FERC Issues Proposal to Ease Regulation of Gen-Tie Lines

26 March 2015 Renewable Energy Outlook Blog

FERC has issued a Notice of Proposed Rulemaking (NOPR) that would substantially reduce the regulatory burdens placed on energy project developers that construct generator lead lines (gen-tie lines) to interconnect their projects to the grid.

Currently, developers that own, operate or control a gen-tie line (referred to in the NOPR as “Interconnection Customer’s Interconnection Facilities” (ICIFs)) are subject to regulation by FERC as a public utility. Under the rules, absent an express waiver, owners of gen-tie lines are treated as common carriers that must file an Open Access Transmission Tariff (OATT) to provide access to third parties that wish to interconnect. However, even if FERC grants an OATT waiver, if a third party later requests service, the gen-tie owner must then file an OATT within 60-days, which subjects them to ongoing regulatory compliance obligations. If the gen-tie owner wishes to exclude the third party from interconnecting and maintain its priority interest on the line, it must affirmatively demonstrate its planned use of the line as well as establish and meet milestones for the construction of new generation to warrant reserving the additional capacity on the line. This is an onerous and often costly process which requires that the gen-tie owner perform interconnection feasibility studies to evaluate the third party’s interconnection. FERC’s policy to favor transmission access on a first-come first-serve basis sends the wrong signal to project developers that bear the risk of financing and constructing gen-tie lines only to have a portion of their line’s capacity potentially used by a competitor.  

To reduce this burden, FERC proposes creating an initial five-year “safe harbor” period after the gen-tie line is energized in which there is a rebuttable presumption the gen-tie owner has definitive plans to use the excess capacity on the line for its own purposes as well as providing a blanket waiver from filing an OATT. These changes are intended to reduce the burdens on developers during the early years of their projects as gen-tie owners routinely preemptively file waiver requests to reserve capacity on their own lines for their future phased-in projects absent any specific third party interconnection request. The proposed rule also reduces the administrative burden on FERC to process waiver requests as interconnection requests are extremely rare. Further, the proposed rule shifts the burden to the third party to show that the developer does not intend to use the excess capacity on their line. OATTs already on file with FERC will not be impacted by the proposed rule, but FERC will consider requests to withdraw OATTs on a case-by-case basis provided no third party is currently taking service under the OATT.

Comments are due within 60 days after the NOPR is published in the Federal Register and should be submitted in FERC Docket No. RM14-11-000. 

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights

RCE PTA Carve-Out Resumes After Interference
18 September 2019
PharmaPatents
The Ninth Circuit Expected to Rule that Doctors Can Be Wrong in the Winter v. Gardens False Claims Act Case
18 September 2019
Legal News: Government Enforcement Defense & Investigations
Upcoming Webinar: Maximizing Solar Tax Credits - Navigating the Start of Construction Rules (Part 1)
17 September 2019
Renewable Energy Outlook
When Birds Finally Find a Nest
17 September 2019
Dashboard Insights
Lacktman, Ferrante Cited in mHealth Intelligence About Ryan Haight Act
19 September 2019
mHealth Intelligence
Tinnen Discusses How Viewpoint Diversity Helps Businesses Thrive
18 September 2019
InsideTrack
Vernaglia Comments on AHA v Azar Decision
18 September 2019
MedPage Today
Lach Comments on Launch of New Group
16 September 2019
BizTimes Milwaukee
MedTech Impact Expo & Conference
13-15 December 2019
Las Vegas, NV
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
BRG Healthcare Leadership Conference
06 December 2019
Washington, D.C.
CTeL Telehealth Fall Summit 2019
04-06 December 2019
Washington, D.C.