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April 20, 2018
NEM Upcoming Events

NEM’s 21st Annual National Restructuring Conference will be held April 30 – May 2, 2018, at the Hyatt Regency Capitol Hill Hotel, Washington, DC. A Draft Agenda is available here. You may register at this hotlink. The following Commissioners are confirmed to attend with additional invitations to state and federal regulators and legislators outstanding: Betty Ann Kane, DCPSC Chairman; Dallas Winslow, DEPSC Chairman; John Rosales, ICC Commissioner; Odogwu O. Linton, MDPSC Commissioner; Upendra J. Chivukula, NJBPU Commissioner; Mary Ann Holden, Commissioner, NJBPU; Larry Friedeman, PUCO Commissioner; Catherine Pugh, Mayor of the City of Baltimore, and Craig Glazer, VP, PJM.

Order 844 on Uplift Cost Allocation and Transparency in RTOs/ISOs

Based on its determination that RTO/ISO practices related to reporting uplift payments and operator-initiated commitments and RTO/ISO tariff provisions regarding transmission constraint penalty factors are insufficiently transparent and result in rates that are not just and reasonable, FERC issued Order 844 requiring changes to RTO/ISO reporting of uplift payments and operator-initiated commitments as well as tariff provisions on transmission constraint penalty factors.

FERC specifically required each RTO/ISO tariff include:
"(1) requirements to report, on a monthly basis, total uplift payments for each transmission zone, broken out by day and uplift category (Zonal Uplift Report); (2) requirements to report, on a monthly basis, total uplift payments for each resource (Resource-Specific Uplift Report); (3) requirements to report, on a monthly basis, for each operator-initiated commitment, the size of the commitment, transmission zone, commitment reason, and commitment start time (Operator-Initiated Commitment Report); and (4) the transmission constraint penalty factors used in its market software, as well as the circumstances under which those factors can set locational marginal prices (LMP), and any process by which they can be changed (Transmission Constraint Penalty Factor Requirements)."

The Commission decided to withdraw a proposal that each RTO/ISO that currently allocates the costs of real-time uplift to deviations allocate such real-time uplift costs only to those market participants whose transactions are reasonably expected to have caused the real-time uplift costs. While recognizing that "uplift should ideally be allocated to those market participants whose transactions caused the uplift and that allocations of uplift costs should avoid penalizing behavior that can improve price formation," the Commission noted "substantial concerns" voiced by commenters about the proposal.

The full text of Order 844 is available on the NEM Website.

Click here to view all past updates.
PUC Issues Preliminary Report on Energy Choice Initiative

The PUC issued a preliminary version of its Report on the energy choice ballot initiative. The PUC had been requested to prepare an "objective" analysis of the ballot initiative to help inform the work of the Governor's Committee on Energy Choice (CEC). The issues that were referred to the PUC by the CEC were: 1) timeline for implementation, 2) programs/statutes that need to be revised and how, 3) wholesale market structure, and 4) retail market structure. PUC Chairman Reynolds independently decided that a review of those four issues would entail a review of the potential costs and benefits of energy choice as well.

The Report made a series of unsubstantiated "key findings," including potential rate increases, projected implementation costs, projected stranded costs, and anticipated job losses. It concluded by stating,

"The Energy Choice Initiative will cause Nevada to abolish its control over a key component of electric rates, and change the way Nevada has generated, bought, and sold electricity for over 100 years. No state has ever done it this way before, and it likely create "winners and losers."

If history and experience are any type of guide, commercial and industrial customers, will fare far better, at least initially, than the average Nevada residential family through this proposed change. Large commercial customers who currently cannot depart bundled electricity service pursuant to NRS Chapter 704B may financially benefit the most, as they cannot currently access a competitive open marketplace that may offer benefits to high-volume electricity users. Monthly bills are reasonably likely to increase in the short term. Immediate Nevada-specific benefits to single-family residential customers, and low-income customers, remain "elusive" and difficult to quantify."

At yesterday's meeting of a CEC workgroup, a member representing Sands Casino gave a blistering critique of the Report and the PUC. Others, including former FERC Chairman Jon Wellinghoff criticized the lack of evidence underlying the report's findings.

The preliminary Report is not yet final. It is expected to be taken up at the Commission's April 30th agenda meeting. This would allow the Report to be considered at the final meeting of the CEC scheduled for May 9th. The full text of the Report is available on the NEM Website.

Click here to view all past updates.
Order on Implementation of Act 40

The Commission adopted an Order on implementation of Act 40 of 2017, which included a provision requiring that solar renewable energy credits (SRECs) must come from within the state of Pennsylvania. The law was intended to address the problem created by previously allowing SRECs to be purchased from out-of-state, but not allowing SRECs to be sold outside of the state.

The Commission unanimously adopted a Joint Motion of Chairman Brown and Vice Chairman Place to form the basis of a Commission Order. As noted in the Motion the "question here is whether or not this statute is intended to 'grandfather' out-of-state facilities certified before October 30, 2017, to generate Tier I Solar credits." A Commission press release stated that "today’s motion still enables some out-of-state facilities - specifically facilities already certified as AEPS Tier 1 Solar Photovoltaic and having contracts with a Pennsylvania utility, supplier, load serving entity, electric or municipal cooperative for the sale of solar credits – to maintain certification until those contracts expire. Additionally, any out-of-state Tier 1 solar credit generated before Oct. 30, 2017, retains its Tier 1 solar attribute for the banking life span enumerated in the AEPS." The full text of the Order will be posted on the NEM Website when made available electronically.

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