FERC on Thursday rejected an effort by Chairman James Danly to take CAISO to task for the rolling blackouts of mid-August by using the commission’s authority under Section 206 of the Federal Power Act (EL21-19).

In a rare occurrence, the commission voted 2-1 against a proposed order, which could have required CAISO to show it can meet demand during extreme heat events.

Amid a Western heat wave Aug. 14-15, CAISO ordered rolling blackouts as solar power waned in the evenings but demand remained high. More than a million residents lost power for short periods. (See CAISO: Blackouts May Continue, Calls Emergency Meetings.) CAISO narrowly avoided blackouts over Labor Day weekend during another heat wave.

“The draft order finds that the heat events of Aug. 14-19, 2020, may indicate that CAISO’s existing Tariff may be inadequate to ensure that sufficient resources are available to meet load and maintain system reliability,” FERC Managing Attorney Michael Haddad told the commissioners in a presentation at their monthly open meeting.

Danly said he felt it was important for FERC to open a Section 206 proceeding to ensure CAISO’s rates are just and reasonable under the circumstances.

“I think that there is an urgent need for action in CAISO,” he said. “CAISO shed load on two days in August. It’s not merely that there was a load-shedding event. It’s the fact that the events that led to it are not unlikely to be replicated. The heat and the wildfires [in the West] seem to be increasingly common. We’ve had ever growing reliance on intermittent resources, and we apparently had only two-thirds of demand response that was called upon actually available.

“When you add that to the increasing drop-off in solar availability as the evening approached … that produced a series of events all of which culminated in a real crisis that CAISO had to actively manage and manage with ever escalating aggression.”

Danly urged FERC to act quickly to head off problems next summer. CAISO has acknowledged a repeat is possible, though it is taking steps to avoid future shortfalls. (See CAISO CEO Defends Blackouts Response.)

Commissioner Neil Chatterjee said he agreed that CAISO needs “serious work” but disagreed that FERC should get involved, at least not yet.

“A broad 206 proceeding at this time would distract from the current efforts that CAISO and its stakeholders are making,” he said. “What’s more, due to our ex parte rules, it would also reduce FERC’s effectiveness by prohibiting commissioners and staff from providing assistance to, and engaging in an open dialogue with, CAISO as it works on solutions.”

CAISO has proposed an increase in the state’s planning reserve margin and undertaken reviews of scarcity pricing and resource adequacy rules, he noted.

Commissioner Richard Glick called the proposed order “ill advised.”

“The last thing this commission should be doing is using Section 206 of the Federal Power Act to say to the states, ‘We’re from the federal government, and we know better than you do,’” he said. “This commission’s bungling efforts have already made a complete mess of the resource adequacy construct in the three Eastern RTOs. Are we really now going to do the same thing to the West?”

More regional cooperation, including an RTO, would help the West, he said. The reluctance of California and other states to join forces has thwarted those efforts, but CAISO’s Western Energy Imbalance Market and other regional partnerships are “baby steps” in the right direction, he said.

“What do we think’s going to happen now that we have this draft order, if it were to go forward?” Glick said. “Everybody is going to run back to their corners and not emerge again for years.”

Glick said FERC could help the West by other means. He proposed a technical conference, which would bring together stakeholders and state regulators, to discuss how the region could resolve concerns about resource adequacy.

Danly said he was “perfectly fine” with a technical conference because it would bring much needed attention. It should happen as soon as possible, he said.

It is rare for a FERC chair to bring a proposal to a vote on an order likely to fail. It’s “definitely happened in the history of FERC, but not recently,” observed Jeff Dennis, general counsel of Advanced Energy Economy and former director of FERC’s Division of Policy Development.

“Danly gets to show that he would’ve taken action on California. Chatterjee gets to occupy the political middle of the commission. Glick gets to signal deference to states,” tweeted Travis Kavulla, vice president of regulation for NRG Energy and former vice chairman of the Montana Public Service Commission.

Danly, however, has brought to a vote at least one other order — albeit routine — on which he was in the minority. On Nov. 30, FERC reversed itself and approved a request by NYC ENERGY, a New York-based storage developer, for a waiver of NYISO interconnection procedures.

The chairman acknowledged that the company “explained why its waiver request was submitted in good faith and has presented sympathetic facts in support of its request,” but he maintains that such waivers exceed the commission’s authority under the filed-rate doctrine and the rule against retroactive ratemaking (ER20-629-001). He had more fully explained his reasoning for dissenting on such requests as a commissioner in previous orders. (See Chatterjee, Danly Clash over ‘Regulatory Flexibility’.)

It is up to the chairman’s discretion as to what items the commission votes on, and when. During his time as chair, Chatterjee regularly removed gas items from open meeting agendas to avoid having them voted down or nullified by a tie vote.

“I don’t know that I’ve ever done this before,” Chatterjee said before casting his “no” vote Thursday.

“It gets easier the more you do it,” joked Glick, a frequent dissenter at open meetings.

The vote came after a 25-minute discussion of the facts surrounding the Western “heat storm” in mid-August and CAISO’s handling of strained grid conditions (AD21-3).

As of press time, the proposed order had not been posted to FERC’s website. Commissioner Allison Clements, who joined the commission Dec. 8, did not vote on the order, nor on any of the items during the meeting.

Michael Brooks contributed to this report.