FERC Issues NOPR to Reduce Small Generator Grid Interconnection Time and Cost

23 January 2013 Publication

Legal News Alert: Energy Industry

On January 17, 2013, FERC issued a Notice of Proposed Rulemaking (NOPR) that would revise the pro forma Small Generator Interconnection Procedures (SGIP) and Small Generator Interconnection Agreement (SGIA) in order to lessen the time and cost required for small generators to interconnect to the electricity grid. The Commission indicated that an impetus for the new rulemaking is the growth in the number of small generator interconnection requests and the increase in solar photovoltaic (PV) installations, bolstered by state renewable energy targets.

In addition to some general clarifications to the existing pro forma SGIP and SGIA, the NOPR contains the following proposed revisions:

New Pre-Application Report to Evaluate Potential Points of Interconnection

The new rule would permit interconnection customers to request a pre-application report from the Transmission Provider, for a cost of $300, to assess possible points of interconnection. The Transmission Provider would have 10 days to supply the report, which would include already existing information regarding the system conditions at the proposed point of interconnection (POI). The NOPR indicates that this report is designed to help eliminate the current practice where generators submit multiple formal interconnection requests to attempt to determine the best interconnection point.

The Transmission Provider would not be required to prepare any new studies, but would be required to provide detailed data to the extent that the data already exists. This data would include total and available capacity and voltage of the facilities that serve the POI, existing and queued users at the POI, number of phases available at the POI, circuit distance between the POI and the substation, and the limiting conductor rating from the POI to the substation. The Transmission Provided also would be required to provide information regarding protective devices and voltage regulating devices between the POI and the substation, peak and minimum load data, and existing or known constraints associated with the POI.

Increased Threshold for “Fast Track Process”

The new rule would increase the threshold for participation in the Fast Track Process for generator interconnections from two to five MWs. Eligibility for the projects under the new threshold would be determined based upon individual system and generator characteristics, including interconnection voltage level, circuit distance from the POI to the substation, and generator capacity, in order to balance the generator’s need to interconnect quickly with the Transmission Provider’s need to maintain system reliability.

Revise Requirements for Customer Options Meeting and Supplemental Review

The Commission proposes to revise the requirements for the “customer options meeting” that is held in the event that a project fails the fast track screen test and the Transmission Provider determines that the project cannot be connected to the grid safely as proposed. At the meeting, which is held so that the Transmission Provider and interconnection customer may discuss how to proceed, the Transmission Provider would be required to do the following:

  • Offer to perform facilities modifications or minor modifications to the Transmission Provider’s system and provide a good faith estimate of the costs, and, if the customer agrees to pay for such minor modifications, to provide the SGIA in five days
  • Offer to provide a supplemental review of the proposed interconnection for $2,500 at the customer’s discretion
  • Obtain the customer’s agreement to proceed with the study process

The Commission also proposes that the supplemental review consist of three additional screens, including (1) the minimum load screen (using daytime minimum load for solar generators and absolute minimum load for all other small generating facilities); (2) the power quality and voltage screen; and (3) the safety and reliability screen.

Customer Opportunity to Submit Comments on Facilities Study

Under the proposed rule, the Facilities Study Agreement for small generators will be revised to permit interconnection customers the opportunity to submit comments on upgrades necessary for interconnection, even though the Transmission Provider will retain the final decision as to whether the upgrades will be performed. The small generator will now also be allowed to request all documentation underlying the study so that it can better evaluate and comment on the upgrade requirements.

The Commission expects that there will be a significant penetration of distributed resources and more small generator interconnection requests as a result of the proposed changes.

Comment Period and Proposed Workshop

Comments on the NOPR will be due 120 days after publication in the Federal Register. FERC also announced that it will hold a workshop before the end of the comment period to discuss the technical aspects of the NOPR. Some of the specific items that the Commission staff expects to address at the workshop include:

  • Whether the characteristics proposed for fast track process eligibility must be modified to protect system safety and reliability
  • The content of the proposed supplemental review screens
  • The content of the pre-application report
  • The appropriateness of the proposed fees
  • Whether storage devices could fall within the definition of “small generating facility” under the SGIP and SGIA

Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

Andrea J. Chambers
Washington, D.C.

Joseph L. Colaneri
Washington, D.C.

Edward C. Hurley
Chicago, Illinois

John J. Klusaritz
Washington, D.C.

Charles E. Schwenck
Los Angeles, California

James T. Tynion III
New York, New York

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