FERC Filings
MOTION TO INTERVENE AND PROTEST OF EPSA, AMERICAN ELECTRIC POWER SERVICE CORP.
II. PROTEST
EPSA supports AEP's filing to the extent that it appropriately recognizes the need for standardized interconnection procedures. However, the mere filing of interconnection procedures, while a necessary step in the right direction, is insufficient to facilitate new generation interconnection. In previous cases, EPSA has urged the Commission to provide comprehensive guidance to the electric industry on issues relating to interconnection by issuing a comprehensive policy statement that would address, among other issues, the rights, obligations, and expectations of interconnecting generators and interconnection service/transmission providers. EPSA has requested that any such policy statement reflect the principles set forth in EPSA's recently filed position paper and proposed Model Interconnection Agreement. In addition, EPSA has called for an industry dialogue for the purpose of developing comprehensive interconnection procedures and a Commission-approved model interconnection agreement.
To date, the Commission has declined to do so, stating in the recent Entergy case that "no additional standardize procedures are necessary at this time." EPSA is concerned that, in fact, the Commission is developing standardized procedures, one case at a time. This filing by AEP is the third interconnection filing made in recent weeks, Entergy and Commonwealth Edison being the other two. While all three filings are substantially similar, variations between the three exist. Each separate filing includes a slightly shorter or longer period for reviewing interconnection applications or for completing needed studies or for the scope of the studies. These distinctions are not insignificant, imposing a burden on generation developers to monitor tariff compliance for each transmission provider under different rules.
Uniform business practices would allow generation developers, many of whom are national companies, to develop more streamlined procedures for their project developments. All interconnection procedures should include the same time frames, deposit requirements and scope. There is no rational reason for these requirements to vary from transmission provider to transmission provider.
The case-by-case approach also requires that generators intervene in what is likely to become a flood of interconnection cases. The Commission, in Entergy and ComEd, has urged transmission providers to revise their OATTs to include interconnection procedures. Generators will be required to review each of these separate filings to determine whether seemingly insignificant differences from prior filings will in fact have significant impacts on project development. Litigation of these proceedings is likely to lead to substantially similar tariff procedures, but at a cost that far outweighs the development of standard procedures.
While the Commission has declined to address interconnection procedures generically, we remained concerned that enormous resources, both from the industry and from the Commission, will be required to implement the current case-by-case approach.
There is one specific concern where the three filings diverge significantly on a important issue and where AEP's filing requires modification and/or clarification to be consistent with the Commission's decision in Tennessee Power. In Tennessee Power the Commission clarified that:
Interconnection is an element of transmission service and is already required to be provided under our pro forma tariff. This is true whether the interconnection request is tendered concurrently with the request for transmission service or in advance of a request for a specific transmission service. . . . We recognize that the pro forma tariff generally envisions a process in which both the interconnection and delivery components of a transmission service request are made at the same time. Accordingly, all of the transmission request procedures (application process, information exchange process, preparation of system studies and facilities studies, notification by transmission provider as to the disposition of the request and the cost of any necessary system upgrades, and the execution of a service agreement) accommodate situations in which both interconnection and delivery are requested at the same time. However, customers also have the right under the pro forma tariff to request the interconnection component of transmission service separately from the delivery component, and when this occurs, the pro forma tariff procedures continue to apply. These procedures include, but are not necessarily limited to, procedures for arranging service, customer responsibilities, study procedures, compensation for new facilities, and service agreements.
(slip op. at page 4-5).
Unless otherwise requested by the generator, the scope of any studies needed to procure interconnection service, separate from transmission service, must be strictly limited to the effect of the proposed interconnection on the transmission system. This is a significant area where consistency among transmission providers' approaches is needed. AEP's approach to the scope of the system study is overly broad.
Section 4 of ComEd's Attachment K states: "The Interconnection Study will detail any System upgrades Transmission Provider finds necessary to connect Applicant's generating facilities to the System." In contrast, the Scope of the System Impact Study (Section 1.3) proposed by AEP is considerably broader, assessing "the impact of the proposed generation capacity addition connection on the reliability of the Transmission System." Phase 1 of that study, the power flow analysis, "at a minimum, will examine the impact on transmission facilities due to the proposed generation capacity addition." The AEP Study Scope, in addition to being vague, appears significantly broader than the ComEd approach. It also focuses on deliverablity in contravention to the Tennessee Power directive that interconnection is a separate service from transmission.
The Commission should require AEP to modify its study requirements to limit the study to the impact of interconnection, without any consideration of deliverability, unless the generator requests transmission service associated with the interconnection service or otherwise requests a deliverability study. In this regard, it is also important that new generators not be required to pay for studies needed to maintain AEP's system. New generation interconnections are not the opportunity for AEP to mitigate preexisting conditions or insufficiencies on its transmission system.
EPSA is also concerned with three additional aspects of AEP's proposal. First, section 1.17 suggests that parties may have as little as 21 days to negotiate an interconnection agreement. While EPSA has previously recommended a model Interconnection Agreement, no such document is in standard use within the industry. Given the number of issues potentially "on the table" this time limit is simply unreasonable.
Second, Section 2.1 suggests two priority queues for grandfathered projects, one for performance of necessary studies and the other for interconnection at a particular site. EPSA is concerned that this bifurcated approach will be confusing and difficult to administer, providing opportunities for debate and contention about queue spots. To ensure that all generators are treated fairly and to minimize opportunities to "jump" the queue, AEP should be directed to establish priorities based on a single queue that is based on the date the study request was received.
Third, AEP requests 45 days to start the System Impact Study, which the OATT would otherwise require be completed in 60 days. AEP will make up some of this time by shortening the timeframe for tendering the System Impact Study Agreement from 30 to seven days. This delay in undertaking the System Impact Study is justified by AEP's claim that its transmission planners are facing a "backlog of interconnection requests." Accordingly, this revised time schedule for the System Impact Study should be approved only on an interim basis until AEP's backlog is cleared up. After that, AEP should complete System Impact Studies within 60 days.
EPSA continues to believe that the industry would benefit from a more comprehensive review of the rights and responsibilities of both generators and transmission providers with respect to new interconnection and associated interconnection procedures and agreements. EPSA, therefore, renews our request that the Commission issue a comprehensive policy statement with respect to these issues. While EPSA supports the use of the Commission's pro forma OATT procedures to process requests for interconnection, the pro forma procedures do not address all of the interconnection-specific procedures that are relevant and necessary to processing requests for interconnection service. In addition, a model interconnection agreement could serve as the starting point for negotiations between transmission providers and interconnecting generators. It also could serve as a benchmark to which company-specific interconnection agreements could be compared once they are filed with the Commission. The terms of the model agreement could also function as an unexecuted agreement to be filed in the event the parties are unable to reach agreement.
In addition, any Commission policy needs to clarify the appropriate scope of studies needed to provide interconnection service. These studies must be strictly limited to the impact of the interconnection itself on the transmission providers' system and should not incorporate any deliverable criteria, unless separately requested. AEP should be directed to revise its proposed tariff filing to incorporate this limitation.