Search
`
November 4, 2024

Posted on

Bowring Concerned over Gaming of Hourly Offers; Role Under CP

By Rich Heidorn Jr.

BALTIMORE — PJM Market Monitor Joe Bowring said last week that the RTO must include strong market-power protections in rules allowing generators to change their offers hourly.

Bowring also told a meeting of the Organization of PJM States Inc. Advisory Committee that he is concerned that the Monitor has no defined role in screening generator offers under the new Capacity Performance rules.

The annual meeting of the OPSI Advisory Committee is the one time per year that the Monitor and the PJM Board of Managers meet publicly face-to-face. Both Bowring and PJM Chairman Howard Schneider agreed that their relationship is strong despite their frequent disagreements on Tariff filings.

“I think part of maintaining the positive relationship we’ve had with PJM over the years is understanding exactly what our roles are,” Bowring said.

And that, he said, is why he is raising his concerns that the CP rules give the Monitor no formal role in evaluating physical parameters in offers from generators.

bowring
Bowring, PJM Market Monitor © RTO Insider

Although the process approved by FERC requires PJM to consider the Monitor’s input, Bowring said he would prefer a parallel review process similar to that used in determining generators’ avoidable cost rate, with PJM ensuring compliance with its Tariff and the Monitor screening for market power. (The ACR of a generation resource is the fixed costs necessary to allow a generation resource to remain in commercial operation.)

“Our process can be much more contentious than PJM’s. It’s a very different standard,” he said.

If the Monitor disagrees with PJM on physical parameters under CP, Bowring said, “it could get messy.”

“I think it’s better to have a clear process where everyone understands what will happen in the event there’s a disagreement. And it’s highly likely there will be one — there are different standards being applied.”

Board Member Jean Kinsey said she thinks the process proposed by PJM and accepted by FERC should be given time to work.

“The process that’s being used for PJM and the Market Monitor to jointly sit down and see the physical parameter data that’s being submitted simultaneously is, it seems to me, a very good process because … you’re collaborating on your thoughts about whether it’s good, bad or indifferent,” Kinsey said. “These are physical parameters. They’re more engineering-centric than the cost-based [parameters]. … If a year from now, a year and a half, it seems not to be working, we will re-address it just like we do everything else.”

Market Power Concerns

Bowring also said that while he supports a move to allow generators to change their offers hourly, he is concerned that it could lead some to exploit weaknesses in PJM’s market power mitigation rules.

In June, FERC ordered PJM to change its Tariff to allow generators to submit day-ahead offers that vary by hour and to update their offers in real time (EL15-73). PJM is the only RTO that doesn’t allow such variable offers. (See Duke, ODEC Denied ‘Stranded’ Gas Compensation.)

PJM must make a compliance filing spelling out how it will implement the change by Nov. 1. The Generator Offer Flexibility Senior Task Force will be meeting Wednesday to discuss the proposal.

He said the introduction of hourly offers has impacts on both local market power — which PJM polices through the three pivotal supplier test — and aggregate market power.

“There are various ways to game the three pivotal supplier test and the impact of that is going to be made much worse with hourly flexibility and hourly offers unless they’re addressed,” he said.

Aggregate market power concerns arose during the January 2014 polar vortex, when Bowring said “just a couple” of generation owners were pivotal — PJM needed their output in order to clear the market.

“In PJM there is no rule governing aggregate market power,” Bowring said. “That’s been fine to date, but with the hourly market flexibility it’s not going to be fine anymore.”

Bowring’s suggestion: “If you change your offer in midday to reflect gas costs, that’s fine. But you should not be allowed to increase your markup from $10 to $500 because you think the market is tight, you’re pivotal and you can get away with it.”

Posted on

PJM Suggests Changes to Virtual Transactions

By Suzanne Herel

PJM recommended three market rule changes regarding virtual trading in a report requested by stakeholders and released last week.

PJM Ponders Changes to Virtual Trades, DA Market.)

It recommends:

  • Aligning the eligible trading points for increment offers (INCs) and decrement bids (DECs) with nodes where generation, load or interchange transactions are settled, or at trading hubs;
  • Altering the biddable locations for up-to-congestion transactions (UTCs) to generation buses as sources only, trading hubs, load zones and interfaces; and
  • Allocating uplift to UTCs consistent with INC and DEC transactions.

PJM said it proposed the changes to stimulate stakeholder discussion. “The goal of this discussion is to retain all of the positive aspects that virtual transactions bring to the market while removing the bulk of the issues that they can create when used inefficiently under the existing rules.”

An overview of the report will be presented at the Oct. 22 meeting of the Markets and Reliability Committee. The study also looks at the purpose of virtual trading, the mechanics by which such trades are offered and cleared, potential problems that can arise and examples of how market participants use them.

Virtual transactions have been incorporated in PJM energy markets since the June 1, 2000, inception of the day-ahead market. They are bids and offers that take financial positions without the intent of delivering or consuming actual power in the real-time market.

Posted on

FERC Rejects Complaints over MISO South Through-and-Out Tx Rules

By Amanda Durish Cook

FERC last week rejected two complaints alleging that MISO overcharged for through-and-out transmission on the MISO South system.

The nearly identical complaints originated from Morgan Stanley Capital Group and eight Entergy export customers, including several Southern Co. utilities and the Springfield, Mo.-based Associated Electric Cooperative Inc. (AECI). The complainants claimed that the power they received from Entergy’s territory was overpriced, violating the grid operator’s no-cost-sharing rule and section 206 of the Federal Power Act. They sought refunds from Dec. 19, 2013, when Entergy transferred control of its transmission facilities to MISO. The parties also asked for an investigation if FERC found improprieties.

FERC found that the through-and-out transaction rates did not violate MISO’s Tariff because the no-cost-sharing-rule found in Tariff attachment FF-6 doesn’t apply to through-and-out charges (EL15-66, EL15-77). The commission also decided the complaints were “duplicative” because the justness and reasonableness of the rates under section 206 is already being challenged by AECI (EL14-19).

That case opposes current through-and-out transmission rates under recent MISO Tariff revisions that provide a five-year transition period “governing regional allocation of network upgrades.” MISO filed for the Tariff changes with FERC in mid-2013 after Entergy moved to MISO control.

“Commission precedent prohibits the filing of successive complaints that seek to re-litigate the same issue absent new evidence or changed circumstances,” FERC wrote.

The complaints said that since the MISO integration, the charges for long-term firm point-to-point transmission service have risen from an average of $1.78/kW-month to $3.45/kW-month.

In its complaint, Morgan Stanley said it was unjust for MISO to apply differing transmission rates to customers based on if they have a sink in or out of the RTO. The company said MISO’s cost assessments are discriminatory because MISO is excluding “MISO Midwest costs from transmission rates charged to former Entergy customers that have a sink in MISO South but is not excluding such costs from former Entergy customers that sink outside of MISO South.” The company also said that customers that sink in SPP are being treated differently than those that sink in PJM.

MISO said the complaints overlooked elimination of its pancaked rate as a result of Entergy’s integration.

“MISO and Entergy state that the purpose of applying an average system-wide rate to through-and-out service is to treat all competitors for a specific load the same. In MISO’s view, complainants are asking the commission to grant them a preferential rate not available to other similarly situated customers,” MISO stated.

Posted on

Generator Tie-Line Exemption Upheld by FERC

By Rich Heidorn Jr.

FERC last week denied requests for changes to Order 807, which granted a blanket waiver from Open Access Transmission Tariff requirements to owners and operators of generator tie lines (RM14-11-001).

Generator Tie Lines Exempted from OATT Rules.)

The commission denied a rehearing request from the National Rural Electric Cooperative Association (NRECA) and a second filed jointly by the American Public Power Association (APPA) and the Transmission Access Policy Study Group (TAPS).

Safe Harbor

NRECA asked the commission to reconsider its presumption that an ICIF owner has plans to use its capacity when the third-party requesting transmission service is a load-serving entity.

NRECA noted that renewable generating resources are often located in remote areas and require long tie lines to connect to the interstate grid. The group said it would be more efficient for an LSE to contract with an ICIF owner to counterflow power over the line rather than to build a new facility to serve its native load.

It said the tie line owner should have the burden of proving it has specific plans to use the excess capacity that would prevent it from providing LSEs access.

FERC said it disagreed with NRECA’s contention that the five-year safe harbor period “impinges upon the reasonable needs of LSEs.”

“Because of the case-specific nature of any request under sections 210 and 211 to use certain ICIF, we cannot … state exactly what evidence would be strong enough to overcome the rebuttable presumption during the safe harbor,” FERC added.

Open Access

FERC also rejected the allegation by APPA and TAPS that the rule grants tie line owners vertical market power over access to their facilities. The groups said FERC unfairly ruled that third parties would not be unduly burdened by pursuing transmission service under Federal Power Act sections 210 and 211.

The commission said its rule “does not foreclose access” to tie lines but sought to reduce unnecessary regulatory burdens for owners that may plan to use excess transmission capacity for future phases of generation construction.

“Without such reasonable assurance, there would be little incentive for a developer to shoulder the extra expense of ICIF sized larger than the initial phase of the project,” the commission said.

Clarification

The commission clarified that no commission proceeding is necessary for a blanket waiver to be revoked if the public utility acquires additional transmission facilities that are not ICIF or otherwise no longer qualifies for the exemption.  FERC said the waiver would be automatically revoked and the owner would be required to file an OATT within 60 days.

FERC also clarified that non-public utility ICIF owners may also take advantage of the blanket waiver and safe harbor period.

“Although the determination in the final rule does not explicitly state that non-public utility ICIF owners may take advantage of the blanket waiver, this omission was unintentional,” the commission said. “The intent of the final rule was to make the package of reforms equally available to nonpublic utility ICIF owners.”

Posted on

PJM Markets and Reliability Members Committees Preview

Below is a summary of the issues scheduled to be brought to a vote at the Markets and Reliability and Members committees Thursday. Each item is listed by agenda number, description and projected time of discussion, followed by a summary of the issue and links to prior coverage in RTO Insider.

RTO Insider will be in Wilmington, Del., covering the discussions and votes. See next Tuesday’s newsletter for a full report.

Markets and Reliability Committee

3. PJM Manuals (9:25-9:35)

Members will be asked to endorse the following manual change:

  • Manual 14B: PJM Region Transmission Planning Process. Establishes criteria for reliability studies focused on meeting winter peaks from Dec. 1 through Feb. 28. Includes assumptions for the input power flow models and parameters for the analytical studies to be performed. (See “Winter Study Criteria, Uplift Added to Planning Manual,” in PJM Planning Committee Briefs.)

4. TIER 1 COMPENSATION (9:35-9:55)

The committee will be asked to approve manual and Tariff language changing compensation of Tier 1 synchronized reserves. Under the new scheme, Tier 1 synchronized reserve resources will be obligated to respond in emergencies and subject to penalties if they can’t. It retains Tier 1’s ability to receive compensation outside of synch reserve events when the non-synch reserve market price is more than $0. Units could opt out of the performance obligation, but by doing so they would forfeit any credit they would have received outside of responding to an event. The changes will go before the MC on Nov. 19 and would be implemented no earlier than February. (See “Tier 1 Compensation Language Approved,” PJM Market Implementation Committee Briefs.)

5. REGULATION PERFORMANCE IMPACTS (9:55-10:10)

The committee will be asked to endorse revisions to Manual 11: Energy & Ancillary Services Markets Operations implementing changes to reduce over-procurement of RegD resources. The solution would move the benefits factor curve to the left so that it is at zero at 40%. A cap of 26.2% also would be implemented during identified excursion hours — hours when dispatch frequently moves the regulation signal manually. It also features tie-breaker logic to rank RegD self-schedules or zero-cost offers. (See “Solution, Task Force Proposed to Curtail RegD Resources,” in PJM Markets and Reliability Committee Briefs.)

6. REGULATION MARKET ISSUES SR. TASK FORCE (rmistf) (10:10-10:20)

Members will be asked to endorse a draft charter for the Regulation Market Issues Senior Task Force. The task force will be tasked with addressing modeling problems that are causing PJM’s regulation market to purchase too much RegD megawatts at times. (See agenda item 5 above.)

7. INCREMENTAL AUCTION TARIFF CLEAN UP (10:20-10:30)

A Tariff provision up for endorsement would allow PJM to release Base Capacity resources to reflect the Capacity Performance resources it acquired in the transition auctions for the 2016/17 and 2017/18 delivery years. (See “PJM Seeks Tariff Change to Release Excess Capacity,” in PJM Markets and Reliability Committee Briefs.)

8. 2015 IRM STUDY RESULTS (10:30-10:45)

The results of the 2015 installed reserve margin study will be presented for endorsement. It increases the IRM for delivery year 2016/17 to 16.4% from 15.5% in the 2014 study. IRMs also rose for 2017/18 and 2018/19. (See “IRM, FPR Rising; PJM Methodology Challenged,” PJM Planning Committee Briefs.)

9. GOVERNING DOCUMENTS ENHANCEMENT AND CLARIFICATION SUBCOMMITTEE (gdecs) (10:45-10:55)

The committee will be asked to approve a draft charter for the Governing Documents Enhancement and Clarification Subcommittee, which will be tasked with identifying, reviewing and resolving inconsistencies among PJM’s governing documents and manuals. It also will offer revisions to correct ambiguous or confusing language.

Members Committee

ENDORSEMENTS (1:25-2:00)

  1. CONSUMER ADVOCATES OF PJM STATES (CAPS) (1:25-1:55)

Members will be asked to vote on a proposal to fund a $450,000 budget for the nonprofit Consumer Advocates for the PJM States through an assessment on electric customers. It would amount to about 0.8 cents annually for a residential customer using 12,000 kWh. (See Consumer Advocates’ Funding Request Sparks Sharp Words.)

  1. ELECTIONS (1:55-2:00)

Members will be elected for the Nominating Committee for 2015-16. The sector representatives are:

  • Electric Distribution Sector: Lisa McAllister, American Municipal Power
  • End Use Customer Sector: Ruth Ann Price, Division of the Public Advocate of the State of Delaware
  • Generation Owner: Joe Kerecman, Calpine
  • Other Supplier Sector: Marji Philips, Direct Energy
  • Transmission Owner Sector: John Horstmann, Dayton Power & Light
Posted on

FERC Upholds PJM’s Capacity Market Parameters

By Suzanne Herel

FERC last week upheld its Nov. 28 order accepting PJM’s changes to its capacity auction demand curve and related parameters, denying rehearing requests by a broad group of interests (ER14-2940).

PJM said the changes to the variable resource requirement (VRR) curve and related pricing inputs, including the cost of new entry (CONE), were identified in the RTO’s triennial review as being necessary to meet evolving market conditions.

The new, more conservative curve results in the procurement of more capacity and carries an estimated 1% cost increase (about $216 million).

PJM uses the curve to gauge how much capacity it needs to meet the one-in-10-year loss-of-load standard. A lower-cost VRR curve identified by The Brattle Group, the independent consultant that conducted the study, would fail to meet the needs of a one-in-five-year event 13% of the time, PJM said.

In the November order, the commission agreed with PJM that the changes to the VRR curve were needed to ensure reliability “in light of evolving market conditions and anticipated supply shifts,” including the planned retirement of 26,000 MW of coal-fired generation. The order accepted the explanation of PJM’s expert witness, economist Paul M. Sotkiewicz, who argued that, due to the anticipated changes, PJM’s prior modeling assumptions were no longer appropriate.

A coalition comprised of the Maryland Public Service Commission, the New Jersey Board of Utilities and PJM load-serving entities challenged PJM’s assessment of evolving market conditions, saying that most of the coal retirements have already occurred and that the region has added 17,000 MW of natural gas-fired capacity in the last three years.

The commission rejected the challenge, saying that its acceptance of the new VRR curve “was not based on the specific timing of these retirements, but on the inability of PJM’s prior modeling construct to capture these evolving conditions and thus on the resulting need for a more conservative VRR curve.”

The PJM Power Providers Group (P3) and Public Service Enterprise Group disputed PJM’s use of an 8% cost of capital used in CONE calculations, saying it was too low because it relied on corporate-level data for publicly traded independent power producers and did not reflect riskier, project-level financing. (See PJM Generators Seek Support for Capital Boost.)

The commission said that in addition to IPP data, it also relied on market- and transaction-based cost of capital data.

“This evidence was verifiable and reflects the market’s required compensation for the specific, systemic operating risks attributable to merchant generation, and the willingness of borrowers to bear these risks,” the commission said.

Posted on

Renewable Energy Reporting Sparks Privacy Concerns in New York

By William Opalka

Market participants in New York are concerned that their proprietary information might not be adequately protected as NYISO plans to bring the RTO’s reporting system for renewable energy generation into compliance with state law.

The New York State Energy Research and Development Authority (NYSERDA), which procures clean energy, was required by a 2012 law to develop the Generating Attribute Tracking System to ensure compliance with the state’s renewable portfolio standard.

Generators’ representatives raised concerns Wednesday when the NYISO Business Issues Committee discussed a proposed change in the ISO’s code of conduct that states the information would be confidential and that market participants will be notified of any requests for confidential data or any decision to disclose it.

The discussion came as New York Assemblyman James Brennan is petitioning the Public Service Commission to force disclosure of bidding information from power generators that they say is proprietary and threatens to disrupt the market if not protected. The PSC and the secretary of the state’s Department of Public Service last year dismissed a similar request under the state’s Freedom of Information Law. (See NYPSC Chair Zibelman Acknowledges Costs Concerns.)

Market participants fear that if the proprietary information from the traditional generators is disclosed, by either the PSC or by the courts following any legal action that the assemblyman may initiate, GATS information would be released as well.

“There’s a lot of concern about the release of information that everybody agrees is confidential,” said Howard Fromer, who represents PSEG Long Island.

NYISO would provide data on megawatts produced and consumed and on import and export transactions. No financial data on settlements and revenue would be included.

No trading is available in the self-contained New York renewable energy market, which officials said Gov. Andrew Cuomo wants to change. Renewable energy certificates (RECs) are traded in the neighboring jurisdictions of ISO-NE and PJM.

NYISO is negotiating an agreement with NYSERDA’s vendor, APX, which will keep data confidential except for identified purposes, NYISO said. APX runs several REC registries, including those in Michigan, North Carolina and New England.

Peter Keane, NYSERDA’s deputy general counsel, said that since the New York portfolio standard was set in 2004, only one request for private information has been made. That involved a dispute over lease payments between a property owner and the owner of wind turbines at the owner’s site. The dispute was resolved before a decision had to be made on the release of the information.

The proposed code of conduct change moves to the ISO’s Management Committee at the end of the month. GATS is expected to be publicly available in March.

Posted on

PJM to File FTR, ARR Rule Changes with FERC

By Suzanne Herel

The PJM Board of Managers last week directed staff to seek FERC approval for a package of rule changes related to financial transmission rights (FTRs) and auction revenue rights (ARRs) after the Members Committee nearly reached consensus on the proposal.

“In making this decision, the board took into account the near two-thirds consensus achieved through the stakeholder process,” PJM said in a release. “It also considered the need to address the equity issues associated with the current rules by which the transmission system is planned to ensure future feasibility of Stage 1A ARRs and revenue inadequacy is allocated among holders of both positively and negatively valued FTRs.”

ftrThe RTO said the filing would be made shortly, and FERC would be asked to take action by the end of the year to provide adequate notice prior to the 2016 annual ARR allocation and FTR auction.

The rule changes, proposed by Old Dominion Electric Cooperative, would redesign the FTR and ARR processes, combining recommendations from PJM and the Independent Market Monitor.

In August, the MC fell just short of a sector-weighted consensus on the proposal, which was backed by most members of the End Use Customer, Transmission Owner and Electric Distributor sectors but won support of only one-third of the Generation Owner and Other Supplier sectors. (See ODEC Seeks Last-Ditch Vote on Deadlocked FTR/ARR Issue.)

The plan contains three elements.

One, drawn from a PJM staff proposal regarding the Stage 1A 10-year process, escalates the current ARR results using a zonal load forecast growth rate of +1.5%. The other two elements change the method of reporting the monthly payout ratio so that any negative target allocations are included as revenue, slightly increasing the reported payout ratio. It also treats each FTR individually, eliminating the netting of positively and negatively valued FTR positions in a portfolio prior to determining positively valued FTR payout ratios.

Posted on

SPP Ponders Response to Lubbock’s ERCOT Move

By Tom Kleckner

LITTLE ROCK, Ark. — Lubbock Power & Light’s recent announcement it was planning to take 400 MW of SPP load and join ERCOT hung heavy over the Strategic Planning Committee last week as it tried to determine what to do next.

Golden Spread Electric Cooperative’s Mike Wise, the SPC chair, teed up the issue by asking whether SPP staff should conduct a transmission study of the area to determine whether LP&L’s departure would result in stranded investment.

“Transmission is built for and paid for by everybody,” Wise said. “Will there be transmission infrastructure out there that wouldn’t be needed if LP&L leaves?”

Bill Grant, Xcel (L) and Carl Monroe, SPP © RTO Insider
Bill Grant, Xcel (L) and Carl Monroe, SPP © RTO Insider

“I can tell you no facilities were built just for Lubbock,” said Bill Grant of Xcel Energy, which currently provides all of the city’s energy (forecast to be 626 MW in 2019) through its Southwestern Public Service subsidiary.

Effective June 1, 2019, when LP&L will also begin receiving power as a member of ERCOT, Xcel will provide only 170 MW of Lubbock’s needs.

“What led to this, and what can we do about it? Will this be the first time or the last time it happens?” Grant asked.

SPP Director Harry Skilton echoed Grant, expressing a need to “understand [LP&L’s] motivation and whether we should be doing something to alleviate whatever incentive they had for moving.”

LP&L, the third-largest municipal electric utility in the state, said joining ERCOT will reduce its energy and capacity costs. (See Integrated System to Join SPP Market Oct. 1; Lubbock Looking at ERCOT.)

“Prices in the ERCOT area are lower than SPP’s. We can debate whether that’s temporary or not,” said Carl Monroe, SPP’s executive vice president and COO. “The second issue is we have a capacity-margin requirement, and ERCOT doesn’t.”

“Load will come and go. Businesses move from one location to another,” said Dogwood Energy’s Rob Janssen. “Let’s face it … ERCOT built transmission lines in West Texas that overlap with SPP’s, so some customers in the area have a choice as to which system to be on.”

Monroe said SPP has no withdrawal fees to discourage load from leaving the RTO. “The only withdrawal provisions we have today are for withdrawn transmission, not load.”

SPP Vice President of Engineering Lanny Nickell said SPP could run studies of the areas. He also said SPS, which has owned the transmission interconnection with LP&L since 1983, could also request re-evaluations of notifications-to-construct to determine whether planned projects are still needed.

Asked whether any projects with NTCs in the area might be affected by the withdrawal of LP&L’s load, Nickell said he “was not aware of any projects directly impacted by Lubbock leaving.”

Grant said Xcel has identified a couple of impacts on its radar screen, and it will “take a closer look when the projects get close to breaking ground.” But he cautioned that the committee might be getting ahead of itself, pointing out LP&L has only announced its intent to join ERCOT and that the Texas grid still must conduct a feasibility study.

“We’ll know when the studies are done … we’ll know way before June ’18,” he said, referring to LP&L and ERCOT’s final decision date. “We’ll know in time what we need to reflect in our own models.”

In the meantime, SPS has filed a Freedom of Information Act request to obtain LP&L’s feasibility study, Grant said.

“We have no idea what numbers they came up with, or how they came up with the numbers, or whether they’re feasible,” he said.

Posted on

Net Metering Caps Temporarily Lifted in NY

By William Opalka

The New York Public Service Commission on Thursday temporarily lifted caps on the amount of net-metered solar energy that can be permitted on a utility system. The move was prompted by a July petition from Orange and Rockland Utilities seeking to suspend its net-metered installations because it had applications for interconnections that exceeded the limit it can accommodate under current state rules.

While the petition came from ORU, the commission ruled that all six investor-owned utilities in New York must file tariff revisions to the rules governing their net-metering caps by Oct. 30, which will become effective Nov. 6.

Under the state’s 6% cap, ORU said it would reach its 62-MW limit in the “near future” and should immediately be allowed to suspend interconnections at that time.

The commission, however, rejected ORU’s proposal for a “buy-all, sell-all” solution whereby a distributed-generation customer would sell all its generation output at a wholesale rate and purchase all the electricity it needs at the retail rate.

The PSC said the ceiling would float upward to accommodate all new applications until the commission can answer a key question: How much are distributed energy resources worth? That answer is expected by the end of next year, under New York’s Reforming the Energy Vision initiative (15-E-0407).

“Rather than engaging in another effort to arrive at the proper level of the ceiling that would anticipate perfect coordination with the implementation of REV, the ceilings shall be allowed to float in the interim until the calculation … affecting valuation of DER is decided,” the commission wrote. “That is, utilities shall accept all interconnection applications and continue to interconnect net metered generation without measuring the DG capacity against an artificially set ceiling level.”

The order said state law gave the commission discretion to adjust the caps in the current scenario. It also said momentum to attain the state’s clean energy goals need not be interrupted now. “The pace of development should be set by the NY-Sun program and other policies for promoting net metered generation, not by the level of the ceilings,” the order said. NY-Sun is Gov. Andrew Cuomo’s effort to spend $1 billion by 2023 to install 3 GW of solar generation.

Much of the commission’s discussion centered on whether lifting the cap may create a “gold rush” for residents who want to install rooftop solar.

To Commissioner Diane Burman, who opposed the move, the interim approach will entice potential customers to rush into the interconnection queue to reserve a place and be grandfathered into the system at the time the PSC determines what the cap ultimately should be.

“I don’t see what we’re doing today as helpful over the long term,” she said.

Commission Chair Audrey Zibelman said setting a higher hard cap now would have a similar negative effect, with residents hurrying to reserve a place in the queue before they are cut off when a utility’s limit is reached, creating a stop-and-go scenario for the industry.

“We have a burgeoning solar industry, and we must not allow the caps to become a barrier,” she said.

This is the second time in less than a year the commission has had to address the cap when a utility approached its limit. Last December the commission doubled the statewide cap from 3% to 6% when environmentalists and Central Hudson Gas & Electric petitioned regulators for an increase. (See New York Doubles Solar Net Metering Cap to 6%.)