Dive Brief:

• Federal regulators late last month denied rehearing requests to changes made last year to ISO New England's retirement process aimed at keeping economical power plants from being retired.
• The New England Power Generators Association, Exelon Corp. and NextEra Energy Resources had asked FERC to reconsider the 2016 order they said improperly changed how power plants set rates.
• Federal regulators disagreed, finding the tariff changes "add steps" to the bid review process "but do not fundamentally alter the process in a manner that infringes on petitioners’ rights."​

Dive Insight:

FERC in an April 2016 order made rule changes aimed at keeping economical units operating, in part to keep generators from shutting down a marginal unit to boost prices elsewhere. But the commission faced pushback from generators who said the changes, which allowed the grid operator to dictate that units keep operating, essentially stripped them of rate-setting rights.

FERC disagreed, rejecting comparisons to an instance where the commission denied tariff provisions allowing a regional transmission organization the unilateral right to file rates under agreements that required a resource to operate at that rate.

"That case involved the potential loss of a supplier’s right to seek cost recovery from the Commission when the resource disagrees with the regional transmission organization’s filing an unexecuted agreement on the supplier’s behalf," the commission wrote in its Oct. 30 order.

The commission agreed the proposed tariff changes "add steps to the bid review process but do not fundamentally alter the process in a manner that infringes on petitioners’ rights to file rates" under the Federal Power Act.

In proposing the changes to mitigate market power, ISO New England had told FERC that given the region's disappearing excess supply of capacity over the past several years, in instances where capacity supply conditions are tight, a supplier could seek to retire an existing resource to reduce available supply and increase prices in order to benefit the remainder of that supplier’s resource portfolio.

FERC, in denying the rehearing, said that "only those suppliers that fail to demonstrate the reasonableness of their cost estimates and exceed the materiality threshold will be mitigated by the Internal Market Monitor."