FERC last Wednesday lifted the curtains on a notice of proposed rulemaking (NOPR) on standardized generator interconnection agreements and procedures that will be made a part of existing and future open access transmission tariffs, a move that the Commission believes will help to encourage needed investment in energy infrastructure, discourage discrimination and ease entry for competitors while ensuring efficient siting decisions.
The NOPR builds on an advanced notice of proposed rulemaking (ANOPR) that FERC issued in October 2001. The ANOPR generally used the Electric Reliability Council of Texas’ standard interconnection agreement and procedures as a starting point for discussion. At that time, the Commission noted that balanced market rules and sufficient infrastructure are essential for achieving a seamless nationwide power market that will provide customers with reasonably priced and reliable service. The Commission held extensive public meetings from November 2001 through January 2002 to discuss key issues and refine its proposal.
The proposed standard generator interconnection agreement (IA) and standard generator interconnection procedures (IP) are proposed as amendments to the open access transmission tariffs of all public utilities that own, operate or control transmission facilities. FERC is also proposing an interconnection reciprocity provision, similar to that found in the open access transmission tariff in Order 888. Any non-public utility that wants to take advantage of, or to continue to take advantage of, open access on a public utility transmission system must adopt the IA and IP into its own reciprocity open access transmission tariff.
The Commission noted that the current interconnection pricing policy was used in negotiating the terms and conditions of the IA and IP. That policy provides that generators would pay the full cost of sole-use direct assignment facilities and initially pay for any additional network facilities that would be needed as a result of their interconnection request. The generator or generators would later receive compensation for network costs, plus interest, through credits once transmission service starts.
The NOPR seeks comment on whether the current pricing should be retained. It also seeks comment on whether FERC should depart from its policy of providing credits for transmission providers that are independent of market participants in order to be consistent with the locational pricing method proposed in the Commission’s standard market design proceeding.
Comments on the proposal should be submitted to FERC after the NOPR [RM02-1-000] is published in the Federal Register.
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