Amid the “uncertainty” over its interconnection policy, FERCearlier this week clarified its procedures to give all types ofelectric generators, especially new market entrants, a “fair shake”at hooking 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.

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 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 a transmission customer and transmissionprovider cannot agree on the rates, terms or conditions forinterconnection, the transmission provider is required to file atFERC an unexecuted agreement specifying the rate it believes isappropriate for the requested service within 30 days of beingnotified by the transmission customer in writing to do so. At thattime, the transmission provider must begin providing the requestedservice “subject to the…..customer agreeing to compensate thetransmission provider at whatever rate the Commission ultimatelydetermines to be just and reasonable…” FERC will issue a decisionwithin 60 days, Massey said.

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

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