FERC on April 19 opened an inquiry regarding open access and priority rights for capacity on interconnection facilities, and issued a final rule involving market surveillance and analysis.
The notice of inquiry (NOI) seeks input on whether FERC should revise its policy on access to interconnection facilities and offers alternate approaches to its current policy for comment. FERC also said that currently, a generation developer may seek priority rights to unused capacity on its interconnection facilities, preserving the ability to phase in new generation projects as long as the developer can justify that priority. The policy is aimed at preventing undue discrimination by ensuring that third parties have access to capacity not being used by the interconnection facilities’ owner, FERC added.
FERC said in the NOI that in a series of cases that have come before it in recent years, FERC has treated certain interconnection facilities as transmission facilities for purposes of open access policies.
However, FERC has allowed an owner of interconnection facilities to have priority to capacity over its facilities at the time of a third-party request for service. In the instance where an owner of interconnection facilities has specific, pre-existing generator expansion plans with milestones for construction of generation facilities and can show that it has made material progress toward meeting those milestones, FERC may grant priority rights for the capacity on the interconnection facilities to those future generation projects or expansions.
FERC said that to date, it has applied the policy on a case-by-case basis, noting that its current policy is guided by wanting to prevent undue discrimination by ensuring that third parties have open access to available transfer capability that is not being used by the owner of the interconnection facilities.
FERC said in its statement that the NOI asks questions about the need to reconsider existing policies:
- Has industry largely adapted to current policy in the time since a March 2011 FERC technical conference, during which commenters said open-access policies may be ill-suited for generator lead lines, which the NOI refers to as interconnection facilities?
- Must interconnection facilities provide third-party access under an open-access transmission tariff (OATT) to ensure non-discriminatory access and just and reasonable rates?
- Does current policy blur the line between interconnection and transmission service regarding third-party access, creating unintended consequences?
The NOI also seeks comments on two alternate approaches, namely, continued use of an OATT framework with certain modifications, including a “safe harbor” period during which a generation developer would be assumed to have priority rights to capacity on its interconnection facilities, and use of a framework that would allow FERC to consider issues of third-party access and priority rights under a modification of its existing interconnection rules and procedures.
Comments are due 45 days after the NOI is published in the Federal Register, FERC added. A FERC spokesperson told TransmissionHub April 20 that the NOI may be published in the Federal Register the week of April 23.
According to the NOI, comments may be submitted online through FERC’s website, or by mail/hand delivery to FERC.
In a separate statement, Commissioner John Norris said the NOI raises the bigger picture issue of the application of FERC’s open access policies to some of the electric industry’s emerging challenges. He noted that FERC’s open access policies were developed nearly 20 years ago when the industry was facing different challenges, most notably the need for new generation market players to access the market and customers.
FERC must consider how these open access policies address, or fail to address, challenges that may have only more recently emerged, including the challenge that involves developing new renewable resources in remote locations that require significant interconnection facilities to deliver their output to the grid, he said.
“Under commission precedent, we treat these interconnection facilities as transmission lines subject to the commission’s open access requirements,” Norris said. “The larger question we have to ask is: how do we balance our statutory duties to ensure just, reasonable and non-discriminatory interstate transmission service with the need to meet new challenges like this?”
According to its final rule on market surveillance and analysis, FERC is amending its regulations to require that each regional transmission organization and independent system operator electronically deliver to FERC, on an ongoing basis, data relating to physical and virtual offers and bids, market awards, resource outputs, marginal cost estimates, shift factors, financial transmission rights, internal bilateral contracts, uplift, and interchange pricing.
FERC said the final rule will enhance its efforts to detect anti-competitive or manipulative behavior, or ineffective market rules. Furthermore, the final rule minimizes the burden on regional organized market administrators by phasing in implementation requirements and not requiring data to be consistently formatted across all regional organized markets.
The final rule takes effect 60 days after publication in the Federal Register.