The Federal Energy Regulatory Commission on April 19 issued a final rule that amends its pro forma Large Generator Interconnection Agreement and Large Generator Interconnection Procedures to implement a number of reforms aimed at enhancing certainty, transparency, and efficiency in the generator interconnection process.
The final rule (Order No. 845) adopts 10 of 14 reforms proposed in the Commission’s Dec. 15, 2016 Notice of Proposed Rulemaking in Docket No. RM17-8-000. Specifically, it revises the pro forma Large Generator Interconnection Procedures and the pro forma Large Generator Interconnection Agreement, which apply to generators larger than 20 megawatts.
Tony Dobbins with FERC’s Office of Energy Policy and Innovation noted at the Commission’s monthly open meeting that the pro forma interconnection procedures and agreement were established in 2003 when FERC issued Order No. 2003. “Since that time, the electric industry has undergone significant changes that have contributed to inefficiencies in the generator interconnection process,” Dobbins said.
“These inefficiencies include backlogs in interconnection queues, long timelines to process interconnection requests, and late-stage withdrawals of interconnection requests” that can lead to cascading interconnection restudies, “which can lead to even more withdrawals,” he noted. “At the same time, transmission providers have expressed concern that the interconnection study process can be difficult to manage because some interconnection customers submit interconnection requests for new facilities that have little chance of reaching commercial operation,” Dobbins said.
The final rule explains that unless these issues are addressed, existing defects and inefficiencies in the generator interconnection processes could become worse, leading to longer delays in generator development, higher costs to customers, more uncertainty in the process and less competition in the market.
To improve certainty for interconnection customers, the final rule adopts reforms that remove a limitation on an interconnection customer’s ability to construct interconnection facilities and stand-alone network upgrades and require that all transmission providers establish more accessible interconnection dispute resolution procedures.
In his presentation, Dobbins noted that in order to improve transparency and to promote more informed interconnection decisions, the rule voted on by the commissioners also adopts reforms that:
- Require transmission providers to outline and make public a method for determining contingent facilities;
- Require transmission providers to list the study processes and assumptions for forming the network models used for interconnection studies;
- Revise the definition of “Generating Facility” to explicitly include electric storage resources; and
- Establish reporting requirements for aggregate interconnection study performance.
Enhancing efficiency of the interconnection process
In order to enhance the efficiency of the interconnection process, the final rule adopts reforms that allow an interconnection customer to request a level of interconnection service that is lower than its generating facility capacity; require transmission providers to allow for provisional interconnection agreements that provide for limited operation of a generating facility prior to completion of the full interconnection process; and require transmission providers to create a process for the use of surplus interconnection service.
Moreover, transmission providers will need to set forth a procedure to assess and, if necessary, study changes in an interconnection customer’s proposed technology that occur during the interconnection process to determine if such changes would constitute a material modification.
The NOPR sought input regarding coordination between “affected systems” in the generator interconnection process, but the final rule takes no action on that issue.
The American Public Power Association, along with the Large Public Power Council and the National Rural Electric Cooperative Association, had filed comments on the NOPR.
The Association strongly opposed the NOPR’s concept of imposing a cost cap on network upgrade expenses that could be charged to interconnecting generators, and the final rule takes no action on this idea.
FERC also declined to require transmission providers to post congestion and curtailment information, consistent with the Association’s position.
The Association, however, did not support certain of the other reforms adopted in the final rule, including (1) allowing an interconnection customer to exercise the “option to build” regardless of whether the transmission provider can meet the interconnection customer’s proposed dates; and (2) providing for the utilization of surplus interconnection service.
At the April 19 meeting, FERC Chairman Kevin McIntyre noted that the Commission recently issued a final rule related to electric storage resources, directing the removal of undue barriers to participation of those resources in wholesale power markets.
McIntyre asked whether any of the reforms in the interconnection processes final rule would have particular relevance to the interconnection of electric storage resources to the grid.
“While the draft final rule is technology neutral and can benefit interconnection customers” of all types, Dobbins said, “there are some reforms that electric storage resources may find particularly helpful and relevant.” These include reforms to expedite the interconnection process, allow new generation projects to leverage existing assets, and allow an interconnection request to incorporate technology advancements without losing a spot in the queue, Dobbins noted.
“Notably, the draft final rule adds storage to the definition of generating facilities in the large generator interconnection agreement and procedures. This addition will reduce a potential barrier to the interconnection of electric storage resources,” Dobbins went on to say.
The final rule becomes effective 75 days after publication in the Federal Register. Compliance filings must be filed with the Commission within 90 days of Federal Register publication.