FERC Denies Retail Suppliers' Requested Stay Of Interest Charges Under ISO Compliance Filing To Allocate Prior Must-Offer Generation Costs To Multiple LSEs

FERC denied a motion to stay interest charges under a compliance filing from the California ISO which would implement FERC's prior order on rehearing that revised the allocation of must-offer generation commitment costs in the California ISO, and in doing so, allocated the costs to a broader group of LSEs (which includes retail suppliers), rather than a single LSE.

The stay had been sought by Shell Energy North America (US) L.P. and the Alliance for Retail Energy Markets

See background on the proceeding, which dates back to 2004, here

Most of the underlying costs (almost $100 million) at issue here relate to the South of Lugo path and whether it was considered a local or zonal constraint. Costs related to the constraint were initially assigned on a local basis, to only a single LSE, Southern California Edison. The constraint was later classified as zonal, which would allocate costs to additional LSEs.

Initially, FERC rejected a refund report from CAISO which would have resettled prior must-offer generation costs related to South of Lugo, and which would have allocated the costs on a zonal basis to new LSEs (via a surcharge) to provide a refund to SCE.

However, FERC on rehearing reversed its prior finding with respect to refunds. FERC on rehearing found that it was appropriate for CAISO to administer market resettlements, with surcharges on a broader group of LSEs, due to the change to zonal allocation

The Alliance for Retail Energy Markets and Shell Energy North America (US), L.P. opposed the resettlement implicated by the original refund report, which has now been approved by FERC, as the retail supply parties said that the refund report amounted to, "unlawful retroactive rate increases/surcharges."

CAISO submitted a compliance filing to implement FERC's order on rehearing, allocating the charges to a broader group of LSEs, stating that it planned to issue settlement statements and invoices by March 31, 2020.

Shell Energy North America (US) L.P. and the Alliance for Retail Energy Markets (collectively, the Coalition) filed a protest requesting that the Commission reject the compliance filing and also filed a motion for a stay of any interest charges that would be assessed pursuant to FERC's rehearing order

In the motion for a stay, the Coalition moved to stay any interest charges that would be assessed pursuant to the rehearing order until after the Commission acts on pending rehearing requests of such order

FERC denied the motion for a stay

In denying the stay, FERC did not act on CAISO's compliance filing, which remains pending

In denying the stay, FERC said, "We find that the Coalition has failed to establish that the inclusion of interest in the refund calculation meets the standard of irreparable harm required to justify a stay. As the Commission recently stated, '[e]ven if [they are] substantial, economic losses alone do not constitute irreparable harm.' The Coalition concedes that 'money damages are not an irreparable injury' and does not otherwise attempt to satisfy the Commission's established standard for a stay. Instead, the Coalition asks that the Commission grant its stay request given the unique nature of this case. We decline to depart from the Commission's precedent and apply a new standard for reviewing motions for stay in this proceeding. Because the Coalition has failed to demonstrate that it will suffer irreparable harm under the Commission's existing standard, we deny its motion for stay."

Docket No. ER04-835-010 et al.