FERC Order 845 reforms interconnection process

Friday, April 27, 2018

U.S. utility regulators have issued an order adopting a final rule reforming the procedures through which electric generators obtain interconnections to the utility grid. The Federal Energy Regulatory Commission's Order No. 845 adopts a final rule which implements ten specific reforms designed to provide interconnection customers better information and more options, in the hopes that transmission providers will better be able to focus on interconnection requests that are likely to reach commercial operation.

Generally speaking, generators need to interconnect to the utility grid (and to consumers) for their power to be valuable. Under the Federal Power Act, many generator interconnections are subject to regulation by the Commission. In December 2016, the Commission issued a Notice of Proposed Rulemaking proposing 14 sets of reforms to its interconnection regulations. In that notice, the Commission cited changes to the electric power industry since the Commission issued its Order No. 2003 governing interconnections, and concerns including long queues and delays for interconnection studies, and a lack of certainty around timing and costs.

As a result, in 2016 the Commission preliminarily found that the interconnection process may hinder the timely development of new generation, and thereby stifle wholesale competition, resulting in rates, terms, and conditions that are not just and reasonable or are unduly discriminatory or preferential. The Commission also preliminarily found the interconnection process could result in uncertainty and inaccurate information, and a potential for discrimination as new technologies enter the market.

Now, following a technical conference and 63 public comments, the Commission issued its order adopting the final rule on April 19, 2018. The final order adopted many of the Commission's 2016 proposals, while deviating from that earlier proposal in some regards.

Among other items, the final rule includes two sets of reforms designed to improve certainty for interconnection customers, four aimed at promoting more informed interconnection decisions, and four designed to enhance the interconnection process.

The Commission also decide to revise its pro forma Large Generator Interconnection Procedures and  Large Generator Interconnection Agreement, to mitigate concerns about systemic inefficiencies, discriminatory utility practices, and time spent on interconnection requests that are unlikely to reach commercial operation.

The final rule, codified as 18 C.F.R. Part 37, will become effective 75 days after its publication in the Federal Register.

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