FERC Asked to Reconsider Whether Generation Interconnection Tie Lines Should be Subject to NERC’s Transmission Reliability Standards

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In a case of importance to all generators who own radial tie lines connecting their project to the transmission grid, Federal Energy Regulatory Commission (FERC) is being asked by wind developers to reconsider a June 16, 2011 Order authorizing of the North American Electric Reliability Corporation’s (NERC) to subject such tie line owners to NERC’s transmission reliability standards as Transmission Owners (TO) and Transmission Operators (TOP). Unless changed on rehearing, FERC’s Order could result in many more power plant owners and operators being required to comply with additional mandatory reliability standards applicable to owners and operators of transmission facilities.

The decision involves two wind projects, one a 300 MW facility connected to the transmission grid via a 76-mile, 230 kV radial generation tie line, and the other a 203.5 MW wind project connected to the transmission grid via an 88-mile, 345 kV radial generation tie line. NERC required registration of both as TOs and TOPs based on its interpretation of Section III.d.1 of the NERC Compliance Registry Criteria. NERC found that each of the gen-tie lines is an “integrated transmission element” that meets the specific registration criteria because each is a link between a generation facility and the grid switchyard, and both end points, according to NERC, are “material to and part of” the Bulk Electric System.

FERC’s decision did not address the difficult issue of whether the tie lines are an “integrated transmission element,” and instead upheld registration on the more general grounds that “the reliable operation and maintenance of the interconnection facilities that connect Cedar Creek and Milford to the Bulk-Power System are necessary to the reliability of the Bulk-Power System.” FERC’s order seems to have applied a less strict analysis compared to a 2008 case where FERC was asked to determine if generator interconnection facilities were subject to transmission reliability standards. There, FERC upheld NERC’s decision to register New Harquahala Generating Company as a TO/TOP based on its ownership of a 500 kV interconnection line for its 1,092 MW gas-fired plant. In that case, however, there was evidence showing that the interconnecting substation was a major hub where over 10,000 MW were connected, including the largest nuclear power plant in the U.S. Further, there was a past incident where a fault at the interconnecting substation caused units of the nearby nuclear station to trip.

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