The Federal Energy Regulatory Commission has announced an accelerated process to develop a standard interconnection agreement to be used by all utilities and regional transmission organizations (RTO) in hooking up generators in the development of an efficient, open access transmission service.

Acting on recommendations from a staff Interconnection Study Team, the commissioners agreed at last Thursday’s open meeting to issue an advance notice of proposed rulemaking (ANOPR), consisting of a “straw man” in the form of ERCOT’s interconnection agreement. Interested parties will be called on to join FERC in thrashing out alterations and coming up with a formal NOPR to be applied nationwide.

Chairman Pat Wood said he expected industry and FERC staff in a series of meetings could reach agreement on most of the provisions to be included in a formal NOPR, leaving the most contentious to be decided in the rulemaking process. The aim is to establish a minimum interconnection standard and define standard interconnection products. Wood said he hoped to have an order finalized by March.

A second rulemaking process would assign the cost responsibility for interconnections and associated system upgrades between the generator and the transmission provider. This could conceivably take up to nine months to complete.

Commissioner Linda Breathitt said cost allocation will be a key item. She pointed out that transmission construction is much more expensive than building a natural gas pipeline to fire a generating plant. Generators need to be given the right incentives to minimize costs by siting plants closer to their load.

The aim is to “encourage needed investment in infrastructure, remove incentives for transmission providers to favor their own generation and ease entry for competitors, while ensuring efficient siting decisions,” the staff report said. While individual utilities and ISOs, at the Commission’s urging, have developed interconnection procedures of their own, there have been complaints about unnecessary delays and possible discrimination, along with confusion about what rights come with interconnection, and where the cost responsibility lies.

The staff report said merchant generators have complained they have had difficulty in securing interconnection without requesting delivery; transmission providers favor their own generation; pro forma tariff provisions lack binding commitments and firm deadlines; and there is a lack of transparency of transmission information needed to make an independent assessment of impact of an interconnection request. The merchant generators also say they should not have to pay system upgrade costs incurred by the transmission provider as the result of adding new generation.

On the other hand transmission providers want minimum commitments from connection applicants prior to performing studies to weed out those who will likely never interconnect. This would result “in a more manageable and realistic queue,” the staff report said. The transmission providers also want “assurance that their control area will benefit from, or at least not be burdened by, adding generators, particularly when the new generator seeks to locate on one system, but serve load on another.” Generators also need to improve communication with the loads they serve.

The ANOPR will seek to determine a number of items: whether FERC should require all utilities to revise their transmission tariffs to include interconnection procedures;whether the procedures need to be generic or identical; how to ensure interconnection studies are completed in a timely fashion; the extent to which transmission data necessary for interconnection should be made transparent; how to create the proper incentives for transmission providers to treat all generation comparably; how to balance costs and benefits of siting generation, both with respect to exports and over-building transmission and generation; and who should pay the costs of system upgrades.

While recommending the use of the ERCOT standard as a starting point, staff noted “there are significant structural differences between Texas and the rest of the nation,” that dictate adaptations of the ERCOT standards.

The 13-page report of the Interconnection Study Team, led by Roland Wentworth, is available on the FERC web site.

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