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Clean Power Plan on trial; FERC to re-evaluate market power


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Clean Power Plan on trial; FERC to re-evaluate market power

The U.S. Court of Appeals for the District of ColumbiaCircuit will hear oral arguments in West Virginia v. EPA (No. 15-1363) on Sept.27. This is the second story in a series previewing that court action. Thefirst recaps thehistory of the Clean Power Plan, the third looks at the many parties to the case and thefourth examines wherestates are in terms of meeting the carbon rule's goals.

The U.S. Court of Appeals for the District of ColumbiaCircuit wrapped up a marathon session of oral arguments on the Clean Power Planlate Sept. 27 by questioning opponents' claims that the carbon-cutting rule isunconstitutional and that the U.S. EPA failed to show its goals are achievable,among other issues.

The judges of a federal appeals court agreed thatconflicting Senate and House amendments related to two sections of the CleanAir Act are certainly confusing. But in the absence of clarity, does that meanCongress alone must speak to the issue leaving the U.S. EPA unable to use oneof those sections?

FERC has decided to re-evaluate the way it has been lookingat market power when considering requests for merger approvals or for theauthority to sell power, capacity and ancillary services at market-based rates.Commissioner Tony Clark said during the agency's Sept. 22 open monthly meetingthat the commission has been working on market power issues "in bits andpieces and a little bit under the surface" for some time. It has decidedto now "tee up" some of the issues involved so they can be discussedin an open and transparent way, he said.

Ruling on an administrative law judge's almost four-year-oldinitial decision, FERC on Sept. 22 found that the costs of equipment regulatorsinstalled on the transmission system of International Transmission Co. cannot be assigned to theNew York ISO and thePJM InterconnectionLLC. However, while FERC agreed with Judge Steven Sterner that theMidcontinent Independent SystemOperator Inc. and the ITC Holdings Corp. subsidiary failed to show that eitherNYISO or PJM will benefit from the installation of the phase angle regulators atissue, the agency reversed several important aspects of the initial decision.

If Donald Trump wins the election in November, KathleenHartnett White, a member of his Economic Advisory Council, would put rollingback "crippling" environmental regulations at the top of a longpolicy wish list, she told S&P Global Market Intelligence in a wide-ranginginterview.

FERC approved a new California ISO flexible ramping product that will helpthe grid operator deal with the growing amount of variable energy resources inits footprint. Ramping capability denotes a resource's ability to quicklyincrease or decrease energy output in response to changes in forecasted netload driven by unexpected shifts in variable resource and othernon-dispatchable generation. As California and other regions becomeincreasingly dependent on renewable resources, the importance of rampingcapability grows.

FERC on Sept. 26 signed off on a settlement that puts torest enforcement staff's allegations that Maxim Power Corp. and several subsidiaries engaged inthree schemes that violated the agency's regulations prohibiting electricenergy market manipulation. Under the settlement, Maxim Power and itssubsidiaries will pay a $4 million civil penalty to the U.S. Treasury anddisgorge $4 million to the ISONew England Inc. to resolve charges that they offered powerproduced by a dual-fuel generating plant in a way that manipulated New Englandpower markets during July and August of 2010.

FERC on Sept. 22 approved a second mandatory reliabilitystandard aimed at protecting the nation's power grid from the risks posed bygeomagnetic disturbances, or GMDs, caused by solar storms. While the firststandard was aimed at mitigating the effects of potential GMDs, this one(TPL-007) sets requirements for transmission planners and owners to assess thegrid's vulnerability to a "benchmark GMD event" and take appropriatesteps to protect their equipment from related impacts.

As FERC previously indicated it would, the agency on Sept.22 issued a notice asking for stakeholder input on proposed revisions andclarifications to the reports electric companies are required to submit on aquarterly basis. Power companies subject to FERC's regulations under Section205 of the Federal Power Act, as well as non-jurisdictional utilities with morethan a de minimis market presence, must file electric quarterly reportssummarizing the contractual terms and conditions in their agreements for alljurisdictional services.