United States: FERC March 2024 Open Meeting Preview

The Federal Energy Regulatory Commission ("FERC" or "Commission") will host its March Open Meeting on Thursday, March 21, 2024. The Sunshine Act Meeting Notice, issued March 14, 2024, indicates that FERC intends to take action on several items of note to generation, storage, and transmission developers, some of which we highlight below.

It seems that "Interconnection Spring" has arrived, as the Commission is poised to adjudicate requests for rehearing of Order No. 2023, as well as to rule on the first wave of compliance filings under the order—its first major actions on interconnection since the Commission issued Order No. 2023 last July. With the compliance deadline, April 3, 2024, fast approaching, we expect to see many more such compliance filings hit FERC's desks very soon. The Commission's rulings on, and conversation around, the filings noticed for discussion for Thursday may give developers of generation and energy storage facilities some clarity as to how the Order No. 2023 reforms will shape the interconnection and project development landscape.

Notably, this will be the first Open Meeting since the Biden administration nominated three new Commissioners at the end of February: Judy Chang, the former Massachusetts Undersecretary of Energy and Climate Solutions; David Rosner, a long-time FERC analyst currently detailed to the Senate Committee on Energy and Natural Resources; and Lindsay See, the Solicitor General of West Virginia. The three nominees will, if confirmed, fill the two Commission seats left empty after the departures of Richard Glick and James Danly (both of whom served as Commission Chairs) and replace current Commissioner Allison Clements, whose term expires this June but who may retain her seat until the end of the calendar year if she is not replaced sooner.

While President Biden's nominations would restore the Commission to full strength, the current three Commissioners still constitute a quorum. Not only will they adjudicate the many Order No. 2023 compliance filings scheduled to arrive at FERC within the next month, but they may also look to finalize the Commission's much-anticipated regional transmission planning and cost allocation reforms, on which Chair Phillips has recently said that he and his colleagues are entering the "final lap." Interconnection Spring will be a busy and momentous time at FERC—so please, stay tuned for updates and events from Foley Hoag's FERC team.

1. Improvements to Generator Interconnection Procedures and Agreements, Docket No. RM22-14

At Thursday's Open Meeting, we expect FERC to take action on the approximately thirty-five requests for clarification and/or rehearing that were submitted in response to Order No. 2023 in August. Requests for clarification and/or rehearing were filed by a wide range of stakeholders, including generators, transmission owners, RTOs and ISOs, trade groups, environmental advocates, and state utility commissions. These requests were denied by operation of law in September 2023 as FERC did not act on them within 30 days; however, the Notice of Denial issued by the FERC Secretary indicated that the requests would be addressed in a future order. Depending on how FERC acts, this order may significantly impact the substance of the compliance filings due April 3, 2024.

2. Duke Energy Carolinas, LLC et al., Arizona Public Service Company, and Idaho Power Company, Docket Nos. ER24-679-000 et al., ER24-300-000, ER24-10-000, et al.

We expect FERC to act on several early Order No. 2023 compliance filings at the Thursday Open Meeting. If the Commission does act, these will be the first orders addressing compliance with Order No. 2023.

3. Joint Federal-State Task Force on Electric Transmission and Federal and State Current Issues Collaborative, Docket Nos. AD21-15-000 and AD24-7-000

As part of FERC's actions on these items on Thursday, we are expecting to see an order commencing a new docket—AD24-7-000—relating to a Federal and State Issues Collaborative. There may also be a report or other update on the Joint Federal-State Task Force on Electric Transmission, which last convened on February 28, 2024.

4. Compensation for Reactive Power Within the Standard Power Factor Range, Docket No. RM22-2-000

In November 2021, the Commission issued a Notice of Inquiry ("NOI") seeking comments on reactive power capability and market design. Specifically, the NOI sought comments from parties addressing certain issues with basing reactive power capability compensation on cost-based revenue requirements, accounting and ratemaking issues related to non-synchronous resources, potential overcompensation in the PJM Interconnection, L.L.C. ("PJM") region, and alternative cost recovery methodologies for reactive power capability. Various parties submitted comments in response to the NOI throughout early 2022. FERC may be poised to order changes to the primary cost recovery methodology for reactive power capability.

5. Viridon New England LLC, Docket No. ER24-771-000

Viridon New England LLC ("VNE") submitted a request in late December 2023 for (i) authorization to use three incentive rate treatments for the development of transmission projects within the ISO-New England, Inc. ("ISO-NE") region; and (ii) authorization to allow any of VNE's subsidiaries "created to own or develop specific transmission assets" in the ISO-NE region "to use the same rate incentives without relitigation." The incentive rate treatments requested by VNE include a regulatory asset incentive, a hypothetical capital structure incentive, and a regional transmission organization participation incentive. VNE submitted a supplement to its petition, clarifying that VNE "would use the common formula transmission rate already embedded" in the ISO-NE Open Access Transmission Tariff rather than using a VNE-specific formula. We anticipate that FERC will act on VNE's request for authorization to use these incentive rate treatments.

6. Karen Schedler et al. v. Salt River Project Agricultural Improvement and Power District, Docket No. EL24-54-000

In January 2024, Schedler and several other parties ("Petitioners") filed a Petition for Enforcement under the Public Utilities Regulatory Policies Act ("PURPA") requesting the Commission bring an enforcement action to compel the Salt River Project Agricultural Improvement and Power District ("Salt River") "to offer non-discriminatory rates for the sale of electricity to, and purchase from, residential customers with rooftop solar." The Petitioners allege that Salt River, an electric utility in Arizona and a political subdivision of the state, has adopted several tariffs for customers with rooftop solar, that the tariffs impose certain higher fixed charges than those applicable to residential customers without rooftop solar, and that the tariffs resulted in a decrease of "between 50 and 96 percent" in applications for rooftop solar systems within Salt River's territory. In its response, Salt River urges the Commission to dismiss the petition on the basis that Salt River's retail rates are not within FERC's jurisdiction, and reiterates that its retail rates for residential customers with rooftop solar are just, reasonable, non-discriminatory, and reflective of the cost of service to each class of customers. We expect that FERC will take action on the petition and response.

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