FERC inaction on Vineyard Wind capacity auction waiver request

Federal energy regulators have declined to act on an emergency petition by an offshore wind energy developer in time to allow the company to participate in a regional capacity auction, prompting two commissioners to issue a statement that "by failing to act, the Commission has introduced significant uncertainty into this auction."

The petition was filed by Vineyard Wind LLC, a joint venture of Avangrid Renewables, LLC and Copenhagen Infrastructure Partners that is developing an offshore wind energy project in federal waters offshore the coast of Massachusetts. The project is expected to be operational by 2021, and its developer has entered into a power purchase agreement to sell electricity to the Massachusetts electric distribution companies.

Vineyard Wind also intended to participate in grid operator ISO New England, Inc.'s February 4, 2019 Forward Capacity Auction 13 -- specifically, as a "Renewable Technology Resource" eligible under the ISO-NE tariff for an exemption from certain rules governing bid pricing. In 2018, Vineyard Wind made timely submissions to the grid operator to support its participation in the auction under these provisions. But the grid operator denied the company's request for Renewable Technology Resource designation, on the grounds that the project will be located in federal waters whereas the tariff limited the exemption's availability to projects located in any ISO-NE state.

While ISO-NE subsequently sought to amend its tariff to remove this "federal waters exclusion," on December 14, 2018, Vineyard Wind also asked the Commission for a waiver to allow it to participate in Forward Capacity Auction 13.In its petition, the company asked for waiver by January 29, 2019, to allow the company and any other similarly situated entities to participate in Forward Capacity Auction 13, which commenced on February 4, 2019.

Vineyard Wind's request was not without support. In early January, the grid operator filed comments saying it did not oppose Vineyard Wind's waiver request, and asking the Commission to act by the January 29, 2019 date requested by Vineyard Wind so the waiver could be effective for the thirteenth Forward Capacity Auction. Also in January, the Massachusetts Department of Energy Resources filed comments supporting the company's waiver request.

Because the Commission did not act on the waiver request by January 29, so two days later, the company asked the Commission for immediate action on its petition. The next day, Massachusetts Governor Charlie Baker filed a letter requesting that the Commission immediately grant the waiver request. On February 4, as the Forward Capacity Auction was set to begin, but without any Commission action on the waiver request, Vineyard Wind submitted an emergency motion asking for the auction to be stayed pending a decision on the waiver request, or in the alternative asking for the Commission to order a redo of the auction if waiver were subsequently granted.

But the Commission still did not act, and ISO-NE's thirteenth forward capacity auction proceeded without Vineyard Wind's participation as a Renewable Technology Resource. That same day, Commissioners LaFleur and Glick issued a joint statement expressing disappointment that the Commission had not acted. In that statement, the two commissioners noted that while "the Commission can move forward only when it has a majority of votes for a particular action", the Commission's failure to act had introduced "significant uncertainty" into the auction, saying, "All parties, including New England’s states, consumers, and auction participants, deserve better."

While ISO-NE has now conducted Forward Capacity Auction 13, Vineyard Wind's petition still remains pending.