Although FERC’s recent effort to clarify its interconnectionpolicy was a “major step” in the right direction, the ElectricPower Supply Association (EPSA) last week said greater reforms wereneeded to protect new generators seeking to interconnect to thepower grid. It asked the Commission to issue a policy statementthat would “comprehensively” spell out “the rights, obligations andexpectations” of interconnecting generators and providers ofinterconnection/transmission services.

In an effort to “jump start” the process, the EPSA submitted a”Bill of Rights” that would confer upon new generators specificrights when trying to hook up to the electric grid. Additionally,it urged the Commission to convene an industry-wide collaborativeto develop a FERC-approved model interconnection agreement. TheEPSA proposed its own model interconnection agreement, a”good-faith attempt at balancing the disparate interests ofgenerators and interconnection service providers,” as a startingpoint.

In the event FERC should agree to a collaborative, the EPSAwants the Commission to defer ruling on the pro formainterconnection and operating agreement proposed by EntergyServices Inc. earlier this month [ER00-1743]. “If, however, theCommission does not pursue a collaborative approach, then it shouldset Entergy’s interconnection agreement for hearing for the purposeof reconciling its proposal with the EPSA’s generator Bill ofRights and the model agreement.”

Without further FERC action, the EPSA fears certaintransmission-owning utilities will continue to obstruct theinterconnection process, which in turn will block the constructionof new generation. Some utilities are preventing new generatorsfrom interconnecting to the grid “by imposing cumbersome andoftentimes largely secretive review processes, unreasonable queuingprocedures, delays in the negotiation of pertinent agreements, andother burdensome interconnection requirements, including, forexample, tying interconnection to transmission service, insistingupon unnecessary system upgrades or requiring excessive securitydeposits.”

If this is allowed to continue, the 154,000 MW of merchantgenerating capacity that’s planned for development over the nextseveral years won’t see the light of day, the power marketer groupsaid. “…..[I]f this merchant generation is to be built, it mustbe expeditiously and predictably interconnected to the grid.”

In an effort to open up access to the grid, the EPSA proposedthat new generators planning to interconnect be afforded ninespecific rights, including the right to: 1) inject power into thegrid at the point of interconnection without having to purchasetransmission services; 2) request interconnection services”pursuant to a FERC-approved nondiscriminatory interconnectionservice tariff,” or other clearly defined rules and procedures; and3) have all interconnection studies and analyses performed by anISO/RTO or other qualified independent contractor.

The EPSA commended FERC for clarifying that interconnection andtransmission services are independent of each other in a recentcomplaint order [EL00-12]. “However, this alone will not besufficient to ensure that competitive power suppliers have theprotections they need to continue building additional generatingcapacity to meet future nationwide demand,” said Lynne H. Church,EPSA’s executive director.

In regions where there are FERC-approved ISOs/RTOs, “theCommission should clearly establish the ISO/RTO as the ‘leadagency’ for new interconnections, with individual transmissionowners’ roles limited to acting at the behest of the RTO,” thepower marketer group noted.

“Transmission-owning utilities — which often are either directcompetitors of prospective new generators seeking interconnectionservice or have disparate interests with respect to transmissionimprovements — should have no opportunity to unduly influence thepreparation of system impact and facilities’ studies whichdetermine the availability and ultimate cost of newinterconnections,” it said.

Susan Parker

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