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August 9, 2019
NEM Fall Leadership Roundtable and Executive Committee Meeting

NEM will convene a Fall Leadership Roundtable and Executive Committee Meeting on October 16-18, 2019, at the The Hotel Hershey in Hershey, Pennsylvania.

Confirmed Speakers thus far include:
1. Neil Chatterjee, Chairman, FERC
2. Andy Ott, Chairman, PJM
3. PAPUC Commissioners & Staff
4. K.R. Sridhar, Founder and CEO, Bloom Energy
5. Don Dodge, Developer Advocate, Google
6. John Chambers, Chairman Emeritus, CISCO, CEO, JC2 Ventures
7. Christian Belady, P.E. General Manager, Microsoft

The room block is now set up to accept reservations at The Hotel Hershey. The room block cut-off date is Friday, September 20, 2019. Reservations can be made by calling 855-729-3108 and asking for the room block for the NEM Fall Policy Leadership Roundtable 2019 at The Hotel Hershey. Alternatively, reservations can be made at this link.

A draft agenda is available at this link.

You may register at this link.

NYPSC-NYSERDA Complaint on NYISO Buyer-Side Mitigation Rules

The NYPSC and NYSERDA filed a complaint at FERC seeking an exemption from NYISO's buyer-side mitigation (BSM) rules for energy storage resources seeking to participate in the Installed Capacity (ICAP) market auctions. Alternatively, they request an exemption from the rules for up to 300 MW of energy storage resources that enter the market each calendar year for ten years. The stated reason for the request is attainment of state-mandated renewable energy policy goals and storage deployment goals.

NYPSC and NYSERDA explain the reason for the requested relief as follows:

"The NYISO’s current tariff provisions, however, interfere with the State’s legitimate policy objectives by subjecting Energy Storage Resources that participate in the wholesale Installed Capacity (“ICAP”) market to buyer-side mitigation measures. While even the threat of mitigation has a deleterious impact discouraging market entry, actual mitigation would severely limit, or even eliminate, the ability of Energy Storage Resources to be paid for the value they provide. This outcome is contrary to the Commission’s mandate to ensure Energy Storage Resources can enter the market and participate to the fullest extent of their technical capability. Moreover, applying buyer-side mitigation measures to Energy Storage Resources in the NYISO’s Mitigated Capacity Zones (Zones G-J), which includes the New York City Metropolitan Area, will shift project development away from the region where energy storage can provide the greatest reliability, resilience, fuel diversity, environmental, and public health benefits.

The NYISO’s current BSM rules are used as both a shield to preserve the market position of incumbent generators and as a sword against new market entrants. These rules, and their impact on Energy Storage Resource development, present a market barrier that is unjust and unreasonable, unduly discriminatory, and contrary to Commission and State policy objectives that seek to ensure the full market participation of Energy Storage Resources. Furthermore, there is no evidence to suggest that the State is seeking to “suppress” ICAP prices as part of its Energy Storage Goal and Deployment Policy. Therefore, there is no rational basis to apply BSM measures to Energy Storage Resources in a manner that improperly interferes with legitimate state actions that fall within the regulatory authority reserved to states under the FPA."

NYPSC and NYSERDA have requested fast track processing of the complaint.

The full text of the Complaint is available on the NEM Website.

Click here to view all past updates.
Staff Proposed Opinion and Order in MEDSIS Grid Initiative

The Commission issued Staff's Proposed Opinion and Order in the MEDSIS grid initiative for stakeholder comment.

The Proposed Opinion and Order recommends that:
1) A Dynamic Pricing Working Group should be convened. To facilitate discussions, Pepco should file a strawman residential dynamic pricing proposal (e.g., Critical Peak Rebate like in Pepco MD or other forms of dynamic pricing, including time-of-use rates), including an explanation of benefits and costs, as well as any PJM market revenue concerns.
2) The Commission should utilize operating funds to develop an interactive micro-website linked to the Commission’s website to house up-to-date competitive energy supplier offers as well as energy education material. The Commission will also design a marketing campaign to accompany the launch of the new micro-website to increase customer awareness of its availability.
3) Pepco should report to the Commission on implementation of Green Button Connect My Data and related customer data matters, including Pepco’s data aggregation sharing practices, data anonymization feasibility, and the feasibility of including GHG emissions data through the CMD platform.
4) Staff should reconvene the Consumer Bill of Rights (CBOR) Working Group to discuss and propose revisions to the Commission’s CBOR rules to reflect customer rights and responsibilities and complaint processes for MEDSIS-related projects.
5) Pepco and WGL should create a secure web portal and NDA process to enable system-level data flow between third parties and each utility for RFP responses and programmatic data requests by government agencies, pertaining to the MEDSIS Pilot Project process.
6) Staff should initiate a Notice of Inquiry to address ownership of energy storage devices and other distributed energy resources.

Comments and reply comments are due forty five days and sixty days, respectively, from the date of the Proposed Decision's release. The full text of Staff's Proposed Opinion and Order is available on the NEM Website.

Click here to view all past updates.
Commission Suspends License of Natural Gas Supplier

The Commission voted to suspend the license of a natural gas supplier, impose a civil penalty of $560,000, and directed that the supplier's customers be transferred to utility default service (unless they had a valid pending enrollment to an alternative supplier, which the Commission directed should be honored). The supplier engaged in three types of violations: "enrolling a customer without a signed contract, failing to provide a contract summary, and engaging in deceptive solicitations." Of particular note in this regard are the Commission's regulations at COMAR which provide,

"1) At the time of completion of the contracting process, a supplier shall provide the customer a copy of the executed contract and completed Contract Summary on the form provided by the Commission.

2) If the contract is completed through telephone solicitation, the supplier shall send the Contract Summary to the customer along with the contract that must be signed by the customer and returned as required by the Maryland Telephone Solicitations Act. If the contract is exempt from the Maryland Telephone Solicitations Act, the supplier shall send the Contract Summary with the contract to the customer."

In deciding to suspend the supplier's license and assess the penalty of this magnitude, the Commission reasoned that,

"the circumstances that led to the violations in question were not the result of an isolated mistake or misunderstanding of the law, but were part of an unlawful scheme by [supplier] to scam three utility customers in Maryland. In addition, [supplier] has admitted that none of its customers in Maryland, past or present, were provided a written contract, which is a direct contravention of Maryland law. Based on the findings in this order and the admissions of [supplier], the Commission finds ample and just cause to suspend [supplier's] license to supply natural gas and natural gas services in Maryland.

Further, as noted above, because [supplier] has admitted that it does not have signed written contracts for any of its current customers, in violation of COMAR and the Maryland Telephone Solicitation Act, none of the enrollments for its existing customers are valid. Given the scale and scope of the admitted violations, the Commission finds more than sufficient cause to order that [supplier] cease serving customers in Maryland, pursuant to PUA 7-507(n). Consequently, all of [supplier's] existing customers shall be returned by their respective utilities to default service for natural gas supply. This order shall have the effect of a drop transaction, and the utilities are requested to process those transactions as provided by COMAR"

The full text of the Order is available at this link.

New Jersey
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Basic Generation Service Legislative Style Hearing

The Board will hold the annual Basic Generation Service (BGS) legislative-style hearing on September 19, 2019, beginning at 10AM at the Board's Trenton office. The purpose of the hearing is to take comments on the electric utilities’ proposal for BGS for the period beginning June 1, 2020, as well as any alternative proposals.

Under the utilities' filing, they propose to continue the use of a multiple round descending clock auction. The BGS-Residential Small Commercial Pricing (RSCP) auction will seek offers for the supply of full requirements tranches of each utility's BGS-RSCP load for a three-year period. Two thirds of the BGS-RSCP load for the June 1, 2020 - May 31, 2021 period was procured in the prior two auctions, and therefore, one-third of the utilities BGS-RSCP load will be procured for the period beginning June 1, 2020. BGS-RSCP bidders will be capped as to the maximum amount of tranches they can win for a particular utility as well as statewide. The BGS-Commercial and Industrial Energy Pricing (CIEP) auction will seek offers for the supply of full requirements tranches of each utility's BGS-CIEP load for a one year term beginning on June 1, 2020. The CIEP threshold is proposed to remain at 500 kW.

Notable changes in the proposal from last year's BGS auction process include: 1) the BGS-CIEP Auction and the BGS-RSCP Auction will be conducted separately but simultaneously; 2) to address increased RPS compliance costs, BGS-CIEP and BGS-RSCP suppliers will be required to transfer RECs and SRECs to the utilities after each of the first three quarters of the Energy Year, in an amount specified by each utility, or else provide collateral to cover any shortfall in the number of RECs or SRECs transferred.

The full text of the Notice of BGS Hearing is available on the NEM Website. The full texts of the Utilities Joint BGS Proposal and Company-Specific Addenda are available at this link.

New York
Click here to view all past updates.
Commission Institutes Proceeding on Resource Adequacy

At its agenda meeting yesterday, the Commission decided to open a proceeding to examine "how to reconcile resource adequacy programs and the State's renewable energy and environmental emission reduction goals." In opening the proceeding the Commission recounted its actions over the years to implement a renewable portfolio standard, which subsequently transitioned to a clean energy standard. The recently enacted State Climate Leadership and Community Protection Act (CLCPA) expands on the clean energy standard by requiring "at least 70 percent of New York's retail load, as served by jurisdictional LSEs in 2030, is from renewable resources." The CLCPA also requires the Commission to establish programs for at least 9 GW of offshore wind by 2035, 6 GW of PV solar generation by 2025, and to support 3 GW of energy storage capacity by 2030. In addition, the CLCPA requires Commission establishment of a program to require that the statewide electrical demand system will be zero emissions by 2040.

The Commission identified issues with NYISO's Installed Capacity (ICAP) market that relate to achievement of these clean energy goals. "ICAP, as currently designed, is an incomplete resource adequacy instrument because it fails to recognize and provide compensation for many important factors, such as environmental and local reliability benefits. Because of this, there is no guarantee that the resources that clear the ICAP auctions are the same ones needed to meet the State’s clean energy and other mandates. Further, the NYISO may impose “mitigation” on resources that are the subject of state policy support by intervening to raise their minimum bid levels into the NYISO-administered auctions and thereby potentially causing them to not “clear” the auction, and therefore to not be counted as eligible capacity resources. As a result, consumers may pay higher costs than necessary, and that increase could grow substantially over time as the State’s clean energy goals expand."

The Commission also opined that because New York is within a single state ISO it is "ideally situated" to "speak clearly and coherently to its environmental, economic, and energy service policy interests, and thus to the services and outcomes it looks to electricity markets and providers to deliver."

The Commission accordingly requests comments on the following questions related to resource adequacy:
1) Are the State’s energy policies and mandates, such as those related to Offshore Wind, photovoltaics, other renewables, and energy storage compatible with the NYISO’s resource adequacy mechanisms? If not, what issues are manifested? Also, if not, how could they be aligned?
2) Does the interaction of policies and market structure mechanisms result in safe and adequate service at just and reasonable rates for customers?
3) Is an ICAP product an effective long-term solution for resource adequacy given the required future generating resource mix, which may have lower marginal costs or different availability profiles than many current generation resources in operation? What are the salient attributes of such long-term solutions?
4) Is there a preferred mechanism(s) for ensuring resource adequacy? What are the cost impacts and benefits to consumers under the various potential resource adequacy mechanisms?
5) Should alternative approaches be considered to ensure the procurement of generation resources is aligned with State policy goals. If so, which ones? Are there existing or proposed models which might be instructive, such as the State overseeing LSEs’ resource adequacy portfolios (e.g., an approach similar to the one used by California) or restructuring NYISO rules to accommodate State public policies (e.g., a Fixed Resource Requirement Alternative, as proposed by FERC Order issued on June 29, 2018 in Docket No. EL16-49, ¶160 et seq.)?
6) What is the State role with respect to resource adequacy matters that best serves New York’s electricity customers with safe, adequate, and reliable service at just and reasonable rates in the context of state policies?
7) What, if any, next steps should the Commission take with respect to resource adequacy matters?

Comments are due November 8, 2019. The full text of the Order Instituting Proceeding is available on the NEM Website.

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