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For 1st time in 13 years, FERC looks to revamp interconnection procedures

FERC on Dec. 15 proposed to make major changes to its large generator interconnection procedures and pro forma interconnection agreement, citing the significant changes that have occurred within the industry since the commission's existing policies were established in 2003.

Revising the policies that apply to the interconnection of new generators larger than 20 MW in the ways suggested could help improve the efficiency of the interconnection process while also maintaining reliability, increasing energy supply, balancing the needs of both interconnection customers and transmission owners and removing barriers to the development of needed resource, the notice of proposed rulemaking said.

During FERC's Dec. 15 regular monthly meeting, FERC staff noted that "the rise of shale gas, the emergence of new technologies, and state and federal policies that have impacted the resource mix" all point to the need to reconsider reforming the 13-year-old policies.

"Additionally, some transmission providers have expressed concerns over what they consider 'speculative' projects with little chance of reaching commercial operation disrupting interconnection study queues," staff noted.

Following staff's presentation, FERC Chairman Norman Bay said the NOPR is a "good example of the kind of bread and butter work" his agency does — "work that is technical and weedy, but work that nevertheless is very important."

Much of the impetus for the NOPR came from a June 2015 request by the American Wind Energy Association for FERC to consider whether changes should be made to its large generator interconnection procedures and agreement to reflect the nation's transition to cleaner energy sources. While that request drew mixed reviews, FERC held a technical conference in May to gather more stakeholder feedback on the subject.

According to the Dec. 15 NOPR, the proposed rulemaking is based, in part, on the input FERC received through those initiatives.

"The commission believes the proposed reforms will benefit interconnection customers through more timely and cost-effective interconnection and will benefit transmission providers by mitigating the potential for serial re-studies associated with late-stage interconnection request withdrawals," the NOPR explained.

To that end, FERC proposed to make changes that fall within three broad categories.

The first set of proposed revisions is aimed at giving interconnection customers more predictability throughout the interconnection process by requiring transmission providers that conduct cluster studies to move toward a scheduled, periodic restudy process and by removing certain limitations on when interconnection customers may opt to build interconnection facilities and standalone network upgrades. They also specify that a transmission owner must secure its interconnection customer's agreement before opting to initially self-fund the costs of the construction of network upgrades and require that the relevant RTO or ISO develop procedures for resolving interconnection disputes.

The NOPR's second set of proposed reforms would benefit all participants in the interconnection process by giving them "a fuller picture of the considerations involved in interconnecting a new large generating facility," FERC said. Among other things, those revisions would require transmission providers to develop a method for determining contingent facilities based on certain "guiding principles" outlined in the NOPR and publicly disclose the specific study processes and modeling assumptions it uses for interconnection studies.

FERC's third set of revisions would "enhance interconnection processes by making use of underutilized existing interconnections, providing interconnection service earlier, or accommodating changes in the development process," according to the NOPR. The commission specifically proposed to let interconnection customers request a level of interconnection service that is below their generating facilities' capacity and allow them to enter into provisional agreements under which they could operate on a limited basis before the full interconnection process is completed.

Still other proposed changes included in the third set of revisions are new requirements that transmission providers create a process for interconnection customers to use excess interconnection service at existing interconnection points, and establish a separate procedure that allows them to assess and potentially study changes in a customer's technology without also changing that customer's queue position. Transmission providers also would have to look at the way they model electric storage resources for interconnection studies and report back to FERC on how their existing practices need to be modified or explain why no changes should be made.

Although the NOPR applies only to large generating facilities, FERC also asked stakeholders to comment on whether any of the proposed reforms should be applied to its interconnection procedures and pro form interconnection agreement for small generating facilities of 20 MW or less.

Comments will be due 60 days after the NOPR is published in the Federal Register. (FERC docket RM17-8)