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07.20.21

FERC takes first steps to reform electric regional transmission and generator interconnection rules

BY Ben Reiter

Last week the Federal Energy Regulatory Commission (FERC) voted to issue an Advance Notice of Proposed Rulemaking (ANOPR) titled Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection. The ANOPR is FERC’s first step, under the leadership of Chairman Rich Glick, towards overhauling how electric transmission in this country get planned, built, and paid for in order to better accommodate the growth of renewable energy projects.

In general, the ANOPR seeks comments on three areas: regional transmission planning and cost allocation processes, identification of cost responsibility for regional transmission facilities and interconnection-related network upgrades, and enhanced transmission oversight over how new transmission facilities are identified and paid for. Particular areas of interest that the ANOPR requests comments on include:

  • Whether FERC should require transmission providers to account for trends in the resource mix in developing energy zones for anticipated future generation as part of planning for transmission needs related to such resources, and if so, what would be the best way to do so (P 58)?
  • Whether reforms are needed to improve the coordination between the regional transmission planning and cost allocation and generator interconnection processes (P 65)?
  • Whether the participant funding approach for interconnection-related network upgrades required for an interconnection request by regional transmission organizations (RTOs)/independent system operators (ISOs) is still just and reasonable (P 71)?
  • What are the types of benefits provided by transmission facilities needed to meet the transmission needs of anticipated future generation that are relevant for cost allocation purposes and the manner in which those benefits can be quantified, if at all (P 94)?
  • Whether there should penalties for submitting speculative interconnection requests, how such should be defined, and whether there should be a limit on the number of interconnection requests that a developer can submit in an interconnection queue study year and how narrowly such a limit should apply (e.g., by transmission provider or by transmission pricing zone) (P 153)?
  • Whether a fast-track generator interconnection process should be developed to facilitate interconnection of generating facilities that have firmly committed to connecting to new regional transmission facilities (P 155)?
  • Whether, to improve oversight of transmission facility costs, it would be appropriate for FERC to require that transmission providers in each RTO/ISO, or more broadly, in non-RTO/ISO transmission planning regions, establish an independent entity to monitor the planning and cost of transmission facilities in the region (P 163)?

In discussing the ANOPR at last Thursday’s open meeting, Chairman Glick noted that FERC hadn’t adopted a major electric transmission reform in over a decade and with 750 GW of generation in interconnection queues—93% of which are renewable projects—FERC needed to act to ensure that the U.S. transmission system could accommodate new generation resources. Commissioner Allison Clements similarly noted that the backlog of projects in interconnection queues were stifling competition and preventing low-cost wind, solar, and hybrid resources from coming online for the benefit of customers. Commissioners James Danly and Mark Christie supported asking the questions proposed in the ANOPR but cautioned against reforms that would increase rates, threaten reliability, or extend FERC beyond its jurisdiction. Many of these sentiments were echoed by the commissioners in their statements appended to the ANOPR.

Initial comments in response to the ANOPR are due 75 days after the date of publication in the Federal Register, with reply comments due 105 days after publication.

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Ben Reiter

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