FERC Denies La Paloma Complaint Requesting Reliability Must-Run Designation

On October 3, 2016, FERC denied La Paloma Generating Company, LLC's ("La Paloma") complaint ("Complaint") requesting that FERC order the California Independent System Operator Corporation ("CAISO") to designate the portion of La Paloma's generating capacity that is not currently designated as resource adequacy capacity as reliability must-run ("RMR") units.

La Paloma owns a four-unit generating facility located in McKittrick, California. According to La Paloma, despite bidding energy from all four of its facility's units into CAISO's market, it has seen a substantial decline in its market revenues. On May 13, 2016, La Paloma submitted maintenance outage requests to CAISO for Unit One, Unit Three, and Unit Four of its generating facility in the interest of reducing economic losses. La Paloma excluded Unit Two from its requests because 42 MW of Unit Two's capacity is subject to a resource adequacy contract.