FERC Filings
EPSA's Comments on Assessing the State of Wind Energy in Wholesale Electricity Markets
Comments
The staff request for comments is extensive, and includes many important issues that need to be addressed to accommodate some of the unique aspects of intermittent wind generation resources. Policy changes that facilitate more wind generation development benefit consumers by increasing electricity supply and decreasing air emissions. Therefore, EPSA appreciates the Commission’s proactive approach to wind generation’s growing importance in wholesale electric markets.
The staff request for comments rightly identifies imbalance penalties as an issue that has implications for wind generation, and consideration of the range of issues associated with imbalance penalties due to the intermittent nature of wind resources is appropriate.
Such considerations associated with discreet wind generation issues has been initiated in a related Notice of Proposed Rulemaking (NOPR) by the Commission’s efforts on wind generation interconnection. In that proceeding, the Commission is correctly seeking to study the coordination between transmission providers and wind generators to better understand imbalance penalties’ impact on wind generation, and will assess existing tariffs for possible changes due to the interconnection of wind generation.
While EPSA welcomes the Commission’s inquiry into these wind issues, EPSA is concerned at the range of questions posed in the December 21 notice. Specifically, EPSA questions the inclusion of many general transmission service and planning issues in the instant proceeding. Competitive generators have long supported efforts to facilitate national competitive wholesale electricity markets, and hence, support a Commission review of transmission system utilization, the transmission access queue, elimination of rate pancaking, cost allocation for new transmission capacity across seams and transmission planning. However, the instant proceeding assessing wind generation and electric markets seems an appropriate venue to address generic and system-wide transmission service, rates and planning issues. The specific action items from the notice that EPSA questions in this context are:
• How can FERC and the industry increase utilization of existing transmission facilities?
Potential options could include, but are not limited to:
o A common definition of innovative transmission services under pro forma transmission tariffs.
o Partial Firm Transmission Service
o Curtailable Firm Transmission Service
o Long-term Non-firm Transmission Service
• Should FERC Seek to develop an alternative to the transmission access queue? First-come-first-served may not be the most appropriate option. Potential solutions could include:
o Clustering
o Open Season
• In what ways should FERC and the industry seek to eliminate rate pancaking?
• Should FERC address allocation of new transmission capacity costs across seams?
• Should FERC update its abandoned plant policy to enable transmission owners to recover costs when building in excess of their current needs in anticipation of interconnection by generators?
• Order No. 888 pro forma tariff provisions 13.5 and 28.2 address a Transmission Provider’s obligations in response to requests for service, continued reliable operations, planning and construction and/or redispatch. How effective are these provisions of the tariff? Do they need to be revisited? Should these provisions shomehow provide for regional planning and expansion; and if so, how might this be accomplished outside an ISO or RTO?
• How can the Commission monitor the secondary market for transmission service and develop methods in which to spur activity in this market?
• How can FERC counter the difficulty of funding long-term regional transmission planning in non-RTO regions?
These questions raise important national policy issues with implications for the entire transmission grid and cannot be addressed in the narrower context of promoting wind resources. A comprehensive review to assess significant transmission issues on a national basis is inappropriate in this proceeding and will, perhaps inadvertently, implicate issues far beyond the scope of a proceeding on wind energy.
EPSA can appreciate the Commission’s desire to examine wind generation issues, but there is a danger inherent in tackling generic transmission issues in this proceeding. Wind generation issues are unique and often regional; therefore, subsuming comprehensive and generic transmission issues into this wind proceeding will not address the important transmission related items needed to accommodate wind energy on the grid.
Many of the transmission issues listed in the request for comments would be more appropriate in a proceeding looking at generic improvements to Order No. 888. Any such proceeding, however, would be frustrated if a parallel proceeding on wind issues is developing a different consensus on the same issues. The risk of creating two tracks that are addressing the same policy issues is a risk the Commission should avoid.
Instead, the Commission should utilize a process similar to the wind generation NOPR. Overarching and generic interconnection issues associated with the Large Generator Interconnection Agreement (LGIA) and Large Generator Interconnection Procedures (LGIP) were adopted in Order No. 2003 for all generation interconnecting to the grid.