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May 8, 2015
NEM New England Energy Policy Summit

NEM is pleased to announce that it will be hosting its New England Energy Policy Summit on October 12-14, 2015 in Cambridge, Massachusetts. A welcome reception will be held on the evening of October 12, 2015, at the Hyatt Regency Cambridge, and a reception will be held the evening of October 13, 2015, at the Harvard Faculty Club. Please save these dates. An agenda is forthcoming. You may register at this hotlink. A block of rooms has been set aside for the event at the Hyatt Regency Cambridge at the NEM rate of $279/night ((617)441-6494).

Supreme Court Grants Cert on FERC Order 745 Case

The U.S. Supreme Court this week granted certiorari in the case of EPSA v. FERC regarding FERC’s Order 745 and demand response compensation.

In granting certiorari, the Supreme Court directed:

“The petitions for writs of certiorari are granted limited to the following Questions: 1) Whether the Federal Energy Regulatory Commission reasonably concluded that it has authority under the Federal Power Act, 16 U. S. C. 791a et seq., to regulate the rules used by operators of wholesale electricity markets to pay for reductions in electricity consumption and to recoup those payments through adjustments to wholesale rates. 2) Whether the Court of Appeals erred in holding that the rule issued by the Federal Energy Regulatory Commission is arbitrary and capricious.”

House and Senate Energy Committees Consider Legislation on Capacity Markets in RTOs/ISOs

U.S. Senator Murkowski, Chair of the Senate Energy and Natural Resources Committee, introduced seventeen legislative proposals intended to modernize the country's energy policies. Of particular note is s1222, Continuity of Electric Capacity Resources Act. The bill would require RTOs to file reports assessing available electric capacity resources, pending unit retirements, projected future needs, and current and projected reliability of their systems. The RTOs would be required to file tariffs to promote the diversity of generation and availability of transmission facilities, "an enhanced opportunity for self-supply of electric capacity resources by electric cooperatives, Federal power marketing agencies, and State utilities with a service obligation," short and long term reliability assurance, and prudent investment in capacity resources.

The House Energy and Power Subcommittee released a discussion draft this week on Energy Reliability and Security to be included in its Architecture of Abundance energy legislation.

Of particular note, the House discussion draft pertains the capacity markets in RTOs/ISOs as follows:

(1) FILING.—Not later than 30 days after the date of enactment of this section, the Commission shall direct each Regional Transmission Organization, and each Independent System Operator, that operates a capacity market, or a comparable market intended to ensure the procurement and availability of sufficient future electric energy resources, to demonstrate, by filing a new schedule under section 205, or, if appropriate, filing a declaration with respect to a schedule or schedules under such section then in force, that the structure of such market meets the following criteria:
(A) The structure of such market is based on integrated system planning practices that include—
(i) a diverse and flexible generation portfolio;
(ii) long-term reliability and stable pricing for customers;
(iii) price adequacy and certainty for power generators over a long-term planning and investment horizon; and
(iv) enhanced operational performance assurance during peak-demand periods;
(B) The structure of such market provides for a sufficient supply of reliable electric energy to load-serving entities (as defined in section 217) from physical generation facilities that have reliability attributes that include—
(I) operational characteristics that enable the generation of electric energy on a continuous basis for an extended period of time for each day over a period of not less than 30 days;
(ii) in order to generate electric energy on a continuous basis for an extended period of time
(I) for each day over a period of not less than 30 days
(aa) possession of adequate fuel on-site; or
(bb) the operational ability to generate electric energy from more than one fuel source; or
(II) fuel certainty, through contractual obligations, that ensures adequate fuel supply at stable pricing without risk of interruption;
(iii) operational characteristics that enable the generation of electric energy during emergency and severe weather conditions; and
(iv) essential reliability services, including frequency support and voltage support, to maintain reliability of the bulk power system (as defined in section 215).”

The full texts of the House and Senate Bills are available on the NEM Website.

New York
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Technical Conference on ESCO Eligibility Criteria and DER Provider Regulation

Staff will convene a technical conference on May 12, 2015, to discuss Commission regulation and oversight of Distributed Energy Resource (DER) providers as well as changes to eligibility criteria for ESCOs. Staff issued an outline of topics to be discussed.

With respect to the oversight of DER Providers, the following topics were identified in Staff's outline:
* Should a compilation of rules for DER providers be developed akin to the UBP?
* Should oversight extend to all sales of products marketed on the digital marketplace, or similar tools?
* What eligibility requirements should be applicable to DER providers (application, annual information/report filing) and should the provider be issued a license or other confirmation of its status?
* Should the DSP be restricted to only interacting with eligible DER providers?
* What procedures should be applicable to DER provider access to customer information such as customer authorization requirements?
* Should the utilities now be required to implement Green Button functionality?
* What marketing standards should be applicable to DER providers?
* What elements should be required in a DER sales agreement with a customer? Should a standard sales agreement be developed?
* What should be required of DER providers when responding to customer inquiries?
* Should a customer dispute resolution process be established for DER providers?
* What systems and process requirements should be established for DER and DSP interactions?
* What reporting requirements should be established for DER providers?

With respect to ESCO eligibility requirements, the following topics were identified in Staff's outline:
* Should ESCOs be required to demonstrate financial risk management expertise and customer service expertise?
* Should the current ESCO eligibility process be replaced by a licensing process, including a licensing fee?
* What are appropriate areas for ESCO self-regulation?
* Should ESCOs using standard billing practices be required to demonstrate financial integrity, and if so, how?
* Should ESCOs offering fixed prices to residential and small commercial customers be required to offer a standard fixed price product (definition to be determined)?
* Should ESCOs that have received complaints in excess of specified levels be subject to additional requirements to retain their eligibility, such as filing of a customer service improvement plan or periodic reports?
* Should DPS Staff be able to request that the Commission revoke or suspend and ESCO's authority to conduct business in the state entirely or subject conditions, or restrict its ability to enroll customers?
* Should the existing application process be expanded to collect information about regulatory actions taken against the ESCO in other jurisdictions; instances when force amjeure provisions were invoked in contracts in other states; number of complaints received over 24 months in each state the ESCO serves residential customers; bankruptcy history?
* Should eligibility criteria for brokers be established as well as procedures for termination?
* Should a process be established to ensure ESCO due process when Staff believes the ESCO should be denied operating authority or authority should be conditioned?

The full texts of the Topic Outline and Conference Agenda are available on the NEM Website.

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