By William Opalka
The Federal Energy Regulatory Commission once again dashed the hopes of the New England congressional delegation seeking to challenge the results of last year’s capacity auction.
FERC Chairman Cheryl LaFleur wrote to the delegation on Feb. 18, telling members that FERC completed its review of the eighth Forward Capacity Auction when it denied a rehearing request in October.
“As that case is no longer an open case, we are unable to reopen the question of the justness and reasonableness of the FCA 8 rates,” LaFleur wrote. “However, even if we could reopen that proceeding, I continue to believe that the rates resulting from FCA 8 are just and reasonable.”
The auction became effective as an “operation of law” in September when the commission — then short one member — deadlocked 2-2 over whether to reject the results due to unchecked market power. (See FERC Commissioners at Odds over ISO-NE Capacity Auction).
The auction, held in February 2014, saw prices more than double from the previous year’s auction to a total of about $3 billion.
FERC is back to its full complement of five commissioners with the addition of former Arkansas regulator Colette Honorable. The delegation wrote to the commission, asking it to use Federal Power Act section 205 or 206 authority to look at the ISO-NE rates that have resulted from the auction. Those rates take effect in the 2017/18 capacity commitment period.
“We strongly supported the commission’s decision to conduct further review of the results of FCA 8 last summer but believe FERC’s failure to make a conclusive decision in September 2014 has unfairly left the ratepayers of New England without appropriate redress,” the delegation wrote Jan. 30. The letter was signed by six senators and 13 congressmen.
FCA 9, held Feb. 2, resulted in even higher prices — an estimated $4 billion for the 2018/19 capacity commitment period. Analysts said prices are likely to fall in the future as a result of new capacity that cleared in the 2015 auction. (See ISO-NE Capacity Prices Likely to Fall in Future.)