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After court decision, FERC backs IMM role in commission proceeding

Highlights

FERC has discretion to decide who can intervene: IMM

FERC requirements distinct from constitutional standing: order

Washington — The US Federal Energy Regulatory Commission has backed the right of the independent market monitor for PJM Interconnection to participate in commission proceedings, in the wake of a federal court decision that threw the IMM's standing into question.

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The issue is important because PJM has cited the court case in several other proceedings to argue that market monitors cannot file complaints about the grid operator's market rules.

In June, Monitoring Analytics filed a late intervention into a proceeding to set rates for reactive supply and voltage control for the PA Solar Park facility in Pennsylvania.

In July, a FERC administrative law judge denied the request, citing a June 15 ruling by the US Court of Appeals for the District of Columbia Circuit that denied Monitoring Analytics' motion to intervene in a case involving a request to recoup operational costs during the 2014 Polar Vortex (Old Dominion Electric Cooperative v. FERC, 16-111).

The ALJ pointed to the court's conclusions that the IMM's role is that of an auditor. "The DC Circuit's characterization and findings as to the role played by the market monitor demonstrate that its participation in the proceeding at hand is not required by the public interest," the ALJ said.

The IMM appealed the ALJ's denial to FERC, arguing that standing before the DC Circuit is subject to the requirements of Article III of the US Constitution, and those requirements do not apply to proceedings before federal agencies.

COMMISSION DISCRETION

FERC has discretion to decide who can intervene in commission proceedings, the IMM said. And if FERC was to start using Article III standards applied in ODEC, many entities would be excluded from commission proceedings, the IMM said.

FERC August 20 decided that the IMM's participation in the proceeding is in the public interest and that ODEC does not mandate a different conclusion. FERC has routinely granted IMM intervention in reactive power rate proceedings, both before and after issuance of the ODEC decision, the August 20 order said.

"Consistent with that precedent and in recognition of the IMM's ongoing role in monitoring the provision of reactive power service within PJM, we find that the IMM's participation in this case is in the public interest," FERC said.

DISTINCT REQUIREMENTS

FERC noted that the court in ODEC made determinations based on the requirements for Article III standing, which are distinct from the requirements to participate in administrative proceedings.

But the ALJ could still decide to deny the IMM's intervention because it was late, FERC said in its order (ER18-1226) remanding the issue back to the ALJ.

On the broader issue of standing, PJM has filed nearly identical letters to FERC in three proceedings arguing that Monitoring Analytics, as well as Potomac Economics, the IMM for the neighboring regions, may not file complaints against the grid operator.

The proceedings include a complaint (EL17-62) filed by Potomac Economics over PJM 's pseudo-tie requirement for external resources; a complaint (EL17-82) from Monitoring Analytics arguing that PJM unfairly approved an exemption from its minimum offer price rule for a 47-MW uprate at the Dominion Energy Fairless power station; and a motion for clarification on FERC 's order generally accepting a PJM compliance filing (ER16-372) on implementing intraday offers in the energy market.

-- Kate Winston, kate.winston@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com