FERC Filings
FERC RTO NOPR COMMENTS
An Additional Function (Cont.)
RTOs should also be encouraged to systematize interconnection rules on a national basis. It simply makes no sense to impose one set of deadlines and requirements in one RTO and a completely different set in another. Not only do developers need the certainty national standards for interconnection will provide, but standardization of interconnection rules will ensure that new generation is installed at the most efficient locations. Otherwise, generation will be located where the local rules are most conducive to development, even if congestion is created elsewhere or optimal siting is in another jurisdiction.
Streamlining the interconnection process for new generation will allow market participants to react quickly and efficiently in response to price signals in the generation market. To proceed with project investment, prospective generators need certainty on interconnection issues, and they need that certainty within a reasonable time frame. EPSA recommends that all studies analyzing the system impacts associated with a proposed new interconnection and all agreements necessary to provide for construction of such a new interconnection should be completed within nine months, absent mutual agreement or extenuating circumstances.
RTO rules, not those developed by individual transmission providers, must control the interconnection process. Studies conducted by transmission-owning utilities continue to raise the specter of discriminatory treatment and needless delay. The potential for self-dealing is strong where the transmission utility continues to own generating plants that will compete with, or, possibly, be supplanted by, any newly installed generation.
Even if the transmission owner does not own generation, as a result of divestiture, the new, proposed plant may present a potential demand for investment in new transmission that the transmission provider may or may not embrace. This does not mean that transmission owners have no role whatsoever in performing certain technical analyses. It simply means that the RTO should assume a prominent role in coordinating such analyses and that it should actively supervise the entire study process, and not simply defer to actions taken or assumptions applied by the transmission owners.
Moreover, generators that propose to market capacity and energy on a non-firm basis, or when firm capacity is otherwise available on an unconstrained basis, should be able to interconnect promptly with no requirement of lengthy studies of the possible impact of their project on system reliability, precisely because there should be no adverse reliability impacts associated with such interconnection.
The RTO, in the case of such interconnecting sellers, always has effective remedies: first, to offer all generators the opportunity to pay congestion charges on any transaction that causes congestion and, second, if the specific generators' interconnections will, during some operating conditions, create an unacceptable situation from a system reliability standpoint, obtain contractual rights to direct that the generator back down its generation. Thus, in these circumstances, all that should be required is maintenance of a safe and reliable interconnection. Ideally, generators should be able to reach transmission hubs, either on an unconstrained basis, by paying for transmission upgrades, or with nonfirm service. Trading hubs would allow numerous marketers to access that supply, paying for "downstream" transmission service and related congestion.