On Friday, parties challenging FERC Order No. 841 filed non-binding statements of issues to be raised in the litigation. APPA, NRECA, EEI, and AMP (utilities) filed jointly, NARUC filed its own statement. The two filings are similar, but the utilities's filing is more succinct:
Issue 1: Did FERC act in excess of its statutory authority by deciding that it alone has jurisdiction to determine whether energy storage resources located on a distribution line or behind a retail meter may participate in wholesale electric markets?
Issue 2: Because of the impact of the Order 841 on the reliability, operations, and costs of local distribution systems and retail electric service, and because the FPA reserves these matters for state and local regulation [1/2]
[Issue 2, cont] did FERC act arbitrarily and capriciously, abuse its discretion, or otherwise act not in accordance with law by declining to give States an opportunity to opt out of the energy storage resource participation model created by the Order 841?
Issue 1 is about FERC's authority under federal law. Utilities are asking the court to draw a line that prohibits FERC from approving RTO tariffs that set rates for DERs, unless a local regulator permits DERs to participate in wholesale markets.
A FERC loss on Issue 1 will have repercussions for DER participation in wholesale markets. A broad ruling by the court could doom FERC's proposed DER aggregation rule. A narrower ruling might limit any future DER rule to states that are "wholesale DER friendly"
A FERC loss on Issue 2 would effectively remand distribution-level storage's participation back to FERC. FERC could issue an order that draws from the existing record to more fully explain why it's not providing an opt out. Or it could take comments on the issue first.
Whether or not there is an appetite at FERC to do either of those things will depend on who is sitting on the Commission. A loss on Issue 2 could have the effect of killing wholesale storage or DERs, even though it wouldn't change FERC's legal authority.
The challengers and FERC also jointly filed a proposed briefing schedule:
Correction to earlier Tweet: this lawsuit won't kill "wholesale storage." Order 841 is almost entirely safe and the only aspect challenged here is about distribution-level storage and whether FERC can require RTOs to accept bids from such resources.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
Scorching hot FERC take from 1976:
The Supreme Court's statement that the purpose of the Power and Gas Acts is to encourage plentiful supplies at reasonable prices is wrong and should be discarded. The Court's conclusion is poorly supported by precedent and history.
Above, the conclusion is repeated by states suing to end DOE's LNG pause and was said yesterday by future Commissioner See at the confirmation hearing.
Here's why it's wrong and why this matters:
Neither law is about maximizing energy production. Both laws are primarily about consumer protection. One element of protecting consumers is ensuring that new gas service (i.e., new pipelines) is needed. Neither law regulates energy production --- states primarily do that.
How is utility control over transmission blocking clean energy and raising costs?
Here’s a look at allegations by renewables or transmission developers that utilities or RTOs are acting anti-competitively.
The complaints are about interconnection, planning, rates, and more!
In some cases, facts are not seriously in dispute. The issue is whether the utility or RTO is violating rules. Ultimately, this is a legal call, and FERC’s answer will not necessarily find that the utility/RTO is not acting anti-competitively.
Alright, let's go!
1. Invenergy v. PSCo [owned by Xcel]
Bottom Line: “Put simply, it very much looks like PSCo [Xcel] is trying to advantage its own generation via its control of transmission and the interconnection process.”
Why isn’t the power industry building more transmission? Adopting advanced transmission technologies? Connecting new projects faster?
In Replacing the Utility Transmission Syndicate’s Control, I diagnose the fundamental issue: regional governance.
🧵papers.ssrn.com/sol3/papers.cf…
Power sector rules determine who can generate and transmit energy and influence the mix of resources on the grid. Having authority to change the rules is hugely consequential. My paper is about decisionmaking structures + processes used to change industry rules (aka governance).
[Wait, don’t go yet – governance is interesting, or at least important...I promise...]
I argue that regional power sector governance is impeding innovation that could challenge incumbent firms, business models, and technologies.
Republicans are planning to attack three decades of FERC’s efforts to replace monopoly power with competition.
It is a regressive plan steeped in techno-pessimism. The plan includes legal challenges and an overhaul of FERC policies if Rs win the White House.
First, the lawsuits:
@PolicyIntegrity Applying MQD to FERC will weaken FERC’s ability to regulate transmission, including planning, interconnection, grid-enhancing tech, non-discriminatory service, etc.
But the 17 states propose a more potent weapon: They want to prevent FERC from issuing *any* rules at all.
This piece starts by equating a national standard for interregional transmission with the Trump Admin's failed proposal to to bail out coal and nuke plants.
It then argues that FERC and Congress should have essentially no role in transmission planning.
The Trump bailout was premised on out-of-date assumptions about system operations and was intended to lock-in an aging resource mix.
By contrast, interregional transmission is about optionality. New transmission will provide value, regardless of the resource mix.
We need a national mandate because IOUs have incentives not to build interregional transmission. Because IOUs won't propose it, states don't really have regulatory mechanisms for ordering a utility to build it.
Time to set the record straight.
Not every utility is reflexively opposed to interregional transmission.
But if utilities want more large-scale transmission, they could make it happen. So why aren’t we seeing more development of big transmission projects?
First, until *very* recently, nearly all utilities owned generation. 1990s state restructuring laws prevented utilities from recovering power plant development costs through state-set consumer rates.
But most states didn’t pass those laws.
In 35+ states, utilities continued to fund generation through consumer rates. Across all states, nearly all utilities owned generation through corporate affiliates that earned revenue from wholesale markets, not directly through state-set consumer rates.