisitions are in the public interest. In a September 22, 2016 Notice of Inquiry (NOI), FERC identified several broad areas in which its current policies may need reform, made a … Continue Reading
Earlier this year, FERC held four technical conferences to discuss the implications of state, regional and/or federal plans for compliance with EPA’s proposed Clean Power Plan (CPP) rule to set carbon emission limits for existing electricity generating units. A major issue raised was the impact of the CPP on electric grid reliability as coal-fired generators … Continue Reading
Amid concerns regarding the impact on reliability of EPA’s proposed Clean Power Plan (“CPP”), FERC scheduled a series of technical conferences to discuss the impacts of state, regional and/or federal plans for compliance with EPA’s proposed rule. Such plans could affect electric reliability, wholesale electric markets and operations, and energy infrastructure. FERC recently held the … Continue Reading
At the first in a series of technical conferences, industry and government stakeholders yesterday strongly urged FERC to be proactive in helping to shape the EPA’s Clean Power Plan (“CPP”). What remains unclear, however, is precisely how the Commissioners can and will seek to influence a rulemaking over which the Commission lacks jurisdiction. FERC is convening four … Continue Reading
Significant developments have occurred recently in wholesale electricity markets in the lower Midwest and Western regions of the U.S. Earlier this week, the Federal Energy Regulatory Commission approved a substantial expansion of the Southwest Power Pool (SPP). SPP is a FERC-regulated Regional Transmission Organization that administers the grid across a nine-state footprint in the south … Continue Reading
On March 7, 2014, the Federal Energy Regulatory Commission (“FERC”) directed the North American Electric Reliability Council (“NERC”) to develop new standards for the protection of critical elements of the bulk-power system from physical attacks. In recent years there has been considerable attention paid to the potential for cyber-attacks against the transmission grid. Following a … Continue Reading
Earlier this year, the CFTC and FERC announced an information sharing Memorandum of Understanding (MOU) between the two agencies. The agencies have now announced that they have begun sharing market data pursuant to this MOU. In addition, they have created an Interagency Surveillance and Data Analytics Working Group “to coordinate information sharing between the agencies … Continue Reading
On March 1, the Southwest Power Pool (SPP), transitioned to a more sophisticated electricity market design that, according to SPP, is expected to realize up to $100 million in annual net benefits. SPP is a FERC-regulated Regional Transmission Organization that administers the grid across a 370,000 square mile, nine-state footprint in the south central part … Continue Reading
In the latest salvo in an ongoing controversy over state efforts to subsidize local generation capacity development, the Third Circuit in New Jersey Board of Public Utilities v. FERC upheld a final FERC order approving a PJM Interconnection tariff governing its wholesale capacity market. The court denied appeals by the New Jersey and Maryland utility … Continue Reading
The unprecedented spikes in natural gas prices due to the recent harsh winter weather have led FERC to approve temporary yet significant waivers of the pricing rules in the mid-Atlantic and New York organized wholesale electricity markets. Both the PJM Interconnection and the New York ISO attract the resources to keep supply and demand in … Continue Reading
