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53-581: In June 2017, Calpine Corporation notified the California Independent System Operator (CAISO) that unless it was granted reliability-must-run (RMR) status, it intended to take the plant offline at the end of 2017. (Reliability-must-run (RMR) status is a designation that a power plant is essential for the reliability of providing needed power at times of peak demand, and/or to maintain a level of redundancy for when other power generation facilities fail.) Calpine stated that it

106-495: A big – and growing – glut of power, an investigation by the Los Angeles Times has found. The state's power plants are on track to be able to produce at least 21% more electricity than it needs by 2020, based on official estimates. And that doesn't even count the soaring production of electricity by rooftop solar panels that has added to the surplus." "Utilities are typically guaranteed a rate of return of about 10.5% for

159-475: A default cost-sharing plan to deliver to state regulators. It "provides for cost-effective expansion of transmission that is being replaced, when needed, known as 'right-sizing' transmission facilities", and it allows states more opportunities to cooperate with utility companies and energy project developers, while preventing states that benefit from regional transmission projects from not paying for them. FERC Order No. 1920-A, an amendment to it passed unanimously

212-406: A separate decision, the D.C. Circuit later sustained the commission's conduct of separate environmental assessments when it clarified that the "critical" factor was that all of the pipeline's projects were either under construction or pending before FERC for environmental review at the same time, noting that the projects lacked temporal overlap. Furthermore, in another case, the D.C. Circuit sustained

265-635: A separate independent regulatory body be retained, and the FPC was renamed the Federal Energy Regulatory Commission (FERC), preserving its independent status within the department. Its most basic mandate was to "determine whether wholesale electricity prices were unjust and unreasonable and, if so, to regulate pricing and order refunds for overcharges to ratepayers." FERC was also given added responsibility to hear appeals of DOE oil price control determinations and to conduct all "on

318-687: A situation here." FERC's decisions in those cases are often upheld by the courts. In a July 1, 2014, decision, No Gas Pipeline v. Federal Energy Regulatory Commission , the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) said that pipeline applicants are not likely to pursue many certificates that are hopeless. "The fact that they generally succeed in choosing to expend their resources on applications that serve their own financial interests does not mean that an agency which recognizes merit in such applications

371-432: A third party. FERC has promoted voluntary formation of regional transmission organizations (RTOs) and Independent System Operators (ISOs) to eliminate the potential for undue discrimination in access to the electric grid ; it has made key decisions expanding its own power in regional and interregional transmission planning and cost allocation through the landmark Order Nos. 1000, 1920, 1977, and 2023. FERC investigated

424-414: Is a stub . You can help Misplaced Pages by expanding it . California Independent System Operator The California Independent System Operator ( CAISO ) is a non-profit Independent System Operator (ISO) serving California . It oversees the operation of California's bulk electric power system , transmission lines , and electricity market generated and transmitted by its member utilities. CAISO

477-707: Is authorized to raise revenue to reimburse the United States Treasury for its appropriations, through annual charges to the natural gas, oil, and electric industries it regulates. FERC is independent of the Department of Energy political structure because FERC activities "shall not be subject to further view by the Secretary [of Energy] or any officer or employee of the Department". The Department of Energy can, however, participate in FERC proceedings as

530-425: Is biased," the court said. Others have directly disputed FERC's critics by pointing out, "FERC is a creature of law. It follows a careful administrative path to regulate only a portion of natural gas such as interstate pipelines and LNG import and export terminals. That regulation includes extensive environmental review, driven by many federal laws enacted by Congress, signed by the president, and reviewed and upheld by

583-606: Is by participating in the related proceeding by submitting comments and participating in public comment sessions, site visits and scoping meetings, since FERC decisions can be appealed up to the Supreme Court. There are regions of the country where the state public utility commission and the FERC regulated Regional Transmission Organization operate in identical footprints (such as in New York State ). Where this occurs, state policy makers and FERC frequently clash as to

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636-473: Is one of the largest ISOs in the world, delivering 300 million megawatt-hours of electricity each year and managing about 80% of California's electric flow. The California Legislature created CAISO in 1998 as part of the state restructuring of electricity markets. The legislature was responding to Federal Energy Regulatory Commission (FERC) recommendations following the passage of the federal Energy Policy Act of 1992 , which removed barriers to competition in

689-570: The 2011 Southwest blackout . Starting August 5 2020, CAISO ordered the utilities operating on its power grid to cut off power to 200,000–250,000 customers. While CAISO stated the high temperatures and corresponding high demand for air conditioning necessitated rolling blackouts , it enacted the blackouts with significant power reserves still being available. When causing the rolling blackouts, CAISO acted contrary to its own policy, with its 2019 resource assessment calling for stage 3 emergency only with 3% or less available power resources. When stage 3

742-628: The Interstate Commerce Commission to FERC. However, the FERC lost some jurisdiction over the imports and exports of gas and electricity. In 1978, FERC was given additional responsibilities for harmonizing the regulation of wellhead gas sales in both the intrastate and interstate markets. FERC also administered a program to foster new cogeneration and small power production under the Public Utilities Regulatory Policy Act of 1978 , which

795-665: The New York Independent System Operator (NYISO), and the Independent Sysoperator New England (ISO-NE) were early adopters. California, with the backing of its state and Congressional policymakers, sought approval of a controversial scheme to set up its ISO, called California ISO, based near Sacramento, CA. FERC approved it without changes because California had warned that it would not accept any changes. Enron charged one of its policy analysts to figure out how to make

848-689: The Commission..., Plaintiffs' recourse lies with their legislative representatives." In New Jersey, the FERC approval of the PennEast Pipeline was met with widespread criticism by environmental groups, which called the decision highly partisan. "FERC has once again demonstrated its tremendous bias for, and partnership with, the pipeline industry," said Maya van Rossum, leader of the Delaware Riverkeeper Network. Doug O'Malley, president of Environment New Jersey, called

901-478: The D.C. Circuit has provided additional guidance concerning Commission procedures, stating that in one case FERC failed to consider the cumulative environmental impact of four projects that had been separately proposed by the same pipeline. The D.C. Circuit held that the projects were not financially independent and were "a single pipeline" that was "linear and physically interdependent," so the cumulative environmental impacts should have been considered concurrently. In

954-407: The Delaware Riverkeeper Network and Maya Van Rossum's claim that FERC has an incentive to award pipeline certificates because it collects its operating expenses from regulated parties. Upholding a lower court ruling, the D.C. Circuit also rejected the Delaware Riverkeeper Network's challenge to FERC's use of tolling orders to meet its statutory deadlines for acting on rehearing applications. However,

1007-502: The FERC approval of the pipeline a "disaster." David Pringle, state campaign director of Clean Water Action and 2018 Congressional candidate, suggested the FERC was serving a partisan interest over the interests of the people of New Jersey, suggesting "The FERC needs to remember it works for the people of the United States not PennEast." These criticisms were unfounded as the D.C. Circuit Court of Appeals on July 10, 2018, rejected

1060-570: The RTO, when a state public utility commission asserts that its retail ratepayers (under state regulation) will be impacted by wholesale-market stakeholder decisions and reforms (under federal-level regulation). In contrast, prior to the formation of the NYISO in 1999 in New York, wholesale energy prices were set within a utility's state rate case proceeding. Examples of contentious issues in New York include

1113-646: The U.S. It is largely responsible for permitting construction of a large network of interstate natural gas pipelines. FERC also works closely with the United States Coast Guard to review the safety, security, and environmental impacts of proposed LNG terminals and associated shipping. FERC is composed of up to five commissioners who are appointed by the President and confirmed by the Senate to staggered five-year terms. The President appoints one of

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1166-597: The U.S. Supreme Court. If the agency were to adopt the path [suggested by these critics], FERC's decisions would routinely be overturned by the federal courts." The United States District Court for the District of Columbia also dismissed a case involving allegations of structural bias on the part of FERC. The plaintiffs contended that the Omnibus Budget Act of 1986 funding mechanism requires the commission to recover its budget through proportional charges on regulated entities, therefore making FERC biased in favor of

1219-451: The agency had the authority to regulate demand response transactions. On July 28, 2023, the Federal Energy Regulatory Commission issued Order No. 2023, which regulates the interconnection process that ties renewables projects into the large-scale grid. Among other provisions, the rule requires transmission planners to consolidate projects into 'clusters' for regulatory approval purposes on a 'first-ready, first-served' basis that prioritizes

1272-687: The alleged manipulation of electricity market by Enron and other energy companies, and their role in the California electricity crisis . FERC has collected more than $ 6.3 billion from California electric market participants through settlements. Since passage of the Energy Policy Act of 2005 , FERC has imposed, through settlements and orders, more than $ 1 billion in civil penalties and disgorgement of unjust profits to address violations of its anti- market manipulation and other rules. FERC regulates approximately 1,600 hydroelectric projects in

1325-421: The commission's use of a separate environmental assessment when it reasoned that the projects in dispute were "unrelated" and did not depend on one another for their justification. This guidance has allowed FERC to address additional claims of improper segmentation. FERC's leaders have stressed many times since the onset of the increased activism that the proper way to oppose a proposed new infrastructure project

1378-421: The commissioners to be the chairman of FERC, the administrative head of the agency. FERC is a bipartisan body; no more than three commissioners may be of the same political party. Commissioners may continue in office past the end of their term if a successor has not yet been confirmed, up to the end of the current session of Congress. The commissioners are: The Federal Power Commission (FPC), which preceded FERC,

1431-429: The cost of each new plant regardless of need. This creates a major incentive to keep construction going: Utilities can make more money building new plants than by buying and reselling readily available electricity from existing plants run by competitors." "Independents like Calpine don't have a captive audience of residential customers like regulated utilities do. Instead, they sell their electricity under contract or into

1484-542: The country facing transmission constraints." In 2010, FERC issued Order No. 1000, which required RTOs to create regional transmission plans and identify transmission needs based on public policy. Cost allocation reforms were included, possibly to reduce barriers faced by non incumbent transmission developers. In February 2018, FERC issued Order No. 841, which required wholesale markets to open up to individual storage installations, regardless of interconnection point (transmission, distribution or behind-the-meter). The Order

1537-630: The creation of regional transmission organizations in the United States. This would impact existing electric power pools by rebranding themselves as independent transmission operators. Electric utilities in some regions began to spin off their generation units as separate companies that would compete in a wholesale electric market administered by the RTOs. Once FERC had created the framework for Regional Transmission Organizations with Order No. 888, several such RTOs were approved. The pre-existing multi-state power pool called PJM (Pennsylvania, Jersey, Maryland),

1590-645: The distribution level or behind-the-meter. A United States courts of appeals court (the D.C. Circuit) issued an order in July 2020 that upheld Order 841 and dismissed the petitioners' complaints. FERC issued Order No. 2222 on September 17, 2020, enabling distributed energy resources such as batteries and demand response to participate in regional wholesale electricity markets. Market operators submitted initial compliance plans by early 2022. The Supreme Court had ruled in 2016 in FERC v. Electric Power Supply Ass'n that

1643-407: The electricity and natural gas markets. The Energy Policy Act of 2005 also gave FERC additional responsibilities and authority. Among the many provisions of the law, FERC was given what is known as "backstop" siting authority which allows FERC to overrule any denial of transmission projects by a state within established corridors of transmission congestion "to expand transmission in limited regions of

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1696-491: The electricity market, and make money only if they can find customers for their power." 37°13′14″N 121°44′45″W  /  37.2206°N 121.7457°W  / 37.2206; -121.7457 This article about a United States power station is a stub . You can help Misplaced Pages by expanding it . This Santa Clara County, California building and structure-related article is a stub . You can help Misplaced Pages by expanding it . This San Jose, California -related article

1749-547: The entities it regulates creates bias in favor of the issuance of pipeline certificates. Some of the critics have disrupted several regular open meetings of the Commission and staged a couple of week-long blockades of FERC's headquarters in Washington, D.C., to make their points. "Pipelines are facing unprecedented opposition," Commissioner LaFleur remarked to the National Press Club in a 2015 speech. "We have

1802-430: The extent of federal power and influence within the state. The planning and siting of public policy and renewable power plants and merchant transmission lines can be contentious, because the planning process must proceed through both entities. For example, in New York State, any large (more than 20 MW for the NYISO or 2 MW for the state Siting Committee) generation or merchant transmission facility must proceed through both

1855-716: The following November, allows state regulators even more opportunities to provide input on interstate grid projects, adds six months to the cost allocation negotiating process, and gives utilities more leeway to forecast additional needs scenarios. The latter order affirms FERC's siting authority in National Interest Electric Transmission Corridors if a state regulatory agency denies any of its own siting responsibility thereof. The order creates an Applicant Code of Conduct to encourage proper landowner outreach, and adds air quality, environmental justice and tribal engagement reports to

1908-475: The following: FERC is a large independent regulatory agency , within the United States Department of Energy , that participates in business oversight. The President and Congress do not generally review FERC decisions, but the decisions are reviewable by the federal courts . FERC is self-funding, in that Congress sets its budget through annual and supplemental appropriations and FERC

1961-447: The industry from which it gets its funding. But in an order issued March 22, 2017, the court said the plain language of the statute indicates that FERC does not have control over its own budget. "The Commission's budget cannot be increased by approving pipelines; rather, [the statute] requires the Commission to make adjustments to 'eliminate any overrecovery or underrecovery.' If Plaintiffs are unhappy with Congress's chosen appropriations to

2014-426: The issue ended with the 2005 Energy Bill ( Energy Policy Act of 2005 ) which was passed with approval of Democrats and Republicans. The Energy Policy Act of 2005 expanded FERC's authority to protect the reliability and cybersecurity of the bulk power system through the establishment and enforcement of mandatory standards, as well as greatly expanding FERC authority to impose civil penalties on entities that manipulate

2067-406: The list of requirements for project applicants. FERC has been subject to criticism and increasing activism by people from communities affected by its decisions approving pipeline and related projects. They contend that FERC "blithely greenlights too many pipelines, export terminals and other gas infrastructure" and that FERC's structure in which it recovers its annual operating costs directly from

2120-607: The most of the flawed rules put in place for the California electricity market. Enron had success with its fraudulent market transactions. In 2001, the George W. Bush administration sought to give the authority of eminent domain to FERC to circumvent state and local bureaucratic processes which often slowed the siting of new transmission projects. This expansion of power was most fiercely opposed by Bush's own Republican party as being an expansion of federal power. Legal battles over

2173-534: The most well-studied and fully financed projects, forecast advanced technologies, and allow for multiple projects to share a new single interconnection point. It also "imposes firm deadlines and penalties if transmission providers fail to complete interconnection studies on time". On May 13, 2024, FERC issued Order Nos. 1920 and 1977. The former order requires utilities to plan 20 years in advance to anticipate future regional (though not interregional) transmission needs, with five-year updates, and to cooperate in creating

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2226-635: The nation in conventional hydroelectric power generation. As of 2017, over half of the electricity (52.7%) produced was from renewable sources. CAISO provides a daily report on California renewable electricity generation, compared to overall system demand. CAISO settled with the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation for $ 6 million for violations of standards related to

2279-543: The planning process of the NYISO, which operates on a two-year cycle at minimum with an inclusive class year pool of new projects evaluated simultaneously, and the siting process of the state Board on Electric Siting and the Environment. Prior to the formation of the NYISO, the planning process was determined mostly by the state siting board (although the utilities' power pool might have had its own closed door planning session) and large generation projects were developed by

2332-413: The record" hearings for DOE. As a result, DOE does not have any administrative law judges . As a further protection, when the Department of Energy proposes a rule, it must refer the proposal to FERC, and FERC can take over the proceeding if FERC determines that the rulemaking "may significantly affect" matters in its jurisdiction. The DOE Act also transferred the regulation of interstate oil pipelines from

2385-422: The utilities themselves. The dual planning process provides an opportunity for other market participants to drag out the process legally, not including the other state and/or federal environmental, trade (if an international connection with Canada is requested), and local certification and regulation processes that need to be met. The controversy similarly applies to various electric wholesale-market issues within

2438-519: The wholesale generation of electricity business. FERC regulates CAISO because interstate transmission lines fall under the jurisdiction of federal commerce laws. CAISO's leadership consists of executive management and governing board members appointed by the Governor of California . The current executive leaders are: In 2018, California ranked first in the nation as a producer of electricity from solar, geothermal, and biomass resources and fourth in

2491-599: Was challenged in court by the state public utility commissions via the National Association of Regulatory Utility Commissioners (NARUC) , the American Public Power Association , and others who claimed that FERC overstepped its jurisdiction by regulating how local electric distribution and behind-the-meter facilities are administered, i.e., in not providing an opt out of wholesale market access for energy storage facilities located at

2544-438: Was created by the U.S. Congress in 1977 in the aftermath of the 1973 oil crisis . FERC is an independent agency, despite being part of the U.S. Department of Energy . It is headed by five commissioners who are nominated by the U.S. president and confirmed by the U.S. Senate . There may be no more than three commissioners of one political party serving on the commission at any given time. The responsibilities of FERC include

2597-651: Was established by Congress in 1920 to allow cabinet members to coordinate federal hydropower development. In 1935, the FPC was transformed into an independent regulatory agency with five members nominated by the President and confirmed by the Senate . The FPC was authorized to regulate both hydropower and interstate electricity. In 1938, the Natural Gas Act gave FPC jurisdiction over interstate natural gas pipelines and wholesale sales. In 1942, this jurisdiction

2650-516: Was expanded to cover the licensing of more natural gas facilities. In 1954, the Supreme Court decision in Phillips Petroleum Co. v. Wisconsin extended FPC jurisdiction over all wellhead sales of natural gas in interstate commerce. In response to the 1973 oil crisis, Congress passed the Department of Energy Organization Act in 1977 , to consolidate various energy-related agencies into a Department of Energy . Congress insisted that

2703-722: Was first enacted on August 15, the CAISO power grid had 8.9% available resources, about three times the required threshold. Federal Energy Regulatory Commission The Federal Energy Regulatory Commission ( FERC ) is an independent agency of the United States government that regulates the interstate transmission and wholesale sale of electricity and natural gas and regulates the prices of interstate transport of petroleum by pipeline . FERC also reviews proposals to build interstate natural gas pipelines, natural gas storage projects, and liquefied natural gas (LNG) terminals, in addition to licensing non-federal hydropower projects. FERC

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2756-505: Was no longer economical to continue to run the Metcalf plant at the currently low wholesale electricity prices; the result of an electricity glut in California. The glut in wholesale prices resulted from policies which guarantee utilities like Pacific Gas and Electric Company (PG&E), (a regulated monopoly), return on investment for building new power plants, even when they are not needed. The Los Angeles Times explains: "California has

2809-690: Was passed as part of the National Energy Act of 1978 . The National Energy Act included the Natural Gas Policy Act of 1978 , which reduced the scope of federal price regulation, to bring greater competition to both the natural gas and electric industry. In 1989, Congress ended federal regulation of wellhead natural gas prices, with the passage of the Natural Gas Wellhead Decontrol Act of 1989 . In 1996, FERC issued Order No. 888, which spurred

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