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Fracking and Alternative Energy

Troutman Sanders: AWEA Petitions FERC to Significantly Reform Pro Forma Generator Interconnection Procedures and Agreement

On July 7, 2015, the Commission issued a notice calling for comments on a Petition for Rulemaking filed by the American Wind Energy Association (“AWEA”) on June 19, 2015 in Docket No. RM15-21-000.  In its petition, AWEA requested that the Commission initiate a rulemaking to significantly amend the pro forma Large Generator Interconnection Procedures (“GIP”) and Large Generation Interconnection Agreement (“GIA”), in order to alleviate what it described as “unduly discriminatory and unreasonable barriers to generator market access.”  Comments on the petition are due August 6, 2015.

While AWEA acknowledged in its petition that previous Commission reforms in the area of generator interconnection have generally had positive results, it stated that “more than a decade has passed since the Commission looked holistically at whether interconnection procedures remain consistent with its statutory mandates.”  AWEA argued that the GIP and GIA have become “out of date” in comparison to current market conditions, and are therefore unable to “ensure that the generator interconnection process is just, reasonable, and not unduly discriminatory or preferential.”

In its petition, AWEA summarized its proposed amendments to the GIP and the GIA as follows:

A. Reforms to improve certainty in the study/restudy process:

  1. Require timely and accurate studies and restudies.
  2. Create an enforceable obligation to provide timely study/restudy results.
  3. Limit restudies to one per year or provide cost-certainty that would eliminate the need for restudies.
  4. Require the inclusion in studies, and the GIA, of only those contingent facilities that are shown to be electrically relevant to an Interconnection Customer’s project.
  5. Require the Transmission Provider to provide cost estimate information earlier in the study process.
  6. Require the Transmission Provider to list standardized study costs and allow recovery of those costs up to a stated cost accuracy margin listed in its GIP absent demonstrated extraordinary circumstances beyond the Transmission Provider’s control.

B. Reforms to improve transparency in the interconnection process:

  1. Require the Transmission Provider to provide more information about its interconnection study assumptions.
  2. Require curtailment risk information to be provided on a Transmission Provider’s website and in interconnection studies.
  3. Allow an Interconnection Customer to use its interconnection capacity through two or more phases, and in two or more GIAs, and provide for full reimbursement if the capacity is terminated and used by another customer.

C. Reforms to improve certainty of network upgrade costs:

  1. Require the costs for interconnection facilities and network upgrades to be capped at stated accuracy margins absent demonstrated extraordinary circumstances beyond the Transmission Provider’s control.
  2. Allow a Transmission Provider to fund network upgrades (self-funding) only if agreed to by the Interconnection Customer.
  3. Require compensation for network upgrades that benefit later Interconnection Customers and network users.
  4. Require the Transmission Provider to follow a consistent process and cost methodology for the Interconnection Customer to fund additional, restorative network upgrades.

D. Reforms to improve accountability in the interconnection process:

  1. Require the Transmission Provider to pay liquidated damages to the Interconnection Customer when it fails to provide timely or accurate interconnection studies.

Comments on AWEA’s petition are due August 6, 2015.  A copy of the petition may be found here.

About Troutman Sanders

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