The Federal Energy Regulatory Commission (“FERC”) will host its February Open Meeting on Thursday, February 15, 2024. The Sunshine Act Meeting Notice (“Notice”) issued February 8, 2024, indicates that FERC intends to take action on several items of note for developers.
Among the items listed on the Notice for action at the Open Meeting are: (1) proposed reliability standards addressing cold weather preparedness; (2) a request for rehearing regarding the allocation of certain “fuel security” out-of-market costs to load in ISO-NE; (3) a request for a limited waiver of the MISO tariff for new gas-fired generators in Wisconsin; (4) a request for approval of a Large Generator Interconnection Agreement for a solar and battery storage facility in Arizona; and (5) a request for transmission rate incentive treatments for a transmission solution proposed to interconnect offshore wind projects in New Jersey into PJM Interconnection, L.L.C. (“PJM”).
1. North American Electric Reliability Council (NERC), Docket No. RD24-1-000
We expect FERC to rule on the proposed reliability standards filed by NERC on October 30, 2023. Citing 2021’s Winter Storm Uri and building on previous reliability standards approved by FERC in 2021 and 2022, NERC has proposed two new enhanced reliability standards to address cold weather preparedness and operations. The proposed standards would require balancing authorities and utilities to limit the participation of natural gas infrastructure loads in demand response and emergency load-shedding programs, as well as require balancing authorities to take specific steps to prepare for operations under cold weather conditions. We believe it is likely that FERC will approve both standards.
2. Constellation Mystic Power, LLC, Docket No. ER18-1639-026
FERC is likely to decide a request for rehearing filed by several Massachusetts and Rhode Island municipal lighting plants. The request for rehearing concerns an October 2023 FERC Order, which overruled an earlier Order (March 2023) finding that interested parties were entitled to review and challenge specific inputs to the formula rate used to set the annual revenue requirement for generating units at Mystic Generating Station. However FERC decides the request for rehearing, the municipal lighting plants have petitioned (as of Monday, February 5, 2024) the D.C. Circuit for review of the October 2023 Order.
3. Wisconsin Electric Power Company, Docket No. ER24-646-000
Wisconsin Electric Power Company (“Wisconsin Electric”) filed a request for a prospective, one-time waiver of certain MISO tariff provisions governing interconnection procedures. Wisconsin Electric is currently seeking to retire a number of coal-fired generating units and replace them with natural gas-fired units, and would like to transfer the existing interconnection rights associated with the coal-fired units exiting service. However, the MISO tariff requires that such interconnection rights transfers maintain the same voltage level at the point of interconnection, while Wisconsin Electric will need to interconnect the new units at different voltage levels due to transmission infrastructure changes in the area of the generating station. Given that the transmission provider (American Transmission Company LLC) and MISO both support the request for waiver, we think it is likely that FERC will approve the request.
4. THSI bn, LLC, Docket No. TX23-5-000
In June 2023, THSI bn, LLC, filed an application for an Order requiring Arizona Electric Power Cooperative (“AEPCO”) to interconnect THSI’s proposed Three Sisters Solar Project. The Three Sisters Solar Project is a proposed 300 MW solar generation and 300 MW/1800 MWh battery storage project to be located in Arizona. In October 2023, FERC issued a proposed order directing interconnection service, ordering further procedures regarding rates, terms, and conditions of the interconnection, and providing an opportunity for the parties to reach further agreement on terms. In November 2023, THSI and AEPCO filed a report indicating the parties had reached agreement on terms to carry out the October proposed order. In December 2023, THSI and AEPCO filed (1) a proposed large Generator Interconnection Agreement, (2) an Operation, Maintenance and Replacement Agreement, (3) an Electric Powerline and Communication Easement Agreement, and (4) a Substation Site Lease Agreement. Consistent with the October 2023 proposed order, if FERC finds the agreed-upon terms acceptable, FERC will issue a final order accepting the agreements.
5. Mid-Atlantic Offshore Development, LLC (“MAOD”), Docket No. EL23-101-000
MAOD filed a petition for declaratory order and expedited review in September 2023 requesting that FERC authorize four Order No. 679 transmission rate incentive treatments: regulatory asset, abandoned plant, hypothetical capital structure, and regional transmission organization (RTO) participation. The request applies to MAOD’s proposed 230 kV transmission substation, land, and related facilities that will ultimately be used to interconnect up to four, future high-voltage direct current (“HVDC”) converter stations. MAOD’s transmission project was selected in 2022 by the New Jersey Board of Public Utilities to interconnect offshore wind projects to shore into PJM; MAOD’s project is currently slated to be in-service by 2027. We anticipate that FERC will act on the transmission rate incentive petition.
Law Clerk Mack Ramsden co-authored this alert.
