FERC Filings
Request of EPSA for Clarification and Rehearing of Order No. 2003-A re: Standardization of Generator Interconnection Agreements and Procedures
Introduction and Overview
Since before the Commission’s issuance of the ANOPR process, EPSA has been a strong supporter of the Commission’s efforts to establish a standardized generator interconnection agreement (IA) and interconnection procedures (IP). EPSA commended the actions of the Commission in establishing the ANOPR, issuing the NOPR and adopting the Final Rule, Order No. 2003, in this proceeding. As EPSA has consistently maintained, and the Commission has recognized, interconnection “plays a critical role in bringing much-needed generation into national energy markets to meet the growing needs of electricity customers.” Order Nos. 2003 and 2003-A both recognize that the current lack of standardization in interconnection procedures and agreements undermines and frustrates the ability of generators to compete in wholesale power markets. Further, this lack of standardization provides an unfair competitive advantage to utilities that own both generation and transmission. As Order No. 2003-A notes, adoption of the Final Rule is intended to “prevent undue discrimination, preserve reliability, increase energy supply and lower wholesale prices for customers.” EPSA lauds the Commission’s decision in Order No. 2003-A to “reaffirm the legal and policy conclusions on which Order No. 2003 is based.”
It is important to note that the policies reflected in Order No. 2003 were largely developed through the ANOPR and NOPR processes. Over the course of several months, parties representing a wide range of interests with respect to interconnection polices met and worked out compromises on a broad spectrum of issues. This process required give and take, trade-offs and compromises by all parties during those discussions and negotiations. Those compromises were largely reflected in the NOPR itself and, ultimately, in Order No. 2003. Unfortunately, some of those carefully crafted provisions have been disrupted in Order No. 2003-A. This may have been the inevitable result of a rehearing process that focuses on only certain aspects of the comprehensive package that was set forth in the Final Rule. The rehearing process provides no opportunity for those who were satisfied with the outcome of the Final Rule to explain their positions or refute various requests. Thus, EPSA now has no choice but to ask the Commission to either clarify or reverse some of the decisions made in Order No. 2003-A.
Briefly summarized, EPSA’s concerns, which are discussed further below, focus in five key areas:
- Network Resource Interconnection Service (NRIS) Studies: Unfortunately, the Commission has introduced some uncertainty as to what additional studies or additional upgrades might be associated with NRIS. The Commission needs to clarify that any additional studies or upgrades referenced in this section apply only to optional upgrades to reduce congestion or to customer-specific delivery issues, not to upgrades related to the designation of a NRIS generator as a network resource.
- Transmission Service Credits: The Commission should not have modified the provisions of Order No. 2003 that permitted the Interconnection Customer to receive transmission credits for all transmission service on the interconnected and affected systems. Similarly, the Commission should not have extended the crediting period beyond five years.
- Tax Issues: The Commission should not have modified Order No. 2003 to permit a Transmission Provider to require security for subsequent taxable events associated with Interconnection Facilities for which the Transmission Provider has received a favorable private letter ruling. In addition, the Commission should not have modified Order No. 2003 to grant the Transmission Provider discretion as to whether to contest determinations when the Interconnection Customer will be responsible for the liability involved.
- Reactive Power: The Commission must clearly establish and enforce the principle that generators have a right to be compensated for providing reactive power to support reliability obligations.
- Disclosure of Confidential Information: The Commission should require that Parties be notified before any disclosure of their Confidential Information.