FERC Round-up: RMR Contracts, MISO SSR Costs, Market-Based Rates for Frequency Response
February 20,2015
Below is a round-up of notable action at FERC's meeting yesterday
New York ISO RMR Contracts
In another sign of the failure of capacity markets, FERC directed the New York Independent System Operator (NYISO) to file tariff revisions to establish rates, terms and conditions for reliability-must-run (RMR) service under which generating units that announce their intention to shut down, but are needed to ensure transmission system reliability and the efficient operation of the NYISO markets, remain in service. The lack of tariff provisions for such service in NYISO creates uncertainty and could undermine the operation of the grid.
FERC affirmed that System Support Resource (SSR) costs (reliability backstop/RMR) in the Midcontinent ISO must be allocated to the load-serving entities that require the operation of the SSR unit for reliability purposes, but found that MISO's current practice fails to allocate costs of the three SSR units located within the ATC pricing zone directly to the entities that benefit from their operation.
The FERC order rejects a MISO filing to revise the allocation of the costs for three SSR units to reflect new local balancing authority boundaries in the ATC pricing zone, and dismisses a complaint contesting that proposed allocation, finding that MISO must allocate SSR costs directly to benefiting load-serving entities without reliance on local balancing authority boundaries.
FERC did not direct any refunds at this time and instead said that the Commission will address any refund requirements in a future order addressing a new study methodology that is required to be filed.