Statements of FERC Chairman and Commissioners on ISO New England Inc. To Comply with the Fair Rates Act of 2018

Statements of FERC Chairman and Commissioners on ISO New England Inc. To Comply with the Fair Rates Act of 2018

In February, “pursuant to section 205 of the Federal Power Act (FPA),ISO New England Inc. (ISO-NE) filed the results from the thirteenth Forward Capacity Auction (FCA 13), to become effective June 28, 2019 (FCA 13 Results Filing).” Then, in response to a request from the Federal Energy Regulatory Commission (FERC) for additional information, “ISO-NE requested waiver of section 388.112(b)(2)(i) of the Commission’s regulations,2 which requires parties seeking privileged treatment for certain filings to provide intervenors who execute a protective agreement with access to that privileged material.” In September the filing went into effect through the operation of law.

If FERC “does not act on a filing made pursuant to section 205 of the FPA within the 60-day period established therein because the Commission lacks a quorum, FPA section 205(g)(1)(B) requires each Commissioner to deliver a written statement to explain their views on the change. Chairman Neil Chatterjee and Commissioner Bernard L. McNamee released a joint statement, and Commissioner Richard Glick also released a statement.

Here is the statement from Chairman Neil Chatterjee and Commissioner Bernard L. McNamee.

Chatterjee and McNamee assert that ISO-NE requested the waiver of FERC’s regulations because they wanted to look at “the information contained in the Deficiency Response because it claims that the information is ‘highly confidential, non-public, proprietary business and competitively-sensitive commercial information’ similar to information that the Commission has previously declined to disclose.” They said that “ISO-NE stated that neither the resource-specific cost data submitted by Killingly nor the IMM’s evaluation thereof should be disclosed to participants and intervenors, even under a non-disclosure agreement.”

“Killingly’s owner and developer, NTE Connecticut, LLC (NTE), objects to the disclosure of the information in the Deficiency Response and supports ISO-NE’s arguments… NTE contends that the disclosure of this commercially sensitive information to Killingly’s direct competitors would irreparably harm Killingly’s ability to compete.”

Capacity Suppliers “oppose the Waiver Request, noting, among other things, that ISO-NE provided no justification for the complete redaction of its Deficiency Response and that, because of the redaction, intervenors are denied the ability to meaningfully participate in this proceeding.”

Chatterjee and McNamee say they would have voted in favor of granting the Waiver Request. FERC “has recognized both that parties have an interest in protecting the confidentiality of their data and that they must be permitted to participate meaningfully in proceedings. To address these competing principles, the Commission weighs the interests of a party seeking confidential treatment for information against the interests of parties seeking access to that information.”

They say that in the past using non-disclosure agreements in order to access the confidential information, and this helped to maintain the balance. “But, the Commission has also recognized that it is inappropriate to disclose confidential material that can create adverse impacts to competition, even under a non-disclosure agreement. Specifically, in the FCA 8 Order and 2017 Waiver Order, the Commission ruled that release of resource-specific privileged information was inappropriate because that information would remain sensitive beyond the FCAs in question and could harm the competitiveness of FCAs going forward.”

NTE objected to FERC’s “issuance of deficiency letters in this proceeding, contending that such letters are meant to address ‘minor, technical shortcomings’ in tariff filings, like a failure to meet “threshold filing requirements,” not to investigate the merits of a protest.” NTE has argued that FERC “could only act to (1) reject the filing on the merits; (2) accept the results despite Capacity Suppliers’ protest; (3) accept the results as filed but note that Capacity Suppliers could file a complaint; or (4) accept the results but set the issues raised in the protest for hearing. Because the Commission did not take any of these actions, NTE argues that the FCA 13 Results Filing went into effect by operation of law on June 28, 2019.”

Chatterjee and McNamee say they “would have rejected NTE’s objections in regard to the issuance of the deficiency letters. The FCA 13 Results Filing was in substantial compliance with the Commission’s filing requirements because ISO-NE submitted information regarding certain FCA 13 inputs and reported detailed FCA 13 outputs resulting from ISO-NE’s application of the FCA Tariff provisions.” There were testimonies submitted by ISO-NE staff “in support of the competitiveness of FCA 13. However, consistent with the discussion in PP&L, Commission staff issued a deficiency letter to cure specific omissions identified in the rate filing… ISO-NE did not provide sufficient cost data to evaluate Killingly’s offer floor price and, therefore, the justness and reasonableness of the FCA 13 Results Filing. Therefore, we would have found that the precedent cited by NTE does not suggest that the Commission improperly issued the deficiency letters in this proceeding.”

They also found that “the FCA 13 Results Filing did not go into effect by operation of law on June 28, 2019. ISO-NE submitted the Deficiency Response on June 28, 2019 and its response to the Second Deficiency Letter on July 26, 2019. Each of these responses established a new filing date for the FCA 13 Results Filing and reset FPA section 205’s 60-day clock.”

They explained that they “would have found that Killingly was appropriately mitigated. Based on an evaluation of the data submitted in the Deficiency Response in this docket, we believe that the IMM complied with its responsibilities as outlined in the Tariff…  we would have found that through its Deficiency Response, ISO-NE demonstrated that its review was not focused solely on whether Killingly received out-of-market revenues but rather that the IMM scrutinized all aspects of Killingly’s offer to ensure they were consistent with prevailing market conditions, including all relevant cost components and revenue assumptions that support Killingly’s offer.”

As for the “the arguments by Vineyard Wind, Massachusetts Attorney General Maura Healey (Massachusetts Attorney General), Clean Energy Advocates and/or Public Citizen Inc. (Public Citizen) related to Vineyard Wind’s participation in the auction, specifically that FCA 13 resulted in unjust and unreasonable rates because the Vineyard Wind facility was not exempted from the Minimum Offer Price Rule (MOPR) as a Renewable Technology Resource.” It is because of this that Chatterjee and McNamee would have rejected these arguments.

“Vineyard Wind met the Tariff requirements to seek Renewable Technology Resource status at the time FCA 13 took place on February 4, 2019, it did not qualify by the October 2, 2018 deadline established in the Tariff. Vineyard Wind did seek a waiver of the Tariff to participate in FCA 13 as a Renewable Technology Resource on December 14, 2018, in Docket No. ER19-570-000. However, that waiver request remains pending… there has been no action on the Vineyard Wind waiver request, and on February 4, 2019, Vineyard Wind had not received a waiver to allow it to be treated as a Renewable Technology Resource. Based on these facts, we would have found that ISO-NE treated Vineyard Wind’s capacity appropriately and in accordance with the Tariff—not as a Renewable Technology Resource—when it conducted FCA 13.”

They conclude explaining that it was because of a “lack of quorum at the time of the statutory deadline for Commission action on the FCA 13 Results Filing, we were unable to fully discuss the issues that arose in this proceeding with our fellow Commissioner, whose arguments we would have thoughtfully considered. To the extent any of those discussions raised new issues for consideration, we would have carefully considered those matters and incorporated them into the decision-making process.”

Commissioner Richard Glick also issued a short statement about the issue.

Glick said that he “signed an ethics pledge that, as relevant here, precludes me from working on any matters in which Avangrid, Inc. or any of its affiliates or subsidiaries is a party until November 29, 2019. Vineyard Wind LLC filed a protest and answer in this proceeding. Vineyard Wind LLC is a joint venture between Copenhagen Infrastructure Partners and Avangrid Renewables, LLC, which is a subsidiary of Avangrid, Inc. Accordingly, I am not participating in this proceeding.”