Uplift Cost Allocation and Transparency in Markets Operated By Regional Transmission Organizations, 041918 FERC, RM17-2-000

Docket Nº:RM17-2-000, Order 844
Party Name:Uplift Cost Allocation and Transparency in Markets Operated by Regional Transmission Organizations and Independent System Operators
Judge Panel:Before Commissioners: Kevin J. McIntyre, Chairman; Cheryl A. LaFleur, Neil Chatterjee, Robert F. Powelson, and Richard Glick. Nathaniel J. Davis, Sr., Deputy Secretary.
Case Date:April 19, 2018
Court:Federal Energy Regulatory Commission
 
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163 FERC ¶ 61, 041

Uplift Cost Allocation and Transparency in Markets Operated by Regional Transmission Organizations and Independent System Operators

No. RM17-2-000

Order No. 844

United States of America, Federal Energy Regulatory Commission

April 19, 2018

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule

SUMMARY: The Federal Energy Regulatory Commission is revising its regulations to improve transparency practices for regional transmission organizations (RTO) and independent system operators (ISO). The Commission requires that each RTO/ISO establish in its tariff: requirements to report, on a monthly basis, total uplift payments for each transmission zone, broken out by day and uplift category; requirements to report, on a monthly basis, total uplift payments for each resource; requirements to report, on a monthly basis, for each operator-initiated commitment, the size of the commitment, transmission zone, commitment reason, and commitment start time; and the transmission constraint penalty factors used in its market software, as well as the circumstances under which those factors can set locational marginal prices, and any process by which they can be changed. The Commission is withdrawing its proposal to require that each RTO/ISO that currently allocates the costs of real-time uplift to deviations allocate such real-time uplift costs only to those market participants whose transactions are reasonably expected to have caused the real-time uplift costs.

EFFECTIVE DATE: This rule will become effective 75 days after publication in the FEDERAL REGISTER.

FOR FURTHER INFORMATION CONTACT:

Adam Cornelius (Technical Information) Office of Energy Policy and Innovation Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 (202) 502-8314 adam.cornelius@ferc.gov

Katherine Scott (Technical Information) Office of Energy Market Regulation Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 (202) 502-6495 Katherine.Scott@ferc.gov

Colin Beckman (Legal Information) Office of the General Counsel Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 (202) 502-8049 colin.beckman@ferc.gov

SUPPLEMENTARY INFORMATION:

Before Commissioners: Kevin J. McIntyre, Chairman; Cheryl A. LaFleur, Neil Chatterjee, Robert F. Powelson, and Richard Glick.

FINAL RULE

TABLE OF CONTENTS

Paragraph Numbers

I. Introduction ....................................................................................................................

1.

II. Background ................................................................................................................. 10.

A. Current RTO/ISO Practices

....................................................................................

12.

1. Reporting Uplift ................................................................................................. 13.

2. Reporting Operator-Initiated Commitments ...................................................... 17.

3. Transmission Constraint Penalty Factors .......................................................... 20.

III. Need for Reform ........................................................................................................ 21.

A. Comments ............................................................................................................... 23.

B. Determination .........................................................................................................

27.

IV. Transparency Reforms .............................................................................................. 30.

A. Zonal Uplift Report ................................................................................................

36.

1. NOPR Proposal ................................................................................................... 36.

2. Comments

...........................................................................................................

39.

3. Determination ..................................................................................................... 50.

B. Resource-Specific Uplift Report

............................................................................

63.

1. NOPR Proposal ................................................................................................... 63.

2. Comments

...........................................................................................................

66.

3. Determination ..................................................................................................... 74.

C. Operator-Initiated Commitments

...........................................................................

83.

1. NOPR Proposal ................................................................................................... 83.

2. Comments

...........................................................................................................

87.

3. Determination ..................................................................................................... 99.

D. Transmission Constraint Penalty Factors

.............................................................

109.

1. NOPR Proposal ................................................................................................. 109.

2. Comments

.........................................................................................................

111.

3. Determination ................................................................................................... 121.

E. Other Comments Requested

.................................................................................

123.

1. Reporting of Transmission Outages ................................................................. 123.

2. Availability of Market Models ......................................................................... 131.

V. Compliance and Implementation Timelines ............................................................. 136.

A. Comments ............................................................................................................. 137.

B. Determination ....................................................................................................... 141.

VI. Information Collection Statement ........................................................................... 142.

VII. Environmental Analysis ......................................................................................... 146.

VIII. Regulatory Flexibility Act .................................................................................... 147.

IX. Document Availability ............................................................................................ 149.

X. Effective Date and Congressional Notification ........................................................ 152.

APPENDIX: List of Short Names/Acronyms of Commenters ........................................

I. Introduction

1. In this Final Rule, the Federal Energy Regulatory Commission (Commission) finds that current regional transmission organization (RTO) and independent system operator (ISO) practices with respect to reporting uplift payments and operator-initiated commitments, 1 and RTO/ISO tariff provisions regarding transmission constraint penalty factors2 are insufficiently transparent, resulting in rates that are not just and reasonable for the reasons discussed below. To remedy these unjust and unreasonable rates, we require, pursuant to section 206 of the Federal Power Act, 3 that each RTO/ISO establish in its tariff: (1) requirements to report, on a monthly basis, total uplift payments for each transmission zone, broken out by day and uplift category (Zonal Uplift Report); (2) requirements to report, on a monthly basis, total uplift payments for each resource (Resource-Specific Uplift Report); (3) requirements to report, on a monthly basis, for each operator-initiated commitment, the size of the commitment, transmission zone, commitment reason, and commitment start time (Operator-Initiated Commitment Report); and (4) the transmission constraint penalty factors used in its market software, as well as the circumstances under which those factors can set locational marginal prices (LMP), and any process by which they can be changed (Transmission Constraint Penalty Factor Requirements).

2. We reach this conclusion for several reasons. RTO/ISO markets can be affected by a number of operational challenges such as...

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