On September 29, 2020, in response to a request for rehearing, FERC issued an order modifying the discussion in, while sustaining the result of, a prior order finding that PJM Interconnection, L.L.C. (“PJM”) was not in compliance with three of the five criteria of Order No. 1000’s immediate need reliability project exemption (“Immediate Need Exemption”). Concurrently, in a separate order, FERC modified, while sustaining the result of, an order where it found that ISO New England Inc.’s (“ISO-NE”) implementation of the Immediate Need Exemption was not unjust, unreasonable, or unduly discriminatory or preferential.
On June 18, 2020 FERC issued concurrent orders dealing with PJM’s, ISO-NE’s, and Southwest Power Pool, Inc.’s implementation of the Immediate Need Exemption (“June 18 Orders”) (see June 24, 2020 edition of the WER). In the June 18 Orders, FERC found that PJM had been inconsistently implementing the Immediate Need Exemption but found no evidence that ISO-NE’s or SPP’s implementation of the exemption had been unjust, unreasonable, or unduly discriminatory or preferential. Based on these findings, FERC directed PJM to implement changes to bring it into compliance with Order No. 1000, and terminated its FPA Section 206 investigations into ISO-NE and SPP. In all three instances, FERC declined suggestions by commenters to create additional criteria for the Immediate Need Exemption.
Commenters filed rehearing requests with respect to the PJM and ISO-NE orders, arguing in both instances that FERC should have found that PJM and ISO-NE had used the exemption too frequently and not only in limited circumstances, as required by Order No. 1000. In its request for rehearing of the PJM-related June 18 Order, LSP Transmission Holdings II, LLC (“LS Power”) also disagreed with FERC’s requirement that, in order to qualify for the Immediate Need Exemption, a project must be needed within three years or less to solve a reliability issue. LS Power contended that the the three-year time frame should be based on a project’s in-service date, not the date by which it is needed.
In response to the requests for rehearing in both the PJM and ISO-NE proceedings, FERC found that its five-criteria test appropriately balances reliability and competition, stating in both orders that the “frequency with which immediate need reliability projects qualify under the exemption does not alone provide sufficient evidence that the tariff is unjust and unreasonable.” Further, FERC disagreed with LS Power’s assertion that the three-year criteria be based on a project’s in-service date and not when the project is needed, stating that the intention of the criteria is not to guarantee that a needed project is in place within the three-year period, but rather to minimize the delays associated with the competitive proposal window process. Based on its findings, FERC sustained, while modifying its discussions in, both orders.
A copy of the PJM order is available here.
A copy of the ISO-NE order is available here.