Commissioner James Danly Statement
June 29, 2021
Docket No. ER21-1816-000
I concur with the decision to accept yet another California Independent System Operator Corporation (CAISO) Reliability Must-Run Service Agreement (RMR Agreement), this time with KES Kingsburg, L.P. (Kingsburg). Given the reliability crisis CAISO faced in August, 2020, and ongoing reliability concerns this summer, there does not appear to be any question that CAISO requires Kingsburg to ensure resource adequacy. But I again write separately to reiterate that RMR agreements are a product of market failure and themselves cause markets to fail.[1]
I also previously expressed my concerns about the broad RMR authority CAISO sought and the Commission approved in 2019.[2] I agreed with now-Chairman Glick’s partial dissent in that case that the Commission granted CAISO unacceptably “broad authority to perform an end-run around the Commission-approved market structures in order to retain particular resources” without being “required to justify its decision to enter an RMR agreement in a filing before the Commission.”[3] With this broad RMR-authority, we cannot determine whether CAISO’s decision to retain Kingsburg was the “last resort” that Commission precedent requires.[4] CAISO’s tariff does not require CAISO to justify its RMR designation at the Commission.
Given the cited reliability concerns and the Commission’s limited role in “approving” CAISO RMR agreements, I concur that the Commission must accept this RMR Agreement. But it would be better if CAISO worked with stakeholders to fix its markets.
For these reasons, I respectfully concur.
[1] Greenleaf Energy Unit 2, LLC, 172 FERC ¶ 61,111 (2020) (Danly, Comm’r, concurring at P 2).
[2] See id. (Danly, Comm’r, concurring at PP 4-5).
[3] Cal. Indep. Sys. Operator Corp., 168 FERC ¶ 61,199 (2019) (Glick, Comm’r, dissenting in part at P 3).
[4] See, e.g., N.Y. Indep. Sys. Operator, Inc., 150 FERC ¶ 61,116, at P 16 (2015), order on compliance and reh’g, 155 FERC ¶ 61,076 (2016), order on compliance and reh’g, 161 FERC ¶ 61,189 (2017), order on clarification and reh’g, 163 FERC ¶ 61,047 (2018); Midwest Indep. Transmission Sys. Operator, Inc., 140 FERC ¶ 61,237, at P 10 (2012).