ISO-NE, NEPOOL: Keep DR in Capacity Market
By William Opalka
U.S. Solicitor General Donald Verrilli will ask the Supreme Court to review an appellate court ruling voiding the Federal Energy Regulatory Commission’s authority over demand response in wholesale energy markets.
Verrilli said in a filing yesterday that Chief Justice John Roberts had granted his request to extend a Dec. 16 deadline for filing a petition for a writ of certiorari by one month. “The FERC orders that the court of appeals set aside in this case address an integral feature of the nation’s wholesale electric-power markets under FERC’s jurisdiction — the rules for participation by demand-response resources — that is of substantial importance to the proper functioning of those markets and to assuring just and reasonable rates for wholesale power,” Verrilli said in a Dec. 5 filing requesting the extension.
FERC Chairman Cheryl LaFleur welcomed Verrilli’s action. “I believe the commission’s ability to regulate demand response in wholesale electric markets is of vital importance,” she said in a statement. “Demand response contributes to reliability, sustainability and affordability of electric service.”
Verrilli’s action came last week as ISO-NE and others took sides in response to a request by generators that DR be eliminated from New England’s forward capacity market.
The New England Power Generators Association asked FERC Nov. 14 to order ISO-NE to exclude DR from the Forward Capacity Market (EL15-21). (See New England Generators: Exclude DR from Capacity Auction.)
The generators said the request was warranted by the D.C. Circuit Court of Appeals ruling that vacated FERC Order 745, which set pricing rules for DR in wholesale energy markets. The ruling, which resulted from a challenge by the Electric Power Supply Association, was also cited in a similar challenge by FirstEnergy in PJM’s capacity market.
As of Friday, nearly 40 entities had sought to intervene in the New England docket, including power generators, demand response providers, consumer and environmental advocates, utilities, state regulators and commercial customers.
ISO-NE said the generators’ request is premature. “NEPGA’s suggestion that demand response simply be removed from the capacity market fails entirely to account for the continued benefits of demand response that currently participates in the wholesale market on the supply side, and the potential for structural and tariff adjustments to reflect these continued benefits.”
The New England Power Pool Participants’ Committee said ISO-NE must follow its filed rate and that NEPGA has not sought to utilize the stakeholder process to change it.
Demand response provider CPower said NEPGA’s complaint should be denied because it will make the capacity market less competitive, resulting in higher prices.
Public Service Enterprise Group was among those filing in support of the generators, saying the commission should prevent the ninth Forward Capacity Auction clearing prices from being distorted by resources that cannot lawfully participate in the auction. Commission action would avoid having to unwind the results of FCA 9 after the auction has run, PSEG said.
NEPGA asked FERC to issue an order by Jan. 15, two weeks before ISO-NE is set to begin its next FCA on Feb. 2.