On March 21, 2024, the Federal Energy Regulatory Commission (FERC) issued Order No. 2023-A, review and clarify its historic final rule on generator interconnection reform. Order No. 2023-A largely confirmed the interconnection reforms adopted by FERC in Order No. 2023, subject to certain modifications and clarifications. These orders will have a significant impact on the development and deployment of new generation and storage projects.
In Order No. 2023, FERC revised its Large Generator Interconnection Pro Forma Procedures to move from a first-come, first-served series interconnection study process to a first-come, first-served cluster study process and adopted measures to expedite interconnection queue processing. In the order, FERC imposed stricter obligations for interconnection customers to enter the interconnection queue (by adding stricter generator site control requirements and increased study deposits and commercial readiness deposits) and imposed fines for withdrawal when peering clients leave the queue. FERC also instituted stricter requirements for transmission providers to timely complete interconnection studies, replacing the reasonable efforts standard with firm deadlines and introducing penalties for studies completed late. Additionally, FERC adopted a more standardized and detailed process for identifying affected systems as part of the interconnection study process. FERC also made reforms to the interconnection process designed to incorporate technological advances. Our white paper, Order No. 2023: Interconnection reform is finally hereexplains the reforms to the interconnection rules.
In evaluating requests for rehearing and clarification, FERC recognized the dramatic increase in interconnection requests and that interconnection delays remain a huge problem across the country that must be addressed. As such, FERC sustained its conclusions from Order No. 2023 that the existing pro forma generator interconnection procedures and agreements are insufficient to ensure that interconnection customers can interconnect to the transmission system in a reliable, efficient, transparent and timely manner and are unfair, unduly discriminatory or preferential; Therefore, the revisions of Order No. 2023 to the pro forma Open access transmission tariff and FERC regulations are necessary to ensure rates that are fair, reasonable, and not unduly discriminatory.
In the new hearing, FERC only modified the margins of the reforms adopted in Order No. 2023. For example, FERC clarified that interconnection customers who are currently in the process of studying the interconnection group of an transmission will be subject to new transmission provider readiness requirements implemented as part of the Order No. 2023 compliance process. Unless FERC approves a variance, an interconnection customer that has not executed a transmission interconnection agreement large generators (LGIA) (or has requested that an unexecuted LGIA be filed with FERC) must comply with those new preparation requirements within 60 days of the effective date of the transmission. Presentation of compliance with Order No. 2023 of the supplier. If an interconnection customer is unable or unwilling to comply with the transmission provider's new readiness requirement, the interconnection customer may withdraw its interconnection request within that 60-day period without penalty.
Additionally, FERC determined in Order No. 2023-A that a shared network upgrade can only be considered a stand-alone network upgrade (and therefore eligible to be built by the interconnection customer(s)) if all Affected interconnection customers agree to exercise the right to create such shared update. Similarly, shared interconnection facilities can only qualify for the build option if all affected interconnection customers agree to exercise the build option. Such affected interconnection customers will be required to voluntarily develop a written agreement (outside of the transmission provider's interconnection process) regarding responsibilities and payment for the construction of applicable shared interconnection facilities and/or independent network upgrades and provide the executed agreement to the conveyance company. supplier.
Additionally, in a new hearing, FERC expanded the acceptable forms of financial security for interconnection customers (in addition to cash and an irrevocable letter of credit) to include surety bonds or other forms of financial security that are reasonably acceptable to the provider. of transmission. FERC also specified that all interconnection requests must be validated by the transmission provider prior to the close of the cluster request window. Only peering clients with valid peering requests at the close of the cluster request window will proceed to the next step in the peering study process.
Among the provisions upheld in the new hearing is a requirement that streaming providers evaluate an enumerated list of "alternative streaming technologies." When applying this requirement to large and small generator interconnection procedures, these include a variety of voltage control equipment, power flow control devices, synchronous capacitors, voltage source converters used with high voltage direct current systems. voltage, advanced conductors and tower elevation. By requiring that these technologies be examined both during cluster studies and during re-studies without the need for a specific request from an interconnection customer, FERC has mandated a much broader range of solutions that may be more cost-effective and more convenient. Conversely, failure to examine these solutions would make FERC's jurisdictional fees unfair and unreasonable. In arguing that the rule is not overly burdensome and does not offer โunlimited discretion to ignoreโ other solutions, FERC noted that transmission providers โmust explain their evaluation of the listed alternative transmission technologies for feasibility, cost, and energy savings.โ timeโ compared to a โtraditionalโ one. network updateโ, and that this determination can be challenged. In clarifying what is meant by "advanced conductors," FERC explained that this means that "the conductors are advanced compared to conventional steel-reinforced aluminum conductors, and include, but are not limited to, superconducting cables, advanced composite conductors, high temperature and low temperature". Panoramic conductors, fiber optic temperature sensing conductors, and advanced overhead conductors.โ
Filings for compliance with Order No. 2023 by transmission providers were due April 3, 2024. In light of the changes made in the rehearing and clarification in Order No. 2023, FERC extended the compliance filing deadline is 30 days after Order No. 2023-A is published in the Federal Register (as of March 26, 2024, Order No. 2023-A has not yet been published in the Federal Register).
