USA Law and Practice Contributed by: David P. Flynn, Lindsey E. Haubenreich, Thomas F. Puchner and Dennis W. Elsenbeck, Phillips Lytle LLP
wholesale power markets operated by the fol- lowing FERC-regulated operators, which provide non-discriminatory access to the transmission network: • the New York ISO; • the California ISO; • the Electric Reliability Council of Texas; • New England ISO; • PJM Interconnection; • Southwest Power Pool; and • the Midcontinent ISO. These seven regional transmission organisa- tions/independent system operators (ISOs), collectively known as regional system opera- tors (RSOs) serve roughly two thirds of the USA. Certain states in the South, Mountain West and Northwest did not join an RSO and continue to operate independently. RSOs are responsible for maintaining operation of the grid; they ensure that demand meets supply through capacity auctions and market mechanisms, and they are governed by FERC tariffs, rules and regulations. Neither FERC nor the RSOs are responsible for making resource mix decisions, as such author- ity lies solely with each state. Some states require utilities to perform integrated resource planning and to demonstrate how utility infra- structure and investment will meet the needs of customers. Other states impose legislation and/ or regulation to mandate or incentivise a certain resource adequacy mix. 1.6 Recent Changes in Law or Regulation Material changes in law or regulation seemingly occur almost daily at the state level, particularly with respect to the role of decentralised, alterna- tive energy resources. This increasing pace of change continues. At least 20 states and terri-
tories have passed legislation or taken executive action to achieve 100% renewable energy and/ or zero greenhouse gas emissions in either the power sector or economy-wide, each with dis- tinct timelines, definitions and structures. Federal Level At the federal level, things are now much differ- ent. There have been several decisions, orders and regulations that have impacted the power industry, and there is an aggressive agenda to roll back some of these. More recently, in July 2020, the DC Circuit reaffirmed FERC’s author- ity under the FPA to regulate the participation of distribution-level energy storage resourc- es in wholesale markets without intruding on state authority over local distribution systems (National Association of Regulatory Utility Com- missioners v FERC, No 19–1142, slip op (DC Cir 10 July 2020)). Building on that authority, FERC adopted Order 2222 in September 2020, which removes barriers to the participation of distrib- uted energy resources (DERs) in energy, capacity and ancillary markets managed by RSOs. Order 2222 sets the foundation for enabling groups of diverse, distribution-level and/or behind-the- meter resources (eg, electric vehicles, storage, efficiency, demand response) to be aggregated as a cohesive resource that would compete with conventional generation. In November 2020, FERC issued Order 872-A, which clarified certain components of its land- mark Order 872, first issued in July 2020, which updates rules that govern QFs under PURPA. Among other things, Order 872-A: • clarified the use of tiered avoided cost rates to promote renewable energy development; • relaxed certain recertification requirements for QFs; and
314 CHAMBERS.COM
Powered by FlippingBook