On October 9, FERC issued an order stating its intent to revoke market based rate authority from 43 companies that have failed to file their Electronic Quarterly Reports (EQRs). Unless all outstanding EQRs are filed for each of these companies, FERC will, within 15 days of the order, “revoke that public utility’s market-based rate authorization and will terminate its electric market-based rate tariff.” The bottom line is that FERC is ramping up its enforcement efforts across the board, and the entities listed below have until October 24 to get their EQRs up to date and save themselves from FERC’s blacklist. All retail electric providers (“REP”) and electric generation suppliers must be aware of what EQRs are. Losing market based rate authority can put an electric company, whether a REP or a supplier, out of business. Continue reading
On August 22, the New York Public Service Commission (NY PSC) issued a proposed rule on the Reforming the Energy Vision (REV) initiative and comments were submitted throughout September. In short, the PSC intends to transform NY’s utilities into Distributed System Platform Providers (DSPPs), which will create, operate, plan, and police new markets for distributed energy resources (DER) and demand response (DR), in addition to acting as a local balancing authority (like a distribution level RTO). Retail Energy Providers (REPs aka ESCOs in NY) are asking, who will police the DSPPs and what will stop utility-affiliated generation from getting preferential treatment?
In our last post on this matter, we highlighted that REV may serve as one of the main driver’s of NY’s compliance efforts under the EPA’s Clean Power Plan. Now that REV’s form is taking shape, it’s being asked whether New York is sacrificing its freedom from monopoly control over the energy industry for the sake of expedience. The question is whether utilities, rather than a third party, should take on this role, as the argument follows that utilities have the resources and ability to more easily expand into becoming DSPPs. Continue reading
On September 8, Feller Energy Law Group attended the NYC Energy Marketing Conference. Although many of the concerns and needs of retail energy providers (“REPs”) remain the same, there was a shift at this conference towards bundling innovative products with commodity service. Speakers highlighted that offering distributed generation, demand response, and energy efficiency products is not just a good idea, but essential for any REP to remain competitive. REPs that offer these products by creating strategic partnerships with energy management firms and by offering financing products, like on-bill financing will remain competitive as the market evolves. Offering innovative products is not just about having the lowest bottom line, but also about being able to cultivate deep relationships with customers through numerous touch points that are not necessarily available when a REP is only offering commodity service. Continue reading
As we left off in Part I, the fight over the Hudson Valley’s energy future has gone to federal court. NYISO’s new capacity zone is going to raise prices for ratepayers by $70 million this summer just as the sting from this past winter’s polar vortex price spikes are beginning to wear off. When this sort of danger strikes who are you going to call? The NYPSC and the CHG&E (expecting someone else?) each filed separate, now consolidated, petitions at the Federal Court of Appeals for the Second Circuit seeking immediate reprieve for New Yorkers who face immediate and sudden “rate shock”. CHG&E petitioned for judicial review of the FERC August and January Orders that seem to have triggered this impending doom, arguing that FERC’s orders are arbitrary, capricious, and contrary to law and FERC’s prior orders, regulations, and policies. CHGE v. FERC, (2d Cir.), Petition for Review (May 30, 2014). Continue reading
New York’s new capacity zone (“NCZ”) conundrum discussed in an April 11, 2014 post, entitled: Hudson Valley & NYC Brace As Imminent Changes to New York’s Energy Markets Approach, is now being fought at Federal Circuit Court. The New York Public Service Commission (NY PSC) and Central Hudson Gas and Electric (CHG&E) have challenged the Federal Energy Regulatory Commission’s (FERC’s) approval of the new capacity zone, which is expected to significantly impact ratepayers in the Lower Hudson Valley. Rising temperatures can bring shockingly high electric prices, however, with an increase of $280 million per year in electric rates and $70 million of that coming just this summer in the Lower Hudson Valley, utility bills may burn much worse than any prolonged summer sun exposure. So sit back in your beach chair and unwind with us as we unravel the story of the Hudson Valley’s energy future. Continue reading
Under President Obama and the EPA’s new carbon reduction plan, which is the first ever national standard on carbon reductions, New York is now required to cut its carbon emissions by 44% by 2030. The EPA’s new rule comes just over a month after Governor Cuomo and the New York State Public Service Commission (PSC)’s April 24, 2014, announcement of their Reforming the Energy Vision (REV) initiative, which aims to develop a new energy paradigm in New York. Under the EPA’s new rule, every state has a great deal of flexibility in developing their implementation plans. REV aims to fundamentally restructure the way New Yorkers buy and use energy, and perhaps will become a main driver of how New York meets its newly federally required carbon emission standards.
Under REV, the PSC will begin a comprehensive overhaul of its regulatory scheme primarily with the creation of Distributed System Platform Providers (“DSPP”). A DSPP will essentially play the role of a local franchise utility (ConEd, O&R, CHP&G, Nat Grid, etc.) – but with more responsibilities. DSPPs would be tasked with planning and redesigning the local grid in order to integrate more distributed energy and demand response.
Though not yet a final plan, REV offers ESCOs, utilities and consumers an exciting opportunity as the traditional role of utilities expands beyond distributing electricity, maintaining local power lines, and billing customers. Additionally, aligning utility interests with increased distributed renewable energy and energy efficiency is an innovative revelation. Some are calling this expansion of the utility model a revolution. So, who implements REV, what are the opportunities and how will the role of ESCOs, energy consumers and other participants in the energy industry be impacted? Continue reading
Once again, the Court of Appeals for the DC Circuit has ruled that the Federal Energy Regulatory Commission (“FERC”) has overstepped its jurisdictional bounds. Last year, the DC Circuit rejected FERC’s presumption of authority to fine energy trader Brian Hunter for manipulating the natural gas futures market. This time, the DC Circuit struck down Order 745 - which sets forth FERC’s mandate to compensate end-use customers for not using electricity under a demand response market schematic. In a ruling issued today (May 23), the DC Circuit found that FERC went too far, “encroaching on the state’s exclusive jurisdiction to regulate the retail market.”
FERC required that RTOs/ISOs establish markets to compensate demand response resources under Order 745 back in 2011. Participants in demand response markets are retail electricity consumers that offer to reduce their energy consumption, and are compensated in the wholesale market as though they had generated the amount of energy they saved. Thus, participants receive compensation for the “NegaWatt” (as opposed to the MegaWatt). Continue reading