On April 19, 2018, the Federal Energy Commission (FERC) issued a Final Rule (Order No. 844) that will require regional transmission organizations (RTOs) and independent system operators (ISOs) to publicly report information regarding uplift payments.1 Specifically, RTOs and ISOs will be required to report: (1) monthly total uplift payments for each transmission zone, broken out by day and uplift category; (2) total monthly uplift payments made to each generation resource; (3) details regarding RTO and ISO decisions to commit resources after the day-ahead market; and (4) the transmission constraint penalty factors used in their market software, as well as the circumstances under which the penalty factors can set locational prices or be altered. FERC will require all RTOs and ISOs to make filings to modify their tariffs to meet the revised reporting obligations.
As part of its examination of price formation in the organized markets, FERC is examining issues related to uplift costs and transparency. On January 19, 2017, FERC issued a Notice of Proposed Rulemaking (NOPR) proposing rules to address these issues, and Order No. 844 is the result of the NOPR process. In Order No. 844, FERC concludes that current RTO and ISO reporting obligations related to uplift costs are insufficiently transparent to permit market participants to fully understand how prices reflect the actual marginal cost of serving load and the full costs of reliable system operations. FERC states that Order No. 844 will allow market participants to align investments in facilities and equipment with the operational needs of the system and may result in shifting a portion of uplift costs to costs recovered through market prices.
To resolve these transparency issues, FERC is imposing, pursuant to section 206 of the Federal Power Act, three reporting requirements on RTOs and ISOs. Each of the reports must be posted on a publicly accessible portion of the RTO or ISO website and must be in machine-readable format.