FERC interconnection reform moving full steam ahead | HUB

On March 21, 2024, the Federal Energy Regulatory Commission (FERC) issued Order No. 2023-A, rehear and clarify its historic final rule on generator interconnection reform. Order No. 2023-A largely affirmed the interconnection reforms adopted by FERC in Order No. 2023, subject to certain modifications and clarifications. These orders will have a significant impact on the development and deployment of new production and storage projects.

In Order No. 2023, FERC revised its pro forma large generator interconnection procedures from a first-come, first-served series interconnection study process to a first-ready, first-served cluster study process and adopted measures to speed up the processing of interconnection queues. In this order, FERC imposed stricter requirements on interconnection customers to enter the interconnection queue (adding more stringent generation site control requirements and increasing study deposits and commercial preparation deposits) and imposed withdrawal penalties when interconnection customers leave the queue. FERC also instituted stricter requirements for transmission providers to timely complete interconnection studies by replacing the reasonable efforts standard with firm deadlines and introducing penalties for studies completed late. Additionally, FERC has adopted a more standardized and detailed process when affected systems are identified as part of the interconnection study process. FERC also made reforms to the interconnection process designed to incorporate technological advances. Our white paper, Order No. 2023: interconnection reform is finally hereexplains reforms to interconnection rules.

In evaluating requests for rehearing and clarification, FERC recognized the dramatic increase in interconnection requests and that interconnection backlogs remain a major problem nationwide that must be addressed. As such, FERC confirmed its findings in Order No. 2023 that the proforma generator interconnection procedures and agreements are insufficient to ensure that interconnection customers can interconnect to the transmission network in a reliable, efficient, transparent and timely manner and are unfair, unduly discriminatory or preferential; therefore, the revisions of Order No. 2023 to proforma open access transmission rates and FERC regulations are necessary to ensure rates are just, reasonable, and not unduly discriminatory.

At the rehearing, FERC only modified the contours of the reforms adopted in Order No. 2023. For example, FERC clarified that interconnection customers currently in the cluster study process of interconnection of a transport supplier will be subject to the new transport supplier preparation requirements implemented as part of the process of complying with Order No. 2023. Unless FERC approves a waiver, an interconnection customer who has not executed a Large Generator Interconnection Agreement (LIA) (or who has requested that an LGIA be filed unsigned with the FERC) must comply with these new preparation requirements within 60 days of the effective date of transportation. filing of compliance with Ordinance No. 2023 from the supplier. If an interconnection customer is unable or unwilling to meet the new transmission provider readiness requirement, it may withdraw its interconnection application during this 60-day period without penalty.

Additionally, FERC determined in Order No. 2023-A that a shared grid upgrade cannot be considered a standalone grid upgrade (and therefore eligible to be built by the customer(s) (s) interconnection) only if all affected interconnection customers agree to exercise the option to create such a shared upgrade. Similarly, shared interconnection facilities are only eligible for the build-out option if all affected interconnection customers agree to exercise the build-out option. Such affected interconnection customers will be required to voluntarily develop a written agreement (outside of the transmission provider's interconnection process) regarding responsibilities and payment for the construction of applicable shared interconnection facilities and/or network upgrades. autonomous and provide the signed agreement to the carrier. supplier.

Additionally, in a new hearing, FERC expanded the forms of financial security acceptable to interconnection customers (in addition to cash and an irrevocable letter of credit) to include surety bonds or other forms financial guarantees reasonably acceptable to the transport provider. FERC also clarified that all interconnection requests must be validated by the transmission provider before the cluster request window closes. Only interconnect customers with valid interconnect requests at the close of the cluster request window will proceed to the next step in the interconnect study process.

Among the provisions confirmed at the rehearing is a requirement for transmission providers to evaluate an enumerated list of “alternative transmission technologies.” Applying this requirement to large and small generator interconnection procedures, these include a range of voltage control equipment, power flow control devices, synchronous capacitors, voltage source converters used with high voltage direct current systems, advanced drivers and lifting towers. By requiring that these technologies be considered during aggregation studies and restudies without requiring a specific request from an interconnection customer, FERC has mandated a much broader range of solutions that may be both more cost-effective and more fast. On the other hand, failure to consider these solutions would make FERC's rates unfair and unreasonable. In maintaining the rule as both lightly burdensome and not allowing “absolute discretion to ignore” other alternatives, FERC emphasized that transmission providers “must explain their evaluation of the listed alternative transmission technologies in terms feasibility, cost and time savings” compared to a “traditional transmission system”. network upgrade”, and that this decision can be challenged. In clarifying what is meant by “advanced conductors,” FERC explained that it means “conductors are advanced compared to conventional steel-reinforced aluminum conductors and include, but are not limited to , superconducting cables, advanced composite conductors, high temperature and low temperature conductors. sag conductors, fiber optic temperature sensing conductors and advanced overhead conductors.

Compliance filings for Order No. 2023 by transmission providers were due April 3, 2024. In light of the changes made at the rehearing and the clarifications in Order No. 2023, FERC extended the compliance filing deadline is 30 days after Order No. 2023. A is published in the Federal Register (as of March 26, 2024, Order No. 2023-A has not yet been published in the Federal Register).