FERC Filings
MOTION TO INTERVENE AND PROTEST OF ELECTRIC POWER SUPPLY ASSOCIATION-Entergy Services, Inc.-Docket No. RT01-75-000
2. New Generator Interconnections
The Umbrella Agreement states that the Transco shall be responsible for evaluating and implementing requests for new generator interconnections on its system. However, the proposed treatment of new interconnections places too much authority with the Transco and does not provide for any RTO oversight and control. Furthermore, the Commission’s objective of one-stop shopping is not advanced in Entergy’s proposal. The approval of siting and construction of new interconnection facilities should be under the authority of the RTO, with limited, if any, input from regional control area operators. While the RTO may assign certain of its functions to the Transco, such as initial review of proposals for new interconnections or performance of studies, the SPP RTO must, in any event, retain decisional authority over generator interconnections, as well as the authority to mandate that the Transco provide data, perform studies, and otherwise cooperate during the study process. In addition, the SPP’s ability to compel construction of system upgrades must be the same as other SPP transmission owner’s systems.
Once again, Entergy proposes that the Transco determine the siting and construction of new merchant plants within its control area and misconstrues Order No. 2000 by proposing that the Transco may act independently of the RTO. EPSA requests that the Commission clarify that the intent of Order No. 2000 was to grant RTOs the authority to delegate certain responsibilities to individual control area operators, subject to the continual oversight and authority of the RTO. If the Transco is permitted to exercise sole discretion over proposals for new merchant plants, there is a risk that the Transco will exercise market power by rejecting those plants that would cause a decrease in congestion revenues that would be realized by the Transco, or otherwise negatively affect the Transco’s revenue stream. The Transco is a for-profit entity and could have a legitimate business objective in maximizing profits for its members at the expense of new interconnecting generators. If the Transco is permitted to exercise total control over the construction of new merchant plants within its region without the protection of oversight by the RTO, the potential for the exercise market power will be great.
In its recent “Staff Report to the Federal Energy Regulatory Commission on the Bulk Power Markets in the United States, Part II,” the Staff addressed to issue of system impact studies and interconnection requests, noting the concerns of several market participants with the lack of standard procedures and oversight for the conduct of studies and the processing of interconnection requests. The Report includes:
<sup>One reason for the complaints may be that transmission providers, as vertically integrated utilities, have no economic incentive to provide transmission access to a competitor, and in fact have incentives to discourage transmission access to competitors, particularly if such access would conflict with the transmission provider’s service of its native load. The engineers and other technical staff who perform system impact studies on interconnection and transmission requests are the same personnel that perform such studies for native load. RTOs could provide the solution to this problem by handling all interconnection requests and system impact studies for their member transmission providers. On the other hand, if existing control areas are maintained, the disincentive for processing third party interconnection and transmission requests would remain.</sup>
November 1, 2000 Staff Report, at 2-44. A transco with the business objective of maximizing the valve of its assets is expected to exhibit a similar bias either for or against particular new interconnecting projects depending upon the impact of those projects on the transco’s bottom line.
In short, Entergy’s proposal is violative of the interconnection, planning and expansion functions, and EPSA urges the Commission to require that it be modified to conform to Order No. 2000.