FERC Establishes Proceeding to Consider DOE Directive on Large Load Transmission Interconnection Rulemaking

1. Similar to generator interconnections, large load interconnections are a “critical component of open access transmission service” that require minimum terms and conditions to ensure nondiscriminatory service.

2. The interconnection of large loads to the transmission system is a “practice directly affecting [FERC]-jurisdictional wholesale electricity rates,” under FPA Section 205.

3. FERC jurisdiction over the interconnection process does not encroach on state authority over local distribution, generation siting or retail sales.

4. The proposal is consistent with the FPA’s core purpose. Under the FPA, FERC has exclusive jurisdiction over the transmission of electric energy in interstate commerce, including the rates, terms and conditions of transmission service, and all facilities for such transmission or sale of electric energy at wholesale in interstate commerce. Accordingly, any large load that seeks to interconnect to the transmission system does so to obtain transmission service and the appurtenant benefits of such.

1. Any reforms should be limited to interconnections directly to transmission facilities, consistent with FERC’s seven-factor test.

2. Consistent with FERC’s pro forma Large Generator Interconnection Procedures and Large Generator Interconnection Agreement, the reforms should only apply to new loads greater than 20 MW and, for co-located generation and load (referred to in the ANOPR as “hybrid facilities”) where the load is greater than 20 MW.

• Request for Comment: The ANOPR seeks comment on alternative thresholds, including whether a threshold is needed at all.

3. To the extent practicable, co-located generation and load should be studied together with generating facilities.

4. Like the pro forma generation-interconnection procedures, load and hybrid facilities should be subject to standardized study deposits, readiness requirements and withdrawal penalties.

• Request for Comment: The DOE seeks comment on (a) the extent to which the existing study deposits, readiness requirements and withdrawal penalties (applicable to generation) can be adopted and (b) whether additional commitments or financial penalties would be appropriate.

5. Co-located facilities should be studied based on the amount of injection and/or withdrawal rights requested (i.e., a 500 MW load co-located with a 600 MW generating facility should be able to seek 0 MW of withdrawal rights and 100 MW of injection rights) to provide an “incentive” for co-location and efficient transmission build-out.

6. Any co-located interconnection shall be required to install the system protection facilities necessary to prevent unauthorized injections or withdrawals that exceed the respective rights.

• Request for Comment: The DOE seeks comment on (a) whether other operational limitations should be considered; (b) the minimum technical requirements for such system protection facilities, whether a co-located interconnection customer should be subject to penalties for unauthorized injections or withdrawals, (c) how any such penalties should be designed and (d) how such penalties should be allocated to other transmission customers.

7. The interconnection study of large loads that agree to be curtailable and of co-located facilities that agree to be curtailable and dispatchable should be expedited (assuming system operator has sufficient ability to control the facilities to integrate them into operations and planning).

• Request for Comment: The DOE seeks comment on (a) whether this should be accomplished through a serial interconnection study process or by some other means, and (b) the appropriate deadlines for such an expedited study process, including whether such studies can be completed in 60 days.

8. Load and co-located facilities should be responsible for 100% of the network upgrades that they are assigned through the interconnection studies.

• Request for Comment: The DOE seeks comment on whether (a) network upgrade costs should be offset through a crediting mechanism and; (b) if so, over how many years.

9. To the extent the interconnection customer is not the transmission owner, the interconnection customer shall be afforded the same (or equivalent) option to build as currently provided to generator interconnection customers.

10. An existing generating facility that seeks to enter a partial suspension to serve a new load at the same location must go through a system support resource (SSR)/reliability must run (RMR) type study that considers system conditions, including forecasted load growth at least three years after the proposed suspension date. If such election is made, the partial suspension can only proceed after necessary network upgrades are placed into to service.

• Request for Comment: The DOE seeks comment on whether and how resource adequacy should be considered in the SSR/RMR type study.

11. Utilities serving large loads, including those at co-located facilities, should be responsible for transmission service based on their withdrawal rights, as that value amount reflects the quantity of capacity and energy that is being transmitted across the transmission system to the load.

12. Utilities serving large loads, including those at co-located facilities, should be responsible for ancillary services based on peak demand, without consideration of any co-located generation.

13. There must be a plan to implement these proposed reforms.

• Request for Comment: The DOE seeks comment on appropriate transition plans, including the treatment of large load interconnections that are already being studied for interconnection.

14. Utilities serving large loads must meet all applicable North American Electric Reliability Corporation (NERC) reliability standards and open access transmission tariff provisions. NERC should evaluate whether new registration categories or new or modified reliability standards are required to ensure reliability of the bulk electric system.