On November 19, 2018, FERC denied a complaint filed by CXA La
Paloma, LLC ("La Paloma") requesting that FERC use its
jurisdiction over resource adequacy to direct the California
Independent System Operator Corp. ("CAISO") to implement
centralized capacity procurement. FERC found that La Paloma failed
to meet its burden to demonstrate that CAISO's tariff was
unjust, unreasonable, or unduly discriminatory or preferential
under section 206 of the Federal Power Act.
In its complaint, La Paloma argued that California's current
resource adequacy regime increasingly requires participants to
provide capacity from existing (often non-renewable) resources,
such as the La Paloma gas-fired generating facility, and receive
capacity payments that are four to seven times lower than those
received by new (renewable) resources, resulting in a revenue
shortfall. La Paloma argued that CAISO's capacity market
effectively functions based on a vertical demand curve, which it
claimed leads
