FERC Rulemaking State Of Play – Renewables

Federal Energy Regulatory Commission (FERC) – observers have their eyes on recent reports that Senator Joe Manchin, Chairman of the Committee on Energy and Utilities Lightning, will not schedule a hearing on Chairman Richard Glick’s reappointment this year, meaning Glick will leave FERC when his term expires in January 2023. Glick has led FERC in reforms to modernize the country’s transmission system and help bring renewables and energy storage online. If he leaves, four commissioners will remain — two Republicans and two Democrats — and three votes will be needed to decide. President Biden will choose one of two Democrats, Willie Phillips or Allison Clements, to be the leader.

Although Glick’s position on the Commission is in limbo, the wheels of administrative progress can continue to (openly) turn. Our special regular initiatives – Notice of Public Policy (NOPR), Communications Update NOPR, and Regional Transmission Operator (RTO) and independent contractor (ISO) implementation of Order 2222- may affect jobs in New York and New England. But they can slow down or even fall into a separate Commission.

Notice of Disclosure of Consent

In April 2022, FERC issued a Communication NOPR, which if adopted, among other things, tries to solve the problem of cost allocation for regional transmission projects. Specifically, the law would require transmission providers to allocate costs to certain transmission areas through (1) a regionally determined cost allocation system, (2) a “state agreement” process in which states can voluntarily agree on a cost-sharing method, or (3) a combination of the two. Although cost allocation is often an issue for state governments and ISOs, it affects project time and is therefore important for developers, too.

Speakers at last month’s New England Electricity Restructuring Roundtable, hosted by Foley Hoag, addressed this issue of transmission reform, cost sharing being one of them. Speakers—FERC Chairman Richard Glick, MA Department of Public Utilities Chairman Matthew Nelson, NY State Energy Research and Development Authority Chairman Doreen Harris, NJ Board of Public Utilities General Counsel Abraham Silverman, Midcontinent Independent System Operator (MISO ) Vice President of System Planning Aubrey Johnson, and ISO New England (ISO-NE) Vice President of System Planning Robert Ethier—found that the current approach to transmission planning falls short of helping states to meet their renewable energy goals. President Glick and President Nelson identified the need for more long-term planning, including envisioning what the mix will look like 20 years from now and planning spread according to the forecast.

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Developing a transmission plan is essential for decarbonizing the grid while maintaining reliability, so this activity is top of mind for regulators and leaders across the energy system. More transmission capacity is needed in New York to bring renewable energy that is being built into the state’s grid to help fund the retirement of New York City’s fired fossil fuels and help support for State Safety and Community Protection Directors. Additional transmission capacity is needed in New England to bring power generated from offshore wind farms under development from their interconnection points near the coast. to the mainland. Massachusetts DPU President Nelson noted at the Roundtable that transmission is central to achieving Massachusetts’ goals.

Law enforcement: Dozens of parties have submitted initial comments and responses to the NOPR, which are due in August and September, respectively. FERC’s final rule on transmission planning, if issued, could represent a new chapter for regional transmission cost sharing and long-term transmission planning. It remains to be seen, however, whether President Glick’s departure could affect whether or not the decision is made.

Connection NOPR

FERC has also set its sights on reforming the interconnection process. In June 2022, he issued a Consultation NOPR, which, among other things, called for the creation of a “pre-plan, pre-work” study group process for the proposal connected. In this process, transmission providers will carry out joint research for many generations, instead of separate research for each site, and the shovel plan will move forward. ahead of the line. The proposed changes are to address the interaction between the interactions and influence the project’s thinking. They are also meant to prevent cascading research, in which operators must constantly adjust the feasibility and reliability of tasks in the queue based on the tasks ahead. released.

Fixing these issues will be an important development for developers with practical projects. As the Roundtable panelists noted, interaction backlogs can leave developers stuck in a “death spiral of relaxation” as tasks cannot be handled with outsourced tasks. . According to President Glick, nationally, projects take approximately 3.7 years in the telecommunications network. And there’s nothing the developers can do about the wait. At New York Independent System Operator, Inc. (NYISO), the developer can expect to be in the connection process for 2-3 years from the connection request before the end of the Class Year (i.e., the research on the major impact on the system by a group of projects). At ISO-NE, projects face a similar timeline from the initial request to the expected date of commercialization. These undesired delays can disrupt construction projects in New York and New England by increasing costs and injecting uncertainty into project timelines.

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Law enforcement: The guidelines launched in October generally supported the reforms, although many also warned against a one-size-fits-all approach for all RTOs and ISOs. The response deadline has been extended to December 14, 2022, due to the volume of FERC comments received. The final rule is expected to be published in the first half of 2023 – again, subject to the uncertainty surrounding Chairman Glick’s departure from the Commission.

Order 2222 Compliance

Although FERC issued Rule 2222 two years ago, it remains a hot topic (and controversial) at the Commission. Executive Order 2222 is intended to help ease restrictions on allowing distributed energy resources (DER) — think solar, etc. — to participate in the wholesale market. The order requires ISOs and RTOs to submit plans to allow DERs to access those markets. However, ISOs and RTOs are stuck in a seemingly never-ending loop of complying with information and requesting additional information as they try to meet FERC regulations, which many ( such as Superintendent Danly) argued vaguely and complexly.

Since NYISO made its first compliance filing in July 2021, FERC has asked for additional information twice, and NYISO has complied. However FERC remains dissatisfied with NYISO’s business design. NYISO sought, and was later denied, an appeal of FERC’s June 2022 order ordering NYISO to submit additional information about how a joint venture could provide full service. more that they can provide. This led NYISO to sue FERC in the DC Circuit Court. While FERC clarified in October 2022 that NYISO could begin implementing its business plan as proposed in Q4 2022, it is not yet clear when the revised service plan will be implemented. business will be used.

NYISO’s issues are not limited to the FERC process. Stakeholders criticized the NYISO business model for requiring expensive metering and telemetry and excluding utility-scale utilities from the definition of DER. Notably, FERC confirmed the exclusion of energy resources in October.

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ISO-NE is facing similar challenges in its efforts to comply with Executive Order 2222. ISO-NE filed its first filing in February 2022. In May 2022, FERC responded with a 25-page application for more information on topics such as the process of connecting to the requested date. In June 2022, ISO-NE made its response to the information request. ISO-NE is planning to allow DERs to participate in its capacity competition, FCA 18, in spring 2023, but is not expected to finalize the design until 2026 for it energy and business potential. Like the NYISO proposal, the ISO-NE proposal has also received significant criticism, including from Senators Elizabeth Warren and Bernie Sanders. Critics cite problems with ISO-NE’s baseline and its exclusion of some behind-the-meter DERs due to measurement and telemetry issues.

It is anyone’s guess when FERC will approve the NYISO or ISO-NE industry standards. But the fact is that the longer the download process, the more uncertainty is injected into the business. That uncertainty could hinder the development of DERs — the implications of Order 2222’s requirements. This uncertainty could be exacerbated by litigation that will result from the FERC order. Governor Danly specifically warned that FERC is micromanaging RTOs and ISOs and may be overstepping its authority limits.

Conclusion: President Glick Dynamic

Not only did President Glick play an important role in pressing for the reforms discussed here, but he was the third-highest voter in favor of moving the reform into action. before.

Some believe that Senator Manchin’s decision not to hold a hearing on President Glick was in response to President Biden’s comments less than two weeks ago about closing coal plants, which Manchin opposes. Manchin also expressed concern about Glick’s leadership in making decisions related to state pipelines, which FERC is responsible for permitting.

We will continue to monitor the progress of these initiatives, both as they advance on the FERC docks and as political action follows Governor Glick’s election. If these FERC proceedings subside as a result of Glick’s departure, energy industry stakeholders should continue to expect the status quo ante for years to come.

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