The Federal Energy Regulatory Commission (FERC) issued Order No. 792 late last year, which amends the pro forma Small Generator Interconnection Procedures (SGIP) and pro forma Small Generator Interconnection Agreement (SGIA) under Order No. 2006. The amendments, many of which are rooted in policies first put in place in California, are intended to remedy undue discrimination and make it more efficient and less costly for small generators (no more than 20 MW) to interconnect to the transmission or jurisdictional distribution grid. The Final Rule also builds on FERC policy to encourage energy storage projects, which was the subject of another Final Rule (Order No. 784) issued last July that promotes the development of energy storage through the unbundling and accounting treatment of ancillary services purchased in electricity markets. (See our prior post on Order No. 784 here.)
Energy storage is becoming increasingly important and California recently became the first U.S. state to mandate that utilities procure set amounts of energy storage capacity. Other states will likely follow as storage technologies evolve. (The order by the California Public Utilities Commission requires that the state’s three largest investor-owned utilities procure a combined 1,325 MWs of energy storage by the end of 2020. A copy of that order is available here.)
In particular, the Final Rule:
FERC explains that the changes described above are necessary in light of the increased penetration of small generator resources, particularly photovoltaic (PV) generation. This is due in part to the decline in capital costs to install new PV generation as well as the continued focus by states on renewable portfolio standards and distributed generation resources. For example, the Final Rule notes that in 2012 alone, approximately 3,300 MW of grid-connected PV generation was installed in the U.S., up from 79 MW in 2005, the year Order No. 2006 was issued. All told, the amount of installed distributed PV generation is expected to double by 2015.
The Final Rule will become effective February 3, 2014. Transmission Providers are required to make compliance filings within six months of the effective date to revise pro forma interconnection documents.