FERC on Thursday denied LS Power’s complaint against PJM seeking to block Dominion Energy’s decision to opt out of the May 19 capacity auction by electing to use the fixed resource requirement (FRR), saying it agreed with the RTO’s interpretation of its Reliability Assurance Agreement (RAA) (EL21-72).

The RAA requires that load-serving entities choosing the FRR must exit the capacity auction for at least five years and demonstrate the “commitment of capacity resources for the term of such election sufficient to meet such party’s daily unforced capacity obligation.”

In the complaint filed in May, LS Power, along with its 1,165-MW Doswell natural gas-fired generator in Virginia, argued that PJM has been approving FRR alternative elections based on capacity plans covering just the first delivery year of the elections. (See LS Power Challenges Dominion FRR Plan.)

Dominion Energy Virginia elected not to participate in PJM’s Base Residual Auction for 2022/23 over concerns the minimum offer price rule (MOPR) could undermine the company’s ability to meet Virginia’s renewable energy targets. More than 60 Dominion generating units totaling more than 18.1 GW were included on PJM’s posting of FRR units in April. (See Dominion Opts out of PJM Capacity Auction.)

LS Power argued that a reference to “2022/2023 FRR Capacity Plans” in the title of PJM’s FRR Resource List implied that “notwithstanding the requirements of the RAA, these FRR capacity plans covered just the 2022/2023 delivery year” and don’t meet the capacity resources commitment.

In its order filed last week, the commission said all parties involved in the filing agreed that the RAA requires a commitment to the FRR alternative for a minimum term of five years. But FERC said the only matter in dispute was whether the initial FRR capacity plan “must cover the entire minimum five-year term or if it may cover only the first delivery year.”

FERC said the RAA’s requirement to submit an FRR capacity plan “for the term of such election” is “ambiguous.” The commission said it agreed with PJM and other commenters in the filing that when the RAA is “read as a whole,” a “reasonable interpretation” is that the phrase “for the term of such election” means an FRR capacity plan “may be submitted every year for the term of an entity’s participation in the FRR alternative.”

“When interpreting tariff and contract provisions, the tariff or contract should be read as a whole, with meaning given to every provision,” the commission said in its order. “We find that, reading the RAA as a whole, other terms and provisions indicate that it does not require the submission of an initial FRR capacity plan that covers the entire term of the initial election.”

FERC said the RAA also requires that entities “annually extend and update” the FRR capacity plan. The commission said the requirement would be “redundant” if five-year plans were required as entities are already required to file annual updates.

The commission said many of the parameters needed for constructing an initial FRR capacity plan are not known for the delivery years beyond the one associated with the upcoming BRA, demonstrating that one-year plans for each year of the minimum term of five years “are more consistent with the overall expectations of the RAA.”

As an example, FERC cited the RAA requirement that an FRR entity “designate capacity resources in a megawatt quantity no less than the forecast pool requirement for each applicable delivery year times the FRR entity’s allocated share of the preliminary zonal peak load forecast for such delivery year.” According to the RAA, the commission said, the forecast pool requirement and the installed reserve margin are only updated three months in advance of each BRA, which would necessitate estimates to be used for a five-year plan.

“The absence of any detail in the RAA on how to estimate these parameters indicates that the RAA does not contemplate that five-year plans are required,” the commission said.

It also determined that concerns about the FRR process and the Independent Market Monitor’s complaint that PJM kept Dominion’s FRR election confidential to be “outside the scope of the complaint.” The Monitor had requested that FERC clarify that an entity’s notice of its intent to elect the FRR alternative “should not be kept confidential” and should be posted by the RTO.