|NRG ENERGY, INC. filed this Form 10-K on 02/29/2016|
In December 2015, FERC voluntarily requested a remand from the D.C. Circuit. FERC also instituted a FPA Section 206 proceeding, directing ISO-NE to submit tariff revisions by March 31, 2016, providing for zonal sloped demand curves to be implemented beginning in Forward Capacity Auction 11. The ultimate outcome of this proceeding will affect the market design governing future capacity auctions in New England.
Challenge to ISO-NE’s Seven-Year Lock-In for New Resources — On February 8, 2016, parties filed a petition in the D.C. Circuit requesting that the Court invalidate FERC’s approval of a “price lock” mechanism for new resources in New England. The price lock mechanism permits qualified new resources that clear the auction to receive their first-year clearing price for seven years. Any change to the price lock mechanism could affect future capacity prices in New England, as well as affect the price that already-cleared resources that elected the price lock could receive from the capacity market in future years.
Dunkirk Power Reliability Service and Natural Gas Addition — Dunkirk Power LLC has been operating one unit (Unit 2) under a reliability services agreement with National Grid, or RSSA, through May 31, 2015. On May 18, 2015, the NYSPSC approved National Grid's request for a seven-month extension of the RSSA with Dunkirk to December 31, 2015. Subsequently, National Grid confirmed that Dunkirk would not be needed for reliability past December 31, 2015, and the facility ceased operations at the end of 2015.
In addition, on February 13, 2014, Dunkirk Power LLC and National Grid agreed to a term sheet for a 10-year agreement to govern the addition of natural gas-burning capabilities to the Dunkirk facility. This term sheet, known as the DNG Agreement Term Sheet, was approved by the NYSPSC on June 13, 2014. On February 27, 2015, Entergy filed a complaint in the U.S. District Court for the Northern District of New York alleging that the NYSPSC’s approval of the DNG Agreement Term Sheet represents an impermissible interference with FERC’s exclusive jurisdiction over the wholesale markets. The U.S. District Court has stayed further discovery until the case goes through summary judgment procedures. In connection with the mothball of the facility, the pending litigation and the latest reliability assessment completed by NYISO, the Company evaluated the related assets for impairment and recorded an impairment loss, as further described in Item 15 - Note 10, Asset Impairments, to the Consolidated Financial Statements.
Request for Investigation of NRG’s Activities Regarding NRG’s Dunkirk Facility — On February 9, 2016, the governor of New York sent a letter to the NYSPSC requesting that it investigate whether NRG acted properly in connection with the reliability services provided by the Dunkirk facility between 2012 and 2015, as well as with respect to NRG’s repowering of the Dunkirk facility, both as approved by the NYPSC. The Company believes that the allegations in the letter have no merit and intends to vigorously dispute these allegations.
Huntley Power Reliability Service — On August 25, 2015, Huntley Power filed a notice with the NYSPSC of its intent to retire Huntley's operating units on March 1, 2016. Huntley Power filed a cost-of-service filing but subsequently withdrew the filing after NYISO confirmed that Huntley would not be needed for bulk system reliability.
FERC Investigation of NYISO RMR Practices — On February 19, 2015, pursuant to Section 206 of the FPA, FERC found NYISO’s tariff to be unjust and unreasonable because it did not contain provisions governing the retention of and compensation to generating units for reliability. FERC ordered NYISO to adopt tariff provisions containing a proposed RMR rate schedule and pro forma RMR agreement within 120 days of the date of FERC’s order. On October 19, 2015, NYISO filed its tariff revisions at FERC. NRG protested the filing. The matter is pending before FERC.
Competitive Entry Exemption to Buyer-Side Mitigation Rules — On December 4, 2014, pursuant to Section 206 of the FPA, a group of New York transmission owners filed a complaint seeking a competitive entry exemption to the current NYISO buyer-side mitigation rules. On December 16, 2014, TDI USA Holdings Corporation filed a complaint under Section 206 of the FPA against the NYISO claiming that the NYISO’s application of the Mitigation Exemption Test under the buyer-side mitigation rules to TDI’s Champlain Hudson 1,000 MW transmission line project is unjust and unreasonable and seeks an exemption from the Mitigation Exemption Test. On February 26, 2015, FERC granted the complaint filed by the New York transmission owners and directed the NYISO to adopt a competitive entry exemption into its tariff within 30 days. In a companion order issued on the same day, FERC rejected the TDI complaint on the grounds that TDI’s concerns were adequately addressed by FERC’s first order. On March 30, 2015, NRG filed a request for rehearing. On August 4, 2015, FERC granted in part and denied in part the rehearing requests and conditionally accepted NYISO's compliance filing subject to revisions clarifying that the competitive entry exemption is not available for generator or unforced capacity deliverability rights projects that are members of the completed class years.