FERC Issues Order On Luminant Application For Market-Based Rate Authority
December 12,2018
FERC accepted and suspended, for a nominal period, the proposed tariff of Luminant Energy Company LLC for market-based rate authority for electricity, with the suspension related to an ongoing review of affiliate Dynegy's market power in the TVA and LGEE areas.
Specifically, FERC accepted and suspended Luminant's tariff, subject to refund and subject to the outcome of the pending proceeding in Docket No. ER15-1596-005, which is examining affiliate Dynegy's ability to make MBR sales in the Tennessee Valley Authority (TVA) and Louisville Gas and Electric/Kentucky Utilities (LGEE) balancing authority areas given results of a market power analysis
As previously reported, Luminant had sought MBR authority to sell energy, capacity, and certain ancillary services at market-based rates
Various Dynegy entities affiliated with Luminant currently hold MBR authority
In its original application, Luminant said, "LUME may sell wholesale electricity, ancillary services, and capacity throughout the United States. LUME’s proposed Rate Schedule FERC No. 1 includes the Commission’s standard tariff language for such sales of ancillary services in the organized electricity markets (CAISO, ISO-NE, MISO, NYISO, PJM and Southwest Power Pool ('SPP'))."
In its original application, Luminant said, "LUME also requests authority under Avista and Order No. 697 to make third-party sales of other specified ancillary services (Regulation Service, Energy Imbalance Service, Spinning Reserves and Supplemental Reserves) in markets other than those specified in the Commission’s standard language adopted in Order No. 697. Such sales shall not include the following: (1) sales to an RTO or ISO (i.e., where that entity has no ability to self-supply ancillary services but instead depends on third-parties); (2) sales to a traditional, franchised public utility affiliated with LUME or sales where the underlying transmission service is on the transmission system of a public utility affiliated with LUME; and (3) sales to a public utility that is purchasing ancillary services to satisfy its own open access transmission tariff requirements to offer ancillary services to its own customers. LUME’s Rate Schedule FERC No. 1 includes a provision authorizing such third-party sales of the specified ancillary services as previously adopted by the Commission."