Amid the “uncertainty” over its interconnection policy, FERClast week clarified its procedures to give all types of electricgenerators, especially new market entrants, a “fair shake” athooking up to the interstate transmission grid.

The Commission outlined its interconnection procedures in acomplaint order involving Tennessee Power [EL00-12]. The decision”provides much needed clarity to the market regarding ourinterconnection policy,” said Commissioner William Massey, who isspearheading an effort at FERC to standardize the interconnectionprocess. He believes “gas-fired generation and the entire gasindustry will benefit” from this effort. [See NGI, 3/13/00]

First, the order clarifies that “interconnection is a componentof transmission service, and the interconnection component may berequested separately from the delivery component,” according toMassey. “This will be valuable for merchant plants that may nothave long-term sales contracts, and thus may not at the outset needlong-term delivery service.”

Second, the order explains that “while interconnection by itselfconveys no right to delivery service, it does convey a right to thenetwork capacity at the point of interconnection, or receipt point,consistent with the parameters specified in the service agreement,”Massey said. “This means that an interconnected generator will notfind itself stranded from the grid as the result of not takingdelivery service at a particular time.”

Third, the Commission clarified that its pro forma tariffprocedures apply to all interconnection requests, whether they are”tendered concurrently with [a] request for transmission service orin advance [of] a specific transmission service,” CommissionerLinda Breathitt said.

This acknowledgment “is very important and should go a long waytoward resolving many of the problems [associated with] securinginterconnections that we have heard about, and the need for adefined process with time limits and safeguards,” Massey noted.

Also, in the event an electric transmission customer andtransmission provider cannot agree on the rates, terms orconditions for interconnection, the transmission provider isrequired to file at FERC an unexecuted agreement specifying therate it believes is appropriate for the requested service within 30days of being notified by the transmission customer in writing todo so. At that time, the transmission provider must begin providingthe requested service “subject to the…..customer agreeing tocompensate the transmission provider at whatever rate theCommission ultimately determines to be just and reasonable…” FERCwill issue a decision within 60 days, Massey said.

“Thus, an interconnected customer can stop…gamesmanship andget a timely decision from us on the matter,” he noted.

Although he commended the Commission’s decision to clarify itspolicy, Massey believes much more is needed. “For example, Ibelieve standardized interconnection agreements are needed.Generators and some utilities tell us thatnegotiating…..interconnection agreements is time consuming,burdensome and should be unnecessary.”

Chairman James Hoecker agreed. “…..[U]ntil the RTOs can ensurethe interconnection policies are fair and expeditious across theboard, I think it’s important that transmission owners…..[enterinto] some agreements, adopt some standards that will make iteasier for new generation to enter the power market.”

Susan Parker

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