Pursuant to Commission requirements, spot market energy sales above the soft price cap of $1,000/MWh in the Western Electricity Coordinating Council (WECC) (i.e., the non-California Independent System Operator Corporation (CAISO) portion of the wholesale spot electricity market in the United States portion of the Western Interconnection) are subject to justification and refund, and that justification must be filed within 30 days after the end of the month in which the sale occurred.
In June 2021, the Commission issued an order providing guidance on justification filings for sales above the WECC soft price cap. The Commission explained that justifications may be based on, but are not limited to, demonstrations from at least one of three frameworks: (1) a production cost-based framework; (2) an index-based framework; and (3) an opportunity cost-based framework. The Commission also allowed sellers to justify their transactions as “sleeve” transactions. Sellers are required to include detailed information to support each transaction above the WECC soft price cap; this support could include documentation such as affidavits, purchase confirmations, and invoices. The Commission stated that it did not intend to preclude sellers from seeking to justify their transactions under approaches different from the ones identified in the June 2021 Guidance Order, but if a seller uses a different approach, the seller must clearly demonstrate how the alternative approach justifies its transaction.
 ConocoPhillips Co., 175 FERC ¶ 61,226 (2021) (June 2021 Guidance Order).