Academic journal article Energy Law Journal

Report of the Electricity Committee

Academic journal article Energy Law Journal

Report of the Electricity Committee

Article excerpt

This report covers significant electric regulatory orders issued by the Federal Energy Regulatory Commission (FERC) in 2015. This report does not, however, address transmission reliability, demand-side management, renewable energy, FERC enforcement matters, or appellate decisions.*

I. RULEMAKINGS AND POLICY STATEMENTS

A. Third-Party Provision of Primary Frequency Response Service

On February 19, 2015, the FERC issued a Notice of Proposed Rulemaking (NOPR) to allow the sale of primary frequency response at market-based rates (MBR) by sellers with market-based rate authority. The FERC defined "primary frequency response" as "a reserve product that involves dedicating capacity on a generator or other resource for autonomous, automatic, and rapid action to change (within seconds) its output to rapidly dampen large changes in frequency." 1 The FERC explained that the proposal is "in anticipation of the potential interest in purchase of primary frequency response service from third-parties as a result of [the new BAL-003-1] reliability standard that requires a Balancing Authority to maintain (either via self-supply or purchase) a minimum frequency response obligation."2

Specifically, the FERC proposed to revise its MBR regulations to provide that a seller would have a rebuttable presumption that it lacks market power with respect to sales of primary frequency response if the seller passes the existing indicative screens (i.e., the wholesale market share screen and the pivotal supplier screen) used for granting energy and capacity MBR authority for the corresponding geographic market.3 In support of using the existing indicative screens, the FERC found that: (1) "the set of resources technically capable of providing primary frequency response service does not differ significantly from the set of resources represented in the existing market pow er screens;" (2) "the geographic market for a primary frequency response product could be the entir e interconnection within which the buyer resides, and in any event would be no smaller than the geographic market represented in the existing market power screens;" and (3) "there should be no barriers related to transmission scheduling or reservation preventing sellers anywhere within the same interconnection as the buyer from providing effective primary frequency response service to that buyer." 4 The FERC preliminarily concluded that "expanding the rebuttable presumption adopted in Order No. 697 for energy and capacity to include primary frequency response service provides adequate protection that market-based rates charged by public utilities will be just and reasonable and not unduly discriminatory or preferential."5 The FERC also proposed "to update its Electric Quarterly Report (EQR) system to include a specific product name option for primary frequency response service."6 Finally, the FERC did not extend the proposed rule to include frequency regulation or secondary frequency response, which is "produced from either manual or automated dispatch from a centralized control system, generally using the communications and control system known as automatic generation control (AGC)."7

B. Open Access and Priority Rights on Interconnection Customer's Interconnection Facilities

On March 19, 2015, the FERC issued a Final Rule permitting owners and operators of Interconnection Customer's Interconnection Facilities ( ICIF, or commonly, "generator tie lines") to obtain an automatic "blanket" waiver of the Open Access Transmission Tariff (OATT) requirements, the Open Access Same-Time Information System (OASIS) requirements, and the Standards of Conduct. 8 The rule also encourages those seeking to interconnect and receive transmission service over ICIF that are subject to blanket waiver procedures to negotiate service under the relevant procedures for interconnection and transmission under sections 210, 211, and 212 of the Federal Power Act (FPA), 9 and establishes a five-year safe harbor period wherein the FERC will apply a rebuttable presumption that the ICIF has definitive plans to use its capacity without demonstrating through specific plans and milestones. …

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