NOPR to Reform Generator Interconnection Procedures and Agreements
On June 16, 2022, the Federal Energy Regulatory Commission (FERC) took another step to ease access to the transmission grid with a Notice of Proposed Rulemaking (NOPR) on Improvements to Generator Interconnection Procedures and Agreements. The NOPR seeks to reform FERC’s current procedures and agreements, and in doing so (1) address the significant interconnection queue backlogs, (2) provide greater certainty, and (3) prevent undue discrimination against new generation technologies.
The NOPR outlines three key reform areas to remove barriers to grid access. First, the NOPR proposes to replace the current serial first-come, first-served study process with a first-ready, first-served cluster study process. The new process would allow public utility transmission providers to study numerous proposed generating facilities at the same time as opposed to conducting a study for each individual generating facility separately. As part of this new process, transmission providers would implement more stringent financial commitments and readiness requirements for interconnection customers. Second, the NOPR proposes to increase the interconnection queue processing speed by eliminating the “reasonable efforts” standard, impose firm study deadlines, and create penalties in certain instances for transmission providers that fail to meet the study deadlines. Transmission providers would be required to use a standardized and transparent affected systems study process and provide an optional resource solicitation study process. Third, the NOPR proposes to incorporate technological advancements into the technological process. Transmission providers would be required to allow multiple resources to co-locate on a shared site behind a single point of interconnection and share a single interconnection request. Interconnection customers would be allowed, under certain circumstances, to add a generating facility to their existing interconnection request without losing their position in the queue.
This NOPR is the latest in a series of transmission and interconnection reform efforts that FERC began in 2003 when it issued Order No. 2003 establishing standard procedures and agreements for large interconnecting generating facilities. FERC issued subsequent rules creating similar requirements for small generating facilities in 2005 with Order No. 2006, then issued its Interconnection Queuing Practices order in 2008 directed at the interconnection queuing practices of regional transmission operators and independent system operators. In more recent years, FERC has sought to improve the generator interconnection process, including through its issuance of Order No. 845 in 2018, and NOPR issued earlier this year to reform regional transmission planning and cost allocation.
The NOPR has yet to be published in the Federal Register. Comments will be due 100 days after its publication date, and reply comments will be due 30 days after that.
Proposed Improvements to Ensure Grid Reliability Against Extreme Weather
Also on June 16, 2022, FERC initiated two NOPRs aimed at improving the Bulk Power System’s reliability against extreme weather, Transmission System Planning Performance Requirements for Extreme Weather (Transmission System Planning NOPR) and One-Time Informational Reports on Extreme Weather Vulnerability Assessments Climate Change, Extreme Weather, and Electric System Reliability (Informational Reports NOPR). Both NOPRs stem from FERC’s Technical Conference on Climate Change, Extreme Weather, and Electric System Reliability held in June 2021.
The Transmission System Planning NOPR proposes to direct the North American Electric Reliability Corporation (NERC) to make modifications to Reliability Standard TPL-001-5.1 (transmission system planning performance requirements) that require (1) NERC to develop benchmark planning cases using information such as major previous extreme weather events and future meteorological projections, (2) transmission providers to plan for extreme weather events using steady state and transient stability analyses covering a range of extreme weather scenarios, and (3) transmission providers to develop corrective action plans for instances in which extreme weather event performance requirements are not met.
The Informational Reports NOPR proposes to require transmission providers to submit one-time informational reports outlining their policies and procedures for conducting extreme weather vulnerability assessments. The informational report must include how the transmission provider will (1) develop a scope for its extreme weather vulnerability assessments, (2) develop inputs, (3) identify vulnerabilities and determine exposure to extreme weather events, (4) estimate impact costs, and (5) develop mitigation measures addressing extreme weather risks.
Given recent and frequent extreme weather events and their increasing threat to grid reliability, FERC has placed a greater focus on taking action in this space. For example, after the February 2021 freeze in Texas and the Midwest, FERC, NERC, and regional entities formed a joint inquiry team and issued a cold weather grid operations report, which included preliminary findings and recommendations. It is likely that FERC will continue to be active in this space.
The NOPRs have yet to be published in the Federal Register. Comments will be due 60 days from their respective publication dates.
Ultimately, these NOPRs are an effort by FERC to ensure that the grid is resilient with respect to climate change, while also allowing for more lower-carbon forms of generation to meet customer demand. A more fulsome discussion of these issues can be found in Emily Mallen’s podcast interview with FERC General Counsel Matthew Christiansen, published by the Environmental Law Institute on June 22, 2022.