FERC Punts on Generators' Appeals of NERC Registrations


In an order issued June 16, 2011, FERC denied appeals of NERC determinations to register two wind generators with significant generator leads as “Transmission Owners” (TO) and “Transmission Operators” (TOP), but in the process may have given these generators the regulatory certainty they were seeking. Cedar Creek Wind Energy, LLC and Milford Wind Corridor Phase I, LLC, 135 FERC ¶ 61,241 (2011). The decision creates significant doubt, however, for other generators regarding their status as TO/TOPs and their reliability compliance obligations.

The dispute arose when the Western Electric Coordinating Council (WECC) registered the two wind generators as TOs and TOPs based solely on ownership and operation of generator lead lines sized 100 kV or higher between the wind generators and the transmission grid. This classification subjected Milford and Cedar Creek to extensive WECC and North American Electric Reliability Corporation (NERC) mandatory reliability standards applicable to TO/TOPs, violations of which can be enforced with significant monetary penalties.

NERC subsequently affirmed WECC’s registration decisions, even while a NERC-commissioned task force report (GO/TO Report) addressed the overarching question of reliability impacts of generator leads owned by Generator Owners (GO) and Generator Operators (GOP). The GO/TO Report found there were minimal reliability impacts which could be resolved if a very limited set of generator related standards were required for lead lines. The GO/TO Report also recommended that NERC stop registering GO/GOPs as TO/TOPs. The GO/TO Report was not controversial and resulted in the establishment of NERC Project 2010-07, designed to implement the limited standards. In registering Milford and Cedar Creek, NERC found the results of the GO/TO Report and the existence of Project 2010-07 irrelevant to its decision.

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