FERC Proposes Major Reforms to Generator Interconnection Process

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The Federal Energy Regulatory Commission (FERC) issued an important Notice of Proposed Rulemaking (NOPR) regarding its generator interconnection procedures and agreements. This NOPR, issued on June 16, 2022, follows FERC's Advanced Notice of Proposed Rulemaking, issued on July 15, 2021, in which FERC laid out various possible improvements to its regulations on how electric generators connect to transmission systems throughout the country (See Holland & Knight's previous blog post, "FERC Considers Bold Electric Transmission and Interconnection Reforms to Aid Renewables," July 19, 2021).

More specifically, FERC is now proposing reforms to its pro forma Large Generator Interconnection Procedures, pro forma Small Generator Interconnection Procedures, pro forma Large Generator Interconnection Agreement and pro forma Small Generator Interconnection Agreement to address interconnection queue backlogs, improve certainty and prevent undue discrimination for new technologies. The reforms are intended to ensure that the generator interconnection process is just and reasonable and not unduly discriminatory or preferential, as required under the Federal Power Act.

In simple terms, FERC is attempting to expedite projects sitting in line in interconnection backlogs, but also imposing on projects the responsibility to commit to project advancement or get out of line.

FERC's proposals include the following:

  • Requiring public utility transmission providers to eliminate the serial "first-come, first-served" study process currently in place and instead use a "first-ready, first-served" cluster study process. For interconnection customers to remain in the interconnection queue, they would have to satisfy additional financial commitments and readiness requirements.
  • Eliminating the "reasonable efforts" standard for completing interconnection studies and instead imposing strict study deadlines on transmission providers, with the risk of financial penalties if such deadlines are not met. Relatedly, transmission providers would have to use a standardized and transparent affected systems study process. They would also be obligated to offer an optional resource solicitation study process to allow a resource planning entity to obtain better information about the interconnection costs of different combinations of projects that may be selected in a state resource solicitation process or qualifying resource plan.
  • Requiring transmission providers to allow more than one generator to co-locate on a shared site behind a single interconnection point and to share a single interconnection request, as well as to join an existing interconnection request so long as the interconnection customer does not request a change to the originally requested interconnection service level.
  • Requiring transmission providers to allow interconnection customers to access the existing surplus interconnection service process sooner once the original interconnection customer has an executed interconnection agreement or requests the filing of an unexecuted one; to use operating assumptions for interconnection studies that reflect the proposed operation of a generating facility; and to evaluate alternative transmission solutions upon request of the transmission customer.
  • Requiring nonsynchronous generators to include in their interconnection request the models needed for accurate interconnection studies and to ride-through abnormal frequency and voltage conditions to address challenges associated with momentary cessation.

Comments on the NOPR are due 100 days from its publication in the Federal Register, with any reply comments due 130 days after such publication.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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