Commissioner Richard Glick Statement
November 19, 2020
Docket No. ER18-619-001
Order: E-20
I dissent from today’s order because I do not believe that ISO New England Inc.’s Competitive Auctions with Sponsored Policy Resources (CASPR) construct is a just and reasonable means of accommodating state public policies in its Forward Capacity Market (FCM). Although CASPR had some theoretical appeal, the nearly three years since the Commission accepted the filing have made clear that, in practice, CASPR simply is not up to the task of accommodating the New England states’ efforts to decarbonize their electricity sector and address the threat of climate change. It is time to go back to the drawing board.
CASPR is, at its core, another effort to make a minimum offer price rule (MOPR) an effective way to mediate the interaction between state public policies and the FCM. That is a fool’s errand. Electricity markets are, and always have been, the product of public policy. Pretending otherwise or trying to mitigate our way to a market free from the effects of certain public policies will only harm customers, create needless federal-state tensions, and undermine faith in the regional markets whose development has been this Commission’s crowning achievement. We must move beyond the MOPR.
I recognize that the question of how to reform electricity markets to manage the ongoing transition to a clean energy future is a complex one and that the right answer will likely vary among the different RTOs. But that is all the more reason to begin putting those structures in place now, rather than searching for ways to keep MOPR-based approaches on life support.
* * *
My theory of the case begins with a basic proposition: Under the Federal Power Act (FPA), the states, not the Commission, are responsible for shaping the mix of resources used to generate electricity. Although the FPA vests the Commission with jurisdiction over wholesale sales of electricity, as well as practices affecting those wholesale sales,[1] Congress expressly precluded the Commission from regulating “facilities used for the generation of electric energy.”[2] The FPA preserves that responsibility for exclusive state jurisdiction.[3]
But while those jurisdictional lines are clearly drawn, the respective spheres of jurisdiction themselves are not “hermetically sealed.”[4] One sovereign’s exercise of its authority will inevitably affect matters subject to the other sovereign’s exclusive jurisdiction.[5] For example, any state regulation that increases or decreases the number of generation facilities will, through the law of supply and demand, inevitably affect wholesale rates.[6] Nevertheless, the existence of such cross-jurisdictional effects is not necessarily a “problem” for the purposes of the FPA. Rather, those effects are the product of the “congressionally designed interplay between state and federal regulation”[7] and the natural result of a system in which regulatory authority over a single industry is divided between federal and state government.[8] Maintaining that interplay and permitting each sovereign to carry out its designated role is essential to the federalist regime that Congress made the foundation of the FPA.
When the Commission tries to prevent state public policies from having their inevitable, but indirect effect on a capacity market, it takes on the role that Congress reserved for the states. That is true even where the Commission claims that its only “policy” is to block the effects of state public policies, not the policies themselves. After all, a federal policy of eliminating the effects of state resource decisionmaking policies is itself a form of public policy—just not one that Congress gave the Commission authority to pursue.
In any case, as former Chairman Norman Bay correctly observed, an “idealized vision of markets free from the influence of public policies . . . does not exist, and it is impossible to mitigate our way to its creation.”[9] Instead, public policy and energy markets are inextricably intertwined.[10] Nearly every aspect of the electricity market is affected by at least one—and more often many—federal, state, or local policies.[11] Even if the Commission were to succeed in ferreting out the effects of state efforts to shape the generation mix, the result would not be a “competitive”[12] market as the Commission defines the term. Instead, the market would continue to reflect the long history of federal and state public policy, ignoring only the contemporary effects of the very policy decisions that Congress expressly reserved for the states.
The futility of trying to simulate a market free of public policy is particularly evident in New England, where the states are actively exercising their authority over generation facilities to decarbonize their electricity sectors and confront the urgent threat posed by climate change.[13] The Commission’s efforts to block the effects of those policies will not lead the states to abandon them. If anything, we are more likely to watch the states ramp up their policies as the consequences of climate change become ever more apparent than we are to watch them acquiesce in the Commission’s efforts to “nullify” those policies.[14] Turning RTO market rules into one of the principal barriers to the realization of state policies will, sooner or later, fragment RTO markets and undermine the regionalization of the grid.
We must avoid that result. RTOs, and regional markets more generally,[15] should be one of the principal building blocks for the transition to the electricity grid of the future. Regional markets can more effectively utilize resources of all types—both the clean resources promoted by state public policies, as well as other resources that currently help balance the system. That dynamic is critical to making the transition to a clean energy future as efficient as possible.[16] To realize those efficiencies, RTOs—and this Commission—need to once and for all stop trying to fight the effects of state public policies and make accommodating those policies a foundational principle of RTO markets.
I recognize that CASPR, when it was proposed, was supposed to provide a way for State Sponsored Resources that were blocked by the MOPR to secure a capacity commitment through the so-called substitution auction.[17] As I explained in my separate statement accompanying the underlying order, that approach had a theoretical appeal insofar as it could recognize the capacity contribution from certain State Sponsored Resources, which would help to accommodate state public policies while reducing costs to consumers.[18] But, even so, CASPR was at root an attempt to work within the MOPR—a point best illustrated by ISO New England’s explanation that, at every turn, it prioritized preventing “price suppression” over accommodating state public policies.[19] Accordingly, I concluded that while CASPR’s theoretical appeal was sufficient on that record to carry ISO New England’s burden under FPA section 205, whether it would ultimately remain just and reasonable would depend on how successful it proved in accommodating state public policies.[20]
On that score, CASPR deserves a failing grade.[21] Only a few dozen megawatts of state-sponsored capacity have cleared through the substitution auction in the first two Forward Capacity Auctions (FCA) featuring CASPR.[22] Moreover, ISO New England has, in my view, failed to demonstrate the commitment to accommodating state public policies that is necessary to make a construct like CASPR successful.[23] Simply put, CASPR is not an adequate substitute for the Renewable Technology Exemption, which ISO New England phased out as part of the CASPR proposal.[24] That alone is sufficient for me to conclude that CASPR has not been shown to be just and reasonable.
In addition, the New England states have significantly increased their decarbonization ambitions since the Commission accepted CASPR. For example, Maine has adopted a 100% clean energy standard,[25] while other states in the region have dramatically increased their clean energy procurement goals.[26] The record in this proceeding and the experience of the first two FCAs featuring CASPR do not provide any reason to believe that it will prove an effective means of accommodating those state policies.
No doubt that is partly because CASPR was never intended as a way of accommodating evolving state efforts decarbonize the resource mix. For example, CASPR established a cut-off date that made only resources sponsored by pre-existing state policies eligible for the substitution auction[27]—surefire evidence that the construct was not designed with an eye toward the subsequent expansion of state efforts to address climate change.[28] A construct that is designed not to adapt to evolving state policies for addressing climate change is, almost a fortiori, destined to fail to accommodate those policies.
The Commission itself also bears considerable responsibility for my conclusion that CASPR is unjust and unreasonable. In the nearly three years since it issued the original CASPR Order, the Commission has thoroughly weaponized MOPRs into a tool for stymying state public policies and propping up prices.[29] Although the roots of that antagonistic approach to the states were evident in the CASPR Order,[30] both the statements that accompanied that order[31] and subsequent testimony before Congress,[32] suggested that the original order’s most antagonistic aspects lacked the support of a majority of the Commission.[33] Nevertheless, the approach foreshadowed in Paragraph 22 of the CASPR Order has come to perfectly capture the Commission’s approach to state public policies.[34] In going down that misguided path, the Commission eliminated any chance that a MOPR-based approach to managing the effects of state public policies on wholesale markets could prove durable.[35] And, in so doing, the Commission’s use of the MOPR against the states has convinced me that a MOPR-based approach to accommodating state public policies cannot be just and reasonable. The irony, of course, is that it has been this Commission’s embrace of the MOPR that has done more than anything to hasten its ultimate demise.
Finally, the Commission’s responses to various rehearing requests in today’s order underscore why its acceptance of CASPR was arbitrary and capricious. First and foremost is the Commission’s continued reliance on the term “investor confidence.”[36] That concept, which the Commission pulled out for the first time in the CASPR Order, and its role in this proceeding have never been adequately explained.[37] Although today’s order argues that the Commission provided a definition of the term in the CASPR Order,[38] it does not explain why “investor confidence” should be the lodestar by which the Commission evaluates whether a proposal to accommodate state public policies is just and reasonable. Instead, today’s order directs us to the CASPR Order’s statement that the “purpose of the FCM is to ensure that sufficient investors will be both available and willing to invest in capacity in New England.”[39] But if one reads the cited language and accompanying authority carefully, it is clear that, prior to this proceeding, the Commission recognized that the purpose of the FCM was to produce the price signals needed to ensure resource adequacy at just and reasonable rates, which is not necessarily the same thing as maintaining investor confidence.[40] After all, price signals that encourage resource exit and discourage new entry might well undermine certain investors’ confidence in the FCM while nevertheless being the result of a well-functioning market. As a result, nothing in the underlying order or today’s order on rehearing explains the Commission’s decision to shift its focus to ensuring “investor confidence” or how that shift could be construed as consistent with the Commission’s previous orders or its obligation to ensure that wholesale rates and practices are just and reasonable and not unduly discriminatory or preferential.[41]
In addition, the Commission has abandoned “investor confidence” in similar proceedings as it has flip-flopped between different justifications for its use of the MOPR in the different RTOs. In its various PJM MOPR orders, for example, the Commission justified its intervention using the equally inscrutable concepts of “market integrity” and the “premise of capacity markets” instead of relying on “investor confidence.”[42] Although the different RTOs can pursue different market designs, the Commission has never, including in today’s order, coherently explained its practice of relying on different, seemingly unrelated buzz words to justify its actions in the different RTOs. That is arbitrary and capricious.
The Commission’s baffling assertion that allowing State Sponsored Resources to enter the capacity auction “over time will reduce the potential for New England to develop more resources than ISO-NE needs to maintain resource adequacy” is similarly arbitrary and capricious.[43] For every State Sponsored Resource that does not receive a capacity supply obligation, either through the main FCM mechanism or CASPR’s substitution auction, an additional resource will receive a corresponding capacity supply obligation and, presumably, participate in the market when it might not otherwise. That is, after all, the purpose of a capacity auction intended to guide resource entry and exit.[44] But that does not mean that State Sponsored Resources that are precluded from receiving a capacity supply obligation will not be built. Those resources are required to be developed under state law, even when their contribution to resource adequacy is ignored in the FCM. Neither economic theory nor the record before us supports the suggestion that limiting the capacity contribution from State Sponsored Resources, or allowing such resource entry only “over time,” will significantly reduce the potential for overbuilding. Rather, overbuilding—and the attendant harm[45]—is the obvious and inevitable consequence of a MOPR-based approach to state policies. There is no reason to believe that CASPR’s phased approach to allowing State Sponsored Resources into the market will vitiate those harms.[46]
For the foregoing reasons, I would grant rehearing and reject CASPR. I would not, however, send ISO New England back to the drawing board alone. As noted above, this Commission has for years mistakenly relied on MOPRs to “mitigate” the impacts of state public policies in the eastern RTOs.[47] The Commission, as much as any other entity, bears responsibility for the unsustainable place in which we find ourselves today. Moreover, the experience in multiple RTOs over recent years is that when the Commission sends an RTO off to implement a vague directive, especially when cut off from communication with the Commission by our ex parte regulations, we unnecessarily complicate the process of identifying a new just and reasonable rate. Accordingly, I believe that it is incumbent on the Commission to work cooperatively with the ISO, its stakeholders, and the New England states to settle upon a durable framework that accommodates state public policies while also ensuring that the wholesale market procures the resources and services needed to operate the grid reliably.
I do not believe that the current FCM is up to that task. In New England, as in the other eastern RTOs, it has become clear that the principles and assumptions that underlay the creation of the current capacity market constructs no longer hold. In particular, the days when the procurement of a single, undifferentiated “capacity” product could serve as an effective guide for efficient resource entry and exit are over. Especially in New England, concerns about the consequences that resource entry and exit decisions have for climate change, among other things, are likely to play a more important role in resource entry and exit than the FCM clearing price. It is past time for the resource adequacy paradigms to evolve accordingly. Rather than clinging to MOPRs as a way of blocking the effects of state public policies, we should be accelerating efforts to more efficiently procure the resources and services needed to reliably operate a clean energy grid.
I do not mean to suggest that this task will be easy, seamless, or completed in one fell swoop. It will eventually require that all the relevant elements of an RTO—including not just the resource adequacy construct, but also the procurement of energy and ancillary services, as well as the planning and development of new transmission facilities—work in concert to accommodate the changing electricity sector. That will be no mean feat. But the longer the Commission waits to take those inevitable steps, the more harm it will do to RTO markets and the customers we are supposed to protect.
For these reasons, I respectfully dissent.
[1] Specifically, the FPA applies to “any rate, charge, or classification, demanded, observed, charged, or collected by any public utility for any transmission or sale subject to the jurisdiction of the Commission” and “any rule, regulation, practice, or contract affecting such rate, charge, or classification.” 16 U.S.C. § 824e(a); see also id. § 824d(a) (similar).
[2] See id. § 824(b)(1); Hughes v. Talen Energy Mktg., LLC, 136 S. Ct. 1288, 1292 (2016) (describing the jurisdictional divide set forth in the FPA); FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760, 767 (2016) (EPSA) (explaining that “the [FPA] also limits FERC’s regulatory reach, and thereby maintains a zone of exclusive state jurisdiction”); Panhandle E. Pipe Line Co. v. Pub. Serv. Comm’n of Ind., 332 U.S. 507, 517-18 (1947) (recognizing that the analogous provisions of the Natural Gas Act (NGA) were “drawn with meticulous regard for the continued exercise of state power”). Although these cases deal with the question of preemption, which is, of course, different from the question of whether a rate is just and reasonable, the Supreme Court’s discussion of the respective roles of the Commission and the states remains instructive when it comes to evaluating how the application of a MOPR squares with the Commission’s role under the FPA.
[3] 16 U.S.C. § 824(b)(1); Hughes, 136 S. Ct. at 1292; see also Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm’n, 461 U.S. 190, 205 (1983) (recognizing that issues including the “[n]eed for new power facilities, their economic feasibility, and rates and services, are areas that have been characteristically governed by the States”).
[4] EPSA, 136 S. Ct. at 776; see Oneok, Inc. v. Learjet, Inc., 135 S. Ct. 1591, 1601 (2015) (explaining that the natural gas sector does not adhere to a “Platonic ideal” of the “clear division between areas of state and federal authority” that undergirds both the FPA and the NGA).
[5] See EPSA, 136 S. Ct. at 776; Oneok, 135 S. Ct. at 1601; Coal. for Competitive Elec. v. Zibelman, 906 F.3d 41, 57 (2d Cir. 2018) (explaining that the Commission “uses auctions to set wholesale prices and to promote efficiency with the background assumption that the FPA establishes a dual regulatory system between the states and federal government and that the states engage in public policies that affect the wholesale markets”).
[6] Zibelman, 906 F.3d at 57 (explaining how a state’s regulation of generation facilities can have an “incidental effect” on the wholesale rate through the basic principles of supply and demand); id. at 53 (“[I]t would be ‘strange indeed’ to hold that Congress intended to allow the states to regulate production, but only if doing so did not affect interstate rates.” (quoting Nw. Cent. Pipeline Corp. v. State Corp. Comm’n of Kan., 489 U.S. 493, 512-13 (1989) (Northwest Central))); Elec. Power Supply Ass’n v. Star, 904 F.3d 518, 524 (7th Cir. 2018) (explaining that the subsidy at issue in that proceeding “can influence the auction price only indirectly, by keeping active a generation facility that otherwise might close . . . . A larger supply of electricity means a lower market-clearing price, holding demand constant. But because states retain authority over power generation, a state policy that affects price only by increasing the quantity of power available for sale is not preempted by federal law.”).
[7] Hughes, 136 S. Ct. at 1300 (Sotomayor, J., concurring) (quoting Northwest Central, 489 U.S. at 518); id. (“recogniz[ing] the importance of protecting the States’ ability to contribute, within their regulatory domain, to the [FPA]’s goal of ensuring a sustainable supply of efficient and price-effective energy”).
[8] Cf. Star, 904 F.3d at 523 (“For decades the Supreme Court has attempted to confine both the Commission and the states to their proper roles, while acknowledging that each use of authorized power necessarily affects tasks that have been assigned elsewhere.”).
[9] N.Y. State Pub. Serv. Comm’n v. N.Y. Indep. Sys. Operator, Inc., 158 FERC ¶ 61,137 (2017) (Bay, Chairman, concurring at 2).
[10] As the FPA itself recognizes, “the business of transmitting and selling electric energy for ultimate distribution to the public is affected with a public interest.” 16 U.S.C. § 824.
[11] See Calpine Corp. v. PJM Interconnection, L.L.C., 169 FERC ¶ 61,239 (2019) (Glick, Comm’r, dissenting at PP 27-28) (discussing the scope of federal and state subsidies affecting the PJM capacity market); Calpine Corp. v. PJM Interconnection, L.L.C., 163 FERC ¶ 61,236 (2018) (Glick, Comm’r, dissenting at 6-9) (explaining how “[g]overnment subsidies pervade the energy markets and have for more than a century”); ISO New England Inc., 162 FERC ¶ 61,205 (2018) (CASPR Order) (Glick, Comm’r, dissenting in part and concurring in part at 3) (“Our federal, state, and local governments have long played a pivotal role in shaping all aspects of the energy sector, including electricity generation.”).
[12] See ISO New England, Inc., 173 FERC ¶ 61,162, at P 38 (2020) (CASPR Rehearing Order) (explaining that ensuring “competitive participation in the FCM” involves “screening out revenues that are only available to a subset of suppliers”).
[13] See, e.g., New England’s Regional Wholesale Electricity Markets and Organizational Structures Must Evolve For 21st Century Clean Energy Future, http://nescoe.com/wp-content/uploads/2020/10/Electricity_System_Reform_GovStatement_14Oct2020.pdf.
[14] Calpine Corp. v. PJM Interconnection, L.L.C., 169 FERC ¶ 61,239 at PP 10, 89 (recognizing, in a moment of rather refreshing candor, that applying the MOPR to federal policies would “disregard or nullify” those policies in a way that the Commission is prohibited from doing); see id. (Glick, Comm’r, dissenting at n.26) (“The Commission justifies its refusal to extend the MOPR to federal subsidies because to do so would ‘disregard or nullify the effect of federal legislation.’ But that can only mean that the Commission is fully aware that this is what it is doing to state policies, notwithstanding its repeated assurances that it respects state jurisdiction over generation facilities.”) (internal citations omitted); see Calpine Corp. v. PJM Interconnection, L.L.C., 171 FERC ¶ 61,035 (2020) (Glick, Comm’r, dissenting at P 10) (similar).
[15] Not all regionalization takes the form of an RTO. CAISO’s Energy Imbalance Market (EIM), for example, has similarly had great success in integrating renewable resources cost-effectively. See California Indep. Sys. Operator, Western EIM Benefits Report: Third Quarter 2020 at 17 (Oct. 29, 2020), https://www.westerneim.com/Documents/ISO-EIM-Benefits-Report-Q3-2020.pdf (calculating the benefits associated with avoided curtailment of renewables).
[16] As I have previously explained, mitigating state-sponsored resources will cause RTOs to procure unneeded capacity at needlessly high prices. See CASPR Order, 162 FERC ¶ 61,205 (Glick, Comm’r, dissenting in part and concurring in part at 5) (“[T]he MOPR will force LSEs to procure more capacity than is needed to maintain resource adequacy, all of which consumers will be required to pay for. In addition, by increasing the market-clearing price in the capacity market, the MOPR increases the cost of every unit of capacity that clears the capacity auction.”). The result is to greatly increase the cost of maintaining resource adequacy as the state drives a transition to a clean energy future.
[17] Transmittal at 5.
[18] CASPR Order, 162 FERC ¶ 61,205 (Glick, Comm’r, dissenting in part and concurring in part at 6-7).
[19] Transmittal at 1 (stating that “whenever possible,” ISO New England elected to preserve what it describes as “competitive prices” over the accommodation of state public policies); see CASPR Order, 162 FERC ¶ 61,205 at P 6 (reciting ISO New England’s description of CASPR’s goals).
[20] CASPR Order, 162 FERC ¶ 61,205 (Glick, Comm’r, dissenting in part and concurring in part at 6-7).
[21] Vineyard Wind LLC, 173 FERC ¶ 61,058 (2020) (Glick, Comm’r, concurring at P 2).
[22] See id. (Glick, Comm’r, concurring at P 2 & nn.5-6). Today’s order does not address the paucity of new capacity that has cleared through the substitution auction, presumably because it was not raised in the rehearing requests, which, as required by law, see 16 U.S.C. § 825l(a), were filed within thirty days of the underlying order. But those rehearing requests have languished before the Commission for almost three years, in which time ISO New England has run a pair of FCAs using CASPR. Given that the Commission elsewhere in today’s order relies on data about those auctions, it is arbitrary and capricious not to consider the ways in which that data from subsequent auctions undermines its conclusions in today’s order, particularly because the rehearing requests questioned whether CASPR would, in fact, accommodate those State Sponsored Resources. E.g., Clean Energy Advocates Rehearing Request at 31-35 (“Had the Commission considered the issue, it would have found that there is insufficient evidence to conclude that the substitution auction will work to allow state-sponsored resources to enter the ISO-NE capacity market, thereby avoiding the procurement of thousands of megawatts of unneeded capacity.”); see Genuine Parts Co. v. EPA, 890 F.3d 304, 312 (D.C. Cir. 2018) (“[A]n agency cannot ignore evidence that undercuts its judgment; and it may not minimize such evidence without adequate explanation.”); Lakeland Bus Lines, Inc. v. NLRB, 347 F.3d 955, 962 (D.C. Cir. 2003) (explaining that a court “may not find substantial evidence ‘merely on the basis of evidence which in and of itself justified [the agency’s conclusion], without taking into account contradictory evidence or evidence from which conflicting inferences could be drawn’” (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 487 (1951)); see also Am. Gas Ass’n v. FERC, 593 F.3d 14, 21 (D.C. Cir. 2010) (explaining that it is arbitrary and capricious for the Commission not to consider and adequately respond to arguments raised by dissenting Commissioners).
[23] Vineyard Wind LLC, 173 FERC ¶ 61,058 (Glick, Comm’r, concurring at PP 1-2); ISO New England Inc., 166 FERC ¶ 61,061 (2019) (Glick, Comm’r, dissenting in part at 2).
[24] See CASPR Order, 162 FERC ¶ 61,205 at P 87. Whether a MOPR along with the Renewable Technology Exemption is itself just and reasonable is another question, but one that is not implicated by this filing.
[25] See An Act To Reform Maine's Renewable Portfolio Standard, Maine LD 1494 (2019).
[26] See, e.g., Adam Wilson, New England Renewable Policies to Drive 12,500 MW of Renewable Capacity By 2030 (June 15, 2020), https://www.spglobal.com/
marketintelligence/en/news-insights/research/new-england-renewable-policies-to-drive-12500-mw-of-renewable-capacity-by-2030; Nat’l Renewable Energy Lab., Comparing Offshore Wind Energy Procurement and Project Revenue Sources Across U.S. States at 17-18 (2020), https://www.nrel.gov/docs/fy20osti/76079.pdf (detailing the New England states offshore wind procurement goals).
[27] CASPR Order, 162 FERC ¶ 61,205 at P 28.
[28] Today’s order does not address how that cut-off date applies to the New England states’ post-CASPR actions, again no doubt because most of that state activity took place in the nearly three years since the rehearing requests were filed, see supra note 22. Nevertheless, the failure to consider that question only underscores to extent to which the Commission has not seriously wrestled with the question of whether CASPR is an adequate means of accommodating state policies in the FCM.
[29] See, e.g., Calpine Corp. v. PJM Interconnection, L.L.C., 173 FERC ¶ 61,061 (2020) (Glick, Comm’r, dissenting at P 8) (“The majority has taken MOPRs, already a controversial topic, and thoroughly weaponized them as a tool for increasing prices and stifling state efforts to promote clean energy.”); N.Y. Pub. Serv. Comm’n v. N.Y. Indep. Sys. Operator, Inc., 173 FERC ¶ 61,060 (2020) (Glick, Comm’r, dissenting at P 4) (“Buyer-side market power rules—often referred to as minimum offer price rules or MOPRs—that were once intended only as a means of preventing the exercise of market power have evolved into a scheme for propping up prices, freezing in place the current resource mix, and blocking states’ exercise of their authority over resource decisionmaking.”).
[30] CASPR Order, 162 FERC ¶ 61,205 at P 22 (stating that the Commission “intend[ed] to use the MOPR to address the impacts of state policies on the wholesale capacity markets”); see id. (Glick, Comm’r, dissenting in part and concurring in part at 1) (“The suggestion in today’s order that the Commission will rely on MOPRs—or something similar—to mitigate the impacts of state public policies will eventually come to rank as a historically serious misstep.”).
[31] See id. (Glick, Comm’r, dissenting in part and concurring in part at n.1) (“My colleagues’ separate statements indicate that paragraph[] 22 of today’s order did not receive the votes of a majority of the Commission.”).
[32] Gavin Bade, Chatterjee Opposes MOPR as ‘Standard Solution’ For State Policies (Apr. 19, 2018), https://www.utilitydive.com/news/chatterjee-opposes-mopr-as-standard-solution-for-state-policies/521731/.
[33] CASPR Order, 162 FERC ¶ 61,205 (Glick, Comm’r, dissenting in part and concurring in part at n.1).
[34] See N.Y. Pub. Serv. Comm’n v. N.Y. Indep. Sys. Operator, Inc., 173 FERC ¶ 61,060 (Glick, Comm’r, at PP 28-29) (“[W]e are witnessing a federal agency attempt to stamp out the effects of a state’s efforts to promote a clean energy future.”); Calpine Corp. v. PJM Interconnection, L.L.C., 171 FERC ¶ 61,035 (Glick, Comm’r, dissenting at PP 3-4) (criticizing the Commission for “establish[ing] a sweeping definition of state subsidy that will subject much, if not most, of the resources in PJM’s capacity market to a minimum offer price rule.”)
[35] At least as a means for managing the effects of state public policies. As I have previously explained, I believe MOPRs may have a legitimate role in managing the effects of actual buyer-side market power. N.Y. Pub. Serv. Comm’n v. N.Y. Indep. Sys. Operator, Inc., 173 FERC ¶ 61,060 (Glick, Comm’r, dissenting at PP 1, 20). But, it should go without saying, buyer-side market power mitigation should be limited only to buyers with market power. Id.
[36] CASPR Rehearing Order, 173 FERC ¶ 61,162 at PP 33-39.
[37] CASPR Order, 162 FERC ¶ 61,205 (Glick, Comm’r, dissenting in part and concurring in part at 4-5).
[38] CASPR Rehearing Order, 173 FERC ¶ 61,162 at P 33 (“[T]he meaning of the term “investor confidence” is readily gleaned from the CASPR Order. As the Commission explained, in the context of the FCM, investor confidence is the willingness to ‘bear resource investment risk in exchange for an opportunity to earn a market return commensurate with that risk.’”) (citing CASPR Order, 162 FERC ¶ 61,205 at P 23).
[39] CASPR Rehearing Order, 173 FERC ¶ 61,162 at P 35 (citing CASPR Order, 162 FERC ¶ 61,205 at P 21).
[40] See ISO New England Inc., 155 FERC ¶ 61,023, at P 35 (2016) (describing “the purpose of the FCM” as “ensuring that price signals are sufficient to incent existing resources to stay in the capacity market, and new resources to enter, so that ISO-NE meets its reliability requirements at least cost”); see also ISO New England Inc., 158 FERC ¶ 61,138, at P 9 (2017) (“One purpose of capacity markets is to send appropriate price signals regarding where and when new resources are needed.”).
[41] See ABM Onsite Servs.-W., Inc. v. NLRB, 849 F.3d 1137, 1142 (D.C. Cir. 2017) (“[A]n agency’s unexplained departure from precedent is arbitrary and capricious.”).
[42] See Calpine Corp. v. PJM Interconnection, L.L.C., 171 FERC ¶ 61,035 (Glick, Comm’r, dissenting at P 18) see also N.Y. Pub. Serv. Comm’n v. N.Y. Indep. Sys. Operator, Inc., 173 FERC ¶ 61,060 (Glick, Comm’r, dissenting at P 28) (criticizing the Commission for using different “buzz words” to justify its actions).
[43] CASPR Rehearing Order, 173 FERC ¶ 61,162 at P 57.
[44] See supra note 40 and accompanying text.
[45] ISO New England Inc., 158 FERC ¶ 61,138 at P 9 (“If renewable resources are being built, but are not reflected in the FCM, then the FCM may send an incorrect signal to construct new capacity that is not needed. Not only would the capacity market send an incorrect signal, but customers would have to pay for capacity twice — first, for renewable resources via out-of-market mechanisms and second, for additional capacity that is procured because the capacity market has sent the incorrect signal that additional capacity is needed.”).
[46] Once again, I recognize that the CASPR proposal is an attempt to provide a way around the MOPR and that ISO New England’s general application of the MOPR is not at issue in this proceeding. Nevertheless, insofar as the Commission is suggesting that the CASPR will avoid some or all of those harms, they become relevant to determining whether the Commission’s decisionmaking is arbitrary and capricious.
[47] See supra P 14; see also N.Y. Pub. Serv. Comm’n v. N.Y. Indep. Sys. Operator, Inc., 173 FERC ¶ 61,060 (Glick, Comm’r, dissenting at PP 3-19) (criticizing the Commission’s bases for applying MOPRs to mitigate the effects of state public policies).