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FERC Issues Letter Order Accepting Emera Maine's et al 12/30/13, as Amended on 2/14/14 Re the Updated Market Power Analysis in Compliance with Order...(Targeted News Service Via Acquire Media NewsEdge) FERC Issues Letter Order Accepting Emera Maine's et al 12/30/13, as Amended on 2/14/14 Re the Updated Market Power Analysis in Compliance with Order 697 and Notice of Change in Status Under ER10-2763 et al WASHINGTON, Oct. 14 -- The U.S. Department of Energy's Federal Energy Regulatory Commission issued the text of the following delegated order: In Reply Refer To: Emera Maine Docket Nos. ER10-2763-009 Bridgeport Energy LLC ER10-2759-003 Emera Energy Services, Inc. ER10-2732-009 Emera Energy Services Subsidiary No. 1 LLC ER10-2736-009 Emera Energy Services Subsidiary No. 2 LLC ER10-2737-009 Emera Energy Services Subsidiary No. 3 LLC ER10-2741-009 Emera Energy Services Subsidiary No. 4 LLC ER10-2749-009 Emera Energy Services Subsidiary No. 5 LLC ER10-2752-009 Emera Energy Services Subsidiary No. 6 LLC ER12-2492-005 Emera Energy Services Subsidiary No. 7 LLC ER12-2493-005 Emera Energy Services Subsidiary No. 8 LLC ER12-2494-005 Emera Energy Services Subsidiary No. 9 LLC ER12-2495-005 Emera Energy Services Subsidiary No. 10 LLC ER12-2496-005 Emera Energy U.S. Subsidiary No. 1, Inc. ER10-2733-009 Emera Energy U.S. Subsidiary No. 2, Inc. ER10-2734-009 Rumford Power Inc. ER10-2631-003 Tiverton Power LLC ER13-815-001 (collectively, the Emera Companies) October 14, 2014 Mr. Jeffrey M. Jakubiak Counsel for the Emera Companies Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, New York 10166 Reference: Updated Market Power Analysis in Compliance with Order No. 697 and Notice of Change in Status Dear Mr. Jakubiak: On December 30, 2013, as amended on February 14, 2014 and supplemented on April 11, 2014, you filed on behalf of the Emera Companies an updated market power analysis for the Northeast region in compliance with the regional reporting schedule adopted in Order No. 697 and pursuant to the Commission's orders granting the Emera Companies authority to sell electric energy and capacity at market-based rates. You also submitted a notice of change in status stating that the Emera Companies upstream owner, Emera Incorporated, recently indirectly acquired all of the ownership interests in Bridgeport Energy LLC, Rumford Power Inc., and Tiverton Power LLC, each of which owns a natural-gas fired generation facility located in the ISO New England, Inc. (ISO-NE) market. You further represent that Emera Incorporated's indirect, partially owned subsidiary, Liberty New England, recently acquired certain regulated natural gas distribution assets. You state that these acquisitions do not affect the conditions the Commission relied upon when granting the Emera Companies market-based rate authority. Your filings were noticed on December 30, 2013 and February 18, 2014, with comments, protests or interventions due on or before February 28, 2014 and March 7, 2014, respectively. None was filed. Pursuant to the authority delegated to the Director, Division of Electric Power Regulation - West, under 18 C.F.R. section 375.307, your submittals filed in the referenced dockets are accepted for filing. You represent that the Emera Companies own and operate approximately 1,081 megawatts of generation capacity, all of which is located in the ISO-NE market. You state that the Emera Companies are affiliated with entities that own and control generation capacity in the ISO-NE, PJM Interconnection, L.L.C. (PJM) and New York Independent System Operator, Inc. (NYISO) markets and the New Brunswick System Operator (NBSO) balancing authority area. You add that the Emera Companies are wholly-owned direct and indirect subsidiaries of Emera Incorporated. You state that Emera Maine owns transmission facilities but has turned over control of its transmission to ISO-NE and therefore has mitigated any transmission market power. You further represent that the Emera Companies are affiliated with Maine Public Service Company (MPS), Maine Electric Power Company (MEPCO), and Nova Scotia Power Inc. (NS Power), each of which owns transmission facilities. You assert that MPS provides transmission service pursuant to the MPS open access transmission tariff (OATT), MEPCO provides transmission service pursuant to the ISO-NE OATT, and NS Power provides transmission service pursuant to the NS Power OATT, which is approved by the Nova Scotia Utility & Review Board. Therefore, you represent that these companies have mitigated any transmission market power. Further, you affirmatively state that the Emera Companies have not erected barriers to entry and will not erect barriers to entry into the relevant market. Market-Based Rate Authorization The Commission allows power sales at market-based rates if the seller and its affiliates do not have, or have adequately mitigated, horizontal and vertical market power. The Emera Companies have prepared the pivotal supplier and wholesale market share screens for the ISO-NE, NYISO and PJM markets, the Connecticut, Southwest Connecticut and PJM East submarkets and the NBSO balancing authority area consistent with the requirements of Order No. 697, when the Commission-accepted Simultaneous Transmission Import Limit (SIL) study results are taken into consideration for the PJM market and the NBSO balancing authority area. Your horizontal market power screens have been reviewed and you pass both the pivotal supplier and wholesale market share screens in ISO-NE, NYISO, and PJM markets, the Connecticut and PJM East submarkets and the NBSO balancing authority area, when the Commission-accepted SIL values for the PJM market and the NBSO balancing authority area are applied. While the Emera Companies pass the pivotal supplier screen in the Southwest Connecticut submarket, they fail the wholesale market share screen in the Southwest Connecticut submarket. The Commission has established a rebuttable presumption that a seller possesses horizontal market power if it fails either screen. The Commission has also stated in Order No. 697 that with respect to market concentration within RTO/ISO submarkets, it will consider any existing Commission-approved market monitoring and mitigation regime already in place within the RTO/ISO that provides for mitigation of the submarket. You state that the Commission-approved market monitoring and mitigation rules administered by ISO-NE are sufficient to address any market power concerns with respect to the Emera Companies' presence in the Southwest Connecticut submarket. As the Commission has previously found, the ISO-NE market monitoring and mitigation rules are sufficient to address market power concerns in the Southwest Connecticut submarket. Based on your representations, the Emera Companies' submittal satisfies the Commission's requirements for market-based rate authority regarding horizontal market power. Based on your representations, the Emera Companies' submittal also satisfies the Commission's requirements for market-based rate authority regarding vertical market power. The Emera Companies must file electronically with the Commission Electric Quarterly Reports. The Emera Companies further must timely report to the Commission any change in status that would reflect a departure from the characteristics the Commission relied upon in granting market-based rate authority in accordance with Order No. 697. This action does not constitute approval of any service, rate, charge, classification, or any rule, regulation, or practice affecting such rate or service provided for in the filed documents; nor shall such action be deemed as recognition of any claimed contractual right or obligation affecting or relating to such service or rate; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against any of the applicant(s). This order constitutes final agency action. Requests for rehearing by the Commission may be filed within 30 days of the date of issuance of this order, pursuant to 18 C.F.R section 385.713. Questions regarding the above order should be directed to: Federal Energy Regulatory Commission Attn: Melissa Lozano Phone: (202) 502-6267 Office of Energy Market Regulation 888 First Street, N.E. Washington, D.C. 20426 Sincerely, Steve P. Rodgers, Director Division of Electric Power Regulation - West TNS 18EstebanLiz-141015-30FurigayJane-4898372 30FurigayJane (c) 2014 Targeted News Service |