The Federal Energy Regulatory Commission (FERC) will host its October open meeting later this week on Thursday, October 19, 2023. FERC’s Sunshine Notice agenda indicates FERC intends to act on several items of note to the electricity industry, including a rulemaking on inverter-based resources and a rulemaking on Electric Quarterly Reports. FERC also looks set to rule on filings relating to a proposal by ISO New England (ISO-NE) to adopt criteria for the use of storage as a transmission-only asset in its region, compliance with FERC Order No. 881 relating to transmission and dynamic line ratings, and a solar project seeking a waiver to permit it to extend its commercial operation date beyond the date contemplated by its interconnection agreement and related tariff. Below we provide a brief preview of these notable agenda items up for consideration at this month’s open meeting.
1. Reliability Standards to Address Inverter-Based Resources, Docket No. RM22-12.
In November 2022, FERC issued a noticed of proposed rulemaking (NOPR) proposing to direct the North American Electric Reliability Corporation (NERC) to develop new or modified reliability standards for inverter-based resources (which include most types of renewable energy and storage resources) to address certain reliability gaps. The NOPR identified several reliability gaps, including: data sharing, model validation, planning and operational studies, and performance requirements. This agenda item suggests FERC may be ready to adopt a final rule or issue a supplemental proposal on the NOPR.
2. Revisions to the Filing Process and Data Collection for the Electric Quarterly Report, Docket No. RM23-9.
Electric Quarterly Reports (EQRs) are quarterly compliance reports required to be filed by public utilities and FERC-jurisdictional sellers of wholesale electricity to summarize each filer’s contractual terms and conditions in agreements for all jurisdictional services, including cost-based sales, market-based rate sales, and transmission service, as well as transaction information for short-term and long-term market-based power sales and cost-based power sales. While this proceeding is new and the Sunshine Notice does not provide any detail on FERC’s planned action, we anticipate this agenda item indicates FERC’s intent to issue a NOPR or Notice of Inquiry (NOI) proposing revisions to the EQR filing and data collection processes.
3. ISO New England, Inc, Docket Nos. ER23-739 and ER23-743.
Late last year, ISO-NE filed a proposal to revise its Transmission, Markets and Services Tariff and Transmission Operating Agreement to enable electric storage facilities to be planned and operated as transmission-only assets. According to the ISO’s proposal, under current arrangements, ISO-NE’s regional system planning process doesn’t allow for the consideration of electric storage facilities as regulated transmission solutions, in part because electric storage facilities have historically been treated as market resources. The proposal seeks to allow the ISO to consider electric storage facilities on par with traditional wires-based regulated transmission solutions. In a subsequent revision to its proposal, the ISO indicates that storage as a transmission-only asset would be selected through the regional system planning process only if 1) the storage resolves a transmission system need that is not, or would not be resolved by, a market response; and 2) the system is operated at the direction of the ISO to address the transmission system need. We anticipate that FERC will issue an order responding to the ISO’s proposal.
4. Various Orders Addressing FERC Order No. 881 Regarding Transmission Line Ratings and Dynamic Line Ratings, Docket Nos. ER22-2318, ER22-2882, and ER22-2989.
FERC Order No. 881, issued in December 2021, requires transmission providers to take certain steps to improve the accuracy of transmission line ratings. Transmission line ratings refer to a transmission line’s maximum transfer capability which can vary significantly based on physical and environmental conditions and produce major effects on the cost of wholesale energy. While traditional transmission line ratings consider some environment factors over longer periods of time, some argue that dynamic line ratings (DLRs) produce a more accurate result as DLRs consider a greater number of environmental factors in near-real time. Order No. 881 stopped short of mandating DLR implementation, but requires regional transmission organizations and independent system operators—like ISO-NE and the New York ISO—to establish systems and procedures to allow transmission owners to use DLRs if they choose to. The Sunshine Notice agenda indicates that FERC will issue orders in response to several FERC Order No. 881 compliance filings, including those submitted by MATL LLP, Western Interconnect LLC, and Wilderness Line Holdings, LLC.
5. Twelvemile Solar Energy, LLC, Docket No. ER23-2603
In August, Twelvemile Solar Energy, LLC, filed a petition for a limited waiver of certain sections of its Interconnection Agreement and the Southwest Power Pool, Inc. Open Access Transmission Tariff to provide a 28-month extension to its Commercial Operation deadline. Twelvemile’s petition states the extension is necessary due to supply chain disruptions, which have prevented the company from securing the photovoltaic panels for its 100 MW solar facility in time to achieve COD by December 1, 2023. Twelvemile argues in its petition that, absent an extension, the company will forfeit its interconnection queue position along with $2.7 million it has paid for interconnection upgrades related to its proposed facility. We expect that FERC will issue an order in response to this Twelvemile’s petition, and potentially set a precedent for other renewable developers that have experienced supply chain-related constraints.
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We’ll continue to monitor these items and look forward to previewing future Open Meeting agenda items of note to the electric industry.
