On October 2, 2017, FERC issued notice of the September 29, 2017 Notice of Proposed Rulemaking (“NOPR”) from the United States Department of Energy (“DOE”) under section 403 of the Department of Energy Organization Act. In the NOPR, DOE urges FERC to act quickly to enact rules requiring regional transmission organizations and independent system operators (“RTOs/ISOs”) to provide just and reasonable rates for “fuel-secure” generation units (seeOctober 2, 2017 edition of the WER). Shortly thereafter, on October 4, FERC staff issued a Request for Information, listing various questions for commenters to address in aiding the Commission to better understand the NOPR’s implications. Commenting parties have until October 23, 2017 to file initial comments and until November 7, 2017 to file reply comments. In recent testimony before the Senate’s Committee on Energy and Natural Resources, FERC General Counsel, James Danly, confirmed that FERC intends to review the comments and take final action within 60 days of the NOPR’s publication, as requested by the DOE.
In the October 4 Request for Information, FERC staff provided five different sets of questions to elicit more information from Commenters on how the DOE NOPR might impact organized electricity markets and grid reliability and resiliency. Staff stated that parties need not answer all the questions and may raise issues not otherwise presented in the Request for Information.
The first question set addressed whether there is, in fact, a need for reform, and whether operational and market-focused actions by RTOs and ISOs have sufficiently addressed the DOE’s stated resiliency concerns. Second, staff posed questions about how to determine generator eligibility for reliability- and resiliency-based cost recovery, and whether such eligibility criteria should, for example, extend beyond the coal and nuclear units primarily contemplated in the NOPR. Third, staff requested comments on how cost recovery could be implemented in the RTO/ISO energy and capacity markets and, fourth, at what rate. Finally, FERC staff set out miscellaneous questions ranging from the minutia, such as the NOPR’s cost estimates, to the more foundational, such as whether other alternative approaches could accomplish the NOPR’s stated goals.
The NOPR, and all filings to date, can be found in FERC Docket No. RM18-1-000. A copy of the October 2, 2017 Notice of the NOPR can be found here, and a copy of the October 4, 2017 Request for Information can be found here.
This article first appeared in the Washington Energy Report, hosted by Troutman Sanders LLP.