Improvements to Generator Interconnection Procedures and Agreements, 27006-27243 [2024-06563]
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 35
[Docket No. RM22–14–001; Order No. 2023–
A]
Improvements to Generator
Interconnection Procedures and
Agreements
Federal Energy Regulatory
Commission.
ACTION: Order on rehearing and
clarification.
AGENCY:
In this order, the Federal
Energy Regulatory Commission
addresses arguments raised on
rehearing, sets aside, in part, and
clarifies Order No. 2023, which
amended the Commission’s regulations
and its pro forma Large Generator
Interconnection Procedures, pro forma
Large Generator Interconnection
Agreement, pro forma Small Generator
Interconnection Procedures, and pro
forma Small Generator Interconnection
Agreement to address interconnection
queue backlogs, improve certainty, and
prevent undue discrimination for new
technologies.
SUMMARY:
DATES:
This rule is effective May 16,
2024.
FOR FURTHER INFORMATION CONTACT:
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Anne Marie Hirschberger (Legal
Information), Office of the General
Counsel, 888 First Street NE,
Washington, DC 20426, (202) 502–
8387, annemarie.hirschberger@
ferc.gov.
Sarah Greenberg (Legal Information),
Office of the General Counsel, 888
First St. NE, Washington, DC 20426,
(202) 502–6230, sarah.greenberg@
ferc.gov.
Franklin Jackson (Technical
Information), Office of Energy Market
Regulation, 888 First Street NE,
Washington, DC 20426, (202) 502–
6464, franklin.jackson@ferc.gov.
Michael G. Henry, Office of Energy
Policy and Innovation, 888 First
Street NE, Washington, DC 20426,
(202) 502–8583, michael.henry@
ferc.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Discussion
A. Need for Reform
1. Order No. 2023
2. Requests for Rehearing and Clarification
3. Determination
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B. Arguments Regarding Conflicts With
Ongoing Queue Reform Efforts and
Evaluation of Variations on Compliance
1. Order No. 2023 Requirements
2. Requests for Rehearing and Clarification
3. Determination
C. Reforms To Implement a First-Ready,
First-Served Cluster Study Process
1. Public Interconnection Information
2. Cluster Study Process
3. Allocation of Cluster Network Upgrade
Costs
4. Shared Network Upgrades
5. Increased Financial Commitments and
Readiness Requirements
6. Transition Process
D. Reforms To Increase the Speed of
Interconnection Queue Processing
1. Elimination of Reasonable Efforts
Standard and Implementation of a
Replacement Rate
2. Affected Systems
E. Reforms To Incorporate Technological
Advancements Into the Interconnection
Process
1. Increasing Flexibility in the Generation
Interconnection Process
2. Incorporating the Enumerated
Alternative Transmission Technologies
Into the Generator Interconnection
Process
3. Modeling and Ride Through
Requirements for Non-Synchronous
Generating Facilities
F. Compliance Procedures
1. Order No. 2023 Requirements
2. Requests for Rehearing and Clarification
3. Determination
III. Information Collection Statement
IV. Environmental Analysis
V. Regulatory Flexibility Act
VI. Document Availability
VII. Effective Date
I. Background
1. On July 28, 2023, the Federal
Energy Regulatory Commission
(Commission) issued Order No. 2023.1
Order No. 2023 required all public
utility transmission providers to adopt
revised pro forma Large Generator
Interconnection Procedures (LGIP), pro
forma Large Generator Interconnection
Agreements (LGIA), pro forma Small
Generator Interconnection Procedures
(SGIP), and pro forma Small Generator
Interconnection Agreements (SGIA).2
1 Improvements to Generator Interconnection
Procs. & Agreements, Order No. 2023, 88 FR 61014
(Sept. 6, 2023), 184 FERC ¶ 61,054 (2023).
2 Id. P 1 n.1 (‘‘Section 201(e) of the Federal Power
Act (FPA) defines ‘‘public utility’’ to mean ‘‘any
person who owns or operates facilities subject to
the jurisdiction of the Commission under this
subchapter.’’ 16 U.S.C. 824(e). A non-public utility
that seeks voluntary compliance with the
reciprocity condition of a tariff may satisfy that
condition by filing a tariff, which includes the pro
forma LGIP, the pro forma SGIP, the pro forma
LGIA, and the pro forma SGIA. See Standardization
of Generator Interconnection Agreements & Procs.,
Order No. 2003, 68 FR 49846 (Aug. 19, 2003), 104
FERC ¶ 61,103, at PP 1, 616 (2003), order on reh’g,
Order No. 2003–A, 69 FR 15932 (Mar. 26, 2004),
106 FERC ¶ 61,220, order on reh’g, Order No. 2003–
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These revisions ensure that
interconnection customers are able to
interconnect to the transmission system
in a reliable, efficient, transparent, and
timely manner, and will prevent undue
discrimination.3 In Order No. 2023, the
Commission adopted a comprehensive
package of reforms in three general
categories: (1) reforms to implement a
first-ready, first-served cluster study
process, (2) reforms to increase the
speed of interconnection queue
processing, and (3) reforms to
incorporate technological advancements
into the interconnection process.
2. To implement a first-ready, first
served cluster study process, Order No.
2023: (1) required transmission
providers to post public interconnection
information in an interactive heatmap to
provide interconnection customers
information before they enter the queue;
(2) eliminated individual serial
feasibility and system impact studies
and created a cluster study; (3) created
a range of allowable allocations of
cluster study costs; (4) required
transmission providers to use a
proportional impact method to assign
network upgrade costs within a cluster;
(5) required increased financial
commitments and readiness
requirements from interconnection
customers, including increased study
deposits, site control, commercial
readiness deposits, an LGIA deposit,
and required transmission providers to
institute penalties for withdrawn
interconnection requests; and (6)
created a transition mechanism for
moving to the cluster study process
adopted in Order No. 2023 from the
existing serial study process.4
3. To increase the speed of
interconnection queue processing,
Order No. 2023: (1) eliminated the
reasonable efforts standard for
completing interconnection studies and
adopted study delay penalties
applicable when transmission providers
fail to complete interconnection studies
B, 70 FR 265 (Jan. 4, 2005), 109 FERC ¶ 61,287
(2004), order on reh’g, Order No. 2003–C, 70 FR
37661 (June 30, 2005), 111 FERC ¶ 61,401 (2005),
aff’d sub nom. Nat’l Ass’n of Regul. Util. Comm’rs
v. FERC, 475 F.3d 1277 (D.C. Cir. 2007) (NARUC
v. FERC). As stated in the pro forma LGIP, pro
forma LGIA, pro forma SGIP, and pro forma SGIA,
transmission provider ‘‘shall mean the public utility
(or its designated agent) that owns, controls, or
operates transmission or distribution facilities used
for the transmission of electric energy in interstate
commerce and provides transmission service under
the [Transmission Provider’s Tariff]. The term . . .
should be read to include the Transmission Owner
when the Transmission Owner is separate from the
Transmission Provider.’’ Pro forma LGIP section 1;
pro forma LGIA art. 1; pro forma SGIP attach. 1; pro
forma SGIA attach. 1.’’).
3 Order No. 2023, 184 FERC ¶ 61,054 at P 1.
4 Id. P 5.
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by the deadlines in their tariff; and (2)
established a more detailed affected
system study process in the pro forma
LGIP, including pro forma affected
system agreements and uniform
modeling standards.5
4. To incorporate technological
advancements into the interconnection
process, Order No. 2023: (1) required
transmission providers to allow more
than one generating facility to co-locate
on a shared site behind a single point of
interconnection and share a single
interconnection request; (2) required
transmission providers to evaluate the
proposed addition of a generating
facility to an existing interconnection
request prior to deeming such an
addition a material modification; (3)
required transmission providers to
allow interconnection customers to
access the surplus interconnection
service process once the original
interconnection customer has an
executed LGIA or requests the filing of
an unexecuted LGIA; (4) required
transmission providers, at the request of
the interconnection customer, to use
operating assumptions in
interconnection studies that reflect the
proposed charging behavior of electric
storage resources; (5) required
transmission providers to evaluate an
enumerated list of alternative
transmission technologies during the
study process; (6) required each
interconnection customer requesting to
interconnect a non-synchronous
generating facility to submit to the
transmission provider certain specific
models of the generating facility; (7)
established ride through requirements
during abnormal frequency conditions
and voltage conditions within the ‘‘no
trip zone’’ defined by NERC Reliability
Standard PRC–024–3 or successor
mandatory ride through reliability
standards; and (8) required that all
newly interconnecting large generating
facilities provide frequency and voltage
ride through capability consistent with
any standards and guidelines that are
applied to other generating facilities in
the balancing authority area on a
comparable basis.6
5. The Commission received 32 timely
filed requests for rehearing and/or
clarification, and two additional
requests for clarification.7 The rehearing
5 Id.
P 6.
P 6.
7 Appendix A provides the short names of the
entities that filed requests for rehearing or
clarification. Shell filed an answer. Rule 713(d)(1)
of the Commission’s Rules of Practice and
Procedure (18 CFR 385.713(d)) prohibits an answer
to a request for rehearing. Accordingly, we deny
Shell’s motion to answer and reject its answer.
6 Id.
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requests raise issues related to nearly all
reforms adopted in Order No. 2023.
6. Pursuant to Allegheny Defense
Project v. FERC,8 the rehearing requests
filed in this proceeding may be deemed
denied by operation of law. However, as
permitted by section 313(a) of the
Federal Power Act (FPA),9 we are
modifying the discussion in Order No.
2023, setting aside the order, in part,
and clarifying the order, as discussed
below.10
7. Specifically, we set aside the order,
in part, to specify that: (1) where an
interconnection customer is in the
interconnection queue of a transmission
provider that currently uses, or is
transitioning to, a cluster study process
and the transmission provider proposes
on compliance to adopt new readiness
requirements for its annual cluster
study, the interconnection customer
must comply with the transmission
provider’s new readiness requirements
within 60 days of the Commissionapproved effective date of the
transmission provider’s compliance
filing, where such readiness
requirements are applicable given the
status of the individual interconnection
customer in the queue; (2) a network
upgrade that is required for multiple
interconnection customers in a cluster
may be considered a stand alone
network upgrade if all such
interconnection customers mutually
agree to exercise the option to build; (3)
transmission providers must complete
their determination that an
interconnection request is valid by the
close of the cluster request window
such that only interconnection
customers with valid interconnection
requests proceed to the customer
engagement window; and (4) acceptable
forms of security for the Commercial
Readiness Deposit and deposits prior to
the Transitional Serial Study,
Transitional Cluster Study, Cluster
Restudy and the Interconnection
Facilities Study should include not only
cash or an irrevocable letter of credit,
but also surety bonds or other forms of
8 964
F.3d 1 (D.C. Cir. 2020) (en banc).
U.S.C. 825l(a) (‘‘Until the record in a
proceeding shall have been filed in a court of
appeals, as provided in subsection (b), the
Commission may at any time, upon reasonable
notice and in such manner as it shall deem proper,
modify or set aside, in whole or in part, any finding
or order made or issued by it under the provisions
of this chapter.’’).
10 Allegheny Def. Project, 964 F.3d at 16–17. In
Appendices C, D, E, and F, we provide the revisions
to the provisions of the pro forma LGIP, pro forma
LGIA, pro forma SGIP, and pro forma SGIA made
in this order on rehearing and clarification.
Additionally, these Appendices reflect several nonsubstantive corrections in these appendices to
address stylistic inconsistencies or clerical errors in
some of the new and revised pro forma provisions.
9 16
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27007
financial security that are reasonably
acceptable to the transmission provider.
8. Additionally, we grant several
clarifications on the following topics, as
further discussed below: (1) conflicts
with ongoing queue reform efforts; (2)
public interconnection information; (3)
cluster study process; (4) allocation of
cluster network upgrade costs; (5)
shared network upgrades; (6)
withdrawal penalties; (7) study delay
penalty and appeal structure; (8)
affected systems; (9) revisions to the
material modification process to require
consideration of generating facility
additions; (10) availability of surplus
interconnection service; (11) operating
assumptions for interconnection
studies; (12) consideration of the
enumerated alternative transmission
technologies in interconnection studies;
and (13) ride-through requirements.
9. Finally, in light of the revisions
made to the pro forma LGIP, pro forma
LGIA, pro forma SGIP, and pro forma
SGIA herein, we extend the deadline for
transmission providers to submit
compliance filings until the effective
date of this order (i.e., the new deadline
for compliance with Order No. 2023
will be 30 days after the publication of
this order in the Federal Register, and
must include the further revisions
reflected in this order).
II. Discussion
A. Need for Reform
1. Order No. 2023
10. The Commission stated that it
found substantial evidence in the record
to support the conclusion that the
existing pro forma generator
interconnection procedures and
agreements were unjust, unreasonable,
and unduly discriminatory or
preferential.11 Therefore, pursuant to
FPA section 206, the Commission
concluded that certain revisions to the
pro forma open access transmission
tariff and the Commission’s regulations
were necessary to ensure rates that are
just, reasonable, and not unduly
discriminatory or preferential.
Specifically, the Commission found that
the existing pro forma generator
interconnection procedures and
agreements were insufficient to ensure
that interconnection customers are able
to interconnect to the transmission
system in a reliable, efficient,
transparent, and timely manner, thereby
ensuring that rates, terms, and
conditions for Commissionjurisdictional services are just,
reasonable, and not unduly
discriminatory or preferential. The
11 Order
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Commission stated that, absent reform,
the interconnection process will
continue to cause interconnection queue
backlogs, longer development timelines,
and increased uncertainty regarding the
cost and timing of interconnecting to the
transmission system. The Commission
explained that these backlogs and
delays, and the resulting timing and cost
uncertainty, hinder the timely
development of new generation and
thereby stifle competition in the
wholesale electric markets resulting in
rates, terms, and conditions that are
unjust, unreasonable, and unduly
discriminatory or preferential.
11. The Commission cited recent data
to support its findings that the dramatic
increase in the number of
interconnection requests and limited
transmission capacity are increasing
interconnection queue backlogs across
all regions of the country.12 This data
indicated that, as of the end of 2022,
there were over 10,000 active
interconnection requests in
interconnection queues throughout the
United States, representing over 2,000
gigawatts (GW) of potential generation
and storage capacity.13 These
interconnection requests and the
generating facilities they represent
amount to the largest interconnection
queue size on record, more than four
times the total volume (in GW) of the
interconnection queues in 2010, and a
40% increase over the interconnection
queue size from just the year prior. The
Commission explained that these trends
are not exclusive to any specific region
of the country; rather, every region,
including regional transmission
organizations (RTO), independent
system operators (ISO), and non-RTOs/
ISOs, has faced an increase in both
interconnection queue size and the
length of time interconnection
customers are spending in the
interconnection queue prior to
commercial operation in recent years.
The Commission noted that the
uncertainty and delays in the
interconnection queues have resulted in
fewer than 25% of interconnection
requests, by capacity, reaching
commercial operation between 2000 and
2017 in any region of the country—with
some regions as low as 8%.
12 Id. P 38 (citing Energy Markets & PolicyBerkeley Lab, Queued Up: Characteristics of Power
Plants Seeking Transmission Interconnection, 7–8
(Apr. 2023) (Queued Up 2023), https://emp.lbl.gov/
sites/default/files/queued_up_2022_04-06-2023.pdf;
Appendix B to Order No. 2023, which provided an
overview of recent data based on reporting by
transmission providers in compliance with Order
No. 845).
13 Id. (citing Queued Up 2023).
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12. The Commission also cited recent
data that interconnection customers are
waiting longer in the interconnection
queue before withdrawing their
interconnection requests, even as
overall interconnection study timelines
are increasing in many regions.14
Despite efforts to address these
challenges, the Commission observed
that interconnection queue backlogs and
delays have persisted and worsened. For
generating facilities built in 2022, wait
times in the interconnection queue saw
a marked increase from 2.1 years for
generating facilities built in 2000–2010
to roughly five years for generating
facilities built in 2022.
13. The Commission explained that
delays in the interconnection study
process are an important contributor to
interconnection queue backlogs
nationwide.15 The Commission cited
recent interconnection study metrics
transmission providers filed with the
Commission, as required by Order No.
845, which showed that of the 2,179
interconnection studies completed in
2022, 68% were issued late. At the end
of 2022, an additional 2,544 studies
were delayed (i.e., ongoing and past
their deadline). All of the RTOs/ISOs
except CAISO and most non-RTO/ISO
transmission providers (14 of 38)
reported pending delayed studies at the
end of 2022.
14. The Commission found that
numerous factors have contributed to
the increasing volume of
interconnection requests, including a
rapidly changing resource mix, market
forces, and emerging technologies.16
The Commission also found that
available transmission capacity has been
largely or fully used in many regions,
creating situations where
interconnection customers face
significant network upgrade cost
assignments to interconnect their
proposed generating facilities. As an
example, the Commission cited a U.S.
DOE report that found that
interconnection costs in MISO doubled
for generating facilities for which the
interconnection studies were completed
between 2019 and 2021 as compared to
those completed prior to 2019, and cost
estimates tripled for proposed
generating facilities still active in the
interconnection queue between the
same time periods.17 The Commission
also noted that other reports show
14 Id.
P 39.
P 40.
16 Id. P 41.
17 Id. (citing Joachim Seel et al., Generator
Interconnection Cost Analysis in the Midcontinent
Independent System Operator (MISO) Territory, 1,
4–5 (Oct. 2022), https://emp.lbl.gov/
interconnection_costs.).
15 Id.
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similar cost increases in NYISO and
PJM.18 The Commission found that this
combination of increased volume of
interconnection requests and
insufficient transmission capacity and
therefore higher costs to interconnect,
which can result in interconnection
request withdrawals, has resulted in
longer interconnection queue processing
times and larger, more delayed
interconnection queues.
15. The Commission explained that
interconnection queue backlogs and
delays have created uncertainty for
interconnection customers regarding the
timing and cost of ultimately
interconnecting to the transmission
system, which may lead to an increase
in costs to consumers.19 The
Commission stated that delayed
interconnection study results or
unexpected cost increases can disrupt
numerous aspects of generating facility
development and such uncertainty,
either on the part of transmission
providers or interconnection customers,
is ultimately passed through to
consumers through higher transmission
or energy rates. The Commission
explained that increases in energy rates
may result from wholesale customers
having limited access to new and more
competitive supplies of generation and
that, conversely, efficient
interconnection queues and wellfunctioning wholesale markets deliver
benefits to consumers by driving down
wholesale electricity costs.
16. Overall, due to continuing and
increasing interconnection queue
backlogs and study delays, the
Commission found that the
Commission’s existing rules contained
in the pro forma LGIP, pro forma LGIA,
pro forma SGIP, and pro forma SGIA
resulted in rates, terms, and conditions
for Commission-jurisdictional services
that are unjust, unreasonable, and
unduly discriminatory or preferential.20
The Commission found that the
problems described above lead to an
inability of interconnection customers
to interconnect to the transmission
system in a reliable, efficient,
transparent, and timely manner, and
18 Id. (citing Julia Mulvaney Kemp et al.,
Interconnection Cost Analysis in the NYISO
Territory (Mar. 2023), https://emp.lbl.gov/
publications/interconnection-cost-analysis-nyiso
(showing that costs have doubled for generating
facilities studied since 2017, relative to costs for
generating facilities studied from 2006 to 2016);
Joachim Seel et al., Interconnection Cost Analysis
in the PJM Territory (Jan. 2023), https://emp.lbl.gov/
publications/interconnection-cost-analysis-pjm
(showing that costs for recent ‘‘complete’’
generating facilities have doubled on average
relative to costs from 2000–2019)).
19 Id. P 43.
20 Id. P 44.
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hindered the timely development of
new generation, thereby stifling
competition in the wholesale electric
markets. Therefore, the Commission
found that reform to the Commission’s
existing pro forma generator
interconnection procedures and
agreements was necessary.
17. The Commission based its
findings that the pro forma LGIP, pro
forma LGIA, pro forma SGIP, and pro
forma SGIA must be reformed on the
following features: (1) the information
(or lack thereof) available to prospective
interconnection customers and the
commitments required of them to enter
and progress through the
interconnection queue; (2) the reliance
on a serial first-come, first-served study
process and the reasonable efforts
standard that transmission providers are
held to for meeting interconnection
study deadlines; (3) the protocols (or
lack thereof) for affected system studies;
(4) the provisions for studying new
generating facility technologies and
evaluating the list of alternative
transmission technologies enumerated
in Order No. 2023; and (5) the modeling
or performance requirements (or lack
thereof) for non-synchronous generating
facilities, including wind, solar, and
electric storage facilities.21 The
Commission further explained each of
these five features.
18. First, the Commission explained
that, without a process by which an
interconnection customer can obtain
information about potential
interconnection costs at a specific
location or point of interconnection
prior to submitting an interconnection
request, it is difficult for
interconnection customers to assess the
commercial viability of a specific
proposed generating facility prior to
entering the interconnection queue.22
The Commission also found that the pro
forma interconnection procedures and
agreements failed to include meaningful
financial commitments and readiness
requirements to enter and stay in the
interconnection queue and lacked
stringent requirements to establish the
commercial viability of proposed
generating facilities. As a result, the
Commission explained, interconnection
customers often submit multiple
interconnection requests for proposed
generating facilities at various points of
interconnection, knowing that not all of
them will reach commercial operation,
as an exploratory mechanism to obtain
information to allow the
interconnection customer to choose to
proceed with the interconnection
request representing the most favorable
site in terms of potential
interconnection-related costs.
19. Second, the Commission
explained that the existing serial firstcome, first-served study process created
incentives for interconnection
customers to submit exploratory or
speculative interconnection requests
pursuant to which interconnection
customers seek to secure valuable queue
positions as early as possible, even if
they are not prepared to move forward
with the proposed generating facility.23
Such generating facilities are often not
commercially viable: thus, the
interconnection customers ultimately
withdraw their interconnection requests
from the interconnection queue, which
triggers reassessments and possible
restudies by the transmission provider
that can delay the timing and increase
the cost to interconnect for lowerqueued interconnection requests. The
Commission found that the lack of
access to information about a specific
location or point of interconnection
prior to submitting an interconnection
request, the lack of any meaningful
financial commitments in the pro forma
interconnection procedures and
agreements for interconnection
customers to enter and stay in the
interconnection queue, as well as the
existing serial first-come, first-served
study process, together incentivized
interconnection customers to submit
speculative interconnection requests
that contribute to interconnection study
backlogs, delays, and uncertainty, and,
in turn, unjust and unreasonable
Commission-jurisdictional rates.24
20. The Commission also found that
interconnection queue backlogs and
delays, and the accompanying
uncertainty, have been further
compounded because transmission
providers have limited incentive to
perform interconnection studies in a
timely manner.25 The Commission
stated that, despite pervasive delays in
completing interconnection studies by
transmission providers, transmission
providers have faced few, if any,
consequences for failing to meet their
tariff-imposed study deadlines under
the reasonable efforts standard. The
Commission therefore found that the
existing pro forma LGIP requirement for
transmission providers to make a
reasonable effort to meet
interconnection study deadlines
contributes to the interconnection study
backlogs, delays, and uncertainty that
erects barriers to new generation,
P 47.
P 48.
25 Id. P 50.
resulting in Commission-jurisdictional
rates that are unjust and unreasonable.
21. Third, the Commission found that,
without requirements for how and when
transmission providers should complete
affected system studies, those studies
often lag behind those completed by the
transmission provider to whose
transmission system the interconnection
customer proposes to interconnect (the
host transmission provider) and are
sometimes completed very late in the
interconnection process, causing an
additional round of delays and cost
uncertainty for interconnection
customers.26 Additionally, for
transmission providers that have
procedures for how to complete affected
system studies in their tariffs or other
documents (e.g., business practice
manuals or joint operating agreements),
the Commission found that those
procedures are not consistent, may be
hard for interconnection customers to
locate, and may not represent the actual
practices in use by the transmission
provider, thus still creating uncertainty
for interconnection customers. As a
result, the Commission found that the
lack of consistent requirements for
affected system modeling and
procedures results in Commissionjurisdictional rates that are unjust,
unreasonable, and unduly
discriminatory or preferential.
22. Fourth, the Commission found
that the Commission’s pro forma LGIP
failed to accommodate the operating
characteristics and technical capabilities
of electric storage resources when it
comes to specific interconnection
procedures and modeling.27 The
Commission noted that interconnection
queues predominantly consist of new
technologies which have operating
characteristics that differ from
synchronous resources and were not
anticipated when the Commission
established the pro forma generator
interconnection procedures and
agreements in Order Nos. 2003 and
2006. The Commission noted that the
existing pro forma generator
interconnection procedures and
agreements did not contemplate the
operating characteristics or technical
capabilities of electric storage resources,
leading to electric storage resources
being studied under inappropriate
operating assumptions (e.g., charging at
full capacity during peak load
conditions) that result in the assignment
of unnecessary network upgrades which
increase costs to interconnection
customers. Therefore, the Commission
found that the inability to modify
23 Id.
21 Id.
P 45.
22 Id. P 46.
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26 Id.
27 Id.
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operating assumptions for electric
storage resources pursuant to the pro
forma LGIP resulted in Commissionjurisdictional rates that are unjust,
unreasonable, and unduly
discriminatory or preferential.
23. The Commission also found that
the existing pro forma interconnection
procedures regarding material
modifications did not provide for
consistent evaluation of technology
additions to an existing interconnection
request, and that automatically deeming
a request to add a generating facility to
an existing interconnection request to be
a material modification creates a
significant barrier to access to the
transmission system.28
24. Finally, the Commission found
that the pro forma LGIP and pro forma
SGIP failed to require the consideration
of alternative transmission technologies
that can be used as network upgrades
and can be deployed more quickly and
at a lower cost than, traditional network
upgrades.29 The Commission found that
failing to require transmission providers
to evaluate the enumerated list of
alternative transmission technologies
resulted in interconnection customers
paying more than is just and reasonable
to reliably interconnect new generating
facilities, ultimately creating
Commission-jurisdictional rates that are
unjust, unreasonable, and unduly
discriminatory or preferential.
25. Fifth, the Commission found that
the Commission’s existing pro forma
LGIP and pro forma SGIP did not
include a modeling requirement for
non-synchronous generating facilities,
which is necessary to enable the
transmission provider to assess and
model the facility’s ability to respond
appropriately to transmission system
disturbances.30 The Commission
explained that interconnection
customers must submit accurate and
validated models, which will prevent
study delays and ensure that
transmission providers identify the
necessary interconnection facilities and
network upgrades to accommodate the
interconnection request and thus allow
the appropriate assignment of
interconnection costs to the
interconnection request. Therefore, the
Commission found that the lack of a
modeling requirement for nonsynchronous generating facilities in the
pro forma LGIP and pro forma SGIP
results in rates that are unjust,
unreasonable, and unduly
discriminatory or preferential.
Additionally, the Commission
P 53.
P 54.
30 Id. P 55.
explained that the physical
characteristics of synchronous
generating facilities allow them to
continue to inject electric current during
transmission system disturbances, as
required by the pro forma LGIA and pro
forma SGIA.31 However, nonsynchronous generating facilities did
not face a comparable requirement and
many cease injecting current during
system disturbances through
‘‘momentary cessation,’’ which creates
reliability issues on the transmission
system. The Commission stated that,
without requirements for nonsynchronous generating facilities to
remain connected to and synchronized
with the transmission system during
system disturbances, interconnection
studies may not accurately model
expected behavior and identify the
appropriate interconnection facilities
and network upgrades to accommodate
the interconnection request, skewing the
assignment of interconnection costs. As
a result, the Commission found that the
lack of comparable requirements for
non-synchronous generating facilities to
remain ‘‘connected to and synchronized
with the [t]ransmission [s]ystem’’ in the
pro forma LGIA and pro forma SGIA
results in rates that are unjust,
unreasonable, and unduly
discriminatory or preferential.
26. The Commission further found
that the reforms adopted in Order No.
2023 will improve the efficiency of
study processes, reduce interconnection
queue backlogs, and thereby ensure just,
reasonable, and not unduly
discriminatory or preferential rates.32
The Commission explained that the
majority of the individual reforms that
the Commission adopted have already
been implemented in one or more
regions in order to improve the
interconnection process, demonstrating
incremental improvements. The
Commission compiled a package of such
reforms that, in their entirety, have not
yet been adopted by any region, and
will ensure that interconnection
customers are able to interconnect to the
transmission system in a reliable,
efficient, transparent, and timely
manner.
2. Requests for Rehearing and
Clarification
27. Dominion seeks rehearing,
asserting that the Commission exceeded
its FPA section 206 authority by
declaring all existing interconnection
tariffs, including recently accepted
reforms by PJM and Dominion Energy
South Carolina (DESC), as unjust,
28 Id.
29 Id.
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unreasonable, and unduly
discriminatory or preferential without
substantial evidence.33 Dominion
asserts that the Commission did not
establish a sufficient legal foundation to
generically find that all tariffs are unjust
and unreasonable.34 Similarly,
Indicated PJM TOs argue that the
Commission arbitrarily and capriciously
relied on inapposite and stale evidence
to impose a generic replacement rate on
early adopters of the cluster study
approach.35 PJM also argues that the
generic findings underlying Order No.
2023 cannot apply to its Interconnection
Process Reform Task Force (IPRTF)
Tariff, which was filed and approved
during the time period between
issuance of the NOPR and Order No.
2023.36 Therefore, PJM contends, the
data underlying Order No. 2023 is stale
as to PJM and its use does not constitute
reasoned decision-making based on
substantial evidence.
28. Dominion acknowledges that the
Commission is able to rely on generic
rulemakings to support an industry
wide solution, but that Order No. 2023
goes beyond the limits of this
authority.37 Dominion argues that Order
No. 2023’s mandate is unlike the generic
rulemaking upheld by the D.C. Circuit
in Transmission Access Policy Study
Group v. FERC because the rule at issue
in that case, Order No. 888, represented
a paradigm shift for which a generic
rulemaking is appropriate.38 Dominion
asserts that the other generic
rulemakings upheld by the courts
similarly involve more wholesale reform
than Order No. 2023, such as the
expansion and creation of new Order
No. 1000 planning obligations upheld in
S.C. Pub. Serv. Auth., or the Order No.
637 requirement for gas pipelines to
permit segmentation where
33 Dominion
Rehearing Request at 2.
at 14 (citing S.C. Pub. Serv. Auth. v. FERC,
762 F.3d 71, 65 (D.C. Cir. 2014) (S.C. Pub. Serv.
Auth.) (‘‘To regulate a practice affecting rates
pursuant to Section 206, the Commission must find
that the existing practice is ‘unjust, unreasonable,
unduly discriminatory or preferential,’ and that the
remedial practice it imposes is ‘just and reasonable.’
These findings must be supported by ‘substantial
evidence[.]’’’); Emera Me. v. FERC, 854 F.3d 9, 25
(D.C. Cir. 2017) (Emera Me.) (‘‘[A] finding that an
existing rate is unjust and unreasonable is the
‘condition precedent’ to FERC’s exercise of its
section 206 authority to change that rate. Section
206, therefore, imposes a ‘dual burden’ on FERC.
Without a showing that the existing rate is
unlawful, FERC has no authority to impose a new
rate.’’)).
35 Indicated PJM TOs Rehearing Request at 7, 17.
36 PJM Rehearing Request at 25–26.
37 Dominion Rehearing Request at 12.
38 Id. (citing Transmission Access Pol’y Study
Grp. v. FERC, 225 F.3d 667 (D.C. Cir. 2000) (TAPS),
aff’d sub nom. N. Y. v. FERC, 535 U.S. 1 (2002));
see also Indicated PJM TOs Rehearing Request at
14.
34 Id.
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operationally feasible, upheld in
Interstate Natural Gas Association of
America v. FERC.39 Dominion contends
that the Commission’s generic findings
in Order No. 2023 are disproportionate
to the evidence the Commission relies
on. Similarly, Indicated PJM TOs assert
that the Commission’s generic finding is
overbroad because many RTOs/ISOs
have already adopted the core reforms
in Order No. 2023.40
29. Dominion further argues that,
while the courts have held that the
Commission can address case-by-case
discrepancies between the generic
determination and specific tariffs during
compliance filings, this cannot be
considered an unlimited way for the
Commission to avoid its obligation
under the Administrative Procedure Act
(APA) to rely on substantial evidence
when making FPA section 206
decisions.41 Dominion asserts that,
because the Commission recently
accepted revisions to PJM’s and DESC’s
tariffs to address the same issue that
Order No. 2023 attempts to address, the
Commission must consider those tariffs
individually and may not sweep them
up in a generic determination based on
evidence of queue backlogs made under
previous tariffs and regions.
30. Dominion argues that Order No.
2023 was arbitrary and capricious
because it relied on out-of-date data and
ignored contrary data.42 Dominion
asserts that, although the Commission is
not required to rely on ‘‘empirical
evidence,’’ the Commission must
support its findings with substantial,
up-to-date, evidence and cannot ignore
new circumstances.43 Dominion asserts
that Order No. 2023 does not reflect
reasoned decision-making as it relates to
PJM and DESC because it relies on
queue delays and backlogs that predate
PJM’s and DESC’s revised
interconnection reforms and it does not
consider those currently effective
interconnection reforms. Indicated PJM
TOs point out that the Order No. 845
data the Commission relied on is stale
because it concerns PJM’s previous
serial study process, and the
Commission’s reliance on that data is
39 Dominion Rehearing Request at 12–13 (citing
S.C. Pub. Serv. Auth., 762 F.3d at 67; Interstate Nat.
Gas Ass’n of Am. v. FERC, 285 F.3d 18 (D.C. Cir.
2002) (INGAA)).
40 Indicated PJM TOs Rehearing Request at 7, 17–
18 (citing PJM Interconnection, L.L.C., 181 FERC
¶ 61,162 (2022)).
41 Dominion Rehearing Request at 14 (citing
INGAA, 285 F.3d at 37).
42 Id. at 2.
43 Id. at 10 (citing S.C. Pub. Serv. Auth., 762 F.3d
at 64–65).
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inconsistent with its decision to omit
SPP’s data from its consideration.44
31. Dominion argues that the
Commission ignored evidence that PJM
and DESC had recently adopted
interconnection reforms to address the
same problem addressed by Order No.
2023.45 Indicated PJM TOs state that the
Commission points repeatedly to
problems associated with a serial study
approach, which are irrelevant to
regions that already implemented
cluster studies.46 Dominion and
Indicated PJM TOs argue that the
Commission should have considered
whether PJM’s, DESC’s, and other
similarly situated transmission
providers’ reforms are working or even
had a chance to be fully implemented.47
Dominion argues that the Commission
cited no evidence to demonstrate that
PJM’s tariff is unjust and unreasonable,
and that it would be difficult to do so
because PJM’s transitional process
began on July 10, 2023, so there is no
data available to determine whether it is
successful.48 Similarly, Dominion notes
that DESC’s transition process began on
June 13, 2022, was based on 12 months
of stakeholder engagement, and
includes many components of Order No.
2023. Dominion contends that reasoned
decision-making should at least require
the Commission to consider all relevant
information, including information
about the efficacy of reforms in existing
tariffs that are attempting to address the
same problem the Commission is
relying upon to make its FPA section
206 determination.49
32. Dominion also states that Order
No. 2023 directly acknowledges that
44 Indicated PJM TOs Rehearing Request at 18
n.45. Indicated PJM TOs specifically point to Order
No. 2023’s citation to Order No. 845 data showing
the number of delayed studies as of the end of 2022,
‘‘with the vast majority of these studies (2,211)’’
coming from PJM, as stale data the Commission
used to support the new obligations Order No. 2023
will impose. Id. at 17.
45 Dominion Rehearing Request at 12.
46 Indicated PJM TOs Rehearing Request at 18.
47 Id.; Dominion Rehearing Request at 13.
48 Dominion Rehearing Request at 8–9.
49 Id. at 13 (citing Greater Bos. Television Corp.
v. Fed. Communications Comm’n, 444 F.2d 841,
851 (D.C. Cir. 1970) (an agency must give ‘‘reasoned
consideration to all the material facts and issues’’
and ‘‘engage[] in reasoned decision making’’);
Tarpon Transmission Co. v. FERC, 860 F.2d 439,
442 (D.C. Cir. 1988) (‘‘We cannot accept an agency
determination unless it is the result of reasoned and
principled decisionmaking that can be ascertained
from the record.’’); ANR Pipeline Co., 71 F.3d 897,
901 (D.C. Cir. 1995) (‘‘[W]here an agency departs
from established precedent without a reasoned
explanation, its decision will be vacated as arbitrary
and capricious.’’); Tenneco Gas v. FERC, 969 F.2d
1187, 1214 (D.C. Cir. 1992) (‘‘Subsumed in the
substantial evidence requirement is the expectation
that agencies will treat fully each of the pertinent
factors and issues before them.’’ (internal citations
omitted))).
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CAISO and some non-RTO/ISO
transmission providers had no delayed
studies at the end of 2022.50 Dominion
argues that, instead of supporting the
Commission’s finding that all
interconnection processes are unjust
and unreasonable, Order No. 2023
acknowledges that the problem is not as
widespread as suggested and that
intervening reforms similar to what
Order No. 2023 requires may already be
addressing the problem used to justify
the FPA section 206 finding.
33. Dominion states that, where an
industry-wide solution is imposed for a
problem that only exists in isolated
pockets, ‘‘the disproportion of remedy
to ailment would, at least at some point,
become arbitrary and capricious.’’ 51
Dominion states that the Order No. 2023
compliance obligation essentially
requires all existing processes to reprove the justness and reasonableness of
their processes, creating a remedy that
is ‘‘disproportionate’’ to the identified
problem.52
34. Dominion asks the Commission to
confirm that, if compliance filings are
required of early adopters like PJM and
DESC, the Commission has the burden
under FPA section 206 to find that
existing processes recently adopted are
unjust and unreasonable.53 Dominion
asserts that the Commission must hew
to the constraints created by FPA
section 206 and cannot shift the burden
to individual early adopters to defend
their current rates.
3. Determination
35. We sustain our finding in Order
No. 2023 54 that the existing pro forma
generator interconnection procedures
and agreements are unjust,
unreasonable, and unduly
discriminatory or preferential.55 We also
continue to find that Order No. 2023’s
revisions to the pro forma open access
transmission tariff and the
Commission’s regulations are necessary
to ensure rates that are just, reasonable,
and not unduly discriminatory or
preferential.
36. We note that Dominion’s
rehearing request misstates the
Commission’s generic finding as
‘‘declaring all existing interconnection
tariffs, including recently accepted
reforms by PJM and DESC, as unjust,
unreasonable, and unduly
50 Id. at 15–16 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 40).
51 Id. at 13 (citing Assoc. Gas Distribs. v. FERC,
824 F.2d 981, 1019 (D.C. Cir. 1987) (Assoc. Gas)).
52 Id. at 7–8 (citing Order No. 2023, 184 FERC
¶ 61,054 at PP 1762–1764).
53 Id. at 16 (citing INGAA, 285 F.3d at 37–39).
54 Order No. 2023, 184 FERC ¶ 61,054 at P 37.
55 16 U.S.C. 824e(a); 18 CFR 385.206.
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discriminatory or preferential.’’ 56 The
findings in Order No. 2023 relate to the
Commission’s existing pro forma
generator interconnection procedures
and agreements, which, among other
things, relied on a serial first-come, firstserved study process.57 The
Commission did not make any findings
regarding specific transmission
provider’s tariffs, and it was not
required to do so under FPA section
206.58 Issues regarding the individual
tariffs of specific transmission providers
that currently deviate from the existing
pro forma generator interconnection
procedures and agreements will be
addressed on an individual basis on
compliance.59
37. We disagree with Dominion’s
argument that Order No. 2023 goes
beyond the limits of our authority to
rely on a generic rulemaking to support
an industry-wide solution. As noted
above, Order No. 2023 adopts reforms to
the existing pro forma interconnection
procedures and agreements, which
themselves were adopted as an
industry-wide reform to identified,
industry-wide problems.60 All three of
the cases Dominion relies on support
the Commission’s authority to issue
Order No. 2023.
38. When the D.C. Circuit upheld
Order No. 888 in TAPS, the court
specifically explained that the
Commission can rely on general
findings of systemic conditions to
impose an industry-wide remedy under
FPA section 206.61 The court agreed
with the Commission that specific
evidence regarding individual utilities’
behavior is not required under FPA
section 206. Similarly, when upholding
Order No. 637 in INGAA, the D.C.
Circuit stated that ‘‘our cases have long
held that the Commission may rely on
‘generic’ or ‘general’ findings of a
systemic problem to support imposition
56 Dominion
Rehearing Request at 2.
No. 2023, 184 FERC ¶ 61,054 at P 37.
58 See, e.g., TAPS, 225 F.3d at 687–88 (upholding
Commission action under FPA section 206
premised on general systemic conditions rather
than evidence regarding individual utilities); S.C.
Pub. Serv. Auth., 762 F.3d at 67 (‘‘[T]he
Commission may rely on ‘generic’ or ‘general’
findings of a systemic problem to support
imposition of an industry-wide solution.’’) (citing
INGAA, 285 F.3d at 37); Assoc. Gas, 824 F.2d at
1008 (‘‘The Commission is not required to make
individual findings, however, if it exercises its
Natural Gas Act § 5 authority by means of a generic
rule.’’).
59 Order No. 2023, 184 FERC ¶ 61,054 at P 1765.
60 See id. PP 8–12 (explaining the need for and
adopting pro forma interconnection agreements and
procedures); see also NARUC v. FERC, 475 F.3d at
1279 (explaining, at the outset, the structural
connection between the nationwide reforms in
Order No. 888 and those in Order No. 2003).
61 TAPS, 225 F.3d at 687–88.
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of an industry-wide solution.’’ 62 The
D.C. Circuit explicitly rejected an
argument that the Commission
impermissibly shifted the burden of
proof merely by requiring pro forma
filings.63 Several years later, when
upholding Order No. 1000 in S.C. Pub.
Serv. Auth., the D.C. Circuit once again
affirmed the Commission’s ability to
promulgate nationwide rules, in lieu of
case-by-case adjudication, to solve a
nationwide problem.64 The court
explained that, even though some
regions had already satisfied some
requirements of the rule, the
deficiencies identified by the
Commission did not only exist in
‘‘isolated pockets,’’ and ‘‘[a]bsent such
an extreme ‘disproportion of remedy to
ailment,’ the Commission could
reasonably proceed to address a
systemic problem with an industry-wide
solution.’’ 65 Nothing in this precedent
indicates that the Commission’s
authority to promulgate generic
rulemakings under FPA section 206
depends upon the rule representing a
paradigm shift. Rather, the precedent is
clear that, where the Commission finds
a systemic, nationwide problem that
renders the rates, terms, and conditions
for Commission-jurisdictional services
unjust, unreasonable, unduly
discriminatory, or preferential, the
Commission has authority to implement
a nationwide solution.66
39. Here, substantial evidence
indicates that interconnection queue
delays and backlogs are a nationwide
problem, not a problem that only exists
in isolated pockets. As explained in
Order No. 2023, interconnection queue
backlogs are increasing across all
regions of the country, and ‘‘every single
region has faced an increase in both
interconnection queue size and the
length of time interconnection
customers are spending in the
interconnection queue prior to
commercial operation in recent years.
This is true for RTO/ISO and non-RTO/
ISO regions alike.’’ 67 ‘‘[T]he uncertainty
and delays in the interconnection
queues have resulted in fewer than 25%
of interconnection requests, by capacity,
reaching commercial operation between
2000 and 2017 in any region of the
country—with some regions as low as
8%.’’ 68 Appendix B to Order No. 2023
shows that most transmission providers
62 INGAA,
285 F.3d at 37.
at 38.
64 S.C. Pub. Serv. Auth., 762 F.3d at 67.
65 Id.
66 S.C. Pub. Serv. Auth., 762 F.3d at 67; TAPS,
225 F.3d at 687–88; INGAA, 285 F.3d at 37.
67 Order No. 2023, 184 FERC ¶ 61,054 at P 38
(citing Queued Up 2023 at 7–9, 32).
68 Id. (citing Queued Up 2023 at 3, 21).
63 Id.
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in the country were late in completing
interconnection studies in 2022.69 We
acknowledge that the data collected in
compliance with Order No. 845
regarding PJM’s queue reflected PJM’s
previous study process, which was
recently reformed. However, excluding
PJM’s data would not change our overall
conclusion that interconnection queue
backlogs and late interconnection
studies are a significant problem in most
regions of the country. To the contrary,
we continue to find that ‘‘the challenges
being faced across the country will be
further compounded in the future,’’ 70
and that the multiple factors
contributing to interconnection queue
backlogs, longer development timelines,
and increased uncertainty regarding the
cost and timing of interconnecting to the
transmission system, including
increasing volume of interconnection
requests, increased complexity in
interconnection studies, and insufficient
transmission capacity, are industrywide challenges likely to persist and
potentially worsen in the future.71
40. Moreover, due to the early stages
of PJM’s reforms, the instant record does
not contain any information regarding
the effects of such reforms, including
whether PJM is meeting all study
deadlines on time, the overall length of
time to reach interconnection, or the
portion of interconnection customers
reaching commercial operation. Nor
does the record support that any region,
including PJM, is unaffected by the
underlying factors that are persistent
and increasing drivers of widespread
interconnection queue delays and
backlogs. Therefore, we continue to find
that the systemic problems identified in
Order No. 2023 warrant a nationwide
solution.
41. In response to Dominion’s
contention that the Commission ignored
evidence regarding recent queue reform
efforts, we note that Order No. 2023
specifically referenced these ongoing
queue reform efforts. The Commission
stated:
We recognize that many transmission
providers have adopted or are in the process
of adopting similar reforms to those adopted
in this final rule. We do not intend to disrupt
these ongoing transition processes or stifle
further innovation. On compliance,
transmission providers can propose
deviations from the requirements adopted in
this final rule—including deviations seeking
to minimize interference with ongoing
transition plans—and demonstrate how those
deviations satisfy the standards 72 discussed
69 Id.
at app. B.
P 58.
71 Id. P 41.
72 Specifically, where transmission providers
propose variations to the Order No. 2023 transition
70 Id.
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above, which the Commission will consider
on a case-by-case basis.73
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In fact, in the NOPR underlying Order
No. 2023, the Commission made clear
that it reviewed these recent queue
reform efforts, learned from them, and
considered them in formulating a
number of its proposals.74
42. However, as explained above, the
Commission was not required to make
FPA section 206 findings specific to
PJM or DESC’s queue reforms. The
details of a specific transmission
provider’s tariff, and whether its recent
queue reform complies with the new
requirements of Order No. 2023, are
appropriately handled on an individual
basis on compliance.
43. We disagree with Dominion’s
argument that Order No. 2023’s
acknowledgement that some
transmission providers had no delayed
studies in 2022 indicates that the
problem is not as widespread as
suggested. The fact that a few
transmission providers complete studies
on time does not mean that the problem
exists only in isolated pockets. As the
D.C. Circuit explained in S.C. Pub. Serv.
Auth., the fact that a problem may not
exist in every single region of the
country ‘‘is as unastonishing as it is
irrelevant, because petitioners have not
shown that the deficiencies identified
by the Commission exist[] only in
isolated pockets.’’ 75
44. Moreover, substantial evidence
indicates that these nationwide
interconnection queue delays and
backlogs result in rates, terms, and
conditions in the wholesale electric
markets that are unjust, unreasonable,
and unduly discriminatory or
preferential.76 Interconnection queue
delays and backlogs result in longer
development timelines, uncertainty
regarding the cost and timing of
interconnecting to the transmission
system, and ultimately higher rates, as
‘‘wholesale customers hav[e] limited
access to new and more competitive
supplies of generation.’’ 77
process, the Commission will evaluate such
proposals under the consistent with or superior to
standard for non-RTO transmission providers and
the independent entity variation standard for RTOs/
ISOs.
73 Order No. 2023, 184 FERC ¶ 61,054 at P 1765.
74 Improvements to Generator Interconnection
Procs. & Agreements, 87 FR 39934 (July 5, 2022),
179 FERC ¶ 61,194, at PP 86–87, 112, 127, 132, 152–
54 (2022) (NOPR).
75 See S.C. Pub. Serv. Auth., 762 F.3d at 67 (citing
Wis. Gas. Co. v. FERC, 770 F.2d 1144, 1157 (D.C.
Cir. 1985) (Wis. Gas.); Assoc. Gas, 824 F.2d at 1019).
76 Order No. 2023, 184 FERC ¶ 61,054 at PP 37,
44.
77 Id. PP 37, 43 (citing May Joint Task Force Tr.
74:9–21 (Andrew French) (stating that generator
developers complain about cost certainty); May
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45. Further, we believe that the
remedies adopted in Order No. 2023 are
proportional to the issues identified. As
explained in detail in Order No. 2023,
each of the reforms the Commission
adopted are directly related to the need
to reform the pro forma generator
interconnection procedures and
agreements to ensure that
interconnection customers are able to
interconnect to the transmission system
in a reliable, efficient, transparent, and
timely manner, and will prevent undue
discrimination.78
46. Further, we also believe that a
generic, nationwide rulemaking is
justified by the need for consistent
interconnection policies that apply to
all public utility transmission
providers.79 We continue to find that it
is necessary to apply the reforms in
Order No. 2023 on a nationwide basis to
ensure that interconnection customers
are able to interconnect to the
transmission system in a reliable,
efficient, transparent, and timely
manner, and to prevent undue
discrimination. We further note that
some of the critical reforms of Order No.
2023 could only have been achieved
through a nationwide rulemaking; for
instance, standardization of the affected
systems study process requires rules
that apply to all jurisdictional
transmission providers.
47. For the reasons stated above, we
disagree with Dominion’s argument that
the Commission bears the burden on
compliance to find that recently
adopted existing processes that deviate
from the pro forma generator
interconnection procedures and
agreements are unjust and
unreasonable.80 We reiterate that the
findings in Order No. 2023 relate to the
Commission’s existing pro forma
generator interconnection procedures
and agreements.81 We note that, on
compliance, the Commission will apply
the consistent with or superior to
Joint Task Force Tr. 23:18–25 (Jason Stanek)
(expressing frustration with the status quo and
agreement that it is ‘‘no longer tenable’’ considering
the inability of generators to interconnect in a
timely manner); Ameren Initial Comments at 2;
ELCON Initial Comments at 2; ELCON Initial
Comments at 2; Xcel Initial Comments at 8).
78 Id. PP 45–56.
79 See Order No. 2003, 104 FERC ¶ 61,103 at P 11
(‘‘[T]here is a pressing need for a single set of
[interconnection] procedures . . . [which] will
minimize opportunities for undue discrimination
and expedite the development of new generation,
while protecting reliability and ensuring that rates
are just and reasonable.’’).
80 Elsewhere in this order, the Commission
clarifies that transmission providers need only refile and seek approval for previously approved
variations where those provisions are modified by
Order No. 2023. See infra P 77.
81 Order No. 2023, 184 FERC ¶ 61,054 at P 37.
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standard for non-RTO transmission
providers and the independent entity
variation standard for RTOs/ISOs when
analyzing deviations from the
Commission’s pro forma LGIP, pro
forma LGIA, pro forma SGIP and/or pro
forma SGIA.82
48. In response to Indicated PJM TOs’
contention that the Commission failed
to grapple with the fact that many
RTOs/ISOs already adopted the
Commission’s core substantive reforms
before Order No. 2023 was issued, we
acknowledge that many transmission
providers have adopted many of the
reforms in Order No. 2023. As explained
above, that is not an accident. The
Commission carefully examined recent
queue reform proposals to identify best
practices to implement nationwide.
However, no transmission provider has
yet adopted all of the reforms in Order
No. 2023. For example, no transmission
provider has eliminated the reasonable
efforts standard for completing
interconnection studies on time. We
continue to believe that this broad suite
of reforms, as a whole, is necessary to
ensure that interconnection customers
are able to interconnect to the
transmission system in a reliable,
efficient, transparent, and timely
manner, thereby ensuring that rates,
terms, and conditions for Commissionjurisdictional services are just,
reasonable, and not unduly
discriminatory or preferential.83
49. Regarding Indicated PJM TOs’
argument that the Commission should
have waited for recent queue reforms to
be fully implemented before
determining whether additional reforms
are required, we disagree. Transmission
providers across the country have been
working on regional queue reform for
well over a decade.84 These proposals
are filed at varying intervals, and at any
given time, multiple transmission
providers may be in the process of
proposing or implementing new queue
processes. By the time one or two
particular transmission providers
implement one set of queue reforms, it
is likely that other transmission
providers would be in the process of
proposing or implementing their next
queue reform. The Commission would
82 See Xcel Energy Servs. Inc. v. FERC, 41 F.4th
548, 557 (D.C. Cir. 2022) (‘‘The Commission has
used its discretion and expertise to craft the
‘‘consistent with or superior to’’ test for deviations
from its pro forma rules.’’) (citing Order No. 2003,
104 FERC ¶ 61,103 at P 826); see also Sacramento
Mun. Util. Dist. v. FERC, 428 F.3d 294, 296 (D.C.
Cir. 2005) (explaining that utilities can deviate from
the terms of the pro forma tariff if such deviations
are consistent with or superior to the terms of the
pro forma tariff).
83 Order No. 2023, 184 FERC ¶ 61,054 at P 59.
84 Id. P 16, n.39.
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be waiting a very long time indeed if it
could not issue a generic rulemaking
while any individual transmission
provider pursues its own regional queue
reform.85
50. Furthermore, we note that the
Commission has historically taken a
gradual approach to addressing
problems with respect to
interconnection queue backlogs. In
Order No. 845, for instance, the
Commission implemented a number of
specific reforms, but held off on other
reforms in favor of collecting further
information from transmission
providers.86 In doing so, the
Commission noted that ‘‘[t]his
information could also be useful to the
Commission in determining if
additional action is required to address
interconnection study delays.’’ 87 In
Order No. 2023, the Commission
determined that additional action was
required to address interconnection
study delays.88 The reforms in Order
No. 845 have not eliminated the
problems of interconnection queue
backlogs and delayed interconnection
studies; rather, these problems have
only grown, notwithstanding the
Commission’s previous reforms. We
maintain that the reforms in Order No.
2023 are necessary to ensure that
interconnection customers are able to
interconnect to the transmission system
in a reliable, efficient, transparent, and
timely manner, thereby ensuring that
rates, terms, and conditions for
Commission-jurisdictional services are
just, reasonable, and not unduly
discriminatory or preferential.
B. Arguments Regarding Conflicts With
Ongoing Queue Reform Efforts and
Evaluation of Variations on Compliance
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1. Order No. 2023 Requirements
51. The Commission addressed
commenters’ concerns regarding Order
No. 2023’s impact on early adopters of
similar queue reforms or those queues
currently in transition to a cluster study
process. The Commission recognized
85 Transmission Plan. & Cost Allocation by
Transmission Owning & Operating Pub. Utils.,
Order No. 1000, 76 FR 49842 (Aug. 11, 2011), 136
FERC ¶ 61,051, at P 50 (2011) (finding that the need
to generically establish rules addressing
transmission planning, as well as the long lead
times and complex problems associated with
developing transmission facilities, made
Commission action appropriate and prudent rather
than allowing the noted transmission planning
problems to persist).
86 Reform of Generator Interconnection Procs. &
Agreements, Order No. 845, 83 FR 21342 (May 9,
2018), 163 FERC ¶ 61,043, at P 24 (2018), order on
reh’g, Order No. 845–A, 84 FR 8156 (Mar. 6, 2019),
166 FERC ¶ 61,137 (2019), order on reh’g, Order No.
845–B, 168 FERC ¶ 61,092 (2019).
87 Order No. 845, 163 FERC ¶ 61,043 at P 309.
88 Order No. 2023, 184 FERC ¶ 61,054 at P 3.
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that many of the individual reforms that
the Commission adopted in Order No.
2023 are incremental improvements that
one or more regions had already
implemented.89 The Commission
explained that Order No. 2023 uses
some of these individual and
incremental improvements as a basis for
a broad suite of reforms that, in their
entirety, have not yet been adopted by
any region.
52. Additionally, the Commission
rejected requests to presume that any
transmission provider’s tariff meets the
requirements of Order No. 2023.90 The
Commission recognized that many
transmission providers have adopted or
are in the process of adopting similar
reforms to those adopted in Order No.
2023 and clarified that the Commission
did not intend to disrupt these ongoing
transition processes or stifle further
innovation.91 The Commission
emphasized that the provisions of Order
No. 2023 are not intended to interfere
with the timely completion of those inprogress cluster studies and transition
processes.92 The Commission explained
that, on compliance, transmission
providers can propose deviations from
the requirements adopted in Order No.
2023, including deviations seeking to
minimize interference with ongoing
transition plans,93 provided that the
reason for the variation is sufficiently
justified, and may continue to propose
solutions to interconnection issues
under FPA section 205.94
53. Therefore, consistent with Order
Nos. 888, 890, 2003, 2006, and 845, the
Commission adopted the NOPR
proposal to continue to apply the
consistent with or superior to standard
when considering proposals from nonRTO/ISO transmission providers to
deviate from the requirements of Order
No. 2023.95 Consistent with Order Nos.
89 Id.
P 59.
P 1765.
91 Id. PP 861, 1765.
92 Id. P 861.
93 Id. P 1765 (clarifying that transmission
providers that have already adopted a cluster study
process or are currently undergoing a transition to
a cluster study process will not be required to
implement a new transition process).
94 Id. P 1767.
95 Id. P 1764 (citing Promoting Wholesale
Competition Through Open Access NonDiscriminatory Transmission Servs. By Pub. Utils,;
Recovery of Stranded Costs by Pub. Utils. &
Transmitting Utils., Order No. 888, FERC Stats. &
Regs. ¶ 31,036, at 31,769–770 (cross-referenced at
75 FERC ¶ 61,080); Preventing Undue
Discrimination & Preference in Transmission Serv.,
Order No. 890, 72 FR 12226 (Mar. 15, 2007), 118
FERC ¶ 61,119 at P 109 (2007) (‘‘[W]e reiterate that
any departures from the pro forma [open access
transmission tariff] proposed by an ISO or an RTO
must be ‘consistent with or superior to’ the pro
forma [open access transmission tariff] in this Final
Rule.’’); Order No. 2003, 104 FERC ¶ 61,103 at P
90 Id.
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2003, 2006, and 845, the Commission
adopted the NOPR proposal to continue
to use the ‘‘independent entity
variation’’ standard when considering
such proposals from RTOs/ISOs.96
Consistent with Order Nos. 888, 890,
2003, 2006, and 845, the Commission
adopted the NOPR proposal to continue
to allow non-RTO/ISO transmission
providers to use the regional differences
rationale to seek variations made in
response to established (i.e., approved
by the Applicable Reliability Council)
reliability requirements.97 The
Commission explained that Order No.
2023 makes no changes to the standards
used to judge requested variations, as
described in Order Nos. 888, 890, 2003,
2006, and 845.
2. Requests for Rehearing and
Clarification
54. Several entities request
clarification regarding the scope of the
application of Order No. 2023 to
transmission providers that have
already transitioned to, or that are in the
process of transitioning to, a cluster
study process.98
55. Clean Energy Associations and IPP
Coalition ask the Commission to clarify
that all existing cluster study processes
must comport with the requirements of
Order No. 2023, whether the
transmission provider currently
operates a cluster study process or is
currently undergoing a transition to a
825; Order No. 2006, 111 FERC ¶ 61,220 at PP 546–
547; Order No. 845, 163 FERC ¶ 61,043 at P 43
(explaining that a transmission provider that is not
an RTO/ISO that seeks a variation from the
requirements of the final rule must present its
justification for the variation as consistent with or
superior to the pro forma LGIA or pro forma LGIP)).
96 Id. (citing Order No. 2003, 104 FERC ¶ 61,103
at P 826 (‘‘[w]ith respect to an RTO or ISO . . . we
will allow it to seek ‘independent entity variations’
from the Final Rule . . . This is a balanced
approach that recognizes that an RTO or ISO has
different operating characteristics depending on its
size and location and is less likely to act in an
unduly discriminatory manner than a Transmission
Provider that is a market participant.’’); Order No.
2006, 111 FERC ¶ 61,220 at PP 447, 549; Order No.
845, 163 FERC ¶ 61,043 at P 556).
97 Id. (citing Order No. 888, FERC Stats. & Regs.
¶ 31,036, at 31,770; Order No. 890, 118 FERC
¶ 61,119 at P 109; Order No. 2003, 104 FERC
¶ 61,103 at P 826 (‘‘if on compliance a non-RTO or
ISO Transmission Provider offers a variation from
the Final Rule LGIP and Final Rule LGIA, and the
variation is in response to established (i.e.,
approved by the Applicable Reliability Council)
reliability requirements, then it may seek to justify
its variation using the regional difference
rationale.’’); Order No. 2006, 111 FERC ¶ 61,220 at
PP 546–547; Order No. 845, 163 FERC ¶ 61,043 at
P 43).
98 Clean Energy Associations Rehearing Request
at 51–52; Dominion Rehearing Request at 17–18;
IPP Coalition Rehearing Request at 10–13;
PacifiCorp Rehearing Request at 15–20; PJM
Rehearing Request at 1–3; Revised Early Adopters
Coalition Rehearing Request at 2–7; WIRES
Rehearing Request at 12.
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cluster study process.99 Clean Energy
Associations and IPP Coalition argue
that interconnection customers that are
currently in a cluster study process
should be required to satisfy the
requirements of Order No. 2023,
including site control requirements,
within an identified time horizon (e.g.,
60–90 days of the compliance filing) or
withdraw from the interconnection
queue without penalty.100 Clean Energy
Associations and IPP Coalition argue
that, if some transmission providers are
not required to transition to a process
that is compliant with Order No. 2023,
projects currently in the queue that are
not ready to proceed will not face the
increased readiness requirements and
delay reforms to new queue requests,
undermining the central purpose of
Order No. 2023.101
56. Clean Energy Associations and IPP
Coalition argue that, absent clarification,
the Commission risks leaving in place a
potentially problematic oversight.102
Specifically, Clean Energy Associations
and IPP Coalition assert that the notion
that transmission providers that have
adopted or are currently transitioning to
a cluster study process will not be
required to implement a new transition
process runs counter to the requirement
that transmission providers may seek
approval, on a case-by-case basis, to
maintain variations from the pro forma
LGIP and pro forma LGIA.103 According
to Clean Energy Associations and IPP
Coalition, the fact that a transmission
provider has an existing cluster study
does not exempt that provider from its
compliance obligation or the need to
update its process to reflect the material
elements of Order No. 2023.
57. NV Energy requests that the
Commission clarify whether the new
tariff changes are applicable to all
interconnection customers, including
those that currently participate in a
cluster study process or have executed
LGIAs.104 Specifically, NV Energy
requests that the Commission clarify if
interconnection customers will be
required to update their respective
99 Clean Energy Associations Rehearing Request
at 51; IPP Coalition Rehearing Request at 10–11.
100 Clean Energy Associations Rehearing Request
at 51; IPP Coalition Rehearing Request at 11–12.
101 Clean Energy Associations Rehearing Request
at 53; IPP Coalition Rehearing Request at 13.
102 Clean Energy Associations Rehearing Request
at 51; IPP Coalition Rehearing Request at 11.
103 Clean Energy Associations Rehearing Request
at 51–52; IPP Coalition Rehearing Request at 11
(both citing Order No. 2023, 184 FERC ¶ 61,054 at
P 1530).
104 NV Energy Rehearing Request at 2 (citing
Order 2023, 184 FERC ¶ 61,054 at P 861). NV
Energy states that Order No. 2023 did not mention
grandfathering any of the existing interconnection
agreements. Id.
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study deposits, provide commercial
readiness deposits correlating to the
amounts required at the various stages
of the process, and update their site
control documentation in order to
remain in the queue.105 NV Energy
requests a one-time ability for existing
interconnection customers of
transmission providers who currently
conduct cluster studies to withdraw
penalty-free from the queue if they are
unable to provide the updated study
deposits, site control, commercial
readiness deposits, etc.
58. NV Energy additionally requests
clarification on whether a queued
interconnection customer, whether in a
current cluster study, with an executed
facilities study agreement, or with an
executed LGIA, must provide the
heightened proof of site control by the
effective date of the new tariff
changes.106 NV Energy seeks clarity on
whether: (1) existing queued
interconnection customers are required
to provide 90% of site control if not
impacted by a regulatory limitation and
are currently within the cluster study
phase of the process; (2) existing queued
interconnection customers with
executed facilities studies agreements
are required to provide 100% of site
control if the site is not impacted by a
regulatory limitation; (3) existing
queued interconnection customers who
are impacted by a regulatory limitation
are required to update their deposit in
lieu of site control to the new deposit
amounts; and (4) existing queued
interconnection customers with
executed LGIAs who are impacted by a
regulatory limitation are required to
provide site control within 180 days of
executing their respective LGIAs.
59. EEI asks the Commission to clarify
that Order No. 2023 does not require
transmission providers to re-file and
seek approval for portions of their
existing LGIA and LGIP that have
previously been approved by the
Commission and are not directly
impacted by Order No. 2023.107 EEI
argues that it would be inappropriate for
the Commission to require transmission
providers to re-file and seek approval
for such portions of their existing LGIAs
and LGIPs because the Commission
provided no notice that it was going to
review or reconsider every change it has
previously approved for LGIAs and
LGIPs, and thus transmission providers
were not given an opportunity to defend
previously approved changes.108 EEI
argues that it would be a significant
105 Id.
at 3.
106 Id.
107 EEI
108 Id.
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administrative burden for transmission
providers to re-justify every change that
the Commission has already
approved.109
60. PJM asks the Commission to
provide a clearer signal as to how it will
take into account recently approved
reforms such as PJM’s IPRTF.110 PJM
states that its recent queue reform meets
the Commission’s intent in
promulgating Order No. 2023,
substantially satisfies its requirements,
and is superior for the PJM region.111
PJM explains that there are differences
between the implementation
mechanisms in its IPRTF Tariff and
Order No. 2023, but that these
mechanisms serve the same goals and
offer the same protections and
benefits.112
61. PJM states that it has begun its
transition period, and unless the
Commission provides more clarity as to
how it will review recently approved
queue reform processes in the Order No.
2023 compliance process, it will create
substantial uncertainty that will distract
from the effort to process the queue
backlog.113 PJM seeks clarification that
it will not be required to implement
Order No. 2023 in a manner that would
modify or undermine the procedures
recently accepted by the Commission,
and that the Commission will review
PJM’s request for an independent entity
variation holistically, by examining
whether the package as a whole is
consistent with or superior to the goals
and requirements of Order No. 2023
rather than forcing PJM to engage in an
item-by-item justification of every
variation from the minutiae of Order No.
2023’s requirements.114 PJM explains
that requiring it to overhaul its tariff or
justify each difference from the new pro
forma will risk that some elements will
be retained while other balancing
elements will be changed, upsetting the
balance that led to stakeholder
approval.115 PJM states that proceeding
element by element through compliance
will also provide intervenors an
opportunity to re-litigate issues on
which they did not prevail, which is
contrary to judicial principles and
would be a poor use of time.116 PJM also
explains that the elements of its tariff
are interdependent, such that a
109 EEI states that this would include changes that
were approved by the Commission in response to
other rulemakings, such as Order No. 845. Id. at 16–
17.
110 PJM Rehearing Request at 1–2.
111 Id. at 1, 19–20.
112 Id. at 19–23.
113 Id. at 2, 10.
114 Id. at 3, 15.
115 Id. at 15.
116 Id. at 16.
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piecemeal approach could undermine
the entire tariff.
62. If the Commission does not
provide the requested clarifications,
PJM seeks rehearing because the
Commission should have established a
presumption that ongoing, recently
approved interconnection queue reform
packages comply with Order No.
2023.117 PJM explains that Order No.
2023 is internally inconsistent because
it seeks to expedite the interconnection
queue, and recognizes the efforts of ongoing queue reform, but refuses to grant
a presumption, which will cause delay
and inefficiency.118 PJM argues that it
would be arbitrary and capricious and
inconsistent with reasoned decisionmaking to require modification of PJM’s
tariff based on a generic rulemaking.119
PJM also argues that failure to grant this
rehearing will undermine confidence in
the use of stakeholder processes.120
63. To the extent that the Commission
does not grant PJM’s request to provide
a clear signal on rehearing that it will
consider whether the entire package of
IPRTF reforms as a whole meets the
goals of Order No. 2023 rather than
forcing PJM to engage in an extensive
justification of every variation from
every detail in Order No. 2023, PJM
requests rehearing.121
64. Dominion argues that the
Commission should cure the
deficiencies in Order No. 2023’s
approach to compliance for early
adopters like DESC and PJM.122
Dominion suggests that the Commission
could simply not require entities that
have already transitioned or are in the
process of transitioning to a first-ready,
first-served cluster study construct to
file compliance filings. Dominion
alternatively argues that the
Commission could defer those entities’
obligations to modify their tariffs,
pending an appropriate period of time
to gather evidence about whether their
particular, Commission-approved
reforms need to be further modified.
Dominion asserts that this approach
would be within the Commission’s
statutory bounds, is administratively
efficient, and maintains the settled
expectations of the stakeholders that
worked diligently and collaboratively to
develop transmission provider-specific
reforms. Dominion asserts that the
Commission has on several occasions
directed entities to provide reports so
that it can monitor situations before
117 Id.
at 3, 25–26.
at 26.
119 Id. at 3–4.
120 Id. at 27.
121 Id. at 24.
122 Dominion Rehearing Request at 17.
118 Id.
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deciding it is necessary to take
action.123 Dominion argues that the
Commission could then require such
early adopters to provide an additional
report after a period of time determined
by the Commission, such as two full
cluster cycles following the transition,
that would update the Commission on
processing time under the proposed
rule.
65. Dominion argues that, if the
reports demonstrate that early adopters’
processes are not meeting the goals of
Order No. 2023, the Commission would
then have a sufficient record, through
the reports, to determine whether to
direct further changes to conform with
Order No. 2023.124 Dominion contends
that this compliance path for early
adopters is superior to Order No. 2023’s
proposal and would allow transmission
providers to demonstrate that the
desired aim of Order No. 2023—
facilitating quicker, more efficient
interconnection processes—is being
achieved.
66. Revised Early Adopter Coalition
and PacifiCorp state that, to the extent
a transmission provider does not seek or
is not granted a variance for its existing
interconnection reforms, such
transmission provider appears to be
required to immediately adopt the
reforms in Order No. 2023 without any
ability to start from a clean slate like
other transmission providers utilizing a
transition study process or to conclude
any ongoing studies.125 Revised Early
Adopters Coalition and PacifiCorp argue
that Order No. 2023 does not appear to
allow early adopters of interconnection
reforms an option to open the initial
cluster request window under Order No.
2023 after the conclusion of the study of
existing interconnection requests.126
Revised Early Adopters Coalition and
PacifiCorp assert that, because many
early adopters are currently in the
process of one or more cluster studies,
123 Id. at 17–18 (citing, for example, One-Time
Informational Reports on Extreme Weather
Vulnerability Assessments Climate Change,
Extreme Weather, & Elec. Sys. Reliability, Order No.
897, 88 FR 41477 (June 27, 2023), 183 FERC
¶ 61,192, at P 25 (2023) (requiring one-time
informational reports related to planning for the
impacts of extreme weather on system reliability);
Hybrid Res., 174 FERC ¶ 61,034, at P 1 (2021)
(requiring RTOs and ISOs to submit information
related to hybrid resources)).
124 Id. at 18.
125 Revised Early Adopters Coalition Rehearing
Request at 3; PacifiCorp Rehearing Request at 16.
126 Revised Early Adopters Coalition Rehearing
Request at 4; PacifiCorp Rehearing Request at 16.
Revised Early Adopters Coalition note that the
initial cluster request window under Order No.
2023 would open ‘‘after the conclusion of the
transition process set out in Section 5.1 of this
LGIP.’’ Revised Early Adopters Coalition Rehearing
Request at 3–4 (citing Order No. 2023, 184 FERC
¶ 61,054 at app. C, pro forma LGIP section 3.4.1).
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not allowing such early adopters to use
a transition cluster study process is both
unworkable for such transmission
providers and also contrary to Order No.
2023’s assurance that ‘‘the provisions of
this final rule are not intended to
interfere with the timely completion of
those in-progress cluster studies and
transition processes.’’ 127
67. Revised Early Adopters Coalition
and PacifiCorp state that Order No. 2023
also appears to require early adopters to
undertake an initial cluster request
window prior to completion of cluster
studies and/or restudies currently
underway.128 Revised Early Adopters
Coalition and PacifiCorp argue that this
would be an unexplained departure
from prior precedent and the
Commission’s own statements in Order
No. 2023.129 Revised Early Adopters
Coalition and PacifiCorp assert that this
will also interfere with the timely
completion of current cluster studies
because it will divert already strained
resources to preparing for and
implementing Order No. 2023’s new
provisions. Revised Early Adopters
Coalition and PacifiCorp further argue
that this will put early adopters in the
difficult, if not impossible, situation of
having to undertake new cluster studies
under Order No. 2023 that are reliant on
outcomes of existing, not-yet-completed,
cluster studies.
68. Revised Early Adopters Coalition
and PacifiCorp ask the Commission to
clarify that early adopters of similar
interconnection reforms, to the extent
they do not seek or are not granted
variances for their existing
interconnection reforms, may conclude
their pending/existing studies before
transition to the new Order No. 2023
process.130 Revised Early Adopters
Coalition and PacifiCorp alternatively
request that the Commission grant
rehearing to permit such study
flexibility for those transmission
providers who have already adopted
similar reforms to Order No. 2023.
PacifiCorp argues that, without this
flexibility, new cluster studies pursuant
to Order No. 2023 may not be reliable
as they will need to rely upon
127 Revised Early Adopters Coalition Rehearing
Request at 4, 7; PacifiCorp Rehearing Request at 16
(both citing Order No. 2023, 184 FERC ¶ 61,054 at
P 861).
128 Revised Early Adopters Coalition Rehearing
Request at 6; PacifiCorp Rehearing Request at 18.
129 Revised Early Adopters Coalition Rehearing
Request at 2, 6; PacifiCorp Rehearing Request at 18
(both citing, for example, Panhandle E. Pipe Line
Co. v. FERC, 196 F.3d 1273, 1275 (D.C. Cir. 1999)
(Panhandle) (‘‘if [FERC] wishes to depart from its
prior policies, it must explain the reasons for its
departure.’’)).
130 Revised Early Adopters Coalition Rehearing
Request at 2; PacifiCorp Rehearing Request at 15.
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assumptions, including ‘‘higher priority
requests’’ that were studied in prior
interconnection studies and assumed to
be in service.131 PacifiCorp emphasizes
that this flexibility is imperative, given
the size of its queue—326 active
interconnection requests, accounting for
over 59 gigawatts of requests.
69. Revised Early Adopters Coalition
and PacifiCorp further assert that Order
No. 2023 puts early adopters of
interconnection reforms in a uniquely
disadvantaged position of having to
simultaneously administer two types of
interconnection processes and, as a
result, potentially expose them to
greater likelihood of penalties than
other transmission providers.132 Revised
Early Adopters Coalition asserts that
exposing early adopters to such outsized
risks would be arbitrary and capricious
as well as discriminatory.133
70. Revised Early Adopters Coalition
and PacifiCorp explain that, if permitted
the flexibility above, any transmission
provider that currently has one or more
ongoing cluster studies pursuant to its
Commission-accepted cluster study
processes, and who has not sought and
received a variance, would commence
new cluster studies only after all
pending interconnection request cluster
studies (or restudies) have concluded
and only under updated tariff
provisions that are consistent with or
superior to Order No. 2023.134 Revised
Early Adopters Coalition and PacifiCorp
state that allowing such providers to
conclude their existing cluster studies
before transition to the new pro forma
study approach will preserve the
interests of current interconnection
customers that have been participating
in the existing cluster study process as
well as ease the administrative burden
for such transmission providers.
71. Revised Early Adopters Coalition
and PacifiCorp also request, in the
alternative, that the Commission allow
early adopters to use a transition
process similar to other transmission
providers, if such a process better suits
their needs and facilitates expedient
131 PacifiCorp
Rehearing Request at 19.
Revised Early Adopters Coalition
Rehearing Request at 2–3, 6 (citing 5 U.S.C.
706(2)(A); Motor Vehicle Mfrs. Ass’n of the U.S.,
Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983) (Motor Vehicle Manufacturers)
(explaining that to survive review under the
arbitrary and capricious standard, an agency must
examine the relevant data and articulate a
satisfactory explanation for its action including a
rational connection between the facts found and the
choice made.’) (internal citations omitted)).
133 Revised Early Adopters Coalition Rehearing
Request at 6.
134 Id. at 6–7; PacifiCorp Rehearing Request at 19–
20.
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132 Id.;
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queue processing.135 Revised Early
Adopters Coalition and PacifiCorp
request that, either through clarification
or rehearing, the Commission ensure
that early adopters have the flexibility to
choose either Order No. 2023’s
transition process or the ability to
implement Order No 2023’s reforms
after completing any existing cluster
studies and restudies.
72. WIRES argues that Order No. 2023
also includes new requirements that
need clarification or further
consideration by the Commission.136
WIRES states that it generally agrees
that the shift from a serial study process
to a cluster study process is likely to
result in greater efficiency and provide
more certainty but argues that the
Commission has not explained how this
new requirement will sync up with
ongoing efforts that are already under
way. WIRES requests that the
Commission clarify how it plans to
accommodate those ongoing efforts.
3. Determination
73. We clarify that all transmission
providers, including those with existing
cluster study processes, have a
compliance obligation to review and
modify their current pro forma
interconnection procedures and pro
forma interconnection agreements to
comply with Order No. 2023. However,
we continue to find that transmission
providers that have already adopted a
cluster study process or are currently
undergoing a transition to a cluster
study process will not be required to
implement the transition process laid
out in Order No. 2023,137 and thus
further clarify that such transmission
providers are not required to file pro
forma LGIP section 5 (Procedures for
Interconnection Requests Submitted
Prior to Effective Date of the Cluster
Study) and the related appendices in
their compliance filings.
74. However, in response to the
arguments raised by Revised Early
Adopters Coalition and PacifiCorp, we
note that Order No. 2023 does not
prohibit such transmission providers
from adopting the transition process
established in Order No. 2023.
Therefore, a transmission provider that
does not seek or is not granted a
variance for its existing cluster study
process and adopts the reforms in Order
No. 2023 would be able to use the Order
No. 2023 transition process. Where
transmission providers propose
variations to the Order No. 2023
135 Revised Early Adopters Coalition Rehearing
Request at 7; PacifiCorp Rehearing Request at 20.
136 WIRES Rehearing Request at 12.
137 Order No. 2023, 184 FERC ¶ 61,054 at P 861.
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transition process, the Commission will
evaluate such proposals under the
consistent with or superior to standard
for non-RTO transmission providers and
the independent entity variation
standard for RTOs/ISOs. A transmission
provider currently conducting a cluster
study process that does not propose to
conduct an Order No. 2023 transition
process must comply with the
remaining requirements of Order No.
2023 other than the transition process.
75. We further grant clarification in
response to requests seeking to clarify
the applicability of the Order No. 2023
readiness requirements to a
transmission provider currently
conducting a cluster study process. On
compliance, unless it proposes a
variation, such a transmission provider
must adopt the Order No. 2023
readiness requirements; 138 those new
readiness requirements are then to be
applied based on the interconnection
customer’s progress in the queue as of
60 calendar days after the Commissionapproved effective date of the
transmission provider’s compliance
filing. Within 60 calendar days of the
Commission-approved effective date of
the transmission provider’s Order No.
2023 compliance filing, interconnection
customers that have not executed an
LGIA or requested an LGIA to be filed
unexecuted with the Commission must
meet the transmission provider’s new
readiness requirements for the relevant
study phase, such as updating their
respective study deposits, providing
commercial readiness deposits
correlating to the amounts required at
the various stages of the process, and
demonstrating site control.
Interconnection customers that must
meet the transmission provider’s new
readiness requirements may withdraw
within the 60 days after the
Commission-approved effective date of
the transmission provider’s Order No.
2023 compliance filing without being
subject to Order No. 2023 withdrawal
penalties. If the interconnection
customer chooses to withdraw outside
this 60-day timeline, the
interconnection customer will be
subject to the new withdrawal penalties.
To reflect these clarifications, we set
aside Order No. 2023, in part, and add
new section 5.1.2 to the pro forma
LGIP.139
138 Id.
PP 490–813.
pro forma LGIP section 5.1.2
(Transmission Providers with Existing Cluster
Study Processes or Currently in Transition) states
that if Transmission Provider is not conducting a
transition process under Section 5.1.1, it will
continue processing interconnection requests under
its current Cluster Study Process. Within 60
139 New
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76. In response to NV Energy, we
clarify that the requirement to meet the
new site control requirements also
requires that a queued interconnection
customer, whether in a current cluster
study or with an executed facilities
study agreement (but not an
interconnection customer with an
executed LGIA or that has requested an
LGIA to be filed unexecuted with the
Commission), that is facing regulatory
limitations must also submit the
applicable deposit and information
regarding the specific limitation within
60 days after the Commission-approved
effective date of the transmission
provider’s compliance filing. An
interconnection customer that
withdraws within the 60-day period
instead of submitting the applicable
deposit and information will not be
subject to Order No. 2023 withdrawal
penalties.
77. We agree with EEI that
transmission providers need only re-file
and seek approval for previously
approved variations where those
provisions are modified by Order No.
2023. As the Commission explained in
Order No. 2023, the Commission
adopted requirements that are part of
the pro forma LGIP, pro forma LGIA,
pro forma SGIP, and pro forma SGIA
and the Commission therefore only
addressed the interaction of the
requirements adopted with existing
requirements that are part of the pro
forma process and not variations
thereto.140 Transmission providers may
seek variations from Order No. 2023’s
requirements on compliance provided
the reason for the variation is
sufficiently justified.141 Transmission
providers may also continue to propose
interconnection process enhancements
beyond Order No. 2023 through a
separate filing under FPA section 205.
78. We reject requests to presume that
any transmission provider’s tariff meets
the requirements of Order No. 2023.142
As explained above, while the majority
of reforms adopted herein are based on
individual and incremental
calendar days of the Commission-approved
effective date of Transmission Provider’s Order No.
2023 compliance filing, Interconnection Customers
that have not executed an LGIA or requested an
LGIA to be filed unexecuted must meet the
requirements of Sections 3.4.2, 7.5, or 8.1 of this
LGIP, based on Interconnection Customer’s Queue
Position. Any Interconnection Customer that fails to
meet these requirements within 60 calendar days of
the Commission-approved effective date of this
LGIP shall have its Interconnection Request deemed
withdrawn by Transmission Provider pursuant to
Section 3.7 of this LGIP. In such case, Transmission
Provider shall not assess the Interconnection
Customer any Withdrawal Penalty.
140 Order No. 2023, 184 FERC ¶ 61,054 at P 1530.
141 Id. P 1767.
142 Id. P 1765.
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improvements that one or more regions
have already implemented, no
transmission provider has yet to adopt
the entirety of Order No. 2023’s broad
suite of reforms.143 Thus, we are
unpersuaded by PJM’s arguments on
rehearing that ongoing, recently
approved interconnection queue reform
packages presumably already comply
with Order No. 2023. Applying a
presumption to transmission providers
who recently adopted some similar
reforms, but not all the reforms
contained herein, will only result in
incomplete change that fails to fulfill or
further delays the comprehensive
reform required by Order No. 2023.
Additionally, because the Commission
continues to find that the record
supports a generic rulemaking,144 the
Commission reiterates that it did not
need to make a finding specific to each
transmission provider’s tariff to require
compliance with Order No. 2023.145
Therefore, we also remain unpersuaded
by Dominion’s arguments on rehearing
to defer the tariff modifications of, or to
not require compliance filings from,
transmission providers that have
already transitioned or are in the
process of transitioning to a cluster
study process or to defer those entities’
obligations to modify their tariffs.
79. In response to requests for
clarification regarding how the
Commission will review the compliance
filings of entities that already adopted
reforms, we continue to find, consistent
with the Commission’s statements in
Order No. 2023, that transmission
providers may explain specific
circumstances on compliance and
justify why any deviations from the pro
forma LGIP, pro forma LGIA, pro forma
SGIP, and pro forma SGIA are either
consistent with or superior to the
reforms adopted in Order No. 2023 for
non-RTO transmission providers or
merit an independent entity variation
for RTOs/ISOs.146 An item-by-item
justification must be offered for each
variation from the pro forma provisions
modified in Order No. 2023; general
statements alone are insufficient under
the consistent with or superior to or the
independent entity variation standard.
Region-specific concerns like those
raised by PJM and Dominion are
appropriately addressed on compliance
where the Commission will review the
compliance filings on a case-by-case
basis.
143 Id.
P 59.
No. 2023, 184 FERC ¶ 61,054 at P 1766;
supra section II.A.3.
145 See Order No. 2023, 184 FERC ¶ 61,054 at P
1766 (citing TAPS, 225 F.3d at 687–88).
146 Id. PP 1764–1765.
144 Order
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C. Reforms To Implement a First-Ready,
First-Served Cluster Study Process
1. Public Interconnection Information
a. Order No. 2023 Requirements
80. In Order No. 2023, the
Commission adopted section 6.1
(Publicly Posted Interconnection
Information) of the pro forma LGIP to
require transmission providers to
maintain and make publicly available
an interactive visual representation of
available interconnection capacity
(commonly known as a ‘‘heatmap’’) as
well as a table of relevant
interconnection metrics that is
produced in response to user-specified
input about their prospective generating
facility.147 The table will allow
prospective interconnection customers
to see certain estimates of a potential
generating facility’s effect on the
transmission provider’s transmission
system. Specifically, the Commission
required transmission providers to post
on their public website a heatmap of
estimated incremental injection capacity
(in MW) available at each point of
interconnection to the whole
transmission provider’s footprint under
N–1 conditions, as well as provide a
table of results in response to a specific
user’s input showing the estimated
impact of the addition of the proposed
project (based on the user-specified MW
amount, voltage level, and point of
interconnection) for each monitored
facility impacted by the proposed
project on: (1) the distribution factor; (2)
the MW impact (based on the proposed
project size and the distribution factor);
(3) the percentage impact on the
monitored facility (based on the MW
values of the proposed project and the
monitored facility rating); (4) the
percentage of power flow on the
monitored facility before the proposed
project; and (5) the percentage power
flow on the monitored facility after the
injection of the proposed project. The
Commission required that heatmaps be
calculated under N–1 conditions and
studied based on the power flow model
of the transmission system used in the
most recent cluster study or restudy,
and with the transfer simulated from
each point of interconnection to the
whole transmission provider’s footprint
(to approximate NRIS), and with the
incremental capacity at each point of
interconnection decremented by the
existing and queued generation at that
location (based on the existing or
requested interconnection service limit
of such generation). The Commission
required transmission providers to
147 Id.
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update their heatmaps within 30
calendars days after the completion of
each cluster study and cluster restudy.
Further, the Commission clarified that
transmission providers are not required
to make their heatmaps available until
after their transition period.148
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b. Requests for Rehearing and
Clarification
81. Clean Energy Associations ask the
Commission to clarify that transmission
providers may use ERIS or NRIS
assumptions for their heatmaps, as
appropriate for their particular
region.149 Clean Energy Associations
argue that the requirement to use only
NRIS assumptions fails to account for
regional differences and could reduce
the value of providing a heatmap. For
example, Clean Energy Associations
assert that in SPP and MISO, ERIS is the
primary driver of determining network
upgrades for new generation. If the
Commission declines to grant
clarification, Clean Energy Associations
seek rehearing of the requirement to use
NRIS assumptions for heatmaps.
82. Non-RTO Providers request
rehearing and modification of Order No.
2023’s requirement that non-RTO/ISO
transmission providers develop
interactive heatmap websites.150 NonRTO Providers assert that the mandate
is arbitrary and capricious and contrary
to reasoned decision-making. Non-RTO
Providers state that the Commission did
not perform an adequate cost-benefit
analysis to weigh the high cost and
administrative burden on non-RTO
transmission providers against the
‘‘limited and speculative benefits’’ of
the heatmaps for non-RTO/ISO
interconnection customers.151 Non-RTO
Providers assert that the mandate will
require the 37 non-RTO/ISO regions 152
to each develop separate heatmap
websites. Non-RTO Providers estimate
that the cumulative upfront cost for
these 37 heatmap websites is $7.4
million, and that the cumulative annual
maintenance cost for the 37 heatmap
websites is $666,000. Non-RTO
Providers assert that the heatmaps will
require regular attention from
interconnection engineers who will
otherwise be focused on transitioning to
cluster studies. Non-RTO Providers
contend that the heatmap requirement
amounts to a penalty on non-RTO/ISO
148 Id.
P 141.
Energy Associations Rehearing Request
at 48–49.
150 Non-RTO Providers Rehearing Request at 1–2.
151 Id. at 3.
152 Non-RTO Providers arrive at this number by
subtracting the RTOs/ISOs from the 44 transmission
providers estimated to be required to comply with
Order No. 2023. Id. n.6.
149 Clean
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transmission providers, who cannot
socialize the costs as broadly as RTOs/
ISOs can.153 Non-RTO Providers request
that the Commission reverse the
mandate on rehearing and (1) issue a
modified version of section 6.1 of the
pro forma LGIP for non-RTO regions
that allows static public information
postings of interconnection capacity
based on cluster study results and (2)
adopt a voluntary approach for the
potential development and maintenance
of interactive heatmaps in non-RTO
regions.
83. Non-RTO Providers note that the
heatmap concept is a novel concept and
that transmission providers have no
special expertise in website
development.154 Non-RTO Providers
contend that the legal question on
rehearing is whether the benefits of a
proposed reform can reasonably be said
to outweigh the costs and assert that the
Commission did not provide sufficient
legal foundation under FPA section 206
to justify the mandate. Non-RTO
Providers aver that the Commission did
not acknowledge that interactive
websites make financial sense only
when done at scale. Therefore, NonRTO Providers agree that the costs of the
requirement are justified for RTO/ISO
regions, which would require seven
websites to serve approximately twothirds of the nation’s transmission
system, but not for non-RTO/ISO
regions, which would have to develop
37 websites to serve the remaining onethird of the transmission system. NonRTO Providers explain that the
Commission appears to prohibit nonRTO/ISO regions from developing joint,
regional heatmaps to reduce the number
of websites needed, which they claim
demonstrates that the cost burden and
administrative burden on engineering
staff to non-RTO/ISO regions was not
adequately considered.155
84. Non-RTO Providers contend that
the Commission wrongly relies on Clean
Energy Associations’ proposition that
the heatmaps will be automated to
conclude that engineering resources will
not be strained by the heatmap
requirement.156 Non-RTO Providers
state that such updates will require one
or two full-time employees to prepare
data for the first three weeks of a given
30-day update period and send the
updated data to the vendor during the
last week. Non-RTO Providers contend
that the N–1 conditions reflected by the
heatmap will offer no practical value to
prospective interconnection customers
but will result in five times as many
engineering staff in non-RTOs/ISOs
making heatmap updates compared to
those in RTOs/ISOs.157 Non-RTO
Providers contend that the Commission
did not adequately address these
discrepancies in arguing that non-RTOs/
ISOs have the technical capacity to
create heatmaps.
85. Further, Non-RTO Providers argue
that the record does not demonstrate
that the incremental rate increase to
non-RTO/ISO regions from the
heatmaps will be justified by
meaningful overall queue efficiency
improvements for non-RTO/ISO
customers in the long run.158 For
example, Non-RTO Providers contend
that the Commission failed to consider
that heatmaps could increase
speculative interconnection requests if
many interconnection customers seek to
interconnect at the same uncongested
points reflected by the heatmap. For the
above reasons, Non-RTO Providers
argue that the connection between
improving queue efficiency and benefits
to transmission customers is too
tenuous to support a FPA section 206
finding that the heatmap mandate is just
and reasonable for non-RTO
transmission providers.159
86. Non-RTO Providers claim that the
Commission erred by failing to consider
a non-interactive website alternative for
the public information posting mandate
in non-RTO regions.160 Non-RTO
Providers state that the Commission
never explains why such information
needs to be provided in an interactive
heatmap format, rather than in static
public information postings regarding
system conditions after each cluster
study or restudy.
87. In the alternative to granting
rehearing, Non-RTO Providers propose
that the Commission revise section 6.1
of the pro forma LGIP to allow static
data postings and adopt a voluntary
funding approach for heatmap
development in non-RTO Regions.161 In
particular, Non-RTO Providers state that
they are not opposed to providing
increased public access to base case data
after cluster studies have been
performed that shows the estimated
incremental injection capacity (in
megawatts) available at each bus in the
transmission provider’s footprint under
N–1 conditions in table format. NonRTO Providers explain that data in this
format could still be uniform and
153 Id.
157 Id.
154 Id.
158 Id.
at 4.
at 4–5.
155 Id. at 5–6.
156 Id. at 6 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 89).
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at 6–7.
at 8.
159 Id. at 9.
160 Id.
161 Id. at 10.
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standardized to the Commission’s
specifications.162 Non-RTO Providers
state that with the voluntary funding
approach, website developers aligned
with any of the relevant stakeholders,
including transmission providers and
prospective interconnection customers
and even the Commission itself, would
be free to develop their own voluntary
interactive heatmaps based on this
publicly available data.
88. NV Energy requests clarification
on (1) whether the heatmap must
include proposed network upgrades
with capacity amounts to reflect the
available transfer capacity or only the
existing facilities and (2) when a
heatmap must be made available and
posted to OASIS by transmission
providers that do not conduct a new
transition period.163 NV Energy asserts
that, presently, the heatmap will
provide limited value and will be
consistently red 164 because
interconnection requests greatly exceed
the available capacity or load.165 NV
Energy asks if the heatmap requirement
for transmission providers already
conducting cluster studies could be
implemented at the same time as study
penalties (after the third cluster study
cycle/three years), which would allow
transmission providers to issue requests
for proposals for the necessary heatmap
software for implementation and would
allow suspended projects to withdraw
as well as remove from the queue those
that fail to (1) submit complete
applications, (2) meet various deadlines,
and (3) reach commercial readiness.
89. PacifiCorp likewise seeks
clarification on when transmission
providers will be required to submit
heatmaps for those transmission
providers that do not conduct a
transition cluster study process because
the Commission is not requiring
transmission providers to submit
heatmaps until after the transition
period ends.166
90. Public Interest Organizations
assert that the Commission erred by not
providing an adequate method for
prospective interconnection customers
to obtain information about potential
interconnection costs at a specific
location prior to submitting an
interconnection request, and that the
limited information publicly available
to interconnection customers will lead
to unjust, unreasonable, unduly
at 11.
Energy Rehearing Request at 4.
164 An ‘‘all red’’ heatmap would indicate no
available interconnection capacity. See Order No.
2023, 184 FERC ¶ 61,054 at P 157.
165 NV Energy Rehearing Request at 4.
166 PacifiCorp Rehearing Request at 22–23 (citing
Order No. 2023, 184 FERC ¶ 61,054 at P 141).
discriminatory, and preferential rates.167
Public Interest Organizations also note
that the level of cost uncertainty for
different interconnection customers is
not balanced because transmission
owner affiliates, particularly in nonRTO/ISO regions, have greater access to
interconnection cost information
relative to independent power
producers. Public Interest Organizations
contend that the Commission’s decision
to not adopt the proposed informational
studies and optional solicitation studies
make Order No. 2023’s adopted reforms
insufficient to remedy its finding that
the pro forma interconnection
procedures ‘‘fail[ ] to contain a process
by which an interconnection customer
can obtain information about potential
interconnection costs at a specific
location or point of interconnection
prior to submitting an interconnection
request.’’ 168 Public Interest
Organizations explain that both the
informational studies and optional
solicitation studies were specifically
intended to provide additional cost
information to prospective
interconnection customers, while the
public access information requirement
was intended to provide high-level
information to assist interconnection
customers with comparing multiple
points of interconnection and estimate
congestion.169
91. Public Interest Organizations state
that many parties suggested that the
Commission add more data to the
heatmap to provide information for
interconnection customers to readily
identify network upgrades, which
would help them estimate the costs to
interconnect their project before they
join the interconnection queue.170
Public Interest Organizations note, for
example, that NextEra suggested
including information on the circuit and
ratings of equipment, and Public
Interest Organizations argued that the
heatmaps should include information
on the number of megawatts that could
be interconnected without substantial
costs, among other suggestions. Public
Interest Organizations argue that,
without such additional data,
interconnection customers continue to
bear the burden of determining potential
costs, and that not all interconnection
customers possess the resources to use
software or hire consultants to extract
meaningful data from the heatmaps.
Public Interest Organizations contend
162 Id.
163 NV
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167 Public Interest Organizations Rehearing
Request at 7.
168 Id. at 8 (citing Order No. 2023, 184 FERC
¶ 61,054 at PP 46, 152).
169 Id. (citing Order No. 2023, 184 FERC ¶ 61,054
at P 68).
170 Id. at 9–10.
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that the heatmap requirement ultimately
falls short of providing a reasonable
method for interconnection customers
to predict potential network upgrade
costs prior to entering the queue,
leading interconnection customers to
make the ‘‘rational’’ decision to submit
multiple interconnection requests to
obtain information, which contributes to
study delays and withdrawals. For these
reasons, Public Interest Organizations
request the Commission revisit the
record to evaluate and adopt
requirements that transmission
providers must also make available the
additional data that will allow all
customers to estimate the potential
network upgrade costs using reasonable
efforts.
92. Public Interest Organizations
further assert that the Commission’s
decision not to require more
information be made publicly available
to potential interconnection customers
is arbitrary and capricious, contrary to
the weight of the comments and record,
and not based on substantial
evidence.171 Public Interest
Organizations argue that the
Commission’s finding that adding any
additional data requirements to assist
interconnection customers is
outweighed by the potential burden to
transmission providers failed to
consider countervailing evidence of the
benefits of additional data. Public
Interest Organizations assert that the
benefits of providing cost information
prior to interconnection customers
submitting an interconnection request is
clear: fewer speculative interconnection
requests and therefore less backlogged
queues. However, Public Interest
Organizations contend that MISO’s
heatmap demonstrates that a heatmap
alone is not enough. Public Interest
Organizations also argue that the
marginal burden on transmission
providers to provide additional heatmap
data is minimal as they can take
advantage of automation.
93. PJM seeks rehearing of Order No.
2023’s blanket requirement to update
the heatmap 30 calendar days after
completion of each cluster study
because PJM states that it is
unreasonable for such a large, multistate RTO like PJM with hundreds of
expected interconnection requests in
each cluster.172 PJM states that
publishing study results to its
interconnection screening tool, queue
scope, requires detailed, precise
analysis using the latest inputs available
at the time and would hold PJM to an
unrealistically strict and expedited
171 Id.
at 10–12.
Rehearing Request at 23–24.
172 PJM
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schedule of updating data, tools,
simulations, and results, and the fact
that such publishing would be
necessary several times a year is
burdensome and adds to the scope of
study work required, taking resources
away from other processing efforts. PJM
instead anticipates annually published
studies. PJM also states that ‘‘the
models’’ are already made available to
interconnection customers via a Critical
Energy Infrastructure Information (CEII)
request and can provide information
about points of interconnection.
94. PJM requests rehearing of Order
No. 2023’s clarification in P 162, which
it interprets as stating that transmission
providers must absorb heatmap costs
but are not barred from seeking recovery
of them through their transmission rates
(and paid by interconnection
customers).173 PJM states that
interconnection customers, rather than
transmission providers or transmission
customers, benefit from heatmap
posting, so there is no good reason that
transmission providers must always
charge the costs of maintaining and
posting heatmaps to transmission
service customers rather than
considering other structures such as fees
for prospective developers not yet in the
queue. PJM states that this rule departs
from the Commission’s and judicial
cost-causation principles, requiring that
costs should be paid by those who
benefit from their incurrence,174 and it
does so (by assigning heatmap costs to
transmission providers or transmission
customers) without explanation,
presents free-ridership issues, and
would be arbitrary and capricious.175
PJM asserts that not granting rehearing
of this item would set a precedent that
transmission providers must absorb or
pass on to transmission customers costs
173 Id.
at 42–43.
at 43 (citing Transmission Plan. & Cost
Allocation by Transmission Owning & Operating
Pub. Utils., Order No. 1000–A, 77 FR 32184 (May
31, 2012), 139 FERC ¶ 61,132 at P 578). PJM
includes an excerpt from Commissioner Christie’s
concurrence to Order No. 2023, which states,
‘‘Commission policy may dictate that
interconnection queue efficiency benefits
transmission customers; however, that should not
result in the costs of a requirement that best benefits
interconnection customers, and really prospective
interconnection customers that may ultimately not
seek to interconnect, being recovered from
consumers through transmission rates carte
blanche. The Commission simply cannot ask retail
consumers to foot the bill for every single
‘‘efficiency,’’ especially where many of these
‘‘efficiencies’’ largely benefit generation developers
and then get folded into transmission rates and
receive an ROE.’’ Order No. 2023, concur op.
(Comm’r Christie) at P 22.
175 PJM Rehearing Request at 43–44 (citing Motor
Vehicle Manufacturers, 463 U.S. at 57; Sw. Airlines
Co. v. FERC, 926 F.3d 851, 858 (D.C. Cir. 2019);
Panhandle, 196 F.3d at 1275).
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that are caused by or that benefit
interconnection customers only.
c. Determination
95. We deny Clean Energy
Associations’ request for the
Commission to clarify that transmission
providers may use ERIS or NRIS
assumptions for their public heatmaps.
As the Commission explained in Order
No. 2023, generating facilities seeking
NRIS are generally subject to more
stringent study requirements.176
Therefore, requiring transmission
providers to produce heatmap results
that approximate NRIS assumptions will
provide actionable information on the
viability of a given proposed generating
facility to both ERIS and NRIS
customers. On the other hand, requiring
heatmaps to approximate ERIS
assumptions would not be helpful to
NRIS customers. Even in regions where
ERIS may be more commonly selected
or lead to a greater number of network
upgrades, we find that the use of stricter
NRIS assumptions would more
consistently alert prospective
interconnection customers to the
possibility of required network upgrades
compared to ERIS assumptions. We
therefore find that using NRIS
assumptions as a baseline would
prevent false negatives, in which the
heatmap incorrectly indicates to
prospective interconnection customers
that their projects would not trigger
network upgrades. This finding
reasonably balances the resources
required of transmission providers in
making heatmaps available with the
value of providing non-binding system
impact information to all prospective
interconnection customers ahead of
entering the interconnection queue. We
note, however, that Order No. 2023
states that ‘‘if transmission providers
find value in providing additional or
different information [than required by
Order No. 2023], they may propose such
variations on compliance.’’ 177
Therefore, if a transmission provider
believes that it would be informative to
interconnection customers, it may
propose on compliance an option for
heatmap users to view results using
ERIS assumptions in addition to NRIS
assumptions. As such, we reiterate that
‘‘heatmaps must be calculated under N–
1 conditions and studied based on the
power flow model of the transmission
system with the transfer simulated from
each point of interconnection to the
whole transmission provider’s footprint
(to approximate NRIS), and with the
incremental capacity at each point of
176 Order
177 Id.
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27021
interconnection decremented by the
existing and queued generation at that
location (based on the existing or
requested interconnection service limit
of such generation).’’ 178 For the same
reasons noted above, we are
unpersuaded by the arguments raised in
Clean Energy Associations’ alternative
request for rehearing.
96. We are also unpersuaded by NonRTO Providers’ argument that the
Commission failed to properly evaluate
the costs and benefits of the heatmap
requirement for non-RTO/ISO regions
and that they cannot socialize the costs
as broadly as RTOs/ISOs. First, without
a comparison to estimated heatmap
costs for RTO/ISO regions, Non-RTO
Providers’ cost estimates do not support
its assertion that the cost of developing
interactive heatmaps is more
burdensome for non-RTO/ISO
regions.179 While RTO/ISO regions do
have larger customer bases from which
to recover costs, their heatmaps will
also reflect larger and potentially more
complex power systems and need to
accommodate a larger pool of users and,
therefore, may cost more.
97. We further disagree that the labor
requirements Non-RTO Providers refer
to will be overly burdensome relative to
RTO/ISO regions. First, as the
Commission clarified in Order No. 2023,
transmission providers are not required
to update their heatmaps on a rolling
30-day basis, but rather within 30 days
of the completion of a cluster study or
restudy.180 Thus, transmission
providers will likely update their
heatmaps at most two times per year,
accounting for one cluster study and
one cluster restudy.
98. Second, to Non-RTO Providers’
argument that annual heatmap
maintenance would divert attention
from interconnection engineers who
would otherwise be focused on
transitioning to cluster studies, we
reiterate that transmission providers are
not required to make heatmaps available
until after their transition period, which
will help ensure that transmission
providers’ implementation of this final
rule, beginning with the transition
period, has begun to reduce backlogged
interconnection queues.
178 Id.
P 135.
e.g., Ill. Commerce Comm’n v. FERC, 721
F.3d 764, 775 (7th Cir. 2013) (stating that not all
benefits can be calculated in advance, and if FERC
cannot quantify the benefits to a particular utility
or utilities but ‘‘has an articulable and plausible
reason to believe that the benefits are at least
roughly commensurate with those utilities’ total
electricity sales in [the] region,’’ then the
Commission can approve the pricing scheme on
that basis) (internal citations omitted).
180 Order No. 2023, 184 FERC ¶ 61,054 at P 141.
179 See,
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99. Third, Non-RTO Providers’ cost
estimates are based on an extrapolation
of one transmission provider’s initial
estimate, and Non-RTO Providers do not
describe any assumptions of this
estimate beyond the assertion that, after
each cluster study or restudy, it would
take two full-time engineers several
weeks to ‘‘prepare the data’’ before
having a vendor update the heatmap.181
We are unpersuaded by this assertion
because, as Order No. 2023 states,
transmission providers must use the
results of their most recent cluster study
or restudy to update the heatmap.182
Therefore, to update their heatmaps,
little additional analysis should be
required beyond what transmission
providers have already completed for
their cluster studies and restudies. We
recognize that engineering labor will
likely be required during heatmap
website development, either directly, in
developing the software and processes,
or in consultation with the firm
developing the heatmap. However, we
believe that it is feasible for
transmission providers, or their
heatmap developers, to develop their
heatmap websites to accept their base
case files as inputs for each update such
that little to no modification of the base
case files and data is necessary. To that
point, and Non-RTO Providers’ concern
that transmission providers have no
special expertise in website
development, we note that Order No.
2023 does not require transmission
providers themselves to develop the
requisite software and processes, and
they may contract with firms whose
expertise includes website development
and data management. Further, Order
No. 2023 does not preclude
transmission providers from proposing
on compliance to develop joint, regional
heatmaps.
100. Finally, we disagree that NonRTO Providers’ proposal to require that
transmission providers post only static
data and allow other entities to
voluntarily develop heatmaps
accomplishes the goals outlined in
Order No. 2023. The purpose of the
heatmap requirement is, in part, to
provide comparable information to all
interconnection customers, prior to
entering the queue, regardless of the
transmission provider. Non-RTO
Providers’ proposal would not ensure
such comparability, but rather would
favor interconnection customers that
have more resources to devote towards
modeling and favor some transmission
providers’ own proposed generation.
181 Non-RTO
182 Order
Providers Rehearing Request at 6.
No. 2023, 184 FERC ¶ 61,054 at PP 139–
183 Id.
140.
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Thus, interconnection customers that
cannot afford to process the static data
Non-RTO Providers propose to post
would still need to submit speculative
interconnection requests to obtain
information. Further, the voluntary
funding approach Non-RTO Providers
propose would not ensure that nonRTO/ISO regions have public
interconnection information available
and therefore would discriminate
against interconnection customers
seeking to interconnect outside of RTO/
ISO regions.
101. In response to NV Energy’s
request for clarification on whether
heatmaps must include proposed
network upgrades or only existing
facilities, we reiterate that heatmaps
must be based on the power flow model
and base case assumptions used in the
most recent cluster study or restudy.
Therefore, heatmaps will incorporate inservice network upgrades and network
upgrades proposed for clusters higher
queued than the most recent cluster
study or restudy, as the base case and
power flow models for any cluster will
include proposed network upgrades for
higher queued clusters.
102. We agree with NV Energy and
PacifiCorp on the need for clarification
regarding when heatmaps must be made
available by transmission providers that
do not conduct transition processes. We
therefore clarify that transmission
providers that do not conduct transition
periods do not need to make their
heatmap available until 360 calendar
days after the Commission-approved
effective date of the transmission
provider’s Order No. 2023 compliance
filing. This timeline will give
transmission providers that do not
conduct transition periods the same
amount of time as transitioning
transmission providers (i.e., completion
of the transitional cluster study within
360 days after the Commissionapproved effective date of the
compliance filing) to develop their
heatmaps. Further, while we agree that
heatmaps for some transmission
providers may initially appear as all red,
which indicates no available
interconnection capacity, we reiterate
our finding that an all red heatmap still
‘‘sends a valuable signal to
interconnection customers regarding
where proposed generating facilities
may be more or less economic to
interconnect prior to entering the
interconnection queue.’’ 183 We are
therefore unpersuaded that such a result
necessitates delaying the posting of the
interactive heatmap.
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P 157.
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103. We are also unpersuaded by NV
Energy’s request for clarification that
transmission providers that do not
conduct transition processes because
they already use cluster studies should
be required to post publicly available
heatmaps only after three cluster cycles,
similar to the transition to study delay
penalties. This would delay
transmission providers already using
cluster studies, and their potential
interconnection customers, from
realizing the benefits of a heatmap (e.g.,
a reduced volume of speculative
interconnection requests) for more than
twice as long as those transmission
providers who do conduct a transition
process and their potential
interconnection customers.
104. We are unpersuaded by Public
Interest Organizations’ assertion that the
Commission erred in not requiring
transmission providers to include
additional data in their heatmaps that
would assist interconnection customers
in estimating interconnection costs at
potential points of interconnection. We
further disagree with Public Interest
Organizations’ contention that the
Commission did not fully consider the
record on this matter in coming to its
decision. On the contrary, as numerous
commenters explain—and as the
Commission stated in Order No. 2023—
cost estimates produced prior to an
interconnection customer entering the
queue would be highly uncertain and
subject to a high degree of change
depending on the actions of other
interconnection customers in the queue
and study results, and therefore would
provide little to no value to
interconnection customers in terms of
improving cost certainty.184 We believe
this to be true regardless of whether the
transmission provider or the
interconnection customer produces
those cost estimates. Further, Public
Interest Organizations do not argue that
cost estimates should be directly
incorporated into transmission
providers’ heatmaps, but rather that
transmission providers should include
additional information in their
heatmaps that would allow
interconnection customers to ascertain
information about potential costs at
points of interconnection. At the same
time, however, Public Interest
Organizations argue that many
interconnection customers lack the
resources to develop cost estimates
based on transmission providers’
heatmaps. Thus, Public Interest
Organizations’ proposal would not only
increase the burden on transmission
providers but require interconnection
184 See
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customers themselves to dedicate more
resources towards developing cost
estimates that are likely to change once
they enter the queue. We therefore
continue to find that the heatmap
requirements set forth in Order No. 2023
strike a reasonable balance between the
burden on transmission providers to
develop and maintain heatmaps and the
benefit of providing interconnection
customers with sufficient information to
identify viable points of
interconnection, given that cost
estimates produced prior to entering the
queue would be unreliable. We note,
however, that, consistent with the
Commission’s statements in Order No.
2023, transmission providers may
explain specific circumstances on
compliance and justify why any
deviations are either consistent with or
superior to the pro forma LGIP or merit
an independent entity variation in the
context of RTOs/ISOs.185
105. We are unpersuaded by PJM’s
request to modify the requirement for
transmission providers to update their
heatmaps within 30 calendar days of
completing a cluster study or restudy.
We find PJM’s argument regarding its
queue scope tool to be inapposite. As
the Commission explained in Order No.
2023, because the heatmap should use
the results of the most recent cluster
study or restudy, the heatmap
requirement should require minimal
additional analysis beyond the cluster
study or restudy and should not
necessitate detailed analysis.186
Transmission providers must simply
make the data and assumptions used in
the analyses they already completed
available in a public, interactive form.
Updating heatmaps within 30 calendar
days of completion of a cluster study or
restudy will also ensure that
interconnection customers can use the
heatmap during the customer
engagement window to determine
whether to proceed in the queue or
withdraw. Finally, we disagree that
interconnection customers’ ability to
request CEII achieves the same goal as
the heatmap requirement. The heatmaps
are intended to improve transparency
and ease the burden of producing
interconnection-related information for
prospective interconnection customers.
On the other hand, requests for CEII
typically require an entity to submit
certain identifying information and/or
legal documents like non-disclosure
agreements and require the transmission
provider to review and verify such
information, and weigh the need for the
information against the potential harm
185 Id.
186 Id.
P 1764.
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of its release, before potentially granting
access to a protected part of its website
or OASIS portal.187 Reliance on such a
process would impose an unnecessary
burden on the prospective
interconnection customer, the
transmission provider, and other
interested stakeholders because, as
commenters explain, the information to
be published in transmission providers’
heatmaps does not raise CEII
concerns.188
106. Further, we are unpersuaded by
PJM’s request to modify the finding in
Order No. 2023 that transmission
providers must bear the costs associated
with their heatmaps or recover them
through transmission rates to the extent
they are recoverable consistent with
Commission accounting and ratemaking
policy. First, transmission providers
already maintain interconnection
information and other related
information online for the purposes of
transparency and facilitating
participation amongst various
stakeholders. Thus, we disagree with
PJM’s requested modification because
transmission providers may recover the
costs associated with heatmaps through
transmission rates to the extent they are
recoverable consistent with Commission
accounting and ratemaking policy.
Second, we disagree that
interconnection customers are the sole
or primary beneficiaries of the heatmap
requirement, and that transmission
providers themselves do not benefit
from it. The heatmap requirement will
reduce the number of speculative
interconnection requests submitted to
transmission providers by providing
prospective interconnection customers
with information to evaluate the
viability of their potential
interconnection requests, thus
improving overall queue efficiency for
the benefit of both transmission
providers and prospective
interconnection customers.
2. Cluster Study Process
a. Order No. 2023 Requirements
107. In Order No. 2023, the
Commission revised the pro forma LGIP
and pro forma LGIA to require
transmission providers to study
interconnection requests in clusters.189
The Commission adopted numerous
revisions to the pro forma LGIP and pro
forma LGIA to effectuate this change.
Specifically, and as relevant here, the
Commission revised the definitions of
187 PJM’s CEII request process, for example,
includes all these process components. See https://
www.pjm.com/library/request-access.
188 Order No. 2023, 184 FERC ¶ 61,054 at P 144.
189 Id. P 177.
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27023
material modification and stand alone
network upgrades, and defined
interconnection facilities study
report.190 The Commission adopted
section 3.1.2 (Submission) of the pro
forma LGIP to require an
interconnection customer to select a
definitive point of interconnection
when executing the cluster study
agreement.191 The Commission adopted
section 3.4.1 (Cluster Request Window),
section 3.4.4 (Deficiencies in
Interconnection Request), and section
3.4.5 (Customer Engagement Window)
of the pro forma LGIP to provide a
process for interconnection customers to
submit a cluster study interconnection
request.192 The Commission adopted
section 3.4.6 (Cluster Study Scoping
Meetings) of the pro forma LGIP to
require transmission providers to hold a
scoping meeting with interconnection
customers in the cluster.193 The
Commission revised section 3.5.2
(Requirement to Post Interconnection
Study Metrics) of the pro forma LGIP to
require transmission providers to post
metrics for cluster study and restudy
processing time.194
108. The Commission adopted several
revisions to the pro forma LGIP related
to the process by which interconnection
customers can make an interconnection
request. The Commission revised
section 4.1 (Queue Position) of the pro
forma LGIP to provide that all
interconnection requests within a
cluster be considered equally queued
and accordingly modified the definition
of queue position.195 The Commission
renamed and revised section 4.2
(General Study Process) of the pro forma
LGIP to require transmission providers
to perform interconnection studies
within the cluster study process.196 The
Commission revised section 4.4
(Modifications) of the pro forma LGIP to
provide that moving a point of
interconnection shall result in the loss
of a queue position if it is deemed a
material modification by the
transmission provider.197 The
Commission also revised section 4.4.1 of
the pro forma LGIP to incorporate the
material modification process as part of
the cluster study process.198 The
Commission revised section 4.4.5 of the
pro forma LGIP to require that
interconnection customers receive an
190 Id.
P 192.
P 200.
192 Id. P 223.
193 Id. P 245.
194 Id. P 259.
195 Id. PP 277, 283.
196 Id. P 278.
197 Id. P 283.
198 Id. P 285.
191 Id.
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extension of fewer than three
cumulative years of the generating
facility’s commercial operation date
without requiring them to request such
an extension from the transmission
provider.199
109. The Commission adopted
revisions to the pro forma LGIP to
implement several cluster study
provisions. The Commission replaced
section 6 (Interconnection Feasibility
Study) of the pro forma LGIP with the
new public interconnection information
requirements as discussed in section
II.C.1 of Order No. 2023.200 The
Commission revised section 7 (Cluster
Study) of the pro forma LGIP to set out
the requirements and scope of the
cluster study agreement, as well as the
cluster study and restudy procedures.201
The Commission revised section 7.4
(Cluster Study Procedures) of the pro
forma LGIP to permit transmission
providers to use subgroups in their
cluster study process if they so
choose.202 The Commission revised
section 8.5 (Restudy) of the pro forma
LGIP to make clear that restudies can be
triggered by the withdrawal or
modification by a higher- or equallyqueued interconnection requests.203 The
Commission revised sections 11.1
(Tender) and 11.3 (Execution and
Filing) of the pro forma LGIP regarding
the tendering, execution, and filing of
the LGIA to incorporate the site control
demonstrations and LGIA deposit
requirements of Order No. 2023.204
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b. Requests for Rehearing and
Clarification
110. Clean Energy Associations
contend that the Commission acted
arbitrarily and capriciously and failed to
engage in reasoned decision-making by
changing the definition of stand alone
network upgrades such that only ‘‘single
customers’’ are eligible to build them.205
Clean Energy Associations claim that,
when considered with the shift to a
cluster study process and other stated
goals for the sharing of network upgrade
costs amongst interconnection
customers, the revised definition
effectively forecloses the opportunity for
any future interconnection customer to
exercise their discretion to build stand
alone network upgrades or identified
transmission provider interconnection
facilities. Additionally, Clean Energy
Associations aver that the revisions
199 Id.
P 293.
P 316.
201 Id. P 317.
202 Id. P 363.
203 Id. P 335.
204 Id. P 344.
205 Clean Energy Associations Rehearing Request
at 8–9.
ignore the relationship of the option to
build to the project sponsor, nearly
eliminating the benefits of the option to
build, such as controlling project
schedules.206 Finally, Clean Energy
Associations assert that the
Commission’s reasoning is based on a
hypothetical situation which has not
occurred since Order No. 845, or
possibly ever.
111. Clean Energy Associations argue
that the Commission’s assertion that
‘‘confusion and potentially lengthy
negotiations and/or disputes’’ would
result without revisions to the definition
of stand alone network upgrades is
unsupported by the record of this
proceeding.207 Clean Energy
Associations note that transmission
providers already using cluster studies
have operated for years under the Order
No. 845 definition, demonstrating that
the revisions were not necessary. Clean
Energy Associations explain that Order
No. 2023 neither cites previous
instances of confusion or lengthy
disputes regarding the construction of
stand alone network upgrades, nor any
other facts or evidence that would
support a finding that the current
definition is insufficient or inadequate.
Clean Energy Associations also note that
one transmission provider using cluster
studies supported the concept of
allowing stand alone network upgrades
to be shared among interconnection
customers.208
112. Clean Energy Associations
contend that this aspect of Order No.
2023 is arbitrary and capricious because
the Commission fails to acknowledge or
adequately explain departures from its
precedent.209 Clean Energy Associations
note that Order No. 845 explains that
the option to build benefits the
interconnection process by giving
interconnection customers more control
and certainty, and that interconnection
customers are in the best position to
determine if the option to build in their
interest. However, Clean Energy
Associations assert that the revised
definition removes interconnection
customers’ ability to exercise their
discretion regarding the option to build
for the majority of network upgrades
identified in a cluster study, and
modifies the status quo by reducing the
number of network upgrades that would
qualify as stand alone network upgrades
because the proportional impact method
of cost allocation will reduce the
200 Id.
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206 Id.
at 9–10.
at 10 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 193).
208 Id. at 11–12 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 185).
209 Id. at 12–13.
207 Id.
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likelihood of finding a single customer
100% responsible for a network
upgrade.210 Clean Energy Associations
contend that this renders the Order No.
845 policy moot and is inconsistent
with the Commission’s intent in Order
No. 2023 to maintain the status quo.
113. Clean Energy Associations state
that the Commission can redress this
error on rehearing by (1) reversing its
decision to revise the definition of stand
alone network upgrade, and (2)
requiring transmission providers to
address, in their compliance filings and
OATTs, the process through which
interconnection customers with shared
network upgrades that qualify as stand
alone network upgrades can exercise
their option to build.211 Alternatively,
Clean Energy Associations suggest that
the Commission require transmission
providers to allow the interconnection
customers amongst whom a stand alone
network upgrade was shared to
unanimously exercise the option to
build and, then, to either select a third
party to construct the upgrade or to
determine responsibility for doing so
amongst themselves. Clean Energy
Associations assert that this would
prevent the concern of disputes among
interconnection customers within a
cluster. Clean Energy Associations state
that both of these options would be
consistent with, and would preserve,
the policy set forth in Order No. 845,
while also addressing the Commission’s
concerns that disputes or confusion may
arise and further delay the
interconnection process, while striking
an appropriate balance between the
Commission’s policy and efforts in
Order No. 845 and Order No. 2023,
honoring both efforts and further
enhancing and benefiting the
interconnection process.
114. Clean Energy Associations state
that the Commission erred in finding
that modifications to project size can
only be made during the customer
engagement window and that
interconnection customers must select a
single, definitive point of
interconnection at that time.212 Clean
Energy Associations assert that the
record does not support the conclusion
that the customer engagement window
is sufficient for the interconnection
customer to enter the cluster study with
confidence in its project size and
definitive point of interconnection and,
thus, this timeline does not reflect an
appropriate balance that will reduce the
need for restudies and delays. Clean
Energy Associations assert the
210 Id.
at 13–14.
at 14–15.
212 Id. at 15–16.
211 Id.
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opposite—that the record indicates that
failure to provide flexibility to
interconnection customers to modify
project size and point of interconnection
after receipt of initial cluster study
results will increase the likelihood of
withdrawals and cascading restudies by
not allowing interconnection customers
to make beneficial adjustments earlier in
the interconnection process that could
be determinative in a project’s decision
to stay in the cluster or withdraw. Clean
Energy Associations disagree with the
Commission’s conclusion that the
extended 60 calendar day customer
engagement window is sufficient to
provide interconnection customers with
‘‘time to consider information collected
during this period of engagement with
the transmission provider,’’ 213 which
will allow customers to determine when
to withdraw their interconnection
requests and avoid penalties while
improving queue efficiency due to fewer
late-stage cluster study withdrawals.
Clean Energy Associations assert that,
prior to the cluster study, it is difficult
for an interconnection customer to make
any informed conclusion about
expected costs of potential network
upgrades and such costs’ impact on
project viability, which the
interconnection customer must learn
from the cluster study.
115. The 60-day customer engagement
window, Clean Energy Associations
assert, only provides interconnection
customers 46 calendar days to evaluate
publicly posted information and make
any potential project modifications prior
to entering the cluster study, and any
such early-acquired information will be
incomplete, lacking modeling data, new
model sets, and other study
assumptions such as confidential merit
order dispatch lists used by
transmission providers to set up power
transfers from new generators, despite
publicly posted information by
transmission providers.214 Clean Energy
Associations state that substantial
information gained through the study
process may necessitate a change in
point of interconnection, making
choosing a single point of
interconnection implausible. They
claim that not requiring transmission
owners to attend scoping meetings
further limits an interconnection
customer’s access to information. Clean
Energy Associations assert that an
interconnection customer will not have
sufficient time and information to
evaluate project viability during the
customer engagement window or
213 Id. at 17–18 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 233).
214 Id. at 18–19.
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modify project size and location in
response to pre-study information
obtained during that window.
116. Clean Energy Associations assert
that limiting post-initial cluster study
entry modifications to the
interconnection request to those the
transmission provider deems not to be
material ignores record evidence that
this practice will not result in a more
reliable, efficient, transparent, and
timely interconnection process.215 Clean
Energy Associations assert that allowing
flexibility in project size reductions
through the initial cluster study will
allow for optimization of projects based
on official study results, resulting in
fewer withdrawals due to increased
project viability and contribution to
reliability through reduced impacts to
the transmission provider’s system,
which it asserts will be less disruptive
to the interconnection process than a
full withdrawal. Clean Energy
Associations state that, likewise,
inability to change the point of
interconnection or to submit an
alternate point of interconnection could
cause delays and can trigger the restudy
of an entire cluster. Clean Energy
Associations assert that the record
demonstrates that interconnection
customers lack sufficient time or
information to optimize project
characteristics prior to entering the
initial cluster study, and that flexibility
to make beneficial modifications after
receipt of initial study results would
reduce rather than increase uncertainty,
restudy, and administrative burden.
117. Clean Energy Associations
further state that the option to instead
pursue a material modification
exemption does not provide sufficient
flexibility because: (1) it leaves this
determination to the discretion of the
transmission provider; and (2) it ignores
that minor project modifications that
could have slight impacts on other
interconnection customers in the same
cluster might nonetheless be far less
disruptive than project withdrawal.216
Clean Energy Associations argue that
the material modification review is
often based on ‘‘opaque assumptions’’
available only to the transmission
provider and may divert resources at a
relatively more intense part of the study
process.
118. Clean Energy Associations note
that SPP, PJM, and MISO have adopted
provisions allowing 50%–100%
reduction allowance and minor point of
interconnection changes, and also
permit smaller size adjustments similar
to that found in pro forma LGIP section
4.4.2 through the initial cluster restudy,
which Clean Energy Associations state
belie the Commission’s assertion that
the timing for modifications in Order
No. 2023 reflects a natural translation of
the timing for modification in the
existing serial study process to a cluster
study process.217 Clean Energy
Associations therefore request that the
Commission grant rehearing and modify
the language in revised pro forma LGIP
section 4.4.1 to allow modifications to
project size (specifically, up to a 60%
size reduction) prior to entering the
cluster restudy, and to allow minor
modifications to project size
(specifically, up to a 15% size
reduction) after the receipt of a cluster
restudy but prior to the start of the
facilities study. Clean Energy
Associations further request that the
Commission grant rehearing and allow
interconnection customers the option to
present a primary and alternative
definitive point of interconnection in an
electrically proximate area, provided
that the transmission provider and
transmission owner verify the
alternative as acceptable during the
customer engagement window and prior
to the scoping meeting.
119. IPP Coalition also asks the
Commission to reconsider its
requirement that customers identify a
single point of interconnection and,
instead, allow for an electrically
proximate alternative point of
interconnection that is verified as
acceptable by the transmission provider
during the cluster study customer
engagement window and listed in the
cluster study agreement.218 IPP
Coalition asserts that electrically
proximate point of interconnection
locations can be effectively
implemented within a study process
without materially impacting a study
process, and that this general standard
should be applied consistently to a
potential change, whether it is sought by
an interconnection customer as part of
the interconnection request or
ultimately required on the basis of a
public policy decision.
120. ;rsted requests that the
Commission clarify that, in
circumstances where state or federal
agency policy or regulation requires a
change to the point of interconnection,
projects should be restudied based upon
the new regulatory or statutory
requirements.219 Alternatively, ;rsted
requests that the Commission clarify
that, in such circumstances, the
transmission provider, the state, or the
217 Id.
at 22.
Coalition Rehearing Request at 7–8.
219 ;rsted Rehearing Request at 11.
215 Id.
at 19–20.
216 Id. at 21–22.
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interconnection customer may request a
waiver of applicable tariff and LGIA/
LGIP provisions that might be affected
in order to comply with the federal or
state regulatory requirement.
121. Clean Energy Associations state
that the Commission should grant
rehearing and amend Order No. 2023 to
stipulate that, if an interconnection
customer submits an interconnection
request at least 15 business days prior
to the close of the cluster request
window, and if failure by the
transmission provider to issue a
deficiency notice within five business
days of receipt results in the
interconnection customer having fewer
than 10 business days to respond to the
deficiency notice prior to the close of
the customer request window, the
interconnection customer shall still be
granted a full 10 business days to
respond prior to facing the
consequences outlined in revised pro
forma LGIP section 3.4.4.220 Clean
Energy Associations state that, to ensure
a full 10 business days to respond, an
interconnection customer would have to
submit its interconnection request more
than 15 business days before the close
of the cluster request window to
account for the five business day
window for the transmission provider to
issue a deficiency notice, and that even
if an interconnection customer
submitted its interconnection request
more than 15 business days before the
close of the cluster window, the
interconnection customer may be left
with fewer than 10 business days to
provide a response in the event that the
transmission provider failed to meet the
five business day notification
requirement. Clean Energy Associations
state that, because of this oversight, an
interconnection customer may, through
no fault of its own, have as little as one
day to respond to a deficiency notice.
Clean Energy Associations argue that
revised pro forma LGIP section 3.4.4
includes significant consequences for
interconnection customers that fail to
meet the 10 business-day deadline, but
no consequences for transmission
providers that fail to meet the fivebusiness day deficiency notice deadline.
Clean Energy Associations argue that
the Commission acted arbitrarily and
capriciously and failed to engage in
reasoned decision-making by failing to
account for potential delay on the part
of the transmission provider.
122. Clean Energy Associations and
;rsted argue that the Commission acted
arbitrarily and capriciously and failed to
engage in reasoned decision-making
220 Clean Energy Associations Rehearing Request
at 25–26.
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when it declined to require transmission
owners to attend scoping meetings.221
Clean Energy Associations and ;rsted
state that requiring transmission owners
to attend may help RTOs/ISOs address
potential challenges sooner, avoiding
penalties caused by transmission owner
delays. Clean Energy Associations and
;rsted assert that the purpose of the
customer engagement window is to
provide interconnection customers with
information to help them determine the
viability of their proposed generating
facilities earlier in the process, and
without transmission owners in these
meetings, interconnection customers are
deprived of critical information
necessary to determine the costs and
commercial viability of their projects.222
;rsted additionally states that
transmission owners are fully
responsible for design of network
upgrades, including both substation and
system network upgrades, as well as
play an important role in informing
point of interconnection decisions by
providing information about the existing
grid conditions and capabilities as well
as information related to
interconnection requirements.223 ;rsted
therefore argues that the transmission
owner is in the best position to give
interconnection customers a sense of the
work required to expand the
transmission facilities to accommodate
new interconnection customers, and
that a failure to include transmission
owners in these meetings deprives
interconnection customers of critical
information necessary to determine the
costs and commercial viability of their
projects. ;rsted asserts that not
requiring transmission owners to attend
the scoping meeting creates an
additional burden on both the
interconnection customer and the
transmission owner because customer
will need to schedule separate meetings
with the transmission owners to get
additional information.
123. EEI, NYISO, and NYTOs seek
rehearing of Order No. 2023’s
elimination of the feasibility study.224
EEI argues that carrying out physical
feasibility studies, which determine
whether the project is ‘‘physically
constructable’’ to the point of
interconnection, early in the
interconnection process will allow for
221 Id.
at 26; ;rsted Rehearing Request at 3.
Energy Associations Rehearing Request
at 27–28; ;rsted Rehearing Request at 3–4.
223 ;rsted Rehearing Request at 4–5.
224 EEI Rehearing Request at 13–14; NYISO
Rehearing Request at 11; NYTOs Rehearing Request
at 6; see also WIRES Rehearing Request at 12
(asking the Commission to clarify that feasibility
studies can continue to be performed under the
‘‘Independent Entity Regional Variation Standard’’).
222 Clean
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the early disqualification of infeasible
interconnection requests, which will
save resources.225 NYTOs contend that
analyzing feasibility is especially
needed in highly congested areas like
New York City and Long Island, where
geographic and environmental
limitations often restrict the ability to
interconnect new generation at certain
locations, which cannot be reflected in
a heatmap.226 NYISO and NYTOs note
that, because physical feasibility issues
are particularly important in New York,
NYISO needs to address early in the
interconnection study process which
proposed projects will be eligible to
make use of those limited points of
interconnection.227 NYISO and NYTOs
assert that the Commission’s
determination to eliminate the
feasibility study and replace it with a
heatmap to provide project developers
with a rough indication of
interconnection capacity before they
submit their interconnection requests
will not address critical physical
feasibility issues.
124. EEI asks the Commission to
clarify that provisional interconnection
service requests will continue to be
processed as received and outside the
cluster study process.228 EEI states that
the Commission may have inadvertently
failed to include provisional service in
its response to PacifiCorp’s comments
regarding processing interconnection
requests (including provisional service
requests) in Order No. 2023.
125. EEI requests that the Commission
clarify how the 150-day study deadline
applies to cascading restudies.229 EEI
states that a withdrawal has the
potential to trigger the restudy of every
subsequent cluster, which will have to
be conducted in turn. EEI specifically
asks the Commission to clarify that
transmission providers have 150 days to
complete the restudy from the initiation
of the restudy, rather than from when
the interconnection customers are
informed that the restudy is needed. EEI
argues that this clarification is necessary
so that transmission providers have the
full 150-day period for each restudy.
126. MISO asks the Commission to
clarify that Order No. 2023’s statements
that decline to allow transmission
providers the flexibility to set their own
study deadlines were intended to
respond to requests to allow
transmission providers to establish
deadlines for specific study clusters
other than through deadlines fixed in
225 EEI
Rehearing Request at 13–14.
Rehearing Request at 8.
227 Id. at 7; NYISO Rehearing Request at 11.
228 EEI Rehearing Request at 14–15.
229 Id. at 15–16.
226 NYTOs
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their tariffs, and were not intended to
preempt transmission providers from
proposing to maintain existing tariffdefined study deadlines that may differ
from the pro forma LGIP’s 150 day
schedule.230 MISO explains that it uses
a three-phase process that has a
different length than the one phase
process in the pro forma, and MISO’s
tariff includes fixed study deadlines for
each phase that are not subject to
discretionary adjustment.
127. NYISO asserts that the one-sizefits-all, 150-calendar day cluster study
timeframe is arbitrary and capricious,
does not reflect reasoned decisionmaking, and is not based on substantial
evidence.231 NYISO states that the
timeframes for the cluster restudy and
facilities studies are also arbitrary and
capricious and deficient. NYISO asserts
that the Commission did not establish a
basis for the 150-day timeframe, but
rather stated that the timeframe for
performing the stability analyses, power
flow analyses, and short circuit analyses
was based on the record without
providing detail as to what in the record
supports that conclusion. NYISO also
claims the Commission cites to a limited
number of parties, none of which it
claims performs such studies, in
support of the 150-day timeframe.
128. NYISO contends that the
Commission has not considered the
impact to the study timeline of any
evaluations required to address
applicable reliability requirements.232
NYISO explains that in New York, for
example, the system impact study
encompasses numerous steps critical to
evaluating reliability impacts of
proposed generating facilities, which
must be performed to fully evaluate a
proposed interconnection under all
Applicable Reliability Requirements.
NYISO notes that in New York,
Applicable Reliability Requirements
include Northeast Power Coordinating
Council rules and New York State
Reliability Council rules, which are
often more stringent than NERC rules
because of New York’s unique
transmission system complexities,
including congestion around New York
City and Long Island, and an influx of
offshore wind generation.
129. NYISO contends that the
Commission has also failed to consider
how the size or complexity of the
cluster could affect the study
timeframe.233 NYISO explains that the
system impact study timeframe is
driven by the study scope (e.g., whether
Rehearing Request at 26.
Rehearing Request at 4–5.
232 Id. at 6–7.
233 Id. at 8.
the study addresses physical feasibility),
the number of impacted parties, the
complexity of the project, and unique
challenges at the project’s point of
interconnection. NYISO further explains
that, for a system impact study to
effectively evaluate a proposed
interconnection, the transmission
provider requires accurate modeling
data from an interconnection customer,
study cases built for the proposed
project, and precise thermal, voltage,
steady state, and short circuit analyses.
NYISO explains that accomplishing this
requires a potential several-month
collaboration with transmission owners
to: (1) build applicable study base cases
and the associated auxiliary study files;
(2) complete any short circuit base cases
necessary to determine point of
interconnection requirements; (3) build
pre-and post-project steady-state base
cases that represent various system
conditions (e.g., summer peak load,
winter peak load, and spring light load
conditions).234 NYISO further explains
that it: (1) collaborates with applicable
transmission owners and/or
interconnection customers to determine
upgrade solutions that constitute the
least cost solution to mitigate reliability
violations consistent with good utility
practice and all applicable reliability
requirements; (2) must sometimes
iteratively redo the reliability analyses
to ensure network upgrades can be
reliably interconnected; and (3) must
conduct stability analysis, transfer
analysis, deliverability analysis, short
circuit analysis, NPCC/NYSRC bulk
power system transmission facility
testing analysis, sub-synchronous
torsional interaction screening analysis,
and additional analyses. NYISO states
that the study results must be
summarized and shared with impacted
parties and stakeholders and reviewed
by the appropriate NYISO committees
and subcommittees. NYISO avers that, if
it had to comply with the 150-day
timeline, it may likely be forced to
eliminate this review and approval
process.235
130. Additionally, NYISO asserts that
cluster studies are unlikely to create the
time savings expected by the
Commission.236 NYISO disagrees with
the Commission’s statement that the
transmission provider ‘‘will be
conducting only one interconnection
study, or at most a small number of
interconnection studies, at a time,
allowing them to devote more resources
to completing the studies in a timely
manner’’ because, NYISO argues, this
230 MISO
231 NYISO
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234 Id.
at 9–10.
at 11.
236 Id. at 12.
235 Id.
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27027
statement does not accurately reflect the
type and amount of work required for
the cluster study that it proposes and
the resources that will need to be
committed to such study.237 NYISO
explains that a large portion of cluster
study work is spent identifying network
upgrades at or near points of
interconnection for individual projects
or subsets of projects within the cluster
which, as NYISO asserts, effectively
requires transmission providers to
perform individual studies within the
broader cluster study and requiring
resources similar to that of a serial
study.238 NYISO contends that only a
small portion of cluster study work
involves assessing the impacts on the
system of the cluster as a whole. NYISO
adds that each additional project in the
cluster adds to the total amount of work
required because each project must be
modeled.
131. Further, NYISO argues that
efficiencies gained by transitioning to a
cluster study may be offset by increased
participation and resultant large
clusters.239 NYISO contends that the
more stringent study deposit,
commercial readiness, and site control
rules adopted in Order No. 2023 will
not materially reduce the number of
projects entering interconnection
queues. NYISO notes that it and other
RTOs/ISOs haves adopted similar rules
without seeing a corresponding decrease
in projects entering and progressing
through their queues.240 NYISO states
that, if the Commission does establish a
firm deadline for cluster study
completion, it should define a
maximum number of projects in a
cluster or allow for extending the 150day timeframe according to cluster size.
132. NYISO requests that the
Commission allow RTOs/ISOs to
propose alternative study deadlines as
independent entity variations.241 NYISO
argues that requiring a single, firm study
timeframe for all transmission providers
does not recognize that interconnection
study process requirements, challenges,
reliability criteria, and queue size will
be different in each region. In the
alternative, NYISO requests that the
Commission grant clarification that
237 Id. (citing Order No. 2023, 184 FERC ¶ 61,054
at P 326).
238 Id. at 13.
239 Id. at 14.
240 Id. (citing, for example, Midcontinent
Independent System Operator Presentation,
Generator Interconnection Queue Improvements,
Planning Advisory Committee (July 19, 2023)
(proposing increasing initial milestone payment
from $4000/MW to $10,000/MW), at: https://
cdn.misoenergy.org/20230719%20PAC%
20Item%2006%20GI%20Queue%
20Improvements%20Proposal629634.pdf).
241 Id. at 15–16.
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Order No. 2023 was not intended to
prevent RTOs/ISOs from proposing
region-specific study deadlines for some
or all future studies in their individual
Order No. 2023 compliance filings.
133. NYISO also asks the Commission
to confirm that, during the 45-day
cluster request window, the
interconnection customer is limited to
one 10-business day opportunity (or
shorter at the end of the request
window) to cure a deficiency in its
application.242 Further, NYISO asks the
Commission to confirm that it did not
intend to require the transmission
provider to issue a second deficiency
notice even if time allowed for such
notice in the cluster request window
and that, if the interconnection
customer fails to fully cure its
application within its single cure
period, its application will be
withdrawn. NYISO notes that section
3.4.4 of the pro forma LGIP provides
that: ‘‘At any time, if Transmission
Provider finds that the technical data
provided by Interconnection Customer
is incomplete or contains errors,
Interconnection Customer and
Transmission Provider shall work
expeditiously and in good faith to
remedy such issues.’’ NYISO argues that
the Commission should clarify that this
language is not intended to extend the
time period by which an
interconnection customer must address
deficiencies for the transmission
provider’s acceptance of a valid,
complete interconnection request, but
instead is simply intended to permit the
transmission provider and
interconnection customer to address any
minor issues that may be discovered
later in the interconnection process,
subject to applicable deadlines. NYISO
proposes revisions to section 3.4.4 of the
pro forma LGIP which it states would
accomplish this clarification.
134. NYISO asks the Commission to
confirm that the transmission provider
may complete its determination that an
interconnection request is valid into the
customer engagement window,
including assessing any updated
information provided by the
interconnection customer, within its
permitted deficiency cure period in the
cluster request window.243 NYISO also
requests confirmation that the
transmission provider is not required to
permit interconnection customers to
address any further deficiencies
identified in the customer engagement
window. Further, NYISO states the
Commission should confirm that, if the
transmission provider determines in the
242 Id.
at 44–45.
243 Id. at 45.
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customer engagement window that an
interconnection customer’s updated
interconnection request remains
deficient and is not valid, the
transmission provider may withdraw
the project upon such determination. In
particular, NYISO notes that Paragraph
234 of Order No. 2023 appears to reject
withdrawals for interconnection
requests that are not deemed valid until
the close of the customer engagement
window. NYISO argues that this
statement is inconsistent with the
Commission’s requirements to not
permit interconnection customers to
cure deficiencies during the customer
engagement window and to limit
participation in the Scoping Meeting
during that window to only customers
‘‘whose valid Interconnection Requests
were received in the Cluster Request
Window.’’ 244
135. NYISO requests rehearing of the
requirement that transmission providers
post an anonymized list of the projects
eligible to participate in the cluster
study during the customer engagement
window.245 NYISO argues that the
requirement creates another
administrative burden on the
transmission provider for which the
Commission has not provided a
reasonable basis and could result in the
unequal public disclosure of certain
information to only a subset of
developers. NYISO asserts that the
Commission has not provided support
for this anonymity requirement, aside
from a general assertion that such
requirement is appropriate ‘‘to reduce
opportunities for developers to gain
competitive advantage over others
before interconnection requests have
been finalized and accepted by the
transmission provider.’’ 246 NYISO
further states that the Commission has
not provided a description of any means
by which publicly identifying the
developers of projects with valid
interconnection requests would provide
the developer or other parties with a
competitive advantage. NYISO also
explains that its OATT requires
transmission providers to publicly post
queue information that includes certain
identifying information about valid
interconnection requests. NYISO argues
that the proposed requirement would
therefore require a further
administrative step for NYISO to have to
conceal certain information in its
publicly posted queue, including the
developer’s name and/or the status of
the project, as well as take additional
244 Id.
(citing pro forma LGIP section 3.4.5).
245 Id.
247 Id.
246 Id.
248 NewSun
at 46 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 237).
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steps to maintain the projects’
anonymity, such as masking
information in any other public
communications.247 Further, NYISO
notes that the group scoping meeting
required during the customer
engagement window will reveal many of
the cluster participants, and that even if
developer names are not provided
during the meeting, many developers in
a region are aware of the employees of
other developers in that region.
Therefore, NYISO argues that
anonymity of developer names will not
mask the identity of the underlying
developers from other cluster
participants but would simply give
them an information advantage over
other developers. Finally, NYISO
explains that in many cases, such
information would be public anyway,
such as through a developer posting its
projects on its website or participating
in public request for proposals,
permitting processes, Commission
submissions, or other federal, state, or
local proceedings.
136. NewSun argues that the 30-day
timeline permitted following receipt of
the cluster study report for
interconnection customers to execute
the facilities study agreement and
provide deposits is arbitrary and
capricious because it is commercially
unreasonable, counterproductive to the
Commission’s goals of reducing
withdrawals and restudies, fails to
address record evidence, and
inconsistent with the rationale provided
in Order No. 2023.248 NewSun argues
that the 30-day timeline does not leave
time for the proper review and
discussion of the study information,
especially where third party information
is involved, or where the
interconnection customer’s
understanding of the information (even
assuming the study was without errors)
is contingent upon study results
meetings. NewSun explains that it takes
time to, for example, read the report,
formulate questions, set up meetings
with consultants, run financial models,
and engage with outside bankers and
financiers.249 NewSun asserts that
companies with ‘‘near infinite resources
can just play chicken with their balance
sheets, many of whom can merely post
a letter of credit (by paying points) to
proceed, and/or make the strategic
decision to hold their noses and stay in,
hope it works out, and just treat
withdrawal penalties as a cost of doing
business,’’ while companies like
NewSun have to arrange cash-backed
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at 46–47.
Rehearing Request at 7–8.
249 Id. at 8–9.
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letter of credit facilities which takes
longer than 30 days to arrange.250
NewSun states that forcing all
interconnection customers, big and
small, to make such huge decisions in
short windows creates biases towards
‘‘nose-holding behavior, fearful exits,
and inability to thoughtfully consider
outcomes—or changes—much less to
collaborate and/or adapt to avoid delaycausing or costly upgrades.251
137. NewSun requests rehearing of
the requirement that, if any
interconnection customer withdraws
from the cluster after receiving the
cluster study report and the
transmission provider concludes that
such withdrawal triggers a restudy, the
transmission provider has 30 days from
the cluster study report meeting (or
cluster restudy report meeting, if
applicable) to notify affected
interconnection customers.252 NewSun
states that notice of restudy will occur
up to 10 days after the interconnection
customer is required to sign a facilities
study agreement and make the
associated deposit 10% of the estimated
network upgrade costs. NewSun states
that, because the time frames for notice
of restudy and for execution of the
facilities study agreement overlap, the
interconnection customer almost
certainly will not know if a restudy—
which entails potentially significant
additional delays and increases in
interconnection costs—is required
before it is required to commit to a
facilities study and making deposits that
in many cases will requiring financing
of millions or even tens of millions of
dollars in financial security. NewSun
asserts that, even if the transmission
provider somehow manages to give the
interconnection customers notice of
intent to conduct a cluster restudy and
tolls the due date for the facilities study
agreement and 10% network upgrade
deposit within 30 days of furnishing the
cluster study report, the interconnection
customer will have only 20 days to
increase the amount on deposit to 5%
of its estimated network upgrade costs.
NewSun notes that this decision point
could require financing of millions of
dollars and, even in cases where monies
may have already been financed, if
refunds are not received, they cannot be
recycled or reused. NewSun seeks
rehearing of these timing issues and
requests that the Commission change
the 30-calendar day timeline to 60 days,
at 9.
at 10.
252 Id. at 13 (citing pro forma LGIP section 7.5(3)–
(4)).
as well as make several other changes to
multiple timelines in Order No. 2023.253
138. PJM argues that the Commission
erred in its apparent requirement that
transmission providers determine
whether a change in a project’s point of
interconnection is a material
modification.254 PJM explains that it
interprets Order No. 2023 to mean that
transmission providers will need to
evaluate every single request from
interconnection customers for a change
to their point of interconnection to
determine whether it is a material
modification. PJM asserts, however, that
analyzing each request would consume
already limited engineering time, and
that most change requests come from
developers seeking to optimize their
projects mid-process instead of
performing their due diligence in
advance of entering the queue. PJM also
implies that most changes to points of
interconnection would result in a
material modification. PJM asks the
Commission to clarify that transmission
providers need not evaluate every single
request to change a point of
interconnection to determine if it would
be a material modification. PJM
recommends instead that the
Commission allow transmission
providers to establish rules that (1)
changes to a project’s point of
interconnection may be made at certain
defined points in the cluster cycle, and
(2) changes to points of interconnection
outside those defined times would be
presumed material modifications. PJM
seeks rehearing on this issue if the
Commission declines to provide its
requested clarification.
139. NYTOs seek clarification of
Order No. 2023’s elimination of queue
priority and finding that all
interconnection requests in a cluster
should hold equal priority.255 NYTOs
explain that there is at least one
instance in which interconnection
priority is necessary: if it is not
physically possible to connect all
interconnection requests at a single
point of interconnection, but it is
feasible to connect some of the requests,
then prioritization based on request
dates should be applied to determine
which interconnection customers have
priority to proceed. NYTOs explain that
this scenario occurs when the number of
interconnection requests exceeds the
available points of interconnection at a
substation, and the substation cannot be
expanded due to physical space or
environmental limitations. NYTOs
explain that allowing for this
250 Id.
251 Id.
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253 Id.
at 22–24.
Rehearing Request at 44–45.
255 NYTOs Rehearing Request at 9–10.
254 PJM
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27029
prioritization is critical in highly
congested areas like New York City and
Long Island. NYTOs state that the
Commission should clarify that
providing interconnection queue
priority in this situation is permissible,
at least under the independent entity
variation. If the clarification is not
provided, NYTOs request rehearing on
the grounds that in the absence of such
priority, the Commission acted
arbitrarily and capriciously by failing to
consider all aspects of the problem.
140. Several commenters request
rehearing regarding reforms the
Commission did not adopt in Order No.
2023. AEP argues that the Commission
failed to adequately consider the need
for, benefits of, and record support for
enhanced generation retirement
replacement processes and erred in
deeming the generation retirement
replacement process beyond the scope
of this proceeding.256 AEP states that
four parties commented on the
importance of generator replacement
programs and argues that, while the
Commission may not be able to direct
with specificity the generator
replacement reforms required, it has
sufficient evidence to provide guidance
on the basic requirements for such
programs.257 MISO asks the
Commission to clarify that Order No.
2023 does not require transmission
providers with Commission-approved
generator replacement processes to
change, abandon, or re-justify these
processes on compliance.258
Alternatively, if the Commission did
intend to require transmission providers
with existing generator replacement
processes to re-justify those processes,
MISO requests rehearing.259 AEP urges
the Commission to include in the pro
forma LGIP an option for transmission
providers to process some
interconnection requests outside the
cluster study process where required for
LSEs to meet reserve margin
requirements.260 AEP argues that, if not
included in the pro forma LGIP, AEP
asks the Commission, in the alternative,
to remain open to the future
consideration of tariff revisions that
allow for such outside-the-cluster
reviews or fast-track processing.261
c. Determination
141. We agree with Clean Energy
Associations that revisions to the
definition of stand alone network
256 AEP
Rehearing Request at 6.
at 24.
258 MISO Rehearing Request at 21–22.
259 Id. at 23.
260 AEP Rehearing Request at 24–25.
261 Id. at 25–26.
257 Id.
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upgrades in the pro forma LGIP and pro
forma LGIA and option to build section
of the pro forma LGIA are necessary to
maintain the pre-Order No. 2023 status
quo opportunity for interconnection
customers to exercise the option to
build as part of the cluster study
process. Accordingly, we set aside this
aspect of Order No. 2023 and modify the
definition of stand alone network
upgrades in section 1 (Definitions) of
the pro forma LGIP and pro forma LGIA
as follows, with brackets indicating
deletions:
Stand Alone Network Upgrades shall mean
Network Upgrades that are not part of an
Affected System that an Interconnection
Customer may construct without affecting
day-to-day operations of the Transmission
System during their construction [and the
following conditions are met: (1) a Substation
Network Upgrade must only be required for
a single Interconnection Customer in the
Cluster and no other Interconnection
Customer in that Cluster is required to
interconnect to the same Substation Network
Upgrades, and (2) a System Network Upgrade
must only be required for a single
Interconnection Customer in the Cluster, as
indicated under the Transmission Provider’s
Proportional Impact Method]. Both
Transmission Provider and Interconnection
Customer must agree as to what constitutes
Stand Alone Network Upgrades and identify
them in Appendix A to the Standard Large
Generator Interconnection Agreement. If
Transmission Provider and Interconnection
Customer disagree about whether a particular
Network Upgrade is a Stand Alone Network
Upgrade, Transmission Provider must
provide Interconnection Customer a written
technical explanation outlining why
Transmission Provider does not consider the
Network Upgrade to be a Stand Alone
Network Upgrade within 15 days of its
determination.
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142. Accordingly, we also modify
article 5.1.3 (Option to Build) of the pro
forma LGIA as follows, with italicized
language indicating additions:
Individual or Multiple Interconnection
Customers shall have the option to assume
responsibility for the design, procurement
and construction of Transmission Provider’s
Interconnection Facilities and Stand Alone
Network Upgrades on the dates specified in
Article 5.1.2, if the requirements of this
Article 5.1.3 are met. When multiple
Interconnection Customers exercise this
option, multiple Interconnection Customers
may agree to exercise this option provided (1)
all Transmission Provider’s Interconnection
Facilities and Stand Alone Network upgrades
constructed under this option are only
required for Interconnection Customers in a
single Cluster and (2) all impacted
Interconnection Customers execute and
provide to Transmission Provider an
agreement regarding responsibilities, and
payment for, the construction of
Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades planned to be built under this
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option. Transmission Provider and the
individual Interconnection Customer or each
of the multiple Interconnection Customers
must agree as to what constitutes Stand
Alone Network Upgrades and identify such
Stand Alone Network Upgrades in Appendix
A. Except for Stand Alone Network
Upgrades, Interconnection Customer shall
have no right to construct Network Upgrades
under this option.
143. We find that this revision to the
definition of stand alone network
upgrades and addition to the option to
build section in the pro forma LGIA will
allow interconnection customers to
exercise the option to build whether the
stand alone network upgrade is
attributable to a single interconnection
customer or a shared network upgrade
shared by multiple interconnection
customers. These revisions will also
avoid potentially lengthy disputes
between interconnection customers,
which was the Commission’s original
concern in Order No. 2023, because, for
interconnection customers with shared
network upgrades that qualify as stand
alone network upgrades,
interconnection customers must
mutually agree to such agreement
outside the transmission provider’s
interconnection process and thus will
not slow down that process.262 We
clarify that, for such circumstances, we
expect such a written agreement among
the relevant interconnection customers
to be reached among the
interconnection customers on their own
and outside of the transmission
provider’s interconnection process.
Further, we clarify that, if no mutual
agreement is reached among the
interconnection customers, no
interconnection customer will have the
ability to exercise the option to build a
stand alone network upgrade that is a
shared network upgrade.
144. We are unpersuaded by Clean
Energy Associations’ argument that the
Commission should modify the allowed
reductions in project size in pro forma
LGIP sections 4.4.1 and 4.4.2. We find
that implementing Clean Energy
Associations’ requested change under a
cluster study process is likely to lead to
delays in the interconnection study
process. Therefore, we continue to rely
on the transmission provider to assess
such a change under pro forma LGIP
section 4.4 (Modifications), where the
transmission provider would be able to
assess whether modifications to project
size (e.g., up to a 60 percent reduction)
would have a material impact on the
cost or timing of any interconnection
requests with an equal or later queue
position.
262 Order
PO 00000
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Frm 00026
Fmt 4701
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145. We disagree with Clean Energy
Associations’ argument that the
customer engagement window is too
short. We note that Order No. 2023
required transmission providers to
develop a heatmap of public
interconnection information to provide
interconnection customers with
information prior to submitting an
interconnection request, which should
obviate the need for a longer
engagement window. We further note
that Order No. 2023 adopted readiness
requirements to encourage
interconnection customers to submit
commercially viable interconnection
requests, so interconnection customers
should be relatively confident in the
viability of their interconnection
requests.263
146. We also are unpersuaded by
Clean Energy Associations’ request
regarding circumstances in which the
transmission provider fails to issue a
deficiency notice within five business
days. We find the requested revision
unnecessary because a transmission
provider taking longer than five
business days to issue the deficiency
notice would violate its tariff
requirements to issue such a notice
within five business days. We find that
the requirement for interconnection
customers to cure deficiencies before
the close of the cluster request window
is necessary to ensure the timely
processing of the interconnection queue.
147. We disagree with ;rsted’s and
Clean Energy Associations’ requests to
require transmission owners (when not
the transmission provider) to attend
scoping meetings. The pro forma LGIP
contemplates that the transmission
owner and transmission provider may
be the same entity, except in the case of
an RTO/ISO, in which case the
transmission owner does not have
operational control of the facilities and
does not perform cluster studies. We
note that transmission providers have
incentive, particularly in light of the
study delay penalties adopted in Order
No. 2023, to facilitate interconnection
customers’ access to information they
need in order to efficiently navigate the
interconnection study process.
Accordingly, we will not require
transmission owners to attend scoping
meetings where the transmission owner
and transmission provider are separate
entities. However, RTOs/ISOs may seek
an independent entity variation and
propose to require attendance of any
entities they feel are necessary to
provide critical information to
interconnection customers.
263 Id.
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148. We disagree with requests that
the Commission include a feasibility
study as part of the interconnection
process. The NOPR did not propose,
and Order No. 2023 did not adopt, a
feasibility study. We reiterate our
findings in Order No. 2023 that the
move from a serial interconnection
process to the new cluster study
process, coupled with the Commission’s
heatmap requirements, render the
feasibility study redundant and an
unnecessary burden on transmission
provider resources.
149. However, in response to requests
for clarification that transmission
providers can continue performing
feasibility studies as an independent
entity variation, we reiterate that
transmission providers may explain
specific circumstances on compliance
and justify why any deviations are
either consistent with or superior to the
pro forma LGIP, pro forma LGIA, pro
forma SGIP, and/or pro forma SGIA or
merit an independent entity variation in
the context of RTOs/ISOs.
150. In response to EEI’s request that
the Commission clarify that provisional
interconnection service requests
continue to be processed as received, we
clarify that Order No. 2023 did not
modify the process for transmission
providers to study provisional
interconnection service requests.
151. In response to EEI’s request that
the Commission clarify how the 150-day
study deadline applies to restudies, we
clarify that transmission providers have
150 days from the point that they inform
interconnection customers of the
restudy to complete each restudy, which
must occur within 30 calendar days
after the cluster study report meeting.
We further clarify that, in the case of
multiple restudies, we expect that the
transmission provider will not
definitively know whether to initiate a
restudy of later-in-time clusters—and
thus inform those interconnection
customers that restudy is needed—until
it has completed the initial restudy.
152. In response to Clean Energy
Associations and IPP Coalition, we
continue to find, as the Commission did
in Order No. 2023, that interconnection
customers must select a definitive point
of interconnection to be studied when
executing the cluster study agreement.
As the Commission explained in Order
No. 2023, requiring interconnection
customers to select one definitive point
of interconnection when executing the
cluster study agreement allows the
interconnection customer to submit its
interconnection request with a proposed
point of interconnection, participate in
the scoping meeting during the
customer engagement window, and
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receive feedback on its proposed point
of interconnection. We continue to
believe that this strikes the right balance
between allowing for flexibility and
potential adjustments to the point of
interconnection, based on discussion
with the transmission provider and the
transmission provider’s detailed
knowledge of its transmission system,
and providing transmission providers
with the information necessary to
conduct the cluster study, thus reducing
the potential for restudies that would be
required if interconnection customers
could change their points of
interconnection later in the process.264
153. Similarly, we continue to believe
that allowing multiple points of
interconnection (whether they are
‘‘electrically proximate’’ or not) to be
studied before the interconnection
customer is required to select the
definitive point of interconnection fails
to take into account the fact that, if an
interconnection customer changes the
definitive point of interconnection after
the cluster study, it may impact the
study results of the other
interconnection customers in the cluster
and could lead to restudies and delays.
It may be the case that an ‘‘electrically
proximate’’ point of interconnection
location can be effectively implemented
within a study process without
materially impacting a study process,
and the current process allows the
transmission provider to determine
whether that change to the point of
interconnection will be considered a
material modification. We find this
sufficient to address IPP Coalition’s
concern.
154. We find ;rsted’s request for
clarification regarding circumstances
where a regulatory limitation requires a
change to the point of interconnection
to be beyond the scope of Order No.
2023. The Commission did not adopt a
process to change the point of
interconnection when there is a
regulatory limitation in Order No. 2023.
In such a circumstance, changes to the
point of interconnection are addressed
in section 4.4 of the pro forma LGIP,
which governs modifications to an
interconnection request.
155. We disagree with PJM’s request
for clarification, and in the alternative,
rehearing, that transmission providers
need not evaluate whether every request
to change an interconnection customer’s
point of interconnection is a material
modification. First, while we agree that
evaluating a change of point of
interconnection will require engineering
labor, we note that the availability of the
public interactive heatmap will provide
interconnection customers with far
more transparency into the viability of
the points of interconnection on the
transmission provider’s system prior to
entering the interconnection queue.
Thus, we expect the heatmap
requirement to reduce the frequency
with which interconnection customers
request changes to their point of
interconnection, as they will be better
informed prior to submitting an
interconnection request. The pro forma
LGIP defines ‘‘material modifications’’
as ‘‘those modifications that have a
material impact on the cost or timing of
any Interconnection Request with an
equal or later Queue Position.’’ 265 Other
than that provision, we leave the
determination of what constitutes a
material modification to the
transmission providers’ currentlyeffective processes for determining
materiality. We are unpersuaded that (1)
interconnection customers should be
limited to one change to their point of
interconnection and (2) that all changes
to points of interconnection should be
presumed to be material outside of
certain points in the cluster study,
because interconnection customers
already have a relatively limited
window in which to request changes to
points of interconnection. Pro forma
LGIP sections 3.1.2, 4.4, and 4.4.3 make
clear that a request to change an
interconnection customer’s point of
interconnection that comes after the
return of the executed cluster study
agreement shall constitute a material
modification. We find these provisions
to address PJM’s concern regarding
point of interconnection change
requests that arise from ‘‘project
developers seeking to optimize their
projects in mid-process’’ 266 by limiting
most point of interconnection change
requests to early in the study process
and presuming those later in the study
process to be material modifications. We
also find that this approach strikes a
reasonable balance between the use of
engineering labor to advance feasible
projects and reducing late-stage
interconnection request modifications
or withdrawals that could slow down
the study process or lead to restudy. For
these reasons, we find that the existing
pro forma LGIP provisions referenced
above adequately address PJM’s
concerns, and therefore no clarification
or rehearing is necessary.
156. As we explain in detail below in
section D.1.c.ii, we are unpersuaded by
NYISO’s assertions that the 150-day
cluster study deadline is unjust and
unreasonable and that the Commission’s
265 Pro
264 Id.
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Frm 00027
forma LGIP, section 1 (Definitions).
Rehearing Request at 44.
266 PJM
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determination reflects arbitrary and
capricious decision-making. As we note
below, and consistent with the
Commission’s statements in Order No.
2023, transmission providers may
explain specific circumstances on
compliance and justify why any
deviations are either consistent with or
superior to the pro forma LGIP or merit
an independent entity variation in the
context of RTOs/ISOs. Accordingly, we
grant MISO’s and NYISO’s requests for
clarification that Order No. 2023 does
not preempt transmission providers
from proposing tariff-defined study
deadlines that may differ from the pro
forma LGIP’s 150-day schedule. Rather,
the statements MISO and NYISO refer to
in Order No. 2023 decline to allow
transmission providers flexibility to set
ad-hoc deadlines beyond their standard,
tariff-defined deadlines.
157. NYISO requests that the
Commission clarify that, during the 45day cluster request window,
interconnection customers are limited to
one 10-business day opportunity to cure
a deficiency in their applications. We
disagree with NYISO’s interpretation of
the applicable pro forma LGIP language
and note that NYISO offers no argument
to support this interpretation. We
therefore clarify that interconnection
customers must receive as many cure
periods as needed to remedy a deficient
interconnection request, as long as the
end of such cure periods fall prior to the
last day of the 45-day cluster request
window. In other words, if an
interconnection customer fails to fully
cure its application within the first cure
period, transmission providers must
issue a second (or third) deficiency
notice to an interconnection customer
during the cluster request window, if
time allows. We clarify that, if a
transmission provider finds an
interconnection request to be deficient
less than 10 days before the close of the
cluster request window, the
interconnection customer may have
until the close of the cluster request
window to cure those deficiencies.267
158. NYISO seeks clarification
regarding the sentence in section 3.4.4
of the pro forma LGIP, which reads ‘‘At
any time, if Transmission Provider finds
that the technical data provided by
Interconnection Customer is incomplete
or contains errors, Interconnection
Customer and Transmission Provider
shall work expeditiously and in good
faith to remedy such issues.’’ We grant
NYISO’s requested clarification that this
language is not meant to extend the time
period by which an interconnection
267 See
Order No. 2023, 184 FERC ¶ 61,054 at P
226.
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customer must address deficiencies for
the transmission provider’s acceptance
of a valid, complete interconnection
request, but instead is simply intended
to permit the transmission provider and
interconnection customer to address any
issues that may be discovered in the
interconnection process, subject to
applicable deadlines. In other words,
the interconnection customer and
transmission provider shall work
expeditiously and in good faith to
remedy any errors or incomplete
information (that do not merit finding
the interconnection request deficient)
either during the cluster request
window or later, i.e., during the
customer engagement window. We
decline to modify the pro forma LGIP as
proposed by NYISO because it is
unnecessary.
159. NYISO seeks further clarification
around when a transmission provider
must complete its determination that an
interconnection request is valid, the
timeline in which an interconnection
customer may cure deficiencies in its
application, and treatment of
interconnection requests deemed
invalid during the customer engagement
window. We clarify that the
transmission provider must complete its
determination that an interconnection
request is valid by the close of the
cluster request window, and therefore,
interconnection customers must also
cure deficient interconnection requests
by the close of the cluster request
window. In other words, only
interconnection customers with valid
interconnection requests, for which
there is no need to cure deficiencies,
proceed to the customer engagement
window. As such, transmission
providers may not continue determining
whether interconnection requests are
valid into the customer engagement
window. This means that there is no
need for transmission providers to deem
interconnection requests withdrawn
during the customer engagement
window, as all invalid interconnection
requests will already have been deemed
withdrawn at the close of the cluster
request window. We acknowledge
NYISO’s confusion regarding Paragraph
234 of Order No. 2023, which rejects the
notion of withdrawing invalid
interconnection requests before the end
of the customer engagement window.
We set aside Paragraph 234 of Order No.
2023 and clarify that an interconnection
customer’s cure period ends at the close
of the cluster request window at the
latest. Nevertheless, interconnection
customers with valid interconnection
requests may work with the
transmission provider, per section 3.4.4
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Frm 00028
Fmt 4701
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of the pro forma LIGP and as explained
above, to resolve minor errors or
incompletions in technical data
throughout the process, without the
need for the transmission provider to
deem an interconnection request
deficient, invalid, or withdrawn. To
improve clarity with regard to these
issues, we modify section 3.4.5 of the
pro forma LGIP as follows, with italics
indicating additions and brackets
indicating deletions:
At the end of the Customer Engagement
Window, all Interconnection Requests
deemed valid that have executed a Cluster
Study Agreement in the form of Appendix 2
to this LGIP shall be included in the Cluster
Study. Any Interconnection Requests for
which the Interconnection Customer has not
executed a Cluster Study Agreement [not
deemed valid at the close of the Customer
Engagement Window] shall be deemed
withdrawn (without the cure period provided
under Section 3.7 of this LGIP) by
Transmission Provider, the application fee
shall be forfeited to the Transmission
Provider, and the Transmission Provider
shall return the study deposit and
Commercial Readiness Deposit to
Interconnection Customer. Immediately
following the Customer Engagement
Window, Transmission Provider shall initiate
the Cluster Study described in Section 7 of
this LGIP.
160. We also modify pro forma LGIP
section 3.4.4 to clarify that all items in
pro forma LGIP section 3.4.2 must be
received during the cluster request
window. Taken together, these
modifications make clear that the
condition to proceed from the cluster
request window to the customer
engagement window is a valid
interconnection request, and the
condition to proceed from the customer
engagement window is an executed
cluster study agreement.
161. We are unpersuaded by NYISO’s
arguments to modify the requirement for
transmission providers to post an
anonymized list of the projects eligible
to participate in the cluster study during
the customer engagement window.
NYISO’s position is that the
requirement would complicate NYISO’s
own specific processes, rather than the
processes of transmission providers
more broadly. Consistent with the
Commission’s statements in Order No.
2023, transmission providers may
explain specific circumstances on
compliance and justify why any
deviations are either consistent with or
superior to the pro forma LGIP, pro
forma LGIA, pro forma SGIP, and/or pro
forma SGIA or merit an independent
entity variation in the context of RTOs/
ISOs.
162. We disagree with NewSun’s
request to extend the 30-calendar day
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period for an interconnection customer
to execute the facilities study
agreement. The NOPR did not propose,
and Order No. 2023 did not adopt, any
modifications to section 8.1 of the pro
forma LGIP regarding the 30-calendar
day period. We believe that 30 calendar
days is a sufficient amount of time to
meet the requirements of pro forma
LGIP section 8.1. We believe that 30calendar day timeframe balances
providing certainty about the timeline
for the interconnection process and
ensuring that studies progress in a
timely manner while providing
sufficient time for an interconnection
customer to execute the facilities study
agreement and submit the appropriate
deposit. We note that, while the
Commission implemented changes in
Order No. 2023 such as the commercial
readiness deposit in pro forma LGIP
section 8.1 that increase certain burdens
on interconnection customers with the
goal of discouraging speculative
requests, the Commission also
implemented changes such as the new
study delay penalty structure that
reasonably incentivizes transmission
providers to ensure the timely
processing of interconnection
requests.268
163. However, we are persuaded by
NewSun’s arguments regarding the
overlapping timelines for the notice of
restudy and execution of the facilities
study agreement (with associated
deposits). Therefore, we modify sections
7.3 and 8.1 of the pro forma LGIP to
remove the requirement for
transmission providers to tender an
interconnection facilities study
agreement simultaneously with issuance
of a cluster study (or restudy) report. We
modify section 8.1 of the pro forma
LGIP to clarify that transmission
providers shall tender the
interconnection facilities study
agreement within 5 business days after
the transmission provider notifies
interconnection customers that no
further restudies are required. This
modification addresses NewSun’s
concern that an interconnection
customer will not know if a restudy is
required before the interconnection
customer is required to commit to a
facilities study and make the required
deposits.
164. Regarding NYTOs’ request for
clarification about equal queue priority,
268 See id. P 962. We also note that MISO and SPP
currently only provide for 15 days to enter the
facilities study phase (called Decision Point 2 in
their respective generator interconnection
procedures), and they each require a 20%
commercial readiness deposit to enter the facilities
study, whereas Order No. 2023 only requires a 10%
deposit.
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we continue to find that, under the pro
forma LGIP, interconnection requests
studied in the same cluster have equal
queue priority.269 To address the
situation that NYTOs describe, which
appears specific to New York, we
reiterate that NYISO, as an ISO, may
explain its specific circumstances on
compliance and justify why any
deviations merit an independent entity
variation.
165. We are not persuaded by
arguments raised by several commenters
regarding reforms not adopted in Order
No. 2023. We are not persuaded by
AEP’s argument that the Commission
should have included a generator
replacement process in the pro forma
LGIP. The NOPR did not propose such
a process, and we continue to believe
that the record in this proceeding is
insufficient to require such a process
generically. To AEP’s alternative request
for clarification, we clarify that nothing
in Order No. 2023 limits transmission
providers’ ability to make an FPA
section 205 filing, and we will continue
to assess such filings on a case-by-case
basis. In response to MISO, we clarify
that Order No. 2023 does not require
transmission providers to change,
eliminate, or re-justify existing
Commission-approved generator
replacement processes on compliance.
We reiterate our determination in Order
No. 2023 that comments concerning
generator replacement processes are
beyond the scope of Order No. 2023.270
166. We also disagree with AEP’s
argument that the Commission should
include an option for processing some
interconnection requests outside the
cluster study process. We continue to
find, as the Commission did in Order
No. 2023, that, based on the record
before us, establishing a separate
interconnection process outside the
cluster study process could detract from
transmission providers’ efforts to
efficiently process cluster studies.271
167. Finally, we revise the pro forma
LGIP to correct inadvertent errors and
add minor, clarifying edits as follows.
First, we revise section 3.4.6 to correct
an inadvertent omission of the word
‘‘or’’ to clarify that the non-disclosure
agreement used for the group cluster
study scoping meeting will provide for
confidentiality of identifying
information or commercially sensitive
information, consistent with the
discussion in Order No. 2023.272
Second, we also revise pro forma LGIP
section 7.5 to clarify that cluster
P 858.
270 See id. PP 1736, 1743.
271 Id. P 392.
272 Id. P 247.
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restudies can be triggered by withdrawal
of a higher-queued interconnection
customer, and that interconnection
customers being restudied are
responsible for the cost of any restudy,
except as provided in section 3.7. Third,
we revise pro forma LGIP section 3.5.2.4
to clarify that the requirement to track
and post metrics on interconnection
queue withdrawals includes each stage
of the study process. Fourth, we revise
pro forma LGIP section 3.4.6 to remove
the phrase ‘‘and one or more available
alternative Point(s) of Interconnection,’’
consistent with the discussion in Order
No. 2023.273 Fifth, we revise the pro
forma LGIP definition of
‘‘interconnection study’’ to reference all
interconnection studies discussed in the
pro forma LGIP.
3. Allocation of Cluster Network
Upgrade Costs
a. Order No. 2023 Requirements
168. In Order No. 2023, the
Commission added new section 4.2.1
(Cost Allocation for Interconnection
Facilities and Network Upgrades) to the
pro forma LGIP to require that
transmission providers (1) allocate
network upgrade costs based on the
proportional impact method and (2)
allocate the costs of substation network
upgrades on a per capita basis.274 To
implement this requirement, the
Commission added definitions for
proportional impact method, substation
network upgrades, and system network
upgrades to the pro forma LGIP and pro
forma LGIA and modified the existing
definition of stand alone network
upgrades. The Commission also
required transmission providers to
allocate the costs of interconnection
facilities (i.e., both the interconnection
customer’s interconnection facilities
and transmission provider’s
interconnection facilities) on a per
capita basis.275 The Commission further
provided that interconnection
customers may agree to share
interconnection facilities, that the per
capita cost allocation will apply only
where interconnection customers agree
to share interconnection facilities, and
that interconnection customers may
choose a different cost sharing
arrangement upon mutual agreement.
169. The Commission found that
transmission providers must provide
tariff provisions that describe the
method they will use for allocating costs
of each type of network upgrade, but
273 Id. P 202 (declining to permit interconnection
customers to submit multiple alternative points of
interconnection).
274 Id. P 453.
275 Id. P 454.
269 Id.
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specific metrics and thresholds for
implementing the allocation, or other
specific technical information, may be
included in business practice manuals,
or publicly posted on the transmission
provider’s website.276 The Commission
found that, in particular, the technical
information surrounding
implementation of the proportional
impact method by a particular
transmission provider does not need to
be included in the transmission
provider’s tariff under the rule of reason
because these provisions are properly
classified as implementation details that
do not significantly affect rates, terms,
and conditions of service.
170. In response to requests for the
Commission to direct transmission
providers to use a specific type of
proportional impact method or
distribution factor analysis and apply
minimum distribution factor thresholds
that will be used to evaluate NRIS and
ERIS requests, the Commission stated
that it was unpersuaded that such level
of prescription is needed to ensure just,
reasonable, and not unduly
discriminatory or preferential rates.277
The Commission stated that, instead, it
believes that flexibility for transmission
providers to develop such details as part
of their compliance filings—and in their
business practice manuals, where
consistent with the rule of reason—is
important to ensure that the
proportional impact method used by
each transmission provider reflects the
characteristics of its region (e.g., types of
network upgrade facilities identified in
the region, or preferred analyses in the
region for determining the share of the
need for the specific network upgrade
type).
b. Requests for Rehearing and
Clarification
171. Generation Developers request
clarification that Order No. 2023 does
not prejudge whether any
implementation detail regarding the
proportional impact method needs to be
included in the tariff rather than in a
business practice manual, and that
Order No. 2023 gives transmission
providers flexibility to develop a
method consistent with the
Commission’s rule of reason.278
Generation Developers express concern
that Order No. 2023 could be
misinterpreted such that any
implementation detail regarding the
proportional impact method does not
significantly affect rates and thus need
276 Id.
P 462.
P 463.
278 Generation Developers Rehearing Request at
3–5.
277 Id.
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not be included in the tariff. Generation
Developers aver that the Commission
has recognized that the rule of reason
must be applied on a case-by-case basis
and thus it would be inappropriate to
make a generic determination that any
specific detail can be placed in a
business practice manual.279 Generation
Developers further argue that the
Commission currently lacks the
information necessary to make such a
determination because whether a
specific threshold or metric will
significantly affect rates depends on
several factors that will be detailed in
the transmission provider’s Order No.
2023 compliance filings.
172. Longroad Energy requests
rehearing of Order No. 2023’s decision
to not require minimum impact
thresholds for purposes of the
proportional impact method.280
Longroad Energy argues that minimum
impact thresholds are necessary to
ensure that interconnection customers
are not required to finance network
upgrades for which they have a de
minimis impact.281 Longroad Energy
avers that the absence of a minimum
impact threshold is administratively
burdensome for transmission providers
because they must track a larger number
of interconnection requests. Longroad
Energy asserts that interconnection
customers may be exposed to
construction delays for network
upgrades for which they only have a de
minimis impact. Longroad Energy notes
that the Commission has accepted
minimum impact thresholds in other
instances.282 Longroad Energy further
argues that minimum impact thresholds
are necessary to prevent any
withdrawing interconnection request
from materially impacting the remaining
interconnection customers and thus
triggering a withdrawal penalty.283
Finally, Longroad Energy requests
clarification that Order No. 2023 does
not preclude a transmission provider
from using minimum impact thresholds.
173. Clean Energy Associations
request clarification that substation
network upgrade cost allocation is based
279 Id. at 4 (citing Cal. Indep. Sys. Operator Corp.,
141 FERC ¶ 61,237, at P 35 (2012)).
280 Longroad Energy Rehearing Request at 4–9.
281 Id. at 5–6.
282 Id. at 7–8 (citing Tenaska Clear Creek Wind,
LLC v. Sw. Power Pool, Inc., 177 FERC ¶ 61,200,
order on compliance and reh’g, 180 FERC ¶ 61,160,
at P 99 (2021), reh’g denied by operation of law, 181
FERC ¶ 62,090 (2022), order addressing arguments
on reh’g and denying motion for stay, 182 FERC
¶ 61,084, at PP 33, 36 (2023); Midcontinent Indep.
Sys. Operator, Inc., 171 FERC ¶ 61,236, at PP 44, 56,
reh’g denied by operation of law, 172 FERC
¶ 62,102, order addressing arguments on reh’g, 172
FERC ¶ 61,235 (2020)).
283 Id. at 8–9.
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on the number of interconnection
facilities (i.e., generator tie lines)
connecting to the substation at the point
of interconnection and not based on the
number of generating facilities
connecting to the substation.284 Clean
Energy Associations explain that it is
the number of interconnection facilities,
not the number of generating facilities,
that drive substation expansion. Clean
Energy Associations request that the
Commission clarify that the
transmission provider should first
allocate substation network upgrade
costs on a per capita basis for each
interconnection facility connecting to
the substation, and secondly divide
those costs between the multiple
generating facilities using that
interconnection facility.
174. Clean Energy Associations also
request clarification that substation
network upgrades are at distinctive
voltage levels.285 Clean Energy
Associations explain that definitive
selection of a point of interconnection
requires a voltage level to be specified
as well as a substation, and that
expansion costs for different voltage
levels are normally unrelated and may
be very different.
c. Determination
175. In response to Generation
Developers’ request for clarification
regarding the location of details on the
implementation of the proportional
impact method, we clarify that,
consistent with the rule of reason, the
Commission will consider the details of
the transmission provider’s proposed
proportional impact method and
whether those details should be in the
tariff in its individual Order No. 2023
compliance filing.
176. We are unpersuaded by Longroad
Energy’s request for rehearing to require
all transmission providers to use
minimum impact thresholds. We
reiterate the Commission’s finding in
Order No. 2023 that it is appropriate for
transmission providers to propose such
details in their Order No. 2023
compliance filings to ensure that the
method used by each transmission
provider reflects the characteristics of
its region.286 For example, different
regions may identify different types of
network upgrades or have preferred
analyses for identifying specific network
upgrade types. We disagree with
Longroad Energy’s assertion that
minimum impact thresholds are
necessary to prevent any withdrawal
284 Clean Energy Associations Rehearing Request
at 54–55.
285 Id. at 55–56.
286 Order No. 2023, 184 FERC ¶ 61,054 at P 463.
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from triggering a withdrawal penalty, as
the transmission provider must still
assess whether the withdrawal has a
material impact on the cost or timing of
equal or lower-queued interconnection
requests in accordance with section
3.7.1 of the pro forma LGIP. In response
to Longroad Energy’s request for
clarification, we clarify that Order No.
2023 does not preclude transmission
providers from proposing a minimum
impact threshold.
177. In response to Clean Energy
Associations’ request for clarification
regarding substation network upgrade
cost allocation, we clarify that the cost
allocation is based on the number of
interconnection facilities connecting to
the substation located at the point of
interconnection. Accordingly, to
allocate such costs per capita to each
generating facility in accordance with
section 4.2.1.1.a of the pro forma LGIP,
the transmission provider must first
allocate the costs of substation network
upgrades on a per capita basis for each
interconnection facility connecting to
the substation, and then allocate those
costs on a per capita basis between each
generating facility using the
interconnection facility.
178. We also grant Clean Energy
Associations’ request for clarification
that substation network upgrades are at
distinct voltage levels. Accordingly, we
modify section 4.2.1.1.a of the pro forma
LGIP as follows, with brackets
indicating deletions and italics
indicating additions:
Substation Network Upgrades, including
all switching stations, shall be allocated first
to Interconnection Facilities interconnecting
to the substation at the same voltage level,
and then per capita to each Generating
Facility sharing the Interconnection Facility
[interconnecting at the same substation].
4. Shared Network Upgrades
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a. Order No. 2023 Requirements
179. In Order No. 2023, the
Commission declined to adopt the
NOPR proposal to implement cost
sharing of network upgrades between
interconnection customers in an earlier
cluster and interconnection customers
in a subsequent cluster.287 The
Commission stated that it declined to
adopt the NOPR proposal because of its
potentially significant administrative
burden and because Order No. 2023’s
cluster network upgrade cost allocation
reform would address the ‘‘first mover/
free rider’’ issue that motivated the
NOPR proposal.
b. Requests for Rehearing and
Clarification
180. Shell requests clarification that
Order No. 2023 does not prohibit
existing mechanisms of inter-cluster
cost sharing of network upgrades and
that the Commission will not prohibit
inter-cluster cost sharing in the
future.288 Shell avers that network
upgrade cost sharing between initial and
subsequent interconnection customers
is common in the industry, for example
in the ISO–NE market.
c. Determination
181. We clarify that Order No. 2023
does not require transmission providers
to eliminate, change, or re-justify
existing tariff mechanisms regarding
cost sharing of network upgrades
between earlier-in-time and later-intime clusters because such provisions
are not impacted by the requirements of
Order No. 2023. We reiterate that
transmission providers need only seek
approval to maintain previously
approved variations from the pro forma
LGIP and pro forma LGIA if such
variations are impacted by the
requirements of Order No. 2023.
5. Increased Financial Commitments
and Readiness Requirements
a. Financial Security Generally
i. Order No. 2023 Requirements
182. In Order No. 2023, the
Commission modified sections 3.4.2(vi),
5.1.1.1, 5.1.1.2, 7.5, and 8.1(3) of the pro
forma LGIP to require that an
interconnection customer pay the
commercial readiness deposit and
deposits prior to the transitional serial
study, transitional cluster study, cluster
restudy and the interconnection
facilities study via cash or a letter of
credit.289 The Commission also
established a pro forma two-party
affected system facilities construction
agreement in Appendix 11 to the pro
forma LGIP and a pro forma multiparty
affected system facilities construction
agreement in Appendix 12 to the pro
forma LGIP.290 In section 4.1 of
Appendix 11 to the pro forma LGIP and
section 4.1 of Appendix 12 to the pro
forma LGIP, the Commission required
that an affected system interconnection
customer provide financial security to
the transmission provider in an amount
sufficient to cover the costs for
constructing, procuring, and installing
the applicable portion of affected system
network upgrade(s) in the form of a
guarantee, a surety bond, a letter of
288 Shell
Rehearing Request at 14–15.
No. 2023, 184 FERC ¶ 61,054 at P 690.
290 Id. P 1193.
289 Order
287 Id.
PP 486–488.
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27035
credit or other form of security that is
reasonably acceptable to transmission
provider, at the affected system
interconnection customer’s option.
ii. Requests for Rehearing and
Clarification
183. Clean Energy Associations
request clarification or, in the
alternative, rehearing that acceptable
forms of security for the commercial
readiness deposit, transitional serial
study deposit, and transitional cluster
study deposit are not limited to only
irrevocable letters of credit and cash.291
Clean Energy Associations assert that
the Commission did not explain the
decision to list these forms of security
to the exclusion of other forms, such as
surety bonds or other forms of security
that may be acceptable to the
transmission provider, and ignored
comments in the record explicitly
requesting flexibility for these
alternative forms of security to be
considered.
184. Similarly, Longroad Energy
requests rehearing to allow generator
interconnection customers to pay
deposits or provide security in the form
of cash, irrevocable letter of credit,
surety bond, or other reasonably
acceptable form of financial security, at
the generator interconnection
customer’s discretion.292 Additionally,
if the interconnection customer submits
its required deposit or security in the
form of a letter of credit or surety bond,
and ultimately some or all of the
security is drawn by the transmission
provider, Longroad Energy argues that
the interconnection customer should be
given the option to pay the amount due
in cash rather than drawing on the letter
of credit or bond. Longroad Energy
argues that limiting the acceptable forms
of financial assurance to only
irrevocable letters of credit and cash is
arbitrary and capricious and an
unexplained departure from
Commission precedent in Order No.
2003.293 In addition to the deposits
mentioned by Clean Energy
Associations, Longroad Energy requests
rehearing regarding the acceptable form
of security for the deposits prior to the
cluster restudy and the interconnection
facilities study.294 Longroad Energy
notes that Order No. 2023 explicitly
allows surety bonds or other forms of
reasonably acceptable financial security
for affected system network upgrade
291 Clean Energy Associations Rehearing Request
at 63–65.
292 Longroad Energy Rehearing Request at 12.
293 Id. at 9–14.
294 Id. at 10–11.
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deposits but not other deposits, which
is unduly discriminatory.295
iii. Determination
185. We are persuaded by Clean
Energy Associations and Longroad
Energy’s arguments on rehearing. We
believe that allowing surety bonds or
other forms of financial security that are
reasonably acceptable to the
transmission provider for the
commercial readiness deposit and all
study deposits will help ensure that
interconnection customers do not face
unjust and unreasonable or unduly
discriminatory hurdles to the
interconnection of new generation
through limitations on the acceptable
forms of financial security. We find that
acceptable forms of security for the
commercial readiness deposit and
deposits prior to the transitional serial
study, transitional cluster study, cluster
restudy and the interconnection
facilities study should include not only
cash or an irrevocable letter of credit,
but also surety bonds or other forms of
financial security that are reasonably
acceptable to the transmission provider.
Accordingly, we modify sections 3.4.2,
5.1.1.1, 5.1.1.2, 7.5, and 8.1 of the pro
forma LGIP to reflect this finding.
186. However, we are not persuaded
by Longroad Energy’s request that, if the
interconnection customer submits its
required deposit or security in the form
of a letter of credit or surety bond, the
interconnection customer should be
given the option to pay any amount
drawn by the transmission provider in
cash rather than drawing on the letter of
credit or surety bond. Longroad Energy
did not provide sufficient reasoning or
evidence as to why this clarification is
necessary to ensure just and reasonable
and not unduly discriminatory or
preferential rates. However, we clarify
that we do not preclude transmission
providers from allowing interconnection
customers to pay cash in lieu of drawing
on a previously submitted letter of
credit or surety bond.
b. Increased Study Deposits
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i. Order No. 2023 Requirements
187. In Order No. 2023, the
Commission adopted the following
study deposit framework in section
3.1.1.1 (Study Deposit) of the pro forma
LGIP: 296
Size of proposed
generating facility
associated with
interconnection
request
Amount of deposit
>20 MW <80 MW ....
≥80 MW <200 MW ..
≥200 MW .................
$35,000 + $1,000/MW.
$150,000.
$250,000.
The Commission required
transmission providers to collect this
study deposit once, upon entry into the
cluster.297
ii. Determination
188. Given that interconnection
customers developing small generating
facilities requesting NRIS submit their
interconnection requests under the
relevant transmission providers’
LGIP,298 we modify 3.1.1.1 as follows to
clarify the applicable study deposits in
such instances:
Size of proposed
generating facility
associated with
interconnection
request under the
pro forma LGIP
Amount of deposit
<80 MW ...................
≥80 MW <200 MW ..
≥200 MW .................
$35,000 + $1,000/MW.
$150,000.
$250,000.
189. We also modify section 3.1.1.1 of
the pro forma LGIP to clarify that the
$5,000 application fee is nonrefundable. We also modify section 13.3
of the pro forma LGIP to remove
language ‘‘or offset against the cost of
any future Interconnection Studies
associated with the applicable Cluster
prior to beginning of any such future
Interconnection Studies,’’ given that the
study deposit structure under Order No.
2023 includes an initial study deposit at
the beginning of the study process,
rather than separate deposits before
each phase of study.
c. Demonstration of Site Control
i. Order No. 2023 Requirements
190. In Order No. 2023, the
Commission adopted revisions to the
pro forma LGIP and pro forma LGIA to
add more stringency to the site control
requirements and to help prevent
speculative interconnection requests
from entering the interconnection
queue.299 The Commission found that,
taken together, these reforms will help
ensure that commercially viable
interconnection requests with
demonstrated site control or with
297 Order
295 Id.
at 12–13.
No. 2023, 184 FERC ¶ 61,054 at PP 502–
503; pro forma LGIP section 3.1.1.1.
296 Order
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No. 2023, 184 FERC ¶ 61,054 at P 505.
Generator Interconnection Agreements
& Procs., Order No. 792, 78 FR 73240 (Dec. 5, 2013),
145 FERC ¶ 61,159, at PP 232, 235 (2013).
299 Order No. 2023, 184 FERC ¶ 61,054 at P 583.
298 Small
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demonstrated regulatory limitations will
be able to enter the interconnection
queue, thereby reducing the negative
impacts of speculative interconnection
requests.
191. As relevant to the requests for
rehearing and clarification, in Order No.
2023, the Commission revised: (1) the
definition for ‘‘site control’’ in section 1
of the pro forma LGIP and in article 1
of the pro forma LGIA; 300 and (2)
section 3.4.2 of the pro forma LGIP to
include a limited option for
interconnection customers to submit a
deposit in lieu of site control when they
submit their interconnection request—
only if qualifying regulatory limitations
prohibit the interconnection customer
from obtaining site control.301
192. Also relevant to the requests for
clarification, in Order No. 2023, the
Commission clarified that deposits in
lieu of site control for interconnection
customers with regulatory limitations
are refundable and cannot be applied to
the costs of interconnection studies or
withdrawal penalties.302 The
Commission also clarified that the site
control demonstration requirements
apply only to the land needed for the
generating facility and explained that,
because it did not propose site control
requirements for interconnection
facilities in the NOPR, it declined to
address comments suggesting
alternative site control requirements for
interconnection facilities or network
upgrades.303
ii. Requests for Rehearing and
Clarification
193. IPP Coalition requests rehearing
and urges the Commission to establish
a requirement for full site control over
generator interconnection facilities
without a deposit in lieu of site control
demonstration option at the facilities
study phase.304 IPP Coalition contends
that Order No. 2023 limited site control
requirements to ‘‘the land needed for
300 Id. P 584 (‘‘Site Control shall mean the
exclusive land right to develop, construct, operate,
and maintain the Generating Facility over the term
of expected operation of the Generating Facility.
Site Control may be demonstrated by
documentation establishing: (1) ownership of, a
leasehold interest in, or a right to develop a site of
sufficient size to construct and operate the
Generating Facility; (2) an option to purchase or
acquire a leasehold site of sufficient size to
construct and operate the Generating Facility for
such purpose; or (3) any other documentation that
clearly demonstrates the right of Interconnection
Customer to exclusively occupy a site of sufficient
size to construct and operate the Generating
Facility. Transmission Provider will maintain
acreage requirements for each Generating Facility
type on its OASIS or public website.’’).
301 Id. P 605.
302 Id. P 612.
303 Id. P 604.
304 IPP Coalition Rehearing Request at 6.
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the generating facility’’ and declined to
extend any site control requirements to
the interconnection customer’s
interconnection facilities without
substantive consideration and a
reasoned response to the comments
urging such a requirement,305 which is
contrary to reasoned decision-making
principles in violation of the APA. IPP
Coalition argues that requiring site
control for interconnection facilities
would increase the quality of
interconnection study results and
increase certainty for interconnection
customers as the interconnection
process becomes more costly and risky
to navigate. IPP Coalition further argues
that the record reflects that such a
requirement could prevent gaming and
reduce the risk of more speculative
projects delaying the interconnection
process.306
194. Clean Energy Associations ask
the Commission to clarify that the
revised definition of site control in the
pro forma LGIP and pro forma LGIA is
not meant to impose term requirements
on site control.307 Further, Clean Energy
Associations urge the Commission to
clarify and modify the definition of site
control to prevent future confusion and
misinterpretation by transmission
providers regarding any term
requirements for site control. Clean
Energy Associations assert that Order
No. 2023 revised the definition of site
control in a way that is not discussed in
the order or in the preceding NOPR to
include the words ‘‘right to develop,
construct, operate, and maintain the
Generating Facility over the term of
expected operation of the Generation
Facility’’ (emphasis added).308 Clean
Energy Associations assert that this
revision implies that a lease option or
other form of site control must have a
term that is valid for the entire life of
the generating facility. Clean Energy
Associations argue that such a term is
contrary to standard industry
practice,309 is unnecessary to ensure
305 Id. at 3–4 (citing AEE Initial Comments at 18;
AEP Initial Comments at 21–23; Cypress Creek
Initial Comments at 22; Enel Initial Comments at
41–42; MISO Initial Comments at 56; National Grid
Initial Comments at 22–23; and Shell Reply
Comments at 23).
306 Id. at 4–5 (citing Order No. 2023, 184 FERC
¶ 61,054 at PP 537–539).
307 Clean Energy Associations Rehearing Request
at 63.
308 Id. at 61.
309 Clean Energy Associations states that the
standard industry practice is to execute a
development lease with a development term and an
extended term. Clean Energy Associations explain
that the development term typically lasts until the
start of construction, is less than ten years, and
expires if not extended by the interconnection
customer. Clean Energy Associations further
explain that, when an interconnection customer is
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that developers have sufficient rights to
develop, construct, operate, and
maintain their generating facilities, and
unnecessarily increases the cost of
development, resulting in rates to
consumers that are unjust and
unreasonable.310
195. ACP requests that the
Commission clarify that, in their
compliance filings, transmission
providers may seek to expand
opportunities for interconnection
customers to submit deposits in lieu of
demonstrating 90% site control when
submitting an interconnection request to
address other exigent circumstances
beyond regulatory constraints.311 ACP
argues that land acquisition in dense
urban areas where battery storage
facilities are more frequently sited is
much more difficult and costly to
achieve at the time an interconnection
request is submitted than is typically
the case for project sites much further
from load. ACP asserts that denying
such flexibility on compliance could
result in key battery storage projects and
other projects near load being unable to
move forward, endangering grid
reliability where and when those
resources are most needed.312 ACP
argues that this clarification would not
alter any aspect of Order No. 2023 but
would provide valuable information to
transmission providers and
interconnection customers in
developing effective compliance
filings.313
196. In the event the point of
interconnection must change due to a
new government policy or regulatory
requirement, ;rsted requests
clarification that any deposits submitted
in lieu of site control would still be
treated as refundable and the project
would not be subject to withdrawal
penalties if the change cannot be
accommodated.314
iii. Determination
197. We are unpersuaded by IPP
Coalition’s request for rehearing of the
Commission’s decision to apply site
control demonstration requirements
only to the land needed for the
generating facility. We reiterate that the
Commission did not propose site
ready to begin construction, the lease grants the
customer the unilateral right to enter the extended
term at a pre-determined higher payment rate. Id.
310 Id. at 62–63.
311 ACP Clarification Request at 1–3.
312 Id. at 3 (also arguing that lease options
available in dense urban areas typically have
shorter terms than the phases of interconnection
studies that determine project feasibility and
capacity deliverability, which in turn can serve to
justify more definitive site control).
313 Id. at 4.
314 ;rsted Rehearing Request at 11.
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27037
control requirements for
interconnection facilities in the NOPR.
While we note that some comments
were submitted on this topic,315 we
continue to find the record insufficient
for the Commission to assess alternative
site control requirements for
interconnection facilities and impose
them on a nationwide basis. We also
note that some of the comments that
were submitted argued that
interconnection customers require
flexibility when siting interconnection
facilities because the route for such
facilities may not be identified until the
very end of the interconnection
process.316
198. We are also unpersuaded by
Clean Energy Associations’ request for
clarification and to modify the
definition of site control to avoid
imposing term limits. We disagree with
Clean Energy Associations that Order
No. 2023 revised the definition of site
control in a way that was not discussed
in the NOPR and note that the proposed
definition of site control in the NOPR
included the words ‘‘right to develop,
construct, operate, and maintain the
Generating Facility over the term of
expected operation of the Generation
Facility.’’ 317 We find that allowing
interconnection customers to submit
site control documentation with a term
shorter than the expected operation of
the generating facility would increase
risks for all parties. For example, in the
event a shorter lease expires, an
interconnection customer could face
property rights disputes that threaten its
ability to operate its generating facility,
which in turn, could jeopardize the
transmission provider’s ability to
reliably operate its transmission system.
Consistent with Order No. 2023, we find
that it is the interconnection customer’s
responsibility to obtain exclusive site
control over the term of expected
operation of the generating facility.
199. We are further unpersuaded by
ACP’s request for clarification. We
reiterate that, because a deposit in lieu
of site control does not demonstrate that
an interconnection customer has the
exclusive right to develop a site, it does
not indicate that an interconnection
customer is ready to proceed with
construction and commercial operation
of the generating facility. As a result, we
believe that allowing transmission
providers to expand the option for
interconnection customers to submit a
deposit in lieu of demonstrating site
315 Order
No. 2023, 184 FERC ¶ 61,054 at PP 535–
539.
316 Id.
P 535.
179 FERC ¶ 61,194, at app. B, section
317 NOPR,
1.
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control to address other exigent
circumstances, beyond regulatory
limitations, would not help to prevent
speculative, commercially non-viable
interconnection requests from entering
the interconnection queue. In cases
where it is particularly challenging or
costly to achieve exclusive site control,
the interconnection customer may not
be ready to proceed with the
construction and commercial operation
of the generating facility, and therefore
it may be inappropriate to submit an
interconnection request for such a
facility. Thus, we decline to clarify that
transmission providers may expand the
option for interconnection customers to
submit a deposit in lieu of
demonstrating site control.
200. In the event a new regulatory
limitation requires a change to the point
of interconnection that cannot be
accommodated and results in an
interconnection request being
withdrawn, we grant ;rsted’s request
for clarification and clarify that any
deposits submitted by the
interconnection customer in lieu of site
control must be refundable.
Nevertheless, the interconnection
customer may be subject to a
withdrawal penalty. We acknowledge
that certain interconnection customers,
such as offshore wind resources, may be
required to modify their point of
interconnection, after they have already
submitted an interconnection request, in
response to a state or federal policy or
regulation. However, the Commission
did not adopt a process for
interconnection customers to modify
their point of interconnection due to a
regulatory limitation in Order No. 2023.
An interconnection customer can
request to modify its interconnection
request pursuant to section 4.4 of the
pro forma LGIP, but if the transmission
provider determines that the change to
the point of interconnection is a
material modification, and the
interconnection customer elects to
withdraw its interconnection request,
the interconnection customer may be
subject to a withdrawal penalty.
d. Commercial Readiness
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i. Order No. 2023 Requirements
201. In Order No. 2023, the
Commission revised sections 3.4.2, 7.5,
8.1, and 11.3 of the pro forma LGIP to
require interconnection customers to
submit commercial readiness deposits
to help reduce the submission of
speculative, commercially non-viable
interconnection requests into
interconnection queues.318 The
318 Order
No. 2023, 184 FERC ¶ 61,054 at P 690.
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Commission found that, because the
interconnection customer’s total
commercial readiness deposit held by
the transmission provider increases as
the interconnection process proceeds,
this approach will encourage
interconnection customers not ready to
proceed through the interconnection
process—or whose projects become
commercially non-viable during the
interconnection process—to withdraw
earlier in the process, thereby lessening
the incidence of late-stage withdrawals
that result in delays and restudies.319
202. The Commission declined to
adopt the non-financial commercial
readiness demonstrations proposed in
the NOPR because they were not
necessary to address the need for
reform—providing additional deterrence
of speculative, commercially non-viable
interconnection requests—given the
significant, increasing commercial
readiness deposits adopted instead.320
The Commission also indicated that the
non-financial commercial readiness
demonstrations proposed in the NOPR
may not necessarily serve as appropriate
indicators of a proposed generating
facility’s commercial viability on a
national basis, or may not match the
timelines of state procurement
efforts.321 Additionally, the Commission
expressed concern that the proposed
non-financial commercial readiness
demonstrations could incentivize power
purchasers in some regions to execute
purchase contracts with interconnection
customers whose generating facilities
will later be determined to be
commercially non-viable.322
203. Because the Commission did not
adopt the non-financial commercial
readiness demonstrations proposed in
the NOPR, the Commission found that
it was unnecessary to address
commenter concerns that certain nonfinancial commercial readiness
demonstrations could provide an
unduly discriminatory or preferential
advantage to projects being developed
by transmission providers or their
affiliates.323 Although the Commission
found that commercial readiness
deposits are sufficient to address the
need for reform in this proceeding, the
Commission stated that this finding
does not preclude transmission
providers from proposing to adopt nonfinancial commercial readiness
demonstrations on compliance,
provided they meet the requirements of
the relevant standards (i.e., an
319 Id.
P 691.
P 694.
321 Id. PP 695–696.
322 Id. P 698.
323 Id. P 700.
320 Id.
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independent entity variation or the
‘‘consistent with and superior to’’
standard) when requesting a
variation.324
ii. Requests for Rehearing and
Clarification
204. Clean Energy Associations
request that the Commission clarify
Order No. 2023 by indicating the
evaluation framework to determine if
non-financial commercial readiness
criteria are unduly discriminatory or
preferential.325 Clean Energy
Associations urge the Commission to
clarify how it will ensure that any
additional non-financial commercial
readiness demonstrations that a
transmission provider may propose will
not provide an unduly or preferential
advantage to projects being developed
by the transmission provider or its
affiliates. Clean Energy Associations
further request that the Commission
clarify whether it will require a
proposing transmission provider to use
the pro forma readiness requirements
before, or along with, implementing
non-financial demonstrations. In the
alternative, Clean Energy Associations
seek rehearing on the basis that the
Commission failed to meaningfully
respond to evidence that the nonfinancial commercial readiness
demonstrations present ample
opportunity for non RTO/ISO
transmission providers to discriminate
against independent power
producers.326 Clean Energy Associations
argue that it is nearly impossible for
independent power producers to enter
the queue by making a non-financial
demonstration of commercial readiness,
whereas transmission providers may be
able to use non-financial readiness
demonstrations to grant their own
projects preferential contracts, resulting
in undue discrimination against
independent power producers.327
324 Id.
P 701.
Energy Associations Rehearing Request
325 Clean
at 67.
326 Id. (citing ACORE Reply Comments at 4;
ACPA And Renew Northeast Reply Comments at 4–
6; AEE Initial Comments at 20; AEE Reply
Comments at 12; Alliant Energy Initial Comments
at 5–6; Clean Energy Associations Initial Comments
at 34–35; CREA/New Sun Initial Comments at 57;
CREA and NewSun Energy Reply Comments at 22–
45; Cypress Creek Initial Comments at 22–23; Enel
Initial Comments at 44; ENGIE Initial Comments at
5; ENGIE Reply Comments at 2–3; EPSA Initial
Comments at 9; Fervo Energy Reply Comments at
6–7; New Jersey Commission Reply Comments at 6–
8; NextEra Initial Comments at 25; NextEra Reply
Comments at 14–16; Pine Gate Initial Comments at
27; PIOs Initial Comments at 29–30; R Street Initial
Comments at 13; SEIA Initial Comments at 25; and
Vistra Initial Comments at 6).
327 Id. at 68–69 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 667).
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iii. Determination
205. We are unpersuaded by Clean
Energy Associations’ arguments on
rehearing that the Commission must
establish an evaluation framework to
determine if non-financial commercial
readiness criteria are unduly
discriminatory or preferential. The
Commission did not adopt non-financial
commercial readiness demonstrations in
Order No. 2023, and therefore such an
evaluation framework is not needed to
evaluate compliance with Order No.
2023. Rather, we reiterate the
Commission’s finding that non-financial
commercial readiness demonstrations
are not necessary to address the need for
reform—providing additional deterrence
of speculative, commercially non-viable
interconnection requests—given the
significant, increasing commercial
readiness deposits the Commission
adopted in Order No. 2023. Given that
the Commission did not adopt nonfinancial commercial readiness
demonstrations, we do not need to
respond to arguments that such
demonstrations could be unduly
discriminatory. As such, we are not
prejudging any compliance proposals
that might include non-financial
commercial readiness demonstrations,
and transmission providers may explain
specific circumstances on compliance
and justify why any deviations from
Order No. 2023 are either consistent
with or superior to the pro forma LGIP
or merit an independent entity variation
in the context of RTOs/ISOs.328
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e. Withdrawal Penalties
i. Order No. 2023 Requirements
206. In Order No. 2023, the
Commission added the term
‘‘withdrawal penalty’’ to section 1 of the
pro forma LGIP; revised section 3.7 of
the pro forma LGIP; and added sections
3.7.1, 3.7.1.1, and 3.7.1.2 related to
withdrawal penalties to the pro forma
LGIP.329 The Commission required
transmission providers to apply
withdrawal penalties to an
interconnection customer if: (1) the
interconnection customer withdraws its
interconnection request at any point in
the interconnection process; (2) the
interconnection customer’s
interconnection request has been
deemed withdrawn by the transmission
provider at any point in the
interconnection process; or (3) the
interconnection customer’s generating
facility does not reach commercial
operation (such as when an
interconnection customer’s LGIA is
328 Order
No. 2023, 184 FERC ¶ 61,054 at P 1764.
329 Id. P 780.
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terminated prior to reaching commercial
operation).330 However, a withdrawal
penalty must only be assessed if the
withdrawal has a material impact on the
cost or timing of any interconnection
requests with an equal or lower queue
position. The Commission stated that
the interconnection customer will also
be exempt from paying a withdrawal
penalty if (1) the interconnection
customer withdraws its interconnection
request after receiving the most recent
cluster study report and the network
upgrade costs assigned to the
interconnection customer’s request have
increased 25% compared to the
previous cluster study report, or (2) the
interconnection customer withdraws its
interconnection request after receiving
the individual facilities study report and
the network upgrade costs assigned to
the interconnection customer’s request
have increased by more than 100%
compared to costs identified in the
cluster study report.331
207. The Commission required a
transmission provider to assess a
withdrawal penalty on an
interconnection customer with a
proposed generating facility that does
not reach commercial operation based
either on the actual study costs or on a
percentage of the interconnection
customer’s assigned network upgrade
costs, depending on what phase the
interconnection customer withdraws its
interconnection request.332 Thus, the
withdrawal penalty for an
interconnection customer will be
calculated as the greater of the study
deposit or: (1) two times the study cost
if the interconnection customer
withdraws during the cluster study or
after receipt of a cluster study report; (2)
5% of the interconnection customer’s
identified network upgrade costs if the
interconnection customer withdraws
during the cluster restudy or after
receipt of any applicable restudy
reports; (3) 10% of the interconnection
customer’s identified network upgrade
costs if the interconnection customer
withdraws during the facilities study,
after receipt of the individual facilities
study report, or after receipt of the draft
LGIA; or (4) 20% of the interconnection
customer’s identified network upgrade
costs if, after executing, or requesting to
file unexecuted, the LGIA, the
interconnection customer’s LGIA is
terminated before its generating facility
achieves commercial operation.
208. The Commission required
transmission providers to use the
withdrawal penalty funds as follows: (1)
P 783.
P 784.
332 Id. P 791.
to fund studies and restudies in the
same cluster; (2) if withdrawal penalty
funds remain, to offset net increases in
costs borne by other remaining
interconnection customers from the
same cluster for network upgrades
shared by both the withdrawing and
non-withdrawing interconnection
customers prior to the withdrawal; and
(3) if any withdrawal penalty funds
remain, to be returned to the
withdrawing interconnection
customer.333
209. Section 3.7.1.2.1 of the pro forma
LGIP describes the transmission
provider’s handling of withdrawal
penalty funds and the first step of
distributing them to fund studies and
restudies.334 For a single cluster, the
transmission provider shall hold all
withdrawal penalty funds until all
interconnection customers in that
cluster have: (1) withdrawn or been
deemed withdrawn; (2) executed an
LGIA; or (3) requested an LGIA to be
filed unexecuted. Any withdrawal
penalty funds collected shall first be
used to fund studies for interconnection
customers in the same cluster that have
executed an LGIA or requested an LGIA
to be filed unexecuted. Distribution of
the withdrawal penalty funds for such
study costs shall not exceed the total
actual study costs.
210. The Commission adopted section
3.7.1.2.2 of the pro forma LGIP, which
provides that if, after the first
distribution step is complete,
withdrawal penalty funds remain, the
transmission provider must proceed to
the second step of distributing them to
offset net increases in network upgrade
cost assignments driven by the
withdrawal.335 The transmission
provider will determine if the
withdrawn interconnection customers,
at any point in the cluster study process,
shared cost assignment for one or more
network upgrades with any remaining
interconnection customers in the same
cluster based on the cluster study
report, cluster restudy report(s),
interconnection facilities study report,
and any subsequent issued restudy
report for the cluster.
211. If the transmission provider
determines that withdrawn
interconnection customers shared cost
assignment for network upgrades with
remaining interconnection customers in
the same cluster, the transmission
provider will calculate the remaining
interconnection customers’ net increase
in costs (i.e., financial impact) due to a
shared cost assignment for network
330 Id.
333 Id.
331 Id.
334 Id.
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335 Id. P 802.
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upgrades with the withdrawn
interconnection customer.336 It will
then distribute withdrawal penalty
funds as described in section 3.7.1.2.3 of
the pro forma LGIP, depending on
whether the withdrawal occurred before
the withdrawing interconnection
customer executed an LGIA (i.e., during
the cluster study process) or afterward.
212. If the transmission provider
determines that more than one
interconnection customer in the same
cluster was financially impacted by the
same withdrawn interconnection
customer, the transmission provider
will apply the relevant withdrawn
interconnection customer’s withdrawal
penalty to reduce the financial impact to
each impacted interconnection
customer based on each withdrawn
interconnection customer’s proportional
share of the financial impact.337 Each
interconnection customer’s proportional
share will be determined by either the
proportional impact method if the net
cost increase is related to a system
network upgrade or on a per capita basis
if the net cost increase is related to a
substation network upgrade.
213. Section 3.7.1.2.4 of the pro forma
LGIP details the process by which the
transmission provider will provide
amended LGIAs to any interconnection
customers in the cluster that qualify for
distribution of withdrawal penalty
funds under this framework.338 To
account for withdrawals that occurred
during the cluster study process, the
transmission provider must do the
following: within 30 calendar days of all
interconnection customers in the same
cluster having: (1) withdrawn or been
deemed withdrawn; (2) executed an
LGIA; or (3) requested an LGIA to be
filed unexecuted, determine if, and to
what extent, any interconnection
customers qualify to have their
increased network upgrade costs offset
by withdrawal penalty funds and
provide such interconnection customers
with an amended LGIA that provides
the reduction in network upgrade cost
assignment and associated reduction to
the interconnection customer’s financial
security requirements.
214. To account for withdrawals that
occurred in the same cluster after the
withdrawing interconnection customer
executed an LGIA, or requests the filing
of an unexecuted LGIA, the
transmission provider must do the
following: within 30 calendar days of
such withdrawal or termination,
determine if, and to what extent, any
interconnection customers qualify to
P 803.
P 804.
338 Id. P 805.
have their increased network upgrade
costs offset by withdrawal penalty funds
and provide such interconnection
customers with an amended LGIA that
provides the reduction in network
upgrade cost assignment and associated
reduction to the interconnection
customer’s financial security
requirements.339
215. For any given withdrawal, if the
transmission provider determines that
there are no network upgrade cost
assignments in the withdrawn
interconnection customer’s cluster
shared with the withdrawn
interconnection customer, or if the
transmission provider determines that
the withdrawn interconnection
customer’s withdrawal did not cause a
net increase in the shared cost
assignment for any remaining
interconnection customers in the
cluster, the transmission provider must
return the remaining withdrawal
penalty to the withdrawn
interconnection customer.340 Such
remaining withdrawal penalties will be
returned to withdrawn interconnection
customers based on the proportion of
each withdrawn interconnection
customer’s contribution to the total
amount of withdrawal penalty funds
collected for the cluster. The
transmission provider must make such
disbursement within 60 calendar days
of the date on which all interconnection
customers in the same cluster have
either: (1) withdrawn or been deemed
withdrawn; (2) executed an LGIA; or (3)
requested an LGIA to be filed
unexecuted.
216. Finally, section 3.7.1.2.5 of the
pro forma LGIP provides that if, after
the first and second distribution steps
are complete, some or all of an
interconnection customer’s withdrawal
penalty remains, the transmission
provider must return the balance of the
withdrawn interconnection customer’s
withdrawal penalty funds to the
withdrawn interconnection
customer.341
ii. Requests for Rehearing and
Clarification
217. NYISO states that the
Commission’s withdrawal penalty
structure adopted in Order No. 2023
does not reflect reasoned decisionmaking as it is unnecessarily
complicated and establishes significant
new administrative burdens on the
transmission provider that are at odds
with the intent of Order No. 2023 to
enable transmission providers to more
336 Id.
339 Id.
342 NYISO
337 Id.
340 Id.
343 Id.
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P 806.
P 807.
341 Id. P 809.
efficiently and timely process
interconnection requests.342 NYISO
states that the Commission’s framework
substantially deviates from its
straightforward proposal in the NOPR,
in which the transmission provider
would solely use the collected penalties
to offset study costs for the cluster.
NYISO asserts that the Commission has
not provided a reasonable basis for
expanding this process to insert an
additional layer to address offsetting
increases in network upgrade costs for
shared network upgrades. NYISO states
that the new requirements will require
the transmission provider to keep track
of multiple penalty streams tied to each
withdrawing developer, of which there
will likely be a substantial number,
across multiple studies while also
requiring the performance of extensive
analysis concerning the impact of the
withdrawal of each of these projects on
the remaining projects. NYISO asserts
that the Commission should select one
approach that can be reasonably
implemented without requiring the
commitment of significant additional
resources or, alternatively, should
permit each transmission provider to
determine how such collected penalty
costs can be best put to use in its
region.343
218. NYISO states that, if the
Commission elects to retain its
withdrawal penalty approach, NYISO
requests rehearing and/or clarification
of certain elements of these
requirements.344 First, NYISO states that
the Commission should clearly establish
that withdrawal penalties cannot exceed
the dollar amount secured by
transmission providers. NYISO asserts
that transmission providers cannot be
responsible for and should not have to
incur the administrative resource and
expense of having to hunt down or to
enter into litigation with withdrawn
interconnection customers to obtain any
withdrawal penalties that they fail to
pay, and should not be required to pass
on any gaps in uncollected penalty
amounts to their market participants.
NYISO therefore argues that the
Commission should modify the
withdrawal penalty rules: (1) to permit
the transmission provider to require
increases in deposits from
interconnection customers when it
becomes evident that the secured
amount is not sufficient to offset penalty
amounts; and/or (2) to establish that, in
the event of a gap between the secured
amount and withdrawal penalties, the
transmission provider is not required to
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344 Id. at 49–50.
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pay out any uncollected amount under
the penalty distribution rules or to
recover such difference from its market
participants.
219. Clean Energy Associations
request rehearing and state that, while
they support the inclusion of the
penalty-free withdrawal provisions as a
necessary protection for interconnection
customers, the thresholds set by the
Commission are unjust and
unreasonable and will result in
significant uncertainty for
interconnection customers and
inefficient queue processing.345 Clean
Energy Associations first argue that the
100% increase in network upgrade costs
threshold for penalty-free withdrawal
from the interconnection queue at the
facilities study stage (compared to costs
identified in a previous cluster study
report) requires interconnection
customers to withstand an unjust and
unreasonable cost increase at such a late
stage. Clean Energy Associations state
that requiring a 100% increase after the
facilities study for a penalty-free
withdrawal is arbitrary and capricious,
as well as unjust and unreasonable
because it would serve to effectively
penalize interconnection customers for
determinations beyond their control, at
a late phase when costs should become
more certain—not subject to potential
doubling. Clean Energy Associations
assert that this is inconsistent with
Order No. 2023’s goal and justification
for subjecting interconnection
customers to increasing cost and risk in
the form of higher milestone payments
and withdrawal penalties as they move
through the stages of the
interconnection process, which is
intended to incentivize interconnection
customers to drop out as soon as they
learn that their projects are
commercially non-viable.346 Clean
Energy Associations submit that the
Commission should lower this
threshold to a 50% cost increase poststudy for a penalty-free withdrawal,
consistent with the penalty-free
withdrawal provisions approved in SPP,
MISO, and PJM.347
220. NYISO explains that the Order
No. 2023 withdrawal penalty
requirements establish certain
exceptions to an interconnection
customer’s responsibility for withdrawal
penalties, including in cases in which
the transmission provider determines
that ‘‘the withdrawal does not have a
material impact on the cost or timing of
345 Clean Energy Associations Rehearing Request
at 29–30.
346 Id. at 30–31 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 691).
347 Id. at 31 (citations omitted).
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any Interconnection Request with an
equal or lower Queue Position.’’ 348
NYISO argues that the Commission
should eliminate this material impact
threshold exception, which it argues is
inconsistent with the Commission’s
rationale for the withdrawal penalties, is
not well defined, and will create an
additional administrative, timeintensive burden on transmission
providers. NYISO states that an
interconnection customer’s withdrawal
at the conclusion of a study phase made
use of the transmission provider’s
limited time and resources to the
detriment of other interconnection
customers that are ready to proceed and
the overall time for completing the
study phase, and that this harm occurs
regardless of whether or not the actual
study results indicate that the
withdrawal of its project has a material
impact on the cost or timing of other
interconnection requests.
221. NYISO further states that the
Commission neither defined nor
provided guidance concerning what
constitutes a material impact, leaving it
instead to the transmission provider to
determine.349 NYISO argues that this
creates significant inefficiencies and
administrative burdens to require
transmission providers to assess each
withdrawing project—which could
potentially be dozens—at each study
phase and determine on a case-by-case
basis what individual impact that
project has on the cost and timing of any
interconnection request with an equal or
lower queue position. NYISO states that
this would require reviewing such
impacts for not only all other projects
participating in the cluster, but also all
other lower queued large and small
generating facilities in a transmission
provider’s interconnection queue.
NYISO argues that this time intensive
analysis required upon each withdrawal
is counter to one of the primary goals of
Order No. 2023: to increase efficiencies
in the interconnection process.
222. Clean Energy Associations also
seek clarification to provide consistency
and objectivity regarding what
constitutes a material impact resulting
from a withdrawal.350 Clean Energy
Associations urge the Commission to
clarify that transmission providers must
develop criteria to use in assessing
materiality and include such criteria in
their compliance filings and tariffs, and
suggest modifications to pro forma LGIP
section 3.7.1.351 Clean Energy
348 NYISO
Rehearing Request at 50–51.
at 51.
350 Clean Energy Associations Rehearing Request
at 56.
351 Id. at 58–59.
349 Id.
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Associations assert that such
clarification would still allow
transmission providers the deference to
make materiality determinations, but
would also provide interconnection
customers with a clear understanding of
how materiality will be determined by
each provider, while also ensuring
consistent treatment of interconnection
customers by transmission providers
and consistent application of the
required withdrawal penalty approach.
Clean Energy Associations also ask the
Commission to clarify that, when a
transmission provider makes a
materiality determination after a
withdrawal, that such determination or
other information associated therewith
be made available along with and at the
same time as the penalty revenue
posting required by revised pro forma
LGIP section 3.7.1.2. Clean Energy
Associations argue that, absent the
mechanisms requested in this
clarification, the Commission and
interconnection customers would have
little or no visibility into transmission
providers’ implementation of the
immateriality exemption, the
inconsistent application of which could
have significant impacts on competition
and could result in undue
discrimination and preferential
treatment amongst similarly situated
interconnection customers.
223. WIRES states that Order No. 2023
provides that any withdrawal penalty
funds collected by the transmission
provider are to be distributed among the
remaining interconnection customers in
the relevant cluster.352 Specifically,
WIRES explains that Order No. 2023
indicates that such withdrawal penalties
are to be used to reduce any net
increases to the existing network
upgrade cost assignments to remaining
customers that saw increased costs as a
result of the withdrawing customer.
WIRES states that, read together with
new section 3.7.1.2.2 of the pro forma,
the new rule provides that penalty
revenues are not directly returned to
non-withdrawing customers; rather, the
transmission provider is to use those
funds to reduce the costs of network
upgrades that are ultimately assigned to
non-withdrawing interconnection
customers. WIRES states that, because
penalty revenues do not appear to be
directly returned to non-withdrawing
customers, it is unclear how the rule
requires the transmission provider to
use those funds to reduce the
interconnection customers’ network
upgrade cost assignment. As a
consequence, WIRES asserts that Order
No. 2023 could be read to require the
352 WIRES
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transmission provider to reduce its
construction costs included in rates
associated with the network upgrade
and preclude it from earning a return on
the full cost of the network upgrades
that transmission owners develop to
serve the needs of the cluster. WIRES
claims that, in effect, the withdrawal
penalty crediting mechanism could
infringe upon a transmission provider’s
right to self-fund network upgrades and
earn a return of and on their investment.
WIRES argues that the Commission’s
proposed rule never specified, much
less suggested, that withdrawal
penalties would be used to offset
network upgrade costs, and the
Commission should clarify that the
Order No. 2023 withdrawal penalty
distribution may be used to offset
payment amounts by the remaining
interconnection customers to the
transmission owner but does not affect
the overall revenue requirement for the
network upgrades.
224. WIRES states that the
Commission could also clarify that the
withdrawal penalty funds are to be
distributed directly to remaining
interconnection customers as cash
payments, which it claims would
achieve the Commission’s apparent
objectives without impermissibly
interfering with a transmission owner’s
right to fund network upgrades.353
WIRES states that, absent the
Commission granting the above
clarification, WIRES seeks rehearing on
the basis that the Commission failed to
provide adequate notice and
opportunity for public comment on the
consequences, impacts, and legality of,
and possible alternatives to, this new
withdrawal penalty distribution scheme
prior to issuing Order No. 2023 as
required by the Administrative
Procedure Act, and failed to consider
the effects of its withdrawal distribution
penalty.
225. NYISO requests that the
Commission confirm or otherwise
clarify the timeframes for the specific
withdrawal penalty application process
steps from the date on which all
interconnection customers in the cluster
have either withdrawn or been deemed
withdrawn, executed an LGIA, or
requested the LGIA be filed
unexecuted.354 NYISO states that it
understands the transmission provider
to have the following responsibilities
within either 30 or 60 calendar days of
this start date. NYISO understands that
the transmission provider must within
30 days: (1) determine the use of the
collected withdrawal penalty funds for
study costs; (2) refund study costs; (3)
determine the use of any remaining
collected withdrawal penalty funds for
net increases to network upgrade costs;
and (4) provide an amended LGIA in the
case of any offset of increases to
network upgrade costs. NYISO states
that it further understands that the
transmission provider must return any
remaining security to interconnection
customer within 60 calendar days.
NYISO requests that the Commission
confirm these are the intended
deadlines or clarify the actual deadlines
for these responsibilities.
226. NYISO next states that pro forma
LGIP section 3.7.1.2.1 indicates that the
transmission provider must use the
collected withdrawal penalties first ‘‘to
fund studies conducted under the
cluster study process,’’ and that the
cluster study process is defined to
include all of the interconnection
studies and re-studies.355 However,
NYISO states that section 3.7.1.2.1
elsewhere describes distributing
withdrawal penalties only in the context
of the cluster study. NYISO asks the
Commission to clarify whether this tariff
language was intended to apply solely
to distribution of penalty funds for
cluster study costs or for all the
interconnection studies—e.g., cluster restudies and the interconnection
facilities study.
227. NYISO also asks the Commission
to clarify whether the requirements in
pro forma LGIP section 3.7.1.2.2 for
refunding any penalty amounts not used
to offset study costs and net increases in
upgrade costs are intended to be the
same or different from the requirements
for distributing such remaining penalty
funds under section 3.7.1.2.5.356 NYISO
requests that the Commission provide
an expanded version of the helpful
example it provided in Paragraph 808 of
Order No. 2023 that walks through the
different potential variations of this
process.
228. Clean Energy Associations and
Shell ask the Commission to clarify the
scope of the withdrawal penalty
contained in revised pro forma LGIP
sections 5.1.1.1 and 5.1.1.2.357 Clean
Energy Associations state that the
withdrawal penalty definition’s
reference to revised pro forma LGIP
section 3.7.1, and its subsection 3.7.1.1,
leads to a conclusion that every
withdrawal penalty is to be calculated
consistent with revised pro forma LGIP
355 Id.
at 53 (citing revised pro forma LGIP section
1).
356 Id.
353 Id.
at 11.
354 NYISO Rehearing Request at 52–53.
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357 Clean Energy Associations Rehearing Request
at 59–60; Shell Rehearing Request at 10.
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section 3.7.1.358 Clean Energy
Associations and Shell state that section
5 of the revised pro forma LGIP
procedures for the transitional cluster
study process refers to the withdrawal
penalty provisions of section 3.7, but
that certain cross references are
unclear.359 Clean Energy Associations
argue that the Commission should
clarify whether the term ‘‘Withdrawal
Penalty’’ in revised pro forma LGIP
sections 5.1.1.1 and 5.1.1.2 either: (1)
should not be capitalized so that the
revised pro forma LGIP section 1
defined term ‘‘Withdrawal Penalty,’’
and its corresponding reference to the
calculation in pro forma LGIP section
3.7.1, do not apply to withdrawals
during the transition process; or (2) a
new term ‘‘Transitional Withdrawal
Penalty’’ should be defined as a specific
withdrawal penalty that applies only
during the transition process and is
calculated pursuant to Revised pro
forma LGIP sections 5.1.1.1 and
5.1.1.2.360 Clean Energy Associations
and Shell further argue that the
Commission also should clarify whether
the term ‘‘study cost,’’ as used in the
calculation of the transitional
withdrawal penalty, includes the cost of
the entire cluster study or the study cost
that has been assigned to the
withdrawing interconnection customer
up to the point of its withdrawal.
229. Clean Energy Associations ask
the Commission to clarify that the new
penalty-free withdrawal thresholds will
apply to transitional projects.361 Clean
Energy Associations argue that this
clarification will increase project
certainty and fairly allow projects that
go through the transition to proceed in
good faith without the risk that new
results that show substantially higher
costs will not allow them to withdraw
penalty-free.
iii. Determination
230. We deny NYISO’s rehearing
request as it pertains to the withdrawal
penalty structure. Specifically, we
disagree with NYISO’s assertion that the
withdrawal penalty structure adopted in
Order No. 2023 is unnecessarily
complicated and burdensome on
transmission providers and that it does
not reflect reasoned decision-making.
While NYISO asserts that the
requirement to distribute withdrawal
penalties to remaining interconnection
customers facing net increases of costs
358 Clean Energy Associations Rehearing Request
at 60.
359 Id.; Shell Rehearing Request at 10.
360 Clean Energy Associations Rehearing Request
at 60–61; see also Shell Rehearing Request at 11.
361 Clean Energy Associations Rehearing Request
at 74–75.
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for shared network upgrades will
complicate and slow the
interconnection study process, we
continue to find that the benefits of
reducing the harm of such cost shifts
outweighs the potential for added
complexity. We continue to maintain
that incorporating such a mechanism
will decrease the risk that very large
cost shifts due to withdrawals result in
cascading withdrawals,362 which in turn
create substantial uncertainty, cost, and
inefficiency for the interconnection
study process. Moreover, the tracking of
withdrawal penalty funds is necessary
to ensure that funds related to
individual interconnection customers’
withdrawals are appropriately allocated.
The concern of ensuring transparency to
interconnection customers regarding
such funds outweighs the perceived
burden to transmission providers,
especially because transmission
providers are likely to track the impact
of an interconnection customer’s
withdrawal regardless: this is valuable
information to the transmission
provider because withdrawals could
lead to a study delay and accompanying
penalty for the transmission provider
and such information could be useful to
the transmission provider in an appeal.
231. We grant NYISO’s request to
clarify that withdrawal penalties cannot
exceed the dollar amount collected from
interconnection customers that have
withdrawn from the interconnection
study process secured by transmission
providers. As stated in section 3.7.1.2.1
of the pro forma LGIP, withdrawal
penalty funds are collected from the
cluster for the purposes of (1) funding
studies conducted under the cluster
study process for interconnection
customers in the same cluster that have
executed the LGIA or requested the
LGIA to be filed unexecuted, and (2)
reducing net increases, for
interconnection customers in the same
cluster, in interconnection customers’
network upgrade cost assignment and
associated financial security
requirements. The total amount of funds
used for (1) and (2) must not exceed the
total amount of withdrawal penalty
funds collected from the cluster. We
accordingly modify the language in pro
forma LGIP section 3.7.1.2.1 to reflect
this clarification. Given this
clarification, we need not adopt
NYISO’s request for additional
modifications.
232. We are unpersuaded by Clean
Energy Associations’ request for
rehearing as it pertains to the 100%
increase in network upgrade costs
requirement after the facilities study
362 Order
No. 2023, 184 FERC ¶ 61,054 at P 799.
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phase for penalty-free withdrawal. We
disagree that the thresholds for penaltyfree withdrawal laid out in Order No.
2023 expose interconnection customers
to unjust and unreasonable cost
increases. We continue to find that the
trigger thresholds are set at an amount
providing sufficient room for estimates
to change as the cluster evolves while
limiting interconnection customer
exposure to withdrawal penalties when
such estimates change by a significant
amount. We acknowledge that the
thresholds for penalty-free withdrawal
are higher at later stages of the
interconnection study process, but
continue to find that this structure is
reasonable, given the greater harms of
late-stage withdrawals and the
importance of incentivizing earlier
withdrawal of non-viable
interconnection requests. An
interconnection customer will know to
factor in both the cost estimates and the
potential withdrawal penalty but also
the exemption trigger thresholds as it
makes the business decision to proceed
in the interconnection queue.
Accordingly, we retain the penalty-free
withdrawal threshold exemptions set
forth in Order No. 2023.
233. We disagree with NYISO’s and
Clean Energy Associations’ requests for
the Commission to define materiality in
the context of the withdrawal penalty
exceptions in pro forma LGIP section
3.7.1. Consistent with the Commission’s
finding in Order No. 2003,363 we find it
unnecessary to revise pro forma LGIP
section 3.7.1 to specify what constitutes
a material impact on the cost or timing
of any interconnection request with an
equal queue position. We also note a
discrepancy between the pro forma
LGIP language in section 3.7.1 and the
withdrawal penalty framework as
described in Order No. 2023.
Accordingly, we revise section 3.7.1
such that there will be no withdrawal
penalty assessed if the withdrawal does
not have a material impact on any
interconnection request in the same
cluster. Withdrawal penalty funds are
allocated to those interconnection
customers in the same cluster as the
withdrawing interconnection customer,
so we find it necessary for clarity to
remove the reference to lower-queued
interconnection customers, as adopted
in Order No. 2023. We note that the
materiality of the impact caused by a
withdrawal could depend on the factors
pertaining to the individual project
(size, location, type) and other projects
in the cluster (proximity to the
withdrawing project, size of remaining
projects relative to the withdrawing
363 Order
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27043
project), as well as the configuration of
the transmission provider’s
transmission system. Therefore, we
leave it to the transmission provider to
make this determination of materiality.
We are also unpersuaded by Clean
Energy Associations’ request for
clarification that, when a transmission
provider makes a materiality
determination after a withdrawal
regarding a delay in timing or increase
in cost of network upgrades of other
proposed generating facilities in the
same cluster, such determination or
other information associated therewith
be made available along with and at the
same time as the penalty revenue
posting required by revised pro forma
LGIP section 3.7.1.2. The benefit to the
interconnection customers would not
outweigh the substantial burden on
transmission providers to detail the
materiality determination for each
individual withdrawal.
234. In response to WIRES, we clarify
that using the Order No. 2023
withdrawal penalties to offset financial
security payment amounts provided to
the transmission provider by the
remaining interconnection customers
would not reduce the total network
upgrade cost that a transmission
provider places in rate base. When the
Order No. 2023 withdrawal penalties
are used to offset financial security
payment amounts, some network
upgrade payments will come from the
withdrawal penalties and some will
come from the remaining
interconnection customer, but the fact
that a portion of the network upgrade
payment comes from withdrawal
penalties does not reduce the total
network upgrade cost that a
transmission provider places in rate
base. Order No. 2023 provides that an
interconnection customer’s reduced
network upgrade cost obligation will be
effectuated by the transmission provider
amending the interconnection
customer’s LGIA or reducing the
network upgrade cost estimate provided
to the interconnection customer if there
is not yet an LGIA to provide a
reduction in network upgrade cost
assignment and an associated reduction
in the interconnection customer’s
financial security requirement.364 Given
this clarification, we believe it
unnecessary to address WIRES’
alternative request for clarification that
these withdrawal penalty disbursements
must be distributed as cash payments.
For the same reasons, we believe it
unnecessary to address WIRES’
alternative request for rehearing
364 Order
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regarding notice of the new withdrawal
penalty regime.
235. We are persuaded by NYISO’s
request to clarify the timeframes for the
specific withdrawal penalty application
process steps. The transmission
provider is required to complete the
following steps within 30 calendar days
of all interconnection customers in the
cluster having either withdrawn or been
deemed withdrawn, executed an LGIA,
or requested the LGIA be filed
unexecuted: (1) apply a refund to
invoiced study costs for interconnection
customers that remain in the cluster (per
pro forma LGIP section 3.7.1.2.1); (2)
determine whether withdrawn
interconnection customers, at any point
in the cluster study process, shared cost
assignment for one or more network
upgrades with any remaining
interconnection customers in the same
cluster (per pro forma LGIP section
3.7.1.2.2); (3) where the withdrawn
interconnection customers have shared
a cost assignment for one or more
network upgrades with any remaining
interconnection customers in the same
cluster, transmission provider is to
perform the calculations described in
pro forma LGIP subsection 3.7.1.2.3(a)
to determine the reduction in the
remaining interconnection customers’
net increase in network upgrade costs
and associated financial security
requirements (per pro forma LGIP
section 3.7.1.2.4); and (4) where
applicable, provide interconnection
customers with an amended LGIA that
provides the reduction in network
upgrade cost assignment and associated
reduction to the interconnection
customer’s financial security
requirements (per pro forma LGIP
section 3.7.1.2.4).
236. Where the transmission provider
conducts step (2) above and determines
that a withdrawn interconnection
customer did not share cost assignments
with remaining interconnection
customers or cause a net increase in the
cost assignment for any remaining
interconnection customers in the same
cluster, the transmission provider must
return any remaining withdrawal
penalty funds to the withdrawn
interconnection customer(s) within 60
calendar days of all interconnection
customers in the cluster having either
withdrawn or been deemed withdrawn,
executed an LGIA, or requested the
LGIA be filed unexecuted (per pro
forma LGIP section 3.7.1.2.2). The 60day period here allows the transmission
provider time to focus on steps 1–4 in
the previous paragraph before it must
disburse funds to withdrawn
interconnection customers.
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237. We grant NYISO’s request to
clarify that pro forma LGIP section
3.7.1.2.1 requires the transmission
provider to use the collected withdrawal
penalties first to fund all the
interconnection studies conducted for
interconnection customers in the
cluster—including cluster restudies and
the interconnection facilities study. We
accordingly modify the language in
section 3.7.1.2.1 of the pro forma LGIP
to be inclusive of these studies.
238. We grant NYISO’s request to
clarify the difference between the
requirements to return withdrawal
penalty funds to withdrawn
interconnection customers in pro forma
LGIP sections 3.7.1.2.2 and 3.7.1.2.5.
Pro forma LGIP section 3.7.1.2.2
establishes that, where the
interconnection customer’s withdrawal
does not cause a net increase in the
shared cost assignment for any
remaining interconnection customers’
network upgrades in the same cluster,
the withdrawal penalty funds returned
to the withdrawn interconnection
customers will be net of the amount
used to pay the study costs for
interconnection customers in the same
cluster that did not withdraw. Pro forma
LGIP section 3.7.1.2.5 addresses the case
where any interconnection customer’s
withdrawal does cause a net increase in
the shared cost assignment for any
remaining interconnection customers’
network upgrades. In this case, the
withdrawal penalty funds returned to
the withdrawn interconnection
customers will be net of both the study
costs and the amount paid to offset net
increases in shared cost assignments for
network upgrades.
239. We are not persuaded by
NYISO’s request for an expanded
version of the withdrawal penalty
example included in Order No. 2023
because another purely illustrative
example is unnecessary.
240. We agree with Clean Energy
Associations and Shell regarding the
withdrawal penalty contained in pro
forma LGIP sections 5.1.1.1 and 5.1.1.2.
We agree that it is necessary to
distinguish the transition process
withdrawal penalty of nine times study
costs from the withdrawal penalty
assessed under the normal cluster study
process which is calculated based on
pro forma LGIP section 3.7.1.
Accordingly, we modify section 1 to
define ‘‘transitional withdrawal
penalty,’’ 365 and modify pro forma LGIP
365 Transitional Withdrawal Penalty shall mean
the penalty assessed by Transmission Provider to an
Interconnection Customer that has entered the
Transitional Cluster Study or Transitional Serial
Interconnection Facilities Study and chooses to
withdraw or is deemed withdrawn from
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sections 5.1.1, 5.1.1.1, and 5.1.1.2 to
reference the transitional withdrawal
penalty.
241. We grant Clean Energy
Associations’ and Shell’s requests for
clarification of whether the term ‘‘study
cost,’’ as used in the calculation of the
transitional withdrawal penalty,
includes the cost of the entire cluster
study or the study cost that has been
assigned to the withdrawing
interconnection customer up to the
point of withdrawal, inclusive of any
costs incurred in the transition process
under the transitional serial facilities
study or transitional cluster study. We
clarify that study costs include all costs
incurred by the interconnection
customer in the transmission provider’s
existing interconnection study process
prior to the Commission-approved
effective date of the transmission
provider’s Order No. 2023 compliance
filing. For example, where a
transmission provider was operating
under the previous pro forma LGIP, the
study costs would include the amount
incurred by the interconnection
customer for the completion of its
interconnection feasibility study,
interconnection system impact study,
and the interconnection facilities study.
As explained in Order No. 2023 and pro
forma LGIP sections 5.1.1.1 and 5.1.1.2,
study costs for purposes of calculating
this withdrawal penalty will also
include any costs incurred in the
transition process under the transitional
serial facilities study or transitional
cluster study.
242. In response to Clean Energy
Associations, we decline to clarify that
the penalty-free withdrawal thresholds
will apply to transitional projects. We
find it important to the goal of reducing
speculative behavior that any
interconnection customer that enters the
transition process is required to pay a
penalty if it does not reach commercial
operation. We note that interconnection
customers can elect not to enter the
transition process and instead enter the
transmission provider’s first annual
cluster study where the withdrawal
penalty exemptions will be applied. We
also note that the penalty-free
exemption provisions are more
appropriate for the normal cluster study
process where the withdrawal penalty
could be much higher than the nine
times study costs amount assessed as
the transitional withdrawal penalty.
243. We also add minor, clarifying
edits to pro forma LGIP section 3.7.1
Transmission Provider’s interconnection queue or
whose Generating Facility does not otherwise reach
Commercial Operation. The calculation of the
Transitional Withdrawal Penalty is set forth in
sections 5.1.1.1 and 5.1.1.2 of this LGIP.
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6. Transition Process
a. Order No. 2023 Requirements
244. In Order No. 2023, the
Commission established a transition
process for moving to the first-ready,
first-served cluster study process.366
The Commission required transmission
providers to offer existing
interconnection customers up to three
transition options, depending on which
phase of the serial study process their
interconnection requests are in: (1) a
transitional serial study, (2) a
transitional cluster study, and (3)
withdrawal from the interconnection
queue without penalty.
245. The Commission agreed with
commenters that, given current
interconnection queue backlogs in
multiple regions, it is essential that the
Commission craft a transition process to
give interconnection customers, along
with other market participants time to
adjust to new processes and
requirements.367 The Commission
explained that the transition process
will create an efficient way to prioritize
and process interconnection requests
based on how far they have advanced
through the interconnection process and
their level of commercial readiness.
246. The Commission required
transmission providers to offer the
transitional serial study option to
interconnection customers that have
been tendered a facilities study
agreement, even if they have not yet
executed the agreement, as of 30
calendar days after the filing date of the
transmission provider’s initial filing to
comply with Order No. 2023.368
Similarly, the Commission required
transmission providers to offer the
transitional cluster study option to
interconnection customers with an
assigned queue position as of 30
calendar days after the filing date of the
transmission provider’s initial filing to
comply with Order No. 2023. The
Commission found that the adopted
transition process appropriately
balances the need to move expeditiously
to the new cluster study process with
the need to respect the investments and
expectations of interconnection
customers at an advanced stage in the
existing interconnection process.369
247. The Commission stated that
interconnection customers will have
120 calendar days after the publication
of Order No. 2023 to achieve eligibility
366 Order
No. 2023, 184 FERC ¶ 61,054 at P 855.
P 856.
368 Id. P 855.
369 Id. P 856.
367 Id.
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for the transition process (90 calendar
days for transmission providers to
submit compliance filings, plus the 30calendar day eligibility cut-off).370 The
Commission also required the
transmission provider to tender the
appropriate transitional study
agreements to eligible interconnection
customers no later than the
Commission-approved effective date of
the transmission provider’s compliance
filing with Order No. 2023.371 The
Commission stated that this will help
ensure that interconnection customers
are informed about their eligibility for
the transitional studies (including the
associated requirements and deadlines)
in a timely manner.
248. The Commission also adopted
transition process deposits, withdrawal
penalties, and deadlines.372 The
Commission required that: (1)
interconnection customers electing the
transitional serial study must provide a
deposit equal to 100% of the
interconnection facility and network
upgrade costs allocated to the
interconnection customer in the system
impact study; and (2) interconnection
customers electing the transitional
cluster study must provide a deposit
equal to $5 million.373 The Commission
explained that the transition process is
anticipated to involve more
interconnection customers than
standard annual clusters (due to existing
interconnection queue backlogs), which
greatly increases the risk of late-stage
withdrawals. The Commission found
that adopting deposit requirements for
the transitional studies higher than
those adopted for the cluster study
process will help to ensure that the
transitional process is used by
interconnection customers that intend
to proceed with their proposed
generating facilities. In response to
arguments that the proposed deposit
amounts are arbitrary and/or excessive,
the Commission explained that the
deposit amounts are ‘‘based on expected
costs to the extent practicable and that
only a portion of these deposits are
ultimately at-risk.’’ 374 The Commission
noted that the withdrawal penalty is set
at nine times the study cost with the
remainder of deposits to be refunded.
The Commission also noted that
existing interconnection customers that
370 Id. P 866. On rehearing, the Commission
extended the compliance date to 150 calendar days
of the effective date of the final rule but did not
adjust the transition date. Improvements to
Generator Interconnection Procs. & Agreements,
185 FERC ¶ 61,063 (2023).
371 Order No. 2023, 184 FERC ¶ 61,054 at P 867.
372 Id. P 855.
373 Id. P 859.
374 Id.
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27045
are currently in an interconnection
queue can opt to withdraw their
interconnection requests without
penalty and wait for the first standard
cluster study with associated lower
deposit requirements.
249. In response to EDF Renewable’s
claim that the transitional serial study
deposit conflicts with the Commission’s
intentions in Order No. 2003,375 the
Commission found that the heightened
need to avoid late-stage withdrawals
during the transition process—a need
that the Commission could not have
anticipated in Order No. 2003—
warrants the use of this requirement for
the transitional serial study.376
250. As noted earlier, the Commission
established a transitional study
withdrawal penalty equaling nine times
the study cost.377 The Commission
explained that the withdrawal penalty
plays an important role in deterring
speculative interconnection requests in
both the standard cluster study and the
transition process. The Commission
disagreed with commenters that call for
a lower penalty to apply during the
transition process, given that the risk of
withdrawals is heightened during the
transition process. The Commission
noted that, regardless of the cause, a
withdrawal may cause harm to other
interconnection customers in the
transition process and therefore found it
appropriate to impose penalties on
those that choose to withdraw,
notwithstanding that withdrawal may at
times be due to circumstances beyond
the interconnection customer’s control.
The Commission explained that
interconnection customers will bear the
risk of withdrawal penalties and should
consider that risk in deciding whether
to elect to join a transition process.
b. Requests for Rehearing and
Clarification
251. Clean Energy Associations ask
that the Commission grant rehearing to
revise the deposit amounts required for
customers entering the transitional
serial or transitional cluster process, and
revise the withdrawal penalty amounts
for customers that proceed through the
transitional process.378 Clean Energy
375 EDF Renewables Initial Comments at 9 (stating
that Order No. 2003 specifically rejected requiring
interconnection customers, at the time of execution
of the transitional serial study agreement, to
provide a deposit equal to 100% of the
interconnection facility and network upgrade costs
allocated to them in the system impact study report
in favor of requiring security for discrete portions
of these costs).
376 Order No. 2023, 184 FERC ¶ 61,054 at P 859.
377 Id. P 860.
378 Clean Energy Associations Rehearing Request
at 36–39.
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Associations argue that the Commission
acted arbitrarily and capriciously by
imposing excessive and arbitrary
deposit requirements and withdrawal
penalties on interconnection customers
electing to proceed through transitional
studies. Clean Energy Associations
assert that the Commission ignored
substantial record evidence, failed to
‘‘articulate a rational connection
between the facts found and the choice
made,’’ and failed to respond
meaningfully to the arguments of
commenters.379
252. Clean Energy Associations argue
that the Commission failed to provide
any record evidence to support the $5
million deposit amount required for an
interconnection customer to proceed to
a transitional cluster study, nor did it
meaningfully respond to contrary
evidence that the transitional serial
study deposit would be unduly
burdensome or have unintended
consequences that frustrate the purpose
of Order No. 2023.380 Clean Energy
Associations argue that there is no
discussion in the record of how Order
No. 2023’s calculus relates to expected
costs, nor practical limitations to more
accurately estimating those costs.381
Clean Energy Associations assert that
the $5 million amount originates from a
single utility’s claim that $5 million is
consistent with interconnection costs on
its system, and not from Commission
reasoning or evidence that this figure is
appropriate on a pro forma basis. Clean
Energy Associations argue that
establishment of a flat deposit amount is
inconsistent with the Commission’s
own determination elsewhere in Order
No. 2023, where the Commission found
that study deposits under the new
cluster study process should differ
based on project size and estimated
network upgrade costs, depending on
379 Id. at 36 (citing Motor Vehicle Manufacturers,
463 U.S. at 43 (action arbitrary and capricious if
agency ‘‘failed to consider an important aspect of
the problem’’ or ‘‘offered an explanation for its
decision that runs counter to the evidence before
the agency’’); Allentown Mack Sales & Serv., Inc. v.
Nat’l Labor Relations Bd., 522 U.S. 359 (1998); Del.
Div. of Pub. Advoc. v. FERC, 3 F.4th 461, at 469
(D.C. Cir. 2021) (Delaware Public Advocate); Pub.
Utils. Comm’n of Cal. v. FERC, 462 F.3d 1027, 1051
(9th Cir. 2006); PPL Wallingford Energy v. FERC,
419 F.3d 1134, 1198 (D.C. Cir. 2005); N. States
Power Co. v. FERC, 30 F.3d 177, 180 (D.C. Cir.
1994)).
380 Id. at 37 (citing Advanced Energy Economy
Initial Comments at 19–20; Clean Energy
Associations Initial Comments at 43; CREA and
NewSun Energy Initial Comments at 81; EDF
Renewables Initial Comments at 9; Pine Gate Initial
Comments at 36).
381 Id. at 38–39 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 859; Del. Div. of Pub. Advoc., 3 F.4th
at 469).
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the stage of the process.382 Clean Energy
Associations also contend that this
deposit requirement could become a
barrier to entry for smaller projects that
do not have the ability to put up a $5
million deposit, and for which a $5
million deposit would have little
linkage to actual upgrade costs or
project economics, which the
Commission acknowledged was the
appropriate driver for deposit amounts.
253. Clean Energy Associations also
argue that the Commission
inappropriately disregarded EDF
Renewable’s concern that Order No.
2023 conflicts with Order No. 2003,
which specifically rejected a proposal to
require customers to post security up
front for the total cost of such
facilities.383 Clean Energy Associations
note that the Commission justifies its
alternative approach due to the
heightened need to avoid late-stage
withdrawals during the transition
process, but argues that the Commission
failed to provide substantial evidence to
further explain or support this
heightened need.
254. Clean Energy Associations
request rehearing of the transition
process set forth in revised pro forma
LGIP section 5.1.1.2 because they argue
that the scope of the transition cluster
group established by the Commission is
too broad.384 Clean Energy Associations
assert that the Commission unjustly and
unreasonably groups customers that
submitted interconnection requests on
the eve of the transmission providers’
Order No. 2023 compliance filing with
customers that have been pending in the
queue for substantially longer periods of
time.385 Clean Energy Associations state
that recently-accepted queue reform
transmission procedures have
commonly implemented a ‘‘cut-off’’ date
for transitional study entry that
coincides with notice of the relevant
reforms.386 Clean Energy Associations
argue that this prevents ‘‘mixing’’ future
382 Id. (citing Order No. 2023, 184 FERC ¶ 61,054
at PP 502, 690).
383 Id. at 39 (citing Order No. 2003, 104 FERC
¶ 61,103 at PP 1, 171, 596).
384 Id. at 44 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1583).
385 Id. at 44–45 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 6 (Comm’r Christie, Concurring)).
386 Id. at 45 (noting PJM’s recently implemented
generator interconnection process tariff reforms,
with a transition process that made projects
assigned queue positions in the existing
interconnection queue between April 1, 2018
through September 30, 2021, subject to ‘‘Transition
Period Rules,’’ requiring a ‘‘retool’’ study and
commercial readiness deposits and site control
evidence) (citing PJM Interconnection, L.L.C., 181
FERC ¶ 61,162 at PP 1, 8, 31, reh’g denied by
operation of law, 182 FERC ¶ 62,055, order
addressing arguments raised on reh’g, 184 FERC
¶ 61,006 (2023)).
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interconnection customers’ applications
with existing interconnection customers
relative to transitional studies. Clean
Energy Associations argue that treating
new and future interconnection
customers the same as customers that
have been waiting for an extended
period of time to begin their studies is
unjust and unreasonable.
255. Clean Energy Associations and
Shell request that the Commission
revise the transitional cluster study
process and sections 5.1.1.2 to set the
July 28, 2023 issuance date of Order No.
2023 as the date of eligibility for
transitional cluster study
participation.387 Shell asserts that pro
forma LGIP section 5.1.1.2 is too broad
because it treats new and future
generator interconnection customers the
same as interconnection customers that
may have been waiting in the queue for
years.388 Shell contends that the
regulatory expectations of existing and
new customers subject to queue reform
are fundamentally different because
existing customers submitted their
requests under one queue structure and
new customers will submit their
requests with reasonable notice of the
new structure. Shell argues that
allowing the transitional cluster study to
remain open for several months beyond
the Order No. 2023 issuance date may
provide an opportunity for
interconnection customers to develop
strategies that will overwhelm specific
transitional cluster studies with
unnecessarily high volumes of new
interconnection requests, which may
enable them to alter the progress of the
transitional cluster study by
strategically withdrawing a specific
subset of these generator
interconnection requests at each
decision point.389 Shell asserts that this
is akin to the queue speculation the
Commission is trying to discourage
pursuant to Order No. 2023. Shell states
that this may allow new interconnection
requests to manipulate the transitional
cluster study process, thereby triggering
multiple restudies until they achieve a
result that favors their projects.
256. Clean Energy Associations also
ask the Commission to clarify that any
interconnection requests submitted after
the Order No. 2023 issuance date will be
placed in the first cluster study that
follows the transitional cluster study.390
Shell states that compliance filings that
include interconnection requests in a
transitional cluster study queued after
387 Id.
at 46; Shell Rehearing Request at 6.
Rehearing Request at 4–5.
389 Id. at 6–7.
390 Clean Energy Associations Rehearing Request
at 46.
388 Shell
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note that no comments in the record
provided a more persuasive estimate.
259. Additionally, we disagree with
Clean Energy Associations’ argument
that a flat deposit is inconsistent with
other Order No. 2023 requirements
because we find that the need for strict
c. Determination
transition requirements warrants the use
257. We are unpersuaded by Clean
of a flat deposit. Furthermore, as the
Energy Associations’ request to revise
Commission explained, only a portion
the deposit amounts required for
of these deposits are ultimately at risk,
customers entering the transitional
and there is no withdrawal penalty if
serial or transitional cluster process, and existing interconnection customers
to revise the withdrawal penalty
currently in the queue opt to withdraw
amounts for customers that proceed
and wait for the first standard cluster
through the transitional process. As the
study with associated lower deposit
Commission explained in Order No.
requirements rather than proceed in the
2023, the transition process is
transitional cluster.395 For similar
anticipated to involve more
reasons, we also decline to modify the
interconnection customers than
withdrawal penalty amount. In light of
standard annual clusters due to existing the heightened risk of withdrawals
interconnection queue backlogs.392 With leading to restudies and delays during
more interconnection customers than
the transition process, we disagree with
normal, there is an increased risk of
Clean Energy Associations’ argument
late-stage withdrawals leading to
that the withdrawal penalty is excessive
restudies and delays that would further
and arbitrary.
frustrate the goals of Order No. 2023.
260. We are not persuaded by Clean
We continue to find that adopting
Energy Associations’ and Shell’s calls to
deposit requirements for the transition
set an earlier cut-off date, the issuance
studies that are higher than those
date of Order No. 2023, as the date for
adopted for the cluster study process
eligibility for transitional cluster study
will help to lower the risk of restudies
participation. Clean Energy Associations
and delays resulting from late-stage
and Shell argue that an earlier cut-off
withdrawals from the transition studies. date would be fair to those generators
This requirement is necessary to ensure who have been waiting in
that the transition process is used by
interconnection queues for years and
interconnection customers that accept
submitted their interconnection request
the heightened financial risks and
under a different queue structure.
nevertheless remain confident in the
However, the fact that more recent
commercial viability of their proposed
interconnection requests may be
generating facilities.
included in the transitional cluster does
258. We further note that the
not in and of itself render the eligibility
Commission explained in Order No.
cut-off date unjust and unreasonable. As
2023 that the transitional deposit
the Commission has stated in multiple
amounts are based on expected costs ‘‘to queue reform proceedings, ‘‘any cut-off
393
the extent practicable.’’
In the case of date inevitably will [exclude certain
the transitional cluster study, it is not
interconnection customers].’’ 396
practical to create deposits based on
Likewise, the inverse of this statement
individualized estimates of network
holds true: any cut-off date inevitably
upgrade costs because, unlike the
will include certain interconnection
transitional serial study, projects
customers. The Commission’s decision
entering the transitional cluster study
to set the eligibility cut-off date as 30
are not required to have any previous
calendar days after the filing date of the
study results on which such estimates
transmission provider’s initial
could be based. Therefore, the
compliance filing was reasonable.
Commission reasonably relied upon
261. Additionally, Commission
available evidence as to general network precedent does not require a certain
394
upgrade cost estimates.
We further
cluster size, nor do Clean Energy
Associations and Shell provide
391 Shell Rehearing Request at 7.
evidence to suggest that the size of the
392 Order No. 2023, 184 FERC ¶ 61,054 at P 859.
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the deadline should explain why their
proposed cut-off date for the transitional
cluster study will advance the goals of
facilitating the reduction of queue
backlogs in a more efficient and costeffective manner.391
393 Id.
P 860.
Pub. Serv. Co. of Colo., Transmittal Letter,
Docket No. ER19–2774–000, at 86–87 (filed Sept. 9,
2019) (explaining that $5 million is ‘‘likely on the
low end’’ of estimated network upgrade costs that
may be allocated to any individual interconnection
customer); Pub. Serv. Co. of Colo., 169 FERC
¶ 61,182, at P 65 n.83 (2019) (approving transitional
cluster study deposit at $5 million); Tri-State
Generation & Transmission Ass’n, Inc., 173 FERC
394 See
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¶ 61,015, at PP 19, 56 (2020) (same); Tri-State
Generation & Transmission Ass’n, Inc., 174 FERC
¶ 61,021, at P 19 (2021) (same).
395 Order No. 2023, 184 FERC ¶ 61,054 at P 859.
396 PJM Interconnection, L.L.C., 181 FERC
¶ 61,162 at P 60; Tri-State Generation &
Transmission Ass’n, Inc, 175 FERC ¶ 61,128, at P
14 (2021); PacifiCorp, 173 FERC ¶ 61,016, at P 25
(2020).
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27047
transitional cluster would be
unworkable. Rather, because there are
stricter requirements to join the
transitional cluster than those adopted
for the cluster study process,397 it is
unlikely that non-ready projects would
be able to join the transitional cluster.
Furthermore, due to existing
interconnection queue backlogs, the
Commission anticipated that the
transition process will involve more
interconnection customers than
standard annual clusters and
established the transition date along
with the accompanying requirements to
enter the transition with this knowledge
in mind. The alternative, moving the
eligibility date earlier, would simply
shift interconnection customers into the
first cluster following the transitional
cluster. We lack a basis in the record to
conclude, as Clean Energy Associations
and Shell appear to argue, that a
somewhat larger transitional cluster is
not just and reasonable, but a somewhat
larger post-transition cluster would be
just and reasonable.
262. We are also unpersuaded by
Shell’s assertion that the current
eligibility cut-off date could lead to a
queue rush. Such a concern is
speculative. We reiterate that the higher
deposit requirements for the transitional
cluster study process than those
adopted for the non-transitional cluster
study process helps ensure that the
transitional process is used by
interconnection customers that intend
to proceed with their proposed
generating facilities.
263. Lastly, we add definitions to the
pro forma LGIP for the terms
‘‘Transitional Cluster Study Agreement’’
and ‘‘Transitional Serial Interconnection
Facilities Study Agreement.’’
D. Reforms To Increase the Speed of
Interconnection Queue Processing
1. Elimination of Reasonable Efforts
Standard and Implementation of a
Replacement Rate
a. Order No. 2023 Requirements
264. In Order No. 2023, the
Commission revised sections 2.2,
3.5.4(i), 7.4, 8.3, and Attachment A to
Appendix 3 (formerly Appendix 4) of
the pro forma LGIP to eliminate the
reasonable efforts standard for
conducting cluster studies, cluster
restudies, facilities studies, and affected
system studies by the tariff-specified
deadlines.398 The Commission added
new section 3.9 to the pro forma LGIP
397 Compare pro forma LGIP section 5.1.1.2
(Transitional Cluster Study) and section 3.4.2
(Initiating an Interconnection Request).
398 Order No. 2023, 184 FERC ¶ 61,054 at P 962.
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to implement a study delay penalty
structure. Specifically, delays of cluster
studies beyond the tariff-specified
deadline will incur a penalty of $1,000
per business day; delays of cluster
restudies beyond the tariff-specified
deadline will incur a penalty of $2,000
per business day; delays of affected
system studies beyond the tariffspecified deadline will incur a penalty
of $2,000 per business day; and delays
of facilities studies beyond the tariffspecified deadline will incur a penalty
of $2,500 per business day. The
Commission explained that, among
other things, these penalty amounts are
intended to incentivize transmission
providers to meet study deadlines and
that the structure of increasing penalties
reflects the progressively greater harm
caused by delayed studies at later
interconnection stages.399
265. The Commission also specified
that the study delay penalty regime
contains the following safeguards for
transmission providers: (1) no study
delay penalties will be assessed until
the third cluster study cycle (including
any transitional cluster study cycle, but
not transitional serial studies) after the
Commission-approved effective date of
the transmission provider’s filing in
compliance with Order No. 2023; (2)
there will be a 10-business day grace
period, such that no study delay
penalties will be assessed for a study
that is delayed by 10 business days or
fewer; (3) deadlines may be extended for
a particular study by 30 business days
by mutual agreement of the
transmission provider and all
interconnection customers with
interconnection requests in the relevant
study; (4) study delay penalties will be
capped at 100% of the initial study
deposits received for all of the
interconnection requests in the relevant
study; and (5) transmission providers
will have the ability to appeal any study
delay penalties to the Commission, with
the Commission determining whether
good cause exists to grant the relief
requested on appeal.400
266. The Commission further
included the following features in the
study delay penalty structure: (1)
transmission providers must distribute
study delay penalties to interconnection
customers in the relevant study that did
not withdraw, or were not deemed
withdrawn, from the interconnection
queue before the missed study deadline
on a pro rata per interconnection
request basis to offset their study costs;
(2) non-RTO/ISO transmission providers
and transmission-owning members of
399 Id.
PP 974–978.
400 Id. P 972.
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RTOs/ISOs may not recover study delay
penalties through transmission rates; (3)
RTOs/ISOs may submit an FPA section
205 filing to propose a default structure
for recovering study delay penalties
and/or to recover the costs of any
specific study delay penalties; 401 and
(4) transmission providers must post
quarterly on their OASIS or other
publicly accessible website (a) the total
amount of study delay penalties from
the previous reporting quarter and (b)
the highest study delay penalty paid to
a single interconnection customer in the
previous reporting quarter.402 The
Commission also added new section
(f)(1)(ii) to 18 CFR 35.28(f)(1) to specify
that any public utility that conducts
interconnection studies shall be subject
to and eligible to appeal penalties
following that public utility’s failure to
complete an interconnection study by
the appropriate deadline.403
267. The Commission explained that
the lengthy interconnection study
delays and interconnection queue
backlogs throughout the country
support a conclusion that the reasonable
efforts standard does not provide an
adequate incentive for transmission
providers to complete interconnection
studies on time.404 The Commission
stated that there is every reason to
believe that many of the factors
contributing to significant
interconnection queue backlogs and
delay—including the rapidly changing
resource mix, market forces, and
emerging technologies—will persist.
The Commission explained that the
reasonable efforts standard worsens
current-day challenges, as it fails to
ensure that transmission providers are
keeping pace with the changing and
complex dynamics of today’s
interconnection queues.405 Therefore, in
response to those ongoing challenges
and based on the record, the
Commission found that the elimination
of the reasonable efforts standard and its
replacement with firm deadlines and
penalties are needed to remedy unjust
and unreasonable rates and ensure that
interconnection customers are able to
interconnect to the transmission system
in a reliable, efficient, transparent, and
timely manner.406
268. The Commission noted that its
conclusions were not based on a finding
401 The typical standard of review under FPA
section 205 would apply to these filings: i.e., the
filer must show that any proposal to recover study
delay penalties is just, reasonable, and not unduly
discriminatory or preferential. See 16 U.S.C. 824d.
402 Order No. 2023, 184 FERC ¶ 61,054 at P 963.
403 Id. P 995.
404 Id. P 966.
405 Id. P 967.
406 Id. P 968.
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that transmission providers have
necessarily acted in bad faith or that
their actions are the sole reason for the
queue delays.407 The Commission
explained that it adopted numerous
other reforms to appropriately
incentivize interconnection customers
to help reduce interconnection delays
that may result from their conduct.
However, the Commission found that
the elimination of the reasonable efforts
standard and the adoption of firm
deadlines and penalties for late studies
are needed to create an incentive for
transmission providers, which will help
reduce interconnection delays and
ensure that Commission-jurisdictional
rates are just, reasonable, and not
unduly discriminatory or preferential.
The Commission further found that
distribution of these penalties to
interconnection customers in the
relevant studies was appropriate as a
means of offsetting these customers’
study costs. The Commission further
explained that the study delay penalty
regime balances the harm to
interconnection customers of
interconnection study delays and the
associated need to incentivize
transmission providers to timely
complete interconnection studies with
the burdens on transmission providers
of conducting interconnection studies
and potentially facing penalties for
delays, including those that may be
caused or exacerbated by factors beyond
their control.408
269. As noted above, the Commission
adopted a process for transmission
providers to appeal any study delay
penalties they incur.409 The
Commission explained that any such
appeal must be filed no later than 45
calendar days after the late study has
been completed. The Commission stated
that it will evaluate whether good cause
exists to grant relief from the study
delay penalty and will issue an order
granting or denying relief. The
Commission noted that in evaluating
whether there is good cause to grant
such relief, the Commission may
consider, among other factors: (1)
extenuating circumstances outside the
transmission provider’s control, such as
delays in affected system study results;
(2) efforts of the transmission provider
to mitigate delays; and (3) the extent to
which the transmission provider has
proposed process enhancements either
in the stakeholder process or at the
Commission to prevent future delays.
The Commission further provided that
the filing of an appeal will stay the
407 Id.
P 966.
P 972.
409 Id. P 987.
408 Id.
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transmission providers’ obligation to
distribute the study delay penalty funds
to interconnection customers until 45
calendar days after (1) the deadline for
filing a rehearing request has ended, if
no requests for rehearing of the
Commission’s decision on the appeal
have been filed, or (2) the date that any
requests for rehearing of the
Commission’s decision on the appeal
are no longer pending before the
Commission. The Commission
explained that the appeals process
balances the need to ensure that
transmission providers have an
incentive to meet interconnection study
deadlines with protections to ensure
that any such penalties are fair and not
triggered if good cause justifies the
delay.410 The Commission further
explained that the protections
embedded in this appeal process
address commenters’ concerns that
there should be adequate process and/
or fact-finding before imposing a study
delay penalty on transmission
providers.
270. Additionally, the Commission
specified that transmission providers
must distribute study delay penalties to
the interconnection customers and
affected system interconnection
customers included in the relevant
study that did not withdraw, or were
not deemed withdrawn, from the
interconnection queue before the missed
study deadline.411 The Commission
explained that, unless the transmission
provider files an appeal to the study
penalty, the study delay penalty must be
distributed no later than 45 calendar
days after the late study has been
completed. The Commission further
specified that a study delay penalty for
a delayed cluster study or cluster
restudy must be distributed on a pro
rata basis per interconnection request to
all interconnection customers in the
cluster, while a study delay penalty for
a delayed facilities study must be
distributed to the interconnection
customer whose facilities were being
studied, and a study delay penalty for
a delayed affected system study must be
distributed to the affected system
interconnection customer(s) whose
generating facility was being studied by
an affected system transmission
provider. The Commission provided
that the study delay penalties are on a
per business day basis and will be
distributed equally to each delayed
interconnection customer per the
requirements above. The Commission
explained that this distribution defrays
410 Id.
411 Id.
P 988.
P 990.
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the study costs of the interconnection
customers affected by that delay.412
271. The Commission also declined to
adopt the NOPR’s proposed force
majeure penalty exception.413 The
Commission explained that this
exemption is unwarranted given the
adoption of an appeal mechanism,
which provides transmission providers
the opportunity to explain to the
Commission any circumstances that
caused the delay, including any events
that qualify as force majeure.414
b. Elimination of the Reasonable Efforts
Standard
i. Requests for Rehearing
272. Many rehearing requests argue
that the decision to eliminate the
reasonable efforts standard is not
supported by substantial record
evidence.415 They argue that the
Commission failed to meet its FPA
section 206 burden because the
Commission failed to show that (1) this
standard is causing or materially
contributing to delays or (2) the
elimination of this standard will
increase the timely provision of
interconnection service, especially
given the other factors that may cause
study delays.416 NYTOs argue that
Order No. 2023’s observation that,
under the reasonable efforts standard,
interconnection studies have been
delayed ‘‘conflates correlation with
causation.’’ 417 Others argue that the
Commission failed to address the root
cause of study delays—namely, the
volume of interconnection requests,
which they claim Order No. 2023 will
412 Id.
P 991.
413 Id. PP 963, 1003.
414 Id. P 1003.
415 AEP Rehearing Request at 10; Avangrid
Rehearing Request at 8–9; MISO TOs Rehearing
Request at 11–13; NYISO Rehearing Request at 39–
40; NYTOs Rehearing Request at 15–19; PJM
Rehearing Request at 30; WIRES Rehearing Request
at 4–6.
416 AEP Rehearing Request at 11–13; Avangrid
Rehearing Request at 8–9, 13–14; MISO TOs
Rehearing Request at 11–13; NYTOs Rehearing
Request at 15–17; WIRES Rehearing Request at 4–
6.
417 NYTOs Rehearing Request at 15–17 (asserting
that the Commission has not undertaken a ‘‘root
cause assessment’’ to determine the extent to which
the reasonable efforts standard causes or contributes
to study delays or shown that this standard is a
‘‘material contributing cause of study delays’’); see
id. at 18–19 (noting the Commission’s recognition
that there are factors outside of the transmission
providers’ control that may contribute to delays,
that timeframes for such studies have historically
been treated by transmission providers as estimates,
and that transmission customers may cause delays);
see also Avangrid Rehearing Request at 8–9;
Dominion Rehearing Request at 19; NYISO
Rehearing Request at 40; WIRES Rehearing Request
at 4–6.
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27049
increase.418 Avangrid disputes Order
No. 2023’s conclusion that the other
reforms adopted therein are expected to
ease the burdens on transmission
providers by streamlining and reducing
the number of interconnection
studies.419
273. Several of the rehearing requests
assert that the Commission has not
demonstrated that interconnection
study delays and backlogs are connected
to transmission provider actions, such
as wrongdoing, incompetence, lack of
appropriate incentives, bad faith, or
failure to exercise due diligence.420 SPP
and ITC claim that there are already
many strong incentives to timely
perform interconnection studies and the
record does not contain the necessary
support to conclude that a lack of
incentives, as opposed to various other
factors outside of transmission
providers’ control, are the cause for
interconnection queue backlogs or study
delays.421 Many rehearing requests
detail numerous factors contributing to
delays and backlogs that they assert are
outside of the transmission provider’s
control (e.g., the volume of
interconnection requests, complexity of
studies, staffing shortages, the shortage
of qualified engineers, withdrawals
triggering the need for restudies,
delayed data from interconnection
customers, affected system
coordination, a rapidly changing
resource mix, market forces, and
emerging technologies) and argue that
these conditions will persist, such that
study delay penalties on transmission
providers cannot be effective and are
unsupported.422
418 Avangrid Rehearing Request at 9–11; NYTOs
Rehearing Request at 14; PJM Rehearing Request at
30.
419 Avangrid Rehearing Request at 11–13
(‘‘[T]here is scant evidence in the record that the
easing of burdens will be sufficient to justify the
broad imposition of arbitrary, strict, one-size-fits-all
deadlines and penalties for non-attainment.’’).
420 AEP Rehearing Request at 12–13; Dominion
Rehearing Request at 18; EEI Rehearing Request at
4–7 (noting that the Commission identifies other
factors as contributing to such delays and backlogs
and has never found a transmission provider at
fault for delays in the interconnection process); ITC
Rehearing Request at 5; PacifiCorp Rehearing
Request at 4–7 (noting that the Commission
confirmed that it was not finding that transmission
providers necessarily acted in bad faith or were the
sole reason for queue delays); SPP Rehearing
Request at 5–6 (noting that the Commission has
never found a transmission provider to have
violated the reasonable efforts standard, and
commenters did not provide evidence that
transmission providers have failed to use
reasonable efforts).
421 ITC Rehearing Request at 6; SPP Rehearing
Request at 6–7.
422 Avangrid Rehearing Request at 4–5, 12–13;
Dominion Rehearing Request at 19–22; MISO TOs
Rehearing Request at 14; PacifiCorp Rehearing
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274. AEP, EEI, and MISO TOs
contend that the Commission’s
elimination of the reasonable efforts
standard and its replacement with the
deadline and penalty framework is
based on notions of fairness or equity
between transmission providers and
interconnection customers, but they
contend that this is an inadequate basis
for reform.423 EEI asserts that penalties
assessed against transmission providers
therefore cannot be effective in reducing
such delays and backlogs.424
275. Certain rehearing requests also
cite the purported benefits of the
reasonable efforts standard, including
the consistency of that standard with
good utility practice and the flexibility
afforded by that standard, urging that
the reasonable efforts standard remains
just and reasonable.425 As a result, ITC
argues that the ‘‘reasonable efforts’’
standard ensures that transmission
providers treat other parties comparably
to how they will protect their own
interests.426 NYTOs assert that the
reasonable efforts standard is just and
reasonable because each generator
project and interconnection request is
unique, such that flexibility is
warranted in the face of the challenges
posed by the study process, the
uniqueness of each study request,
mounting volumes of such requests, and
because delays in that process may not
Request at 11–13; SPP Rehearing Request at 6–7.
Dominion also asserts that Order No. 2023 will
increase demand for qualified engineers, such that
hiring additional staff may not be feasible.
Dominion Rehearing Request at 20–21.
423 AEP Rehearing Request at 11–12; EEI
Rehearing Request at 5, 7 (asserting that the
Commission eliminated the reasonable efforts
standard and imposed penalties to ‘‘ensure that
transmission providers are ‘doing their part’ ’’ and
to establish ‘‘a strange kind of parity in its
reforms’’); MISO TOs Rehearing Request at 19
(arguing that the Commission has not found bad
faith on the part of transmission providers or that
they are the sole reason for delays and transmission
providers—unlike interconnection customers, who
have control over burdens that the Commission has
imposed on them—will be penalized regardless of
whether they had control of the factors causing a
study delay); see also Indicated PJM TOs Rehearing
Request at 39–40 (claiming that the Commission
failed to address their comments that the testimony
of Chairman LeVar of the Utah Public Service
Commission does not support the use of penalties
as incentives).
424 EEI Rehearing Request at 6–7.
425 Id. at 8–9; Indicated PJM TOs Rehearing
Request at 5–6; ITC Rehearing Request at 4; MISO
TOs Rehearing Request at 8–10; NYTOs Rehearing
Request at 17–20.
426 ITC Rehearing Request at 4 (arguing that this
strikes an appropriate balance between competing
interests); see also MISO TOs Rehearing Request at
8–10 (similar argument); id. at 20–24 (arguing that
the Commission has long recognized the need for
flexibility in the study process, which reflects why
a ‘‘no fault’’ and less flexible regime of automatic
penalties is illogical, particularly given increasing
workload and complexity of interconnection
studies).
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be the fault of transmission
providers.427 EEI argues that retaining
the reasonable efforts standard is
particularly appropriate given the other
requirements of Order No. 2023,
contending that flexibility will be
necessary given the complexity of the
cluster study process, the new
technologies that must be evaluated,
and new NERC standards.428 Indicated
PJM TOs assert that the reasonable
efforts standard provides the optimal
balance of incentives to complete
studies in a timely manner and the
reasonable flexibility for planners to
take the time needed to ensure grid
reliability will be maintained in a costeffective manner.429
276. Many of the rehearing requests
assert that the Commission failed to
demonstrate that there are steps that
transmission providers can take that
will, in fact, improve the timeliness of
study processes and challenge the
Commission’s determination that
transmission providers can feasibly take
steps to better ensure timely
interconnection request processing,
such as deploying resources, exploring
administrative efficiencies, and using
innovative study approaches.430 They
contend that this determination is
vague, poorly supported, and based on
‘‘notions that transmission providers are
not sufficiently imaginative’’ or that
they will be easily able to find and hire
qualified staff and deploy automation
and computing solutions in short
order.431 EEI asserts that replacing the
reasonable efforts standard with
deadlines and penalties cannot alter the
number of requests submitted or the
number of qualified individuals that can
perform these studies.432 SPP observes
that qualified engineers may not want to
work for transmission providers if they
risk being identified as a cause of study
delays that result in penalties or face
potential liability.433
277. A number of the rehearing
requests also contend that the
Commission should have allowed the
other reforms in Order No. 2023 to take
427 NYTOs Rehearing Request at 17–20; cf. id. at
26 (asserting that rigid deadlines and penalties are
inconsistent with flexibility that Order No. 2023
claims to support).
428 EEI Rehearing Request at 8–9.
429 Indicated PJM TOs Rehearing Request at 5–6.
430 See Order No. 2023, 184 FERC ¶ 61,054 at P
967.
431 AEP Rehearing Request at 12; EEI Rehearing
Request at 6–7; MISO TOs Rehearing Request at 18
(arguing that the Commission acknowledges the
shortage of qualified engineers but simply dismisses
this problem); PJM Rehearing Request at 32–33; SPP
Rehearing Request at 7; WIRES Rehearing Request
at 7–8 (contending that these steps are ‘‘more
hopeful thinking than discrete, tangible actions’’).
432 EEI Rehearing Request at 6.
433 SPP Rehearing Request at 7.
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effect before eliminating the reasonable
efforts standard and adopting a structure
of study deadlines and penalties.434
AEP argues that the Commission should
require transmission providers to
augment the reports required under
section 3.5 of the pro forma LGIP and
Order No. 845 to require information
regarding the effects of cluster study
reforms, giving the Commission real
world data regarding the causes of
interconnection study delays.435
278. Some rehearing requests also
argue that the Commission relied on
stale and inapposite evidence to support
the elimination of the reasonable efforts
standard and replacement with the
deadline and penalty structure.436
Indicated PJM TOs assert that the vast
majority of study delays reflected in the
Order No. 845 data for the end of 2022
came from PJM, which had recently
transitioned to a first-ready, first-served
cluster cycle approach effective in
January 2023.437 Indicated PJM TOs also
assert that the Commission relied on a
stale record from Order No. 890 as
support for imposing penalties on
RTOs/ISOs that fail to meet
deadlines.438 PacifiCorp similarly
contends that the evidence the
Commission relied on relates to delays
in the serial study process, rather than
the new cluster-based process, and
‘‘implementation of penalties, therefore,
is attempting to fix a problem that has
not been shown to exist.’’ 439 NYISO
434 AEP Rehearing Request at 15–16; Avangrid
Rehearing Request at 9; EEI Rehearing Request at 5;
NYTOs Rehearing Request at 17, 20–22 (‘‘Only if
the variables outside of a transmission provider’s
control are removed will the Commission have a
sufficient evidentiary foundation to make the
determinations required under Section 206 with
respect to whether the Reasonable Efforts standard
is unjust and unreasonable as applied in context of
actual performance.’’); PacifiCorp Rehearing
Request at 4–5.
435 AEP Rehearing Request at 15–16 (setting forth
AEP’s view on how to augment those reports and
noting other areas where reporting requirements
were required and arguing that such reporting
would incentivize transmission providers to
perform studies in a timely fashion).
436 Indicated PJM TOs Rehearing Request at 17–
18; NYISO Rehearing Request at 39–40; PacifiCorp
Rehearing Request at 7–8.
437 Indicated PJM TOs Rehearing Request at 17–
18 (arguing that, while the Commission points to
deficiencies with serial study approaches, they do
not apply to regions that have already implemented
cluster studies and that those regions should be
allowed to fully implement those new approaches).
438 Id. at 18–19 (arguing that the ‘‘world has
changed’’ in certain respects since Order No. 890
was issued, that the Order No. 890 deadlines were
consistent with what was historically achievable,
and the penalties in Order No. 890 were less
draconian than those imposed by Order No. 2023).
439 PacifiCorp Rehearing Request at 7–8
(referencing Nat’l Fuel Gas Supply Corp. v. FERC,
468 F.3d 831, 842 (D.C. Cir. 2006) (National Fuel),
in which the D.C. Circuit vacated the prior version
of the Commission’s Standards of Conduct on the
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argues that the data the Commission
relied on concerns missed study
deadlines in ‘‘RTO/ISO regions that
have been contending with
unprecedented numbers of new
interconnection requests and/or have
recently made substantial improvements
to their interconnection procedures that
are not reflected in earlier metrics.’’ 440
279. Indicated PJM TOs and NYISO
also argue that the Commission failed to
justify eliminating the reasonable efforts
standard and imposition of deadlines
and penalties through a generic
rulemaking.441 Indicated PJM TOs
contend that the Commission lacked
substantial evidence to make a generic
finding that all existing interconnection
study regimes—some of which already
use the cluster study approach—are
unjust and unreasonable to the extent
those regimes rely on the reasonable
efforts standard rather than imposing
deadlines and penalties.442 Indicated
PJM TOs further assert the Commission
cannot use general or generic findings to
enact an industry-wide solution for a
problem that exists only in isolated
pockets and that study delays are not
sufficiently widespread to justify the
Commission’s generic approach.443
NYISO argues that it is not reasoned
decision-making to assume that all
transmission providers need stronger
incentives to timely complete studies
and asserts that state regulators in New
York support retaining some form of the
reasonable efforts standard.444
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ii. Determination
280. The gravity of the problem of
increased interconnection queue
backlogs and delays, leading to unjust
and unreasonable rates, prompted the
Commission in Order No. 2023 to adopt
a comprehensive set of reforms to the
interconnection process, including
reforms to the reasonable efforts
standard for the completion of
interconnection studies.445 As to that
basis that, inter alia, the purported record evidence
FERC relied upon were rulemaking comments that
did not identify any actual examples of
wrongdoing).
440 NYISO Rehearing Request at 39–40.
441 Id. at 40; Indicated PJM TOs Rehearing
Request at 13–17.
442 Indicated PJM TOs Rehearing Request at 13–
17.
443 Id. at 14 (citing S.C. Pub. Serv. Auth., 762 F.3d
at 66–67; Assoc. Gas, 824 F.2d at 1019; Wis. Gas.,
770 F.2d at 1151, 1168); see also id. at 15–16
(discussing the Order No. 845 data, noting that 14
of 24 non-RTOs/ISOs experienced no study delays;
as to RTOs/ISOs, CAISO experienced no study
delays, SPP’s data was excluded, and urging that
PJM’s data should also have been excluded).
444 NYISO Rehearing Request at 40.
445 The Commission explained in Order No. 2023
how interconnection queue backlogs result in
unjust and unreasonable rates, including by
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standard, the Commission explained
that ‘‘interconnection queue backlogs
and delays, and the accompanying
uncertainty, are further compounded
because transmission providers have
limited incentive to perform
interconnection studies in a timely
manner.’’ 446 Under this standard,
‘‘[t]here are no explicit consequences in
the pro forma LGIP for transmission
providers that fail to meet their study
deadlines,’’ 447 allowing ‘‘significant
discretion to the transmission providers
in extending their own deadlines.’’ 448
As the Commission found, ‘‘[t]his
outcome stands in stark contrast to
interconnection customers that face
financial and commercial consequences
due to late interconnection study results
and may be considered withdrawn from
the interconnection queue for failing to
meet their tariff-imposed deadlines.’’ 449
281. The history of the Commission’s
action with respect to interconnection
queue backlogs, and particularly
interconnection study delays as a
contributor to such backlogs, reflects
that the Commission has taken a gradual
approach to addressing these problems.
In Order No. 2003, the Commission first
imposed the reasonable efforts standard
for the timely completion of
interconnection studies, without
adopting firm deadlines or a structure of
automatic penalties for delays.450 As the
Commission observed in Order No.
2023, the reasonable efforts standard
allowed transmission providers
significant discretion to extend their
own deadlines for the completion of
interconnection studies.451 In 2018, in
Order No. 845, the Commission rejected
requests to eliminate the reasonable
efforts standard in favor of firm
interconnection study deadlines,452
hindering the development of new generation,
stifling competition in wholesale electric markets,
and creating uncertainty that increases costs. See,
e.g., Order No. 2023, 184 FERC ¶ 61,054 at PP 3,
27–29, 37–60; supra section II.A. We disagree with
arguments that the Commission failed to adequately
explain or that the record does not support this
conclusion. See, e.g., Indicated PJM TOs Rehearing
Request at 29–30.
446 Order No. 2023, 184 FERC ¶ 61,054 at P 50.
447 Id. P 872.
448 Id. P 50 (noting that despite ‘‘pervasive delays
in completing interconnection studies by
transmission providers . . . transmission providers
have faced few, if any, consequences for failing to
meet their tariff-imposed study deadlines under the
reasonable efforts standard’’).
449 Id. (concluding that the reasonable efforts
standard results in rates that are unjust and
unreasonable).
450 Order No. 2003, 104 FERC ¶ 61,103 (pro forma
LGIP sections 7.4, 8.3).
451 Order No. 2023, 184 FERC ¶ 61,054 at P 50.
452 See Order No. 845, 163 FERC ¶ 61,043 at PP
315–21; id. at 322 (noting that the Commission had
not proposed, in its notice of proposed rulemaking
for Order No. 845, such firm study deadlines).
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27051
explaining that reliance on increased
reporting was a preferable approach
because the ‘‘current record’’ did not
support elimination of the reasonable
efforts standard, such that doing so
would be inappropriate ‘‘[a]t this
time.’’ 453 The Commission likewise
decided not to implement automatic
penalties for delayed studies,
recognizing the extent to which delays
could be caused by factors outside of
transmission providers’ control, instead
adopting measures to ‘‘improve
transparency by highlighting where
interconnection study delays are most
common and the causes of delays in
these regions.’’ 454 It further stated that
‘‘[t]his information could also be useful
to the Commission in determining if
additional action is required to address
interconnection study delays.’’ 455
282. Order No. 2023 reflects a
determination that such additional
action is required. The reforms in Order
No. 845 have not eliminated the
problems of interconnection queue
backlogs and delayed interconnection
studies. These problems have only
grown, notwithstanding the
Commission’s previous reforms.456
283. Broadly speaking, the
Commission’s conclusion that there is a
need to reform the Commission’s pro
forma interconnection procedures and
agreements received overwhelming
support.457 However, as summarized
above, many of the rehearing requests
challenge the elimination of the
reasonable efforts standard set forth in
sections 2.2, 3.5.4(i), 7.4, 8.3, and
Attachment A to Appendix 4 of the pro
forma LGIP,458 leading to the adoption
of firm study deadlines, claiming that
the Commission failed to meet its
burden to justify this specific reform
under FPA section 206.459 Many of
these rehearing requests argue that the
Commission recognized that there are
many factors outside the control of
transmission providers that can
contribute to backlogs and delays in the
453 Id.
P 323.
P 309 (‘‘Such information could highlight
systemic problems for individual transmission
providers and interconnection customers.’’).
455 Id.
456 See, e.g., Order No. 2023, 184 FERC ¶ 61,054
at PP 38–43 (summarizing evidence of growing
queue backlogs and study delays as contributors to
those backlogs); supra section II.A.3.
457 See Order No. 2023, 184 FERC ¶ 61,054 at P
30.
458 Id. P 965; see also id. P 964 (‘‘We adopt these
reforms to remedy the unjust and unreasonable
rates stemming from interconnection queue
backlogs and to ensure that interconnection
customers are able to interconnect to the
transmission system in a reliable, efficient,
transparent, and timely manner.’’).
459 See supra section II.D.1.b.i.
454 Id.
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interconnection study process.460 In
pointing to these other factors, the
rehearing requests contend that holding
transmission providers to standards of
performance in terms of ensuring the
timely completion of interconnection
studies cannot be effective to ensure the
timely completion of those studies. We
disagree with this argument and
continue to find that the elimination of
the reasonable efforts standard, and its
replacement with firm study deadlines,
is warranted under FPA section 206 in
order to address the unjust and
unreasonable rates resulting from
interconnection queue delays and
backlogs.
284. We are not persuaded by
attempts to minimize the responsibility
transmission providers have for—and
the ways in which they can effectuate—
the timely completion of
interconnection studies. Attempts to do
so fail to recognize the key role
transmission providers play in timely
interconnection study completion: the
transmission provider conducting the
study is the entity with the most control
over whether the study deadline is
met.461 As the entity that conducts the
study, transmission providers have
control over (among other things): the
resources allocated to the study process;
the actual conduct of the study, e.g., the
use of advanced computing or other
methods to improve efficiency;
coordination with interconnection
customers and consultants; and
providing the conclusions of the
study.462 They are the entities with the
most complete knowledge of the
transmission system to which the
generator will be interconnecting.463
Moreover, transmission providers have
significant authority to help ensure that
other entities do not unduly delay the
results of the interconnection study,
including by deeming withdrawn the
requests of interconnection customers
that fail to adhere to the requirements of
the pro forma LGIP.464
460 See
Order No. 2023, 184 FERC ¶ 61,054 at P
966.
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461 See
id. P 995.
462 See, e.g., id. PP 967, 975, 1007 (noting
transmission providers’ ability deploy resources,
hire additional personnel, invest in new software,
and employ innovative study approaches).
463 See, e.g., id. P 201 (noting ‘‘the transmission
provider’s detailed knowledge of its transmission
system’’); Order No. 1000, 136 FERC ¶ 61,051 at P
260 (‘‘[W]e acknowledge that incumbent
transmission providers may have unique knowledge
of their own transmission systems . . . .’’).
464 See pro forma LGIP section 3.7
(‘‘Transmission Provider shall deem the
Interconnection Request to be withdrawn and shall
provide written notice to Interconnection Customer
of the deemed withdrawal and an explanation of
the reasons for such deemed withdrawal . . . .
Withdrawal shall result in the loss of
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285. That there are other factors that
may also affect the timely completion of
interconnection studies—and that these
factors may not be within transmission
providers’ control, in whole or in part—
does not negate the substantial control
that transmission providers have over
this process. To the contrary, the
existence of multiple factors influencing
interconnection study timeliness favors
addressing the problem of
interconnection queue backlogs from
multiple angles, as with the
comprehensive approach adopted in
Order No. 2023. Even where multiple
factors may cause or contribute to
delays of interconnection studies,
transmission providers are responsible
for conducting the studies and their
actions or inaction in doing so can cause
or contribute to such delays.
286. Overall, the record reflects a
problem of delayed study results
contributing to interconnection queue
backlogs,465 numerous comments
asserting that the reasonable efforts
standard fails to ensure that
transmission providers take adequate
steps to ensure study timeliness,466 and
Interconnection Customer’s Queue Position. If an
Interconnection Customer disputes the withdrawal
and loss of its Queue Position, then during Dispute
Resolution, Interconnection Customer’s
Interconnection Request is eliminated from the
queue until such time that the outcome of Dispute
Resolution would restore its Queue Position.’’).
465 See Order No. 2023, 184 FERC ¶ 61,054 at P
40; see also supra P 39. While the rehearing
requests generally point to factors that are beyond
transmission providers’ control (for instance,
awaiting affected system study results or deficient
information from interconnection customers), the
record does not demonstrate that these are, in fact,
the factors exclusively or even primarily causing
study delays. See, e.g., Order No. 2023, 184 FERC
¶ 61,054 at P 50.
466 See, e.g., ACE NY Initial Comments at 11–12
(‘‘The Commission’s review of the reported Order
No. 845 metrics helps to corroborate the anecdotal
experiences of interconnection customers
throughout the nation and demonstrates the
widespread failure to complete interconnection
studies consistent with the timelines identified in
the pro forma LGIP.’’); CAISO Initial Comments at
25 (‘‘The reasonable efforts standard has only
served as the exception that swallows the rule of
study deadlines.’’); EPSA Initial Comments at 10–
11 (acknowledging that other factors may contribute
to delays but ‘‘there have also been vast failures by
Transmission Providers to process interconnection
studies and provide necessary information to
prospective and existing interconnection customers
in a timely manner’’); Invenergy Initial Comments
at 29–30 (‘‘[I]nterconnection studies are routinely
delayed by several years. This is an ongoing
problem and may reflect, among other things, an
apparently low priority placed on adequate staffing
and the lack of any accountability under the
existing interconnection procedures.’’); Public
Interest Organizations Initial Comments at 33
(‘‘[T]he slow pace at which interconnection
requests are evaluated has contributed to a
ballooning of interconnection queues across the
country. . . . [B]inding deadlines are the most
effective option for ensuring that prospective
generation receives timely responses to
interconnection requests.’’).
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evidence of significant, growing
backlogs leading to unjust and
unreasonable rates. Based on our
statutory obligation to remedy these
unjust and unreasonable rates, and also
in light of the significant level of control
transmission providers exercise over the
timeliness of the study process, we
continue to find that the elimination of
the reasonable efforts standard, and its
replacement with firm study deadlines,
is warranted as part of a package of
comprehensive reforms to address
interconnection queue delays and
backlogs.
287. Consistent with this approach,
we are not persuaded by arguments that
the Commission conflated correlation
and causation in concluding that unjust
and unreasonable rates resulting from
interconnection queue delays and
backlogs, and delayed interconnection
study completion, supported
elimination of the reasonable efforts
standard. In this vein, several of the
rehearing requests assert that other
factors, principally the volume and
complexity of interconnection requests,
are the real causes of such backlogs and
delays, and that eliminating the
reasonable efforts standard will not
reduce the volume of such requests. We
note, however, that Order No. 2023 did
not claim that the reasonable efforts
standard was the only driving force
behind missed study deadlines. Order
No. 2023 recognized that study delays
are caused by a number of factors,467
and adopted a comprehensive package
of reforms aimed at alleviating many of
those factors from various angles.468 The
reasonable efforts standard is but one of
these factors.
288. The Commission in Order No.
2023 took significant other steps to
address the volume of interconnection
requests including to reduce the number
of speculative requests and to improve
the efficiency of interconnection studies
and interconnection queue
processing.469 But to the extent that
factors contributing to study delays,
467 Order
No. 2023, 184 FERC ¶ 61,054 at PP 40–
45.
468 See id. PP 45–56. For example, Order No. 2023
acknowledged that affected system study delays are
a key contributor to overall delays in the
interconnection queue, and adopted several specific
reforms aimed at standardizing and streamlining
affected system study processes. See id. P 51. Order
No. 2023 also acknowledged that speculative
interconnection requests contribute to study delays
and queue backlogs, and adopted commercial
readiness deposits and site control requirements
aimed at alleviating this factor. See id. PP 47–48.
469 See id. P 968; see also id. P 966 (‘‘Indeed,
throughout this final rule, we adopt numerous
reforms to appropriately incentivize
interconnection customers to help reduce
interconnection delays that may result from their
conduct.’’).
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including higher volumes or complexity
of interconnection requests, are still
expected to persist,470 this does not
warrant failing to pursue other available
solutions to reduce such backlogs that
are within transmission providers’
control, especially in light of the
magnitude and growth of the overall
interconnection queue backlog.471
289. Eliminating the reasonable efforts
standard, which allowed for selfextensions of interconnection study
deadlines and lacked appropriate
incentives for transmission providers to
help ensure study timeliness, is one
such further solution.472 In its place, the
Commission has specified standards of
performance in the form of deadlines,
accompanied by a penalty. This penalty
is a self-implementing performance
incentive (subject to appropriate
safeguards) that also effectively adjusts
what transmission providers can charge
for interconnection studies that fail to
meet those standards. This incentive
will help ensure that transmission
providers exercise the control they have
over the interconnection process as to
the timely conduct of those studies,473
and thereby contribute to alleviating the
problem of interconnection queue
backlogs, including to address increased
volumes of interconnection requests.474
470 See id. P 966 (‘‘There is every reason to
believe that many of the factors contributing to
significant interconnection queue backlogs and
delay—including the rapidly changing resource
mix, market forces, and emerging technologies—
will persist.’’).
471 See id. P 968 (‘‘In this Section, we adopt
reforms to ensure that transmission providers are
doing their part as well by eliminating the
reasonable efforts standard . . . . Based on the
record, we find that the elimination of the
reasonable efforts standard and its replacement
with firm deadlines and penalties are needed to
remedy unjust and unreasonable rates . . . .’’); see
also id. P 966 (reform to the reasonable efforts
standard was warranted based on ‘‘ongoing
challenges’’ that ‘‘will persist’’).
472 See id. P 967 (noting that this standard
‘‘worsens current-day challenges’’ and there are
‘‘steps within transmission providers’ control, from
deploying transmission providers’ resources to
exploring administrative efficiencies and innovative
study approaches, to better ensure timely
processing of interconnection studies to remedy
existing deficiencies’’).
473 See, e.g., Cent. Hudson Gas & Elec. Corp. v.
FERC, 783 F.3d 92, 109 (2d Cir. 2015) (Cent.
Hudson) (‘‘FERC may permissibly rely on economic
theory alone to support its conclusions so long as
it has applied the relevant economic principles in
a reasonable manner and adequately explained its
reasoning’’); Sacramento Mun. Util. Dist. v. FERC,
616 F.3d 520, 531 (2010) (Sacramento) (‘‘[I]t was
perfectly legitimate for the Commission to base its
findings about the benefits of marginal loss charges
on basic economic theory . . . .’’); Assoc. Gas, 824
F.2d at 1008–09 (‘‘Agencies do not need to conduct
experiments in order to rely on the prediction that
an unsupported stone will fall . . . .’’).
474 Indicated PJM TOs single out one piece of
evidence that the Commission cited in the NOPR as
supporting use of such incentives, the testimony of
Chairman LeVar of the Utah Public Service
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As explained below and in Order No.
2023, these deadlines should be
achievable and—where there may be
factors outside of a transmission
provider’s control that influence
whether these deadlines can be met—
the Commission has adopted
appropriate safeguards to account for
this possibility.
290. The rehearing requests
misunderstand the Commission’s
approach in claiming that eliminating
the reasonable efforts standard and
adopting firm study deadlines cannot be
warranted absent findings of intentional
delay, bad faith, misconduct, or a ‘‘lack
of effort’’ by transmission providers that
fails to meet the reasonable efforts
standard. Such findings are not
necessary predicates to concluding that
the interconnection study process must
occur more expeditiously in order to
help remedy the problem of unjust and
unreasonable rates caused by
interconnection queue backlogs. Nor are
they predicates to concluding that the
reasonable efforts standard was not
accomplishing this goal, and that there
are steps within transmission providers’
control that can facilitate the timely
completion of interconnection studies
on timeframes set forth in Order No.
2023.475
291. Similarly, we are not persuaded
by arguments that the structure adopted
in Order No. 2023 is disproportionate to
the problems identified in that order or
that study delays are not sufficiently
widespread to justify adoption of
penalties for study delays. As discussed
above in section II.A., we find that
Order No. 2023’s generic finding that
the existing pro forma interconnection
Commission, claiming that the Commission failed
to address their comments that this testimony does
not support the use of penalties as incentives. See
Indicated PJM TOs Rehearing Request at 39–40;
Indicated PJM TOs Initial Comments at 38. We
continue to find that this testimony is one piece of
evidence that supports imposing such incentives:
although Chairman LeVar testified that fines are not
always the best approach, he described the need to
impose consequences on transmission providers as
‘‘a pretty intuitive, important step,’’ testified that
there ‘‘needs to be some clear, predictable
consequence for transmission providers not meeting
their obligations,’’ and identified such
consequences as ‘‘the first step in queue reform.’’
May Joint Task Force Tr. 89:6–25.
475 PacifiCorp’s comparison of this case to Nat’l
Fuel Gas Supply Co. v. FERC, 468 F.3d 831, 842
(vacating Commission standards of conduct that
had been justified in part by a claimed record of
abuse, where the court found no such record was
apparent), is therefore not apt. See PacifiCorp
Rehearing Request at 7. The Commission has not
relied on claims of wrongdoing, bad faith, or abuse
to justify the reforms in Order No. 2023, but rather
acted based the substantial record that
interconnection queue backlogs, driven in part by
untimely interconnection studies, are resulting in
unjust and unreasonable rates and transmission
providers’ have the ability to better ensure study
timeliness.
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27053
procedures and agreements were unjust,
unreasonable, unduly discriminatory or
preferential was supported by
substantial evidence. The D.C. Circuit
has been clear that the Commission can
rely on general findings of systemic
conditions to impose an industry-wide
remedy, unless the deficiencies
identified exist only in isolated
pockets: 476 the record here indicates
that interconnection study delays are a
nationwide problem, not one that exists
only in isolated pockets.477 Therefore,
we continue to conclude that industrywide reform is appropriate.
Furthermore, interconnection study
delays and queue backlogs are severe,478
and we continue to find that the
deadline and penalty regime adopted in
Order No. 2023 is proportional to the
scope of the problem.
292. It appears that, in arguing that
study delays are not sufficiently
widespread to justify a generically
applicable incentive structure, Indicated
PJM TOs misread the Order No. 845
data cited in Order No. 2023: Indicated
PJM TOs state that the Commission
acknowledges that at the end of 2022, 14
(of 24) non-RTO/ISO transmission
providers experienced no study
delays.479 However, the Commission
actually stated, and the data shows, that
at the end of 2022, 14 (of 24) non-RTO/
ISO transmission providers had delayed
studies still pending at the end of the
year.480 Furthermore, of the studies
completed over the course of 2022, the
data indicates that 16 non-RTO
transmission providers completed one
or more interconnection study past the
deadline.481 As stated above in section
II.A.2., we recognize that PJM’s data
reflects its previous, serial study
process. However, even excluding both
PJM and SPP, the data show that three
of the four remaining RTOs/ISOs
reported delayed studies at the end of
2022.482 Moreover, although we find the
data even excluding PJM and SPP’s
backlogs is sufficient to show that study
delays are not a problem that exists only
in isolated pockets, the existing
interconnection study backlogs in SPP
and PJM reinforce that it is imperative
that these entities, too, conduct their
cluster study processes in a timely
fashion, as will be facilitated by firm
476 TAPS, 225 F.3d at 687–88; INGAA, 285 F.3d
at 37; S.C. Pub. Serv. Auth., 762 F.3d at 67.
477 See supra section II.A.3.
478 Order No. 2023, 184 FERC ¶ 61,054 at PP 38,
40, & app. B.
479 Indicated PJM TOs Rehearing Request at 15–
16.
480 Order No. 2023, 184 FERC ¶ 61,054 at P 40 &
app. B tbl. 3.
481 Id.
482 Id. at app. B.
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study deadlines.483 The data indicate
that study delays are not a problem that
only exists in isolated pockets.
293. We disagree with arguments that
it was disproportionate or inappropriate
for the Commission to make a generic
finding eliminating the reasonable
efforts standard and adopting firm study
deadlines, given that some regions have
already adopted cluster study processes
and are, therefore, generally in accord
with a number of other reforms adopted
in Order No. 2023. The data do not
indicate that cluster studies alone are
sufficient to remedy interconnection
queue backlogs. To the contrary, a
number of transmission providers that
have already adopted cluster studies
still experience substantial study
delays.484 While cluster studies are a
key component of the Order No. 2023
reforms, clustering alone has not proved
sufficient to solve the problems the
Commission identified in Order No.
2023. We conclude that the elimination
of the reasonable efforts standard, which
has not yet been adopted by any
transmission providers, is an
appropriate and important component
of the package of reforms in Order No.
2023 to remedy study delays and queue
backlogs.
294. We disagree with arguments that
the Commission relied on stale data to
support the elimination of the
reasonable efforts standard and the
adoption of deadlines and study delay
penalties. It appears that these rehearing
requests are premised on speculation
that future data might tell a different
story than the data the Commission
relied upon in Order No. 2023. Such
speculation about potential future data
does not render current data stale.485
483 See id. P 40, app. B, tbls. 2 & 4; NOPR, 179
FERC ¶ 61,194, at app. A, tbl. 1 n.489 (noting that
SPP’s ‘‘normal interconnection queue processing
has been modified to address its large queue
backlog and transition to a new interconnection
study process’’).
484 Order No. 2023, 184 FERC ¶ 61,054 at P 40
(indicating that multiple transmission providers
that have already adopted cluster studies—
including, among others, MISO, APS, Dominion,
Duke, El Paso, PNM, and PSCo—still have study
delays).
485 See ICC v. Jersey City, 322 U.S. 503, 514 (1944)
(‘‘Administrative consideration of evidence . . .
always creates a gap between the time the record
is closed and the time the administrative decision
is promulgated . . . [if] litigants might demand
rehearings . . . because some new circumstance has
arisen . . . there would be little hope that the
administrative process could ever be
consummated[.]’’); Wis. Elec. Power Co. v. Costle,
715 F.2d 323, 327 (7th Cir. 1983) (finding that the
record was not stale just because it did not include
data collected five days before the agency issued its
decision); Vill. of Logan v. U.S. Dep’t of Interior,
577 F. App’x 760, 770 (10th Cir. 2014) (‘‘Defendants
likewise cannot be faulted for failing to consider a
study that was published after the [agency decision]
was published[.]’’).
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Order No. 2023 relied on the most
recent data available, from 2020–
2022.486 Even if this dataset is not
perfect, imperfection does not amount
to arbitrary decision-making.487 We also
note that, for purposes of judicial
review, the record consists of the
information that was before the
Commission at the time Order No. 2023
was issued.488 Particularly given the
trends of worsening queue delays and
backlogs, which we have found are
likely to persist in the absence of
Commission action,489 and the gravity
of the problem of such delays in
interconnecting new generation, the
Commission was not required to wait
for pending developments before
issuing Order No. 2023, nor are we
required to retract Order No. 2023 in
order to supplement the Commission’s
decision with new data.490
295. We disagree with Indicated PJM
TOs’ claim that Order No. 2023 relied
on the stale record from Order No. 890,
even though the world has changed
substantially since 2007. Order No. 2023
cited Order No. 890 as precedent
reflecting that the Commission has
authority to (1) implement a study delay
penalty structure for RTOs/ISOs for
missed tariff deadlines notwithstanding
486 See Order No. 2023, 184 FERC ¶ 61,054 at app.
B (summarizing data from 2020–2022); id. at P 38
(citing Queued Up 2023 at 7–8). Cases in which
courts have found data to be stale involve
significantly older data. See N. Plains Res. Council,
Inc. v. Surface Transp. Bd., 668 F.3d 1067, 1086
(9th Cir. 2011) (finding that ten-year-old data was
stale); Lands Council v. Powell, 395 F.3d 1019, 1031
(9th Cir. 2005) (finding that six-year-old data was
stale).
487 See White Stallion Energy Ctr., LLC v. EPA,
748 F.3d 1222, 1248 (D.C. Cir. 2014) (agency’s
‘‘data-collection process was reasonable, even if it
may not have resulted in a perfect dataset’’); In re
Polar Bear ESA Listing, 709 F.3d 1, 13 (D.C. Cir.
2013) (‘‘That a model is limited or imperfect is not,
in itself, a reason to remand agency decisions based
upon it.’’); Allied Local & Reg’l Mfrs. Caucus v.
EPA, 215 F.3d 61, 71 (D.C. Cir. 2000) (‘‘We
generally defer to an agency’s decision to proceed
on the basis of imperfect scientific information’’);
State of N.C. v. FERC, 112 F.3d 1175, 1190 (D.C.
Cir. 1997) (‘‘The mere fact that the Commission
relied on necessarily imperfect information . . .
does not render [its decision] arbitrary.’’); Chemical
Mfrs. Ass’n v. EPA, 28 F.3d 1259, 1265 (D.C. Cir.
1994) (agency may nonetheless use model ‘‘even
when faced with data indicating that it is not a
perfect fit’’).
488 See Vt. Yankee Nuclear Power Corp. v. Nat.
Res. Def. Council, Inc., 435 U.S. 519, 554–55 (1978)
(Vt. Yankee) (explaining that an agency decision
‘‘had to be judged by the information then available
to it[.]’’).
489 See, e.g., Order No. 2023, 184 FERC ¶ 61,054
at P 966.
490 See Marsh v. Oregon Nat. Res. Council, 490
U.S. 360, 373 (1989) (‘‘agenc[ies] need not
supplement [a decision] every time new
information comes to light[.]’’); Friends of the River
v. FERC, 720 F.2d 93, 109 (D.C. Cir. 1983) (‘‘Were
we to order the Commission to reassess its
decisions every time new forecasts were released,
we would risk immobilizing the agency.’’).
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their non-profit status,491 and (2)
prohibit non-RTO transmission provider
and transmission-owning members of
RTOs/ISOs from recovering penalty
amounts through transmission rates.492
Order No. 2023 further acknowledged
differences between the transmission
service studies addressed in Order No.
890 and interconnection studies and
accounted for these differences in
developing this study delay penalty
regime.493
296. We also disagree with rehearing
requests that argue that the elimination
of the reasonable efforts standard and
the adoption of a structure of
performance standards, in the form of
deadlines, and performance incentives,
in the form of penalties, is premature,
and that the Commission should have
waited until other reforms took effect
before considering whether to
implement this reform, or should have
instead simply augmented the reporting
approach set forth in Order No. 845.
While the Commission could have taken
a more gradual approach in addressing
interconnection queue backlogs, we find
that such an approach would not
represent a just and reasonable
replacement rate. Indeed, not only have
our prior reforms failed to adequately
control interconnection backlogs and
delays, but the problem has instead
significantly worsened, leading to
unjust and unreasonable rates. Thus,
notwithstanding that certain
commenters may prefer a different
approach—and particularly favor one
that preserves for as long as possible the
ability of transmission providers to
extend their own deadlines to complete
interconnection studies—we sustain
Order No. 2023’s finding that the
reasonable efforts standard is
contributing to those unjust and
unreasonable rates such that reform of
that standard is warranted now.494 As a
result, we also continue to find that
Order No. 2023’s approach of
addressing the problem of
interconnection queue backlogs and
delays from multiple angles is both
permissible and warranted given the
491 See
Order No. 2023, 184 FERC ¶ 61,054 at P
876.
492 See
id. P 992.
id. P 1013.
494 Notably, the rehearing requests cite no
authority precluding the Commission from adopting
the more comprehensive approach embodied in
Order No. 2023. See Flyers Rts. Educ. Fund, Inc. v.
U. S. Dep’t of Transp., 810 F. App’x 1, 3 (D.C. Cir.
2020) (explaining that FCC v. Fox Television
Stations, Inc., 556 U.S. 502 (2009) ‘‘permits, but
does not require, an agency to act incrementally.’’);
WildEarth Guardians v. U.S. E.P.A., 751 F.3d 649,
655–56 (D.C. Cir. 2014) (summarizing Defenders of
Wildlife v. Gutierrez, 532 F.3d 913 (D.C. Cir. 2008),
upholding a decision to focus on a comprehensive
approach).
493 See
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extreme challenges identified in section
II.A, above, and Order No. 2023.495
297. Moreover, under FPA section
206, the Commission need only find
that the existing pro forma is unjust and
unreasonable and that the replacement
rate is just and reasonable; the
Commission need not demonstrate that
the replacement rate is the only just and
reasonable approach.496 We continue to
find that a comprehensive approach,
including the elimination of the
reasonable efforts standard and
adoption of performance standards and
incentives (study deadlines and
penalties), is necessary to remedy the
unjust and unreasonable rates resulting
from interconnection queue backlogs
and is just and reasonable. We also note
that arguments that this reform is
premature are based on the premise that
the other reforms in Order No. 2023 will
be sufficient to remedy study delays.
But at the same time, parties argue on
rehearing that they cannot meet study
deadlines, even with the other reforms
in Order No. 2023. Both cannot be true.
Either the other reforms in Order No.
2023 will be sufficient to ensure
transmission providers can meet study
deadlines, in which case they will not
incur penalties under this regime, or—
consistent with the Commission’s
conclusions in Order No. 2023 and
herein—the other reforms will not be
sufficient to ensure transmission
providers meet study deadlines. In
contrast, the Commission has here
determined that a package of reforms—
including both the elimination of the
reasonable efforts standard and the
other reforms required by the final
rule—represents a reasonable and wellsupported decision regarding the
appropriate replacement rate.
298. With regard to arguments that the
Commission’s adoption of a deadline
and penalty structure does not take into
account that some transmission
providers have engaged in stakeholder
processes on queue reform, we note that
Order No. 2023 acknowledged these
efforts.497 However, we disagree that
these efforts mean that the Commission
cannot or should not implement further
reforms. In the regions where
stakeholder reforms are ultimately
successful in reducing queue backlogs
and preventing delayed studies, the
penalties adopted in Order No. 2023
may never be relevant. However, as
explained above, many regions of the
country are still seeing significant and
even growing queue backlogs and study
delays. It is clear that further action is
warranted.
299. The rehearing requests also
mischaracterize Order No. 2023 in
claiming that the Commission
eliminated the reasonable efforts
standard based on ensuring parity or
fairness, rather than evidence. Given the
magnitude and growth of the
interconnection queue backlog, the
Commission adopted a comprehensive
approach to remedying the unjust and
unreasonable rates caused by that
backlog.498 Order No. 2023’s references
to ensuring that transmission providers
were ‘‘doing their part’’ 499 and ‘‘striking
a balance’’ 500 were made in this
context, reflecting that transmission
providers have a role to play in
addressing this backlog. This
comprehensive approach recognizes the
importance of addressing each of the
principal factors contributing to
interconnection queue backlogs,
including those—like study
timeliness—that are within the control,
whether in whole or in part, of
transmission providers. We are,
therefore, not persuaded by arguments
that the existence of factors beyond the
control of transmission providers that
may delay interconnection studies
means that the elimination of the
reasonable efforts standard, and its
replacement with firm study deadlines
and incentives in the form of penalties,
cannot or will not be effective in
reducing study delays.
300. We further conclude that
contentions that the reasonable efforts
standard carries benefits, including the
flexibility to account for the
complexities and variability of
interconnection requests that may arise
in the study process, do not demonstrate
that this standard remains just and
reasonable. While there is some benefit
to such flexibility, this benefit does not
495 See, e.g., Order No. 2023, 184 FERC ¶ 61,054
at PP 3, 27–29, 37–60.
496 See Emera Me., 854 F.3d at 22–23 (explaining
the two-step analysis under section 206 and that, on
the second prong, there is a substantial spread of
potentially just and reasonable rates).
497 Order No. 2023, 184 FERC ¶ 61,054 at PP 16,
59, 1765–67. Because Order No. 2023 adopted the
NOPR proposal to continue to apply the ‘‘consistent
with or superior to’’ and ‘‘independent entity
variation standards,’’ see id. P 1764, the
transmission providers that have engaged in these
processes may still benefit from them, although we
cannot prejudge any particular compliance filings.
498 See id. P 968 (discussing the other reforms the
Commission was adopting).
499 Id.
500 Id. P 972 (‘‘The study delay penalty structure
adopted in this final rule balances the harm to
interconnection customers of interconnection study
delays and the associated need to incentivize
transmission providers to timely complete
interconnection studies with the burdens on
transmission providers of conducting
interconnection studies and potentially facing
penalties for delays, including those that may be
caused or exacerbated by factors beyond their
control.’’).
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27055
outweigh the need for reform the
Commission has discussed and
particularly does not change the fact
that interconnection queue backlogs and
study delays are resulting in unjust and
unreasonable rates. Indeed,
unwarranted flexibility to the detriment
of timely study completion represents a
defect in the reasonable efforts standard
in light of the record demonstrating
such backlogs: it allows transmission
providers too much discretion to extend
their own study deadlines. We thus
disagree with arguments claiming that
the reasonable efforts standard is
sufficient to hold transmission
providers accountable and appealing to
the flexible nature of the reasonable
efforts standard as purportedly
demonstrating that it remains just and
reasonable.
301. Furthermore, we do not agree
that the deadline and penalty structure
set forth in Order No. 2023 is inflexible,
as certain rehearing requests attempt to
portray that structure in contrasting it
with the reasonable efforts standard.
Order No. 2023’s deadline and penalty
structure reasonably accounts for the
interests of transmission providers,
including in maintaining flexibility and
accounting for the complexities of the
interconnection study process,501 in
light of the need for reform to set clear
standards for timeliness and effective
measures to ensure those standards are
met.502 How each transmission provider
determines to meet interconnection
study deadlines is left up to that
transmission provider. We find that this
approach is appropriate given the
variation in the operations of the
transmission providers and how they
conduct the study process, and that they
have the most complete knowledge as to
what actions to better ensure study
timeliness will be most effective as to
their specific processes. Rather than
imposing a top-down approach that
mandates specific actions, the
Commission in Order No. 2023
provided flexibility to transmission
providers as to how they achieve those
standards,503 along with appropriate
safeguards.
302. We disagree with arguments that
the Commission has not demonstrated
that there are steps that transmission
501 See, e.g., supra section II.D.1.a. (summarizing
the safeguards established in Order No. 2023,
particularly including the appeals process).
502 See also infra PP 374–382 (rejecting arguments
that the deadline and penalty structure adopted by
Order No. 2023 is not just and reasonable based on
purported negative consequences of that structure).
503 Cf., e.g., Transp. Div. of the Int’l Ass’n of Sheet
Metal, Air, Rail & Transp. Workers v. Fed. R.R.
Admin., 10 F.4th 869, 876 (D.C. Cir. 2021)
(affirming a performance-based approach, rather
than prescriptive approach, as reasonable).
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providers can take to improve the
timeliness of study processing,
particularly given the factors that are
outside of or not fully within their
control, such that implementing a
structure of performance standards and
penalties to incentivize transmission to
providers meet study deadlines is not
just and reasonable. As described above,
transmission providers exercise
significant control over the study
process through which they can
influence whether the studies are timely
completed.504 It is not the case that
there is no nexus between the speed of
the interconnection queue and the
incentives imposed on transmission
providers to timely complete
interconnection studies. In Order No.
2023, the Commission explained that
transmission providers should be able to
implement reforms to ensure that their
study process is efficient and to help
meet the deadlines set forth in that rule,
including examples of steps that they
may be able to take.505 To the extent
that transmission providers suggest that
it is generically infeasible to allocate
additional resources to ensure the
timely completion of interconnection
studies because that will require them to
bear increased study costs, we are not
persuaded by these concerns. As Order
No. 2023 stated, ‘‘interconnection
customers, rather than transmission
providers, ultimately bear the costs of
interconnection studies.’’ 506 The
allocation of such additional resources
includes the allocation of additional
personnel or consultants, as appropriate
and available. Moreover, increased
availability of qualified personnel may
be driven, over time, by increased
demand on the part of transmission
providers. To the extent that
transmission providers seek to retain
additional personnel but there are
extenuating circumstances rendering
necessary personnel unavailable,
leading to the assessment of penalties,
transmission providers can explain the
504 See
supra P 284.
Order No. 2023, 184 FERC ¶ 61,054 at PP
967, 975, 1004, 1007 (identifying steps including
the management of operational resources,
implementing reforms to increase the efficiency of
study processing, investing in new software, and
hiring additional personnel).
506 Id. P 1007 (‘‘To the extent that it is more costly
to complete studies in a timely and accurate
fashion, these interconnection study costs will be
passed on to interconnection customers.’’). Nothing
in Order No. 2023 or herein requires or suggests
that transmission providers should attempt to hold
personnel liable or punish them for study delays,
and we therefore are not persuaded by SPP’s claim
that that qualified engineers may not want to work
for transmission providers if they risk being
identified as a cause of study delays that result in
penalties.
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specific facts of their situation in an
appeal to the Commission.
303. In addition, claims that
transmission providers cannot take
reasonable steps to achieve the
deadlines set forth in Order No. 2023
are premised on incorrectly portraying
the substantive deadlines set in Order
No. 2023 and the circumstances under
which penalties will be assessed as
unduly burdensome or punitive. In
imposing these deadlines, the
Commission was mindful of the burdens
on transmission providers in conducting
interconnection studies.507 Moreover, in
Order No. 2023 the Commission
adopted a reasonable approach to
selecting the deadlines in the pro forma
interconnection procedures and, as
further explained in greater detail
below, we continue to conclude that the
record supports that those deadlines
should be achievable for the pro forma
study process.508 The safeguards the
Commission selected—including, but
not limited to, the ability to appeal a
penalty—further respond to
transmission providers’ objections,
including the extent to which study
delays may be due to factors outside of
their control.509
c. Adoption of a Study Deadline and
Penalty Structure Replacement Rate
304. Having adopted the NOPR
proposal to eliminate the reasonable
efforts standard in Order No. 2023, the
Commission was then required to adopt
a replacement rate.510 It found that a
structure in which transmission
providers are required to meet firm
507 See, e.g., id. P 1004 (explaining that the
Commission was adopting reforms from the NOPR
such that it expected ‘‘that a transmission provider
that faces the potential of a study delay penalty for
failing to meet interconnection study deadlines will
be able to allocate sufficient resources to conduct
interconnection studies, in addition to
implementing reforms to ensure that its study
process is efficient’’ and declining to adopt certain
proposals that might have resulted in greater
burdens on transmission providers).
508 See infra PP 318–320 (explaining that the pro
forma study process should not impose a greater
aggregate burden on transmission providers than
the serial study process and discussing the available
data reflecting the ability of transmission providers
that have adopted a cluster study approach to
conduct those studies within the timeframes set
forth in Order No. 2023).
509 See Order No. 2023, 184 FERC ¶ 61,054 at P
987 (‘‘In evaluating whether there is good cause to
grant such relief, the Commission may consider,
among other factors: (1) extenuating circumstances
outside the transmission provider’s control, such as
delays in affected system study results; (2) efforts
of the transmission provider to mitigate delays; and
(3) the extent to which the transmission provider
has proposed process enhancements either in the
stakeholder process or at the Commission to
prevent future delay’’); id. at 979 (providing a
lengthy transition period to allow transmission
providers time to adapt to the new processes).
510 See id. P 970.
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study deadlines (a standard to measure
performance) and subject to penalties
(an incentive to meet the tariffprescribed firm study deadlines) with
appropriate safeguards, was a just and
reasonable approach.511 This regulation
of the interconnection study process is
consistent with the Commission’s longstanding regulation of the
interconnection process, including the
terms of the relationship between
interconnection customers and
transmission providers.
305. Courts have affirmed that this
regulation of the interconnection
process, and specifically the interaction
between interconnection customers and
transmission providers as necessary to
avoid a degradation in service leading to
unjust and unreasonable rates, falls
squarely within the Commission’s
ratemaking authority.512 For instance, in
NARUC v. FERC, the D.C. Circuit
affirmed the Commission’s authority to
issue Order No. 2003, observing that
‘‘Order No. 2003 asserts jurisdiction
over the terms of interconnection
between generators and transmission
providers’’ 513 and citing the connection
between those terms and the prices for
regulated service. Indeed, the
Commission established both the
timelines for interconnection studies
and the reasonable efforts standard in
Order No. 2003,514 which reflects the
Commission’s long-standing regulation
of the timeliness of the interconnection
study process.515
511 See
id. PP 970–72.
e.g., S.C. Pub. Serv. Auth., 762 F.3d at 63;
NARUC v. FERC, 475 F.3d at 1279–1280; see also
FERC v. Elec. Power Supply Ass’n, 577 U.S. 260,
266 (2016) (EPSA) (discussing the Commission’s
authority to ‘‘regulate ‘the transmission of electric
energy in interstate commerce’ and ‘the sale of
electric energy at wholesale in interstate commerce’
under FPA section 201(b), 16 U.S.C. 824(b), and
describing FPA sections 205 and 206 as affording
FERC authority to ‘‘oversee all prices for those
interstate transactions and all rules and practices
affecting such prices’’); see also id. at 277.
513 NARUC v. FERC, 475 F.3d at 1279 (‘‘By
establishing standard agreements FERC has
exercised its jurisdiction over the terms of those
relationships.’’); see id. at 1280; ESI Energy, LLC v.
FERC, 892 F.3d 321, 324 (‘‘[E]very time a new
generator of electricity asked to use a transmission
network owned by another—to interconnect the two
entities—disputes between the generator and the
owner of the transmission grid would arise,
delaying completion of the interconnection
process,’’ which disputes ‘‘delay[ed] entry into the
market by new generators,’’ thus ‘‘providing an
unfair competitive advantage to utilities owning
both transmission and generation facilities.’’).
514 See Order No. 2003, 104 FERC ¶ 61,103, at
app. C, LGIP section 1 (defining ‘‘Reasonable
Efforts’’; id. sections 6.3, 7.4, 8.3 (providing for the
use of reasonable efforts to complete study
processes within specified timeframes).
515 The Commission further has regulated the
charges for the interconnection study process
through setting the study deposit amount, see pro
forma LGIP section 3.1.1, and the recovery of the
512 See,
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306. The deadline and penalty
structure set forth in Order No. 2023 is
a replacement of the Commission’s prior
study timelines, including the
reasonable efforts standard, with
another standard directed toward that
same end.516 Specifically, the deadline
and penalty structure implemented in
Order No. 2023 governs the terms of the
relationship between the
interconnection customer and
transmission provider regarding the
costs that transmission providers can
recover for interconnection studies that
fail to meet certain standards. Given that
interconnection queue backlogs—which
are driven, in part, by study delays—
result in unjust and unreasonable rates
through, e.g., increased costs and
decreased competition,517 the study
delay penalty structure is a means of
ensuring just and reasonable rates,
consistent with the Commission’s
authority under FPA section 206.
Moreover, delayed interconnection
studies impose costs on interconnection
customers,518 such that the value of the
interconnection study to such customers
is linked to its timely performance. The
implementation of study delay penalties
reflects this fact, and—particularly
because the penalties are distributed to
interconnection customers in proportion
to their study costs 519—regulates what
a transmission provider can charge for
an interconnection study, accounting for
study timeliness, as a matter of ensuring
just and reasonable rates.
307. The approach adopted in Order
No. 2023 of employing penalties as an
incentive for regulated actors to ensure
adequate service, pursuant to the
Commission’s statutory mandate to
ensure just and reasonable rates under
FPA sections 205 and 206, is not novel.
The Commission has previously
accepted tariff mechanisms
incorporating the use of penalties for
failure to meet a performance standard
as a component of a just and reasonable
rate.520 Order No. 890’s implementation
costs for interconnection studies, see Order No.
2023, 184 FERC ¶ 61,054, pro forma LGIP sections
7.1, 8.1, 9.4, 13.3, app. 2 at section 6, app. 7 at
section 7, app. 8 at sections 7–8, app. 9 at section
6, app. 10 at section 6 (reflecting revisions to the
pro forma LGIP and appendices set forth in Order
No. 2003).
516 See Order No. 2023, 184 FERC ¶ 61,054 at P
50.
517 See id. PP 37, 43, 50, 963.
518 See id. PP 43, 972.
519 See id. PP 984, 990; infra P 439 (discussing the
distribution of penalties to interconnection
customers).
520 See, e.g., Advanced Energy Mgmt. All. v.
FERC, 860 F.3d 656, 665 (D.C. Cir. 2017) (AEMA)
(affirming Commission approval of revised market
rules under which ‘‘a resource that fails to meet its
capacity commitment during an emergency hour
must pay a penalty’’); Belmont Mun. Light Dep’t v.
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of operational penalties for routinely
delayed transmission studies similarly
reflects a structure using such penalties
to accomplish the Commission’s
ratemaking objectives.521
308. To that end, the Commission
adopted the study deadline and penalty
structure pursuant to its authority under
FPA section 206.522 In doing so, it stated
that its approach was not based on a
finding of bad faith on the part of
transmission providers,523 or intended
to create a punitive structure,524 but
instead reflected the need for adequate
incentives for transmission providers to
take the steps within their control to
help alleviate unjust and unreasonable
rates stemming from interconnection
queue delays and backlogs.525 In this
respect, the implementation of the study
deadline and penalty structure in Order
No. 2023 reflects that—as a component
of a comprehensive package of reforms
to remedy the problem of severe
interconnection queue delays and
backlogs—transmission providers will
be held to appropriate standards, with
stated consequences for failure to meet
those standards, as is also the case with
FERC, 38 F.4th 173, 177 (D.C. Cir. 2022); Energy
Harbor LLC, 185 FERC ¶ 61,203, at P 2 (2023)
(explaining that ‘‘PJM’s Capacity Performance
construct creates a penalty and bonus structure for
Capacity Resources to deliver energy and reserves’’
under certain conditions); PJM Interconnection,
L.L.C., 155 FERC ¶ 61,157, at P 18 (2016) (further
describing this capacity construct); ISO New
England Inc., 174 FERC ¶ 61,252, at PP 3–4 (2021)
(discussing ISO–NE’s ‘‘pay-for-performance’’
capacity market design); ISO New England Inc., 165
FERC ¶ 61,266, at PP 1, 22 (2018) (accepting
proposal to allow ISO–NE to levy a monthly
‘‘Failure to Cover Charge Rate,’’ described as a ‘‘just
and reasonable penalty rate,’’ explaining that it will
incentivize resources to cover that obligation); cf.
PJM Rehearing Request at 30 (acknowledging that
various ‘‘RTO tariffs and other tariffs contain
various penalty provisions’’); Order No. 2003, 104
FERC ¶ 61,103 at PP 857, 898 (considering whether
to provide for liquidated damages for delayed
interconnection studies in the pro forma LGIP, and
declining to do so, but observing that liquidated
damages provisions are within the Commission’s
statutory authority).
521 See, e.g., Order No. 890, 118 FERC ¶ 61,119 at
P 1340 (describing this structure and explaining
that transmission providers ‘‘must have a
meaningful stake in meeting study time frames’’);
id. P 1347 (explaining the Commission’s rationale
for the penalty amounts selected as ‘‘in line with
the cost the transmission provider would incur to
focus additional resources on processing’’ study
requests and as an effective incentive to comply
with study deadlines); Order No. 2023, 184 FERC
¶ 61,054 at PP 1013, 1015 & nn.1958–60 (discussing
the penalty structure implemented under Order No.
890 for transmission service studies and automatic
penalties for ‘‘traffic ticket’’ violations).
522 Order No. 2023, 184 FERC ¶ 61,054 at P 1014.
523 See id. P 966.
524 See, e.g., id. P 999 (‘‘[W]e believe that the
study delay penalty structure strikes a reasonable
balance by providing an adequate incentive without
being punitive’’).
525 See id. PP 37–43, 50, 970–72.
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interconnection customers.526 As
discussed in detail below,527 the
implementation of this incentive
structure pursuant to FPA section 206 is
further consistent with Supreme Court
precedent differentiating civil penalties
that are imposed as punishment to
redress a wrong to the public versus
those that serve other purposes, such as
the regulation of the interaction between
parties to serve a compensatory
function.528 Order No. 2023’s deadline
and penalty structure falls within the
latter category, supported by the
Commission’s well-established FPA
authority over the interconnection
process to avoid degradation of service,
its authority to regulate the relationship
of the parties involved in that process,
and its authority to ensure just and
reasonable rates under FPA section 206.
i. Interconnection Study Deadlines
(a) Requests for Rehearing
309. Several of the rehearing requests
contend that the imposition of fixed,
uniform study deadlines is arbitrary and
capricious because it fails to account for
the specific circumstances of the cluster
being studied, particularly given the
complexity and variability of the study
process.529 For instance, Avangrid and
EEI argue that the Commission’s 150day cluster study deadline is a ‘‘onesize-fits-all’’ approach that disregards
that clusters of interconnection studies
will vary widely in size and complexity,
and there are numerous variables
outside of transmission providers’
control that contribute to delays.530
Indicated PJM TOs argue that the
Commission failed to consider the
uneven and unpredictable timing of
interconnection requests.531
526 See, e.g., supra section II.A.3 (discussing the
need for comprehensive reform to address this
problem); pro forma LGIP sections 3.4, 3.5, 3.7,
3.7.1 (reflecting examples of such consequences
applicable to interconnection customers, including
that their interconnection requests may be deemed
withdrawn, loss of queue position, and application
of the withdrawal penalty).
527 See infra section II.D.1.c.iv.
528 See Kokesh v. SEC, 581 U.S. 455, 461 (2017)
(Kokesh).
529 Avangrid Rehearing Request at 4–5; EEI
Rehearing Request at 10; Indicated PJM TOs
Rehearing Request at 16; NYISO Rehearing Request
at 4; NYTOs Rehearing Request at 13–15; 26–27
(arguing that there are conflicting directives in
Order No. 2023 that support regional flexibility but
also provide for study penalties following strict
deadlines that do not account for unique challenges
and dynamics in different regions, which it claims
could hinder ongoing regional queue reform
initiatives and stifle innovation); SPP Rehearing
Request at 9–10.
530 Avangrid Rehearing Request at 4–5; EEI
Rehearing Request at 10.
531 Indicated PJM TOs Rehearing Request at 16
(citing factors driving variability in the number and
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310. Relatedly, Indicated PJM TOs
also assert that the uniform study
deadline and penalty framework is
unduly discriminatory against
transmission owners in regions with
substantial renewable generation in
development, because such regions with
long queues will experience greater risk
of penalties due to factors they cannot
control.532 Dominion asserts that,
within RTOs and ISOs, there may be
disparate outcomes in different zones
because of an uneven distribution of
interconnection requests, such that
different transmission owners or
transmission providers will face very
different risks.533
311. A number of the rehearing
requests also challenge the specific
deadlines the Commission selected—
including, in particular, the 150-day
cluster study deadline—as insufficiently
supported and/or too short, risking a
less efficient interconnection process.534
MISO TOs and NYISO argue that the
deadlines imposed in Order No. 2023
have not been shown to be appropriate
and achievable or are not supported by
evidence.535 NYISO argues that study
deadlines should be tailored to each
region.536 NYISO and PJM argue that a
150-day timeframe for the cluster study
is not achievable in their regions in
timing of interconnection requests in different
locations); id. at 30–31 (arguing that the evidence
of widespread study delays show that the aggressive
deadlines are unreasonable, unrealistic, and
arbitrary, particularly given the increased burdens
that can be expected going forward, including new
NERC standards; arguing that uniform study
deadlines are not justified).
532 Id. at 31–32.
533 Dominion Rehearing Request at 24–25.
534 EEI Rehearing Request at 9–10 (‘‘Experience
has shown that reliability and deliverability studies
take longer than 50 days and that the development
of binding cost estimates may be complex,
especially in high-density urban areas.’’); MISO TOs
Rehearing Request at 11–12; NYISO Rehearing
Request at 5–6; NYTOs Rehearing Request at 13–15;
PacifiCorp Rehearing Request at 5, 15; PJM
Rehearing Request at 32.
535 MISO TOs Rehearing Request at 11–12 (also
arguing that the Commission has not shown why a
uniform deadline is appropriate irrespective of ‘‘the
cluster size, scope, geography, make up, proposed
resource mix, and other circumstances of the
particular cluster’’ and that the automatic
imposition of penalties exacerbates the problem
posed by the deadlines); NYTOs Rehearing Request
at 13–15 (citing N.Y. v. EPA, 964 F.3d 1214, 1224
(D.C. Cir. 2020) and All. for Cannabis Therapeutics
v. DEA., 930 F.2d 936, 940 (D.C. Cir. 1991) for the
propositions that standards that are not reasonably
attainable and conditions which are ‘‘impossible to
fulfill’’ are arbitrary and capricious).
536 NYISO Rehearing Request at 5–6; see also id.
at 15–17 (arguing that the Commission should allow
RTOs/ITOs to propose alternative study deadlines
as independent entity variations, and that failure to
do so unreasonably treats all transmission providers
similarly, regardless of how they may be differently
situated); id. at 40 (‘‘[T]he Commission has not
adequately addressed, or explained its response to,
arguments that study deadlines themselves are
unreasonable.’’).
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particular.537 PacifiCorp asserts that the
Commission should extend the 150-day
cluster study and restudy deadlines by
45 days to provide transmission
providers adequate time to address
third-party delays.538
312. Avangrid, NYISO, and PJM
contend that the efficiency gains that
can be expected from the other reforms
set forth in Order No. 2023 will not
render the deadlines imposed by that
decision more achievable.539 NYISO
and PJM contend that the study entry
requirements are not likely to materially
deter participation in cluster studies,
claiming that certain RTOs/ISOs—
including NYISO—have already
adopted similar requirements without a
noticeable reduction in the number of
study participants.540
313. Dominion, MISO TOs, and
NYISO also challenge the effectiveness
of one of the safeguards that the
Commission imposed: the ability to
extend a study deadline for 30 days,
upon agreement of all interconnection
customers.541 Dominion argues that
there is no incentive for interconnection
customers to agree to such an extension
where they would otherwise be entitled
to a share of the penalty assessed against
a transmission provider.542 MISO TOs
note that obtaining this relief requires
unanimity among all interconnection
customers.543
537 Id.
at 6–11 (describing the applicable New
York reliability requirements and discussing
particular challenges applicable to New York); PJM
Rehearing Request at 32 (‘‘This simply is not
possible in a region such as the PJM Region, where
the typical queue over a one-year period in the last
few years has included in excess of 1,000 projects’’).
538 PacifiCorp Rehearing Request at 5, 15.
539 Avangrid Rehearing Request at 12; NYISO
Rehearing Request at 12–15 (arguing that much of
the work in cluster studies still concerns individual
projects or subsets of projects, and thus require
many of the same resources as would be necessary
to conduct individual studies); see also id. at 34
(contending that the Commission assumes, without
evidence, that other improvements will fully offset
the burdens imposed by Order No. 2023 on
transmission providers); PJM Rehearing Request at
32.
540 NYISO Rehearing Request at 14–15 (asserting
that the entry requirements and withdrawal
penalties adopted by Order No. 2023 for cluster
studies are comparatively modest and likely to be
only minimal deterrent to speculative projects); PJM
Rehearing Request at 32 (noting that MISO received
more than 960 requests following the close of its
2022 Definitive Planning Process cycle that closed
in 2022).
541 Dominion Rehearing Request at 24; MISO TOs
Rehearing Request at 18–19; NYISO Rehearing
Request at 35.
542 Dominion Rehearing Request at 24.
543 MISO TOs Rehearing Request at 18–19
(contending that this safeguard is therefore ‘‘wholly
illusory’’); see also NYISO Rehearing Request at 35
(arguing that a 30-day extension is not a reasonable
safeguard; noting that it will be conducting
interconnection studies potentially involving more
than 100 interconnection requests and arguing that
each interconnection customer will have an
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(b) Determination
314. We are not persuaded by the
rehearing requests challenging the study
deadlines set forth in Order No. 2023.
The timelines set forth in Order No.
2023 are reforms to the Commission’s
pro forma LGIP, against which
individual compliance filings will be
assessed.544 In Order No. 2023, the
Commission declined to ‘‘adopt
suggestions to allow transmission
providers flexibility to set their own
study deadlines,’’ instead imposing
standard deadlines for the specific study
processes set forth in the pro forma
LGIP.545 As explained below, we
continue to find that the deadlines set
in Order No. 2023 for the pro forma
study process are just and reasonable
and represent a reasonable policy
determination that appropriately
balances multiple competing
considerations.546
315. We continue to conclude that the
timeframes in Order No. 2023 for the
completion of studies, including the
150-day timeframe for the completion of
cluster studies, are just and reasonable
for the pro forma study approach set
forth in Order No. 2023.547 The
underlying reason for the reforms in
Order No. 2023, including the deadlines
imposed on transmission providers to
incentive to oppose an extension since their study
costs would be offset by penalty charges).
544 See Order No. 2023, 184 FERC ¶ 61,054 at P
10 (‘‘We note that the compliance obligations that
result from this final rule will be evaluated in light
of the independent entity variation standard for
[RTOs] and [ISOs] and the consistent with or
superior to standard for non-RTO/ISO transmission
providers.’’); id. P 1764; see also Order No. 2003
104 FERC ¶ 61,103 at P 26 (discussing the standards
for non-independent and independent transmission
providers to seek variations from the terms of the
pro forma LGIP and LGIA); Preventing Undue
Discrimination & Preference in Transmission Serv.,
Order No. 890–B, 123 FERC ¶ 61,299, at PP 95, 101
(2008) (‘‘The Commission clarifies, in response to
NYISO, that transmission providers are free to make
filings under FPA section 205 to seek variations
from the pro forma OATT and demonstrate that
alternative tariff provisions are consistent with or
superior to the pro forma OATT.’’); N.Y. Indep. Sys.
Operator, Inc., 125 FERC ¶ 61,274, at P 24 & n.23
(2008) (‘‘NYISO proposed to increase the
transmission study deadlines from 60 days to 120
days. The Commission accepted the filing . . . .’’).
545 Order No. 2023, 184 FERC ¶ 61,054 at P 331
(explaining that allowing transmission providers to
propose their own deadlines in the first instance
‘‘would undermine the purpose of ensuring that
transmission providers complete interconnection
studies by standard deadlines prescribed by their
tariffs and would thus be insufficient to ensure that
interconnection customers are able to interconnect
to the transmission system in a reliable, efficient,
transparent, and timely manner’’).
546 Transmission providers are also allowed to
propose variations from the requirements of Order
No. 2023, under the applicable standard, including
as to the deadlines set for the pro forma study
processes, although we cannot prejudge any such
filings. See id. P 1764.
547 See id. PP 324, 326.
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conduct studies, is that interconnection
queue backlogs are causing unjust and
unreasonable rates and that these
backlogs must, therefore, be remedied
pursuant to our statutory mandate.548
We find that the timelines set forth in
Order No. 2023 appropriately address
transmission providers’ role and control
in the interconnection study process
and strike a reasonable balance between
the transmission provider and other
interests, such as those of
interconnection customers, in
addressing such unjust and
unreasonable rates. As explained in
greater detail below, we further find that
these timelines are reasonably
achievable to accomplish the pro forma
study processes set forth in Order No.
2023. We therefore disagree that these
timelines are too short or
inappropriately uniform.
316. As the Commission explained in
Order No. 2023, ‘‘[t]he pro forma LGIP
[set forth in Order No. 2003] requires
that transmission providers use
reasonable efforts to complete: (1)
feasibility studies within 45 calendar
days; (2) system impact studies within
90 calendar days; and (3) facilities
studies within 90 or 180 calendar
days.’’ 549 Under the Commission’s pro
forma LGIP set forth in Order No. 2003,
the interconnection study process for
large generating facilities was a ‘‘serial
first-come, first-served study process by
which transmission providers study
interconnection requests individually in
the order the transmission provider
received them.’’ 550 Under this process,
the transmission provider had 135 total
days to conduct both the feasibility
study and system impact study for each
interconnection request, with each
study conducted separately.
317. Order No. 2023 eliminated the
requirement to conduct a separate
feasibility study under section 6 of the
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548 Id.
P 964; see also 16 U.S.C. 824e(a); Coal. of
MISO Transmission Customers v. FERC, 45 F.4th
1004, 1020 (D.C. Cir. 2022) (‘‘[T]he Commission is
under a statutory mandate to ensure that all rates
are just and reasonable . . . .’’).
549 Order No. 2023, 184 FERC ¶ 61,054 at P 13.
Challenges to the timelines for interconnection
studies set forth in Order No. 2023 are focused on
the deadlines for conducting cluster studies, rather
than facilities studies. Order No. 2023 provides 90
or 180 days to conduct facilities studies, which is
consistent with the timeframe specified in Order
No. 2003 under the reasonable efforts standard. See
pro forma LGIP section 8.3. Thus, Order No. 2023
effectively eliminates the ability of transmission
providers to unilaterally grant themselves
extensions as to the deadline for facilities studies,
but provides other avenues for relief in the form of
the safeguards adopted in Order No. 2023. We
continue to conclude that this is a just and
reasonable result.
550 NOPR, 179 FERC ¶ 61,194 at P 18.
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pro forma LGIP,551 and provides a
modestly longer timeframe (150 days) to
conduct the cluster study and another
150 days to conduct any necessary
restudy. The 150-day period to conduct
the cluster study runs from the
conclusion of a new 60-day customer
engagement window, during which time
the transmission provider can begin to
coordinate with customers that have
submitted interconnection requests that
will be included in a particular study
and ensure that the provider is
considering only valid interconnection
requests.552
318. We acknowledge that conducting
a cluster study of many interconnection
requests may involve increased
complexity or require an increased
commitment of resources in a given
study timeframe as compared to
conducting a single, individual study of
a particular interconnection request
under the serial process.553 However,
arguments to this effect do not take into
account the full package of reforms
aimed at improving efficiency of the
study process, supporting our
determination that the 150-day cluster
study and cluster restudy deadlines
reflect a reasonable balance of
competing interests.
319. Indeed, various reforms in Order
No. 2023 are directed toward ensuring
that transmission providers can conduct
their interconnection studies more
efficiently under the cluster study
process than the pro forma study
approach previously applicable under
Order No. 2003.554 For instance, the
Commission found that the cluster
study ‘‘process will increase efficiency
because transmission providers can
perform larger interconnection studies
encompassing many proposed
generating facilities, rather than separate
studies for each individual
interconnection customer.’’ 555 Under
this approach, transmission providers
will be able to focus their resources on
551 Order No. 2023, 184 FERC ¶ 61,054 at PP 67,
92, 316. Instead, the stability analysis, short circuit
analysis, and power flow analysis that were
previously part of the feasibility study and
conducted on a serial basis, see id. at PP 297, 317;
pro forma LGIP section 7.3, are now conducted as
components of the cluster study and restudy
process.
552 See LGIP section 3.4.5 (describing tasks to be
performed in the Customer Engagement Window
and that interconnection requests not deemed valid
at the close of this window shall be deemed
withdrawn, with no cure period); Order No. 2023,
184 FERC ¶ 61,054 at PP 223, 233–34.
553 See Order No. 2023, 184 FERC ¶ 61,054 at P
326 (‘‘While we have extended the timeline from
that provided in the individual serial study process,
we believe that 150 calendar days is a reasonable
extension to account for the more complex study.’’).
554 Id. PP 326, 1004.
555 Id. P 177.
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27059
a single study, rather than conducting
multiple individual studies.556 For that
reason, even if cluster studies prove
more complex, that point does not
undercut the Commission’s conclusion
that they can be performed in the time
allotted in the pro forma LGIP. The
Commission also explained that a
cluster study process is likely to result
in fewer interconnection customer
withdrawals—which can result in
cascading restudies, delays, and wasted
resources which could otherwise be
used productively—because
‘‘conducting a single cluster study and
cluster restudy will minimize delays
that arise from proposed generating
facility interdependencies under the
existing serial study process.’’ 557 The
Commission also adopted further
measures to increase efficiency,
including to ‘‘disincentivize
interconnection customers from
submitting interconnection requests for
speculative generating facilities and
ensure that ready, more viable proposed
generating facilities can proceed
through the study process.’’ 558
320. Thus, for the pro forma LGIP
approach set forth in Order No. 2023,
we conclude that conducting cluster
studies and restudies should not, in
terms of the total transmission provider
resources required, be materially more
burdensome than conducting serial
studies and expect that the process
should, in fact, be more efficient. We
acknowledge that conducting a cluster
study in 150 days may require a more
concerted deployment of transmission
provider resources than conducting
serial studies, because cluster studies
typically involve the evaluation of
multiple interconnection requests,
rather than allowing a full 135 days to
separately evaluate each
interconnection request. However, even
absent the efficiency gains the adopted
in Order No. 2023, the record here does
556 Id. P 326 (‘‘We also note that transmission
providers will be conducting only one
interconnection study, or at most a small number
of interconnection studies, at a time, allowing them
to devote more resources to completing the studies
in a timely manner.’’).
557 Id. P 177.
558 Id. (discussing the cluster study process,
combined with ‘‘the increased financial
commitments and requirements to enter the
interconnection queue, such as a demonstration of
site control’’); see also id. P 977 (noting the ‘‘the
new site control requirements, commercial
readiness deposits, and withdrawal penalties we
adopt in this final rule, which also become
increasingly stringent as the study process
progresses’’); cf. also LGIP sections 3.4.5, 3.7
(providing that, at the close of the customer
engagement window, only valid interconnection
request are included in the study process; further
providing that interconnection requests may be
deemed withdrawn if interconnection customers
fail to adhere to the requirements of the LGIP).
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not reflect that conducting a cluster
study will be, in aggregate, more
burdensome, let alone significantly
more burdensome, than conducting a
study of each interconnection request
on an individualized basis. Moreover,
balancing this concern regarding the
burdens associated with cluster studies
against interconnection customers’ need
for timely processing of their requests,
interconnection queue backlogs, and the
unjust and unreasonable rates resulting
from such backlogs, we conclude that
this is a necessary reform in order to
improve the timeliness of
interconnection study processing and
should be within transmission
providers’ capabilities.559
321. Data reported as required by
Order No. 845 by the non-RTO/ISO
transmission providers that conducted
cluster studies in 2022 also supports our
conclusion that the deadlines for
conducting cluster studies, restudies,
and facilities studies are just and
reasonable.560 While the approaches of
each transmission provider to
conducting cluster studies vary and no
transmission provider represented in
this data employs precisely the pro
forma study approach set forth in Order
No. 2023, we find that this data
provides a valid basis of comparison to
assess the deadlines set in Order No.
2023. In general, this represents the
most recent data set available at the time
the record closed and these
transmission providers’ approach to
cluster studies reflect some of the key
substantive reforms required in Order
No. 2023.561
322. The data reflects that five (of
eight) such transmission providers were
able, applying a cluster study approach,
to complete system impact studies in an
average of fewer than 150 days. In
several cases, they did so for clusters
containing significant numbers of
interconnection requests. Thus, the
experience of these transmission
providers supports that it is reasonably
feasible to complete cluster studies in
the timeframe specified by Order No.
2023. Particularly given the other
reforms provided in Order No. 2023 to
increase the efficiency of this process,
the ability of transmission providers to
increase efficiency and devote more
resources to this process, and the need
to ensure timely processing of
interconnection studies in order to
559 Order
No. 2023, 184 FERC ¶ 61,054 at P 1007.
app. B.
561 Moreover, that several transmission providers
with somewhat variable approaches to cluster
studies completed system impact studies in fewer
than 150 days, on average, corroborates that—in
general—it is possible to conduct such studies on
this time frame.
560 See
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ensure just and reasonable rates, this
data supports our conclusion that the
deadlines set by Order No. 2023 to
complete such studies are just and
reasonable.
323. We acknowledge that three of the
transmission providers represented in
this data exceeded this timeframe, in
some cases by a substantial amount.
This, however, does not rebut the
evidence from other transmission
providers that these deadlines are
reasonably achievable. Moreover, that
these transmission providers did not
complete their studies in fewer than 150
days, operating under a regime governed
by the reasonable efforts standard and
the ability to self-extend such deadlines,
does not demonstrate that they could
not have done so if appropriately
incentivized to meet these performance
standards, as under the deadline and
penalty structure adopted in Order No.
2023.562
324. We also find that the safeguards
provided in Order No. 2023 help ensure
that the balance struck by Order No.
2023 in setting the timeframes for the
pro forma interconnection study process
is reasonable because transmission
providers will not unduly incur
penalties for failing to meet these
timeframes. Two of those safeguards,
namely the ten-business day grace
period and the potential availability of
a 30-day extension upon agreement of
the interconnection customers in the
cluster study,563 help accommodate the
possible need for extensions to study
deadlines. The significant transition
period that the Commission afforded
before study delay penalties might be
assessed allows transmission providers
‘‘time to adapt to the new processes’’
and ‘‘will help ensure that transmission
providers’ implementation of this final
rule has begun to reduce backlogged
interconnection queues.’’ 564 The
appeals process allows transmission
providers the opportunity to
demonstrate that, under their
individualized circumstances, they
should receive relief from the
application of penalties for failing to
562 See, e.g., Cent. Hudson, 783 F.3d at 109
(holding that the Commission may permissibly rely
on economic theory so long as it has applied the
relevant economic principles in a reasonable
manner and adequately explained its reasoning);
Sacramento, 616 F.3d at 531 (‘‘[I]t was perfectly
legitimate for the Commission to base its findings
about the benefits of marginal loss charges on basic
economic theory, given that it explained and
applied the relevant economic principles in a
reasonable manner.’’).
563 See Order No. 2023, 184 FERC ¶ 61,054 at PP
963, 981–83; see also infra P 335 (recognizing that
the 30-day extension is not guaranteed in all cases
but disagreeing with claims that it will be
ineffective in practice).
564 Order No. 2023, 184 FERC ¶ 61,054 at P 979.
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meet the deadlines set in Order No.
2023.565 To the extent that transmission
providers assert that factors allegedly
outside of their control may render it
difficult or infeasible to meet the
interconnection study deadlines, this
appeals process is the avenue to raise
those considerations in particular cases
and seek relief.566 Moreover, as
addressed above, where transmission
providers conclude that the 150-day
deadline for the pro forma study process
is not appropriate for their particular
study processes, they can raise this
issue in their compliance filings, under
the appropriate standard. Thus, we
continue to conclude that the deadlines
imposed by Order No. 2023 are
reasonable as to the pro forma LGIP
approach to interconnection studies set
forth therein.
325. The challenges on rehearing
arguing that the timeframes set forth to
conduct interconnection studies are too
short or inappropriately uniform do not
persuade us that these deadlines are not
reasonable for the timely completion of
the pro forma study process. We
disagree with arguments that the
Commission failed to adequately set
forth its rationale for adopting these
deadlines, and find that our reasons for
adopting these deadlines have been
adequately explained, including
through our discussion herein.
Arguments that the deadlines are too
short are largely conclusory, do not
support a finding that the deadlines set
for the pro forma LGIP processes are not
generally achievable as to those
processes, and fail to establish that these
deadlines—in light of the overall
structure of Order No. 2023, including
the relevant safeguards and ability to
seek variations—reflect an unreasonable
balance of the competing interests.
326. We are unpersuaded by
arguments that uniform study deadlines
are inappropriate. First, these arguments
disregard the mechanisms in Order No.
2023 to account for variability,
including the safeguards attendant to
the potential assessment of penalties
and the ability to seek variations from
the pro forma LGIP in the compliance
process. Second, general assertions that
some transmission providers may have
higher workloads than others do not
establish that the relevant deadlines will
not, as a general matter, be sufficient to
allow most transmission providers to
conduct the relevant studies. Third, to
the extent that some transmission
565 Id.
PP 987–89.
also infra P 363 (noting that concerns that
transmission providers may not be afforded relief in
the appeals process, where they believe such relief
would be warranted, are premature).
566 See
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providers have higher workloads
associated with interconnection
requests than other providers, the
deadlines in Order No. 2023 incentivize
those transmission providers to devote
resources commensurate with those
workloads to the timely processing of
the interconnection requests in their
queue. On that point, it bears repeating
that the Commission has determined
that the status quo is leading to unjust
and unreasonable rates. As such, while
the reforms in Order No. 2023 may
require transmission providers to
reprioritize their allocation of resources,
we find that such reallocation may be
necessary to satisfy the statutory
mandate.
327. In response to arguments that the
Commission ignored the uneven and
unpredictable timing of interconnection
requests, we conclude that Order No.
2023 adequately accounts for these
considerations. First, interconnection
requests will be submitted during an
annual cluster request window, which
is a 45-calendar day period with the
start date to be determined by each
transmission provider: under this
structure, the timing of interconnection
requests will not be unpredictable.567
Second, we acknowledge that the
number of interconnection requests
submitted in a given cluster request
window is unpredictable and impacts
the deployment of resources that may be
required to complete that cluster of
interconnection studies.568 However, we
continue to find that it is necessary for
transmission providers to have explicit
and firm deadlines prescribed by their
tariffs to ensure customers are able to
interconnect to the transmission system
in a reliable, efficient, transparent, and
timely manner.569 These deadlines,
subject to the safeguards articulated in
Order No. 2023 (including the appeals
process), represent a just and reasonable
approach that balances the competing
interests of transmission providers and
other entities, and should be reasonably
achievable for the pro forma study
approach adopted in Order No. 2023.
And as noted above, Order No. 2023
does not foreclose transmission
providers from proposing different
deadlines as part of their compliance
filings and supporting such proposals
using either the consistent with or
567 Order
No. 2023, 184 FERC ¶ 61,054 at PP 223,
236.
568 Cf. id. P 324 (‘‘We note that depending on the
cluster size, cluster studies may not always
consume the entire 150 calendar days, and if a
cluster study is complete prior to this deadline,
transmission providers have flexibility to provide
the cluster study report at that time prior to the
deadline indicated in its LGIP[.]’’)
569 Id. P 331.
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superior to or independent entity
variation standard, as appropriate.
328. NYISO specifically asserts that
the 150-day deadline for completing
cluster studies is not adequate to
accommodate NYISO’s process.570 In
support, it introduces a new affidavit
describing NYISO’s performance of
interconnection studies, and the timing
associated with the relevant tasks.571
Acknowledging that the Commission
does not typically consider new
evidence on rehearing, NYISO asserts
that the Nguyen Affidavit is not new
evidence because it ‘‘provides clarifying
details regarding publicly available
information about the NYISO’s
Commission-approved interconnection
procedures that the NYISO has already
described in this proceeding.’’ 572 It
further claims that, even if the Nguyen
Affidavit constitutes new evidence, the
Commission should accept it to because
NYISO could not have reasonably
anticipated certain alleged factual
misunderstandings regarding the
interconnection study process, the
potential benefits of interconnection
studies, and the level of collaboration
required to complete studies in New
York in Order No. 2023.
329. We are not persuaded that the
Nguyen Affidavit is properly before us.
To the extent that the Nguyen Affidavit
contains material not otherwise present
in the record, it is new evidence. And
NYISO has not shown that the evidence
in this affidavit could not have been
presented previously; this affidavit is
not prompted by information that only
recently became available or concerns
driven by a material change in
circumstance.573 Indeed, NYISO’s
argument that the Commission should
consider this evidence is, essentially,
that it believes the Commission erred 574
570 See NYISO Rehearing Request at 5–6 (arguing
that the Commission has not established a basis for
the 150-day deadline for cluster studies and should
allow each transmission provider to propose its
own study deadline); id. at 6–12 (arguing that a 150day study timeframe is not consistent the process
NYISO follows).
571 See id., attach. I (Nguyen Aff.).
572 NYISO Rehearing Request at 7 n.15; see also
NRG Power Mktg., LLC v. FERC, 862 F.3d 108, 116–
17 (D.C. Cir. 2017) (citing PJM Interconnection,
L.L.C., 108 FERC ¶ 61,187, at P 49 (2004) (‘‘Parties
seeking rehearing of Commission orders are not
permitted to include additional evidence in support
of their position, particularly when such evidence
is available at the time of the initial filing.’’); NO
Gas Pipeline v. FERC, 756 F.3d 764, 770 (D.C. Cir.
2014) (NO Gas) (‘‘FERC regularly rejects requests for
rehearing that raise issues not previously presented
where there is no showing that the issue is ‘based
on matters not available for consideration . . . at
the time of the final decision.’ ’’).
573 See 18 CFR 713.385(c)(3); Pub. Ser. Co. of
N.M., 181 FERC ¶ 61,013, at P 12 & n.25 (2022).
574 We also disagree with NYISO’s generalized
assertion that the Commission misunderstood the
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27061
but—if so—NYISO’s proper recourse
would be to demonstrate that purported
error based on the existing record.
330. Regardless, we would not be
persuaded by NYISO’s arguments even
if we were to consider the Nguyen
Affidavit in assessing them. The
question before the Commission in
establishing the deadlines for the pro
forma study process set forth in Order
No. 2023 is whether those deadlines are
reasonable as applied to that process.
NYISO’s argument does not address this
question. Rather, NYISO’s position is
that the 150-day timeframe is not
sufficient for NYISO’s specific
interconnection process, which it has
adopted under the independent entity
variation standard and which differs
significantly from the process specified
in Order No. 2023.575 NYISO itself
obliquely recognizes this point,
asserting that ‘‘NYISO anticipates that it
will seek an independent entity
variation from this study timeframe to
better align with the study scope it will
propose for the unique interconnection
issues in New York.’’ 576 As noted
above, we will consider such arguments
in individual transmission provider
compliance proceedings.
331. NYISO more generally asserts
that the efficiencies associated with a
cluster study approach that the
Commission identified in Order No.
2023 may be offset by increased
volumes of interconnection requests
that might participate in each cluster
study.577 NYISO further claims that
additional financial requirements to
enter the interconnection queue have
not, in its experience, materially
decreased the number of projects
entering the queue.578 Similarly,
interconnection study process, the benefits of such
studies, or the level of collaboration involved in
such studies.
575 See, e.g., NYISO Rehearing Request at 6–11;
NYISO Initial Comments at 2–3 (‘‘Among the
significant variations, the NYISO already uses a
first-ready, first served approach for managing
projects in its interconnection queue and uses a
cluster Class Year Study as the final, hallmark study
in its LFIP.’’); NYISO Initial Comments, app. A at
1 (explaining that ‘‘NYISO’s interconnection
procedures include numerous independent-entity
variations accepted by the Commission that are
specifically tailored to the distinct circumstances in
New York and the NYISO’s wholesale market rules
and planning processes.’’); National Grid Initial
Comments at 13–14 (discussing the NYISO ‘‘Class
Year Study’’ approach and asserting that 150 days
may not be sufficient for this process).
576 NYISO Rehearing Request at 4.
577 Id. at 12–14.
578 Id. at 14–15 (stating that increasing study
deposits and adding regulatory milestone deposits
has not resulted in a corresponding decrease in
projects entering the queue; also citing MISO’s July
19, 2023, proposal to impose more stringent entry
requirements); see also PJM Rehearing Request at 32
(asserting that MISO received more than 960
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Avangrid claims that there is
insufficient evidence that the easing of
burdens on transmission providers,
under Order No. 2023’s reforms, will be
adequate to justify the deadlines
imposed by Order No. 2023.579
332. These arguments do not persuade
us that the pro forma deadlines selected
in Order No. 2023 for the conduct of
interconnection studies are not just and
reasonable. Neither NYISO nor
Avangrid disputes that there will be
efficiency gains from transitioning to
cluster studies, which was a reform
broadly supported by commenters. We
further expect that the more stringent
requirements to enter the
interconnection queue set forth in Order
No. 2023, including but not limited to
financial requirements,580 will help
reduce speculative interconnection
requests. To the extent that volumes of
interconnection requests remain high,
this counsels in favor of—not against—
ensuring that that transmission
providers exercise the control they have
over the process to help ensure
interconnection studies proceed more
expeditiously. As discussed, these
reforms are necessary to ensure the
timely processing of interconnection
requests and thereby remedy the
problem of unjust and unreasonable
rates resulting from queue delays and
backlogs.
333. Indicated PJM TOs rely on a nonsequitur in claiming that the existence
of widespread study delays in 2022 is
evidence that the deadlines set in Order
No. 2023 are ‘‘inherently
unreasonable.’’ 581 The mere existence
of past study delays, under a standard
that allowed transmission providers
significant discretion to extend those
deadlines, does not show that any given
set of deadlines to perform studies are
requests following the close of its 2022 Definitive
Planning Process cycle that closed in 2022).
579 Avangrid Rehearing Request at 12.
580 NYISO discusses the effects of increased
deposits, but Order No. 2023 also imposed site
control requirements and withdrawal penalties that
we expect will also deter speculative
interconnection requests. Moreover, the MISO
PowerPoint presentation that NYISO cites is best
understood as reflecting MISO’s view that more
stringent queue requirements will help reduce
speculative interconnection requests. See MISO
Presentation, Generator Interconnection Queue
Improvements, Planning Advisory Committee (July
19, 2023), https://cdn.misoenergy.org/
20230719%20PAC%20Item%2006%20GI
%20Queue%20Improvements%
20Proposal629634.pdf (proposing to increase such
requirements and referring to its current tariff rules
as incentivizing speculative projects because they
require a ‘‘small financial commitment’’ and have
‘‘ineffective withdrawal rules’’ that allow
withdrawn requests ‘‘to get most of their money
back, with interest, due to lack of penalties’’).
581 Indicated PJM TOs Rehearing Request at 30.
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unachievable or unreasonable.582 It
particularly does not demonstrate that
the deadlines for the specific pro forma
LGIP process set forth in Order No.
2023, with the accompanying reforms to
improve efficiency, are not
reasonable.583
334. Dominion, MISO TOs, and
NYISO assert that the ability to extend
a study deadline for 30 days by mutual
agreement of the transmission provider
and all interconnection customers with
interconnection requests in the relevant
study will not be effective in practice.584
They contend that interconnection
customers lack incentives to agree to
such an extension, particularly given
that they will be the beneficiaries of any
assessed penalty, and that it will be
particularly infeasible to secure
agreement from all interconnection
customers to such an extension.
335. We are not persuaded by
speculation that interconnection
customers will adopt an unreasonably
adversarial approach to requests for
modest extensions to study deadlines.
The interconnection process is one that,
by its nature, tends to require
cooperation and collaboration, and all
parties have a continuing interest in this
process functioning smoothly.585
Moreover, because interconnection
customers have a particular interest in
reliable interconnection studies,
interconnection customers are not well
served by refusing to accede to a
transmission provider’s reasonable
request for an extension that is
necessary, particularly in light of unique
circumstances, to ensure accurate study
results.586 Likewise, there may be
582 Indeed, this is a one-size-fits-all argument that
could be directed toward essentially any effort to
impose an interconnection study deadline as a
means of expediting the study process.
583 Indicated PJM TOs also cite new NERC
standards that may require additional study
elements, broadly claiming that this will add to
transmission providers’ workloads, Indicated PJM
TOs Rehearing Request at 30–31, but do not explain
why any additional workload associated with these
standards would render the deadlines set in Order
No. 2023 unjust and unreasonable.
584 Dominion Rehearing Request at 24; MISO TOs
Rehearing Request at 18–19; NYISO Rehearing
Request at 35.
585 See, e.g., EEI Initial Comments at 16
(describing the interconnection study process as
benefitting from collaboration, in which
transmission providers ‘‘work with project
developers as they refine their requests, redesign
projects, or modify study parameters for optimum
results’’); Eversource Initial Comments at 25
(similarly describing interconnection as a
collaborative process between the interconnection
customer and transmission provider); Indicated PJM
TOs Rehearing Request at 37 (describing the
‘‘cooperative engagement’’ between transmission
owners and interconnection customers and
providing examples of such collaboration to resolve
issues arising in the study process).
586 See, e.g., Order No. 2023, 184 FERC ¶ 61,054
at P 30 (noting that the ‘‘vast majority of
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circumstances in which a modest
extension of a cluster study would save
time, for all interconnection customers
in a study, for example by helping
reduce the need for a restudy.587 The
prospect that interconnection customers
may receive penalties for late studies is
not likely to override this need for
collaboration and cooperation,
particularly given that any award of
penalties to interconnection customers
is uncertain (given the availability of an
appeal) and any such penalties will be
split among all interconnection
customers involved in the study.
Moreover, this 30-day extension is just
one safeguard among several, to extend
deadlines that we generally conclude
should be achievable on their own
terms, such that we would still reach
the same result even if invocation of this
safeguard turns out to be uncommon in
practice.
336. NYISO challenges the 10 day
grace period, under which no penalties
would be assessed for a study delayed
by no more than 10 business days,
claiming that this grace period does not
provide meaningful relief to
transmission providers that will study
large numbers of interconnection
requests.588 This challenge is not
persuasive. The grace period is one
component of the penalty structure—
and, again, one safeguard among
several—through which Order No. 2023
strikes an appropriate balance between
commenters overwhelmingly agree’’ that reform of
the Commission’s pro forma interconnection
procedures and agreements is necessary ‘‘to ensure
that interconnection customers are able to
interconnect to the transmission system in a
reliable, efficient, transparent, and timely manner’’);
MISO Initial Comments at 78 (‘‘Errors or omissions
discovered later may drive the need for a restudy,
causing unscheduled surprises for Interconnection
Customers who have already made decisions based
on the results of a rushed study.’’); SPP Initial
Comments at 12 (‘‘Interconnection Customers have
expressed to SPP that timely results that are
inaccurate are useless and that it is imperative that
they be able to rely on study results to make sound
business decisions.’’); cf. Order No. 2023, 184 FERC
¶ 61,054 at P 1007 (rejecting arguments that
imposing study deadlines and penalties will
necessarily reduce study accuracy).
587 In addition, any such extension would be
time-limited and transparent, allowing
interconnection customers to better plan around
such extensions as compared to ad hoc selfextensions under the reasonable efforts standard.
Cf. Fervo Reply Comments at 7–8 (explaining that
under the status quo with the reasonable efforts
standard, interconnection customers face
uncertainty, which imposes barriers to entry);
NARUC Initial Comments at 14 (explaining that
missed deadlines create uncertainty in bringing
new generation online); SEIA Initial Comments at
32 (noting that backlogs deprive developers of
needed business certainty, which can lead to issues
like losing site control rights and financing).
588 NYISO Rehearing Request at 35 (arguing also
that the grace period should not be uniform given
variability in study workloads and challenges to the
study deadlines themselves).
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creating an incentive for transmission
providers to help ensure that
interconnection studies are completed
in a timely fashion, while not being
punitive. Specifically, the grace period,
in particular, provides a ‘‘level of
flexibility for transmission providers to
address unforeseen circumstances or
complexities that arise in the study
process,’’ 589 which may necessitate
modest delays. This grace period was
not intended to provide an automatic,
lengthy extension to the study
deadlines.
337. Likewise, the longer transition
period the Commission adopted does
not, as NYISO claims, simply
‘‘postpone[ ] the RTO/ISO penalty cost
recovery problem.’’ 590 Rather, the
transition period 591 is another measure
to ensure that the structure adopted in
Order No. 2023 provides incentives that
are appropriate, but fair. The transition
period allows time for transmission
providers to address and adapt to the
requirements of Order No. 2023, reduce
backlogs, and address other issues
(which may include, for example, FPA
section 205 filings to address RTO/ISO
penalty cost recovery).592 The transition
process will thus help ensure that the
standards for timeliness set by Order
No. 2023 are reasonably achievable
before penalties are assessed. Neither of
NYISO’s arguments regarding the tenday grace period or the transition period
demonstrates any defect in Order No.
2023’s deadline and penalty structure.
ii. Reasonableness of the Study Delay
Penalty and Appeal Structure
(a) Requests for Rehearing
338. Many of the rehearing requests
state that Order No. 2023 assigns
penalties to transmission providers
without an assessment of fault, as a
‘‘strict liability’’ matter, until they
demonstrate their lack of fault through
the appeals process.593 These rehearing
589 Order
No. 2023, 184 FERC ¶ 61,054 at P 981.
Rehearing Request at 37.
591 Under the transition process, in Order No.
2023, the Commission specified that transmission
providers already using a cluster study process will
not be subject to penalties until the third cluster
study cycle after the transmission providers’
compliance filing becomes effective. Order No.
2023, 184 FERC ¶ 61,054 at P 980.
592 Id. PP 979–80.
593 See, e.g., MISO TOs Rehearing Request at 27–
29; NYISO Rehearing Request at 29–30 (arguing that
‘‘[t]he Commission may not reasonably presume
that RTOs/ISOs should be penalized at the same
time that it recognizes that overwhelming record
evidence demonstrates that other parties will often
be solely or substantially responsible for delays’’
and that RTO/ISO interconnection metrics
compliance reports under Order No. 845 are
specific evidence of how a variety of complex and
interactive factors can cause study delays); NYTOs
Rehearing Request at 11–12, 23 (citing factors that
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requests variously contend that this is
unjust and unreasonable, arbitrary and
capricious, unsupported by substantial
evidence, inequitable, and/or offends
due process. Many of them object to this
framework as placing the burden on the
transmission provider or transmission
owner to demonstrate an entitlement to
relief from the assessed penalty.
339. Avangrid argues that the
Commission has deemed transmission
providers who fail to meet the deadlines
set forth in Order No. 2023 guilty unless
they can prove their innocence and
thereby denies transmission providers
and transmission owners due
process.594 Avangrid argues that the
appeals process is inequitable because it
does not ensure exoneration where a
transmission provider is not at fault,
such as in the case of force majeure.595
Avangrid further asserts that the lack of
clarity concerning when relief will be
granted violates the fair notice doctrine
and renders the appeals process unjust
and unreasonable.
340. Indicated PJM TOs argue that the
imposition of penalties subject to an
appeal mechanism applying a good
cause standard contravenes due process
requirements.596 They assert that it is
not clear how the appeals process
would apply to transmission owners
seeking relief from a penalty after an
RTO or ISO has determined that the
transmission owner is responsible for
some or all of the penalty.597 Indicated
PJM TOs claim that an RTO/ISO
assignment of a penalty cannot receive
deference in a proceeding where a
transmission owner seeks relief from a
penalty.598
341. MISO TOs argue that the
Commission erred in creating a ‘‘nofault, strict liability regime’’ whereas
tort law reflects that strict liability is
only warranted in circumstances
involving very dangerous activities,
may drive delays due to following Good Utility
Practice; asserting that only if the variables outside
of a transmission provider’s control are removed
can the Commission have a sufficient evidentiary
basis to determine the reasonable efforts standard
is unjust and unreasonable); PacifiCorp Rehearing
Request at 8–9.
594 Avangrid Rehearing Request at 12–13.
595 Id. at 15.
596 Indicated PJM TOs Rehearing Request at 23.
597 Id. at 23–24 (arguing that it is ‘‘not clear
whether the Commission intends to impose the
burden of proof on transmission owners to
demonstrate that the assignment of costs by the
transmission provider was unreasonable’’ or
whether transmission owners can show good cause
by showing that the transmission provider or
another entity caused the delay).
598 Id. at 24 (arguing that the appeals process
must be conducted de novo); see also id. at 24–25
(asserting that the other safeguards to the
imposition of penalties that the Commission
adopted in Order No. 2023 are inadequate to
alleviate these concerns).
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such as product liability for harm
caused.599 MISO TOs also claim that the
penalty and appeals structure conflicts
with Commission penalty procedures in
enforcement cases by imposing a
penalty automatically unless the
transmission provider pursues an
appeal, resulting in a deprivation of due
process. They further contend that the
appeals process is lacking in detail and
fails to address these concerns because
it puts the onus on the transmission
provider to appeal penalties—which the
Commission does not review de novo—
and requires transmission providers to
expend resources to seek relief for
penalties caused by the actions of
others.600
342. PacifiCorp claims that ‘‘[t]he
assessment of a civil penalty before any
agency adjudication is made violates the
due process clause of the Fifth
Amendment to the U.S.
Constitution.’’ 601 PacifiCorp also objects
that the transmission provider has the
burden to show ‘‘good cause’’ and that
the Commission suggested that ‘‘if the
transmission provider offers proof that it
did not cause the study delay at issue,
that is only ‘potentially’
exculpatory.’’ 602 PacifiCorp further
contends that Order No. 2023 lacks a
cogent explanation of the showing
necessary to avoid a penalty, which
offends due process requirements and
renders the appeal a moving target.603
343. NYISO contends that the appeals
process wrongly places the burden on
RTOs/ISOs to demonstrate that they are
not at fault, when there are good reasons
to anticipate that RTOs/ISO will not
actually be responsible for many study
delays.604 Moreover, NYISO asserts that,
while the Commission has set forth
certain factors it will consider, it does
599 MISO TOs Rehearing Request at 31–32 (citing
Acosta Orellana v. CropLife Int’l, 711 F. Supp. 2d
81, 105 (D.D.C. 2010)).
600 Id. at 34–36 (arguing that this inappropriately
shifts the Commission’s burden to prove a violation
to the transmission provider to disprove it and
asserting that it is not clear under what statutory
provision, or under what authority, the penalty
appeal will be conducted).
601 PacifiCorp Rehearing Request at 8–9; see also
id. at 4–5 (‘‘The Final Rule violates the due process
clause of the Fifth Amendment to the U.S.
Constitution by assessing penalties with no
development of a factual record about whether the
transmission provider did anything wrong.’’).
602 Id. at 9 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 993).
603 Id. (asserting that the Commission has wellestablished standards for tariff waivers but has not
been clear that the traditional waiver standards
apply).
604 NYISO Rehearing Request at 32–33 (noting
that due process requirements dictate fair and
proportionate penalties, rather than excessively
punitive penalties) (citing Enf’t of Statutes, Ords.,
Rules & Reguls., 132 FERC ¶ 61,216, at P 222 (2008);
Enf’t of Statutes, Reguls. & Ords., 123 FERC
¶ 61,156, at PP 50–71 (2008)).
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not provide guidance as to what exactly
a transmission provider must do to
establish good cause for relief.605
344. WIRES states that the penalty
structure adopted by Order No. 2023 is
not just and reasonable because it is a
strict liability approach that sanctions
transmission providers for missing
deadlines for reasons beyond the control
of those providers.606 WIRES asserts
that strict liability for penalties can only
reasonably be imposed if transmission
providers have full control over the
interconnection study process, but the
Commission has acknowledged that this
is not the case.607
345. NYTOs argue that the deadline
and penalty structure, with the right to
seek relief through an appeal, is vague
and impermissibly presumes fault
without conducting a de novo review of
whether a penalty is warranted.608
NYTOs claim that, in Order No. 2023,
the Commission has reserved its
discretion to uphold a penalty even in
the absence of substantial evidence that
a sanctioned transmission provider was
at fault, and that the Commission will
grant whatever relief it determines is
appropriate.609
346. PJM argues that the Commission
failed to adequately explain its refusal
to adopt a structure in which
transmission providers incur penalties
only where a study delay is due to a
factor that can be conclusively
demonstrated to be within a
transmission provider’s control, and
that it failed to show that this approach
was consistent with due process.610 PJM
asserts that the appeals process is not
just and reasonable and violates the
constitutional guarantee of due process
if it only provides due process ‘‘to some
extent.’’ 611 PJM argues that ‘‘[i]f a
605 Id. at 33–34 (claiming that the burden will be
‘‘unreasonably heavy’’ given that the Commission
decided not to adopt a structure providing for
penalties only when a factor causing delay can
conclusively be determined to be within a
transmission provider’s control).
606 WIRES Rehearing Request at 6–7.
607 Id. (arguing that penalties cannot reduce
delays that occur for reasons beyond the
transmission providers’ control).
608 NYTOs Rehearing Request at 12–13.
609 Id. at 12; see also id. at 27 (asserting that Order
No. 2023 does not confirm that transmission
providers will not be penalized when a delay is not
their fault, and that the cost of an appeal may cause
transmission providers to accede to minor
penalties).
610 PJM Rehearing Request at 31 (arguing that the
Commission has recognized the need to protect due
process rights in other instances; citing Enf’t of
Statutes, Reguls. & Ords., 123 FERC ¶ 61,156 at PP
40, 51; 16 U.S.C. 825o–1).
611 Id. (asserting that Order No. 2023 stated that
‘‘details such as whether the penalized transmission
provider actually is responsible for the study delay
are ‘addressed to some extent through the ability to
appeal.’ ’’ (quoting Order No. 2023, 184 FERC
¶ 61,054 at P 989)).
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transmission provider knows it will be
penalized for any delay in
interconnection studies regardless of its
role in the delays, and will have to
appeal that penalty and demonstrate
that the penalty imposed on it should
not be assessed, i.e., that it is guilty until
it can prove its innocence, it might
reasonably ask what deterrence or
incentive purpose the penalty actually
serves.’’ 612
347. Certain of the rehearing requests
also assert that the appeals process set
forth in Order No. 2023 is too vaguely
defined. Avangrid refers to the appeal as
a ‘‘vaguely-defined waiver process.’’ 613
MISO TOs assert that ‘‘the appeals
process is rife with ambiguity, making it
unworkable and overly timeconsuming’’ and lacks detail on the
process for an appeal, including the
form and forum, whether interventions
will be permitted, whether discovery
will be allowed, and under what
statutory provision the appeal is
conducted.614 NYISO asserts that the
Commission did not indicate whether it
would use fact-finding neutrals, paper
hearing procedures, or some other
method to conduct appeals of penalties,
or how appeals would be further
reviewed on rehearing or under the
APA.615 NYTOs state that the
Commission failed to explain how the
process will work, including whether—
in assessing good cause—the
Commission will apply the standard
applicable to tariff waivers, the burdens
of proof, how genuine issues of material
fact will be adjudicated, clear standards
for granting relief, and the parameters of
the appeals process.616
348. A number of the rehearing
requests assert that the Commission
should have adopted exceptions to the
assessment of penalties for failure to
meet the required deadlines. Several of
these rehearing requests challenge the
Commission’s decision not to provide
an exception to such penalties for
circumstances involving force
majeure.617 PacifiCorp argues, more
612 Id.
at 31–32.
Rehearing Request at 12–13.
614 MISO TOs Rehearing Request at 35–36.
615 NYISO Rehearing Request at 33–34.
616 NYTOs Rehearing Request at 24–25 & n.67
(asserting that courts have found that due process
requires hearing procedures for the adjudication of
genuine disputes of material fact; arguing that the
‘‘good cause’’ standard is a novel ratemaking
standard that the Commission fails to justify).
617 See Avangrid Rehearing Request at 15 (arguing
that the appeals process is inequitable because it
does not ensure exoneration where a transmission
provider is not at fault, such as in the case of force
majeure or where the delay may be due to multiple
factors); EEI Rehearing Request at 8 (arguing that
the Commission failed to provide an exception for
force majeure, which has a specific definition in the
pro forma LGIP and pro forma LGIA reflecting
613 Avangrid
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broadly, that because study delays are
often driven by third parties or factors
beyond the control of transmission
providers, the Commission should have
adopted self-effectuating exemptions for
study delays that are outside of a
transmission provider’s control.618 In
support, PacifiCorp contends that failing
to provide such exemptions ‘‘(1) ignores
the frequency at which delays are
caused by third parties and; (2)
mistakenly assumes: (a) transmission
providers can take actions to mitigate
delays caused by third parties, and (b)
it is prudent for transmission providers
to increase expenditures in an effort to
offset causes for delays that are outside
of their control.’’ 619
349. Indicated PJM TOs and NYTOs
also take issue with the Commission’s
statement that appeals of penalties for
missing study deadlines ‘‘should not be
filed under FPA section 206.’’ 620
Indicated PJM TOs assert that, to the
extent that the Commission intends to
withhold the right to seek relief under
FPA section 206, ‘‘[t]he Commission
cannot deprive any aggrieved party of
the right to file a complaint under FPA
section 206’’ 621 or limit the scope of
such challenges.622 NYTOs state that
‘‘the appeals process specified by the
Order, which requires appeals to be
circumstances beyond a parties’ control, and
asserting that where a transmission provider has
declared force majeure assessing a penalty and
requiring an appeal is an unnecessary burden and
will take time away from completing pending
studies); NYISO Rehearing Request at 37–38
(arguing that the Commission erroneously failed to
adopt the force majeure exception given the
purported flaws associated with the appeals
process); NYTOs Rehearing Request at 27
(requesting clarification on this point); PJM
Rehearing Request at 31–32 (‘‘Moreover, the Final
Rule fails to explain how removing force majeure
as a reason penalties would not apply and refusing
to impose penalties ‘only where a factor can be
conclusively demonstrated to be within a
transmission provider’s control’ is logical’’).
618 PacifiCorp Rehearing Request at 13–15
(‘‘Transmission providers therefore should not: (1)
be penalized if, as portrayed in the example above,
it takes more than 150 Calendar Days to complete
as the study due to responding to such
interconnection customer actions; or (2) expend
resources and effort to submit an appeal when the
transmission provider is prudently incorporating
changes from one or more interconnection
customers . . . .’’).
619 Id. at 15.
620 Indicated PJM TOs Rehearing Request at 26
(citing Order No. 2023, 184 FERC ¶ 61,054 at P 987
n.1911); NYTOs Rehearing Request at 23.
621 Indicated PJM TOs Rehearing Request at 26
(citing Papago Tribal Util. Auth. v. FERC, 723 F.2d
950, 953 (D.C. Cir. 1983) (noting the Commission’s
‘‘indefeasible right . . . under [FPA section] 206 to
replace rates that are contrary to the public
interest’’); Me. Pub. Util. Comm’n v. FERC, 454 F.3d
278, 283 (D.C. Cir. 2006) (same)).
622 Id. (‘‘The scope of a challenge could not be
limited by the factors the Commission identified as
affecting a ‘‘good cause’’ determination, nor could
it be limited to whether the transmission owner
caused or contributed to the study delay.’’).
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pursued under the Commission’s
procedural rules and not under section
206, effectively imposes a mandatory
waiver of transmission providers’
statutory rights, which is contrary to
law.’’ 623
350. Many of the rehearing requests
argue that replacing the reasonable
efforts standard with the deadline and
penalty structure set forth in Order No.
2023 will have negative, unintended
consequences. Avangrid contends that
this structure will result in transmission
providers focusing on ‘‘processing speed
and ‘checking the boxes’ specified in
Order No. 2023 over providing
flexibility and collaboration with
interconnecting generators on
challenging issues unique to their
situations.’’ 624 Indicated PJM TOs add
that this structure will divert attention
from optimal system planning.625 MISO
TOs and SPP emphasize that
interconnection studies must be
conducted with precision to avoid
inefficiency or costly mistakes.626
NYISO argues that this structure will
incentivize transmission providers to
prioritize meeting deadlines over
ensuring the quality and completeness
of studies and that inferior studies
conducted under time pressure could
lead to suboptimal results or negatively
impact reliability.627 WIRES further
asserts that this structure will require
transmission providers to take a more
rigid approach to managing the
interconnection queue, reducing
flexibility to allow interconnection
customers to redesign projects or modify
their requests, and inhibit efforts to
623 NYTOs Rehearing Request at 23 (citing Atl.
City Elec. Co. v. FERC, 295 F.3d 1, 10 (D.C. Cir.
2002) (Atl. City I)); see also id. at 13.
624 Avangrid Rehearing Request at 13.
625 Indicated PJM TOs Rehearing Request at 34–
37 (asserting that transmission providers have no
incentive to delay interconnection studies and that
it is ‘‘is poor policy on the part of the Commission
to confront transmission planners with the potential
option of either avoiding concrete penalties
associated with a strict arbitrary deadline or taking
more time to ensure that a study is complete and
comprehensive’’ and noting the shortage of
qualified engineers).
626 MISO TOs Rehearing Request at 10, 16–17;
SPP Rehearing Request at 6, 8–9 (discussing
examples of the consequences of inaccurate or
suboptimal studies).
627 NYISO Rehearing Request at 27–29 (arguing
that the Commission failed to provide a reasoned
response to these concerns, but instead dismissed
them by asserting transmission providers can
increase timely study processing without
necessarily facing such tradeoffs); see also id. at 19
(arguing that this problem is particularly acute for
NYISO ‘‘because New York State is pursuing what
is arguably the most ambitious clean energy agenda
in the country,’’ driving high volumes of
interconnection requests and that New York City
also presents the most complex reliability
challenges in the country).
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streamline the interconnection
process.628
351. Certain rehearing requests assert
that the deadline and penalty structure
in Order No. 2023 will foster a
combative atmosphere and discord,
potentially leading to delays. Avangrid
asserts that this structure incentivizes
transmission providers to no longer use
reasonable efforts to work with
interconnection customers to fulfill the
completeness of their application
information and improve effectiveness,
but instead declare interconnection
customers in breach for delays and
remove them from the interconnection
process.629 PJM asserts that the
Commission failed to address arguments
that this structure would undermine
collaboration, with RTOs and
transmission owners instead focusing
on the need to simply protect against
legal exposure.630 Indicated PJM TOs
assert that this structure will lead to
acrimony—particularly in the regions
where the interconnection queues are
the longest—that will counter any
efficiency gains.631 SPP similarly argues
that Order No. 2023 leaves open the
question of how transmission providers
would recover study delay penalties
assessed to them, and could erode the
working relationship of RTOs and the
transmission owners in their
footprint.632
352. Several of the rehearing requests
argue that the deadline and penalty
structure will create administrative or
other burdens on transmission
providers, which may be
counterproductive because it will
consume the same resources that would
otherwise be used to perform
interconnection studies. AEP argues that
study delay penalties will
overcomplicate the interconnection
process and increase litigation,
administrative burden, and costs.633
MISO TOs, PacifiCorp, and SPP claim
that imposing penalties on transmission
providers will make it more difficult to
complete studies in a timely fashion
because such penalties will deprive
them of funds that could be used for
qualified engineering personnel, and
pursuing an appeal will create
administrative burdens.634 PJM claims
628 WIRES
Rehearing Request at 7–8.
Rehearing Request at 14–15.
630 PJM Rehearing Request at 32–33.
631 Indicated PJM TOs Rehearing Request at 37–
38.
632 SPP Rehearing Request at 8.
633 AEP Rehearing Request at 28–29.
634 MISO TOs Rehearing Request at 17–18 (noting
also the shortage of qualified personnel and that the
Commission did not point to evidence of better
software that would allow transmission providers to
escape study delay penalties); id. at 35 (noting that
629 Avangrid
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that the Commission failed to address
difficulties in assigning fault for delays,
which will likely lead to litigation.635
PJM also argues that the penalty
structure will add time consuming
study and reporting requirements,
including administration to track study
metrics, pursue penalty appeals, and
collect and disburse penalty amounts.
Indicated PJM TOs assert that the
burdens imposed by the deadline and
penalty structure will further strain
already scarce utility resources, given
other industry trends that will likely
increase transmission providers’
workloads.636
353. Indicated PJM TOs also note that
managing new study deadlines by
deploying additional resources will
come at a cost to transmission
providers.637 Indicated PJM TOs
contend that the Commission failed to
consider the extent of such costs and
their impacts in Order No. 2023.
Indicated PJM TOs also argue that the
Commission failed to respond to the
argument that the NOPR misrepresented
statements by Utah Public Service
Commission Chairman LeVar as
providing support for study delay
penalties.
354. Indicated PJM TOs and NYTOs
assert that Order No. 2023’s deadline
and penalty structure will negatively
affect transmission providers’ own
efforts at reforming the interconnection
process.638 Indicated PJM TOs claim
that imposing this structure on regions
that have already adopted cluster-study
processes, but chose to retain the
reasonable efforts standard, sends the
message that their efforts to reach
consensus as to appropriate reforms do
not matter.639 NYTOs assert that strictly
enforcing deadlines and penalties,
without exceptions, will hinder ongoing
regional queue reform efforts, perhaps
stifling innovation and necessary
the same personnel that perform interconnection
studies will likely be the fact witnesses in any
Commission penalty appeal proceeding); PacifiCorp
Rehearing Request at 11–13 (arguing that it is highly
likely that appeals will be filed faster and more
frequently than the Commission can process them
and noting that interconnection customers will be
incentivized to protest appeals, which will increase
administrative and resource costs of pursuing such
appeals); SPP Rehearing Request at 7, 9 (arguing
also that this will create a litigious environment
that threatens timely study completion).
635 PJM Rehearing Request at 32–33.
636 Indicated PJM TOs Rehearing Request at 38
(citing the need to analyze advanced transmission
technologies and increased burdens surrounding
modeling, and also noting that the same staff who
are responsible for processing interconnection
requests will need to be deployed to address
disputes regarding interconnection study
timeliness).
637 Id. at 39–40.
638 Id. at 16–17; NYTOs Rehearing Request at 27.
639 Indicated PJM TOs Rehearing Request at 17.
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changes to address circumstances
applicable in each region.640
355. Dominion contends that the
Commission failed to consider whether
the study deposits assessed for
interconnection studies would be
sufficient to support the increased
personnel costs required to complete
those studies by the deadlines set forth
in Order No. 2023.641 Dominion further
claims that there may be perverse
incentives for interconnection
customers to delay the completion of
studies, given that customers can benefit
from the penalty funds awarded to
them, and Order No. 2023 does not
penalize such customers for delays.
356. Certain of the rehearing requests
also assert that the deadline and penalty
structure set forth in Order No. 2023 is
one-sided, and therefore unduly
discriminatory or unjust and
unreasonable, noting that
interconnection customers (or other
parties) are not subject to potential
penalties for the role they may play in
delayed interconnection studies.642
Avangrid also contends that Order
2023’s incentives are one-sided, with
interconnecting generators having both
‘‘carrot’’ incentives (in the form of
profits from having generation
interconnected) and ‘‘stick’’ incentives,
but transmission providers and
transmission owners, who perform
generator interconnection activities
(often on a non-profit basis) are limited
to avoiding the ‘‘stick’’ of a study delay
penalty.643 Indicated PJM TOs assert
that the Commission’s reasoning for
declining to assess such penalties
against interconnection customers—that
transmission providers may deem noncompliant interconnection requests
withdrawn—underestimates the
difficulty of removing an
interconnection customer that fails to
meet deadlines from the queue,
particularly given that customers may
seek redress at the Commission.644
357. Avangrid, MISO TOs, and
NYTOs assert that the assessment of
penalties for failing to meet a study
deadline without regard to fault is
640 NYTOs
Rehearing Request at 27.
Rehearing Request at 23–24 (‘‘There
is also no discussion in Order No. 2023 as to how
cost recovery for these expenses would be
recovered other than through the study deposits.’’);
see also id., attach. A (Affidavit of James R. Bailey).
642 See Avangrid Rehearing Request at 14;
Indicated PJM TOs Rehearing Request at 27–29; id.
at 29 (arguing that while modification of Order No.
2023 to subject interconnection customers to
penalties is necessary, it would only complicate the
process further and is an additional reason the
penalty structure is not workable); MISO TOs
Rehearing Request at 28–29; NYTOs Rehearing
Request at 23–24.
643 Avangrid Rehearing Request at 7.
644 Indicated PJM TOs Rehearing Request at 28.
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confiscatory, asserting that this renders
the penalties regulatory takings in
violation of the Takings Clause of the
Constitution.645 Avangrid and NYTOs
further contend that the penalty
framework may potentially deny
recovery of costs incurred for
interconnection studies performed using
good utility practice.646 MISO TOs
assert that the penalty framework may
require transmission providers to
perform interconnection studies ‘‘for
free, simply if they miss a deadline.’’ 647
(b) Determination
358. We disagree with the rehearing
requests that argue that Order No.
2023’s penalty structure is unjust and
unreasonable, violates due process, or is
otherwise inequitable because it is a
‘‘strict liability’’ structure that assigns
penalties to transmission providers
regardless of fault. To begin with, the
imposition of standards of
performance—namely, deadlines—on
transmission providers to conduct
interconnection studies was based on
the need for reform to ensure the timely
processing of such studies given the
control that transmission providers
exercise over the study process.
Likewise, the deadlines were selected
based on timeframes that, as a general
matter, should be reasonably achievable
for transmission providers under the pro
forma LGIP process, including other
reforms adopted in Order No. 2023. As
a result, based on the record and the
Commission’s findings in this
proceeding, we have concluded that a
failure to meet these deadlines
presumptively reflects that a
transmission provider has failed to
respond appropriately to the need for
timely interconnection study processing
such that a penalty is warranted in order
to ensure just and reasonable rates. That
penalty reduces what transmission
providers can charge for interconnection
studies that fail to meet the performance
standards set forth in Order No. 2023.
359. Moreover, the characterization of
this structure as ‘‘strict liability’’ is
inaccurate because section 3.9(3) of the
pro forma LGIP provides a robust
framework for transmission providers to
appeal any study delay penalties to the
Commission. Under that framework,
and unlike a ‘‘strict liability’’ regime,
transmission providers can raise casespecific facts and circumstances for the
Commission’s consideration in
determining whether there is good cause
to grant relief from a penalty. The list
of factors that the Commission set forth
in Order No. 2023 reflects that
transmission providers have the
opportunity to demonstrate that a
penalty for a late study is not warranted,
including based on considerations of the
transmission provider’s conduct or lack
of fault for any delay.648 In fact, the
Commission will consider affording
relief based not just on the transmission
provider’s conduct in any particular
study, but also their efforts to prevent
future delays. This list of factors, while
reflecting the considerations that the
Commission deems most likely to be
pertinent to establishing good cause for
relief from a penalty, is also nonexhaustive such that transmission
providers may raise, for the
Commission’s consideration, any other
circumstances that they deem pertinent
to a request for relief.649 Any final
Commission order finding that there is
not good cause for relief from a penalty
is subject to rehearing, as appropriate,
and may also be subject to judicial
review, pursuant to FPA section 313.650
360. Arguments in the rehearing
requests that the deadline and penalty
structure set forth in Order No. 2023
645 Avangrid Rehearing Request at 16 (citing FPC
v. Hope Natural Gas Co., 320 U.S. 591, 603 (1944)
(Hope); Ameren Servs. Co. v. FERC, 880 F.3d 571,
580 (D.C. Cir. 2018) (Ameren)); MISO TOs
Rehearing Request at 33–34; NYTOs Rehearing
Request at 25–26.
646 Avangrid Rehearing Request at 16; NYTOs
Rehearing Request at 25–26 (‘‘In properly balancing
the interests of investors and consumers, the
Commission is required to allow the public utility
transmission provider to recover its reasonably
incurred operating expenses.’’ (citing Hope, 320
U.S. at 603; Bluefield Water Works & Improvement
Co. v. Pub. Serv. Comm’n of the State of W.Va., 262
U.S. 679, 690 (1923); Ameren, 880 F.3d at 580, 581–
82, 584–85; Jersey Cent. Power & Light Co., 810 F.2d
1168, 1175 (D.C. Cir. 1987) (Jersey Cent.)); see also
id. at 28 (‘‘penalties are shifted to transmission
owner members of RTOs/ISOs without regard to
fault, equity and the Takings Clause demand that
the transmission owners should be allowed to
recover such costs’’).
647 MISO TOs Rehearing Request at 33–34 (‘‘The
FPA does not permit the Commission to compel
utilities to provide service to others for free.’’ (citing
Ameren, 880 F.3d at 582)).
648 Order No. 2023, 184 FERC ¶ 61,054 at P 987
(‘‘[T]he Commission may consider, among other
factors: (1) extenuating circumstances outside the
transmission provider’s control, such as delays in
affected system study results; (2) efforts of the
transmission provider to mitigate delays; and (3) the
extent to which the transmission provider has
proposed process enhancements either in the
stakeholder process or at the Commission to
prevent future delays . . . .’’).
649 In this respect, the ‘‘good cause’’ standard
allows the Commission to consider the totality of
the circumstances resulting in any delay, as
appropriate given the variety of facts and
circumstances that may arise; balances competing
interests while addressing concerns that the
Commission provide for adequate due process and
fact-finding; and will help avoid punitive results.
See id. PP 987–89; cf. NYTOs Rehearing Request at
24 (arguing that the ‘‘good cause’’ standard is a
novel standard that the Commission in Order No.
2023 failed to justify).
650 16 U.S.C. 825l (setting forth the procedures for
a party aggrieved by an order issued by the
Commission to obtain judicial review of such
orders).
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violates due process are not well
developed, as they largely fail to address
the governing legal standards,651 or
explain how Order No. 2023 is
inconsistent with judicial or
Commission precedent,652 in this
respect. Moreover, the Commission’s
adoption of the deadline and penalty
structure in Order No. 2023 reflects an
exercise of its ratemaking authority
under FPA section 206, setting
performance standards associated with
the conduct of interconnection studies
and financial consequences for the
failure to meet those standards.653 In
this context, the Commission exercised
its discretion to adopt an appeals
process. Although commenters have not
established what, if any, constitutional
due process rights they might possess in
this context, we need not reach this
question. Rather, based on the
arguments that have been presented and
the record before us, we find that the
deadline and penalty structure in Order
No. 2023 does not violate any
transmission providers’ potential rights
to due process and is just and
reasonable.
361. In particular, even assuming
arguendo that transmission providers
have due process rights relating to the
appeals process the Commission chose
to adopt in Order No. 2023, the
hallmarks of due process are fair notice
and an opportunity to be heard.654
Transmission providers have received
fair notice and an extensive opportunity
to be heard through this notice-andcomment rulemaking proceeding as to,
among other things, the conduct that
(absent an appeal demonstrating good
cause for relief) will result in a
penalty,655 the amount of the potential
penalty,656 and the ability to seek relief
from a penalty through the appeals
process.657 The appeals process
651 See, e.g., Mathews v. Eldridge, 424 U.S. 319
(1976) (Mathews).
652 A limited exception is that certain of the
rehearing requests contend that the Commission’s
approach is inconsistent with its enforcement
policies. See NYISO Rehearing Request at 29–30;
PJM Rehearing Request at 31; infra P 417
(explaining that those enforcement policies are not
applicable in the ratemaking context).
653 See supra section II.D.1.c; infra section
II.D.1.c.iv.
654 Mathews, 424 U.S. at 348–49 (‘‘The essence of
due process is the requirement that a person in
jeopardy of serious loss (be given) notice of the case
against him and opportunity to meet it. All that is
necessary is that the procedures be tailored, in light
of the decision to be made, to the capacities and
circumstances of those who are to be heard to
insure that they are given a meaningful opportunity
to present their case.’’ (citations and quotation
marks omitted)).
655 See Order No. 2023, 184 FERC ¶ 61,054 at PP
962–63, 979–83.
656 See id. PP 962, 973, 984.
657 See id. P 987.
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provides a further opportunity, prior to
any obligation to distribute an assessed
study penalty,658 for transmission
providers to be heard regarding whether
relief from a particular assessment of a
penalty, on the facts of a given case, is
warranted.659 A party aggrieved by a
Commission order addressing such an
appeal—which order will state the
Commission’s reasoning for any denial
of relief—has yet another opportunity to
be heard by seeking rehearing of that
order.
362. Transmission providers also have
fair notice 660 of the factors that the
Commission has concluded are most
likely to be pertinent to demonstrating
good cause for relief.661 We disagree
that the Commission must specify
‘‘exactly’’ what transmission providers
must do to demonstrate good cause for
relief or that failing to do so renders the
appeal impermissibly vague or a
‘‘moving target’’ that offends due
process. The Commission’s decisions
addressing appeals will also be subject
to the standard requirements of
administrative law regarding reasoned
decision-making, including that the
Commission develop a consistent body
of precedent in considering such
658 See id. (‘‘The filing of an appeal will stay the
transmission providers’ obligation to distribute the
study delay penalty funds to interconnection
customers until 45 calendar days after (1) the
deadline for filing a rehearing request has ended,
if no requests for rehearing of the Commission’s
decision or the appeal have been filed, or (2) the
date that any requests for rehearing of the
Commission’s decision on the appeal are no longer
pending before the Commission.’’).
659 See Opp Cotton Mills, Inc. v. Adm’r of Wage
& Hour Div., 312 U.S. 126, 152–53 (1941) (‘‘The
demands of due process do not require a hearing,
at the initial stage or at any particular point or at
more than one point in time in an administrative
proceeding so long as the requisite hearing is held
before the final order becomes effective.’’).
660 See, e.g., Fed. Express Corp. v. U.S. Dep’t of
Com., 39 F.4th 756, 773 (D.C. Cir. 2022) (explaining
that ‘‘[t]he Due Process Clause’s fair notice
requirement generally requires only that the
government make the requirements of the law
public and afford the citizenry a reasonable
opportunity to familiarize itself with its terms and
to comply’’ and that even trained lawyers may find
it necessary to consult legal dictionaries, treatises,
and precedent); Ramsingh v. Transport. Sec.
Admin., 40 F.4th 625, 636 (D.C. Cir. 2022) (‘‘An
enactment violates the Due Process Clause if it is
so vague that it fails to give ordinary people fair
notice of the conduct it punishes, or so standardless
that it invites arbitrary enforcement.’’ (quotation
marks omitted)).
661 Order No. 2023, 184 FERC ¶ 61,054 at P 987.
Having set forth these factors as most likely to be
pertinent to a showing of good cause, we do not
intend to apply our traditional waiver factors and
confirm that the appeals process, as a tariffspecified mechanism to seek relief from penalties,
is distinct from seeking a waiver of a tariff
provision. See PacifiCorp Rehearing Request at 9–
10 (asserting that the Commission had not been
clear as to whether such waiver standards would
apply).
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appeals and explain any deviation from
that precedent in a reasoned fashion.662
363. Indeed, arguments speculating
that the Commission might, in the
appeals process, decline to afford relief
where a transmission provider believes
the facts warrant relief, are premature.
Arguments that the Commission should
or must grant relief from a penalty (such
that failure to do so is arbitrary and
capricious, violates due process, or is
otherwise unlawful) can be raised in the
context of the appeals process in a given
case, rehearing, and—if appropriate—
judicial review, where the particular
facts of the case at issue have been
developed.663 The Commission is not at
this time presented with determining,
and declines to prejudge, whether any
particular set of facts will necessarily
warrant relief, as such considerations
are best left to a case-by-case
assessment.664
364. A number of the rehearing
requests assert that the appeals process
impermissibly places the burden of
seeking relief from a penalty on the
transmission provider, rather than
requiring that the penalty be determined
‘‘de novo’’ before the Commission.665
Here, too, the rehearing requests cite no
legal authority supporting this argument
that the appeals process, for this reason,
is unjust and unreasonable, offends due
process, or is otherwise unlawful. In
Order No. 2023, the Commission
determined, as a rulemaking and based
on the record before it, that in the
662 See, e.g., Fairless Energy, LLC v. FERC, 77
F.4th 1140, 1147 (D.C. Cir. 2023) (agencies must
generally conform to prior practice and decisions or
explain the reasons for departure from precedent).
663 See, e.g., Ohio Forestry Ass’n, Inc. v. Sierra
Club, 523 U.S. 726, 732–33 (1998) (explaining that,
in assessing whether an argument is ripe for
resolution, courts consider ‘‘(1) whether delayed
review would cause hardship to the plaintiffs; (2)
whether judicial intervention would
inappropriately interfere with further
administrative action; and (3) whether the courts
would benefit from further factual development of
the issues presented’’); Abbott Lab’ys v. Gardner,
387 U.S. 136, 148–49 (1967) (explaining that the
basic rationale the ripeness requirement ‘‘is to
prevent the courts, through avoidance of premature
adjudication, from entangling themselves in
abstract disagreements over administrative policies,
and also to protect the agencies from judicial
interference until an administrative decision has
been formalized and its effects felt in a concrete
way by the challenging parties’’).
664 See N. Y. State Comm’n on Cable Television
v. F.C.C., 749 F.2d 804, 815 (D.C. Cir. 1984) (‘‘The
decision whether to proceed by rulemaking or
adjudication lies within the Commission’s
discretion’’ (citing N.L.R.B. v. Bell Aerospace Co.
Div. of Textron, 416 U.S. 267, 293 (1974))).
665 See Order No. 2023, 184 FERC ¶ 61,054 at P
989 (‘‘We disagree with Indicated PJM TOs that a
complete de novo review is needed to assess study
delay penalties. We find that the good cause
standard adopted in this final rule provides an
adequate framework through which the
Commission can evaluate whether it is appropriate
to grant relief from any applicable penalties.’’).
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context of what constitutes a just and
reasonable rate, failure to meet
performance standards for the timely
completion of interconnection studies
warrants a penalty that effectively
reduces what transmission providers
can charge for interconnection studies
that fail to meet those standards. The
appeals process is a safeguard in which
the transmission provider is the
proponent of a requested order seeking
relief from the penalty.666 Requiring the
transmission provider to demonstrate
good cause for relief is also just and
reasonable under the circumstances.
The application of a penalty in defined
amounts for failure to meet study
deadlines, absent a showing of good
cause for relief, helps to ensure that
transmission providers are on notice of
the instances when penalties apply and
in what magnitude, and that they will
take seriously the prospect of a penalty.
Transmission providers are also the
entities with the most control over, and
most knowledge regarding, the conduct
of the study process and the reasons that
the process may be delayed, such that
it is reasonable to put the burden on
transmission providers to establish a
basis for relief from a penalty.
365. Likewise, we are not persuaded
by arguments that, because there are
other factors that can contribute to
interconnection study delays, the
imposition of penalties on transmission
providers, under the structure set forth
in Order No. 2023, is not just and
reasonable. We disagree that adopting
performance standards and incentives,
in the form of deadlines and penalties,
in Order No. 2023 cannot be just and
reasonable unless the Commission first
addresses and removes every other
variable that may influence the timely
completion of interconnection studies.
As discussed above, the existence of
multiple factors that may delay
interconnection studies is a
consideration that favors taking a
comprehensive approach to address the
unjust and unreasonable rates resulting
from interconnection queue backlogs.
Having found that the reasonable efforts
standard was failing to ensure adequate
incentives for transmission providers for
timely study completion, we have also
found that imposing deadlines 667
subject to penalties for late
666 See, e.g., 5 U.S.C. 556(d) (‘‘Except as otherwise
provided by statute, the proponent of a rule or order
has the burden of proof.’’). Similarly, under FPA
sections 205 and 206, the burden of proof typically
rests with the proponent of a Commission order.
See 16 U.S.C. 824e(b); FirstEnergy Serv. Co. v.
FERC, 758 F.3d 346, 353 (D.C. Cir. 2014); Midwest
Indep. Transmission Sys. Operator, Inc., 148 FERC
¶ 61,206, at P 51 (2014).
667 See supra section II.D.1.c.i (explaining why
the selected deadlines are just and reasonable).
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interconnection studies—subject to
appropriate safeguards 668—will help
ensure that transmission providers take
the steps that are within their control to
ensure study timeliness.
366. Arguments that the procedures
for an appeal are too vaguely defined are
not meritorious. The Commission has
broad discretion as to procedural
matters,669 and we conclude that the
exercise of that discretion on a case-bycase basis is appropriate, including
because doing so will help avoid undue
administrative burdens attendant to
employing set procedures in appeals
that may not require those procedures.
Similarly, as to NYTO’s argument that
cases involving genuine disputes of
material fact require hearing beyond
evaluation of a written record,670 the
Commission can order such hearings in
cases that require them. If parties
believe that particular procedures in a
given appeal are necessary or would be
beneficial, they can so inform the
Commission in the context of that
case.671
367. We disagree with arguments that
the Commission inappropriately
discouraged transmission providers
from filing appeals of study delay
penalties under FPA section 206. Order
No. 2023 only clarified that, when a
transmission provider that conducts
interconnection studies appeals study
delay penalties incurred automatically
under 18 CFR 35.28(f)(1)(ii) or § 3.9 of
the pro forma LGIP, that appeal should
not be filed under FPA section 206.672
The appeals process supplements,
rather than diminishes, the transmission
provider’s ability to make a section 206
filing. To the extent that commenters are
concerned about the ability of a
transmission owner to challenge a
penalty assigned to it by a transmission
provider,673 we note that nothing in
Order No. 2023 prevents any entity from
protesting a transmission providers’
FPA section 205 filing that seeks to
assign penalties or seeks to create a
default structure for recovery of penalty
costs. Nor does Order No. 2023 prevent
any entity from challenging a
transmission provider’s assignment of
study delay penalties to that entity
under FPA section 206. Nothing in
Order No. 2023 prevents any entity from
exercising any statutory filing rights.
368. We also disagree with NYTOs’
suggestion that the requirement for
transmission providers to pursue
appeals under the Commission’s
procedural rules and not under FPA
section 206 ‘‘effectively imposes a
mandatory waiver of transmission
providers’ statutory rights, which is
contrary to law.’’ 674 The Commission
did not foreclose transmission
providers’ abilities to exercise their
statutory rights, but rather provided the
appeals process as the avenue for
transmission providers to seek relief
under the just and reasonable tariff
process established by Order No. 2023,
applying the ‘‘good cause’’ standard,
which provides more flexibility and is
more favorable to transmission
providers than requiring them to show
that the penalty would be ‘‘unjust and
unreasonable’’ under FPA section 206.
Because Order No. 2023 provided a
specific tariff-based mechanism for
appeals, the filing of such appeals under
FPA section 206 is unnecessary.675
369. We sustain the decision, in Order
No. 2023, not to create generic
exceptions for study delay penalties or
to exempt transmission providers from
such penalties in cases where they
assert that force majeure applies, for the
reasons articulated in Order No.
2023.676 In further support, we find that
creating ‘‘self-effectuating’’ exceptions
668 See supra PP 359, 361 (explaining, inter alia,
that the appeal process is a safeguard to address
considerations relevant to individual cases that may
warrant relief).
669 See Vt. Yankee, 435 U.S. at 524–25 (agencies
have broad discretion over the formulation of their
procedures); Mich. Pub. Power Agency v. FERC, 963
F.2d 1574, 1578–79 (D.C. Cir. 1992) (the
Commission has discretion to mold its procedures
to the exigencies of the particular case); Woolen Mill
Assoc. v. FERC, 917 F.2d 589, 592 (D.C. Cir. 1990)
(the decision as to whether to conduct an
evidentiary hearing is in the Commission’s
discretion).
670 See NYTO Rehearing Request at 24 n.67.
671 Similar to our reasoning above, see supra P
363, arguments contending that a particular
procedure may be required in a particular case are
premature.
672 Order No. 2023, 184 FERC ¶ 61,054 at PP 963,
987 n.1911.
673 Indicated PJM TOs Rehearing Request at 26
(‘‘transmission owners should be entitled to
challenge the propriety or size of the penalty
amount assigned to it either ‘automatically’ or by
a transmission provider as an unjust, unreasonable,
or unduly discriminatory rate based on grounds of
its own choosing.).
674 NYTOs Rehearing Request at 23 (citing Atl.
City I, 295 F.3d at 10).
675 Transmission providers have initiated
complaints under FPA section 206 alleging that
their own tariff provisions are unjust and
unreasonable, but this procedure is generally used
when there is no other mechanism by which a
transmission provider could change or challenge
such tariff provisions. For example, PJM has
initiated FPA section 206 complaints regarding its
own Operating Agreement because it does not have
FPA section 205 filing authority to file market rule
changes to the Operating Agreement without
supermajority stakeholder approval. See, e.g., PJM
Intra-PJM Tariffs, § 8.4, OA § 8.4 (Manner of Acting)
(1.0.0); PJM Interconnection, L.L.C., 180 FERC
¶ 61,051, at PP 8–9 (2022).
676 See Order No. 2023, 184 FERC ¶ 61,054 at PP
1003, 1019, 1024 (explaining that transmission
providers could raise these issues in an appeal). For
the same reasons, we deny NYTO’s request for
clarification on this point.
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to penalties where a delay is caused by
factors outside of the control of the
transmission provider is not a preferable
approach to the appeals process,
particularly given that there may be
disputes as to whether and to what
extent a delay was within a
transmission provider’s control.
Creating an exemption for
circumstances of force majeure is an
example of this problem, as there may
be disputes as to whether the
declaration of force majeure was valid
or the extent to which a delay is
attributable to the alleged force majeure.
The appeals process is a just and
reasonable approach to addressing these
issues.
370. MISO TOs’ argument that strict
liability under tort law is only imposed
in circumstances involving very
dangerous activities is not persuasive.
As discussed above,677 the adoption of
a deadline and penalty structure in
Order No. 2023 is supported by the
record in this case and does not reflect
a ‘‘strict liability’’ approach that is
analogous to these tort law regimes. Nor
did the Commission rely on tort law
governing hazardous activities to
support Order No. 2023.678
371. We disagree with arguments that
Order No. 2023 created a strict liability
structure. The portion of Order No. 2023
quoted by NYISO’s request for rehearing
in this respect 679 was addressing the
ability to appeal—the mechanism
through which transmission providers’
responsibility for delay in individual
cases can be assessed.680 We have
already explained, in both Order No.
2023 and herein, why the presumptive
imposition of penalties on transmission
providers should they fail to meet their
study deadlines, with a subsequent
evaluation of whether relief is
warranted in a particular case, reflects
reasoned decision-making and is a just
and reasonable approach.
372. We also disagree with arguments
that Order No. 2023’s implementation of
a study delay penalty structure is unjust
and unreasonable, or unduly
discriminatory or preferential, because
677 See
supra PP 358–359.
Order No. 2023, 184 FERC ¶ 61,054 at PP
1001, 1013, 1015 (discussing Commission
precedent for the approach in Order No. 2023
including traffic ticket penalties and penalties
under Order No. 890); infra section II.D.1.c.v
(same); infra section II.D.1.c.iv (discussing Order
No. 2023 as an application of the Commission’s
ratemaking authority).
679 See NYISO Rehearing Request at 29–30.
680 Order No. 2023, 184 FERC ¶ 61,054 at P 989.
The Commission was particularly explaining that it
would be inappropriate to adopt a structure
providing for penalties ‘‘only where a factor can be
conclusively demonstrated to be within a
transmission provider’s control, as this would
impose significant administrative burden.’’ Id.
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it limits the assessment of penalties for
late studies to transmission providers
rather than also extending them to other
entities—including interconnection
customers—that may contribute to
delays of interconnection studies. We
similarly disagree with claims that
Order No. 2023’s incentives are
impermissibly one-sided.
Interconnection customers and
transmission providers are not similarly
situated with respect to the conduct of
interconnection studies: transmission
providers control and are responsible
for the conduct of those studies, while
other entities, including interconnection
customers, generally are not.681
Moreover, transmission providers are
further differently situated from
interconnection customers because
interconnection customers already are
subject to significant incentives to avoid
delaying the study process that
transmission providers do not face.
These include interconnection
customers’ interest in achieving timely
commercial operation of their facilities,
that failure to meet their obligations in
the interconnection process may result
in their interconnection requests being
deemed withdrawn,682 and that they
may be subject to withdrawal
penalties.683 The adoption of a penalty
structure for transmission providers that
fail to meet the study timeframes set by
Order No. 2023 reflects, in part, that
transmission providers lacked adequate
incentives to ensure study timeliness
and the role they can play in ensuring
the timeliness of interconnection study
processes.684 It further reflects that the
value of interconnection studies
681 See, e.g., Ark. Elec. Energy Consumers v.
FERC, 290 F.3d 362, 367 (D.C. Cir. 2002) (‘‘A rate
is not ‘unduly’ preferential or ‘unreasonably’
discriminatory if the utility can justify the disparate
effect.’’); Cities of Bethany v. FERC, 727 F.2d 1131,
1139 (D.C. Cir. 1984) (Cities of Bethany); El Paso
Nat. Gas Co., 104 FERC ¶ 61,045, at P 115 (2003)
(‘‘Discrimination is undue when there is a
difference in rates or services among similarly
situated customers that is not justified by some
legitimate factor.’’).
682 Being deemed withdrawn from the
interconnection queue carries significant
consequences for an interconnection customer,
and—while the interconnection customer may
dispute that decision—loss of queue position occurs
automatically after a failure to cure (if an
opportunity to cure is allowed) and lasts ‘‘until
such time that the outcome of Dispute Resolution
would restore its Queue Position.’’ Pro forma LGIP
section 3.7. We are therefore not persuaded by
Indicated PJM TOs’ suggestion that this will not be
a significant consideration discouraging
interconnection customers from delaying
interconnection studies. See Indicated PJM TOs
Rehearing Request at 28.
683 See, e.g., Order No. 2023, 184 FERC ¶ 61,054
at PP 37, 43, 50, 780–84, 1020; pro forma LGIP
section 3.7.
684 See Order No. 2023, 184 FERC ¶ 61,054 at PP
50, 968, 972.
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depends in part on their timely
completion and, therefore, that it is
reasonable that transmission providers
may recover less for these studies where
they are delayed without good cause.685
Thus, we disagree that we must apply
the study delay penalties set by Order
No. 2023 to these other entities.
373. We are also not persuaded by
arguments that under Order No. 2023’s
deadline and penalty structure,
interconnection customers are
incentivized to affirmatively delay the
completion of interconnection studies.
As explained in Order No. 2023, the
economic harms to the interconnection
customer of delayed study completion
significantly outweigh any incentive to
delay the interconnection process.686
Moreover, the appeals process available
to transmission providers undermines
any incentive for strategic delay on the
part of interconnection customers
because it provides an opportunity for
transmission providers to argue for
relief from penalties, including because
delays were caused by factors beyond
their control, such as the actions of
interconnection customers. And even if
a transmission provider is subject to a
penalty, those amounts will be
distributed among all the
interconnection customers included in
the relevant study that did not
withdraw, which further reduces the
purported incentive for any individual
interconnection customer to cause
delays, as they will not receive the
entirety of any penalty assessed to the
transmission provider.
374. Many of the rehearing requests
contend that the study deadline and
penalty structure under Order No. 2023
will have certain negative
consequences. As explained below, we
continue to find this structure to be just
and reasonable, notwithstanding these
arguments. In many cases we disagree
that these purported negative
consequences will manifest and, to the
extent there may be such consequences,
we continue to find that Order No.
2023’s deadline and penalty structure is
just and reasonable.
375. The Commission in Order No.
2023 concluded that there is not an
inherent trade-off between firm study
deadlines with study delay penalties
685 See id. P 972 (‘‘The study delay penalty
structure adopted in this final rule balances the
harm to interconnection customers of
interconnection study delays and the associated
need to incentivize transmission providers to timely
complete interconnection studies with the burdens
on transmission providers of conducting
interconnection studies and potentially facing
penalties for delays, including those that may be
caused or exacerbated by factors beyond their
control.’’).
686 Id. P 1020.
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versus ‘‘interconnection study flexibility
and accuracy, as well as system
reliability.’’ 687 As explained in Order
No. 2023, we are not persuaded by
arguments on rehearing that such
deadlines and penalties will necessarily
incentivize speed and meeting
deadlines over accuracy, with
deleterious results. These arguments
present a false dichotomy between the
accuracy of interconnection studies and
their timely completion,688 fail to give
appropriate weight to the reliability and
economic risks associated with failure
to timely interconnect new generating
facilities,689 and fail to consider the
safeguards adopted in the deadline and
penalty structure that allow
transmission providers avenues of relief
from the strict application of study
deadlines.690
376. We are also not persuaded that
Order No. 2023’s deadline and penalty
structure will foster a combative
atmosphere, potentially increasing
delays. As noted above, the
interconnection process is one that has
generally been characterized by
cooperation.691 Interconnection
customers and transmission providers—
who are all generally professional and
sophisticated parties—share a reciprocal
interest in the smooth functioning of the
interconnection process. While it is
possible that, in some cases, the
increased accountability on
transmission providers for timely
interconnection study completion may
mean that transmission providers are
less inclined to accede to
interconnection customer actions that
may delay the study process, we find
that—given the need to ensure timely
interconnection study completion to
687 Id.
P 1007.
id. (‘‘We reiterate that it is within
transmission providers’ ability to improve
interconnection study processes and policies and
take other measures, such as hiring additional staff,
to efficiently process interconnection queues
without sacrificing accuracy, flexibility, or
reliability.’’); id. (also noting that transmission
providers can recover increased costs of
interconnection studies); see also supra section
II.D.1.c.i (explaining that the deadlines selected for
the completion of interconnection studies are just
and reasonable).
689 See Order No. 2023, 184 FERC ¶ 61,054 at P
1007 (‘‘[W]e further agree that the failure to bring
new generating facilities online in a timely manner
can also create reliability and economic risk.’’).
690 See id. (‘‘[T]he study delay penalty structure
includes significant safeguards for the transmission
provider, such as the transition period, the 10business day grace period, the penalty cap, the
ability to extend deadlines by mutual agreement,
and the ability to appeal any study delay penalties
to the Commission.’’); id. P 1005 (‘‘If, for whatever
reason, the transmission provider is not able to
meet firm study deadlines, that is an issue the
transmission provider is free to raise in appealing
any penalties it incurs.’’).
691 See supra P 335.
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ensure just and reasonable rates—this
possibility is an acceptable consequence
of Order No. 2023.692 Indeed, it reflects
that transmission providers can use the
knowledge and control they have with
respect to the study process to ensure
that individual interconnection
customers are not allowed to unduly
delay the overall study process.693 As to
claims that the deadline and penalty
structure may motivate transmission
providers, including RTOs/ISOs and
transmission owners, to focus on the
need to protect against exposure to
penalties and undermine constructive
collaboration among them, the principal
way for these entities to minimize that
exposure will be to endeavor to
complete interconnection studies in a
timely fashion, which is the purpose of
the deadline and penalty structure. In
this respect, the interests of RTOs/ISOs
and transmission owners will be
aligned, and we expect that Order No.
2023 will not undermine the incentives
for cooperation among RTOs/ISOs and
transmission owners.
377. Several of the rehearing requests
contend that adoption of
interconnection study deadlines and
penalties, with an appeals process, will
divert resources that would otherwise
be used for interconnection studies. We
sustain the Commission’s rejection of
these arguments, for the reasons already
stated in Order No. 2023.694 We
particularly note that it is not the case
that the funds used to pay for penalties
(or to appeal such penalties) necessarily
must be diverted from those used to
perform interconnection studies.695
Indeed, although we do not prejudge the
facts of any particular case, it would not
appear to be generally rational or
appropriate for a transmission provider
to respond to the assessment of a
penalty for a late interconnection study
by diverting significant resources from
future interconnection studies in a way
that will increase the likelihood that it
will incur additional penalties.
378. Similarly, while several
rehearing requests contend that
managing deadlines and penalties, as
692 The various safeguards attendant to the
deadline and penalty structure should also limit the
likelihood that transmission providers feel
constrained to take an unduly stringent response to
reasonable interconnection customer requests.
693 In this respect, the adoption of a deadline and
penalty structure for transmission providers to
ensure timely study completion may translate into
increased accountability for interconnection
customers not to delay the study process.
694 See Order No. 2023, 184 FERC ¶ 61,054 at P
1005; see also id. P 1007 (noting that the costs of
timely completing interconnection studies are
ultimately borne by interconnection customers)
695 See, id. P 992 (noting that at-fault transmission
provider’s shareholders may pay the penalty).
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well as the appeals process, may create
burdens on transmission providers, we
conclude that—particularly given the
need for replacement of the reasonable
efforts standard with a standard that
will better ensure the timeliness of
interconnection study completion—the
deadline and penalty structure is just
and reasonable notwithstanding such
burdens. Here, too, we do not believe it
would be rational or appropriate for a
transmission provider to divert
significant resources from the timely
completion of interconnection studies to
the appeals process. As stated above,
when considering appeals the
Commission intends to exercise its
discretion as to procedural matters on a
case-by-case basis, which will help
reduce the burdens attendant to
pursuing an appeal.696 Moreover, many
alternative mechanisms directed toward
ensuring study timeliness would
consume transmission provider
resources to explain why they are not
responsible for study delays, and
likewise invite arguments from other
entities addressing such responsibility,
but would have lesser utility in
responding to the problem of
interconnection queue backlogs.697 In
addition, the amounts of the
penalties 698 are not so large that we
expect that transmission providers will
unduly divert large amounts of
resources to an appeal of penalties,
particularly those assessed for relatively
short delays.699 While the
administrative appeals process may
draw protests, e.g., by interconnection
customers, resulting in litigation, filing
those protests and engaging in such
litigation will also consume resources
for the filing parties and any penalty
funds assessed to the transmission
provider will be allocated among the
relevant interconnection customers.
696 See
supra P 366.
infra PP 429–430 (discussing why the
Commission found that differences between
deadline and penalty structure under Order No.
2023 and the structure under Order No. 890 were
warranted).
698 See Order No. 2023, 184 FERC ¶ 61,054 at P
962 (‘‘[D]elays of cluster studies beyond the tariffspecified deadline will incur a penalty of $1,000
per business day; delays of cluster restudies beyond
the tariff-specified deadline will incur a penalty of
$2,000 per business day; delays of affected system
studies beyond the tariff-specified deadline will
incur a penalty of $2,000 per business day; and
delays of facilities studies beyond the tariffspecified deadline will incur a penalty of $2,500
per business day.’’).
699 The 10-day grace period also helps to address
concerns that, for relatively short delays leading to
minor penalties, transmission providers may wish
to forego the burdens of seeking such an appeal. See
NYTOs Rehearing Request at 27. It is, of course, up
to transmission providers to manage their resources
and determine whether taking an appeal of a minor
penalty is in their best interest.
697 See
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This decreases the incentive to file
protests in cases where delays are small
and penalty amounts are low or where
there is not a genuine, credible dispute
as to where responsibility for a delay of
an interconnection study properly
resides.700 We conclude that the
burdens that Order No. 2023 places on
transmission providers do not render
the rule unjust and unreasonable.
379. While Dominion argues that
higher study deposits may be necessary
to address increased personnel costs
resulting from the penalty regime,
Dominion fails to acknowledge that the
Commission has already significantly
increased the required study deposits
for interconnection customers in Order
No. 2023,701 and that study costs
exceeding study deposits can be
recovered from interconnection
customers.702 We are therefore not
persuaded by this argument.
380. We do not agree with Indicated
PJM TOs’ contention that adopting a
structure of deadlines and penalties for
regions that have already adopted a
cluster study process sends a message
that their stakeholder processes do not
matter. That the Commission found, in
generic proceedings, that a suite of
reforms to its pro forma LGIP and pro
forma LGIA approach to
interconnection were necessary to
ensure just and reasonable rates does
not reflect any disparagement of an
individual entity’s or region’s efforts at
similar reforms, such as the adoption of
cluster studies. The Commission has
found that adoption of a cluster study
approach is such a just and reasonable
reform, but that additional reforms are
also necessary. Adopting Indicated PJM
TOs’ contrary view in this case would—
in effect—be to conclude that the
Commission should have adopted a selfimposed limit on acting through a
generic proceeding out of deference to
stakeholder processes that have resulted
in only a partial solution to the problem
at hand, contrary to the Commission’s
700 We are also not persuaded by PacifiCorp’s
suggestion that the appeals process is not workable
because ‘‘it is highly likely that appeals will be filed
faster and more frequently than the Commission
can process them,’’ PacifiCorp Rehearing Request at
12, which is founded on speculation that
transmission providers will frequently fail to meet
their deadlines leading to such appeals, and that
such appeals will be onerous to process.
701 See pro forma LGIP section 3.1.1.1. To the
extent that study deposits must be further
increased, beyond these levels, the Commission can
consider that going forward, including in response
to compliance proposals or—if necessary—further
reforms to the pro forma LGIP.
702 Order No. 2023, 184 FERC ¶ 61,054 at P 1007;
see also, e.g., pro forma LGIP sections 7.1, 8.1, 9.4,
13.3, app. 2 at section 6, app. 7 at section 7, app.
8 at sections 7–8, app. 9 at section 6, app. 10 at
section 6.
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FPA section 206 authority and
obligation to ensure just and reasonable
rates.703
381. We are further not convinced by
NYTOs’ claim that if Order No. 2023’s
deadlines and penalties are strictly
enforced without exceptions (such as
demonstration of compliance with Good
Utility Practice or the presence of force
majeure), it will hinder ongoing regional
queue reform initiatives. This argument
is conclusory and unexplained as to
why strict application of deadlines and
penalties without such exceptions
would have this alleged effect.704
Regardless, Order No. 2023 does not
provide for an unduly inflexible
approach by allowing for numerous
flexibilities including the appeals
process, as explained above.
382. We are not persuaded by PJM’s
claim that under Order No. 2023
transmission providers will incur
penalties on a strict liability basis,
reducing their deterrence and incentive
effects. As already discussed, Order No.
2023 does not adopt a ‘‘strict liability’’
approach to penalties.705 More
fundamentally, PJM fails to explain why
a penalty as a presumptive matter, based
on objective conduct, that is then
subject to an appeal, would reduce the
incentive to avoid triggering the
penalty.706 Indeed, PJM’s argument here
appears circular: in support of its claim
that the penalty structure in Order No.
2023 will reduce the deterrence and
incentive effects of a penalty, PJM offers
nothing more than a characterization of
that structure and assertion that this
structure will cause transmission
providers to question the deterrence or
incentive purpose of the penalty.
383. NYISO also claims that the
Commission increased penalty levels
from the levels proposed by the NOPR
without sufficient explanation. It asserts
that the example the Commission
provided in support of doing so—
explaining that, under the NOPR
703 This argument also overlooks transmission
providers’ ability to propose alternative reforms, as
informed by their stakeholder processes, under the
‘‘consistent with or superior to’’ or ‘‘independent
entity variation’’ standards, as applicable. See Order
No. 2023, 184 FERC ¶ 61,054 at P 1764.
704 Cf. id. P 967 (‘‘The reasonable efforts standard
worsens current-day challenges, as it fails to ensure
that transmission providers are keeping pace with
the changing and complex dynamics of today’s
interconnection queues.’’).
705 See supra PP –360. Indeed, PJM acknowledges
that transmission providers have the ability to
‘‘demonstrate that the penalty imposed on it should
not be assessed.’’ PJM Rehearing Request at 31.
706 The economically rational response to a
potential penalty, even one that is presumptively
applied subject to an appeal, is to take the steps
necessary to avoid or reduce the penalty, to the
extent that the cost of taking such steps is lower
than the expected value of the reduction in the
amount of the penalty.
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27071
approach, a full six months of study
delay (roughly 126 business days)
would result in an estimated penalty of
only $63,000 707—does not support this
result or show that the penalties
adopted in Order No. 2023 will be nonpunitive.708 We sustain the
Commission’s determination to increase
the study delay penalties as specified in
Order No. 2023.709 This example
reflects that, under the NOPR penalty
amount, a transmission provider that
takes roughly twice as long as allowed
to perform a cluster study would incur
a relatively modest penalty,710 which
we find would not provide an
appropriate incentive to spur the
investments or allocation of resources
necessary to facilitate timely study
completion, or strike an appropriate
balance between transmission provider
and interconnection customer
interests.711 One point of comparison
supporting this conclusion is to
consider that a single proposed 250 MW
generating facility is required to tender
$755,000 (i.e., a $5,000 application fee,
a $250,000 study deposit, and a
$500,000 commercial readiness deposit
in cash or as an irrevocable a letter of
credit) to enter the study process under
the Commission’s pro forma LGIP.712
That facility must then progressively
increase its investment in the process
through increasing deposits, study costs,
and potential withdrawal penalties, not
to mention the dedication of resources
to develop the project and shepherd it
through the interconnection process.713
707 See
Order No. 2023, 184 FERC ¶ 61,054 at P
975.
708 NYISO Rehearing Request at 37 (arguing that
this does not demonstrate that the Commission has
set non-punitive penalty levels, particularly as
applied to RTOs/ISOs).
709 See Order No. 2023, 184 FERC ¶ 61,054 at PP
973–78.
710 Cf., e.g., pro forma LGIP section 3.1.1.1
(specify study deposit amounts for each
interconnection request).
711 See Order No. 2023, 184 FERC ¶ 61,054 at P
975 (‘‘We view such a penalty as insufficient
considering that the purpose of the penalty is to
incentivize timely study completion that may be
achieved, for example, by hiring additional
personnel or investing in new software.’’); cf., e.g.,
EPSA, 577 U.S. at 295 (ratemaking involves both
technical understanding and policy judgment);
Cities of Bethany, 727 F.2d at 1138 (explaining that
because ‘‘ratemaking is less of a science than it is
an art’’ such that ‘‘substantial deference’’ to the
Commission’s expert judgment is warranted (citing
Alabama Elec. Co-op., Inc. v. FERC, 684 F.2d 20,
27 (D.C. Cir. 1982)).
712 See pro forma LGIP section 3.1.1.1 (requiring
$5,000 application fee and a $250,000 study deposit
for interconnection requests greater than or equal to
200 MW) and section 3.4.2(vi) (requiring a
commercial readiness deposit of twice the study
deposit).
713 See, e.g., pro forma LGIP sections 7.5(1)(b),
8.1(3), 11.3 (requiring adjustments to commercial
readiness deposits to equal an increasing percentage
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Viewed in this context, we disagree that
the revised penalty amounts are
punitive on their own, and they are
particularly not punitive when
considered in light of the safeguards 714
provided and avenues for RTO/ISO
penalty cost recovery.
384. We disagree with Indicated PJM
TOs’ and Dominion’s contentions that
the penalty and deadline framework is
unduly discriminatory, citing the
uneven distribution of interconnection
requests among transmission providers,
such that some transmission providers
may face a heightened risk of penalties
as compared to other transmission
providers. At the outset, given the
structure of Order No. 2023—under
which we have imposed deadlines that
should be reasonably achievable,
replaced the serial study process with
cluster studies, and afforded several
safeguards, including the appeals
process 715—it is not necessarily the
case that some transmission providers
will be more likely to have to pay
penalties than others based on the
uneven distribution of interconnection
requests. Moreover, transmission
providers may propose variations from
the requirements of Order No. 2023,
under the applicable standard, which
provides a further vehicle to ensure that
the late study deadline and penalty
structure does not unduly burden
certain transmission providers as
compared to others.
385. But even accepting, arguendo,
the premise of this argument that such
disparate outcomes might occur, we
disagree that this would necessarily
render Order No. 2023’s penalty
structure unduly discriminatory. The
increased possibility for penalties to be
assessed in regions facing higher
of interconnection customer’s assigned network
upgrade cost as the customer progresses through the
interconnection process); section 13.3 (requiring the
interconnection customer to pay for interconnection
study costs); and section 3.7.1 (unless certain
exemptions apply, requiring interconnection
customer that withdraws from the interconnection
process to pay a withdrawal penalty that increases
as the customer progresses through the
interconnection process).
714 Order No. 2023, 184 FERC ¶ 61,054 at P 976
(‘‘Based on the record before us, we believe the
$1,000/$2,000/$2,500 per business day penalty
structure, combined with the transition, grace
period, cap on penalties, and ability to appeal that
we adopt below, strikes an appropriate balance
because it creates an incentive for transmission
providers to meet study deadlines while not being
overly punitive.’’).
715 Dominion and Indicated PJM TOs’ arguments
also presuppose that, in any appeal, the
Commission would find there is not good cause for
relief from penalties, on the facts of the relevant
case. That the Commission can consider the
individualized factors in a particular case to
determine whether to grant relief from penalties is
another avenue to ensure that undue discrimination
does not occur.
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volumes of interconnection requests
necessarily results from the increased
likelihood of delayed results in those
regions. That, however, correspondingly
reflects in an increased need in these
regions to ensure timely processing of
those requests.716 Thus, any increased
possibility of penalties in those regions
is a just and reasonable and not unduly
discriminatory result.717
386. We reject arguments from
Avangrid, MISO TOs, and NYTOs that
incurring a penalty for failure to meet an
interconnection study deadline is
confiscatory, compelling transmission
providers to provide service while not
allowing them to recover their costs,718
because these arguments were not raised
in the comments received in response to
the NOPR but have instead been raised
for the first time on rehearing. We
typically reject arguments raised for the
first time on rehearing, unless those
arguments could not have been
previously presented, e.g., claims based
on information that only recently
became available or concerns prompted
by a change in material
716 Similarly, where transmission providers are
facing comparatively high volumes of
interconnection requests in a given cluster study,
there are more interconnection customers who will
face uncertainty and increased costs due to any
delays.
717 See, e.g., AEMA, 860 F.3d at 670–71 (‘‘The law
provides no basis to claim the Commission cannot
approve uniform performance requirements simply
because those requirements will be easier to satisfy
for some generators than for others. . . . Using an
annual performance standard is a reflection of the
Commission’s policy judgment as to the level of
capacity performance the market requires, not an
undue privileging of one resource’s costs over
another’s.’’); BP Energy Co. v. FERC, 828 F.3d 959,
967 (D.C. Cir. 2016) (‘‘No undue discrimination
exists where there is ‘a rational basis for treating
[two entities] differently’ and such differential
treatment is ‘based on relevant, significant facts
which are explained.’’ (quoting Complex Consol.
Edison Co. of N.Y., Inc. v. FERC, 165 F.3d 992,
1012–13 (D.C. Cir. 1999))); Town of Norwood, Mass.
v. FERC, 202 F.3d 393, 402 (1st Cir. 2000)
(explaining that ‘‘differential treatment does not
necessarily amount to undue preference where the
difference in treatment can be explained by some
factor deemed acceptable by the regulators (and the
courts)’’ (emphasis in original) (citing Cities of
Newark v. FERC, 763 F.2d 533, 546 (3d Cir. 1985))).
718 Although Avangrid and NYTOs assert that
study delay penalties are ‘‘regulatory takings,’’ their
arguments focus on the purportedly confiscatory
nature of the study delay penalties and they do not
otherwise argue that the penalties are regulatory
takings under the relevant legal standard. See, e.g.,
N. Y. Indep. Sys. Operator, Inc., 151 FERC ¶ 61,075,
61,534, at PP 64–67 (2015) (discussing the threefactor test to determine whether an action
constitutes a regulatory taking under Penn Cent.
Transport. Co. v. City of New York, which requires
consideration of ‘‘[t]he economic impact of the
regulation on the claimant and, particularly, the
extent to which the regulation has interfered with
distinct investment-backed expectations;’’ and ‘‘the
character of the governmental action.’’ 438 U.S. 104,
123 (1978)).
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circumstances.719 Commenters had the
opportunity to argue that the study
deadline and penalty structure is
confiscatory in response to the NOPR
but did not do so. We find that these
arguments are, therefore, not properly
before us.720
387. Even had these arguments been
properly raised, these arguments would
also be premature because they depend
on speculative assertions that the result
of applying penalties to transmission
providers will be confiscatory.721 For a
transmission provider to establish this
premise will necessarily depend on the
facts of each individual case.
Transmission providers will have the
opportunity to argue on appeal that
there is good cause to grant relief from
the penalty, for example, because delays
in completing interconnection studies
were due to factors beyond their control
719 See Ala. Power Co., 179 FERC ¶ 61,128, at P
15 (2022); KEI (Me.) Power Mgmt. (III) LLC, 173
FERC ¶ 61,069, at P 38 n.77 (2020); Tex. E.
Transmission, LP, 141 FERC ¶ 61,043, at P 19 (2012)
(‘‘We do so because (1) our regulations preclude
other parties from responding to a request for
rehearing and (2) such behavior is disruptive to the
administrative process because it has the effect of
moving the target for parties seeking a final
administrative decision.’’ (quotation marks
omitted)); Calpine Oneta Power v. Am. Elec. Power
Serv. Corp., 114 FERC ¶ 61,030, at P 7 (2006);
Iroquois Gas Transmission Sys., L.P., 86 FERC
¶ 61,261, at 61,949 (1999)); Ocean State Power II,
69 FERC ¶ 61,146, at 61,548 (1994); NO Gas
Pipeline, 756 F.3d at 770 (‘‘We finally note that
Jersey City’s alleged constitutional claim of actual
bias is also barred as untimely. Jersey City has
shown us nothing of record to establish that it
raised this issue before FERC’s issuance of the
initial order.’’); see also 18 CFR 385.713(c)(3)
(providing that any request for rehearing must ‘‘[s]et
forth the matters relied upon by the party
requesting rehearing, if rehearing is sought based on
matters not available for consideration by the
Commission at the time of the final decision or final
order.’’).
720 See U.S. v. L. A. Tucker Truck Lines, Inc., 344
U.S. 33, 37 (1952) (‘‘Simple fairness to those who
are engaged in the tasks of administration, and to
litigants, requires as a general rule that courts
should not topple over administrative decisions
unless the administrative body not only has erred
but has erred against objection made at the time
appropriate under its practice.’’); cf. Reytblatt v.
U.S. Nuclear Regul. Comm’n, 105 F.3d 715, 723
(D.C. Cir. 1997) (agencies are not required to
respond to untimely comments).
721 See Avangrid Rehearing Request at 16
(similarly arguing that penalties that ‘‘potentially
denies recovery of reasonable costs incurred for
interconnection studies performed according to
Good Utility Practice’’); MISO TOs Rehearing
Request at 33–34 (arguing that ‘‘[t]he FPA does not
permit the Commission to compel utilities to
provide service to others for free’’ and that applying
a penalty in a ‘‘strict liability’’ fashion to
transmission providers ‘‘when the fault is not
theirs’’ is particularly problematic); NYTOs
Rehearing Request at 25–26 (arguing that penalties
will be ‘‘confiscatory’’ because transmission
providers may not be provided ‘‘cost recovery plus
a reasonable return on prudent investment’’ such
that the imposition of penalties will ‘‘conscript
public utility transmission providers into
performing services without just and reasonable
compensation’’).
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and that, as a result, they should be
entitled to recovery of their costs of
performing such studies; and that
failure to allow such recovery would be
confiscatory.
388. In the alternative, even if we
were to consider these arguments as
properly raised as a procedural matter
and ripe for consideration at this time,
we would reject them. While
transmission providers have historically
recovered the full costs of
interconnection studies from
interconnection customers, the structure
adopted in Order No. 2023 reflects a
different approach under which the
amount transmission providers can
charge for such studies will be
effectively reduced if transmission
providers fail to meet the relevant
deadlines.722 As the Supreme Court
explained in FPC v. Hope Natural Gas
Co., ratemaking involves ‘‘a balancing of
the investor and the consumer
interests,’’ 723 under which regulated
utilities are generally entitled to a
reasonable opportunity to recover their
prudently incurred costs, but are not
guaranteed such cost recovery.724
389. Order No. 2023’s deadline and
penalty structure reflects this balancing
of interests, providing a reasonable
opportunity for cost recovery dependent
on the transmission provider’s
performance in providing the service at
issue. It allows the opportunity for full
cost recovery for the conduct of
interconnection studies, should
transmission providers meet the
relevant standards of performance
(deadlines) for the timely conduct of
those studies. Should transmission
providers fail to meet those standards,
the penalties reduce the compensation
available, consistent with
interconnection customers’ interests in
the timely completion of those studies
and the extent to which delays in the
completion of those studies contribute
to interconnection queue backlogs,
resulting in unjust and unreasonable
722 For the reasons provided herein and in Order
No. 2023, we find that this approach, under which
transmission providers will be held to appropriate
performance standards and incentivized to
complete studies in a timely fashion, is permitted
under FPA section 206, see supra section II.D.1.c;
infra section II.D.1.c.iv, is just and reasonable, and
reflects a preferable policy approach in light of the
gravity of the problem of interconnection queue
delays and backlogs.
723 Hope320 U.S. at 603; see also Jersey Cent., 810
F.2d at 1177–78. Hope interpreted the Natural Gas
Act, whereas the instant proceedings concern the
FPA. Nevertheless, ‘‘courts rely interchangeably on
cases construing each of these Acts when
interpreting the other,’’ including the standards
articulated by the Court in Hope. See Jersey Cent.,
810 F.2d at 1175.
724 See Hope, 320 U.S. at 603 (ratemaking does
not guarantee that the regulated utility will produce
net revenues).
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rates to consumers. Even then, however,
transmission providers may still obtain
relief from penalties through the appeals
process, including by arguing that
factors outside of their control rather
than their own conduct caused the
delay, further confirming their
reasonable opportunity to recover their
costs.725 Avangrid, MISO TOs, and
NYTOs do not demonstrate that the
deadline and penalty structure under
Order No. 2023 is confiscatory.
iii. RTO/ISO Issues
(a) Requests for Rehearing
390. Several parties on rehearing raise
challenges to the Commission’s
treatment of RTOs/ISOs under the
deadline and penalty structure. NYISO
asserts that imposing penalties on
RTOs/ISOs is inappropriate because
such penalties will be disproportionate
or ineffective, and may pose an
existential risk to RTOs/ISOs given their
non-profit nature, lack of shareholders,
and the risk that they will be denied
recovery of their costs.726 NYISO argues
that Commission precedent prevents
passing penalty costs to customers, but
RTOs/ISOs lack shareholders to absorb
the costs such that penalties pose an
existential risk—and that the
Commission arbitrarily and capriciously
dismissed these concerns.727 NYISO
claims that the ability to make FPA
section 205 filings to recover costs
associated with penalties (whether
through individual filings or a default
structure) does not eliminate the risk
that penalties pose, because such
proposals will likely be contested and
may be rejected.728 NYISO also observes
that Order No. 2023 ‘‘asserts for the first
time that RTOs/ISOs actually are
authorized to pay penalty costs,
seemingly without first making any kind
725 The arguments that Order No. 2023 is
confiscatory or works a regulatory taking also
depend on claims that the penalty structure set
forth in Order No. 2023 is ‘‘strict liability’’ or that
the deadlines selected for the completion of studies
are ‘‘unjustified and arbitrary.’’ See Avangrid
Rehearing Request at 16; MISO TOs Rehearing
Request at 33e. As explained above, these
arguments are not meritorious. See supra section
II.D.1.c.i; PP 359–360.
726 NYISO Rehearing Request at 17–18 (asserting
that this penalty structure as applied to RTOs/ISOs
is ‘‘unjust, unreasonable, unduly discriminatory,
and violative of due process, and would impede the
Commission’s policy goals’’).
727 Id. at 21–23 (arguing that NYISO and
similarly-situated RTOs/ISOs cannot pay penalties
without recovering costs from customers in some
form and that being denied permission to recover
such costs could threaten their financial viability).
728 Id. at 23–24 (noting that in N.Y. Indep. Sys.
Operator, Inc., 127 FERC ¶ 61,196, at P 36 (2009),
the Commission indicated that Commission review
serves as a check on NYISO’s ability to pass through
a penalty and that denial of relief or other
appropriate action is a possibility).
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27073
of section 205 filing, by using funds that
are not related to transmission
services,’’ but claims that the
Commission ignores that any funds
collected by RTOs/ISOs must come from
market participants.729 NYISO asserts
that it is not clear why the Commission
would allow recovery of penalty costs
automatically from non-transmission
charges but require FPA section 205
filings to recover costs from
transmission customers.730 NYISO also
claims it is unduly discriminatory to
subject them to the same penalty regime
as traditional transmission providers.731
391. AEP argues that the
Commission’s approach to penalties as
applied to RTOs/ISOs—providing that
the transmission owner responsible for
conducting a late study in an RTO/ISO
will directly incur the penalty and
allowing recovery of penalty costs
incurred by RTOs/ISOs through FPA
section 205 filings—underestimates the
complexity of assigning fault for study
delays.732 AEP argues that assigning
fault for study delays is not a
straightforward proposition in RTOs/
ISOs, noting the collaborative nature of
the study process and citing an example
from a recent SPP informational report
that identified multiple drivers of
delays, at least two of which were
outside of SPP’s control. AEP argues
that the Commission failed to justify the
imposition of administrative and
litigative burdens on RTOs and ISOs
related to assigning fault for delays to
the completion of interconnection
studies.733 AEP also contends that the
Commission appears to have restricted
the appeal process to the party that
conducts the interconnection study,
such that other contributors to fault—to
whom the RTO/ISO assigns some
portion of the penalty—may be unable
to appeal.734 In addition, AEP argues
that, at a minimum, the Commission
should reconsider who has standing to
appeal penalties under the Order No.
2023 procedures and broaden the
729 Id.
at 25.
at 25–26 (noting that NYISO anticipates
that there will be objections to allowing automatic
recovery via non-transmission related charges, such
that recovery through this avenue is also not
guaranteed).
731 Id. at 38–39 (arguing that ‘‘the same penalties
are harsher when applied to the RTO/ISO’’ because
of potential uncertainties around the ability of
RTOs/ISOs to recover penalty costs and the risks
penalties pose to RTOs/ISOs).
732 AEP Rehearing Request at 17–19.
733 Id. at 18–19 (arguing that imposing such
burdens is particularly unwarranted because the
record does not support that penalties will reduce
delays and if penalties are not assigned to the right
entity, penalties cannot constitute an effective
incentive).
734 Id. at 19–20 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 963).
730 Id.
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standard to include parties taking part
in the study process that are not tasked
with conducting a study.
392. As to the direct assignment of
study delay penalties, Indicated PJM
TOs contend that penalties cannot be
automatically assigned in this fashion
and the Commission is incorrect to
suggest that such assignment could
occur with little to no factfinding.735
Indicated PJM TOs assert that, to the
extent that the Commission intends to
assign the penalty only to the singular
entity that performed the study, it is not
clear how the penalty would be
assigned if the study is primarily
executed by the RTO/ISO but also
depends on a collaborative effort
between the RTO/ISO and transmission
owners. On the other hand, they argue
that, to the extent the Commission
intends that penalties be directly
assigned to the entity with the ‘‘most
control’’ over the study (or allocated
proportionately based on the level of
control or responsibility for the delay),
significant factfinding will be required,
given the collaborative nature of the
process. Indicated PJM TOs also note
that interconnection customers may be
responsible for delays, reinforcing the
need for a factual analysis to determine
which entity had ‘‘more control’’ over a
study and caused or contributed to the
study delay.736 In addition, Indicated
PJM TOs assert that Order No. 2023
empowers RTOs/ISOs to determine a
transmission owner’s responsibility for
study delay penalties, such that RTOs/
ISOs will have incentives to blame
transmission owners for delays, rather
than assigning fault to themselves or
mitigating delays, and forcing
transmission owners to appeal
penalties.737 Furthermore, they argue
that the Commission cannot delegate to
third parties (i.e., RTOs/ISOs) the
obligation to ensure the justness and
reasonableness of rates.738
393. MISO TOs also contend that, in
providing for the direct assignment of
penalties where the transmissionowning members of an RTO/ISO
perform interconnection studies, the
Commission failed to consider the
complexity of the study process and
how fault for delays can rest with more
than one entity.739 They argue that, in
the RTO context, both the RTO and
transmission owner perform critical
tasks for the completion of studies and
735 Indicated
PJM TOs Rehearing Request at 9–10.
at 11, 21.
737 Id. at 25.
738 Id. at 22.
739 MISO TOs Rehearing Request at 30–31.
736 Id.
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factors outside of their control may
cause delays.
394. NYISO claims that the automatic
assignment of penalties to transmissionowning members of RTOs/ISOs for
studies that they conduct is not a
reasoned solution to how penalties
should apply to RTOs/ISOs, likewise
citing the complexities of how the study
process works in practice and
collaborative nature of that process.740
NYISO argues that allocating
responsibility for delays will be highly
subjective and contentious, leading to
adversarial postures and undermining
necessary cooperation. NYISO further
argues that if ‘‘transmission owners bear
100% of the penalty for any study that
they have any involvement with then
there will foreseeably be transmission
owner challenges to every penalty
assignment’’ and that assigning
penalties to transmission owners ‘‘only
to the extent that they contributed to a
missed deadline’’ will require a
determination of relative
responsibility.741
395. Dominion also questions the
automatic allocation of the penalty for
missing deadlines to the transmission
owner versus the RTO/ISO.742 Pointing
to the collaborative nature of the study
process in PJM, Dominion challenges
the Commission’s blanket assumption
that the interconnection transmission
owner conducting the study has the
most control over the study.
396. A number of the rehearing
requests assert that the deadline and
penalty structure does not impose
proper or effective incentives on RTOs/
ISOs. Avangrid asserts that the
Commission failed to establish how this
structure would incentivize RTOs/ISOs
to meet fixed deadlines, but rather ‘‘asks
the non-profit transmission provider to
propose how it would penalize
itself.’’ 743 NYSPSC argues that the
Commission failed to explain how,
given the mechanisms it discussed for
RTOs/ISOs to recover the costs of
penalties, RTOs/ISOs will be subject to
an incentive to meet the study deadlines
set in Order No. 2023, asserting that if
RTOs/ISOs can pass-through penalty
costs to market participants they will be
indifferent to those penalties.744 NYTOs
740 NYISO
Rehearing Request at 35–37 (‘‘In the
NYISO, transmission owners perform some part of
all interconnection studies, and none are performed
entirely by transmission owners.’’).
741 Id. at 36.
742 Dominion Rehearing Request at 25.
743 Avangrid Rehearing Request at 6 (noting that
the Commission indicated that RTOs/ISOs could
submit FPA section 205 filings).
744 NYSPSC Rehearing Request at 6–8 (arguing
the Commission recognized, for non-RTO/ISO
transmission providers and transmission-owning
members of RTOs/ISOs, the need to have ‘‘skin in
PO 00000
Frm 00070
Fmt 4701
Sfmt 4700
argue that allowing RTOs/ISOs to avoid
penalty costs ‘‘contradicts the intended
incentive, making the penalty
ineffective and therefore arbitrary and
capricious.’’ 745 Avangrid also notes that
allowing RTOs/ISOs to collect penalties
from market participants ‘‘provides no
financial motivation to the ISO to
change behavior to meet deadlines, as
the ISO would merely be passing along
the penalty costs to others.’’ 746
397. Avangrid, NYISO, NYSPC, and
NYTOs assert that RTOs/ISOs may
attempt to recover the cost of penalties
in a manner that is not consistent with
principles of cost causation or is
otherwise unjust and unreasonable.
Avangrid argues that allowing RTOs/
ISOs to collect penalties from market
participants violates cost causation
principles and expresses concerns that
RTOs/ISOs may attempt to allocate
100% of the penalty to a transmission
owner that contributes to a delay in only
a minor fashion, particularly if the RTO/
ISO has no other way to recover the
penalty costs. NYISO argues that RTOs/
ISOs must recover costs associated with
a penalty regime from their customers,
and that penalties would simply punish
customers that have nothing to do with
missed deadlines.747 NYSPSC contends
that it is unjust and unreasonable to
allow RTOs/ISOs to seek to recover the
costs associated with penalties from
administrative fees charged to market
participants, as these are beyond the
costs necessary to provide electric
service to customers and should not be
borne by them.748 NYTOs claim that
‘‘passing penalties to transmission
owner members of RTOs/ISOs when
those providers are not responsible for
a delay violates cost causation and is
not just and reasonable.’’ 749
398. NYISO argues that that it was
unlawful for the Commission in Order
No. 2023 to not further address the
question of how RTOs/ISOs will recover
the costs of study delay penalties that
are not automatically imposed on a
transmission-owning member, asserting
that this question was raised in
comments, acknowledged by the
Commission, and is central to Order No.
2023’s penalty regime.750 Similarly,
the game’’ by making shareholders accountable and
urging the Commission to consider other
mechanisms to incentivize RTOs/ISOs).
745 NYTOs Rehearing Request at 28 (citing Garcia
v. U.S. Bd. of Parole, 409 F. Supp. 1230, 1239 (N.D.
Ill. 1976)).
746 Avangrid Rehearing Request at 6–7.
747 NYISO Rehearing Request at 18.
748 NYSPC Rehearing Request at 8–9.
749 NYTOs Rehearing Request at 28.
750 NYISO Rehearing Request at 19–20 (‘‘The
Commission should not defer the question to future
section 205 or penalty appeal proceedings. It must
resolve the problem now.’’).
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Dominion asserts that the Commission
has not articulated a sensible approach
to RTO/ISO penalty costs that is
supported by substantial evidence in the
first instance, but is instead
inappropriately deferring the issue to
future RTO/ISO filings to propose a
penalty allocation structure.751
399. MISO argues that Order No. 2023
should be revised to provide that RTOs
are not required to pay any penalties
until there is a Commission accepted
mechanism to collect such penalties—
and that the Commission failed to
respond to comments raising this
concern in a reasoned fashion.752 MISO
notes that the Commission recognizes
that RTOs have no ability to pay study
delay penalties without collecting them
from another party and asserts that,
until there is a mechanism in place to
collect the funds to pay study delay
penalties in RTOS, the RTOs may lack
the authority and funds to collect and
pay the penalties. However, MISO also
notes that section 3.9 of the pro forma
LGIP provides for distribution of
penalties no later than 45 calendar days
after the late study has been completed
or 45 calendar days after the completion
of any appeal and rehearing of the
penalty.
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(b) Determination
400. As an initial matter, we disagree
with arguments that applying the
penalty regime to RTOs/ISOs is
inappropriate or unduly discriminatory
because RTOs/ISOs do not have
shareholders or guaranteed means of
absorbing penalty costs whereas nonRTO/ISO transmission providers do. We
believe that it would be inappropriate to
categorically exempt RTOs/ISOs from
the study delay penalties adopted in
Order No. 2023.753 RTOs/ISOs manage
interconnection queues and process
interconnection studies like non-RTO
transmission providers. The available
evidence indicates that study delays are
just as significant a problem in RTOs/
ISOs as non-RTO/ISO regions.754 RTOs/
ISOs, just like non-RTOs, are facing
increases in interconnection queue size,
study duration, and length of time
interconnection customers are spending
in the queue.755 As noted above, Order
No. 2023 explained the gravity of the
national problem of interconnection
queue backlogs,756 and we continue to
751 Dominion
Rehearing Request at 25–26.
Rehearing Request at 8–11.
753 See also Order No. 890, 118 FERC ¶ 61,119 at
P 1353.
754 See Order No. 2023, 184 FERC ¶ 61,054 at app.
B.
755 Queued Up 2023 at 9, 27, 32.
756 Order No. 2023, 184 FERC ¶ 61,054 at PP 37–
58.
752 MISO
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believe that this is a dire problem that
requires nationally implemented
solutions.
401. Moreover, while we agree that
there are differences between RTOs/
ISOs and non-RTO transmission
providers, we conclude that the penalty
regime adopted in Order No. 2023
sufficiently accounts for the differences.
First, in RTOs/ISOs, where an
interconnection study is performed by a
transmission-owning member of the
RTO/ISO (as is often the case for
facilities studies), under Order No. 2023
the penalty for missing a study deadline
is incurred by that transmission-owning
member, not the RTO/ISO.757 Second,
as to penalties that are incurred directly
by the RTO/ISO, the RTO/ISO is
permitted to seek cost recovery of
penalty costs from their transmissionowning members or other market
participants, whereas non-RTO/ISO
transmission providers are not.
Additionally, RTOs/ISOs, as well as
non-RTOs, can appeal the imposition of
penalties in specific instances. In light
of these avenues for an RTO/ISO to
avoid or reduce the prospect that it is
responsible for payment of a penalty, we
find that any residual uncertainty as to
an RTO/ISO’s ability to recover penalty
costs is outweighed by the critical need
for all transmission providers, including
RTOs/ISOs, to process interconnection
studies in a timely manner.
Furthermore, particularly given that the
daily amount of the penalties is not
punitive and that the penalties will be
capped, we do not view the possibility
that RTOs/ISOs may face some
uncertainty in recovering penalty costs
as an existential threat.
402. We are not persuaded by the
following arguments to eliminate or
modify the penalty regime: (1) RTOs/
ISOs will not be incentivized to meet
study deadlines; (2) the complexity of
studies in RTOs/ISOs may lead to
inappropriate assignment of cost
responsibility; or (3) where RTOs/ISOs
have dispute resolution processes, these
procedures may delay assignment of
fault. We continue to find that allowing
RTOs/ISOs to recover penalty costs is
warranted because RTOs/ISOs are
differently situated than non-RTO
transmission providers in terms of their
ability to bear penalty costs, as RTOs/
ISOs are non-profit entities and do not
have shareholders. Therefore, it is
appropriate for RTOs/ISOs to be
permitted to seek to recover the cost of
penalties they incur. We disagree that
this structure will not incentivize RTOs/
ISOs to mitigate study delays.
Comments on the NOPR explained that
757 Id.
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P 995.
Frm 00071
RTOs/ISOs have good reason to try to
avoid collecting penalty costs from their
transmission-owning members, as that
could create tension between RTOs/
ISOs and their transmission-owning
members.758 RTO/ISOs have an interest
in limiting unnecessary charges to their
member transmission owners or other
market participants because the case for
participating in RTO/ISOs, which
remains voluntary and subject to state
law, is founded on the increased
efficiencies and cost-savings of RTO/
ISO membership. If RTO/ISOs ignore
opportunities within their control to
eliminate or reduce the risk of incurring
penalties, they erode these benefits.
403. As a result, the record indicates
that RTOs/ISOs will be incentivized to
avoid incurring penalties in the first
instance. And to the extent that an RTO/
ISO does incur a penalty cost, it will be
incentivized to appeal that penalty,
where appropriate, to avoid the need to
collect that penalty cost. For these
reasons, we find that the incentive
structure created by Order No. 2023 will
function as the Commission
contemplated, helping to ensure just
and reasonable rates.
404. In response to the argument that
assigning penalties directly to the
transmission owner that conducted the
study is complicated because of the
collaboration between the RTO and its
transmission-owning members, we note
that penalties will only be directly
assigned to the applicable transmission
owner within an RTO/ISO where there
is an identifiable transmission-owning
member who is formally responsible for
conducting the applicable study. In
other words, even where there is
collaboration between entities, it is only
if the transmission-owning member is
the formally designated ‘‘lead’’ of the
process that the transmission-owning
member will directly incur the study
delay penalty. To contrast, where there
is no identifiable transmission-owning
member that is formally responsible for
leading the interconnection study, the
penalty will be incurred by the RTO/
ISO itself.
405. We decline to implement MISO’s
suggestion that Order No. 2023 be
revised to provide that RTOs/ISOs
should not be required to pay any
penalties until there is a Commissionaccepted mechanism to recover such
penalties. Order No. 2023 provides that
RTOs/ISOs may—but are not required
to—submit section 205 filings to
propose cost recovery mechanisms to
recover the costs of penalties they
758 See
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incur.759 Revising the penalty structure
as MISO suggests would leave open the
possibility that RTOs/ISOs could avoid
the penalty regime altogether by simply
not proposing any cost recovery
mechanism. Additionally, Order No.
2023 notes that RTOs/ISOs have
multiple options for collecting
necessary funds, and that one of these
options is to submit an FPA section 205
filing after-the-fact to assign the cost of
a specific study delay penalty. MISO’s
suggested revision is inconsistent with
that potential avenue for cost recovery.
406. We find speculative arguments
that RTOs/ISOs may attempt to recover
penalties in a manner inconsistent with
cost causation. RTOs/ISOs may propose
under FPA section 205 either a default
structure for recovering penalty costs or
file section 205 proceedings to recover
the costs of individual penalty costs. We
will not prejudge those filings. Any
arguments that those hypothetical
proposals might violate cost causation
principles are best addressed in the
context of the specific proposal and
should be raised in those FPA section
205 proceedings.
407. We disagree with arguments that
it is unlawful for the Commission to
defer resolution of how RTOs/ISOs can
recover penalties to future section 205
filings. In Order No. 2023, the
Commission responded to comments on
the penalty regime as it relates to RTOs/
ISOs by identifying potential avenues
for RTOs/ISOs to recover penalties and
modifying the NOPR proposal where
appropriate.760 We do not believe that it
is unlawful to allow section 205 filings
to implement specific details of this
regime. We further disagree that the
particulars of how RTOs/ISOs recover
penalty costs are integral to this
rulemaking, which is focused on the
overarching penalty structure that will
apply nationwide. The specifics of RTO/
ISO cost recovery will be highly fact
dependent based on regional tariff
variations. We continue to believe that
it is appropriate to address cost recovery
issues in individual proceedings that
can take into account the variations in
tariffs in each RTO/ISO region.
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iv. Statutory Authority To Implement a
Study Delay Penalty Structure Under
FPA Section 206
(a) Requests for Rehearing
408. Certain of the rehearing requests
challenge the Commission’s authority to
adopt the deadline and penalty
structure set forth in Order No. 2023
and/or contend that it is contrary to or
not supported by Commission
759 Order
760 Id.
No. 2023, 184 FERC ¶ 61,054 at P 994.
PP 994–1001.
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precedent. NYTOs and PacifiCorp claim
that the penalty structure is ultra vires
because the Commission’s civil penalty
authority resides in FPA sections 316 761
and 316A,762 and that the Commission
is impermissibly reading such authority
into section 206, which contains no
civil penalty authority.763 PacifiCorp
argues that the Commission is
attempting to ‘‘get around due process
and other limits on its civil penalty
authority by claiming it is only engaged
in a rate-setting exercise’’ but ‘‘[a] civil
penalty is a civil penalty.’’ 764 NYTOs
also assert that, under the Commission’s
policy statements on enforcement and
compliance, penalties are meted out for
wrongdoing or misconduct.765 Thus,
NYTOs claim, the Commission cannot
adopt a structure in which transmission
providers will incur penalties where the
willful and knowing mens rea
requirement is absent, or where the
transmission provider is not at fault for
a study delay.
409. PJM asserts that the study delay
penalty structure violates FPA section
315 766 because that section governs
forfeitures for willful failures to comply
with a Commission order, rule, or
regulation or timely file a required
report, and requires that such forfeitures
be remitted to the United States
Treasury.767 PJM concedes that RTO
tariffs, including its own, and other
tariffs contain various penalty
provisions; however, PJM attempts to
differentiate these provisions by
asserting that here, the Commission is
imposing a mandate on transmission
providers to include such a provision in
their tariffs involuntarily, calling it a
penalty, and using the compliance
process to bypass the penalty provisions
that Congress established in section 315
of the FPA.
410. AEP asserts that the penalty
structure set forth in Order No. 2023 is
unlawful because it constitutes
monetary damages—defraying the study
costs of the interconnection customers
affected by a delay—and the
Commission lacks authority to grant
761 16
U.S.C. 825o.
U.S.C. 825o–1.
763 NYTOs Rehearing Request at 22–23;
PacifiCorp Rehearing Request at 10–11 (asserting
that the Commission cites no precedent for civil
penalties under section 206; also claiming that the
Commission failed to address whether a study
timely violation was itself a tariff violation).
764 PacifiCorp Rehearing Request at 11.
765 NYTOs Rehearing Request at 22 (citing Enf’t
of Statutes, Ords., Rules, & Reguls., 113 FERC
¶ 61,068, at PP 14, 26 (2005); Kokesh, 581 U.S. at
461 (government-assessed penalties are ‘‘for the
purpose of punishment, and to deter others from
offending in like manner.’’)).
766 16 U.S.C. 825n.
767 PJM Rehearing Request at 29–30.
762 16
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such damages.768 AEP also contends
that the Commission’s decision to adopt
a penalty structure for late studies is
contrary to precedent, including Order
No. 2003 and Order No. 845, in which
the Commission rejected proposed
requirements to impose liquidated
damages or automatic penalties if a
transmission provider failed to meet
deadlines.769
(b) Determination
411. We are not convinced by
PacifiCorp’s, NYTOs’, or PJM’s
arguments that the Commission lacked
authority to implement Order No.
2023’s performance standard and
incentive structure by relying on
deadlines and penalties because, they
argue, the Commission’s civil penalty
authority resides exclusively in certain
provisions of the FPA. To begin with,
these arguments were not raised prior to
rehearing, as required by the
Commission’s Rule of Practice and
Procedure 713(c)(3).770 Here, because
the NOPR proposed the elimination of
the reasonable efforts standard and its
replacement with a materially similar
penalty structure to that adopted in
Order No. 2023,771 nothing precluded
commenters from raising these
arguments prior to the issuance of Order
No. 2023—yet they did not do so. Thus,
here too, these arguments are not
properly before us.
412. Regardless, even considering
these arguments on their substance, we
find that they are not meritorious. As
discussed above, the deadline and
penalty structure adopted in Order No.
2023 reflects an exercise of the
Commission’s authority under FPA
section 206, consistent with its
longstanding regulation of the
interconnection process.772 PJM,
NYTOs, and PacifiCorp fail to
acknowledge this authority or
precedent. Instead, they view FPA
sections 315, 316, and 316A’s grant of
768 AEP Rehearing Request at 7–8 (citing Bachofer
v. Calpine Corp., 134 FERC ¶ 61,100, at P 9 (2011);
New England Power Pool, 98 FERC ¶ 61,299, at
62,290 n.6 (2002); TranSource, LLC v. PJM
Interconnection, L.L.C., 168 FERC ¶ 61,119 at n.896
(2019)).
769 Id. at 8–9 (asserting that the Commission
failed to explain this change) (citing Order No.
2003, 104 FERC ¶ 61,103 at PP 883, 898; Order No.
2003–A, 106 FERC ¶ 61,220 at P 249; Order No. 845,
163 FERC ¶ 61,043 at P 309; N.Y. Indep. Sys.
Operator, Inc., 108 FERC ¶ 61,159, at PP 77–78
(2004)).
770 See supra P 386 & nn. 723–724; 18 CFR
385.713(c)(3) (providing that any request for
rehearing must ‘‘[s]et forth the matters relied upon
by the party requesting rehearing, if rehearing is
sought based on matters not available for
consideration by the Commission at the time of the
final decision or final order’’).
771 See NOPR, 179 FERC ¶ 61,194 at PP 161–73.
772 See supra section II.D.1.c.
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authority to assess a particular kind of
monetary sanction—a civil penalty
pursuant to statutorily-granted
enforcement authority—as necessarily
reflecting an across-the-board restriction
of the Commission’s other authority,
including its FPA section 206
ratemaking authority. For instance,
NYTOs cite the Supreme Court’s
decision in Kokesh v. SEC as standing
for the proposition that ‘‘governmentassessed penalties are ‘for the purpose
of punishment, and to deter others from
offending in like manner,’ ’’ 773 while
PacifiCorp asserts that ‘‘a civil penalty
is a civil penalty.’’ 774 These arguments
fail to recognize that not all monetary
sanctions, even when labeled as
penalties, are civil penalties and that
monetary sanctions can serve different
purposes, have different structures, and
flow from different sources of authority.
413. The Supreme Court’s decision in
Kokesh 775 supports our conclusion that
the fact that a financial sanction is
assessed for conduct—here, failure to
complete a study by the required
deadline—does not render it a civil
penalty of the sort that conflicts with or
exceeds Congress’s enactment of
statutory civil penalty authorities in the
FPA. In Kokesh, the Supreme Court
differentiated between penalties, even
those expressly labeled as ‘‘penal,’’ that
are imposed as punishment versus other
pecuniary sanctions. It explained that
this inquiry turned on whether (1) the
wrong sought to be redressed is a wrong
to the public (an offense committed
against the State) or a wrong to the
individual and (2) whether it was
imposed for the purpose of punishment
and to deter others from offending in
like manner, as opposed to
compensating a victim for a loss.776
Similarly, in Meeker v. Lehigh Valley
Railroad Company, the Court held that
an order by the Interstate Commerce
Commission, which directed a railroad
company to refund and pay damages to
a shipping company for excessive
shipping rates, was not imposing a
penalty for purposes of the statute of
773 NYTOs Rehearing Request at 22–23 n.60
(quoting Kokesh, 581 U.S. at 461); see also id. at 22–
23 nn. 56, 61 (citing Cal. Indep. Sys. Operator Corp.
v. FERC, 372 F.3d 395, 398 (D.C. Cir. 2004) (the
Commission’s authority is defined by Congress);
Altamont Gas Transmission Co. v. FERC, 92 F.3d
1239, 1248 (D.C. Cir. 1996) (the Commission cannot
do indirectly what it could not do directly)).
774 PacifiCorp Rehearing Request at 11.
775 In Kokesh, the Court considered whether the
general statute of limitations applicable for ‘‘action,
suit or proceeding for the enforcement of any civil
fine, penalty, or forfeiture, pecuniary or otherwise,’’
28 U.S.C. 2462, applied to claims for disgorgement
as a sanction for violating a federal securities law.
581 U.S. at 457.
776 Id. at 461 (quoting Huntington v. Attrill, 146
U.S. 657, 667 (1892)).
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limitations, given that the payment was
to redress a private injury, rather than
punitive.777 Here, Order No. 2023
implemented a system of deadlines and
penalties for late studies not to redress
a wrong to the public, as under FPA
sections 315, 316, and 316A, or to
punish, but instead to effectively adjust
what transmission providers can charge
based on study timeliness.
414. Specifically, Order No. 2023’s
deadline and penalty structure was
adopted to define substantive terms of
the commercial relationship between
particular parties—transmission
providers and interconnection
customers—in the Commissionjurisdictional context of regulating
interconnection, ensuring just and
reasonable rates, and avoiding
degradation of service.778 The
Commission in Order No. 2023 did not
invoke a need to punish or to label
transmission providers as wrongdoers as
a rationale for its action and, in fact,
stated that it was ‘‘not finding that
transmission providers have necessarily
acted in bad faith.’’ 779 The Commission
established safeguards to avoid punitive
results, including the cap on
penalties 780 and the appeals process.781
The appeals process also takes into
account the broader economic effects of
regulating this interaction between
777 236 U.S. 412, 423 (1915) (‘‘The words ‘penalty
or forfeiture’ in this section refer to something
imposed in a punitive way for an infraction of a
public law, and do not include a liability imposed
solely for the purpose of redressing a private injury,
even though the wrongful act be a public offense,
and punishable as such. Here the liability sought to
be enforced was not punitive, but strictly remedial
. . . .’’).
778 See supra section II.D.1.c (explaining that the
penalty structure reflects how the interconnection
relationship may impact overall rates for consumers
and the costs to interconnection customers of late
studies, in terms of defining the charges
transmission providers may assess for such studies
as a function of their timeliness); Kokesh, 581 U.S.
at 463 (explaining that one factor that favored
concluding that disgorgement was a penalty falling
within 28 U.S.C. 2462 was that the SEC was acting
to protect the public interest, writ large, rather than
standing in the shoes of particular parties, reflecting
that the violation for which the remedy was sought
was committed against the United States, rather
than aggrieved individuals); cf. Oneok, Inc. v.
Learjet, Inc., 575 U.S. 373, 385 (2015) (discussing,
in the context of preemption, the importance of
looking to the aim of an initiative in assessing
whether it crosses a jurisdictional boundary).
779 Order No. 2023, 184 FERC ¶ 61,054 at P 966;
see Gabelli v. SEC., 568 U.S. 442, 451–52 (2013).
780 See Kokesh, 581 U.S. at 466–67 (finding it
significant that disgorgement sometimes exceeds
the profits gained as the result of a violation, in
rejecting an argument that disgorgement was
remedial rather than punitive); cf. also Liu v. Sec.
& Exch. Comm’n, 140 S. Ct. 1936, 1940, 1947 (2020)
(holding that ‘‘a disgorgement award that does not
exceed a wrongdoer’s net profits and is awarded for
victims is equitable relief permissible under [15
U.S.C. 78u(d)(5)]’’).
781 See Order No. 2023, 184 FERC ¶ 61,054 at PP
875, 972, 984–85.
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interconnection customers and
transmission providers by ensuring that
transmission providers are not held to
unduly strict standards that could result
in economically inefficient outcomes or
unjust and unreasonable rates.782
Likewise, and contrary to PJM’s claim
that the failure to remit the penalties
under Order No. 2023 to the Treasury
demonstrates that these penalties are
beyond the Commission’s authority, the
fact that the penalties are disbursed to
interconnection customers distinguishes
them from the sort of sanctions
addressed in Kokesh and authorized in
FPA sections 315, 316, and 316A.783
And, as the Commission recognized,
delayed interconnection studies impose
financial harm on interconnection
customers,784 reinforcing that the
penalties under Order No. 2023 help to
ensure that the transmission provider is
compensated for performing
interconnection studies based on
whether it achieves (or the extent that
it fails to achieve) performance
standards relating to the timeliness of
those studies.785
415. Thus, and consistent with our
broad discretion in determining how to
ensure just and reasonable rates,786 we
continue to find that the study delay
penalty structure implemented in Order
No. 2023 is an appropriate exercise of
our authority under FPA section 206.
Likewise, we also are not persuaded by
related arguments asserting that the
study delay penalty structure is
782 Cf. id. P 1003 (noting that the appeals process
is an avenue to account for delays beyond a
transmission provider’s control, such as those due
to force majeure, which could excuse a failure to
perform at a particular standard).
783 Kokesh, 581 U.S. at 464–65 (explaining that in
many cases SEC disgorgement is not compensatory,
because disgorged profits are not necessarily paid
to investors but rather paid to the district court and
may ultimately be paid to the Treasury); see also
id. at 462–63.
784 See Order No. 2023, 184 FERC ¶ 61,054 at P
971.
785 Cf. Kokesh, 581 U.S. at 462–63 (discussing
cases in which liability was found to remedy
private wrongs, with payments made to the party
suffering the injury, as essentially compensatory not
imposing penalties).
786 See, e.g., Morgan Stanley Cap. Grp. Inc. v.
Pub. Util. Dist. No. 1 of Snohomish Cnty., Wash.,
554 U.S. 527, 532 (2008) (explaining that the just
and reasonable standard is ‘‘obviously incapable of
precise definition’’ such that the Commission is
afforded ‘‘great deference’’ in its rate decisions);
Mobil Oil Expl. & Producing Se. Inc. v. United
Distrib. Cos., 498 U.S. 211, 214 (1991) (explaining
that the just and reasonable standard, ‘‘far from
binding the Commission . . . accords it broad
ratemaking authority’’ and does not compel a
particular approach); MISO Transmission Owners v.
FERC, 45 F.4th at 261 (‘‘FERC is entitled to adopt
any methodology it believes will help it ensure that
rates are just and reasonable, so long as it doesn’t
adopt that methodology in an arbitrary and
capricious manner.’’) (citing S. Cal. Edison Co. v.
FERC, 717 F.3d 177, 182 (D.C. Cir. 2013)).
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otherwise in tension with the civil
penalty provisions in the FPA or
contradicts the Commission’s policies
on enforcement.
416. For instance, PJM argues that, in
contrast to other tariff penalty
provisions adopted pursuant to FPA
section 205, the Commission in Order
No. 2023 ‘‘impos[ed] a mandate on
transmission providers to include such
a provision in their tariffs
involuntarily,’’ thereby bypassing the
penalty provision in FPA section 315.787
As just discussed, the study delay
penalty structure does not bypass any
penalty provisions of the FPA but,
instead, was adopted pursuant to the
Commission’s independent ratemaking
authority. Moreover, PJM fails to
explain its assertion that the scope of
permissible tariff mechanisms to ensure
such rates are just and reasonable
should substantially differ between FPA
sections 205 and 206.788 We do not find
this argument supported by the statute,
particularly given that a purpose of
section 206 is to allow the Commission
to replace, by its own initiative, rates
that may have resulted from section 205
filings but have since become unjust
and unreasonable.
417. We are also not persuaded by
NYTO’s reliance on the Commission’s
policy statements in the enforcement
context.789 These policy statements are
not directed toward the study delay
penalty structure set forth in Order No.
2023 as an exercise of the Commission’s
authority under FPA section 206, but
instead address how the Commission
will consider civil penalties and other
remedies pursuant to its separate
enforcement authorities granted under
other sections of the FPA. As to similar
arguments by MISO TOs, PJM, and
NYISO asserting that the study delay
penalty structure set forth in Order No.
2023 is in tension with Commission
policy in enforcement cases,790 the
787 PJM
Rehearing Request at 30.
implication that penalties have only
been previously adopted under FPA section 205 is
also incorrect. See Order No. 890, 118 FERC
¶ 61,119 at PP 40, 1324–57, order on reh’g, Order
No. 890–A, 121 FERC ¶ 61,297, order on reh’g,
Order No. 890–B, 123 FERC ¶ 61,299, order on
reh’g, Order No. 890–C, 126 FERC ¶ 61,228, order
on clarification, Order No. 890–D, 129 FERC
¶ 61,126 (adopting, through generic proceedings
under FPA section 206, a penalty structure that is
similar in several respects to that adopted in Order
No. 2023).
789 See NYTOs Rehearing Request at 22 & n.60
(‘‘Under the Commission’s policy statements on
enforcement and compliance, penalties are meted
out for wrongdoing and misconduct.’’ (citing Enf’t
of Statutes, Ords., Rules, and Reguls., 113 FERC
¶ 61,068 at PP 14, 26); see also id. at 27.
790 See MISO TOs Rehearing Request at 31
(asserting that the study delay penalty structure
results in a deprivation of due process whereas
‘‘both the Commission’s Office of Enforcement and
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study delay penalty structure adopted in
Order No. 2023 is not an
implementation of the Commission’s
enforcement authority under FPA
sections 315, 316, or 316A. Moreover,
and contrary to these arguments, the
Commission has adopted appropriate
mechanisms to ensure that the study
delay penalty structure is not punitive
and can account for the facts of
particular cases, as discussed above.
418. We disagree with PacifiCorp’s
claim that the Commission erred in
Order No. 2023 because it failed to
address a comment questioning whether
a violation of the study deadlines giving
rise to penalties under Order No. 2023
could also be treated as a tariff violation
under the FPA. As an invocation of the
Commission’s ratemaking authority
under section 206, Order No. 2023 did
not address or invoke the Commission’s
civil enforcement authority, practices,
or policies. The Commission may
consider whether a particular failure to
meet a study deadline meets the
statutory, regulatory, and policy
considerations to constitute a tariff
violation warranting enforcement action
in an appropriate case, on the facts
presented. Attempting to further resolve
this issue at this time is beyond the
scope of this proceeding.
419. We further disagree with AEP’s
claim that the Commission lacks
authority to adopt the study delay
penalty structure set forth in Order No.
2023 on the theory that Commission
precedent forbids it from awarding
monetary damages. None of the cases
AEP cites addressed a penalty structure
similar to that presented here,
supported by the Commission’s
authority to ensure just and reasonable
rates. Rather, in Bachofer v. Calpine
Corp., the Commission found that it
lacked jurisdiction to address claims for
property damage due to the alleged
actions of a generation facility, that such
allegations ‘‘are more appropriately
addressed in some other forum,’’ and
that ‘‘monetary damages are also beyond
the scope of the Commission’s authority
under Part II of the Federal Power
Act.’’ 791 In TranSource, LLC v. PJM
Interconnection, L.L.C., the Commission
explained that monetary relief for ‘‘lost
business opportunities and other
litigation-related expense’’ allegedly
NERC Reliability Standard enforcement involve fact
finding and affording the targeted entity the
opportunity to present evidence to demonstrate lack
of fault or mitigating circumstances before a penalty
is imposed’’); NYISO Rehearing Request at 31 &
n.89 (arguing that ‘‘the Commission may not
establish penalties that are excessively punitive in
relation to the severity of a violation’’ and citing
Commission policies in the enforcement context);
PJM Rehearing Request at 31 n.67.
791 134 FERC ¶ 61,100 at P 9.
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suffered by TranSource was beyond the
scope of relief the Commission could
award.792 New England Power Pool
involved a rehearing request directed
toward the effective date of certain tariff
changes, where no waiver of the
Commission’s prior notice requirements
had been sought, and reflected that the
Commission cannot engage in
retroactive ratemaking.793 Here, the
Commission is not confronted by claims
seeking post-hoc, consequential
monetary damages to make a specific
party whole following alleged
wrongdoing. Rather, it is exercising its
FPA section 206 authority to
prospectively and generically regulate
the commercial relationship between
interconnection customers and
transmission providers, including as to
the appropriate charges for
interconnection studies.
v. Commission Precedent
(a) Requests for Rehearing
420. MISO TOs assert that the
Commission failed to heed its precedent
in Order No. 2003, which rejected
liquidated damages for study delays,
because that approach might undermine
the transmission provider’s ability to
economically administer its study
process.794 Likewise, MISO TOs also
point to Order No. 845, asserting that
the Commission there rejected requests
to include penalties for study delays,
recognizing that often the transmission
provider will not be at fault for such
delays.795 MISO TOs also contend that,
as recently as November 29, 2022, the
Commission affirmed the reasonable
efforts standard and rejected firm study
deadlines and does not discuss in Order
No. 2023 why it now abandons that
result.796 Additionally, MISO TOs claim
that Order Nos. 890 and 890–A reflect
that the Commission imposed study
delay penalties only when transmission
providers routinely failed to meet
deadlines, failed to meet deadlines for a
certain number of studies, and were
imposed only after they had the
opportunity to present evidence of
extenuating circumstances.797 MISO
792 168
FERC ¶ 61,119 at P 285 & n.896.
FERC ¶ 61,299 at 62,290 & n.6.
794 MISO TOs Rehearing Request at 24–25
(arguing that the Commission failed to respond to
MISO TOs comments on this point).
795 Id. at 25 (arguing that the Commission failed
to articulate a meaningful response, but instead
simply asserts that it is attempting to remedy unjust
and unreasonable rates and ensure interconnection
in a reliable, efficient, transparent, and timely
manner; contending that the penalty structure will
not accomplish these aims).
796 Id. at 26 (citing PJM Interconnection, L.L.C.,
181 FERC ¶ 61,162 at P 138).
797 Id. at 20–24 (noting that in Order 890–A, the
Commission clarified that such penalties would
793 98
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TOs contrast Order No. 2023’s penalty
structure with that in Order No. 890,
arguing that it does not make sense to
grant less flexibility to transmission
providers for conducting
interconnection studies than
transmission studies, given that
interconnection studies are more
complex, more numerous, and involve
more requests to be studied.798
421. NYISO and Indicated PJM TOs
assert that the Commission was wrong
in Order No. 2023 to compare the
penalty structure it adopted to ‘‘traffic
ticket’’ penalties, asserting that such
penalties are applied solely based on
objective criteria that can be applied
automatically, whereas study delays
raise more complex questions regarding
the fault for any delay.799 NYISO
contends that the Commission failed to
address, in a reasoned fashion, NYISO’s
argument that reliability penalties are
distinguishable from the penalty
structure adopted under Order No. 2023
because reliability penalties are
generally non-financial and, when such
penalties apply, there are numerous
mechanisms in place to avoid unfairly
harsh results.800
422. Indicated PJM TOs also claim
that Order No. 2023’s penalty structure
is unlawful because it impermissibly
attempts to override RTO/ISO governing
documents.801 In particular, they assert
that the PJM Consolidated Transmission
Owners Agreement (PJM CTOA) does
not authorize PJM to assign penalty
amounts to PJM transmission owners.
According to Indicated PJM TOs, under
apply only to transmission providers unable to
justify their repeated failure to meet deadlines and
discussed the factors that might excuse such
failures).
798 Id. at 23–24; see also NYISO Rehearing
Request at 31–32.
799 NYISO Rehearing Request at 31 (stating that
‘‘[t]he fact that the Commission recognized the need
for an appeals process to resolve inevitable factual
disputes about penalties demonstrates that the
traffic ticket model is not relevant’’); Indicated PJM
TOs Rehearing Request at 19–21.
800 NYISO Rehearing Request at 31–32 (asserting
that the appeals process, which the Commission
discussed in response to these arguments, is not an
adequate process because it is inchoate and
unreasonably presumes fault on the part of
transmission providers and presumes that penalties
are warranted for delays); see id. at 31 n.85
(‘‘Violators may avoid penalties for a variety of
reasons including demonstrating a culture of
compliance, cooperating with investigations, and
taking effective remedial actions. Thus, the
reliability penalty regime incorporates due
process.’’).
801 Indicated PJM TOs Rehearing Request at 8–12
(citing Atl. City I, 295 F.3d at 10 (‘‘Nor may FERC
prohibit public utilities from filing changes in the
first instance.’’); Atl. City Elec. Co. v. FERC, 329
F.3d 856, 859 (2003) (per curiam) (Atl. City II)
(‘‘FERC has no jurisdiction to enter limitations
requiring utilities to surrender their rights under
§ 205 of the FPA to make filings to initiate rate
changes.’’)).
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the Atlantic City precedent, the
Commission cannot prevent
transmission providers from deciding
how to propose to recover their costs
and cannot direct transmission
providers to make cost recovery filings
in any prescribed manner (here, in
alleged contravention of the CTOA).802
(b) Determination
423. We are not persuaded by
arguments that the deadline and penalty
structure in Order No. 2023 is
inconsistent with the Commission’s
precedent or that, to the extent it differs
from other penalty structures in the
Commission’s precedent, that departure
is insufficiently explained. For instance,
certain parties argue that in Order No.
845 the Commission acknowledged that
study delays may be attributable to
factors not within the control of
transmission providers and that the
Commission in Order No. 845 declined
to implement automatic penalties for
study delays.803 The Commission in
Order No. 2023, however, explained the
reasons for its change in approach: that
its determination was based on the
evidence in the record, including
evidence of worsening queue delays
based on the reporting data collected
under Order No. 845 and that failure on
the part of transmission providers to
timely complete studies was a
significant reason for those delays.804
Thus, even though it remains the case
that there are factors outside of a
transmission providers’ control that may
contribute to interconnection study
delays, on this record the Commission
reasonably concluded that elimination
of the reasonable efforts standard and
adoption of a study delay penalty
structure is warranted notwithstanding
that it took a different approach in
Order No. 845.805 We sustain that
determination.
424. We are also not convinced that
the adoption of penalties for late
interconnection studies conflicts with
Order No. 2003, in which the
Commission declined to include a
liquidated damages provision in the pro
forma LGIP, observing that it ‘‘may
undermine the Transmission Provider’s
ability to economically administer its
study process.’’ 806 At the outset, to the
802 Id.
at 11–12.
AEP Rehearing Request at 7–8; MISO TOs
Rehearing Request at 24–25.
804 Order No. 2023, 184 FERC ¶ 61,054 at P 1012;
see supra PP 281–282.
805 In particular, the Commission has established
the appeals process to take into account the
possibility that an interconnection study is delayed
due to factors beyond the control of the
transmission provider.
806 Order No. 2003, 104 FERC ¶ 61,103 at P 898.
803 See
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extent that the rehearing requests rely
on the Commission’s decision not to
include the proposed liquidated
damages provision in Article 5.1 of the
pro forma LGIA, that proposed
liquidated damages provision is
distinguishable in that it is related to a
transmission provider’s failure to
complete construction of
interconnection facilities in a timely
fashion.807 Furthermore, even in this
context, the Commission simply
declined to impose a liquidated
damages provision in the pro forma
LGIP, but was clear that such provisions
were permissible in LGIAs upon
agreement of the parties.808
425. Moreover, the Commission in
Order No. 2023 did not take action
based on the record that was available
in 2003. Instead, the Commission has
adopted the specific deadline and
penalty structure set forth in Order No.
2023, as clarified herein, based on the
record before us in this proceeding. This
record is informed by an additional two
decades of experience,809 which justify
the need for the reforms adopted in
Order No. 2023, including the adoption
of study delay penalties.810 The
Commission has also taken steps (e.g.,
site control requirements, commercial
readiness deposits, and withdrawal
penalties) directed toward reducing the
number of speculative interconnection
requests and has discussed the costs to
interconnection customers of
interconnection queue backlogs and late
interconnection studies.811 The penalty
structure adopted in Order No. 2023
further includes several safeguards,
807 See id. PP 851–52 (describing the liquidated
damages provision proposed the Commission
proposed to include in Article 5.1); id. P 854
(explaining that while there were some common
issues regarding the two liquidated damages
provisions the Commission was considering, ‘‘the
provisions serve different functions’’); id. PP 868–
85 (discussing the proposed LGIA liquidated
damages provision, and the Commission’s rationale
for declining to adopt it).
808 See, e.g., Order No. 2003–A, 106 FERC
¶ 61,220 at P 249; see also N.Y. Indep. Sys.
Operator, Inc. 108 FERC ¶ 61,159 at PP 77–78
(liquidated damages are permissible upon
agreement of the parties).
809 See Order No. 2023, 184 FERC ¶ 61,054 at P
3 (‘‘The electricity sector has transformed
significantly since the issuance of Order Nos. 2003
and 2006 . . . . These new challenges are creating
large interconnection queue backlogs and
uncertainty regarding the cost and timing of
interconnecting to the transmission system,
increasing costs for consumers.’’).
810 Even in Order No. 2003—when it was not
confronting the magnitude of interconnection queue
backlogs and late studies occurring now—the
Commission recognized ‘‘value of providing an
incentive to complete Interconnection Studies.’’
Order No. 2003, 104 FERC ¶ 61,103 at P 898. It also
concluded that it had statutory authority to adopt
liquidated damages provisions. Id. P 857.
811 See, e.g., Order No. 2023, 184 FERC ¶ 61,054
at PP 3, 27, 37–40, 43, 50.
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including the appeal mechanism to seek
relief from penalties, and we do not
believe that the penalty structure will be
punitive.812 On the record before us
now, we continue to find that a
structure where penalties are incurred
for late interconnection studies is
warranted notwithstanding that the
Commission declined to adopt a
proposal for liquidated damages for
study delays on a different record
twenty years ago.
426. MISO TOs also point to a
Commission decision from the end of
2022 in which—MISO TOs claim—the
Commission ‘‘affirmed the reasonable
efforts standard and eschewed the
adoption of firm study deadlines.’’ 813 In
that decision, however, the Commission
approved PJM’s FPA section 205
proposal because, at that time, the
reasonable efforts standard was ‘‘the
currently applicable standard under the
Commission’s pro forma LGIP and
LGIA,’’ noting that in Order No. 845 the
Commission had declined to eliminate
the reasonable efforts standard.814 The
Commission has now determined, based
on the record in this proceeding and
under FPA section 206, that the
reasonable efforts standard is no longer
just and reasonable and specified the
replacement standards, and
transmission providers (including PJM)
are required to submit compliance
filings to adopt the requirements of
Order No. 2023, as modified herein.
427. We disagree with Indicated PJM
TOs’ and NYISO’s claims that the
Commission erred in comparing the
penalty structure under Order No. 2023
to traffic ticket penalties, asserting that
such traffic ticket penalties are assessed
solely based on objective criteria. Under
Order No. 2023’s penalty structure,
penalties are incurred based on
objectively identifiable criteria set forth
in the tariff (failure to complete the
study in the required timeframe) and
transmission providers are not subject to
sanctions or consequences other than
the penalty set forth in the tariff and
approved by the Commission.815 While
812 Id.
P 972.
TOs Rehearing Request at 26 (citing PJM
Interconnection, L.L.C., 181 FERC ¶ 61,162 at P
138).
814 PJM Interconnection, L.L.C., 181 FERC
¶ 61,162 at P 138 (‘‘Accordingly, at this time, we
decline to require PJM to adopt firm study
deadlines instead of its proposed ‘Reasonable
Efforts’ standard.’’ (emphasis added)). Because the
Commission relied on the fact that the reasonable
efforts standard was the then-applicable pro forma
standard, nothing in that case conflicts with our
decision here.
815 See Cal. Indep. Sys. Operator Corp., 134 FERC
¶ 61,050, at P 34 (2011) (‘‘[T]hree qualifications
must be met: (1) The activity must be expressly set
forth in the tariff; (2) The activity must involve
objectively identifiable behavior; and (3) The
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Indicated PJM TOs and NYISO argue
that, in light of the appeal process, the
ultimate imposition of the penalty is not
based on objectively identifiable
behavior, the approach adopted in
Order No. 2023 is consistent with the
Commission’s traffic ticket penalty
precedent which includes an ‘‘appeals
process’’ under which the Commission
considers ‘‘all relevant
circumstances.’’ 816
428. Nor, contrary to Indicated PJM
TOs’ claim, is any aspect of the penalty
structure impermissibly ‘‘delegate[d]
. . . to third parties’’ such as
‘‘jurisdictional utilities.’’ 817 As just
discussed, the trigger for penalties
occurs through objective criteria, which
were determined by the Commission on
the record in this proceeding. The
appeals process is conducted by the
Commission. To the extent that RTOs/
ISOs seek to recover the costs of
penalties assessed to them through
section 205 filings, whether through
individual filings or a default structure,
the Commission will review those
filings to determine whether they are
just and reasonable, and not unduly
discriminatory or preferential.818
429. As to NYISO’s argument that
Order No. 890’s transmission study
penalties are not relevant to the
Commission’s adoption of the penalty
structure in Order No. 2023, NYISO
does not refute the numerous
similarities between these two
structures. These include that, in Order
No. 890, the Commission: imposed set
time frames for the completion of
transmission studies and found that
transmission providers must have a
meaningful stake in meeting those
deadlines; 819 included a process to
waive penalties in unique
circumstances but declined to create
broad categories of exemptions from
penalties; 820 rejected arguments that
activity does not subject the actor to sanctions or
consequences other than those expressly approved
by the Commission and set forth in the tariff, with
the right of appeal to the Commission.’’).
816 Id. P 37.
817 Indicated PJM TOs Rehearing Request at 22.
818 Indicated PJM TOs also argue that the
Commission ‘‘cannot delegate authority to RTOs
and ISOs to determine the reasonableness of study
delay penalty allocations’’ such that it would be
inappropriate to ‘‘giv[e] deference to the RTO’s/
ISO’s decision in a ‘good cause’ proceeding.’’
Indicated PJM TOs Rehearing Request at 24. This
argument conflates appeals of penalties incurred by
RTOs/ISOs with how those penalties may be
allocated as a matter of RTO/ISO cost recovery
under FPA section 205 proposals. Moreover, as just
explained, the Commission has not impermissibly
delegated its authority to RTOs/ISOs.
819 Order No. 890, 118 FERC ¶ 61,119 at P 1340;
Order No. 890–A, 121 FERC ¶ 61,297 at P 741.
820 Order No. 890, 118 FERC ¶ 61,119 at PP 1342–
43, 1349; Order No. 890–A, 121 FERC ¶ 61,297 at
PP 743–45.
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imposing deadlines and penalties will
necessarily decrease study quality or
harm system reliability; 821 discussed
other reforms that would help achieve
transmission deadlines, but did not take
piecemeal action by waiting to observe
the effects of those reforms; 822 provided
for the distribution of penalties to
transmission customers; 823 did not
exempt RTOs; 824 and prohibited
transmission providers from recovering
study delay penalties through their
transmission rates.825 In light of these
similarities, we continue to conclude
that Order No. 890 is relevant
Commission precedent supporting the
study delay penalty structure adopted in
Order No. 2023.826
430. The Commission in Order No.
2023 also recognized that there were
differences between the penalty
structure in Order No. 2023 as
compared to Order No. 890, but found
that they were ‘‘warranted by the
significant and growing interconnection
queue backlogs.’’ 827 In other words, far
from NYISO’s suggestion that the
Commission was unreasonably citing
‘‘the fact that interconnection studies
are more numerous, complex, and
susceptible to delays than transmission
studies as a reason for treating the two
identically,’’ 828 the Commission was
here explaining why the differences
between these two structures were
appropriate.829 We continue to find
821 Order No. 890, 118 FERC ¶ 61,119 at P 1345;
Order No. 890–A, 121 FERC ¶ 61,297 at P 742.
822 Order No. 890, 118 FERC ¶ 61,119 at P 1346.
823 Id. P 1351.
824 Id. P 1353.
825 Id. P 1357; see also Order No. 890–A, 121
FERC ¶ 61,297 at PP 486, 754–57 (noting that the
Commission could consider case-specific cost
recovery proposals from RTOs/ISOs under FPA
section 205).
826 NYISO’s argument that it does not conduct the
kinds of transmission studies that Order No. 890
addressed and that such studies are ‘‘not a major
issue for most other RTOs/ISOs,’’ NYISO Initial
Comments at 36; see also NYISO Rehearing Request
at 32 n.87, does not negate these similarities for
purposes of determining a just and reasonable pro
forma approach to ensuring interconnection study
timeliness under Order No. 2023. See Order No.
2023, 184 FERC ¶ 61,054 at P 1001 (rejecting
NYISO’s argument); cf.id. PP 965–72 (finding that
the imposition of study delay penalties was just and
reasonable and would not be punitive as to
transmission providers); id. PP 1004–07, 1013.
827 Order No. 2023, 184 FERC ¶ 61,054 at P 1013
(noting that interconnection studies ‘‘are more
numerous, complex, and susceptible to delays’’ and
‘‘there is a growing number of interconnection
customers affected by study delays. We believe that
these factors underscore the need for transmission
providers to meet study deadlines and the need to
provide an incentive, in the form of study delay
penalties’’).
828 NYISO Rehearing Request at 32 n.87.
829 See also supra PP 281–282 (explaining how
previous reforms had failed to ensure timely
interconnection study queue processing or resolve
significant interconnection queue backlogs). This
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those differences warranted, based on
the same considerations articulated in
Order No. 2023,830 notwithstanding
arguments that the approach in Order
No. 2023 represents a departure from
the approach the Commission took in
Order No. 890. These considerations
reflect greater need for direct, clear, and
straightforward incentives for
transmission providers to achieve
interconnection study timeliness than
were pertinent in the context of
transmission studies in Order No. 890.
431. We also find that the
Commission adequately responded to
NYISO’s argument that ‘‘reliability
penalties are generally non-financial
and that when financial penalties do
apply there are numerous mechanisms
in place to avoid unfairly harsh results,’’
particularly a ‘‘risk-based evaluation of
all the facts and circumstances related
to an individual violation.’’ 831 Under
Order No. 2023, transmission providers
have ‘‘the opportunity to seek relief
from a penalty by filing an appeal,
which the Commission will closely
scrutinize and in response to which the
Commission will issue an order.’’ 832 We
have elsewhere rejected arguments that
this appeals process is impermissibly
‘‘inchoate’’ and arguments that Order
No. 2023 unreasonably presumes that
‘‘transmission providers are at fault for
study delays and that all study delays
warrant penalties.’’ 833
432. Indicated PJM TOs’ contention
that Order No. 2023 is unlawful because
the Commission has attempted therein
to override RTO/ISO governing
documents, in contravention of Atlantic
City I and Atlantic City II,834 is
explanation for the differences between Order No.
2023 and Order No. 890 also addresses the
substance of NYISO’s comment in which it also
observed such differences. See NYISO Rehearing
Request at 32 n.87; NYISO Initial Comments at 36
(arguing that the penalty structure proposed in the
NOPR differed from that in Order No. 890 because
transmission study penalties were not imposed
automatically, without notification to the
Commission). We further note that NYISO’s
characterization of Order No. 2023 as strict liability
is inaccurate, and that the appeal process in
particular addresses these concerns. See supra PP
–360.
830 Order No. 2023, 184 FERC ¶ 61,054 at P 1013
(‘‘[C]ompared to transmission service requests,
interconnection studies are more numerous,
complex, and susceptible to delays. Further, as
noted above, there is a growing number of
interconnection customers affected by study delays.
We believe that these factors underscore the need
for transmission providers to meet study
deadlines.’’).
831 NYISO Rehearing Request at 31–32 & n.85.
832 Order No. 2023, 184 FERC ¶ 61,054 at P 1001.
833 NYISO Rehearing Request at 31; see, e.g.,
supra section II.D.1.c.ii.
834 See Indicated PJM TOs Rehearing Request at
6 (arguing that ‘‘the PJM CTOA does not authorize
PJM to assign penalty amounts to PJM transmission
owners’’ and, under these cases ‘‘the Commission
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misplaced.835 Indicated PJM TOs are
misreading Atlantic City I and Atlantic
City II, which do not stand for the
proposition that a particular RTO/ISO’s
approach to its own governance can
override the Commission’s authority
under FPA section 206 to set just and
reasonable rates. Rather, in Atlantic City
I, the Commission had required
modifications to a proposed ISO
structure including ‘‘to eliminate a
provision allowing utilities ‘to
unilaterally file to make changes in rate
design, terms or conditions of
jurisdictional services,’ except that they
could still unilaterally seek a change in
the transmission revenue
requirements.’’ 836 As a result of these
required modifications, changes in rate
design could not be made through
unilateral FPA section 205 filings by
individual utilities, but instead ‘‘only
the ISO could propose changes in rate
design.’’ 837 The court held that the
Commission erred in doing so,
explaining that the Commission lacked
statutory authority ‘‘to require the utility
petitioners to cede rights expressly
given to them in section 205 of the
Federal Power Act.’’ 838
433. Thus, the basis for the court’s
remands in Atlantic City I and Atlantic
City II was that the Commission
exceeded its jurisdiction in requiring
cannot prevent public utilities from deciding how
to recover their costs and cannot direct public
utilities to make cost recovery filings in any
prescribed manner’’); id. at 8–12.
835 We note that this argument overstates the
effect of Order No. 2023, which did not ‘‘direct’’
any RTOs/ISOs, including PJM, to make cost
recovery filings at all, let alone do so according to
any particular structure. See Order No. 2023, 184
FERC ¶ 61,054 at P 994 (providing that RTOs/ISOs
‘‘may’’ submit FPA section 205 filings and that they
may propose a default structure or make individual
section 205 filings to recover costs); id. P 998
(noting potential avenues to fund study delay
penalties, such as collecting administrative fees).
836 Atl. City I, 295 F.3d at 7; see also id. at 6–7
(explaining that the proposed agreement permitted
the ‘‘transmission owners to file changes in
transmission service rate design and non-rate terms
and conditions to the tariff under section 205,’’
subject to potential rejection of a proposed change
by the independent PJM Board by majority vote).
837 Id. at 7.
838 Id. at 9; see also id. at 10 (explaining that the
Commission was ‘‘purport[ing] to deny the utility
petitioners any ability to initiate rate design
changes with respect to services provided with their
own assets,’’ thereby ‘‘eliminat[ing] the very thing
that the statute was designed to protect—the ability
of the utility owner to set the rates it will charge
prospective customers, and change them at will,
subject to review by the Commission.’’ (quotation
marks omitted); id. at 11 (holding that the
Commission cannot deny ‘‘the petitioners their
rights provided for by a statute enacted by both
houses of Congress and signed into law by the
[p]resident’’); Atl. City II, 329 F.3d at 859 (‘‘[W]e
reaffirm and clarify our prior decision that FERC
has no jurisdiction to enter limitations requiring
utilities to surrender their rights under § 205 of the
FPA to make filings to initiate rate changes.’’).
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utilities to surrender, to an RTO/ISO,
their FPA section 205 right to propose
changes to rate designs. These cases do
not establish that the Commission’s
power under FPA section 206, following
appropriate findings, to ‘‘determine the
just and reasonable rate, charge,
classification, rule, regulation, practice,
or contract to be thereafter observed and
in force’’ 839 is subordinate to a
particular RTO/ISO’s governing
documents. To the contrary, the court
acknowledged the Commission’s
authority to require transmission
providers to file particular rates upon a
finding that existing rates are unlawful,
under FPA section 206.840
vi. Alternative Approaches and
Miscellaneous Issues
(a) Requests for Rehearing
434. A number of the rehearing
requests assert that the Commission
could have taken an alternative
approach to eliminating the reasonable
efforts standard and adopting the
deadline and penalty structure set forth
in Order No. 2023. EEI urges that the
Commission could have instead
‘‘ensure[d] transmission providers are
afforded specified timeframes to
complete certain tasks during
studies.’’ 841 MISO TOs assert that the
Commission should have taken an
approach that parallels the one adopted
for transmission studies in Order No.
890 of monitoring for chronic delays,
investigating causes, and then imposing
a remedy.842 NYISO argues that the
Commission could instead allow
‘‘individual RTO/ISO regions to propose
alternative rules as independent entity
variations’’ or build on Order No. 845 by
updating and enhancing its reporting
requirements, which would allow more
targeted actions to address problems.843
435. NYISO asserts that Order No.
2023’s adoption of a 10 business-day
grace period does not provide
meaningful relief to transmission
providers, like NYISO, that will be
required to study large numbers of
interconnection requests, and that
affording the same grace period to all
transmission providers despite differing
839 16
U.S.C. 824e(a).
e.g., Atl. City I, 295 F.3d at 10 (‘‘The
courts have repeatedly held that FERC has no
power to force public utilities to file particular rates
unless it first finds the existing filed rates unlawful.
. . . [T]he power to initiate rate changes rests with
the utility and cannot be appropriated by FERC in
the absence of a finding that the existing rate was
unlawful.’’ (emphasis added)).
841 EEI Rehearing Request at 9 (arguing that this
approach acknowledges that one entity’s actions
often cannot commence until another entity’s work
is completed).
842 MISO TOs Rehearing Request at 36–37.
843 NYISO Rehearing Request at 20–21.
840 See,
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workloads is not reasoned decisionmaking.844 It further argues that the
transition period the Commission
adopted in Order No. 2023 simply
postpones the problems with RTO/ISO
penalty cost recovery, without resolving
that problem.845 And NYISO claims that
the Commission significantly increased
penalty levels from the levels proposed
by the NOPR, without a reasoned basis
for doing so.846
436. Indicated PJM TOs argue that pro
rata disbursement of penalties to
interconnection customers is unduly
discriminatory, given that study
deposits increase based on the size of
the generating facility making the
interconnection request.847 They assert
that Order No. 2023 disregards the
different costs associated with larger
generating facilities and seeks to treat
interconnection customers with
substantially fewer costs as equals,
which they claim is inconsistent with
precedent.848
437. Invenergy argues that the
Commission erred in failing to provide
for penalties when an affected system
misses a pre-study deadline, such as the
20 business day deadline to indicate
whether it will conduct an affected
system study, or the 15 business day
deadline to provide a cost estimate and
schedule for that study.849 Invenergy
notes that, in contrast to the 150-day
deadline for cluster studies, which is
measured from the end of the customer
engagement window, an affected system
will be expected to meet pre-study
deadlines only when and if the host
transmission provider provides a notice
that it has been identified as an affected
system for a particular interconnection
customer.850 Invenergy argues that the
Commission should apply a $2,000 per
business day penalty on affected
systems for failing to meet pre-study
deadlines. Clean Energy Associations
present similar arguments in a request
for clarification.851
844 Id.
at 35.
at 37.
846 Id. (asserting that the Commission’s example
estimating a $63,000 penalty for a six-month delay
under the NOPR structure does not show that the
penalties assessed under Order No. 2023 will be
proportionate or non-punitive, particularly as to
not-for-profit RTOs/ISOs).
847 Indicated PJM TOs Rehearing Request at 40–
41.
848 Id. at 40 (citing Ala. Elec. Coop., 684 F.2d at
28).
849 Invenergy Rehearing Request at 2–3.
850 Id. (asserting that there is a ‘‘risk that the
failure of an Affected System to meet pre-study
deadlines will delay commencement of the Affected
System study (and thus the start of the 150-day
clock applicable to that study)’’).
851 See Clean Energy Associations Rehearing
Request at 76–77.
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438. MISO argues that Order No. 2023
should be revised to provide that RTOs
that conduct multiple system impact
studies may include a combined
timeline for cluster studies for penalty
purposes.852 MISO also argues that the
Commission should modify the
transition period to properly account for
delays in clusters that pre-date the
effective date of Order No. 2023,
because delays in such clusters could
cause backlogs that will affect future
studies.853 It claims that doing so is
necessary to avoid retroactive effects
that penalize RTOs for delays prior to
Order No. 2023’s effective date, which
would contravene the filed rate doctrine
and the rule against retroactive
ratemaking.
(b) Determination
439. In Order No. 2023, the
Commission stated that transmission
providers should distribute any
collected study delay penalties ‘‘to
interconnection customers in the
relevant study on a pro rata per
interconnection request basis to offset
their study costs.’’ 854 Indicated PJM
TOs assert that this approach is unduly
discriminatory because it results in
equal treatment of differently situated
customers, specifically those that paid
larger study deposits or that may have
larger final study costs versus those that
paid smaller study deposits or that may
have smaller final study costs.855 While
the Commission in Order No. 2023
stated that disbursement of
interconnection study delay penalties
would be on a ‘‘pro rata’’ (i.e.,
proportionate) basis per interconnection
request, it did not further specify how
penalties would be distributed. We
clarify here that study delay penalties
must be distributed on a pro rata basis
proportionate to the final study costs
paid by each interconnection customer
in the relevant study. This approach
ensures that the distribution of the
penalty (i.e., the amount of the ‘‘offset’’
each interconnection customer receives)
is related to the costs paid by the
interconnection customer for the
relevant study.
440. We decline Invenergy’s request
that the Commission grant rehearing
and find that the study delay penalty of
$2,000 per business day applies to the
pre-study deadlines for affected
systems.856 The penalties the
852 MISO
Rehearing Request at 11–14.
at 15–16.
854 Order No. 2023, 184 FERC ¶ 61,054 at P 963;
see also id. at P 990; pro forma LGIP section 3.9.
855 Indicated PJM TOs Rehearing Request at 40–
41.
856 For the same reasons discussed in this
paragraph, we also reject Clean Energy
853 Id.
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Commission adopted in Order No. 2023
focus on the process of conducting
interconnection studies, and how delays
in that process contribute to
interconnection queue backlogs. The
record in this proceeding does not
contain sufficient information regarding
persistent delays in the pre-study
process for affected systems that
contribute to interconnection queue
backlogs to persuade us to extend the
study delay penalties to such pre-study
deadlines.857 We further find that
imposing penalties on affected system
transmission providers would result in
unduly discriminatory treatment of
similarly situated entities: host
transmission providers are also required
to meet pre-study deadlines in the pro
forma LGIP,858 including deadlines for
communications with affected system
transmission providers, but incur no
penalties for missing those deadlines.
441. In Order No. 2023, the
Commission explained that it
‘‘decline[d] to adopt alternative
proposals [instead of the deadline and
penalty approach set forth in Order No.
2023] suggested by various
commenters,’’ 859 and we sustain that
decision here in response to similar
arguments on rehearing.860 As to MISO
TOs’ argument that the Commission
should grant rehearing and adopt an
approach similar to the approach taken
in Order No. 890, the Commission
considered the differences from the
approach set forth in Order No. 890. It
determined that these differences were
Associations’ similar argument couched as a request
for clarification.
857 The opportunities for delay that Invenergy
cites are associated with tasks that—particularly
compared to the conduct of an interconnection
study—are relatively straightforward: providing
notice of intent to conduct an affected system study
and a non-binding cost estimate and schedule for
that study. See id. It is therefore not apparent that
there should be significant delays associated with
these tasks as a general matter, and we will not
presume that affected systems will tactically delay
such tasks to avoid triggering other deadlines. If
such delays arise we may consider further action.
858 See, e.g., pro forma LGIP sections 3.1, 3.4, 3.6.
859 Order No. 2023, 184 FERC ¶ 61,054 at P 1025.
860 Even assuming that one or more of these
alternative approaches might also address the
problem of late interconnection studies contributing
to interconnection queue backlogs, leading to unjust
and unreasonable rates, this does not demonstrate
that the deadline and penalty structure in Order No.
2023 is not just and reasonable. See Petal Gas
Storage, LLC v. FERC, 496 F.3d 695, 703 (D.C. Cir.
2007) (‘‘[The Commission]is not required to choose
the best solution, only a reasonable one.’’);
ExxonMobil Oil Corp. v. FERC, 487 F.3d 945, 955
(D.C. Cir. 2007) (‘‘We need not decide whether the
Commission has adopted the best possible policy as
long as the agency has acted within the scope of its
discretion and reasonably explained its actions.’’);
Midwest Indep. Transmission Sys. Operator, Inc.,
127 FERC ¶ 61,109, at P 20 (2009) (‘‘It is well
established that there can be more than one just and
reasonable rate . . . .’’).
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warranted,861 and—on rehearing—we
affirm that conclusion. The study delay
penalty structure appropriately
responds to the problem of
interconnection study delays
contributing to unjust and unreasonable
rates by creating strong, direct, and clear
incentives on transmission providers
while recognizing that the value of
interconnection studies is related to
their timeliness. Moreover, given that
interconnection study delays are already
a significant and widespread problem,
we find that it would not be appropriate
to further delay imposing meaningful
incentives while we further ‘‘monitor
for chronic study delays’’ 862 by
individual transmission providers.
Likewise, we find that ‘‘updating and
enhancing [Order No. 845’s] reporting
requirements’’ to ‘‘create even more
transparency,’’ as NYISO urges,863 or
that, instead of imposing deadlines
supported by penalties, the Commission
simply provide ‘‘specified timeframes to
complete certain tasks during studies’’
as EEI suggests,864 would not be
sufficient to address the problem of
interconnection queue backlogs and
repeatedly delayed interconnection
studies.865
442. We also decline AEP’s request to
expand appeal rights beyond the
transmission provider that is directly
assigned the penalty. In instances where
an RTO/ISO incurs a penalty and seeks
to recover the cost of that penalty from
transmission-owning members, such
transmission owners would have the
right to intervene in any proceeding
under FPA section 205 or file a
complaint challenging the recovery of
that penalty cost under FPA section 206,
as appropriate. We believe that this
adequately protects the interests of
861 See Order No. 2023, 184 FERC ¶ 61,054 at P
1013 (noting that interconnection studies ‘‘are more
numerous, complex, and susceptible to delays’’ and
‘‘there is a growing number of interconnection
customers affected by study delays. We believe that
these factors underscore the need for transmission
providers to meet study deadlines and the need to
provide an incentive, in the form of study delay
penalties’’); id. P 1025.
862 MISO TOs Rehearing Request at 36.
863 NYISO Rehearing Request at 21.
864 EEI Rehearing Request at 9.
865 See Order No. 2023, 184 FERC ¶ 61,054 at P
1025; supra PP 281–282 (explaining that the
Commission’s previous efforts to address
interconnection queue backlogs through Order No.
845’s reporting requirements have not been
sufficient to remedy this problem, which has
worsened since those efforts were undertaken). The
Commission has already addressed NYISO’s
suggestion that ‘‘the Commission could allow
individual RTO/ISO regions to propose alternative
rules as independent entity variations in their Order
No. 2023 compliance filings.’’ NYISO Rehearing
Request at 20–21; see Order No. 2023, 184 FERC
¶ 61,054 at P 1764. We do not, and cannot, prejudge
whether such requested variations will be
acceptable.
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transmission-owning members of RTOs/
ISOs.
443. MISO argues that the
Commission should modify the
transition period to account for delays
in clusters that pre-date the effective
date of Order No. 2023 and can cause
backlogs that will affect future studies,
claiming that this modification is
necessary because delays in prior study
clusters may affect studies in future
clusters.866 According to MISO, it must
be allowed to ‘‘clear all pre-effective
date ‘baked-in’ delays before penalties
begin’’ in order to avoid ‘‘statutory
retroactive effects by penalizing RTOs
based on delays that occur prior to its
effective date.’’ 867 We do not agree.
Order No. 2023 is directed toward
future cluster studies, and—in fact—
already provides a generous transition
period to adapt and address existing
backlogs, as a matter of ensuring that the
impacts of the deadline and penalty
structure are not unduly burdensome or
punitive. It is not clear to us how the
prospective application of penalties to
the third cluster study cycle after a
transmission provider’s compliance
filing becomes effective implicates
concerns about retroactivity or the filed
rate doctrine.868 More generally, all
transmission providers, including
RTOs/ISOs, retain the option to argue
on compliance why their particular
circumstances warrant variations from
Order No. 2023 using the appropriate
standard.
vii. Requests for Clarification
(a) Summary of Requests for
Clarification
444. AEP asks the Commission to
clarify that the study delay penalties
will not incur interest prior to
distribution of the penalty funds and
that the entity (i.e., transmission
provider or transmission owner)
conducting the study will have no
obligation to pay interest on study delay
penalties.869
866 See
MISO Rehearing Request at 15–16.
at 16.
868 Neither of the cases MISO cites supports the
notion that, where the Commission regulates future
activity, retroactivity and filed rate concerns may
arise simply because pre-existing facts might
influence the ease of compliance with the
Commission’s forward-looking regulation. See Ark.
La. Gas Co. v. Hall, 453 U.S. 571, 573 (1981)
(considering whether the filed rate doctrine
‘‘forbids a state court to calculate damages in a
breach-of-contract action based on an assumption
that had a higher rate been filed, the Commission
would have approved it’’); Old Dominion Elec.
Coop. v. FERC, 892 F.3d 1223, 1226 (D.C. Cir. 2018)
(affirming Commission decision that it could
‘‘waive provisions of the governing tariff
retroactively so that [Old Dominion] could recover
its costs’’).
869 AEP Rehearing Request at 21.
867 Id.
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445. Joint RTOs ask the Commission
to clarify that Order No. 2023’s onephase cluster study was not intended to
require RTOs or others that conduct
multiple system impact studies in a
multi-phase study process (e.g., MISO,
SPP, and PJM) to impose penalties for
each delayed system impact study on an
individual basis.870 They argue that an
RTO with a multi-phase interconnection
process should be allowed to propose
on compliance that the penalty for
delayed interconnection studies will be
assessed based on whether the RTO has
complied with the aggregate timeline
provided for all of the system impact
studies in a cluster.871 They also seek
clarification from the Commission that,
in establishing study completion
timelines in their tariffs (to the extent
such timelines do not already exist),
they may propose specific factors they
would apply in assessing the
complexity of individual clusters for the
purposes of establishing such timelines
and the application of penalties for
exceeding such timelines.872
446. Joint RTOs and PJM seek
clarification that all penalties for
delayed studies will apply on a per
cluster basis, per business day rather
than per interconnection customer in
the cluster, per business day.873
447. Joint RTOs ask the Commission
to clarify that the RTO/ISO penalty
recovery options provided in Order No.
2023 are not mutually exclusive, nor
intended to be an exhaustive list, and
that an RTO/ISO may propose using a
combination of such options.874 They
also ask the Commission to clarify that,
where interconnection customers
contributed to the study delay, any
resulting penalty may be collected from
such interconnection customers under
the penalty collection mechanism(s)
that an RTO/ISO may adopt pursuant to
Order No. 2023 and that an RTO/ISO
may propose to limit any penalty
distribution to those interconnection
customers that have not contributed to
a study delay. In addition, Joint RTOs
ask the Commission to clarify that, in
cases where a transmission-owing
member(s) conducted the late study, the
tariff mechanisms by which payments
flow can be addressed in individual
compliance filings where transmission
providers can account for their regional
processes. Lastly, Joint RTOs ask the
Commission to clarify that RTOs/ISOs
870 Joint
RTOs Rehearing Request at 10.
at 10–11 (noting that in its three-phase
study process, MISO is required to complete a
preliminary, revised, and final system impact study
in 65, 75, and 50 calendar days, respectively).
872 Id. at 12.
873 Id.; PJM Rehearing Request at 28.
874 Joint RTOs Rehearing Request at 13–14.
871 Id.
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are not required to collect any penalty
prior to concluding the appeals process
under section 3.9(3) of the pro forma
LGIP.
448. NYTOs request clarification that
Order No. 2023’s prohibition against
transmission owners recovering delay
penalties in rates does not preclude a
transmission owner from recovering
such penalty costs that were caused by,
and initially assessed to, the RTO/
ISO.875
449. NYISO asks the Commission to
clarify that Order No. 2023 authorizes
RTOs/ISOs to recover study penalty
costs from consumers without first
seeking the Commission’s permission,
so long as they do so through nontransmission-related charges, such as
administrative fees assessed against
market participants.876
450. NYISO asks the Commission to
clarify that the Commission will allow
penalty waivers when a transmission
provider is not solely responsible for a
study delay 877 or in cases where
identifying the extent to which different
parties are to blame for a late study
would be difficult and timeconsuming.878 NYISO also asks the
Commission to clarify that reasonable
penalty waiver requests will be
compatible with its traditional fourprong waiver analysis.879
451. NYISO requests clarification that
RTOs/ISOs may include study penalty
cost recovery proposals in their
individual compliance filings.880
Specifically, it asks the Commission to
clarify that ‘‘default structure’’ penalty
cost recovery proposals may be
included in Order No. 2023 compliance
filings in addition to FPA section 205
filings.881 NYISO argues that the
Commission has traditionally afforded
875 NYTOs Rehearing Request at 29 (arguing that
‘‘[t]ransmission providers’ investors should not bear
such third-party risks and costs, especially when
they have no ownership stake in the non-profit
RTO/ISO,’’ and that ‘‘forcing such a burden
breaches basic cost causation principles, is arbitrary
and capricious, and is an uncompensated taking’’).
876 NYISO Rehearing Request at 26.
877 Id. at 40 (for example, if it were shown that
interconnection customers substantially caused a
study delay with transmission owners and/or an
RTO/ISO playing comparatively smaller roles or
other potentially likely scenarios).
878 Id. at 41 (arguing that it would be better for
all parties and the Commission to avoid complex
contested appeal proceedings).
879 Id. (for example, if a study delay impacts
numerous interconnection customers, that will not
mean that a waiver request would be denied
because it is ‘‘not limited in scope’’).
880 Id. at 41–42.
881 Id. at 42 (explaining that, because it must
obtain super majority stakeholder approval to
submit tariff revisions under FPA section 205, it
and other similarly situated RTOs/ISOs would be
prevented from filing ‘‘default structure’’ recovery
mechanisms if a minority of their stakeholders
opposed them).
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beyond the tariff-specified deadline will
incur a penalty of $1,000 per business
day; delays of cluster restudies beyond
the tariff-specified deadline will incur a
penalty of $2,000 per business day;
delays of affected system studies beyond
the tariff-specified deadline will incur a
penalty of $2,000 per business day; and
delays of facilities studies beyond the
tariff-specified deadline will incur a
(b) Determination
penalty of $2,500 per business day.885
452. We grant AEP’s request for
455. We grant Joint RTOs’ request for
clarification regarding the mutual
clarification that study delay penalties
exclusivity of RTO/ISO penalty recovery
will not incur interest prior to
options and reiterate that Order No.
distribution of the penalty funds and
that the entity conducting the study (i.e., 2023 did not require adoption of any
specific RTO/ISO penalty recovery
transmission provider or transmission
mechanism. Order No. 2023 recognized
owner) will have no obligation to pay
that RTOs/ISOs have several options for
interest on study delay penalties.
collecting study delay penalties, such as
Assessing interest during the pendency
submitting FPA section 205 filings to
of an appeal could be viewed as
penalizing the transmission provider for seek recovery for study delay penalties
from transmission owners contributing
making the appeal, particularly to the
to study delays or proposing to either
extent that the transmission provider
establish a tariff mechanism for
does not control the timeline for
assigning costs generally or for assigning
resolution of the appeal.
costs for specific study delay
453. We deny requests for
penalties.886 These options were not
clarification of how the penalty process
intended to be mutually exclusive or
would apply to RTOs/ISOs with multiexhaustive; rather, the Commission
phase interconnection procedures that
recognized RTOs/ISOs’ flexibility to
include multiple sequential cluster
propose penalty recovery mechanisms
studies. Order No. 2023 did not
that work for their regions.
contemplate such sequential phased
456. We deny Joint RTOs’ request to
cluster study procedures: thus, any such
clarify that, where interconnection
procedures and attendant penalty
customers contribute to a study delay,
processes are outside the scope of the
any resulting penalty may be collected
rule. However, the Commission
from such interconnection customers
recognized that many transmission
under the penalty collection
providers have adopted or are in the
mechanisms that an RTO/ISO may
process of adopting similar reforms to
adopt pursuant to Order No. 2023.
those adopted in Order No. 2023 and
Indeed, the Commission explicitly
noted that it did not intend to disrupt
stated in Order No. 2023 that it
these ongoing transition processes.883
‘‘decline[d] to allow any transmission
On compliance, transmission providers
provider to recover study delay
can propose deviations from the
requirements adopted in Order No. 2023 penalties from interconnection
customers to the extent the
and demonstrate how those deviations
interconnection customers cause
meet the relevant standard.884
delays.’’ 887 We note, however, that to
454. We grant requests for
the extent that study delays result from
clarification that all penalties for
an interconnection customer’s actions,
delayed studies will apply on a pertransmission providers may record the
study basis, per business day that the
length of those delays and report that
study is delayed past the tariff-specific
information in any appeal of study
deadline, rather than per
delay penalties filed with the
interconnection customer. As noted in
Order No. 2023, delays of cluster studies Commission.888 Further, in the event
that an interconnection request is
882 Id. at 43.
incomplete or an interconnection
883 Order No. 2023, 184 FERC ¶ 61,054 at P 1765.
customer misses a deadline, those
884 Id. PP 1764–1765 (citing Order No. 2003, 104
interconnection requests are subject to
FERC ¶ 61,103 at P 825; Order No. 2006, 111 FERC
the withdrawal provisions of pro forma
¶ 61,220 at PP 546–547; Order No. 845, 163 FERC
LGIP section 3.7.
¶ 61,043 at P 43 (explaining that a transmission
457. We deny Joint RTOs’ request to
provider that is not an RTO/ISO that seeks a
variation from the requirements of the final rule
clarify that an RTO/ISO may propose to
RTOs/ISOs considerable flexibility
regarding the scope of compliance
filings made in response to major new
rules and that it would be unduly
discriminatory for the Commission to
leave RTOs/ISOs that need stakeholder
approval to file tariff revisions with less
ability to recover study penalty costs
than those that do not.882
must present its justification for the variation as
consistent with or superior to the pro forma LGIA
or pro forma LGIP); Order No. 2003, 104 FERC
¶ 61,103 at P 826 (‘‘[w]ith respect to an RTO or ISO
. . . we will allow it to seek ‘independent entity
variations’ from the Final Rule . . .)).
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885 Order
No. 2023, 184 FERC ¶ 61,054 at P 973.
P 998.
887 Id. P 993.
888 See id. P 1019.
886 Id.
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limit any penalty distribution to those
interconnection customers that have not
contributed to a study delay. We note
that we agree with the principle that
interconnection customers who
contribute to study delays should not
benefit from penalty payments the same
as other interconnection customers who
were affected by, but did not contribute
to, the delayed study. However, the
appeals process established by Order
No. 2023 provides a strong safeguard
against that scenario. Specifically,
transmission providers will be able to
appeal any penalties to the Commission
and show that there is good cause to
grant relief from such penalties. As
Order No. 2023 noted, to the extent that
study delays result from an
interconnection customer’s actions,
transmission providers may record the
length of those delays and report that
information in any appeal of study
delay penalties filed with the
Commission.889 Thus, if the record
shows that a study delay is caused
solely by the actions or inactions of
interconnection customers, the
Commission is likely to grant relief from
that penalty, meaning that there will be
no penalty to distribute to
interconnection customers.
458. We recognize that a study delay
might be caused only in part by an
interconnection customer and in part by
the actions of the transmission provider,
in which case the transmission provider
could incur a penalty that would then
be distributed to all interconnection
customers affected by the delay. Even
so, we provide two reasons why the atfault interconnection customer in that
situation would likely still not benefit
from penalty payments. First,
interconnection customers that
contribute to study delays, for example
because they fail to timely submit
information needed to commence a
study, are not likely to remain in the
queue past the missed study deadline.
This is because all interconnection
customers have strict deadlines during
the study process and, as Order No.
2023 noted, if an interconnection
customer fails to adhere to all
requirements in the pro forma LGIP
(except in the case of disputes), the
transmission provider may deem the
interconnection customer’s
interconnection request to be
withdrawn pursuant to section 3.7 of
the pro forma LGIP, in which case they
would be ineligible to receive study
delay penalty payments. Second, in the
unlikely scenario that interconnection
customers that contribute to study
delays remain in the queue past the
889 Id.
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missed study deadline, and a study
penalty is incurred by the transmission
provider, the transmission provider
would be able to provide, in an appeal
to the Commission, facts sufficient to
assess the length of the delay caused by
the interconnection customers, because
any missed LGIP deadlines and
subsequent delays should be welldocumented. Thus, the Commission
could, for example, reduce the penalty
by the length of the delay (in business
days) that is attributable to the
interconnection customers. In this case,
the penalty distributed to all
interconnection customers would
exclude the number of business days the
study was delayed due to the actions of
the at-fault interconnection customers
and would only be calculated based on
the number of business days the study
was delayed due to the actions of the
transmission provider. In this fashion,
the interconnection customers that
contributed to the delay would not
benefit from their contributions to the
study delay.
459. For these reasons, we believe that
the burden of establishing such a
penalty distribution limitation would
outweigh the benefit. This process
would create additional litigation
around penalties beyond the established
appeals process, which would take up
more of the parties’ and Commission’s
resources. As discussed above, given the
low likelihood that interconnection
customers who contribute to study
delays would be eligible for distribution
of the penalty amount assessed for such
delays, we do not find that the
additional administrative burden is
warranted.
460. We deny Joint RTOs’ request for
clarification that, in cases where the
transmission-owning member(s)
conducted the late study, the
mechanisms by which payments flow
can be addressed in individual
compliance filings where transmission
providers can account for their regional
tariff processes. In Order No. 2023, the
Commission adopted 18 CFR
35.28(f)(1)(ii) to specify that, for RTOs/
ISOs in which the transmission-owning
members perform certain
interconnection studies, the study delay
penalties under the new pro forma LGIP
will be incurred directly by the
transmission-owning member(s) that
conducted the late study, thereby
mooting the issue of how RTOs/ISOs
recover those specific penalties. RTOs/
ISOs will thus not be required to make
any filings establishing how late study
penalty payments flow from at-fault
transmission owners. However, we note
that RTOs/ISOs may explain specific
circumstances on compliance and
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27085
justify any deviations under the
independent entity variation standard.
461. We grant Joint RTOs’ request for
clarification that transmission providers
are not required to collect or earmark
any late study penalty prior to
concluding the appeals process under
section 3.9(3) of the pro forma LGIP. We
agree that this is not required because
collecting or earmarking study penalties
before the appeals process runs its
course would be administratively
burdensome and could entail
unnecessary refund processes.
462. In response to NYISO’s request
for clarification that the Commission
will entertain requests for appeal of a
penalty in various situations, we clarify
that the Commission did not limit the
evidence that a transmission provider
might present in its appeal. The
Commission will evaluate each appeal
on a case-by-case basis and determine
whether good cause has been shown to
grant relief from any applicable
penalties.
463. We deny NYISO’s request for
clarification that reasonable penalty
waiver requests will be compatible with
the Commission’s traditional four-prong
waiver analysis. The four-prong waiver
analysis will not be the relevant
standard used in the penalty appeals
process; rather, as the Commission
made clear in Order No. 2023, the
Commission will evaluate whether good
cause exists to grant relief from the
study delay penalty and will issue an
order granting or denying relief.890 We
continue to find that the good cause
standard provides an adequate
framework through which the
Commission can evaluate whether it is
appropriate to grant relief from any
applicable penalties.
464. We deny NYISO’s request to
clarify that ‘‘default structure’’ penalty
cost recovery proposals may be
included in Order No. 2023 compliance
filings in addition to FPA section 205
filings. Order No. 2023 declined to
adopt the NOPR proposal to require
RTOs/ISOs to submit requests to recover
the costs of specific study delay
penalties; instead, Order No. 2023 stated
that RTOs/ISOs may make such filings
under FPA section 205 in the future if
they choose.891 We find it inappropriate
to invite such proposals on compliance
because the Commission did not make
an FPA section 206 finding that any
such default penalty structure would be
just, reasonable, and not unduly
discriminatory or preferential. In
response to NYISO’s concerns about
obtaining majority stakeholder approval
890 Id.
891 Id.
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P 994.
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for FPA section 205 filings, we note
that, to the extent it is concerned that
the lack of a mechanism for the
transmission provider to recover the
costs of delay penalties renders its tariff
unjust and unreasonable, NYISO has the
opportunity to file an FPA section 206
complaint.
465. We deny NYTOs’ request to
clarify that Order No. 2023’s prohibition
against transmission providers
recovering delay penalties in rates does
not preclude a transmission owner from
recovering such penalty costs that were
caused by, and initially assessed to, the
RTO/ISO. NYTOs are concerned that
RTOs/ISOs will pass penalties to
transmission owner members when
those providers are not responsible for
a delay. We find this concern premature
because the Commission does not yet
have before it any FPA section 205
proposals by an RTO/ISO to recover the
costs of study delay penalties. We
continue to find that concerns about any
RTO/ISO proposal to recover the costs
of study delay penalties are best
addressed on a case-by-case basis in the
relevant FPA section 205
proceedings.892
2. Affected Systems
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a. Affected Systems Study Process
i. Order No. 2023 Requirements
466. In Order No. 2023, the
Commission adopted an affected system
study process and added several related
definitions to the pro forma LGIP.893
The Commission found that a detailed
affected system study process in the pro
forma LGIP would: (1) prevent the use
of ad hoc approaches that may give rise
to interconnection customers being
treated in an unjust, unreasonable, and
unduly discriminatory or preferential
manner; (2) provide interconnection
customers greater certainty regarding
expectations throughout the
interconnection process, including
greater cost certainty, which will lead to
fewer late-stage withdrawals and fewer
delays; (3) ensure that the affected
system study process moves along
expediently, providing clarity, cost
certainty, and increased transparency
throughout the study process, which
will minimize opportunities for undue
discrimination, through firm affected
system study deadlines; and (4) ensure
that interconnection customers are able
to interconnect to the transmission
system in a reliable, efficient,
transparent, and timely manner.
467. The Commission adopted several
definitions in section 1 of the pro forma
892 Id.
893 Id.
P 996.
P 1110.
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LGIP related to the affected system
reforms, specifically, ‘‘affected system
facilities construction agreement,’’
‘‘affected system interconnection
customer,’’ ‘‘affected system network
upgrades,’’ ‘‘affected system queue
position,’’ ‘‘affected system study,’’
‘‘affected system study agreement,’’
‘‘affected system study report,’’
‘‘multiparty affected system facilities
construction agreement,’’ and
‘‘multiparty affected system study
agreement.’’ 894
468. The Commission adopted section
3.6.1 (Initial Notification) of the pro
forma LGIP, which requires the
transmission provider to notify the
affected system operator within 10
business days of the first instance of an
identified potential affected system
impact, which may occur at the
completion of either the cluster study or
the cluster restudy.895
469. The Commission next adopted
several requirements for the
transmission provider when it is acting
as the affected system transmission
provider (i.e., when the transmission
provider is studying the impacts on its
own transmission system of proposed
interconnections to other transmission
providers’ transmission systems) in pro
forma LGIP section 9 (Affected System
Study).896 First, the Commission
adopted section 9.2 (Response to Initial
Notification) of the pro forma LGIP,
which requires the affected system
transmission provider to respond to
notification of a potential affected
system impact in writing within 20
business days indicating whether it
intends to conduct an affected system
study.897 Section 9.2 also requires that,
within 15 business days of the affected
system transmission provider’s
affirmative response of its intent to
conduct an affected system study, the
affected system transmission provider
must share a non-binding good faith
estimate of the cost and schedule to
complete the affected system study.
470. The Commission next adopted
section 9.3 (Affected System Queue
Position) of the pro forma LGIP.898
Under section 9.3, the interconnection
requests of affected system
interconnection customers that have
executed an affected system study
agreement will be higher-queued than
the interconnection requests of those
894 Id.
P 1112; see pro forma LGIP section 1.
No. 2023 184 FERC ¶ 61,054 at P 1119;
see pro forma LGIP section 3.6.1.
896 Order No. 2023, 184 FERC ¶ 61,054 at P 1113;
see pro forma LGIP section 9.1.
897 Order No. 2023, 184 FERC ¶ 61,054 at P 1120;
see pro forma LGIP section 9.2.
898 Order No. 2023, 184 FERC ¶ 61,054 at P 1138;
see pro forma LGIP section 9.3.
895 Order
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host system interconnection customers
that have not yet received their cluster
study results, and lower-queued than
those interconnection customers that
have already received their cluster study
results. All affected system
interconnection requests studied within
the same affected system cluster will be
equally queued.
471. The Commission next adopted
section 9.4 (Affected System Study
Agreement/Multiparty Affected System
Study Agreement) of the pro forma LGIP
to require that the transmission provider
tender the affected system study
agreement within 10 business days of
sharing the schedule for the study with
the affected system interconnection
customers.899 Section 9.4 also requires
the affected system interconnection
customer to compensate the affected
system transmission provider for the
actual costs of the affected system study,
and the difference between the affected
system study deposit and actual cost of
the affected system study will be
detailed in an invoice and paid by or
refunded to the affected system
interconnection customer within 30
calendar days of the receipt of such
invoice.900 An affected system
interconnection customer’s failure to
pay the difference between these
amounts will result in loss of that
affected system interconnection
customer’s affected system queue
position. Section 9.4 also requires that
the affected system transmission
provider notify the host transmission
provider of the affected system
interconnection customer’s breach of its
obligations under this section, should
such breach occur.901
472. The Commission next adopted
section 9.5 (Execution of Affected
System Study Agreement/Multiparty
Affected System Study Agreement) of
the pro forma LGIP, which provides the
affected system interconnection
customer with 10 business days from
the date of receipt of the affected system
study agreement to execute and deliver
it to the affected system transmission
provider.902 Section 9.5 also provides
that, if the affected system
interconnection customer does not
provide all required technical data
when it delivers the affected system
study agreement, the affected system
transmission provider shall notify the
affected system interconnection
customer of the deficiency within five
business days of the receipt of the
899 Order No. 2023, 184 FERC ¶ 61,054 at P 1154;
see pro forma LGIP section 9.4.
900 Order No. 2023, 184 FERC ¶ 61,054 at P 1157.
901 Id. P 1159.
902 Id. P 1158; see pro forma LGIP section 9.5.
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affected system study agreement, and
the affected system interconnection
customer has 10 business days to cure
the deficiency after receipt of such
notice (provided that the deficiency
does not include failure to deliver the
executed affected system study
agreement or deposit).
473. The Commission next adopted
section 9.6 (Scope of Affected System
Study) of the pro forma LGIP, which
requires the affected system study to
consider the base case as well as all
higher-queued generating facilities on
the affected system transmission
provider’s transmission system and to
consist of a power flow, stability, and
short circuit analysis.903 Section 9.6 also
requires the affected system study to
provide a list of affected system network
upgrades that are required because of
the affected system interconnection
customer’s proposed interconnection, a
non-binding good faith estimate of cost
responsibility, and a non-binding good
faith estimated time to construct.
474. The Commission next adopted
section 9.7 of the pro forma LGIP
(Affected System Study Procedures),
which requires clustering of affected
system interconnection customers for
study purposes where multiple
interconnection requests that are part of
a single cluster in the host system’s
cluster study process cause the need for
an affected system study.904 Section 9.7
also requires the affected system
transmission provider to complete the
affected system study and provide the
affected system interconnection
customer with affected system study
results within 150 calendar days after
receipt of the affected system study
agreement. Section 9.7 also requires the
affected system transmission provider to
provide the affected system study report
to the host transmission provider at the
same time it provides the report to the
affected system interconnection
customer. The affected system
transmission provider must notify the
affected system interconnection
customer that an affected system study
will be late.905 Lastly, pro forma LGIP
section 9.7 requires affected system
transmission providers to study all
affected system interconnection requests
using ERIS modeling standards.906
475. The Commission added a new
section 11.2.1 to the pro forma LGIP
(Delay in LGIA Execution, or Filing
Unexecuted, to Await Affected System
903 Order
No. 2023, 184 FERC ¶ 61,054 at P 1160;
see pro forma LGIP section 9.6.
904 Order No. 2023, 184 FERC ¶ 61,054 at P 1133;
see pro forma LGIP section 9.7.
905 Order No. 2023, 184 FERC ¶ 61,054 at P 1135.
906 Id. P 1276.
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Study Report).907 Under this section, if
the interconnection customer does not
receive its affected system study results
before the deadline in its host system for
LGIA execution, or the deadline to
request that the LGIA be filed
unexecuted, the host transmission
provider must, at the interconnection
customer’s request, delay the deadline
for the interconnection customer to
finalize its LGIA.908 The
interconnection customer will have 30
calendar days after receipt of the
affected system study report to execute
the LGIA, or request that the LGIA be
filed unexecuted. Additionally, if the
interconnection customer prefers to
proceed to the execution of its LGIA, or
request that the LGIA be filed
unexecuted, before it has received its
affected system study results, it may
notify the host transmission provider of
its intent to proceed with the execution
of the LGIA, or request that the LGIA be
filed unexecuted.909 If the host
transmission provider determines that
further delay to the LGIA execution date
would cause a material impact on the
cost or timing of an equal- or lowerqueued interconnection customer, the
transmission provider must notify the
relevant interconnection customer of
such impact and establish that the new
deadline is 30 calendar days after such
notice is provided.
476. The Commission adopted section
9.8 of the pro forma LGIP (Meeting with
Transmission Provider), which requires
the affected system transmission
provider and the affected system
interconnection customer to meet
within 10 business days of the affected
system transmission provider tendering
the affected system study report to the
affected system interconnection
customer.910
477. The Commission adopted section
9.9 of the pro forma LGIP (Affected
System Cost Allocation), which requires
the allocation of affected system
network upgrade costs using a
proportional impact method in
accordance with pro forma LGIP section
4.2.1(1)(b).911
478. The Commission adopted section
9.10 of the pro forma LGIP (Tender of
Affected System Facilities Construction
Agreement/Multiparty Affected System
907 Id.
P 1123; see pro forma LGIP section 11.2.1.
interconnection customer that is not
awaiting the results of an affected system study
must proceed under the timelines set forth in pro
forma LGIP section 11.1.
909 Order No. 2023, 184 FERC ¶ 61,054 at P 1124.
910 Id. P 1169; see pro forma LGIP section 9.8.
911 Order No. 2023, 184 FERC ¶ 61,054 at P 1149;
see pro forma LGIP section 9.9.
27087
Facilities Construction Agreement).912
Under section 9.10, an affected system
transmission provider must tender an
affected system facilities construction
agreement to the affected system
interconnection customer within 30
calendar days of providing the affected
system study report. The affected
system transmission provider must
provide 10 business days after receipt of
the affected system facilities
construction agreement for the affected
system interconnection customer to
execute the agreement or have the
affected system transmission provider
file it unexecuted with the Commission.
479. The Commission adopted section
9.11 of the pro forma LGIP (Restudy) to
include a maximum 60-calendar day
restudy period for any affected system
restudies.913 Section 9.11 also adopts a
30-calendar day notification
requirement for the affected system
transmission provider to notify the
affected system interconnection
customer of the need for affected system
restudy upon discovery of such need.914
ii. Requests for Rehearing and
Clarification
480. Clean Energy Associations and
Invenergy ask the Commission to clarify
that there are deadlines for determining
that an affected system study will be
conducted.915 Clean Energy
Associations and Invenergy note that
Order No. 2023 requires transmission
providers to notify affected system
transmission providers of potential
affected system impacts at the
completion of the cluster study or
cluster restudy, and affected system
transmission providers have 20 business
days to determine whether or not to
conduct an affect system study.
However, Clean Energy Associations
and Invenergy state that it is unclear
whether an affected system may decline
to conduct an affected system study
after the initial notification but later
elect to conduct an affected system
study after the cluster restudy, even if
no new potential affected system impact
is found. Clean Energy Associations and
Invenergy argue that affected system
transmission providers may have an
incentive to perform affected system
studies as late as possible to: (1) give
priority to queue requests on their own
system; (2) avoid the volume of studies
created by restudies; or (3) reduce the
amount of necessary studies to reduce
908 Any
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912 Order No. 2023, 184 FERC ¶ 61,054 at P 1165;
see pro forma LGIP section 9.10.
913 Order No. 2023, 184 FERC ¶ 61,054 at P 1170;
see pro forma LGIP section 9.11.
914 Order No. 2023, 184 FERC ¶ 61,054 at P 1171.
915 Clean Energy Associations Rehearing Request
at 78–79; Invenergy Rehearing Request at 18–19.
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the risk of study delay penalties. Clean
Energy Associations and Invenergy
explain that interconnection customers
need to know as soon as possible if
affected system studies will be
performed and what the results of those
studies are. Clean Energy Associations
and Invenergy argue that, while it is
possible that new information about an
affected system impact could show up
when the host transmission provider
conducts its restudy (which would then
require the affected system to conduct
its own study), the affected system
should not be permitted to wait until
the restudy stage to make its
determination to perform studies unless
new information has been identified in
the restudy. Clean Energy Associations
and Invenergy therefore request
clarification that, if an affected system
declines to perform an affected system
study after the cluster study and host
transmission provider’s notification of
an impact on the affected system, the
affected system is not eligible to run a
study after the cluster restudy unless the
cluster restudy results in information
that was not identified in the initial
notification.
481. Clean Energy Associations and
Invenergy agree with Order No. 2023’s
directive that, if the interconnection
customer does not have the results of
the affected system study prior to
finalizing the LGIA, the interconnection
customer may request that the host
transmission provider delay finalizing
the LGIA.916 However, Clean Energy
Associations and Invenergy argue that a
host transmission provider should not
be able to reject that request if it
determines that delaying the LGIA
pending completion of the affected
system study would materially impact
the cost or timing of equal or lowerqueued interconnection customers.
Clean Energy Associations and
Invenergy explain that, when an
interconnection customer executes its
LGIA, it should be able to rely on those
costs and other agreement provisions
without significant changes, and that
allowing the host transmission provider
to reject requests for delaying LGIA
execution is directly at odds with the
Commission’s goal of ensuring that
interconnection customers have
adequate time to evaluate their costs
prior to committing to the LGIA. When
the affected system costs are not known,
Clean Energy Associations and
Invenergy explain, it exacerbates the
cost uncertainty and late-stage upgrades
916 Clean Energy Associations Rehearing Request
at 79; Invenergy Rehearing Request at 4 (both citing
Order No. 2023, 184 FERC ¶ 61,054 at PP 1124–
1125).
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that Order No. 2023 sought to
ameliorate.917 Further, they argue,
allowing the host transmission provider
alone to determine when the material
threshold is met creates potential for
undue discrimination. Therefore, Clean
Energy Associations and Invenergy
request that the Commission strike the
last sentence in revised pro forma LGIP,
section 11.2.1.
482. Clean Energy Associations and
Invenergy also seek clarification of pro
forma LGIP section 11.2.1, which states
that the interconnection customer is not
required to post security under the LGIA
and fund network upgrades if the
deadline for LGIA execution, or to
request that the LGIA be filed
unexecuted, is delayed.918 Clean Energy
Associations state that the ability to not
post security or fund network upgrades
should also apply when the host
transmission provider determines a
material impact from delay and requires
that the interconnection customer move
forward with LGIA execution. If the
Commission does not grant this request,
Clean Energy Associations and
Invenergy contend that the Commission
should clarify that, when an
interconnection customer is not allowed
to delay LGIA execution under the
material impact standard, the
interconnection customer will receive a
refund of the deposit upon deciding to
not move forward with the
interconnection after receiving the
affected system studies.
483. Duke Southeast Utilities ask for
clarification of the requirement for a
host transmission provider to notify an
affected system transmission provider
within 10 days of the completion of a
cluster study or restudy of potential
affected system impacts identified in the
study.919 Specifically, Duke Southeast
Utilities ask the Commission to clarify
the meaning of the ‘‘completion of’’ a
cluster study or restudy, referring to a
number of possible interpretations,
including: (1) the date stated on the
study report; (2) the date the report is
provided to interconnection customers;
(3) the date the report is posted to
OASIS; and (4) the date of the cluster
study report meeting. Duke Southeast
Utilities assert that a lack of clarity will
lead to lack of uniformity in how
transmission providers calculate their
10-day deadline. Further, Duke
Southeast Utilities note that, because
affected system transmission providers
have 20 days to decide whether to
917 Clean Energy Associations Rehearing Request
at 80; Invenergy Rehearing Request at 5.
918 Clean Energy Associations Rehearing Request
at 80–81; Invenergy Rehearing Request at 5–6.
919 Duke Southeast Utilities Rehearing Request at
2–4.
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conduct an affected system study, and
host transmission providers have 30
days after the cluster study report
meeting to decide whether to conduct a
cluster restudy, there is potential for an
affected system transmission provider to
have begun conducting an affected
system study before being notified that
the host transmission provider will
conduct a cluster restudy. Duke
Southeast Utilities request clarification
on whether an affected system
transmission provider may terminate an
affected system study once it learns of
the host transmission provider’s
restudy, or whether it must continue
with the affected system study. Duke
Southeast Utilities explain that
continuing an affected system study in
this case would cause affected system
interconnection customers to pay for an
unnecessary study.
484. Clean Energy Associations and
Invenergy ask for rehearing or
clarification with respect to the
exclusion of affected system network
upgrade costs from the penalty-free
withdrawal calculation in pro forma
LGIP section 3.7.1, which allows for
penalty-free withdrawal if the
withdrawal follows significant,
unanticipated increases in network
upgrade cost estimates.920 Clean Energy
Associations request rehearing and
argue that failing to include affected
system network upgrade costs in
withdrawal penalty exemption
calculations will discourage generating
facilities that experience significant cost
increases from withdrawing from the
interconnection process in a timely
way.921 Clean Energy Associations state
that an interconnection customer will be
incentivized to remain in the queue
despite significant cost increases from
the transmission provider and affected
system transmission provider in the
hopes that either other interconnection
customers withdraw, or other
conditions change such that the
generating facility faces reduced
network upgrade and affected system
network upgrade costs and becomes
financially viable again. Clean Energy
Associations further state that it is
unreasonable to penalize an
interconnection customer for
proceeding when its costs increase
dramatically due to affected system
interconnection study results. Clean
Energy Associations state that affected
system study results are not known at
the conclusion of the cluster study and
are also subject to errors or significant
920 Clean Energy Associations Rehearing Request
at 34; Invenergy Rehearing Request at 7.
921 Clean Energy Associations Rehearing Request
at 34–35.
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inaccuracies. Invenergy argues that the
differing treatment in withdrawal
penalties for host transmission system
studies versus affected system studies is
arbitrary and capricious and not a result
of reasoned decision-making.922
485. Clean Energy Associations and
Invenergy further argue that the
Commission erred by failing to set any
penalty-free withdrawal threshold based
upon costs identified in an affected
system study, which would result in
essentially uncapped liability for
interconnection customers.923
486. Clean Energy Associations and
Invenergy disagree with the
Commission’s statement that the use of
ERIS modeling standard to conduct
affected system studies should reduce
the number and total cost of affected
system network upgrades assigned to
affected system interconnection
customers.924 Clean Energy Associations
argue that the ERIS modeling standard
in no way guarantees a small number of
assigned affected system network
upgrades or total assigned network
upgrade costs to any one affected system
interconnection customer, and that
significant impacts can occur in both
large and small transmission systems.925
Invenergy similarly argues that the ERIS
modeling standard does not guarantee
fewer assigned costs, and that even if
using ERIS modeling decreases the
number of interconnection customers
receiving significant affected system
upgrade costs, the lack of penalty-free
withdrawal for when affected system
network upgrade costs remain
significant is unjust and
unreasonable.926 Invenergy states that
the Commission’s reasoning does not
ameliorate the differing treatment of
interconnection customers with
significant network upgrades and those
with significant affected system network
upgrades merely because significant
affected system upgrade costs might
occur less often.
487. Clean Energy Associations
request that the Commission match the
penalty-free withdrawal cost increase
thresholds for both the host and affected
systems at the facilities study phase at
50%.927 In the alternative, Clean Energy
Associations argue that the Commission
922 Invenergy
Rehearing Request at 7.
at 6; Clean Energy Associations Rehearing
Request at 31.
924 Clean Energy Associations Rehearing Request
at 33; Invenergy Rehearing Request at 7–8 (both
citing Order No. 2023, 184 FERC ¶ 61,054 at P
1151).
925 Clean Energy Associations Rehearing Request
at 33.
926 Invenergy Rehearing Request at 7–8.
927 Clean Energy Associations Rehearing Request
at 36.
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should allow penalty-free withdrawal
for interconnection customers based
upon the same 100% cost increase on
the affected system as on the host
transmission system. Invenergy requests
that the Commission modify pro forma
LGIP section 3.7.1 to include that an
interconnection customer may
withdraw penalty free after receiving
the affected system study and the
affected system network upgrade costs
identified in the report have increased
the interconnection customer’s costs by
more than 25% compared to the costs
assigned by the host system.928
Invenergy asserts that such modification
is consistent with MISO’s withdrawal
process, which progressively increases
when interconnection customers may
withdraw penalty free, including for
affected system network upgrade
costs.929
488. SPP states that the Commission’s
decision to require affected system
operators to study all interconnection
requests on neighboring systems using
the ERIS modeling standard is
unsupported.930 SPP argues that
limiting affected system transmission
providers to use of the ERIS standard
will result in significant equity issues
when certain generating facilities that
are deemed firm by one transmission
provider will not be required to mitigate
issues on another transmission
provider’s system unless they impact a
constraint at a level significantly higher
than internal generating facilities
requesting firm service. SPP asserts that
Order No. 2023 ignores this issue by
claiming to ensure that all affected
system interconnection customers are
studied similarly, while the root issue of
the inequity (i.e., the point at which
deliverability is determined) remains
unaddressed. SPP states that the
Commission’s rationalization, that
studying affected system impacts using
ERIS lowers affected system network
upgrade costs and makes requests less
likely to withdraw at a late stage,
conflicts with the Commission’s longstanding policy that interconnection
customers should be responsible for the
costs of all network upgrades that would
not be required ‘‘but for’’ their
interconnection.
489. SPP contends that the
Commission’s reliance on MISO’s use of
only ERIS in affected system studies
fails to recognize that SPP assesses
deliverability through the transmission
service process.931 As such, SPP asserts
that MISO has the opportunity to assess
the impacts on its system of firm
deliverability granted to generating
facilities on the SPP system through
transmission service study coordination.
SPP states that it does not get the same
opportunity as MISO, who determines
and grants deliverability on its own
system through its awarding of NRIS
during the interconnection process
without a subsequent request for
transmission service. SPP concludes
that the Commission’s failure to
recognize this problem renders Order
No. 2023 both discriminatory toward
interconnection customers in RTOs/
ISOs like SPP and arbitrary and
capricious.
490. Similarly, PJM asserts that,
because it studies affected system
interconnection customers to ensure
deliverability anywhere on PJM’s
transmission system, studying affected
systems interconnection customers
based on a lesser standard than that
applied to directly connected
interconnection customers would be
unduly discriminatory and inconsistent
with how PJM plans its transmission
system.932 PJM requests clarification
that the requirement for all affected
system studies to be performed using
ERIS will not apply to affected system
studies that PJM performs under the
interconnection reforms accepted by the
Commission in November 2022.
491. SPP notes that Order No. 2023
directly contradicts recent Commission
precedent holding that use of NRIS
modeling standards in affected system
studies is just and reasonable where the
interconnection customer requested
NRIS-level interconnection service on
the host transmission system.933 SPP
asserts that, by failing to acknowledge
its prior holdings and relying on a
blanket unsupported assertion that any
significant impact would generally be
captured by an ERIS study, the
Commission’s determination in Order
No. 2023 constitutes an arbitrary and
capricious departure from prior
precedent.
iii. Determination
492. In response to Clean Energy
Associations’ and Invenergy’s requests
for clarification that there are deadlines
for determining that an affected system
study will be conducted, we clarify that
there are such deadlines. Pursuant to
931 Id.
928 Invenergy
Rehearing Request at 9.
929 Id. at 9–10 (citing MISO, Open Access
Transmission, Energy and Operating Markets Tariff,
attach. X (Generator Interconnection Procedures
(GIP)) (161.0.0), § 7.6.2.4).
930 SPP Rehearing Request at 12–14.
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27089
at 14.
Rehearing Request at 24.
933 SPP Rehearing Request at 16–17 (citing
Tenaska Clear Creek Wind, LLC v. Sw. Power Pool,
Inc., 180 FERC ¶ 61,160 at P 62; EDF Renewable
Energy Inc. v. Midcontinent Indep. Sys. Operator,
Inc., 168 FERC ¶ 61,173, at P 86 (2019)).
932 PJM
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pro forma LGIP section 9.2, the affected
system transmission provider is
required to respond in writing within 20
business days of receipt of the initial
notification from the host transmission
provider that interconnection requests
may impact the affected system
transmission provider’s transmission
system. From the point of written
notification of the intention to conduct
the affected system study, the affected
system transmission provider then has
15 business days to share a non-binding
good faith estimate of the cost and
schedule to complete the affected
system study.
493. We reject Clean Energy
Associations’ and Invenergy’s requests
for clarification that, if an affected
system transmission provider declines
to perform an affected system study
after the cluster study and the host
transmission provider’s notification of
an impact on the affected system, the
affected system transmission provider is
ineligible to run a study after the cluster
restudy unless the cluster restudy
results in information that was not
identified in the initial notification. We
understand Clean Energy Associations’
and Invenergy’s concern to be that
affected system transmission providers
may have an incentive to perform
affected system studies as late as
possible, and therefore might decline to
conduct an affected system study after
the initial notification but later elect to
conduct an affected system study, even
if no new potential affected system
impact is found. We expect affected
system transmission providers to adhere
to the affected system study process
timelines prescribed in Order No. 2023.
We therefore expect that an affected
system transmission provider will
respond within 20 business days
following notification, pursuant to pro
forma LGIP section 9.2, if it intends to
conduct an affected system study based
on the initial host transmission provider
notification, and there is no need for the
further clarification requested.
494. We are not persuaded by Clean
Energy Associations’ request to strike
the last sentence of pro forma LGIP
section 11.2.1, which allows a
transmission provider to reject an
interconnection customer’s request for
extension of the deadline to execute its
LGIA (or request that the LGIA be filed
unexecuted) if the transmission
provider determines that such delay
would cause a material impact on the
cost or timing of an equal- or lowerqueued interconnection customer. We
also disagree with Invenergy’s assertion
that the material exception language in
pro forma LGIP section 11.2.1 makes
Order No. 2023 arbitrary and capricious
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and not the result of reasoned decisionmaking. We find that allowing a
transmission provider to determine
what constitutes a material impact on
interconnection customers in a single
cluster due to another interconnection
customer’s delay in LGIA execution
appropriately balances the benefits of
delay due to one interconnection
customer’s network upgrade cost
certainty with the potential burdens on
other interconnection customers in that
cluster as a result of such delay.
Allowing the transmission provider
discretion in determining what
constitutes a material impact provides a
necessary degree of flexibility for each
transmission provider. We disagree with
Clean Energy Associations that this
provision undermines the goal of LGIA
cost certainty for interconnection
customers because there is no
requirement for affected system network
upgrade costs to be known at the time
of LGIA execution: the costs included in
the LGIA are estimates and always
subject to true-up once final costs are
known, pursuant to pro forma LGIA
article 12.2 (Final Invoice). The goal is
a better estimate of costs at the time of
LGIA execution, and the material
impact language in pro forma LGIP
section 11.2.1 provides a check to
ensure a balance between multiple
interconnection customers’ competing
needs for certainty.
495. We reject Clean Energy
Associations’ and Invenergy’s requests
for clarification that the interconnection
customer should be exempt from the
requirement to post security or fund
network upgrades when the host
transmission provider determines a
material impact from delay and requires
that the interconnection customer
moves forward with LGIA execution.
We further disagree with Clean Energy
Associations’ assertion that we should
clarify that when an interconnection
customer is not allowed to delay LGIA
execution under the material impact
standard the interconnection customer
will receive a refund of the deposit
upon deciding to not move forward with
the interconnection after receiving the
affected system studies. Once an
interconnection customer executes an
LGIA, or requests that it be filed
unexecuted, it must fulfill its
obligations under the LGIA, which
include the requirements to provide
financial security and fund assigned
network upgrades.934 Similarly, an
interconnection customer that has
finalized its LGIA is not entitled to a
refund of its deposit.935 We note that the
934 See
935 See
PO 00000
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pro forma LGIP section 11.3.
Frm 00086
Fmt 4701
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transmission provider may only require
an interconnection customer to finalize
its LGIA, despite waiting for its affected
system study report, because it
materially impacts other
interconnection customers. Allowing an
interconnection customer to avoid its
financial responsibilities under a
finalized LGIA or to have its deposit
refunded upon withdrawal after it has
finalized its LGIA would nullify the
purpose of requiring the interconnection
customer to finalize its LGIA—to
provide greater certainty to other
interconnection customers that would
be materially impacted by the
interconnection request’s delay or
withdrawal. To the contrary, allowing
an interconnection customer to evade
these financial risks increases the
likelihood it proceeds to finalize its
LGIA although its proposed generating
facility may no longer be commercially
viable. The other materially impacted
interconnection customers, who, for
example, may share network upgrade
costs with the delayed interconnection
customer, would face greater risk of cost
increases or timing delays should the
delayed interconnection request later be
withdrawn, even as they are required to
finalize their LGIAs.936
496. In response to Duke Southeast
Utilities’ request for clarification of the
requirement for a host transmission
provider to notify an affected system
transmission provider within 10 days of
the completion of a cluster study or
restudy of potential affected system
impacts identified in the study, we
clarify that the meaning of the
‘‘completion of’’ a cluster study or
restudy is the date the cluster study
report or cluster restudy report is
provided to interconnection customers.
497. In response to Duke Southeast
Utilities’ request for clarification
regarding whether an affected system
transmission provider may terminate an
affected system study once it learns of
the host transmission provider’s restudy
or whether it must continue with the
affected system study, we clarify that an
affected system transmission provider
may pause an affected system study that
is planned or in progress if the host
transmission provider decides to
conduct a cluster restudy. We also
clarify that, if a host transmission
provider decides to conduct a cluster
restudy, then the affected system
transmission provider may delay the
affected system study until after the
completion of the cluster restudy,
following which the host transmission
provider will notify the affected system
transmission provider that the cluster
936 See
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restudy is complete and of any possible
affected system impacts. The cluster
restudy may result in further
withdrawals on the host transmission
system, which in turn, would impact
the affected system study results,
possibly resulting in an affected system
restudy. Allowing an affected system
transmission provider to delay the
affected system study in the event that
the host transmission provider is
conducting a cluster restudy will
prevent unnecessary studies, and
potentially cascading restudies, and the
resultant costs to interconnection
customers, in the affected system
transmission provider’s queue.
498. To ensure that the affected
system transmission provider is timely
informed of the host transmission
provider’s decision to conduct a cluster
restudy, we add to pro forma LGIP
section 3.6.2 (Notification of Cluster
Restudy) the requirement that the host
transmission provider notify any
relevant affected system operators of a
cluster restudy at the same time that it
notifies the interconnection customers
in the cluster restudy. Through this
modification, the affected system
transmission provider will receive
notification of the cluster restudy before
commencement or completion of a
planned or in-progress affected system
study and can use that information to
decide whether to move forward with
the affected system study or to delay the
affected system study until the host
transmission provider completes the
cluster restudy. We also add pro forma
LGIP section 9.2.2 (Response to
Notification of Cluster Restudy) to allow
the affected system transmission
provider five business days from
receiving notification of the cluster
restudy to send a written notification to
the relevant affected system
interconnection customers and the host
transmission provider if it intends to
delay commencement or completion of
a planned or in-progress affected system
study until after the completion of the
cluster restudy. If the affected system
transmission provider decides to delay
the affected system study, then it is not
required to perform its obligations
under pro forma LGIP section 9 until
the time that it receives notification
from the host transmission provider that
the cluster restudy is complete. In
contrast, if the affected system
transmission provider decides to move
forward with its affected system study
despite the cluster restudy, then it must
meet all obligations to proceed with the
affected system study process under pro
forma LGIP section 9.
499. Additionally, we modify pro
forma LGIP section 9.5 (Execution of
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Affected System Study Agreement/
Multiparty Affected System Study
Agreement) to remove the requirement
for an affected system interconnection
customer to execute and return its
previously received affected system
study agreement/multiparty affected
system study agreement and submit its
affected system study deposit if the
affected system transmission provider
decides to delay the affected system
study, pursuant to pro forma LGIP
section 9.2.2. We find this modification
necessary because the affected system
transmission provider will provide the
affected system interconnection
customer with a new affected system
study agreement/multiparty affected
system study agreement in this
circumstance, and the previously
tendered agreement will be moot.
500. We add a new pro forma LGIP
section 3.6.3 (Notification of Cluster
Restudy Completion) to require that,
upon the completion of the host
transmission provider’s cluster restudy,
the host transmission provider will
notify the affected system transmission
provider the completion of the cluster
restudy and of a potential affected
system impact caused by an
interconnection request within 10
business days of the completion of the
cluster restudy, regardless of whether
that potential affected system impact
was previously identified. At the time of
the notification of the completion of the
cluster restudy to the affected system
operator, the host transmission provider
must provide the interconnection
customer with a list of potential affected
systems, along with relevant contact
information.
501. Moreover, we clarify that, upon
the receipt of notification of any
potential affected system impacts from
interconnection customers in the cluster
restudy, the affected system
transmission provider must respond in
writing to such interconnection
customers within 20 business days
whether it intends to conduct an
affected system study. Accordingly, we
rename former pro forma LGIP section
9.2 (Response to Initial Notification) to
‘‘Response to Notifications’’ and move
the requirements into new section 9.2.1
(Response to Initial Notification). We
revise the requirements to clarify that an
affected system transmission provider’s
obligations under section 9.2.1 apply
whether in response to a notification
that an affected system interconnection
customer’s proposed interconnection to
its host transmission provider may
impact the affected system based on a
cluster study or a cluster restudy.
Finally, we revise a reference in pro
forma LGIP section 9.4 (Affected System
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27091
Study Agreement/Multiparty Affected
System Study Agreement) from section
9.2 to section 9.2.1.
502. We disagree with Clean Energy
Associations’ and Invenergy’s assertions
that Order No. 2023 was arbitrary and
capricious because it failed to allow
interconnection customers to withdraw
penalty-free from the interconnection
queue if such withdrawal follows
significant, unanticipated increases in
affected system network upgrade cost
estimates. Although the affected system
study process reforms seek to coordinate
the host system and affected system
studies, there is no guarantee that
affected system network upgrade costs
will be known even at the time of LGIA
finalization, particularly where the
affected system is non-jurisdictional
and, therefore, not governed by the pro
forma LGIP affected systems processes.
The possibility of a long lag between
delivery of host system facilities study
report and affected system study report
could lead to uncertainty for other
interconnection customers in the same
cluster who are not awaiting affected
system study reports and thus must
finalize their LGIAs pursuant to pro
forma LGIP section 11.2.1. Allowing
late-stage, penalty-free withdrawal for
interconnection customers after
potentially delayed receipt of the
affected system study report could
substantially harm those
interconnection customers who had to
finalize their LGIAs and share network
upgrade costs with the withdrawing
interconnection customer. Such a
practice of penalty-free withdrawal after
other interconnection customers in the
same cluster have finalized their LGIAs
would give greater weight to cost
certainty of a few interconnection
customers who are awaiting affected
system study results than to the many
interconnection customers who did not
impact an affected system and had to
finalize their LGIAs. Furthermore,
penalty-free withdrawal of
interconnection customers after they
have received their affected system
study results and after other
interconnection customers in the same
cluster have finalized their LGIAs could
lead to one of the very problems Order
No. 2023 sought to mitigate—cascading
withdrawals and restudies—which can
result in cost increases and delays,
which in turn can prompt further latestage withdrawals.937 It is, therefore,
more important for all interconnection
customers in a cluster to have greater
certainty that, once interconnection
customers decide whether to proceed
after the final facilities study report,
937 Order
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No. 2023, 184 FERC ¶ 61,054 at P 49.
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withdrawals are less likely, than for one
or few interconnection customers in a
cluster to have cost estimate certainty
inclusive of affected system study
results.
503. We expect that the affected
system study process reforms in Order
No. 2023 should reduce affected system
network upgrade costs. Specifically, as
Clean Energy Associations and
Invenergy point out, the Commission
stated in Order No. 2023 that the use of
ERIS to conduct affected system studies
should reduce the number and total cost
of affected system network upgrades
assigned to interconnection customers
with affected system impacts. We did
not, as Invenergy implies, state that the
use of ERIS in affected system studies
guarantees fewer assigned costs. As the
Commission noted in Order No. 2023,
interconnection customers inherently
assume some risk.938 Interconnection
customers will calculate that risk into
their decision as to whether to stay in
the queue following the receipt of their
facilities study reports, and we note that
interconnection customers are always
able to withdraw, pursuant to pro forma
LGIP section 3.7, if their project
becomes uneconomical based on
significant affected system network
upgrade costs. We also note that the
language in pro forma LGIP section
3.7.1 applies to network upgrades costs
assigned to the interconnection request,
and, because an affected system network
upgrade is a subset of network upgrades,
affected system network upgrade cost
estimates should be included in the
total cost increase if listed in the
facilities study report. In such a
situation, if the network upgrades costs
(including the affected system network
upgrade costs) in the facilities study
report were more than 100% higher
than the cluster study report, then the
interconnection customer may be
eligible for penalty-free withdrawals.
504. We are unpersuaded by Clean
Energy Associations’ and Invenergy’s
assertions that, even if ERIS modeling
decreases the number of interconnection
customers receiving significant affected
system network upgrades costs, this
does not ameliorate the differing
treatment between interconnection
customers with significant network
upgrades and those with significant
affected system network upgrades. An
interconnection customer that is
notified of significant network upgrades
and one that is notified of significant
affected system network upgrades are
not differently situated, as alleged,
because affected system network
upgrade costs may occur less often, but
938 Id.
P 1151.
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rather because of the timing within the
interconnection study process that such
notices occur, and the increased impacts
on other interconnection customers of
allowing for penalty-free withdrawal
late within that process. As discussed
above, because allowing late-stage,
penalty-free withdrawal for
interconnection customers after
potentially delayed receipt of the
affected system study report could
substantially harm those
interconnection customers who had to
finalize their LGIAs and share network
upgrade costs with the withdrawing
interconnection customer, the differing
requirements are justified.
505. We, therefore, are not persuaded
to extend penalty-free withdrawal
provisions to interconnection customers
for affected system network upgrade
cost increases beyond a certain
threshold. As noted, in the interest of
greater cost certainty for all
interconnection customers, we maintain
that penalty-free withdrawal
exemptions triggered by cost increases
above a certain threshold are not
applicable after the finalization of the
LGIA for any interconnection customers
in the same cluster, even an
interconnection customer that must
finalize its LGIA before receiving its
affected system study report. We also
disagree that the lack of penalty-free
withdrawal thresholds essentially
results in uncapped liability because the
interconnection customer may still
withdraw and face only the withdrawal
penalty.
506. We disagree with Clean Energy
Associations’ and Invenergy’s
arguments that failing to include
affected system network upgrade costs
in withdrawal penalty exemption
calculations will discourage generating
facilities that experience significant cost
increases from withdrawing from the
interconnection process in a timely
manner. As long as the interconnection
customer fulfills its obligations under
the pro forma LGIP, it may opt to stay
in the queue until it decides that its
project is uneconomical. If the
interconnection customer decides after
receiving its affected system study
report that significant cost increases
render its project uneconomical,
nothing in the pro forma LGIP prohibits
it from withdrawing from the queue at
that time. Moreover, if affected system
network upgrade costs were included as
a basis for withdrawal penalty-free in all
cases, this could encourage
interconnection customers waiting for
their affected systems study results to
remain in the queue, even if they have
determined that their proposed
generating facility is no longer
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commercially viable, because the
possibility of significant affected
systems network upgrade costs in such
study could allow for withdrawal
penalty-free.
507. We disagree with SPP’s assertion
that requiring affected system
transmission providers to use ERIS in
affected system studies will result in
significant equity issues because of the
differences in how neighboring
transmission providers study generators
requesting firm transmission service.
SPP states that each RTO/ISO evaluates
deliverability of resources pursuant to
its individual Commission-approved
processes and relies on the differences
between SPP’s and MISO’s
interconnection and transmission
service study processes as evidence for
its need to use NRIS for affected system
interconnection requests requesting
NRIS on their host system to ensure
deliverability. However, as the
Commission found in Order No. 2003
and reiterated in Order No. 2023,
interconnection service is an element of,
but separate from the delivery
component of, transmission service,
and, in the majority of circumstances,
interconnection alone is unlikely to
affect the reliability of an affected
system transmission provider’s
transmission system.939 Furthermore,
the differences between SPP’s and
MISO’s interconnection and
transmission study processes that SPP
describes do not undermine the bases
on which the Commission determined
that continuing to permit affected
system transmission providers to study
affected system interconnection
customers using NRIS assumptions
would allow unjust and unreasonable
rates to persist.940 A primary basis on
which the Commission found the ERIS
requirement just and reasonable is that
even when an interconnection customer
seeks NRIS on the host system, it does
not seek—and an affected system
transmission provider has no obligation
to continually ensure—deliverability on
the affected system.941 To instead
permit an affected system transmission
provider to use NRIS assumptions risks
939 Id. P 1288 (citing Order No. 2003, 104 FERC
¶ 61,103 at PP 118–120; Order No. 2003–A, 106
FERC ¶ 61,220 at P 113); see also Tenn. Power Co.,
90 FERC ¶ 61,238, at 61,761 (2000) (finding that
interconnection is an element of transmission
service but that the interconnection component of
transmission service may be requested separately
from the delivery component (i.e., interconnection
is distinct from transmission service)); see also
Fervo Energy Initial Comments at 6, Shell Initial
Comments at 32, Utah Municipal Power Initial
Comments at 6 (all stating that the use of ERIS in
affected system studies will reduce the assignment
of unnecessary network upgrades).
940 Id. P 1278.
941 Id. P 1277. See also infra n.1193.
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‘‘an affected system interconnection
customer [facing] increased costs
without a commensurate increase in
service.’’ 942 We continue to find that
adopting the ERIS requirement for
affected system transmission providers
will provide important benefits 943 even
where the details of study processes
may differ somewhat across
transmission providers, and that such
requirement is sufficient to capture
reliability impacts of affected system
interconnection requests on the affected
system.944
508. We similarly reject PJM’s request
for clarification that Order No. 2023’s
requirement for affected system
transmission providers to use ERIS
when conducting affected system
studies will not apply to PJM’s affected
system studies. We reject this
clarification because it is essentially a
request for the Commission to allow
PJM to deviate from the requirements
outlined in Order No. 2023 based on its
individual interconnection study
procedures. Consistent with the
Commission’s statements in Order No.
2023, transmission providers may
explain specific circumstances on
compliance and justify why any
deviations are either ‘consistent with or
superior to’ the pro forma LGIP or merit
an independent entity variation in the
context of RTOs/ISOs.945
509. We also disagree with SPP’s
assertion that the Commission’s
rationale for requiring ERIS conflicts
with the Commission’s long-standing
policy that interconnection customers
should be responsible for the costs of all
network upgrades that would not be
required ‘‘but for’’ their interconnection.
This policy only requires
interconnection customers to pay
initially the costs of network upgrades
942 Order
No. 2023, 184 FERC ¶ 61,054 at P 1278.
at PP 1278–1280 (identifying as benefits
that affected system interconnection customers (1)
will not be required to construct significant network
upgrades on the affected system while not receiving
deliverability on that system due to curtailment or
congestion on the affected system; (2) will not face
significant upfront costs to construct affected
system network upgrades, which could lead to latestage withdrawals given that interconnection
customers will not receive affected system study
results until late in the interconnection process; and
(3) will be studied in a consistent and transparent
manner across transmission provider regions, thus
avoiding potentially dramatically different affected
system network upgrades costs due to varying
modeling standards without any factual or service
differences to justify discriminatory treatment).
944 Id. PP 1285, 1290. As Order No. 2023
explained transmission providers may explain
specific circumstances on compliance and justify
why any deviations are either ‘‘consistent with or
superior to’’ the pro forma LGIP or merit an
independent entity variation in the context of
RTOs/ISOs. Id. P 1764.
945 Id.
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that would not have been needed but for
the interconnection of the
interconnection customer’s generating
facility.946 The Commission has not
defined a particular technical approach
that must be implemented in order to
reasonably capture these ‘‘but for’’
network upgrade costs; instead, the
Commission has accepted varying
approaches as just and reasonable and
not unduly discriminatory or
preferential.947 In Order No. 2023, the
Commission found that ‘‘any significant
impact would generally be captured by
an ERIS study’’ and such study would
‘‘ensure any reliability impacts on the
affected system are mitigated to
accommodate the affected systems
interconnection customer’s proposed
generating facility to the host
system.’’ 948 Accordingly, requiring use
of an ERIS study to assign affected
system network upgrades to affected
system interconnection customers does
not conflict with the Commission’s ‘‘but
for’’ pricing policy.
510. We disagree with SPP’s assertion
that the Commission’s reliance on
MISO’s use of ERIS in affected system
studies fails to recognize that SPP
assesses deliverability through the
transmission service process. Order No.
2023 relies on MISO’s use of ERIS in
affected system studies simply to
demonstrate that, as noted by MISO
itself, this requirement does not result
in reliability issues and will not cause
unnecessary curtailment or redispatch
on affected systems.949
511. We are unpersuaded by SPP’s
claim that the findings in Order No.
2023 contradict recent Commission
precedent holding that the use of NRIS
modeling standards in affected system
studies is just and reasonable where the
interconnection customer requested
NRIS-level interconnection service on
the host transmission system.950 While
946 Order No. 2003, 104 FERC ¶ 61,103 at P 694
(finding that ‘‘it is appropriate for the
Interconnection Customer to pay initially the full
cost of . . . Network Upgrades that would not be
needed but for the interconnection’’).
947 We note that MISO’s joint operating agreement
with SPP states that MISO will use ERIS to study
the impact of SPP’s interconnection customers on
MISO’s system. See Southwest Power Pool Inc.,
Rate and Schedules and Seams Agreement Tariff,
MISO–SPP Joint Operating Agreement, § 9.4
(Analysis of Interconnection Requests) § 9.4.d.iii
(7.0.0); Xcel Energy Servs., Inc. v. FERC, 77 F.4th
1057, 1064 (D.C. Cir. 2023) (finding that the plain
text of SPP’s Attachment Z2, Section II.B, was
ambiguous with respect to what methodology could
be used to calculate charges under the ‘‘but for’’
standard in the tariff).
948 Order No. 2023, 184 FERC ¶ 61,054 at P 1285.
949 Id. P 1285 (citing MISO Initial Comments at
98).
950 See Tenaska Clear Creek Wind, LLC v. Sw.
Power Pool, Inc., 180 FERC ¶ 61,160; EDF
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27093
the Commission previously allowed
affected system transmission providers
to justify their own approach to
selecting the modeling standard used to
evaluate affected system impacts, we
found in Order No. 2023 that the
assignment of significant affected
system network upgrades under an
NRIS study without a commensurate
increase in service would result in
unjust and unreasonable rates.951 This is
because the affected system
transmission provider has no obligation
to ensure that the output from an
affected system interconnection
customer’s generating facility is
integrated on the affected system similar
to generating facilities that serve the
affected system transmission provider’s
native load customers or network
resources.952 The Commission found
that the mismatch between costs and
services received would occur because
the affected system transmission
provider has no obligation to ensure that
the output from the affected system
interconnection customer’s generating
facility is studied so that it could be
integrated on the affected system similar
to generating facilities that serve the
affected system transmission provider’s
native load or customers and could lead
to curtailment of the generating facility
or there could be congestion on the
affected system preventing
deliverability of the generating facility’s
output.953 Thus, we sustain Order No.
2023’s finding that being assigned
significant affected system network
upgrades under an NRIS study, without
the obligation for the affected system
transmission provider to ensure that the
output from an affected system
interconnection customer’s generating
facility is integrated on the affected
system similar to generating facilities
that serve the affected system
transmission provider’s native load
customers or network resources, results
in unjust and unreasonable rates by
increasing the cost for affected system
interconnection customers without a
Renewable Energy Inc. v. Midcontinent Indep. Sys.
Operator, Inc., 168 FERC ¶ 61,173.
951 Order No. 2023, 184 FERC ¶ 61,054 at P 1288.
952 The pro forma LGIP defines NRIS service as
‘‘an Interconnection Service that allows the
Interconnection Customer to integrate its Large
Generating Facility with the Transmission
Provider’s Transmission System (1) in a manner
comparable to that in which the Transmission
Provider integrates its generating facilities to serve
native load customers; or (2) in an RTO or ISO with
market-based congestion management, in the same
manner as Network Resources. Network Resource
Interconnection Service in and of itself does not
convey transmission service.’’ Pro forma LGIP
section 1.
953 Order No. 2023, 184 FERC ¶ 61,054 at P 1278.
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commensurate increase in service.954
Given this finding, the Commission’s
previous permissiveness in allowing
transmission providers to justify their
own approach to affected system study
modeling criteria is no longer
appropriate.
512. Additionally, we note that the
issue raised in EDF Renewable Energy
Inc. v. Midcontinent Indep. Sys.
Operator, Inc. was not whether the use
of NRIS in affected system studies
results in just and reasonable and not
unduly discriminatory or preferential
treatment of affected system
interconnection customers. Rather, the
issue was whether lack of transparency
as to whether MISO, SPP, and PJM, as
affected system transmission providers,
would conduct affected system studies
using NRIS or ERIS standards results in
unjust and unreasonable rates. The
Commission addressed in its holding
the complainants’ core concerns
regarding transparency, finding, on the
record in that proceeding, that there was
not sufficient evidence to demonstrate
that current modeling practices in those
RTOs were unjust and unreasonable.955
In any event, the Commission has
sufficiently explained its evolution in
thinking, as discussed above.
i. Order No. 2023 Requirements
513. The Commission adopted several
pro forma agreements to improve the
efficiency and transparency of the
interactions among the parties during
the affected system study process. The
Commission first adopted a pro forma
affected system study agreement in new
Appendix 9 of the pro forma LGIP and
a pro forma multiparty affected system
study agreement in new Appendix 10 of
the pro forma LGIP.956 These pro forma
affected system study agreements
stipulate how to study the impact of
interconnecting generating facilities on
an affected system to identify network
upgrades needed to accommodate the
interconnection request. The
Commission next adopted a pro forma
affected system facilities construction
agreement in new Appendix 11 of the
ii. Requests for Rehearing and
Clarification
514. Duke Southeast Utilities take
issue with article 3.2.2.1 (Repayment) of
the pro forma affected system facilities
construction agreement, which states
that the affected system interconnection
customer shall be entitled to a cash
repayment of the amount it paid for any
affected system network upgrades.958
515. Duke Southeast Utilities state
that, despite conceding that the
repayment policy for affected system
network upgrades was a NOPR
proposal, the Commission declined to
address arguments on the merits of this
policy on the basis that the Commission
simply proposed to memorialize the
Commission’s existing policy in a pro
forma agreement for affected systems.959
Duke Southeast Utilities contend that
the Commission’s refusal to engage on
this critical question was wrong on the
law and renders this portion of Order
No. 2023 reversible error. Duke
Southeast Utilities state that the
Commission’s central argument is that
the cost allocation question is beyond
the scope of Order No. 2023 because the
Commission did not propose to change
its existing policy. Duke Southeast
Utilities assert that the Commission’s
‘‘existing policy’’ is the subject of
significant debate and ongoing litigation
in the courts.960 Duke Southeast
Utilities state that they have steadfastly
maintained that, before Order No. 2023,
there was no such existing policy that
required affected system operators to
reimburse distant interconnection
customers. Duke Southeast Utilities
explain that, first, because there was no
pro forma affected system facilities
construction agreement before now,
transmission owners fashioned their
own agreements and filed them with the
954 Id. P 1288; F.C.C. v. Fox Television Stations,
Inc., 556 U.S. 502, 536 (2009) (‘‘The question in
each case is whether the agency’s reasons for the
change, when viewed in light of the data available
to it, and when informed by the experience and
expertise of the agency, suffice to demonstrate that
the new policy rests upon principles that are
rational, neutral, and in accord with the agency’s
proper understanding of its authority.’’).
955 EDF Renewable Energy Inc. v. Midcontinent
Indep. Sys. Operator, Inc., 168 FERC ¶ 61,173 at P
86.
956 Order No. 2023, 184 FERC ¶ 61,054 at PP
1171, 1232; see pro forma LGIP, apps. 9, 10.
957 Order No. 2023, 184 FERC ¶ 61,054 at P 1233;
see pro forma LGIP, apps. 10, 11.
958 Duke Southeast Utilities Rehearing Request at
4.
959 Id. (citing Order No. 2023, 184 FERC ¶ 61,054
at PP 1211, 1244).
960 Id. at 5 (citing Duke Energy Progress, LLC v.
FERC, Petitions for Review, Case No. 21–1272, (D.C.
Cir., Dec. 27, 2021), Case No. 22–1072 (D.C. Cir.,
May 4, 2022), Case No. 22–1284 (D.C. Cir., Nov. 3,
2022), Case No. 22–1327 (D.C. Cir., Dec. 20, 2022);
Duke Energy Progress, LLC v. FERC, Petition for
Review, Case No. 23–1114 (D.C. Cir. Apr. 14,
2023)).
b. Affected System Pro Forma
Agreements
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pro forma LGIP and a pro forma
multiparty affected system facilities
construction agreement in new
Appendix 12 of the pro forma LGIP.957
These pro forma affected system
facilities construction agreements
standardize the terms and conditions
regarding construction of affected
system network upgrades.
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Commission. Duke Southeast Utilities
state that the Commission had routinely
accepted such affected system
agreements without reimbursement
provisions, which it clearly would not
have done if such filed agreements
violated an ‘‘existing policy’’ of the
Commission.961
516. Duke Southeast Utilities explain
that, second, while the Commission has
claimed that Order No. 2003 and the
LGIA contain a requirement that
affected system operators reimburse
distant interconnection customers, the
Commission was equally clear that the
LGIA adopted in Order No. 2003 by its
terms does not apply to affected system
operators.962 Duke Southeast Utilities
state that, in Midwest Independent
Transmission System Operator, Inc., the
Commission accepted an agreement
between an affected system and an
interconnection customer that allocated
50% of the network upgrade costs to the
interconnection customer without
reimbursement.963 Duke Southeast
Utilities state that, in the process of
accepting that agreement, the
Commission rejected the
interconnection customer’s argument
that Order No. 2003 entitled it to 100%
reimbursement, because the affected
system there ‘‘was not a party to the
interconnection agreement and cannot
be bound by a contract to which it is not
a party’’ and because ‘‘Order [ ] 2003 [ ]
acknowledges that an Affected System
is not bound by the Final Rule [Large
Generator Interconnection Procedures]
and interconnection agreement.’’ 964
Duke Southeast Utilities conclude that it
is therefore clear that there was no
‘‘existing policy’’ that would justify the
Commission’s refusal to engage this
question in the present rulemaking.
517. Duke Southeast Utilities state
that the Commission adopted a brand
new agreement—the pro forma affected
system facilities construction
agreement—that includes a mandatory
reimbursement requirement without
acknowledging its past practice of
accepting such agreements without
961 Id. (citing S. Co. Servs., Inc., Docket No. ER21–
1701–000 (June 10, 2021) (delegated letter order); S.
Co. Servs., Inc., Docket No. ER20–2825–000 (Oct. 9,
2020) (delegated letter order); Duke Energy Fla.,
LLC, Docket No. ER20–2419–000 (Sept. 2, 2020)
(delegated letter order) (accepting two agreements);
Fla. Power & Light Co., Docket No. ER19–2445–000
(Aug. 30, 2019) (delegated letter order);
MidAmerican Energy Co., Docket No. ER09–1654–
000 (Oct. 22, 2009) (delegated letter order)).
962 Id.
963 Id. at 5–6 (citing Midcontinent Indep. Trans.
Sys. Operator, Inc., 120 FERC ¶ 61,066, at PP 16,
23–25 (2007) (Midwest ISO)).
964 Id. at 6 (citing Midwest ISO, 120 FERC
¶ 61,066 at P 25 (capitalization altered) (citation
omitted)).
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reimbursement language.965 Duke
Southeast Utilities assert that the
Commission has repeatedly accepted
proposed affected system agreements
that allocate affected system network
upgrade costs to affected system
interconnection customers without
reimbursement.966 Duke Southeast
Utilities argue that this reflects the
Commission’s practice of accepting as
just and reasonable and not unduly
discriminatory affected system
agreements in which the affected system
interconnection customer has no right to
reimbursement. Duke Southeast Utilities
contend that the Commission’s failure to
explain its change of course on its
reimbursement policy without
addressing the precedent from which it
departs is a direct violation of the
APA.967
518. Duke Southeast Utilities contend
that, under this repayment provision,
customers on the affected system must
bear higher transmission costs to pay for
network upgrades they do not need (by
reimbursing interconnection customers
who provide upfront funding), so that
an interconnection customer can
interconnect on a neighboring
transmission system.968 Duke Southeast
Utilities state that, in the case of the
Duke Southeast Utilities, and as shown
in the rulemaking comments filed by
North Carolina state regulators and
consumer advocate bodies, this often
means that the retail customers of North
Carolina are forced to subsidize
generating facilities interconnecting to,
and selling into, PJM.969 Duke Southeast
Utilities assert that the Commission was
not entitled to willfully ignore changed
circumstances and refuse to provide
meaningful answers to arguments
presented by North Carolina
stakeholders.970 Duke Southeast
Utilities state that the Commission (1)
acted arbitrarily and capriciously by
failing to address the various
965 Id.
at 8.
(citing Duke Energy Progress, LLC, 177
FERC ¶ 61,001, at P 7 & n.16 (2021) (listing
numerous examples cited by DEP with full
allocation), appeal pending, Petition for Review,
Case No. 21–1272, order on reh’g, 179 FERC
¶ 61,007 (2022), appeal pending, Petition for
Review, Case No. 22–107).
967 Id. (citing 5 U.S.C. 551 et seq).
968 Id. at 4.
969 Id. at 4, 10 (citing Joint Comments of the North
Carolina Utilities Commission and the North
Carolina Utilities Commission Public Staff, at 23,
Docket No. RM22–14–000 (filed Oct. 13, 2022). The
North Carolina Commission and Staff further
provided that the total of the affected system costs
for DEP of recent projects in the DENC territory that
have already been studied is currently estimated at
$126 million and there are several additional PJM
queues for which affected system studies have yet
to be completed and are projected to interconnect
a total of 7,312 MW. Id. at 21–22.
970 Id. at 6.
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commenters’ concerns, and such actions
without substantial evidence in support
is grounds for reversal on its own under
the APA 971 and (2) violated section 205
of the FPA by mandating a new pro
forma cost allocation agreement without
meaningfully considering the needs of
impacted customers.972
519. Duke Southeast Utilities state
that the Commission has not conducted
an analysis based on the specific facts
and record presented in this case to
justify allocating these network upgrade
costs to Duke Southeast Utilities’
existing transmission customers.973
Duke Southeast Utilities state that Order
No. 2023 contains no explanation or
evidence that the Commission
considered the impacts to native
transmission customers at all. Duke
Southeast Utilities assert that, if the
Commission undertook such a balancing
of interests, it had a responsibility under
the APA to explain itself.974 Duke
Southeast Utilities argue that, on
rehearing, the Commission should
explain in detail what this analysis
entailed.975
520. Duke Southeast Utilities argues
that the Commission’s cost allocation
decision is inconsistent with the cost
causation principle, which states that all
approved rates must reflect to some
degree the costs actually caused by the
customer who must pay them 976 and
that benefits must be at least roughly
commensurate with costs.977
521. Duke Southeast Utilities state
that the Commission declined in Order
No. 2023 to respond to Duke Southeast
Utilities’ arguments that the
reimbursement policy goes against the
Commission’s cost causation
principles.978 Duke Southeast Utilities
state that the mere fact is that, ‘‘but for’’
the affected system interconnection
customers’ interconnection with the
host transmission provider, there would
be no need for the affected system
network upgrades. Duke Southeast
Utilities contend that customers on the
affected system will not benefit from the
971 Id.
at 7.
at 9.
973 Id. at 10.
974 Id. at 10–11 (citing Gen. Chem. Corp. v. U.S.,
817 F.2d 844, 857 (D.C. Cir. 1987) (finding an
administrative agency order arbitrary and
capricious because the agency’s analysis was
‘‘internally inconsistent and inadequately
explained.’’))
975 Id. at 11.
976 Id. at 11–12 (citing Order No. 845–A, 166
FERC ¶ 61,137 at P 78 (citation omitted); Ill.
Commerce Comm’n, 576 F.3d 470, at 476 (7th Cir.
2009)).
977 Id. (citing Ill. Commerce Comm’n, 756 F.3d
556, at 562 (7th Cir. 2014)).
978 Id. at 12–13 (citing Order No. 2023, 184 FERC
¶ 61,054 at PP 1243–44).
972 Id.
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27095
interconnection of the affected system
interconnection customers onto the
interconnecting transmission provider’s
transmission system from an energy and
capacity perspective because the
affected system is not receiving energy
and capacity from the host transmission
provider: therefore, Duke Southeast
Utilities’ retail customers will not be
receiving the generation. Duke
Southeast Utilities state that the
required network upgrades also provide
no benefit to the customers of the
affected system from a transmission
perspective because they are not needed
‘‘but for’’ the affected system
interconnection customers
interconnection to the host transmission
provider.
522. Duke Southeast Utilities’ argue
that, in the context of affected system
network upgrades, the Commission
should require affected system
interconnection customers to fund the
cost of affected system network
upgrades because (a) such network
upgrades would not be necessary but for
the affected system interconnection
request and (b) doing so would allocate
the network upgrades costs to the party
that caused the costs to be incurred and
reaps the resulting benefits—the
affected system interconnection
customers.979
iii. Determination
523. We disagree with Duke Southeast
Utilities’ characterization that the
Commission conceded that the affected
system network upgrade reimbursement
provisions in the pro forma affected
system facilities construction
agreements were a ‘‘NOPR proposal;’’
rather, the Commission merely
acknowledged that in the NOPR it
included the existing affected system
network upgrade reimbursement in the
newly proposed pro forma affected
system facilities construction
agreements. The Commission did not
state that the affected system network
upgrade reimbursement was a ‘‘NOPR
proposal’’ of new regulations.
524. In response to Duke Southeast
Utilities’ request for rehearing of the
affected system network upgrade
reimbursement provisions in the pro
forma affected system facilities
construction agreements, we note that,
although we are not changing existing
Commission policy, we continue to find
that policy to be just, reasonable, and
not unduly discriminatory or
preferential. We disagree with Duke
Southeast Utilities’ assertion that, before
Order No. 2023, there was no such
existing affected system network
979 Id.
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upgrade reimbursement policy. As the
Commission concluded in Order No.
2003, and we affirm here, the
Commission’s interconnection pricing
policy as it applies to a nonindependent affected system
transmission provider should be
consistent with the policy the
Commission adopted for nonindependent host transmission
providers.980 Specifically, under the
Commission’s interconnection pricing
policy, the costs of interconnection
facilities are the responsibility of the
interconnection customer and the costs
of network upgrades are funded initially
by the interconnection customer (unless
the transmission provider elects to fund
them), and the interconnection
customer is entitled to a cash equivalent
refund equal to the total amount paid
for the network upgrades.981
525. We find that it is important for
the repayment provisions for affected
system interconnection customers to be
consistent with the manner that the
transmission provider repays its own
interconnection customers. For
example, the Commission in Order No.
2003 explained that non-independent
transmission providers have an
incentive to frustrate rival
interconnection customers, and, absent
a reimbursement requirement, such
transmission providers might
discriminate against independent
interconnection customers by, for
example, finding that a disproportionate
share of the costs of expansions needed
to serve its own power customers is
attributable to competing
interconnection customers.982 This
rationale applies equally to affected
system transmission providers.
526. Affected system transmission
providers might source generation from
the host transmission provider’s
transmission system to serve its own
load, and such affected system
transmission provider’s interests might
benefit from additional network
upgrades to facilitate transactions across
the seam between transmission
providers. If that is the case, the affected
system transmission provider would
have an incentive to impose additional
burdensome and unnecessary affected
system network upgrades on affected
system interconnection customers;
however, because under Commission
policy the affected system transmission
providers are required to reimburse the
affected system interconnection
980 Order No. 2003, 106 FERC ¶ 61,220 at P 738;
Order No. 2003–A, 106 FERC ¶ 61,220 at P 636.
981 Order No. 2003, 106 FERC ¶ 61,220 at PP 676,
693.
982 Id. P 696.
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customer for those network upgrade
costs, the incentive for discriminatory
behavior is absent.
527. The Commission also found in
Order No. 2003 that the reimbursement
requirement would enhance
competition by promoting new
generation.983 We similarly find that the
requirement for affected system
transmission providers to repay affected
system interconnection customers will
enhance competition because it will
discourage affected system transmission
providers from assigning unnecessary
affected system network upgrade costs
to interconnection customers if the
transmission provider ultimately must
reimburse the affected system
interconnection customer for such
costs.984 In doing so, we continue to
maintain that such additional
generation and related enhanced
competition will generally cause the
average embedded cost transmission
rate to decline for all remaining
customers.985
528. We also continue to find, as we
did in Order Nos. 2003 and 2003–A,
that ‘‘network facilities are not ‘sole use’
facilities but facilities that benefit all
Transmission Customers . . . the
addition [of a network upgrade facility]
represents a system expansion used by
and benefiting all users due to the
integrated nature of the grid.’’ 986
529. In response to Duke Southeast
Utilities’ assertion that the Commission
has routinely accepted affected system
agreements without affected system
network upgrade reimbursement
provisions, we clarify that such
acceptances were in error and in
contravention of Commission policy as
established in Order No. 2003.987 In
Docket No. ER20–2419–000, the two
service agreements at issue involved
system protection facilities, the costs of
which, per Duke Southeast Utilities’
tariff, are directly assignable to an
983 Id.
PP 694–696.
id. P 696.
985 Order No. 2003–A, 106 FERC ¶ 61,220 at P 581
(stating that the Commission’s ‘‘experience
indicates that the incremental rate associated with
network upgrades required to interconnect a new
generator (dividing the costs of any necessary
network upgrades by the projected transmission
usage by the new generator) will generally be less
that the embedded average cost rate (including the
costs of the new facilities in the numerator and the
additional usage of the system in the
denominator).’’).
986 Order No. 2003, 106 FERC ¶ 61,220 at PP 21,
65, Order No. 2003–A, 106 FERC ¶ 61,220 at P 585;
see also Pub Serv. Co. Colo., 59 FERC ¶ 61,311
(1992), reh’g denied, 62 FERC ¶ 61,013 (1993); W.
Mass. Elec. Co., 77 FERC ¶ 61,268, at 62,119 (1996).
987 See Duke Energy Progress, LLC, 181 FERC
¶ 61,197, at P 39 (2022); Duke Energy Progress, LLC,
177 FERC ¶ 61,001 at P 37.
interconnection customer without
reimbursement.988
530. We also disagree with Duke
Southeast Utilities’ assertion that the
Commission has been clear that the pro
forma LGIA adopted in Order No. 2003
does not apply to affected system
operators. We reiterate that Order No.
2003’s reimbursement requirements are
reflected both in the preamble of Order
No. 2003 and pro forma LGIA Article
11.4, which Order No. 2003 explicitly
made applicable to all jurisdictional
affected system operators.989
531. The Midwest Independent
Transmission System Operator, Inc.
proceeding that Duke Southeast Utilities
cites is inapposite to the status quo as
established in Order No. 2003. First, the
affected system transmission owner was
not a party to the agreement in that
proceeding and was not required to
reimburse the interconnection customer
in a region that had transitioned to
participant funding prior to the filing of
the interconnection agreement at issue
in that proceeding.990 Second, the
affected system ‘‘operator’’ was a
transmission owner within the MISO
footprint, not a transmission provider in
a separate service territory with its own
tariff.991 Furthermore, in Order No.
2003, the Commission limited the use of
participant funding to independent
transmission providers, such as MISO,
because of its concern that for a nonindependent transmission provider,
such as Duke Southeast Utilities, the
implementation of participant funding
creates opportunities for undue
discrimination.992 The Commission also
stated that, if the affected system
operator is an independent transmission
provider, then it has flexibility
regarding its interconnection pricing
policy (including participant funding)
that the affected system operator may
propose while as discussed above, an
affected system operator that is not
independent must be consistent with
the policy adopted for non-independent
transmission providers (i.e.,
984 See
PO 00000
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Fmt 4701
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988 Duke Energy Fla., LLC, Docket No. ER20–
2419–000 (Sept. 20, 2020) (delegated letter order).
989 Order No. 2003, 106 FERC ¶ 61,220 at P 738;
see also Duke Energy Progress, LLC, 177 FERC
¶ 61,001, on reh’g, 179 FERC ¶ 61,007, at P 33
(‘‘Order No. 2003 explicitly requires jurisdictional
affected system operators to reimburse
interconnection customers for network upgrade
costs.’’).
990 Midwest Indep. Transmission Sys. Operator,
Inc., 120 FERC ¶ 61,066, at PP 24–25.
991 In MISO, the definition of affected system
encompasses an electric transmission or
distribution system other than the transmission
owner’s transmission system that is affected by an
interconnection request. MISO, FERC Electric
Tariff, attach. X (Generator Interconnection
Procedures (GIP)), (161.0.0) § 1.
992 Order No. 2003, 106 FERC ¶ 61,220 at P 696.
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reimbursement).993 This circumstance
does not even speak to Order No. 2003’s
network upgrade reimbursement
requirement for jurisdictional affected
system operators, much less undermine
it.
532. In response to Duke Southeast
Utilities’ allegation that the Commission
failed to address commenters’ concerns
in Order No. 2023, we are not obligated
to respond to each argument that goes
to issues outside the scope of the
proceeding one-by-one.994 We reiterate
that the affected system network
upgrade reimbursement provisions in
the pro forma affected system facilities
construction agreements are a
codification of existing Commission
policy and are not a new policy
proposal. Order No. 2023 is not a
vehicle for challenging existing
Commission policy 995 and, accordingly,
the Commission did not need to address
each individual argument attempting to
undermine existing Commission policy
because Order No. 2023 did not revise
the Commission’s existing
reimbursement policy.
533. Finally, we remove from the pro
forma affected system facilities
construction agreements sections 3.1.2.2
(Recommencing of Work) and 3.1.2.3
(Right to Suspend Due to Default). We
find that these provisions are
inconsistent with the pro forma LGIA
and, accordingly, are unnecessary.
c. Miscellaneous
i. Requests for Rehearing and
Clarification
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534. MISO asks the Commission to
require MISO, PJM, and SPP to
coordinate their affected systems
revisions on compliance.996 MISO
explains that Order No. 2023 only
encourages, but does not require,
‘‘voluntary coordination between
transmission providers who share
transmission system seams and whose
customers frequently impact each
other’s systems.’’ 997 MISO argues that
this could potentially allow neighboring
RTOs/ISOs to independently develop
affected systems approaches that could
conflict with each other’s procedures
and disrupt or sideline existing joint
993 Order No. 2003–A, 106 FERC ¶ 61,220 at PP
636–637.
994 See Pub. Serv. Elec. & Gas Co. v. FERC, 989
F.3d 10, 20 (D.C. Cir. 2021) (finding that the
Commission need only respond to significant
comments raised on rehearing and is free to ignore
insignificant ones (citing NARUC v. FERC, 475 F.3d
at 1285).
995 See Order No. 2003, 104 FERC ¶ 61,103 at PP
738–739; see also pro forma LGIA art. 11.4.
996 MISO Rehearing Request at 17.
997 Id. at 18 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1172).
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operating agreement coordination
processes.998 MISO states that MISO,
PJM, and SPP would need to intervene
in each other’s compliance proceedings
to monitor proposed revisions and
protest if needed, which would be less
efficient than the current joint affected
system coordination process. MISO
adds that misalignment on affected
systems studies between MISO, PJM,
and SPP could lead to delayed study
penalties. Further, MISO explains that
the Commission has previously required
coordinated filings by RTO/ISOs
proposing identical changes to their
joint operating agreements. MISO states
that it addressed these concerns in its
comments but asserts that Order No.
2023 did not meaningfully respond to
them and failed to acknowledge the
unique status of MISO, PJM, and SPP’s
affected system coordination
procedures. Rather, MISO explains that
Order No. 2023 states that the
Commission ‘‘is not persuaded that any
potential efficiencies of such
coordination outweigh the burdens that
may be placed on host transmission
providers.’’ 999 MISO argues that
ignoring these arguments violates the
requirement of reasoned decisionmaking and asserts that it is arbitrary
and capricious that the Commission did
not justify its departure from its
precedent of requiring coordination
between transmission providers.
535. Shell requests clarification that
affected system transmission providers
must reimburse affected system
interconnection customers for affected
system network upgrades, not only
when those network upgrades are
identified via a traditional affected
system study, but also when identified
through a seams study.1000 Shell
explains that seams studies integrate
generator interconnection and regional
and inter-regional transmission
planning and cost allocation. Shell
asserts that it would be unjust,
unreasonable, and unduly
discriminatory to reimburse
interconnection customers for affected
systems network upgrades identified
under the revised pro forma, but not
those identified under a seams
arrangement.
536. Southeastern Utilities agree with
the Commission that, in most cases, an
affected system transmission provider
will receive the opportunity to study a
delivery request if the ‘‘affected system
interconnection customer subsequently
seeks deliverability on either the host
998 Id.
at 19–20.
at 21 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1172).
1000 Shell Rehearing Request at 13–14.
999 Id.
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27097
system or an affected system.’’ 1001
However, Southeastern Utilities explain
that, in some cases, the host
transmission provider may not perform
a transmission service study before
power flows from a generating facility
based on an NRIS request, and in those
cases, it is not clear how or when the
affected system transmission provider
would have the opportunity to study the
transmission service request. For
example, Southeastern Utilities note
that MISO’s business practice manual
allows MISO to accept a network service
request ‘‘without further analysis’’ if the
generating facility implicated in the
request is a MISO aggregate deliverable
resource that is identified during an
NRIS deliverability study.1002 Therefore,
Southeastern Utilities ask the
Commission to clarify that, in the event
a host transmission provider performs a
delivery analysis as part of its
interconnection study, the affected
system transmission provider can also
study both interconnection and delivery
requirements because the affected
system transmission provider may not
have an opportunity to study a
transmission service request related to
the generating facility.1003 Southeastern
Utilities argue that this clarification is
needed to better consider impacts on
their systems from delivery of power on
neighboring systems. If the Commission
does not provide clarification,
Southeastern Utilities request rehearing
on this matter. Southeastern Utilities
argue that prohibiting affected system
transmission providers to perform a
delivery study along with an
interconnection study under the
circumstances it describes would be
arbitrary and capricious and contrary to
law for failing to consider all aspects of
the issue under consideration,
inconsistent with the Commission’s
stated rationale, and would jeopardize
system reliability.
ii. Determination
537. We reject MISO’s request that the
Commission require MISO, PJM, and
SPP to coordinate their affected systems
revisions on compliance. We disagree
with MISO’s argument that failing to
include a directive for joint operating
parties to coordinate affected systems
was arbitrary and capricious. Order No.
2023 sets the requirements in the pro
forma LGIP for the affected system
study process. As MISO acknowledges
1001 Southeastern Utilities Clarification and
Rehearing Request at 4 (citing Order 2023, 184
FERC ¶ 61,054 at P 1288).
1002 Id. (citing MISO, BPM–020–r29
(Transmission Planning Business Practices
Manual), section 5.2.3 (May 2023)).
1003 Id. at 5–6.
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in its rehearing request, the RTOs’/ISOs’
joint operating agreements are ‘‘unique’’
and thus are not part of the
Commission’s pro forma LGIP. We
recognize that MISO has joint operating
agreements with SPP and PJM that may
need to be updated to reflect the
requirements of Order No. 2023, and to
the extent that revisions are needed,
then we expect that MISO, PJM, and
SPP will propose revisions to their joint
operating agreements to ensure that
there are no conflicts among their joint
operating agreements, their LGIPs, and
Order No. 2023’s requirements.
538. We also disagree with MISO’s
argument that failing to include a
directive for joint operating parties to
coordinate affected systems is a
departure from Commission precedent.
We note that MISO points to a
complaint that was specifically filed
against MISO’s, PJM’s, and SPP’s joint
operating agreements and tariffs.
However, here, we are revising the
Commission’s pro forma LGIP. Order
No. 2023 does not modify or address
individual seams arrangements, which
are not part of the Commission’s pro
forma LGIP. We agree that alignment
among neighboring processes is
important, and we continue to
encourage voluntary coordination
between transmission providers who
share transmission seams.1004
539. We also reject Shell’s request for
clarification that affected system
transmission providers must reimburse
affected system interconnection
customers for affected system network
upgrades whether identified via a
traditional affected system study or
through a seams study, because such
clarification is outside of the scope of
Order No. 2023. As discussed above,
Order No. 2023 modifies the
Commission’s pro forma LGIP to
establish a standardized affected system
study process. Additionally, as
discussed above, we note that Order No.
2023 does not alter the Commission’s
existing reimbursement requirements
for affected system network upgrades.
540. We reject Southeastern Utilities’
request for rehearing that, in the event
a host transmission provider does not
perform a delivery analysis as part of its
interconnection study, the affected
system transmission provider can also
study both interconnection and delivery
requirements. In Order No. 2023, the
Commission found, and we continue to
find, that an affected system
transmission provider must use ERIS
studies on affected system
interconnection requests regardless of
1004 Order No. 2023, 184 FERC ¶ 61,054 at PP
1172, 1194.
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the level of service requested on the
host system. Southeastern Utilities
argue that there are some instances
where the affected system transmission
provider will not have the opportunity
to study the impact of the generating
facility in the context of the associated
transmission service request before any
power flow from that generating facility
and notes, as an example, that MISO
does not conduct a deliverability study
for network service requests when an
interconnection customer requests
NRIS. However, as discussed in Order
No. 2023, the ERIS modeling
requirement applies to the pro forma
LGIP affected system study process and
the Commission explicitly stated that it
would not address whether a
transmission provider has adequate
transmission service studies.1005 As
discussed above, the Commission found
in Order No. 2003 and reiterated in
Order No. 2023 that interconnection
service is an element of, but separate
from the delivery component of,
transmission service.1006
E. Reforms To Incorporate
Technological Advancements Into the
Interconnection Process
1. Increasing Flexibility in the
Generation Interconnection Process
a. Co-Located Generating Facilities
Behind One Point of Interconnection
i. Order No. 2023 Requirements
541. In Order No. 2023, the
Commission revised pro forma LGIP
section 3.1.2 to require transmission
providers to allow more than one
generating facility to co-locate on a
shared site behind a single point of
interconnection and share a single
interconnection request.1007 The
Commission clarified that
interconnection customers have the
choice to structure their interconnection
requests for co-located generating
facilities according to their preference
(i.e., as separate interconnection
requests or as a shared interconnection
request) and that Order No. 2023 does
not require interconnection customers
to share a single interconnection request
for multiple generating facilities located
on the same site.1008 The Commission
also clarified that co-located generating
facilities can be owned by a single
interconnection customer with multiple
generating facilities sharing a site, or by
multiple interconnection customers that
1005 Id.
P 1290.
P 1288 (citing Order No. 2003, 104 FERC
¶ 61,103 at P 118; Order No. 2003–A, 106 FERC
¶ 61,220 at P 113).
1007 Id. P 1346.
1008 Id. PP 1351–1352.
have a contract or other agreement that
allows for shared land use.1009
542. The Commission found that colocated generating facilities, in spite of
being prevalent in current
interconnection queues, face barriers to
interconnection under existing
interconnection procedures, and that
this reform will effectively remove such
barriers.1010 The Commission further
found that requiring transmission
providers to allow interconnection
customers to submit a single
interconnection request that represents
multiple generating facilities that are
located behind a single point of
interconnection is required to ensure
just and reasonable rates. The
Commission stated that this reform will
improve efficiency for transmission
providers in the study process by
reducing the number of interconnection
requests in the interconnection queue
and will reduce costs for
interconnection customers because they
will only submit a single set of deposits
to enter the interconnection queue. The
Commission also stated that this reform
will improve interconnection queue
efficiency without imposing an adverse
impact on the efficacy of
interconnection study results or other
interconnection customers.1011
ii. Requests for Rehearing and
Clarification
543. MISO urges the Commission to
clarify that the requirement to allow colocated resources to share an
interconnection request is limited to colocated resources owned by the same
interconnection customer.1012 MISO
states that requiring or even allowing
separate interconnection customers to
combine their projects into a single
interconnection request would create
numerous opportunities for conflict and
interconnection management
challenges. MISO argues, for example,
that, if one of two interconnection
customers sharing an interconnection
request fails to adhere to the
requirements of MISO’s LGIP and must
be withdrawn, MISO would need to
develop an extensive set of revisions to
the LGIP and new procedures for
separating one interconnection
customer’s facilities out of a shared
interconnection request. MISO asserts
that it is not necessary to require a
transmission provider to allow separate
interconnection customers to share an
interconnection request for separate
projects just to allow them to co-locate
1006 Id.
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1009 Id.
P 1355.
P 1349.
1011 Id. P 1350.
1012 MISO Rehearing Request at 23–25.
1010 Id.
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behind a common point of
interconnection. Therefore, MISO asks
the Commission to clarify that allowing
multiple interconnection customers to
share an interconnection request is
merely one mechanism to achieve Order
No. 2023’s goal allowing
interconnection customers to co-locate
their generating facilities and that
transmission providers are not required
to use that particular mechanism
provided they adopt procedures to
allow the intended result.
544. NYTOs ask the Commission to
clarify the definition of stand alone
network upgrades and the option to
build standalone network upgrades in
situations of co-located generating
facilities.1013 Specifically, NYTOs note
that Order No. 2023 maintains the
definition of stand alone network
upgrades as ‘‘only those required for a
single interconnection customer,’’ 1014
but also requires transmission providers
to allow interconnection customers to
submit a single interconnection request
that represents multiple generating
facilities that are located behind a single
point of interconnection.1015 Therefore,
NYTOs urge the Commission to clarify
application of the option to build stand
alone network upgrades when required
for a shared interconnection request.
iii. Determination
545. We are unpersuaded by MISO’s
arguments that the requirement to allow
co-located resources to share an
interconnection request should be
limited to co-located resources owned
by the same interconnection customer.
We sustain our findings in Order No.
2023 that transmission providers must
allow more than one generating facility
to co-locate on a shared site behind a
single point of interconnection and
share a single interconnection request,
and that such co-located generating
facilities can be owned by a single
interconnection customer with multiple
generating facilities sharing a site, or by
multiple interconnection customers that
have a contract or other agreement that
allows for shared land use.1016 We
continue to find that this reform will
improve efficiency for transmission
providers in the study process by
reducing the number of interconnection
requests in the interconnection queue
and will reduce costs for
interconnection customers because they
will only submit a single set of deposits
to enter the interconnection queue. For
1013 NYTOs
1014 Id.
Rehearing Request at 39.
(citing Order No. 2023, 184 FERC ¶ 61,054
at P 193).
1015 Id. (citing Order No. 2023, 184 FERC ¶ 61,054
at P 1349).
1016 Order No. 2023, 184 FERC ¶ 61,054 at P 1355.
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these reasons, we continue to believe
that this reform will improve efficiency
for both transmission providers and
interconnection customers, and that this
reform is necessary to ensure just and
reasonable rates.
546. Regarding the situation that
MISO describes, in which one of the colocated generating facilities sharing an
interconnection request is withdrawn or
requested to be withdrawn, we do not
believe that revisions to the pro forma
LGIP are needed to separate the
facilities in the shared interconnection
request. Rather, we believe that
transmission providers should
determine whether the entire shared
interconnection request should proceed
or be withdrawn using the existing
withdrawal provisions in section 3.7 of
the pro forma LGIP or the existing
material modification procedures in
section 4.4 of the pro forma LGIP. If a
transmission provider would like to
propose revisions to its LGIP to allow
one co-located generating facility
sharing an interconnection request to
withdraw from the queue while
allowing another co-located generating
facility sharing the same
interconnection request to proceed in
the interconnection queue, it may do so
in an FPA section 205 filing.
547. In response to NYTOs’ request
for clarification, we believe that the
revisions to the definition of stand alone
network upgrades earlier in this order in
response to Clean Energy Associations’
request for rehearing should resolve
NYTOs’ concern and clarify the option
to build stand alone network upgrades
when required for a shared
interconnection request.1017
b. Revisions to the Modification Process
To Require Consideration of Generating
Facility Additions
i. Order No. 2023 Requirements
548. In Order No. 2023, the
Commission revised section 4.4.3 of the
pro forma LGIP to require transmission
providers to evaluate the proposed
addition of a generating facility at the
same point of interconnection prior to
deeming such an addition a material
modification, if the addition does not
change the originally requested
interconnection service level.1018 The
Commission found that automatically
deeming a request to add a generating
facility to an existing interconnection
request to be a material modification
without such evaluation creates a
significant barrier to access to the
transmission system and renders
1017 See
supra section II.C.2.c.
No. 2023, 184 FERC ¶ 61,054 at P 1406.
1018 Order
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27099
existing interconnection processes
unjust and unreasonable.1019
549. The Commission clarified that
interconnection customers may
continue to request changes to proposed
generating facilities at any time in the
interconnection process; however,
transmission providers are only
required to evaluate whether a request
to add a generating facility to an existing
interconnection request is material if the
request is submitted before the
interconnection customer returns the
executed facilities study agreement to
the transmission provider. Once the
executed facilities study agreement is
returned, the transmission provider may
decide to automatically treat requests to
add a generating facility to an existing
interconnection request as material
modifications without review.1020 The
Commission also created an exception
from these requirements for
transmission providers that employ
fuel-based dispatch assumptions.1021
550. The Commission clarified that,
per pro forma LGIP section 4.4.1, prior
to the return of the cluster study
agreement from the transmission
provider to the interconnection
customer, a decrease of up to 60% of
electrical output (MW) must not be
considered a material modification.1022
In addition, per pro forma LGIP section
4.4.2, prior to the return of the executed
interconnection facilities study, an
additional 15% decrease of electrical
output of the proposed project must not
be considered a material modification if
the change occurred either through a
decrease in plant size (MW) or a
decrease in interconnection service
level accomplished by applying
transmission provider-approved
injection-limiting equipment.
ii. Requests for Rehearing and
Clarification
551. PJM seeks rehearing of this
reform because it believes that the
Commission fails to address the
concerns PJM raised in its NOPR
comments that locating an additional
facility at the site of the first project can
affect other interconnection customers,
especially if the additional facility has
a different fuel type than the initial
facility.1023 PJM adds that the
Commission’s determination is arbitrary
and capricious because a project
developer who is unsure which
facilities it seeks to interconnect at the
time of its application is not ready to
1019 Id.
P 1407.
PP 1409–1410.
1021 Id. P 1411.
1022 Id. P 1417.
1023 PJM Rehearing Request at 41–42.
1020 Id.
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proceed and performing a material
modification analysis is timeconsuming: therefore, this requirement
is inconsistent with Order No. 2023’s
stated goal of facilitating a prompt study
process that allows ready projects to
move forward.
552. Shell seeks rehearing regarding
the deadlines by which an
interconnection customer can reduce
the size of its generating facilities
without the change being deemed a
material modification.1024 Shell notes
that Order No. 2023 allows an initial
60% size reduction prior to the
interconnection customer executing the
cluster study agreement. Shell states
that, because Order No. 2023 eliminated
the feasibility study from the
interconnection study process,
interconnection customers no longer
have a basis at that point in the study
process from which to determine if they
should decrease the size of their
generating facility. Shell argues that the
Commission should revise pro forma
LGIP section 4.4.1 to allow
interconnection customers to reduce
their project size after the initial cluster
study report and prior to the start of the
subsequent cluster re-study or facilities
study.
553. Clean Energy Associations ask
the Commission to clarify that changing
solar modules or wind turbines, adding
storage capacity, or making minor
adjustment to inverter performance are
presumptively immaterial if the
project’s planned export and import
capacity remains the same.1025 Clean
Energy Associations state that finalizing
procurement is highly reliant on the
results and timing of the
interconnection studies and argue that
this clarification is necessary to ensure
that project developers are not
effectively forced into locking in
inefficient equipment early in the
interconnection process.
iii. Determination
554. We disagree with PJM that the
Commission did not sufficiently address
PJM’s concerns that locating an
additional facility at the site of the first
project could affect other
interconnection customers. In Order No.
2023, the Commission established a
procedural requirement for transmission
providers to evaluate the proposed
addition of a generating facility at the
same point of interconnection prior to
deeming such an addition a material
modification, if the addition does not
change the originally requested
1024 Shell
1025 Clean
Rehearing Request at 7.
Energy Associations Rehearing Request
at 75–76.
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interconnection service level.1026 The
Commission did not require any
particular substantive outcome
following this evaluation; rather,
transmission providers may still find
that a proposed modification involving
the proposed addition of a generating
facility at the same point of
interconnection would have a material
impact on the cost or timing of any
interconnection request with an equal or
later queue position, and therefore
constitutes a material modification.
While such evaluation likely entails
some additional burden on the
transmission provider, we continue to
find that this outcome is warranted
given the countervailing benefits.
Specifically, we sustain our finding that
transmission providers automatically
deeming a request to add a generating
facility to an existing interconnection
request to be a material modification
creates a significant barrier to access to
the transmission system and renders
existing interconnection processes
unjust and unreasonable.1027 Further,
we continue to find that this reform will
ensure that interconnection customers
are able to interconnect to the
transmission system in a reliable,
efficient, transparent, and timely
manner, and will prevent undue
discrimination.
555. We are not persuaded by Shell’s
arguments on rehearing that the
Commission should allow a 60% size
reduction after the initial cluster study
report and prior to the start of the
subsequent cluster re-study or facilities
study. We find that allowing every
interconnection customer in a cluster a
60% size reduction after the initial
cluster study report will significantly
impact the amount of uncertainty faced
by interconnection customers in a
cluster—because each change in
proposed generating facility size may
shift network upgrade costs to other
interconnection customers, who in turn,
may elect to re-size—and may lead to
withdrawals and restudies. Rather, we
reiterate our finding that, per pro forma
LGIP section 4.4.1, prior to the return of
the cluster study agreement from the
transmission provider to the
interconnection customer, the proposed
decrease of up to 60% of a generating
facility’s electrical output (MW) must
not be considered a material
modification.1028 We clarify that this
allowable decrease of up to 60% of a
generating facility’s electrical output
may occur during the customer
engagement window (i.e., prior to the
return of the cluster study agreement
from the transmission provider to the
interconnection customer). Further, we
note that interconnection customers
have an additional opportunity to
propose a decrease in the output of the
generation facility after the cluster study
report: per pro forma LGIP section 4.4.2,
prior to the return of the executed
interconnection facilities study, an
additional 15% decrease of electrical
output of the proposed project must not
be considered a material modification if
the change occurred either through a
decrease in plant size (MW) or a
decrease in interconnection service
level accomplished by applying
transmission provider-approved
injection-limiting equipment.
556. We find Clean Energy
Associations’ requested clarification
that changing solar modules or wind
turbines, adding storage capacity, or
making minor adjustments to inverter
performance are presumptively
immaterial if the project’s planned
export and import capacity remains the
same, is outside the scope of this
rulemaking. In Order No. 2023, the
Commission did not establish a
presumption of immateriality for any
specific changes to an interconnection
request that do not impact the requested
interconnection service level. Rather,
the Commission established a
procedural requirement for transmission
providers to evaluate the proposed
addition of a generating facility at the
same point of interconnection prior to
deeming such an addition a material
modification, if the addition does not
change the originally requested
interconnection service level.1029 We
decline to establish any presumption of
immateriality here for specific changes
to an interconnection request that do
not impact the requested
interconnection service level. We do
note that Order No. 845 established the
technological change procedure to
provide for the evaluation of whether a
technological advancement can be
incorporated into an interconnection
request without the change being
considered a material modification (i.e.,
whether the change is a permissible
technological advancement).1030 Any
such technical change procedures are in
the transmission provider’s tariff, and
Order No. 2023 did not affect them.
1026 Order
1029 Id.
1027 Id.
1030 Order
No. 2023, 184 FERC ¶ 61,054 at P 1406.
P 1407.
1028 Id. P 1417.
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c. Availability of Surplus
Interconnection Service
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i. Order No. 2023 Requirements
557. In Order No. 2023, the
Commission revised section 3.3.1 of the
pro forma LGIP to require transmission
providers to allow interconnection
customers to access the surplus
interconnection service process once the
original interconnection customer has
an executed LGIA or requests the filing
of an unexecuted LGIA.1031 The
Commission found that this reform will
enable interconnection customers with
unused interconnection service to let
other generating facilities use that
interconnection service earlier than is
currently allowed and, therefore,
increase overall efficiency of the
interconnection queue and in turn
ensure just and reasonable rates.1032 The
Commission clarified that this reform
does not modify how the surplus
interconnection service process is
conducted, but rather addresses when a
request for surplus interconnection
service may be submitted.1033 The
Commission further clarified that the
original interconnection customer must
have an LGIA in place, either executed
or requested to be filed unexecuted with
the Commission, prior to the
transmission provider tendering any
LGIA for surplus interconnection
service.1034
ii. Requests for Rehearing and
Clarification
558. PJM requests clarification or, in
the alternative, rehearing of Order No.
2023’s requirement regarding surplus
interconnection service.1035 PJM asserts
that, when the initial interconnection
customer signs an LGIA, none of the
network upgrades or customer
interconnection facilities will have been
built, such that there will be no service,
much less ‘‘surplus’’ service, available.
PJM argues that the requirement would
introduce additional administrative
burden, thereby detracting from the
timely completion of interconnection
studies and increasing the potential for
study delay penalties, while providing
little additional benefit to
interconnection customers.1036 PJM
adds that studying co-located generating
facilities of different fuel types is
appropriate within the same cluster
study rather than at disjointed points in
time given that such generating facilities
1031 Order
No. 2023, 184 FERC ¶ 61,054 at P 1436.
P 1437.
1033 Id. P 1447.
1034 Id. P 1445.
1035 PJM Rehearing Request at 35–36 (citing Order
No. 2023, 184 FERC ¶ 61,054 at P 1438).
1036 Id. at 37–38.
1032 Id.
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can have very different electrical
characteristics. Therefore, PJM seeks
clarification that it is entitled to an
independent entity variation to not
provide surplus interconnection service
at such an early stage of project
development or to not provide the
service at any stage if it demonstrates
that surplus interconnection service
requests are inconsistent with its cluster
study processes and will hinder
efficient and timely clustered
interconnection studies. In the
alternative, PJM seeks rehearing of the
requirement for being arbitrary and
capricious because the expansion of
surplus interconnection service runs
contrary to Order No. 2023’s goal of
speeding up interconnection processes.
559. SPP asks the Commission to
clarify that Order No. 2023 requires
transmission providers to allow
interconnection customers to apply for
surplus interconnection service once the
underlying GIA is executed or filed
unexecuted, not that transmission
providers must allow interconnection
customers to begin receiving surplus
interconnection service at that point.1037
Because surplus interconnection service
fundamentally relies upon another
interconnection service request, SPP
asks the Commission to clarify that
Order No. 2023 does not obligate
transmission providers to provide
surplus interconnection service earlier
than they provide interconnection
service to the underlying
interconnection service request. In the
alternative, SPP requests rehearing of
the requirement because it would be
impossible for transmission providers to
provide surplus interconnection service
before providing service for the
underlying interconnection request and
would threaten system reliability.
iii. Determination
560. We are unpersuaded by PJM’s
arguments on rehearing that the
Commission should eliminate this
reform because it would detract from
the timely completion of
interconnection studies without
providing any measurable benefit to
interconnection customers. We reiterate
that the reform solely modifies when an
interconnection customer can submit a
request for surplus interconnection
service, allowing interconnection
customers to access the surplus
interconnection service process once the
initial interconnection customer has an
executed LGIA or requests the filing of
an unexecuted LGIA. Surplus
interconnection service is defined as
any unneeded portion of
interconnection service established in
an LGIA, such that if surplus
interconnection service is utilized, the
total amount of interconnection service
at the point of interconnection would
remain the same.1038 PJM notes that,
when the initial interconnection
customer signs an LGIA, the
interconnection facilities and network
upgrades to accommodate the initial
interconnection customer’s generating
facility will not yet have been built. At
that point, however, it will be known
whether there is any unneeded portion
of interconnection service established in
the LGIA that a surplus interconnection
customer could utilize. For this reason,
we disagree with PJM that
interconnection customers should not
be allowed to request surplus
interconnection service once the initial
interconnection customer signs an
LGIA. We continue to find that this
reform will enable interconnection
customers with unused interconnection
service to allow other generating
facilities to use that interconnection
service earlier than was previously
allowed and, therefore, will increase the
overall efficiency of the interconnection
queue. We continue to find that this
reform will ensure that interconnection
customers are able to interconnect to the
transmission system in a reliable,
efficient, transparent, and timely
manner, and will prevent undue
discrimination.
561. We also decline to grant PJM’s
request for clarification that PJM is
entitled to an independent entity
variation to not provide surplus
interconnection service. Consistent with
the Commission’s statements in Order
No. 2023, transmission providers may
explain specific circumstances on
compliance and justify why any
deviations are either consistent with or
superior to the pro forma LGIP or merit
an independent entity variation in the
context of RTOs/ISOs.
562. We grant SPP’s request for
clarification that Order No. 2023
requires transmission providers to allow
interconnection customers to apply for
surplus interconnection service once the
underlying LGIA is executed or filed
unexecuted, not that transmission
providers must allow interconnection
customers to begin receiving surplus
interconnection service at that point. As
the Commission stated in Order No.
2023, and as SPP describes, this reform
modifies when a request for surplus
interconnection service may be
submitted.1039 We reiterate the
1038 Pro
1037 SPP
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forma LGIP section 1.
No. 2023, 184 FERC ¶ 61,054 at P 1447.
1039 Order
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clarification in Order No. 2023 that the
initial interconnection customer must
have an LGIA in place, either executed
or requested to be filed unexecuted with
the Commission, prior to the
transmission provider tendering any
LGIA for surplus interconnection
service.1040
d. Operating Assumptions for
Interconnection Studies
i. Order No. 2023 Requirements
563. In Order No. 2023, the
Commission revised sections 3.1.2,
3.2.1.2, 3.2.2.2, 3.3.1, 3.4.2, 4.4.3, 7.3,
8.2, and Appendix 1 of the pro forma
LGIP and article 17.2 and Appendix H
of the pro forma LGIA to require
transmission providers, at the request of
the interconnection customer, to use
operating assumptions in
interconnection studies that reflect the
proposed charging behavior of electric
storage resources 1041 (whether
standalone, co-located generating
facilities,1042 or part of a hybrid
generating facility 1043)—i.e., whether
the interconnecting generating facility
will or will not charge during peak load
conditions—unless good utility practice,
including applicable reliability
standards,1044 otherwise requires the
use of different operating
assumptions.1045 The Commission
clarified that studying electric storage
resources, at the request of the
interconnection customer, according to
their planned operating assumptions
refers only to the operating assumptions
for withdrawals of energy (e.g., the
charging of an electric storage resource)
in interconnection studies. The
Commission further clarified that the
reforms described in that determination
section of Order No. 2023 and the
related sections of the pro forma LGIP
apply to all interconnecting electric
1040 Id.
P 1445.
electric storage resource is a generating
facility capable of receiving electric energy from the
grid and storing it for later injection of electricity.
See id. P 1509 n.2854.
1042 Co-located generating facilities are more than
one generating facility that are located on the same
site and that are connected at the same point of
interconnection that are operated and dispatched as
separate generating facilities. See id. P 1346 n. 2552.
1043 A hybrid generating facility is a generating
facility composed of more than one device of
different technology types for the production and/
or storage for later injection of electricity that are
located on the same site and are operated and
dispatched as a single integrated generating facility.
See id. P 604 n.1204.
1044 Applicable reliability standards means ‘‘the
requirements and guidelines of the Electric
Reliability Organization and the Balancing
Authority Area of the Transmission System to
which the Generating Facility is directly
interconnected.’’ See pro forma LGIP section 1
(Definitions).
1045 Order No. 2023, 184 FERC ¶ 61,054 at P 1509.
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storage resources, whether they are
standalone, co-located generating
facilities, or part of a hybrid generating
facility.1046
564. The Commission stated that, if an
interconnection customer fails to
operate its electric storage resource in
accordance with the operating
assumptions memorialized in the
interconnection customer’s LGIA, the
procedure for termination of the LGIA
pursuant to articles 17.1.1 and 17.1.2 of
the pro forma LGIA is appropriate.1047
The Commission further found that an
electric storage resource that operates
contrary to the operating assumptions
specified in its LGIA must not be
considered in breach of its LGIA by the
transmission provider if its operation is
at the direction of the transmission
provider to maintain the reliable and
efficient operation of the transmission
system.
565. The Commission found that, by
more accurately reflecting the technical
capabilities of electric storage resources
in interconnection studies through the
use of appropriate operating
assumptions, this reform will ensure the
reliable interconnection of new electric
storage resources without
overestimating their impact on the
transmission system, thereby ensuring
just and reasonable rates by avoiding
excessive and unnecessary network
upgrades that may hinder the timely
development of new generating facilities
that stifles competition in the wholesale
market.1048 The Commission also found
that this reform reduces unduly
discriminatory or preferential barriers to
the interconnection of electric storage
resources.
566. The Commission found that,
taken together, the revisions to the pro
forma LGIP and pro forma LGIA
adopted in Order No. 2023 will ensure
that interconnection customers adhere
to the operating assumptions used to
study their electric storage resource and
ameliorate concerns about possible
reliability problems expressed by
commenters.1049 The Commission
further found that: (1) control devices
can prevent electric storage resources
from charging during peak load
conditions; (2) modern electric storage
resources can respond to signals from
the transmission provider within
seconds; (3) electric storage resources
generally do not have an economic
incentive to charge during peak load
conditions; and (4) the consequence of
being considered in breach of the LGIA
1046 Id.
n.2858.
P 1521.
1048 Id. P 1510.
1049 Id. P 1522.
1047 Id.
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provides an additional incentive for
electric storage resources to follow the
agreed-upon operating assumptions
memorialized in their LGIA. Further,
the Commission noted that some
transmission providers already assume
in their interconnection studies that
electric storage resources will not charge
during peak load conditions.1050 The
Commission emphasized that,
irrespective of these changes to
operating assumptions, all electric
storage resources must continue to meet
all requirements in the pro forma LGIP
and pro forma LGIA, as well as all
applicable reliability standards.
567. The Commission found that the
speed and control with which electric
storage resources can respond to signals
from transmission providers sufficiently
distinguishes the charging behavior of
electric storage resources from that of
firm customer end-use load.1051
Therefore, for purposes of determining
any network upgrades necessary to
accommodate the reliable
interconnection of electric storage
resources, the Commission found that
the charging of electric storage resources
should not be modeled equivalently to
firm customer end-use load in
interconnection studies if the
interconnection customer memorializes
its operating assumptions in the LGIA
and installs control technologies, if
required, to limit its operations as
specified. The Commission further
clarified that the transmission provider
must not assign network upgrade costs
to the interconnection customer based
on those worst-case operating
assumptions (e.g., charging at maximum
capacity during peak load conditions)
where there is agreement from the
interconnection customer to, if required,
implement operating restrictions
including installing or demonstrating
that the generating facility already has
control technologies (software and/or
hardware) to limit its operations during
peak load conditions.1052
568. Additionally, in Order No. 2023
the Commission declined to extend the
reform to apply to additional generating
facility technologies (e.g., natural gas,
solar, wind) or to other operating
assumptions, including the injection of
power.1053 The Commission encouraged
1050 Id. n.2865 (citing to Bonneville Initial
Comments at 23; MISO Comments at 117;
PacifiCorp, 182 FERC ¶ 61,131 (2023) (accepting,
subject to condition, revisions to PacifiCorp’s LGIP
and LGIA to allow PacifiCorp to study electric
storage resources in its interconnection study
process using operating assumptions that more
accurately reflect their expected operation)).
1051 Id. P 1523.
1052 Id. P 1525.
1053 Id. P 1529.
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transmission providers to examine on
an individual basis what operating
assumptions used to study the injection
of power may be appropriate to render
the study process more accurate. The
Commission also clarified that this
requirement does not apply to
transmission service requests and that
Order No. 2023 does not modify the
process for requesting transmission
service.1054
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ii. Requests for Rehearing and
Clarification
569. Joint RTOs and PJM request
rehearing of the operating assumptions
reform because they assert that the
Commission failed to respond
meaningfully to the concerns raised that
the use of customer-provided operating
assumptions in interconnection studies
(1) is not consistent with how planning
studies are performed, (2) will add
additional administrative burdens for
transmission providers, and (3) may
jeopardize reliability and shift costs to
load.1055 Joint RTOs also urge the
Commission to revise or clarify Order
No. 2023 to allow RTOs/ISOs to develop
generally applicable procedures for
addressing storage charging
assumptions rather than burdensome ad
hoc analyses for each interconnection
customer.1056 Joint RTOs argue that the
operating assumptions reform is
impractical and creates reliability
problems due to the complexities of the
required studies and lack of feasible
enforcement mechanisms, and will
burden real-time operations to limit
these units to assumptions they
provided as part of their interconnection
application.1057
570. Joint RTOs and PJM assert that
transmission providers have no ability
to monitor in real time if an
interconnection customer violates its
operating limits, which could threaten
reliability, and contend that Order No.
2023 does not explain how transmission
providers would police storage
resources’ operations and enforce the
operating assumptions on which their
interconnection studies were based.1058
Joint RTOs and PJM add that, to the
extent electric storage resources exceed
their operating parameters in real time,
the costs of network upgrades would fall
unfairly upon load because, once
interconnected, load (rather than the
interconnection customer) is
responsible for the costs of upgrading
1054 Id.
P 1526.
RTOs Rehearing Request at 3, 6; PJM
Rehearing Request at 12, 38.
1056 Joint RTOs Rehearing Request at 6.
1057 Id. at 4.
1058 Id. at 7–8; PJM Rehearing Request at 40.
1055 Joint
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the system to maintain the unit’s
deliverability over its lifetime.1059 Joint
RTOs and PJM state that
interconnection studies are not designed
to incorporate the real-time dispatch of
resources or withdrawals of load or
storage resources, arguing that the
Commission fails to distinguish how
storage resources differ from other
generating facilities so as to justify this
unwarranted departure from the
principles which underlie planning and
interconnection analyses. Joint RTOs
and PJM also argue that implementing
this reform, including the requirement
to provide an interconnection customer
with an explanation of why the
submitted operating assumptions are
insufficient or inappropriate and allow
the interconnection customer to revise
and resubmit the operating
assumptions, is likely to add more time
to the interconnection study process
and engender arguments of unequal
treatment by other resources within a
cluster.1060 PJM adds that Order No.
2023 is unduly discriminatory and
provides no clear basis for favoring
storage projects over all other types of
generating resources or other types of
load.1061
571. NYISO requests rehearing of the
operating assumptions reform because it
is inconsistent with the NYISOadministered markets given that storage
resources participating as installed
capacity suppliers are required to bid,
schedule, and/or declare unavailable
their entire withdrawal operating range
during the day-ahead market, or
otherwise may be subject to financial
penalties.1062 NYISO adds that grid or
market conditions may make it desirable
for storage resources to charge during
peak demand hours and/or during
NYISO’s peak load window, for
example to capture energy production
during peak output of solar generating
facilities.1063 NYISO argues that the
reform will add significant new
complexity to interconnection studies
and increase the time required to
complete such studies, which is at odds
with the intent of Order No. 2023 to
expedite such studies by establishing
firm deadlines subject to penalties.1064
NYISO asserts that requiring a
transmission provider to consider the
1059 Joint RTOs Rehearing Request at 5–6; PJM
Rehearing Request at 40–41.
1060 Joint RTOs Rehearing Request at 6–7; PJM
Rehearing Request at 39.
1061 PJM Rehearing Request at 38–39.
1062 NYISO Rehearing Request at 3, 54–55.
1063 Id. at 54 (citing NYISO, Market
Administration and Control Area Services Tariff,
§ 5.12 (MST Requirements Applicable to Installed
Capacity Supply) (41.0.0) § 5.12.14).
1064 Id. at 55–56.
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individual operating assumptions of
each storage project would require that
it create additional off-peak system base
cases that are tailored for each
individual project as the standardized
set of system base cases may not
represent the system conditions where
the developer of the storage project opts
to charge.
572. In contrast, Public Interest
Organizations argue that the
Commission erred in limiting the reform
to only the operating parameters for
withdrawals of energy by storage
resources and declining to extend it to
storage injections or other
technologies.1065 Public Interest
Organizations contend that the
Commission’s reasoning that the
potential reliability impacts and
administrative burden of extending the
reform to injections of energy is
arbitrary and capricious given (1) the
broad support among commenters that
the failure to use realistic operating
assumptions for injections of power can
result in unnecessary network upgrades,
stifle competition, and create unduly
discriminatory barriers and (2) the
ample evidence presented of how the
reliability impacts of injections are
already being sufficiently managed by
grid operators during real-time
operations. Public Interest
Organizations aver that, without
consideration of operating parameters in
interconnection studies, certain
interconnection customers will be
forced to pay for increasingly excessive
and unnecessary upgrades that will sit
unused, which will ultimately lead to a
less efficient power system and unjust
and unreasonable electricity costs for
ratepayers.1066
573. Clean Energy Associations
request clarification, or in the
alternative rehearing, so that the pro
forma LGIP requires that the
interconnection customer and
transmission provider mutually agree in
the cluster study agreement as to (1)
which loading cases are applied to
storage charging and discharging and (2)
what power level or percentage output
or percentage charging is applied to
each case.1067 Clean Energy
Associations also ask the Commission to
require transmission providers to
identify which loading case triggered
identified upgrades in the cluster study
results. Further, to ensure that
interconnection customers and
transmission providers have clarity
1065 Public Interest Organizations Rehearing
Request at 17–18.
1066 Id. at 19–20.
1067 Clean Energy Associations Rehearing Request
at 70–73.
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about the operating constraints that
apply in an LGIA, Clean Energy
Associations urge the Commission to
specify requirements for operating
assumptions in the cluster study
agreement as well as what the
transmission provider must deliver to
the electric storage resource owner
interconnection customer in cluster
study results, rather than having the
utility state when their peak load
applies. Clean Energy Associations state
that, because Order No. 2023 does not
provide for any means to address
situations in which the interconnection
customer and transmission provider
continue to have a disagreement after
the revision and resubmittal of the
operating assumptions during the
customer engagement window, they
seek clarification or, in the alternative
rehearing, that interconnection
customers may submit conflicting
situations to the Commission along with
a request to file the applicable study
agreement unexecuted, with a request
that the Commission determine which
operating assumption should be used in
the applicable study.
574. Clean Energy Associations ask
the Commission to clarify that the
planned operating assumptions of
electric storage resources must be
considered as part of the
interconnection process.1068 Clean
Energy Associations assert that planned
operating assumptions should also be
considered part of transmission service
requests. Clean Energy Associations also
ask the Commission to clarify that the
operating assumption requirement
applies not just to standalone storage,
but to hybrid and co-located resources
as well. Clean Energy Associations add
that, given the Commission’s findings
regarding the capabilities and incentives
of energy storage resources, the
Commission should clarify that
modeling energy storage charging
equivalently to firm customer end-use
load for purposes of determining
network upgrades is inconsistent with
good utility practice going forward.1069
iii. Determination
575. We are not persuaded by PJM’s
and Joint RTOs’ arguments on rehearing.
First, we disagree with PJM and Joint
RTOs that the Commission did not
sufficiently articulate how electric
storage resources are distinct from other
types of generating facilities, why this
reform is needed to ensure just and
reasonable rates, and why this reform is
not unduly discriminatory or
preferential. As the Commission stated
1068 Id.
1069 Id.
at 69–70.
at 72–73.
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in Order No. 2023, electric storage
resources have operating parameters
that differ from traditional types of
generating facilities for which the
generator interconnection process was
originally designed, namely their ability
to both inject power and withdraw
power.1070 The instant reform is
directed specifically and exclusively at
how transmission providers study the
withdrawal of power from electric
storage resources (i.e., the unique
feature of electric storage resources
compared to other types of generating
facilities) within the generator
interconnection process.
576. As the record indicates, the
existing practice of some transmission
providers is to study withdrawals of
power from electric storage resources
during peak load conditions
equivalently to firm customer end-use
load, and this practice results in
excessive and unnecessary network
upgrades and may hinder the timely
development of new generation, thereby
stifling competition in the wholesale
markets, and resulting in rates, terms,
and conditions that are unjust and
unreasonable.1071 We continue to find
that the speed and control with which
electric storage resources can respond to
signals from transmission providers
sufficiently distinguishes the charging
behavior of electric storage resources
from that of firm customer end-use load,
and that reflecting the technical
capabilities of electric storage resources
through the use of appropriate operating
assumptions in interconnection studies
reduces unduly discriminatory or
preferential barriers to the
interconnection of electric storage
resources.1072
577. We are unpersuaded by PJM’s
and Joint RTOs’ arguments that
reflecting whether an interconnecting
electric storage resource will or will not
charge during peak load conditions is
fundamentally incompatible with
interconnection studies. We reiterate
that Order No. 2023 requires
transmission providers, at the request of
the interconnection customer, to reflect
in their interconnection studies whether
an interconnecting electric storage
resource will or will not charge during
peak load conditions (unless good
1070 Order
No. 2023, 184 FERC ¶ 61,054 at P 1448.
e.g., AEE Initial Comments at 42; Alliant
Energy Initial Comments at 8; Clean Energy
Associations Initial Comments at 52–53;
Hydropower Commenters Initial Comments at 21–
22; Longroad Reply Comments at 10–12; NARUC
Initial Comments at 36–37; NESCOE Reply
Comments at 18; Pine Gate Initial Comments at 51,
54; Public Interest Organizations Initial Comments
at 47; rPlus Initial Comments at 6; SEIA Initial
Comments at 40; SEIA Reply Comments at 27.
1072 Order No. 2023, 184 FERC ¶ 61,054 at P 1523.
1071 See,
PO 00000
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utility practice, including applicable
reliability standards, otherwise requires
the use of different operating
assumptions).1073 We clarify that the
instant reform does not require
transmission providers to develop new
base cases for each interconnecting
electric storage resource to reflect when
that resource intends to charge. Rather,
the reform requires transmission
providers to reflect whether an electric
storage resource will or will not charge
in any studies of peak load conditions
in the interconnection process.
Transmission providers regularly
evaluate the impact of an
interconnecting generating facility on
the transmission system during
anticipated peak load conditions as part
of their interconnection studies, and we
note that some transmission providers
already assume in their interconnection
studies that electric storage resources
will not charge during peak load
conditions.1074 Further, we agree with
commenters in this record that, when
transmission providers’ interconnection
studies rely on the assumption that all
electric storage resources will withdraw
power at their maximum capacity
during peak load conditions (i.e.,
modeling the charging of electric storage
resources equivalently to firm end-use
customer demand), this practice fails to
recognize the real-time attributes of
electric storage resources, such as the
ability to respond within seconds to
dispatch signals from the transmission
provider.1075
578. We disagree with PJM and Joint
RTOs that this requirement will
compromise reliability because, they
argue, transmission providers are unable
to monitor and enforce interconnection
customer-provided operating
assumptions. We continue to maintain
that this reform will ensure the reliable
operation of the transmission system
because: (1) control devices are able to
prevent electric storage resources from
charging during peak load conditions;
(2) modern electric storage resources are
able to respond to signals from the
transmission provider within seconds;
(3) electric storage resources generally
1073 Id.
P 1509.
Bonneville Initial Comments at 23; MISO
Comments at 117; see also PacifiCorp, 182 FERC
¶ 61,131 (accepting, subject to condition, revisions
to PacifiCorp’s LGIP and LGIA to allow PacifiCorp
to study electric storage resources in its
interconnection study process using operating
assumptions that more accurately reflect their
expected operation).
1075 See, e.g., Clean Energy Alliance Initial
Comments at 14–15; NARUC Initial Comments at
37; NESCOE Reply Comments at 18; PacifiCorp
Initial Comments at 41; Pattern Energy Initial
Comments at 12; Pine Gate Initial Comments at 51;
SEIA Initial Comments at 40; Union of Concerned
Scientists Reply Comments at 10–11.
1074 See
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do not have an economic incentive to
charge during peak load conditions; and
(4) the consequence of being considered
in breach of the LGIA provides an
additional incentive for electric storage
resources to follow the agreed-upon
operating assumptions memorialized in
their LGIA, unless otherwise directed by
the transmission provider. Further, we
believe that ensuring that an electric
storage resource adheres to the
operating assumptions memorialized in
its LGIA presents substantially similar
concerns to ensuring that any generating
facility stays within its interconnection
service level (e.g., a generating facility
that requests interconnection service
less than its full generating facility
capacity). We emphasize again that,
irrespective of these changes to
operating assumptions, all electric
storage resources must continue to meet
all requirements in the pro forma LGIP
and pro forma LGIA, as well as all
applicable reliability standards.
579. We disagree with Joint RTOs and
PJM that, if an electric storage resource
fails to adhere to its operating
assumptions during real-time
operations, load will be required to bear
the costs of network upgrades needed to
maintain deliverability of the electric
storage resource over its lifetime. As the
Commission stated in Order No. 2023, if
an interconnection customer fails to
operate its electric storage resource in
accordance with the operating
assumptions memorialized in the
interconnection customer’s LGIA
(absent instructions from the
transmission provider to the contrary),
the transmission provider may consider
the electric storage resource to be in
breach and may pursue termination of
the LGIA pursuant to article 17 of the
LGIA.1076
580. Regarding Joint RTOs’ and PJM’s
argument that this reform will add
administrative burdens for transmission
providers, we continue to find that the
benefits of this reform—reducing
unduly discriminatory or preferential
barriers to the interconnection of
electric storage resources—outweigh the
added burden to transmission providers.
We decline to grant Joint RTOs’ request
for clarification that the Joint RTOs are
entitled to an independent entity
variation to develop generally
applicable procedures for addressing
storage charging assumptions rather
than the reform as constructed in Order
No. 2023. Consistent with the
Commission’s statements in Order No.
2023, transmission providers may
explain specific circumstances on
compliance and justify why any
1076 Order
No. 2023, 184 FERC ¶ 61,054 at P 1521.
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deviations are either consistent with or
superior to the pro forma LGIP or merit
an independent entity variation in the
context of RTOs/ISOs.
581. We are not persuaded by
NYISO’s arguments on rehearing. We
note that NYISO’s arguments relate to
NYISO’s specific market rules and do
not necessarily apply to the reform more
broadly. In Order No. 2023, the
Commission clarified that, if done so at
the direction of the transmission
provider to maintain the reliable and
efficient operation of the transmission
system, an electric storage resource that
operates contrary to the operating
assumptions specified in its LGIA must
not be considered in breach of its LGIA
by the transmission provider.1077 We
believe this clarification ensures that the
instant reform will work in concert with
RTOs’/ISOs’ existing congestion
management practices. Additionally, we
reiterate the clarification above that the
instant reform does not require
transmission providers to develop new
base cases for each interconnecting
electric storage resource to reflect when
that resource intends to charge, as
NYISO suggests. Rather, the reform
requires transmission providers to
reflect whether an electric storage
resource will or will not charge in any
studies of peak load conditions in the
interconnection process. However, if
NYISO continues to believe the instant
reform conflicts with its market rules,
NYISO may explain the specific
circumstances on compliance and
justify why any deviations merit an
independent entity variation.
582. We are unpersuaded by Public
Interest Organizations’ arguments on
rehearing that the Commission should
extend this reform to apply to operating
assumptions for injections of power
from electric storage resources and other
technologies. Although several
commenters urged the use of more
accurate operating assumptions for
injections of power from certain types of
generating facilities, we believe that the
current record does not sufficiently
support extending the instant reform to
injections of power from all types of
generating facilities and does not
provide sufficient information on the
incremental burden that such a reform
could place on transmission providers’
study methods and timelines. Further,
we are concerned that extending the
reform to apply to operating
assumptions for injections of power
from only some types of generating
facilities and not all types of generating
facilities that are capable of injecting
power could potentially be unduly
1077 Id.
PO 00000
P 1521.
Frm 00101
Fmt 4701
discriminatory or preferential. We
continue to encourage transmission
providers to examine on an individual
basis what operating assumptions used
to study the injection of power from
generating facilities may be appropriate
to render the study process more
accurate. Similarly, we continue to
acknowledge that fuel-based dispatch
assumptions may be able to address
some of the identified challenges
associated with inaccurate modeling
assumptions for all generating facility
types and encourage transmission
providers to evaluate the merits of
adopting them.1078
583. We decline to grant Clean Energy
Associations’ requested clarification
that the pro forma LGIP requires the
interconnection customer and
transmission provider to mutually agree
in the cluster study agreement as to (1)
which loading cases are applied to
storage charging and discharging and (2)
what power level or % output or %
charging is applied to each case. The
instant reform is directed specifically
and exclusively at how transmission
providers study the withdrawal of
power from electric storage resources
within the generator interconnection
process (namely, whether an electric
storage resource will or will not charge
during peak load conditions). The
Commission did not require
transmission providers to revise how
they study injections of power from
electric storage resources, and we
decline to do so now. For the same
reason, we are unpersuaded by Clean
Energy Associations’ rehearing request
on the same issue.
584. We also decline to grant Clean
Energy Associations’ requested
clarification that, in situations in which
the interconnection customer and
transmission provider disagree about
operating assumptions, the
interconnection customers may request
to file the applicable study agreement
with the Commission unexecuted, with
a request that the Commission
determine which operating assumptions
should be used in the applicable study.
In such a situation, we find it more
appropriate for the interconnection
customer to instead use the dispute
resolution procedures in section 13.5 of
the pro forma LGIP. For the same
reason, we are unpersuaded by Clean
Energy Associations’ rehearing request
on the same issue.
585. We decline to grant Energy
Associations’ requested clarification
that the planned operating assumptions
of electric storage resources must be
considered as part of the
1078 Id.
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interconnection process and in
transmission service requests. In Order
No. 2023, the Commission explained
that the instant reform does not require
transmission providers to study
charging as part of the interconnection
process if they do not already to so, and
we decline to require so now.1079 We
reiterate that, if a transmission provider
does not determine the network
upgrades needed to accommodate the
charging of an electric storage resource
through the interconnection process
(e.g., the transmission provider
determines such upgrades as part of the
transmission service request process),
then the transmission provider must
demonstrate on compliance why this
reform does not apply to that particular
transmission provider. Additionally, the
Commission clarified in Order No. 2023
that the instant reform does not apply to
transmission service requests, and Order
No. 2023 does not modify the process
for requesting transmission service.
586. In response to Clean Energy
Associations’ requested clarification
that all aspects of the operating
assumption reform of Order No.
2023 1080 apply not just to standalone
storage, but also to hybrid and colocated generating facilities that contain
an electric storage resource, we reiterate
the clarification the Commission made
in Order No. 2023: ‘‘For clarity, we note
that the reforms described in this
determination section and the related
sections of the pro forma LGIP apply to
all interconnecting electric storage
resources, whether they are standalone,
co-located generating facilities, or part
of a hybrid generating facility.’’ 1081
587. We decline to grant Clean Energy
Associations’ requested clarification
that modeling the charging of an electric
storage resource equivalently to firm
customer end-use load for purposes of
determining network upgrades is
inconsistent with good utility practice.
We reiterate our finding that, for
purposes of determining any network
upgrades necessary to accommodate the
reliable interconnection of electric
storage resources, the charging of
electric storage resources should not be
modeled equivalently to firm customer
end-use load in interconnection studies
if the interconnection customer agrees
to memorialize its operating
assumptions in the LGIA and installs
control technologies, if required by the
transmission provider, to limit its
operations as specified.1082 However,
there are still situations in which we
1079 Id.
P 1526.
PP 1509–1533.
1081 Id. P 1509 n.2858.
1082 Id. P 1523.
1080 Id.
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believe it is acceptable, and Order No.
2023 allows, for a transmission provider
to continue to model an electric storage
resource in interconnection studies as
charging during peak load conditions,
for example: (1) if the interconnection
customer does not request during the
interconnection process that the
transmission provider study the electric
storage resource as not charging during
peak load conditions; (2) if the
interconnection customer declines the
transmission provider’s request to
install or demonstrate that it has
installed control technologies sufficient
to prevent it from charging during peak
load conditions unless otherwise
directed by the transmission provider;
or (3) if the interconnection customer
declines the transmission provider’s
request to memorialize the requested
operating assumptions in its LGIA.
2. Incorporating the Enumerated
Alternative Transmission Technologies
Into the Generator Interconnection
Process
a. Consideration of the Enumerated
Alternative Transmission Technologies
in Interconnection Studies Upon
Request of the Interconnection
Customer
i. Order No. 2023 Requirements
588. In Order No. 2023, the
Commission revised section 7.3 of the
pro forma LGIP, and sections 3.3.6 and
3.4.10 of the pro forma SGIP.1083 The
Commission required transmission
providers to evaluate the following
enumerated list of alternative
transmission technologies: static
synchronous compensators, static VAR
compensators, advanced power flow
control devices, transmission switching,
synchronous condensers, voltage source
converters, advanced conductors, and
tower lifting. The Commission revised
pro forma LGIP section 7.3 to require
transmission providers to evaluate the
list of alternative transmission
technologies enumerated in Order No.
2023 during the cluster study, including
any restudies, of the generator
interconnection process in all instances
(i.e., for all interconnection customers
in a cluster), without the need for a
request from an interconnection
customer. The Commission required
transmission providers to evaluate each
alternative transmission technology
listed in pro forma LGIP section 7.3 and
to determine, in the transmission
provider’s sole discretion, whether it
should be used, consistent with good
utility practice, applicable reliability
standards, and other applicable
regulatory requirements. Finally, the
Commission required transmission
providers to include, in the pro forma
LGIP cluster study report, an
explanation of the results of the
evaluation of the enumerated alternative
transmission technologies for feasibility,
cost, and time savings as an alternative
to a traditional network upgrade.
589. The Commission modified the
enumerated list of alternative
transmission technologies from the
NOPR proposal to: (1) retain
synchronous, static VAR compensators,
advanced power flow control, and
transmission switching in the list; (2)
add synchronous condensers, voltage
source converters, advanced conductors,
and tower lifting to the list; and (3)
remove dynamic line ratings from the
list.1084 Generally, the Commission
found that these enumerated alternative
transmission technologies are those
with the most potential to be useful to
reduce interconnection costs by
providing lower cost network upgrades
to interconnect new generating facilities
and thus required transmission
providers to evaluate these technologies
in the interconnection process for their
feasibility, cost, and time savings
potential.
590. The Commission revised sections
3.3.6 and 3.4.10 of the pro forma SGIP,
consistent with the pro forma LGIP
requirement, to require transmission
providers to evaluate the enumerated
alternative transmission technologies
when performing interconnection
studies for small generating facilities,
without the need for a request from an
interconnection customer.1085 The
Commission required such evaluations
to occur during the pro forma SGIP
feasibility study and system impact
study of the generator interconnection
process. The Commission found that it
is appropriate for these evaluations to
occur during the relevant pro forma
SGIP studies where network upgrades
are identified, consistent with the pro
forma LGIP requirement. The
Commission required transmission
providers to evaluate each alternative
transmission technology listed in pro
forma SGIP sections 3.3.6 and 3.4.10
and determine, in the transmission
provider’s sole discretion, whether it
should be used, consistent with good
utility practice, applicable reliability
standards, and other applicable
regulatory requirements.
591. Finally, the Commission required
transmission providers to include, in
the feasibility study report and system
impact study report, an explanation of
1084 Id.
1083 Id.
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the results of the evaluation of the
enumerated alternative transmission
technologies for feasibility, cost, and
time savings as an alternative to a
traditional network upgrade.1086 The
Commission noted that this reform is
one of the few reforms in Order No.
2023 that applies to small generating
facilities, in addition to large generating
facilities. The Commission found that
the enumerated alternative transmission
technologies that it required
transmission providers to evaluate in
their interconnection studies are
appropriate for evaluation in the pro
forma SGIP context because they are
scalable and that the enumerated
alternative transmission technologies
have the potential to provide similar
benefits in the context of both small and
large generating facilities, including cost
and time savings.
592. Based on the record, the
Commission found that alternative
transmission technologies have the
potential to provide benefits to optimize
the transmission system in specific
scenarios.1087 The Commission found
that failing to evaluate the enumerated
alternative transmission technologies
renders Commission-jurisdictional rates
unjust and unreasonable and fails to
ensure that interconnection customers
are able to interconnect in a reliable,
efficient, transparent, and timely
manner.1088
593. The Commission found that the
record demonstrated that the
requirements adopted in Order No. 2023
will not overly burden transmission
providers.1089 The Commission also
maintained that the requirement that
transmission providers evaluate the
enumerated alternative transmission
technologies for an entire cluster—
rather than on an individual
1086 Id.
P 1581.
P 1583 (noting arguments that selecting
alternative transmission technologies: may reduce
interconnection costs by providing lower cost
transmission solutions to interconnecting new
generating facilities; may allow faster
interconnection by providing solutions that can be
implemented more quickly; may allow better use of
the existing transmission system, enhance
reliability, reduce withdrawals, restudies, and
overall interconnection delays; would decrease
network upgrade costs that will reduce the number
of withdrawals from interconnection queues,
ultimately creating a more efficient interconnection
process by reducing the number of restudies
triggered by withdrawals; and would offer
additional value because they are scalable and
modular to address evolving needs and can be
redeployed as those needs continue to change).
1088 Id. (citing NOPR, 179 FERC ¶ 61,194 at P 296;
see Clean Energy Associations Reply Comments at
9–10; Environmental Defense Fund Initial
Comments at 7; Fervo Reply Comments at 9;
NARUC Initial Comments at 38).
1089 Id. P 1586 (citing AEE Initial Comments at 44;
ENGIE Initial Comments at 13; ACORE Reply
Comments at 3–4).
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interconnection customer-request
basis—and the modifications to the
enumerated list of alternative
transmission technologies will ease the
burden on transmission providers,
thereby lessening the risk that they are
unable to complete studies by the
required deadlines.1090 The Commission
noted that it was not dictating how a
transmission provider must evaluate
each enumerated alternative
transmission technology on the list in
each instance. The Commission
recognized that in some cases
transmission providers may be able to
rapidly determine if a certain
enumerated alternative transmission
technology is inappropriate for further
study.
594. The Commission also found that
the benefits of evaluating and
implementing the enumerated
alternative transmission technologies
outweigh any potential burden or the
potential of increased study times.1091
The Commission stated that, as
recognized by commenters and
explained earlier in Order No. 2023, the
evaluation and use, at the transmission
provider’s sole discretion, of the
enumerated alternative transmission
technologies could decrease network
upgrade costs, withdrawals, and
restudies, thereby increasing the
efficiency of the interconnection process
overall. For these reasons, the
Commission disagreed with commenters
who argued that requiring transmission
providers to evaluate the enumerated
alternative transmission technologies is
contrary to the NOPR’s goal of
increasing the speed of interconnection
queue processing.
595. The Commission explained that
Order No. 2023 did not create a
presumption in favor of substituting
alternative transmission technologies for
necessary traditional network upgrades,
either categorically or in specific
cases.1092 The Commission stated that
Order No. 2023 is agnostic as to
whether, in a specific case, an
alternative transmission technology is
1090 Id.
P 1590.
P 1586 (citing AEE Initial Comments at 44;
ENGIE Initial Comments at 13; ACORE Reply
Comments at 3–4).
1092 Id. PP 1582, 1584 (citing PJM Initial
Comments at 68 (‘‘PJM therefore cautions the
Commission not to conflate the operational benefits
of alternative transmission technologies . . . with
the need to address significant capacity
enhancement needs (short and long-term) or longrange transmission needs under rapid growth or
changing resource mix scenarios.’’); MISO Initial
Comments at 120 (‘‘However, the Commission fails
to recognize that these technologies may be
evaluated in the generator interconnection process
already but may nonetheless not be adopted as they
are not the appropriate solution to a Transmission
Issue related to an interconnection.’’)).
1091 Id.
PO 00000
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27107
an acceptable alternative to a traditional
network upgrade.1093 The Commission
explained that the rule mandates a
process of evaluation of alternatives to
traditional network upgrades, not
outcomes in specific cases.1094
596. The Commission stated that the
requirement is to evaluate the
enumerated alternative transmission
technologies in the interconnection
process for feasibility, cost, and time
savings and to determine whether, in
the transmission provider’s sole
discretion, an alternative transmission
technology should be used as a
solution—consistent with good utility
practice, applicable reliability
standards, and other applicable
regulatory requirements.1095 The
Commission found that it is appropriate
to continue to rely on transmission
providers to use good utility practice,
applicable reliability standards, and
other applicable regulatory
requirements, in their evaluations of
alternative transmission technologies,
including the enumerated list, because
the specific evaluation may depend on
the transmission provider’s individual
transmission system, cluster makeup,
and other factors.1096
597. The Commission explained that
the transmission provider must
determine whether using any of the
enumerated alternative transmission
technologies is an appropriate and
reliable network upgrade ‘‘that would
allow the interconnection customer to
flow the output of its generating facility
onto the transmission provider’s
transmission system in a safe and
reliable manner.’’ 1097 The Commission
1093 Id. P 1582 (citing MISO Initial Comments at
121–22 (‘‘Further, although these technologies may
be evaluated, the technologies identified by the
Commission still may not provide the appropriate
solution from a planning perspective. Many of the
technologies identified are appropriately
considered as operational tools or short-term
solutions but are not necessarily appropriate for
planning to support a particular generator
interconnection.’’) (citation omitted)).
1094 Id. PP 1582, 1584.
1095 Id. PP 1584, 1587, 1589.
1096 Id. P 1589 (adding that ‘‘the transmission
provider—consistent with good utility practice,
applicable reliability standards, and other
applicable regulatory requirements—retains the sole
discretion to determine whether a particular
technology in the enumerated list of alternative
transmission technologies is appropriate and
reliable as a network upgrade, or not, for a given
cluster.’’).
1097 Id. P 1582 (citing Order No. 2003, 104 FERC
¶ 61,103 at P 767 (‘‘Both Energy Resource
Interconnection Service and Network Resource
Interconnection Service provide for the
construction of Network Upgrades that would allow
the Interconnection Customer to flow the output of
its Generating Facility onto the Transmission
Provider’s Transmission System in a safe and
reliable manner’’); Order No. 2003–A, 106 FERC
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further explained that the requirement
to make such a determination before
allowing for the use of the enumerated
alternative transmission technologies
addresses concerns that their use may
impinge on reliability, delay network
upgrades instead of reducing the need
for them or obviating the need for them
altogether, or fail to address all
transmission system issues that a
traditional network upgrade would
address. The Commission recognized
the need to avoid time-consuming
delays and costly disputes or litigation
over interconnection costs that could
arise as a result of this reform.1098
Therefore, the Commission found that,
if a transmission provider evaluates the
enumerated alternative transmission
technologies as required herein and, in
its sole discretion, determines not to use
any enumerated alternative
transmission technologies as an
alternative to a traditional network
upgrade, the transmission provider has
complied with Order No. 2023,
including tariffs filed pursuant thereto.
598. The Commission explained that
transmission providers are required to
include an explanation of the results of
the evaluation of the required
alternative transmission technologies for
feasibility, cost, and time savings as an
alternative to a traditional network
upgrade in the applicable study
report.1099 The Commission found the
required explanation of the results of
the transmission provider’s evaluation
included in the applicable study report
provides sufficient transparency
without placing a further burden on
transmission providers that would delay
the processing of interconnection
requests.
¶ 61,220 at P 404; pro forma LGIA art. 9.3
(‘‘Transmission Provider shall cause the
Transmission System and the Transmission
Provider’s Interconnection Facilities to be operated,
maintained and controlled in a safe and reliable
manner and in accordance with this LGIA’’);
Midwest Indep. Transmission Sys. Operator, Inc.,
138 FERC ¶ 61,233, at P 190, reh’g denied, 139
FERC ¶ 61,253, partial reh’g granted on other
grounds, 150 FERC ¶ 61,035). See also pro forma
LGIA art. 9.4 (‘‘Interconnection Customer shall at its
own expense operate, maintain and control the
Large Generating Facility and Interconnection
Customer’s Interconnection Facilities in a safe and
reliable manner and in accordance with this
LGIA’’)).
1098 Order No. 2023, 184 FERC ¶ 61,054 at P 1587
(citing SPP Initial Comments at 26 (‘‘Even though
the Commission has stated that transmission
providers retain the discretion regarding whether to
use such technologies, the very fact that the
transmission provider is required to evaluate them
will lead to disputes if the transmission provider
then exercises that discretion.’’)).
1099 Id. P 1590.
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ii. Requests for Rehearing and
Clarification
599. SPP seeks rehearing of the
requirement for transmission providers
to evaluate certain enumerated
alternative transmission technologies in
the interconnection study process
because SPP argues that this
requirement will burden transmission
providers and lengthen the
interconnection process.1100 SPP also
asserts that the Commission does not
provide adequate guidance on what
metrics would be sufficient to support
the use or non-use of a specific
alternative technology, which SPP
contends will invite litigation from
interconnection customers and further
lengthen the interconnection process.
WATT Coalition also contends that, to
comply with the FPA, the Commission
must grant rehearing to set a meaningful
standard for evaluation and ensure that
alternative transmission technologies
are used if they are the most costeffective and fastest interconnection
upgrade solution.1101
600. PJM asks the Commission to
clarify that Order No. 2023’s
requirement for transmission providers
to explain their evaluation of the
enumerated alternative transmission
technologies in their cluster study
reports does not apply when a
transmission provider already includes
all the enumerated technologies in its
studies.1102 PJM argues that this
reporting requirement is
administratively burdensome with no
corresponding benefit because PJM
already studies all of the enumerated
technologies in its interconnection
process. PJM also asserts that Order No.
2023’s requirement that transmission
providers evaluate the enumerated
alternative transmission technologies
will be burdensome because
interconnection customers are likely to
demand re-evaluation of the
technologies.
601. Clean Energy Associations,
Public Interest Organizations, and
WATT Coalition request rehearing of
Order No. 2023’s requirement that
transmission providers have sole
discretion over the evaluation and use
of an enumerated alternative
transmission technologies.1103 Public
Interest Organizations argue that Order
No. 2023’s requirement that
transmission providers’ decisions be
1100 SPP
Rehearing Request at 19.
Coalition Rehearing Request at 24.
1102 PJM Rehearing Request at 45–46.
1103 Clean Energy Associations Rehearing Request
at 48; Public Interest Organizations Rehearing
Request at 13–15; WATT Coalition Rehearing
Request at 1–2, 14–15, 24–30.
1101 WATT
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consistent with good utility practice,
applicable reliability standards, and
other applicable regulatory
requirements is vague and will allow
transmission providers to reject the
enumerated alternative transmission
technologies, even when studies
demonstrate them to be lower cost and
faster than traditional network
upgrades.1104 Public Interest
Organizations further argue that,
because transmission providers have
sole discretion over implementing the
enumerated alternative transmission
technologies, the study process will be
a mere formality that allows the
transmission provider to reject an
enumerated alternative transmission
technology, even if its own studies have
demonstrated that they are the least cost
and/or fastest solutions. Public Interest
Organizations contend that requiring
traditional network upgrades when a
transmission provider’s own study has
found that an enumerated alternative
transmission technology would be
cheaper and/or faster imposes excessive
costs on consumers, leading to unjust
and unreasonable rates, and unduly
discriminates against providers of
alternative transmission technologies.
602. Clean Energy Associations
contend that giving transmission
providers sole discretion insulates
transmission providers from challenges
to inadequate evaluations or unjustified
adoption decisions.1105 Clean Energy
Associations assert that, absent some
form of review and recourse,
transmission providers might only
cursorily evaluate alternative
transmission technologies and
interconnection customers will have no
opportunity to respond to unjust and
unreasonable charges. Clean Energy
Associations argue that the FPA requires
a more nuanced analysis than Order No.
2023’s requirement that determinations
be consistent with good utility practice,
applicable reliability standards, and
other applicable regulatory
requirements. Clean Energy
Associations ask the Commission to
allow challenges to the transmission
provider’s evaluation of the enumerated
alternative transmission technologies as
a means to ensure meaningful
consideration of these technologies.
603. WATT Coalition argues that
Order No. 2023 unlawfully gives
transmission providers unfettered
discretion to disregard and disadvantage
alternative transmission technologies as
1104 Public Interest Organizations Rehearing
Request at 13–15.
1105 Clean Energy Associations Rehearing Request
at 46–48.
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network upgrades.1106 WATT Coalition
argues that the Commission undermined
its decision to provide a pre-defined list
of alternative transmission technologies
evaluated as a matter of course in every
cluster study by failing to require
meaningful consideration of alternative
transmission technologies and by
placing alternative transmission
technologies at an artificial
disadvantage to ‘‘traditional’’ network
upgrades.1107 WATT Coalition asserts
that enshrining a preferential advantage
for more expensive and longer lead-time
traditional network upgrades, at the
expense of more efficient, cost-effective,
and quicker solutions, will increase
rates and slow down the
interconnection process. WATT
Coalition points to dynamic line ratings’
ability to resolve a thermal overload,
rather than spending $50 million on a
line rebuild, to demonstrate that
requiring a traditional network upgrade
would unduly discriminate against
interconnection customers and in favor
of transmission providers, impose
excessive costs on interconnection
customers (and ultimately consumers),
and work against Order No. 2023’s goal
of making the interconnection process
more efficient. WATT Coalition argues
that, contrary to the FPA, the
Commission has deprived
interconnection customers of the
opportunity to interconnect at a just and
reasonable rate and unduly
discriminates against interconnection
customers to the benefit of transmission
providers.
604. WATT Coalition questions the
Commission’s reliance on MISO’s initial
comments as ground for allowing
transmission providers to use their sole
discretion consistent with ‘‘good utility
practice’’ and ‘‘applicable regulatory
standards.’’ 1108 WATT Coalition argues
that MISO’s comments merely quoted
the NOPR, which suggested that the use
of alternative transmission technologies
may not meet these standards, without
providing justification. WATT Coalition
contends that requiring transmission
providers to ‘‘use good utility practice,
applicable reliability standards, and
other applicable regulatory
requirements’’ is insufficient because
making such a determination is not the
same as determining whether that
decision is consistent with the FPA,
which is a transmission provider’s most
1106 WATT Coalition Rehearing Request at 1–2, 14
(arguing that Order No. 2023 violates APA section
706(2)(A)).
1107 Id. at 24–25 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1585).
1108 Id. at 26.
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fundamental responsibility.1109 WATT
Coalition argues that the Commission
made no attempt to explain whether it
believes satisfying those standards will,
in all cases, produce a lawful result
under the FPA.1110 WATT Coalition
argues that the Commission has no
authority to grant transmission
providers the ability to unduly
discriminate or implement a rate that is
unjust and unreasonable.1111 WATT
Coalition asserts that the Commission’s
failure to explain and support that
decision violates the APA.1112
605. WATT Coalition adds that Order
No. 2023 deprives interconnection
customers of a meaningful opportunity
to inform the evaluations and appears to
close off any input or challenge to
transmission provider evaluation.1113
WATT Coalition asks the Commission
to grant rehearing to allow
interconnection customers to engage in
the transmission provider’s alternative
transmission technologies evaluations
and ensure that they are both
technically sound and consistent with
the FPA. WATT Coalition suggests
allowing either the interconnection
customer or the transmission provider
to request such an evaluation at any
point during the interconnection study
process as more information becomes
available. WATT Coalition asks the
Commission to allow developers to
conduct their own analysis in response
to an initial interconnection study result
to demonstrate that a FERC-enumerated
technology, or another technology, can
reduce interconnection costs or
timelines and require transmission
providers to evaluate those solutions.
WATT Coalition states that
interconnection customers’ right to
register objections and identify
deficiencies in a transmission provider’s
identification of network upgrades in
interconnection studies must extend to
an interconnection study’s evaluation of
alternative transmission technologies,
not just traditional network
upgrades.1114 WATT Coalition asserts
that including interconnection customer
input on the evaluation of alternative
transmission technologies after the
initial phase of the cluster study, with
a requirement for the transmission
provider’s decision regarding
deployment to be in line with the FPA,
1109 Id. at 27 (quoting Order No. 2023, 184 FERC
¶ 61,054 at P 1589).
1110 Id. at 26.
1111 Id. at 27 (quoting Order No. 2023, 184 FERC
¶ 61,054 at P 1589).
1112 Id. at 26.
1113 Id. at 29 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1587).
1114 Id. (citing, e.g., MISO Business Practice
Manual 015 Section 5.3.1).
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27109
would achieve just and reasonable
rates.1115
606. If the Commission does not grant
rehearing, WATT Coalition requests that
the Commission make two
clarifications.1116 First, WATT Coalition
asks the Commission to clarify that
interconnection customers have the
right and opportunity to identify
potential deficiencies and errors in a
transmission provider’s evaluation of
alternative transmission technologies in
a cluster study, and the transmission
provider must address those potential
deficiencies and errors in its cluster
study report. WATT Coalition states that
the Commission must correct the
implication that a transmission
provider’s evaluation and determination
to deploy or not deploy alternative
transmission technologies are immune
from challenge by allowing
interconnection customers to review the
initial evaluation and provide their own
analysis to inform the transmission
provider’s decision. Second, WATT
Coalition asks the Commission to clarify
that it did not intend to exempt
transmission providers’ consideration
of, and determinations regarding, the
use of alternative transmission
technologies in a cluster study from
compliance with the FPA, making clear
that complying with ‘‘good utility
practice’’ does not supersede the
foundational requirements of the FPA.
607. A number of parties seek
rehearing or clarification regarding the
technologies included in the list of the
enumerated alternative transmission
technologies that transmission providers
are required to evaluate. SPP asks the
Commission to reconsider the inclusion
of transmission switching in the list of
enumerated alternative transmission
technologies, arguing that it is a shortterm operational tool that is
inappropriate for use in long-term
planning applications.1117 VEIR asks the
Commission to clarify the scope of the
technologies that are considered
advanced conductors under Order No.
2023.1118 VEIR argues that, although
Order No. 2023 does not describe the
advanced conductors that must be
studied, it is consistent with the
Commission’s intent and the intent of
the Energy Policy Act of 2005 for the
Commission to clarify that there are a
range of permissible present and future
technologies that ‘‘significantly increase
transmission capacity and allow for the
interconnection of new generating
facilities without the construction of
1115 Id.
at 24, 30.
at 30.
1117 SPP Rehearing Request at 20.
1118 VEIR Rehearing Request at 3–6.
1116 Id.
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new network upgrades.’’ 1119 VEIR
contends that this clarification will help
ensure that Commission regulations will
help stimulate innovation—rather than
freeze it within the confines of an
existing set of technologies—consistent
with the Commission’s overall mandate
that alternative transmission
technologies be considered by
transmission providers seeking to
provide reliable transmission solutions
in the most cost effective manner. VEIR
adds that this clarification will ensure
that the term ‘‘advanced conductors’’
contemplates a wide-range of present
and future transmission line
technologies, such as VEIR’s technology,
whose power flow capacities exceed the
power flow capacities of conventional
transmission line technologies, thus
achieving the Commission’s objectives
for transmission providers to evaluate
technologies that are deployed more
quickly and at a lower cost than other
network upgrades.1120
608. Clean Energy Associations and
WATT Coalition request rehearing of
Order No. 2023’s exclusion of dynamic
line ratings from the enumerated list of
alternative transmission
technologies.1121 WATT Coalition
claims that the Commission excluded
dynamic line ratings, while retaining
four other technologies in the NOPR and
adding four that were not included in
the NOPR, without a reasoned basis for
why dynamic line ratings provided less
relative potential to be useful in
reducing interconnection costs.1122
WATT Coalition argues that it is
arbitrary and capricious and contrary to
law to exclude dynamic line ratings on
the basis that they ‘‘may’’ not be as
beneficial, while at the same time
conceding that other technologies that
were included on the list have certain
1119 Id. at 4–5 (quoting Order No. 2023, 184 FERC
¶ 61,054 at P 1597 (citing Energy Policy Act of 2005,
42 U.S.C. 16422(a), (b))). VEIR points to several
definitions of advanced conductors: (1) advanced
conductor technology include advanced composite
conductors high temperature low-sag conductors,
and fiber optic temperature sensing conductors, 42
U.S.C. 16422(a); (2) advanced conductors and
cables include advanced overhead conductors that
are facilities that ‘‘employ advanced aluminum
alloys, steel, and composite material in novel ways
that provide enhanced performance over
conventional overhead conductors,’’ advancedtransmission-technologies-report (energy.gov), at p.
26, and (3) advanced conductors and cables are
‘‘superconducting cables’’ composed of materials
that have near zero resistance at extremely low
temperatures, offering little to no electrical losses if
used in transmission, advanced-transmissiontechnologies-report (energy.gov), at p. 26.
1120 VEIR Rehearing Request at 5–6.
1121 Clean Energy Associations Rehearing Request
at 44; WATT Coalition Rehearing Request at 1–31.
1122 WATT Coalition Rehearing Request at 13–14
(citing Order No. 2023, 184 FERC ¶ 61,054 at PP
1578, 1598).
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limitations that render them no more or
less useful than dynamic line ratings.
WATT Coalition states that dynamic
line ratings are regularly a cost-effective
solution in generator interconnection.
WATT Coalition claims that its
comments on the value of dynamic line
ratings in planning, including
interconnection, and statements in
support of dynamic line ratings are not
addressed in the Commission’s
reasoning.1123 WATT Coalition states
that the only citation the Commission
provided to support its determination to
exclude dynamic line ratings refers only
to the few adverse comments submitted
by PJM Transmission Owners, ISO–NE,
NYTOs, PacifiCorp, Tri-State, and the
Chamber of Commerce.1124 WATT
Coalition argues that the Commission
did not address the Environmental
Defense Fund’s argument that excluding
dynamic line ratings is not consistent
with transmission providers’ least-cost
obligation and concerns about
technology implementation do not
warrant failing to consider alternative
transmission technologies.1125 Clean
Energy Associations assert that the
Commission’s general justification that
alternative transmission technology
could decrease network upgrade costs,
withdrawals, and restudies, which
increases the efficiency of the
interconnection process, applies to
dynamic line ratings, arguing that the
Commission acknowledges that
dynamic line ratings could be beneficial
to the interconnection process.1126
609. Clean Energy Associations and
WATT Coalition contend that the
Commission did not address the
benefits of dynamic line ratings set forth
in the record.1127 WATT Coalition notes
1123 Id. at 19–20 (citing WATT Coalition Reply
Comments at 7–15, 16–17).
1124 Id. at 20 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1598 (citing PJM Transmission
Owners Initial Comments at 56; ISO–NE Initial
Comments at 41; NYTOs Initial Comments at 32–
33; PacifiCorp Initial Comments at 4; Tri-State
Initial Comments at 23; Chamber of Commerce
Initial Comments at 12–13)).
1125 Id. at 20–21 (Environmental Defense Fund
NOPR Reply Comments at 11–12).
1126 Clean Energy Associations Rehearing Request
at 41.
1127 Id. at 40–42; WATT Coalition Rehearing
Request at 6–11, 20–21. See WATT Coalition
Rehearing Request at 6–9 (pointing to use of
dynamic line ratings in Europe, Australia and
Sweden, including the European Network of
Transmission System Operators for Electricity
Technopedia rating dynamic line ratings as ‘‘system
ready for full-scale deployment;’’; to the U.S.
Canada Power System Outage Task Force
recommendation for NERC to use dynamic line
ratings to prevent and mitigate outages; to the U.S.
Department of Energy support for the deployment
of dynamic line ratings in the United States (e.g.,
the Oncor Electric Delivery Company pilot); to U.S.
utilities piloting dynamic line ratings and the 95th
Edison Award in 2023 to PPL Electric Utilities for
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the Commission previously recognized
the potential of dynamic line ratings to
provide benefits to the interconnection
process.1128 WATT Coalition further
notes that, in Order No. 881, the
Commission took initial steps to reduce
barriers to operational deployment by
requiring RTO/ISOs to ‘‘establish and
implement the systems and procedures
necessary to allow transmission owners
to electronically update transmission
line ratings at least hourly.’’ 1129 WATT
Coalition argues that dynamic line
ratings is a solution that could bring
projects into viability if permitted by the
transmission owner.1130
610. WATT Coalition contends that
the Commission has failed to meet its
burden to provide an explanation
supported by evidence in the record for
its suggestion that dynamic line ratings
are better applied in operations and
planning.1131 WATT Coalition adds
that, because transmission planning and
interconnection processes typically use
similar or identical study processes (for
example, steady state, short circuit, and
stability analysis) and share common
models of the transmission system
representing expected future system
conditions such as Summer Peak or
High Wind Low Load, it is not logical
to expect the consideration of dynamic
line ratings to benefit transmission
planning and interconnection in a
demonstrably different manner.
611. However, WATT Coalition
argues that the relative value of dynamic
line ratings in interconnection versus
transmission planning is irrelevant.1132
WATT Coalition contends that the
Commission made no determination as
to the absolute value of dynamic line
ratings in the interconnection context,
which it argues is the relevant inquiry
in determining whether the
interconnection reforms are just and
reasonable.1133 WATT Coalition argues
the first operational deployment of dynamic line
ratings in the United States, and to the use of
dynamic line ratings in the place of a 200MW
standalone battery in MISO).
1128 Id. at 9–11 (citing NOPR, 179 FERC ¶ 61,194
at PP 289–290, 294–95; FERC, Grid-Enhancing
Technologies, Notice of Workshop, Docket No.
AD19–19–000 (Sept. 9, 2019); Bldg. for the Future
Through Elec. Reg’l Transmission Planning & Cost
Allocation & Generator Interconnection, 86 FR
40266 (July 15, 2021), 176 FERC ¶ 61,024 at P 158
(2021)).
1129 Id. at 13 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1598; Managing Transmission Line
Ratings, Order No. 881, 87 FR 2244 (Jan. 13, 2022),
177 FERC 61,179 at P 251 (2021)).
1130 Id. at 9.
1131 Id. at 21–22.
1132 Id. at 22.
1133 Id. at 22–23 (citing Am. Clean Power Ass’n
v. FERC, 54 F.4th 722 (D.C. Cir. 2022) (finding that
the Commission failed to reasonably explain its
decision, noting it gave short shrift to the
Petitioner’s concern)).
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that, if dynamic line ratings are highly
beneficial in one and extremely
beneficial in the other, it should be
adopted in both, not excluded from the
former.1134 WATT Coalition adds that
the example the Commission gave for
why dynamic line ratings may be less
beneficial in the interconnection context
is flawed. WATT Coalition argues that
the assertion that its value ‘‘depends on
favorable weather and congestion
parameters’’ is wrong. WATT Coalition
explains that many lines are chronically
underrated, regardless of weather and
congestion parameters, ‘‘congestion
parameters’’ themselves are often
inaccurate precisely because dynamic
line ratings are not used on a line.
612. WATT Coalition claims that the
following statement in Order No. 2023
is inaccurate and does not reflect the
record:
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[W]hile dynamic line ratings may relieve
congestion to increase available
interconnection service temporarily or in the
short-term, they may not be an adequate
substitute for building interconnection
facilities and/or traditional network upgrades
identified through the interconnection study
process that are needed to reliably
interconnect a generating facility to the
transmission system during all hours.1135
WATT Coalition states that dynamic
line ratings are not a temporary or shortterm fix; they are a long-term fix for the
specific parameters of the cluster study.
WATT Coalition explains that, if system
conditions change subsequent to the
cluster study such that additional
investment in the transmission system
is needed, that does not mean that the
value of dynamic line ratings is
diminished. WATT Coalition states that
any other alternative transmission
technology or even traditional upgrade
could see its value change based on
system conditions in the same way.
WATT Coalition argues that
implementing network upgrades when
dynamic line ratings would satisfy the
identified need will cause overbuilding
the system and saddling interconnection
customers and consumers with
unnecessary costs.
613. WATT Coalition contends that
these unnecessary costs mean that the
Commission’s decision is also contrary
to the FPA.1136 WATT Coalition argues
that the Commission has failed to
demonstrate that the rates established
through this order will be just and
reasonable because it lacks justification
for the exclusion of dynamic line ratings
and fails to respond to the comments
arguing that including dynamic line
ratings would reduce costs to
consumers. WATT Coalition claims
that, if the Commission included
dynamic line ratings in all studies, all
generators would potentially see their
interconnection costs reduced and
timelines shortened. WATT Coalition
argues that, by excluding dynamic line
ratings, generators in windy regions
especially will be disadvantaged
because one of the core solutions for
increasing transmission capacity rapidly
will not be evaluated in their
interconnection studies. WATT
Coalition notes Advanced Energy
Economy’s comment that, ‘‘[w]hile not
all interconnections may benefit from
[grid enhancing technologies],
evaluating their use at every
opportunity ensures that their
contributions and savings will not be
lost.’’ 1137 WATT Coalition contends
that the Commission erred by instead
ensuring that dynamic line ratings’
contributions and savings will be lost,
interconnection customers will pay
vastly higher costs for network
upgrades, and consumers ultimately
will pay higher rates as a result.1138
614. Clean Energy Associations
request rehearing of Order No. 2023’s
exclusion of energy storage serving as a
transmission asset from the enumerated
list of alternative transmission
technologies.1139 Clean Energy
Associations argue that excluding
storage resources because ‘‘the
evaluation of whether a storage resource
performs a transmission function
requires a case-by-case analysis’’ does
not constitute reasoned decision-making
because the Commission directs the
transmission providers to conduct a
case-by-case evaluation of the
alternative transmission technologies
included in Order No. 2023’s list of
enumerated technologies.1140 Clean
Energy Associations assert that, without
a specific requirement to evaluate
dynamic line ratings and energy storage,
these technologies will be excluded
from the interconnection process
despite the record demonstrating that
these technologies can improve
interconnection process efficiency.1141
1137 Id.
1134 Id. at 22 (pointing to the background
information demonstrating that dynamic line
ratings have specific and appreciable value in
generator interconnection).
1135 Id. at 23 (citing Order No. 2023, 184 FERC
¶ 61,054 at P 1598).
1136 Id.
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(citing Advanced Energy Economy NOPR
Reply Comments at 41–42).
1138 Id. at 23–24.
1139 Clean Energy Associations Rehearing Request
at 44.
1140 Id. at 42–43 (citing Order No. 2023, 184 FERC
¶ 61,054 at PP 1582, 1584).
1141 Id. at 43–44.
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27111
iii. Determination
615. We are not persuaded by SPP’s
request to revisit the requirement to
evaluate the enumerated list of
alternative transmission technologies,
which SPP argues will burden
transmission providers and lengthen the
interconnection process. As explained
in Order No. 2023, the Commission
found that the record supported a
finding that these alternative
transmission technologies can provide
benefits to optimize the transmission
system in specific scenarios.1142 SPP
has not convinced us otherwise. We also
find it unnecessary to provide metrics
for determining what would support the
use, or non-use of, an alternative
transmission technology to avoid
litigation and lengthening the
interconnection process, as SPP
requests. In Order No. 2023, the
Commission recognized the need to
avoid time-consuming delays and costly
disputes or litigation over
interconnection costs that could arise as
a result of this reform.1143
Consequently, the Commission found
that, if a transmission provider
evaluates the enumerated alternative
transmission technologies as required
herein and, in its sole discretion,
determines not to use any enumerated
alternative transmission technologies as
an alternative to a traditional network
upgrade, the transmission provider has
complied with Order No. 2023,
including tariffs filed pursuant to Order
No. 2023. Similarly, we disagree with
WATT’s contention that Order No. 2023
does not set a standard for evaluation
and does not ensure that alternative
transmission technologies are used if
they are the most cost-effective and
fastest interconnection upgrade
solution. In Order No. 2023, as modified
below, the Commission set forth the
standard for evaluation, explaining that
the requirement is to evaluate the
enumerated alternative transmission
technologies in the interconnection
process for feasibility, cost, and time
savings and to determine whether, in
the transmission provider’s sole
discretion, an alternative transmission
technology should be used as a
solution—consistent with good utility
practice, applicable reliability
standards, and applicable laws and
1142 Order No. 2023, 184 FERC ¶ 61,054 at P 1583
(citing NOPR, 179 FERC ¶ 61,194 at PP 294–295).
1143 Id. P 1587 (citing SPP Initial Comments at 26
(‘‘Even though the Commission has stated that
transmission providers retain the discretion
regarding whether to use such technologies, the
very fact that the transmission provider is required
to evaluate them will lead to disputes if the
transmission provider then exercises that
discretion.’’)).
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regulations.1144 This standard will
ensure transmission providers identify
network upgrades in a manner that
ensures just and reasonable rates.
616. We deny PJM’s requested
clarification about whether Order No.
2023 requires transmission providers
that already include all the enumerated
technologies in its studies to explain
their evaluation of the enumerated
alternative transmission technologies in
their cluster study reports. Consistent
with the Commission’s statements in
Order No. 2023, transmission providers
may explain specific circumstances on
compliance and justify why any
deviations are either consistent with or
superior to the pro forma LGIP or merit
an independent entity variation in the
context of RTOs/ISOs.1145
617. We disagree with PJM that the
requirement in Order No. 2023 for
transmission providers to evaluate the
enumerated alternative transmission
technologies will be burdensome
because interconnection customers are
likely to demand re-evaluation of the
technologies. The Commission
determined that, if a transmission
provider evaluates the enumerated
alternative transmission technologies as
required herein and, in its sole
discretion, determines not to use any
enumerated alternative transmission
technologies as an alternative to a
traditional network upgrade, and
explains its evaluation of the
enumerated alternative transmission
technologies in the applicable study
report(s), the transmission provider has
complied with Order No. 2023,
including tariffs filed pursuant thereto.
We continue to find that these
limitations on review address concerns
about time-consuming delays and costly
disputes or litigation.
618. In response to Clean Energy
Associations’, Public Interest
Organizations’, and WATT Coalition’s
requests for rehearing regarding
transmission provider discretion, we
sustain the discretion that Order No.
2023 affords transmission providers in
determining whether to use an
alternative transmission technology for
several reasons. First, we continue to
find that this level of discretion is
justified because (1) the transmission
provider is responsible for determining
whether using any of the enumerated
alternative transmission technologies is
an appropriate and reliable network
upgrade that allows the interconnection
customer to flow the output of its
generating facility onto the transmission
provider’s transmission system in a safe
1144 Id.
1145 Id.
PP 1578, 1579, 1581, 1587, 1590.
P 1764.
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and reliable manner; 1146 (2) the
requirement to make such a
determination before allowing for the
use of the enumerated alternative
transmission technologies addresses
concerns that their use may impinge on
reliability, delay network upgrades
instead of reducing the need for them or
obviating the need for them altogether,
or fail to address all transmission
system issues that a traditional network
upgrade would address; 1147 and (3)
there is a need to avoid time-consuming
delays and costly disputes or litigation
over interconnection costs that could
arise as a result of this reform.1148
619. Second, contrary to WATT
Coalition’s and Clean Energy
Associations’ assertions, Order No. 2023
does not give transmission providers
unfettered discretion to disregard
alternative transmission technologies. In
spite of the discretion provided to
transmission providers, they must
explain their evaluation of the
enumerated alternative transmission
technologies for feasibility, cost, and
time savings as an alternative to a
traditional network upgrade in their
applicable study report(s), and their use
determinations must be consistent with
good utility practice, applicable
reliability standards, and applicable
laws and regulations.1149 An
interconnection customer may contest a
transmission provider’s evaluation and
use determination, just as it does with
respect to traditional network
upgrades.1150 This ensures that the
transmission provider’s explanation of
its evaluation of the enumerated
alternative transmission technologies for
feasibility, cost, and time savings as an
alternative to a traditional network
upgrade in its applicable study report(s)
as well as its determinations regarding
the use of a network upgrade and/or an
alternative transmission technology are
consistent with the FPA and the
transmission provider’s tariff.
620. Finally, the level of discretion
that Order No. 2023 affords
transmission providers is consistent
with the general discretion the
Commission affords transmission
providers to maintain a reliable
system.1151 The transmission provider is
1146 Id.
P 1589.
P 1587.
1148 Id. P 1764.
1149 See infra PP 621–627.
1150 See, e.g., Sw. Power Pool, Inc., 171 FERC
¶ 61,068, order on reh’g, 172 FERC ¶ 61,286 (2020).
1151 Order No. 2003–A, 106 FERC ¶ 61,220 at P
404; pro forma LGIA art. 9.3 (‘‘Transmission
Provider shall cause the Transmission System and
the Transmission Provider’s Interconnection
Facilities to be operated, maintained and controlled
in a safe and reliable manner and in accordance
1147 Id.
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the only entity responsible for
determining appropriate and reliable
network upgrades for its transmission
system. Applying this general
interconnection status quo ante to the
determination of whether an alternative
transmission technology could serve as
a network upgrade inevitably means
that the transmission provider is the
only entity responsible for determining
‘‘whether using any of the enumerated
alternative transmission technologies is
an appropriate and reliable network
upgrade ‘that would allow the
interconnection customer to flow the
output of its generating facility onto the
transmission provider’s transmission
system in a safe and reliable
manner.’ ’’ 1152 In fact, the transmission
provider may be subject to penalties if
its transmission system does not
function in a reliable manner as
required by the provisions of the
Reliability Standards.1153 Thus,
Commission precedent supports a
finding that the transmission provider is
the entity with sole discretion as to
which network upgrades must be
constructed to ensure the safe and
reliable operation of the transmission
system as a new generating facility
interconnects.1154 The term ‘‘sole
discretion’’ does not absolve the
transmission provider from making a
use determination that is consistent
with the FPA and its tariff.
621. We sustain the performance
standards that Order No. 2023 applies to
a transmission provider’s evaluation of
each alternative transmission
technology listed in pro forma LGIP
section 7.3 and pro forma SGIP sections
3.3.6 and 3.4.10 and to its determination
whether it should be used. Specifically,
Order No. 2023 requires that a
with this LGIA’’); Interconnection for Wind Energy,
111 FERC ¶ 61,353, at P51, reh’g granted in part on
other grounds, 113 FERC ¶ 61,254 (2005) (‘‘because
the Transmission Provider is responsible for the
safe and reliable operation of its transmission
system (pursuant to NERC and regional reliability
council standards), it is in the best position to
establish if reactive power is needed in individual
circumstances’’); Big Sandy Peaker Plant, LLC v.
PJM Interconnection, L.L.C., 154 FERC ¶ 61,216, at
P 50 (2016) (the Commission gives ‘‘reliabilityrelated discretion to [ISOs], and [will] not secondguess their decisions in that regard’’).
1152 Order No. 2023, 184 FERC ¶ 61,054 at PP
1582, 1584, 1589.
1153 See, e.g., Reliability Standard TOP–001–5,
‘‘Transmission Operations,’’ which requires each
Transmission Operator to act to maintain the
reliability of its Transmission Operator Area; see
also Interconnection for Wind Energy, 113 FERC
¶ 61,254, at P 42 (2005) (‘‘Transmission Providers
are required to complete a detailed System Impact
Study, and are required to ensure that NERC
reliability standards are met in all instances.’’).
1154 Order No. 2023, 184 FERC ¶ 61,054 at P 1582
(citing Order No. 2003, 104 FERC ¶ 61,103 at P 767;
Order No. 2003–A, 106 FERC ¶ 61,220 at P 404; pro
forma LGIA arts. 9.3, 9.4).
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transmission provider evaluate each
alternative transmission technology
listed in pro forma LGIP section 7.3 and
pro forma SGIP sections 3.3.6 and 3.4.10
and determine whether it should be
used ‘‘consistent with good utility
practice, applicable reliability
standards, and other applicable
regulatory requirements.’’ 1155 Order No.
2023 also adopted corresponding
modifications to the pro forma LGIP and
pro forma SGIP. Below, we discuss
further modifications to these pro forma
documents.
622. As discussed above, Order No.
2023 requires transmission providers to
conduct their alternative transmission
technology evaluations and use
determinations consistent with good
utility practice, applicable reliability
standards, and other applicable
regulatory requirements. We address
each performance standard in turn.
First, we disagree with Public Interest
Organizations that ‘‘good utility
practice’’ is vague or ambiguous because
that term is defined in the pro forma
LGIP 1156 and the pro forma SGIP.1157
623. Second, we disagree with Public
Interest Organizations that ‘‘applicable
reliability standards’’ is vague or
ambiguous because that term is defined
in the pro forma LGIP.1158 We note,
however, that, unlike the pro forma
LGIP, ‘‘applicable reliability standards’’
is not defined in the pro forma SGIP.
Therefore, consistent with the definition
in the pro forma LGIP and Order No.
2023, we modify the pro forma SGIP to
define ‘‘Applicable Reliability
Standards’’ as ‘‘the requirements and
guidelines of the Electric Reliability
Organization and the Balancing
Authority Area of the Transmission
System to which the Generating Facility
is directly interconnected.’’ 1159 We also
find that the words ‘‘applicable
reliability standards’’ were
inadvertently not included in the
performance standards that Order No.
2023 added to pro forma LGIP section
7.3 and pro forma SGIP sections 3.3.6
and 3.4.10. Therefore, we include that
term in those pro forma sections now.
624. Finally, we find that the use of
the catchall phrase ‘‘other applicable
regulatory requirements’’ is vague or
ambiguous. Unlike the two standards
discussed above, this phrase is not
defined in either the pro forma LGIP or
1155 Id. PP 1578, 1580, 1582, 1584, 1587, 1589.
Below, we discuss modifying this standard to refer
to ‘‘applicable laws and regulations’’ rather than
‘‘other applicable regulatory requirements.’’ See
infra PP 624, 626–627.
1156 Pro forma LGIP section 1 (Definitions).
1157 Pro forma SGIP attach. 1 (Glossary of Terms).
1158 Pro forma LGIP section 1 (Definitions).
1159 See id.
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the pro forma SGIP. In order to remedy
this deficiency, we modify Order No.
2023 to replace ‘‘other applicable
regulatory requirements’’ with the term
‘‘applicable laws and regulations,’’
which is a defined term in the pro forma
LGIP. We note, however, that, unlike the
pro forma LGIP, ‘‘applicable laws and
regulations’’ is not defined in the pro
forma SGIP. Therefore, consistent with
the definition in the pro forma LGIP and
Order No. 2023, we modify the pro
forma SGIP to define ‘‘applicable laws
and regulations’’ as ‘‘all duly
promulgated applicable federal, state
and local laws, regulations, rules,
ordinances, codes, decrees, judgments,
directives, or judicial or administrative
orders, permits and other duly
authorized actions of any Governmental
Authority.’’ 1160 We also modify pro
forma LGIP section 7.3 and pro forma
SGIP sections 3.3.6 and 3.4.10 to reflect
this change in terminology.
625. Finally, we find that, although
Order No. 2023 applies the performance
standards to both the transmission
provider’s evaluation of the enumerated
alternative transmission technologies
and the determination to use the
technology,1161 pro forma LGIP section
7.3 does not apply the standards to the
former. We therefore modify pro forma
LGIP section 7.3 to remedy this
deficiency.
626. Based on these findings, we
modify pro forma LGIP section 7.3, in
relevant part, as follows: ‘‘Transmission
Provider shall evaluate each identified
alternative transmission technology and
determine whether the above
technologies should be used, consistent
with Good Utility Practice, Applicable
Reliability Standards, and [other
applicable regulatory
requirements]Applicable Laws and
Regulations.’’
627. We also modify pro forma SGIP
sections 3.3.6 and 3.4.10, in relevant
part, as follows: ‘‘Transmission Provider
shall evaluate each identified alternative
transmission technology and determine
whether it should be used, consistent
with Good Utility Practice, Applicable
Reliability Standards, and [other
applicable regulatory
requirements]Applicable Laws and
Regulations.’’
628. We disagree with Clean Energy
Associations, Public Interest
Organizations and WATT Coalition that
requiring a transmission provider to
evaluate the list of enumerated
alternative transmission technologies
and determine the use of those
technologies consistent with these
1160 See
id.
No. 2023, 184 FERC ¶ 61,054 at P 1589.
1161 Order
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performance standards will negatively
impact an interconnection customer’s
ability to challenge a transmission
provider’s actions. As explained above,
the performance standards applied in
this context are the same as, or similar
to, those that apply to other sections of
the pro forma LGIP and pro forma SGIP.
Therefore, the use of these performance
standards in this context does not in
and of itself change an interconnection
customer’s ability to challenge a
transmission provider’s conduct. As
discussed above, an interconnection
customer may challenge a transmission
provider’s evaluation of the enumerated
alternative transmission technologies
and its determination about whether to
use alternative transmission
technologies as it can challenge other
conduct in the pro forma LGIP and pro
forma SGIP that is allegedly
inconsistent with the performance
standards.1162
629. We do not believe that WATT’s
suggestion to allow an interconnection
customer to provide input on the
evaluation of alternative transmission
technologies after the initial phase of
the cluster study within the pro forma
LGIP is necessary. The existing
interconnection procedures already
provide the opportunity for
interconnection customer input with
respect to all aspects of a cluster study
after the cluster study report is
completed, which necessarily provides
an opportunity for input as to the
evaluation of the enumerated alternative
transmission technologies. Specifically,
pro forma LGIP section 7.4 provides
that, ‘‘[w]ithin ten (10) Business Days of
simultaneously furnishing a Cluster
Study Report to each Interconnection
Customer within the Cluster and posting
such report on OASIS, Transmission
Provider shall convene a Cluster Study
Report Meeting.’’ Pro forma LGIP
section 7.5 provides a similar
opportunity for input after the
completion of a cluster restudy report.
WATT Coalition does not explain how
an additional opportunity to provide
input after the initial phase of a cluster
study would be beneficial and ensure
just and reasonable rates. We find that,
to the contrary, WATT’s request for an
additional opportunity to provide input
would slow down the interconnection
process, which would undermine the
Commission’s efforts to ensure a
reliable, efficient, transparent, and
timely interconnection process.
630. We address in turn rehearing
parties’ requests for rehearing and/or
clarification related to the list of
enumerated alternative transmission
1162 See
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technologies in Order No. 2023. We are
not persuaded by SPP’s request to
reconsider the inclusion of transmission
switching in the list of enumerated
alternative transmission technologies.
While transmission switching may be
used more often in short-term,
operational timeframes, we continue to
find that it is just and reasonable to
include transmission switching on the
list of technologies that transmission
providers are required to evaluate
because it could provide topology
solutions that relieve transmission
constraints for the duration of the
requested interconnection service and
does not rely only on transient
conditions. As discussed above, Order
No. 2023 did not create a presumption
in favor of substituting alternative
transmission technologies for necessary
traditional network upgrades, either
categorically or in specific cases.1163
631. We are persuaded by VEIR’s
arguments raised on rehearing and
clarify that there are a range of
permissible present and future
advanced conductor technologies that
fall within this class of technologies that
transmission providers are required to
evaluate pursuant to Order No. 2023.
We agree that this clarification will
ensure that the term ‘‘advanced
conductors’’ includes present and future
transmission line technologies whose
power flow capacities exceed the power
flow capacities of conventional
transmission line technologies, thus
achieving the Commission’s objectives
in Order No. 2023. Consistent with
VEIR’s request for clarification, we
further clarify that advanced conductors
are advanced relative to conventional
aluminum conductor steel reinforced
conductors and include, but are not
limited to, superconducting cables,
advanced composite conductors, high
temperature low-sag conductors, fiber
optic temperature sensing conductors,
and advanced overhead conductors.1164
632. We sustain the Commission’s
decision in Order No. 2023 not to
include dynamic line ratings in the
enumerated list of alternative
transmission technologies that a
transmission provider must evaluate. In
Order No. 2023, the Commission
properly exercised its discretion to
determine just and reasonable rates and
balanced various factors to establish a
list of alternative transmission
technologies that transmission providers
1163 Order No. 2023, 184 FERC ¶ 61,054 at PP
1582, 1584.
1164 See VEIR Rehearing Request at 3–6 (citing 42
U.S.C. 16422(a); U.S. Department of Energy
December 2020 Report (Advanced Transmission
Technologies)).
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are required to evaluate.1165
Specifically, the Commission balanced
two competing objectives in its effort to
ensure just and reasonable rates: (1) the
speed of interconnection queue
processing times and (2) the cost and
the speed at which network upgrades
can be constructed. In particular, the
Commission recognized that evaluating
the enumerated alternative transmission
technologies in the cluster studies has
the potential to identify network
upgrade solutions that are cheaper and
faster to construct but, all else equal,
may also increase interconnection study
processing times by increasing the scope
and complexity of the cluster
studies.1166
633. The list of alternative
transmission technologies enumerated
in Order No. 2023 that transmission
providers must evaluate includes those
technologies that can serve as network
upgrade solutions even in high stress
conditions and scenarios in which
weather conditions are less favorable.
Unlike the alternative transmission
technologies on the list, dynamic line
ratings are dependent on weather
conditions (e.g., wind speed and
direction and solar irradiance level). If
weather conditions change, the
interconnection customer and the load
reliant on that interconnection customer
are both at risk of the interconnection
customer’s energy not being deliverable
during real-time operations. Given that
interconnection studies for NRIS
incorporate a range of simulations
assuming worst-case conditions,1167
worst-case line rating input assumptions
are appropriate in this context as inputs
to interconnection studies, as explained
further below. Because dynamic line
ratings use non-worst case scenario
input assumptions, it is not arbitrary
and capricious to exempt dynamic line
ratings from the enumerated list of
technologies that must be considered in
interconnection studies.
634. WATT Coalition further asserts
that line ratings in interconnection
studies are chronically underrated, and
that, without dynamic line ratings,
lower wind assumptions are used,
causing transmission lines to be rated
lower in planning studies. This
1165 Order
No. 2023, 184 FERC ¶ 61,054 at P 1586.
acknowledge that the Commission found
that ‘‘in some cases transmission providers may be
able to rapidly determine if a certain enumerated
alternative transmission technology is inappropriate
for further study.’’ See id. P 1590. In such instances,
the transmission provider would be able to exclude
dynamic line ratings as a possible solution for
certain reliability violations identified in the cluster
study. In so doing, interconnection queue
processing times would be unaffected.
1167 Order No. 2003–A, 106 FERC ¶ 61,220 at P
500.
1166 We
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assertion does not properly address how
transmission providers conduct
interconnection studies. Under the
current approach to interconnection
studies, which the Commission did not
fundamentally change in Order No.
2023, transmission providers study
requests for NRIS using line ratings that
assume worst case inputs in order to
ensure reliability under the most
restrictive operating conditions
anticipated to occur.1168
635. We also disagree that the
evaluation of potential benefits of
dynamic line ratings in transmission
planning and interconnection should be
analogous. Operational studies,
transmission planning studies, and
interconnection studies have distinct
goals. The objective of an
interconnection study, which is
inherently a type of reliability study, is
to identify interconnection facilities
and/or traditional network upgrades
that are needed to safely and reliably
interconnect a generating facility to the
transmission system.1169 Contrary to
WATT Coalition’s assertion, there is
limited record evidence that dynamic
line ratings are well-suited to meeting
the reliability goals of interconnection
studies, and several commenters express
concerns that dynamic line ratings
cannot reliably serve as network
upgrades.1170 In particular, dynamic
line ratings only alter line ratings as
operational conditions, such as wind
speed and direction or solar irradiance
level, warrant as forecasted over a
particular timeframe. Therefore,
dynamic line ratings cannot guarantee
that an increased line rating will be
available at any particular time,
including times of system stress such as
those studied to evaluate the reliability
impact of an interconnection request.
636. In terms of evidence, WATT
Coalition provides instances in which
dynamic line ratings have been studied
as a pilot project or have been used in
operations and some theoretical
examples of how dynamic line ratings
can raise line ratings and thus could be
helpful in interconnection; however,
WATT Coalition does not provide
evidence that interconnection studies
have relied upon dynamic line ratings
in the place of a network upgrade to
resolve potential reliability violations.
1168 Id.
1169 See, e.g., LGIP section 7.3 (‘‘[t]he [c]luster
[s]tudy shall evaluate the impact of the proposed
interconnection on the reliability of the
[t]ransmission [s]ystem.’’).
1170 Order No. 2023, 184 FERC ¶ 61,054 at P 1545
(citing AECI Initial Comments at 9; AEP Initial
Comments at 51; Avangrid Initial Comments at 36;
Southern Initial Comments at 29; U.S. Chamber of
Commerce Initial Comments at 12).
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We are not persuaded by the examples
that WATT Coalition uses as the basis
for its rehearing request for both
procedural and substantive reasons.
First, WATT Coalition provides a few
examples for the first time on rehearing
that could have been provided earlier in
the proceeding, which is impermissible
under the Commission’s precedent.1171
637. Second, substantively, WATT
Coalition’s reliance on the scenarios is
also misplaced. In particular, in the case
of high-wind scenarios cited by WATT
Coalition, it is possible that a dynamic
line rating studied in lieu of a
traditional network upgrade would be
able to resolve a thermal overload in a
high-wind scenario. However, under
NRIS, ‘‘[t]ransmission [p]roviders must
study the [t]ransmission [s]ystem at
peak load, under a variety of severely
stressed conditions to determine
whether, with the [g]enerating [f]acility
at full output, the aggregate of
generation in the local area can be
delivered to the aggregate of load,
consistent with [t]ransmission
[p]rovider’s reliability criteria and
procedures.’’ 1172 As a weather
dependent technology, if there are
thermal overloads or other
contingencies not connected to a highwind scenario, dynamic line ratings
cannot necessarily ensure the needed
local area deliverability to the aggregate
of load.1173
638. We are also not persuaded by
WATT Coalition’s contention that Order
No. 2023’s statements that dynamic line
ratings may relieve congestion by
increasing available interconnection
capacity only temporarily or in the
short-term are incorrect and that,
instead, dynamic line ratings are a longterm solution for the specific parameter
of the cluster study. The issue is not
whether dynamic line ratings can
provide additional transmission
capacity at a specific point in time;
rather, the issue is whether, as a weather
dependent technology, they can be
relied upon to replace the need for a
different network upgrade by ensuring
the necessary local area deliverability to
the aggregate of load if there are thermal
1171 See
supra PP 386, 609 n.1145.
No. 2003–A, 106 FERC ¶ 61,220 at P
500 (also stating that, ‘‘[h]owever, [NRIS] does not
necessarily provide the [i]nterconnection
[c]ustomer with the capability to physically deliver
the output of its [g]enerating [f]acility to any
particular load without incurring congestion costs.
Nor does [NRIS] convey a right to deliver the output
of the [g]enerating [f]acility to any particular
customer.’’).
1173 Id. See also Order No. 881, 177 FERC
¶ 61,179 at P 35 (explaining that ‘‘while current
transmission line rating practices usually
understate transfer capability, they can also
overstate transfer capability . . .’’).
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overloads or other contingencies not
connected to a high-wind scenario.
Moreover, because transmission
providers generally consider worst-case
scenarios in interconnection studies,
such transmission providers would still
have to use worst-case line rating input
assumptions, which are typically the
seasonal line rating (assuming high air
temperature, full sun, and low or no
wind) on a system using dynamic line
ratings, not the highest dynamic rating
that would apply in more favorable
conditions (e.g., low air temperature, no
sun, strong sustained winds). For these
reasons, WATT Coalition’s rehearing
arguments do not refute Order No.
2023’s finding that dynamic line ratings
‘‘may be less beneficial in the
interconnection context.’’ 1174 As
explained above, in Order No. 2023, the
Commission balanced various factors
(i.e., the potential benefits of studying
the technology with the burden on the
transmission provider and the increase
in study times) and established a list of
alternative transmission technologies
that are most likely to ensure just and
reasonable rates.1175
639. We disagree with WATT
Coalition’s assertion that the
Commission did not engage in reasoned
decision-making by excluding dynamic
line ratings from this enumerated list of
alternative transmission technologies. In
Order No. 2023, the Commission
explained that, because the benefits of
evaluating dynamic line ratings did not
outweigh the burden and the potential
increase in study times, dynamic line
ratings were less beneficial than other
alternative transmission technologies in
the interconnection context and did not
include it on the final enumerated list.
Regarding the burden, for example, both
MISO and the MISO TOs highlighted
the additional studies and requirements
that an obligation to evaluate dynamic
line ratings would impose on the first
phase of the interconnection study
process.1176 These entities further
highlighted that these additional
obligations could also necessitate
further debate about the impact that
such dynamic line ratings may have on
the rest of the transmission system and
were in contrast to the need to
accelerate the interconnection process.
After having determined that the
existing pro forma LGIP and pro forma
SGIP are not just and reasonable, the
Commission must determine, based on
1174 WATT Coalition Rehearing Request at 21–23
(quoting Order No. 2023, 184 FERC ¶ 61,054 at P
1598).
1175 Order No. 2023, 184 FERC ¶ 61,054 at P 1586.
1176 Id. P 1549 (citing MISO TOs Initial
Comments at 30; MISO Initial Comments at 11).
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27115
substantial evidence, a replacement rate
that is just, reasonable and not unduly
preferential.1177 Thus, the Commission
both provided a reasoned explanation
for excluding dynamic line ratings from
the final enumerated list of alternative
transmission technologies and
established a just and reasonable
replacement rate. Further, we note, that
the Commission did not ‘‘exclude’’
dynamic line ratings from consideration
in cluster studies, as WATT Coalition
claims. Order No. 2023 specifically
provided that transmission providers
are permitted to go beyond the
enumerated list and can do so without
changing their tariffs.1178
640. We are not persuaded by Clean
Energy Associations’ arguments that
energy storage serving as a transmission
asset should be included in the
enumerated list of alternative
transmission technologies. We agree
with Clean Energy Associations that
energy storage, like other alternative
transmission technologies on the list,
would need to be evaluated on a caseby-case basis to determine if the
technology can serve in the place of a
network upgrade. However, we continue
to find that, as discussed in Order No.
2023, energy storage requires an
additional case-by-case analysis that
distinguishes it from the enumerated list
of alternative transmission technologies:
storage resources must also be evaluated
to determine whether a storage resource
performs a transmission function
through a case-by-case analysis of either
how a particular storage resource would
be operated or the requirements set forth
in a tariff governing selection of such
1177 FPA section 206 requires that, when the
Commission finds a rate subject to its jurisdiction
to be ‘‘unjust, unreasonable, unduly discriminatory
or preferential, the Commission shall determine the
just and reasonable rate, charge, classification, rule,
regulation, practice, or contract to be thereafter
observed and in force, and shall fix the same by
order.’’ 16 U.S.C. 824e; see also Del. Pub. Serv.
Comm’n v. PJM Interconnection, L.L.C, 166 FERC
¶ 61,161, at P 16 (2019) (‘‘In finding [certain tariff
provisions] unjust and unreasonable . . . pursuant
to FPA section 206, the Commission is required to
establish the just and reasonable replacement
rate.’’).
1178 Order No. 2023, 184 FERC ¶ 61,054 at P 1600.
While we are declining to include dynamic line
ratings among the enumerated technologies for the
reasons explained herein, we note that dynamic
line ratings may have greater utility when studying
an interconnection customer requesting ERIS
because such a customer is opting for ‘‘as available’’
service. See Order No. 2003–A, 106 FERC ¶ 61,220
at P 499. By contrast, for NRIS, ‘‘[t]ransmission
[p]roviders must study the [t]ransmission [s]ystem
at peak load, under a variety of severely stressed
conditions to determine whether, with the
[g]enerating [f]acility at full output, the aggregate of
generation in the local area can be delivered to the
aggregate of load, consistent with [t]ransmission
[p]rovider’s reliability criteria and procedures.’’
Order No. 2003–A, 106 FERC ¶ 61,220 at P 500.
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storage resources.1179 That analysis
would determine whether the storage
resource’s cost can be recovered in
transmission rate base or as a network
upgrade. This additional analysis
distinguishes energy storage from the
other technologies on the enumerated
list of alternative transmission
technologies and is the basis for its
exclusion from the list. We reiterate,
however, that Order No. 2023 does not
preclude a transmission provider from
studying or evaluating any technology
that was not included in the enumerated
list of alternative transmission
technologies.1180
3. Modeling and Ride Through
Requirements for Non-Synchronous
Generating Facilities
a. Modeling Requirements
i. Order No. 2023 Requirements
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641. In Order No. 2023, the
Commission revised Attachment A to
Appendix 1 of the pro forma LGIP and
Attachment 2 of the pro forma SGIP to
require each interconnection customer
requesting to interconnect a nonsynchronous generating facility to
submit to the transmission provider: (1)
a validated user-defined root mean
square (RMS) positive sequence
dynamic model; (2) an appropriately
parameterized generic library RMS
positive sequence dynamic model,
including a model block diagram of the
inverter control system and plant
control system, that corresponds to a
model listed in a new table of
acceptable models or a model otherwise
approved by the Western Electricity
Coordinating Council (WECC); and (3) a
validated electromagnetic transient
(EMT) model, if the transmission
provider performs an EMT study as part
of the interconnection study
process.1181
642. The Commission also adopted
the NOPR proposals to: (1) define a
user-defined model as any set of
programming code created by
equipment manufacturers or developers
that captures the latest features of
controllers that are mainly softwarebased and represent the entities’ control
strategies but does not necessarily
correspond to any particular generic
library model, as contained in
Attachment A to Appendix 1 of the pro
1179 Order No. 2023, 184 FERC ¶ 61,054 at P 1599.
In Order No. 2023, the Commission pointed to the
process in SPP, which takes into account five
considerations that, together, ensure that a selected
storage resource will serve a transmission function.
Id. (citing Sw. Power Pool, Inc., 183 FERC ¶ 61,153,
at P 29 (2023)).
1180 Id. P 1600.
1181 Id. P 1659.
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forma LGIP and Attachment 2 of the pro
forma SGIP; (2) revise Attachment A to
Appendix 1 of the pro forma LGIP and
Attachment 2 of the pro forma SGIP to
add a table of acceptable generic library
models, based on the current WECC list
of approved dynamic models for
renewable energy generating facilities;
and (3) revise section 4.4.4 of the pro
forma LGIP and section 1.4 of the pro
forma SGIP to require that any proposed
modification of the interconnection
request be accompanied by updated
models of the proposed generating
facility.1182
ii. Requests for Rehearing and
Clarification
643. Invenergy asks the Commission
to modify the pro forma LGIP,
Appendix 1, Attachment A to state that,
if a validated EMT model is not
available, a preliminary EMT model
may be provided, and, if a validated
EMT model is determined to be
necessary, the interconnection customer
shall submit the validated EMT model
no later than needed for the cluster
restudy.1183 Invenergy argues that
requiring validation of EMT models at
the time of the interconnection
application will impede an
interconnection customer’s ability to
use an advanced product with higher
annual energy production values
because such products will not be
validated.1184 Invenergy explains that
the only equipment with an available,
validated EMT model is equipment that
has been in the market for some years,
and it is unreasonable to require an
interconnection customer to submit a
validated EMT model at the time of
interconnection application even if the
proposed commercial operation date
may be in five or six years. Invenergy
asserts that it is unclear whether a
project developer might be able to
provide EMT models for different
equipment later in the process as newer
equipment becomes field tested without
the transmission provider determining
that it is a material modification,
leading some developers to forego using
state-of-the-art technology otherwise
available under the commercial
operation deadline.
644. Invenergy contends that the
Commission’s alternative to a validated
EMT model that the customer could
pursue is not accurate.1185 Invenergy
asserts that the interconnection
customer cannot attest to the accuracy
of model information because model
P 1660.
Rehearing Request at 13.
1184 Id. at 10–12.
1185 Id. at 12–13.
information is provided by the
manufacturer, and equipment
manufacturers will not attest to model
data until the field test is done, which
is later in the process. Invenergy argues
that requiring validation is not
necessary to achieve the Commission’s
goal of ensuring that accurate
information is used in studies. In
particular, Invenergy notes that
preliminary models contain the same
information as a validated model and
are developed based on real design
codes but have not been field tested.
645. Invenergy contends that, much
like EMT models, requiring validated
RMS models at the beginning of the
interconnection process will force
developers to use older technology and
thus stifle innovation and waste time
and resources.1186 Invenergy also argues
that the Commission’s requirement is
not necessary to ensure accurate model
information. Therefore, Invenergy asks
the Commission to modify the pro
forma LGIP, Appendix 1, Attachment A
and pro forma SGIP, Attachment 2, to
state that, if a validated RMS model is
not available, a preliminary RMS model
may be provided and the
interconnection customer shall submit
the validated RMS model no later than
needed for the cluster restudy.
646. ;rsted argues that the
Commission’s decision to require a
validated EMT model when seeking to
interconnect is arbitrary and capricious
and not supported by reasoned
decision-making.1187 ;rsted contends
that accurate models for
nonsynchronous resources may not be
available early in the interconnection
process due to rapid advances in
inverter and control technologies and
that some resources may need
customization requiring interconnection
customers to make decisions about
specific types of technology they may
use later in the interconnection process.
;rsted claims that the Commission’s
requirement does not provide a path
forward for such resources and could
deter the use of new and more efficient
technologies or delay interconnection of
needed resources.
647. ;rsted also argues that
transmission providers generally do not
conduct EMT studies until much later
in the interconnection process, resulting
in minimal value in the interconnection
customer providing and subsequently
updating EMT models at the time of
interconnection application.1188 ;rsted
asserts that EMT study results typically
reveal the need for items such as control
1182 Id.
1183 Invenergy
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at 14.
Rehearing Request at 6–7.
1188 Id. at 7–8.
1187 ;rsted
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tuning rather than additional
transmission system upgrades, but this
requires an EMT model that accurately
represents how the plant is installed
and configured as well as transmission
system data that can only be provided
by the transmission provider, so the
Commission’s requirement is not likely
to provide information that is useful for
reliability studies and will waste time
and resources for both the
interconnection customer and the
transmission provider.1189
648. ;rsted asks the Commission to
clarify how to provide a validated
model for equipment that does not yet
exist.1190 ;rsted suggests, as example,
that the interconnection customer or
vendor could self-attest that, to the best
of their knowledge, the equipment
response is expected to be consistent
with the RMS and the EMT models
provided at the time of interconnection
study.
649. PacifiCorp asks the Commission
to add two models to the table of
acceptable models that are approved by
WECC and relate to ride through
requirements.1191 PacifiCorp states that
these qualify as validated user-defined
root mean squared positive sequency
dynamic models and their inclusion
will allow transmission providers to
accurately model the ride through
characteristics of these resources and
help understand if the resource will be
tripped for any transmission related
event away from the resource.
iii. Determination
650. We are unpersuaded by
Invenergy’s request for rehearing
regarding potential barriers to validation
of EMT models at the time of the
interconnection application. Pursuant to
Order No. 2023’s definition of a
validated model, the interconnection
customer has a number of options that
do not require field data, such as an
attestation that the models accurately
reflect the expected behavior of a
proposed generating facility based on
the interconnection customer’s best
understanding at the time of the
interconnection request.1192 Therefore,
we are not persuaded that the
interconnection customer is unable to
provide this attestation, even for
advanced products.
651. We also find it unnecessary to
grant Invenergy’s request to modify the
pro forma LGIP, Appendix 1,
Attachment A and pro forma SGIP,
Attachment 2, to state that, if a validated
EMT or RMS model is not available, a
preliminary model may be provided,
and the interconnection customer shall
submit the validated model no later
than needed for the cluster restudy. As
noted above, such preliminary models
are acceptable under Order No. 2023’s
definition of a validated model, as long
as it is based on the actual programming
code used by the manufacturer to
program equipment.
652. We deny ;rsted’s request for
clarification regarding how to provide a
validated model for equipment that does
not yet exist. An interconnection
request that fails to specify the
equipment to be used, including, for
example, the inverter manufacturer,
model name, number, and version, is
not a complete application.1193
However, we acknowledge that
equipment, including inverters, may
advance over the period of time an
interconnection customer proceeds
through the queue. We note that section
4.6 of the pro forma LGIP contains the
transmission provider’s technological
change procedure, which is designed to
allow transmission providers to evaluate
equipment changes to an
interconnection request.1194
653. We are unpersuaded by
Invenergy’s request for rehearing
regarding whether a project developer
might be able to provide EMT models
for different equipment later in the
process as newer equipment becomes
field tested without the transmission
provider determining that it is a
material modification. Order No. 2023
was clear that section 4.4 of the pro
forma LGIP and section 1.4 of the pro
forma SGIP set forth procedures for
modifications to an interconnection
request, including the evaluation of
technical changes to a request, and such
changes may be determined to be a
material modification.1195 Furthermore,
as noted above, section 4.6 of the pro
forma LGIP contains the transmission
provider’s technological change
procedure, which is designed to allow
transmission providers to evaluate
equipment changes to an
interconnection request.
654. We are unpersuaded by ;rsted’s
rehearing request regarding the timing
of EMT model availability. While the
Commission has approved proposals to
perform an EMT study following
execution of the LGIA, the pro forma
LGIP and pro forma SGIP contain no
such study.1196 We sustain the finding
1193 See
1189 Id.
at 8–9.
at 9.
1191 PacifiCorp Rehearing Request at 23–24.
1192 Order No. 2023, 184 FERC ¶ 61,054 at P 1675.
1190 Id.
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pro forma LGIP, attach. A to app. 1.
1194 Order No. 2023, 184 FERC ¶ 61,054 at P 1682.
1195 Id.
1196 See Sw. Power Pool Inc., 181 FERC ¶ 61,018,
at P 8 (2022).
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in Order No. 2023 that requiring models
to be submitted with the
interconnection request is consistent
with the principles underpinning other
requirements in the pro forma LGIP and
pro forma SGIP. Allowing model
validation at a point further into the
interconnection process could lead to
restudies and subsequent delays that
would frustrate the efficiency gained by
the other reforms in Order No. 2023.1197
655. We are unpersuaded by
PacifiCorp’s request for the Commission
to add two models to the table of
acceptable models that are approved by
WECC and relate to ride through
requirements.1198 PacifiCorp presents
this issue for the first time in its
rehearing request. In general, we reject
rehearing requests that raise a new
issue, unless we find that the issue
could not have been previously
presented.1199 We are not persuaded
that PacifiCorp could not have raised
this issue earlier in this proceeding.
However, we also note that transmission
providers may explain specific
circumstances on compliance and
justify why any deviations are either
consistent with or superior to the pro
forma LGIP or merit an independent
entity variation in the context of RTOs/
ISOs.
b. Ride Through Requirements
i. Order No. 2023 Requirements
656. The Commission revised article
9.7.3 of the pro forma LGIA and article
1.5.7 of the pro forma SGIA to require
that, during abnormal frequency
conditions and voltage conditions
within the ‘‘no trip zone’’ defined by
Reliability Standard PRC–024–3 or
successor mandatory ride through
reliability standards, the nonsynchronous generating facility must
ensure that, within any physical
limitations of the generating facility, its
control and protection settings are
configured or set to: (1) continue active
power production during disturbance
and post disturbance periods at predisturbance levels unless providing
primary frequency response or fast
frequency response; (2) minimize
reductions in active power and remain
within dynamic voltage and current
limits, if reactive power priority mode is
enabled, unless providing primary
frequency response or fast frequency
response; (3) not artificially limit
1197 Order
No. 2023, 184 FERC ¶ 61,054 at P 1669.
Rehearing Request at 23–24. It is
unclear which models PacifiCorp would like to add,
but it appears that they might be LHFRT (Low/High
Frequency Ride Through) and LHVRT (Low/High
Voltage Ride Through).
1199 See supra P 386.
1198 PacifiCorp
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dynamic reactive power capability
during disturbances; and (4) return to
pre-disturbance active power levels
without artificial ramp rate limits if
active power is reduced, unless
providing primary frequency response
or fast frequency response.1200
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ii. Requests for Rehearing and
Clarification
657. Invenergy argues that the
proposed ride through requirements
impose requirements on nonsynchronous generators that they may
not be able to meet because the
generator can only maintain active
current, not power, and may not have a
choice to choose between reactive and
real power output during a disturbance
due to equipment limitations.1201
Invenergy asserts that requiring a nonsynchronous generator to produce active
power instead of providing reactive
support is very likely to exacerbate,
rather than alleviate, the disturbance.
Therefore, Invenergy asks the
Commission to modify section 9.7.3 of
the pro forma LGIA to limit the
prioritization of active power to
frequency response disturbances and
clarify that the default ride-though rule
for other disturbances can be
prioritizing reactive power. Invenergy
also asks the Commission to consider
establishing a technical conference to
obtain information directly from the
standards setting bodies, the companies
that design and supply the equipment,
and other engineering experts to support
the Commission’s determinations.
658. Similarly, Clean Energy
Associations ask the Commission to
clarify that the text ‘‘within any
physical limitations of the generating
facility’’ allows a resource that is
responding to a disturbance in reactive
power priority mode to reduce its active
power production if it does not have
sufficient headroom to increase reactive
power to provide required voltage
support, without violating the
requirement to continue active power
production during disturbance and post
disturbance periods at pre-disturbance
levels.1202
iii. Determination
659. We are not persuaded by
Invenergy’s request to modify section
9.7.3 of the pro forma LGIA to limit the
prioritization of active power to
frequency response disturbances and
clarify that the default ride-though rule
for other disturbances can be
1200 Order
No. 2023, 184 FERC ¶ 61,054 at P 1715.
Rehearing Request at 16–17.
1202 Clean Energy Associations Rehearing Request
at 83.
1201 Invenergy
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prioritizing reactive power. As further
explained below, Order No. 2023 allows
a non-synchronous generating facility
with physical limitations to prioritize
reactive power. The extent to which a
non-synchronous generating facility
prioritizes real or reactive power is best
handled on a case-by-case basis based
on the transmission provider’s
evaluation of the reliability needs of its
system, because different transmission
systems and different operating
conditions may require different
responses from interconnected
resources, as opposed to a default
response.
660. We grant Clean Energy
Associations’ request for clarification. In
Order No. 2023, the Commission noted
that the modified reform accommodates
existing technical capabilities and
physical limitations of non-synchronous
generating facilities by providing for
reductions in active power to prioritize
reactive power.1203 A generating
facility’s inability to prioritize reactive
power without a reduction in active
power is considered one of the
‘‘physical limitations of the generating
facility’’ that provides an exception,
albeit limited, to the requirement that
the generating facility continue active
power production during disturbance
and post disturbance periods at predisturbance levels.
661. However, given the importance
of prioritization of reactive power, we
are persuaded that additional clarity is
necessary. Accordingly, we revise
section 9.7.3 of the pro forma LGIA and
article 1.5.7 of the pro forma SGIA to
state that a non-synchronous generating
facility must ensure that, within any
physical limitations of the generating
facility:
. . . its control and protection settings are
configured or set to (1) continue active power
production during disturbance and post
disturbance periods at pre-disturbance levels,
unless reactive power priority mode is
enabled or unless providing primary
frequency response or fast frequency
response. . . .
662. Given this modification, we do
not believe a technical conference, as
suggested by Invenergy, is necessary at
this time.
F. Compliance Procedures
1. Order No. 2023 Requirements
663. The Commission required
transmission providers to submit
compliance filings within 90 calendar
days of the publication date of Order
No. 2023 in the Federal Register, rather
1203 Order
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than the proposed 180 days from the
effective date of Order No. 2023.
2. Requests for Rehearing and
Clarification
664. A number of entities asked the
Commission to extend the deadline for
compliance established in Order No.
2023.1204
665. Indicated PJM TOs argue that
Order No. 2023 is unduly
discriminatory and will inappropriately
impose substantial administrative
burdens on all transmission providers,
even though transmission providers
who have already adopted cluster study
processes are not similarly situated to
those transmission providers who have
not adopted such processes.1205
666. Dominion states that it
understands that the Commission
intended tariff revisions made in
compliance with Order No. 2023 to be
prospective, but Dominion argues that
the Commission did not provide
guidance as to what effective date
transmission providers should use for
purposes of their compliance filing.1206
Dominion asks the Commission to
clarify that any compliance filings can
be made effective in a way that will
align with cluster processing dates, such
as the start of a new processing window.
Dominion asserts that such an effective
date would allow the required revisions
to be implemented on a going-forward
and efficient basis and would not
require any mid-process changes by
requiring revisions to go into effect in
the middle of a cluster window.
3. Determination
667. On October 25, 2023, the
Commission addressed arguments on
rehearing regarding extending the
deadline for compliance established in
Order No. 2023.1207 The Commission
1204 See AEP Rehearing Request at 26–28
(requesting more time for compliance); Dominion
Rehearing Request at 26–30 (requesting a year to
submit compliance filings); EEI Rehearing Request
at 10–11 (requesting the compliance deadline be set
to 180 days from the effective date of the final rule);
PacifiCorp Rehearing Request at 20–22 (requesting
the compliance deadline be set to 180 days from the
effective date of the final rule, or alternatively, 120
days); PJM Rehearing Request at 46–48 (requesting
the Commission delay compliance such that the 90
day clock would start upon the Commission’s
issuance of an order on rehearing).
1205 Indicated PJM TOs Rehearing Request at 17.
1206 Dominion Rehearing Request at 30 (citing
Order No. 2023, 184 FERC ¶ 61,054 at P 1769 (‘‘This
final rule will be effective as described above;
however, the pro forma LGIP, pro forma LGIA, pro
forma SGIP], and pro forma SGIP requirements in
transmission providers’ tariffs will not be effective
until the Commission-approved effective date of the
transmission provider’s filing in compliance with
this final rule.’’)).
1207 Order on Motions and Addressing Limited
Arguments Raised on Rehearing and Setting Aside
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extended the compliance deadline to
require compliance filings to be
submitted within 210 calendar days of
the publication of Order No. 2023 in the
Federal Register (i.e., within 149
calendar days of the effective date of
Order No. 2023, or April 3, 2024). To
incorporate the changes made herein,
we further extend the deadline until the
effective date of this order (i.e., the
deadline for compliance with Order No.
2023 will be 30 days after the
publication of this order in the Federal
Register, and must include the further
revisions reflected in this order).
668. We disagree with arguments that
Order No. 2023 imposes an
inappropriately large compliance
burden on regions already generally in
accord with the approach adopted in
Order No. 2023, or that it is unduly
discriminatory to impose the same
compliance obligations on both entities
that have already adopted cluster study
processes and those that have not. We
find that the compliance burden
imposed by Order No. 2023 is
appropriate given the scope of the
problem at hand. It is not unduly
discriminatory to require all
transmission providers subject to the
Commission’s jurisdiction to comply
with Commission rules.
669. Regarding Dominion’s request for
clarification, we confirm that
transmission providers may propose
effective dates in their compliance
filings that align with their existing
queue processing dates, such as the start
of a new processing window. We will
consider these requests on a case-bycase basis in each individual
compliance filing. To the extent Order
No. 2023 suggested, by referencing
MISO’s compliance filing, that
transmission providers may not be
granted an effective date that predates
the Commission order on
compliance,1208 we clarify that the
Commission will consider, and may
grant, requests from transmission
providers for an effective date that
predates the Commission’s order on
their compliance filing, on a case-bycase basis.
III. Information Collection Statement
670. The information collection
requirements contained in this final rule
are subject to review by the Office of
Management and Budget (OMB) under
section 3507(d) of the Paperwork
Reduction Act of 1995.1209 OMB’s
regulations require approval of certain
Prior Order, In Part, Docket No. RM22–14 (Oct. 25,
2023).
1208 Order No. 2023, 184 FERC ¶ 61,054 at P 1769.
1209 44 U.S.C. 3507(d).
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information collection requirements
imposed by agency rules.1210
Respondents subject to the filing
requirements of this order on rehearing
will not be penalized for failing to
respond to the collection of information
unless the collection of information
displays a valid OMB control number.
671. Previously, the Commission
submitted to OMB the information
collection requirements arising from
Order No. 2023 and OMB approved
those requirements. In this order on
rehearing, the Commission makes no
substantive changes to those
requirements, but does make some
modifications to the Commission’s
standard large generator interconnection
procedures and agreements (i.e., the pro
forma LGIP and pro forma LGIA) and
the Commission’s standard small
generator interconnection procedures
and agreement (i.e., the pro forma SGIP
and pro forma SGIA) that every public
utility transmission provider is required
to include in their tariff under section
35.28 of the Commission’s
regulations.1211 This order on rehearing
in Docket No. RM22–14–001 requires
each transmission provider to amend its
tariff to implement the modifications
adopted in this order on rehearing and
submit a compliance filing to the
Commission for approval of those
modifications. Therefore, the
Commission finds it necessary to make
a formal submission to OMB for review
and approval under section 3507(d) of
the Paperwork Reduction Act of
1995.1212
672. The modifications in the Docket
No. RM22–14–001 affect the following
currently approved information
collections: FERC–516, Electric Rate
Schedules and Tariff Filings (Control
No. 1902–0096); and FERC–516A,
Standardization of Small Generator
Interconnection Agreements and
Procedures (Control No. 1902–0203).
The Commission, in this order on
rehearing, is updating the burden 1213
estimates associated with FERC–516 and
FERC–516A information collections to
reflect the incremental burden of
complying with the new requirements
set forth in this order.
673. Summary of the Revisions to the
Collection of Information due to the
order on rehearing in Docket No. RM22–
14–001:
• FERC–516: This order on rehearing
revises the Commission’s pro forma
LGIP and LGIA and requires each public
utility to amend its LGIP and LGIA. The
1210 5
CFR 1320.11.
CFR 35.28(f)(1).
1212 44 U.S.C. 3507(d).
1213 5 CFR 1320.3(b)(1).
1211 18
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amendments pertain to the first ready,
first served cluster study process,
withdrawal penalties, affected systems
study process, the evaluation of
alternative transmission technologies,
and the maintenance of power
production during abnormal frequency
conditions and certain voltage
conditions.
• FERC–516A: This order on
rehearing amends the Commission’s
standard small generator
interconnection procedures and
agreement (i.e., the pro forma SGIP and
pro forma SGIA) regarding the
evaluation of alternative transmission
technologies and the maintenance of
power production during abnormal
frequency conditions and certain
voltage conditions.
• Title: Electric Rate Schedules and
Tariff Filings (FERC–516), and
Standardization of Small Generator
Interconnection Agreements and
Procedures (FERC–516A).
• Action: Revision of information
collections in accordance with Docket
No. RM22–14–001.
• OMB Control Nos.: 1902–0096
(FERC–516) and 1902–0203 (FERC–
516A).
• Respondents: Public utility
transmission providers, including
RTOs/ISOs.
• Frequency of Information
Collection: One time during Year 1.
• Necessity of Information: The LGIP,
LGIA, SGIP, and SGIA modifications in
this order on rehearing ensure that
interconnection customers can
interconnect to the transmission system
in a reliable, efficient, transparent, and
timely manner, and prevent undue
discrimination. The modifications are
intended to ensure that the generator
interconnection process is just,
reasonable, and not unduly
discriminatory or preferential.
• Internal Review: We have reviewed
the requirements set forth in this order
on rehearing that impose information
collection burdens and have determined
that such requirements are necessary.
These requirements conform to the
Commission’s need for efficient
information collection, communication,
and management within the energy
industry. We have specific, objective
support for the burden estimates
associated with the information
collection requirements.
• Public Reporting Burden: As with
Order No. 2023, we estimate that 44
transmission providers, including
RTOs/ISOs, will be subject to this order
on rehearing. The burden and cost
estimates below reflect the incremental
burden of complying with this order on
rehearing, which will require a single
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compliance filing to be submitted to the
Commission. We estimate no ongoing
information collection burden because
there is either no information collection
aspect of the requirement or the
requirements would merely supplant
existing ones. The Commission
estimates that the order on rehearing in
Docket No. RM22–14–001 will adjust
the burden and cost of FERC–516 and
FERC–516A as follows:
TABLE 1—INFORMATION COLLECTION REQUIREMENTS
Changes due to order on rehearing in Docket No. RM22–14–001
Reforms
Number of
respondents
Annual
number of
responses per
respondent
Total number of
responses
(rounded)
Average
burden (hr.) & cost ($)
per response 1214
Total annual burden hours &
total annual cost ($)
(rounded)
(1)
(2)
(1) * (2) = (3)
(4)
(3) * (4) = (5)
FERC–516
First Ready, First Served Cluster Study .............
44 (TPs) ..........
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 2 hr; $200 ........
Ongoing: 0 ...................
Allocation of Cluster Network Upgrade Costs .....
44 (TPs) ..........
Affected System Study Process ..........................
44 (TPs) ..........
Study Deposits and LGIA Deposit ......................
44 (TPs) ..........
Commercial Readiness .......................................
44 (TPs) ..........
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 44 ...............
Ongoing: 0 1215 .......
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 44 ...............
Ongoing: 0 ..............
Withdrawal Penalties ...........................................
44 (TPs) ..........
Elimination of Reasonable Efforts Standard .......
44 (TPs) ..........
Transition Process ...............................................
44 (TPs) ..........
Co-Located Generating Facilities Behind One
Point of Interconnection with Shared Interconnection Requests.
Ride Through Requirements ...............................
44 (TPs) ..........
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Year 1: 2 hr; $200 ........
Ongoing: 0 ...................
Year 1: 1 hr; $100 Ongoing: 0.
Year 1: 3 hrs; ...............
$300 .............................
Ongoing: 0 ...................
Year 1: 2 hr; $200 ........
Ongoing: 0 ...................
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Year 1: 88 hr;
$8,800
Ongoing: 0
Year 1: 44 hr; $4,400
Ongoing: 0
Year 1: 88 hr; $8,800
Ongoing: 0
Year 1: 44 hr; $4,400 Ongoing: 0
Year 1: 132 hr;
$13,200
Ongoing: 0
Year 1: 88 hr; $8,800
Ongoing: 0
Year 1: 44 hr; $4,400
Ongoing: 0
Year 1: 44 hr; $4,400
Ongoing: 0
Year 1: 44 hr; $4,400
Ongoing: 0
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Year 1: 44 hr; $4,400
Ongoing: 0
Year 1: 44 hr; $4,400
Ongoing: 0
Incorporating Enumerated Alternative Transmission Technologies into the Generator
Interconnection Process.
44 (TPs) ..........
44 (TPs) ..........
Total New Burden for FERC–516 (due to
Docket No. RM22–14–001).
Year 1: 484 responses
Year 1: 704 hr; $70,400
Ongoing: 0
Ongoing: 0 hr; 0
FERC–516A
Ride Through Requirements ...............................
44 (TPs) ..........
Incorporating Enumerated Alternative Transmission Technologies into the Generator
Interconnection Process.
44 (TPs) ..........
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 1 .........
Ongoing: 0 ......
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 44 ...............
Ongoing: 0 ..............
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Year 1: 1 hr; $100 ........
Ongoing: 0 ...................
Total New Burden for FERC–516A (due to
Docket No. RM22–14–001).
Year 1: 88 responses; Ongoing: 0
Year 1: 88 hr; $8,800; Ongoing: 0
Grand Total (FERC–516 plus FERC–516A,
including all respondents).
Year 1: 572 responses; Ongoing: 0
Year 1: 792 hr; $79,200; Ongoing: 0
Grand Total Average Per Entity Cost (44
TPs).
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Year 1: 44 hr; $4,400
Ongoing: 0
Year 1: 44 hr; $4,400
Ongoing: 0
Year 1: $1,800; Ongoing: 0
674. Interested persons may obtain
information on the reporting
requirements by contacting Jean
Sonneman via email at DataClearance@
ferc.gov or telephone (202) 502–6362.
IV. Environmental Analysis
675. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
for any action that may have a
significant adverse effect on the human
environment.1216 We conclude that
neither an Environmental Assessment
nor an Environmental Impact Statement
is required for this final rule under
§ 380.4(a)(15) of the Commission’s
regulations, which provides a
categorical exemption for approval of
actions under sections 205 and 206 of
1214 Commission staff estimate that respondents’
hourly wages plus benefits are comparable to those
of FERC employees (2024). Therefore, the 2024
FERC hourly cost estimate in this analysis is $100
per hour ($207,786 per year).
1215 Order No. 2023 erroneously reported 44
ongoing responses for Affected Systems Study
Process reforms. This was an error and the current
number of estimated ongoing responses is zero.
However, the burden cost per response and total
burden estimates for Affected Systems Study
Process reforms were correctly calculated and
reported.
1216 Reguls. Implementing the Nat’l. Env’t Pol’y
Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987),
FERC Stats. & Regs. Preambles 1986–1990 ¶ 30,783
(1987) (cross-referenced at 41 FERC ¶ 61,284).
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the FPA relating to the filing of
schedules containing all rates and
charges for the transmission or sale of
electric energy subject to the
Commission’s jurisdiction, plus the
classification, practices, contracts, and
regulations that affect rates, charges,
classification, and services.1217
V. Regulatory Flexibility Act
676. The Regulatory Flexibility Act of
1980 1218 requires a description and
analysis of proposed and final rules that
will have significant economic impact
on a substantial number of small
entities. The Commission continues to
certify that the reforms adopted in this
order on rehearing would not have a
significant economic impact on a
substantial number of small entities.
677. The Small Business
Administration (SBA) sets the threshold
for what constitutes a small business.
Under SBA’s size standards,1219
transmission providers and RTOs/ISOs
fall under the category of Electric Bulk
Power Transmission and Control
(NAICS code 221121), that has a size
threshold of under 950 employees
including the entity and its
associates.1220 This order on rehearing
modifies the Commission’s standard
large generator interconnection
procedures and agreements (i.e., the pro
forma LGIP and pro forma LGIA) and
the Commission’s standard small
generator interconnection procedures
and agreement (i.e., the pro forma SGIP
and pro forma SGIA) that every public
utility transmission provider is required
to include in their tariff under section
35.28 of the Commission’s regulations,
regardless of the size of the entity.1221
678. As with Order No. 2023, we
estimate that there are 44 transmission
providers affected by the reforms
proposed in this order on rehearing.
Furthermore, we estimate that six of the
44 total transmission providers,
approximately 14% (rounded), are small
entities.
679. We estimate that one-time costs
(in Year 1) associated with the reforms
required by this order on rehearing for
one transmission provider (as shown in
the table in the Information Collection
Statement above) would be $1,800.
Following Year 1, we estimate that there
will be no ongoing costs for
transmission providers. According to
SBA guidance, the determination of
significance of impact ‘‘should be seen
as relative to the size of the business,
the size of the competitor’s business,
and the impact the regulation has on
larger competitors.’’ 1222 The Year 1
estimated cost of this order on rehearing
reflects 2.5% of the Year 1 estimated
cost of Order No. 2023, which the
Commission found to not have a
significant economic impact. Further,
this order on rehearing will create no
ongoing costs for transmission providers
in addition to those in Order No. 2023.
We therefore do not consider the
estimated cost of $1,800 per
transmission provider due to this order
on rehearing to be a significant
economic impact. As a result, as the
Commission concluded in Order 2023,
we certify that the reforms proposed in
this order on rehearing would not have
a significant economic impact on a
substantial number of small entities.
VI. Document Availability
680. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
document via the internet through the
Commission’s Home Page (https://
www.ferc.gov).
681. From FERC’s Home Page on the
internet, this information is available on
eLibrary. The full text of this document
is available on eLibrary in PDF and
Microsoft Word format for viewing,
printing, and/or downloading. To access
this document in eLibrary, type the
docket number excluding the last three
digits of this document in the docket
number field.
682. User assistance is available for
eLibrary and the FERC’s website during
normal business hours from FERC
Online Support at (202) 502–6652 (toll
free at 1–866–208–3676) or email at
ferconlinesupport@ferc.gov, or the
Public Reference Room at (202) 502–
8371, TTY (202) 502–8659. Email the
Public Reference Room at
public.referenceroom@ferc.gov.
VII. Effective Date
683. This order is effective May 16,
2024.
By the Commission. Commissioner
Christie is concurring with a separate
statement attached.
Issued: March 22, 2024.
Debbie-Anne A. Reese,
Acting Secretary.
Note: The following appendices will not
appear in the Code of Federal Regulations.
Appendix A: Abbreviated Names of
Rehearing Parties
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American Clean Power Association .......................................................................................................
American Electric Power Service Corporation ......................................................................................
Avangrid, Inc ...........................................................................................................................................
California Independent System Operator Corporation .........................................................................
Advanced Energy United, American Clean Power Association, and Solar Energy Industries Association.
Dominion Energy Services, Inc ..............................................................................................................
Duke Energy Carolinas, LLC; Duke Energy Progress, LLC; and Duke Energy Florida, LLC ..............
Edison Electric Institute .........................................................................................................................
National Grid Renewables Development, LLC, Clearway Energy Group LLC, and Pine Gate Renewables, LLC.
Cypress Creek Renewables, LLC, New Leaf Energy, Inc., and Enel Green Power ..............................
Indicated PJM Transmission Owners ....................................................................................................
Invenergy Solar Development North America LLC; Invenergy Thermal Development LLC;
Invenergy Wind Development North America LLC; and Invenergy Transmission LLC.
1217 18
CFR 380.4(a)(15).
U.S.C. 601–612.
1219 13 CFR 121.201.
1220 The RFA definition of ‘‘small entity’’ refers to
the definition provided in the Small Business Act,
which defines a ‘‘small business concern’’ as a
business that is independently owned and operated
and that is not dominant in its field of operation.
1218 5
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The Small Business Administration’s regulations
define the threshold for a small Electric Bulk Power
Transmission and Control entity (NAICS code
221121) to be 950 employees (‘‘the maximum
allowed for a concern and its affiliates to be
considered small’’). See 13 CFR 121.201; see also
5 U.S.C. § 601(3) (citing to section 3 of the Small
Business Act, 15 U.S.C. § 632).
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27121
ACP.
AEP.
Avangrid.
CAISO.
Clean Energy Associations.
Dominion.
Duke Southeast Utilities.
EEI.
Generation Developers.
IPP Coalition.
Indicated PJM TOs.
Invenergy.
1221 18
CFR 35.28(f)(1).
Small Business Administration, A Guide
for Government Agencies How to Comply with the
Regulatory Flexibility Act, at 18 (Aug. 2017),
https://cdn.advocacy.sba.gov/wp-content/uploads/
2019/06/21110349/How-to-Comply-with-theRFA.pdf.
1222 U.S.
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ITC Holdings Corp., on behalf of its operating subsidiaries International Transmission Company
d/b/a ITC Transmission, Michigan Electric Transmission Company, LLC, ITC Midwest LLC,
and ITC Great Plains, LLC.
PJM Interconnection, LLC, Midcontinent Independent System Operator, Inc., and Southwest
Power Pool, Inc.
Longroad Energy Holdings, LLC ............................................................................................................
Midcontinent Independent System Operator, Inc ................................................................................
MISO Transmission Owners ..................................................................................................................
New York Independent System Operator, Inc ......................................................................................
New York Public Service Commission ..................................................................................................
New York Transmission Owners ...........................................................................................................
NewSun Energy LLC ...............................................................................................................................
Dominion Energy South Carolina, Inc., Florida Power & Light Company, and Public Service
Company of Colorado.
Nevada Power Company and Sierra Pacific Power Company .............................................................
;rsted North America, LLC ....................................................................................................................
PacifiCorp ................................................................................................................................................
PJM Interconnection, L.L.C ....................................................................................................................
Sustainable FERC Project, Sierra Club, Natural Resources Defense Council, Earthjustice, Acadia
Center, Environmental Defense Fund, National Audubon Society, Southern Environmental
Law Center, and Southface.
Dominion Energy South Carolina, Inc., PacifiCorp, and Tri-State Generation and Transmission
Association, Inc.
Shell Energy North America (US), L.P., Shell New Energies US, LLC, and Savion, LLC .................
Duke Energy Carolinas, LLC, Duke Energy Progress, LLC, Louisville Gas and Electric Company
and Kentucky Utilities Company, PowerSouth Energy Cooperative, and Southern Company
Services, Inc., acting as agent for Alabama Power Company, Georgia Power Company, and Mississippi Power Company.
Southwest Power Pool, Inc .....................................................................................................................
VEIR Inc ...................................................................................................................................................
Working for Advanced Transmission Technologies Coalition ............................................................
WIRES ......................................................................................................................................................
ITC.
Joint RTOs.
Longroad Energy.
MISO.
MISO TOs.
NYISO.
NYSPSC.
NYTOs.
NewSun.
Non-RTO Providers.
NV Energy.
;rsted.
PacifiCorp.
PJM.
Public Interest Organizations.
Revised Early Adopters Coalition.
Shell.
Southeastern Utilities.
SPP.
VEIR.
WATT Coalition.
WIRES.
Appendix B: Interconnection Study
Metrics
TABLE 1—2022 INTERCONNECTION STUDY METRICS FROM NON-RTOS/ISOS WITH A CLUSTERED SYSTEM IMPACT STUDY
Number of
interconnection
requests with
completed
clustered system
impact studies
Transmission provider
Arizona Public Service .................................................................
Avista Corp ..................................................................................
Dominion Energy South Carolina ................................................
Duke Energy Carolinas ................................................................
El Paso Electric Co ......................................................................
Nevada Power .............................................................................
PacifiCorp ....................................................................................
Public Service Company of Colorado .........................................
Public Service Company of New Mexico ....................................
Tri-State Generation and Transmission 1223 ................................
Appendix C: Changes to the Pro Forma
LGIP
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Note: Deletions are in brackets and
additions are in italics.
21
22
0
14
5
67
189
25
17
10
Average number
of days to
complete
clustered system
impact study
511
61
................................
N/A
76
119
146
246
507
119
Standard Large Generator Interconnection
Procedures (LGIP)
Including
Standard Large Generator Interconnection
Agreement (LGIA)
Standard Large Generator Interconnection
Procedures (LGIP)
(Applicable to Generating Facilities That
Exceed 20 MW)
Table of Contents
Section 1. Definitions
1223 Data drawn from the following sources,
respectively: https://www.oasis.oati.com/azps/
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Number of
facilities
studies
completed
19
7
0
1
1
36
13
16
4
10
Average number
of days to
complete
facilities study
144
136
................................
185
76
120
90
143
168
85
Section 2. Scope and Application
2.1 Application of Standard Large
Generator Interconnection Procedures
(Arizona Public Service); https://www.oasis.
oati.com/avat/ (Avista Corp.); https://
www.oasis.oati.com/SCEG/ (Dominion Energy
South Carolina); https://www.oasis.oati.com/duk/
index.html (Duke Energy Carolinas); https://
www.oasis.oati.com/epe/ (El Paso
Electric Co.); https://www.oasis.oati.com/NEVP/
(Nevada Power); https://www.oasis.oati.com/PPW/
(PacifiCorp); https://www.oasis.oati.com/psco/
index.html (Public Service Company of Colorado);
https://www.oasis.oati.com/PNM/ (Public Service
Company of New Mexico); and https://
www.oasis.oati.com/tsgt/ (Tri-State
Generation and Transmission).
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2.2 Comparability
2.3 Base Case Data
2.4 No Applicability to Transmission
Service
Section 3. Interconnection Requests
3.1 Interconnection Requests
3.1.1 Study Deposits
3.1.2 Submission
3.2 Identification of Types of
Interconnection Services
3.2.1 Energy Resource Interconnection
Service
3.2.2 Network Resource Interconnection
Service
3.3 Utilization of Surplus Interconnection
Service
3.3.1 Surplus Interconnection Service
Requests
3.4 Valid Interconnection Request
3.4.1 Cluster Request Window
3.4.2 Initiating an Interconnection Request
3.4.3 Acknowledgment of Interconnection
Request
3.4.4 Deficiencies in Interconnection
Request
3.4.5 Customer Engagement Window
3.4.6 Cluster Study Scoping Meeting
3.5. OASIS Posting
3.5.1 OASIS Posting
3.5.2 Requirement to Post Interconnection
Study Metrics
3.6 Coordination with Affected Systems
3.7 Withdrawal
3.8 Identification of Contingent Facilities
Section 4. Interconnection Request
Evaluation Process
4.1 Queue Position
4.1.1 Assignment of Queue Position
4.1.2 Higher Queue Position
4.2. General Study Process
4.2.1 Cost Allocation for Interconnection
Facilities and Network Upgrades
4.3 Transferability of Queue Position
4.4 Modifications
4.4.6 Technological Change Procedures
Section 5. Procedures for Interconnection
Requests Submitted Prior to Effective
Date of the Cluster Study Revisions
5.1 Procedures for Transitioning to the
Cluster Study Process
5.2 New Transmission Provider
Section 6. Interconnection Information
Access
6.1 Publicly Posted Interconnection
Information
Section 7. Cluster Study
7.1 Cluster Study Agreement
7.2 Execution of Cluster Study Agreement
7.3 Scope of Cluster Study
7.4 Cluster Study Procedures
7.5 Cluster Study Restudies
Section 8. Interconnection Facilities Study
8.1 Interconnection Facilities Study
Agreement
8.2 Scope of Interconnection Facilities
Study
8.3 Interconnection Facilities Study
Procedures
8.4 Meeting With Transmission Provider
8.5 Restudy
Section 9. Affected System Study
9.1 Applicability
9.2 Response to Initial Notification
9.3 Affected System Queue Position
9.4 Affected System Study Agreement/
Multiparty Affected System Study
Agreement
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9.5 Execution of Affected System Study
Agreement/Multiparty Affected System
Study Agreement
9.6 Scope of Affected System Study
9.7 Affected System Study Procedures
9.8 Meeting With Transmission Provider
9.9 Affected System Cost Allocation
9.10 Tender of Affected Systems Facilities
Construction Agreement/Multiparty
Affected System Facilities Construction
Agreement
9.11 Restudy
Section 10. Optional Interconnection Study
10.1 Optional Interconnection Study
Agreement
10.2 Scope of Optional Interconnection
Study
10.3 Optional Interconnection Study
Procedures
Section 11. Standard Large Generator
Interconnection Agreement (LGIA)
11.1 Tender
11.2 Negotiation
11.2.1 Delay in LGIA Execution, or Filing
Unexecuted, To Await Affected System
Study Report
11.3 Execution and Filing
11.4 Commencement of Interconnection
Activities
Section 12. Construction of Transmission
Provider’s Interconnection Facilities and
Network Upgrades
12.1 Schedule
12.2 Construction Sequencing
12.2.1 General
12.2.2 Advance Construction of Network
Upgrades That are an Obligation of an
Entity Other Than Interconnection
Customer
12.2.3 Advancing Construction of Network
Upgrades that are Part of an Expansion
Plan of [the] Transmission Provider
12.2.4 Amended Interconnection Cluster
Study Report
Section 13. Miscellaneous
13.1 Confidentiality
13.1.1 Scope
13.1.2 Release of Confidential Information
13.1.3 Rights
13.1.4 No Warranties
13.1.5 Standard of Care
13.1.6 Order of Disclosure
13.1.7 Remedies
13.1.8 Disclosure to FERC, its Staff, or a
State
13.2 Delegation of Responsibility
13.3 Obligation for Study Costs
13.4 Third Parties Conducting Studies
13.5 Disputes
13.5.1 Submission
13.5.2 External Arbitration Procedures
13.5.3 Arbitration Decisions
13.5.4 Costs
13.5.5 Non-Binding Dispute Resolution
Procedures
13.6 Local Furnishing Bonds
13.6.1 Transmission Providers That Own
Facilities Financed by Local Furnishing
Bonds
13.6.2 Alternative Procedures for
Requesting Interconnection Service
13.7 Engineering & Procurement (‘E&P’)
Agreement
Appendix 1—Interconnection Request for a
Large Generating Facility
Appendix 2—Cluster Study Agreement
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Appendix 3—Interconnection Facilities
Study Agreement
Appendix 4—Optional Interconnection
Study Agreement
Appendix 5—Standard Large Generator
Interconnection Agreement
Appendix 6—Interconnection Procedures for
a Wind Generating Plant
Appendix 7—Transitional Cluster Study
Agreement
Appendix 8—Transitional Serial
Interconnection Facilities Study
Agreement
Appendix 9—Two-Party Affected System
Study Agreement
Appendix 10—Multiparty Affected System
Study Agreement
Appendix 11—Two-Party Affected System
Facilities Construction Agreement
Appendix 12—Multiparty Affected System
Facilities Construction Agreement
Section 1. Definitions
Adverse System Impact shall mean the
negative effects due to technical or
operational limits on conductors or
equipment being exceeded that may
compromise the safety and reliability of the
electric system.
Affected System shall mean an electric
system other than Transmission Provider’s
Transmission System that may be affected by
the proposed interconnection.
Affected System Facilities Construction
Agreement shall mean the agreement
contained in Appendix 11 to this LGIP that
is made between Transmission Provider and
Affected System Interconnection Customer to
facilitate the construction of and to set forth
cost responsibility for necessary Affected
System Network Upgrades on Transmission
Provider’s Transmission System.
Affected System Interconnection Customer
shall mean any entity that submits an
interconnection request for a generating
facility to a transmission system other than
Transmission Provider’s Transmission
System that may cause the need for Affected
System Network Upgrades on [the]
Transmission Provider’s Transmission
System.
Affected System Network Upgrades shall
mean the additions, modifications, and
upgrades to Transmission Provider’s
Transmission System required to
accommodate Affected System
Interconnection Customer’s proposed
interconnection to a transmission system
other than Transmission Provider’s
Transmission System.
Affected System Operator shall mean the
entity that operates an Affected System.
Affected System Queue Position shall
mean the queue position of an Affected
System Interconnection Customer in
Transmission Provider’s interconnection
queue relative to Transmission Provider’s
Interconnection Customers’ Queue Positions.
Affected System Study shall mean the
evaluation of Affected System
Interconnection Customers’ proposed
interconnection(s) to a transmission system
other than Transmission Provider’s
Transmission System that have an impact on
Transmission Provider’s Transmission
System, as described in Section 9 of this
LGIP.
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Affected System Study Agreement shall
mean the agreement contained in Appendix
9 to this LGIP that is made between
Transmission Provider and Affected System
Interconnection Customer to conduct an
Affected System Study pursuant to Section 9
of this LGIP.
Affected System Study Report shall mean
the report issued following completion of an
Affected System Study pursuant to Section
9.[6]7 of this LGIP.
Affiliate shall mean, with respect to a
corporation, partnership or other entity, each
such other corporation, partnership or other
entity that directly or indirectly, through one
or more intermediaries, controls, is
controlled by, or is under common control
with, such corporation, partnership or other
entity.
Ancillary Services shall mean those
services that are necessary to support the
transmission of capacity and energy from
resources to loads while maintaining reliable
operation of [the] Transmission Provider’s
Transmission System in accordance with
Good Utility Practice.
Applicable Laws and Regulations shall
mean all duly promulgated applicable
federal, state and local laws, regulations,
rules, ordinances, codes, decrees, judgments,
directives, or judicial or administrative
orders, permits and other duly authorized
actions of any Governmental Authority.
Applicable Reliability Standards shall
mean the requirements and guidelines of the
Electric Reliability Organization and the
Balancing Authority Area of the
Transmission System to which the
Generating Facility is directly
interconnected.
Balancing Authority shall mean an entity
that integrates resource plans ahead of time,
maintains demand and resource balance
within a Balancing Authority Area, and
supports interconnection frequency in real
time.
Balancing Authority Area shall mean the
collection of generation, transmission, and
loads within the metered boundaries of the
Balancing Authority. The Balancing
Authority maintains load-resource balance
within this area.
Base Case shall mean the base case power
flow, short circuit, and stability data bases
used for the Interconnection Studies by
Transmission Provider or Interconnection
Customer.
Breach shall mean the failure of a Party to
perform or observe any material term or
condition of the Standard Large Generator
Interconnection Agreement.
Breaching Party shall mean a Party that is
in Breach of the Standard Large Generator
Interconnection Agreement.
Business Day shall mean Monday through
Friday, excluding Federal Holidays.
Calendar Day shall mean any day
including Saturday, Sunday or a Federal
Holiday.
Cluster shall mean a group of one or more
Interconnection Requests that are studied
together for the purpose of conducting a
Cluster Study.
Cluster Request Window shall mean the
time period set forth in Section 3.4.1 of this
LGIP.
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Cluster Restudy shall mean a restudy of a
Cluster Study conducted pursuant to Section
7.5 of this LGIP.
Cluster Restudy Report shall mean the
report issued following completion of a
Cluster Restudy pursuant to Section 7.5 of
this LGIP.
Cluster Restudy Report Meeting shall mean
the meeting held to discuss the results of a
Cluster Restudy pursuant to Section 7.5 of
this LGIP.
[Cluster Restudy Report shall mean the
report issued following completion of a
Cluster Restudy pursuant to Section 7.5 of
this LGIP.]
Cluster Study shall mean the evaluation of
one or more Interconnection Requests within
a Cluster as described in Section 7 of this
LGIP.
Cluster Study Agreement shall mean the
agreement contained in Appendix 2 to this
LGIP for conducting the Cluster Study.
Cluster Study Process shall mean the
following processes, conducted in sequence:
the Cluster Request Window; the Customer
Engagement Window and Scoping Meetings
therein; the Cluster Study; any needed
Cluster Restudies; and the Interconnection
Facilities Study.
Cluster Study Report shall mean the report
issued following completion of a Cluster
Study pursuant to Section 7 of this LGIP.
Cluster Study Report Meeting shall mean
the meeting held to discuss the results of a
Cluster Study pursuant to Section 7 of this
LGIP.
Clustering shall mean the process whereby
one or more Interconnection Requests are
studied together, instead of serially, as
described in Section 7 of this LGIP.
Commercial Operation shall mean the
status of a Generating Facility that has
commenced generating electricity for sale,
excluding electricity generated during Trial
Operation.
Commercial Operation Date of a unit shall
mean the date on which the Generating
Facility commences Commercial Operation
as agreed to by the Parties pursuant to
Appendix E to the Standard Large Generator
Interconnection Agreement.
Commercial Readiness Deposit shall mean
a deposit paid as set forth in Sections 3.4.2,
7.5, and 8.1 of this LGIP.
Confidential Information shall mean any
confidential, proprietary or trade secret
information of a plan, specification, pattern,
procedure, design, device, list, concept,
policy or compilation relating to the present
or planned business of a Party, which is
designated as confidential by the Party
supplying the information, whether
conveyed orally, electronically, in writing,
through inspection, or otherwise.
Contingent Facilities shall mean those
unbuilt Interconnection Facilities and
Network Upgrades upon which the
Interconnection Request’s costs, timing, and
study findings are dependent, and if delayed
or not built, could cause a need for restudies
of the Interconnection Request or a
reassessment of the Interconnection Facilities
and/or Network Upgrades and/or costs and
timing.
Customer Engagement Window shall mean
the time period set forth in Section 3.4.5 of
this LGIP.
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Default shall mean the failure of a
Breaching Party to cure its Breach in
accordance with Article 17 of the Standard
Large Generator Interconnection Agreement.
Dispute Resolution shall mean the
procedure for resolution of a dispute between
the Parties in which they will first attempt
to resolve the dispute on an informal basis.
Distribution System shall mean [the]
Transmission Provider’s facilities and
equipment used to transmit electricity to
ultimate usage points such as homes and
industries directly from nearby generators or
from interchanges with higher voltage
transmission networks which transport bulk
power over longer distances. The voltage
levels at which distribution systems operate
differ among areas.
Distribution Upgrades shall mean the
additions, modifications, and upgrades to
[the] Transmission Provider’s Distribution
System at or beyond the Point of
Interconnection to facilitate interconnection
of the Generating Facility and render the
transmission service necessary to effect
Interconnection Customer’s wholesale sale of
electricity in interstate commerce.
Distribution Upgrades do not include
Interconnection Facilities.
Effective Date shall mean the date on
which the Standard Large Generator
Interconnection Agreement becomes effective
upon execution by the Parties subject to
acceptance by FERC, or if filed unexecuted,
upon the date specified by FERC.
Electric Reliability Organization shall
mean the North American Electric Reliability
Corporation (NERC) or its successor
organization.
Emergency Condition shall mean a
condition or situation: (1) that in the
judgment of the Party making the claim is
imminently likely to endanger life or
property; or (2) that, in the case of a
Transmission Provider, is imminently likely
(as determined in a non-discriminatory
manner) to cause a material adverse effect on
the security of, or damage to Transmission
Provider’s Transmission System,
Transmission Provider’s Interconnection
Facilities or the electric systems of others to
which [the] Transmission Provider’s
Transmission System is directly connected;
or (3) that, in the case of Interconnection
Customer, is imminently likely (as
determined in a non-discriminatory manner)
to cause a material adverse effect on the
security of, or damage to, the Generating
Facility or Interconnection Customer’s
Interconnection Facilities. System restoration
and black start shall be considered
Emergency Conditions; provided that
Interconnection Customer is not obligated by
the Standard Large Generator Interconnection
Agreement to possess black start capability.
Energy Resource Interconnection Service
shall mean an Interconnection Service that
allows [the] Interconnection Customer to
connect its Generating Facility to [the]
Transmission Provider’s Transmission
System to be eligible to deliver the
Generating Facility’s electric output using the
existing firm or nonfirm capacity of [the]
Transmission Provider’s Transmission
System on an as available basis. Energy
Resource Interconnection Service in and of
itself does not convey transmission service.
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Engineering & Procurement (E&P)
Agreement shall mean an agreement that
authorizes [the] Transmission Provider to
begin engineering and procurement of long
lead-time items necessary for the
establishment of the interconnection in order
to advance the implementation of the
Interconnection Request.
Environmental Law shall mean Applicable
Laws or Regulations relating to pollution or
protection of the environment or natural
resources.
Federal Power Act shall mean the Federal
Power Act, as amended, 16 U.S.C. §§ 791a et
seq.
FERC shall mean the Federal Energy
Regulatory Commission (Commission) or its
successor.
Force Majeure shall mean any act of God,
labor disturbance, act of the public enemy,
war, insurrection, riot, fire, storm or flood,
explosion, breakage or accident to machinery
or equipment, any order, regulation or
restriction imposed by governmental,
military or lawfully established civilian
authorities, or any other cause beyond a
Party’s control. A Force Majeure event does
not include acts of negligence or intentional
wrongdoing by the Party claiming Force
Majeure.
Generating Facility shall mean
Interconnection Customer’s device(s) for the
production and/or storage for later injection
of electricity identified in the
Interconnection Request, but shall not
include Interconnection Customer’s
Interconnection Facilities.
Generating Facility Capacity shall mean
the net capacity of the Generating Facility or
the aggregate net capacity of the Generating
Facility where it includes more than one
device for the production and/or storage for
later injection of electricity.
Good Utility Practice shall mean any of the
practices, methods and acts engaged in or
approved by a significant portion of the
electric industry during the relevant time
period, or any of the practices, methods and
acts which, in the exercise of reasonable
judgment in light of the facts known at the
time the decision was made, could have been
expected to accomplish the desired result at
a reasonable cost consistent with good
business practices, reliability, safety and
expedition. Good Utility Practice is not
intended to be limited to the optimum
practice, method, or act to the exclusion of
all others, but rather to be acceptable
practices, methods, or acts generally accepted
in the region.
Governmental Authority shall mean any
federal, state, local or other governmental
regulatory or administrative agency, court,
commission, department, board, or other
governmental subdivision, legislature,
rulemaking board, tribunal, or other
governmental authority having jurisdiction
over the Parties, their respective facilities, or
the respective services they provide, and
exercising or entitled to exercise any
administrative, executive, police, or taxing
authority or power; provided, however, that
such term does not include Interconnection
Customer, Transmission Provider, or any
Affiliate thereof.
Hazardous Substances shall mean any
chemicals, materials or substances defined as
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or included in the definition of ‘‘hazardous
substances,’’ ‘‘hazardous wastes,’’
‘‘hazardous materials,’’ ‘‘hazardous
constituents,’’ ‘‘restricted hazardous
materials,’’ ‘‘extremely hazardous
substances,’’ ‘‘toxic substances,’’ ‘‘radioactive
substances,’’ ‘‘contaminants,’’ ‘‘pollutants,’’
‘‘toxic pollutants’’ or words of similar
meaning and regulatory effect under any
applicable Environmental Law, or any other
chemical, material or substance, exposure to
which is prohibited, limited or regulated by
any applicable Environmental Law.
Initial Synchronization Date shall mean the
date upon which the Generating Facility is
initially synchronized and upon which Trial
Operation begins.
In-Service Date shall mean the date upon
which [the] Interconnection Customer
reasonably expects it will be ready to begin
use of [the] Transmission Provider’s
Interconnection Facilities to obtain back feed
power.
Interconnection Customer shall mean any
entity, including [the] Transmission
Provider, Transmission Owner or any of the
Affiliates or subsidiaries of either, that
proposes to interconnect its Generating
Facility with [the] Transmission Provider’s
Transmission System.
Interconnection Customer’s
Interconnection Facilities shall mean all
facilities and equipment, as identified in
Appendix A of the Standard Large Generator
Interconnection Agreement, that are located
between the Generating Facility and the
Point of Change of Ownership, including any
modification, addition, or upgrades to such
facilities and equipment necessary to
physically and electrically interconnect the
Generating Facility to Transmission
Provider’s Transmission System.
Interconnection Customer’s Interconnection
Facilities are sole use facilities.
Interconnection Facilities shall mean
Transmission Provider’s Interconnection
Facilities and Interconnection Customer’s
Interconnection Facilities. Collectively,
Interconnection Facilities include all
facilities and equipment between the
Generating Facility and the Point of
Interconnection, including any modification,
additions or upgrades that are necessary to
physically and electrically interconnect the
Generating Facility to Transmission
Provider’s Transmission System.
Interconnection Facilities are sole use
facilities and shall not include Distribution
Upgrades, Stand Alone Network Upgrades or
Network Upgrades.
Interconnection Facilities Study shall
mean a study conducted by Transmission
Provider or a third party consultant for
Interconnection Customer to determine a list
of facilities (including Transmission
Provider’s Interconnection Facilities and
Network Upgrades as identified in the
Cluster Study), the cost of those facilities,
and the time required to interconnect the
Generating Facility with Transmission
Provider’s Transmission System. The scope
of the study is defined in Section 8 of this
LGIP.
Interconnection Facilities Study
Agreement shall mean the form of agreement
contained in Appendix 3 of this LGIP for
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27125
conducting the Interconnection Facilities
Study.
Interconnection Facilities Study Report
shall mean the report issued following
completion of an Interconnection Facilities
Study pursuant to Section 8 of this LGIP.
Interconnection Request shall mean an
Interconnection Customer’s request, in the
form of Appendix 1 to this LGIP, in
accordance with the Tariff, to interconnect a
new Generating Facility, or to increase the
capacity of, or make a Material Modification
to the operating characteristics of, an existing
Generating Facility that is interconnected
with [the] Transmission Provider’s
Transmission System.
Interconnection Service shall mean the
service provided by [the] Transmission
Provider associated with interconnecting
[the] Interconnection Customer’s Generating
Facility to [the] Transmission Provider’s
Transmission System and enabling it to
receive electric energy and capacity from the
Generating Facility at the Point of
Interconnection, pursuant to the terms of the
Standard Large Generator Interconnection
Agreement and, if applicable, [the]
Transmission Provider’s Tariff.
Interconnection Study shall mean any of
the following studies: the Cluster Study, the
Cluster Restudy, the Surplus Interconnection
Service [System Impact] Study, [and] the
Interconnection Facilities Study, the Affected
System Study, Optional Interconnection
Study, and Material Modification
assessment, described in this LGIP.
IRS shall mean the Internal Revenue
Service.
Joint Operating Committee shall be a group
made up of representatives from
Interconnection Customers and [the]
Transmission Provider to coordinate
operating and technical considerations of
Interconnection Service.
Large Generating Facility shall mean a
Generating Facility having a Generating
Facility Capacity of more than 20 MW.
LGIA Deposit shall mean the deposit
Interconnection Customer submits when
returning the executed LGIA, or within ten
(10) Business Days of requesting that the
LGIA be filed unexecuted at the Commission,
in accordance with Section 11.3 of this LGIP.
Loss shall mean any and all losses relating
to injury to or death of any person or damage
to property, demand, suits, recoveries, costs
and expenses, court costs, attorney fees, and
all other obligations by or to third parties,
arising out of or resulting from the other
Party’s performance, or non-performance of
its obligations under the Standard Large
Generator Interconnection Agreement on
behalf of the Indemnifying Party, except in
cases of gross negligence or intentional
wrongdoing by the Indemnifying Party.
Material Modification shall mean those
modifications that have a material impact on
the cost or timing of any Interconnection
Request with an equal or later Queue
Position.
Metering Equipment shall mean all
metering equipment installed or to be
installed at the Generating Facility pursuant
to the Standard Large Generator
Interconnection Agreement at the metering
points, including but not limited to
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instrument transformers, MWh-meters, data
acquisition equipment, transducers, remote
terminal unit, communications equipment,
phone lines, and fiber optics.
Multiparty Affected System Facilities
Construction Agreement shall mean the
agreement contained in Appendix 12 to this
LGIP that is made among Transmission
Provider and multiple Affected System
Interconnection Customers to facilitate the
construction of and to set forth cost
responsibility for necessary Affected System
Network Upgrades on Transmission
Provider’s Transmission System.
Multiparty Affected System Study
Agreement shall mean the agreement
contained in Appendix 10 to this LGIP that
is made among Transmission Provider and
multiple Affected System Interconnection
Customers to conduct an Affected System
Study pursuant to Section 9 of this LGIP.
Network Resource shall mean any
designated generating resource owned,
purchased, or leased by a Network Customer
under the Network Integration Transmission
Service Tariff. Network Resources do not
include any resource, or any portion thereof,
that is committed for sale to third parties or
otherwise cannot be called upon to meet the
Network Customer’s Network Load on a noninterruptible basis.
Network Resource Interconnection Service
shall mean an Interconnection Service that
allows [the] Interconnection Customer to
integrate its Large Generating Facility with
[the] Transmission Provider’s Transmission
System (1) in a manner comparable to that in
which [the] Transmission Provider integrates
its generating facilities to serve native load
customers; or (2) in an RTO or ISO with
market based congestion management, in the
same manner as Network Resources. Network
Resource Interconnection Service in and of
itself does not convey transmission service.
Network Upgrades shall mean the
additions, modifications, and upgrades to
[the] Transmission Provider’s Transmission
System required at or beyond the point at
which the Interconnection Facilities connect
to [the] Transmission Provider’s
Transmission System to accommodate the
interconnection of the Large Generating
Facility to [the] Transmission Provider’s
Transmission System.
Notice of Dispute shall mean a written
notice of a dispute or claim that arises out
of or in connection with the Standard Large
Generator Interconnection Agreement or its
performance.
Optional Interconnection Study shall mean
a sensitivity analysis based on assumptions
specified by [the] Interconnection Customer
in the Optional Interconnection Study
Agreement.
Optional Interconnection Study Agreement
shall mean the form of agreement contained
in Appendix 4 of this LGIP for conducting
the Optional Interconnection Study.
Party or Parties shall mean Transmission
Provider, Transmission Owner,
Interconnection Customer or any
combination of the above.
Permissible Technological Advancement
{Transmission Provider inserts definition
here}.
Point of Change of Ownership shall mean
the point, as set forth in Appendix A to the
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Standard Large Generator Interconnection
Agreement, where [the] Interconnection
Customer’s Interconnection Facilities
connect to [the] Transmission Provider’s
Interconnection Facilities.
Point of Interconnection shall mean the
point, as set forth in Appendix A to the
Standard Large Generator Interconnection
Agreement, where the Interconnection
Facilities connect to [the] Transmission
Provider’s Transmission System.
Proportional Impact Method shall mean a
technical analysis conducted by
Transmission Provider to determine the
degree to which each Generating Facility in
the Cluster Study contributes to the need for
a specific System Network Upgrade.
Provisional Interconnection Service shall
mean Interconnection Service provided by
Transmission Provider associated with
interconnecting [the] Interconnection
Customer’s Generating Facility to
Transmission Provider’s Transmission
System and enabling that Transmission
System to receive electric energy and
capacity from the Generating Facility at the
Point of Interconnection, pursuant to the
terms of the Provisional Large Generator
Interconnection Agreement and, if
applicable, the Tariff.
Provisional Large Generator
Interconnection Agreement shall mean the
interconnection agreement for Provisional
Interconnection Service established between
Transmission Provider and/or [the]
Transmission Owner and [the]
Interconnection Customer. This agreement
shall take the form of the Standard Large
Generator Interconnection Agreement,
modified for provisional purposes.
Queue Position shall mean the order of a
valid Interconnection Request, relative to all
other pending valid Interconnection
Requests, established pursuant to Section 4.1
of this LGIP.
Reasonable Efforts shall mean, with respect
to an action required to be attempted or taken
by a Party under the Standard Large
Generator Interconnection Agreement, efforts
that are timely and consistent with Good
Utility Practice and are otherwise
substantially equivalent to those a Party
would use to protect its own interests.
Scoping Meeting shall mean the meeting
between representatives of Interconnection
Customer(s) and Transmission Provider
conducted for the purpose of discussing the
proposed Interconnection Request and any
alternative interconnection options,
exchanging information including any
transmission data and earlier study
evaluations that would be reasonably
expected to impact such interconnection
options, refining information and models
provided by Interconnection Customer(s),
discussing the Cluster Study materials posted
to OASIS pursuant to Section 3.5 of this
LGIP, and analyzing such information.
Site Control shall mean the exclusive land
right to develop, construct, operate, and
maintain the Generating Facility over the
term of expected operation of the Generating
Facility. Site Control may be demonstrated
by documentation establishing: (1)
ownership of, a leasehold interest in, or a
right to develop a site of sufficient size to
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construct and operate the Generating Facility;
(2) an option to purchase or acquire a
leasehold site of sufficient size to construct
and operate the Generating Facility; or (3)
any other documentation that clearly
demonstrates the right of Interconnection
Customer to exclusively occupy a site of
sufficient size to construct and operate the
Generating Facility. Transmission Provider
will maintain acreage requirements for each
Generating Facility type on its OASIS or
public website.
Small Generating Facility shall mean a
Generating Facility that has a Generating
Facility Capacity of no more than 20 MW.
Stand Alone Network Upgrades shall mean
Network Upgrades that are not part of an
Affected System that [an] Interconnection
Customer may construct without affecting
day-to-day operations of the Transmission
System during their construction [and the
following conditions are met: (1) a Substation
Network Upgrade must only be required for
a single Interconnection Customer in the
Cluster and no other Interconnection
Customer in that Cluster is required to
interconnect to the same Substation Network
Upgrades, and (2) a System Network Upgrade
must only be required for a single
Interconnection Customer in the Cluster, as
indicated under the Transmission Provider’s
Proportional Impact Method]. Both
Transmission Provider and Interconnection
Customer must agree as to what constitutes
Stand Alone Network Upgrades and identify
them in Appendix A to the Standard Large
Generator Interconnection Agreement. If
Transmission Provider and Interconnection
Customer disagree about whether a particular
Network Upgrade is a Stand Alone Network
Upgrade, Transmission Provider must
provide Interconnection Customer a written
technical explanation outlining why
Transmission Provider does not consider the
Network Upgrade to be a Stand Alone
Network Upgrade within fifteen (15) Business
[d]Days of its determination.
Standard Large Generator Interconnection
Agreement (LGIA) shall mean the form of
interconnection agreement applicable to an
Interconnection Request pertaining to a Large
Generating Facility that is included in [the]
Transmission Provider’s Tariff.
Standard Large Generator Interconnection
Procedures (LGIP) shall mean the
interconnection procedures applicable to an
Interconnection Request pertaining to a Large
Generating Facility that are included in [the]
Transmission Provider’s Tariff.
Substation Network Upgrades shall mean
Network Upgrades that are required at the
substation located at the Point of
Interconnection.
Surplus Interconnection Service shall
mean any unneeded portion of
Interconnection Service established in a
Standard Large Generator Interconnection
Agreement, such that if Surplus
Interconnection Service is utilized, the total
amount of Interconnection Service at the
Point of Interconnection would remain the
same.
System Network Upgrades shall mean
Network Upgrades that are required beyond
the substation located at the Point of
Interconnection.
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System Protection Facilities shall mean the
equipment, including necessary protection
signal communications equipment, required
to protect (1) [the] Transmission Provider’s
Transmission System from faults or other
electrical disturbances occurring at the
Generating Facility and (2) the Generating
Facility from faults or other electrical system
disturbances occurring on [the] Transmission
Provider’s Transmission System or on other
delivery systems or other generating systems
to which [the] Transmission Provider’s
Transmission System is directly connected.
Tariff shall mean [the] Transmission
Provider’s Tariff through which open access
transmission service and Interconnection
Service are offered, as filed with FERC, and
as amended or supplemented from time to
time, or any successor tariff.
Transitional Cluster Study shall mean an
Interconnection Study evaluating a Cluster of
Interconnection Requests during the
transition to the Cluster Study Process, as set
forth in Section 5.1.1.2 of this LGIP.
Transitional Cluster Study Agreement shall
mean the agreement contained in Appendix
7 to this LGIP that is made between
Transmission Provider and Interconnection
Customer to conduct a Transitional Cluster
Study pursuant to Section 5.1.1.2 of this
LGIP.
Transitional Cluster Study Report shall
mean the report issued following completion
of a Transitional Cluster Study pursuant to
Section 5.1.1.2 of this LGIP.
Transitional Serial Interconnection
Facilities Study shall mean an
Interconnection Facilities Study evaluating
an Interconnection Request on a serial basis
during the transition to the Cluster Study
Process, as set forth in Section 5.1.1.1 of this
LGIP.
Transitional Serial Interconnection
Facilities Study Agreement shall mean the
agreement contained in Appendix 8 to this
LGIP that is made between Transmission
Provider and Interconnection Customer to
conduct a Transitional Serial Interconnection
Facilities Study pursuant to Section 5.1.1.1 of
this LGIP.
Transitional Serial Interconnection
Facilities Study Report shall mean the report
issued following completion of a Transitional
Serial Interconnection Facilities Study
pursuant to Section 5.1.1.1 of this LGIP.
Transitional Withdrawal Penalty shall
mean the penalty assessed by Transmission
Provider to Interconnection Customer that
has entered the Transitional Cluster Study or
Transitional Serial Interconnection Facilities
Study and chooses to withdraw or is deemed
withdrawn from Transmission Provider’s
interconnection queue or whose Generating
Facility does not otherwise reach Commercial
Operation. The calculation of the
Transitional Withdrawal Penalty is set forth
in Sections 5.1.1.1 and 5.1.1.2 of this LGIP.
Transmission Owner shall mean an entity
that owns, leases or otherwise possesses an
interest in the portion of the Transmission
System at the Point of Interconnection and
may be a Party to the Standard Large
Generator Interconnection Agreement to the
extent necessary.
Transmission Provider shall mean the
public utility (or its designated agent) that
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owns, controls, or operates transmission or
distribution facilities used for the
transmission of electricity in interstate
commerce and provides transmission service
under the Tariff. The term Transmission
Provider should be read to include the
Transmission Owner when the Transmission
Owner is separate from [the] Transmission
Provider.
Transmission Provider’s Interconnection
Facilities shall mean all facilities and
equipment owned, controlled, or operated by
Transmission Provider from the Point of
Change of Ownership to the Point of
Interconnection as identified in Appendix A
to the Standard Large Generator
Interconnection Agreement, including any
modifications, additions or upgrades to such
facilities and equipment. Transmission
Provider’s Interconnection Facilities are sole
use facilities and shall not include
Distribution Upgrades, Stand Alone Network
Upgrades or Network Upgrades.
Transmission System shall mean the
facilities owned, controlled or operated by
[the] Transmission Provider or Transmission
Owner that are used to provide transmission
service under the Tariff.
Trial Operation shall mean the period
during which Interconnection Customer is
engaged in on-site test operations and
commissioning of the Generating Facility
prior to Commercial Operation.
Withdrawal Penalty shall mean the penalty
assessed by Transmission Provider to an
Interconnection Customer that chooses to
withdraw or is deemed withdrawn from
Transmission Provider’s interconnection
queue or whose Generating Facility does not
otherwise reach Commercial Operation. The
calculation of the Withdrawal Penalty is set
forth in Section 3.7.1 of this LGIP.
Section 2. Scope and Application
2.1 Application of Standard Large
Generator Interconnection Procedures
Sections 2 through 13 of this LGIP apply
to processing an Interconnection Request
pertaining to a Large Generating Facility.
2.2 Comparability
Transmission Provider shall receive,
process and analyze all Interconnection
Requests in a timely manner as set forth in
this LGIP. Transmission Provider shall
process and analyze Interconnection
Requests from all Interconnection Customers
comparably, regardless of whether the
Generating Facilities are owned by
Transmission Provider, its subsidiaries or
Affiliates or others.
2.3 Base Case Data
Transmission Provider shall maintain base
power flow, short circuit and stability
databases, including all underlying
assumptions, and contingency list on either
its OASIS site or a password-protected
website, subject to confidentiality provisions
in LGIP Section 13.1. In addition,
Transmission Provider shall maintain
network models and underlying assumptions
on either its OASIS site or a passwordprotected website. Such network models and
underlying assumptions should reasonably
represent those used during the most recent
[i]Interconnection [s]Study and be
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representative of current system conditions.
If Transmission Provider posts this
information on a password-protected
website, a link to the information must be
provided on Transmission Provider’s OASIS
site. Transmission Provider is permitted to
require that Interconnection Customers,
OASIS site users and password-protected
website users sign a confidentiality
agreement before the release of commercially
sensitive information or Critical Energy
Infrastructure Information in the Base Case
data. Such databases and lists, hereinafter
referred to as Base Cases, shall include all (1)
generation projects and (2) transmission
projects, including merchant transmission
projects that are proposed for the
Transmission System for which a
transmission expansion plan has been
submitted and approved by the applicable
authority.
2.4 No Applicability to Transmission
Service
Nothing in this LGIP shall constitute a
request for transmission service or confer
upon an Interconnection Customer any right
to receive transmission service.
Section 3. Interconnection Requests
3.1 Interconnection Requests
3.1.1
Study Deposits
3.1.1.1 Study Deposit
Interconnection Customer shall submit to
Transmission Provider, during a Cluster
Request Window, an Interconnection Request
in the form of Appendix 1 to this LGIP, a[n]
non-refundable application fee of $5,000, and
a refundable study deposit of:
(a) $35,000 plus $1,000 per MW for
Interconnection Requests [≥ 20 MW] < 80
MW; or
(b) $150,000 for Interconnection Requests ≥
80 MW < 200 MW; or
(c) $250,000 for Interconnection Requests ≥
200 MW.
Transmission Provider shall apply the
study deposit toward the cost of the Cluster
Study Process.
3.1.2 Submission
Interconnection Customer shall submit a
separate Interconnection Request for each
site. Where multiple Generating Facilities
share a site, Interconnection Customer(s) may
submit separate Interconnection Requests or
a single Interconnection Request. An
Interconnection Request to evaluate one site
at two different voltage levels shall be treated
as two Interconnection Requests.
At Interconnection Customer’s option,
Transmission Provider and Interconnection
Customer will identify alternative Point(s) of
Interconnection and configurations at a
Scoping Meeting within the Customer
Engagement Window to evaluate in this
process and attempt to eliminate alternatives
in a reasonable fashion given resources and
information available. Interconnection
Customer will select the definitive Point of
Interconnection to be studied no later than
the execution of the Cluster Study
Agreement. For purposes of clustering
Interconnection Requests, Transmission
Provider may propose changes to the
requested Point of Interconnection to
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facilitate efficient interconnection of
Interconnection Customers at common
Point(s) of Interconnection. Transmission
Provider shall notify Interconnection
Customers in writing of any intended
changes to the requested Point of
Interconnection within the Customer
Engagement Window, and the Point of
Interconnection shall only change upon
mutual agreement.
Transmission Provider shall have a process
in place to consider requests for
Interconnection Service below the Generating
Facility Capacity. These requests for
Interconnection Service shall be studied at
the level of Interconnection Service
requested for purposes of Interconnection
Facilities, Network Upgrades, and associated
costs, but may be subject to other studies at
the full Generating Facility Capacity to
ensure safety and reliability of the system,
with the study costs borne by
Interconnection Customer. If after the
additional studies are complete,
Transmission Provider determines that
additional Network Upgrades are necessary,
then Transmission Provider must: (1) specify
which additional Network Upgrade costs are
based on which studies; and (2) provide a
detailed explanation of why the additional
Network Upgrades are necessary. Any
Interconnection Facility and/or Network
Upgrade costs required for safety and
reliability also would be borne by
Interconnection Customer. Interconnection
Customers may be subject to additional
control technologies as well as testing and
validation of those technologies consistent
with Article 6 of the LGIA. The necessary
control technologies and protection systems
shall be established in Appendix C of that
executed, or requested to be filed
unexecuted, LGIA.
Transmission Provider shall have a process
in place to study Generating Facilities that
include at least one electric storage resource
using operating assumptions (i.e., whether
the interconnecting Generating Facility will
or will not charge at peak load) that reflect
the proposed charging behavior of the
Generating Facility as requested by
Interconnection Customer, unless
Transmission Provider determines that Good
Utility Practice, including Applicable
Reliability Standards, otherwise requires the
use of different operating assumptions. If
Transmission Provider finds Interconnection
Customer’s requested operating assumptions
conflict with Good Utility Practice,
Transmission Provider must provide
Interconnection Customer an explanation in
writing of why the submitted operating
assumptions are insufficient or inappropriate
by no later than thirty (30) Calendar Days
before the end of the Customer Engagement
Window and allow Interconnection Customer
to revise and resubmit requested operating
assumptions one time at least ten (10)
Calendar Days prior to the end of the
Customer Engagement Window.
Transmission Provider shall study these
requests for Interconnection Service, with the
study costs borne by Interconnection
Customer, using the submitted operating
assumptions for purposes of Interconnection
Facilities, Network Upgrades, and associated
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costs. These requests for Interconnection
Service also may be subject to other studies
at the full Generating Facility Capacity to
ensure safety and reliability of the system,
with the study costs borne by
Interconnection Customer. Interconnection
Customer’s Generating Facility may be
subject to additional control technologies as
well as testing and validation of such
additional control technologies consistent
with Article 6 of the LGIA. The necessary
control technologies and protection systems
shall be set forth in Appendix C of [the]
Interconnection Customer’s LGIA.
3.2 Identification of Types of
Interconnection Services
At the time the Interconnection Request is
submitted, Interconnection Customer must
request either Energy Resource
Interconnection Service or Network Resource
Interconnection Service, as described;
provided, however, any Interconnection
Customer requesting Network Resource
Interconnection Service may also request that
it be concurrently studied for Energy
Resource Interconnection Service, up to the
point when an Interconnection Facilities
Study Agreement is executed.
Interconnection Customer may then elect to
proceed with Network Resource
Interconnection Service or to proceed under
a lower level of interconnection service to the
extent that only certain upgrades will be
completed.
3.2.1 Energy Resource Interconnection
Service
3.2.1.1 The Product
Energy Resource Interconnection Service
allows Interconnection Customer to connect
the Large Generating Facility to the
Transmission System and be eligible to
deliver the Large Generating Facility’s output
using the existing firm or non-firm capacity
of the Transmission System on an ‘‘as
available’’ basis. Energy Resource
Interconnection Service does not in and of
itself convey any right to deliver electricity
to any specific customer or Point of Delivery.
3.2.1.2 The Study
The study consists of short circuit/fault
duty, steady state (thermal and voltage) and
stability analyses. The short circuit/fault duty
analysis would identify direct
Interconnection Facilities required and the
Network Upgrades necessary to address short
circuit issues associated with the
Interconnection Facilities. The stability and
steady state studies would identify necessary
upgrades to allow full output of the proposed
Large Generating Facility, except for
Generating Facilities that include at least one
electric storage resource that request to use
operating assumptions pursuant to Section
3.1.2, unless [the] Transmission Provider
determines that Good Utility Practice,
including Applicable Reliability Standards,
otherwise requires the use of different
operating assumptions, and would also
identify the maximum allowed output, at the
time the study is performed, of the
interconnecting Large Generating Facility
without requiring additional Network
Upgrades.
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3.2.2 Network Resource Interconnection
Service
3.2.2.1 The Product
Transmission Provider must conduct the
necessary studies and construct the Network
Upgrades needed to integrate the Large
Generating Facility (1) in a manner
comparable to that in which Transmission
Provider integrates its generating facilities to
serve native load customers; or (2) in an ISO
or RTO with market based congestion
management, in the same manner as Network
Resources. Network Resource
Interconnection Service [A]allows
Interconnection Customer’s Large Generating
Facility to be designated as a Network
Resource, up to the Large Generating
Facility’s full output, on the same basis as
existing Network Resources interconnected
to Transmission Provider’s Transmission
System, and to be studied as a Network
Resource on the assumption that such a
designation will occur.
3.2.2.2 The Study
The Interconnection Study for Network
Resource Interconnection Service shall
assure that Interconnection Customer’s Large
Generating Facility meets the requirements
for Network Resource Interconnection
Service and as a general matter, that such
Large Generating Facility’s interconnection is
also studied with Transmission Provider’s
Transmission System at peak load, under a
variety of severely stressed conditions, to
determine whether, with the Large
Generating Facility at full output, except for
Generating Facilities that include at least one
electric storage resource that request to use,
and for which Transmission Provider
approves, operating assumptions pursuant to
Section 3.1.2, the aggregate of generation in
the local area can be delivered to the
aggregate of load on Transmission Provider’s
Transmission System, consistent with
Transmission Provider’s reliability criteria
and procedures. This approach assumes that
some portion of existing Network Resources
are displaced by the output of
Interconnection Customer’s Large Generating
Facility. Network Resource Interconnection
Service in and of itself does not convey any
right to deliver electricity to any specific
customer or Point of Delivery. [The]
Transmission Provider may also study the
Transmission System under non-peak load
conditions. However, upon request by [the]
Interconnection Customer, [the]
Transmission Provider must explain in
writing to [the] Interconnection Customer
why the study of non-peak load conditions
is required for reliability purposes.
3.3 Utilization of Surplus Interconnection
Service
Transmission Provider must provide a
process that allows an Interconnection
Customer to utilize or transfer Surplus
Interconnection Service at an existing Point
of Interconnection. The original
Interconnection Customer or one of its
affiliates shall have priority to utilize Surplus
Interconnection Service. If the existing
Interconnection Customer or one of its
affiliates does not exercise its priority, then
that service may be made available to other
potential Interconnection Customers.
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3.3.1 Surplus Interconnection Service
Requests
Surplus Interconnection Service requests
may be made by the existing Interconnection
Customer or one of its affiliates or may be
submitted once Interconnection Customer
has executed the LGIA or requested that the
LGIA be filed unexecuted. Surplus
Interconnection Service requests also may be
made by another Interconnection Customer.
Transmission Provider shall provide a
process for evaluating Interconnection
Requests for Surplus Interconnection Service.
Studies for Surplus Interconnection Service
shall consist of reactive power, short circuit/
fault duty, stability analyses, and any other
appropriate studies. Steady-state (thermal/
voltage) analyses may be performed as
necessary to ensure that all required
reliability conditions are studied. If the
Surplus Interconnection Service was not
studied under off-peak conditions, off-peak
steady state analyses shall be performed to
the required level necessary to demonstrate
reliable operation of the Surplus
Interconnection Service. If the original
system impact study report or Cluster Study
Report is not available for the Surplus
Interconnection Service, both off-peak and
peak analysis may need to be performed for
the existing Generating Facility associated
with the request for Surplus Interconnection
Service. The reactive power, short circuit/
fault duty, stability, and steady-state analyses
for Surplus Interconnection Service will
identify any additional Interconnection
Facilities and/or Network Upgrades
necessary.
Transmission Provider shall study Surplus
Interconnection Service requests for a
Generating Facility that includes at least one
electric storage resource using operating
assumptions (i.e., whether the
interconnecting Generating Facility will or
will not charge at peak load) that reflect the
proposed charging behavior of the Generating
Facility as requested by Interconnection
Customer, unless Transmission Provider
determines that Good Utility Practice,
including Applicable Reliability Standards,
otherwise requires the use of different
operating assumptions.
3.4 Valid Interconnection Request
3.4.1 Cluster Request Window
Transmission Provider shall accept
Interconnection Requests during a forty-five
(45) Calendar Day period (the Cluster Request
Window). The initial Cluster Request
Window shall open for Interconnection
Requests beginning {Transmission Provider
to provide number of Calendar Days} after
the conclusion of the transition process set
out in Section 5.1 of this LGIP and successive
Cluster Request Windows shall open
annually every {Transmission Provider to
provide Month and Day (e.g., January 1)}
thereafter.
3.4.2 Initiating an Interconnection Request
An Interconnection Customer seeking to
join a Cluster shall submit its Interconnection
Request to Transmission Provider within,
and no later than the close of, the Cluster
Request Window. Interconnection Requests
submitted outside of the Cluster Request
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Window will not be considered. To initiate
an Interconnection Request, Interconnection
Customer must submit all of the following:
(i) [a]Applicable study deposit amount,
pursuant to Section 3.1.1.1 of this LGIP,
(ii) [a]A completed application in the form
of Appendix 1,
(iii) [d]Demonstration of no less than
ninety percent (90%) Site Control or (1) a
signed affidavit from an officer of the
company indicating that Site Control is
unobtainable due to regulatory limitations as
such term is defined by [the] Transmission
Provider; and (2) documentation sufficiently
describing and explaining the source and
effects of such regulatory limitations,
including a description of any conditions
that must be met to satisfy the regulatory
limitations and the anticipated time by
which Interconnection Customer expects to
satisfy the regulatory requirements and (3) a
deposit in lieu of Site Control of $10,000 per
MW, subject to a minimum of $500,000 and
a maximum of $2,000,000. Interconnection
Requests from multiple Interconnection
Customers for multiple Generating Facilities
that share a site must include a contract or
other agreement that allows for shared land
use[.],
(iv) Generating Facility Capacity (MW)
(and requested Interconnection Service level
if the requested Interconnection Service is
less than the Generating Facility Capacity),
(v) If applicable, (1) the requested
operating assumptions (i.e., whether the
interconnecting Generating Facility will or
will not charge at peak load) to be used by
Transmission Provider that reflect the
proposed charging behavior of the Generating
Facility that includes at least one electric
storage resource, and (2) a description of any
control technologies (software and/or
hardware) that will limit the operation of the
Generating Facility to the operating
assumptions submitted by Interconnection
Customer[.],
(vi) A Commercial Readiness Deposit equal
to two times the study deposit described in
Section 3.1.1.1 of this LGIP in the form of an
irrevocable letter of credit, [or] cash, a surety
bond, or other form of security that is
reasonably acceptable to Transmission
Provider. This Commercial Readiness Deposit
is refunded to Interconnection Customer
according to Section 3.7 of this LGIP,
(vii) A Point of Interconnection, and
(viii) Whether the Interconnection Request
shall be studied for Network Resource
Interconnection Service or for Energy
Resource Interconnection Service, consistent
with Section 3.2 of this LGIP.
An Interconnection Customer that submits
a deposit in lieu of Site Control due to
demonstrated regulatory limitations must
demonstrate that it is taking identifiable steps
to secure the necessary regulatory approvals
from the applicable federal, state, and/or
tribal entities before execution of the Cluster
Study Agreement. Such deposit will be held
by Transmission Provider until
Interconnection Customer provides the
required Site Control demonstration for its
point in the Cluster Study Process.
Interconnection Customers facing qualifying
regulatory limitations must demonstrate
one[-] hundred percent (100%) Site Control
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27129
within one[-] hundred eighty (180) Calendar
Days of the effective date of the LGIA.
Interconnection Customer shall promptly
inform Transmission Provider of any material
change to Interconnection Customer’s
demonstration of Site Control under Section
3.4.2(iii) of this LGIP. If Transmission
Provider determines, based on
Interconnection Customer’s information, that
Interconnection Customer no longer satisfies
the Site Control requirement, Transmission
Provider shall give Interconnection Customer
ten (10) Business Days to demonstrate
satisfaction with the applicable requirement
subject to Transmission Provider’s approval.
Absent such, Transmission Provider shall
deem the Interconnection Request withdrawn
pursuant to Section 3.7 of this LGIP.
The expected In-Service Date of the new
Large Generating Facility or increase in
capacity of the existing Generating Facility
shall be no more than the process window for
the regional expansion planning period (or in
the absence of a regional planning process,
the process window for Transmission
Provider’s expansion planning period) not to
exceed seven (7) years from the date the
Interconnection Request is received by
Transmission Provider, unless
Interconnection Customer demonstrates that
engineering, permitting and construction of
the new Large Generating Facility or increase
in capacity of the existing Generating Facility
will take longer than the regional expansion
planning period. The In-Service Date may
succeed the date the Interconnection Request
is received by Transmission Provider by a
period up to ten (10) years, or longer where
Interconnection Customer and Transmission
Provider agree, such agreement not to be
unreasonably withheld.
3.4.3 Acknowledgment of Interconnection
Request
Transmission Provider shall acknowledge
receipt of the Interconnection Request within
five (5) Business Days of receipt of the
request and attach a copy of the received
Interconnection Request to the
acknowledgement.
3.4.4 Deficiencies in Interconnection
Request
An Interconnection Request will not be
considered to be a valid request until all
items in Section 3.4.2 of this LGIP have been
received by Transmission Provider during
the Cluster Request Window. If an
Interconnection Request fails to meet the
requirements set forth in Section 3.4.2 of this
LGIP, Transmission Provider shall notify
Interconnection Customer within five (5)
Business Days of receipt of the initial
Interconnection Request of the reasons for
such failure and that the Interconnection
Request does not constitute a valid request.
Interconnection Customer shall provide
Transmission Provider the additional
requested information needed to constitute a
valid request within ten (10) Business Days
after receipt of such notice but no later than
the close of the Cluster Request Window. At
any time, if Transmission Provider finds that
the technical data provided by
Interconnection Customer is incomplete or
contains errors, Interconnection Customer
and Transmission Provider shall work
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expeditiously and in good faith to remedy
such issues. In the event that Interconnection
Customer fails to comply with this Section
3.4.4 of this LGIP, Transmission Provider[s]
shall deem the Interconnection Request
withdrawn (without the cure period provided
under Section 3.7 of this LGIP), the
application fee is forfeited to [the]
Transmission Provider, and the study deposit
and Commercial Readiness Deposit shall be
returned to Interconnection Customer.
3.4.5 Customer Engagement Window
Upon the close of each Cluster Request
Window, Transmission Provider shall open a
sixty (60) Calendar Day period (Customer
Engagement Window). During the Customer
Engagement Window, Transmission Provider
shall hold a Scoping Meeting with all
interested Interconnection Customers.
Notwithstanding the preceding requirements
and upon written consent of all
Interconnection Customers within the
Cluster, Transmission Provider may shorten
the Customer Engagement Window and begin
the Cluster Study. Within ten (10) Business
Days of the opening of the Customer
Engagement Window, Transmission Provider
shall post on its OASIS a list of
Interconnection Requests for that Cluster.
The list shall identify, for each anonymized
Interconnection Request: (1) the requested
amount of Interconnection Service; (2) the
location by county and state; (3) the station
or transmission line or lines where the
interconnection will be made; (4) the
projected In-Service Date; (5) the type of
Interconnection Service requested; and (6)
the type of Generating Facility or Facilities to
be constructed, including fuel types, such as
coal, natural gas, solar, or wind. [The]
Transmission Provider must ensure that
project information is anonymized and does
not reveal the identity or commercial
information of [i]Interconnection
[c]Customers with submitted requests.
During the Customer Engagement Window,
Transmission Provider shall provide to
Interconnection Customer a non-binding
updated good faith estimate of the cost and
timeframe for completing the cluster Study
and a Cluster Study Agreement to be
executed prior to the close of the Customer
Engagement Window.
At the end of the Customer Engagement
Window, all Interconnection Requests
deemed valid that have executed a Cluster
Study Agreement in the form of Appendix 2
to this LGIP shall be included in the Cluster
Study. Any Interconnection Requests for
which Interconnection Customer has not
executed a Cluster Study Agreement [not
deemed valid at the close of the Customer
Engagement Window] shall be deemed
withdrawn (without the cure period provided
under Section 3.7 of this LGIP) by
Transmission Provider, the application fee
shall be forfeited to [the] Transmission
Provider, and [the] Transmission Provider
shall return the study deposit and
Commercial Readiness Deposit to
Interconnection Customer. Immediately
following the Customer Engagement
Window, Transmission Provider shall initiate
the Cluster Study described in Section 7 of
this LGIP.
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3.4.6 Cluster Study Scoping Meeting
During the Customer Engagement Window,
Transmission Provider shall hold a Scoping
Meeting with all Interconnection Customers
whose valid Interconnection Requests were
received in that Cluster Request Window.
The purpose of the Cluster Study Scoping
Meeting shall be to discuss alternative
interconnection options, to exchange
information including any transmission data
and earlier study evaluations that would
reasonably be expected to impact such
interconnection options, to discuss the
Cluster Study materials posted to OASIS
pursuant to Section 3.5 of this LGIP, if
applicable, and to analyze such information.
Transmission Provider and Interconnection
Customer(s) will bring to the meeting such
technical data, including, but not limited to:
(i) general facility loadings, (ii) general
instability issues, (iii) general short circuit
issues, (iv) general voltage issues, and (v)
general reliability issues as may be
reasonably required to accomplish the
purpose of the meeting. Transmission
Provider and Interconnection Customer(s)
will also bring to the meeting personnel and
other resources as may be reasonably
required to accomplish the purpose of the
meeting in the time allocated for the meeting.
On the basis of the meeting, Interconnection
Customer(s) shall designate its Point of
Interconnection [and one or more available
alternative Point(s) of Interconnection]. The
duration of the meeting shall be sufficient to
accomplish its purpose. If the Cluster Study
Scoping Meeting consists of more than one
Interconnection Customer, Transmission
Provider shall issue, no later than fifteen (15)
Business Days after the commencement of
the Customer Engagement Window, and
Interconnection Customer shall execute a
non-disclosure agreement prior to a group
Cluster Study Scoping Meeting, which will
provide for confidentiality of identifying
information or commercially sensitive
information pertaining to any other
Interconnection Customers.
3.5. OASIS Posting
3.5.1 OASIS Posting
Transmission Provider will maintain on its
OASIS a list of all Interconnection Requests.
The list will identify, for each
Interconnection Request: (i) the maximum
summer and winter megawatt electrical
output; (ii) the location by county and state;
(iii) the station or transmission line or lines
where the interconnection will be made; (iv)
the projected In-Service Date; (v) the status
of the Interconnection Request, including
Queue Position; (vi) the type of
Interconnection Service being requested;
[and] (vii) the availability of any studies
related to the Interconnection Request; (viii)
the date of the Interconnection Request; (ix)
the type of Generating Facility to be
constructed; and (x) for Interconnection
Requests that have not resulted in a
completed interconnection, an explanation as
to why it was not completed. Except in the
case of an Affiliate, the list will not disclose
the identity of Interconnection Customer
until Interconnection Customer executes an
LGIA or requests that Transmission Provider
file an unexecuted LGIA with FERC. Before
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holding a Scoping Meeting with its Affiliate,
Transmission Provider shall post on OASIS
an advance notice of its intent to do so.
Transmission Provider shall post to its
OASIS site any deviations from the study
timelines set forth herein. Interconnection
Study reports and Optional Interconnection
Study reports shall be posted to
Transmission Provider’s OASIS site
subsequent to the meeting between
Interconnection Customer and Transmission
Provider to discuss the applicable study
results. Transmission Provider shall also post
any known deviations in the Large
Generating Facility’s In-Service Date.
3.5.2 Requirement To Post Interconnection
Study Metrics
Transmission Provider will maintain on its
OASIS or its website summary statistics
related to processing Interconnection Studies
pursuant to Interconnection Requests,
updated quarterly. If Transmission Provider
posts this information on its website, a link
to the information must be provided on
Transmission Provider’s OASIS site. For each
calendar quarter, Transmission Provider[s]
must calculate and post the information
detailed in Sections 3.5.2.1 through 3.5.2.4 of
this LGIP.
3.5.2.1 Interconnection Cluster Study
Processing Time
(A) Number of Interconnection Requests
that had Cluster Studies completed within
Transmission Provider’s coordinated region
during the reporting quarter,
(B) Number of Interconnection Requests
that had Cluster Studies completed within
Transmission Provider’s coordinated region
during the reporting quarter that were
completed more than one hundred fifty (150)
Calendar Days after the close of the Customer
Engagement Window,
(C) At the end of the reporting quarter, the
number of active valid Interconnection
Requests with ongoing incomplete Cluster
Studies where such Interconnection Requests
had executed a Cluster Study Agreement
received by Transmission Provider more than
one hundred fifty (150) Calendar Days before
the reporting quarter end,
(D) Mean time (in days), Cluster Studies
completed within Transmission Provider’s
coordinated region during the reporting
quarter, from the commencement of the
Cluster Study to the date when Transmission
Provider provided the completed Cluster
Study Report to Interconnection Customer,
(E) Mean time (in days), Cluster Studies
were completed within Transmission
Provider’s coordinated region during the
reporting quarter, from the close of the
Cluster Request Window to the date when
Transmission Provider provided the
completed Cluster Study Report to
Interconnection Customer,[.]
(F) Percentage of Cluster Studies exceeding
one hundred fifty (150) Calendar Days to
complete this reporting quarter, calculated as
the sum of Section 3.5.2.1(B) plus Section
3.5.2.1(C) divided by the sum of Section
3.5.2.1(A) plus Section 3.5.2.1(C) of this
LGIP.
3.5.2.2 Cluster Restudies Processing Time
(A) Number of Interconnection Requests
that had Cluster Restudies completed within
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Transmission Provider’s coordinated region
during the reporting quarter,
(B) Number of Interconnection Requests
that had Cluster Restudies completed within
Transmission Provider’s coordinated region
during the reporting quarter that were
completed more than one hundred fifty (150)
Calendar Days after Transmission Provider
notifies Interconnection Customers in the
Cluster that a Cluster Restudy is required
pursuant to Section 7.5(4) of this LGIP,
(C) At the end of the reporting quarter, the
number of active valid Interconnection
Requests with ongoing incomplete Cluster
Restudies where Transmission Provider
notified Interconnection Customers in the
Cluster that a Cluster Restudy is required
pursuant to Section 7.5(4) of this LGIP more
than one hundred fifty (150) Calendar Days
before the reporting quarter end,
(D) Mean time (in days), Cluster Restudies
completed within Transmission Provider’s
coordinated region during the reporting
quarter, from the date when Transmission
Provider notifies Interconnection Customers
in the Cluster that a Cluster Restudy is
required pursuant to Section 7.5(4) of this
LGIP to the date when Transmission Provider
provided the completed Cluster Restudy
Report to Interconnection Customer,
(E) Mean time (in days), Cluster Restudies
completed within Transmission Provider’s
coordinated region during the reporting
quarter, from the close of the Cluster Request
Window to the date when Transmission
Provider provided the completed Cluster
Restudy Report to Interconnection
Customer,[.]
(F) Percentage of Cluster Restudies
exceeding one hundred fifty (150) Calendar
Days to complete this reporting quarter,
calculated as the sum of Section 3.5.2.2(B)
plus Section 3.5.2.2(C) divided by the sum of
Section 3.5.2.2(A) plus Section 3.5.2.2(C)[)] of
this LGIP.
3.5.2.3 Interconnection Facilities Studies
Processing Time
(A) Number of Interconnection Requests
that had Interconnection Facilities Studies
that are completed within Transmission
Provider’s coordinated region during the
reporting quarter,
(B) Number of Interconnection Requests
that had Interconnection Facilities Studies
that are completed within Transmission
Provider’s coordinated region during the
reporting quarter that were completed more
than {timeline as listed in Transmission
Provider’s LGIP} after receipt by
Transmission Provider of [the]
Interconnection Customer’s executed
Interconnection Facilities Study Agreement,
(C) At the end of the reporting quarter, the
number of active valid Interconnection
Service requests with ongoing incomplete
Interconnection Facilities Studies where
such Interconnection Requests had executed
Interconnection Facilities Studies Agreement
received by Transmission Provider more than
{timeline as listed in Transmission
Provider’s LGIP} before the reporting quarter
end,
(D) Mean time (in days), for
Interconnection Facilities Studies completed
within Transmission Provider’s coordinated
region during the reporting quarter,
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calculated from the date when Transmission
Provider received the executed
Interconnection Facilities Study Agreement
to the date when Transmission Provider
provided the completed Interconnection
Facilities Study to [the] Interconnection
Customer,
(E) Mean time (in days), Interconnection
Facilities Studies completed within
Transmission Provider’s coordinated region
during the reporting quarter, from the close
of the Cluster Request Window to the date
when Transmission Provider provided the
completed Interconnection Facilities Study
to Interconnection Customer,[.]
(F) Percentage of delayed Interconnection
Facilities Studies this reporting quarter,
calculated as the sum of Section 3.5.2.3(B)
plus Section 3.5.2.3(C) divided by the sum of
Section 3.5.2.3(A) plus Section 3.5.2.3(C)[)] of
this LGIP.
3.5.2.4 Interconnection Service Requests
Withdrawn From Interconnection Queue
(A) Number of Interconnection Requests
withdrawn from Transmission Provider’s
interconnection queue during the reporting
quarter,
(B) Number of Interconnection Requests
withdrawn from Transmission Provider’s
interconnection queue during the reporting
quarter before completion of any
[i]Interconnection [s]Studies or execution of
any [i]Interconnection [s]Study agreements,
(C) Number of Interconnection Requests
withdrawn from Transmission Provider’s
interconnection queue during the reporting
quarter before completion of a Cluster Study,
(D) Number of Interconnection Requests
withdrawn from Transmission Provider’s
interconnection queue during the reporting
quarter before completion of an
Interconnection Facilities Study,
(E) Number of Interconnection Requests
withdrawn from Transmission Provider’s
interconnection queue after completion of an
Interconnection Facilities Study but before
execution of an [generator interconnection
agreement] LGIA or Interconnection
Customer requests the filing of an
unexecuted, new [interconnection
agreement] LGIA,
(F) Number of Interconnection Requests
withdrawn from Transmission Provider’s
interconnection queue after execution of an
LGIA or Interconnection Customer requests
the filing of an unexecuted, new LGIA
([F]G) Mean time (in days), for all
withdrawn Interconnection Requests, from
the date when the request was determined to
be valid to when Transmission Provider
received the request to withdraw from the
queue.
3.5.3
Transmission Provider is required to post
on OASIS or its website the measures in
[paragraph] Section 3.5.2.1(A) through
[paragraph] Section 3.5.2.4([F]G) for each
calendar quarter within thirty (30) Calendar
[d]Days of the end of the calendar quarter.
Transmission Provider will keep the
quarterly measures posted on OASIS or its
website for three (3) calendar years with the
first required report to be in the first quarter
of 2020. If Transmission Provider retains this
information on its website, a link to the
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information must be provided on
Transmission Provider’s OASIS site.
3.5.4
In the event that any of the values
calculated in [paragraphs] Sections 3.5.2.1(E),
3.5.2.2(E) or 3.5.2.3(E) exceeds twenty-five
[25] percent (25%) for two (2) consecutive
calendar quarters, Transmission Provider
will have to comply with the measures below
for the next four (4) consecutive calendar
quarters and must continue reporting this
information until Transmission Provider
reports four (4) consecutive calendar quarters
without the values calculated in Sections
3.5.2.1(E), 3.5.2.2(E) or 3.5.2.3(E) exceeding
[25] twenty-five percent (25%) for two (2)
consecutive calendar quarters:
(i) Transmission Provider must submit a
report to the Commission describing the
reason for each Cluster Study, Cluster
Restudy, or individual Interconnection
Facilities Study pursuant to one or more
Interconnection Request(s) that exceeded its
deadline (i.e., 150, 90 or 180 Calendar
[d]Days) for completion. Transmission
Provider must describe the reasons for each
study delay and any steps taken to remedy
these specific issues and, if applicable,
prevent such delays in the future. The report
must be filed at the Commission within fortyfive (45) Calendar [d]Days of the end of the
calendar quarter.
(ii) Transmission Provider shall aggregate
the total number of employee-hours and third
party consultant hours expended towards
[i]Interconnection [s]Studies within its
coordinated region that quarter and post on
OASIS or its website. If Transmission
Provider posts this information on its
website, a link to the information must be
provided on Transmission Provider’s OASIS
site. This information is to be posted within
thirty (30) Calendar [d]Days of the end of the
calendar quarter.
3.6 Coordination With Affected Systems
Transmission Provider will coordinate the
conduct of any studies required to determine
the impact of the Interconnection Request on
Affected Systems with Affected System
Operators. Interconnection Customer will
cooperate with Transmission Provider and
Affected System Operator in all matters
related to the conduct of studies and the
determination of modifications to Affected
Systems.
A Transmission Provider whose system
may be impacted by a proposed
interconnection on another transmission
provider’s transmission system shall
cooperate with [the] transmission provider
with whom interconnection has been
requested in all matters related to the
conduct of studies and the determination of
modifications to Transmission Provider’s
Transmission System.
3.6.1 Initial Notification
Transmission Provider must notify
Affected System Operator of a potential
Affected System impact caused by an
Interconnection Request within ten (10)
Business Days of the completion of the
Cluster Study[ or, if the potential Affected
System impact is only determined in the
Cluster Restudy, the completion of the
Cluster Restudy].
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At the time of initial notification,
Transmission Provider must provide
Interconnection Customer with a list of
potential Affected Systems, along with
relevant contact information.
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3.6.2 Notification of Cluster Restudy
Transmission Provider must notify
Affected System Operator of a Cluster
Restudy concurrently with its notification of
such Cluster Restudy to Interconnection
Customers.
3.6.3 Notification of Cluster Restudy
Completion
Upon the completion of Transmission
Provider’s Cluster Restudy, Transmission
Provider will notify Affected System Operator
of a potential Affected System impact caused
by an Interconnection Request within ten (10)
Business Days of the completion of the
Cluster Restudy, regardless of whether that
potential Affected System impact was
previously identified. At the time of the
notification of the completion of the Cluster
Restudy to the Affected System Operator,
Transmission Provider must provide
Interconnection Customer with a list of
potential Affected System Operators, along
with relevant contact information.
3.7 Withdrawal
Interconnection Customer may withdraw
its Interconnection Request at any time by
written notice of such withdrawal to
Transmission Provider. In addition, if
Interconnection Customer fails to adhere to
all requirements of this LGIP, except as
provided in Section 13.5 (Disputes),
Transmission Provider shall deem the
Interconnection Request to be withdrawn and
shall provide written notice to
Interconnection Customer of the deemed
withdrawal and an explanation of the reasons
for such deemed withdrawal. Upon receipt of
such written notice, Interconnection
Customer shall have fifteen (15) Business
Days in which to either respond with
information or actions that cures the
deficiency or to notify Transmission Provider
of its intent to pursue Dispute Resolution.
Withdrawal shall result in the loss of
Interconnection Customer’s Queue Position.
If an Interconnection Customer disputes the
withdrawal and loss of its Queue Position,
then during Dispute Resolution,
Interconnection Customer’s Interconnection
Request is eliminated from the queue until
such time that the outcome of Dispute
Resolution would restore its Queue Position.
An Interconnection Customer that withdraws
or is deemed to have withdrawn its
Interconnection Request shall pay to
Transmission Provider all costs that
Transmission Provider prudently incurs with
respect to that Interconnection Request prior
to Transmission Provider’s receipt of notice
described above. Interconnection Customer
must pay all monies due to Transmission
Provider before it is allowed to obtain any
Interconnection Study data or results.
If Interconnection Customer withdraws its
Interconnection Request or is deemed
withdrawn by Transmission Provider under
Section 3.7 of this LGIP, Transmission
Provider shall (i) update the OASIS Queue
Position posting; (ii) impose the Withdrawal
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Penalty described in Section 3.7.1 of this
LGIP; and (iii) refund to Interconnection
Customer any portion of the refundable
portion of Interconnection Customer’s study
deposit that exceeds the costs that
Transmission Provider has incurred,
including interest calculated in accordance
with Section 35.19a(a)(2) of FERC’s
regulations. Transmission Provider shall also
refund any portion of the Commercial
Readiness Deposit not applied to the
Withdrawal Penalty and, if applicable, the
deposit in lieu of site control. In the event
of such withdrawal, Transmission Provider,
subject to the confidentiality provisions of
Section 13.1 of this LGIP, shall provide, at
Interconnection Customer’s request, all
information that Transmission Provider
developed for any completed study
conducted up to the date of withdrawal of
the Interconnection Request.
3.7.1 Withdrawal Penalty
Interconnection Customer shall be subject
to a Withdrawal Penalty if it withdraws its
Interconnection Request or is deemed
withdrawn, or the Generating Facility does
not otherwise reach Commercial Operation
unless: (1) the withdrawal does not have a
material impact on the cost or timing of any
Interconnection Request [with an equal or
lower Queue Position]in the same Cluster; (2)
Interconnection Customer withdraws after
receiving Interconnection Customer’s most
recent Cluster Restudy Report and the
Network Upgrade costs assigned to the
Interconnection Request identified in that
report have increased by more than twentyfive percent (25%) compared to costs
identified in Interconnection Customer’s
preceding Cluster Study Report or Cluster
Restudy Report; or (3) Interconnection
Customer withdraws after receiving
Interconnection Customer’s Interconnection
Facilities Study Report and the Network
Upgrade costs assigned to the
Interconnection Request identified in that
report have increased by more than one
hundred percent (100%) compared to costs
identified in the Cluster Study Report or
Cluster Restudy Report.
3.7.1.1 Calculation of the Withdrawal
Penalty
If Interconnection Customer withdraws its
Interconnection Request or is deemed
withdrawn prior to the commencement of the
initial Cluster Study, Interconnection
Customer shall not be subject to a
Withdrawal Penalty. If Interconnection
Customer withdraws, is deemed withdrawn,
or otherwise does not reach Commercial
Operation at any point after the
commencement of the initial Cluster Study,
that Interconnection Customer’s Withdrawal
Penalty will be the greater of: (1) [the]
Interconnection Customer’s study deposit
required under Section 3.1.1.1 of this LGIP;
or (2) as follows in (a)–(d):
(a) If Interconnection Customer withdraws
or is deemed withdrawn during the Cluster
Study or after receipt of a Cluster Study
Report, but prior to commencement of the
Cluster Restudy or Interconnection Facilities
Study if no Cluster Restudy is required,
Interconnection Customer shall be charged
two (2) times its actual allocated cost of all
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studies performed for Interconnection
Customers in the Cluster up until that point
in the [i]Interconnection [s]Study process.
(b) If Interconnection Customer withdraws
or is deemed withdrawn during the Cluster
Restudy or after receipt of any applicable
restudy reports issued pursuant to Section
7.5 of this LGIP, but prior to commencement
of the Interconnection Facilities Study,
Interconnection Customer shall be charged
five percent (5%) its estimated Network
Upgrade costs.
(c) If Interconnection Customer withdraws
or is deemed withdrawn during the
Interconnection Facilities Study, after receipt
of the Interconnection Facilities Study Report
issued pursuant to Section 8.3 of this LGIP,
or after receipt of the draft LGIA but before
Interconnection Customer has executed an
LGIA or has requested that its LGIA be filed
unexecuted, and has satisfied the other
requirements described in Section 11.3 of
this LGIP (i.e., Site Control demonstration,
LGIA Deposit, reasonable evidence of one or
more milestones in the development of the
Generating Facility), Interconnection
Customer shall be charged ten percent (10%)
its estimated Network Upgrade costs.
(d) If Interconnection Customer has
executed an LGIA or has requested that its
LGIA be filed unexecuted and has satisfied
the other requirements described in Section
11.3 of this LGIP (i.e., Site Control
demonstration, LGIA Deposit, reasonable
evidence of one or more milestones in the
development of the Generating Facility) and
subsequently withdraws its Interconnection
Request or if Interconnection Customer’s
Generating Facility otherwise does not reach
Commercial Operation, that Interconnection
Customer’s Withdrawal Penalty shall be
twenty percent (20%) its estimated Network
Upgrade costs.
3.7.1.2 Distribution of the Withdrawal
Penalty
3.7.1.2.1 Initial Distribution of Withdrawal
Penalties Prior to Assessment of Network
Upgrade Costs Previously Shared With
Withdrawn Interconnection Customers in the
Same Cluster
For a single [c]Cluster, Transmission
Provider shall hold all Withdrawal Penalty
funds until all Interconnection Customers in
that Cluster have either: (1) withdrawn or
been deemed withdrawn; (2) executed an
LGIA; or (3) requested an LGIA to be filed
unexecuted. Any Withdrawal Penalty funds
collected from the Cluster shall first be used
to fund studies conducted under the Cluster
Study Process for Interconnection Customers
in the same Cluster that have executed the
LGIA or requested the LGIA to be filed
unexecuted. Next, after the Withdrawal
Penalty funds are applied to relevant study
costs in the same Cluster, Transmission
Provider will apply the remaining
Withdrawal Penalty funds to reduce net
increases, for Interconnection Customers in
the same Cluster, in Interconnection
Customers’ Network Upgrade cost
assignment and associated financial security
requirements under Article 11.5 of the pro
forma LGIA attributable to the impacts of
withdrawn Interconnection Customers that
shared an obligation with the remaining
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Interconnection Customers to fund a Network
Upgrade, as described in more detail in
Sections 3.7.1.2.3 and 3.7.1.2.4. The total
amount of funds used to fund these studies
under the Cluster Study Process or those
applied to any net increases in Network
Upgrade costs for Interconnection Customers
in the same Cluster shall not exceed the total
amount of Withdrawal Penalty funds
collected from the Cluster.
Withdrawal Penalty funds shall first be
applied as a refund to invoiced study costs
for Interconnection Customers in the same
Cluster that did not withdraw within thirty
(30) Calendar Days of such Interconnection
Customers executing their LGIA or requesting
to have their LGIA filed unexecuted.
Distribution of Withdrawal Penalty funds
within one specific Cluster [Study ]for study
costs shall not exceed the total actual Cluster
Study Process costs for the Cluster.
Withdrawal Penalty funds applied to study
costs shall be allocated within the same
Cluster to Interconnection Customers in a
manner consistent with [the] Transmission
Provider’s method in Section 13.3 of this
LGIP for allocating the costs of
[i]Interconnection [s]Studies conducted on a
clustered basis. Transmission Provider shall
post the balance of Withdrawal Penalty funds
held by Transmission Provider but not yet
dispersed on its OASIS site and update this
posting on a quarterly basis.
If an Interconnection Customer withdraws
after it executes, or requests the unexecuted
filing of, its LGIA, Transmission Provider
shall first apply such Interconnection
Customer’s Withdrawal Penalty funds to any
restudy costs required due to [the]
Interconnection Customer’s withdrawal as a
credit to as-yet-to be invoiced study costs to
be charged to the remaining Interconnection
Customers in the same Cluster in a manner
consistent with [the] Transmission Provider’s
method in Section 13.3 of this LGIP for
allocating the costs of [i]Interconnection
[s]Studies conducted on a clustered basis.
Distribution of the Withdrawal Penalty funds
for such restudy costs shall not exceed the
total actual restudy costs.
3.7.1.2.2 Assessment of Network Upgrade
Costs Previously Shared With Withdrawn
Interconnection Customers in the Same
Cluster
If Withdrawal Penalty funds remain for the
same Cluster after the Withdrawal Penalty
funds are applied to relevant study costs,
Transmission Provider will determine if the
withdrawn Interconnection Customers, at
any point in the Cluster Study Process,
shared cost assignment for one or more
Network Upgrades with any remaining
Interconnection Customers in the same
Cluster based on the Cluster Study Report,
Cluster Restudy Report(s), Interconnection
Facilities Study Report, and any subsequent
issued restudy report issued for the Cluster.
In [s]Section 3.7.1.2 of this LGIP, shared
cost assignments for Network Upgrades refers
to the cost of Network Upgrades still needed
for the same Cluster for which an
Interconnection Customer, prior to
withdrawing its Interconnection Request,
shared the obligation to fund along with
Interconnection Customers that have
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executed an LGIA, or requested the LGIA to
filed unexecuted.
If Transmission Provider’s assessment
determines that there are no shared cost
assignments for any Network Upgrades in the
same Cluster for the withdrawn
Interconnection Customer, or determines that
the withdrawn Interconnection Customer’s
withdrawal did not cause a net increase in
the shared cost assignment for any remaining
Interconnection Customers’ Network
Upgrade(s) in the same Cluster, Transmission
Provider will return any remaining
Withdrawal Penalty funds to the withdrawn
Interconnection Customer(s). Such remaining
Withdrawal Penalty funds will be returned to
withdrawn Interconnection Customers based
on the proportion of each withdrawn
Interconnection Customer’s contribution to
the total amount of Withdrawal Penalty
funds collected for the Cluster (i.e., the total
amount before the initial disbursement
required under Section 3.7.1.2.1 of this
LGIP). Transmission Provider must make
such disbursement within sixty (60) Calendar
Days of the date on which all Interconnection
Customers in the same Cluster have either:
(1) withdrawn or been deemed withdrawn;
(2) executed an LGIA; or (3) requested an
LGIA to be filed unexecuted. For the
withdrawn Interconnection Customers that
Transmission Provider determines have
caused a net increase in the shared cost
assignment for one or more Network
Upgrade(s) in the same Cluster under
[subs]Section 3.7.1.2.3(a) of this LGIP,
Transmission Provider will determine each
such withdrawn Interconnection Customers’
Withdrawal Penalty funds remaining balance
that will be applied toward net increases in
Network Upgrade shared costs calculated
under [subs]Sections 3.7.1.2.3(a) and
3.7.1.2.3(b) of this LGIP based on each such
withdrawn Interconnection Customer’s
proportional contribution to the total amount
of Withdrawal Penalty funds collected for the
same Cluster (i.e., the total amount before the
initial disbursement requirement under
Section 3.7.1.2.1 of this LGIP).
If [the] Transmission Provider’s assessment
determines that there are shared cost
assignments for Network Upgrades in the
same Cluster, Transmission Provider will
calculate the remaining Interconnection
Customers’ net increase in cost assignment
for Network Upgrades due to a shared cost
assignment for Network Upgrades with the
withdrawn Interconnection Customer and
distribute Withdrawal Penalty funds as
described in Section 3.7.1.2.3, depending on
whether the withdrawal occurred before the
withdrawing Interconnection Customer
executed the LGIA (or filed unexecuted), as
described in [subs]Section 3.7.1.2.3(a) of this
LGIP, or after such execution (or filing
unexecuted) of an LGIA, as described in
[subs]Section 3.7.1.2.3(b) of this LGIP.
As discussed in [subs]Section 3.7.1.2.4 of
this LGIP, Transmission Provider will amend
executed (or filed unexecuted) LGIAs of the
remaining Interconnection Customers in the
same Cluster to apply the remaining
Withdrawal Penalty funds to reduce net
increases in Interconnection Customers’
Network Upgrade cost assignment and
associated financial security requirements
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under Article 11.5 of the pro forma LGIA
attributable to the impacts of withdrawn
Interconnection Customers on
Interconnection Customers remaining in the
same Cluster that had a shared cost
assignment for Network Upgrades with the
withdrawn Interconnection Customers.
3.7.1.2.3 Impact Calculations
3.7.1.2.3(a) Impact Calculation for
Withdrawals During the Cluster Study
Process
If an Interconnection Customer withdraws
before it executes, or requests the unexecuted
filing of, its LGIA, [the] Transmission
Provider will distribute in the following
manner the Withdrawal Penalty funds to
reduce the Network Upgrade cost impact on
the remaining Interconnection Customers in
the same Cluster who had a shared cost
assignment for a Network Upgrade with the
withdrawn Interconnection Customer.
To calculate the reduction in the remaining
Interconnection Customers’ net increase in
Network Upgrade costs and associated
financial security requirements under Article
11.5 of the pro forma LGIA, [the]
Transmission Provider will determine the
financial impact of a withdrawing
Interconnection Customer on other
Interconnection Customers in the same
Cluster that shared an obligation to fund the
same Network Upgrade(s). Transmission
Provider shall calculate this financial impact
once all [the] Interconnection Customers in
the same Cluster either: (1) have withdrawn
or have been deemed withdrawn; (2)
executed an LGIA; or (3) request an LGIA to
be filed unexecuted. Transmission Provider
will perform the financial impact calculation
using the following steps.
First, Transmission Provider must
determine which withdrawn Interconnection
Customers shared an obligation to fund
Network Upgrades with Interconnection
Customers from the same Cluster that have
LGIAs that are executed or have been
requested to be filed unexecuted. Next,
Transmission Provider shall perform the
calculation of the financial impact of a
withdrawal on another Interconnection
Request in the same Cluster by performing a
comparison of the Network Upgrade cost
estimates between each of the following:
(1) Cluster Study phase to Cluster Restudy
phase (if Cluster Restudy was necessary);
(2) Cluster Restudy phase to
Interconnection Facilities Study phase (if a
Cluster Restudy was necessary);
(3) Cluster Study phase to Interconnection
Facilities Study phase (if no Cluster Restudy
was performed);
(4) Interconnection Facilities Study phase
to any subsequent restudy that was
performed before the execution or filing of an
unexecuted LGIA;
(5) the restudy to the executed, or filed
unexecuted, LGIA (if a restudy was
performed after the Interconnection Facilities
Study phase and before the execution or
filing of an unexecuted LGIA).
If, based on the above calculations,
Transmission Provider determines:
(i) that the costs assigned to an
Interconnection Customer in the same
Cluster for Network Upgrades that a
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withdrawn Interconnection Customer shared
cost assignment for increased between any
two studies, and
(ii) after the impacted Interconnection
Customer’s LGIA was executed or filed
unexecuted, [the] Interconnection Customer’s
cost assignment for the relevant Network
Upgrade is greater than it was prior to the
withdrawal of [the] Interconnection
Customer in the same Cluster that shared cost
assignment for the Network Upgrade, then
Transmission Provider shall apply the
withdrawn Interconnection Customer’s
Withdrawal Penalty funds that has not
already been applied to study costs in the
amount of the financial impact by reducing,
in the same Cluster, the remaining
Interconnection Customer’s Network
Upgrade costs and associated financial
security requirements under Article 11.5 of
the pro forma LGIA.
If Transmission Provider determines that
more than one Interconnection Customer in
the same Cluster was financially impacted by
the same withdrawn Interconnection
Customer, Transmission Provider will apply
the relevant withdrawn Interconnection
Customer’s Withdrawal Penalty funds that
has not already been applied to study costs
to reduce the financial impact to each
Interconnection Customer based on each
Interconnection Customer’s proportional
share of the financial impact, as determined
by either the [p]Proportional [i]Impact
[m]Method if it is a System Network Upgrade
or on a per capita basis if it is a Substation
Network Upgrade, as described under
Section 4.2.1 of this LGIP.
3.7.1.2.3(b) Impact Calculation for
Withdrawals in the Same Cluster After the
Cluster Study Process
If an Interconnection Customer withdraws
after it executes, or requests the unexecuted
filing of, its LGIA, Transmission Provider
will distribute in the following manner the
remaining Withdrawal Penalty funds to
reduce the Network Upgrade cost impact on
the remaining Interconnection Customers in
the same Cluster who had a shared cost
assignment with the withdrawn
Interconnection Customer for one or more
Network Upgrades.
Transmission Provider will determine the
financial impact on the remaining
Interconnection Customers in the same
Cluster within thirty (30) [c]Calendar [d]Days
after the withdrawal occurs. [The]
Transmission Provider will determine that
financial impact by comparing the Network
Upgrade cost funding obligations [the]
Interconnection Customers shared with the
withdrawn Interconnection Customer before
the withdrawal of [the] Interconnection
Customer and after the withdrawal of [the]
Interconnection Customer. If that comparison
indicates an increase in Network Upgrade
costs for an Interconnection Customer,
Transmission Provider shall apply the
withdrawn Interconnection Customer’s
Withdrawal Penalty funds to the increased
costs each impacted Interconnection
Customer in the same Cluster experienced
associated with such Network Upgrade(s) in
proportion to each Interconnection
Customer’s increased cost assignment, as
determined by Transmission Provider.
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3.7.1.2.4 Amending LGIA To Apply
Reductions to Interconnection Customer’s
Assigned Network Upgrade Costs and
Associated Financial Security Requirement
With Respect to Withdrawals in the Same
Cluster
Within thirty (30) Calendar Days of all
Interconnection Customers in the same
Cluster having: (1) withdrawn or been
deemed withdrawn; (2) executed an LGIA; or
(3) requested an LGIA to be filed unexecuted,
Transmission Provider must perform the
calculations described in [subs]Section
3.7.1.2.3(a) of this LGIP and provide such
Interconnection Customers with an amended
LGIA that provides the reduction in Network
Upgrade cost assignment and associated
reduction to [the] Interconnection Customer’s
financial security requirements, under
Article 11.5 of the pro forma LGIA, due from
[the] Interconnection Customer to [the]
Transmission Provider.
Where an Interconnection Customer
executes the LGIA (or requests the filing of
an unexecuted LGIA) and is later withdrawn
or its LGIA is terminated, Transmission
Provider must, within thirty (30) Calendar
Days of such withdrawal or termination,
perform the calculations described in
[subs]Section 3.7.1.2.3(b) of this LGIP and
provide such Interconnection Customers in
the same Cluster with an amended LGIA that
provides the reduction in Network Upgrade
cost assignment and associated reduction to
[the] Interconnection Customer’s financial
security requirements, under Article 11.5 of
the pro forma LGIA, due from [the]
Interconnection Customer to Transmission
Provider.
Any repayment by Transmission Provider
to Interconnection Customer under Article
11.4 of the pro forma LGIA of amounts
advanced for Network Upgrades after the
Generating Facility achieves Commercial
Operation shall be limited to [the]
Interconnection Customer’s total amount of
Network Upgrade costs paid and associated
financial security provided to Transmission
Provider under Article 11.5 of the pro forma
LGIA.
3.7.1.2.5 Final Distribution of Withdrawal
Penalty Funds
If Withdrawal Penalty funds remain for the
Cluster after the Withdrawal Penalty funds
are applied to relevant study costs and net
increases in shared cost assignments for
Network Upgrades to remaining
Interconnection Customers, Transmission
Provider will return any remaining
Withdrawal Penalty funds to the withdrawn
Interconnection Customers in the same
Cluster net of the amount of each withdrawn
Interconnection Customer’s Withdrawal
Penalty funds applied to study costs and net
increases in shared cost assignments for
Network Upgrades to remaining
Interconnection Customers.
3.8 Identification of Contingent Facilities
Transmission Provider shall post in this
section a method for identifying the
Contingent Facilities to be provided to
Interconnection Customer at the conclusion
of the Cluster Study and included in
Interconnection Customer’s Large Generator
Interconnection Agreement. The method
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shall be sufficiently transparent to determine
why a specific Contingent Facility was
identified and how it relates to the
Interconnection Request. Transmission
Provider shall also provide, upon request of
Interconnection Customer, the estimated
Interconnection Facility and/or Network
Upgrade costs and estimated in-service
completion time of each identified
Contingent Facility when this information is
readily available and not commercially
sensitive.
3.9 Penalties for Failure To Meet Study
Deadlines
(1) Transmission Provider shall be subject
to a penalty if it fails to complete a Cluster
Study, Cluster Restudy, Interconnection
Facilities Study, or Affected Systems Study
by the applicable deadline set forth in this
LGIP. Transmission Provider must pay the
penalty for each late Cluster Study, Cluster
Restudy, and Interconnection Facilities
Study on a pro rata basis per Interconnection
Request to all Interconnection Customer(s)
included in the relevant study that did not
withdraw, or were not deemed withdrawn,
from Transmission Provider’s
interconnection queue before the missed
study deadline, in proportion to each
Interconnection Customer’s final study cost.
Transmission Provider must pay the penalty
for a late Affected Systems Study on a pro
rata basis per interconnection request to all
Affected System Interconnection Customer(s)
included in the relevant Affected System
Study that did not withdraw, or were not
deemed withdrawn, from the host
transmission provider’s interconnection
queue before the missed study deadline, in
proportion to each Interconnection
Customer’s final study cost. The study delay
penalty for each late study shall be
distributed no later than forty-five (45)
Calendar Days after the late study has been
completed.
(2) For penalties assessed in accordance
with this Section, the penalty amount will be
equal to: $1,000 per Business Day for delays
of Cluster Studies beyond the applicable
deadline set forth in this LGIP; $2,000 per
Business Day for delays of Cluster Re[S]studies beyond the applicable deadline set
forth in this LGIP; $2,000 per Business Day
for delays of Affected System Studies beyond
the applicable deadline set forth in this LGIP;
and $2,500 per Business Day for delays of
Interconnection Facilities Studies beyond the
applicable deadline set forth in this LGIP.
The total amount of a penalty assessed under
this Section shall not exceed: (a) one
hundred percent (100%) of the initial study
deposit(s) received for all of the
Interconnection Requests in the Cluster for
Cluster Studies and Cluster Restudies; (b) one
hundred percent (100%) of the initial study
deposit received for the single
Interconnection Request in the study for
Interconnection Facilities Studies; and (c)
one hundred percent (100%) of the study
deposit(s) that Transmission Provider
collects for conducting the Affected System
Study.
(3) Transmission Provider may appeal to
the Commission any penalties imposed
under this Section. Any such appeal must be
filed no later than forty-five (45) Calendar
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Days after the late study has been completed.
While an appeal to the Commission is
pending, Transmission Provider shall remain
liable for the penalty, but need not distribute
the penalty until forty-five (45) Calendar
Days after (1) the deadline for filing a
rehearing request has ended, if no requests
for rehearing of the appeal have been filed,
or (2) the date that any requests for rehearing
of the Commission’s decision on the appeal
are no longer pending before the
Commission. The Commission may excuse
Transmission Provider from penalties under
this Section for good cause.
(4) No penalty will be assessed under this
Section where a study is delayed by ten (10)
Business Days or less. If the study is delayed
by more than ten (10) Business Days, the
penalty amount will be calculated from the
first Business Day [the] Transmission
Provider misses the applicable study
deadline.
(5) If (a) Transmission Provider needs to
extend the deadline for a particular study
subject to penalties under this Section and
(b) all Interconnection Customers or Affected
System Interconnection Customers included
in the relevant study mutually agree to such
an extension, the deadline for that study
shall be extended thirty (30) Business Days
from the original deadline. In such a
scenario, no penalty will be assessed for
Transmission Provider missing the original
deadline.
(6) No penalties shall be assessed until the
third Cluster Study cycle (including any
Transitional Cluster Study cycle, but not
Transitional Serial Interconnection Facilities
Studies) after the Commission-approved
effective date of Transmission Provider’s
filing made in compliance with the Final
Rule in Docket No. RM22–14–000.
(7) Transmission Provider must maintain
on its OASIS or its public website summary
statistics related to penalties assessed under
this Section, updated quarterly. For each
calendar quarter, Transmission Provider
must calculate and post (1) the total amount
of penalties assessed under this Section
during the previous reporting quarter and (2)
the highest penalty assessed under this
Section paid to a single Interconnection
Customer or Affected System Interconnection
Customer during the previous reporting
quarter. Transmission Provider must post on
its OASIS or its website these penalty
amounts for each calendar quarter within
thirty (30) Calendar Days of the end of the
calendar quarter. Transmission Provider
must maintain the quarterly measures posted
on its OASIS or its website for three (3)
calendar years with the first required posting
to be the third Cluster Study cycle (including
any Transitional Cluster Study cycle, but not
Transitional Serial Interconnection Facilities
Studies) after Transmission Provider
transitions to the Cluster Study Process.
Section 4. Interconnection Request
Evaluation Process
Once an Interconnection Customer has
submitted a valid Interconnection Request
pursuant to Section 3.4 of this LGIP, such
Interconnection Request shall become part of
[the] Transmission Provider’s
interconnection queue for further processing
pursuant to the following procedures.
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4.1
Queue Position
4.1.1 Assignment of Queue Position
Transmission Provider shall assign a
Queue Position as follows: the Queue
Position within the queue shall be assigned
based upon the date and time of receipt of
all items required pursuant to the provisions
of Section 3.4 of this LGIP. All
Interconnection Requests submitted and
validated in a single Cluster Request Window
shall be considered equally queued.
4.1.2 Higher Queue Position
A higher Queue Position assigned to an
Interconnection Request is one that has been
placed ‘‘earlier’’ in the queue in relation to
another Interconnection Request that is
assigned a lower Queue Position. All requests
studied in a single Cluster shall be
considered equally queued. Interconnection
Customers that are part of Clusters initiated
earlier in time than an instant [Q]queue shall
be considered to have a higher Queue
Position than Interconnection Customers that
are part of Clusters initiated later than an
instant [Q]queue.
4.2 General Study Process
Interconnection Studies performed within
the Cluster Study Process shall be conducted
in such a manner to ensure the efficient
implementation of the applicable regional
transmission expansion plan in light of the
Transmission System’s capabilities at the
time of each study and consistent with Good
Utility Practice.
Transmission Provider may use subgroups
in the Cluster Study Process. In all instances
in which Transmission Provider elects to use
subgroups in the [c]Cluster [s]Study
[p]Process, Transmission Provider must
publish the criteria used to define and
determine subgroups on its OASIS or public
website.
4.2.1 Cost Allocation for Interconnection
Facilities and Network Upgrades
(1) For Network Upgrades identified in
Cluster Studies, Transmission Provider shall
calculate each Interconnection Customer’s
share of the costs as follows:
(a) Substation Network Upgrades,
including all switching stations, shall be
allocated first per capita to Interconnection
Facilities interconnecting to the substation at
the same voltage level, and then per capita
to each Generating Facility sharing the
Interconnection Facility [interconnecting at
the same substation].
(b) System Network Upgrades shall be
allocated based on the proportional impact of
each individual Generating Facility in the
Cluster Study on the need for a specific
System Network Upgrade. {Transmission
Provider shall include in this section a
description of how cost for each facility type
designated as a network upgrade will be
allocated using its proportional impact
method.}
(c) An Interconnection Customer that funds
Substation Network Upgrades and/or System
Network Upgrades shall be entitled to
transmission credits as provided in Article
11.4 of the LGIA.
(2) The costs of any needed
Interconnection Facilities identified in the
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Cluster Study Process will be directly
assigned to [the] Interconnection Customer(s)
using such facilities. Where Interconnection
Customers in the Cluster agree to share
Interconnection Facilities, the cost of such
Interconnection Facilities shall be allocated
based on the number of Generating Facilities
sharing use of such Interconnection Facilities
on a per capita basis (i.e., on a per Generating
Facility basis), unless Parties mutually agree
to a different cost sharing arrangement.
4.3 Transferability of Queue Position
An Interconnection Customer may transfer
its Queue Position to another entity only if
such entity acquires the specific Generating
Facility identified in the Interconnection
Request and the Point of Interconnection
does not change.
4.4 Modifications
Interconnection Customer shall submit to
Transmission Provider, in writing,
modifications to any information provided in
the Interconnection Request. Interconnection
Customer shall retain its Queue Position if
the modifications are in accordance with
Sections 4.4.1, 4.4.2, or 4.4.5 of this LGIP, or
are determined not to be Material
Modifications pursuant to Section 4.4.3 of
this LGIP.
Notwithstanding the above, during the
course of the Interconnection Studies, either
Interconnection Customer or Transmission
Provider may identify changes to the planned
interconnection that may improve the costs
and benefits (including reliability) of the
interconnection, and the ability of the
proposed change to accommodate the
Interconnection Request. To the extent the
identified changes are acceptable to
Transmission Provider and Interconnection
Customer, such acceptance not to be
unreasonably withheld, Transmission
Provider shall modify the Point of
Interconnection prior to return of the
executed Cluster Study Agreement, and
Interconnection Customer shall retain its
Queue Position.
4.4.1 Prior to the return of the executed
Cluster Study Agreement to Transmission
Provider, modifications permitted under this
Section shall include specifically: (a) a
decrease of up to [60] sixty percent (60%) of
electrical output (MW) of the proposed
project, through either (1) a decrease in plant
size or (2) a decrease in Interconnection
Service level (consistent with the process
described in Section 3.1 of this LGIP)
accomplished by applying Transmission
Provider-approved injection-limiting
equipment; (b) modifying the technical
parameters associated with the Large
Generating Facility technology or the Large
Generating Facility step-up transformer
impedance characteristics; and (c) modifying
the interconnection configuration. For plant
increases, the incremental increase in plant
output will go in the next Cluster
[Study]Request Window for the purposes of
cost allocation and study analysis.
4.4.2 Prior to the return of the executed
Interconnection Facilities Study Agreement
to Transmission Provider, the modifications
permitted under this Section shall include
specifically: (a) additional [15] fifteen percent
(15%) decrease of electrical output of the
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proposed project through either (1) a
decrease in plant size (MW) or (2) a decrease
in Interconnection Service level (consistent
with the process described in Section 3.1)
accomplished by applying Transmission
Provider-approved injection-limiting
equipment; (b) Large Generating Facility
technical parameters associated with
modifications to Large Generating Facility
technology and transformer impedances;
provided, however, the incremental costs
associated with those modifications are the
responsibility of the requesting
Interconnection Customer; and (c) a
Permissible Technological Advancement for
the Large Generating Facility after the
submission of the Interconnection Request.
Section 4.4.6 of this LGIP specifies a separate
technological change procedure including
the requisite information and process that
will be followed to assess whether [the]
Interconnection Customer’s proposed
technological advancement under Section
4.4.2(c) of this LGIP is a Material
Modification. Section 1 of this LGIP contains
a definition of Permissible Technological
Advancement.
4.4.3 Prior to making any modification
other than those specifically permitted by
Sections 4.4.1, 4.4.2, and 4.4.5 of this LGIP,
Interconnection Customer may first request
that Transmission Provider evaluate whether
such modification is a Material Modification.
In response to Interconnection Customer’s
request, Transmission Provider shall evaluate
the proposed modifications prior to making
them and inform Interconnection Customer
in writing of whether the modifications
would constitute a Material Modification.
Any change to the Point of Interconnection,
except those deemed acceptable under
Sections 3.1.2 or 4.4 of this LGIP or so
allowed elsewhere, shall constitute a
Material Modification. Interconnection
Customer may then withdraw the proposed
modification or proceed with a new
Interconnection Request for such
modification. Transmission Provider shall
study the addition of a Generating Facility
that includes at least one electric storage
resource using operating assumptions (i.e.,
whether the interconnecting Generating
Facility will or will not charge at peak load)
that reflect the proposed charging behavior of
the Generating Facility as requested by
Interconnection Customer, unless
Transmission Provider determines that Good
Utility Practice, including Applicable
Reliability Standards, otherwise requires the
use of different operating assumptions.
{Transmission Providers using fuel-based
dispatch assumptions in Interconnection
Studies are not required to include Section
4.4.3.1 because it does not apply to them}
4.4.3.1 Interconnection Customer may
request, and Transmission Provider shall
evaluate, the addition to the Interconnection
Request of a Generating Facility with the
same Point of Interconnection indicated in
the initial Interconnection Request, if the
addition of the Generating Facility does not
increase the requested Interconnection
Service level. Transmission Provider must
evaluate such modifications prior to deeming
them a Material Modification, but only if
Interconnection Customer submits them prior
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to the return of the executed Interconnection
Facilities Study Agreement by
Interconnection Customer to Transmission
Provider. Interconnection Customers
requesting that such a modification be
evaluated must demonstrate the required Site
Control at the time such request is made.
4.4.4 Upon receipt of Interconnection
Customer’s request for modification
permitted under this Section 4.4 of this LGIP,
Transmission Provider shall commence and
perform any necessary additional studies as
soon as practicable, but in no event shall
Transmission Provider commence such
studies later than thirty (30) Calendar Days
after receiving notice of Interconnection
Customer’s request. Any additional studies
resulting from such modification shall be
done at Interconnection Customer’s cost. Any
such request for modification of the
Interconnection Request must be
accompanied by any resulting updates to the
models described in Attachment A to
Appendix 1 of this LGIP.
4.4.5 Extensions of less than three (3)
cumulative years in the Commercial
Operation Date of the Large Generating
Facility to which the Interconnection Request
relates are not material and should be
handled through construction sequencing.
For purposes of this section, the Commercial
Operation Date reflected in the initial
Interconnection Request shall be used to
calculate the permissible extension prior to
Interconnection Customer executing an LGIA
or requesting that the LGIA be filed
unexecuted. After an LGIA is executed or
requested to be filed unexecuted, the
Commercial Operation Date reflected in the
LGIA shall be used to calculate the
permissible extension. Such cumulative
extensions may not exceed three years
including both extensions requested after
execution of the LGIA by Interconnection
Customer or the filing of an unexecuted LGIA
by Transmission Provider and those
requested prior to execution of the LGIA by
Interconnection Customer or the filing of an
unexecuted LGIA by Transmission Provider.
4.4.6 Technological Change Procedures
{Insert technological change procedure
here}
Section 5. Procedures for Interconnection
Requests Submitted Prior to Effective Date of
the Cluster Study Revisions
5.1 Procedures for Transitioning to the
Cluster Study Process
5.1.1 Any Interconnection Customer
assigned a Queue Position as of thirty (30)
Calendar Days after {Transmission Provider
to insert filing date} (the filing date of this
LGIP) shall retain that Queue Position subject
to the requirements in Sections 5.1.1.1 and
5.1.1.2 of this LGIP. Any Interconnection
Customer that fails to meet these
requirements shall have its Interconnection
Request deemed withdrawn by Transmission
Provider pursuant to Section 3.7 of this LGIP.
In such case, Transmission Provider shall not
assess [the] Interconnection Customer any
Withdrawal Penalty.
Any Interconnection Customer that has
received a final Interconnection Facilities
Study Report before the commencement of
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the studies under the transition process set
forth in this [s]Section shall be tendered an
LGIA pursuant to Section 11 of this LGIP,
and shall not be required to enter this
transition process.
5.1.1.1 Transitional Serial Study
An Interconnection Customer that has been
tendered an Interconnection Facilities Study
Agreement as of thirty (30) Calendar Days
after {Transmission Provider to insert filing
date} (the filing date of this LGIP) may opt
to proceed with an Interconnection Facilities
Study. Transmission Provider shall tender
each eligible Interconnection Customer a
Transitional Serial Interconnection Facilities
Study Agreement, in the form of Appendix
8 to this LGIP, no later than the Commissionapproved effective date of this LGIP.
Transmission Provider shall proceed with the
Interconnection Facilities Study, provided
that [the] Interconnection Customer: (1)
meets each of the following requirements;
and (2) executes the Transitional Serial
Interconnection Facilities Study Agreement
within sixty (60) Calendar Days of the
Commission-approved effective date of this
LGIP. If an eligible Interconnection Customer
does not meet these requirements, its
Interconnection Request shall be deemed
withdrawn without penalty. Transmission
Provider must commence the Transitional
Serial Interconnection Facilities Study at the
conclusion of this sixty (60) Calendar Day
period. Transitional Serial Interconnection
Facilities Study costs shall be allocated
according to the method described in Section
13.3 of this LGIP.
All of the following must be included
when an Interconnection Customer returns
the Transitional Serial Interconnection
Facilities Study Agreement:
(1) A deposit equal to one hundred percent
(100%) of the costs identified for
Transmission Provider’s Interconnection
Facilities and Network Upgrades in
Interconnection Customer’s system impact
study report. If Interconnection Customer
does not withdraw, the deposit shall be trued
up to actual costs once they are known and
applied to future construction costs
described in Interconnection Customer’s
eventual LGIA. Any amounts in excess of the
actual construction costs shall be returned to
Interconnection Customer within thirty (30)
Calendar Days of the issuance of a final
invoice for construction costs, in accordance
with Article 12.2 of the pro forma LGIA. If
Interconnection Customer withdraws or
otherwise does not reach Commercial
Operation, Transmission Provider shall
refund the remaining deposit after the final
invoice for study costs and Transitional
Withdrawal Penalty is settled. The deposit
shall be in the form of an irrevocable letter
of credit,[ or] cash, a surety bond, or other
form of security that is reasonably acceptable
to Transmission Provider, where cash
deposits shall be treated according to Section
3.7 of this LGIP.
(2) Exclusive Site Control for 100% of the
proposed Generating Facility.
Transmission Provider shall conduct each
Transitional Serial Interconnection Facilities
Study and issue the associated Transitional
Serial Interconnection Facilities Study
Report within one hundred fifty (150)
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Calendar Days of the Commission-approved
effective date of this LGIP.
After Transmission Provider issues each
Transitional Interconnection Facilities Study
Report, Interconnection Customer shall
proceed pursuant to Section 11 of this LGIP.
If Interconnection Customer withdraws its
Interconnection Request or if Interconnection
Customer’s Generating Facility otherwise
does not reach Commercial Operation, a
Transitional Withdrawal Penalty shall be
imposed on Interconnection Customer equal
to nine (9) times Interconnection Customer’s
total study cost incurred since entering [the]
Transmission Provider’s interconnection
queue (including the cost of studies
conducted under Section 5 of this LGIP).
5.1.1.2 Transitional Cluster Study
An Interconnection Customer with an
assigned Queue Position as of thirty (30)
Calendar Days after {Transmission Provider
to insert filing date} (the filing date of this
LGIP) may opt to proceed with a Transitional
Cluster Study. Transmission Provider shall
tender each eligible Interconnection
Customer a Transitional Cluster Study
Agreement, in the form of Appendix 7 to this
LGIP, no later than the Commissionapproved effective date of this LGIP.
Transmission Provider shall proceed with the
Transitional Cluster Study that includes each
Interconnection Customer that: (1) meets
each of the following requirements listed as
(1)–(3) in this section; and (2) executes the
Transitional Cluster Study Agreement within
sixty (60) Calendar Days of the Commissionapproved effective date of this LGIP. All
Interconnection Requests that enter the
Transitional Cluster Study shall be
considered to have an equal Queue Position
that is lower than Interconnection
Customer(s) proceeding with Transitional
Serial Interconnection Facilities Study. If an
eligible Interconnection Customer does not
meet these requirements, its Interconnection
Request shall be deemed withdrawn without
penalty. Transmission Provider must
commence the Transitional Cluster Study at
the conclusion of this sixty (60) Calendar Day
period. All identified Transmission
Provider’s Interconnection Facilities and
Network Upgrade costs shall be allocated
according to Section 4.2.1 of this LGIP.
Transitional Cluster Study costs shall be
allocated according to the method described
in Section 13.3 of this LGIP.
Interconnection Customer may make a onetime extension to its requested Commercial
Operation Date upon entry into the
Transitional Cluster Study, where any such
extension shall not result in a Commercial
Operation Date later than December 31, 2027.
All of the following must be included
when an Interconnection Customer returns
the Transitional Cluster Study Agreement:
(1) A selection of either Energy Resource
Interconnection Service or Network Resource
Interconnection Service.
(2) A deposit of five million dollars
($5,000,000) in the form of an irrevocable
letter of credit,[ or] cash, a surety bond, or
other form of security that is reasonably
acceptable to Transmission Provider, where
cash deposits will be treated according to
Section 3.7 of this LGIP. If Interconnection
Customer does not withdraw, the deposit
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shall be reconciled with and applied towards
future construction costs described in the
LGIA. Any amounts in excess of the actual
construction costs shall be returned to
Interconnection Customer within thirty (30)
Calendar Days of the issuance of a final
invoice for construction costs, in accordance
with Article 12.2 of the pro forma LGIA. If
Interconnection Customer withdraws or
otherwise does not reach Commercial
Operation, Transmission Provider must
refund the remaining deposit once the final
invoice for study costs and Transitional
Withdrawal Penalty is settled.
(3) Exclusive Site Control for 100% of the
proposed Generating Facility.
Transmission Provider shall conduct the
Transitional Cluster Study and issue both an
associated interim Transitional Cluster Study
Report and an associated final Transitional
Cluster Study Report. The interim
Transitional Cluster Study Report shall
provide the following information:
—identification of any circuit breaker short
circuit capability limits exceeded as a
result of the interconnection;
—identification of any thermal overload or
voltage limit violations resulting from the
interconnection;
—identification of any instability or
inadequately damped response to system
disturbances resulting from the
interconnection; and
—Transmission Provider’s Interconnection
Facilities and Network Upgrades that are
expected to be required as a result of the
Interconnection Request(s) and a nonbinding, good faith estimate of cost
responsibility and a non-binding, good
faith estimated time to construct.
In addition to the information provided in
the interim Transitional Cluster Study
Report, the final Transitional Cluster Study
Report shall provide a description of,
estimated cost of, and schedule for
construction of [the] Transmission Provider’s
Interconnection Facilities and Network
Upgrades required to interconnect the
Generating Facility to the Transmission
System that resolve issues identified in the
interim Transitional Cluster Study Report.
The interim and final Transitional Cluster
Study Reports shall be issued within three
hundred (300) and three hundred sixty (360)
Calendar Days of the Commission-approved
effective date of this LGIP, respectively, and
shall be posted on Transmission Provider’s
OASIS consistent with the posting of other
study results pursuant to Section 3.5.1 of this
LGIP. Interconnection Customer shall have
thirty (30) Calendar Days to comment on the
interim Transitional Cluster Study Report,
once it has been received.
After Transmission Provider issues the
final Transitional Cluster Study Report,
Interconnection Customer shall proceed
pursuant to Section 11 of this LGIP. If
Interconnection Customer withdraws its
Interconnection Request or if Interconnection
Customer’s Generating Facility otherwise
does not reach Commercial Operation, a
Transitional Withdrawal Penalty will be
imposed on[m] Interconnection Customer
equal to nine (9) times Interconnection
Customer’s total study cost incurred since
entering [the] Transmission Provider’s
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27137
interconnection queue (including the cost of
studies conducted under Section 5 of this
LGIP).
5.1.2 Transmission Providers With Existing
Cluster Study Processes or Currently in
Transition
If Transmission Provider is not conducting
a transition process under Section 5.1.1, it
will continue processing Interconnection
Requests under its current Cluster Study
Process. Within sixty (60) Calendar Days of
the Commission-approved effective date of
this LGIP, Interconnection Customers that
have not executed an LGIA or requested an
LGIA to be filed unexecuted must meet the
requirements of Sections 3.4.2, 7.5, or 8.1 of
this LGIP, based on Interconnection
Customer’s Queue Position.
Any Interconnection Customer that fails to
meet these requirements within sixty (60)
Calendar Days of the Commission-approved
effective date of this LGIP shall have its
Interconnection Request deemed withdrawn
by Transmission Provider pursuant to
Section 3.7 of this LGIP. In such case,
Transmission Provider shall not assess
Interconnection Customer any Withdrawal
Penalty.
5.2 New Transmission Provider
If Transmission Provider transfers control
of its Transmission System to a successor
Transmission Provider during the period
when an Interconnection Request is pending,
the original Transmission Provider shall
transfer to the successor Transmission
Provider any amount of the deposit or
payment with interest thereon that exceeds
the cost that it incurred to evaluate the
request for interconnection. Any difference
between such net amount and the deposit or
payment required by this LGIP shall be paid
by or refunded to [the] Interconnection
Customer, as appropriate. The original
Transmission Provider shall coordinate with
the successor Transmission Provider to
complete any Interconnection Study, as
appropriate, that the original Transmission
Provider has begun but has not completed. If
Transmission Provider has tendered a draft
LGIA to Interconnection Customer but
Interconnection Customer has not either
executed the LGIA or requested the filing of
an unexecuted LGIA with FERC, unless
otherwise provided, Interconnection
Customer must complete negotiations with
the successor Transmission Provider.
Section 6. Interconnection Information
Access
6.1 Publicly Posted Interconnection
Information
Transmission Provider shall maintain and
make publicly available: (1) an interactive
visual representation of the estimated
incremental injection capacity (in megawatts)
available at each point of interconnection in
Transmission Provider’s footprint under N–1
conditions, and (2) a table of metrics
concerning the estimated impact of a
potential Generating Facility on
Transmission Provider’s Transmission
System based on a user-specified addition of
a particular number of megawatts at a
particular voltage level at a particular point
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of interconnection. At a minimum, for each
transmission facility impacted by the userspecified megawatt addition, the following
information will be provided in the table: (1)
the distribution factor; (2) the megawatt
impact (based on the megawatt values of the
proposed Generating Facility and the
distribution factor); (3) the percentage impact
on each impacted transmission facility (based
on the megawatt values of the proposed
Generating Facility and the facility rating);
(4) the percentage of power flow on each
impacted transmission facility before the
injection of the proposed project; (5) the
percentage power flow on each impacted
transmission facility after the injection of the
proposed Generating Facility. These metrics
must be calculated based on the power flow
model of the Transmission System with the
transfer simulated from each point of
interconnection to the whole Transmission
Provider’s footprint (to approximate Network
Resource Interconnection Service), and with
the incremental capacity at each point of
interconnection decremented by the existing
and queued Generating Facilities (based on
the existing or requested interconnection
service limit of the generation). These metrics
must be updated within thirty (30) Calendar
Days after the completion of each Cluster
Study and Cluster Restudy. This information
must be publicly posted, without a password
or a fee. The website will define all
underlying assumptions, including the name
of the most recent Cluster Study or Restudy
used in the Base Case.
Section 7. Cluster Study
7.1 Cluster Study Agreement
No later than five (5) Business Days after
the close of a Cluster Request Window,
Transmission Provider shall tender to each
Interconnection Customer that submitted a
valid Interconnection Request a Cluster
Study Agreement in the form of Appendix 2
to this LGIP. The Cluster Study Agreement
shall require Interconnection Customer to
compensate Transmission Provider for the
actual cost of the Cluster Study pursuant to
Section 13.3 of this LGIP. The specifications,
assumptions, or other provisions in the
appendices of the Cluster Study Agreement
provided pursuant to Section 7.1 of this LGIP
shall be subject to change by Transmission
Provider following the conclusion of the
Scoping Meeting.
7.2 Execution of Cluster Study Agreement
Interconnection Customer shall execute the
Cluster Study Agreement and deliver the
executed Cluster Study Agreement to
Transmission Provider no later than the close
of the Customer Engagement Window.
If Interconnection Customer does not
provide all required technical data when it
delivers the Cluster Study Agreement,
Transmission Provider shall notify
Interconnection Customer of the deficiency
within five (5) Business Days of the receipt
of the executed Cluster Study Agreement and
Interconnection Customer shall cure the
deficiency within ten (10) Business Days of
receipt of the notice, provided, however,
such deficiency does not include failure to
deliver the executed Cluster Study
Agreement or [S]study [D]deposit.
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7.3 Scope of Cluster Study
The Cluster Study shall evaluate the
impact of the proposed interconnection on
the reliability of the Transmission System.
The Cluster Study will consider the Base
Case as well as all Generating Facilities (and
with respect to (iii) below, any identified
Network Upgrades associated with such
higher queued interconnection) that, on the
date the Cluster Study is commenced: (i) are
directly interconnected to the Transmission
System; (ii) are interconnected to Affected
Systems and may have an impact on the
Interconnection Request; (iii) have a pending
higher queued Interconnection Request to
interconnect to the Transmission System;
and (iv) have no Queue Position but have
executed an LGIA or requested that an
unexecuted LGIA be filed with FERC.
For purposes of determining necessary
Interconnection Facilities and Network
Upgrades, the Cluster Study shall use the
level of Interconnection Service requested by
Interconnection Customers in the Cluster,
except where [the] Transmission Provider
otherwise determines that it must study the
full Generating Facility Capacity due to
safety or reliability concerns.
The Cluster Study will consist of power
flow, stability, and short circuit analyses, the
results of which are documented in a single
Cluster Study Report, as applicable. At the
conclusion of the Cluster Study,
Transmission Provider shall issue a Cluster
Study Report. The Cluster Study Report will
state the assumptions upon which it is based;
state the results of the analyses; and provide
the requirements or potential impediments to
providing the requested [i]Interconnection
[s]Service, including a preliminary indication
of the cost and length of time that would be
necessary to correct any problems identified
in those analyses and implement the
interconnection. The Cluster Study Report
shall identify the Interconnection Facilities
and Network Upgrades expected to be
required to reliably interconnect the
Generating Facilities in that Cluster Study at
the requested Interconnection Service level
and shall provide non-binding cost estimates
for required Network Upgrades. The Cluster
Study Report shall identify each
Interconnection Customer’s estimated
allocated costs for Interconnection Facilities
and Network Upgrades pursuant to the
method in Section 4.2.1 of this LGIP.
Transmission Provider shall hold an open
stakeholder meeting pursuant to Section 7.4
of this LGIP.
For purposes of determining necessary
Interconnection Facilities and Network
Upgrades, the Cluster Study shall use
operating assumptions (i.e., whether the
interconnecting Generating Facility will or
will not charge at peak load) that reflect the
proposed charging behavior of a Generating
Facility that includes at least one electric
storage resource as requested by
Interconnection Customer, unless
Transmission Provider determines that Good
Utility Practice, including Applicable
Reliability Standards, otherwise requires the
use of different operating assumptions.
Transmission Provider may require the
inclusion of control technologies sufficient to
limit the operation of the Generating Facility
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per the operating assumptions as set forth in
the Interconnection Request and to respond
to dispatch instructions by Transmission
Provider. As determined by Transmission
Provider, Interconnection Customer may be
subject to testing and validation of those
control technologies consistent with Article 6
of the LGIA.
[The Cluster Study Report will provide a
list of facilities that are required as a result
of the Interconnection Requests within the
Cluster and a non-binding good faith estimate
of cost responsibility and a non-binding good
faith estimated time to construct.]
[Upon issuance of a Cluster Study Report,
or Cluster Restudy Report, if any,
Transmission Provider shall simultaneously
tender a draft Interconnection Facilities
Study Agreement to each Interconnection
Customer within the Cluster, subject to the
conditions in Section 8.1 of this LGIP.]
The Cluster Study shall evaluate the use of
static synchronous compensators, static VAR
compensators, advanced power flow control
devices, transmission switching,
synchronous condensers, voltage source
converters, advanced conductors, and tower
lifting. Transmission Provider shall evaluate
each identified alternative transmission
technology and determine whether the above
technologies should be used, consistent with
Good Utility Practice, Applicable Reliability
Standards, and Applicable Laws and
Regulations[other applicable regulatory
requirements]. Transmission Provider shall
include an explanation of the results of [the]
Transmission Provider’s evaluation for each
technology in the Cluster Study Report.
The Cluster Study Report will provide a list
of facilities that are required as a result of the
Interconnection Requests within the Cluster
and a non-binding good faith estimate of cost
responsibility and a non-binding good faith
estimated time to construct.
7.4 Cluster Study Procedures
Transmission Provider shall coordinate the
Cluster Study with any Affected System
Operator that is affected by the
Interconnection Request pursuant to Section
3.6 of this LGIP. Transmission Provider shall
utilize existing studies to the extent
practicable when it performs the Cluster
Study. Interconnection Requests for a Cluster
Study may be submitted only within the
Cluster Request Window and Transmission
Provider shall initiate the Cluster Study
[p]Process pursuant to Section 7 of this LGIP.
Transmission Provider shall complete the
Cluster Study within one hundred fifty (150)
Calendar Days of the close of the Customer
Engagement Window.
Within ten (10) Business Days of
simultaneously furnishing a Cluster Study
Report to each Interconnection Customer
within the Cluster and posting such report on
OASIS, Transmission Provider shall convene
a Cluster Study Report Meeting.
At the request of Interconnection Customer
or at any time Transmission Provider
determines that it will not meet the required
time frame for completing the Cluster Study,
Transmission Provider shall notify
Interconnection Customers as to the schedule
status of the Cluster Study. If Transmission
Provider is unable to complete the Cluster
Study within the time period, it shall notify
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Interconnection Customers and provide an
estimated completion date with an
explanation of the reasons why additional
time is required. Upon request, Transmission
Provider shall provide Interconnection
Customers all supporting documentation,
workpapers and relevant pre-Interconnection
Request and post-Interconnection Request
power flow, short circuit and stability
databases for the Cluster Study, subject to
confidentiality arrangements consistent with
Section 13.1 of this LGIP.
7.5 Cluster Study Restudies
(1) Within twenty (20) Calendar Days after
the Cluster Study Report Meeting,
Interconnection Customer must provide the
following:
(a) Demonstration of continued Site
Control pursuant to Section 3.4.2(iii) of this
LGIP; and
(b) An additional deposit that brings the
total Commercial Readiness Deposit
submitted to Transmission Provider to five
percent (5%) of [the] Interconnection
Customer’s Network Upgrade cost
assignment identified in the Cluster Study in
the form of an irrevocable letter of credit,[ or]
cash, a surety bond, or other form of security
that is reasonably acceptable to
Transmission Provider. Transmission
Provider shall refund the deposit to
Interconnection Customer upon withdrawal
in accordance with Section 3.7 of this LGIP.
Interconnection Customer shall promptly
inform Transmission Provider of any material
change to Interconnection Customer’s
demonstration of Site Control under Section
3.4.2(iii) of this LGIP. Upon Transmission
Provider determining that Interconnection
Customer no longer satisfies the Site Control
requirement, Transmission Provider shall
notify Interconnection Customer. Within ten
(10) Business Days of such notification,
Interconnection Customer must demonstrate
compliance with the applicable requirement
subject to Transmission Provider’s approval,
not to be unreasonably withheld. Absent
such demonstration, Transmission Provider
shall deem the subject Interconnection
Request withdrawn pursuant to Section 3.7
of this LGIP.
(2) If no Interconnection Customer
withdraws from the Cluster after completion
of the Cluster Study or Cluster Restudy or is
deemed withdrawn pursuant to Section 3.7
of this LGIP after completion of the Cluster
Study or Cluster Restudy, Transmission
Provider shall notify Interconnection
Customers in the Cluster that a Cluster
Restudy is not required.
(3) If one or more Interconnection
Customers withdraw from the Cluster or are
deemed withdrawn pursuant to Section 3.7
of this LGIP, Transmission Provider shall
determine if a Cluster Restudy is necessary
within thirty (30) Calendar Days after the
Cluster Study Report Meeting. If
Transmission Provider determines a Cluster
Restudy is not necessary, Transmission
Provider shall notify Interconnection
Customers in the Cluster that a Cluster
Restudy is not required and Transmission
Provider shall provide an updated Cluster
Study Report within thirty (30) Calendar
Days of such determination.
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(4) If one or more Interconnection
Customers withdraws from the Cluster or is
deemed withdrawn pursuant to Section 3.7
of this LGIP, and Transmission Provider
determines a Cluster Restudy is necessary as
a result, Transmission Provider shall notify
Interconnection Customers in the Cluster and
post on OASIS that a Cluster Restudy is
required within thirty (30) Calendar Days
after the Cluster Study Report Meeting.
Transmission Provider shall continue with
such restudies until Transmission Provider
determines that no further restudies are
required. If an Interconnection Customer
withdraws or is deemed withdrawn pursuant
to Section 3.7 of this LGIP during the
Interconnection Facilities Study, or after
other Interconnection Customers in the same
Cluster have executed LGIAs, or requested
that unexecuted LGIAs be filed, and
Transmission Provider determines a Cluster
Restudy is necessary, the Cluster shall be
restudied. If a Cluster Restudy is required
due to a higher queued project withdrawing
from the queue, or a modification of a higher
or equally queued project subject to Section
4.4 of this LGIP, Transmission Provider shall
so notify affected Interconnection Customers
in writing. Except as provided in Section 3.7
of this LGIP in the case of withdrawing
Interconnection Customers, any cost of
Restudy shall be borne by Interconnection
Customers being restudied.
(5) The scope of any Cluster Restudy shall
be consistent with the scope of an initial
Cluster Study pursuant to Section 7.3 of this
LGIP. Transmission Provider shall complete
the Cluster Restudy within one hundred fifty
(150) Calendar Days of [the] Transmission
Provider informing [the] Interconnection
Customers in the [c]Cluster that restudy is
needed. The results of the Cluster Restudy
shall be combined into a single report
(Cluster Restudy Report). Transmission
Provider shall hold a meeting with [the]
Interconnection Customers in the [c]Cluster
(Cluster Restudy Report Meeting) within ten
(10) Business Days of simultaneously
furnishing the Cluster Restudy Report to each
Interconnection Customer in the Cluster
Restudy and publishing the Cluster Restudy
Report on OASIS.
If additional restudies are required,
Interconnection Customer and Transmission
Provider shall follow the procedures of this
Section 7.5 of this LGIP until such time that
Transmission Provider determines that no
further restudies are required. Transmission
Provider shall notify each Interconnection
Customer within the Cluster when no further
restudies are required.
Section 8. Interconnection Facilities Study
8.1 Interconnection Facilities Study
Agreement
[Simultaneously with the delivery of the
Cluster Study Report, or Cluster Restudy
Report if applicable,] Within five (5) Business
Days following Transmission Provider
notifying each Interconnection Customer
within the Cluster that no further Cluster
Restudy is required (per Section 7.5 of this
LGIP), Transmission Provider shall provide
to Interconnection Customer an
Interconnection Facilities Study Agreement
in the form of Appendix 3 to this LGIP.
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27139
Interconnection Customer shall compensate
Transmission Provider for the actual cost of
the Interconnection Facilities Study. Within
five (5) Business Days following the Cluster
Report Meeting or Cluster Restudy Report
Meeting if applicable, Transmission Provider
shall provide to Interconnection Customer a
non-binding good faith estimate of the cost
and timeframe for completing the
Interconnection Facilities Study.
Interconnection Customer shall execute the
Interconnection Facilities Study Agreement
and deliver the executed Interconnection
Facilities Study Agreement to Transmission
Provider within thirty (30) Calendar Days
after its receipt, together with:
(1) Any required technical data;
(2) Demonstration of one-hundred percent
(100%) Site Control or demonstration of a
regulatory limitation and applicable deposit
in lieu of Site Control provided to [the]
Transmission Provider in accordance with
[s]Section 3.4.2 of this LGIP; and
(3) An additional deposit that brings the
total Commercial Readiness Deposit
submitted to [the] Transmission Provider to
ten percent (10%) of [the] Interconnection
Customer’s Network Upgrade cost
assignment identified in the Cluster Study or
Cluster Restudy, if applicable, in the form of
an irrevocable letter of credit,[ or] cash, a
surety bond, or other form of security that is
reasonably acceptable to Transmission
Provider. Transmission Provider shall refund
the deposit to Interconnection Customer
upon withdrawal in accordance with Section
3.7 of this LGIP.
Interconnection Customer shall promptly
inform Transmission Provider of any material
change to Interconnection Customer’s
demonstration of Site Control under Section
3.4.2(iii) of this LGIP. Upon Transmission
Provider determining separately that
Interconnection Customer no longer satisfies
the Site Control requirement, Transmission
Provider shall notify Interconnection
Customer. Within ten (10) Business Days of
such notification, Interconnection Customer
must demonstrate compliance with the
applicable requirement subject to
Transmission Provider’s approval, not to be
unreasonably withheld. Absent such
demonstration, Transmission Provider shall
deem the subject Interconnection Request
withdrawn pursuant to Section 3.7 of this
LGIP.
8.2 Scope of Interconnection Facilities
Study
The Interconnection Facilities Study shall
be specific to each Interconnection Request
and performed on an individual, i.e., nonclustered, basis. The Interconnection
Facilities Study shall specify and provide a
non-binding estimate of the cost of the
equipment, engineering, procurement and
construction work needed to implement the
conclusions of the Cluster Study Report (and
any associated restudies) in accordance with
Good Utility Practice to physically and
electrically connect the Interconnection
Facilities to the Transmission System. The
Interconnection Facilities Study shall also
identify the electrical switching
configuration of the connection equipment,
including, without limitation: the
transformer, switchgear, meters, and other
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station equipment; the nature and estimated
cost of any Transmission Provider’s
Interconnection Facilities and Network
Upgrades necessary to accomplish the
interconnection; and an estimate of the time
required to complete the construction and
installation of such facilities. The
Interconnection Facilities Study will also
identify any potential control equipment for
(1) requests for Interconnection Service that
are lower than the Generating Facility
Capacity, and/or (2) requests to study a
Generating Facility that includes at least one
electric storage resource using operating
assumptions (i.e., whether the
interconnecting Generating Facility will or
will not charge at peak load) that reflect its
proposed charging behavior, as requested by
Interconnection Customer, unless
Transmission Provider determines that Good
Utility Practice, including Applicable
Reliability Standards, otherwise require the
use of different operating assumptions.
8.3 Interconnection Facilities Study
Procedures
Transmission Provider shall coordinate the
Interconnection Facilities Study with any
Affected System Operator pursuant to
Section 3.6 of this LGIP. Transmission
Provider shall utilize existing studies to the
extent practicable in performing the
Interconnection Facilities Study.
Transmission Provider shall complete the
study and issue a draft Interconnection
Facilities Study Report to Interconnection
Customer within the following number of
days after receipt of an executed
Interconnection Facilities Study Agreement:
ninety (90) Calendar Days after receipt of an
executed Interconnection Facilities Study
Agreement, with no more than a +/¥ [20]
twenty percent (20%) cost estimate contained
in the report; or one hundred eighty (180)
Calendar Days, if Interconnection Customer
requests a +/¥ [10] ten percent (10%) cost
estimate.
At the request of Interconnection Customer
or at any time Transmission Provider
determines that it will not meet the required
time frame for completing the
Interconnection Facilities Study,
Transmission Provider shall notify
Interconnection Customer as to the schedule
status of the Interconnection Facilities Study.
If Transmission Provider is unable to
complete the Interconnection Facilities Study
and issue a draft Interconnection Facilities
Study Report within the time required, it
shall notify Interconnection Customer and
provide an estimated completion date and an
explanation of the reasons why additional
time is required.
Interconnection Customer may, within
thirty (30) Calendar Days after receipt of the
draft Interconnection Facilities Study Report,
provide written comments to Transmission
Provider, which Transmission Provider shall
include in completing the final
Interconnection Facilities Study Report.
Transmission Provider shall issue the final
Interconnection Facilities Study Report
within fifteen (15) Business Days of receiving
Interconnection Customer’s comments or
promptly upon receiving Interconnection
Customer’s statement that it will not provide
comments. Transmission Provider may
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reasonably extend such fifteen (15) Business
Day period upon notice to Interconnection
Customer if Interconnection Customer’s
comments require Transmission Provider to
perform additional analyses or make other
significant modifications prior to the
issuance of the final Interconnection
Facilities Study Report. Upon request,
Transmission Provider shall provide
Interconnection Customer supporting
documentation, workpapers, and databases
or data developed in the preparation of the
Interconnection Facilities Study, subject to
confidentiality arrangements consistent with
Section 13.1 of this LGIP.
8.4
Meeting with Transmission Provider
Within ten (10) Business Days of providing
a draft Interconnection Facilities Study
Report to Interconnection Customer,
Transmission Provider and Interconnection
Customer shall meet to discuss the results of
the Interconnection Facilities Study.
8.5
Restudy
If [R]restudy of the Interconnection
Facilities Study is required due to a higher
or equally queued project withdrawing from
the queue or a modification of a higher or
equally queued project pursuant to Section
4.4 of this LGIP, Transmission Provider shall
so notify Interconnection Customer in
writing. Transmission Provider shall ensure
that such [R]restudy takes no longer than
sixty (60) Calendar Days from the date of
notice. Except as provided in Section 3.7 of
this LGIP in the case of withdrawing
Interconnection Customers, any cost of
[R]restudy shall be borne by Interconnection
Customer being restudied.
Section 9. Affected System Study
9.1
Applicability
This Section 9 outlines the duties of
Transmission Provider when it receives
notification that an Affected System
Interconnection Customer’s proposed
interconnection to its host transmission
provider may impact Transmission
Provider’s Transmission System.
9.2
Response to Notifications
9.2.1
Response to Initial Notification
When Transmission Provider receives
initial notification either following the
Cluster Study or a Cluster Restudy that an
Affected System Interconnection Customer’s
proposed interconnection to its host
transmission provider may impact
Transmission Provider’s Transmission
System, Transmission Provider must respond
in writing within twenty (20) Business Days
whether it intends to conduct an Affected
System Study.
By fifteen (15) Business Days after [the]
Transmission Provider responds with its
affirmative intent to conduct an Affected
System Study, Transmission Provider shall
share with Affected System Interconnection
Customer(s) and the Affected System
Interconnection Customer’s host
transmission provider a non-binding good
faith estimate of the cost and the schedule to
complete the Affected System Study.
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9.2.2 Response to Notification of Cluster
Restudy
Within five (5) Business Days of receipt of
notification of Cluster Restudy, Transmission
Provider will send written notification to
Affected System Interconnection Customer(s)
involved in the Cluster Restudy and the host
transmission provider that Transmission
Provider intends to delay a planned or inprogress Affected System Study until after
completion of the Cluster Restudy. If
Transmission Provider decides to delay the
Affected System Study, it is not required to
meet its obligations under Section 9 of this
LGIP until the time that it receives
notification from the host transmission
provider that the Cluster Restudy is complete.
If Transmission Provider decides to move
forward with its Affected System Study
despite the Cluster Restudy, then it must
meet all requirements under Section 9 of this
LGIP.
9.3 Affected System Queue Position
Transmission Provider must assign an
Affected System Queue Position to Affected
System Interconnection Customer(s) that
require(s) an Affected System Study. Such
Affected System Queue Position shall be
assigned based upon the date of execution of
the Affected System Study Agreement.
Relative to [the] Transmission Provider’s
Interconnection Customers, this Affected
System Queue Position shall be higherqueued than any Cluster that has not yet
received its Cluster Study Report and shall be
lower-queued than any Cluster that has
already received its Cluster Study Report.
Consistent with Section 9.7 of this LGIP,
Transmission Provider shall study the
Affected System Interconnection Customer(s)
via Clustering, and all Affected System
Interconnection Customers studied in the
same Cluster under Section 9.7 of this LGIP
shall be equally queued. For Affected System
Interconnection Customers that are equally
queued, the Affected System Queue Position
shall have no bearing on the assignment of
Affected System Network Upgrades
identified in the applicable Affected System
Study. The costs of the Affected System
Network Upgrades shall be allocated among
the Affected System Interconnection
Customers in accordance with Section 9.9 of
this LGIP.
9.4 Affected System Study Agreement/
Multiparty Affected System Study Agreement
Unless otherwise agreed, Transmission
Provider shall provide to Affected System
Interconnection Customer(s) an Affected
System Study Agreement/Multiparty
Affected System Study Agreement, in the
form of Appendix 9 or Appendix 10 to this
LGIP, as applicable, within ten (10) Business
Days of Transmission Provider sharing the
schedule for the Affected System Study per
Section 9.2.1 of this LGIP.
Upon Affected System Interconnection
Customer(s)’ receipt of the Affected System
Study Report, Affected System
Interconnection Customer(s) shall
compensate Transmission Provider for the
actual cost of the Affected System Study.
Any difference between the study deposit
and the actual cost of the Affected System
Study shall be paid by or refunded to the
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Affected System Interconnection
Customer(s). Any invoices for the Affected
System Study shall include a detailed and
itemized accounting of the cost of the study.
Affected System Interconnection Customer(s)
shall pay any excess costs beyond the
already-paid Affected System Study deposit
or be reimbursed for any costs collected over
the actual cost of the Affected System Study
within thirty (30) Calendar Days of receipt of
an invoice thereof. If Affected System
Interconnection Customer(s) fail to pay such
undisputed costs within the time allotted, it
shall lose its Affected System Queue
Position. Transmission Provider shall notify
Affected System Interconnection Customer’s
host transmission provider of such failure to
pay.
9.5 Execution of Affected System Study
Agreement/Multiparty Affected System
Study Agreement
Affected System Interconnection
Customer(s) shall execute the Affected
System Study Agreement/Multiparty
Affected System Study Agreement, deliver
the executed Affected System Study
Agreement/Multiparty Affected System
Study Agreement to Transmission Provider,
and provide the Affected System Study
deposit within ten (10) Business Days of
receipt. If Transmission Provider notifies
Affected System Interconnection Customer(s)
that it will delay the Affected System Study
pursuant to Section 9.2.2 of this LGIP,
Affected System Interconnection Customer(s)
are neither required to execute and return the
previously tendered Affected System Study/
Multiparty Affected System Study Agreement
nor provide the Affected System Study
deposit for the previously tendered Affected
System Study/Multiparty Affected System
Study Agreement.
If Affected System Interconnection
Customer does not provide all required
technical data when it delivers the Affected
System Study Agreement/Multiparty
Affected System Study Agreement,
Transmission Provider shall notify the
deficient Affected System Interconnection
Customer, as well as the host transmission
provider with which Affected System
Interconnection Customer seeks to
interconnect, of the technical data deficiency
within five (5) Business Days of the receipt
of the executed Affected System Study
Agreement/Multiparty Affected System
Study Agreement and the deficient Affected
System Interconnection Customer shall cure
the technical deficiency within ten (10)
Business Days of receipt of the notice:
provided, however, that such deficiency does
not include failure to deliver the executed
Affected System Study Agreement/
Multiparty Affected System Study Agreement
or deposit for the Affected System Study
Agreement/Multiparty Affected System
Study Agreement. If Affected System
Interconnection Customer does not cure the
technical data deficiency within the cure
period or fails to execute the Affected System
Study Agreement/Multiparty Affected
System Study Agreement or provide the
deposit, the Affected System Interconnection
Customer shall lose its Affected System
Queue Position.
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9.6 Scope of Affected System Study
The Affected System Study shall evaluate
the impact that any Affected System
Interconnection Customer’s proposed
interconnection to another transmission
provider’s transmission system will have on
the reliability of Transmission Provider’s
Transmission System. The Affected System
Study shall consider the Base Case as well as
all Generating Facilities (and with respect to
(iii) below, any identified Affected System
Network Upgrades associated with such
higher-queued Interconnection Request) that,
on the date the Affected System Study is
commenced: (i) are directly interconnected to
Transmission Provider’s Transmission
System; (ii) are directly interconnected to
another transmission provider’s transmission
system and may have an impact on Affected
System Interconnection Customer’s
interconnection request; (iii) have a pending
higher-queued Interconnection Request to
interconnect to Transmission Provider’s
Transmission System; and (iv) have no queue
position but have executed an LGIA or
requested that an unexecuted LGIA be filed
with FERC. Transmission Provider has no
obligation to study impacts of Affected
System Interconnection Customers of which
it is not notified.
The Affected System Study shall consist of
a power flow, stability, and short circuit
analysis. The Affected System Study Report
will: state the assumptions upon which it is
based; state the results of the analyses; and
provide the potential impediments to
Affected System Interconnection Customer’s
receipt if interconnection service on its host
transmission provider’s transmission system,
including a preliminary indication of the cost
and length of time that would be necessary
to correct any problems identified in those
analyses and implement the interconnection.
For purposes of determining necessary
Affected System Network Upgrades, the
Affected System Study shall consider the
level of interconnection service requested in
megawatts by Affected System
Interconnection Customer, unless otherwise
required to study the full generating facility
capacity due to safety or reliability concerns.
The Affected System Study Report shall
provide a list of facilities that are required as
a result of Affected System Interconnection
Customer’s proposed interconnection to
another transmission provider’s system, a
non-binding good faith estimate of cost
responsibility, and a non-binding good faith
estimated time to construct. The Affected
System Study may consist of a system impact
study, a facilities study, or some combination
thereof.
9.7 Affected System Study Procedures
Transmission Provider shall use Clustering
in conducting the Affected System Study and
shall use existing studies to the extent
practicable, when multiple Affected System
Interconnection Customers that are part of a
single Cluster may cause the need for
Affected System Network Upgrades.
Transmission Provider shall complete the
Affected System Study and provide the
Affected System Study Report to Affected
System Interconnection Customer(s) and the
host transmission provider with whom
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interconnection has been requested within
one hundred fifty (150) Calendar Days after
the receipt of the Affected System Study
Agreement and deposit.
At the request of Affected System
Interconnection Customer, Transmission
Provider shall notify Affected System
Interconnection Customer as to the status of
the Affected System Study. If Transmission
Provider is unable to complete the Affected
System Study within the requisite time
period, it shall notify Affected System
Interconnection Customer(s), as well as [the]
transmission provider with which Affected
System Interconnection Customer seeks to
interconnect, and shall provide an estimated
completion date with an explanation of the
reasons why additional time is required. If
Transmission Provider does not meet the
deadlines in this [s]Section, Transmission
Provider shall be subject to the financial
penalties as described in Section 3.9 of this
LGIP. Upon request, Transmission Provider
shall provide Affected System
Interconnection Customer(s) with all
supporting documentation, workpapers and
relevant power flow, short circuit and
stability databases for the Affected System
Study, subject to confidentiality
arrangements consistent with Section 13.1 of
this LGIP.
Transmission Provider must study an
Affected System Interconnection Customer
using the Energy Resource Interconnection
Service modeling standard used for
Interconnection Requests on its own
Transmission System, regardless of the level
of interconnection service that Affected
System Interconnection Customer is seeking
from the host transmission provider with
whom it seeks to interconnect.
9.8 Meeting with Transmission Provider
Within ten (10) Business Days of providing
the Affected System Study Report to Affected
System Interconnection Customer(s),
Transmission Provider and Affected System
Interconnection Customer(s) shall meet to
discuss the results of the Affected System
Study.
9.9 Affected System Cost Allocation
Transmission Provider shall allocate
Affected System Network Upgrade costs
identified during the Affected System Study
to Affected System Interconnection
Customer(s) using a proportional impact
method, consistent with Section 4.2.1(1)(b) of
this LGIP.
9.10 Tender of Affected Systems Facilities
Construction Agreement/Multiparty Affected
System Facilities Construction Agreement
Transmission Provider shall tender to
Affected System Interconnection Customer(s)
an Affected System Facilities Construction
Agreement/Multiparty Affected System
Facilities Construction Agreement, as
applicable, in the form of Appendix 11 or 12
to this LGIP, within thirty (30) Calendar Days
of providing the Affected System Study
Report. Within ten (10) Business Days of the
receipt of the Affected System Facilities
Construction Agreement/Multiparty Affected
System Facilities Construction Agreement,
the Affected System Interconnection
Customer(s) must execute the agreement or
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request the agreement to be filed unexecuted
with FERC. Transmission Provider shall
execute the agreement or file the agreement
unexecuted within five (5) Business Days
after receiving direction from Affected
System Interconnection Customer(s).
Affected System Interconnection Customer’s
failure to execute the Affected System
Facilities Construction Agreement/
Multiparty Affected System Facilities
Construction Agreement, or failure to request
the agreement to be filed unexecuted with
FERC, shall result in the loss of its Affected
System Queue Position.
9.11 Restudy
If restudy of the Affected System Study is
required, Transmission Provider shall notify
Affected System Interconnection Customer(s)
in writing within thirty (30) Calendar Days of
discovery of the need for restudy. Such
restudy shall take no longer than sixty (60)
Calendar Days from the date of notice. Any
cost of restudy shall be borne by the Affected
System Interconnection Customer(s) being
restudied.
Section 10. Optional Interconnection Study
10.1 Optional Interconnection Study
Agreement
On or after the date when Interconnection
Customer receives Cluster Study results,
Interconnection Customer may request, and
Transmission Provider shall perform a
reasonable number of Optional
Interconnection Studies. The request shall
describe the assumptions that
Interconnection Customer wishes
Transmission Provider to study within the
scope described in Section 10.2 of this LGIP.
Within five (5) Business Days after receipt of
a request for an Optional Interconnection
Study, Transmission Provider shall provide
to Interconnection Customer an Optional
Interconnection Study Agreement in the form
of Appendix 4.
The Optional Interconnection Study
Agreement shall: (i) specify the technical
data that Interconnection Customer must
provide for each phase of the Optional
Interconnection Study, (ii) specify
Interconnection Customer’s assumptions as
to which Interconnection Requests with
earlier queue priority dates will be excluded
from the Optional Interconnection Study case
and assumptions as to the type of
I[i]nterconnection S[s]ervice for
Interconnection Requests remaining in the
Optional Interconnection Study case, and
(iii) Transmission Provider’s estimate of the
cost of the Optional Interconnection Study.
To the extent known by Transmission
Provider, such estimate shall include any
costs expected to be incurred by any Affected
System Operator whose participation is
necessary to complete the Optional
Interconnection Study. Notwithstanding the
above, Transmission Provider shall not be
required as a result of an Optional
Interconnection Study request to conduct any
additional Interconnection Studies with
respect to any other Interconnection Request.
Interconnection Customer shall execute the
Optional Interconnection Study Agreement
within ten (10) Business Days of receipt and
deliver the Optional Interconnection Study
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Agreement, the technical data and a $10,000
deposit to Transmission Provider.
10.2 Scope of Optional Interconnection
Study
The Optional Interconnection Study will
consist of a sensitivity analysis based on the
assumptions specified by Interconnection
Customer in the Optional Interconnection
Study Agreement. The Optional
Interconnection Study will also identify
Transmission Provider’s Interconnection
Facilities and the Network Upgrades, and the
estimated cost thereof, that may be required
to provide transmission service or
Interconnection Service based upon the
results of the Optional Interconnection
Study. The Optional Interconnection Study
shall be performed solely for informational
purposes. Transmission Provider shall use
Reasonable Efforts to coordinate the study
with any Affected Systems that may be
affected by the types of Interconnection
Services that are being studied. Transmission
Provider shall utilize existing studies to the
extent practicable in conducting the Optional
Interconnection Study.
10.3 Optional Interconnection Study
Procedures
The executed Optional Interconnection
Study Agreement, the prepayment, and
technical and other data called for therein
must be provided to Transmission Provider
within ten (10) Business Days of
Interconnection Customer receipt of the
Optional Interconnection Study Agreement.
Transmission Provider shall use Reasonable
Efforts to complete the Optional
Interconnection Study within a mutually
agreed upon time period specified within the
Optional Interconnection Study Agreement.
If Transmission Provider is unable to
complete the Optional Interconnection Study
within such time period, it shall notify
Interconnection Customer and provide an
estimated completion date and an
explanation of the reasons why additional
time is required. Any difference between the
study payment and the actual cost of the
study shall be paid to Transmission Provider
or refunded to Interconnection Customer, as
appropriate. Upon request, Transmission
Provider shall provide Interconnection
Customer supporting documentation and
workpapers and databases or data developed
in the preparation of the Optional
Interconnection Study, subject to
confidentiality arrangements consistent with
Section 13.1 of this LGIP.
Section 11. Standard Large Generator
Interconnection Agreement (LGIA)
11.1 Tender
Interconnection Customer shall tender
comments on the draft Interconnection
Facilities Study Report within thirty (30)
Calendar Days of receipt of the report. Within
thirty (30) Calendar Days after the comments
are submitted or after Interconnection
Customer notifies Transmission Provider that
it will not provide comments, Transmission
Provider shall tender a draft LGIA, together
with draft appendices. The draft LGIA shall
be in the form of Transmission Provider’s
FERC-approved standard form LGIA, which
is in Appendix 5. Interconnection Customer
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shall execute and return the LGIA and
completed draft appendices within thirty (30)
Calendar Days, unless (1) the sixty (60)
Calendar Day negotiation period under
Section 11.2 of this LGIP has commenced, or
(2) LGIA execution, or filing unexecuted, has
been delayed to await the Affected System
Study Report pursuant to Section 11.2.1 of
this LGIP.
11.2 Negotiation
Notwithstanding Section 11.1 of this LGIP,
at the request of Interconnection Customer,
Transmission Provider shall begin
negotiations with Interconnection Customer
concerning the appendices to the LGIA at any
time after Interconnection Customer executes
the Interconnection Facilities Study
Agreement. Transmission Provider and
Interconnection Customer shall negotiate
concerning any disputed provisions of the
appendices to the draft LGIA for not more
than sixty (60) Calendar Days after tender of
the final Interconnection Facilities Study
Report. If Interconnection Customer
determines that negotiations are at an
impasse, it may request termination of the
negotiations at any time after tender of the
draft LGIA pursuant to Section 11.1 of this
LGIP and request submission of the
unexecuted LGIA with FERC or initiate
Dispute Resolution procedures pursuant to
Section 13.5 of this LGIP. If Interconnection
Customer requests termination of the
negotiations, but within sixty (60) Calendar
Days thereafter fails to request either the
filing of the unexecuted LGIA or initiate
Dispute Resolution, it shall be deemed to
have withdrawn its Interconnection Request.
Unless otherwise agreed by the Parties, if
Interconnection Customer has not executed
the LGIA, requested filing of an unexecuted
LGIA, or initiated Dispute Resolution
procedures pursuant to Section 13.5 of this
LGIP within sixty (60) Calendar Days of
tender of draft LGIA, it shall be deemed to
have withdrawn its Interconnection Request.
Transmission Provider shall provide to
Interconnection Customer a final LGIA
within fifteen (15) Business Days after the
completion of the negotiation process.
11.2.1 Delay in LGIA Execution, or Filing
Unexecuted, To Await Affected System
Study Report
If Interconnection Customer has not
received its Affected System Study Report
from the Affected System Operator prior to
the date that it would be required to execute
its LGIA (or request that its LGIA be filed
unexecuted) pursuant to Section 11.1 of this
LGIP, Transmission Provider shall, upon
request of Interconnection Customer, extend
this deadline to thirty (30) Calendar Days
after Interconnection Customer’s receipt of
the Affected System Study Report. If
Interconnection Customer, after delaying
LGIA execution, or requesting unexecuted
filing, to await Affected System Study
[Results]Report, decides to proceed to LGIA
execution, or request unexecuted filing,
without those results, it may notify
Transmission Provider of its intent to
proceed with LGIA execution (or request that
its LGIA be filed unexecuted) pursuant to
Section 11.1 of this LGIP. If Transmission
Provider determines that further delay to the
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LGIA execution date would cause a material
impact on the cost or timing of an equal- or
lower-queued [i]Interconnection [c]Customer,
Transmission Provider must notify
Interconnection Customer of such impacts
and set the deadline to execute the LGIA (or
request that the LGIA be filed unexecuted) to
thirty (30) Calendar Days after such notice is
provided.
11.3 Execution and Filing
Simultaneously with submitting the
executed LGIA to Transmission Provider, or
within ten (10) Business Days after [the]
Interconnection Customer requests that [the]
Transmission Provider file the LGIA
unexecuted at the Commission,
Interconnection Customer shall provide
Transmission Provider with the following: (1)
demonstration of continued Site Control
pursuant to Section 8.1(2) of this LGIP; and
(2) the LGIA Deposit equal to twenty percent
(20%) of Interconnection Customer’s
estimated Network Upgrade costs identified
in the draft LGIA minus the total amount of
Commercial Readiness Deposits that
Interconnection Customer has provided to
Transmission Provider for its Interconnection
Request. Transmission Provider shall use
LGIA Deposit as (or as a portion of) [the]
Interconnection Customer’s security required
under LGIA Article 11.5. Interconnection
Customer may not request to suspend its
LGIA under LGIA Article 5.16 until
Interconnection Customer has provided (1)
and (2) to Transmission Provider. If
Interconnection Customer fails to provide (1)
and (2) to Transmission Provider within the
thirty (30) Calendar Days allowed for
returning the executed LGIA and appendices
under LGIP Section 11.1, or within ten (10)
Business Days after Interconnection
Customer requests that Transmission
Provider file the LGIA unexecuted at the
Commission as allowed in this Section 11.3
of this LGIP, the Interconnection Request will
be deemed withdrawn pursuant to Section
3.7 of this LGIP.
At the same time, Interconnection
Customer also shall provide reasonable
evidence that one or more of the following
milestones in the development of the Large
Generating Facility, at Interconnection
Customer election, has been achieved (unless
such milestone is inapplicable due to the
characteristics of the Generating Facility): (i)
the execution of a contract for the supply or
transportation of fuel to the Large Generating
Facility; (ii) the execution of a contract for
the supply of cooling water to the Large
Generating Facility; (iii) execution of a
contract for the engineering for, procurement
of major equipment for, or construction of,
the Large Generating Facility; (iv) execution
of a contract (or comparable evidence) for the
sale of electric energy or capacity from the
Large Generating Facility; or (v) application
for an air, water, or land use permit.
Interconnection Customer shall either: (i)
execute two originals of the tendered LGIA
and return them to Transmission Provider; or
(ii) request in writing that Transmission
Provider file with FERC an LGIA in
unexecuted form. As soon as practicable, but
not later than ten (10) Business Days after
receiving either the two executed originals of
the tendered LGIA (if it does not conform
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with a FERC-approved [standard form of
interconnection agreement] Standard Large
Generator Interconnection Agreement) or the
request to file an unexecuted LGIA,
Transmission Provider shall file the LGIA
with FERC, together with its explanation of
any matters as to which Interconnection
Customer and Transmission Provider
disagree and support for the costs that
Transmission Provider proposes to charge to
Interconnection Customer under the LGIA.
An unexecuted LGIA should contain terms
and conditions deemed appropriate by
Transmission Provider for the
Interconnection Request. If the Parties agree
to proceed with design, procurement, and
construction of facilities and upgrades under
the agreed-upon terms of the unexecuted
LGIA, they may proceed pending FERC
action.
11.4 Commencement of Interconnection
Activities
If Interconnection Customer executes the
final LGIA, Transmission Provider and
Interconnection Customer shall perform their
respective obligations in accordance with the
terms of the LGIA, subject to modification by
FERC. Upon submission of an unexecuted
LGIA, Interconnection Customer and
Transmission Provider shall promptly
comply with the unexecuted LGIA, subject to
modification by FERC.
Section 12. Construction of Transmission
Provider’s Interconnection Facilities and
Network Upgrades
12.1 Schedule
Transmission Provider and Interconnection
Customer shall negotiate in good faith
concerning a schedule for the construction of
Transmission Provider’s Interconnection
Facilities and the Network Upgrades.
12.2 Construction Sequencing
12.2.1 General
In general, the In-Service Date of an
Interconnection Customer[s] seeking
interconnection to the Transmission System
will determine the sequence of construction
of Network Upgrades.
12.2.2 Advance Construction of Network
Upgrades That Are an Obligation of an Entity
Other Than Interconnection Customer
An Interconnection Customer with an
LGIA, in order to maintain its In-Service
Date, may request that Transmission Provider
advance to the extent necessary the
completion of Network Upgrades that: (i)
were assumed in the Interconnection Studies
for such Interconnection Customer, (ii) are
necessary to support such In-Service Date,
and (iii) would otherwise not be completed,
pursuant to a contractual obligation of an
entity other than Interconnection Customer
that is seeking interconnection to the
Transmission System, in time to support
such In-Service Date. Upon such request,
Transmission Provider will use Reasonable
Efforts to advance the construction of such
Network Upgrades to accommodate such
request; provided that Interconnection
Customer commits to pay Transmission
Provider: (i) any associated expediting costs
and (ii) the cost of such Network Upgrades.
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Transmission Provider will refund to
Interconnection Customer both the
expediting costs and the cost of Network
Upgrades, in accordance with Article 11.4 of
the LGIA. Consequently, the entity with a
contractual obligation to construct such
Network Upgrades shall be obligated to pay
only that portion of the costs of the Network
Upgrades that Transmission Provider has not
refunded to Interconnection Customer.
Payment by that entity shall be due on the
date that it would have been due had there
been no request for advance construction.
Transmission Provider shall forward to
Interconnection Customer the amount paid
by the entity with a contractual obligation to
construct the Network Upgrades as payment
in full for the outstanding balance owed to
Interconnection Customer. Transmission
Provider then shall refund to that entity the
amount that it paid for the Network
Upgrades, in accordance with Article 11.4 of
the LGIA.
12.2.3 Advancing Construction of Network
Upgrades That Are Part of an Expansion Plan
of [the] Transmission Provider
An Interconnection Customer with an
LGIA, in order to maintain its In-Service
Date, may request that Transmission Provider
advance to the extent necessary the
completion of Network Upgrades that: (i) are
necessary to support such In-Service Date
and (ii) would otherwise not be completed,
pursuant to an expansion plan of
Transmission Provider, in time to support
such In-Service Date. Upon such request,
Transmission Provider will use Reasonable
Efforts to advance the construction of such
Network Upgrades to accommodate such
request; provided that Interconnection
Customer commits to pay Transmission
Provider any associated expediting costs.
Interconnection Customer shall be entitled to
transmission credits, if any, for any
expediting costs paid.
12.2.4 Amended Interconnection Cluster
Study Report
An Interconnection Cluster Study Report
will be amended to determine the facilities
necessary to support the requested In-Service
Date. This amended study report will include
those transmission and Large Generating
Facilities that are expected to be in service
on or before the requested In-Service Date.
Section 13. Miscellaneous
13.1 Confidentiality
Confidential Information shall include,
without limitation, all information relating to
a Party’s technology, research and
development, business affairs, and pricing,
and any information supplied by either of the
Parties to the other prior to the execution of
an LGIA.
Information is Confidential Information
only if it is clearly designated or marked in
writing as confidential on the face of the
document, or, if the information is conveyed
orally or by inspection, if the Party providing
the information orally informs the Party
receiving the information that the
information is confidential.
If requested by either Party, the other Party
shall provide in writing, the basis for
asserting that the information referred to in
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this Article warrants confidential treatment,
and the requesting Party may disclose such
writing to the appropriate Governmental
Authority. Each Party shall be responsible for
the costs associated with affording
confidential treatment to its information.
13.1.1 Scope
Confidential Information shall not include
information that the receiving Party can
demonstrate: (1) is generally available to the
public other than as a result of a disclosure
by the receiving Party; (2) was in the lawful
possession of the receiving Party on a nonconfidential basis before receiving it from the
disclosing Party; (3) was supplied to the
receiving Party without restriction by a third
party, who, to the knowledge of the receiving
Party after due inquiry, was under no
obligation to the disclosing Party to keep
such information confidential; (4) was
independently developed by the receiving
Party without reference to Confidential
Information of the disclosing Party; (5) is, or
becomes, publicly known, through no
wrongful act or omission of the receiving
Party or Breach of the LGIA; or (6) is
required, in accordance with Section 13.1.6
of this LGIP, Order of Disclosure, to be
disclosed by any Governmental Authority or
is otherwise required to be disclosed by law
or subpoena, or is necessary in any legal
proceeding establishing rights and
obligations under the LGIA. Information
designated as Confidential Information will
no longer be deemed confidential if the Party
that designated the information as
confidential notifies the other Party that it no
longer is confidential.
13.1.2 Release of Confidential Information
Neither Party shall release or disclose
Confidential Information to any other person,
except to its Affiliates (limited by the
Standards of Conduct requirements),
employees, consultants, or to parties who
may be or considering providing financing to
or equity participation with Interconnection
Customer, or to potential purchasers or
assignees of Interconnection Customer, on a
need-to-know basis in connection with these
procedures, unless such person has first been
advised of the confidentiality provisions of
this Section 13.1 and has agreed to comply
with such provisions. Notwithstanding the
foregoing, a Party providing Confidential
Information to any person shall remain
primarily responsible for any release of
Confidential Information in contravention of
this Section 13.1.
13.1.3 Rights
Each Party retains all rights, title, and
interest in the Confidential Information that
each Party discloses to the other Party. The
disclosure by each Party to the other Party of
Confidential Information shall not be deemed
a waiver by either Party or any other person
or entity of the right to protect the
Confidential Information from public
disclosure.
13.1.4 No Warranties
By providing Confidential Information,
neither Party makes any warranties or
representations as to its accuracy or
completeness. In addition, by supplying
Confidential Information, neither Party
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obligates itself to provide any particular
information or Confidential Information to
the other Party nor to enter into any further
agreements or proceed with any other
relationship or joint venture.
13.1.5 Standard of Care
Each Party shall use at least the same
standard of care to protect Confidential
Information it receives as it uses to protect
its own Confidential Information from
unauthorized disclosure, publication or
dissemination. Each Party may use
Confidential Information solely to fulfill its
obligations to the other Party under these
procedures or its regulatory requirements.
13.1.6 Order of Disclosure
If a court or a Government Authority or
entity with the right, power, and apparent
authority to do so requests or requires either
Party, by subpoena, oral deposition,
interrogatories, requests for production of
documents, administrative order, or
otherwise, to disclose Confidential
Information, that Party shall provide the
other Party with prompt notice of such
request(s) or requirement(s) so that the other
Party may seek an appropriate protective
order or waive compliance with the terms of
the LGIA. Notwithstanding the absence of a
protective order or waiver, the Party may
disclose such Confidential Information
which, in the opinion of its counsel, the
Party is legally compelled to disclose. Each
Party will use Reasonable Efforts to obtain
reliable assurance that confidential treatment
will be accorded any Confidential
Information so furnished.
13.1.7 Remedies
The Parties agree that monetary damages
would be inadequate to compensate a Party
for the other Party’s Breach of its obligations
under this Section 13.1. Each Party
accordingly agrees that the other Party shall
be entitled to equitable relief, by way of
injunction or otherwise, if the first Party
Breaches or threatens to Breach its
obligations under this Section 13.1, which
equitable relief shall be granted without bond
or proof of damages, and the receiving Party
shall not plead in defense that there would
be an adequate remedy at law. Such remedy
shall not be deemed an exclusive remedy for
the Breach of this Section 13.1, but shall be
in addition to all other remedies available at
law or in equity. The Parties further
acknowledge and agree that the covenants
contained herein are necessary for the
protection of legitimate business interests
and are reasonable in scope. No Party,
however, shall be liable for indirect,
incidental, or consequential or punitive
damages of any nature or kind resulting from
or arising in connection with this Section
13.1.
13.1.8 Disclosure to FERC, its Staff, or a
State
Notwithstanding anything in this Section
13.1 to the contrary, and pursuant to 18 CFR
1b.20, if FERC or its staff, during the course
of an investigation or otherwise, requests
information from one of the Parties that is
otherwise required to be maintained in
confidence pursuant to the LGIP, the Party
shall provide the requested information to
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FERC or its staff, within the time provided
for in the request for information. In
providing the information to FERC or its
staff, the Party must, consistent with 18 CFR
388.112, request that the information be
treated as confidential and non-public by
FERC and its staff and that the information
be withheld from public disclosure. Parties
are prohibited from notifying the other Party
prior to the release of the Confidential
Information to FERC or its staff. The Party
shall notify the other Party to the LGIA when
it[s] is notified by FERC or its staff that a
request to release Confidential Information
has been received by FERC, at which time
either of the Parties may respond before such
information would be made public, pursuant
to 18 CFR 388.112. Requests from a state
regulatory body conducting a confidential
investigation shall be treated in a similar
manner, consistent with applicable state
rules and regulations.
13.1.9
Subject to the exception in Section 13.1.8
of this LGIP, any information that a Party
claims is competitively sensitive, commercial
or financial information (‘‘Confidential
Information’’) shall not be disclosed by the
other Party to any person not employed or
retained by the other Party, except to the
extent disclosure is (i) required by law; (ii)
reasonably deemed by the disclosing Party to
be required to be disclosed in connection
with a dispute between or among the Parties,
or the defense of litigation or dispute; (iii)
otherwise permitted by consent of the other
Party, such consent not to be unreasonably
withheld; or (iv) necessary to fulfill its
obligations under this LGIP or as a
transmission service provider or a Balancing
Authority Area operator including disclosing
the Confidential Information to an RTO or
ISO or to a subregional, regional or national
reliability organization or planning group.
The Party asserting confidentiality shall
notify the other Party in writing of the
information it claims is confidential. Prior to
any disclosures of the other Party’s
Confidential Information under this
subparagraph, or if any third party or
Governmental Authority makes any request
or demand for any of the information
described in this subparagraph, the
disclosing Party agrees to promptly notify the
other Party in writing and agrees to assert
confidentiality and cooperate with the other
Party in seeking to protect the Confidential
Information from public disclosure by
confidentiality agreement, protective order or
other reasonable measures.
13.1.10
This provision shall not apply to any
information that was or is hereafter in the
public domain (except as a result of a Breach
of this provision).
13.1.11
Transmission Provider shall, at
Interconnection Customer’s election, destroy,
in a confidential manner, or return the
Confidential Information provided at the
time of Confidential Information is no longer
needed.
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13.2 Delegation of Responsibility
Transmission Provider may use the
services of subcontractors as it deems
appropriate to perform its obligations under
this LGIP. Transmission Provider shall
remain primarily liable to Interconnection
Customer for the performance of such
subcontractors and compliance with its
obligations of this LGIP. The subcontractor
shall keep all information provided
confidential and shall use such information
solely for the performance of such obligation
for which it was provided and no other
purpose.
13.3 Obligation for Study Costs
In the event an Interconnection Customer
withdraws its Interconnection Request prior
to the commencement of the Cluster Study,
Interconnection Customer must pay
Transmission Provider the actual costs of
processing its Interconnection Request. In the
event an Interconnection Customer
withdraws after the commencement of the
Cluster Study, Transmission Provider shall
charge and Interconnection Customer shall
pay the actual costs of the Interconnection
Studies. The costs of any interconnection
study conducted on a clustered basis shall be
allocated among each Interconnection
Customer within the cluster as follows:
{Transmission Provider shall include in this
section a description of how the cost of any
clustered interconnection study will be
allocated.}
Any difference between the study deposit
and the actual cost of the [applicable]
Interconnection Studies[y] shall be paid by or
refunded to, except as otherwise provided
herein, to Interconnection Customers [or
offset against the cost of any future
Interconnection Studies associated with the
applicable Cluster prior to beginning of any
such future Interconnection Studies]. Any
invoices for Interconnection Studies shall
include a detailed and itemized accounting
of the cost of each Interconnection Study.
Interconnection Customers shall pay any
such undisputed costs within thirty (30)
Calendar Days of receipt of an invoice
therefor. If [an] Interconnection Customer
fails to pay such undisputed costs within the
time allotted, its Interconnection Request
shall be deemed withdrawn from the Cluster
Study Process and will be subject to
Withdrawal Penalties pursuant to Section 3.7
of this LGIP.
13.4 Third Parties Conducting Studies
If (i) at the time of the signing of an
Interconnection Study Agreement there is
disagreement as to the estimated time to
complete an Interconnection Study, (ii)
Interconnection Customer receives notice
pursuant to Sections 6.3, 7.4 or 8.3 of this
LGIP that Transmission Provider will not
complete an Interconnection Study within
the applicable timeframe for such
Interconnection Study, or (iii)
Interconnection Customer receives neither
the Interconnection Study nor a notice under
Sections 6.3, 7.4 or 8.3 of this LGIP within
the applicable timeframe for such
Interconnection Study, then Interconnection
Customer may require Transmission Provider
to utilize a third party consultant reasonably
acceptable to Interconnection Customer and
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Transmission Provider to perform such
Interconnection Study under the direction of
Transmission Provider. At other times,
Transmission Provider may also utilize a
third party consultant to perform such
Interconnection Study, either in response to
a general request of Interconnection
Customer, or on its own volition.
In all cases, use of a third party consultant
shall be in accord with Article 26 of the LGIA
(Subcontractors) and limited to situations
where Transmission Provider determines that
doing so will help maintain or accelerate the
study process for Interconnection Customer’s
pending Interconnection Request and not
interfere with Transmission Provider’s
progress on Interconnection Studies for other
pending Interconnection Requests. In cases
where Interconnection Customer requests use
of a third party consultant to perform such
Interconnection Study, Interconnection
Customer and Transmission Provider shall
negotiate all of the pertinent terms and
conditions, including reimbursement
arrangements and the estimated study
completion date and study review deadline.
Transmission Provider shall convey all
workpapers, data bases, study results and all
other supporting documentation prepared to
date with respect to the Interconnection
Request as soon as soon as practicable upon
Interconnection Customer’s request subject to
the confidentiality provision in Section 13.1
of this LGIP. In any case, such third party
contract may be entered into with either
Interconnection Customer or Transmission
Provider at Transmission Provider’s
discretion. In the case of (iii) Interconnection
Customer maintains its right to submit a
claim to Dispute Resolution to recover the
costs of such third party study. Such third
party consultant shall be required to comply
with this LGIP, Article 26 of the LGIA
(Subcontractors), and the relevant Tariff
procedures and protocols as would apply if
Transmission Provider were to conduct the
Interconnection Study and shall use the
information provided to it solely for purposes
of performing such services and for no other
purposes. Transmission Provider shall
cooperate with such third party consultant
and Interconnection Customer to complete
and issue the Interconnection Study in the
shortest reasonable time.
13.5 Disputes
13.5.1 Submission
In the event either Party has a dispute, or
asserts a claim, that arises out of or in
connection with the LGIA, the LGIP, or their
performance, such Party (the ‘‘disputing
Party’’) shall provide the other Party with
written notice of the dispute or claim
(‘‘Notice of Dispute’’). Such dispute or claim
shall be referred to a designated senior
representative of each Party for resolution on
an informal basis as promptly as practicable
after receipt of the Notice of Dispute by the
other Party. In the event the designated
representatives are unable to resolve the
claim or dispute through unassisted or
assisted negotiations within thirty (30)
Calendar Days of the other Party’s receipt of
the Notice of Dispute, such claim or dispute
may, upon mutual agreement of the Parties,
be submitted to arbitration and resolved in
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27145
accordance with the arbitration procedures
set forth below. In the event the Parties do
not agree to submit such claim or dispute to
arbitration, each Party may exercise whatever
rights and remedies it may have in equity or
at law consistent with the terms of this LGIA.
13.5.2 External Arbitration Procedures
Any arbitration initiated under these
procedures shall be conducted before a single
neutral arbitrator appointed by the Parties. If
the Parties fail to agree upon a single
arbitrator within ten (10) Calendar Days of
the submission of the dispute to arbitration,
each Party shall choose one arbitrator who
shall sit on a three-member arbitration panel.
The two arbitrators so chosen shall within
twenty (20) Calendar Days select a third
arbitrator to chair the arbitration panel. In
either case, the arbitrators shall be
knowledgeable in electric utility matters,
including electric transmission and bulk
power issues, and shall not have any current
or past substantial business or financial
relationships with any party to the arbitration
(except prior arbitration). The arbitrator(s)
shall provide each of the Parties an
opportunity to be heard and, except as
otherwise provided herein, shall conduct the
arbitration in accordance with the
Commercial Arbitration Rules of the
American Arbitration Association
(‘‘Arbitration Rules’’) and any applicable
FERC regulations or RTO rules; provided,
however, in the event of a conflict between
the Arbitration Rules and the terms of this
Section 13, the terms of this Section 13 shall
prevail.
13.5.3 Arbitration Decisions
Unless otherwise agreed by the Parties, the
arbitrator(s) shall render a decision within
ninety (90) Calendar Days of appointment
and shall notify the Parties in writing of such
decision and the reasons therefor. The
arbitrator(s) shall be authorized only to
interpret and apply the provisions of the
LGIA and LGIP and shall have no power to
modify or change any provision of the LGIA
and LGIP in any manner. The decision of the
arbitrator(s) shall be final and binding upon
the Parties, and judgment on the award may
be entered in any court having jurisdiction.
The decision of the arbitrator(s) may be
appealed solely on the grounds that the
conduct of the arbitrator(s), or the decision
itself, violated the standards set forth in the
Federal Arbitration Act or the Administrative
Dispute Resolution Act. The final decision of
the arbitrator must also be filed with FERC
if it affects jurisdictional rates, terms and
conditions of service, Interconnection
Facilities, or Network Upgrades.
13.5.4 Costs
Each Party shall be responsible for its own
costs incurred during the arbitration process
and for the following costs, if applicable: (1)
the cost of the arbitrator chosen by the Party
to sit on the three member panel and one half
of the cost of the third arbitrator chosen; or
(2) one half the cost of the single arbitrator
jointly chosen by the Parties.
13.5.5 Non-Binding Dispute Resolution
Procedures
If a Party has submitted a Notice of Dispute
pursuant to Section 13.5.1 of this LGIP, and
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the Parties are unable to resolve the claim or
dispute through unassisted or assisted
negotiations within the thirty (30) Calendar
Days provided in that section, and the Parties
cannot reach mutual agreement to pursue the
Section 13.5 arbitration process, a Party may
request that Transmission Provider engage in
Non-binding Dispute Resolution pursuant to
this [s]Section by providing written notice to
Transmission Provider (‘‘Request for Nonbinding Dispute Resolution’’). Conversely,
either Party may file a Request for Nonbinding Dispute Resolution pursuant to this
[s]Section without first seeking mutual
agreement to pursue the Section 13.5
arbitration process. The process in this
Section 13.5.5 shall serve as an alternative to,
and not a replacement of, the Section 13.5
arbitration process. Pursuant to this process,
a Transmission Provider must within thirty
(30) Calendar [d]Days of receipt of the
Request for Non-binding Dispute Resolution
appoint a neutral decision-maker that is an
independent subcontractor that shall not
have any current or past substantial business
or financial relationships with either Party.
Unless otherwise agreed by the Parties, the
decision-maker shall render a decision
within sixty (60) Calendar Days of
appointment and shall notify the Parties in
writing of such decision and reasons
therefore. This decision-maker shall be
authorized only to interpret and apply the
provisions of the LGIP and LGIA and shall
have no power to modify or change any
provision of the LGIP and LGIA in any
manner. The result reached in this process is
not binding, but, unless otherwise agreed, the
Parties may cite the record and decision in
the non-binding dispute resolution process in
future dispute resolution processes,
including in a Section 13.5 arbitration, or in
a Federal Power Act section 206 complaint.
Each Party shall be responsible for its own
costs incurred during the process and the
cost of the decision-maker shall be divided
equally among each Party to the dispute.
13.6 Local Furnishing Bonds
13.6.1 Transmission Providers That Own
Facilities Financed by Local Furnishing
Bonds
This provision is applicable only to a
Transmission Provider that has financed
facilities for the local furnishing of electric
energy with tax-exempt bonds, as described
in Section 142(f) of the Internal Revenue
Code (‘‘local furnishing bonds’’).
Notwithstanding any other provision of this
LGIA and LGIP, Transmission Provider shall
not be required to provide Interconnection
Service to Interconnection Customer
pursuant to this LGIA and LGIP if the
provision of such Transmission Service
would jeopardize the tax-exempt status of
any local furnishing bond(s) used to finance
Transmission Provider’s facilities that would
be used in providing such Interconnection
Service.
13.6.2 Alternative Procedures for
Requesting Interconnection Service
If Transmission Provider determines that
the provision of Interconnection Service
requested by Interconnection Customer
would jeopardize the tax-exempt status of
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any local furnishing bond(s) used to finance
its facilities that would be used in providing
such Interconnection Service, it shall advise
[the] Interconnection Customer within thirty
(30) Calendar Days of receipt of the
Interconnection Request.
Interconnection Customer thereafter may
renew its request for interconnection using
the process specified in [Article]Section
5.2(ii) of [the] Transmission Provider’s Tariff.
13.7 Engineering & Procurement (‘E&P’)
Agreement
Prior to executing an LGIA, an
Interconnection Customer may, in order to
advance the implementation of its
interconnection, request and Transmission
Provider shall offer Interconnection
Customer, an E&P Agreement that authorizes
Transmission Provider to begin engineering
and procurement of long lead-time items
necessary for the establishment of the
interconnection. However, Transmission
Provider shall not be obligated to offer an
E&P Agreement if Interconnection Customer
is in Dispute Resolution as a result of an
allegation that Interconnection Customer has
failed to meet any milestones or comply with
any prerequisites specified in other parts of
the LGIP. The E&P Agreement is an optional
procedure and it will not alter
Interconnection Customer’s Queue Position
or In-Service Date. The E&P Agreement shall
provide for Interconnection Customer to pay
the cost of all activities authorized by
Interconnection Customer and to make
advance payments or provide other
satisfactory security for such costs.
Interconnection Customer shall pay the
cost of such authorized activities and any
cancellation costs for equipment that is
already ordered for its interconnection,
which cannot be mitigated as hereafter
described, whether or not such items or
equipment later become unnecessary. If
Interconnection Customer withdraws its
Interconnection Request or either Party
terminates the E&P Agreement, to the extent
the equipment ordered can be canceled
under reasonable terms, Interconnection
Customer shall be obligated to pay the
associated cancellation costs. To the extent
that the equipment cannot be reasonably
canceled, Transmission Provider may elect:
(i) to take title to the equipment, in which
event Transmission Provider shall refund
Interconnection Customer any amounts paid
by Interconnection Customer for such
equipment and shall pay the cost of delivery
of such equipment, or (ii) to transfer title to
and deliver such equipment to
Interconnection Customer, in which event
Interconnection Customer shall pay any
unpaid balance and cost of delivery of such
equipment.
Appendix 1 to LGIP
Interconnection Request for a Large
Generating Facility
1. The undersigned Interconnection
Customer submits this request to
interconnect its Large Generating Facility
with Transmission Provider’s Transmission
System pursuant to a Tariff.
2. This Interconnection Request is for
(check one):
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ll A proposed new Large Generating
Facility.
ll An increase in the generating capacity
or a Material Modification of an existing
Generating Facility.
3. The type of interconnection service
requested (check one):
ll Energy Resource Interconnection
Service.
ll Network Resource Interconnection
Service.
4. ll Check here only if Interconnection
Customer requesting Network Resource
Interconnection Service also seeks to have its
Generating Facility studied for Energy
Resource Interconnection Service.
5. Interconnection Customer provides the
following information:
a. Address or location or the proposed new
Large Generating Facility site (to the extent
known) or, in the case of an existing
Generating Facility, the name and specific
location of the existing Generating Facility;
b. Maximum summer at ll degrees C and
winter at ll degrees C megawatt electrical
output of the proposed new Large Generating
Facility or the amount of megawatt increase
in the generating capacity of an existing
Generating Facility;
c. General description of the equipment
configuration;
d. Commercial Operation Date (Day,
Month, and Year);
e. Name, address, telephone number, and
email address of Interconnection Customer’s
contact person;
f. Approximate location of the proposed
Point of Interconnection (optional);
g. Interconnection Customer Data (set forth
in Attachment A);
h. Primary frequency response operating
range for electric storage resources;
i. Requested capacity (in MW) of
Interconnection Service (if lower than the
Generating Facility Capacity);
j. If applicable, (1) the requested operating
assumptions (i.e., whether the
interconnecting Generating Facility will or
will not charge at peak load) to be used by
Transmission Provider that reflect the
proposed charging behavior of a Generating
Facility that includes at least one electric
storage resource, and (2) a description of any
control technologies (software and/or
hardware) that will limit the operation of the
Generating Facility to its intended operation.
6. Applicable deposit amount as specified
in the LGIP.
7. Evidence of Site Control as specified in
the LGIP (check one).
ll Is attached to this Interconnection
Request.
ll Will be provided at a later date in
accordance with this LGIP.
8. This Interconnection Request shall be
submitted to the representative indicated
below:
{To be completed by Transmission
Provider}
9. Representative of Interconnection
Customer to contact:
{To be completed by Interconnection
Customer}
10. This Interconnection Request is
submitted by:
Name of Interconnection Customer: llll
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27147
By (signature): llllllllllllll Date: llllllllllllllllll Attachment A to Appendix 1
Name (type or print): lllllllllll BILLING CODE 6717–01–P
Interconnection Request
Title: llllllllllllllllll
Attachment A to Appendix 1
Interconnection Request
LARGE GENERATING FACILITY DATA
UNIT RATINGS
op
kVA - - - - - Power Factor
----
Voltage _ _ _ _ __
----
Speed (RPM) _ __
Connection (e.g. Wye) _ _ _ _ __
Short Circuit Ratio - - - -
Frequency, Hertz _ _ _ __
Stator Amperes at Rated kVA _ _ __
Field Volts - - - - - - -
Max Turbine MW
0
-----
p ---
Primary frequency response operating range for electric storage
resources:
Minimum State of Charge: _ _ _ __
Maximum State of Charge: _ _ _ __
COMBINED TURBINE-GENERATOR-EXCITER INERTIA DATA
- - - - - - - - - kW sec/kVA
Moment-of-Inertia, WR2 =
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---------
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Inertia Constant, H =
27148
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
REACTANCE DATA (PER UNIT-RATED KVA)
DIRECT AXIS
QUADRATURE AXIS
Synchronous - saturated
Xctv
Xqv
Synchronous - unsaturated
Xcti
Xqi
Transient - saturated
X'ctv
Transient - unsaturated
X'cti
X'qi
Subtransient - saturated
X II dv
X II qv
Subtransient - unsaturated
X
m
X I Iq1.
Negative Sequence - saturated
X2v
Negative Sequence - unsaturated
X2i
Zero Sequence - saturated
XOv
11
Zero Sequence - unsaturated
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XOi
Xlm
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Leakage Reactance
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X'qv
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27149
FIELD TIME CONSTANT DATA (SEC)
Open Circuit
T'qo
T'do
Three-Phase Short Circuit Transient
T'd3
Line to Line Short Circuit Transient
T'c12
T'q
Line to Neutral Short Circuit Transient
T'dl
Short Circuit Subtransient
T"d
T"q
Open Circuit Subtransient
T "do
T "qo
ARMATURE TIME CONSTANT DATA (SEC)
Three Phase Short Circuit
Ta3
Line to Line Short Circuit
Ta2
Line to Neutral Short Circuit
Tai
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NOTE: If requested information is not applicable, indicate by marking "NIA."
27150
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
MW CAPABILITY AND PLANT CONFIGURATION
LARGE GENERATING FACILITY DATA
ARMATURE WINDING RESISTANCE DATA (PER UNIT)
Positive
Negative
Zero
Rotor Short Time Thermal Capacity lit = _ __
Field Current at Rated kVA, Armature Voltage and PF= _ _ _ amps
Field Current at Rated kVA and Armature Voltage, 0 PF =
amps
Three Phase Armature Winding Capacitance = _ _ _ microfarad
Field Winding Resistance = _ _ _ ohms _ _ °C
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Armature Winding Resistance (Per Phase) = _ _ _ ohms _ _ °C
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27151
CURVES
Provide Saturation, Vee, Reactive Capability, Capacity Temperature Correction curves.
Designate normal and emergency Hydrogen Pressure operating range for multiple curves.
GENERATOR STEP-UP TRANSFORMER DATA RATINGS
Capacity
Self-cooled/
Maximum Nameplate
- - - - - -/- - - - - - -kVA
Voltage Ratio( Generator Side/System side/Tertiary)
I ' - - - - - - -kV
- - - - - -I- - - - - - - - -
Winding Connections (Low V/High V/Tertiary V (Delta or Wye))
I ------ - - - - - I- - - - - - -
Fixed Taps Available _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Present Tap Setting _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Positive
Z1 (on self-cooled kVA rating)_ _ _ _ _ _ % ____ X/R
Zero
Zo (on self-cooled kVA rating)_ _ _ _ _ _ % ____ X/R
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IMPEDANCE
27152
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
EXCITATION SYSTEM DATA
Identify appropriate IEEE model block diagram of excitation system and power system
stabilizer (PSS) for computer representation in power system stability simulations and the
corresponding excitation system and PSS constants for use in the model.
GOVERNOR SYSTEM DATA
Identify appropriate IEEE model block diagram of governor system for computer
representation in power system stability simulations and the corresponding governor
system constants for use in the model.
WIND GENERATORS
Number of generators to be interconnected pursuant to this Interconnection Request:
_ _ Single Phase _ _ Three Phase
Elevation: - - - - - -
List of adjustable setpoints for the protective equipment or software:
BILLING CODE 6717–01–C
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Note: A completed General Electric
Company Power Systems Load Flow (PSLF)
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data sheet or other compatible formats, such
as IEEE and PTI power flow models, must be
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Inverter manufacturer, model name, number, and version:
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
(*) Reactive Power Required In Vars (Full
Load): lllllllllllllllll
(*) Total Rotating Inertia, H: Per Unit on KVA
Base llllllllllllllllll
Note: Please consult Transmission Provider
Induction Generators
prior to submitting the Interconnection
(*) Field Volts: lllllllllllll Request to determine if the information
(*) Field Amperes: llllllllllll designated by (*) is required.
(*) Motoring Power (kW): lllllllll
(*) Neutral Grounding Resistor (If Applica- Models for Non-Synchronous Generators
ble): llllllllllllllllll
For a non-synchronous Large Generating
(*) I22t or K (Heating Time Constant): lll
(*) Rotor Resistance: lllllllllll Facility, Interconnection Customer shall
(*) Stator Resistance: lllllllllll provide (1) a validated user-defined root
(*) Stator Reactance: lllllllllll mean squared (RMS) positive sequence
(*) Rotor Reactance: lllllllllll dynamics model; (2) an appropriately
(*) Magnetizing Reactance: llllllll parameterized generic library RMS positive
(*) Short Circuit Reactance: llllllll sequence dynamics model, including model
(*) Exciting Current: lllllllllll block diagram of the inverter control and
(*) Temperature Rise: llllllllll plant control systems, as defined by the
(*) Frame Size: lllllllllllll selection in Table 1 or a model otherwise
(*) Design Letter: llllllllllll approved by the Western Electricity
(*) Reactive Power Required In Vars (No Coordinating Council, that corresponds to
Load): lllllllllllllllll Interconnection Customer’s Large Generating
supplied with the Interconnection Request. If
other data sheets are more appropriate to the
proposed device, then they shall be provided
and discussed at Scoping Meeting.
27153
Facility; and (3) if applicable, a validated
electromagnetic transient model if
Transmission Provider performs an
electromagnetic transient study as part of the
interconnection study process. A userdefined model is a set of programming code
created by equipment manufacturers or
developers that captures the latest features of
controllers that are mainly software based
and represents the entities’ control strategies
but does not necessarily correspond to any
generic library model. Interconnection
Customer must also demonstrate that the
model is validated by providing evidence
that the equipment behavior is consistent
with the model behavior (e.g., an attestation
from Interconnection Customer that the
model accurately represents the entire Large
Generating Facility; attestations from each
equipment manufacturer that the user
defined model accurately represents the
component of the Large Generating Facility;
or test data).
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TABLE 1—ACCEPTABLE GENERIC LIBRARY RMS POSITIVE SEQUENCE DYNAMICS MODELS
GE PSLF
Siemens
PSS/E*
PowerWorld simulator
Description
pvd1 .............
der_a ............
regc_a ..........
regc_b ..........
wt1g .............
........................................
DERAU1 ........................
REGCAU1, REGCA1 ....
REGCBU1 .....................
WT1G1 ..........................
PVD1 .............................
DER_A ...........................
REGC_A ........................
REGC_B ........................
WT1G and WT1G1 .......
wt2g .............
wt2e .............
WT2G1 ..........................
WT2E1 ...........................
WT2G and WT2G1 .......
WT2E and WT2E1 ........
reec_a ..........
reec_c ..........
reec_d ..........
wt1t ..............
REECAU1, REECA1 .....
REECCU1 .....................
REECDU1 .....................
WT12T1 .........................
REEC_A ........................
REEC_C ........................
REEC_D ........................
WT1T and WT12T1 .......
wt1p_b ..........
wt2t ..............
wt1p_b ...........................
WT12T1 .........................
WT12A1U_B ..................
WT2T .............................
wtgt_a ...........
wtga_a ..........
wtgp_a ..........
wtgq_a ..........
wtgwgo_a .....
wtgibffr_a ......
wtgp_b ..........
wtgt_b ...........
repc_a ..........
WTGT_A ........................
WTGA_A ........................
WTGPT_A .....................
WTGTRQ_A ..................
WTGWGO_A .................
WTGIBFFR_A ................
WTGPT_B .....................
WTGT_B ........................
REPC_A ........................
repc_b ..........
WTDTAU1, WTDTA1 ....
WTARAU1, WTARA1 ....
WTPTAU1, WTPTA1 .....
WTTQAU1, WTTQA1 ....
WTGWGOAU ................
WTGIBFFRA .................
WTPTBU1 .....................
WTDTBU1 .....................
Type 4: REPCAU1
(v33), REPCA1 (v34).
Type 3: REPCTAU1
(v33), REPCTA1 (v34).
PLNTBU1 ......................
Distributed PV system model.
Distributed energy resource model.
Generator/converter model.
Generator/converter model.
Wind turbine model for Type-1 wind turbines (conventional directly connected induction generator).
Generator model for generic Type-2 wind turbines.
Rotor resistance control model for wound-rotor induction wind-turbine generator wt2g.
Renewable energy electrical control model.
Electrical control model for battery energy storage system.
Renewable energy electrical control model.
Wind turbine model for Type-1 wind turbines (conventional directly connected induction generator).
Generic wind turbine pitch controller for WTGs of Types 1 and 2.
Wind turbine model for Type-2 wind turbines (directly connected induction
generator wind turbines with an external rotor resistance).
Wind turbine drive train model.
Simple aerodynamic model.
Wind Turbine Generator Pitch controller.
Wind Turbine Generator Torque controller.
Supplementary control model for Weak Grids.
Inertial-base fast frequency response control.
Wind Turbine Generator Pitch controller.
Drive train model.
Power Plant Controller.
repc_c ..........
REPCCU .......................
REPC_C ........................
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REPC_B ........................
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Power Plant Level Controller for controlling several plants/devices.
In regard to Siemens PSS/E*: Names of other models for interface with
other devices:
REA3XBU1, REAX4BU1—for interface with Type 3 and 4 renewable machines.
SWSAXBU1—for interface with SVC (modeled as switched shunt in
powerflow).
SYNAXBU1—for interface with synchronous condenser.
FCTAXBU1—for interface with FACTS device.
Power plant controller.
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Appendix 2 to LGIP
khammond on DSKJM1Z7X2PROD with RULES2
Cluster Study Agreement
This Agreement is made and entered into
this llday ofllll, 20ll by and
between llll, a llll organized and
existing under the laws of the State
ofllll, (‘‘Interconnection Customer,’’)
and lllla llll organized and
existing under the laws of the State of ll,
(‘‘Transmission Provider’’). Interconnection
Customer and Transmission Provider each
may be referred to as a ‘‘Party,’’ or
collectively as the ‘‘Parties.’’
Recitals
Whereas, Interconnection Customer is
proposing to develop a Large Generating
Facility or generating capacity addition to an
existing Generating Facility consistent with
the Interconnection Request submitted by
Interconnection Customer dated llll;
and
Whereas, Interconnection Customer desires
to interconnect the Large Generating Facility
with the Transmission System; and
Whereas, Interconnection Customer has
requested Transmission Provider to perform
a Cluster Study to assess the impact of
interconnecting the Large Generating Facility
to the Transmission System, and of any
Affected Systems; and
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein the Parties agreed as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated in this
LGIP.
2.0 Interconnection Customer elects and
Transmission Provider shall cause to be
performed a Cluster Study consistent with
Section 7.0 of this LGIP in accordance with
the Tariff.
3.0 The scope of the Cluster Study shall
be subject to the assumptions set forth in
Attachment A to this Agreement.
4.0 The Cluster Study will be based upon
the technical information provided by
Interconnection Customer in the
Interconnection Request, subject to any
modifications in accordance with Section 4.4
of this LGIP. Transmission Provider reserves
the right to request additional technical
information from Interconnection Customer
as may reasonably become necessary
consistent with Good Utility Practice during
the course of the Cluster Study.
5.0 The Cluster Study Report shall
provide the following information:
—identification of any circuit breaker short
circuit capability limits exceeded as a
result of the interconnection;
—identification of any thermal overload or
voltage limit violations resulting from the
interconnection;
—identification of any instability or
inadequately damped response to system
disturbances resulting from the
interconnection and
—description and non-binding, good faith
estimated cost of facilities required to
interconnect the Large Generating Facility
to the Transmission System and to address
the identified short circuit, instability, and
power flow issues.
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6.0 Transmission Provider’s good faith
estimate for the time of completion of the
Cluster Study is {insert date}.
Upon receipt of the Cluster Study Report,
Transmission Provider shall charge and
Interconnection Customer shall pay its share
of the actual costs of the Cluster Study,
consistent with Section 13.3 of this LGIP.
Any difference between the deposit and
the actual cost of the study shall be paid by
or refunded to Interconnection Customer, as
appropriate.
7.0 Miscellaneous. The Cluster Study
Agreement shall include standard
miscellaneous terms including, but not
limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability and assignment, that reflect
best practices in the electric industry, that are
consistent with regional practices,
Applicable Laws and Regulations and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of this
LGIP and the LGIA.
In witness thereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or
Transmission Owner, if applicable}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
{Insert name of Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
Attachment A to Appendix 2
Cluster Study Agreement
Assumptions Used in Conducting the Cluster
Study
The Cluster Study will be based upon the
technical information provided by [the]
Interconnection Customer in the
Interconnection Request, subject to any
modifications in accordance with Section 4.4
of this LGIP, and the following assumptions:
Designation of Point of Interconnection
and configuration to be studied.
Designation of alternative Point(s) of
Interconnection and configuration.
{Above assumptions to be completed by
Interconnection Customer and other
assumptions to be provided by
Interconnection Customer and Transmission
Provider}
Appendix 3 to LGIP
Interconnection Facilities Study Agreement
This agreement is made and entered into
this ll day of llll, 20llby and
between llll, a llllorganized and
existing under the laws of the State of
llll, (‘‘Interconnection Customer,’’) and
llll a llll organized and existing
under the laws of the State of llll,
(‘‘Transmission Provider’’). Interconnection
Customer and Transmission Provider each
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may be referred to as a ‘‘Party,’’ or
collectively as the ‘‘Parties.’’
Recitals
Whereas, Interconnection Customer is
proposing to develop a Large Generating
Facility or generating capacity addition to an
existing Generating Facility consistent with
the Interconnection Request submitted by
Interconnection Customer dated l ; and
Whereas, Interconnection Customer desires
to interconnect the Large Generating Facility
with the Transmission System; and
Whereas, Transmission Provider has
completed a[n Interconnection] Cluster Study
(the ‘‘Cluster Study’’) and provided the
results of said study to Interconnection
Customer; and
Whereas, Interconnection Customer has
requested Transmission Provider to perform
an Interconnection Facilities Study to specify
and estimate the cost of the equipment,
engineering, procurement and construction
work needed to implement the conclusions
of the Cluster Study in accordance with Good
Utility Practice to physically and electrically
connect the Large Generating Facility to the
Transmission System.
Now, Therefore, in consideration of and
subject to the mutual covenants contained
herein the Parties agreed as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated in
Transmission Provider’s FERC-approved
LGIP.
2.0 Interconnection Customer elects and
Transmission Provider shall cause an
Interconnection Facilities Study consistent
with Section 8.0 of this LGIP to be performed
in accordance with the Tariff.
3.0 The scope of the Interconnection
Facilities Study shall be subject to the
assumptions set forth in Attachment A and
the data provided in Attachment B to this
Agreement.
4.0 The Interconnection Facilities Study
Report (i) shall provide a description,
estimated cost of (consistent with
Attachment A), schedule for required
facilities to interconnect the Large Generating
Facility to the Transmission System and (ii)
shall address the short circuit, instability,
and power flow issues identified in the
Cluster Study.
5.0 Interconnection Customer shall
provide a Commercial Readiness Deposit per
Section 8.1 of this LGIP to enter the
Interconnection Facilities Study. The time for
completion of the Interconnection Facilities
Study is specified in Attachment A.
6.0 Miscellaneous. The Interconnection
Facilities Study Agreement shall include
standard miscellaneous terms including, but
not limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability and assignment, that reflect
best practices in the electric industry, and
that are consistent with regional practices,
Applicable Laws and Regulations, and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of the
LGIP and the LGIA.
In witness whereof, the Parties have caused
this Agreement to be duly executed by their
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duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or
Transmission Owner, if applicable}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
{Insert name of Interconnection Customer}
By: lllllllllllllllllll
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Title: llllllllllllllllll days after receipt of an executed copy of this
Date: llllllllllllllllll Interconnection Facilities Study Agreement:
—ninety (90) Calendar Days with no more
Attachment A To Appendix 3
than a +/¥ 20 percent cost estimate
Interconnection Facilities Study Agreement
contained in the report, or
Interconnection Customer Schedule Election —one hundred eighty (180) Calendar Days
with no more than a +/¥ 10 percent cost
for Conducting the Interconnection Facilities
estimate contained in the report.
Study
Transmission Provider shall complete the
study and issue a draft Interconnection
Facilities Study Report to Interconnection
Customer within the following number of
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Attachment B to Appendix 3
Interconnection Facilities Study Agreement
BILLING CODE 6717–01–P
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Attachment B to Appendix 3
Interconnection Facilities
Study Agreement
DATA FORM TO BE PROVIDED BY INTERCONNECTION CUSTOMER
WITH THE
INTERCONNECTION FACILITIES STUDY AGREEMENT
Provide location plan and simplified one-line diagram of the plant and station facilities.
For staged projects, please indicate future generation, transmission circuits, etc.
One set of metering is required for each generation connection to the new ring bus or
existing Transmission Provider station. Number of generation connections:
On the one-line diagram indicate the generation capacity attached at each metering
location. (Maximum load on CT/PT)
On the one-line diagram indicate the location of auxiliary power. (Minimum load on
CT/PT) Amps
Will an alternate source of auxiliary power be available during CT/PT maintenance?
_ _Yes
No
What type of control system or PLC will be located at Interconnection Customer's Large
Generating Facility?
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Will a transfer bus on the generation side of the metering require that each meter set be
designed for the total plant generation? _ _Yes
_ _No (Please indicate on
one line diagram).
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27157
What protocol does the control system or PLC use?
Please provide a 7 .5-minute quadrangle of the site. Sketch the plant, station, transmission
line, and property line.
Physical dimensions of the proposed interconnection station:
Bus length from generation to interconnection station:
Line length from interconnection station to Transmission Provider's transmission line.
Tower number observed in the field. (Painted on tower leg)* _ _ _ _ _ _ _ _ __
Number of third party easements required for transmission lines*:
*Tobe completed in coordination with Transmission Provider.
Is the Large Generating Facility in [the] Transmission Provider's service area?
- -No
Local provider: _________________
Please provide proposed schedule dates:
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- -Yes
27158
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Begin Construction
Date: - - - - - - - - - -
Generator step-up transformer
Date: - - - - - - - - - -
receives back feed power
Generation Testing
Date:
Commercial Operation
Date: - - - - - - - - - -
Appendix 4 to LGIP
Optional Interconnection Study Agreement
This agreement is made and entered into
this ll day of llll, 20ll by and
between llll, a llll organized and
existing under the laws of the State of ll
ll, (‘‘Interconnection Customer,’’) and ll
ll a llll organized and existing under
the laws of the State of ll-ll,
(‘‘Transmission Provider’’). Interconnection
Customer and Transmission Provider each
may be referred to as a ‘‘Party,’’ or
collectively as the ‘‘Parties.’’
khammond on DSKJM1Z7X2PROD with RULES2
Recitals
Whereas, Interconnection Customer is
proposing to develop a Large Generating
Facility or generating capacity addition to an
existing Generating Facility consistent with
the Interconnection Request submitted by
Interconnection Customer dated llll;
and
Whereas, Interconnection Customer is
proposing to establish an interconnection
with the Transmission System; and
Whereas, Interconnection Customer has
submitted to Transmission Provider an
Interconnection Request; and
Whereas, on or after the date when
Interconnection Customer receives the
Cluster Study results, Interconnection
Customer has further requested that
Transmission Provider prepare an Optional
Interconnection Study;
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein the Parties agree as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated in
Transmission Provider’s FERC-approved
LGIP.
2.0 Interconnection Customer elects and
Transmission Provider shall cause an
Optional Interconnection Study consistent
with Section 10.0 of this LGIP to be
performed in accordance with the Tariff.
3.0 The scope of the Optional
Interconnection Study shall be subject to the
assumptions set forth in Attachment A to this
Agreement.
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4.0 The Optional Interconnection Study
shall be performed solely for informational
purposes.
5.0 The Optional Interconnection Study
report shall provide a sensitivity analysis
based on the assumptions specified by
Interconnection Customer in Attachment A
to this Agreement. The Optional
Interconnection Study will identify
Transmission Provider’s Interconnection
Facilities and the Network Upgrades, and the
estimated cost thereof, that may be required
to provide transmission service or
interconnection service based upon the
assumptions specified by Interconnection
Customer in Attachment A.
6.0 Interconnection Customer shall
provide a deposit of $10,000 for the
performance of the Optional Interconnection
Study. Transmission Provider’s good faith
estimate for the time of completion of the
Optional Interconnection Study is {insert
date}.
Upon receipt of the Optional
Interconnection Study, Transmission
Provider shall charge and Interconnection
Customer shall pay the actual costs of the
Optional Study.
Any difference between the initial payment
and the actual cost of the study shall be paid
by or refunded to Interconnection Customer,
as appropriate.
7.0 Miscellaneous. The Optional
Interconnection Study Agreement shall
include standard miscellaneous terms
including, but not limited to, indemnities,
representations, disclaimers, warranties,
governing law, amendment, execution,
waiver, enforceability and assignment, that
reflect best practices in the electric industry,
and that are consistent with regional
practices, Applicable Laws and Regulations,
and the organizational nature of each Party.
All of these provisions, to the extent
practicable, shall be consistent with the
provisions of the LGIP and the LGIA.
In witness whereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or
Transmission Owner, if applicable}
By: lllllllllllllllllll
Title: llllllllllllllllll
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Date: llllllllllllllllll
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
{Insert name of Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
Appendix 5 to LGIP
Large Generator Interconnection Agreement
(See LGIA)
Appendix 6 to LGIP
Interconnection Procedures for a Wind
Generating Plant
Appendix 6 sets forth procedures specific
to a wind generating plant. All other
requirements of this LGIP continue to apply
to wind generating plant interconnections.
A. Special Procedures Applicable to Wind
Generators
The wind plant Interconnection Customer,
in completing the Interconnection Request
required by Section 3.3 of this LGIP, may
provide to [the] Transmission Provider a set
of preliminary electrical design specifications
depicting the wind plant as a single
equivalent generator. Upon satisfying these
and other applicable Interconnection Request
conditions, the wind plant may enter the
queue and receive the base case data as
provided for in this LGIP.
No later than six months after submitting
an Interconnection Request completed in this
manner, the wind plant Interconnection
Customer must submit completed detailed
electrical design specifications and other data
(including collector system layout data)
needed to allow [the] Transmission Provider
to complete the Cluster Study.
Appendix 7 to LGIP
Transitional Cluster Study Agreement
This agreement is made and entered into
this ll day of llll, 20ll by and
between llll, a llll organized and
existing under the laws of the State of ll
ll (‘‘Interconnection Customer’’), and ll
ll, a llll organized and existing under
the laws of the State of llll
(‘‘Transmission Provider’’). Interconnection
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BILLING CODE 6717–01–C
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
khammond on DSKJM1Z7X2PROD with RULES2
Customer and Transmission Provider each
may be referred to as a ‘‘Party,’’ or
collectively as the ‘‘Parties.’’
Recitals
Whereas, Interconnection Customer is
proposing to develop a Large Generating
Facility or generating capacity addition to an
existing Generating Facility consistent with
the Interconnection Request submitted by
Interconnection Customer dated llll;
Whereas, Interconnection Customer desires
to interconnect the Large Generating Facility
with the Transmission System; and
Whereas, Interconnection Customer has
requested Transmission Provider to perform
a ‘‘Transitional Cluster Study,’’ which
combines the Cluster Study and
Interconnection Facilities Study, in a single
cluster study, followed by any needed
restudies, to specify and estimate the cost of
the equipment, engineering, procurement,
and construction work needed to physically
and electrically connect the Large Generating
Facility to Transmission Provider’s
Transmission System; and
Whereas, Interconnection Customer has a
valid Queue Position as of the {Transmission
Provider to insert Commission-approved
effective date of compliance filing}.
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein, the Parties agree as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated in this
LGIP.
2.0 Interconnection Customer elects, and
Transmission Provider shall cause to be
performed, a Transitional Cluster Study.
3.0 The Transitional Cluster Study shall
be based upon the technical information
provided by Interconnection Customer in the
Interconnection Request. Transmission
Provider reserves the right to request
additional technical information from
Interconnection Customer as may reasonably
become necessary consistent with Good
Utility Practice during the course of the
Transitional Cluster Study and
Interconnection Customer shall provide such
data as quickly as reasonable.
4.0 Pursuant to Section 5.1.1.2 of this
LGIP, the interim Transitional Cluster Study
Report shall provide the information below:
—identification of any circuit breaker short
circuit capability limits exceeded as a result
of the interconnection;
—identification of any thermal overload or
voltage limit violations resulting from the
interconnection;
—identification of any instability or
inadequately damped response to system
disturbances resulting from the
interconnection; and
—Transmission Provider’s Interconnection
Facilities and Network Upgrades that are
expected to be required as a result of the
Interconnection Request(s) and a nonbinding, good faith estimate of cost
responsibility and a non-binding, good faith
estimated time to construct.
5.0 Pursuant to Section 5.1.1.2 of this
LGIP, the final Transitional Cluster Study
Report shall: (1) provide all the information
included in the interim Transitional Cluster
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Study Report; (2) provide a description of,
estimated cost of, and schedule for required
facilities to interconnect the Generating
Facility to the Transmission System; and (3)
address the short circuit, instability, and
power flow issues identified in the interim
Transitional Cluster Study Report.
6.0 Interconnection Customer has met the
requirements described in Section 5.1.1.2 of
this LGIP.
7.0 Interconnection Customer previously
provided a deposit for the performance of
Interconnection Studies. Upon receipt of the
final Transitional Cluster Study Report,
Transmission Provider shall charge and
Interconnection Customer shall pay the
actual costs of the Transitional Cluster Study.
Any difference between the study deposit
and the actual cost of the study shall be paid
by or refunded to Interconnection Customer,
in accordance with the provisions of Section
13.3 of this LGIP.
8.0 Miscellaneous. The Transitional
Cluster Study Agreement shall include
standard miscellaneous terms including, but
not limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability and assignment, that reflect
best practices in the electric industry, and
that are consistent with regional practices,
Applicable Laws and Regulations, and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of this
LGIP and the LGIA.
In witness whereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or
Transmission Owner, if applicable}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
{Insert name of Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
Appendix 8 to LGIP
Transitional Serial Interconnection
Facilities Study Agreement
This agreement is made and entered into
this ll day of ll, 20ll, by and between
llll, a llll organized and existing
under the laws of the State of llll
(‘‘Interconnection Customer’’) and llll,
a llll organized and existing under the
laws of the State of llll (‘‘Transmission
Provider’’). Interconnection Customer and
Transmission Provider each may be referred
to as a ‘‘Party,’’ or collectively as the
‘‘Parties.’’
Recitals
Whereas, Interconnection Customer is
proposing to develop a Large Generating
Facility or generating capacity addition to an
existing Large Generating Facility consistent
with the Interconnection Request submitted
by Interconnection Customer dated ll; and
Whereas, Interconnection Customer desires
to interconnect the Large Generating Facility
with the Transmission System; and
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27159
Whereas, Interconnection Customer has
requested Transmission Provider to continue
processing its Interconnection Facilities
Study to specify and estimate the cost of the
equipment, engineering, procurement, and
construction work needed to implement the
conclusions of the final interconnection
system impact study (from the previously
effective serial study process) in accordance
with Good Utility Practice to physically and
electrically connect the Large Generating
Facility to the Transmission System; and
Whereas, Transmission Provider has
provided an Interconnection Facilities Study
Agreement to [the] Interconnection Customer
on or before {Transmission Provider to insert
Commission-approved effective date of
compliance filing}.
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein, the Parties agree as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated in this
LGIP.
2.0 Interconnection Customer elects and
Transmission Provider shall cause to be
performed an Interconnection Facilities
Study consistent with Section 8 of this LGIP.
3.0 The scope of the Interconnection
Facilities Study shall be subject to the
assumptions set forth in Attachment A to this
Agreement, which shall be the same
assumptions as the previous Interconnection
Facilities Study Agreement executed by [the]
Interconnection Customer.
4.0 The Interconnection Facilities Study
Report shall: (1) provide a description,
estimated cost of (consistent with
Attachment A), and schedule for required
facilities to interconnect the Large Generating
Facility to the Transmission System; and (2)
address the short circuit, instability, and
power flow issues identified in the most
recently published Cluster Study Report.
5.0 Interconnection Customer has met the
requirements described in Section 5.1.1.1 of
this LGIP. The time for completion of the
Interconnection Facilities Study is specified
in Attachment A, and shall be no later than
one hundred fifty (150) Calendar Days after
{Transmission Provider to insert
Commission-approved effective date
[accepted on]of compliance filing}.
6.0 Interconnection Customer previously
provided a deposit of llll dollars ($ll)
for the performance of the Interconnection
Facilities Study.
7.0 Upon receipt of the Interconnection
Facilities Study results, Transmission
Provider shall charge and Interconnection
Customer shall pay the actual costs of the
Interconnection Facilities Study.
8.0 Any difference between the study
deposit and the actual cost of the study shall
be paid by or refunded to Interconnection
Customer, as appropriate.
9.0 Miscellaneous. The Interconnection
Facilities Study Agreement shall include
standard miscellaneous terms including, but
not limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability and assignment, that reflect
best practices in the electric industry, and
that are consistent with regional practices,
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Applicable Laws and Regulations, and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of this
LGIP and this LGIA.
In witness whereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or
Transmission Owner, if applicable}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
{Insert name of Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
Attachment A to Appendix 8
Transitional Serial Interconnection
Facilities Study Agreement
Assumptions Used in Conducting the
Transitional Serial Interconnection
Facilities Study
{Assumptions to be completed by
Interconnection Customer and Transmission
Provider}
Appendix 9 to LGIP
Two-Party Affected System Study Agreement
This agreement is made and entered into
this ll day of llll, 20, by and between
llll, a llll organized and existing
under the laws of the State of llll
(Affected System Interconnection Customer)
and llll, a organized and existing under
the laws of the State of llll
(Transmission Provider). Affected System
Interconnection Customer and Transmission
Provider each may be referred to as a ‘‘Party,’’
or collectively as the ‘‘Parties.’’
khammond on DSKJM1Z7X2PROD with RULES2
Recitals
Whereas, Affected System Interconnection
Customer is proposing to develop a
{description of generating facility or
generating capacity addition to an existing
generating facility} consistent with the
interconnection request submitted by
Affected System Interconnection Customer to
{name of host transmission provider}, dated
llll, for which {name of host
transmission provider} found impacts on
Transmission Provider’s Transmission
System; and
Whereas, Affected System Interconnection
Customer desires to interconnect the
{generating facility} with {name of host
transmission provider}’s transmission
system;
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein, the Parties agree as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated in this
LGIP.
2.0 Transmission Provider shall
coordinate with Affected System
Interconnection Customer to perform an
Affected System Study consistent with
Section 9 of this LGIP.
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3.0 The scope of the Affected System
Study shall be subject to the assumptions set
forth in Attachment A to this Agreement.
4.0 The Affected System Study will be
based upon the technical information
provided by Affected System Interconnection
Customer and {name of host transmission
provider}. Transmission Provider reserves
the right to request additional technical
information from Affected System
Interconnection Customer as may reasonably
become necessary consistent with Good
Utility Practice during the course of the
Affected System Study.
5.0 The Affected System Study shall
provide the following information:
—identification of any circuit breaker short
circuit capability limits exceeded as a result
of the interconnection;
—identification of any thermal overload or
voltage limit violations resulting from the
interconnection;
—identification of any instability or
inadequately damped response to system
disturbances resulting from the
interconnection;
—non-binding, good faith estimated cost and
time required to construct facilities required
on Transmission Provider’s Transmission
System to accommodate the interconnection
of the {generating facility} to the
transmission system of the host transmission
provider; and
—description of how such facilities will
address the identified short circuit,
instability, and power flow issues.
6.0 Affected System Interconnection
Customer shall provide a deposit of ll for
performance of the Affected System Study.
Upon receipt of the results of the Affected
System Study by the Affected System
Interconnection Customer, Transmission
Provider shall charge, and Affected System
Interconnection Customer shall pay, the
actual cost of the Affected System Study.
Any difference between the deposit and the
actual cost of the Affected System Study
shall be paid by or refunded to Affected
System Interconnection Customer, as
appropriate, including interest calculated in
accordance with section 35.19a(a)(2) of
FERC’s regulations.
7.0 This Agreement shall include
standard miscellaneous terms including, but
not limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability, and assignment, which reflect
best practices in the electric industry, that are
consistent with regional practices,
Applicable Laws and Regulations and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of the
LGIP.
In witness thereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
By: lllllllllllllllllll
Title: llllllllllllllllll
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Date: llllllllllllllllll
{Insert name of Affected System
Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
Project No. ll
Attachment A to Appendix 9
Two-Party Affected System Study Agreement
Assumptions Used in Conducting the
Affected System Study
The Affected System Study will be based
upon the following assumptions:
{Assumptions to be completed by Affected
System Interconnection Customer and
Transmission Provider}
Appendix 10 to LGIP
Multiparty Affected System Study
Agreement
This agreement is made and entered into
this ll day of llll, 20 ll, by and
among llll, a llll organized and
existing under the laws of the State of ll
ll (Affected System Interconnection
Customer); llll, a llll organized
and existing under the laws of the State of
llll (Affected System Interconnection
Customer); and llll, a llll
organized and existing under the laws of the
State of llll (Transmission Provider).
Affected System Interconnection Customers
and Transmission Provider each may be
referred to as a ‘‘Party,’’ or collectively as the
‘‘Parties.’’ When it is not important to
differentiate among them, Affected System
Interconnection Customers each may be
referred to as ‘‘Affected System
Interconnection Customer’’ or collectively as
the ‘‘Affected System Interconnection
Customers.’’
Recitals
Whereas, Affected System Interconnection
Customers are proposing to develop
{description of generating facilities or
generating capacity additions to an existing
generating facility}, consistent with the
interconnection requests submitted by
Affected System Interconnection Customers
to {name of host transmission provider},
dated llll, for which {name of host
transmission provider} found impacts on
Transmission Provider’s Transmission
System; and
Whereas, Affected System Interconnection
Customers desire to interconnect the
{generating facilities} with {name of host
transmission provider}’s transmission
system;
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein, the Parties agree as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated in this
LGIP.
2.0 Transmission Provider shall
coordinate with Affected System
Interconnection Customers to perform an
Affected System Study consistent with
Section 9 of this LGIP.
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3.0 The scope of the Affected System
Study shall be subject to the assumptions set
forth in Attachment A to this Agreement.
4.0 The Affected System Study will be
based upon the technical information
provided by Affected System Interconnection
Customers and {name of host transmission
provider}. Transmission Provider reserves
the right to request additional technical
information from Affected System
Interconnection Customers as may
reasonably become necessary consistent with
Good Utility Practice during the course of the
Affected System Study.
5.0 The Affected System Study shall
provide the following information:
—identification of any circuit breaker short
circuit capability limits exceeded as a result
of the interconnection;
—identification of any thermal overload or
voltage limit violations resulting from the
interconnection;
—identification of any instability or
inadequately damped response to system
disturbances resulting from the
interconnection;
—non-binding, good faith estimated cost and
time required to construct facilities required
on Transmission Provider’s Transmission
System to accommodate the interconnection
of the {generating facilities} to the
transmission system of the host transmission
provider; and
—description of how such facilities will
address the identified short circuit,
instability, and power flow issues.
6.0 Affected System Interconnection
Customers shall each provide a deposit of l
l for performance of the Affected System
Study. Upon receipt of the results of the
Affected System Study by the Affected
System Interconnection Customers,
Transmission Provider shall charge, and
Affected System Interconnection Customers
shall pay, the actual cost of the Affected
System Study. Any difference between the
deposit and the actual cost of the Affected
System Study shall be paid by or refunded
to Affected System Interconnection
Customers, as appropriate, including interest
calculated in accordance with section
35.19a(a)(2) of FERC’s regulations.
7.0 This Agreement shall include
standard miscellaneous terms including, but
not limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability, and assignment, which reflect
best practices in the electric industry, that are
consistent with regional practices,
Applicable Laws and Regulations, and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of the
LGIP.
In witness thereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
By: lllllllllllllllllll
Title: llllllllllllllllll
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Date: llllllllllllllllll
{Insert name of Affected System
Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
Project No. ll
{Insert name of Affected System
Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
Project No. ll
Attachment A to Appendix 10
Multiparty Affected System Study
Agreement
Assumptions Used in Conducting the
Multiparty Affected System Study
The Affected System Study will be based
upon the following assumptions:
{Assumptions to be completed by Affected
System Interconnection Customers and
Transmission Provider}
Appendix 11 to LGIP
Two-Party Affected System Facilities
Construction Agreement
This agreement is made and entered into
this ll day of llll, 20ll, by and
between llll, organized and existing
under the laws of the State of llll
(Affected System Interconnection Customer)
and llll, an entity organized and
existing under the laws of the State of ll
ll (Transmission Provider). Affected
System Interconnection Customer and
Transmission Provider each may be referred
to as a ‘‘Party’’ or collectively as the
‘‘Parties.’’
Recitals
Whereas, Affected System Interconnection
Customer is proposing to develop a
{description of generating facility or
generating capacity addition to an existing
generating facility} consistent with the
interconnection request submitted by
Affected System Interconnection Customer to
{name of host transmission provider}, dated
llll, for which {name of host
transmission provider} found impacts on
Transmission Provider’s Transmission
System; and
Whereas, Affected System Interconnection
Customer desires to interconnect the
{generating facility} to {name of host
transmission provider}’s transmission
system; and
Whereas, additions, modifications, and
upgrade(s) must be made to certain existing
facilities of Transmission Provider’s
Transmission System to accommodate such
interconnection; and
Whereas, Affected System Interconnection
Customer has requested, and Transmission
Provider has agreed, to enter into this
Agreement for the purpose of facilitating the
construction of necessary Affected System
Network Upgrade(s);
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein, the Parties agree as follows:
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27161
Article 1—Definitions
When used in this Agreement, with initial
capitalization, the terms specified and not
otherwise defined in this Agreement shall
have the meanings indicated in this LGIP.
Article 2—Term of Agreement
2.1 Effective Date. This Agreement shall
become effective upon execution by the
Parties subject to acceptance by FERC (if
applicable), or if filed unexecuted, upon the
date specified by FERC.
2.2 Term.
2.2.1 General. This Agreement shall
become effective as provided in Article 2.1
and shall continue in full force and effect
until the earlier of (1) the final repayment,
where applicable, by Transmission Provider
of the amount funded by Affected System
Interconnection Customer for Transmission
Provider’s design, procurement, construction
and installation of the Affected System
Network Upgrade(s) provided in Appendix
A; (2) the Parties agree to mutually terminate
this Agreement; (3) earlier termination is
permitted or provided for under Appendix A
of this Agreement; or (4) Affected System
Interconnection Customer terminates this
Agreement after providing Transmission
Provider with written notice at least sixty
(60) Calendar Days prior to the proposed
termination date, provided that Affected
System Interconnection Customer has no
outstanding contractual obligations to
Transmission Provider under this Agreement.
No termination of this Agreement shall be
effective until the Parties have complied with
all Applicable Laws and Regulations
applicable to such termination. The term of
this Agreement may be adjusted upon mutual
agreement of the Parties if (1) the commercial
operation date for the {generating facility} is
adjusted in accordance with the rules and
procedures established by {name of host
transmission provider} or (2) the in-service
date for the Affected System Network
Upgrade(s) is adjusted in accordance with the
rules and procedures established by
Transmission Provider.
2.2.2 Termination Upon Default. Default
shall mean the failure of a Breaching Party
to cure its Breach in accordance with Article
5 of this Agreement where Breach and
Breaching Party are defined in Article 5.
Defaulting Party shall mean the Party that is
in Default. In the event of a Default by a
Party, the non-Defaulting Party shall have the
termination rights described in Articles 5 and
6; provided, however, Transmission Provider
may not terminate this Agreement if Affected
System Interconnection Customer is the
Defaulting Party and compensates
Transmission Provider within thirty (30)
Calendar Days for the amount of damages
billed to Affected System Interconnection
Customer by Transmission Provider for any
such damages, including costs and expenses,
incurred by Transmission Provider as a result
of such Default.
2.2.3 Consequences of Termination. In
the event of a termination by either Party,
other than a termination by Affected System
Interconnection Customer due to a Default by
Transmission Provider, Affected System
Interconnection Customer shall be
responsible for the payment to Transmission
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Provider of all amounts then due and payable
for construction and installation of the
Affected System Network Upgrade(s)
(including, without limitation, any
equipment ordered related to such
construction), plus all out-of-pocket expenses
incurred by Transmission Provider in
connection with the construction and
installation of the Affected System Network
Upgrade(s), through the date of termination,
and, in the event of the termination of the
entire Agreement, any actual costs which
Transmission Provider reasonably incurs in
(1) winding up work and construction
demobilization and (2) ensuring the safety of
persons and property and the integrity and
safe and reliable operation of Transmission
Provider’s Transmission System.
Transmission Provider shall use Reasonable
Efforts to minimize such costs.
2.2.4 Reservation of Rights. Transmission
Provider shall have the right to make a
unilateral filing with FERC to modify this
Agreement with respect to any rates, terms
and conditions, charges, classifications of
service, rule or regulation under section 205
or any other applicable provision of the
Federal Power Act and FERC’s rules and
regulations thereunder, and Affected System
Interconnection Customer shall have the
right to make a unilateral filing with FERC
to modify this Agreement pursuant to section
206 or any other applicable provision of the
Federal Power Act and FERC’s rules and
regulations thereunder; provided that each
Party shall have the right to protest any such
filing by the other Party and to participate
fully in any proceeding before FERC in
which such modifications may be
considered. Nothing in this Agreement shall
limit the rights of the Parties or of FERC
under sections 205 or 206 of the Federal
Power Act and FERC’s rules and regulations
thereunder, except to the extent that the
Parties otherwise mutually agree as provided
herein.
2.3 Filing. Transmission Provider shall
file this Agreement (and any amendment
hereto) with the appropriate Governmental
Authority, if required. Affected System
Interconnection Customer may request that
any information so provided be subject to the
confidentiality provisions of Article 8. If
Affected System Interconnection Customer
has executed this Agreement, or any
amendment thereto, Affected System
Interconnection Customer shall reasonably
cooperate with Transmission Provider with
respect to such filing and to provide any
information reasonably requested by
Transmission Provider needed to comply
with applicable regulatory requirements.
2.4 Survival. This Agreement shall
continue in effect after termination, to the
extent necessary, to provide for final billings
and payments and for costs incurred
hereunder, including billings and payments
pursuant to this Agreement; to permit the
determination and enforcement of liability
and indemnification obligations arising from
acts or events that occurred while this
Agreement was in effect; and to permit each
Party to have access to the lands of the other
Party pursuant to this Agreement or other
applicable agreements, to disconnect,
remove, or salvage its own facilities and
equipment.
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2.5 Termination Obligations. Upon any
termination pursuant to this Agreement,
Affected System Interconnection Customer
shall be responsible for the payment of all
costs or other contractual obligations
incurred prior to the termination date,
including previously incurred capital costs,
penalties for early termination, and costs of
removal and site restoration.
Article 3—Construction of Affected System
Network Upgrade(s)
3.1 Construction.
3.1.1 Transmission Provider Obligations.
Transmission Provider shall (or shall cause
such action to) design, procure, construct,
and install, and Affected System
Interconnection Customer shall pay,
consistent with Article 3.2, the costs of all
Affected System Network Upgrade(s)
identified in Appendix A. All Affected
System Network Upgrade(s) designed,
procured, constructed, and installed by
Transmission Provider pursuant to this
Agreement shall satisfy all requirements of
applicable safety and/or engineering codes
and comply with Good Utility Practice, and
further, shall satisfy all Applicable Laws and
Regulations. Transmission Provider shall not
be required to undertake any action which is
inconsistent with its standard safety
practices, its material and equipment
specifications, its design criteria and
construction procedures, its labor
agreements, or any Applicable Laws and
Regulations.
3.1.2 Suspension of Work.
3.1.2.1 Right to Suspend. Affected System
Interconnection Customer must provide to
Transmission Provider written notice of its
request for suspension. Only the milestones
described in the Appendices of this
Agreement are subject to suspension under
this Article 3.1.2. Affected System Network
Upgrade(s) will be constructed on the
schedule described in the Appendices of this
Agreement unless: (1) construction is
prevented by the order of a Governmental
Authority; (2) the Affected System Network
Upgrade(s) are not needed by any other
Interconnection Customer; or (3)
Transmission Provider determines that a
Force Majeure event prevents construction.
In the event of (1), (2), or (3), any security
paid to Transmission Provider under Article
4.1 of this Agreement shall be released by
Transmission Provider upon the
determination by Transmission Provider that
the Affected System Network Upgrade(s) will
no longer be constructed. If suspension
occurs, Affected System Interconnection
Customer shall be responsible for the costs
which Transmission Provider incurs (i) in
accordance with this Agreement prior to the
suspension; (ii) in suspending such work,
including any costs incurred to perform such
work as may be necessary to ensure the safety
of persons and property and the integrity of
Transmission Provider’s Transmission
System and, if applicable, any costs incurred
in connection with the cancellation of
contracts and orders for material which
Transmission Provider cannot reasonably
avoid; and (iii) reasonably incurs in winding
up work and construction demobilization;
provided, however, that, prior to canceling
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any such contracts or orders, Transmission
Provider shall obtain Affected System
Interconnection Customer’s authorization.
Affected System Interconnection Customer
shall be responsible for all costs incurred in
connection with Affected System
Interconnection Customer’s failure to
authorize cancellation of such contracts or
orders.
Interest on amounts paid by Affected
System Interconnection Customer to
Transmission Provider for the design,
procurement, construction, and installation
of the Affected System Network Upgrade(s)
shall not accrue during periods in which
Affected System Interconnection Customer
has suspended construction under this
Article 3.1.2.
Transmission Provider shall invoice
Affected System Interconnection Customer
pursuant to Article 4 and will use Reasonable
Efforts to minimize its costs. In the event
Affected System Interconnection Customer
suspends work by Affected System
Transmission Provider required under this
Agreement pursuant to this Article 3.1.2.1,
and has not requested Affected System
Transmission Provider to recommence the
work required under this Agreement on or
before the expiration of three (3) years
following commencement of such
suspension, this Agreement shall be deemed
terminated. The three-year period shall begin
on the date the suspension is requested, or
the date of the written notice to Affected
System Transmission Provider, whichever is
earlier, if no effective date of suspension is
specified.
[3.1.2.2 Recommencing of Work. If
Affected System Interconnection Customer
requests that Transmission Provider
recommence construction of Affected System
Network Upgrade(s), Transmission Provider
shall have no obligation to afford such work
the priority it would have had but for the
prior actions of Affected System
Interconnection Customer to suspend the
work. In such event, Affected System
Interconnection Customer shall be
responsible for any costs incurred in
recommencing the work. All recommenced
work shall be completed pursuant to an
amended schedule for the interconnection
agreed to by the Parties. Transmission
Provider has the right to conduct a restudy
of the Affected System Study if conditions
have materially changed subsequent to the
request to suspend. Affected System
Interconnection Customer shall be
responsible for the costs of any studies or
restudies required.]
[3.1.2.3 Right to Suspend Due to Default.
Transmission Provider reserves the right,
upon written notice to Affected System
Interconnection Customer, to suspend, at any
time, work by Transmission Provider due to
Default by Affected System Interconnection
Customer. Affected System Interconnection
Customer shall be responsible for any
additional expenses incurred by
Transmission Provider associated with the
construction and installation of the Affected
System Network Upgrade(s) (as set forth in
Article 2.2.3) upon the occurrence of either
a Breach that Affected System
Interconnection Customer is unable to cure-
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pursuant to Article 5 or a Default pursuant
to Article 5. Any form of suspension by
Transmission Provider shall not be barred by
Articles 2.2.2, 2.2.3, or 5.2.2, nor shall it
affect Transmission Provider’s right to
terminate the work or this Agreement
pursuant to Article 6.]
3.1.3 Construction Status. Transmission
Provider shall keep Affected System
Interconnection Customer advised
periodically as to the progress of its design,
procurement and construction efforts, as
described in Appendix A. Affected System
Interconnection Customer may, at any time
and reasonably, request a progress report
from Transmission Provider. If, at any time,
Affected System Interconnection Customer
determines that the completion of the
Affected System Network Upgrade(s) will not
be required until after the specified in-service
date, Affected System Interconnection
Customer will provide written notice to
Transmission Provider of such later date
upon which the completion of the Affected
System Network Upgrade(s) would be
required. Transmission Provider may delay
the in-service date of the Affected System
Network Upgrade(s) accordingly.
3.1.4 Timely Completion. Transmission
Provider shall use Reasonable Efforts to
design, procure, construct, install, and test
the Affected System Network Upgrade(s) in
accordance with the schedule set forth in
Appendix A, which schedule may be revised
from time to time by mutual agreement of the
Parties. If any event occurs that will affect the
time or ability to complete the Affected
System Network Upgrade(s), Transmission
Provider shall promptly notify Affected
System Interconnection Customer. In such
circumstances, Transmission Provider shall,
within fifteen (15) Calendar Days of such
notice, convene a meeting with Affected
System Interconnection Customer to evaluate
the alternatives available to Affected System
Interconnection Customer. Transmission
Provider shall also make available to Affected
System Interconnection Customer all studies
and work papers related to the event and
corresponding delay, including all
information that is in the possession of
Transmission Provider that is reasonably
needed by Affected System Interconnection
Customer to evaluate alternatives, subject to
confidentiality arrangements consistent with
Article 8. Transmission Provider shall, at
Affected System Interconnection Customer’s
request and expense, use Reasonable Efforts
to accelerate its work under this Agreement
to meet the schedule set forth in Appendix
A, provided that (1) Affected System
Interconnection Customer authorizes such
actions, such authorization to be withheld,
conditioned, or delayed by Affected System
Interconnection Customer only if it can
demonstrate that the acceleration would have
a material adverse effect on it; and (2) the
Affected System Interconnection Customer
funds costs associated therewith in advance.
3.2 Interconnection Costs.
3.2.1 Costs. Affected System
Interconnection Customer shall pay to
Transmission Provider costs (including taxes
and financing costs) associated with seeking
and obtaining all necessary approvals and of
designing, engineering, constructing, and
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testing the Affected System Network
Upgrade(s), as identified in Appendix A, in
accordance with the cost recovery method
provided herein. Unless Transmission
Provider elects to fund the Affected System
Network Upgrade(s), they shall be initially
funded by Affected System Interconnection
Customer.
3.2.1.1 Lands of Other Property Owners.
If any part of the Affected System Network
Upgrade(s) is to be installed on property
owned by persons other than Affected
System Interconnection Customer or
Transmission Provider, Transmission
Provider shall, at Affected System
Interconnection Customer’s expense, use
efforts similar in nature and extent to those
that it typically undertakes on its own behalf
or on behalf of its Affiliates, including use of
its eminent domain authority to the extent
permitted and consistent with Applicable
Laws and Regulations and, to the extent
consistent with such Applicable Laws and
Regulations, to procure from such persons
any rights of use, licenses, rights-of-way, and
easements that are necessary to construct,
operate, maintain, test, inspect, replace, or
remove the Affected System Network
Upgrade(s) upon such property.
3.2.2 Repayment.
3.2.2.1 Repayment. Consistent with
Articles 11.4.1 and 11.4.2 of [the]
Transmission Provider’s pro forma LGIA,
Affected System Interconnection Customer
shall be entitled to a cash repayment by
Transmission Provider of the amount paid to
Transmission Provider, if any, for the
Affected System Network Upgrade(s),
including any tax gross-up or other taxrelated payments associated with the
Affected System Network Upgrade(s), and
not refunded to Affected System
Interconnection Customer pursuant to Article
3.3.1 or otherwise. The Parties may mutually
agree to a repayment schedule, to be outlined
in Appendix A, not to exceed twenty (20)
years from the commercial operation date, for
the complete repayment for all applicable
costs associated with the Affected System
Network Upgrade(s). Any repayment shall
include interest calculated in accordance
with the methodology set forth in FERC’s
regulations at 18 CFR 35.19 a(a)(2)(iii) from
the date of any payment for Affected System
Network Upgrade(s) through the date on
which Affected System Interconnection
Customer receives a repayment of such
payment pursuant to this subparagraph.
Interest shall not accrue during periods in
which Affected System Interconnection
Customer has suspended construction
pursuant to Article 3.1.2. Affected System
Interconnection Customer may assign such
repayment rights to any person.
3.2.2.2 Impact of Failure to Achieve
Commercial Operation. If the Affected
System Interconnection Customer’s
generating facility fails to achieve
commercial operation, but it or another
generating facility is later constructed and
makes use of the Affected System Network
Upgrade(s), Transmission Provider shall at
that time reimburse Affected System
Interconnection Customer for the amounts
advanced for the Affected System Network
Upgrade(s). Before any such reimbursement
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27163
can occur, Affected System Interconnection
Customer (or the entity that ultimately
constructs the generating facility, if
different), is responsible for identifying the
entity to which the reimbursement must be
made.
3.3 Taxes.
3.3.1 Indemnification for Contributions in
Aid of Construction. With regard only to
payments made by Affected System
Interconnection Customer to Transmission
Provider for the installation of the Affected
System Network Upgrade(s), Transmission
Provider shall not include a gross-up for
income taxes in the amounts it charges
Affected System Interconnection Customer
for the installation of the Affected System
Network Upgrade(s) unless (1) Transmission
Provider has determined, in good faith, that
the payments or property transfers made by
Affected System Interconnection Customer to
Transmission Provider should be reported as
income subject to taxation, or (2) any
Governmental Authority directs
Transmission Provider to report payments or
property as income subject to taxation.
Affected System Interconnection Customer
shall reimburse Transmission Provider for
such costs on a fully grossed-up basis, in
accordance with this Article, within thirty
(30) Calendar Days of receiving written
notification from Transmission Provider of
the amount due, including detail about how
the amount was calculated.
The indemnification obligation shall
terminate at the earlier of (1) the expiration
Of the ten (10)-year testing period and the
applicable statute of limitation, as it may be
extended by Transmission Provider upon
request of the Internal Revenue Service, to
keep these years open for audit or
adjustment, or (2) the occurrence of a
subsequent taxable event and the payment of
any related indemnification obligations as
contemplated by this Article.
Notwithstanding the foregoing provisions of
this Article 3.3.1, and to the extent permitted
by law, to the extent that the receipt of such
payments by Transmission Provider is
determined by any Governmental Authority
to constitute income by Transmission
Provider subject to taxation, Affected System
Interconnection Customer shall protect,
indemnify, and hold harmless Transmission
Provider and its Affiliates, from all claims by
any such Governmental Authority for any
tax, interest, and/or penalties associated with
such determination. Upon receiving written
notification of such determination from the
Governmental Authority, Transmission
Provider shall provide Affected System
Interconnection Customer with written
notification within thirty (30) Calendar Days
of such determination and notification.
Transmission Provider, upon the timely
written request by Affected System
Interconnection Customer and at Affected
System Interconnection Customer’s expense,
shall appeal, protest, seek abatement of, or
otherwise oppose such determination.
Transmission Provider reserves the right to
make all decisions with regard to the
prosecution of such appeal, protest,
abatement, or other contest, including the
compromise or settlement of the claim;
provided that Transmission Provider shall
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cooperate and consult in good faith with
Affected System Interconnection Customer
regarding the conduct of such contest.
Affected System Interconnection Customer
shall not be required to pay Transmission
Provider for the tax, interest, and/or penalties
prior to the seventh (7th) Calendar Day before
the date on which Transmission Provider (1)
is required to pay the tax, interest, and/or
penalties or other amount in lieu thereof
pursuant to a compromise or settlement of
the appeal, protest, abatement, or other
contest; (2) is required to pay the tax,
interest, and/or penalties as the result of a
final, non-appealable order by a
Governmental Authority; or (3) is required to
pay the tax, interest, and/or penalties as a
prerequisite to an appeal, protest, abatement,
or other contest. In the event such appeal,
protest, abatement, or other contest results in
a determination that Transmission Provider
is not liable for any portion of any tax,
interest, and/or penalties for which Affected
System Interconnection Customer has
already made payment to Transmission
Provider, Transmission Provider shall
promptly refund to Affected System
Interconnection Customer any payment
attributable to the amount determined to be
non-taxable, plus any interest (calculated in
accordance with 18 CFR 35.19a(a)(2)(iii)) or
other payments Transmission Provider
receives or which Transmission Provider
may be entitled with respect to such
payment. Affected System Interconnection
Customer shall provide Transmission
Provider with credit assurances sufficient to
meet Affected System Interconnection
Customer’s estimated liability for
reimbursement of Transmission Provider for
taxes, interest, and/or penalties under this
Article 3.3.1. Such estimated liability shall be
stated in Appendix A.
To the extent that Transmission Provider is
a limited liability company and not a
corporation, and has elected to be taxed as
a partnership, then the following shall apply:
Transmission Provider represents, and the
Parties acknowledge, that Transmission
Provider is a limited liability company and
is treated as a partnership for federal income
tax purposes. Any payment made by Affected
System Interconnection Customer to
Transmission Provider for Affected System
Network Upgrade(s) is to be treated as an
upfront payment. It is anticipated by the
Parties that any amounts paid by Affected
System Interconnection Customer to
Transmission Provider for Affected System
Network Upgrade(s) will be reimbursed to
Affected System Interconnection Customer in
accordance with the terms of this Agreement,
provided Affected System Interconnection
Customer fulfills its obligations under this
Agreement.
3.3.2 Private Letter Ruling. At Affected
System Interconnection Customer’s request
and expense, Transmission Provider shall file
with the Internal Revenue Service a request
for a private letter ruling as to whether any
property transferred or sums paid, or to be
paid, by Affected System Interconnection
Customer to Transmission Provider under
this Agreement are subject to federal income
taxation. Affected System Interconnection
Customer will prepare the initial draft of the
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request for a private letter ruling and will
certify under penalties of perjury that all
facts represented in such request are true and
accurate to the best of Affected System
Interconnection Customer’s knowledge.
Transmission Provider and Affected System
Interconnection Customer shall cooperate in
good faith with respect to the submission of
such request.
3.3.3 Other Taxes. Upon the timely
request by Affected System Interconnection
Customer, and at Affected System
Interconnection Customer’s sole expense,
Transmission Provider shall appeal, protest,
seek abatement of, or otherwise contest any
tax (other than federal or state income tax)
asserted or assessed against Transmission
Provider for which Affected System
Interconnection Customer may be required to
reimburse Transmission Provider under the
terms of this Agreement. Affected System
Interconnection Customer shall pay to
Transmission Provider on a periodic basis, as
invoiced by Transmission Provider,
Transmission Provider’s documented
reasonable costs of prosecuting such appeal,
protest, abatement, or other contest. Affected
System Interconnection Customer and
Transmission Provider shall cooperate in
good faith with respect to any such contest.
Unless the payment of such taxes is a
prerequisite to an appeal or abatement or
cannot be deferred, no amount shall be
payable by Affected System Interconnection
Customer to Transmission Provider for such
taxes until they are assessed by a final, nonappealable order by any court or agency of
competent jurisdiction. In the event that a tax
payment is withheld and ultimately due and
payable after appeal, Affected System
Interconnection Customer will be responsible
for all taxes, interest and penalties, other
than penalties attributable to any delay
caused by Transmission Provider. Each Party
shall cooperate with the other Party to
maintain each Party’s tax status. Nothing in
this Agreement is intended to adversely
affect any Party’s tax-exempt status with
respect to the issuance of bonds including,
but not limited to, local furnishing bonds, as
described in section 142(f) of the Internal
Revenue Code.
Article 4—Security, Billing, and Payments
4.1 Provision of Security. By the earlier of
(1) thirty (30) Calendar Days prior to the due
date for Affected System Interconnection
Customer’s first payment under the payment
schedule specified in Appendix A, or (2) the
first date specified in Appendix A for the
ordering of equipment by Transmission
Provider for installing the Affected System
Network Upgrade(s), Affected System
Interconnection Customer shall provide
Transmission Provider, at Affected System
Interconnection Customer’s option, a
guarantee, a surety bond, letter of credit or
other form of security that is reasonably
acceptable to Transmission Provider. Such
security for payment shall be in an amount
sufficient to cover the costs for constructing,
procuring, and installing the applicable
portion of Affected System Network
Upgrade(s) and shall be reduced on a dollarfor-dollar basis for payments made to
Transmission Provider for these purposes.
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The guarantee must be made by an entity
that meets the creditworthiness requirements
of Transmission Provider and contain terms
and conditions that guarantee payment of
any amount that may be due from Affected
System Interconnection Customer, up to an
agreed-to maximum amount. The letter of
credit must be issued by a financial
institution reasonably acceptable to
Transmission Provider and must specify a
reasonable expiration date. The surety bond
must be issued by an insurer reasonably
acceptable to Transmission Provider and
must specify a reasonable expiration date.
4.2 Invoice. Each Party shall submit to
the other Party, on a monthly basis, invoices
of amounts due, if any, for the preceding
month. Each invoice shall state the month to
which the invoice applies and fully describe
the services and equipment provided. The
Parties may discharge mutual debts and
payment obligations due and owing to each
other on the same date through netting, in
which case all amounts a Party owes to the
other Party under this Agreement, including
interest payments, shall be netted so that
only the net amount remaining due shall be
paid by the owing Party.
4.3 Payment. Invoices shall be rendered
to the paying Party at the address specified
by the Parties. The Party receiving the
invoice shall pay the invoice within thirty
(30) Calendar Days of receipt. All payments
shall be made in immediately available funds
payable to the other Party, or by wire transfer
to a bank named and account designated by
the invoicing Party. Payment of invoices by
a Party will not constitute a waiver of any
rights or claims that Party may have under
this Agreement.
4.4 Final Invoice. Within six (6) months
after completion of the construction of the
Affected System Network Upgrade(s),
Transmission Provider shall provide an
invoice of the final cost of the construction
of the Affected System Network Upgrade(s)
and shall set forth such costs in sufficient
detail to enable Affected System
Interconnection Customer to compare the
actual costs with the estimates and to
ascertain deviations, if any, from the cost
estimates. Transmission Provider shall
refund, with interest (calculated in
accordance with 18 CFR 35.19a(a)(2)(iii)), to
Affected System Interconnection Customer
any amount by which the actual payment by
Affected System Interconnection Customer
for estimated costs exceeds the actual costs
of construction within thirty (30) Calendar
Days of the issuance of such final
construction invoice.
4.5 Interest. Interest on any unpaid
amounts shall be calculated in accordance
with 18 CFR 35.19a(a)(2)(iii).
4.6 Payment During Dispute. In the event
of a billing dispute among the Parties,
Transmission Provider shall continue to
construct the Affected System Network
Upgrade(s) under this Agreement as long as
Affected System Interconnection Customer:
(1) continues to make all payments not in
dispute; and (2) pays to Transmission
Provider or into an independent escrow
account the portion of the invoice in dispute,
pending resolution of such dispute. If
Affected System Interconnection Customer
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fails to meet these two requirements, then
Transmission Provider may provide notice to
Affected System Interconnection Customer of
a Default pursuant to Article 5. Within thirty
(30) Calendar Days after the resolution of the
dispute, the Party that owes money to
another Party shall pay the amount due with
interest calculated in accordance with the
methodology set forth in 18 CFR
35.19a(a)(2)(iii).
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Article 5—Breach, Cure and Default
5.1 Events of Breach. A Breach of this
Agreement shall include the:
(a) Failure to pay any amount when due;
(b) Failure to comply with any material
term or condition of this Agreement,
including but not limited to any material
Breach of a representation, warranty, or
covenant made in this Agreement;
(c) Failure of a Party to provide such access
rights, or a Party’s attempt to revoke access
or terminate such access rights, as provided
under this Agreement; or
(d) Failure of a Party to provide
information or data to another Party as
required under this Agreement, provided the
Party entitled to the information or data
under this Agreement requires such
information or data to satisfy its obligations
under this Agreement.
5.2 Definition. Breaching Party shall
mean the Party that is in Breach.
5.3 Notice of Breach, Cure, and Default.
Upon the occurrence of an event of Breach,
the Party not in Breach, when it becomes
aware of the Breach, shall give written notice
of the Breach to the Breaching Party and to
any other person representing a Party to this
Agreement identified in writing to the other
Party in advance. Such notice shall set forth,
in reasonable detail, the nature of the Breach,
and where known and applicable, the steps
necessary to cure such Breach.
5.3.1 Upon receiving written notice of the
Breach hereunder, the Breaching Party shall
have a period to cure such Breach
(hereinafter referred to as the ‘‘Cure Period’’)
which shall be sixty (60) Calendar Days.
5.3.2 In the event the Breaching Party
fails to cure within the Cure Period, the
Breaching Party will be in Default of this
Agreement, and the non-Defaulting Party
may terminate this Agreement in accordance
with Article 6.2 of this Agreement or take
whatever action at law or in equity as may
appear necessary or desirable to enforce the
performance or observance of any rights,
remedies, obligations, agreement, or
covenants under this Agreement.
5.4 Rights in the Event of Default.
Notwithstanding the foregoing, upon the
occurrence of a Default, the non-Defaulting
Party shall be entitled to exercise all rights
and remedies it may have in equity or at law.
Article 6—Termination of Agreement
6.1 Expiration of Term. Except as
otherwise specified in this Article 6, the
Parties’ obligations under this Agreement
shall terminate at the conclusion of the term
of this Agreement.
6.2 Termination. In addition to the
termination provisions set forth in Article
2.2, a Party may terminate this Agreement
upon the Default of the other Party in
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accordance with Article 5.2.2 of this
Agreement. Subject to the limitations set
forth in Article 6.3, in the event of a Default,
the termination of this Agreement by the
non-Defaulting Party shall require a filing at
FERC of a notice of termination, which filing
must be accepted for filing by FERC.
6.3 Disposition of Facilities Upon
Termination of Agreement.
6.3.1 Transmission Provider Obligations.
Upon termination of this Agreement, unless
otherwise agreed to by the Parties in writing,
Transmission Provider:
(a) shall, prior to the construction and
installation of any portion of the Affected
System Network Upgrade(s) and to the extent
possible, cancel any pending orders of, or
return, such equipment or material for such
Affected System Network Upgrade(s);
(b) may keep in place any portion of the
Affected System Network Upgrade(s) already
constructed and installed; and,
(c) shall perform such work as may be
necessary to ensure the safety of persons and
property and to preserve the integrity of
Transmission Provider’s Transmission
System (e.g., construction demobilization to
return the system to its original state, windup work).
6.3.2 Affected System Interconnection
Customer Obligations. Upon billing by
Transmission Provider, Affected System
Interconnection Customer shall reimburse
Transmission Provider for any costs incurred
by Transmission Provider in performance of
the actions required or permitted by Article
6.3.1 and for the cost of any Affected System
Network Upgrade(s) described in Appendix
A. Transmission Provider shall use
Reasonable Efforts to minimize costs and
shall offset the amounts owed by any salvage
value of facilities, if applicable. Affected
System Interconnection Customer shall pay
these costs pursuant to Article 4.3 of this
Agreement.
6.3.3 Pre-construction or Installation.
Upon termination of this Agreement and
prior to the construction and installation of
any portion of the Affected System Network
Upgrade(s), Transmission Provider may, at its
option, retain any portion of such Affected
System Network Upgrade(s) not cancelled or
returned in accordance with Article 6.3.1(a),
in which case Transmission Provider shall be
responsible for all costs associated with
procuring such Affected System Network
Upgrade(s). To the extent that Affected
System Interconnection Customer has
already paid Transmission Provider for any
or all of such costs, Transmission Provider
shall refund Affected System Interconnection
Customer for those payments. If
Transmission Provider elects to not retain
any portion of such facilities, Transmission
Provider shall convey and make available to
Affected System Interconnection Customer
such facilities as soon as practicable after
Affected System Interconnection Customer’s
payment for such facilities.
6.4 Survival of Rights. Termination or
expiration of this Agreement shall not relieve
either Party of any of its liabilities and
obligations arising hereunder prior to the
date termination becomes effective, and each
Party may take whatever judicial or
administrative actions as appear necessary or
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desirable to enforce its rights hereunder. The
applicable provisions of this Agreement will
continue in effect after expiration, or early
termination hereof to the extent necessary to
provide for (1) final billings, billing
adjustments, and other billing procedures set
forth in this Agreement; (2) the determination
and enforcement of liability and
indemnification obligations arising from acts
or events that occurred while this Agreement
was in effect; and (3) the confidentiality
provisions set forth in Article 8.
Article 7—Subcontractors
7.1 Subcontractors. Nothing in this
Agreement shall prevent a Party from
utilizing the services of subcontractors, as it
deems appropriate, to perform its obligations
under this Agreement; provided, however,
that each Party shall require its
subcontractors to comply with all applicable
terms and conditions of this Agreement in
providing such services, and each Party shall
remain primarily liable to the other Party for
the performance of such subcontractor.
7.1.1 Responsibility of Principal. The
creation of any subcontract relationship shall
not relieve the hiring Party of any of its
obligations under this Agreement. In
accordance with the provisions of this
Agreement, each Party shall be fully
responsible to the other Party for the acts or
omissions of any subcontractor it hires as if
no subcontract had been made. Any
applicable obligation imposed by this
Agreement upon a Party shall be equally
binding upon, and shall be construed as
having application to, any subcontractor of
such Party.
7.1.2 No Third-Party Beneficiary. Except
as may be specifically set forth to the
contrary herein, no subcontractor or any
other party is intended to be, nor will it be
deemed to be, a third-party beneficiary of this
Agreement.
7.1.3 No Limitation by Insurance. The
obligations under this Article 7 will not be
limited in any way by any limitation of any
insurance policies or coverages, including
any subcontractor’s insurance.
Article 8—Confidentiality
8.1 Confidentiality. Confidential
Information shall include, without limitation,
all information relating to a Party’s
technology, research and development,
business affairs, and pricing, and any
information supplied to the other Party prior
to the execution of this Agreement.
Information is Confidential Information
only if it is clearly designated or marked in
writing as confidential on the face of the
document, or, if the information is conveyed
orally or by inspection, if the Party providing
the information orally informs the Party
receiving the information that the
information is confidential. The Parties shall
maintain as confidential any information that
is provided and identified by a Party as
Critical Energy Infrastructure Information
(CEII), as that term is defined in 18 CFR
388.113(c).
Such confidentiality will be maintained in
accordance with this Article 8. If requested
by the receiving Party, the disclosing Party
shall provide in writing, the basis for
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asserting that the information referred to in
this Article warrants confidential treatment,
and the requesting Party may disclose such
writing to the appropriate Governmental
Authority. Each Party shall be responsible for
the costs associated with affording
confidential treatment to its information.
8.1.1 Term. During the term of this
Agreement, and for a period of three (3) years
after the expiration or termination of this
Agreement, except as otherwise provided in
this Article 8 or with regard to CEII, each
Party shall hold in confidence and shall not
disclose to any person Confidential
Information. CEII shall be treated in
accordance with FERC policies and
regulations.
8.1.2 Scope. Confidential Information
shall not include information that the
receiving Party can demonstrate: (1) is
generally available to the public other than
as a result of a disclosure by the receiving
Party; (2) was in the lawful possession of the
receiving Party on a non-confidential basis
before receiving it from the disclosing Party;
(3) was supplied to the receiving Party
without restriction by a non-Party, who, to
the knowledge of the receiving Party after
due inquiry, was under no obligation to the
disclosing Party to keep such information
confidential; (4) was independently
developed by the receiving Party without
reference to Confidential Information of the
disclosing Party; (5) is, or becomes, publicly
known, through no wrongful act or omission
of the receiving Party or Breach of this
Agreement; or (6) is required, in accordance
with Article 8.1.6 of this Agreement, to be
disclosed by any Governmental Authority or
is otherwise required to be disclosed by law
or subpoena, or is necessary in any legal
proceeding establishing rights and
obligations under this Agreement.
Information designated as Confidential
Information will no longer be deemed
confidential if the Party that designated the
information as confidential notifies the
receiving Party that it no longer is
confidential.
8.1.3 Release of Confidential Information.
No Party shall release or disclose
Confidential Information to any other person,
except to its Affiliates (limited by the
Standards of Conduct requirements),
subcontractors, employees, agents,
consultants, or to non-Parties that may be or
are considering providing financing to or
equity participation with Affected System
Interconnection Customer, or to potential
purchasers or assignees of Affected System
Interconnection Customer, on a need-toknow basis in connection with this
Agreement, unless such person has first been
advised of the confidentiality provisions of
this Article 8 and has agreed to comply with
such provisions. Notwithstanding the
foregoing, a Party providing Confidential
Information to any person shall remain
primarily responsible for any release of
Confidential Information in contravention of
this Article 8.
8.1.4 Rights. Each Party shall retain all
rights, title, and interest in the Confidential
Information that it discloses to the receiving
Party. The disclosure by a Party to the
receiving Party of Confidential Information
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shall not be deemed a waiver by the
disclosing Party or any other person or entity
of the right to protect the Confidential
Information from public disclosure.
8.1.5 Standard of Care. Each Party shall
use at least the same standard of care to
protect Confidential Information it receives
as it uses to protect its own Confidential
Information from unauthorized disclosure,
publication, or dissemination. Each Party
may use Confidential Information solely to
fulfill its obligations to the other Party under
this Agreement or its regulatory
requirements.
8.1.6 Order of Disclosure. If a court or a
Government Authority or entity with the
right, power, and apparent authority to do so
requests or requires either Party, by
subpoena, oral deposition, interrogatories,
requests for production of documents,
administrative order, or otherwise, to
disclose Confidential Information, that Party
shall provide the disclosing Party with
prompt notice of such request(s) or
requirement(s) so that the disclosing Party
may seek an appropriate protective order or
waive compliance with the terms of this
Agreement. Notwithstanding the absence of a
protective order or waiver, the Party may
disclose such Confidential Information
which, in the opinion of its counsel, the
Party is legally compelled to disclose. Each
Party will use Reasonable Efforts to obtain
reliable assurance that confidential treatment
will be accorded any Confidential
Information so furnished.
8.1.7 Termination of Agreement. Upon
termination of this Agreement for any reason,
each Party shall, within ten (10) Business
Days of receipt of a written request from the
other Party, use Reasonable Efforts to destroy,
erase, or delete (with such destruction,
erasure, and deletion certified in writing to
the requesting Party) or return to the
requesting Party any and all written or
electronic Confidential Information received
from the requesting Party, except that each
Party may keep one copy for archival
purposes, provided that the obligation to
treat it as Confidential Information in
accordance with this Article 8 shall survive
such termination.
8.1.8 Remedies. The Parties agree that
monetary damages would be inadequate to
compensate a Party for the other Party’s
Breach of its obligations under this Article 8.
Each Party accordingly agrees that the
disclosing Party shall be entitled to equitable
relief, by way of injunction or otherwise, if
the receiving Party Breaches or threatens to
Breach its obligations under this Article 8,
which equitable relief shall be granted
without bond or proof of damages, and the
breaching Party shall not plead in defense
that there would be an adequate remedy at
law. Such remedy shall not be deemed an
exclusive remedy for the Breach of this
Article 8, but it shall be in addition to all
other remedies available at law or in equity.
The Parties further acknowledge and agree
that the covenants contained herein are
necessary for the protection of legitimate
business interests and are reasonable in
scope. Neither Party, however, shall be liable
for indirect, incidental, or consequential or
punitive damages of any nature or kind
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resulting from or arising in connection with
this Article 8.
8.1.9 Disclosure to FERC, its Staff, or a
State Regulatory Body. Notwithstanding
anything in this Article 8 to the contrary, and
pursuant to 18 CFR 1b.20, if FERC or its staff,
during the course of an investigation or
otherwise, requests information from a Party
that is otherwise required to be maintained
in confidence pursuant to this Agreement,
the Party shall provide the requested
information to FERC or its staff, within the
time provided for in the request for
information. In providing the information to
FERC or its staff, the Party must, consistent
with 18 CFR 388.112, request that the
information be treated as confidential and
non-public by FERC and its staff and that the
information be withheld from public
disclosure. Parties are prohibited from
notifying the other Party to this Agreement
prior to the release of the Confidential
Information to FERC or its staff. The Party
shall notify the other Party to the Agreement
when it is notified by FERC or its staff that
a request to release Confidential Information
has been received by FERC, at which time
either of the Parties may respond before such
information would be made public, pursuant
to 18 CFR 388.112. Requests from a state
regulatory body conducting a confidential
investigation shall be treated in a similar
manner if consistent with the applicable state
rules and regulations.
8.1.10 Subject to the exception in Article
8.1.9, any information that a disclosing Party
claims is competitively sensitive,
commercial, or financial information under
this Agreement shall not be disclosed by the
receiving Party to any person not employed
or retained by the receiving Party, except to
the extent disclosure is (1) required by law;
(2) reasonably deemed by the disclosing
Party to be required to be disclosed in
connection with a dispute between or among
the Parties, or the defense of litigation or
dispute; (3) otherwise permitted by consent
of the disclosing Party, such consent not to
be unreasonably withheld; or (4) necessary to
fulfill its obligations under this Agreement or
as [the] Transmission Provider or a balancing
authority, including disclosing the
Confidential Information to a regional or
national reliability organization. The Party
asserting confidentiality shall notify the
receiving Party in writing of the information
that Party claims is confidential. Prior to any
disclosures of that Party’s Confidential
Information under this subparagraph, or if
any non-Party or Governmental Authority
makes any request or demand for any of the
information described in this subparagraph,
the Party that received the Confidential
Information from the disclosing Party agrees
to promptly notify the disclosing Party in
writing and agrees to assert confidentiality
and cooperate with the disclosing Party in
seeking to protect the Confidential
Information from public disclosure by
confidentiality agreement, protective order,
or other reasonable measures.
Article 9—Information Access and Audit
Rights
9.1 Information Access. Each Party shall
make available to the other Party information
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necessary to verify the costs incurred by the
other Party for which the requesting Party is
responsible under this Agreement and carry
out obligations and responsibilities under
this Agreement, provided that the Parties
shall not use such information for purposes
other than those set forth in this Article 9.1
and to enforce their rights under this
Agreement.
9.2 Audit Rights. Subject to the
requirements of confidentiality under Article
8 of this Agreement, the accounts and records
related to the design, engineering,
procurement, and construction of the
Affected System Network Upgrade(s) shall be
subject to audit during the period of this
Agreement and for a period of twenty-four
(24) months following Transmission
Provider’s issuance of a final invoice in
accordance with Article 4.4. Affected System
Interconnection Customer at its expense shall
have the right, during normal business hours,
and upon prior reasonable notice to
Transmission Provider, to audit such
accounts and records. Any audit authorized
by this Article 9.2 shall be performed at the
offices where such accounts and records are
maintained and shall be limited to those
portions of such accounts and records that
relate to obligations under this Agreement.
Article 10—Notices
10.1—General. Any notice, demand, or
request required or permitted to be given by
a Party to the other Party, and any instrument
required or permitted to be tendered or
delivered by a Party in writing to another
Party, may be so given, tendered, or
delivered, as the case may be, by depositing
the same with the United States Postal
Service with postage prepaid, for
transmission by certified or registered mail,
addressed to the Parties, or personally
delivered to the Parties, at the address set out
below:
To Transmission Provider:
To Affected System Interconnection
Customer:
10.2 Billings and Payments. Billings and
payments shall be sent to the addresses
shown in Article 10.1 unless otherwise
agreed to by the Parties.
10.3 Alternative Forms of Notice. Any
notice or request required or permitted to be
given by a Party to the other Party and not
required by this Agreement to be given in
writing may be so given by telephone,
facsimile or email to the telephone numbers
and email addresses set out below:
To Transmission Provider:
To Affected System Interconnection
Customer:
10.4 Execution and Filing. Affected
System Interconnection Customer shall
either: (i) execute two originals of this
tendered Agreement and return them to
Transmission Provider; or (ii) request in
writing that Transmission Provider file with
FERC this Agreement in unexecuted form. As
soon as practicable, but not later than ten (10)
Business Days after receiving either the two
executed originals of this tendered
Agreement (if it does not conform with a
FERC-approved standard form of this
Agreement) or the request to file this
Agreement unexecuted, Transmission
Provider shall file this Agreement with FERC,
together with its explanation of any matters
as to which Affected System Interconnection
Customer and Transmission Provider
disagree and support for the costs that
Transmission Provider proposes to charge to
Affected System Interconnection Customer
under this Agreement. An unexecuted
version of this Agreement should contain
terms and conditions deemed appropriate by
Transmission Provider for the Affected
System Interconnection Customer’s
generating facility. If the Parties agree to
proceed with design, procurement, and
construction of facilities and upgrades under
the agreed-upon terms of the unexecuted
version of this Agreement, they may proceed
pending FERC action.
Article 11—Miscellaneous
11.1 This Agreement shall include
standard miscellaneous terms including, but
not limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability and assignment, which reflect
best practices in the electric industry, that are
consistent with regional practices,
27167
Applicable Laws and Regulations and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of this
LGIP.
{Signature Page to Follow}
In witness whereof, the Parties have
executed this Agreement in multiple
originals, each of which shall constitute and
be an original Agreement among the Parties.
Transmission Provider
{Transmission Provider}
By: lllllllllllllllllll
Name: lllllllllllllllll
Title: llllllllllllllllll
Affected System Interconnection Customer
{Affected System Interconnection Customer}
By: lllllllllllllllllll
Name: lllllllllllllllll
Title: llllllllllllllllll
Project No. ll
Attachment A to Appendix 11
Two-Party Affected System Facilities
Construction Agreement
Affected System Network Upgrade(s), Cost
Estimates and Responsibility, Construction
Schedule and Monthly Payment Schedule
This Appendix A is a part of the Affected
System Facilities Construction Agreement
between Affected System Interconnection
Customer and Transmission Provider.
1.1 Affected System Network Upgrade(s)
to be installed by Transmission Provider.
{description}
1.2 First Equipment Order (including
permitting).
{description}
1.2.1. Permitting and Land Rights—
Transmission Provider Affected System
Network Upgrade(s)
{description}
1.3 Construction Schedule. Where
applicable, construction of the Affected
System Network Upgrade(s) is scheduled as
follows and will be periodically updated as
necessary:
TABLE 1—TRANSMISSION PROVIDER CONSTRUCTION ACTIVITIES
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Milestone No.
Description
Note: Construction schedule assumes that
Transmission Provider has obtained final
authorizations and security from Affected
System Interconnection Customer and all
necessary permits from Governmental
Authorities as necessary prerequisites to
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Start date
commence construction of any of the
Affected System Network Upgrade(s).
1.4 Payment Schedule.
1.4.1 Timing of and Adjustments to
Affected System Interconnection Customer’s
Payments and Security.
{description}
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End date
1.4.2 Monthly Payment Schedule.
Affected System Interconnection Customer’s
payment schedule is as follows.
{description}
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TABLE 2—AFFECTED SYSTEM INTERCONNECTION CUSTOMER’S PAYMENT/
SECURITY OBLIGATIONS FOR AFFECTED SYSTEM NETWORK UPGRADE(S)
Milestone No.
Description
Date
Note: Affected System Interconnection
Customer’s payment or provision of security
as provided in this Agreement operates as a
condition precedent to Transmission
Provider’s obligations to construct any
Affected System Network Upgrade(s), and
failure to meet this schedule will constitute
a Breach pursuant to Article 5.1 of this
Agreement.
1.5 Permits, Licenses, and
Authorizations.
{description}
Attachment B to Appendix 11
Two-Party Affected System Facilities
Construction Agreement
Notification of Completed Construction
This Appendix B is a part of the Affected
Systems Facilities Construction Agreement
between Affected System Interconnection
Customer and Transmission Provider. Where
applicable, when Transmission Provider has
completed construction of the Affected
System Network Upgrade(s), Transmission
Provider shall send notice to Affected System
Interconnection Customer in substantially
the form following:
{Date}
{Affected System Interconnection Customer
Address}
Re: Completion of Affected System Network
Upgrade(s)
Dear {Name or Title}:
This letter is sent pursuant to the Affected
System Facilities Construction Agreement
between {Transmission Provider} and
{Affected System Interconnection Customer},
dated llllllll, 20ll.
On {Date}, Transmission Provider
completed to its satisfaction all work on the
Affected System Network Upgrade(s)
required to facilitate the safe and reliable
interconnection and operation of Affected
System Interconnection Customer’s
{description of generating facility}.
Transmission Provider confirms that the
Affected System Network Upgrade(s) are in
place.
Thank you.
{Signature}
{Transmission Provider Representative}
Attachment C to Appendix 11
Two-Party Affected System Facilities
Construction Agreement
Exhibits
This Appendix C is a part of the Affected
System Facilities Construction Agreement
[among] between Affected System
Interconnection Customer and Transmission
Provider.
Exhibit A1—Transmission Provider Site
Map
Exhibit A2—Site Plan
Exhibit A3—Affected System Network
Upgrade(s) Plan & Profile
Exhibit A4—Estimated Cost of Affected
System Network Upgrade(s)
Facilities to be constructed by
transmission provider
Location
Estimate in
dollars
Total
Appendix 12 to LGIP
khammond on DSKJM1Z7X2PROD with RULES2
Multiparty Affected System Facilities
Construction Agreement
This Agreement is made and entered into
this ll day of llllll, 20ll, by and
among llllllll, organized and
existing under the laws of the State of
llllll (Affected System
Interconnection Customer); llllll, a
llllll organized and existing under
the laws of the State of llllll
(Affected System Interconnection Customer);
and llllll, an entity organized and
existing under the laws of the State of
lllll (Transmission Provider). Affected
System Interconnection Customers and
Transmission Provider each may be referred
to as a ‘‘Party’’ or collectively as the
‘‘Parties.’’ When it is not important to
differentiate among them, Affected System
Interconnection Customers each may be
referred to as ‘‘Affected System
Interconnection Customer’’ or collectively as
‘‘Affected System Interconnection
Customers.’’
Recitals
Whereas, Affected System Interconnection
Customers are proposing to develop
{description of generating facilities or
generating capacity additions to an existing
generating facility}, consistent with the
interconnection requests submitted by
Affected System Interconnection Customers
to {name of host transmission provider},
dated llllll, for which {name of host
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transmission provider} found impacts on
Transmission Provider’s Transmission
System; and
Whereas, Affected System Interconnection
Customers desire to interconnect the
{generating facilities} to {name of host
transmission provider}’s transmission
system; and
Whereas, additions, modifications, and
upgrade(s) must be made to certain existing
facilities of Transmission Provider’s
Transmission System to accommodate such
interconnection; and
Whereas, Affected System Interconnection
Customers have requested, and Transmission
Provider has agreed, to enter into this
Agreement for the purpose of facilitating the
construction of necessary Affected System
Network Upgrade(s);
Now, Therefore, in consideration of and
subject to the mutual covenants contained
herein, the Parties agree as follows:
Article 1—Definitions
When used in this Agreement, with initial
capitalization, the terms specified and not
otherwise defined in this Agreement shall
have the meanings indicated in this LGIP.
Article 2—Term of Agreement
2.1 Effective Date. This Agreement shall
become effective upon execution by the
Parties subject to acceptance by FERC (if
applicable), or if filed unexecuted, upon the
date specified by FERC.
2.2 Term.
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2.2.1 General. This Agreement shall
become effective as provided in Article 2.1
and shall continue in full force and effect
until the earlier of (1) the final repayment,
where applicable, by Transmission Provider
of the amount funded by Affected System
Interconnection Customers for Transmission
Provider’s design, procurement, construction,
and installation of the Affected System
Network Upgrade(s) provided in Appendix
A; (2) the Parties agree to mutually terminate
this Agreement; (3) earlier termination is
permitted or provided for under Appendix A
of this Agreement; or (4) Affected System
Interconnection Customers terminate this
Agreement after providing Transmission
Provider with written notice at least sixty
(60) Calendar Days prior to the proposed
termination date, provided that Affected
System Interconnection Customers have no
outstanding contractual obligations to
Transmission Provider under this Agreement.
No termination of this Agreement shall be
effective until the Parties have complied with
all Applicable Laws and Regulations
applicable to such termination. The term of
this Agreement may be adjusted upon mutual
agreement of the Parties if the commercial
operation date(s) for the {generating
facilities} is adjusted in accordance with the
rules and procedures established by {name of
host transmission provider} or the in-service
date for the Affected System Network
Upgrade(s) is adjusted in accordance with the
rules and procedures established by
Transmission Provider.
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2.2.2 Termination Upon Default. Default
shall mean the failure of a Breaching Party
to cure its Breach in accordance with Article
5 of this Agreement where Breach and
Breaching Party are defined in Article 5.
Defaulting Party shall mean the Party that is
in Default. In the event of a Default by a
Party, each non-Defaulting Party shall have
the termination rights described in Articles 5
and 6; provided, however, Transmission
Provider may not terminate this Agreement if
an Affected System Interconnection
Customer is the Defaulting Party and
compensates Transmission Provider within
thirty (30) Calendar Days for the amount of
damages billed to Affected System
Interconnection Customer(s) by Transmission
Provider for any such damages, including
costs and expenses incurred by Transmission
Provider as a result of such Default.
Notwithstanding the foregoing, Default by
one or more Affected System Interconnection
Customers shall not provide the other
Affected System Interconnection
Customer(s), either individually or in
concert, with the right to terminate the entire
Agreement. The non-Defaulting Party/Parties
may, individually or in concert, initiate the
removal of an Affected System
Interconnection Customer that is a Defaulting
Party from this Agreement. Transmission
Provider shall not terminate this Agreement
or the participation of any Affected System
Interconnection Customer without provision
being made for Transmission Provider to be
fully reimbursed for all of its costs incurred
under this Agreement.
2.2.3 Consequences of Termination. In
the event of a termination by a Party, other
than a termination by Affected System
Interconnection Customer(s) due to a Default
by Transmission Provider, each Affected
System Interconnection Customer whose
participation in this Agreement is terminated
shall be responsible for the payment to
Transmission Provider of all amounts then
due and payable for construction and
installation of the Affected System Network
Upgrade(s) (including, without limitation,
any equipment ordered related to such
construction), plus all out-of-pocket expenses
incurred by Transmission Provider in
connection with the construction and
installation of the Affected System Network
Upgrade(s), through the date of termination,
and, in the event of the termination of the
entire Agreement, any actual costs which
Transmission Provider reasonably incurs in
(1) winding up work and construction
demobilization and (2) ensuring the safety of
persons and property and the integrity and
safe and reliable operation of Transmission
Provider’s Transmission System.
Transmission Provider shall use Reasonable
Efforts to minimize such costs. The cost
responsibility of other Affected System
Interconnection Customers shall be adjusted,
as necessary, based on the payments by an
Affected System Interconnection Customer
that is terminated from the Agreement.
2.2.4 Reservation of Rights. Transmission
Provider shall have the right to make a
unilateral filing with FERC to modify this
Agreement with respect to any rates, terms
and conditions, charges, classifications of
service, rule or regulation under section 205
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or any other applicable provision of the
Federal Power Act and FERC’s rules and
regulations thereunder, and Affected System
Interconnection Customers shall have the
right to make a unilateral filing with FERC
to modify this Agreement pursuant to section
206 or any other applicable provision of the
Federal Power Act and FERC’s rules and
regulations thereunder; provided that each
Party shall have the right to protest any such
filing by the other Party and to participate
fully in any proceeding before FERC in
which such modifications may be
considered. Nothing in this Agreement shall
limit the rights of the Parties or of FERC
under sections 205 or 206 of the Federal
Power Act and FERC’s rules and regulations
thereunder, except to the extent that the
Parties otherwise mutually agree as provided
herein.
2.3 Filing. Transmission Provider shall
file this Agreement (and any amendment
hereto) with the appropriate Governmental
Authority, if required. Affected System
Interconnection Customers may request that
any information so provided be subject to the
confidentiality provisions of Article 8. Each
Affected System Interconnection Customer
that has executed this Agreement, or any
amendment thereto, shall reasonably
cooperate with Transmission Provider with
respect to such filing and to provide any
information reasonably requested by
Transmission Provider needed to comply
with applicable regulatory requirements.
2.4 Survival. This Agreement shall
continue in effect after termination, to the
extent necessary, to provide for final billings
and payments and for costs incurred
hereunder, including billings and payments
pursuant to this Agreement; to permit the
determination and enforcement of liability
and indemnification obligations arising from
acts or events that occurred while this
Agreement was in effect; and to permit each
Party to have access to the lands of the other
Party pursuant to this Agreement or other
applicable agreements, to disconnect,
remove, or salvage its own facilities and
equipment.
2.5 Termination Obligations. Upon any
termination pursuant to this Agreement or
termination of the participation in this
Agreement of an Affected System
Interconnection Customer, each Affected
System Interconnection Customer shall be
responsible for the payment of its
proportionate share of all costs or other
contractual obligations incurred prior to the
termination date, including previously
incurred capital costs, penalties for early
termination, and costs of removal and site
restoration. The cost responsibility of the
other Affected System Interconnection
Customers shall be adjusted as necessary.
Article 3—Construction of Affected System
Network Upgrade(s)
3.1 Construction.
3.1.1 Transmission Provider Obligations.
Transmission Provider shall (or shall cause
such action to) design, procure, construct,
and install, and Affected System
Interconnection Customers shall pay,
consistent with Article 3.2, the costs of all
Affected System Network Upgrade(s)
PO 00000
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Fmt 4701
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27169
identified in Appendix A. All Affected
System Network Upgrade(s) designed,
procured, constructed, and installed by
Transmission Provider pursuant to this
Agreement shall satisfy all requirements of
applicable safety and/or engineering codes
and comply with Good Utility Practice, and
further, shall satisfy all Applicable Laws and
Regulations. Transmission Provider shall not
be required to undertake any action which is
inconsistent with its standard safety
practices, its material and equipment
specifications, its design criteria and
construction procedures, its labor
agreements, or any Applicable Laws and
Regulations.
3.1.2 Suspension of Work.
3.1.2.1 Right to Suspend. Affected System
Interconnection Customers must jointly
provide to Transmission Provider written
notice of their request for suspension. Only
the milestones described in the Appendices
of this Agreement are subject to suspension
under this Article 3.1.2. Affected System
Network Upgrade(s) will be constructed on
the schedule described in the Appendices of
this Agreement unless: (1) construction is
prevented by the order of a Governmental
Authority; (2) the Affected System Network
Upgrade(s) are not needed by any other
Interconnection Customer; or (3)
Transmission Provider determines that a
Force Majeure event prevents construction.
In the event of (1), (2), or (3), any security
paid to Transmission Provider under Article
4.1 of this Agreement shall be released by
Transmission Provider upon the
determination by Transmission Provider that
the Affected System Network Upgrade(s) will
no longer be constructed. If suspension
occurs, Affected System Interconnection
Customers shall be responsible for the costs
which Transmission Provider incurs (i) in
accordance with this Agreement prior to the
suspension; (ii) in suspending such work,
including any costs incurred to perform such
work as may be necessary to ensure the safety
of persons and property and the integrity of
Transmission Provider’s Transmission
System and, if applicable, any costs incurred
in connection with the cancellation of
contracts and orders for material which
Transmission Provider cannot reasonably
avoid; and (iii) reasonably incurs in winding
up work and construction demobilization;
provided, however, that, prior to canceling
any such contracts or orders, Transmission
Provider shall obtain Affected System
Interconnection Customers’ authorization.
Affected System Interconnection Customers
shall be responsible for all costs incurred in
connection with Affected System
Interconnection Customers’ failure to
authorize cancellation of such contracts or
orders.
Interest on amounts paid by Affected
System Interconnection Customers to
Transmission Provider for the design,
procurement, construction, and installation
of the Affected System Network Upgrade(s)
shall not accrue during periods in which
Affected System Interconnection Customers
have suspended construction under this
Article 3.1.2.
Transmission Provider shall invoice
Affected System Interconnection Customers
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pursuant to Article 4 and will use Reasonable
Efforts to minimize its costs. In the event
Affected System Interconnection Customers
suspend work by Affected System
Transmission Provider required under this
Agreement pursuant to this Article 3.1.2.1,
and have not requested Affected System
Transmission Provider to recommence the
work required under this Agreement on or
before the expiration of three (3) years
following commencement of such
suspension, this Agreement shall be deemed
terminated. The three-year period shall begin
on the date the suspension is requested, or
the date of the written notice to Affected
System Transmission Provider, whichever is
earlier, if no effective date of suspension is
specified.
[3.1.2.2 Recommencing of Work. If
Affected System Interconnection Customers
request that Transmission Provider
recommence construction of Affected System
Network Upgrade(s), Transmission Provider
shall have no obligation to afford such work
the priority it would have had but for the
prior actions of Affected System
Interconnection Customers to suspend the
work. In such event, Affected System
Interconnection Customers shall be
responsible for any costs incurred in
recommencing the work. All recommenced
work shall be completed pursuant to an
amended schedule for the interconnection
agreed to by the Parties. Transmission
Provider has the right to conduct a restudy
of the Affected System Study if conditions
have materially changed subsequent to the
request to suspend. Affected System
Interconnection Customers shall be
responsible for the costs of any studies or
restudies required.]
[3.1.2.3 Right to Suspend Due to Default.
Transmission Provider reserves the right,
upon written notice to Affected System
Interconnection Customers, to suspend, at
any time, work by Transmission Provider due
to a Default by Affected System
Interconnection Customer(s). DefaultingAffected System Interconnection Customer(s)
shall be responsible for any additional
expenses incurred by Transmission Provider
associated with the construction and
installation of the Affected System Network
Upgrade(s) (as set forth in Article 2.2.3) upon
the occurrence of a Default pursuant to
Article 5. Any form of suspension by
Transmission Provider shall not be barred by
Articles 2.2.2, 2.2.3, or 5.2.2, nor shall it
affect Transmission Provider’s right to
terminate the work or this Agreement
pursuant to Article 6.]
3.1.3 Construction Status. Transmission
Provider shall keep Affected System
Interconnection Customers advised
periodically as to the progress of its design,
procurement, and construction efforts, as
described in Appendix A. An Affected
System Interconnection Customer may, at
any time and reasonably, request a progress
report from Transmission Provider. If, at any
time, an Affected System Interconnection
Customer determines that the completion of
the Affected System Network Upgrade(s) will
not be required until after the specified inservice date, such Affected System
Interconnection Customer will provide
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written notice to all other Parties of such
later date for which the completion of the
Affected System Network Upgrade(s) would
be required. Transmission Provider may
delay the in-service date of the Affected
System Network Upgrade(s) accordingly, but
only if agreed to by all other Affected System
Interconnection Customers.
3.1.4 Timely Completion. Transmission
Provider shall use Reasonable Efforts to
design, procure, construct, install, and test
the Affected System Network Upgrade(s) in
accordance with the schedule set forth in
Appendix A, which schedule may be revised
from time to time by mutual agreement of the
Parties. If any event occurs that will affect the
time or ability to complete the Affected
System Network Upgrade(s), Transmission
Provider shall promptly notify all other
Parties. In such circumstances, Transmission
Provider shall, within fifteen (15) Calendar
Days of such notice, convene a meeting with
Affected System Interconnection Customers
to evaluate the alternatives available to
Affected System Interconnection Customers.
Transmission Provider shall also make
available to Affected System Interconnection
Customers all studies and work papers
related to the event and corresponding delay,
including all information that is in the
possession of transmission Provider that is
reasonably needed by Affected System
Interconnection Customers to evaluate
alternatives, subject to confidentiality
arrangements consistent with Article 8.
Transmission Provider shall, at any Affected
System Interconnection Customer’s request
and expense, use Reasonable Efforts to
accelerate its work under this Agreement to
meet the schedule set forth in Appendix A,
provided that (1) Affected System
Interconnection Customers jointly authorize
such actions, such authorizations to be
withheld, conditioned, or delayed by a given
Affected System Interconnection Customer
only if it can demonstrate that the
acceleration would have a material adverse
effect on it; and (2) the requesting Affected
System Interconnection Customer(s) funds
the costs associated therewith in advance, or
all Affected System Interconnection
Customers agree in advance to fund such
costs based on such other allocation method
as they may adopt.
3.2 Interconnection Costs.
3.2.1 Costs. Affected System
Interconnection Customers shall pay to
Transmission Provider costs (including taxes
and financing costs) associated with seeking
and obtaining all necessary approvals and of
designing, engineering, constructing, and
testing the Affected System Network
Upgrade(s), as identified in Appendix A, in
accordance with the cost recovery method
provided herein. Except as expressly
otherwise agreed, Affected System
Interconnection Customers shall be
collectively responsible for these costs, based
on their proportionate share of cost
responsibility, as provided in Appendix A.
Unless Transmission Provider elects to fund
the Affected System Network Upgrade(s),
they shall be initially funded by the
applicable Affected System Interconnection
Customer.
3.2.1.1 Lands of Other Property Owners.
If any part of the Affected System Network
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Upgrade(s) is to be installed on property
owned by persons other than Affected
System Interconnection Customers or
Transmission Provider, Transmission
Provider shall, at Affected System
Interconnection Customers’ expense, use
efforts similar in nature and extent to those
that it typically undertakes on its own behalf
or on behalf of its Affiliates, including use of
its eminent domain authority to the extent
permitted and consistent with Applicable
Laws and Regulations and, to the extent
consistent with such Applicable Laws and
Regulations, to procure from such persons
any rights of use, licenses, rights-of-way, and
easements that are necessary to construct,
operate, maintain, test, inspect, replace, or
remove the Affected System Network
Upgrade(s) upon such property.
3.2.2 Repayment.
3.2.2.1 Repayment. Consistent with
articles 11.4.1 and 11.4.2 of [the]
Transmission Provider’s pro forma LGIA,
each Affected System Interconnection
Customer shall be entitled to a cash
repayment by Transmission Provider of the
amount each Affected System
Interconnection Customer paid to
Transmission Provider, if any, for the
Affected System Network Upgrade(s),
including any tax gross-up or other taxrelated payments associated with the
Affected System Network Upgrade(s), and
not refunded to Affected System
Interconnection Customer pursuant to Article
3.3.1 or otherwise. The Parties may mutually
agree to a repayment schedule, to be outlined
in Appendix A, not to exceed twenty (20)
years from the commercial operation date, for
the complete repayment for all applicable
costs associated with the Affected System
Network Upgrade(s). Any repayment shall
include interest calculated in accordance
with the methodology set forth in FERC’s
regulations at 18 CFR 35.19 a(a)(2)(iii) from
the date of any payment for Affected System
Network Upgrade(s) through the date on
which Affected System Interconnection
Customers receive a repayment of such
payment pursuant to this subparagraph.
Interest shall not accrue during periods in
which Affected System Interconnection
Customers have suspended construction
pursuant to Article 3.1.2.1. Affected System
Interconnection Customers may assign such
repayment rights to any person.
3.2.2.2 Impact of Failure to Achieve
Commercial Operation. If an Affected System
Interconnection Customer’s generating
facility fails to achieve commercial operation,
but it or another generating facility is later
constructed and makes use of the Affected
System Network Upgrade(s), Transmission
Provider shall at that time reimburse such
Affected System Interconnection Customers
for the portion of the Affected System
Network Upgrade(s) it funded. Before any
such reimbursement can occur, Affected
System Interconnection Customer (or the
entity that ultimately constructs the
generating facility, if different), is responsible
for identifying the entity to which the
reimbursement must be made.
3.3 Taxes.
3.3.1 Indemnification for Contributions in
Aid of Construction. With regard only to
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payments made by Affected System
Interconnection Customers to Transmission
Provider for the installation of the Affected
System Network Upgrade(s), Transmission
Provider shall not include a gross-up for
income taxes in the amounts it charges
Affected System Interconnection Customers
for the installation of the Affected System
Network Upgrade(s) unless (1) Transmission
Provider has determined, in good faith, that
the payments or property transfers made by
Affected System Interconnection Customers
to Transmission Provider should be reported
as income subject to taxation, or (2) any
Governmental Authority directs
Transmission Provider to report payments or
property as income subject to taxation.
Affected System Interconnection Customers
shall reimburse Transmission Provider for
such costs on a fully grossed-up basis, in
accordance with this Article, within thirty
(30) Calendar Days of receiving written
notification from Transmission Provider of
the amount due, including detail about how
the amount was calculated.
The indemnification obligation shall
terminate at the earlier of (1) the expiration
of the ten (10)-year testing period and the
applicable statute of limitation, as it may be
extended by Transmission Provider upon
request of the Internal Revenue Service, to
keep these years open for audit or
adjustment, or (2) the occurrence of a
subsequent taxable event and the payment of
any related indemnification obligations as
contemplated by this Article.
Notwithstanding the foregoing provisions of
this Article 3.3.1, and to the extent permitted
by law, to the extent that the receipt of such
payments by Transmission Provider is
determined by any Governmental Authority
to constitute income by Transmission
Provider subject to taxation, Affected System
Interconnection Customers shall protect,
indemnify, and hold harmless Transmission
Provider and its Affiliates, from all claims by
any such Governmental Authority for any
tax, interest, and/or penalties associated with
such determination. Upon receiving written
notification of such determination from the
Governmental Authority, Transmission
Provider shall provide Affected System
Interconnection Customers with written
notification within thirty (30) Calendar Days
of such determination and notification.
Transmission Provider, upon the timely
written request by any one or more Affected
System Interconnection Customer(s) and at
the expense of such Affected System
Interconnection Customer(s), shall appeal,
protest, seek abatement of, or otherwise
oppose such determination. Transmission
Provider reserves the right to make all
decisions with regard to the prosecution of
such appeal, protest, abatement or other
contest, including the compromise or
settlement of the claim; provided that
Transmission Provider shall cooperate and
consult in good faith with the requesting
Affected System Interconnection Customer(s)
regarding the conduct of such contest.
Affected System Interconnection Customer(s)
shall not be required to pay Transmission
Provider for the tax, interest, and/or penalties
prior to the seventh (7th) Calendar Day before
the date on which Transmission Provider (1)
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is required to pay the tax, interest, and/or
penalties or other amount in lieu thereof
pursuant to a compromise or settlement of
the appeal, protest, abatement, or other
contest; (2) is required to pay the tax,
interest, and/or penalties as the result of a
final, non-appealable order by a
Governmental Authority; or (3) is required to
pay the tax, interest, and/or penalties as a
prerequisite to an appeal, protest, abatement,
or other contest. In the event such appeal,
protest, abatement, or other contest results in
a determination that Transmission Provider
is not liable for any portion of any tax,
interest, and/or penalties for which any
Affected System Interconnection Customer(s)
has already made payment to Transmission
Provider, Transmission Provider shall
promptly refund to such Affected System
Interconnection Customer(s) any payment
attributable to the amount determined to be
non-taxable, plus any interest (calculated in
accordance with 18 CFR 35.19a(a)(2)(iii)) or
other payments Transmission Provider
receives or to which Transmission Provider
may be entitled with respect to such
payment. Each Affected System
Interconnection Customer shall provide
Transmission Provider with credit assurances
sufficient to meet each Affected System
Interconnection Customer’s estimated
liability for reimbursement of Transmission
Provider for taxes, interest, and/or penalties
under this Article 3.3.1. Such estimated
liability shall be stated in Appendix A.
To the extent that Transmission Provider is
a limited liability company and not a
corporation, and has elected to be taxed as
a partnership, then the following shall apply:
Transmission Provider represents, and the
Parties acknowledge, that Transmission
Provider is a limited liability company and
is treated as a partnership for federal income
tax purposes. Any payment made by Affected
System Interconnection Customers to
Transmission Provider for Affected System
Network Upgrade(s) is to be treated as an
upfront payment. It is anticipated by the
Parties that any amounts paid by each
Affected System Interconnection Customer to
Transmission Provider for Affected System
Network Upgrade(s) will be reimbursed to
such Affected System Interconnection
Customer in accordance with the terms of
this Agreement, provided such Affected
System Interconnection Customer fulfills its
obligations under this Agreement.
3.3.2 Private Letter Ruling. At the request
and expense of any Affected System
Interconnection Customer(s), Transmission
Provider shall file with the Internal Revenue
Service a request for a private letter ruling as
to whether any property transferred or sums
paid, or to be paid, by such Affected System
Interconnection Customer(s) to Transmission
Provider under this Agreement are subject to
federal income taxation. Each Affected
System Interconnection Customer desiring
such a request will prepare the initial draft
of the request for a private letter ruling and
will certify under penalties of perjury that all
facts represented in such request are true and
accurate to the best of such Affected System
Interconnection Customer’s knowledge.
Transmission Provider and such Affected
System Interconnection Customer(s) shall
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cooperate in good faith with respect to the
submission of such request.
3.3.3 Other Taxes. Upon the timely
request by any one or more Affected System
Interconnection Customer(s), and at such
Affected System Interconnection
Customer(s)’ sole expense, Transmission
Provider shall appeal, protest, seek
abatement of, or otherwise contest any tax
(other than federal or state income tax)
asserted or assessed against Transmission
Provider for which such Affected System
Interconnection Customer(s) may be required
to reimburse Transmission Provider under
the terms of this Agreement. Affected System
Interconnection Customer(s) who requested
the action shall pay to Transmission Provider
on a periodic basis, as invoiced by
Transmission Provider, Transmission
Provider’s documented reasonable costs of
prosecuting such appeal, protest, abatement,
or other contest. The requesting Affected
System Interconnection Customer(s) and
Transmission Provider shall cooperate in
good faith with respect to any such contest.
Unless the payment of such taxes is a
prerequisite to an appeal or abatement or
cannot be deferred, no amount shall be
payable by Affected System Interconnection
Customer(s) to Transmission Provider for
such taxes until they are assessed by a final,
non-appealable order by any court or agency
of competent jurisdiction. In the event that a
tax payment is withheld and ultimately due
and payable after appeal, Affected System
Interconnection Customer(s) will be
responsible for all taxes, interest, and
penalties, other than penalties attributable to
any delay caused by Transmission Provider.
Each Party shall cooperate with the other
Party to maintain each Party’s tax status.
Nothing in this Agreement is intended to
adversely affect any Party’s tax-exempt status
with respect to the issuance of bonds
including, but not limited to, local furnishing
bonds, as described in section 142(f) of the
Internal Revenue Code.
Article 4
Security, Billing, and Payments
4.1 Provision of Security. By the earlier of
(1) thirty (30) Calendar Days prior to the due
date for each Affected System
Interconnection Customer’s first payment
under the payment schedule specified in
Appendix A, or (2) the first date specified in
Appendix A for the ordering of equipment by
Transmission Provider for installing the
Affected System Network Upgrade(s), each
Affected System Interconnection Customer
shall provide Transmission Provider, at each
Affected System Interconnection Customer’s
option, a guarantee, a surety bond, letter of
credit, or other form of security that is
reasonably acceptable to Transmission
Provider. Such security for payment shall be
in an amount sufficient to cover the costs for
constructing, procuring, and installing the
applicable portion of Affected System
Network Upgrade(s) and shall be reduced on
a dollar-for-dollar basis for payments made to
Transmission Provider for these purposes.
The guarantee must be made by an entity
that meets the creditworthiness requirements
of Transmission Provider and contain terms
and conditions that guarantee payment of
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any amount that may be due from such
Affected System Interconnection Customer,
up to an agreed-to maximum amount. The
letter of credit must be issued by a financial
institution reasonably acceptable to
Transmission Provider and must specify a
reasonable expiration date. The surety bond
must be issued by an insurer reasonably
acceptable to Transmission Provider and
must specify a reasonable expiration date.
4.2 Invoice. Each Party shall submit to
the other Parties, on a monthly basis,
invoices of amounts due, if any, for the
preceding month. Each invoice shall state the
month to which the invoice applies and fully
describe the services and equipment
provided. The Parties may discharge mutual
debts and payment obligations due and
owing to each other on the same date through
netting, in which case all amounts a Party
owes to another Party under this Agreement,
including interest payments, shall be netted
so that only the net amount remaining due
shall be paid by the owing Party.
4.3 Payment. Invoices shall be rendered
to the paying Party at the address specified
by the Parties. The Party receiving the
invoice shall pay the invoice within thirty
(30) Calendar Days of receipt. All payments
shall be made in immediately available funds
payable to the other Party, or by wire transfer
to a bank named and account designated by
the invoicing Party. Payment of invoices by
a Party will not constitute a waiver of any
rights or claims that Party may have under
this Agreement.
4.4 Final Invoice. Within six (6) months
after completion of the construction of the
Affected System Network Upgrade(s)
Transmission Provider shall provide an
invoice of the final cost of the construction
of the Affected System Network Upgrade(s)
and shall set forth such costs in sufficient
detail to enable each Affected System
Interconnection Customer to compare the
actual costs with the estimates and to
ascertain deviations, if any, from the cost
estimates. Transmission Provider shall
refund, with interest (calculated in
accordance with 18 CFR 35.19a(a)(2)(iii)), to
each Affected System Interconnection
Customer any amount by which the actual
payment by Affected System Interconnection
Customer for estimated costs exceeds the
actual costs of construction within thirty (30)
Calendar Days of the issuance of such final
construction invoice.
4.5 Interest. Interest on any unpaid
amounts shall be calculated in accordance
with 18 CFR 35.19a(a)(2)(iii).
4.6 Payment During Dispute. In the event
of a billing dispute among the Parties,
Transmission Provider shall continue to
construct the Affected System Network
Upgrade(s) under this Agreement as long as
each Affected System Interconnection
Customer: (1) continues to make all payments
not in dispute; and (2) pays to Transmission
Provider or into an independent escrow
account the portion of the invoice in dispute,
pending resolution of such dispute. If any
Affected System Interconnection Customer
fails to meet these two requirements, then
Transmission Provider may provide notice to
such Affected System Interconnection
Customer of a Default pursuant to Article 5.
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Within thirty (30) Calendar Days after the
resolution of the dispute, the Party that owes
money to another Party shall pay the amount
due with interest calculated in accordance
with the methodology set forth in 18 CFR
35.19a(a)(2)(iii).
Article 5
Breach, Cure, and Default
5.1 Events of Breach. A Breach of this
Agreement shall include the:
(a) Failure to pay any amount when due;
(b) Failure to comply with any material
term or condition of this Agreement,
including but not limited to any material
Breach of a representation, warranty, or
covenant made in this Agreement;
(c) Failure of a Party to provide such access
rights, or a Party’s attempt to revoke access
or terminate such access rights, as provided
under this Agreement; or
(d) Failure of a Party to provide
information or data to another Party as
required under this Agreement, provided the
Party entitled to the information or data
under this Agreement requires such
information or data to satisfy its obligations
under this Agreement.
5.2 Definition. Breaching Party shall
mean the Party that is in Breach.
5.3 Notice of Breach, Cure, and Default.
Upon the occurrence of an event of Breach,
any Party aggrieved by the Breach, when it
becomes aware of the Breach, shall give
written notice of the Breach to the Breaching
Party and to any other person representing a
Party to this Agreement identified in writing
to the other Party in advance. Such notice
shall set forth, in reasonable detail, the
nature of the Breach, and where known and
applicable, the steps necessary to cure such
Breach.
5.2.1 Upon receiving written notice of the
Breach hereunder, the Breaching Party shall
have a period to cure such Breach
(hereinafter referred to as the ‘‘Cure Period’’)
which shall be sixty (60) Calendar Days. If an
Affected System Interconnection Customer is
the Breaching Party and the Breach results
from a failure to provide payments or
security under Article 4.1 of this Agreement,
the other Affected System Interconnection
Customers, either individually or in concert,
may cure the Breach by paying the amounts
owed or by providing adequate security,
without waiver of contribution rights against
the breaching Affected System
Interconnection Customer. Such cure for the
Breach of an Affected System
Interconnection Customer is subject to the
reasonable consent of Transmission Provider.
Transmission Provider may also cure such
Breach by funding the proportionate share of
the Affected System Network Upgrade costs
related to the Breach of Affected System
Interconnection Customer. Transmission
Provider must notify all Parties that it will
exercise this option within thirty (30)
Calendar Days of notification that an Affected
System Interconnection Customer has failed
to provide payments or security under
Article 4.1.
5.2.2 In the event the Breach is not cured
within the Cure Period, the Breaching Party
will be in Default of this Agreement, and the
non-Defaulting Parties may (1) act in concert
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to amend the Agreement to remove an
Affected System Interconnection Customer
that is in Default from this Agreement for
cause and to make other changes as
necessary, or (2) either in concert or
individually take whatever action at law or
in equity as may appear necessary or
desirable to enforce the performance or
observance of any rights, remedies,
obligations, agreement, or covenants under
this Agreement.
5.3 Rights in the Event of Default.
Notwithstanding the foregoing, upon the
occurrence of Default, the non-Defaulting
Parties shall be entitled to exercise all rights
and remedies it may have in equity or at law.
Article 6
Termination of Agreement
6.1 Expiration of Term. Except as
otherwise specified in this Article 6, the
Parties’ obligations under this Agreement
shall terminate at the conclusion of the term
of this Agreement.
6.2 Termination and Removal. Subject to
the limitations set forth in Article 6.3, in the
event of a Default, termination of this
Agreement, as to a given Affected System
Interconnection Customer or in its entirety,
shall require a filing at FERC of a notice of
termination, which filing must be accepted
for filing by FERC.
6.3 Disposition of Facilities Upon
Termination of Agreement.
6.3.1 Transmission Provider Obligations.
Upon termination of this Agreement, unless
otherwise agreed to by the Parties in writing,
Transmission Provider:
(a) shall, prior to the construction and
installation of any portion of the Affected
System Network Upgrade(s) and to the extent
possible, cancel any pending orders of, or
return, such equipment or material for such
Affected System Network Upgrade(s);
(b) may keep in place any portion of the
Affected System Network Upgrade(s) already
constructed and installed; and,
(c) shall perform such work as may be
necessary to ensure the safety of persons and
property and to preserve the integrity of
Transmission Provider’s Transmission
System (e.g., construction demobilization to
return the system to its original state, windup work).
6.3.2 Affected System Interconnection
Customer Obligations. Upon billing by
Transmission Provider, each Affected System
Interconnection Customer shall reimburse
Transmission Provider for its share of any
costs incurred by Transmission Provider in
performance of the actions required or
permitted by Article 6.3.1 and for its share
of the cost of any Affected System Network
Upgrade(s) described in Appendix A.
Transmission Provider shall use Reasonable
Efforts to minimize costs and shall offset the
amounts owed by any salvage value of
facilities, if applicable. Each Affected System
Interconnection Customer shall pay these
costs pursuant to Article 4.3 of this
Agreement.
6.3.3 Pre-construction or Installation.
Upon termination of this Agreement and
prior to the construction and installation of
any portion of the Affected System Network
Upgrade(s), Transmission Provider may, at its
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option, retain any portion of such Affected
System Network Upgrade(s) not cancelled or
returned in accordance with Article 6.3.1(a),
in which case Transmission Provider shall be
responsible for all costs associated with
procuring such Affected System Network
Upgrade(s). To the extent that an Affected
System Interconnection Customer has
already paid Transmission Provider for any
or all of such costs, Transmission Provider
shall refund Affected System Interconnection
Customer for those payments. If
Transmission Provider elects to not retain
any portion of such facilities, and one or
more of Affected System Interconnection
Customers wish to purchase such facilities,
Transmission Provider shall convey and
make available to the applicable Affected
System Interconnection Customer(s) such
facilities as soon as practicable after Affected
System Interconnection Customer(s)’
payment for such facilities.
6.4 Survival of Rights. Termination or
expiration of this Agreement shall not relieve
any Party of any of its liabilities and
obligations arising hereunder prior to the
date termination becomes effective, and each
Party may take whatever judicial or
administrative actions as appear necessary or
desirable to enforce its rights hereunder. The
applicable provisions of this Agreement will
continue in effect after expiration, or early
termination hereof, to the extent necessary to
provide for (1) final billings, billing
adjustments, and other billing procedures set
forth in this Agreement; (2) the determination
and enforcement of liability and
indemnification obligations arising from acts
or events that occurred while this Agreement
was in effect; and (3) the confidentiality
provisions set forth in Article 8.
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Article 7
Subcontractors
7.1 Subcontractors. Nothing in this
Agreement shall prevent a Party from
utilizing the services of subcontractors, as it
deems appropriate, to perform its obligations
under this Agreement; provided, however,
that each Party shall require its
subcontractors to comply with all applicable
terms and conditions of this Agreement in
providing such services, and each Party shall
remain primarily liable to the other Parties
for the performance of such subcontractor.
7.1.1 Responsibility of Principal. The
creation of any subcontract relationship shall
not relieve the hiring Party of any of its
obligations under this Agreement. In
accordance with the provisions of this
Agreement, each Party shall be fully
responsible to the other Parties for the acts
or omissions of any subcontractor it hires as
if no subcontract had been made. Any
applicable obligation imposed by this
Agreement upon a Party shall be equally
binding upon, and shall be construed as
having application to, any subcontractor of
such Party.
7.1.2 No Third-Party Beneficiary. Except
as may be specifically set forth to the
contrary herein, no subcontractor or any
other party is intended to be, nor will it be
deemed to be, a third-party beneficiary of this
Agreement.
7.1.3 No Limitation by Insurance. The
obligations under this Article 7 will not be
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limited in any way by any limitation of any
insurance policies or coverages, including
any subcontractor’s insurance.
Article 8
Confidentiality
8.1 Confidentiality. Confidential
Information shall include, without limitation,
all information relating to a Party’s
technology, research and development,
business affairs, and pricing, and any
information supplied to the other Parties
prior to the execution of this Agreement.
Information is Confidential Information
only if it is clearly designated or marked in
writing as confidential on the face of the
document, or, if the information is conveyed
orally or by inspection, if the Party providing
the information orally informs the Party
receiving the information that the
information is confidential. The Parties shall
maintain as confidential any information that
is provided and identified by a Party as
Critical Energy Infrastructure Information
(CEII), as that term is defined in 18 CFR
388.113(c).
Such confidentiality will be maintained in
accordance with this Article 8. If requested
by the receiving Party, the disclosing Party
shall provide in writing, the basis for
asserting that the information referred to in
this Article warrants confidential treatment,
and the requesting Party may disclose such
writing to the appropriate Governmental
Authority. Each Party shall be responsible for
the costs associated with affording
confidential treatment to its information.
8.1.1 Term. During the term of this
Agreement, and for a period of three (3) years
after the expiration or termination of this
Agreement, except as otherwise provided in
this Article 8 or with regard to CEII, each
Party shall hold in confidence and shall not
disclose to any person Confidential
Information. CEII shall be treated in
accordance with FERC policies and
regulations.
8.1.2 Scope. Confidential Information
shall not include information that the
receiving Party can demonstrate: (1) is
generally available to the public other than
as a result of a disclosure by the receiving
Party; (2) was in the lawful possession of the
receiving Party on a non-confidential basis
before receiving it from the disclosing Party;
(3) was supplied to the receiving Party
without restriction by a non-Party, who, to
the knowledge of the receiving Party after
due inquiry, was under no obligation to the
disclosing Party to keep such information
confidential; (4) was independently
developed by the receiving Party without
reference to Confidential Information of the
disclosing Party; (5) is, or becomes, publicly
known, through no wrongful act or omission
of the receiving Party or Breach of this
Agreement; or (6) is required, in accordance
with Article 8.1.6 of this Agreement, to be
disclosed by any Governmental Authority or
is otherwise required to be disclosed by law
or subpoena, or is necessary in any legal
proceeding establishing rights and
obligations under this Agreement.
Information designated as Confidential
Information will no longer be deemed
confidential if the Party that designated the
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information as confidential notifies the
receiving Party that it no longer is
confidential.
8.1.3 Release of Confidential Information.
No Party shall release or disclose
Confidential Information to any other person,
except to its Affiliates (limited by the
Standards of Conduct requirements),
subcontractors, employees, agents,
consultants, or to non-Parties that may be or
are considering providing financing to or
equity participation with Affected System
Interconnection Customer(s), or to potential
purchasers or assignees of Affected System
Interconnection Customer(s), on a need-toknow basis in connection with this
Agreement, unless such person has first been
advised of the confidentiality provisions of
this Article 8 and has agreed to comply with
such provisions. Notwithstanding the
foregoing, a Party providing Confidential
Information to any person shall remain
primarily responsible for any release of
Confidential Information in contravention of
this Article 8.
8.1.4 Rights. Each Party shall retain all
rights, title, and interest in the Confidential
Information that it discloses to the receiving
Party. The disclosure by a Party to the
receiving Party of Confidential Information
shall not be deemed a waiver by the
disclosing Party or any other person or entity
of the right to protect the Confidential
Information from public disclosure.
8.1.5 Standard of Care. Each Party shall
use at least the same standard of care to
protect Confidential Information it receives
as it uses to protect its own Confidential
Information from unauthorized disclosure,
publication, or dissemination. Each Party
may use Confidential Information solely to
fulfill its obligations to the other Party under
this Agreement or its regulatory
requirements.
8.1.6 Order of Disclosure. If a court or a
Government Authority or entity with the
right, power, and apparent authority to do so
requests or requires any Party, by subpoena,
oral deposition, interrogatories, requests for
production of documents, administrative
order, or otherwise, to disclose Confidential
Information, that Party shall provide the
disclosing Party with prompt notice of such
request(s) or requirement(s) so that the
disclosing Party may seek an appropriate
protective order or waive compliance with
the terms of this Agreement. Notwithstanding
the absence of a protective order or waiver,
the Party may disclose such Confidential
Information which, in the opinion of its
counsel, the Party is legally compelled to
disclose. Each Party will use Reasonable
Efforts to obtain reliable assurance that
confidential treatment will be accorded any
Confidential Information so furnished.
8.1.7 Termination of Agreement. Upon
termination of this Agreement for any reason,
each Party shall, within ten (10) Business
Days of receipt of a written request from the
other Party, use Reasonable Efforts to destroy,
erase, or delete (with such destruction,
erasure, and deletion certified in writing to
the requesting Party) or return to the
requesting Party any and all written or
electronic Confidential Information received
from the requesting Party, except that each
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Party may keep one copy for archival
purposes, provided that the obligation to
treat it as Confidential Information in
accordance with this Article 8 shall survive
such termination.
8.1.8 Remedies. The Parties agree that
monetary damages would be inadequate to
compensate a Party for another Party’s
Breach of its obligations under this Article 8.
Each Party accordingly agrees that the
disclosing Party shall be entitled to equitable
relief, by way of injunction or otherwise, if
the receiving Party Breaches or threatens to
Breach its obligations under this Article 8,
which equitable relief shall be granted
without bond or proof of damages, and the
Breaching Party shall not plead in defense
that there would be an adequate remedy at
law. Such remedy shall not be deemed an
exclusive remedy for the Breach of this
Article 8, but it shall be in addition to all
other remedies available at law or in equity.
The Parties further acknowledge and agree
that the covenants contained herein are
necessary for the protection of legitimate
business interests and are reasonable in
scope. No Party, however, shall be liable for
indirect, incidental, or consequential or
punitive damages of any nature or kind
resulting from or arising in connection with
this Article 8.
8.1.9 Disclosure to FERC, its Staff, or a
State Regulatory Body. Notwithstanding
anything in this Article 8 to the contrary, and
pursuant to 18 CFR 1b.20, if FERC or its staff,
during the course of an investigation or
otherwise, requests information from a Party
that is otherwise required to be maintained
in confidence pursuant to this Agreement,
the Party shall provide the requested
information to FERC or its staff, within the
time provided for in the request for
information. In providing the information to
FERC or its staff, the Party must, consistent
with 18 CFR 388.112, request that the
information be treated as confidential and
non-public by FERC and its staff and that the
information be withheld from public
disclosure. Parties are prohibited from
notifying the other Parties to this Agreement
prior to the release of the Confidential
Information to FERC or its staff. The Party
shall notify the other Parties to the
Agreement when it is notified by FERC or its
staff that a request to release Confidential
Information has been received by FERC, at
which time either of the Parties may respond
before such information would be made
public, pursuant to 18 CFR 388.112. Requests
from a state regulatory body conducting a
confidential investigation shall be treated in
a similar manner if consistent with the
applicable state rules and regulations.
8.1.10 Subject to the exception in Article
8.1.9, any information that a disclosing Party
claims is competitively sensitive,
commercial, or financial information under
this Agreement shall not be disclosed by the
receiving Party to any person not employed
or retained by the receiving Party, except to
the extent disclosure is (1) required by law;
(2) reasonably deemed by the disclosing
Party to be required to be disclosed in
connection with a dispute between or among
the Parties, or the defense of litigation or
dispute; (3) otherwise permitted by consent
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of the disclosing Party, such consent not to
be unreasonably withheld; or (4) necessary to
fulfill its obligations under this Agreement or
as Transmission Provider or a balancing
authority, including disclosing the
Confidential Information to a regional or
national reliability organization. The Party
asserting confidentiality shall notify the
receiving Party in writing of the information
that Party claims is confidential. Prior to any
disclosures of that Party’s Confidential
Information under this subparagraph, or if
any non-Party or Governmental Authority
makes any request or demand for any of the
information described in this subparagraph,
the Party that received the Confidential
Information from the disclosing Party agrees
to promptly notify the disclosing Party in
writing and agrees to assert confidentiality
and cooperate with the disclosing Party in
seeking to protect the Confidential
Information from public disclosure by
confidentiality agreement, protective order,
or other reasonable measures.
Article 9
Information Access and Audit Rights
9.1 Information Access. Each Party shall
make available to the other Parties
information necessary to verify the costs
incurred by the other Parties for which the
requesting Party is responsible under this
Agreement and carry out obligations and
responsibilities under this Agreement,
provided that the Parties shall not use such
information for purposes other than those set
forth in this Article 9.1 and to enforce their
rights under this Agreement.
9.2 Audit Rights. Subject to the
requirements of confidentiality under Article
8 of this Agreement, the accounts and records
related to the design, engineering,
procurement, and construction of the
Affected System Network Upgrade(s) shall be
subject to audit during the period of this
Agreement and for a period of twenty-four
(24) months following Transmission
Provider’s issuance of a final invoice in
accordance with Article 4.4. Affected System
Interconnection Customers may, jointly or
individually, at the expense of the requesting
Party(ies), during normal business hours, and
upon prior reasonable notice to Transmission
Provider, audit such accounts and records.
Any audit authorized by this Article 9.2 shall
be performed at the offices where such
accounts and records are maintained and
shall be limited to those portions of such
accounts and records that relate to
obligations under this Agreement.
Article 10
Notices
10.1 General. Any notice, demand, or
request required or permitted to be given by
a Party to the other Parties, and any
instrument required or permitted to be
tendered or delivered by a Party in writing
to another Party, may be so given, tendered,
or delivered, as the case may be, by
depositing the same with the United States
Postal Service with postage prepaid, for
transmission by certified or registered mail,
addressed to the Parties, or personally
delivered to the Parties, at the address set out
below:
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To Transmission Provider:
To Affected System Interconnection
Customers:
10.2 Billings and Payments. Billings and
payments shall be sent to the addresses
shown in Article 10.1 unless otherwise
agreed to by the Parties.
10.3 Alternative Forms of Notice. Any
notice or request required or permitted to be
given by a Party to the other Parties and not
required by this Agreement to be given in
writing may be so given by telephone,
facsimile, or email to the telephone numbers
and email addresses set out below:
To Transmission Provider:
To Affected System Interconnection
Customers:
10.4 Execution and Filing. Affected
System Interconnection Customers shall
either: (i) execute two originals of this
tendered Agreement and return them to
Transmission Provider; or (ii) request in
writing that Transmission Provider file with
FERC this Agreement in unexecuted form. As
soon as practicable, but not later than ten (10)
Business Days after receiving either the two
executed originals of this tendered
Agreement (if it does not conform with a
FERC-approved standard form of this
Agreement) or the request to file this
Agreement unexecuted, Transmission
Provider shall file this Agreement with FERC,
together with its explanation of any matters
as to which Affected System Interconnection
Customers and Transmission Provider
disagree and support for the costs that
Transmission Provider proposes to charge to
Affected System Interconnection Customers
under this Agreement. An unexecuted
version of this Agreement should contain
terms and conditions deemed appropriate by
Transmission Provider for the Affected
System Interconnection Customers’
generating facilities. If the Parties agree to
proceed with design, procurement, and
construction of facilities and upgrades under
the agreed-upon terms of the unexecuted
version of this Agreement, they may proceed
pending FERC action.
Article 11
Miscellaneous
11.1 This Agreement shall include
standard miscellaneous terms including, but
not limited to, indemnities, representations,
disclaimers, warranties, governing law,
amendment, execution, waiver,
enforceability, and assignment, which reflect
best practices in the electric industry, that are
consistent with regional practices,
Applicable Laws and Regulations, and the
organizational nature of each Party. All of
these provisions, to the extent practicable,
shall be consistent with the provisions of this
LGIP.
{Signature Page to Follow}
In witness whereof, the Parties have
executed this Agreement in multiple
originals, each of which shall constitute and
be an original Agreement among the Parties.
Transmission Provider
{Transmission Provider}
By: lllllllllllllllllll
Name: lllllllllllllllll
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Title: llllllllllllllllll
Affected System Interconnection Customer
{Affected System Interconnection Customer}
By: lllllllllllllllllll
Name: lllllllllllllllll
Title: llllllllllllllllll
Project No. lllllllllllllll
Affected System Interconnection Customer
{Affected System Interconnection Customer}
By: lllllllllllllllllll
Name: lllllllllllllllll
Title: llllllllllllllllll
Project No. lllllllllllllll
Attachment A to Appendix 12
Multiparty Affected System Facilities
Construction Agreement
Affected System Network Upgrade(s), Cost
Estimates and Responsibility, Construction
Schedule, and Monthly Payment Schedule
This Appendix A is a part of the
Multiparty Affected System Facilities
Construction Agreement [between] among
Affected System Interconnection Customers
and Transmission Provider.
1.1 Affected System Network Upgrade(s)
to be installed by Transmission Provider.
{description}
1.2 First Equipment Order (including
permitting).
{description}
1.2.1. Permitting and Land Rights—
Transmission Provider Affected System
Network Upgrade(s)
{description}
1.3 Construction Schedule. Where
applicable, construction of the Affected
System Network Upgrade(s) is scheduled as
follows and will be periodically updated as
necessary:
TABLE 3—TRANSMISSION PROVIDER CONSTRUCTION ACTIVITIES
Milestone No.
Description
Note: Construction schedule assumes that
Transmission Provider has obtained final
authorizations and security from Affected
System Interconnection Customers and all
necessary permits from Governmental
Authorities as necessary prerequisites to
commence construction of any of the
Affected System Network Upgrade(s).
1.4 Payment Schedule.
1.4.1 Timing of and Adjustments to
Affected System Interconnection Customers’
Payments and Security.
{description}
1.4.2 Monthly Payment Schedule.
Affected System Interconnection Customers’
payment schedule is as follows.
{description}
TABLE 4—AFFECTED SYSTEM INTERCONNECTION CUSTOMERS’ PAYMENT/
SECURITY OBLIGATIONS FOR AFFECTED SYSTEM NETWORK UPGRADE(S)
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Milestone No.
Description
Date
* Affected System Interconnection
Customers’ proportionate responsibility for
each payment is as follows:
Affected System Interconnection Customer 1
ll.l%
Affected System Interconnection Customer 2
ll.l%
Affected System Interconnection Customer N
ll.l%
Note: Affected System Interconnection
Customers’ payment or provision of security
as provided in this Agreement operates as a
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Start Date
condition precedent to Transmission
Provider’s obligations to construct any
Affected System Network Upgrade(s), and
failure to meet this schedule will constitute
a Breach pursuant to Article 5.1 of this
Agreement.
1.5 Permits, Licenses, and
Authorizations.
{description}
Attachment B to Appendix 12
Multiparty Affected System Facilities
Construction Agreement
Notification of Completed Construction
This Appendix B is a part of the Multiparty
Affected System Facilities Construction
Agreement among Affected System
Interconnection Customers and Transmission
Provider. Where applicable, when
Transmission Provider has completed
construction of the Affected System Network
Upgrade(s), Transmission Provider shall send
notice to Affected System Interconnection
Customers in substantially the form
following:
{Date}
{Affected System Interconnection Customers
Addresses}
Re: Completion of Affected System Network
Upgrade(s)
Dear {Name or Title}:
This letter is sent pursuant to the
Multiparty Affected System Facilities
Construction Agreement among
{Transmission Provider} and {Affected
System Interconnection Customers}, dated ,
20.
On {Date}, Transmission Provider
completed to its satisfaction all work on the
Affected System Network Upgrade(s)
required to facilitate the safe and reliable
interconnection and operation of Affected
System Interconnection Customer’s
generating facilities. Transmission Provider
confirms that the Affected System Network
Upgrade(s) are in place.
Thank you.
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End Date
{Signature}
{Transmission Provider Representative}
Attachment C to Appendix 12
Multiparty Affected System Facilities
Construction Agreement
EXHIBITS
This Appendix C is a part of the Multiparty
Affected System Facilities Construction
Agreement among Affected System
Interconnection Customers and Transmission
Provider.
Exhibit A1—Transmission Provider Site Map
Exhibit A2—Site Plan
Exhibit A3—Affected System Network
Upgrade(s) Plan & Profile
Exhibit A4—Estimated Cost of Affected
System Network Upgrade(s)
Facilities to be
constructed by
transmission
provider
Location
I
I
Estimate
in
dollars
Total:
Appendix D: Changes to pro forma
LGIA
Appendix 5 to the Standard Large Generator
Interconnection Procedures
Standard Large Generator Interconnection
Agreement (LGIA)
Table of Contents
Article 1. Definitions
Article 2. Effective Date, Term, and
Termination
2.1 Effective Date
2.2 Term of Agreement
2.3 Termination Procedures
2.3.1 Written Notice
2.3.2 Default
2.4 Termination Costs
2.5 Disconnection.
2.6 Survival
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Article 3. Regulatory Filings
3.1 Filing
Article 4. Scope of Service
4.1 Interconnection Product Options
4.1.1 Energy Resource Interconnection
Service
4.1.2 Network Resource Interconnection
Service
4.2 Provision of Service
4.3 Performance Standards
4.4 No Transmission Delivery Service
4.5 Interconnection Customer Provided
Services
Article 5. Interconnection Facilities
Engineering, Procurement, and
Construction
5.1 Options
5.1.1 Standard Option
5.1.2 Alternate Option
5.1.3 Option to Build
5.1.4 Negotiated Option
5.2 General Conditions Applicable to Option
To Build
5.3 Liquidated Damages
5.4 Power System Stabilizers
5.5 Equipment Procurement
5.6 Construction Commencement
5.7 Work Progress
5.8 Information Exchange
5.9 Other Interconnection Options
5.9.1 Limited Operation
5.9.2 Provisional Interconnection Service
5.10 Interconnection Customer’s
Interconnection Facilities (‘ICIF’)
5.10.1 Interconnection Customer’s
Interconnection Facility Specifications
5.10.2 Transmission Provider’s Review
5.10.3 ICIF Construction
5.11 Transmission Provider’s Interconnection
Facilities Construction
5.12 Access Rights
5.13 Lands of Other Property Owners
5.14 Permits
5.15 Early Construction of Base Case
Facilities
5.16 Suspension
5.17 Taxes
5.17.1 Interconnection Customer Payments
Not Taxable
5.17.2 Representations and Covenants
5.17.3 Indemnification for the Cost
Consequences of Current Tax Liability
Imposed Upon [the] Transmission Provider
5.17.4 Tax Gross-Up Amount
5.17.5 Private Letter Ruling or Change or
Clarification of Law
5.17.6 Subsequent Taxable Events
5.17.7 Contests
5.17.8 Refund
5.17.9 Taxes Other Than Income Taxes
5.17.10 Transmission Owners Who Are Not
Transmission Providers
5.18 Tax Status
5.19 Modification
5.19.1 General
5.19.2 Standards
5.19.3 Modification Costs
Article 6. Testing and Inspection
6.1 Pre-Commercial Operation Date Testing
and Modifications
6.2 Post-Commercial Operation Date Testing
and Modifications
6.3 Right to Observe Testing
6.4 Right to Inspect
Article 7. Metering
7.1 General
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7.2 Check Meters
7.3 Standards
7.4 Testing of Metering Equipment
7.5 Metering Data
Article 8. Communications
8.1 Interconnection Customer Obligations
8.2 Remote Terminal Unit
8.3 No Annexation
8.4 Provision of Data from a Variable Energy
Resource
Article 9. Operations
9.1 General
9.2 Balancing Authority Area Notification
9.3 Transmission Provider Obligations
9.4 Interconnection Customer Obligations
9.5 Start-Up and Synchronization
9.6 Reactive Power and Primary Frequency
Response
9.6.1 Power Factor Design Criteria
9.6.2 Voltage Schedules
9.6.3 Payment for Reactive Power
9.6.4 Primary Frequency Response
9.7 Outages and Interruptions
9.7.1 Outages
9.7.2 Interruption of Service
9.7.3 Ride Through Capability and
Performance
9.7.4 System Protection and Other Control
Requirements
9.7.5 Requirements for Protection
9.7.6 Power Quality
9.8 Switching and Tagging Rules
9.9 Use of Interconnection Facilities by Third
Parties
9.9.1 Purpose of Interconnection Facilities
9.9.2 Third Party Users
9.10 Disturbance Analysis Data Exchange
Article 10. Maintenance
10.1 Transmission Provider Obligations
10.2 Interconnection Customer Obligations
10.3 Coordination
10.4 Secondary Systems
10.5 Operating and Maintenance Expenses
Article 11. Performance Obligation
11.1 Interconnection Customer
Interconnection Facilities
11.2 Transmission Provider’s Interconnection
Facilities
11.3 Network Upgrades and Distribution
Upgrades
11.4 Transmission Credits
11.4.1 Repayment of Amounts Advanced for
Network Upgrades
11.4.2 Special Provisions for Affected
Systems
11.5 Provision of Security
11.6 Interconnection Customer
Compensation
11.6.1 Interconnection Customer
Compensation for Actions During
Emergency Condition
Article 12. Invoice
12.1 General
12.2 Final Invoice
12.3 Payment
12.4 Disputes
Article 13. Emergencies
13.1 Definition
13.2 Obligations
13.3 Notice
13.4 Immediate Action
13.5 Transmission Provider Authority
13.5.1 General
13.5.2 Reduction and Disconnection
13.6 Interconnection Customer Authority
13.7 Limited Liability
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Article 14. Regulatory Requirements and
Governing Law
14.1 Regulatory Requirements
14.2 Governing Law
Article 15. Notices
15.1 General
15.2 Billings and Payments
15.3 Alternative Forms of Notice
15.4 Operations and Maintenance Notice
Article 16. Force Majeure
16.1 Force Majeure
Article 17. Default
17.1 Default
17.1.1 General
17.1.2 Right to Terminate
17.2 Violation of Operating Assumptions for
Generating Facilities
Article 18. Indemnity, Consequential
Damages and Insurance
18.1 Indemnity
18.1.1 Indemnified Person
18.1.2 Indemnifying Party
18.1.3 Indemnity Procedures
18.2 Consequential Damages
18.3 Insurance
Article 19. Assignment
19.1 Assignment
Article 20. Severability
20.1 Severability
Article 21. Comparability
21.1 Comparability
Article 22. Confidentiality
22.1 Confidentiality
22.1.1 Term
22.1.2 Scope
22.1.3 Release of Confidential Information
22.1.4 Rights
22.1.5 No Warranties
22.1.6 Standard of Care
22.1.7 Order of Disclosure
22.1.8 Termination of Agreement
22.1.9 Remedies
22.1.10 Disclosure to FERC, its Staff, or a
State
Article 23. Environmental Releases
Article 24. Information Requirements
24.1 Information Acquisition
24.2 Information Submission by
Transmission Provider
24.3 Updated Information Submission by
Interconnection Customer
24.4 Information Supplementation
Article 25. Information Access and Audit
Rights
25.1 Information Access
25.2 Reporting of Non-Force Majeure Events
25.3 Audit Rights
25.4 Audit Rights Periods
25.4.1 Audit Rights Period for ConstructionRelated Accounts and Records
25.4.2 Audit Rights Period for All Other
Accounts and Records
25.5 Audit Results
Article 26. Subcontractors
26.1 General
26.2 Responsibility of Principal
26.3 No Limitation by Insurance
Article 27. Disputes
27.1 Submission
27.2 External Arbitration Procedures
27.3 Arbitration Decisions
27.4 Costs
Article 28. Representations, Warranties, and
Covenants
28.1 General
28.1.1 Good Standing
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28.1.2 Authority
28.1.3 No Conflict
28.1.4 Consent and Approval
Article 29. Joint Operating Committee
29.1 Joint Operating Committee
Article 30. Miscellaneous
30.1 Binding Effect
30.2 Conflicts
30.3 Rules of Interpretation
30.4 Entire Agreement
30.5 No Third Party Beneficiaries
30.6 Waiver
30.7 Headings
30.8 Multiple Counterparts
30.9 Amendment
30.10 Modification by the Parties
30.11 Reservation of Rights
30.12 No Partnership
Appendix A—Interconnection Facilities,
Network Upgrades, and Distribution
Upgrades
Appendix B—Milestones
Appendix C—Interconnection Details
Appendix D—Security Arrangements Details
Appendix E—Commercial Operation Date
Appendix F—Addresses for Delivery of
Notices and Billings
Appendix G—Interconnection Requirements
for a Wind Generating Plant
Appendix H—Operating Assumptions for
Generating Facility
khammond on DSKJM1Z7X2PROD with RULES2
Standard Large Generator Interconnection
Agreement
This Standard Large Generator
Interconnection Agreement (‘‘Agreement’’) is
made and entered into this ll day of
llll 20ll, by and between
llllllll, a llllllll
organized and existing under the laws of the
State/Commonwealth of lllll
(‘‘Interconnection Customer’’ with a Large
Generating Facility), and llllllll ,
a llllll organized and existing under
the laws of the State/Commonwealth of
lllll (‘‘Transmission Provider and/or
Transmission Owner’’). Interconnection
Customer and Transmission Provider each
may be referred to as a ‘‘Party’’ or collectively
as the ‘‘Parties.’’
Recitals
Whereas, Transmission Provider operates
the Transmission System; and
Whereas, Interconnection Customer
intends to own, lease and/or control and
operate the Generating Facility identified as
a Large Generating Facility in Appendix C to
this Agreement; and
Whereas, Interconnection Customer and
Transmission Provider have agreed to enter
into this Agreement for the purpose of
interconnecting the Large Generating Facility
with the Transmission System;
Now, Therefore, in consideration of and
subject to the mutual covenants contained
herein, it is agreed:
When used in this Standard Large
Generator Interconnection Agreement, terms
with initial capitalization that are not defined
in Article 1 shall have the meanings specified
in the Article in which they are used or the
Open Access Transmission Tariff (Tariff).
Article 1. Definitions
Adverse System Impact shall mean the
negative effects due to technical or
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operational limits on conductors or
equipment being exceeded that may
compromise the safety and reliability of the
electric system.
Affected System shall mean an electric
system other than [the] Transmission
Provider’s Transmission System that may be
affected by the proposed interconnection.
Affected System Operator shall mean the
entity that operates an Affected System.
Affiliate shall mean, with respect to a
corporation, partnership or other entity, each
such other corporation, partnership or other
entity that directly or indirectly, through one
or more intermediaries, controls, is
controlled by, or is under common control
with, such corporation, partnership or other
entity.
Ancillary Services shall mean those
services that are necessary to support the
transmission of capacity and energy from
resources to loads while maintaining reliable
operation of [the] Transmission Provider’s
Transmission System in accordance with
Good Utility Practice.
Applicable Laws and Regulations shall
mean all duly promulgated applicable
federal, state and local laws, regulations,
rules, ordinances, codes, decrees, judgments,
directives, or judicial or administrative
orders, permits and other duly authorized
actions of any Governmental Authority.
Applicable Reliability Standards shall
mean the requirements and guidelines of the
Electric Reliability Organization and the
Balancing Authority Area of the
Transmission System to which the
Generating Facility is directly
interconnected.
Balancing Authority shall mean an entity
that integrates resource plans ahead of time,
maintains demand and resource balance
within a Balancing Authority Area, and
supports interconnection frequency in real
time.
Balancing Authority Area shall mean the
collection of generation, transmission, and
loads within the metered boundaries of the
Balancing Authority. The Balancing
Authority maintains load-resource balance
within this area.
Base Case shall mean the base case power
flow, short circuit, and stability data bases
used for the Interconnection Studies by
Transmission Provider or Interconnection
Customer.
Breach shall mean the failure of a Party to
perform or observe any material term or
condition of the Standard Large Generator
Interconnection Agreement.
Breaching Party shall mean a Party that is
in Breach of the Standard Large Generator
Interconnection Agreement.
Business Day shall mean Monday through
Friday, excluding Federal Holidays.
Calendar Day shall mean any day
including Saturday, Sunday or a Federal
Holiday.
Cluster shall mean a group of one or more
Interconnection Requests that are studied
together for the purpose of conducting a
Cluster Study.
Cluster Restudy shall mean a restudy of a
Cluster Study conducted pursuant to Section
7.5 of the LGIP.
Cluster Study shall mean the evaluation of
one or more Interconnection Requests within
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27177
a Cluster as described in Section 7 of the
LGIP.
Clustering shall mean the process whereby
one or more Interconnection Requests are
studied together, instead of serially, as
described in Section 7 of the LGIP.
Commercial Operation shall mean the
status of a Generating Facility that has
commenced generating electricity for sale,
excluding electricity generated during Trial
Operation.
Commercial Operation Date of a unit shall
mean the date on which the Generating
Facility commences Commercial Operation
as agreed to by the Parties pursuant to
Appendix E to the Standard Large Generator
Interconnection Agreement.
Confidential Information shall mean any
confidential, proprietary or trade secret
information of a plan, specification, pattern,
procedure, design, device, list, concept,
policy or compilation relating to the present
or planned business of a Party, which is
designated as confidential by the Party
supplying the information, whether
conveyed orally, electronically, in writing,
through inspection, or otherwise.
Contingent Facilities shall mean those
unbuilt Interconnection Facilities and
Network Upgrades upon which the
Interconnection Request’s costs, timing, and
study findings are dependent, and if delayed
or not built, could cause a need for restudies
of the Interconnection Request or a
reassessment of the Interconnection Facilities
and/or Network Upgrades and/or costs and
timing.
Default shall mean the failure of a
Breaching Party to cure its Breach in
accordance with Article 17 of the Standard
Large Generator Interconnection Agreement.
Dispute Resolution shall mean the
procedure for resolution of a dispute between
the Parties in which they will first attempt
to resolve the dispute on an informal basis.
Distribution System shall mean [the]
Transmission Provider’s facilities and
equipment used to transmit electricity to
ultimate usage points such as homes and
industries directly from nearby generators or
from interchanges with higher voltage
transmission networks which transport bulk
power over longer distances. The voltage
levels at which distribution systems operate
differ among areas.
Distribution Upgrades shall mean the
additions, modifications, and upgrades to
[the] Transmission Provider’s Distribution
System at or beyond the Point of
Interconnection to facilitate interconnection
of the Generating Facility and render the
transmission service necessary to effect
Interconnection Customer’s wholesale sale of
electricity in interstate commerce.
Distribution Upgrades do not include
Interconnection Facilities.
Effective Date shall mean the date on
which the Standard Large Generator
Interconnection Agreement becomes effective
upon execution by the Parties subject to
acceptance by FERC, or if filed unexecuted,
upon the date specified by FERC.
Electric Reliability Organization shall
mean the North American Electric Reliability
Corporation (NERC) or its successor
organization.
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Emergency Condition shall mean a
condition or situation: (1) that in the
judgment of the Party making the claim is
imminently likely to endanger life or
property; or (2) that, in the case of a
Transmission Provider, is imminently likely
(as determined in a non-discriminatory
manner) to cause a material adverse effect on
the security of, or damage to Transmission
Provider’s Transmission System,
Transmission Provider’s Interconnection
Facilities or the electric systems of others to
which [the] Transmission Provider’s
Transmission System is directly connected;
or (3) that, in the case of Interconnection
Customer, is imminently likely (as
determined in a non-discriminatory manner)
to cause a material adverse effect on the
security of, or damage to, the Generating
Facility or Interconnection Customer’s
Interconnection Facilities. System restoration
and black start shall be considered
Emergency Conditions; provided, that
Interconnection Customer is not obligated by
the Standard Large Generator Interconnection
Agreement to possess black start capability.
Energy Resource Interconnection Service
shall mean an Interconnection Service that
allows [the] Interconnection Customer to
connect its Generating Facility to [the]
Transmission Provider’s Transmission
System to be eligible to deliver the
Generating Facility’s electric output using the
existing firm or nonfirm capacity of [the]
Transmission Provider’s Transmission
System on an as available basis. Energy
Resource Interconnection Service in and of
itself does not convey transmission service.
Engineering & Procurement (E&P)
Agreement shall mean an agreement that
authorizes [the] Transmission Provider to
begin engineering and procurement of long
lead-time items necessary for the
establishment of the interconnection in order
to advance the implementation of the
Interconnection Request.
Environmental Law shall mean Applicable
Laws or Regulations relating to pollution or
protection of the environment or natural
resources.
Federal Power Act shall mean the Federal
Power Act, as amended, 16 U.S.C. §§ 791a et
seq.
FERC shall mean the Federal Energy
Regulatory Commission (Commission) or its
successor.
Force Majeure shall mean any act of God,
labor disturbance, act of the public enemy,
war, insurrection, riot, fire, storm or flood,
explosion, breakage or accident to machinery
or equipment, any order, regulation or
restriction imposed by governmental,
military or lawfully established civilian
authorities, or any other cause beyond a
Party’s control. A Force Majeure event does
not include acts of negligence or intentional
wrongdoing by the Party claiming Force
Majeure.
Generating Facility shall mean
Interconnection Customer’s devices for the
production and/or storage for later injection
of electricity identified in the
Interconnection Request, but shall not
include Interconnection Customer’s
Interconnection Facilities.
Generating Facility Capacity shall mean
the net capacity of the Generating Facility or
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the aggregate net capacity of the Generating
Facility where it includes more than one
device for the production and/or storage for
later injection of electricity.
Good Utility Practice shall mean any of the
practices, methods and acts engaged in or
approved by a significant portion of the
electric industry during the relevant time
period, or any of the practices, methods and
acts which, in the exercise of reasonable
judgment in light of the facts known at the
time the decision was made, could have been
expected to accomplish the desired result at
a reasonable cost consistent with good
business practices, reliability, safety and
expedition. Good Utility Practice is not
intended to be limited to the optimum
practice, method, or act to the exclusion of
all others, but rather to be acceptable
practices, methods, or acts generally accepted
in the region.
Governmental Authority shall mean any
federal, state, local or other governmental
regulatory or administrative agency, court,
commission, department, board, or other
governmental subdivision, legislature,
rulemaking board, tribunal, or other
governmental authority having jurisdiction
over the Parties, their respective facilities, or
the respective services they provide, and
exercising or entitled to exercise any
administrative, executive, police, or taxing
authority or power; provided, however, that
such term does not include Interconnection
Customer, Transmission Provider, or any
Affiliate thereof.
Hazardous Substances shall mean any
chemicals, materials or substances defined as
or included in the definition of ‘‘hazardous
substances,’’ ‘‘hazardous wastes,’’
‘‘hazardous materials,’’ ‘‘hazardous
constituents,’’ ‘‘restricted hazardous
materials,’’ ‘‘extremely hazardous
substances,’’ ‘‘toxic substances,’’ ‘‘radioactive
substances,’’ ‘‘contaminants,’’ ‘‘pollutants,’’
‘‘toxic pollutants’’ or words of similar
meaning and regulatory effect under any
applicable Environmental Law, or any other
chemical, material or substance, exposure to
which is prohibited, limited or regulated by
any applicable Environmental Law.
Initial Synchronization Date shall mean the
date upon which the Generating Facility is
initially synchronized and upon which Trial
Operation begins.
In-Service Date shall mean the date upon
which [the] Interconnection Customer
reasonably expects it will be ready to begin
use of [the] Transmission Provider’s
Interconnection Facilities to obtain back feed
power.
Interconnection Customer shall mean any
entity, including [the] Transmission
Provider, Transmission Owner or any of the
Affiliates or subsidiaries of either, that
proposes to interconnect its Generating
Facility with [the] Transmission Provider’s
Transmission System.
Interconnection Customer’s
Interconnection Facilities shall mean all
facilities and equipment, as identified in
Appendix A of the Standard Large Generator
Interconnection Agreement, that are located
between the Generating Facility and the
Point of Change of Ownership, including any
modification, addition, or upgrades to such
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facilities and equipment necessary to
physically and electrically interconnect the
Generating Facility to [the] Transmission
Provider’s Transmission System.
Interconnection Customer’s Interconnection
Facilities are sole use facilities.
Interconnection Facilities shall mean
Transmission Provider’s Interconnection
Facilities and Interconnection Customer’s
Interconnection Facilities. Collectively,
Interconnection Facilities include all
facilities and equipment between the
Generating Facility and the Point of
Interconnection, including any modification,
additions or upgrades that are necessary to
physically and electrically interconnect the
Generating Facility to Transmission
Provider’s Transmission System.
Interconnection Facilities are sole use
facilities and shall not include Distribution
Upgrades, Stand Alone Network Upgrades or
Network Upgrades.
Interconnection Facilities Study shall
mean a study conducted by Transmission
Provider or a third party consultant for
Interconnection Customer to determine a list
of facilities (including Transmission
Provider’s Interconnection Facilities and
Network Upgrades as identified in the
Cluster Study), the cost of those facilities,
and the time required to interconnect the
Generating Facility with Transmission
Provider’s Transmission System. The scope
of the study is defined in Section 8 of the
LGIP.
Interconnection Facilities Study
Agreement shall mean the form of agreement
contained in Appendix 3 of the Standard
Large Generator Interconnection Procedures
for conducting the Interconnection Facilities
Study.
Interconnection Request shall mean an
Interconnection Customer’s request, in the
form of Appendix 1 to the LGIP, in
accordance with the Tariff, to interconnect a
new Generating Facility, or to increase the
capacity of, or make a Material Modification
to the operating characteristics of, an existing
Generating Facility that is interconnected
with [the] Transmission Provider’s
Transmission System.
Interconnection Service shall mean the
service provided by [the] Transmission
Provider associated with interconnecting
[the] Interconnection Customer’s Generating
Facility to [the] Transmission Provider’s
Transmission System and enabling it to
receive electric energy and capacity from the
Generating Facility at the Point of
Interconnection, pursuant to the terms of the
Standard Large Generator Interconnection
Agreement and, if applicable, [the]
Transmission Provider’s Tariff.
Interconnection Study shall mean any of
the following studies: the Cluster Study, the
Cluster Restudy, the Surplus Interconnection
Service [System Impact] Study, [and] the
Interconnection Facilities Study, the Affected
System Study, Optional Interconnection
Study, and Material Modification
assessment, described in the LGIP.
IRS shall mean the Internal Revenue
Service.
Joint Operating Committee shall be a group
made up of representatives from
Interconnection Customers and [the]
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Transmission Provider to coordinate
operating and technical considerations of
Interconnection Service.
Large Generating Facility shall mean a
Generating Facility having a Generating
Facility Capacity of more than 20 MW.
LGIA Deposit shall mean the deposit
Interconnection Customer submits when
returning the executed LGIA, or within ten
(10) Business Days of requesting that the
LGIA be filed unexecuted at the Commission,
in accordance with Section 11.3 of the LGIP.
Loss shall mean any and all losses relating
to injury to or death of any person or damage
to property, demand, suits, recoveries, costs
and expenses, court costs, attorney fees, and
all other obligations by or to third parties,
arising out of or resulting from the other
Party’s performance, or non-performance of
its obligations under the Standard Large
Generator Interconnection Agreement on
behalf of the Indemnifying Party, except in
cases of gross negligence or intentional
wrongdoing by the Indemnifying Party.
Material Modification shall mean those
modifications that have a material impact on
the cost or timing of any Interconnection
Request with an equal or later Queue
Position.
Metering Equipment shall mean all
metering equipment installed or to be
installed at the Generating Facility pursuant
to the Standard Large Generator
Interconnection Agreement at the metering
points, including but not limited to
instrument transformers, MWh-meters, data
acquisition equipment, transducers, remote
terminal unit, communications equipment,
phone lines, and fiber optics.
Network Resource shall mean any
designated generating resource owned,
purchased, or leased by a Network Customer
under the Network Integration Transmission
Service Tariff. Network Resources do not
include any resource, or any portion thereof,
that is committed for sale to third parties or
otherwise cannot be called upon to meet the
Network Customer’s Network Load on a noninterruptible basis.
Network Resource Interconnection Service
shall mean an Interconnection Service that
allows [the] Interconnection Customer to
integrate its Large Generating Facility with
[the] Transmission Provider’s Transmission
System (1) in a manner comparable to that in
which [the] Transmission Provider integrates
its generating facilities to serve native load
customers; or (2) in an RTO or ISO with
market based congestion management, in the
same manner as Network Resources. Network
Resource Interconnection Service in and of
itself does not convey transmission service.
Network Upgrades shall mean the
additions, modifications, and upgrades to
[the] Transmission Provider’s Transmission
System required at or beyond the point at
which the Interconnection Facilities connect
to [the] Transmission Provider’s
Transmission System to accommodate the
interconnection of the Large Generating
Facility to [the] Transmission Provider’s
Transmission System.
Notice of Dispute shall mean a written
notice of a dispute or claim that arises out
of or in connection with the Standard Large
Generator Interconnection Agreement or its
performance.
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Optional Interconnection Study shall mean
a sensitivity analysis based on assumptions
specified by [the] Interconnection Customer
in the Optional Interconnection Study
Agreement.
Optional Interconnection Study Agreement
shall mean the form of agreement contained
in Appendix 4 of the LGIP for conducting the
Optional Interconnection Study.
Party or Parties shall mean Transmission
Provider, Transmission Owner,
Interconnection Customer or any
combination of the above.
Point of Change of Ownership shall mean
the point, as set forth in Appendix A to the
Standard Large Generator Interconnection
Agreement, where [the] Interconnection
Customer’s Interconnection Facilities
connect to [the] Transmission Provider’s
Interconnection Facilities.
Point of Interconnection shall mean the
point, as set forth in Appendix A to the
Standard Large Generator Interconnection
Agreement, where the Interconnection
Facilities connect to [the] Transmission
Provider’s Transmission System.
Proportional Impact Method shall mean a
technical analysis conducted by
Transmission Provider to determine the
degree to which each Generating Facility in
the Cluster Study contributes to the need for
a specific System Network Upgrade.
Provisional Interconnection Service shall
mean Interconnection Service provided by
Transmission Provider associated with
interconnecting [the] Interconnection
Customer’s Generating Facility to
Transmission Provider’s Transmission
System and enabling that Transmission
System to receive electric energy and
capacity from the Generating Facility at the
Point of Interconnection, pursuant to the
terms of the Provisional Large Generator
Interconnection Agreement and, if
applicable, the Tariff.
Provisional Large Generator
Interconnection Agreement shall mean the
interconnection agreement for Provisional
Interconnection Service established between
Transmission Provider and/or the
Transmission Owner and [the]
Interconnection Customer. This agreement
shall take the form of the Standard Large
Generator Interconnection Agreement,
modified for provisional purposes.
Queue Position shall mean the order of a
valid Interconnection Request, relative to all
other pending valid Interconnection
Requests, established pursuant to Section 4.1
of this LGIP.
Reasonable Efforts shall mean, with respect
to an action required to be attempted or taken
by a Party under the Standard Large
Generator Interconnection Agreement, efforts
that are timely and consistent with Good
Utility Practice and are otherwise
substantially equivalent to those a Party
would use to protect its own interests.
Scoping Meeting shall mean the meeting
between representatives of Interconnection
Customer(s) and Transmission Provider
conducted for the purpose of discussing the
proposed Interconnection Request and any
alternative interconnection options,
exchanging information including any
transmission data and earlier study
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evaluations that would be reasonably
expected to impact such interconnection
options, refining information and models
provided by Interconnection Customer(s),
discussing the Cluster Study materials posted
to OASIS pursuant to Section 3.5 of the LGIP,
and analyzing such information.
Site Control shall mean the exclusive land
right to develop, construct, operate, and
maintain the Generating Facility over the
term of expected operation of the Generating
Facility. Site Control may be demonstrated
by documentation establishing: (1)
ownership of, a leasehold interest in, or a
right to develop a site of sufficient size to
construct and operate the Generating Facility;
(2) an option to purchase or acquire a
leasehold site of sufficient size to construct
and operate the Generating Facility for such
purpose; or (3) any other documentation that
clearly demonstrates the right of
Interconnection Customer to exclusively
occupy a site of sufficient size to construct
and operate the Generating Facility.
Transmission Provider will maintain acreage
requirements for each Generating Facility
type on its OASIS or public website.
Small Generating Facility shall mean a
Generating Facility that has a Generating
Facility Capacity of no more than 20 MW.
Stand Alone Network Upgrades shall mean
Network Upgrades that are not part of an
Affected System that an Interconnection
Customer may construct without affecting
day-to-day operations of the Transmission
System during their construction [and the
following conditions are met: (1) a Substation
Network Upgrade must only be required for
a single Interconnection Customer in the
Cluster and no other Interconnection
Customer in that Cluster is required to
interconnect to the same Substation Network
Upgrades, and (2) a System Network Upgrade
must only be required for a single
Interconnection Customer in the Cluster, as
indicated under Transmission Provider’s
Proportional Impact Method]. Both
Transmission Provider and Interconnection
Customer must agree as to what constitutes
Stand Alone Network Upgrades and identify
them in Appendix A to the Standard Large
Generator Interconnection Agreement. If
Transmission Provider and Interconnection
Customer disagree about whether a particular
Network Upgrade is a Stand Alone Network
Upgrade, Transmission Provider must
provide Interconnection Customer a written
technical explanation outlining why
Transmission Provider does not consider the
Network Upgrade to be a Stand Alone
Network Upgrade within fifteen (15) Business
[d]Days of its determination.
Standard Large Generator Interconnection
Agreement (LGIA) shall mean the form of
interconnection agreement applicable to an
Interconnection Request pertaining to a Large
Generating Facility that is included in [the]
Transmission Provider’s Tariff.
Standard Large Generator Interconnection
Procedures (LGIP) shall mean the
interconnection procedures applicable to an
Interconnection Request pertaining to a Large
Generating Facility that are included in [the]
Transmission Provider’s Tariff.
Substation Network Upgrades shall mean
Network Upgrades that are required at the
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substation located at the Point of
Interconnection.
Surplus Interconnection Service shall
mean any unneeded portion of
Interconnection Service established in a
Standard Large Generator Interconnection
Agreement, such that if Surplus
Interconnection Service is utilized the total
amount of Interconnection Service at the
Point of Interconnection would remain the
same.
System Network Upgrades shall mean
Network Upgrades that are required beyond
the substation located at the Point of
Interconnection.
System Protection Facilities shall mean the
equipment, including necessary protection
signal communications equipment, required
to protect (1) [the] Transmission Provider’s
Transmission System from faults or other
electrical disturbances occurring at the
Generating Facility and (2) the Generating
Facility from faults or other electrical system
disturbances occurring on [the] Transmission
Provider’s Transmission System or on other
delivery systems or other generating systems
to which [the] Transmission Provider’s
Transmission System is directly connected.
Tariff shall mean [the] Transmission
Provider’s Tariff through which open access
transmission service and Interconnection
Service are offered, as filed with FERC, and
as amended or supplemented from time to
time, or any successor tariff.
Transmission Owner shall mean an entity
that owns, leases or otherwise possesses an
interest in the portion of the Transmission
System at the Point of Interconnection and
may be a Party to the Standard Large
Generator Interconnection Agreement to the
extent necessary.
Transmission Provider shall mean the
public utility (or its designated agent) that
owns, controls, or operates transmission or
distribution facilities used for the
transmission of electricity in interstate
commerce and provides transmission service
under the Tariff. The term Transmission
Provider should be read to include the
Transmission Owner when the Transmission
Owner is separate from [the] Transmission
Provider.
Transmission Provider’s Interconnection
Facilities shall mean all facilities and
equipment owned, controlled, or operated by
Transmission Provider from the Point of
Change of Ownership to the Point of
Interconnection as identified in Appendix A
to the Standard Large Generator
Interconnection Agreement, including any
modifications, additions or upgrades to such
facilities and equipment. Transmission
Provider’s Interconnection Facilities are sole
use facilities and shall not include
Distribution Upgrades, Stand Alone Network
Upgrades or Network Upgrades.
Transmission System shall mean the
facilities owned, controlled or operated by
[the] Transmission Provider or Transmission
Owner that are used to provide transmission
service under the Tariff.
Trial Operation shall mean the period
during which Interconnection Customer is
engaged in on-site test operations and
commissioning of the Generating Facility
prior to Commercial Operation.
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Variable Energy Resource shall mean a
device for the production of electricity that
is characterized by an energy source that: (1)
is renewable; (2) cannot be stored by the
facility owner or operator; and (3) has
variability that is beyond the control of the
facility owner or operator.
Withdrawal Penalty shall mean the penalty
assessed by Transmission Provider to an
Interconnection Customer that chooses to
withdraw or is deemed withdrawn from
Transmission Provider’s interconnection
queue or whose Generating Facility does not
otherwise reach Commercial Operation. The
calculation of the Withdrawal Penalty is set
forth in Section 3.7.1 of the LGIP.
Article 2. Effective Date, Term, and
Termination
2.1 Effective Date. This LGIA shall
become effective upon execution by the
Parties subject to acceptance by FERC (if
applicable), or if filed unexecuted, upon the
date specified by FERC. Transmission
Provider shall promptly file this LGIA with
FERC upon execution in accordance with
Article 3.1, if required.
2.2 Term of Agreement. Subject to the
provisions of Article 2.3, this LGIA shall
remain in effect for a period of ten (10) years
from the Effective Date or such other longer
period as Interconnection Customer may
request (Term to be specified in individual
agreements) and shall be automatically
renewed for each successive one-year period
thereafter.
2.3 Termination Procedures.
2.3.1 Written Notice. This LGIA may be
terminated by Interconnection Customer after
giving Transmission Provider ninety (90)
Calendar Days advance written notice, or by
Transmission Provider notifying FERC after
the Generating Facility permanently ceases
Commercial Operation.
2.3.2 Default. Either Party may terminate
this LGIA in accordance with Article 17.
2.3.3 Notwithstanding Articles 2.3.1 and
2.3.2, no termination shall become effective
until the Parties have complied with all
Applicable Laws and Regulations applicable
to such termination, including the filing with
FERC of a notice of termination of this LGIA,
which notice has been accepted for filing by
FERC.
2.4 Termination Costs. If a Party elects to
terminate this Agreement pursuant to Article
2.3 above, each Party shall pay all costs
incurred (including any cancellation costs
relating to orders or contracts for
Interconnection Facilities and equipment) or
charges assessed by the other Party, as of the
date of the other Party’s receipt of such
notice of termination, that are the
responsibility of the Terminating Party under
this LGIA. In the event of termination by a
Party, the Parties shall use commercially
Reasonable Efforts to mitigate the costs,
damages and charges arising as a
consequence of termination. Upon
termination of this LGIA, unless otherwise
ordered or approved by FERC:
2.4.1 With respect to any portion of
Transmission Provider’s Interconnection
Facilities that have not yet been constructed
or installed, Transmission Provider shall to
the extent possible and with Interconnection
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Customer’s authorization cancel any pending
orders of, or return, any materials or
equipment for, or contracts for construction
of, such facilities; provided that in the event
Interconnection Customer elects not to
authorize such cancellation, Interconnection
Customer shall assume all payment
obligations with respect to such materials,
equipment, and contracts, and Transmission
Provider shall deliver such material and
equipment, and, if necessary, assign such
contracts, to Interconnection Customer as
soon as practicable, at Interconnection
Customer’s expense. To the extent that
Interconnection Customer has already paid
Transmission Provider for any or all such
costs of materials or equipment not taken by
Interconnection Customer, Transmission
Provider shall promptly refund such amounts
to Interconnection Customer, less any costs,
including penalties incurred by Transmission
Provider to cancel any pending orders of or
return such materials, equipment, or
contracts.
If an Interconnection Customer terminates
this LGIA, it shall be responsible for all costs
incurred in association with that
Interconnection Customer’s interconnection,
including any cancellation costs relating to
orders or contracts for Interconnection
Facilities and equipment, and other expenses
including any Network Upgrades for which
Transmission Provider has incurred expenses
and has not been reimbursed by
Interconnection Customer.
2.4.2 Transmission Provider may, at its
option, retain any portion of such materials,
equipment, or facilities that Interconnection
Customer chooses not to accept delivery of,
in which case Transmission Provider shall be
responsible for all costs associated with
procuring such materials, equipment, or
facilities.
2.4.3 With respect to any portion of the
Interconnection Facilities, and any other
facilities already installed or constructed
pursuant to the terms of this LGIA,
Interconnection Customer shall be
responsible for all costs associated with the
removal, relocation or other disposition or
retirement of such materials, equipment, or
facilities.
2.5 Disconnection. Upon termination of
this LGIA, the Parties will take all
appropriate steps to disconnect the Large
Generating Facility from the Transmission
System. All costs required to effectuate such
disconnection shall be borne by the
terminating Party, unless such termination
resulted from the non-terminating Party’s
Default of this LGIA or such non-terminating
Party otherwise is responsible for these costs
under this LGIA.
2.6 Survival. This LGIA shall continue in
effect after termination to the extent
necessary to provide for final billings and
payments and for costs incurred hereunder,
including billings and payments pursuant to
this LGIA; to permit the determination and
enforcement of liability and indemnification
obligations arising from acts or events that
occurred while this LGIA was in effect; and
to permit each Party to have access to the
lands of the other Party pursuant to this LGIA
or other applicable agreements, to
disconnect, remove or salvage its own
facilities and equipment.
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Article 3. Regulatory Filings
3.1 Filing. Transmission Provider shall
file this LGIA (and any amendment hereto)
with the appropriate Governmental
Authority, if required. Interconnection
Customer may request that any information
so provided be subject to the confidentiality
provisions of Article 22. If Interconnection
Customer has executed this LGIA, or any
amendment thereto, Interconnection
Customer shall reasonably cooperate with
Transmission Provider with respect to such
filing and to provide any information
reasonably requested by Transmission
Provider needed to comply with applicable
regulatory requirements.
Article 4. Scope of Service
4.1 Interconnection Product Options.
Interconnection Customer has selected the
following (checked) type of Interconnection
Service:
4.1.1 Energy Resource Interconnection
Service.
4.1.1.1 The Product. Energy Resource
Interconnection Service allows
Interconnection Customer to connect the
Large Generating Facility to the Transmission
System and be eligible to deliver the Large
Generating Facility’s output using the
existing firm or non-firm capacity of the
Transmission System on an ‘‘as available’’
basis. To the extent Interconnection
Customer wants to receive Energy Resource
Interconnection Service, Transmission
Provider shall construct facilities identified
in Attachment A.
4.1.1.2 Transmission Delivery Service
Implications.
Under Energy Resource Interconnection
Service, Interconnection Customer will be
eligible to inject power from the Large
Generating Facility into and deliver power
across the interconnecting Transmission
Provider’s Transmission System on an ‘‘as
available’’ basis up to the amount of MWs
identified in the applicable stability and
steady state studies to the extent the
upgrades initially required to qualify for
Energy Resource Interconnection Service
have been constructed. Where eligible to do
so (e.g., PJM, ISO–NE, NYISO),
Interconnection Customer may place a bid to
sell into the market up to the maximum
identified Large Generating Facility output,
subject to any conditions specified in the
interconnection service approval, and the
Large Generating Facility will be dispatched
to the extent Interconnection Customer’s bid
clears. In all other instances, no transmission
delivery service from the Large Generating
Facility is assured, but Interconnection
Customer may obtain Point-to-Point
Transmission Service, Network Integration
Transmission Service, or be used for
secondary network transmission service,
pursuant to Transmission Provider’s Tariff,
up to the maximum output identified in the
stability and steady state studies. In those
instances, in order for Interconnection
Customer to obtain the right to deliver or
inject energy beyond the Large Generating
Facility Point of Interconnection or to
improve its ability to do so, transmission
delivery service must be obtained pursuant to
the provisions of Transmission Provider’s
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Tariff. [The] Interconnection Customer’s
ability to inject its Large Generating Facility
output beyond the Point of Interconnection,
therefore, will depend on the existing
capacity of Transmission Provider’s
Transmission System at such time as a
transmission service request is made that
would accommodate such delivery. The
provision of firm Point-to-Point Transmission
Service or Network Integration Transmission
Service may require the construction of
additional Network Upgrades.
4.1.2 Network Resource Interconnection
Service.
4.1.2.1 The Product. Transmission
Provider must conduct the necessary studies
and construct the Network Upgrades needed
to integrate the Large Generating Facility (1)
in a manner comparable to that in which
Transmission Provider integrates its
generating facilities to serve native load
customers; or (2) in an ISO or RTO with
market based congestion management, in the
same manner as all Network Resources. To
the extent Interconnection Customer wants to
receive Network Resource Interconnection
Service, Transmission Provider shall
construct the facilities identified in
Attachment A to this LGIA.
4.1.2.2 Transmission Delivery Service
Implications. Network Resource
Interconnection Service allows
Interconnection Customer’s Large Generating
Facility to be designated by any Network
Customer under the Tariff on Transmission
Provider’s Transmission System as a Network
Resource, up to the Large Generating
Facility’s full output, on the same basis as
existing Network Resources interconnected
to Transmission Provider’s Transmission
System, and to be studied as a Network
Resource on the assumption that such a
designation will occur. Although Network
Resource Interconnection Service does not
convey a reservation of transmission service,
any Network Customer under the Tariff can
utilize its network service under the Tariff to
obtain delivery of energy from the
interconnected Interconnection Customer’s
Large Generating Facility in the same manner
as it accesses Network Resources. A Large
Generating Facility receiving Network
Resource Interconnection Service may also
be used to provide Ancillary Services after
technical studies and/or periodic analyses
are performed with respect to the Large
Generating Facility’s ability to provide any
applicable Ancillary Services, provided that
such studies and analyses have been or
would be required in connection with the
provision of such Ancillary Services by any
existing Network Resource. However, if an
Interconnection Customer’s Large Generating
Facility has not been designated as a Network
Resource by any load, it cannot be required
to provide Ancillary Services except to the
extent such requirements extend to all
generating facilities that are similarly
situated. The provision of Network
Integration Transmission Service or firm
Point-to-Point Transmission Service may
require additional studies and the
construction of additional upgrades. Because
such studies and upgrades would be
associated with a request for delivery service
under the Tariff, cost responsibility for the
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studies and upgrades would be in accordance
with FERC’s policy for pricing transmission
delivery services.
Network Resource Interconnection Service
does not necessarily provide Interconnection
Customer with the capability to physically
deliver the output of its Large Generating
Facility to any particular load on
Transmission Provider’s Transmission
System without incurring congestion costs.
In the event of transmission constraints on
Transmission Provider’s Transmission
System, Interconnection Customer’s Large
Generating Facility shall be subject to the
applicable congestion management
procedures in Transmission Provider’s
Transmission System in the same manner as
Network Resources.
There is no requirement either at the time
of study or interconnection, or at any point
in the future, that Interconnection Customer’s
Large Generating Facility be designated as a
Network Resource by a Network Service
Customer under the Tariff or that
Interconnection Customer identify a specific
buyer (or sink). To the extent a Network
Customer does designate the Large
Generating Facility as a Network Resource, it
must do so pursuant to Transmission
Provider’s Tariff.
Once an Interconnection Customer satisfies
the requirements for obtaining Network
Resource Interconnection Service, any future
transmission service request for delivery
from the Large Generating Facility within
Transmission Provider’s Transmission
System of any amount of capacity and/or
energy, up to the amount initially studied,
will not require that any additional studies
be performed or that any further upgrades
associated with such Large Generating
Facility be undertaken, regardless of whether
or not such Large Generating Facility is ever
designated by a Network Customer as a
Network Resource and regardless of changes
in ownership of the Large Generating
Facility. However, the reduction or
elimination of congestion or redispatch costs
may require additional studies and the
construction of additional upgrades.
To the extent Interconnection Customer
enters into an arrangement for long term
transmission service for deliveries from the
Large Generating Facility outside
Transmission Provider’s Transmission
System, such request may require additional
studies and upgrades in order for
Transmission Provider to grant such request.
4.2 Provision of Service. Transmission
Provider shall provide Interconnection
Service for the Large Generating Facility at
the Point of Interconnection.
4.3 Performance Standards. Each Party
shall perform all of its obligations under this
LGIA in accordance with Applicable Laws
and Regulations, Applicable Reliability
Standards, and Good Utility Practice, and to
the extent a Party is required or prevented or
limited in taking any action by such
regulations and standards, such Party shall
not be deemed to be in Breach of this LGIA
for its compliance therewith. If such Party is
a Transmission Provider or Transmission
Owner, then that Party shall amend the LGIA
and submit the amendment to FERC for
approval.
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4.4 No Transmission Delivery Service.
The execution of this LGIA does not
constitute a request for, nor the provision of,
any transmission delivery service under
Transmission Provider’s Tariff, and does not
convey any right to deliver electricity to any
specific customer or Point of Delivery.
4.5 Interconnection Customer Provided
Services. The services provided by
Interconnection Customer under this LGIA
are set forth in Article 9.6 and Article 13.5.1.
Interconnection Customer shall be paid for
such services in accordance with Article
11.6.
Article 5. Interconnection Facilities
Engineering, Procurement, and Construction
5.1 Options. Unless otherwise mutually
agreed to between the Parties,
Interconnection Customer shall select the InService Date, Initial Synchronization Date,
and Commercial Operation Date; and either
the Standard Option or Alternate Option set
forth below, and such dates and selected
option shall be set forth in Appendix B,
Milestones. At the same time,
Interconnection Customer shall indicate
whether it elects to exercise the Option to
Build set forth in Article 5.1.3 below. If the
dates designated by Interconnection
Customer are not acceptable to Transmission
Provider, Transmission Provider shall so
notify Interconnection Customer within
thirty (30) Calendar Days. Upon receipt of the
notification that Interconnection Customer’s
designated dates are not acceptable to
Transmission Provider, [the] Interconnection
Customer shall notify Transmission Provider
within thirty (30) Calendar Days whether it
elects to exercise the Option to Build if it has
not already elected to exercise the Option to
Build.
5.1.1 Standard Option. Transmission
Provider shall design, procure, and construct
Transmission Provider’s Interconnection
Facilities and Network Upgrades, using
Reasonable Efforts to complete Transmission
Provider’s Interconnection Facilities and
Network Upgrades by the dates set forth in
Appendix B, Milestones. Transmission
Provider shall not be required to undertake
any action which is inconsistent with its
standard safety practices, its material and
equipment specifications, its design criteria
and construction procedures, its labor
agreements, and Applicable Laws and
Regulations. In the event Transmission
Provider reasonably expects that it will not
be able to complete Transmission Provider’s
Interconnection Facilities and Network
Upgrades by the specified dates,
Transmission Provider shall promptly
provide written notice to Interconnection
Customer and shall undertake Reasonable
Efforts to meet the earliest dates thereafter.
5.1.2 Alternate Option. If the dates
designated by Interconnection Customer are
acceptable to Transmission Provider,
Transmission Provider shall so notify
Interconnection Customer within thirty (30)
Calendar Days, and shall assume
responsibility for the design, procurement
and construction of Transmission Provider’s
Interconnection Facilities by the designated
dates.
If Transmission Provider subsequently fails
to complete Transmission Provider’s
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Interconnection Facilities by the In-Service
Date, to the extent necessary to provide back
feed power; or fails to complete Network
Upgrades by the Initial Synchronization Date
to the extent necessary to allow for Trial
Operation at full power output, unless other
arrangements are made by the Parties for
such Trial Operation; or fails to complete the
Network Upgrades by the Commercial
Operation Date, as such dates are reflected in
Appendix B, Milestones; Transmission
Provider shall pay Interconnection Customer
liquidated damages in accordance with
Article 5.3, Liquidated Damages, provided,
however, the dates designated by
Interconnection Customer shall be extended
day for day for each day that the applicable
RTO or ISO refuses to grant clearances to
install equipment.
5.1.3 Option to Build. Individual or
Multiple Interconnection Customer shall
have the option to assume responsibility for
the design, procurement and construction of
Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades on the dates specified in Article
5.1.2, if the requirements of this Article 5.1.3
are met. When multiple Interconnection
Customers exercise this option, multiple
Interconnection Customers may agree to
exercise this option provided (1) all
Transmission Provider’s Interconnection
Facilities and Stand Alone Network upgrades
constructed under this option are only
required for Interconnection Customers in a
single Cluster and (2) all impacted
Interconnection Customers execute and
provide to Transmission Provider an
agreement regarding responsibilities and
payment for the construction of Transmission
Provider’s Interconnection Facilities and
Stand Alone Network Upgrades planned to
be built under this option. Transmission
Provider and the individual Interconnection
Customer or each of the multiple
Interconnection Customers must agree as to
what constitutes Stand Alone Network
Upgrades and identify such Stand Alone
Network Upgrades in Appendix A. Except for
Stand Alone Network Upgrades,
Interconnection Customer shall have no right
to construct Network Upgrades under this
option.
5.1.4 Negotiated Option. If the dates
designated by Interconnection Customer are
not acceptable to Transmission Provider, the
Parties shall in good faith attempt to
negotiate terms and conditions (including
revision of the specified dates and liquidated
damages, the provision of incentives, or the
procurement and construction of all facilities
other than Transmission Provider’s
Interconnection Facilities and Stand Alone
Network Upgrades if [the] Interconnection
Customer elects to exercise the Option to
Build under Article 5.1.3). If the Parties are
unable to reach agreement on such terms and
conditions, then pursuant to Article 5.1.1
(Standard Option), Transmission Provider
shall assume responsibility for the design,
procurement and construction of all facilities
other than Transmission Provider’s
Interconnection Facilities and Stand Alone
Network Upgrades if [the] Interconnection
Customer elects to exercise the Option to
Build.
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5.2 General Conditions Applicable to
Option to Build. If Interconnection Customer
assumes responsibility for the design,
procurement and construction of
Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades,
(1) Interconnection Customer shall
engineer, procure equipment, and construct
Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades (or portions thereof) using Good
Utility Practice and using standards and
specifications provided in advance by
Transmission Provider;
(2) Interconnection Customer’s
engineering, procurement and construction
of Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades shall comply with all requirements
of law to which Transmission Provider
would be subject in the engineering,
procurement or construction of Transmission
Provider’s Interconnection Facilities and
Stand Alone Network Upgrades;
(3) Transmission Provider shall review and
approve the engineering design, equipment
acceptance tests, and the construction of
Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades;
(4) prior to commencement of construction,
Interconnection Customer shall provide to
Transmission Provider a schedule for
construction of Transmission Provider’s
Interconnection Facilities and Stand Alone
Network Upgrades, and shall promptly
respond to requests for information from
Transmission Provider;
(5) at any time during construction,
Transmission Provider shall have the right to
gain unrestricted access to Transmission
Provider’s Interconnection Facilities and
Stand Alone Network Upgrades and to
conduct inspections of the same;
(6) at any time during construction, should
any phase of the engineering, equipment
procurement, or construction of
Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades not meet the standards and
specifications provided by Transmission
Provider, Interconnection Customer shall be
obligated to remedy deficiencies in that
portion of Transmission Provider’s
Interconnection Facilities and Stand Alone
Network Upgrades;
(7) Interconnection Customer shall
indemnify Transmission Provider for claims
arising from Interconnection Customer’s
construction of Transmission Provider’s
Interconnection Facilities and Stand Alone
Network Upgrades under the terms and
procedures applicable to Article 18.1
Indemnity;
(8) Interconnection Customer shall transfer
control of Transmission Provider’s
Interconnection Facilities and Stand Alone
Network Upgrades to Transmission Provider;
(9) Unless Parties otherwise agree,
Interconnection Customer shall transfer
ownership of Transmission Provider’s
Interconnection Facilities and Stand-Alone
Network Upgrades to Transmission Provider;
(10) Transmission Provider shall approve
and accept for operation and maintenance
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Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades to the extent engineered, procured,
and constructed in accordance with this
Article 5.2; and
(11) Interconnection Customer shall deliver
to Transmission Provider ‘‘as-built’’
drawings, information, and any other
documents that are reasonably required by
Transmission Provider to assure that the
Interconnection Facilities and Stand-Alone
Network Upgrades are built to the standards
and specifications required by Transmission
Provider.
(12) If Interconnection Customer exercises
the Option to Build pursuant to Article 5.1.3,
Interconnection Customer shall pay
Transmission Provider the agreed upon
amount of {$ PLACEHOLDER} for
Transmission Provider to execute the
responsibilities enumerated to Transmission
Provider under Article 5.2. Transmission
Provider shall invoice Interconnection
Customer for this total amount to be divided
on a monthly basis pursuant to Article 12.
5.3 Liquidated Damages. The actual
damages to Interconnection Customer, in the
event Transmission Provider’s
Interconnection Facilities or Network
Upgrades are not completed by the dates
designated by Interconnection Customer and
accepted by Transmission Provider pursuant
to subparagraphs 5.1.2 or 5.1.4, above, may
include Interconnection Customer’s fixed
operation and maintenance costs and lost
opportunity costs. Such actual damages are
uncertain and impossible to determine at this
time. Because of such uncertainty, any
liquidated damages paid by Transmission
Provider to Interconnection Customer in the
event that Transmission Provider does not
complete any portion of Transmission
Provider’s Interconnection Facilities or
Network Upgrades by the applicable dates,
shall be an amount equal to 1⁄2 of 1 percent
per day of the actual cost of Transmission
Provider’s Interconnection Facilities and
Network Upgrades, in the aggregate, for
which Transmission Provider has assumed
responsibility to design, procure and
construct.
However, in no event shall the total
liquidated damages exceed 20 percent of the
actual cost of Transmission Provider’s
Interconnection Facilities and Network
Upgrades for which Transmission Provider
has assumed responsibility to design,
procure, and construct. The foregoing
payments will be made by Transmission
Provider to Interconnection Customer as just
compensation for the damages caused to
Interconnection Customer, which actual
damages are uncertain and impossible to
determine at this time, and as reasonable
liquidated damages, but not as a penalty or
a method to secure performance of this LGIA.
Liquidated damages, when the Parties agree
to them, are the exclusive remedy for [the]
Transmission Provider’s failure to meet its
schedule.
No liquidated damages shall be paid to
Interconnection Customer if: (1)
Interconnection Customer is not ready to
commence use of Transmission Provider’s
Interconnection Facilities or Network
Upgrades to take the delivery of power for
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the Large Generating Facility’s Trial
Operation or to export power from the Large
Generating Facility on the specified dates,
unless Interconnection Customer would have
been able to commence use of Transmission
Provider’s Interconnection Facilities or
Network Upgrades to take the delivery of
power for Large Generating Facility’s Trial
Operation or to export power from the Large
Generating Facility, but for Transmission
Provider’s delay; (2) Transmission Provider’s
failure to meet the specified dates is the
result of the action or inaction of
Interconnection Customer or any other
Interconnection Customer who has entered
into an LGIA with Transmission Provider or
any cause beyond Transmission Provider’s
reasonable control or reasonable ability to
cure; (3) [the] Interconnection Customer has
assumed responsibility for the design,
procurement and construction of
Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades; or (4) the Parties have otherwise
agreed.
5.4 Power System Stabilizers.
Interconnection Customer shall procure,
install, maintain and operate Power System
Stabilizers in accordance with the guidelines
and procedures established by the Electric
Reliability Organization. Transmission
Provider reserves the right to reasonably
establish minimum acceptable settings for
any installed Power System Stabilizers,
subject to the design and operating
limitations of the Large Generating Facility.
If the Large Generating Facility’s Power
System Stabilizers are removed from service
or not capable of automatic operation,
Interconnection Customer shall immediately
notify Transmission Provider’s system
operator, or its designated representative.
The requirements of this paragraph shall not
apply to wind generators.
5.5 Equipment Procurement. If
responsibility for construction of
Transmission Provider’s Interconnection
Facilities or Network Upgrades is to be borne
by Transmission Provider, then Transmission
Provider shall commence design of
Transmission Provider’s Interconnection
Facilities or Network Upgrades and procure
necessary equipment as soon as practicable
after all of the following conditions are
satisfied, unless the Parties otherwise agree
in writing:
5.5.1 Transmission Provider has
completed the Interconnection Facilities
Study pursuant to the Interconnection
Facilities Study Agreement;
5.5.2 Transmission Provider has received
written authorization to proceed with design
and procurement from Interconnection
Customer by the date specified in Appendix
B, Milestones; and
5.5.3 Interconnection Customer has
provided security to Transmission Provider
in accordance with Article 11.5 by the dates
specified in Appendix B, Milestones.
5.6 Construction Commencement.
Transmission Provider shall commence
construction of Transmission Provider’s
Interconnection Facilities and Network
Upgrades for which it is responsible as soon
as practicable after the following additional
conditions are satisfied:
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5.6.1 Approval of the appropriate
Governmental Authority has been obtained
for any facilities requiring regulatory
approval;
5.6.2 Necessary real property rights and
rights-of-way have been obtained, to the
extent required for the construction of a
discrete aspect of Transmission Provider’s
Interconnection Facilities and Network
Upgrades;
5.6.3 Transmission Provider has received
written authorization to proceed with
construction from Interconnection Customer
by the date specified in Appendix B,
Milestones; and
5.6.4 Interconnection Customer has
provided security to Transmission Provider
in accordance with Article 11.5 by the dates
specified in Appendix B, Milestones.
5.7 Work Progress. The Parties will keep
each other advised periodically as to the
progress of their respective design,
procurement and construction efforts. Either
Party may, at any time, request a progress
report from the other Party. If, at any time,
Interconnection Customer determines that
the completion of Transmission Provider’s
Interconnection Facilities will not be
required until after the specified In-Service
Date, Interconnection Customer will provide
written notice to Transmission Provider of
such later date upon which the completion
of Transmission Provider’s Interconnection
Facilities will be required.
5.8 Information Exchange. As soon as
reasonably practicable after the Effective
Date, the Parties shall exchange information
regarding the design and compatibility of the
Parties’ Interconnection Facilities and
compatibility of the Interconnection
Facilities with Transmission Provider’s
Transmission System, and shall work
diligently and in good faith to make any
necessary design changes.
5.9 Other Interconnection Options.
5.9.1 Limited Operation. If any of
Transmission Provider’s Interconnection
Facilities or Network Upgrades are not
reasonably expected to be completed prior to
the Commercial Operation Date of the Large
Generating Facility, Transmission Provider
shall, upon the request and at the expense of
Interconnection Customer, perform operating
studies on a timely basis to determine the
extent to which the Large Generating Facility
and Interconnection Customer’s
Interconnection Facilities may operate prior
to the completion of Transmission Provider’s
Interconnection Facilities or Network
Upgrades consistent with Applicable Laws
and Regulations, Applicable Reliability
Standards, Good Utility Practice, and this
LGIA. Transmission Provider shall permit
Interconnection Customer to operate the
Large Generating Facility and
Interconnection Customer’s Interconnection
Facilities in accordance with the results of
such studies.
5.9.2 Provisional Interconnection Service.
Upon the request of Interconnection
Customer, and prior to completion of
requisite Interconnection Facilities, Network
Upgrades, Distribution Upgrades, or System
Protection Facilities Transmission Provider
may execute a Provisional Large Generator
Interconnection Agreement or
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Interconnection Customer may request the
filing of an unexecuted Provisional Large
Generator Interconnection Agreement with
[the] Interconnection Customer for limited
Interconnection Service at the discretion of
Transmission Provider based upon an
evaluation that will consider the results of
available studies. Transmission Provider
shall determine, through available studies or
additional studies as necessary, whether
stability, short circuit, thermal, and/or
voltage issues would arise if Interconnection
Customer interconnects without
modifications to the Generating Facility or
Transmission System. Transmission Provider
shall determine whether any Interconnection
Facilities, Network Upgrades, Distribution
Upgrades, or System Protection Facilities that
are necessary to meet the requirements of the
Electric Reliability Organization, or any
applicable Regional Entity for the
interconnection of a new, modified and/or
expanded Generating Facility are in place
prior to the commencement of
Interconnection Service from the Generating
Facility. Where available studies indicate
that such, Interconnection Facilities,
Network Upgrades, Distribution Upgrades,
and/or System Protection Facilities that are
required for the interconnection of a new,
modified and/or expanded Generating
Facility are not currently in place,
Transmission Provider will perform a study,
at [the] Interconnection Customer’s expense,
to confirm the facilities that are required for
Provisional Interconnection Service. The
maximum permissible output of the
Generating Facility in the Provisional Large
Generator Interconnection Agreement shall
be studied and updated {on a frequency
determined by Transmission Provider and at
[the] Interconnection Customer’s expense}.
Interconnection Customer assumes all risk
and liabilities with respect to changes
between the Provisional Large Generator
Interconnection Agreement and the Large
Generator Interconnection Agreement,
including changes in output limits and
Interconnection Facilities, Network
Upgrades, Distribution Upgrades, and/or
System Protection Facilities cost
responsibilities.
5.10 Interconnection Customer’s
Interconnection Facilities (‘ICIF’).
Interconnection Customer shall, at its
expense, design, procure, construct, own and
install the ICIF, as set forth in Appendix A,
Interconnection Facilities, Network Upgrades
and Distribution Upgrades.
5.10.1 Interconnection Customer’s
Interconnection Facility Specifications.
Interconnection Customer shall submit initial
specifications for the ICIF, including System
Protection Facilities, to Transmission
Provider at least one hundred eighty (180)
Calendar Days prior to the Initial
Synchronization Date; and final
specifications for review and comment at
least ninety (90) Calendar Days prior to the
Initial Synchronization Date. Transmission
Provider shall review such specifications to
ensure that the ICIF are compatible with the
technical specifications, operational control,
and safety requirements of Transmission
Provider and comment on such specifications
within thirty (30) Calendar Days of
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Interconnection Customer’s submission. All
specifications provided hereunder shall be
deemed confidential.
5.10.2 Transmission Provider’s Review.
Transmission Provider’s review of
Interconnection Customer’s final
specifications shall not be construed as
confirming, endorsing, or providing a
warranty as to the design, fitness, safety,
durability or reliability of the Large
Generating Facility, or the ICIF.
Interconnection Customer shall make such
changes to the ICIF as may reasonably be
required by Transmission Provider, in
accordance with Good Utility Practice, to
ensure that the ICIF are compatible with the
technical specifications, operational control,
and safety requirements of Transmission
Provider.
5.10.3 ICIF Construction. The ICIF shall
be designed and constructed in accordance
with Good Utility Practice. Within one
hundred twenty (120) Calendar Days after the
Commercial Operation Date, unless the
Parties agree on another mutually acceptable
deadline, Interconnection Customer shall
deliver to Transmission Provider ‘‘as-built’’
drawings, information and documents for the
ICIF, such as: a one-line diagram, a site plan
showing the Large Generating Facility and
the ICIF, plan and elevation drawings
showing the layout of the ICIF, a relay
functional diagram, relaying AC and DC
schematic wiring diagrams and relay settings
for all facilities associated with
Interconnection Customer’s step-up
transformers, the facilities connecting the
Large Generating Facility to the step-up
transformers and the ICIF, and the
impedances (determined by factory tests) for
the associated step-up transformers and the
Large Generating Facility. [The]
Interconnection Customer shall provide
Transmission Provider specifications for the
excitation system, automatic voltage
regulator, Large Generating Facility control
and protection settings, transformer tap
settings, and communications, if applicable.
5.11 Transmission Provider’s
Interconnection Facilities Construction.
Transmission Provider’s Interconnection
Facilities shall be designed and constructed
in accordance with Good Utility Practice.
Upon request, within one hundred twenty
(120) Calendar Days after the Commercial
Operation Date, unless the Parties agree on
another mutually acceptable deadline,
Transmission Provider shall deliver to
Interconnection Customer the following ‘‘asbuilt’’ drawings, information and documents
for Transmission Provider’s Interconnection
Facilities {include appropriate drawings and
relay diagrams}.
Transmission Provider will obtain control
of Transmission Provider’s Interconnection
Facilities and Stand Alone Network
Upgrades upon completion of such facilities.
5.12 Access Rights. Upon reasonable
notice and supervision by a Party, and
subject to any required or necessary
regulatory approvals, a Party (‘‘Granting
Party’’) shall furnish at no cost to the other
Party (‘‘Access Party’’) any rights of use,
licenses, rights of way and easements with
respect to lands owned or controlled by the
Granting Party, its agents (if allowed under
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the applicable agency agreement), or any
Affiliate, that are necessary to enable the
Access Party to obtain ingress and egress to
construct, operate, maintain, repair, test (or
witness testing), inspect, replace or remove
facilities and equipment to: (i) interconnect
the Large Generating Facility with the
Transmission System; (ii) operate and
maintain the Large Generating Facility, the
Interconnection Facilities and the
Transmission System; and (iii) disconnect or
remove the Access Party’s facilities and
equipment upon termination of this LGIA. In
exercising such licenses, rights of way and
easements, the Access Party shall not
unreasonably disrupt or interfere with
normal operation of the Granting Party’s
business and shall adhere to the safety rules
and procedures established in advance, as
may be changed from time to time, by the
Granting Party and provided to the Access
Party.
5.13 Lands of Other Property Owners. If
any part of Transmission Provider or
Transmission Owner’s Interconnection
Facilities and/or Network Upgrades is to be
installed on property owned by persons other
than Interconnection Customer or
Transmission Provider or Transmission
Owner, Transmission Provider or
Transmission Owner shall at Interconnection
Customer’s expense use efforts, similar in
nature and extent to those that it typically
undertakes on its own behalf or on behalf of
its Affiliates, including use of its eminent
domain authority, and to the extent
consistent with state law, to procure from
such persons any rights of use, licenses,
rights of way and easements that are
necessary to construct, operate, maintain,
test, inspect, replace or remove Transmission
Provider or Transmission Owner’s
Interconnection Facilities and/or Network
Upgrades upon such property.
5.14 Permits. Transmission Provider or
Transmission Owner and Interconnection
Customer shall cooperate with each other in
good faith in obtaining all permits, licenses,
and authorizations that are necessary to
accomplish the interconnection in
compliance with Applicable Laws and
Regulations. With respect to this paragraph,
Transmission Provider or Transmission
Owner shall provide permitting assistance to
Interconnection Customer comparable to that
provided to Transmission Provider’s own, or
an Affiliate’s generation.
5.15 Early Construction of Base Case
Facilities. Interconnection Customer may
request Transmission Provider to construct,
and Transmission Provider shall construct,
using Reasonable Efforts to accommodate
Interconnection Customer’s In-Service Date,
all or any portion of any Network Upgrades
required for Interconnection Customer to be
interconnected to the Transmission System
which are included in the Base Case of the
Interconnection Facilities Study for
Interconnection Customer, and which also
are required to be constructed for another
Interconnection Customer, but where such
construction is not scheduled to be
completed in time to achieve Interconnection
Customer’s In-Service Date.
5.16 Suspension. Interconnection
Customer reserves the right, upon written
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notice to Transmission Provider, to suspend
at any time all work by Transmission
Provider associated with the construction
and installation of Transmission Provider’s
Interconnection Facilities and/or Network
Upgrades required under this LGIA with the
condition that Transmission System shall be
left in a safe and reliable condition in
accordance with Good Utility Practice and
Transmission Provider’s safety and reliability
criteria. In such event, Interconnection
Customer shall be responsible for all
reasonable and necessary costs which
Transmission Provider (i) has incurred
pursuant to this LGIA prior to the suspension
and (ii) incurs in suspending such work,
including any costs incurred to perform such
work as may be necessary to ensure the safety
of persons and property and the integrity of
the Transmission System during such
suspension and, if applicable, any costs
incurred in connection with the cancellation
or suspension of material, equipment and
labor contracts which Transmission Provider
cannot reasonably avoid; provided, however,
that prior to canceling or suspending any
such material, equipment or labor contract,
Transmission Provider shall obtain
Interconnection Customer’s authorization to
do so.
Transmission Provider shall invoice
Interconnection Customer for such costs
pursuant to Article 12 and shall use due
diligence to minimize its costs. In the event
Interconnection Customer suspends work by
Transmission Provider required under this
LGIA pursuant to this Article 5.16, and has
not requested Transmission Provider to
recommence the work required under this
LGIA on or before the expiration of three (3)
years following commencement of such
suspension, this LGIA shall be deemed
terminated. The three-year period shall begin
on the date the suspension is requested, or
the date of the written notice to Transmission
Provider, if no effective date is specified.
5.17 Taxes.
5.17.1 Interconnection Customer
Payments Not Taxable. The Parties intend
that all payments or property transfers made
by Interconnection Customer to Transmission
Provider for the installation of Transmission
Provider’s Interconnection Facilities and the
Network Upgrades shall be non-taxable,
either as contributions to capital, or as an
advance, in accordance with the Internal
Revenue Code and any applicable state
income tax laws and shall not be taxable as
contributions in aid of construction or
otherwise under the Internal Revenue Code
and any applicable state income tax laws.
5.17.2 Representations and Covenants. In
accordance with IRS Notice 2001–82 and IRS
Notice 88–129, Interconnection Customer
represents and covenants that (i) ownership
of the electricity generated at the Large
Generating Facility will pass to another party
prior to the transmission of the electricity on
the Transmission System, (ii) for income tax
purposes, the amount of any payments and
the cost of any property transferred to
Transmission Provider for Transmission
Provider’s Interconnection Facilities will be
capitalized by Interconnection Customer as
an intangible asset and recovered using the
straight-line method over a useful life of
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twenty (20) years, and (iii) any portion of
Transmission Provider’s Interconnection
Facilities that is a ‘‘dual-use intertie,’’ within
the meaning of IRS Notice 88–129, is
reasonably expected to carry only a de
minimis amount of electricity in the
direction of the Large Generating Facility. For
this purpose, ‘‘de minimis amount’’ means
no more than 5 percent of the total power
flows in both directions, calculated in
accordance with the ‘‘5 percent test’’ set forth
in IRS Notice 88–129. This is not intended
to be an exclusive list of the relevant
conditions that must be met to conform to
IRS requirements for non-taxable treatment.
At Transmission Provider’s request,
Interconnection Customer shall provide
Transmission Provider with a report from an
independent engineer confirming its
representation in clause (iii), above.
Transmission Provider represents and
covenants that the cost of Transmission
Provider’s Interconnection Facilities paid for
by Interconnection Customer will have no
net effect on the base upon which rates are
determined.
5.17.3 Indemnification for the Cost
Consequences of Current Tax Liability
Imposed Upon [the] Transmission Provider.
Notwithstanding Article 5.17.1,
Interconnection Customer shall protect,
indemnify and hold harmless Transmission
Provider from the cost consequences of any
current tax liability imposed against
Transmission Provider as the result of
payments or property transfers made by
Interconnection Customer to Transmission
Provider under this LGIA for Interconnection
Facilities, as well as any interest and
penalties, other than interest and penalties
attributable to any delay caused by
Transmission Provider.
Transmission Provider shall not include a
gross-up for the cost consequences of any
current tax liability in the amounts it charges
Interconnection Customer under this LGIA
unless (i) Transmission Provider has
determined, in good faith, that the payments
or property transfers made by
Interconnection Customer to Transmission
Provider should be reported as income
subject to taxation or (ii) any Governmental
Authority directs Transmission Provider to
report payments or property as income
subject to taxation; provided, however, that
Transmission Provider may require
Interconnection Customer to provide security
for Interconnection Facilities, in a form
reasonably acceptable to Transmission
Provider (such as a parental guarantee or a
letter of credit), in an amount equal to the
cost consequences of any current tax liability
under this Article 5.17. Interconnection
Customer shall reimburse Transmission
Provider for such costs on a fully grossed-up
basis, in accordance with Article 5.17.4,
within thirty (30) Calendar Days of receiving
written notification from Transmission
Provider of the amount due, including detail
about how the amount was calculated.
The indemnification obligation shall
terminate at the earlier of (1) the expiration
of the ten year testing period and the
applicable statute of limitation, as it may be
extended by Transmission Provider upon
request of the IRS, to keep these years open
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27185
for audit or adjustment, or (2) the occurrence
of a subsequent taxable event and the
payment of any related indemnification
obligations as contemplated by this Article
5.17.
5.17.4 Tax Gross-Up Amount.
Interconnection Customer’s liability for the
cost consequences of any current tax liability
under this Article 5.17 shall be calculated on
a fully grossed-up basis. Except as may
otherwise be agreed to by the parties, this
means that Interconnection Customer will
pay Transmission Provider, in addition to the
amount paid for the Interconnection
Facilities and Network Upgrades, an amount
equal to (1) the current taxes imposed on
Transmission Provider (‘‘Current Taxes’’) on
the excess of (a) the gross income realized by
Transmission Provider as a result of
payments or property transfers made by
Interconnection Customer to Transmission
Provider under this LGIA (without regard to
any payments under this Article 5.17) (the
‘‘Gross Income Amount’’) over (b) the present
value of future tax deductions for
depreciation that will be available as a result
of such payments or property transfers (the
‘‘Present Value Depreciation Amount’’), plus
(2) an additional amount sufficient to permit
Transmission Provider to receive and retain,
after the payment of all Current Taxes, an
amount equal to the net amount described in
clause (1).
For this purpose, (i) Current Taxes shall be
computed based on Transmission Provider’s
composite federal and state tax rates at the
time the payments or property transfers are
received and Transmission Provider will be
treated as being subject to tax at the highest
marginal rates in effect at that time (the
‘‘Current Tax Rate’’), and (ii) the Present
Value Depreciation Amount shall be
computed by discounting Transmission
Provider’s anticipated tax depreciation
deductions as a result of such payments or
property transfers by Transmission Provider’s
current weighted average cost of capital.
Thus, the formula for calculating
Interconnection Customer’s liability to
Transmission Owner pursuant to this Article
5.17.4 can be expressed as follows: (Current
Tax Rate x (Gross Income Amount—Present
Value of Tax Depreciation))/(1-Current Tax
Rate). Interconnection Customer’s estimated
tax liability in the event taxes are imposed
shall be stated in Appendix A,
Interconnection Facilities, Network Upgrades
and Distribution Upgrades.
5.17.5 Private Letter Ruling or Change or
Clarification of Law. At Interconnection
Customer’s request and expense,
Transmission Provider shall file with the IRS
a request for a private letter ruling as to
whether any property transferred or sums
paid, or to be paid, by Interconnection
Customer to Transmission Provider under
this LGIA are subject to federal income
taxation. Interconnection Customer will
prepare the initial draft of the request for a
private letter ruling, and will certify under
penalties of perjury that all facts represented
in such request are true and accurate to the
best of Interconnection Customer’s
knowledge. Transmission Provider and
Interconnection Customer shall cooperate in
good faith with respect to the submission of
such request.
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Transmission Provider shall keep
Interconnection Customer fully informed of
the status of such request for a private letter
ruling and shall execute either a privacy act
waiver or a limited power of attorney, in a
form acceptable to the IRS, that authorizes
Interconnection Customer to participate in all
discussions with the IRS regarding such
request for a private letter ruling.
Transmission Provider shall allow
Interconnection Customer to attend all
meetings with IRS officials about the request
and shall permit Interconnection Customer to
prepare the initial drafts of any follow-up
letters in connection with the request.
5.17.6 Subsequent Taxable Events. If,
within 10 years from the date on which the
relevant Transmission Provider’s
Interconnection Facilities are placed in
service, (i) Interconnection Customer
Breaches the covenants contained in Article
5.17.2, (ii) a ‘‘disqualification event’’ occurs
within the meaning of IRS Notice 88–129, or
(iii) this LGIA terminates and Transmission
Provider retains ownership of the
Interconnection Facilities and Network
Upgrades, Interconnection Customer shall
pay a tax gross-up for the cost consequences
of any current tax liability imposed on
Transmission Provider, calculated using the
methodology described in Article 5.17.4 and
in accordance with IRS Notice 90–60.
5.17.7 Contests. In the event any
Governmental Authority determines that
Transmission Provider’s receipt of payments
or property constitutes income that is subject
to taxation, Transmission Provider shall
notify Interconnection Customer, in writing,
within thirty (30) Calendar Days of receiving
notification of such determination by a
Governmental Authority. Upon the timely
written request by Interconnection Customer
and at Interconnection Customer’s sole
expense, Transmission Provider may appeal,
protest, seek abatement of, or otherwise
oppose such determination. Upon
Interconnection Customer’s written request
and sole expense, Transmission Provider
may file a claim for refund with respect to
any taxes paid under this Article 5.17,
whether or not it has received such a
determination. Transmission Provider
reserves the right to make all decisions with
regard to the prosecution of such appeal,
protest, abatement or other contest, including
the selection of counsel and compromise or
settlement of the claim, but Transmission
Provider shall keep Interconnection
Customer informed, shall consider in good
faith suggestions from Interconnection
Customer about the conduct of the contest,
and shall reasonably permit Interconnection
Customer or an Interconnection Customer
representative to attend contest proceedings.
Interconnection Customer shall pay to
Transmission Provider on a periodic basis, as
invoiced by Transmission Provider,
Transmission Provider’s documented
reasonable costs of prosecuting such appeal,
protest, abatement or other contest. At any
time during the contest, Transmission
Provider may agree to a settlement either
with Interconnection Customer’s consent or
after obtaining written advice from
nationally-recognized tax counsel, selected
by Transmission Provider, but reasonably
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acceptable to Interconnection Customer, that
the proposed settlement represents a
reasonable settlement given the hazards of
litigation. Interconnection Customer’s
obligation shall be based on the amount of
the settlement agreed to by Interconnection
Customer, or if a higher amount, so much of
the settlement that is supported by the
written advice from nationally-recognized tax
counsel selected under the terms of the
preceding sentence. The settlement amount
shall be calculated on a fully grossed-up
basis to cover any related cost consequences
of the current tax liability. Any settlement
without Interconnection Customer’s consent
or such written advice will relieve
Interconnection Customer from any
obligation to indemnify Transmission
Provider for the tax at issue in the contest.
5.17.8 Refund. In the event that (a) a
private letter ruling is issued to Transmission
Provider which holds that any amount paid
or the value of any property transferred by
Interconnection Customer to Transmission
Provider under the terms of this LGIA is not
subject to federal income taxation, (b) any
legislative change or administrative
announcement, notice, ruling or other
determination makes it reasonably clear to
Transmission Provider in good faith that any
amount paid or the value of any property
transferred by Interconnection Customer to
Transmission Provider under the terms of
this LGIA is not taxable to Transmission
Provider, (c) any abatement, appeal, protest,
or other contest results in a determination
that any payments or transfers made by
Interconnection Customer to Transmission
Provider are not subject to federal income
tax, or (d) if Transmission Provider receives
a refund from any taxing authority for any
overpayment of tax attributable to any
payment or property transfer made by
Interconnection Customer to Transmission
Provider pursuant to this LGIA, Transmission
Provider shall promptly refund to
Interconnection Customer the following:
(i) any payment made by Interconnection
Customer under this Article 5.17 for taxes
that is attributable to the amount determined
to be non-taxable, together with interest
thereon,
(ii) interest on any amounts paid by
Interconnection Customer to Transmission
Provider for such taxes which Transmission
Provider did not submit to the taxing
authority, calculated in accordance with the
methodology set forth in FERC’s regulations
at 18 CFR 35.19a(a)(2)(iii) from the date
payment was made by Interconnection
Customer to the date Transmission Provider
refunds such payment to Interconnection
Customer, and
(iii) with respect to any such taxes paid by
Transmission Provider, any refund or credit
Transmission Provider receives or to which
it may be entitled from any Governmental
Authority, interest (or that portion thereof
attributable to the payment described in
clause (i), above) owed to Transmission
Provider for such overpayment of taxes
(including any reduction in interest
otherwise payable by Transmission Provider
to any Governmental Authority resulting
from an offset or credit); provided, however,
that Transmission Provider will remit such
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amount promptly to Interconnection
Customer only after and to the extent that
Transmission Provider has received a tax
refund, credit or offset from any
Governmental Authority for any applicable
overpayment of income tax related to
Transmission Provider’s Interconnection
Facilities.
The intent of this provision is to leave the
Parties, to the extent practicable, in the event
that no taxes are due with respect to any
payment for Interconnection Facilities and
Network Upgrades hereunder, in the same
position they would have been in had no
such tax payments been made.
5.17.9 Taxes Other Than Income Taxes.
Upon the timely request by Interconnection
Customer, and at Interconnection Customer’s
sole expense, Transmission Provider may
appeal, protest, seek abatement of, or
otherwise contest any tax (other than federal
or state income tax) asserted or assessed
against Transmission Provider for which
Interconnection Customer may be required to
reimburse Transmission Provider under the
terms of this LGIA. Interconnection Customer
shall pay to Transmission Provider on a
periodic basis, as invoiced by Transmission
Provider, Transmission Provider’s
documented reasonable costs of prosecuting
such appeal, protest, abatement, or other
contest. Interconnection Customer and
Transmission Provider shall cooperate in
good faith with respect to any such contest.
Unless the payment of such taxes is a
prerequisite to an appeal or abatement or
cannot be deferred, no amount shall be
payable by Interconnection Customer to
Transmission Provider for such taxes until
they are assessed by a final, non-appealable
order by any court or agency of competent
jurisdiction. In the event that a tax payment
is withheld and ultimately due and payable
after appeal, Interconnection Customer will
be responsible for all taxes, interest and
penalties, other than penalties attributable to
any delay caused by Transmission Provider.
5.17.10 Transmission Owners Who Are
Not Transmission Providers. If Transmission
Provider is not the same entity as the
Transmission Owner, then (i) all references
in this Article 5.17 to Transmission Provider
shall be deemed also to refer to and to
include the Transmission Owner, as
appropriate, and (ii) this LGIA shall not
become effective until such Transmission
Owner shall have agreed in writing to assume
all of the duties and obligations of
Transmission Provider under this Article
5.17 of this LGIA.
5.18 Tax Status. Each Party shall
cooperate with the other to maintain the
other Party’s tax status. Nothing in this LGIA
is intended to adversely affect any
Transmission Provider’s tax exempt status
with respect to the issuance of bonds
including, but not limited to, Local
Furnishing Bonds.
5.19 Modification.
5.19.1 General. Either Party may
undertake modifications to its facilities. If a
Party plans to undertake a modification that
reasonably may be expected to affect the
other Party’s facilities, that Party shall
provide to the other Party sufficient
information regarding such modification so
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that the other Party may evaluate the
potential impact of such modification prior
to commencement of the work. Such
information shall be deemed to be
confidential hereunder and shall include
information concerning the timing of such
modifications and whether such
modifications are expected to interrupt the
flow of electricity from the Large Generating
Facility. The Party desiring to perform such
work shall provide the relevant drawings,
plans, and specifications to the other Party at
least ninety (90) Calendar Days in advance of
the commencement of the work or such
shorter period upon which the Parties may
agree, which agreement shall not
unreasonably be withheld, conditioned or
delayed.
In the case of Large Generating Facility
modifications that do not require
Interconnection Customer to submit an
Interconnection Request, Transmission
Provider shall provide, within thirty (30)
Calendar Days (or such other time as the
Parties may agree), an estimate of any
additional modifications to the Transmission
System, Transmission Provider’s
Interconnection Facilities or Network
Upgrades necessitated by such
Interconnection Customer modification and a
good faith estimate of the costs thereof.
5.19.2 Standards. Any additions,
modifications, or replacements made to a
Party’s facilities shall be designed,
constructed and operated in accordance with
this LGIA and Good Utility Practice.
5.19.3 Modification Costs.
Interconnection Customer shall not be
directly assigned for the costs of any
additions, modifications, or replacements
that Transmission Provider makes to
Transmission Provider’s Interconnection
Facilities or the Transmission System to
facilitate the interconnection of a third party
to Transmission Provider’s Interconnection
Facilities or the Transmission System, or to
provide transmission service to a third party
under Transmission Provider’s Tariff.
Interconnection Customer shall be
responsible for the costs of any additions,
modifications, or replacements to
Interconnection Customer’s Interconnection
Facilities that may be necessary to maintain
or upgrade such Interconnection Customer’s
Interconnection Facilities consistent with
Applicable Laws and Regulations, Applicable
Reliability Standards or Good Utility
Practice.
Article 6. Testing and Inspection
6.1 Pre-Commercial Operation Date
Testing and Modifications. Prior to the
Commercial Operation Date, Transmission
Provider shall test Transmission Provider’s
Interconnection Facilities and Network
Upgrades and Interconnection Customer
shall test the Large Generating Facility and
Interconnection Customer’s Interconnection
Facilities to ensure their safe and reliable
operation. Similar testing may be required
after initial operation. Each Party shall make
any modifications to its facilities that are
found to be necessary as a result of such
testing. Interconnection Customer shall bear
the cost of all such testing and modifications.
Interconnection Customer shall generate test
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energy at the Large Generating Facility only
if it has arranged for the delivery of such test
energy.
6.2 Post-Commercial Operation Date
Testing and Modifications. Each Party shall
at its own expense perform routine
inspection and testing of its facilities and
equipment in accordance with Good Utility
Practice as may be necessary to ensure the
continued interconnection of the Large
Generating Facility with the Transmission
System in a safe and reliable manner. Each
Party shall have the right, upon advance
written notice, to require reasonable
additional testing of the other Party’s
facilities, at the requesting Party’s expense, as
may be in accordance with Good Utility
Practice.
6.3 Right to Observe Testing. Each Party
shall notify the other Party in advance of its
performance of tests of its Interconnection
Facilities. The other Party has the right, at its
own expense, to observe such testing.
6.4 Right to Inspect. Each Party shall have
the right, but shall have no obligation to: (i)
observe the other Party’s tests and/or
inspection of any of its System Protection
Facilities and other protective equipment,
including Power System Stabilizers; (ii)
review the settings of the other Party’s
System Protection Facilities and other
protective equipment; and (iii) review the
other Party’s maintenance records relative to
the Interconnection Facilities, the System
Protection Facilities and other protective
equipment. A Party may exercise these rights
from time to time as it deems necessary upon
reasonable notice to the other Party. The
exercise or non-exercise by a Party of any
such rights shall not be construed as an
endorsement or confirmation of any element
or condition of the Interconnection Facilities
or the System Protection Facilities or other
protective equipment or the operation
thereof, or as a warranty as to the fitness,
safety, desirability, or reliability of same. Any
information that a Party obtains through the
exercise of any of its rights under this Article
6.4 shall be deemed to be Confidential
Information and treated pursuant to Article
22 of this LGIA.
Article 7. Metering
7.1 General. Each Party shall comply with
the Electric Reliability Organization
requirements. Unless otherwise agreed by the
Parties, Transmission Provider shall install
Metering Equipment at the Point of
Interconnection prior to any operation of the
Large Generating Facility and shall own,
operate, test and maintain such Metering
Equipment. Power flows to and from the
Large Generating Facility shall be measured
at or, at Transmission Provider’s option,
compensated to, the Point of Interconnection.
Transmission Provider shall provide
metering quantities, in analog and/or digital
form, to Interconnection Customer upon
request. Interconnection Customer shall bear
all reasonable documented costs associated
with the purchase, installation, operation,
testing and maintenance of the Metering
Equipment.
7.2 Check Meters. Interconnection
Customer, at its option and expense, may
install and operate, on its premises and on
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27187
its side of the Point of Interconnection, one
or more check meters to check Transmission
Provider’s meters. Such check meters shall be
for check purposes only and shall not be
used for the measurement of power flows for
purposes of this LGIA, except as provided in
Article 7.4 below. The check meters shall be
subject at all reasonable times to inspection
and examination by Transmission Provider
or its designee. The installation, operation
and maintenance thereof shall be performed
entirely by Interconnection Customer in
accordance with Good Utility Practice.
7.3 Standards. Transmission Provider
shall install, calibrate, and test revenue
quality Metering Equipment in accordance
with applicable ANSI standards.
7.4 Testing of Metering Equipment.
Transmission Provider shall inspect and test
all Transmission Provider-owned Metering
Equipment upon installation and at least
once every two (2) years thereafter. If
requested to do so by Interconnection
Customer, Transmission Provider shall, at
Interconnection Customer’s expense, inspect
or test Metering Equipment more frequently
than every two (2) years. Transmission
Provider shall give reasonable notice of the
time when any inspection or test shall take
place, and Interconnection Customer may
have representatives present at the test or
inspection. If at any time Metering
Equipment is found to be inaccurate or
defective, it shall be adjusted, repaired or
replaced at Interconnection Customer’s
expense, in order to provide accurate
metering, unless the inaccuracy or defect is
due to Transmission Provider’s failure to
maintain, then Transmission Provider shall
pay. If Metering Equipment fails to register,
or if the measurement made by Metering
Equipment during a test varies by more than
two percent from the measurement made by
the standard meter used in the test,
Transmission Provider shall adjust the
measurements by correcting all
measurements for the period during which
Metering Equipment was in error by using
Interconnection Customer’s check meters, if
installed. If no such check meters are
installed or if the period cannot be
reasonably ascertained, the adjustment shall
be for the period immediately preceding the
test of the Metering Equipment equal to onehalf the time from the date of the last
previous test of the Metering Equipment.
7.5 Metering Data. At Interconnection
Customer’s expense, the metered data shall
be telemetered to one or more locations
designated by Transmission Provider and one
or more locations designated by
Interconnection Customer. Such telemetered
data shall be used, under normal operating
conditions, as the official measurement of the
amount of energy delivered from the Large
Generating Facility to the Point of
Interconnection.
Article 8. Communications
8.1 Interconnection Customer
Obligations. Interconnection Customer shall
maintain satisfactory operating
communications with Transmission
Provider’s Transmission System dispatcher
or representative designated by Transmission
Provider. Interconnection Customer shall
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provide standard voice line, dedicated voice
line and facsimile communications at its
Large Generating Facility control room or
central dispatch facility through use of either
the public telephone system, or a voice
communications system that does not rely on
the public telephone system. Interconnection
Customer shall also provide the dedicated
data circuit(s) necessary to provide
Interconnection Customer data to
Transmission Provider as set forth in
Appendix D, Security Arrangements Details.
The data circuit(s) shall extend from the
Large Generating Facility to the location(s)
specified by Transmission Provider. Any
required maintenance of such
communications equipment shall be
performed by Interconnection Customer.
Operational communications shall be
activated and maintained under, but not be
limited to, the following events: system
paralleling or separation, scheduled and
unscheduled shutdowns, equipment
clearances, and hourly and daily load data.
8.2 Remote Terminal Unit. Prior to the
Initial Synchronization Date of the Large
Generating Facility, a Remote Terminal Unit,
or equivalent data collection and transfer
equipment acceptable to the Parties, shall be
installed by Interconnection Customer, or by
Transmission Provider at Interconnection
Customer’s expense, to gather accumulated
and instantaneous data to be telemetered to
the location(s) designated by Transmission
Provider through use of a dedicated point-topoint data circuit(s) as indicated in Article
8.1. The communication protocol for the data
circuit(s) shall be specified by Transmission
Provider. Instantaneous bi-directional analog
real power and reactive power flow
information must be telemetered directly to
the location(s) specified by Transmission
Provider.
Each Party will promptly advise the other
Party if it detects or otherwise learns of any
metering, telemetry or communications
equipment errors or malfunctions that
require the attention and/or correction by the
other Party. The Party owning such
equipment shall correct such error or
malfunction as soon as reasonably feasible.
8.3 No Annexation. Any and all
equipment placed on the premises of a Party
shall be and remain the property of the Party
providing such equipment regardless of the
mode and manner of annexation or
attachment to real property, unless otherwise
mutually agreed by the Parties.
8.4 Provision of Data from a Variable
Energy Resource. [The] Interconnection
Customer whose Generating Facility contains
at least one Variable Energy Resource shall
provide meteorological and forced outage
data to [the] Transmission Provider to the
extent necessary for [the] Transmission
Provider’s development and deployment of
power production forecasts for that class of
Variable Energy Resources. [The]
Interconnection Customer with a Variable
Energy Resource having wind as the energy
source, at a minimum, will be required to
provide [the] Transmission Provider with
site-specific meteorological data including:
temperature, wind speed, wind direction,
and atmospheric pressure. [The]
Interconnection Customer with a Variable
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Energy Resource having solar as the energy
source, at a minimum, will be required to
provide [the] Transmission Provider with
site-specific meteorological data including:
temperature, atmospheric pressure, and
irradiance. [The] Transmission Provider and
Interconnection Customer whose Generating
Facility contains a Variable Energy Resource
shall mutually agree to any additional
meteorological data that are required for the
development and deployment of a power
production forecast. [The] Interconnection
Customer whose Generating Facility contains
a Variable Energy Resource also shall submit
data to [the] Transmission Provider regarding
all forced outages to the extent necessary for
[the] Transmission Provider’s development
and deployment of power production
forecasts for that class of Variable Energy
Resources. The exact specifications of the
meteorological and forced outage data to be
provided by [the] Interconnection Customer
to [the] Transmission Provider, including the
frequency and timing of data submittals,
shall be made taking into account the size
and configuration of the Variable Energy
Resource, its characteristics, location, and its
importance in maintaining generation
resource adequacy and transmission system
reliability in its area. All requirements for
meteorological and forced outage data must
be commensurate with the power production
forecasting employed by [the] Transmission
Provider. Such requirements for
meteorological and forced outage data are set
forth in Appendix C, Interconnection Details,
of this LGIA, as they may change from time
to time.
Article 9. Operations
9.1 General. Each Party shall comply with
the Electric Reliability Organization
requirements. Each Party shall provide to the
other Party all information that may
reasonably be required by the other Party to
comply with Applicable Laws and
Regulations and Applicable Reliability
Standards.
9.2 Balancing Authority Area
Notification. At least three months before
Initial Synchronization Date, Interconnection
Customer shall notify Transmission Provider
in writing of the Balancing Authority Area in
which the Large Generating Facility will be
located. If Interconnection Customer elects to
locate the Large Generating Facility in a
Balancing Authority Area other than the
Balancing Authority Area in which the Large
Generating Facility is physically located, and
if permitted to do so by the relevant
transmission tariffs, all necessary
arrangements, including but not limited to
those set forth in Article 7 and Article 8 of
this LGIA, and remote Balancing Authority
Area generator interchange agreements, if
applicable, and the appropriate measures
under such agreements, shall be executed
and implemented prior to the placement of
the Large Generating Facility in the other
Balancing Authority Area.
9.3 Transmission Provider Obligations.
Transmission Provider shall cause the
Transmission System and Transmission
Provider’s Interconnection Facilities to be
operated, maintained and controlled in a safe
and reliable manner and in accordance with
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this LGIA. Transmission Provider may
provide operating instructions to
Interconnection Customer consistent with
this LGIA and Transmission Provider’s
operating protocols and procedures as they
may change from time to time. Transmission
Provider will consider changes to its
operating protocols and procedures proposed
by Interconnection Customer.
9.4 Interconnection Customer
Obligations. Interconnection Customer shall
at its own expense operate, maintain and
control the Large Generating Facility and
Interconnection Customer’s Interconnection
Facilities in a safe and reliable manner and
in accordance with this LGIA.
Interconnection Customer shall operate the
Large Generating Facility and
Interconnection Customer’s Interconnection
Facilities in accordance with all applicable
requirements of the Balancing Authority Area
of which it is part, as such requirements are
set forth in Appendix C, Interconnection
Details, of this LGIA. Appendix C,
Interconnection Details, will be modified to
reflect changes to the requirements as they
may change from time to time. Either Party
may request that the other Party provide
copies of the requirements set forth in
Appendix C, Interconnection Details, of this
LGIA.
9.5 Start-Up and Synchronization.
Consistent with the Parties’ mutually
acceptable procedures, Interconnection
Customer is responsible for the proper
synchronization of the Large Generating
Facility to Transmission Provider’s
Transmission System.
9.6 Reactive Power and Primary
Frequency Response.
9.6.1 Power Factor Design Criteria.
9.6.1.1 Synchronous Generation.
Interconnection Customer shall design the
Large Generating Facility to maintain a
composite power delivery at continuous
rated power output at the Point of
Interconnection at a power factor within the
range of 0.95 leading to 0.95 lagging, unless
Transmission Provider has established
different requirements that apply to all
synchronous generators in the Balancing
Authority Area on a comparable basis.
9.6.1.2 Non-Synchronous Generation.
Interconnection Customer shall design the
Large Generating Facility to maintain a
composite power delivery at continuous
rated power output at the high-side of the
generator substation at a power factor within
the range of 0.95 leading to 0.95 lagging,
unless Transmission Provider has established
a different power factor range that applies to
all non-synchronous generators in the
Balancing Authority Area on a comparable
basis. This power factor range standard shall
be dynamic and can be met using, for
example, power electronics designed to
supply this level of reactive capability (taking
into account any limitations due to voltage
level, real power output, etc.) or fixed and
switched capacitors, or a combination of the
two. This requirement shall only apply to
newly interconnecting non-synchronous
generators that have not yet executed a
Facilities Study Agreement as of the effective
date of the Final Rule establishing this
requirement (Order No. 827).
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9.6.2 Voltage Schedules. Once
Interconnection Customer has synchronized
the Large Generating Facility with the
Transmission System, Transmission Provider
shall require Interconnection Customer to
operate the Large Generating Facility to
produce or absorb reactive power within the
design limitations of the Large Generating
Facility set forth in Article 9.6.1 (Power
Factor Design Criteria). Transmission
Provider’s voltage schedules shall treat all
sources of reactive power in the Balancing
Authority Area in an equitable and not
unduly discriminatory manner. Transmission
Provider shall exercise Reasonable Efforts to
provide Interconnection Customer with such
schedules at least one (1) day in advance, and
may make changes to such schedules as
necessary to maintain the reliability of the
Transmission System. Interconnection
Customer shall operate the Large Generating
Facility to maintain the specified output
voltage or power factor at the Point of
Interconnection within the design limitations
of the Large Generating Facility set forth in
Article 9.6.1 (Power Factor Design Criteria).
If Interconnection Customer is unable to
maintain the specified voltage or power
factor, it shall promptly notify the System
Operator.
9.6.2.1 Voltage Regulators. Whenever the
Large Generating Facility is operated in
parallel with the Transmission System and
voltage regulators are capable of operation,
Interconnection Customer shall operate the
Large Generating Facility with its voltage
regulators in automatic operation. If the Large
Generating Facility’s voltage regulators are
not capable of such automatic operation,
Interconnection Customer shall immediately
notify Transmission Provider’s system
operator, or its designated representative, and
ensure that such Large Generating Facility’s
reactive power production or absorption
(measured in MVARs) are within the design
capability of the Large Generating Facility’s
generating unit(s) and steady state stability
limits. Interconnection Customer shall not
cause its Large Generating Facility to
disconnect automatically or instantaneously
from the Transmission System or trip any
generating unit comprising the Large
Generating Facility for an under or over
frequency condition unless the abnormal
frequency condition persists for a time period
beyond the limits set forth in ANSI/IEEE
Standard C37.106, or such other standard as
applied to other generators in the Balancing
Authority Area on a comparable basis.
9.6.3 Payment for Reactive Power.
Transmission Provider is required to pay
Interconnection Customer for reactive power
that Interconnection Customer provides or
absorbs from the Large Generating Facility
when Transmission Provider requests
Interconnection Customer to operate its Large
Generating Facility outside the range
specified in Article 9.6.1, provided that if
Transmission Provider pays its own or
affiliated generators for reactive power
service within the specified range, it must
also pay Interconnection Customer. Payments
shall be pursuant to Article 11.6 or such
other agreement to which the Parties have
otherwise agreed.
9.6.4 Primary Frequency Response.
Interconnection Customer shall ensure the
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primary frequency response capability of its
Large Generating Facility by installing,
maintaining, and operating a functioning
governor or equivalent controls. The term
‘‘functioning governor or equivalent
controls’’ as used herein shall mean the
required hardware and/or software that
provides frequency responsive real power
control with the ability to sense changes in
system frequency and autonomously adjust
the Large Generating Facility’s real power
output in accordance with the droop and
deadband parameters and in the direction
needed to correct frequency deviations.
Interconnection Customer is required to
install a governor or equivalent controls with
the capability of operating: (1) with a
maximum 5 percent droop and ±0.036 Hz
deadband; or (2) in accordance with the
relevant droop, deadband, and timely and
sustained response settings from an approved
Electric Reliability Organization reliability
standard providing for equivalent or more
stringent parameters. The droop
characteristic shall be: (1) based on the
nameplate capacity of the Large Generating
Facility, and shall be linear in the range of
frequencies between 59 to 61 Hz that are
outside of the deadband parameter; or (2)
based an approved Electric Reliability
Organization reliability standard providing
for an equivalent or more stringent
parameter. The deadband parameter shall be:
the range of frequencies above and below
nominal (60 Hz) in which the governor or
equivalent controls is not expected to adjust
the Large Generating Facility’s real power
output in response to frequency deviations.
The deadband shall be implemented: (1)
without a step to the droop curve, that is,
once the frequency deviation exceeds the
deadband parameter, the expected change in
the Large Generating Facility’s real power
output in response to frequency deviations
shall start from zero and then increase (for
under-frequency deviations) or decrease (for
over-frequency deviations) linearly in
proportion to the magnitude of the frequency
deviation; or (2) in accordance with an
approved Electric Reliability Organization
reliability standard providing for an
equivalent or more stringent parameter.
Interconnection Customer shall notify
Transmission Provider that the primary
frequency response capability of the Large
Generating Facility has been tested and
confirmed during commissioning. Once
Interconnection Customer has synchronized
the Large Generating Facility with the
Transmission system, Interconnection
Customer shall operate the Large Generating
Facility consistent with the provisions
specified in [Sections] articles 9.6.4.1 and
9.6.4.2 of this Agreement. The primary
frequency response requirements contained
herein shall apply to both synchronous and
non-synchronous Large Generating Facilities.
9.6.4.1 Governor or Equivalent Controls.
Whenever the Large Generating Facility is
operated in parallel with the Transmission
System, Interconnection Customer shall
operate the Large Generating Facility with its
governor or equivalent controls in service
and responsive to frequency. Interconnection
Customer shall: (1) in coordination with
Transmission Provider and/or the relevant
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balancing authority, set the deadband
parameter to: (1) a maximum of ±0.036 Hz
and set the droop parameter to a maximum
of 5 percent; or (2) implement the relevant
droop and deadband settings from an
approved Electric Reliability Organization
reliability standard that provides for
equivalent or more stringent parameters.
Interconnection Customer shall be required
to provide the status and settings of the
governor or equivalent controls to
Transmission Provider and/or the relevant
balancing authority upon request. If
Interconnection Customer needs to operate
the Large Generating Facility with its
governor or equivalent controls not in
service, Interconnection Customer shall
immediately notify Transmission Provider
and the relevant balancing authority, and
provide both with the following information:
(1) the operating status of the governor or
equivalent controls (i.e., whether it is
currently out of service or when it will be
taken out of service); (2) the reasons for
removing the governor or equivalent controls
from service; and (3) a reasonable estimate of
when the governor or equivalent controls
will be returned to service. Interconnection
Customer shall make Reasonable Efforts to
return its governor or equivalent controls into
service as soon as practicable.
Interconnection Customer shall make
Reasonable Efforts to keep outages of the
Large Generating Facility’s governor or
equivalent controls to a minimum whenever
the Large Generating Facility is operated in
parallel with the Transmission System.
9.6.4.2 Timely and Sustained Response.
Interconnection Customer shall ensure that
the Large Generating Facility’s real power
response to sustained frequency deviations
outside of the deadband setting is
automatically provided and shall begin
immediately after frequency deviates outside
of the deadband, and to the extent the Large
Generating Facility has operating capability
in the direction needed to correct the
frequency deviation. Interconnection
Customer shall not block or otherwise inhibit
the ability of the governor or equivalent
controls to respond and shall ensure that the
response is not inhibited, except under
certain operational constraints including, but
not limited to, ambient temperature
limitations, physical energy limitations,
outages of mechanical equipment, or
regulatory requirements. The Large
Generating Facility shall sustain the real
power response at least until system
frequency returns to a value within the
deadband setting of the governor or
equivalent controls. A Commission-approved
reliability standard with equivalent or more
stringent requirements shall supersede the
above requirements.
9.6.4.3 Exemptions. Large Generating
Facilities that are regulated by the United
States Nuclear Regulatory Commission shall
be exempt from [Sections]articles 9.6.4,
9.6.4.1, and 9.6.4.2 of this Agreement. Large
Generating Facilities that are behind the
meter generation that is sized-to-load (i.e.,
the thermal load and the generation are nearbalanced in real-time operation and the
generation is primarily controlled to
maintain the unique thermal, chemical, or
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mechanical output necessary for the
operating requirements of its host facility)
shall be required to install primary frequency
response capability in accordance with the
droop and deadband capability requirements
specified in [Section]article 9.6.4, but shall
be otherwise exempt from the operating
requirements in [Sections]articles 9.6.4,
9.6.4.1, 9.6.4.2, and 9.6.4.4 of this Agreement.
9.6.4.4[.] Electric Storage Resources.
Interconnection Customer interconnecting a
Generating Facility that contains an electric
storage resource shall establish an operating
range in Appendix C of its LGIA that
specifies a minimum state of charge and a
maximum state of charge between which the
electric storage resource will be required to
provide primary frequency response
consistent with the conditions set forth in
[Sections] articles 9.6.4, 9.6.4.1, 9.6.4.2 and
9.6.4.3 of this Agreement. Appendix C shall
specify whether the operating range is static
or dynamic, and shall consider (1) the
expected magnitude of frequency deviations
in the interconnection; (2) the expected
duration that system frequency will remain
outside of the deadband parameter in the
interconnection; (3) the expected incidence
of frequency deviations outside of the
deadband parameter in the interconnection;
(4) the physical capabilities of the electric
storage resource; (5) operational limitations
of the electric storage resource due to
manufacturer specifications; and (6) any
other relevant factors agreed to by
Transmission Provider and Interconnection
Customer, and in consultation with the
relevant transmission owner or balancing
authority as appropriate. If the operating
range is dynamic, then Appendix C must
establish how frequently the operating range
will be reevaluated and the factors that may
be considered during its reevaluation.
Interconnection Customer’s electric storage
resource is required to provide timely and
sustained primary frequency response
consistent with [Section]article 9.6.4.2 of this
Agreement when it is online and dispatched
to inject electricity to the Transmission
System and/or receive electricity from the
Transmission System. This excludes
circumstances when the electric storage
resource is not dispatched to inject electricity
to the Transmission System and/or
dispatched to receive electricity from the
Transmission System. If Interconnection
Customer’s electric storage resource is
charging at the time of a frequency deviation
outside of its deadband parameter, it is to
increase (for over-frequency deviations) or
decrease (for under-frequency deviations) the
rate at which it is charging in accordance
with its droop parameter. Interconnection
Customer’s electric storage resource is not
required to change from charging to
discharging, or vice versa, unless the
response necessitated by the droop and
deadband settings requires it to do so and it
is technically capable of making such a
transition.
9.7 Outages and Interruptions.
9.7.1 Outages.
9.7.1.1 Outage Authority and
Coordination. Each Party may in accordance
with Good Utility Practice in coordination
with the other Party remove from service any
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of its respective Interconnection Facilities or
Network Upgrades that may impact the other
Party’s facilities as necessary to perform
maintenance or testing or to install or replace
equipment. Absent an Emergency Condition,
the Party scheduling a removal of such
facility(ies) from service will use Reasonable
Efforts to schedule such removal on a date
and time mutually acceptable to the Parties.
In all circumstances, any Party planning to
remove such facility(ies) from service shall
use Reasonable Efforts to minimize the effect
on the other Party of such removal.
9.7.1.2 Outage Schedules. Transmission
Provider shall post scheduled outages of its
transmission facilities on the OASIS.
Interconnection Customer shall submit its
planned maintenance schedules for the Large
Generating Facility to Transmission Provider
for a minimum of a rolling twenty-four
month period. Interconnection Customer
shall update its planned maintenance
schedules as necessary. Transmission
Provider may request Interconnection
Customer to reschedule its maintenance as
necessary to maintain the reliability of the
Transmission System; provided, however,
adequacy of generation supply shall not be a
criterion in determining Transmission
System reliability. Transmission Provider
shall compensate Interconnection Customer
for any additional direct costs that
Interconnection Customer incurs as a result
of having to reschedule maintenance,
including any additional overtime, breaking
of maintenance contracts or other costs above
and beyond the cost Interconnection
Customer would have incurred absent
Transmission Provider’s request to
reschedule maintenance. Interconnection
Customer will not be eligible to receive
compensation, if during the twelve (12)
months prior to the date of the scheduled
maintenance, Interconnection Customer had
modified its schedule of maintenance
activities.
9.7.1.3 Outage Restoration. If an outage
on a Party’s Interconnection Facilities or
Network Upgrades adversely affects the other
Party’s operations or facilities, the Party that
owns or controls the facility that is out of
service shall use Reasonable Efforts to
promptly restore such facility(ies) to a
normal operating condition consistent with
the nature of the outage. The Party that owns
or controls the facility that is out of service
shall provide the other Party, to the extent
such information is known, information on
the nature of the Emergency Condition, an
estimated time of restoration, and any
corrective actions required. Initial verbal
notice shall be followed up as soon as
practicable with written notice explaining
the nature of the outage.
9.7.2 Interruption of Service. If required
by Good Utility Practice to do so,
Transmission Provider may require
Interconnection Customer to interrupt or
reduce deliveries of electricity if such
delivery of electricity could adversely affect
Transmission Provider’s ability to perform
such activities as are necessary to safely and
reliably operate and maintain the
Transmission System. The following
provisions shall apply to any interruption or
reduction permitted under this Article 9.7.2:
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9.7.2.1 The interruption or reduction
shall continue only for so long as reasonably
necessary under Good Utility Practice;
9.7.2.2 Any such interruption or
reduction shall be made on an equitable,
non-discriminatory basis with respect to all
generating facilities directly connected to the
Transmission System;
9.7.2.3 When the interruption or
reduction must be made under circumstances
which do not allow for advance notice,
Transmission Provider shall notify
Interconnection Customer by telephone as
soon as practicable of the reasons for the
curtailment, interruption, or reduction, and,
if known, its expected duration. Telephone
notification shall be followed by written
notification as soon as practicable;
9.7.2.4 Except during the existence of an
Emergency Condition, when the interruption
or reduction can be scheduled without
advance notice, Transmission Provider shall
notify Interconnection Customer in advance
regarding the timing of such scheduling and
further notify Interconnection Customer of
the expected duration. Transmission
Provider shall coordinate with
Interconnection Customer using Good Utility
Practice to schedule the interruption or
reduction during periods of least impact to
Interconnection Customer and Transmission
Provider;
9.7.2.5 The Parties shall cooperate and
coordinate with each other to the extent
necessary in order to restore the Large
Generating Facility, Interconnection
Facilities, and the Transmission System to
their normal operating state, consistent with
system conditions and Good Utility Practice.
9.7.3 Ride Through Capability and
Performance. The Transmission System is
designed to automatically activate a loadshed program as required by the Electric
Reliability Organization in the event of an
under-frequency system disturbance.
Interconnection Customer shall implement
under-frequency and over-frequency relay set
points for the Large Generating Facility as
required by the Electric Reliability
Organization to ensure frequency ‘‘ride
through’’ capability of the Transmission
System. Large Generating Facility response to
frequency deviations of pre-determined
magnitudes, both under-frequency and overfrequency deviations, shall be studied and
coordinated with Transmission Provider in
accordance with Good Utility Practice.
Interconnection Customer shall also
implement under-voltage and over-voltage
relay set points, or equivalent electronic
controls, as required by the Electric
Reliability Organization to ensure voltage
‘‘ride through’’ capability of the
Transmission System. The term ‘‘ride
through’’ as used herein shall mean the
ability of a Generating Facility to stay
connected to and synchronized with the
Transmission System during system
disturbances within a range of underfrequency, over-frequency, under-voltage,
and over-voltage conditions, in accordance
with Good Utility Practice and consistent
with any standards and guidelines that are
applied to other Generating Facilities in the
Balancing Authority Area on a comparable
basis. For abnormal frequency conditions and
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voltage conditions within the ‘‘no trip zone’’
defined by Reliability Standard PRC–024–3
or successor mandatory ride through
reliability standards, the non-synchronous
Large Generating Facility must ensure that,
within any physical limitations of the Large
Generating Facility, its control and protection
settings are configured or set to (1) continue
active power production during disturbance
and post disturbance periods at predisturbance levels, unless reactive power
priority mode is enabled or unless providing
primary frequency response or fast frequency
response; (2) minimize reductions in active
power and remain within dynamic voltage
and current limits, if reactive power priority
mode is enabled, unless providing primary
frequency response or fast frequency
response; (3) not artificially limit dynamic
reactive power capability during
disturbances; and (4) return to predisturbance active power levels without
artificial ramp rate limits if active power is
reduced, unless providing primary frequency
response or fast frequency response.
9.7.4 System Protection and Other
Control Requirements.
9.7.4.1 System Protection Facilities.
Interconnection Customer shall, at its
expense, install, operate and maintain
System Protection Facilities as a part of the
Large Generating Facility or Interconnection
Customer’s Interconnection Facilities.
Transmission Provider shall install at
Interconnection Customer’s expense any
System Protection Facilities that may be
required on Transmission Provider’s
Interconnection Facilities or the
Transmission System as a result of the
interconnection of the Large Generating
Facility and Interconnection Customer’s
Interconnection Facilities.
9.7.4.2 Each Party’s protection facilities
shall be designed and coordinated with other
systems in accordance with Good Utility
Practice.
9.7.4.3 Each Party shall be responsible for
protection of its facilities consistent with
Good Utility Practice.
9.7.4.4 Each Party’s protective relay
design shall incorporate the necessary test
switches to perform the tests required in
Article 6. The required test switches will be
placed such that they allow operation of
lockout relays while preventing breaker
failure schemes from operating and causing
unnecessary breaker operations and/or the
tripping of Interconnection Customer’s units.
9.7.4.5 Each Party will test, operate and
maintain System Protection Facilities in
accordance with Good Utility Practice.
9.7.4.6 Prior to the In-Service Date, and
again prior to the Commercial Operation
Date, each Party or its agent shall perform a
complete calibration test and functional trip
test of the System Protection Facilities. At
intervals suggested by Good Utility Practice
and following any apparent malfunction of
the System Protection Facilities, each Party
shall perform both calibration and functional
trip tests of its System Protection Facilities.
These tests do not require the tripping of any
in-service generation unit. These tests do,
however, require that all protective relays
and lockout contacts be activated.
9.7.5 Requirements for Protection. In
compliance with Good Utility Practice,
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Interconnection Customer shall provide,
install, own, and maintain relays, circuit
breakers and all other devices necessary to
remove any fault contribution of the Large
Generating Facility to any short circuit
occurring on the Transmission System not
otherwise isolated by Transmission
Provider’s equipment, such that the removal
of the fault contribution shall be coordinated
with the protective requirements of the
Transmission System. Such protective
equipment shall include, without limitation,
a disconnecting device or switch with loadinterrupting capability located between the
Large Generating Facility and the
Transmission System at a site selected upon
mutual agreement (not to be unreasonably
withheld, conditioned or delayed) of the
Parties. Interconnection Customer shall be
responsible for protection of the Large
Generating Facility and Interconnection
Customer’s other equipment from such
conditions as negative sequence currents,
over- or under-frequency, sudden load
rejection, over- or under-voltage, and
generator loss-of-field. Interconnection
Customer shall be solely responsible to
disconnect the Large Generating Facility and
Interconnection Customer’s other equipment
if conditions on the Transmission System
could adversely affect the Large Generating
Facility.
9.7.6 Power Quality. Neither Party’s
facilities shall cause excessive voltage flicker
nor introduce excessive distortion to the
sinusoidal voltage or current waves as
defined by ANSI Standard C84.1–1989, in
accordance with IEEE Standard 519, or any
applicable superseding electric industry
standard. In the event of a conflict between
ANSI Standard C84.1–1989, or any
applicable superseding electric industry
standard, ANSI Standard C84.1–1989, or the
applicable superseding electric industry
standard, shall control.
9.8 Switching and Tagging Rules. Each
Party shall provide the other Party a copy of
its switching and tagging rules that are
applicable to the other Party’s activities.
Such switching and tagging rules shall be
developed on a non-discriminatory basis.
The Parties shall comply with applicable
switching and tagging rules, as amended
from time to time, in obtaining clearances for
work or for switching operations on
equipment.
9.9 Use of Interconnection Facilities by
Third Parties.
9.9.1 Purpose of Interconnection
Facilities. Except as may be required by
Applicable Laws and Regulations, or as
otherwise agreed to among the Parties, the
Interconnection Facilities shall be
constructed for the sole purpose of
interconnecting the Large Generating Facility
to the Transmission System and shall be used
for no other purpose.
9.9.2 Third Party Users. If required by
Applicable Laws and Regulations or if the
Parties mutually agree, such agreement not to
be unreasonably withheld, to allow one or
more third parties to use Transmission
Provider’s Interconnection Facilities, or any
part thereof, Interconnection Customer will
be entitled to compensation for the capital
expenses it incurred in connection with the
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Interconnection Facilities based upon the pro
rata use of the Interconnection Facilities by
Transmission Provider, all third party users,
and Interconnection Customer, in accordance
with Applicable Laws and Regulations or
upon some other mutually-agreed upon
methodology. In addition, cost responsibility
for ongoing costs, including operation and
maintenance costs associated with the
Interconnection Facilities, will be allocated
between Interconnection Customer and any
third party users based upon the pro rata use
of the Interconnection Facilities by
Transmission Provider, all third party users,
and Interconnection Customer, in accordance
with Applicable Laws and Regulations or
upon some other mutually agreed upon
methodology. If the issue of such
compensation or allocation cannot be
resolved through such negotiations, it shall
be submitted to FERC for resolution.
9.10 Disturbance Analysis Data Exchange.
The Parties will cooperate with one another
in the analysis of disturbances to either the
Large Generating Facility or Transmission
Provider’s Transmission System by gathering
and providing access to any information
relating to any disturbance, including
information from oscillography, protective
relay targets, breaker operations and
sequence of events records, and any
disturbance information required by Good
Utility Practice.
Article 10. Maintenance
10.1 Transmission Provider Obligations.
Transmission Provider shall maintain the
Transmission System and Transmission
Provider’s Interconnection Facilities in a safe
and reliable manner and in accordance with
this LGIA.
10.2 Interconnection Customer
Obligations. Interconnection Customer shall
maintain the Large Generating Facility and
Interconnection Customer’s Interconnection
Facilities in a safe and reliable manner and
in accordance with this LGIA.
10.3 Coordination. The Parties shall
confer regularly to coordinate the planning,
scheduling and performance of preventive
and corrective maintenance on the Large
Generating Facility and the Interconnection
Facilities.
10.4 Secondary Systems. Each Party shall
cooperate with the other in the inspection,
maintenance, and testing of control or power
circuits that operate below 600 volts, AC or
DC, including, but not limited to, any
hardware, control or protective devices,
cables, conductors, electric raceways,
secondary equipment panels, transducers,
batteries, chargers, and voltage and current
transformers that directly affect the operation
of a Party’s facilities and equipment which
may reasonably be expected to impact the
other Party. Each Party shall provide advance
notice to the other Party before undertaking
any work on such circuits, especially on
electrical circuits involving circuit breaker
trip and close contacts, current transformers,
or potential transformers.
10.5 Operating and Maintenance
Expenses. Subject to the provisions herein
addressing the use of facilities by others, and
except for operations and maintenance
expenses associated with modifications made
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for providing interconnection or transmission
service to a third party and such third party
pays for such expenses, Interconnection
Customer shall be responsible for all
reasonable expenses including overheads,
associated with: (1) owning, operating,
maintaining, repairing, and replacing
Interconnection Customer’s Interconnection
Facilities; and (2) operation, maintenance,
repair and replacement of Transmission
Provider’s Interconnection Facilities.
Article 11. Performance Obligation
11.1 Interconnection Customer
Interconnection Facilities. Interconnection
Customer shall design, procure, construct,
install, own and/or control Interconnection
Customer Interconnection Facilities
described in Appendix A, Interconnection
Facilities, Network Upgrades and
Distribution Upgrades, at its sole expense.
11.2 Transmission Provider’s
Interconnection Facilities. Transmission
Provider or Transmission Owner shall
design, procure, construct, install, own and/
or control [the] Transmission Provider’s
Interconnection Facilities described in
Appendix A, Interconnection Facilities,
Network Upgrades and Distribution
Upgrades, at the sole expense of [the]
Interconnection Customer.
11.3 Network Upgrades and Distribution
Upgrades. Transmission Provider or
Transmission Owner shall design, procure,
construct, install, and own the Network
Upgrades and Distribution Upgrades
described in Appendix A, Interconnection
Facilities, Network Upgrades and
Distribution Upgrades. Interconnection
Customer shall be responsible for all costs
related to Distribution Upgrades. Unless
Transmission Provider or Transmission
Owner elects to fund the capital for the
Network Upgrades, they shall be solely
funded by Interconnection Customer.
11.4 Transmission Credits.
11.4.1 Repayment of Amounts Advanced
for Network Upgrades. Interconnection
Customer shall be entitled to a cash
repayment, equal to the total amount paid to
Transmission Provider and Affected System
Operator, if any, for the Network Upgrades,
including any tax gross-up or other taxrelated payments associated with Network
Upgrades, and not refunded to
Interconnection Customer pursuant to Article
5.17.8 or otherwise, to be paid to
Interconnection Customer on a dollar-fordollar basis for the non-usage sensitive
portion of transmission charges, as payments
are made under Transmission Provider’s
Tariff and Affected System’s Tariff for
transmission services with respect to the
Large Generating Facility. Any repayment
shall include interest calculated in
accordance with the methodology set forth in
FERC’s regulations at 18 CFR 35.19a(a)(2)(iii)
from the date of any payment for Network
Upgrades through the date on which [the]
Interconnection Customer receives a
repayment of such payment pursuant to this
subparagraph. Interconnection Customer may
assign such repayment rights to any person.
Notwithstanding the foregoing,
Interconnection Customer, Transmission
Provider, and Affected System Operator may
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adopt any alternative payment schedule that
is mutually agreeable so long as
Transmission Provider and Affected System
Operator take one of the following actions no
later than five years from the Commercial
Operation Date: (1) return to Interconnection
Customer any amounts advanced for Network
Upgrades not previously repaid, or (2)
declare in writing that Transmission Provider
or Affected System Operator will continue to
provide payments to Interconnection
Customer on a dollar-for-dollar basis for the
non-usage sensitive portion of transmission
charges, or develop an alternative schedule
that is mutually agreeable and provides for
the return of all amounts advanced for
Network Upgrades not previously repaid;
however, full reimbursement shall not extend
beyond twenty (20) years from the
Commercial Operation Date.
If the Large Generating Facility fails to
achieve commercial operation, but it or
another Generating Facility is later
constructed and makes use of the Network
Upgrades, Transmission Provider and
Affected System Operator shall at that time
reimburse Interconnection Customer for the
amounts advanced for the Network Upgrades.
Before any such reimbursement can occur,
[the] Interconnection Customer, or the entity
that ultimately constructs the Generating
Facility, if different, is responsible for
identifying the entity to which
reimbursement must be made.
11.4.2 Special Provisions for Affected
Systems. Unless Transmission Provider
provides, under the LGIA, for the repayment
of amounts advanced to Affected System
Operator for Network Upgrades,
Interconnection Customer and Affected
System Operator shall enter into an
agreement that provides for such repayment.
The agreement shall specify the terms
governing payments to be made by
Interconnection Customer to the Affected
System Operator as well as the repayment by
the Affected System Operator.
11.4.3 Notwithstanding any other
provision of this LGIA, nothing herein shall
be construed as relinquishing or foreclosing
any rights, including but not limited to firm
transmission rights, capacity rights,
transmission congestion rights, or
transmission credits, that Interconnection
Customer, shall be entitled to, now or in the
future under any other agreement or tariff as
a result of, or otherwise associated with, the
transmission capacity, if any, created by the
Network Upgrades, including the right to
obtain cash reimbursements or transmission
credits for transmission service that is not
associated with the Large Generating Facility.
11.5 Provision of Security. At least thirty
(30) Calendar Days prior to the
commencement of the procurement,
installation, or construction of a discrete
portion of a Transmission Provider’s
Interconnection Facilities, Network
Upgrades, or Distribution Upgrades,
Interconnection Customer shall provide
Transmission Provider, at Interconnection
Customer’s option, a guarantee, a surety
bond, letter of credit or other form of security
that is reasonably acceptable to Transmission
Provider and is consistent with the Uniform
Commercial Code of the jurisdiction
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identified in Article 14.2.1. Such security for
payment, as specified in Appendix B of this
LGIA, shall be in an amount sufficient to
cover the costs for constructing, procuring
and installing the applicable portion of
Transmission Provider’s Interconnection
Facilities, Network Upgrades, or Distribution
Upgrades and shall be reduced on a dollarfor-dollar basis for payments made to
Transmission Provider for these purposes.
Transmission Provider must use the LGIA
Deposit required in Section 11.3 of the LGIP
before requiring Interconnection Customer to
submit security in addition to that LGIA
Deposit. Transmission Provider must specify,
in Appendix B of this LGIA, the dates for
which Interconnection Customer must
provide additional security for construction
of each discrete portion of Transmission
Provider’s Interconnection Facilities,
Network Upgrades, or Distribution Upgrades
and Interconnection Customer must provide
such additional security.
In addition:
11.5.1 The guarantee must be made by an
entity that meets the creditworthiness
requirements of Transmission Provider, and
contain terms and conditions that guarantee
payment of any amount that may be due from
Interconnection Customer, up to an agreed-to
maximum amount.
11.5.2 The letter of credit must be issued
by a financial institution reasonably
acceptable to Transmission Provider and
must specify a reasonable expiration date.
11.5.3 The surety bond must be issued by
an insurer reasonably acceptable to
Transmission Provider and must specify a
reasonable expiration date.
11.6 Interconnection Customer
Compensation. If Transmission Provider
requests or directs Interconnection Customer
to provide a service pursuant to Articles 9.6.3
(Payment for Reactive Power), or 13.5.1 of
this LGIA, Transmission Provider shall
compensate Interconnection Customer in
accordance with Interconnection Customer’s
applicable rate schedule then in effect unless
the provision of such service(s) is subject to
an RTO or ISO FERC-approved rate schedule.
Interconnection Customer shall serve
Transmission Provider or RTO or ISO with
any filing of a proposed rate schedule at the
time of such filing with FERC. To the extent
that no rate schedule is in effect at the time
[the] Interconnection Customer is required to
provide or absorb any Reactive Power under
this LGIA, Transmission Provider agrees to
compensate Interconnection Customer in
such amount as would have been due
Interconnection Customer had the rate
schedule been in effect at the time service
commenced; provided, however, that such
rate schedule must be filed at FERC or other
appropriate Governmental Authority within
sixty (60) Calendar Days of the
commencement of service.
11.6.1 Interconnection Customer
Compensation for Actions During Emergency
Condition. Transmission Provider or RTO or
ISO shall compensate Interconnection
Customer for its provision of real and
reactive power and other Emergency
Condition services that Interconnection
Customer provides to support the
Transmission System during an Emergency
Condition in accordance with Article 11.6.
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Article 12. Invoice
12.1 General. Each Party shall submit to
the other Party, on a monthly basis, invoices
of amounts due for the preceding month.
Each invoice shall state the month to which
the invoice applies and fully describe the
services and equipment provided. The
Parties may discharge mutual debts and
payment obligations due and owing to each
other on the same date through netting, in
which case all amounts a Party owes to the
other Party under this LGIA, including
interest payments or credits, shall be netted
so that only the net amount remaining due
shall be paid by the owing Party.
12.2 Final Invoice. Within six months
after completion of the construction of
Transmission Provider’s Interconnection
Facilities and the Network Upgrades,
Transmission Provider shall provide an
invoice of the final cost of the construction
of Transmission Provider’s Interconnection
Facilities and the Network Upgrades and
shall set forth such costs in sufficient detail
to enable Interconnection Customer to
compare the actual costs with the estimates
and to ascertain deviations, if any, from the
cost estimates. Transmission Provider shall
refund to Interconnection Customer any
amount by which the actual payment by
Interconnection Customer for estimated costs
exceeds the actual costs of construction
within thirty (30) Calendar Days of the
issuance of such final construction invoice.
12.3 Payment. Invoices shall be rendered
to the paying Party at the address specified
in Appendix F. The Party receiving the
invoice shall pay the invoice within thirty
(30) Calendar Days of receipt. All payments
shall be made in immediately available funds
payable to the other Party, or by wire transfer
to a bank named and account designated by
the invoicing Party. Payment of invoices by
either Party will not constitute a waiver of
any rights or claims either Party may have
under this LGIA.
12.4 Disputes. In the event of a billing
dispute between Transmission Provider and
Interconnection Customer, Transmission
Provider shall continue to provide
Interconnection Service under this LGIA as
long as Interconnection Customer: (i)
continues to make all payments not in
dispute; and (ii) pays to Transmission
Provider or into an independent escrow
account the portion of the invoice in dispute,
pending resolution of such dispute. If
Interconnection Customer fails to meet these
two requirements for continuation of service,
then Transmission Provider may provide
notice to Interconnection Customer of a
Default pursuant to Article 17. Within thirty
(30) Calendar Days after the resolution of the
dispute, the Party that owes money to the
other Party shall pay the amount due with
interest calculated in accord with the
methodology set forth in FERC’s regulations
at 18 CFR 35.19a(a)(2)(iii).
Article 13. Emergencies
13.1 Definition. ‘‘Emergency Condition’’
shall mean a condition or situation: (i) that
in the judgment of the Party making the
claim is imminently likely to endanger life or
property; or (ii) that, in the case of
Transmission Provider, is imminently likely
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(as determined in a non-discriminatory
manner) to cause a material adverse effect on
the security of, or damage to the
Transmission System, Transmission
Provider’s Interconnection Facilities or the
Transmission Systems of others to which the
Transmission System is directly connected;
or (iii) that, in the case of Interconnection
Customer, is imminently likely (as
determined in a non-discriminatory manner)
to cause a material adverse effect on the
security of, or damage to, the Large
Generating Facility or Interconnection
Customer’s Interconnection Facilities’
System restoration and black start shall be
considered Emergency Conditions; provided,
that Interconnection Customer is not
obligated by this LGIA to possess black start
capability.
13.2 Obligations. Each Party shall comply
with the Emergency Condition procedures of
the applicable ISO/RTO, the Electric
Reliability Organization, Applicable Laws
and Regulations, and any emergency
procedures agreed to by the Joint Operating
Committee.
13.3 Notice. Transmission Provider shall
notify Interconnection Customer promptly
when it becomes aware of an Emergency
Condition that affects Transmission
Provider’s Interconnection Facilities or the
Transmission System that may reasonably be
expected to affect Interconnection Customer’s
operation of the Large Generating Facility or
Interconnection Customer’s Interconnection
Facilities. Interconnection Customer shall
notify Transmission Provider promptly when
it becomes aware of an Emergency Condition
that affects the Large Generating Facility or
Interconnection Customer’s Interconnection
Facilities that may reasonably be expected to
affect the Transmission System or
Transmission Provider’s Interconnection
Facilities. To the extent information is
known, the notification shall describe the
Emergency Condition, the extent of the
damage or deficiency, the expected effect on
the operation of Interconnection Customer’s
or Transmission Provider’s facilities and
operations, its anticipated duration and the
corrective action taken and/or to be taken.
The initial notice shall be followed as soon
as practicable with written notice.
13.4 Immediate Action. Unless, in
Interconnection Customer’s reasonable
judgment, immediate action is required,
Interconnection Customer shall obtain the
consent of Transmission Provider, such
consent to not be unreasonably withheld,
prior to performing any manual switching
operations at the Large Generating Facility or
Interconnection Customer’s Interconnection
Facilities in response to an Emergency
Condition either declared by Transmission
Provider or otherwise regarding the
Transmission System.
13.5 Transmission Provider Authority.
13.5.1 General. Transmission Provider
may take whatever actions or inactions with
regard to the Transmission System or
Transmission Provider’s Interconnection
Facilities it deems necessary during an
Emergency Condition in order to (i) preserve
public health and safety, (ii) preserve the
reliability of the Transmission System or
Transmission Provider’s Interconnection
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Facilities, (iii) limit or prevent damage, and
(iv) expedite restoration of service.
Transmission Provider shall use
Reasonable Efforts to minimize the effect of
such actions or inactions on the Large
Generating Facility or Interconnection
Customer’s Interconnection Facilities.
Transmission Provider may, on the basis of
technical considerations, require the Large
Generating Facility to mitigate an Emergency
Condition by taking actions necessary and
limited in scope to remedy the Emergency
Condition, including, but not limited to,
directing Interconnection Customer to shutdown, start-up, increase or decrease the real
or reactive power output of the Large
Generating Facility; implementing a
reduction or disconnection pursuant to
Article 13.5.2; directing Interconnection
Customer to assist with blackstart (if
available) or restoration efforts; or altering
the outage schedules of the Large Generating
Facility and Interconnection Customer’s
Interconnection Facilities. Interconnection
Customer shall comply with all of
Transmission Provider’s operating
instructions concerning Large Generating
Facility real power and reactive power
output within the manufacturer’s design
limitations of the Large Generating Facility’s
equipment that is in service and physically
available for operation at the time, in
compliance with Applicable Laws and
Regulations.
13.5.2 Reduction and Disconnection.
Transmission Provider may reduce
Interconnection Service or disconnect the
Large Generating Facility or Interconnection
Customer’s Interconnection Facilities, when
such, reduction or disconnection is necessary
under Good Utility Practice due to
Emergency Conditions. These rights are
separate and distinct from any right of
curtailment of Transmission Provider
pursuant to Transmission Provider’s Tariff.
When Transmission Provider can schedule
the reduction or disconnection in advance,
Transmission Provider shall notify
Interconnection Customer of the reasons,
timing and expected duration of the
reduction or disconnection. Transmission
Provider shall coordinate with
Interconnection Customer using Good Utility
Practice to schedule the reduction or
disconnection during periods of least impact
to Interconnection Customer and
Transmission Provider. Any reduction or
disconnection shall continue only for so long
as reasonably necessary under Good Utility
Practice. The Parties shall cooperate with
each other to restore the Large Generating
Facility, the Interconnection Facilities, and
the Transmission System to their normal
operating state as soon as practicable
consistent with Good Utility Practice.
13.6 Interconnection Customer Authority.
Consistent with Good Utility Practice and the
LGIA and the LGIP, Interconnection
Customer may take actions or inactions with
regard to the Large Generating Facility or
Interconnection Customer’s Interconnection
Facilities during an Emergency Condition in
order to (i) preserve public health and safety,
(ii) preserve the reliability of the Large
Generating Facility or Interconnection
Customer’s Interconnection Facilities, (iii)
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limit or prevent damage, and (iv) expedite
restoration of service. Interconnection
Customer shall use Reasonable Efforts to
minimize the effect of such actions or
inactions on the Transmission System and
Transmission Provider’s Interconnection
Facilities. Transmission Provider shall use
Reasonable Efforts to assist Interconnection
Customer in such actions.
13.7 Limited Liability. Except as
otherwise provided in Article 11.6.1 of this
LGIA, neither Party shall be liable to the
other for any action it takes in responding to
an Emergency Condition so long as such
action is made in good faith and is consistent
with Good Utility Practice.
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Article 14. Regulatory Requirements and
Governing Law
14.1 Regulatory Requirements. Each
Party’s obligations under this LGIA shall be
subject to its receipt of any required approval
or certificate from one or more Governmental
Authorities in the form and substance
satisfactory to the applying Party, or the Party
making any required filings with, or
providing notice to, such Governmental
Authorities, and the expiration of any time
period associated therewith. Each Party shall
in good faith seek and use its Reasonable
Efforts to obtain such other approvals.
Nothing in this LGIA shall require
Interconnection Customer to take any action
that could result in its inability to obtain, or
its loss of, status or exemption under the
Federal Power Act, the Public Utility Holding
Company Act of 1935, as amended, or the
Public Utility Regulatory Policies Act of
1978.
14.2 Governing Law.
14.2.1 The validity, interpretation and
performance of this LGIA and each of its
provisions shall be governed by the laws of
the state where the Point of Interconnection
is located, without regard to its conflicts of
law principles.
14.2.2 This LGIA is subject to all
Applicable Laws and Regulations.
14.2.3 Each Party expressly reserves the
right to seek changes in, appeal, or otherwise
contest any laws, orders, rules, or regulations
of a Governmental Authority.
Article 15. Notices
15.1 General. Unless otherwise provided
in this LGIA, any notice, demand or request
required or permitted to be given by either
Party to the other and any instrument
required or permitted to be tendered or
delivered by either Party in writing to the
other shall be effective when delivered and
may be so given, tendered or delivered, by
recognized national courier, or by depositing
the same with the United States Postal
Service with postage prepaid, for delivery by
certified or registered mail, addressed to the
Party, or personally delivered to the Party, at
the address set out in Appendix F, Addresses
for Delivery of Notices and Billings.
Either Party may change the notice
information in this LGIA by giving five (5)
Business Days written notice prior to the
effective date of the change.
15.2 Billings and Payments. Billings and
payments shall be sent to the addresses set
out in Appendix F.
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15.3 Alternative Forms of Notice. Any
notice or request required or permitted to be
given by a Party to the other and not required
by this Agreement to be given in writing may
be so given by telephone, facsimile or email
to the telephone numbers and email
addresses set out in Appendix F.
15.4 Operations and Maintenance Notice.
Each Party shall notify the other Party in
writing of the identity of the person(s) that
it designates as the point(s) of contact with
respect to the implementation of Articles 9
and 10.
Article 16. Force Majeure
16.1 Force Majeure.
16.1.1 Economic hardship is not
considered a Force Majeure event.
16.1.2 Neither Party shall be considered
to be in Default with respect to any obligation
hereunder, (including obligations under
Article 4), other than the obligation to pay
money when due, if prevented from fulfilling
such obligation by Force Majeure. A Party
unable to fulfill any obligation hereunder
(other than an obligation to pay money when
due) by reason of Force Majeure shall give
notice and the full particulars of such Force
Majeure to the other Party in writing or by
telephone as soon as reasonably possible
after the occurrence of the cause relied upon.
Telephone notices given pursuant to this
article shall be confirmed in writing as soon
as reasonably possible and shall specifically
state full particulars of the Force Majeure, the
time and date when the Force Majeure
occurred and when the Force Majeure is
reasonably expected to cease. The Party
affected shall exercise due diligence to
remove such disability with reasonable
dispatch, but shall not be required to accede
or agree to any provision not satisfactory to
it in order to settle and terminate a strike or
other labor disturbance.
Article 17. Default
17.1 Default
17.1.1 General. No Default shall exist
where such failure to discharge an obligation
(other than the payment of money) is the
result of Force Majeure as defined in this
LGIA or the result of an act of omission of
the other Party. Upon a Breach, the nonbreaching Party shall give written notice of
such Breach to the breaching Party. Except as
provided in Article 17.1.2, the breaching
Party shall have thirty (30) Calendar Days
from receipt of the Default notice within
which to cure such Breach; provided
however, if such Breach is not capable of
cure within thirty (30) Calendar Days, the
breaching Party shall commence such cure
within thirty (30) Calendar Days after notice
and continuously and diligently complete
such cure within ninety (90) Calendar Days
from receipt of the Default notice; and, if
cured within such time, the Breach specified
in such notice shall cease to exist.
17.1.2 Right to Terminate. If a Breach is
not cured as provided in this article, or if a
Breach is not capable of being cured within
the period provided for herein, the nonbreaching Party shall have the right to
declare a Default and terminate this LGIA by
written notice at any time until cure occurs,
and be relieved of any further obligation
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hereunder and, whether or not that Party
terminates this LGIA, to recover from the
breaching Party all amounts due hereunder,
plus all other damages and remedies to
which it is entitled at law or in equity. The
provisions of this article will survive
termination of this LGIA.
17.2 Violation of Operating Assumptions
for Generating Facilities. If Transmission
Provider requires Interconnection Customer
to memorialize the operating assumptions for
the charging behavior of a Generating Facility
that includes at least one electric storage
resource in Appendix H of this LGIA,
Transmission Provider may consider
Interconnection Customer to be in Breach of
the LGIA if Interconnection Customer fails to
operate the Generating Facility in accordance
with those operating assumptions for
charging behavior. However, if
Interconnection Customer operates contrary
to the operating assumptions for charging
behavior specified in Appendix H of this
LGIA at the direction of Transmission
Provider, Transmission Provider shall not
consider Interconnection Customer in Breach
of this LGIA.
Article 18. Indemnity, Consequential
Damages and Insurance
18.1 Indemnity. The Parties shall at all
times indemnify, defend, and hold the other
Party harmless from, any and all damages,
losses, claims, including claims and actions
relating to injury to or death of any person
or damage to property, demand, suits,
recoveries, costs and expenses, court costs,
attorney fees, and all other obligations by or
to third parties, arising out of or resulting
from the other Party’s action or inactions of
its obligations under this LGIA on behalf of
the Indemnifying Party, except in cases of
gross negligence or intentional wrongdoing
by the indemnified Party.
18.1.1 Indemnified Person. If an
Indemnified Person is entitled to
indemnification under this Article 18 as a
result of a claim by a third party, and the
Indemnifying Party fails, after notice and
reasonable opportunity to proceed under
Article 18.1, to assume the defense of such
claim, such Indemnified Person may at the
expense of the Indemnifying Party contest,
settle or consent to the entry of any judgment
with respect to, or pay in full, such claim.
18.1.2 Indemnifying Party. If an
Indemnifying Party is obligated to indemnify
and hold any Indemnified Person harmless
under this Article 18, the amount owing to
the Indemnified Person shall be the amount
of such Indemnified Person’s actual Loss, net
of any insurance or other recovery.
18.1.3 Indemnity Procedures. Promptly
after receipt by an Indemnified Person of any
claim or notice of the commencement of any
action or administrative or legal proceeding
or investigation as to which the indemnity
provided for in Article 18.1 may apply, the
Indemnified Person shall notify the
Indemnifying Party of such fact. Any failure
of or delay in such notification shall not
affect a Party’s indemnification obligation
unless such failure or delay is materially
prejudicial to the Indemnifying Party.
The Indemnifying Party shall have the
right to assume the defense thereof with
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counsel designated by such Indemnifying
Party and reasonably satisfactory to the
Indemnified Person. If the defendants in any
such action include one or more Indemnified
Persons and the Indemnifying Party and if
the Indemnified Person reasonably concludes
that there may be legal defenses available to
it and/or other Indemnified Persons which
are different from or additional to those
available to the Indemnifying Party, the
Indemnified Person shall have the right to
select separate counsel to assert such legal
defenses and to otherwise participate in the
defense of such action on its own behalf. In
such instances, the Indemnifying Party shall
only be required to pay the fees and expenses
of one additional attorney to represent an
Indemnified Person or Indemnified Persons
having such differing or additional legal
defenses.
The Indemnified Person shall be entitled,
at its expense, to participate in any such
action, suit or proceeding, the defense of
which has been assumed by the
Indemnifying Party. Notwithstanding the
foregoing, the Indemnifying Party (i) shall not
be entitled to assume and control the defense
of any such action, suit or proceedings if and
to the extent that, in the opinion of the
Indemnified Person and its counsel, such
action, suit or proceeding involves the
potential imposition of criminal liability on
the Indemnified Person, or there exists a
conflict or adversity of interest between the
Indemnified Person and the Indemnifying
Party, in such event the Indemnifying Party
shall pay the reasonable expenses of the
Indemnified Person, and (ii) shall not settle
or consent to the entry of any judgment in
any action, suit or proceeding without the
consent of the Indemnified Person, which
shall not be reasonably withheld,
conditioned or delayed.
18.2 Consequential Damages. Other than
the Liquidated Damages heretofore described,
in no event shall either Party be liable under
any provision of this LGIA for any losses,
damages, costs or expenses for any special,
indirect, incidental, consequential, or
punitive damages, including but not limited
to loss of profit or revenue, loss of the use
of equipment, cost of capital, cost of
temporary equipment or services, whether
based in whole or in part in contract, in tort,
including negligence, strict liability, or any
other theory of liability; provided, however,
that damages for which a Party may be liable
to the other Party under another agreement
will not be considered to be special, indirect,
incidental, or consequential damages
hereunder.
18.3 Insurance. Each party shall, at its
own expense, maintain in force throughout
the period of this LGIA, and until released by
the other Party, the following minimum
insurance coverages, with insurers
authorized to do business in the state where
the Point of Interconnection is located:
18.3.1 Employers’ Liability and Workers’
Compensation Insurance providing statutory
benefits in accordance with the laws and
regulations of the state in which the Point of
Interconnection is located.
18.3.2 Commercial General Liability
Insurance including premises and operations,
personal injury, broad form property damage,
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broad form blanket contractual liability
coverage (including coverage for the
contractual indemnification) products and
completed operations coverage, coverage for
explosion, collapse and underground
hazards, independent contractors coverage,
coverage for pollution to the extent normally
available and punitive damages to the extent
normally available and a cross liability
endorsement, with minimum limits of One
Million Dollars ($1,000,000) per occurrence/
One Million Dollars ($1,000,000) aggregate
combined single limit for personal injury,
bodily injury, including death and property
damage.
18.3.3 Comprehensive Automobile
Liability Insurance for coverage of owned
and non-owned and hired vehicles, trailers or
semi-trailers designed for travel on public
roads, with a minimum, combined single
limit of One Million Dollars ($1,000,000) per
occurrence for bodily injury, including death,
and property damage.
18.3.4 Excess Public Liability Insurance
over and above the Employers’ Liability
Commercial General Liability and
Comprehensive Automobile Liability
Insurance coverage, with a minimum
combined single limit of Twenty Million
Dollars ($20,000,000) per occurrence/Twenty
Million Dollars ($20,000,000) aggregate.
18.3.5 The Commercial General Liability
Insurance, Comprehensive Automobile
Insurance and Excess Public Liability
Insurance policies shall name the other Party,
its parent, associated and Affiliate companies
and their respective directors, officers,
agents, servants and employees (‘‘Other Party
Group’’) as additional insured. All policies
shall contain provisions whereby the insurers
waive all rights of subrogation in accordance
with the provisions of this LGIA against the
Other Party Group and provide thirty (30)
Calendar Days advance written notice to the
Other Party Group prior to anniversary date
of cancellation or any material change in
coverage or condition.
18.3.6 The Commercial General Liability
Insurance, Comprehensive Automobile
Liability Insurance and Excess Public
Liability Insurance policies shall contain
provisions that specify that the policies are
primary and shall apply to such extent
without consideration for other policies
separately carried and shall state that each
insured is provided coverage as though a
separate policy had been issued to each,
except the insurer’s liability shall not be
increased beyond the amount for which the
insurer would have been liable had only one
insured been covered. Each Party shall be
responsible for its respective deductibles or
retentions.
18.3.7 The Commercial General Liability
Insurance, Comprehensive Automobile
Liability Insurance and Excess Public
Liability Insurance policies, if written on a
Claims First Made Basis, shall be maintained
in full force and effect for two (2) years after
termination of this LGIA, which coverage
may be in the form of tail coverage or
extended reporting period coverage if agreed
by the Parties.
18.3.8 The requirements contained herein
as to the types and limits of all insurance to
be maintained by the Parties are not intended
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27195
to and shall not in any manner, limit or
qualify the liabilities and obligations
assumed by the Parties under this LGIA.
18.3.9 Within ten (10) Business [d]Days
following execution of this LGIA, and as soon
as practicable after the end of each fiscal year
or at the renewal of the insurance policy and
in any event within ninety (90) Calendar
[d]Days thereafter, each Party shall provide
certification of all insurance required in this
LGIA, executed by each insurer or by an
authorized representative of each insurer.
18.3.10 Notwithstanding the foregoing,
each Party may self-insure to meet the
minimum insurance requirements of Articles
18.3.2 through 18.3.8 to the extent it
maintains a self-insurance program; provided
that, such Party’s senior secured debt is rated
at investment grade or better by Standard &
Poor’s and that its self-insurance program
meets the minimum insurance requirements
of Articles 18.3.2 through 18.3.8. For any
period of time that a Party’s senior secured
debt is unrated by Standard & Poor’s or is
rated at less than investment grade by
Standard & Poor’s, such Party shall comply
with the insurance requirements applicable
to it under Articles 18.3.2 through 18.3.9. In
the event that a Party is permitted to selfinsure pursuant to this article, it shall notify
the other Party that it meets the requirements
to self-insure and that its self-insurance
program meets the minimum insurance
requirements in a manner consistent with
that specified in Article 18.3.9.
18.3.11 The Parties agree to report to each
other in writing as soon as practical all
accidents or occurrences resulting in injuries
to any person, including death, and any
property damage arising out of this LGIA.
Article 19. Assignment
19.1 Assignment. This LGIA may be
assigned by either Party only with the written
consent of the other; provided that either
Party may assign this LGIA without the
consent of the other Party to any Affiliate of
the assigning Party with an equal or greater
credit rating and with the legal authority and
operational ability to satisfy the obligations
of the assigning Party under this LGIA; and
provided further that Interconnection
Customer shall have the right to assign this
LGIA, without the consent of Transmission
Provider, for collateral security purposes to
aid in providing financing for the Large
Generating Facility, provided that
Interconnection Customer will promptly
notify Transmission Provider of any such
assignment. Any financing arrangement
entered into by Interconnection Customer
pursuant to this article will provide that prior
to or upon the exercise of the secured party’s,
trustee’s or mortgagee’s assignment rights
pursuant to said arrangement, the secured
creditor, the trustee or mortgagee will notify
Transmission Provider of the date and
particulars of any such exercise of
assignment right(s), including providing [the]
Transmission Provider with proof that it
meets the requirements of Articles 11.5 and
18.3. Any attempted assignment that violates
this article is void and ineffective. Any
assignment under this LGIA shall not relieve
a Party of its obligations, nor shall a Party’s
obligations be enlarged, in whole or in part,
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by reason thereof. Where required, consent to
assignment will not be unreasonably
withheld, conditioned or delayed.
Article 20. Severability
20.1 Severability. If any provision in this
LGIA is finally determined to be invalid, void
or unenforceable by any court or other
Governmental Authority having jurisdiction,
such determination shall not invalidate, void
or make unenforceable any other provision,
agreement or covenant of this LGIA; provided
that if Interconnection Customer (or any third
party, but only if such third party is not
acting at the direction of Transmission
Provider) seeks and obtains such a final
determination with respect to any provision
of the Alternate Option (Article 5.1.2), or the
Negotiated Option (Article 5.1.4), then none
of these provisions shall thereafter have any
force or effect and the Parties’ rights and
obligations shall be governed solely by the
Standard Option (Article 5.1.1).
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Article 21. Comparability
21.1 Comparability. The Parties will
comply with all applicable comparability and
code of conduct laws, rules and regulations,
as amended from time to time.
Article 22. Confidentiality
22.1 Confidentiality. Confidential
Information shall include, without limitation,
all information relating to a Party’s
technology, research and development,
business affairs, and pricing, and any
information supplied by either of the Parties
to the other prior to the execution of this
LGIA.
Information is Confidential Information
only if it is clearly designated or marked in
writing as confidential on the face of the
document, or, if the information is conveyed
orally or by inspection, if the Party providing
the information orally informs the Party
receiving the information that the
information is confidential.
If requested by either Party, the other Party
shall provide in writing, the basis for
asserting that the information referred to in
this Article 22 warrants confidential
treatment, and the requesting Party may
disclose such writing to the appropriate
Governmental Authority. Each Party shall be
responsible for the costs associated with
affording confidential treatment to its
information.
22.1.1 Term. During the term of this
LGIA, and for a period of three (3) years after
the expiration or termination of this LGIA,
except as otherwise provided in this Article
22, each Party shall hold in confidence and
shall not disclose to any person Confidential
Information.
22.1.2 Scope. Confidential Information
shall not include information that the
receiving Party can demonstrate: (1) is
generally available to the public other than
as a result of a disclosure by the receiving
Party; (2) was in the lawful possession of the
receiving Party on a non-confidential basis
before receiving it from the disclosing Party;
(3) was supplied to the receiving Party
without restriction by a third party, who, to
the knowledge of the receiving Party after
due inquiry, was under no obligation to the
disclosing Party to keep such information
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confidential; (4) was independently
developed by the receiving Party without
reference to Confidential Information of the
disclosing Party; (5) is, or becomes, publicly
known, through no wrongful act or omission
of the receiving Party or Breach of this LGIA;
or (6) is required, in accordance with Article
22.1.7 of the LGIA, Order of Disclosure, to be
disclosed by any Governmental Authority or
is otherwise required to be disclosed by law
or subpoena, or is necessary in any legal
proceeding establishing rights and
obligations under this LGIA. Information
designated as Confidential Information will
no longer be deemed confidential if the Party
that designated the information as
confidential notifies the other Party that it no
longer is confidential.
22.1.3 Release of Confidential
Information. Neither Party shall release or
disclose Confidential Information to any
other person, except to its Affiliates (limited
by the Standards of Conduct requirements),
subcontractors, employees, consultants, or to
parties who may be or considering providing
financing to or equity participation with
Interconnection Customer, or to potential
purchasers or assignees of Interconnection
Customer, on a need-to-know basis in
connection with this LGIA, unless such
person has first been advised of the
confidentiality provisions of this Article 22
and has agreed to comply with such
provisions. Notwithstanding the foregoing, a
Party providing Confidential Information to
any person shall remain primarily
responsible for any release of Confidential
Information in contravention of this Article
22.
22.1.4 Rights. Each Party retains all
rights, title, and interest in the Confidential
Information that each Party discloses to the
other Party. The disclosure by each Party to
the other Party of Confidential Information
shall not be deemed a waiver by either Party
or any other person or entity of the right to
protect the Confidential Information from
public disclosure.
22.1.5 No Warranties. By providing
Confidential Information, neither Party
makes any warranties or representations as to
its accuracy or completeness. In addition, by
supplying Confidential Information, neither
Party obligates itself to provide any particular
information or Confidential Information to
the other Party nor to enter into any further
agreements or proceed with any other
relationship or joint venture.
22.1.6 Standard of Care. Each Party shall
use at least the same standard of care to
protect Confidential Information it receives
as it uses to protect its own Confidential
Information from unauthorized disclosure,
publication or dissemination. Each Party may
use Confidential Information solely to fulfill
its obligations to the other Party under this
LGIA or its regulatory requirements.
22.1.7 Order of Disclosure. If a court or a
Government Authority or entity with the
right, power, and apparent authority to do so
requests or requires either Party, by
subpoena, oral deposition, interrogatories,
requests for production of documents,
administrative order, or otherwise, to
disclose Confidential Information, that Party
shall provide the other Party with prompt
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notice of such request(s) or requirement(s) so
that the other Party may seek an appropriate
protective order or waive compliance with
the terms of this LGIA. Notwithstanding the
absence of a protective order or waiver, the
Party may disclose such Confidential
Information which, in the opinion of its
counsel, the Party is legally compelled to
disclose. Each Party will use Reasonable
Efforts to obtain reliable assurance that
confidential treatment will be accorded any
Confidential Information so furnished.
22.1.8 Termination of Agreement. Upon
termination of this LGIA for any reason, each
Party shall, within ten (10) Calendar Days of
receipt of a written request from the other
Party, use Reasonable Efforts to destroy,
erase, or delete (with such destruction,
erasure, and deletion certified in writing to
the other Party) or return to the other Party,
without retaining copies thereof, any and all
written or electronic Confidential
Information received from the other Party.
22.1.9 Remedies. The Parties agree that
monetary damages would be inadequate to
compensate a Party for the other Party’s
Breach of its obligations under this Article
22. Each Party accordingly agrees that the
other Party shall be entitled to equitable
relief, by way of injunction or otherwise, if
the first Party Breaches or threatens to Breach
its obligations under this Article 22, which
equitable relief shall be granted without bond
or proof of damages, and the receiving Party
shall not plead in defense that there would
be an adequate remedy at law. Such remedy
shall not be deemed an exclusive remedy for
the Breach of this Article 22, but shall be in
addition to all other remedies available at
law or in equity. The Parties further
acknowledge and agree that the covenants
contained herein are necessary for the
protection of legitimate business interests
and are reasonable in scope. No Party,
however, shall be liable for indirect,
incidental, or consequential or punitive
damages of any nature or kind resulting from
or arising in connection with this Article 22.
22.1.10 Disclosure to FERC, its Staff, or a
State. Notwithstanding anything in this
Article 22 to the contrary, and pursuant to 18
CFR 1b.20, if FERC or its staff, during the
course of an investigation or otherwise,
requests information from one of the Parties
that is otherwise required to be maintained
in confidence pursuant to this LGIA, the
Party shall provide the requested information
to FERC or its staff, within the time provided
for in the request for information. In
providing the information to FERC or its
staff, the Party must, consistent with 18 CFR
388.112, request that the information be
treated as confidential and non-public by
FERC and its staff and that the information
be withheld from public disclosure. Parties
are prohibited from notifying the other Party
to this LGIA prior to the release of the
Confidential Information to FERC or its staff.
The Party shall notify the other Party to the
LGIA when it is notified by FERC or its staff
that a request to release Confidential
Information has been received by FERC, at
which time either of the Parties may respond
before such information would be made
public, pursuant to 18 CFR 388.112. Requests
from a state regulatory body conducting a
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confidential investigation shall be treated in
a similar manner if consistent with the
applicable state rules and regulations.
22.1.11 Subject to the exception in
Article 22.1.10, any information that a Party
claims is competitively sensitive, commercial
or financial information under this LGIA
(‘‘Confidential Information’’) shall not be
disclosed by the other Party to any person
not employed or retained by the other Party,
except to the extent disclosure is (i) required
by law; (ii) reasonably deemed by the
disclosing Party to be required to be
disclosed in connection with a dispute
between or among the Parties, or the defense
of litigation or dispute; (iii) otherwise
permitted by consent of the other Party, such
consent not to be unreasonably withheld; or
(iv) necessary to fulfill its obligations under
this LGIA or as a transmission service
provider or a Balancing Authority Area
operator including disclosing the
Confidential Information to an RTO or ISO or
to a regional or national reliability
organization. The Party asserting
confidentiality shall notify the other Party in
writing of the information it claims is
confidential. Prior to any disclosures of the
other Party’s Confidential Information under
this subparagraph, or if any third party or
Governmental Authority makes any request
or demand for any of the information
described in this subparagraph, the
disclosing Party agrees to promptly notify the
other Party in writing and agrees to assert
confidentiality and cooperate with the other
Party in seeking to protect the Confidential
Information from public disclosure by
confidentiality agreement, protective order or
other reasonable measures.
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Article 23. Environmental Releases
23.1 Each Party shall notify the other
Party, first orally and then in writing, of the
release of any Hazardous Substances, any
asbestos or lead abatement activities, or any
type of remediation activities related to the
Large Generating Facility or the
Interconnection Facilities, each of which may
reasonably be expected to affect the other
Party. The notifying Party shall: (i) provide
the notice as soon as practicable, provided
such Party makes a good faith effort to
provide the notice no later than twenty-four
hours after such Party becomes aware of the
occurrence; and (ii) promptly furnish to the
other Party copies of any publicly available
reports filed with any Governmental
Authorities addressing such events.
Article 24. Information Requirements
24.1 Information Acquisition.
Transmission Provider and Interconnection
Customer shall submit specific information
regarding the electrical characteristics of
their respective facilities to each other as
described below and in accordance with
Applicable Reliability Standards.
24.2 Information Submission by
Transmission Provider. The initial
information submission by Transmission
Provider shall occur no later than one
hundred eighty (180) Calendar Days prior to
Trial Operation and shall include
Transmission System information necessary
to allow Interconnection Customer to select
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equipment and meet any system protection
and stability requirements, unless otherwise
agreed to by the Parties. On a monthly basis
Transmission Provider shall provide
Interconnection Customer a status report on
the construction and installation of
Transmission Provider’s Interconnection
Facilities and Network Upgrades, including,
but not limited to, the following information:
(1) progress to date; (2) a description of the
activities since the last report (3) a
description of the action items for the next
period; and (4) the delivery status of
equipment ordered.
24.3 Updated Information Submission by
Interconnection Customer. The updated
information submission by Interconnection
Customer, including manufacturer
information, shall occur no later than one
hundred eighty (180) Calendar Days prior to
the Trial Operation. Interconnection
Customer shall submit a completed copy of
the Large Generating Facility data
requirements contained in Appendix 1 to the
LGIP. It shall also include any additional
information provided to Transmission
Provider for the Cluster Study and Facilities
Study. Information in this submission shall
be the most current Large Generating Facility
design or expected performance data.
Information submitted for stability models
shall be compatible with Transmission
Provider standard models. If there is no
compatible model, Interconnection Customer
will work with a consultant mutually agreed
to by the Parties to develop and supply a
standard model and associated information.
If Interconnection Customer’s data is
materially different from what was originally
provided to Transmission Provider pursuant
to the Interconnection Study Agreement
between Transmission Provider and
Interconnection Customer, then
Transmission Provider will conduct
appropriate studies to determine the impact
on Transmission Provider Transmission
System based on the actual data submitted
pursuant to this Article 24.3. Interconnection
Customer shall not begin Trial Operation
until such studies are completed.
24.4 Information Supplementation. Prior
to the Operation Date, the Parties shall
supplement their information submissions
described above in this Article 24 with any
and all ‘‘as-built’’ Large Generating Facility
information or ‘‘as-tested’’ performance
information that differs from the initial
submissions or, alternatively, written
confirmation that no such differences exist.
[The] Interconnection Customer shall
conduct tests on the Large Generating
Facility as required by Good Utility Practice
such as an open circuit ‘‘step voltage’’ test on
the Large Generating Facility to verify proper
operation of the Large Generating Facility’s
automatic voltage regulator.
Unless otherwise agreed, the test
conditions shall include: (1) Large Generating
Facility at synchronous speed; (2) automatic
voltage regulator on and in voltage control
mode; and (3) a five percent change in Large
Generating Facility terminal voltage initiated
by a change in the voltage regulators
reference voltage. Interconnection Customer
shall provide validated test recordings
showing the responses of Large Generating
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Facility terminal and field voltages. In the
event that direct recordings of these voltages
is impractical, recordings of other voltages or
currents that mirror the response of the Large
Generating Facility’s terminal or field voltage
are acceptable if information necessary to
translate these alternate quantities to actual
Large Generating Facility terminal or field
voltages is provided. Large Generating
Facility testing shall be conducted and
results provided to Transmission Provider for
each individual generating unit in a station.
Subsequent to the Operation Date,
Interconnection Customer shall provide
Transmission Provider any information
changes due to equipment replacement,
repair, or adjustment. Transmission Provider
shall provide Interconnection Customer any
information changes due to equipment
replacement, repair or adjustment in the
directly connected substation or any adjacent
Transmission Provider-owned substation that
may affect Interconnection Customer’s
Interconnection Facilities equipment ratings,
protection or operating requirements. The
Parties shall provide such information no
later than thirty (30) Calendar Days after the
date of the equipment replacement, repair or
adjustment.
Article 25. Information Access and Audit
Rights
25.1 Information Access. Each Party (the
‘‘disclosing Party’’) shall make available to
the other Party information that is in the
possession of the disclosing Party and is
necessary in order for the other Party to: (i)
verify the costs incurred by the disclosing
Party for which the other Party is responsible
under this LGIA; and
(ii) carry out its obligations and
responsibilities under this LGIA. The Parties
shall not use such information for purposes
other than those set forth in this Article 25.1
and to enforce their rights under this LGIA.
25.2 Reporting of Non-Force Majeure
Events. Each Party (the ‘‘notifying Party’’)
shall notify the other Party when the
notifying Party becomes aware of its inability
to comply with the provisions of this LGIA
for a reason other than a Force Majeure event.
The Parties agree to cooperate with each
other and provide necessary information
regarding such inability to comply, including
the date, duration, reason for the inability to
comply, and corrective actions taken or
planned to be taken with respect to such
inability to comply. Notwithstanding the
foregoing, notification, cooperation or
information provided under this article shall
not entitle the Party receiving such
notification to allege a cause for anticipatory
breach of this LGIA.
25.3 Audit Rights. Subject to the
requirements of confidentiality under Article
22 of this LGIA, each Party shall have the
right, during normal business hours, and
upon prior reasonable notice to the other
Party, to audit at its own expense the other
Party’s accounts and records pertaining to
either Party’s performance or either Party’s
satisfaction of obligations under this LGIA.
Such audit rights shall include audits of the
other Party’s costs, calculation of invoiced
amounts, Transmission Provider’s efforts to
allocate responsibility for the provision of
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reactive support to the Transmission System,
Transmission Provider’s efforts to allocate
responsibility for interruption or reduction of
generation on the Transmission System, and
each Party’s actions in an Emergency
Condition. Any audit authorized by this
article shall be performed at the offices where
such accounts and records are maintained
and shall be limited to those portions of such
accounts and records that relate to each
Party’s performance and satisfaction of
obligations under this LGIA. Each Party shall
keep such accounts and records for a period
equivalent to the audit rights periods
described in Article 25.4.
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25.4 Audit Rights Periods.
25.4.1 Audit Rights Period for
Construction-Related Accounts and Records.
Accounts and records related to the design,
engineering, procurement, and construction
of Transmission Provider’s Interconnection
Facilities and Network Upgrades shall be
subject to audit for a period of twenty-four
months following Transmission Provider’s
issuance of a final invoice in accordance with
Article 12.2.
25.4.2 Audit Rights Period for All Other
Accounts and Records. Accounts and records
related to either Party’s performance or
satisfaction of all obligations under this LGIA
other than those described in Article 25.4.1
shall be subject to audit as follows: (i) for an
audit relating to cost obligations, the
applicable audit rights period shall be
twenty-four months after the auditing Party’s
receipt of an invoice giving rise to such cost
obligations; and (ii) for an audit relating to
all other obligations, the applicable audit
rights period shall be twenty-four months
after the event for which the audit is sought.
25.5 Audit Results. If an audit by a Party
determines that an overpayment or an
underpayment has occurred, a notice of such
overpayment or underpayment shall be given
to the other Party together with those records
from the audit which support such
determination.
Article 26. Subcontractors
26.1 General. Nothing in this LGIA shall
prevent a Party from utilizing the services of
any subcontractor as it deems appropriate to
perform its obligations under this LGIA;
provided, however, that each Party shall
require its subcontractors to comply with all
applicable terms and conditions of this LGIA
in providing such services and each Party
shall remain primarily liable to the other
Party for the performance of such
subcontractor.
26.2 Responsibility of Principal. The
creation of any subcontract relationship shall
not relieve the hiring Party of any of its
obligations under this LGIA. The hiring Party
shall be fully responsible to the other Party
for the acts or omissions of any subcontractor
the hiring Party hires as if no subcontract had
been made; provided, however, that in no
event shall Transmission Provider be liable
for the actions or inactions of Interconnection
Customer or its subcontractors with respect
to obligations of Interconnection Customer
under Article 5 of this LGIA. Any applicable
obligation imposed by this LGIA upon the
hiring Party shall be equally binding upon,
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and shall be construed as having application
to, any subcontractor of such Party.
26.3 No Limitation by Insurance. The
obligations under this Article 26 will not be
limited in any way by any limitation of
subcontractor’s insurance.
Article 27. Disputes
27.1 Submission. In the event either Party
has a dispute, or asserts a claim, that arises
out of or in connection with this LGIA or its
performance, such Party (the ‘‘disputing
Party’’) shall provide the other Party with
written notice of the dispute or claim
(‘‘Notice of Dispute’’). Such disp ute or claim
shall be referred to a designated senior
representative of each Party for resolution on
an informal basis as promptly as practicable
after receipt of the Notice of Dispute by the
other Party. In the event the designated
representatives are unable to resolve the
claim or dispute through unassisted or
assisted negotiations within thirty (30)
Calendar Days of the other Party’s receipt of
the Notice of Dispute, such claim or dispute
may, upon mutual agreement of the Parties,
be submitted to arbitration and resolved in
accordance with the arbitration procedures
set forth below. In the event the Parties do
not agree to submit such claim or dispute to
arbitration, each Party may exercise whatever
rights and remedies it may have in equity or
at law consistent with the terms of this LGIA.
27.2 External Arbitration Procedures.
Any arbitration initiated under this LGIA
shall be conducted before a single neutral
arbitrator appointed by the Parties. If the
Parties fail to agree upon a single arbitrator
within ten (10) Calendar Days of the
submission of the dispute to arbitration, each
Party shall choose one arbitrator who shall sit
on a three-member arbitration panel. The two
arbitrators so chosen shall within twenty (20)
Calendar Days select a third arbitrator to
chair the arbitration panel. In either case, the
arbitrators shall be knowledgeable in electric
utility matters, including electric
transmission and bulk power issues, and
shall not have any current or past substantial
business or financial relationships with any
party to the arbitration (except prior
arbitration). The arbitrator(s) shall provide
each of the Parties an opportunity to be heard
and, except as otherwise provided herein,
shall conduct the arbitration in accordance
with the Commercial Arbitration Rules of the
American Arbitration Association
(‘‘Arbitration Rules’’) and any applicable
FERC regulations or RTO rules; provided,
however, in the event of a conflict between
the Arbitration Rules and the terms of this
Article 27, the terms of this Article 27 shall
prevail.
27.3 Arbitration Decisions. Unless
otherwise agreed by the Parties, the
arbitrator(s) shall render a decision within
ninety (90) Calendar Days of appointment
and shall notify the Parties in writing of such
decision and the reasons therefor. The
arbitrator(s) shall be authorized only to
interpret and apply the provisions of this
LGIA and shall have no power to modify or
change any provision of this Agreement in
any manner. The decision of the arbitrator(s)
shall be final and binding upon the Parties,
and judgment on the award may be entered
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in any court having jurisdiction. The
decision of the arbitrator(s) may be appealed
solely on the grounds that the conduct of the
arbitrator(s), or the decision itself, violated
the standards set forth in the Federal
Arbitration Act or the Administrative Dispute
Resolution Act. The final decision of the
arbitrator must also be filed with FERC if it
affects jurisdictional rates, terms and
conditions of service, Interconnection
Facilities, or Network Upgrades.
27.4 Costs. Each Party shall be
responsible for its own costs incurred during
the arbitration process and for the following
costs, if applicable: (1) the cost of the
arbitrator chosen by the Party to sit on the
three member panel and one half of the cost
of the third arbitrator chosen; or (2) one half
the cost of the single arbitrator jointly chosen
by the Parties.
Article 28. Representations, Warranties,
and Covenants
28.1 General. Each Party makes the
following representations, warranties and
covenants:
28.1.1 Good Standing. Such Party is duly
organized, validly existing and in good
standing under the laws of the state in which
it is organized, formed, or incorporated, as
applicable; that it is qualified to do business
in the state or states in which the Large
Generating Facility, Interconnection
Facilities and Network Upgrades owned by
such Party, as applicable, are located; and
that it has the corporate power and authority
to own its properties, to carry on its business
as now being conducted and to enter into this
LGIA and carry out the transactions
contemplated hereby and perform and carry
out all covenants and obligations on its part
to be performed under and pursuant to this
LGIA.
28.1.2 Authority. Such Party has the
right, power and authority to enter into this
LGIA, to become a Party hereto and to
perform its obligations hereunder. This LGIA
is a legal, valid and binding obligation of
such Party, enforceable against such Party in
accordance with its terms, except as the
enforceability thereof may be limited by
applicable bankruptcy, insolvency,
reorganization or other similar laws affecting
creditors’ rights generally and by general
equitable principles (regardless of whether
enforceability is sought in a proceeding in
equity or at law).
28.1.3 No Conflict. The execution,
delivery and performance of this LGIA does
not violate or conflict with the organizational
or formation documents, or bylaws or
operating agreement, of such Party, or any
judgment, license, permit, order, material
agreement or instrument applicable to or
binding upon such Party or any of its assets.
28.1.4 Consent and Approval. Such Party
has sought or obtained, or, in accordance
with this LGIA will seek or obtain, each
consent, approval, authorization, order, or
acceptance by any Governmental Authority
in connection with the execution, delivery
and performance of this LGIA, and it will
provide to any Governmental Authority
notice of any actions under this LGIA that are
required by Applicable Laws and
Regulations.
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Article 29. Joint Operating Committee
29.1 Joint Operating Committee. Except
in the case of ISOs and RTOs, Transmission
Provider shall constitute a Joint Operating
Committee to coordinate operating and
technical considerations of Interconnection
Service. At least six (6) months prior to the
expected Initial Synchronization Date,
Interconnection Customer and Transmission
Provider shall each appoint one
representative and one alternate to the Joint
Operating Committee. Each Interconnection
Customer shall notify Transmission Provider
of its appointment in writing. Such
appointments may be changed at any time by
similar notice. The Joint Operating
Committee shall meet as necessary, but not
less than once each calendar year, to carry
out the duties set forth herein. The Joint
Operating Committee shall hold a meeting at
the request of either Party, at a time and
place agreed upon by the representatives.
The Joint Operating Committee shall perform
all of its duties consistent with the provisions
of this LGIA. Each Party shall cooperate in
providing to the Joint Operating Committee
all information required in the performance
of the Joint Operating Committee’s duties. All
decisions and agreements, if any, made by
the Joint Operating Committee, shall be
evidenced in writing. The duties of the Joint
Operating Committee shall include the
following:
29.1.1 Establish data requirements and
operating record requirements.
29.1.2 Review the requirements,
standards, and procedures for data
acquisition equipment, protective equipment,
and any other equipment or software.
29.1.3 Annually review the one (1) year
forecast of maintenance and planned outage
schedules of Transmission Provider’s and
Interconnection Customer’s facilities at the
Point of Interconnection.
29.1.4 Coordinate the scheduling of
maintenance and planned outages on the
Interconnection Facilities, the Large
Generating Facility and other facilities that
impact the normal operation of the
interconnection of the Large Generating
Facility to the Transmission System.
29.1.5 Ensure that information is being
provided by each Party regarding equipment
availability.
29.1.6 Perform such other duties as may
be conferred upon it by mutual agreement of
the Parties.
Article 30. Miscellaneous
30.1 Binding Effect. This LGIA and the
rights and obligations hereof, shall be
binding upon and shall inure to the benefit
of the successors and assigns of the Parties
hereto.
30.2 Conflicts. In the event of a conflict
between the body of this LGIA and any
attachment, appendices or exhibits hereto,
the terms and provisions of the body of this
LGIA shall prevail and be deemed the final
intent of the Parties.
30.3 Rules of Interpretation. This LGIA,
unless a clear contrary intention appears,
shall be construed and interpreted as follows:
(1) the singular number includes the plural
number and vice versa; (2) reference to any
person includes such person’s successors and
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assigns but, in the case of a Party, only if
such successors and assigns are permitted by
this LGIA, and reference to a person in a
particular capacity excludes such person in
any other capacity or individually; (3)
reference to any agreement (including this
LGIA), document, instrument or tariff means
such agreement, document, instrument, or
tariff as amended or modified and in effect
from time to time in accordance with the
terms thereof and, if applicable, the terms
hereof; (4) reference to any Applicable Laws
and Regulations means such Applicable
Laws and Regulations as amended, modified,
codified, or reenacted, in whole or in part,
and in effect from time to time, including, if
applicable, rules and regulations
promulgated thereunder; (5) unless expressly
stated otherwise, reference to any Article,
Section or Appendix means such Article of
this LGIA or such Appendix to this LGIA, or
such Section to the LGIP or such Appendix
to the LGIP, as the case may be; (6)
‘‘hereunder’’, ‘‘hereof’’, ‘‘herein’’, ‘‘hereto’’
and words of similar import shall be deemed
references to this LGIA as a whole and not
to any particular Article or other provision
hereof or thereof; (7) ‘‘including’’ (and with
correlative meaning ‘‘include’’) means
including without limiting the generality of
any description preceding such term; and (8)
relative to the determination of any period of
time, ‘‘from’’ means ‘‘from and including,’’
‘‘to’’ means ‘‘to but excluding’’ and
‘‘through’’ means ‘‘through and including.’’
30.4 Entire Agreement. This LGIA,
including all Appendices and Schedules
attached hereto, constitutes the entire
agreement between the Parties with reference
to the subject matter hereof, and supersedes
all prior and contemporaneous
understandings or agreements, oral or
written, between the Parties with respect to
the subject matter of this LGIA. There are no
other agreements, representations,
warranties, or covenants which constitute
any part of the consideration for, or any
condition to, either Party’s compliance with
its obligations under this LGIA.
30.5 No Third Party Beneficiaries. This
LGIA is not intended to and does not create
rights, remedies, or benefits of any character
whatsoever in favor of any persons,
corporations, associations, or entities other
than the Parties, and the obligations herein
assumed are solely for the use and benefit of
the Parties, their successors in interest and,
where permitted, their assigns.
30.6 Waiver. The failure of a Party to this
LGIA to insist, on any occasion, upon strict
performance of any provision of this LGIA
will not be considered a waiver of any
obligation, right, or duty of, or imposed
upon, such Party.
Any waiver at any time by either Party of
its rights with respect to this LGIA shall not
be deemed a continuing waiver or a waiver
with respect to any other failure to comply
with any other obligation, right, duty of this
LGIA. Termination or Default of this LGIA for
any reason by Interconnection Customer
shall not constitute a waiver of
Interconnection Customer’s legal rights to
obtain an interconnection from Transmission
Provider. Any waiver of this LGIA shall, if
requested, be provided in writing.
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30.7 Headings. The descriptive headings
of the various Articles of this LGIA have been
inserted for convenience of reference only
and are of no significance in the
interpretation or construction of this LGIA.
30.8 Multiple Counterparts. This LGIA
may be executed in two or more
counterparts, each of which is deemed an
original but all constitute one and the same
instrument.
30.9 Amendment. The Parties may by
mutual agreement amend this LGIA by a
written instrument duly executed by the
Parties.
30.10 Modification by the Parties. The
Parties may by mutual agreement amend the
Appendices to this LGIA by a written
instrument duly executed by the Parties.
Such amendment shall become effective and
a part of this LGIA upon satisfaction of all
Applicable Laws and Regulations.
30.11 Reservation of Rights. Transmission
Provider shall have the right to make a
unilateral filing with FERC to modify this
LGIA with respect to any rates, terms and
conditions, charges, classifications of service,
rule or regulation under section 205 or any
other applicable provision of the Federal
Power Act and FERC’s rules and regulations
thereunder, and Interconnection Customer
shall have the right to make a unilateral filing
with FERC to modify this LGIA pursuant to
section 206 or any other applicable provision
of the Federal Power Act and FERC’s rules
and regulations thereunder; provided that
each Party shall have the right to protest any
such filing by the other Party and to
participate fully in any proceeding before
FERC in which such modifications may be
considered. Nothing in this LGIA shall limit
the rights of the Parties or of FERC under
sections 205 or 206 of the Federal Power Act
and FERC’s rules and regulations thereunder,
except to the extent that the Parties otherwise
mutually agree as provided herein.
30.12 No Partnership. This LGIA shall
not be interpreted or construed to create an
association, joint venture, agency
relationship, or partnership between the
Parties or to impose any partnership
obligation or partnership liability upon either
Party. Neither Party shall have any right,
power, or authority to enter into any
agreement or undertaking for, or act on behalf
of, or to act as or be an agent or
representative of, or to otherwise bind, the
other Party.
In witness whereof, the Parties have
executed this LGIA in duplicate originals,
each of which shall constitute and be an
original effective Agreement between the
Parties.
{Insert name of Transmission Provider or
Transmission Owner, if applicable}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
{Insert name of Interconnection Customer}
By: lllllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
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{Interconnection Customer Representative}
Appendix A to LGIA
Interconnection Facilities, Network
Upgrades and Distribution Upgrades
1. Interconnection Facilities:
(a) {insert Interconnection Customer’s
Interconnection Facilities}:
(b) {insert Transmission Provider’s
Interconnection Facilities}:
2. Network Upgrades:
(a) {insert Stand Alone Network
Upgrades}:
(b) {insert Substation Network Upgrades}:
(c) {insert System Network Upgrades}:
3. Distribution Upgrades:
Appendix B to LGIA
Milestones
Site Control
Check box if applicable { }
Interconnection Customer with qualifying
regulatory limitations must demonstrate
100% Site Control by {Transmission
Provider to insert date one hundred eighty
(180) Calendar [d]Days from the effective
date of this LGIA} or the LGIA may be
terminated per Article 17 (Default) of this
LGIA and [the] Interconnection Customer
may be subject to Withdrawal Penalties per
Section 3.7.1.1 of [the] Transmission
Provider’s LGIP (Calculation of the
Withdrawal Penalty).
Appendix C to LGIA
Interconnection Details
Appendix D to LGIA
Security Arrangements Details
Infrastructure security of Transmission
System equipment and operations and
control hardware and software is essential to
ensure day-to-day Transmission System
reliability and operational security. FERC
will expect all Transmission Providers,
market participants, and Interconnection
Customers interconnected to the
Transmission System to comply with the
recommendations offered by the President’s
Critical Infrastructure Protection Board and,
eventually, best practice recommendations
from the electric reliability authority. All
public utilities will be expected to meet basic
standards for system infrastructure and
operational security, including physical,
operational, and cyber-security practices.
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Appendix E to LGIA
Commercial Operation Date
This Appendix E is a part of the LGIA
between Transmission Provider and
Interconnection Customer.
{Date}
{Transmission Provider Address}
Re: llll Large Generating Facility
Dear llll:
On {Date} {Interconnection Customer} has
completed Trial Operation of Unit No. ll.
This letter confirms that {Interconnection
Customer} commenced Commercial
Operation of Unit No. ll at the Large
Generating Facility, effective as of {Date plus
one day}.
Thank you.
{Signature}
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Appendix F to LGIA
Addresses for Delivery of Notices and
Billings
Notices:[.]
Transmission Provider:
{To be supplied.}
Interconnection Customer:
{To be supplied.}
Billings and Payments:
Transmission Provider:
{To be supplied.}
Interconnection Customer:
{To be supplied.}
Alternative Forms of Delivery of Notices
(telephone, facsimile or email):
Transmission Provider:
{To be supplied.}
Interconnection Customer:
{To be supplied.}
Appendix G
Interconnection Requirements for a Wind
Generating Plant
Appendix G sets forth requirements and
provisions specific to a wind generating plant
or a Generating Facility that contains a wind
generating plant. All other requirements of
this LGIA continue to apply to wind
generating plant interconnections.
A. Technical Standards Applicable to a Wind
Generating Plant
i. Low Voltage Ride-Through (LVRT)
Capability
A wind generating plant shall be able to
remain online during voltage disturbances up
to the time periods and associated voltage
levels set forth in the standard below. The
LVRT standard provides for a transition
period standard and a post-transition period
standard.
Transition Period LVRT Standard
The transition period standard applies to
wind generating plants subject to FERC Order
661 that have either: (i) interconnection
agreements signed and filed with the
Commission, filed with the Commission in
unexecuted form, or filed with the
Commission as non-conforming agreements
between January 1, 2006 and December 31,
2006, with a scheduled in-service date no
later than December 31, 2007, or (ii) wind
generating turbines subject to a wind turbine
procurement contract executed prior to
December 31, 2005, for delivery through
2007.
1. Wind generating plants are required to
remain in-service during three-phase faults
with normal clearing (which is a time period
of approximately 4–9 cycles) and single line
to ground faults with delayed clearing, and
subsequent post-fault voltage recovery to
prefault voltage unless clearing the fault
effectively disconnects the generator from the
system. The clearing time requirement for a
three-phase fault will be specific to the wind
generating plant substation location, as
determined by and documented by [the]
transmission provider. The maximum
clearing time the wind generating plant shall
be required to withstand for a three-phase
fault shall be 9 cycles at a voltage as low as
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0.15 p.u., as measured at the high side of the
wind generating plant step-up transformer
(i.e. the transformer that steps the voltage up
to the transmission interconnection voltage
or ‘‘GSU’’), after which, if the fault remains
following the location-specific normal
clearing time for three-phase faults, the wind
generating plant may disconnect from the
transmission system.
2. This requirement does not apply to
faults that would occur between the wind
generator terminals and the high side of the
GSU or to faults that would result in a
voltage lower than 0.15 per unit on the high
side of the GSU serving the facility.
3. Wind generating plants may be tripped
after the fault period if this action is intended
as part of a special protection system.
4. Wind generating plants may meet the
LVRT requirements of this standard by the
performance of the generators or by installing
additional equipment (e.g., Static VAr
Compensator, etc.) within the wind
generating plant or by a combination of
generator performance and additional
equipment.
5. Existing individual generator units that
are, or have been, interconnected to the
network at the same location at the effective
date of the Appendix G LVRT
Standard are exempt from meeting the
Appendix G LVRT Standard for the
remaining life of the existing generation
equipment. Existing individual generator
units that are replaced are required to meet
the Appendix G LVRT Standard.
Post-Transition Period LVRT Standard
All wind generating plants subject to FERC
Order No. 661 and not covered by the
transition period described above must meet
the following requirements:
1. Wind generating plants are required to
remain in-service during three-phase faults
with normal clearing (which is a time period
of approximately 4–9 cycles) and single line
to ground faults with delayed clearing, and
subsequent post-fault voltage recovery to
prefault voltage unless clearing the fault
effectively disconnects the generator from the
system. The clearing time requirement for a
three-phase fault will be specific to the wind
generating plant substation location, as
determined by and documented by [the]
transmission provider. The maximum
clearing time the wind generating plant shall
be required to withstand for a three-phase
fault shall be 9 cycles after which, if the fault
remains following the location-specific
normal clearing time for three-phase faults,
the wind generating plant may disconnect
from the transmission system. A wind
generating plant shall remain interconnected
during such a fault on the transmission
system for a voltage level as low as zero volts,
as measured at the high voltage side of the
wind GSU.
2. This requirement does not apply to
faults that would occur between the wind
generator terminals and the high side of the
GSU.
3. Wind generating plants may be tripped
after the fault period if this action is intended
as part of a special protection system.
4. Wind generating plants may meet the
LVRT requirements of this standard by the
performance of the generators or by installing
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additional equipment (e.g., Static VAR
Compensator) within the wind generating
plant or by a combination of generator
performance and additional equipment.
Existing individual generator units that are,
or have been, interconnected to the network
at the same location at the effective date of
the Appendix G LVRT Standard are exempt
from meeting the Appendix G LVRT
Standard for the remaining life of the existing
generation equipment. Existing individual
generator units that are replaced are required
to meet the Appendix G LVRT Standard.
ii. Power Factor Design Criteria (Reactive
Power)
The following reactive power requirements
apply only to a newly interconnecting wind
generating plant that has executed a Facilities
Study Agreement as of the effective date of
the Final Rule establishing the reactive
power requirements for non-synchronous
generators in [Section]article 9.6.1 of this
LGIA (Order No. 827). A wind generating
plant to which this provision applies shall
maintain a power factor within the range of
0.95 leading to 0.95 lagging, measured at the
Point of Interconnection as defined in this
LGIA, if [the] Transmission Provider’s
Cluster Study shows that such a requirement
is necessary to ensure safety or reliability.
The power factor range standard can be met
by using, for example, power electronics
designed to supply this level of reactive
capability [606] (taking into account any
limitations due to voltage level, real power
output, etc.) or fixed and switched capacitors
if agreed to by [the] Transmission Provider,
or a combination of the two. [The]
Interconnection Customer shall not disable
power factor equipment while the wind plant
is in operation. Wind plants shall also be able
to provide sufficient dynamic voltage support
in lieu of the power system stabilizer and
automatic voltage regulation at the generator
excitation system if the [System Impact]
Cluster Study shows this to be required for
system safety or reliability.
iii. Supervisory Control and Data Acquisition
(SCADA) Capability
The wind plant shall provide SCADA
capability to transmit data and receive
instructions from [the] Transmission
Provider to protect system reliability. [The]
Transmission Provider and the wind plant
Interconnection Customer shall determine
what SCADA information is essential for the
proposed wind plant, taking into account the
size of the plant and its characteristics,
location, and importance in maintaining
generation resource adequacy and
transmission system reliability in its area.
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Appendix H to LGIA
Operating Assumptions for Generating
Facility
Check box if applicable { }
Operating Assumptions:
{insert operating assumptions that reflect
the charging behavior of the Generating
Facility that includes at least one electric
storage resource}
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Appendix E: Changes to Pro Forma
SGIP
Small Generator Interconnection Procedures
(SGIP)
(For Generating Facilities No Larger Than 20
MW)
Table of Contents
Section 1. Application
1.1 Applicability
1.2 Pre-Application
1.3 Interconnection Request
1.4 Modification of the Interconnection
Request
1.5 Site Control
1.6 Queue Position
1.7 Interconnection Requests Submitted
Prior to the Effective Date of the SGIP
Section 2. Fast Track Process
2.1 Applicability
2.2 Initial Review
2.3 Customer Options Meeting
2.4 Supplemental Review
Section 3. Study Process
3.1 Applicability
3.2 Scoping Meeting
3.3 Feasibility Study
3.4 System Impact Study
3.5 Facilities Study
Section 4. Provisions that Apply to All
Interconnection Requests
4.1 Reasonable Efforts
4.2 Disputes
4.3 Interconnection Metering
4.4 Commissioning
4.5. Confidentiality
4.6 Comparability
4.7 Record Retention
4.8 Interconnection Agreement
4.9 Coordination with Affected Systems
4.10 Capacity of the Small Generating
Facility
Attachment 1—Glossary of Terms
Attachment 2—Small Generator
Interconnection Request
Attachment 3—Certification Codes and
Standards
Attachment 4—Certification of Small
Generator Equipment Packages
Attachment 5—Application, Procedures, and
Terms and Conditions for
Interconnecting a Certified InvertorBased Small Generating Facility No
Larger than 10 kW (‘‘10 kW Inverter
Process’’).
Attachment 6—Feasibility Study Agreement
Attachment 7—System Impact Study
Agreement
Attachment 8—Facilities Study Agreement
Section 1. Application
1.1 Applicability
1.1.1 A request to interconnect a certified
Small Generating Facility (See Attachments 3
and 4 for description of certification criteria)
to [the] Transmission Provider’s Distribution
System shall be evaluated under the section
2 Fast Track Process if the eligibility
requirements of section 2.1 are met. A
request to interconnect a certified inverterbased Small Generating Facility no larger
than 10 kilowatts (kW) shall be evaluated
under the Attachment 5 10 kW Inverter
Process. A request to interconnect a Small
Generating Facility no larger than 20
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27201
megawatts (MW) that does not meet the
eligibility requirements of section 2.1, or
does not pass the Fast Track Process or the
10 kW Inverter Process, shall be evaluated
under the section 3 Study Process. If [the]
Interconnection Customer wishes to
interconnect its Small Generating Facility
using Network Resource Interconnection
Service, it must do so under the Standard
Large Generator Interconnection Procedures
and execute the Standard Large Generator
Interconnection Agreement.
1.1.2 Capitalized terms used herein shall
have the meanings specified in the Glossary
of Terms in Attachment 1 or the body of
these procedures.
1.1.3 Neither these procedures nor the
requirements included hereunder apply to
Small Generating Facilities interconnected or
approved for interconnection prior to sixty
(60) Business Days after the effective date of
these procedures.
1.1.4 Prior to submitting its
Interconnection Request (Attachment 2), [the]
Interconnection Customer may ask [the]
Transmission Provider’s interconnection
contact employee or office whether the
proposed interconnection is subject to these
procedures. [The] Transmission Provider
shall respond within fifteen (15) Business
Days.
1.1.5 Infrastructure security of electric
system equipment and operations and
control hardware and software is essential to
ensure day-to-day reliability and operational
security. The Federal Energy Regulatory
Commission expects all Transmission
Providers, market participants, and
Interconnection Customers interconnected
with electric systems to comply with the
recommendations offered by the President’s
Critical Infrastructure Protection Board and
best practice recommendations from the
electric reliability authority. All public
utilities are expected to meet basic standards
for electric system infrastructure and
operational security, including physical,
operational, and cyber-security practices.
1.1.6 References in these procedures to
interconnection agreement are to the Small
Generator Interconnection Agreement (SGIA).
1.2 Pre-Application
1.2.1 [The] Transmission Provider shall
designate an employee or office from which
information on the application process and
on an Affected System can be obtained
through informal requests from [the]
Interconnection Customer presenting a
proposed project for a specific site. The
name, telephone number, and email address
of such contact employee or office shall be
made available on [the] Transmission
Provider’s internet website. Electric system
information provided to [the] Interconnection
Customer should include relevant system
studies, interconnection studies, and other
materials useful to an understanding of an
interconnection at a particular point on [the]
Transmission Provider’s Transmission
System, to the extent such provision does not
violate confidentiality provisions of prior
agreements or critical infrastructure
requirements. [The] Transmission Provider
shall comply with reasonable requests for
such information.
1.2.2 In addition to the information
described in section 1.2.1, which may be
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provided in response to an informal request,
an Interconnection Customer may submit a
formal written request form along with a nonrefundable fee of $300 for a pre-application
report on a proposed project at a specific site.
[The] Transmission Provider shall provide
the pre-application data described in section
1.2.3 to [the] Interconnection Customer
within twenty (20) Business Days of receipt
of the completed request form and payment
of the $300 fee. The pre-application report
produced by [the] Transmission Provider is
non-binding, does not confer any rights, and
[the] Interconnection Customer must still
successfully apply to interconnect to [the]
Transmission Provider’s system. The written
pre-application report request form shall
include the information in sections 1.2.2.1
through 1.2.2.8 below to clearly and
sufficiently identify the location of the
proposed Point of Interconnection.
1.2.2.1 Project contact information,
including name, address, phone number, and
email address.
1.2.2.2 Project location (street address
with nearby cross streets and town)
1.2.2.3 Meter number, pole number, or
other equivalent information identifying
proposed Point of Interconnection, if
available.
1.2.2.4 Generator Type (e.g., solar, wind,
combined heat and power, etc.)
1.2.2.5 Size (alternating current kW)
1.2.2.6 Single or three phase generator
configuration
1.2.2.7 Stand-alone generator (no onsite
load, not including station service—Yes or
No?)
1.2.2.8 Is new service requested? Yes or
No? If there is existing service, include the
customer account number, site minimum and
maximum current or proposed electric loads
in kW (if available) and specify if the load
is expected to change.
1.2.3 Using the information provided in
the pre-application report request form in
section 1.2.2, [the] Transmission Provider
will identify the substation/area bus, bank or
circuit likely to serve the proposed Point of
Interconnection. This selection by [the]
Transmission Provider does not necessarily
indicate, after application of the screens and/
or study, that this would be the circuit the
project ultimately connects to. [The]
Interconnection Customer must request
additional pre-application reports if
information about multiple Points of
Interconnection is requested. Subject to
section 1.2.4, the pre-application report will
include the following information:
1.2.3.1 Total capacity (in MW) of
substation/area bus, bank or circuit based on
normal or operating ratings likely to serve the
proposed Point of Interconnection.
1.2.3.2 Existing aggregate generation
capacity (in MW) interconnected to a
substation/area bus, bank or circuit (i.e.,
amount of generation online) likely to serve
the proposed Point of Interconnection.
1.2.3.3 Aggregate queued generation
capacity (in MW) for a substation/area bus,
bank or circuit (i.e., amount of generation in
the queue) likely to serve the proposed Point
of Interconnection.
1.2.3.4 Available capacity (in MW) of
substation/area bus or bank and circuit likely
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to serve the proposed Point of
Interconnection (i.e., total capacity less the
sum of existing aggregate generation capacity
and aggregate queued generation capacity).
1.2.3.5 Substation nominal distribution
voltage and/or transmission nominal voltage
if applicable.
1.2.3.6 Nominal distribution circuit
voltage at the proposed Point of
Interconnection.
1.2.3.7 Approximate circuit distance
between the proposed Point of
Interconnection and the substation.
1.2.3.8 Relevant line section(s) actual or
estimated peak load and minimum load data,
including daytime minimum load as
described in section 2.4.4.1.1 below and
absolute minimum load, when available.
1.2.3.9 Number and rating of protective
devices and number and type (standard, bidirectional) of voltage regulating devices
between the proposed Point of
Interconnection and the substation/area.
Identify whether the substation has a load tap
changer.
1.2.3.10 Number of phases available at
the proposed Point of Interconnection. If a
single phase, distance from the three-phase
circuit.
1.2.3.11 Limiting conductor ratings from
the proposed Point of Interconnection to the
distribution substation.
1.2.3.12 Whether the Point of
Interconnection is located on a spot network,
grid network, or radial supply.
1.2.3.13 Based on the proposed Point of
Interconnection, existing or known
constraints such as, but not limited to,
electrical dependencies at that location, short
circuit interrupting capacity issues, power
quality or stability issues on the circuit,
capacity constraints, or secondary networks.
1.2.4 The pre-application report need
only include existing data. A pre-application
report request does not obligate [the]
Transmission Provider to conduct a study or
other analysis of the proposed generator in
the event that data is not readily available.
If [the] Transmission Provider cannot
complete all or some of a pre-application
report due to lack of available data, the
Transmission Provider shall provide [the]
Interconnection Customer with a preapplication report that includes the data that
is available. The provision of information on
‘‘available capacity’’ pursuant to section
1.2.3.4 does not imply that an
interconnection up to this level may be
completed without impacts since there are
many variables studied as part of the
interconnection review process, and data
provided in the pre-application report may
become outdated at the time of the
submission of the complete Interconnection
Request. Notwithstanding any of the
provisions of this section, [the] Transmission
Provider shall, in good faith, include data in
the pre-application report that represents the
best available information at the time of
reporting.
1.3 Interconnection Request
[The] Interconnection Customer shall
submit its Interconnection Request to [the]
Transmission Provider, together with the
processing fee or deposit specified in the
Interconnection Request. The
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Interconnection Request shall be date- and
time-stamped upon receipt. The original
date- and time-stamp applied to the
Interconnection Request at the time of its
original submission shall be accepted as the
qualifying date- and time-stamp for the
purposes of any timetable in these
procedures. [The] Interconnection Customer
shall be notified of receipt by [the]
Transmission Provider within three (3)
Business Days of receiving the
Interconnection Request. [The] Transmission
Provider shall notify [the] Interconnection
Customer within ten (10) Business Days of
the receipt of the Interconnection Request as
to whether the Interconnection Request is
complete or incomplete. If the
Interconnection Request is incomplete, [the]
Transmission Provider shall provide along
with the notice that the Interconnection
Request is incomplete, a written list detailing
all information that must be provided to
complete the Interconnection Request. [The]
Interconnection Customer will have ten (10)
Business Days after receipt of the notice to
submit the listed information or to request an
extension of time to provide such
information. If [the] Interconnection
Customer does not provide the listed
information or a request for an extension of
time within the deadline, the Interconnection
Request will be deemed withdrawn. An
Interconnection Request will be deemed
complete upon submission of the listed
information to [the] Transmission Provider.
1.4 Modification of the Interconnection
Request
Any modification to machine data or
equipment configuration or to the
interconnection site of the Small Generating
Facility not agreed to in writing by [the]
Transmission Provider and [the]
Interconnection Customer may be deemed a
withdrawal of the Interconnection Request
and may require submission of a new
Interconnection Request, unless proper
notification of each Party by the other and a
reasonable time to cure the problems created
by the changes are undertaken. Any such
modification of the Interconnection Request
must be accompanied by any resulting
updates to the models described in
Attachment 2 of this SGIP.
1.5 Site Control
Documentation of site control must be
submitted with the Interconnection Request.
Site control may be demonstrated through:
1.5.1 Ownership of, a leasehold interest
in, or a right to develop a site for the purpose
of constructing the Small Generating Facility;
1.5.2 An option to purchase or acquire a
leasehold site for such purpose; or
1.5.3 An exclusivity or other business
relationship between [the] Interconnection
Customer and the entity having the right to
sell, lease, or grant [the] Interconnection
Customer the right to possess or occupy a site
for such purpose.
1.6 Queue Position
[The] Transmission Provider shall assign a
Queue Position based upon the date- and
time-stamp of the Interconnection Request.
The Queue Position of each Interconnection
Request will be used to determine the cost
responsibility for the Upgrades necessary to
accommodate the interconnection. [The]
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Transmission Provider shall maintain a
single queue per geographic region. At [the]
Transmission Provider’s option,
Interconnection Requests may be studied
serially or in clusters for the purpose of the
system impact study.
1.7 Interconnection Requests Submitted
Prior to the Effective Date of the SGIP
Nothing in this SGIP affects an
Interconnection Customer’s Queue Position
assigned before the effective date of this
SGIP. The Parties agree to complete work on
any interconnection study agreement
executed prior the effective date of this SGIP
in accordance with the terms and conditions
of that interconnection study agreement. Any
new studies or other additional work will be
completed pursuant to this SGIP.
Section 2. Fast Track Process
2.1
Applicability
The Fast Track Process is available to an
Interconnection Customer proposing to
interconnect its Small Generating Facility
with [the] Transmission Provider’s
Distribution System if the Small Generating
Facility’s capacity does not exceed the size
limits identified in the table below. Small
Generating Facilities below these limits are
eligible for Fast Track review. However, Fast
Track eligibility is distinct from the Fast
Track Process itself, and eligibility does not
imply or indicate that a Small Generating
Facility will pass the Fast Track screens in
section 2.2.1 below or the Supplemental
Review screens in section 2.4.4 below.
Fast Track eligibility is determined based
upon the generator type, the size of the
generator, voltage of the line and the location
of and the type of line at the Point of
Interconnection. All Small Generating
Facilities connecting to lines greater than 69
kilovolt (kV) are ineligible for the Fast Track
27203
Process regardless of size. All synchronous
and induction machines must be no larger
than 2 MW to be eligible for the Fast Track
Process, regardless of location. For certified
inverter-based systems, the size limit varies
according to the voltage of the line at the
proposed Point of Interconnection. Certified
inverter-based Small Generating Facilities
located within 2.5 electrical circuit miles of
a substation and on a mainline (as defined in
the table below) are eligible for the Fast Track
Process under the higher thresholds
according to the table below. In addition to
the size threshold, [the] Interconnection
Customer’s proposed Small Generating
Facility must meet the codes, standards, and
certification requirements of Attachments 3
and 4 of these procedures, or [the]
Transmission Provider has to have reviewed
the design or tested the proposed Small
Generating Facility and is satisfied that it is
safe to operate.
FAST TRACK ELIGIBILITY FOR INVERTER-BASED SYSTEMS
Fast track eligibility
regardless of location
Line voltage
≤500 kW
≤2 MW
≤3 MW
≤4 MW
<5 kV .......................................................................................................................................
≥5 kV and <15 kV ....................................................................................................................
≥15 kV and <30 kV ..................................................................................................................
≥30 kV and ≤69 kV ..................................................................................................................
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2.2 Initial Review
Within fifteen (15) Business Days after
[the] Transmission Provider notifies [the]
Interconnection Customer it has received a
complete Interconnection Request, [the]
Transmission Provider shall perform an
initial review using the screens set forth
below, shall notify [the] Interconnection
Customer of the results, and include with the
notification copies of the analysis and data
underlying [the] Transmission Provider’s
determinations under the screens.
2.2.1 Screens
2.2.1.1 The proposed Small Generating
Facility’s Point of Interconnection must be on
a portion of [the] Transmission Provider’s
Distribution System that is subject to the
Tariff.
2.2.1.2 For interconnection of a proposed
Small Generating Facility to a radial
distribution circuit, the aggregated
generation, including the proposed Small
Generating Facility, on the circuit shall not
exceed 15% of the line section annual peak
load as most recently measured at the
substation. A line section is that portion of
a Transmission Provider’s electric system
connected to a customer bounded by
automatic sectionalizing devices or the end
of the distribution line.
2.2.1.3 For interconnection of a proposed
Small Generating Facility to the load side of
spot network protectors, the proposed Small
Generating Facility must utilize an inverterbased equipment package and, together with
the aggregated other inverter-based
generation, shall not exceed the smaller of
5% of a spot network’s maximum load or 50
kW.3
2.2.1.4 The proposed Small Generating
Facility, in aggregation with other generation
on the distribution circuit, shall not
contribute more than 10% to the distribution
circuit’s maximum fault current at the point
on the high voltage (primary) level nearest
the proposed point of change of ownership.
Type of interconnection to primary
distribution line
Three-phase, three wire .......................
Three-phase, four wire .........................
3-phase or single phase, phase-to-phase ........................................................
Effectively-grounded 3 phase or Single-phase, line-to-neutral ........................
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2 An Interconnection Customer can determine
this information about its proposed interconnection
location in advance by requesting a pre-application
report pursuant to section 1.2.
3 A spot network is a type of distribution system
found within modern commercial buildings to
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≤500 kW
≤3 MW
≤4 MW
≤5 MW
2.2.1.5 The proposed Small Generating
Facility, in aggregate with other generation
on the distribution circuit, shall not cause
any distribution protective devices and
equipment (including, but not limited to,
substation breakers, fuse cutouts, and line
reclosers), or Interconnection Customer
equipment on the system to exceed 87.5% of
the short circuit interrupting capability; nor
shall the interconnection be proposed for a
circuit that already exceeds 87.5% of the
short circuit interrupting capability.
2.2.1.6 Using the table below, determine
the type of interconnection to a primary
distribution line. This screen includes a
review of the type of electrical service
provided to the Interconnecting Customer,
including line configuration and the
transformer connection to limit the potential
for creating over-voltages on [the]
Transmission Provider’s electric power
system due to a loss of ground during the
operating time of any anti-islanding function.
Primary distribution line type
1 For purposes of this table, a mainline is the
three-phase backbone of a circuit. It will typically
constitute lines with wire sizes of 4/0 American
wire gauge, 336.4 kcmil, 397.5 kcmil, 477 kcmil and
795 kcmil.
Fast track eligibility
on a mainline 1 and
≤2.5 electrical
circuit miles from
substation 2
Result/criteria
Pass screen.
Pass screen.
provide high reliability of service to a single
customer. (Standard Handbook for Electrical
Engineers, 11th edition, Donald Fink, McGraw Hill
Book Company).
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2.2.1.7 If the proposed Small Generating
Facility is to be interconnected on singlephase shared secondary, the aggregate
generation capacity on the shared secondary,
including the proposed Small Generating
Facility, shall not exceed 20 kW.
2.2.1.8 If the proposed Small Generating
Facility is single-phase and is to be
interconnected on a center tap neutral of a
240 volt service, its addition shall not create
an imbalance between the two sides of the
240 volt service of more than 20% of the
nameplate rating of the service transformer.
2.2.1.9 The Small Generating Facility, in
aggregate with other generation
interconnected to the transmission side of a
substation transformer feeding the circuit
where the Small Generating Facility proposes
to interconnect shall not exceed 10 MW in
an area where there are known, or posted,
transient stability limitations to generating
units located in the general electrical vicinity
(e.g., three or four transmission busses from
the point of interconnection).
2.2.1.10 No construction of facilities by
[the] Transmission Provider on its own
system shall be required to accommodate the
Small Generating Facility.
2.2.2 If the proposed interconnection
passes the screens, the Interconnection
Request shall be approved and [the]
Transmission Provider will provide [the]
Interconnection Customer an executable
interconnection agreement within five (5)
Business Days after the determination.
2.2.3 If the proposed interconnection fails
the screens, but [the] Transmission Provider
determines that the Small Generating Facility
may nevertheless be interconnected
consistent with safety, reliability, and power
quality standards, [the] Transmission
Provider shall provide [the] Interconnection
Customer an executable interconnection
agreement within five (5) Business Days after
the determination.
2.2.4 If the proposed interconnection fails
the screens, and [the] Transmission Provider
does not or cannot determine from the initial
review that the Small Generating Facility
may nevertheless be interconnected
consistent with safety, reliability, and power
quality standards unless [the]
Interconnection Customer is willing to
consider minor modifications or further
study, [the] Transmission Provider shall
provide [the] Interconnection Customer with
the opportunity to attend a customer options
meeting.
2.3 Customer Options Meeting
If [the] Transmission Provider determines
the Interconnection Request cannot be
approved without (1) minor modifications at
minimal cost, (2) a supplemental study or
other additional studies or actions, or (3)
incurring significant cost to address safety,
reliability, or power quality problems, [the]
Transmission Provider shall notify [the]
Interconnection Customer of that
determination within five (5) Business Days
after the determination and provide copies of
all data and analyses underlying its
conclusion. Within ten (10) Business Days of
[the] Transmission Provider’s determination,
[the] Transmission Provider shall offer to
convene a customer options meeting with
[the] Transmission Provider to review
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possible Interconnection Customer facility
modifications or the screen analysis and
related results, to determine what further
steps are needed to permit the Small
Generating Facility to be connected safely
and reliably. At the time of notification of
[the] Transmission Provider’s determination,
or at the customer options meeting, [the]
Transmission Provider shall:
2.3.1 Offer to perform facility
modifications or minor modifications to [the]
Transmission Provider’s electric system (e.g.,
changing meters, fuses, relay settings) and
provide a non-binding good faith estimate of
the limited cost to make such modifications
to [the] Transmission Provider’s electric
system. If [the] Interconnection Customer
agrees to pay for the modifications to the
Transmission Provider’s electric system, [the]
Transmission Provider will provide [the]
Interconnection Customer with an executable
interconnection agreement within ten (10)
Business Days of the customer options
meeting; or
2.3.2 Offer to perform a supplemental
review in accordance with section 2.4 and
provide a non-binding good faith estimate of
the costs of such review; or
2.3.3 Obtain [the] Interconnection
Customer’s agreement to continue evaluating
the Interconnection Request under the
section 3 Study Process.
2.4 Supplemental Review
2.4.1 To accept the offer of a
supplemental review, [the] Interconnection
Customer shall agree in writing and submit
a deposit for the estimated costs of the
supplemental review in the amount of [the]
Transmission Provider’s good faith estimate
of the costs of such review, both within
fifteen (15) Business Days of the offer. If the
written agreement and deposit have not been
received by [the] Transmission Provider
within that timeframe, the Interconnection
Request shall continue to be evaluated under
the section 3 Study Process unless it is
withdrawn by [the] Interconnection
Customer.
2.4.2 [The] Interconnection Customer
may specify the order in which [the]
Transmission Provider will complete the
screens in section 2.4.4.
2.4.3 [The] Interconnection Customer
shall be responsible for [the] Transmission
Provider’s actual costs for conducting the
supplemental review. [The] Interconnection
Customer must pay any review costs that
exceed the deposit within twenty (20)
Business Days of receipt of the invoice or
resolution of any dispute. If the deposit
exceeds the invoiced costs, [the]
Transmission Provider will return such
excess within twenty (20) Business Days of
the invoice without interest.
2.4.4 Within thirty (30) Business Days
following receipt of the deposit for a
supplemental review, [the] Transmission
Provider shall (1) perform a supplemental
review using the screens set forth below; (2)
notify in writing [the] Interconnection
Customer of the results; and (3) include with
the notification copies of the analysis and
data underlying [the] Transmission
Provider’s determinations under the screens.
Unless [the] Interconnection Customer
provided instructions for how to respond to
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the failure of any of the supplemental review
screens below at the time [the]
Interconnection Customer accepted the offer
of supplemental review, [the] Transmission
Provider shall notify [the] Interconnection
Customer following the failure of any of the
screens, or if it is unable to perform the
screen in section 2.4.4.1, within two (2)
Business Days of making such determination
to obtain [the] Interconnection Customer’s
permission to: (1) continue evaluating the
proposed interconnection under this section
2.4.4; (2) terminate the supplemental review
and continue evaluating the Small
Generating Facility under section 3; or (3)
terminate the supplemental review upon
withdrawal of the Interconnection Request by
[the] Interconnection Customer.
2.4.4.1 Minimum Load Screen: Where 12
months of line section minimum load data
(including onsite load but not station service
load served by the proposed Small
Generating Facility) are available, can be
calculated, can be estimated from existing
data, or determined from a power flow
model, the aggregate Generating Facility
capacity on the line section is less than 100%
of the minimum load for all line sections
bounded by automatic sectionalizing devices
upstream of the proposed Small Generating
Facility. If minimum load data is not
available, or cannot be calculated, estimated
or determined, [the] Transmission Provider
shall include the reason(s) that it is unable
to calculate, estimate or determine minimum
load in its supplemental review results
notification under section 2.4.4.
2.4.4.1.1 The type of generation used by
the proposed Small Generating Facility will
be taken into account when calculating,
estimating, or determining circuit or line
section minimum load relevant for the
application of screen 2.4.4.1. Solar
photovoltaic (PV) generation systems with no
battery storage use daytime minimum load
(i.e., 10 a.m. to 4 p.m. for fixed panel systems
and 8 a.m. to 6 p.m. for PV systems utilizing
tracking systems), while all other generation
uses absolute minimum load.
2.4. 4.1.2 When this screen is being
applied to a Small Generating Facility that
serves some station service load, only the net
injection into [the] Transmission Provider’s
electric system will be considered as part of
the aggregate generation.
2.4. 4.1.3 Transmission Provider will not
consider as part of the aggregate generation
for purposes of this screen generating facility
capacity known to be already reflected in the
minimum load data.
2.4.4.2 Voltage and Power Quality
Screen: In aggregate with existing generation
on the line section: (1) the voltage regulation
on the line section can be maintained in
compliance with relevant requirements
under all system conditions; (2) the voltage
fluctuation is within acceptable limits as
defined by Institute of Electrical and
Electronics Engineers (IEEE) Standard 1453,
or utility practice similar to IEEE Standard
1453; and (3) the harmonic levels meet IEEE
Standard 519 limits.
2.4.4.3 Safety and Reliability Screen: The
location of the proposed Small Generating
Facility and the aggregate generation capacity
on the line section do not create impacts to
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safety or reliability that cannot be adequately
addressed without application of the Study
Process. [The] Transmission Provider shall
give due consideration to the following and
other factors in determining potential
impacts to safety and reliability in applying
this screen.
2.4.4.3.1 Whether the line section has
significant minimum loading levels
dominated by a small number of customers
(e.g., several large commercial customers).
2.4.4.3.2 Whether the loading along the
line section is uniform or even.
2.4.4.3.3 Whether the proposed Small
Generating Facility is located in close
proximity to the substation (i.e., less than 2.5
electrical circuit miles), and whether the line
section from the substation to the Point of
Interconnection is a Mainline rated for
normal and emergency ampacity.
2.4.4.3.4 Whether the proposed Small
Generating Facility incorporates a time delay
function to prevent reconnection of the
generator to the system until system voltage
and frequency are within normal limits for a
prescribed time.
2.4.4.3.5 Whether operational flexibility
is reduced by the proposed Small Generating
Facility, such that transfer of the line
section(s) of the Small Generating Facility to
a neighboring distribution circuit/substation
may trigger overloads or voltage issues.
2.4.4.3.6 Whether the proposed Small
Generating Facility employs equipment or
systems certified by a recognized standards
organization to address technical issues such
as, but not limited to, islanding, reverse
power flow, or voltage quality.
2.4.5 If the proposed interconnection
passes the supplemental screens in sections
2.4.4.1, 2.4.4.2, and 2.4.4.3 above, the
Interconnection Request shall be approved
and [the] Transmission Provider will provide
[the] Interconnection Customer with an
executable interconnection agreement within
the timeframes established in sections 2.4.5.1
and 2.4.5.2 below. If the proposed
interconnection fails any of the supplemental
review screens and [the] Interconnection
Customer does not withdraw its
Interconnection Request, it shall continue to
be evaluated under the section 3 Study
Process consistent with section 2.4.5.3 below.
2.4.5.1 If the proposed interconnection
passes the supplemental screens in sections
2.4.4.1, 2.4.4.2, and 2.4.4.3 above and does
not require construction of facilities by [the]
Transmission Provider on its own system, the
interconnection agreement shall be provided
within ten (10) Business Days after the
notification of the supplemental review
results.
2.4.5.2 If interconnection facilities or
minor modifications to [the] Transmission
Provider’s system are required for the
proposed interconnection to pass the
supplemental screens in sections 2.4.4.1,
2.4.4.2, and 2.4.4.3 above, and [the]
Interconnection Customer agrees to pay for
the modifications to [the] Transmission
Provider’s electric system, the
interconnection agreement, along with a nonbinding good faith estimate for the
interconnection facilities and/or minor
modifications, shall be provided to [the]
Interconnection Customer within fifteen (15)
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Business Days after receiving written
notification of the supplemental review
results.
2.4.5.3 If the proposed interconnection
would require more than interconnection
facilities or minor modifications to [the]
Transmission Provider’s system to pass the
supplemental screens in sections 2.4.4.1,
2.4.4.2, and 2.4.4.3 above, [the] Transmission
Provider shall notify [the] Interconnection
Customer, at the same time it notifies [the]
Interconnection Customer with the
supplemental review results, that the
Interconnection Request shall be evaluated
under the section 3 Study Process unless
[the] Interconnection Customer withdraws its
Small Generating Facility.
Section 3. Study Process
3.1 Applicability
The Study Process shall be used by an
Interconnection Customer proposing to
interconnect its Small Generating Facility
with [the] Transmission Provider’s
Transmission System or Distribution System
if the Small Generating Facility (1) is larger
than 2 MW but no larger than 20 MW, (2) is
not certified, or (3) is certified but did not
pass the Fast Track Process or the 10 kW
Inverter Process.
3.2 Scoping Meeting
3.2.1 A scoping meeting will be held
within ten (10) Business Days after the
Interconnection Request is deemed complete,
or as otherwise mutually agreed to by the
Parties. [The] Transmission Provider and
[the] Interconnection Customer will bring to
the meeting personnel, including system
engineers and other resources as may be
reasonably required to accomplish the
purpose of the meeting.
3.2.2 The purpose of the scoping meeting
is to discuss the Interconnection Request and
review existing studies relevant to the
Interconnection Request. The Parties shall
further discuss whether [the] Transmission
Provider should perform a feasibility study or
proceed directly to a system impact study, or
a facilities study, or an interconnection
agreement. If the Parties agree that a
feasibility study should be performed, [the]
Transmission Provider shall provide [the]
Interconnection Customer, as soon as
possible, but not later than five (5) Business
Days after the scoping meeting, a feasibility
study agreement (Attachment 6) including an
outline of the scope of the study and a nonbinding good faith estimate of the cost to
perform the study.
3.2.3 The scoping meeting may be
omitted by mutual agreement. In order to
remain in consideration for interconnection,
an Interconnection Customer who has
requested a feasibility study must return the
executed feasibility study agreement within
fifteen (15) Business Days. If the Parties agree
not to perform a feasibility study, [the]
Transmission Provider shall provide [the]
Interconnection Customer, no later than five
(5) Business Days after the scoping meeting,
a system impact study agreement
(Attachment 7) including an outline of the
scope of the study and a non-binding good
faith estimate of the cost to perform the
study.
3.3 Feasibility Study
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3.3.1 The feasibility study shall identify
any potential adverse system impacts that
would result from the interconnection of the
Small Generating Facility.
3.3.2 A deposit of the lesser of 50 percent
of the good faith estimated feasibility study
costs or earnest money of $1,000 may be
required from [the] Interconnection
Customer.
3.3.3 The scope of and cost
responsibilities for the feasibility study are
described in the attached feasibility study
agreement (Attachment 6).
3.3.4 If the feasibility study shows no
potential for adverse system impacts, [the]
Transmission Provider shall send [the]
Interconnection Customer a facilities study
agreement, including an outline of the scope
of the study and a non-binding good faith
estimate of the cost to perform the study. If
no additional facilities are required, [the]
Transmission Provider shall send [the]
Interconnection Customer an executable
interconnection agreement within five (5)
Business Days.
3.3.5 If the feasibility study shows the
potential for adverse system impacts, the
review process shall proceed to the
appropriate system impact study(s).
3.3.6 The feasibility study shall evaluate
static synchronous compensators, static VAR
compensators, advanced power flow control
devices, transmission switching,
synchronous condensers, voltage source
converters, advanced conductors, and tower
lifting. Transmission Provider shall evaluate
each identified alternative transmission
technology and determine whether it should
be used, consistent with Good Utility
Practice, Applicable Reliability Standards,
and Applicable Laws and Regulations [other
applicable regulatory requirements].
Transmission Provider shall include an
explanation of the results of Transmission
Provider’s evaluation for each technology in
the feasibility study report.
3.4 System Impact Study
3.4.1 A system impact study shall
identify and detail the electric system
impacts that would result if the proposed
Small Generating Facility were
interconnected without project modifications
or electric system modifications, focusing on
the adverse system impacts identified in the
feasibility study, or to study potential
impacts, including but not limited to those
identified in the scoping meeting. A system
impact study shall evaluate the impact of the
proposed interconnection on the reliability of
the electric system.
3.4.2 If no transmission system impact
study is required, but potential electric
power Distribution System adverse system
impacts are identified in the scoping meeting
or shown in the feasibility study, a
distribution system impact study must be
performed. [The] Transmission Provider shall
send [the] Interconnection Customer a
distribution system impact study agreement
within fifteen (15) Business Days of
transmittal of the feasibility study report,
including an outline of the scope of the study
and a non-binding good faith estimate of the
cost to perform the study, or following the
scoping meeting if no feasibility study is to
be performed.
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3.4.3 In instances where the feasibility
study or the distribution system impact study
shows potential for transmission system
adverse system impacts, within five (5)
Business Days following transmittal of the
feasibility study report, [the] Transmission
Provider shall send [the] Interconnection
Customer a transmission system impact
study agreement, including an outline of the
scope of the study and a non-binding good
faith estimate of the cost to perform the
study, if such a study is required.
3.4.4 If a transmission system impact
study is not required, but electric power
Distribution System adverse system impacts
are shown by the feasibility study to be
possible and no distribution system impact
study has been conducted, Transmission
Provider shall send Interconnection
Customer a distribution system impact study
agreement.
3.4.5 If the feasibility study shows no
potential for transmission system or
Distribution System adverse system impacts,
[the] Transmission Provider shall send [the]
Interconnection Customer either a facilities
study agreement (Attachment 8), including
an outline of the scope of the study and a
non-binding good faith estimate of the cost to
perform the study, or an executable
interconnection agreement, as applicable.
3.4.6 In order to remain under
consideration for interconnection, [the]
Interconnection Customer must return
executed system impact study agreements, if
applicable, within thirty (30) Business Days.
3.4.7 A deposit of the good faith
estimated costs for each system impact study
may be required from [the] Interconnection
Customer.
3.4.8 The scope of and cost
responsibilities for a system impact study are
described in the attached system impact
study agreement.
3.4.9 Where transmission systems and
Distribution Systems have separate owners,
such as is the case with transmissiondependent utilities (‘‘TDUs’’)—whether
investor-owned or not—[the] Interconnection
Customer may apply to the nearest
Transmission Provider (Transmission Owner,
Regional Transmission Operator, or
Independent Transmission Provider)
providing transmission service to the TDU to
request project coordination. Affected
Systems shall participate in the study and
provide all information necessary to prepare
the study.
3.4.10 The system impact study shall
evaluate static synchronous compensators,
static VAR compensators, advanced power
flow control devices, transmission switching,
synchronous condensers, voltage source
converters, advanced conductors, and tower
lifting. Transmission Provider shall evaluate
each identified alternative transmission
technology and determine whether it should
be used, consistent with Good Utility
Practice, Applicable Reliability Standards,
and Applicable Laws and Regulations [other
applicable regulatory requirements].
Transmission Provider shall include an
explanation of the results of Transmission
Provider’s evaluation for each technology in
the system impact study report.
3.5 Facilities Study
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3.5.1 Once the required system impact
study(s) is completed, a system impact study
report shall be prepared and transmitted to
[the] Interconnection Customer along with a
facilities study agreement within five (5)
Business Days, including an outline of the
scope of the study and a non-binding good
faith estimate of the cost to perform the
facilities study. In the case where one or both
impact studies are determined to be
unnecessary, a notice of the fact shall be
transmitted to [the] Interconnection
Customer within the same timeframe.
3.5.2 In order to remain under
consideration for interconnection, or, as
appropriate, in [the] Transmission Provider’s
interconnection queue, [the] Interconnection
Customer must return the executed facilities
study agreement or a request for an extension
of time within thirty (30) Business Days.
3.5.3 The facilities study shall specify
and estimate the cost of the equipment,
engineering, procurement and construction
work (including overheads) needed to
implement the conclusions of the system
impact study(s).
3.5.4 Design for any required
Interconnection Facilities and/or Upgrades
shall be performed under the facilities study
agreement. [The] Transmission Provider may
contract with consultants to perform
activities required under the facilities study
agreement. [The] Interconnection Customer
and [the] Transmission Provider may agree to
allow [the] Interconnection Customer to
separately arrange for the design of some of
the Interconnection Facilities. In such cases,
facilities design will be reviewed and/or
modified prior to acceptance by [the]
Transmission Provider, under the provisions
of the facilities study agreement. If the Parties
agree to separately arrange for design and
construction, and provided security and
confidentiality requirements can be met, [the]
Transmission Provider shall make sufficient
information available to [the] Interconnection
Customer in accordance with confidentiality
and critical infrastructure requirements to
permit [the] Interconnection Customer to
obtain an independent design and cost
estimate for any necessary facilities.
3.5.5 A deposit of the good faith
estimated costs for the facilities study may be
required from [the] Interconnection
Customer.
3.5.6 The scope of and cost
responsibilities for the facilities study are
described in the attached facilities study
agreement.
3.5.7 Upon completion of the facilities
study, and with the agreement of [the]
Interconnection Customer to pay for
Interconnection Facilities and Upgrades
identified in the facilities study, [the]
Transmission Provider shall provide [the]
Interconnection Customer an executable
interconnection agreement within five (5)
Business Days.
Section 4. Provisions That Apply to All
Interconnection Requests
4.1 Reasonable Efforts
[The] Transmission Provider shall make
reasonable efforts to meet all time frames
provided in these procedures unless [the]
Transmission Provider and [the]
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Interconnection Customer agree to a different
schedule. If [the] Transmission Provider
cannot meet a deadline provided herein, it
shall notify [the] Interconnection Customer,
explain the reason for the failure to meet the
deadline, and provide an estimated time by
which it will complete the applicable
interconnection procedure in the process.
4.2 Disputes
4.2.1 The Parties agree to attempt to
resolve all disputes arising out of the
interconnection process according to the
provisions of this article.
4.2.2 In the event of a dispute, either
Party shall provide the other Party with a
written Notice of Dispute. Such Notice shall
describe in detail the nature of the dispute.
4.2.3 If the dispute has not been resolved
within two (2) Business Days after receipt of
the Notice, either Party may contact FERC’s
Dispute Resolution Service (DRS) for
assistance in resolving the dispute.
4.2.4 The DRS will assist the Parties in
either resolving their dispute or in selecting
an appropriate dispute resolution venue (e.g.,
mediation, settlement judge, early neutral
evaluation, or technical expert) to assist the
Parties in resolving their dispute. DRS can be
reached at 1–877–337–2237 or via the
internet at https://www.ferc.gov/legal/adr.asp.
4.2.5 Each Party agrees to conduct all
negotiations in good faith and will be
responsible for one-half of any costs paid to
neutral third-parties.
4.2.6 If neither Party elects to seek
assistance from the DRS, or if the attempted
dispute resolution fails, then either Party
may exercise whatever rights and remedies it
may have in equity or law consistent with the
terms of these procedures.
4.3 Interconnection Metering
Any metering necessitated by the use of the
Small Generating Facility shall be installed at
[the] Interconnection Customer’s expense in
accordance with Federal Energy Regulatory
Commission, state, or local regulatory
requirements or [the] Transmission
Provider’s specifications.
4.4 Commissioning
Commissioning tests of [the]
Interconnection Customer’s installed
equipment shall be performed pursuant to
applicable codes and standards. [The]
Transmission Provider must be given at least
five (5) Business Days written notice, or as
otherwise mutually agreed to by the Parties,
of the tests and may be present to witness the
commissioning tests.
4.5. Confidentiality
4.5.1 Confidential information shall mean
any confidential and/or proprietary
information provided by one Party to the
other Party that is clearly marked or
otherwise designated ‘‘Confidential.’’ For
purposes of these procedures all design,
operating specifications, and metering data
provided by [the] Interconnection Customer
shall be deemed confidential information
regardless of whether it is clearly marked or
otherwise designated as such.
4.5.2 Confidential Information does not
include information previously in the public
domain, required to be publicly submitted or
divulged by Governmental Authorities (after
notice to the other Party and after exhausting
any opportunity to oppose such publication
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or release), or necessary to be divulged in an
action to enforce these procedures. Each
Party receiving Confidential Information
shall hold such information in confidence
and shall not disclose it to any third party
nor to the public without the prior written
authorization from the Party providing that
information, except to fulfill obligations
under these procedures, or to fulfill legal or
regulatory requirements.
4.5.2.1 Each Party shall employ at least
the same standard of care to protect
Confidential Information obtained from the
other Party as it employs to protect its own
Confidential Information.
4.5.2.2 Each Party is entitled to equitable
relief, by injunction or otherwise, to enforce
its rights under this provision to prevent the
release of Confidential Information without
bond or proof of damages, and may seek
other remedies available at law or in equity
for breach of this provision.
4.5.3 Notwithstanding anything in this
article to the contrary, and pursuant to 18
CFR 1b.20, if FERC, during the course of an
investigation or otherwise, requests
information from one of the Parties that is
otherwise required to be maintained in
confidence pursuant to these procedures, the
Party shall provide the requested information
to FERC, within the time provided for in the
request for information. In providing the
information to FERC, the Party may,
consistent with 18 CFR 388.112, request that
the information be treated as confidential and
non-public by FERC and that the information
be withheld from public disclosure. Parties
are prohibited from notifying the other Party
prior to the release of the Confidential
Information to FERC. The Party shall notify
the other Party when it is notified by FERC
that a request to release Confidential
Information has been received by FERC, at
which time either of the Parties may respond
before such information would be made
public, pursuant to 18 CFR 388.112. Requests
from a state regulatory body conducting a
confidential investigation shall be treated in
a similar manner if consistent with the
applicable state rules and regulations.
4.6 Comparability
[The] Transmission Provider shall receive,
process and analyze all Interconnection
Requests in a timely manner as set forth in
this document. [The] Transmission Provider
shall use the same reasonable efforts in
processing and analyzing Interconnection
Requests from all Interconnection Customers,
whether the Small Generating Facility is
owned or operated by [the] Transmission
Provider, its subsidiaries or affiliates, or
others.
4.7 Record Retention
[The] Transmission Provider shall
maintain for three years records, subject to
audit, of all Interconnection Requests
received under these procedures, the times
required to complete Interconnection Request
approvals and disapprovals, and justification
for the actions taken on the Interconnection
Requests.
4.8 Interconnection Agreement
After receiving an interconnection
agreement from [the] Transmission Provider,
[the] Interconnection Customer shall have
thirty (30) Business Days or another mutually
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agreeable timeframe to sign and return the
interconnection agreement or request that
[the] Transmission Provider file an
unexecuted interconnection agreement with
the Federal Energy Regulatory Commission.
If [the] Interconnection Customer does not
sign the interconnection agreement, or ask
that it be filed unexecuted by [the]
Transmission Provider within thirty (30)
Business Days, the Interconnection Request
shall be deemed withdrawn. After the
interconnection agreement is signed by the
Parties, the interconnection of the Small
Generating Facility shall proceed under the
provisions of the interconnection agreement.
4.9 Coordination with Affected Systems
[The] Transmission Provider shall
coordinate the conduct of any studies
required to determine the impact of the
Interconnection Request on Affected Systems
with Affected System operators and, if
possible, include those results (if available)
in its applicable interconnection study
within the time frame specified in these
procedures. [The] Transmission Provider will
include such Affected System operators in all
meetings held with [the] Interconnection
Customer as required by these procedures.
[The] Interconnection Customer will
cooperate with [the] Transmission Provider
in all matters related to the conduct of
studies and the determination of
modifications to Affected Systems. A
Transmission Provider which may be an
Affected System shall cooperate with [the]
Transmission Provider with whom
interconnection has been requested in all
matters related to the conduct of studies and
the determination of modifications to
Affected Systems.
4.10 Capacity of the Small Generating
Facility
4.10.1 If the Interconnection Request is
for an increase in capacity for an existing
Small Generating Facility, the
Interconnection Request shall be evaluated
on the basis of the new total capacity of the
Small Generating Facility.
4.10.2 If the Interconnection Request is
for a Small Generating Facility that includes
multiple energy production devices at a site
for which [the] Interconnection Customer
seeks a single Point of Interconnection, the
Interconnection Request shall be evaluated
on the basis of the aggregate capacity of the
multiple devices.
4.10.3 The Interconnection Request shall
be evaluated using the maximum capacity
that the Small Generating Facility is capable
of injecting into [the] Transmission
Provider’s electric system. However, if the
maximum capacity that the Small Generating
Facility is capable of injecting into [the]
Transmission Provider’s electric system is
limited (e.g., through use of a control system,
power relay(s), or other similar device
settings or adjustments), then [the]
Interconnection Customer must obtain [the]
Transmission Provider’s agreement, with
such agreement not to be unreasonably
withheld, that the manner in which [the]
Interconnection Customer proposes to
implement such a limit will not adversely
affect the safety and reliability of [the]
Transmission Provider’s system. If [the]
Transmission Provider does not so agree,
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27207
then the Interconnection Request must be
withdrawn or revised to specify the
maximum capacity that the Small Generating
Facility is capable of injecting into [the]
Transmission Provider’s electric system
without such limitations. Furthermore,
nothing in this section shall prevent a
Transmission Provider from considering an
output higher than the limited output, if
appropriate, when evaluating system
protection impacts.
Attachment 1
Glossary of Terms
10 kW Inverter Process—The procedure for
evaluating an Interconnection Request for a
certified inverter-based Small Generating
Facility no larger than 10 kW that uses the
section 2 screens. The application process
uses an all-in-one document that includes a
simplified Interconnection Request,
simplified procedures, and a brief set of
terms and conditions. See SGIP Attachment
5.
Affected System—An electric system other
than [the] Transmission Provider’s
Transmission System that may be affected by
the proposed interconnection.
Applicable Reliability Standards—The
requirements and guidelines of the Electric
Reliability Organization and the Balancing
Authority Area of the Transmission System
to which the Generating Facility is directly
interconnected.
Applicable Laws and Regulations—All
duly promulgated applicable federal, state
and local laws, regulations, rules, ordinances,
codes, decrees, judgments, directives, or
judicial or administrative orders, permits and
other duly authorized actions of any
Governmental Authority.
Business Day—Monday through Friday,
excluding Federal Holidays.
Distribution System—[The] Transmission
Provider’s facilities and equipment used to
transmit electricity to ultimate usage points
such as homes and industries directly from
nearby generators or from interchanges with
higher voltage transmission networks which
transport bulk power over longer distances.
The voltage levels at which Distribution
Systems operate differ among areas.
Distribution Upgrades—The additions,
modifications, and upgrades to [the]
Transmission Provider’s Distribution System
at or beyond the Point of Interconnection to
facilitate interconnection of the Small
Generating Facility and render the
transmission service necessary to effect [the]
Interconnection Customer’s wholesale sale of
electricity in interstate commerce.
Distribution Upgrades do not include
Interconnection Facilities.
Fast Track Process—The procedure for
evaluating an Interconnection Request for a
certified Small Generating Facility that meets
the eligibility requirements of section 2.1 and
includes the section 2 screens, customer
options meeting, and optional supplemental
review.
Good Utility Practice—Any of the
practices, methods and acts engaged in or
approved by a significant portion of the
electric industry during the relevant time
period, or any of the practices, methods and
act which, in the exercise of reasonable
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judgment in light of the facts known at the
time the decision was made, could have been
expected to accomplish the desired result at
a reasonable cost consistent with good
business practices, reliability, safety and
expedition. Good Utility Practice is not
intended to be limited to the optimum
practice, method, or act to the exclusion of
all others, but rather to be acceptable
practices, methods, or acts generally accepted
in the region.
Interconnection Customer—Any entity,
including [the] Transmission Provider, the
Transmission Owner or any of the affiliates
or subsidiaries of either, that proposes to
interconnect its Small Generating Facility
with [the] Transmission Provider’s
Transmission System.
Interconnection Facilities—[The]
Transmission Provider’s Interconnection
Facilities and [the] Interconnection
Customer’s Interconnection Facilities.
Collectively, Interconnection Facilities
include all facilities and equipment between
the Small Generating Facility and the Point
of Interconnection, including any
modification, additions or upgrades that are
necessary to physically and electrically
interconnect the Small Generating Facility to
[the] Transmission Provider’s Transmission
System. Interconnection Facilities are sole
use facilities and shall not include
Distribution Upgrades or Network Upgrades.
Interconnection Request—[The]
Interconnection Customer’s request, in
accordance with the Tariff, to interconnect a
new Small Generating Facility, or to increase
the capacity of, or make a Material
Modification to the operating characteristics
of, an existing Small Generating Facility that
is interconnected with [the] Transmission
Provider’s Transmission System.
Material Modification—A modification
that has a material impact on the cost or
timing of any Interconnection Request with
a later queue priority date.
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Network Resource—Any designated
generating resource owned, purchased, or
leased by a Network Customer under the
Network Integration Transmission Service
Tariff. Network Resources do not include any
resource, or any portion thereof, that is
committed for sale to third parties or
otherwise cannot be called upon to meet the
Network Customer’s Network Load on a noninterruptible basis.
Network Resource Interconnection
Service—An Interconnection Service that
allows [the] Interconnection Customer to
integrate its Generating Facility with [the]
Transmission Provider’s System (1) in a
manner comparable to that in which [the]
Transmission Provider integrates its
generating facilities to serve native load
customers; or (2) in an RTO or ISO with
market based congestion management, in the
same manner as Network Resources. Network
Resource Interconnection Service in and of
itself does not convey transmission service.
Network Upgrades—Additions,
modifications, and upgrades to [the]
Transmission Provider’s Transmission
System required at or beyond the point at
which the Small Generating Facility
interconnects with [the] Transmission
Provider’s Transmission System to
accommodate the interconnection with the
Small Generating Facility to [the]
Transmission Provider’s Transmission
System. Network Upgrades do not include
Distribution Upgrades.
Party or Parties—[The] Transmission
Provider, Transmission Owner,
Interconnection Customer or any
combination of the above.
Point of Interconnection—The point where
the Interconnection Facilities connect with
[the] Transmission Provider’s Transmission
System.
Queue Position—The order of a valid
Interconnection Request, relative to all other
pending valid Interconnection Requests, that
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is established based upon the date and time
of receipt of the valid Interconnection
Request by [the] Transmission Provider.
Small Generating Facility—[The]
Interconnection Customer’s device for the
production and/or storage for later injection
of electricity identified in the
Interconnection Request, but shall not
include [the] Interconnection Customer’s
Interconnection Facilities.
Study Process—The procedure for
evaluating an Interconnection Request that
includes the section 3 scoping meeting,
feasibility study, system impact study, and
facilities study.
Transmission Owner—The entity that
owns, leases or otherwise possesses an
interest in the portion of the Transmission
System at the Point of Interconnection and
may be a Party to the Small Generator
Interconnection Agreement to the extent
necessary.
Transmission Provider—The public utility
(or its designated agent) that owns, controls,
or operates transmission or distribution
facilities used for the transmission of
electricity in interstate commerce and
provides transmission service under the
Tariff. The term Transmission Provider
should be read to include the Transmission
Owner when the Transmission Owner is
separate from [the] Transmission Provider.
Transmission System—The facilities
owned, controlled or operated by [the]
Transmission Provider or the Transmission
Owner that are used to provide transmission
service under the Tariff.
Upgrades—The required additions and
modifications to [the] Transmission
Provider’s Transmission System at or beyond
the Point of Interconnection. Upgrades may
be Network Upgrades or Distribution
Upgrades. Upgrades do not include
Interconnection Facilities.
BILLING CODE 6717–01–P
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27209
Attachment 2
SMALL GENERATOR INTERCONNECTION REQUEST
(Application Form)
Transmission Provider:
Designated Contact Person:
Address: - - - - - - - - - - - - - - - - - - - - - - - - - - - - Telephone Number: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Fax: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - E-Mail Address: - - - - - - - - - - - - - - - - - - - - - - - - - An Interconnection Request is considered complete when it provides all applicable and
correct information required below. Per SGIP section 1.5, documentation of site control
must be submitted with the Interconnection Request.
Preamble and Instructions
An Interconnection Customer who requests a Federal Energy Regulatory Commission
jurisdictional interconnection must submit this Interconnection Request by hand delivery,
mail, e-mail, or fax to [the] Transmission Provider.
Processing Fee or Deposit:
If the Interconnection Request is submitted under the Fast Track Process, the nonrefundable processing fee is $500.
If the Interconnection Request is submitted under the Study Process, whether a new
submission or an Interconnection Request that did not pass the Fast Track Process, [the]
Interconnection Customer shall submit to [the] Transmission Provider a deposit not to
exceed $1,000 towards the cost of the feasibility study.
Interconnection Customer Information
Name:
Contact Person:
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--------------------------
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Legal Name of [the] Interconnection Customer (or, ifan individual, individual's name)
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Mailing Address:
City: - - - - - - - - - - - - - State:- - - - - - -
Zip:- - - - -
Facility Location (if different from above):
Telephone (Day): _ _ _ _ _ _ _ _ Telephone (Evening): _ _ _ _ _ __
Fax:
E-Mail Address: - - - - - - - - - - - - -
Alternative Contact Information (if different from [the] Interconnection Customer)
Contact Name:
Title: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Address:
Telephone (Day): _ _ _ _ _ __
Telephone (Evening): _ _ _ _ _ _ __
Fax: - - - - - - - - - - E-Mail Address: - - - - - - - - - - Application is for:
___New Small Generating Facility
___Capacity addition to Existing Small Generating Facility
If capacity addition to existing facility, please describe: _ _ _ _ _ _ _ _ _ _ __
Will the Small Generating Facility be used for any of the following?
Net Metering? Yes_ No_
To Supply Power to [the] Interconnection Customer? Yes _No_
To Supply Power to Others? Yes __ No __
(Local Electric Service Provider*)
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For installations at locations with existing electric service to which the proposed Small
Generating Facility will interconnect, provide:
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27211
{*To be provided by [the] Interconnection Customer if the local electric service provider
is different from [the] Transmission Provider}
Contact Name:
Title:
Address:
Telephone (Day): _ _ _ _ _ _ _ _ _ _ Telephone (Evening):
Fax: - - - - - - - - - - - E-Mail Address:
Requested Point of Interconnection:
Interconnection Customer's Requested In-Service Date:
Small Generating Facility Information
Data apply only to the Small Generating Facility, not the Interconnection Facilities.
Energy Source: _Solar _Wind _Hydro _ Hydro Type (e.g. Run-ofRiver):____ Diesel Natural Gas
Fuel Oil Other (state type)
Microturbine
PV
Type of Generator: __Synchronous
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Gas Turb
Other
Induction
Generator Nameplate Rating: ____kW (Typical)
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Steam Turb
Inverter
Generator Nameplate kVAR:
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Prime Mover: _Fuel Cell _Recip Engine
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Interconnection Customer or Customer-Site Load: ________kW (if none, so
state)
Typical Reactive Load (if known): _ _ _ _ _ _ __
Maximum Physical Export Capability Requested: _ _ _ _ _ _ kW
List components of the Small Generating Facility equipment package that are currently
certified:
Equipment Type
Certifying Entity
1.
2.
3.
4.
5.
Is the prime mover compatible with the certified protective relay package? __Yes
No
Generator (or solar collector) Manufacturer, Model Name & Number:
Version Number: - - - - - - - Nameplate Output Power Rating in kW: (Summer) _ _ _ _ __
(Winter)
Nameplate Output Power Rating in kVA: (Summer) _ _ _ _ _ _ (Winter)
Individual Generator Power Factor
Rated Power Factor: Leading: _ _ _ _ _ _Lagging: _______
Total Number of Generators in wind farm to be interconnected pursuant to this
Three
Inverter Manufacturer, Model Name & Number (if
used): ______________
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Interconnection Request: _____ Elevation:__ _Single phase
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27213
List of adjustable set points for the protective equipment or software:
Note: A completed Power Systems Load Flow data sheet must be supplied with the
Interconnection Request.
Small Generating Facility Characteristic Data (for inverter-based machines)
Max design fault contribution current: _ __
Instantaneous or RMS
?
Harmonics Characteristics:
Start-up requirements:
Small Generating Facility Characteristic Data (for rotating machines)
RPM Frequency: - - - - - (*) Neutral Grounding Resistor (If Applicable): _ _ _ __
Synchronous Generators:
Direct Axis Synchronous Reactance, Xa: _ _ _ P.U.
Direct Axis Transient Reactance, X' a:
P.U.
Direct Axis Subtransient Reactance, X"a: - - - - - - -P.U.
Negative Sequence Reactance, X2: _ _ _ _ P.U.
Zero Sequence Reactance, Xo: - - - - - - P.U.
KVABase: - - - - - - Field Volts: - - - - - - Field Amperes: _ _ _ __
Induction Generators:
I22t or K (Heating Time Constant): _ _ _ _ __
Rotor Resistance, Rr: - - - - - - -
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Motoring Power (kW): _ _ _ _ __
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Stator Resistance, Rs:
Stator Reactance, Xs: - - - - - - Rotor Reactance, Xr:
-------
Magnetizing Reactance, Xm: _ _ _ _ _ __
Short Circuit Reactance, Xd": - - - - - - Exciting Current: _ _ _ _ _ __
Temperature Rise: _ _ _ _ _ __
Frame Size:
Design Letter: _ _ _ _ _ __
Reactive Power Required In Vars (No Load): - - - - - - Reactive Power Required In Vars (Full Load): _ _ _ _ __
Per Unit on kVA Base
Total Rotating Inertia, H: _ _ _ _ __
Note: Please contact [the] Transmission Provider prior to submitting the Interconnection
Request to determine if the specified information above is required.
BILLING CODE 6717–01–C
Excitation and Governor System Data for
Synchronous Generators Only
Provide appropriate IEEE model block
diagram of excitation system, governor
system and power system stabilizer (PSS) in
accordance with the regional reliability
council criteria. A PSS may be determined to
be required by applicable studies. A copy of
the manufacturer’s block diagram may not be
substituted.
Models for Non-Synchronous Small
Generating Facilities
For a non-synchronous Small Generating
Facility, Interconnection Customer shall
provide (1) a validated user-defined root
mean squared (RMS) positive sequence
dynamics model; (2) an appropriately
parameterized generic library RMS positive
sequence dynamics model, including model
block diagram of the inverter control and
plant control systems, as defined by the
selection in Table 1 or a model otherwise
approved by the Western Electricity
Coordinating Council, that corresponds to
Interconnection Customer’s Small Generating
Facility; and (3) if applicable, a validated
electromagnetic transient model if
Transmission Provider performs an
electromagnetic transient study as part of the
interconnection study process. A userdefined model is a set of programming code
created by equipment manufacturers or
developers that captures the latest features of
controllers that are mainly software based
and represents the entities’ control strategies
but does not necessarily correspond to any
generic library model. Interconnection
Customer must also demonstrate that the
model is validated by providing evidence
that the equipment behavior is consistent
with the model behavior (e.g., an attestation
from Interconnection Customer that the
model accurately represents the entire Small
Generating Facility; attestations from each
equipment manufacturer that the user
defined model accurately represents the
component of the Small Generating Facility;
or test data).
GE PSLF
Siemens PSS/E*
PowerWorld
simulator
Description
pvd1 ..................
der_a ................
regc_a ...............
regc_b ...............
wt1g ..................
............................................................................
DERAU1 ............................................................
REGCAU1, REGCA1 ........................................
REGCBU1 .........................................................
WT1G1 ..............................................................
PVD1 ........................................
DER_A ......................................
REGC_A ...................................
REGC_B ...................................
WT1G and WT1G1 ..................
wt2g ..................
wt2e ..................
WT2G1 ..............................................................
WT2E1 ...............................................................
WT2G and WT2G1 ..................
WT2E and WT2E1 ...................
reec_a ...............
reec_c ...............
reec_d ...............
wt1t ...................
REECAU1, REECA1 .........................................
REECCU1 ..........................................................
REECDU1 ..........................................................
WT12T1 .............................................................
REEC_A ...................................
REEC_C ...................................
REEC_D ...................................
WT1T and WT12T1 .................
wt1p_b ..............
wt1p_b ...............................................................
WT12A1U_B .............................
Distributed PV system model.
Distributed energy resource model.
Generator/converter model.
Generator/converter model.
Wind turbine model for Type-1 wind turbines (conventional directly connected induction generator).
Generator model for generic Type-2 wind turbines.
Rotor resistance control model for wound-rotor induction windturbine generator wt2g.
Renewable energy electrical control model.
Electrical control model for battery energy storage system.
Renewable energy electrical control model.
Wind turbine model for Type-1 wind turbines (conventional directly connected induction generator).
Generic wind turbine pitch controller for WTGs of Types 1 and
2.
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TABLE 1—ACCEPTABLE GENERIC LIBRARY RMS POSITIVE SEQUENCE DYNAMICS MODELS
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27215
TABLE 1—ACCEPTABLE GENERIC LIBRARY RMS POSITIVE SEQUENCE DYNAMICS MODELS—Continued
GE PSLF
Siemens PSS/E*
PowerWorld
simulator
Description
wt2t ...................
WT12T1 .............................................................
WT2T ........................................
wtgt_a ...............
wtga_a ..............
wtgp_a ..............
wtgq_a ..............
wtgwgo_a .........
wtgibffr_a ..........
wtgp_b ..............
wtgt_b ...............
repc_a ...............
WTGT_A ...................................
WTGA_A ..................................
WTGPT_A ................................
WTGTRQ_A .............................
WTGWGO_A ............................
WTGIBFFR_A ..........................
WTGPT_B ................................
WTGT_B ...................................
REPC_A ...................................
repc_b ...............
WTDTAU1, WTDTA1 ........................................
WTARAU1, WTARA1 ........................................
WTPTAU1, WTPTA1 .........................................
WTTQAU1, WTTQA1 ........................................
WTGWGOAU ....................................................
WTGIBFFRA ......................................................
WTPTBU1 ..........................................................
WTDTBU1 .........................................................
Type 4: REPCAU1 (v33), REPCA1 (v34) Type
3: REPCTAU1 (v33), REPCTA1 (v34).
PLNTBU1 ...........................................................
Wind turbine model for Type-2 wind turbines (directly connected induction generator wind turbines with an external
rotor resistance).
Wind turbine drive train model.
Simple aerodynamic model.
Wind Turbine Generator Pitch controller.
Wind Turbine Generator Torque controller.
Supplementary control model for Weak Grids.
Inertial-base fast frequency response control.
Wind Turbine Generator Pitch controller.
Drive train model.
Power Plant Controller.
repc_c ...............
REPCCU ............................................................
REPC_C ...................................
REPC_B ...................................
Power Plant Level Controller for controlling several plants/devices In regard to Siemens PSS/E*: Names of other models
for interface with other devices: REA3XBU1, REAX4BU1—
for interface with Type 3 and 4 renewable machines
SWSAXBU1—for interface with SVC (modeled as switched
shunt in powerflow) SYNAXBU1—for interface with synchronous condenser FCTAXBU1—for interface with FACTS
device.
Power plant controller.
khammond on DSKJM1Z7X2PROD with RULES2
BILLING CODE 6717–01–P
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27216
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Interconnection Facilities Information
Will a transformer be used between the generator and the point of common coupling?
Yes
No
Will the transformer be provided by [the] Interconnection Customer? __Yes __No
Transformer Data (If Applicable, for Interconnection Customer-Owned Transformer):
Is the transformer: __single phase _ _three phase?
kVA
Size:
Transformer Impedance: _ _ _% on _____kVA Base
If Three Phase:
Transformer Primary:
_ _ Volts _ _ Delta _ _Wye _ _ Wye Grounded
Transformer Secondary: _ _ Volts _ _ Delta _ _Wye
Wye Grounded
Transformer Tertiary:
Wye Grounded
_ _ Volts _ _ Delta _ _Wye
Transformer Fuse Data (If Applicable, for Interconnection Customer-Owned Fuse):
(Attach copy of fuse manufacturer's Minimum Melt and Total Clearing Time-Current
Curves)
Manufacturer: _ _ _ _ _ _ _ _ Type: _______ Size: ___ Speed:
Interconnecting Circuit Breaker (if applicable):
Manufacturer: _____________ Type: _ _ _ __
Load Rating (Amps): ___ Interrupting Rating (Amps): _ _ _ Trip Speed (Cycles):
If Microprocessor-Controlled:
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Interconnection Protective Relays (If Applicable):
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27217
List of Functions and Adjustable Setpoints for the protective equipment or software:
Setpoint Function
Minimum
Maximum
1.
2.
3.
4.
5.
6.
If Discrete Components:
(Enclose Copy of any Proposed Time-Overcurrent Coordination Curves)
Manufacturer:
Type: __
Manufacturer:
Type: __
Manufacturer:
Type: __
Manufacturer:
Type: __
Manufacturer:
Type: __
Sty le/Catalog
No.:
Sty le/Catalog
No.:
Sty le/Catalog
No.:
Sty le/Catalog
No.:
Sty le/Catalog
No.:
Proposed
Setting:
Proposed
Setting:
Proposed
Setting:
Proposed
Setting:
Proposed
Setting:
(Enclose Copy of Manufacturer's Excitation and Ratio Correction Curves)
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Current Transformer Data (If Applicable):
27218
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Manufacturer:
Type: - - - - - - - - - Accuracy Class: - - Proposed Ratio Connection:
Manufacturer:
Type: _ _ _ _ _ _ _ _ _ Accuracy Class: _ _ Proposed Ratio Connection:
Potential Transformer Data (If Applicable):
Manufacturer:
Type: _ _ _ _ _ _ _ _ _ Accuracy Class: _ _ Proposed Ratio Connection:
Manufacturer:
Type: _ _ _ _ _ _ _ _ _ Accuracy Class: _ _ Proposed Ratio Connection:
General Information
Enclose copy of site electrical one-line diagram showing the configuration of all Small
Generating Facility equipment, current and potential circuits, and protection and control
schemes. This one-line diagram must be signed and stamped by a licensed Professional
Engineer if the Small Generating Facility is larger than 50 kW. Is One-Line Diagram
Enclosed?
Yes
No
Enclose copy of any site documentation that indicates the precise physical location of the
proposed Small Generating Facility (e.g., USGS topographic map or other diagram or
documentation).
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Proposed location of protective interface equipment on property (include address if
different from [the] Interconnection Customer's
address)- - - - - - - - - - - - - - - - - - -
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27219
Enclose copy of any site documentation that describes and details the operation of the
protection and control schemes.
Is Available Documentation Enclosed?
Yes
No
Enclose copies of schematic drawings for all protection and control circuits, relay current
circuits, relay potential circuits, and alarm/monitoring circuits (if applicable).
Are Schematic Drawings Enclosed? _Yes __No
Applicant Signature
I hereby certify that, to the best of my knowledge, all the information provided in this
Interconnection Request is true and correct.
khammond on DSKJM1Z7X2PROD with RULES2
BILLING CODE 6717–01–C
-----------------
Attachment 3
NEMA MG 1–2003 (Rev 2004), Motors and
Generators, Revision 1
Certification Codes and Standards
Attachment 4
IEEE1547 Standard for Interconnecting
Distributed Resources with Electric Power
Systems (including use of IEEE 1547.1
testing protocols to establish conformity)
UL 1741 Inverters, Converters, and
Controllers for Use in Independent Power
Systems
IEEE Std 929–2000 IEEE Recommended
Practice for Utility Interface of Photovoltaic
(PV) Systems
NFPA 70 (2002), National Electrical Code
IEEE Std C37.90.1–1989 (R1994), IEEE
Standard Surge Withstand Capability
(SWC) Tests for Protective Relays and
Relay Systems
IEEE Std C37.90.2 (1995), IEEE Standard
Withstand Capability of Relay Systems to
Radiated Electromagnetic Interference from
Transceivers
IEEE Std C37.108–1989 (R2002), IEEE Guide
for the Protection of Network Transformers
IEEE Std C57.12.44–2000, IEEE Standard
Requirements for Secondary Network
Protectors
IEEE Std C62.41.2–2002, IEEE Recommended
Practice on Characterization of Surges in
Low Voltage (1000V and Less) AC Power
Circuits
IEEE Std C62.45–1992 (R2002), IEEE
Recommended Practice on Surge Testing
for Equipment Connected to Low-Voltage
(1000V and Less) AC Power Circuits
ANSI C84.1–1995 Electric Power Systems
and Equipment—Voltage Ratings (60 Hertz)
IEEE Std 100–2000, IEEE Standard Dictionary
of Electrical and Electronic Terms
NEMA MG 1–1998, Motors and Small
Resources, Revision 3
IEEE Std 519–1992, IEEE Recommended
Practices and Requirements for Harmonic
Control in Electrical Power Systems
Certification of Small Generator Equipment
Packages
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1.0 Small Generating Facility equipment
proposed for use separately or packaged with
other equipment in an interconnection
system shall be considered certified for
interconnected operation if (1) it has been
tested in accordance with industry standards
for continuous utility interactive operation in
compliance with the appropriate codes and
standards referenced below by any
Nationally Recognized Testing Laboratory
(NRTL) recognized by the United States
Occupational Safety and Health
Administration to test and certify
interconnection equipment pursuant to the
relevant codes and standards listed in SGIP
Attachment 3, (2) it has been labeled and is
publicly listed by such NRTL at the time of
the interconnection application, and (3) such
NRTL makes readily available for verification
all test standards and procedures it utilized
in performing such equipment certification,
and, with consumer approval, the test data
itself. The NRTL may make such information
available on its website and by encouraging
such information to be included in the
manufacturer’s literature accompanying the
equipment.
2.0 [The] Interconnection Customer must
verify that the intended use of the equipment
falls within the use or uses for which the
equipment was tested, labeled, and listed by
the NRTL.
3.0 Certified equipment shall not require
further type-test review, testing, or additional
equipment to meet the requirements of this
interconnection procedure; however, nothing
herein shall preclude the need for an on-site
commissioning test by the parties to the
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Date:
interconnection nor follow-up production
testing by the NRTL.
4.0 If the certified equipment package
includes only interface components
(switchgear, inverters, or other interface
devices), then an Interconnection Customer
must show that the generator or other electric
source being utilized with the equipment
package is compatible with the equipment
package and is consistent with the testing
and listing specified for this type of
interconnection equipment.
5.0 Provided the generator or electric
source, when combined with the equipment
package, is within the range of capabilities
for which it was tested by the NRTL, and
does not violate the interface components’
labeling and listing performed by the NRTL,
no further design review, testing or
additional equipment on the customer side of
the point of common coupling shall be
required to meet the requirements of this
interconnection procedure.
6.0 An equipment package does not
include equipment provided by the utility.
7.0 Any equipment package approved
and listed in a state by that state’s regulatory
body for interconnected operation in that
state prior to the effective date of these small
generator interconnection procedures shall
be considered certified under these
procedures for use in that state.
Attachment 5
Application, Procedures, and Terms and
Conditions for Interconnecting a Certified
Inverter-Based Small Generating Facility No
Larger Than 10 kW (‘‘10 kW Inverter
Process’’)
1.0 [The] Interconnection Customer
(‘‘Customer’’) completes the Interconnection
Request (‘‘Application’’) and submits it to
[the] Transmission Provider (‘‘Company’’).
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For Interconnection Customer:
27220
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
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2.0 The Company acknowledges to the
Customer receipt of the Application within
three (3) Business Days of receipt.
3.0 The Company evaluates the
Application for completeness and notifies the
Customer within ten (10) Business Days of
receipt that the Application is or is not
complete and, if not, advises what material
is missing.
4.0 The Company verifies that the Small
Generating Facility can be interconnected
safely and reliably using the screens
contained in the Fast Track Process in the
Small Generator Interconnection Procedures
(SGIP). The Company has fifteen (15)
Business Days to complete this process.
Unless the Company determines and
demonstrates that the Small Generating
Facility cannot be interconnected safely and
reliably, the Company approves the
Application and returns it to the Customer.
Note to Customer: Please check with the
Company before submitting the Application
if disconnection equipment is required.
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5.0 After installation, the Customer
returns the Certificate of Completion to the
Company. Prior to parallel operation, the
Company may inspect the Small Generating
Facility for compliance with standards which
may include a witness test, and may
schedule appropriate metering replacement,
if necessary.
6.0 The Company notifies the Customer
in writing that interconnection of the Small
Generating Facility is authorized. If the
witness test is not satisfactory, the Company
has the right to disconnect the Small
Generating Facility. The Customer has no
right to operate in parallel until a witness test
has been performed, or previously waived on
the Application. The Company is obligated to
complete this witness test within ten (10)
Business Days of the receipt of the Certificate
of Completion. If the Company does not
inspect within ten (10) Business Days or by
mutual agreement of the Parties, the witness
test is deemed waived.
7.0 Contact Information—The Customer
must provide the contact information for the
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legal applicant (i.e., [the] Interconnection
Customer). If another entity is responsible for
interfacing with the Company, that contact
information must be provided on the
Application.
8.0 Ownership Information—Enter the
legal names of the owner(s) of the Small
Generating Facility. Include the percentage
ownership (if any) by any utility or public
utility holding company, or by any entity
owned by either.
9.0 UL1741 Listed—This standard
(‘‘Inverters, Converters, and Controllers for
Use in Independent Power Systems’’)
addresses the electrical interconnection
design of various forms of generating
equipment. Many manufacturers submit their
equipment to a Nationally Recognized
Testing Laboratory (NRTL) that verifies
compliance with UL1741. This ‘‘listing’’ is
then marked on the equipment and
supporting documentation.
BILLING CODE 6717–01–P
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27221
Application for Interconnecting a Certified Inverter-Based Small Generating
Facility No Larger than lOkW
This Application is considered complete when it provides all applicable and correct
information required below. Per SGIP section 1.5, documentation of site control must be
submitted with the Interconnection Request. Additional information to evaluate the
Application may be required.
Processing Fee
A non-refundable processing fee of $100 must accompany this Application.
Interconnection Customer
Name:
Contact Person:
Address:
City: _____________ State: _ __
Telephone (Day): _ _ _ _ __
Fax: - - - - - - -
Zip: _ _ __
(Evening):
E-Mail Address: - - - - - - -
Contact (if different from Interconnection Customer)
Name:
Contact Person:
Address:
City: _____________ State: _ __
Telephone (Day): - - - - - - Fax: - - - - - - -
Zip: _ _ __
(Evening):
E-Mail Address: - - - - - - -
_ _ Small Generating Facility Information
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Owner of the facility (include% ownership by any electric utility):
27222
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Location (if different from above):
Electric Service Company:
Account Number:
Inverter Manufacturer: _____________ Model:
_ _ _ _ _ _ _ _ Nameplate Rating: _ _ (kW) _ _(kVA) _ _(AC Volts)
Single Phase __ Three Phase__
System Design Capacity: _ _ _ _ (kW) _ _ _ (kVA)
_Photovoltaic _Reciprocating Engine
Prime Mover:
Fuel Cell
_Other (describe)- - - - - - - - - -
Turbine
Energy Source: _Solar _Wind _Hydro
Diesel
Natural Gas
_Fuel Oil _Other (describe) _ _ _ _ _ _ _ _ __
Is the equipment ULl 741 Listed?
Yes
No
If Yes, attach manufacturer's cut-sheet showing ULl 741 listing
Estimated Installation Date: - - - - - -
Estimated In-Service Date:
The 10 kW Inverter Process is available only for inverter-based Small Generating
Facilities no larger than 10 kW that meet the codes, standards, and certification
requirements of Attachments 3 and 4 of the Small Generator Interconnection Procedures
(SGIP), or [the] Transmission Provider has reviewed the design or tested the proposed
Small Generating Facility and is satisfied that it is safe to operate.
List components of the Small Generating Facility equipment package that are currently
certified:
Certifying Entity
1.
2.
3.
4.
5.
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Equipment Type
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27223
Interconnection Customer Signature
I hereby certify that, to the best of my knowledge, the information provided in this
Application is true. I agree to abide by the Terms and Conditions for Interconnecting an
Inverter-Based Small Generating Facility No Larger than lOkW and return the Certificate
of Completion when the Small Generating Facility has been installed.
Signed:
Title:
Date:
Contingent Approval to Interconnect the Small Generating Facility
(For Company use only)
Interconnection of the Small Generating Facility is approved contingent upon the Terms
and Conditions for Interconnecting an Inverter-Based Small Generating Facility No
Larger than lOkW and return of the Certificate of Completion.
Company Signature:
Title: - - - - - - - - - - - - - - -
Date:
Application ID number: _ _ _ _ _ _ __
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Company waives inspection/witness test? Y es_No_
27224
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
Small Generating Facility Certificate of Completion
Is the Small Generating Facility owner-installed? Yes___ No _ __
Interconnection Customer:
Contact Person:
Address:
Location of the Small Generating Facility (if different from above):
_ _ City: _ _ _ _ _ _ _ _ _ __
Telephone (Day): _ _ _ _ __
Fax: - - - - - - -
State: - - -
Zip:
(Evening):
E-Mail Address: - - - - - - -
Electrician:
Name:
Address:
Location of the Small Generating Facility (if different from above):
_ _ City: _ _ _ _ _ _ _ _ _ __
Telephone (Day): _ _ _ _ __
Fax: - - - - - - -
State: - - -
Zip:
(Evening):
E-Mail Address: - - - - - - -
License number: - - - - - - - - - - - - - - - -
Application ID number: _ _ _ _ _ _ _ _ _ _ _ __
Inspection:
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Date Approval to Install Facility granted by the Company: _ _ _ _ _ _ _ __
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
27225
The Small Generating Facility has been installed and inspected in compliance with the
local
building/electrical code of:
Signed (Local electrical wiring inspector, or attach signed electrical inspection):
Print Name: - - - - - - - - - - - - - Date:
As a condition of interconnection, you are required to send/fax a copy of this form along
with a copy of the signed electrical permit to (insert Company information below):
Name:
Company: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Address:- - - - - - - - - - - - - - - - - - - - -
City, State ZIP: _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Fax: - - - - - - - - - - - - - - - - - - - - - - -
Approval to Energize the Small Generating Facility (For Company use only)
Energizing the Small Generating Facility is approved contingent upon the Terms and
Conditions for Interconnecting an Inverter-Based Small Generating Facility No Larger
than lOkW
Title: - - - - - - - - - - - - - - - - - - - Date: - - - - - - - - -
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Company Signature: _________________________
27226
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khammond on DSKJM1Z7X2PROD with RULES2
BILLING CODE 6717–01–C
Terms and Conditions for Interconnecting an
Inverter-Based Small Generating Facility No
Larger Than 10kW
1.0 Construction of the Facility
[The] Interconnection Customer (the
‘‘Customer’’) may proceed to construct
(including operational testing not to exceed
two hours) the Small Generating Facility
when [the] Transmission Provider (the
‘‘Company’’) approves the Interconnection
Request (the ‘‘Application’’) and returns it to
the Customer.
2.0 Interconnection and Operation
The Customer may operate Small
Generating Facility and interconnect with the
Company’s electric system once all of the
following have occurred:
2.1 Upon completing construction, the
Customer will cause the Small Generating
Facility to be inspected or otherwise certified
by the appropriate local electrical wiring
inspector with jurisdiction, and
2.2 The Customer returns the Certificate
of Completion to the Company, and
2.3 The Company has either:
2.3.1 Completed its inspection of the
Small Generating Facility to ensure that all
equipment has been appropriately installed
and that all electrical connections have been
made in accordance with applicable codes.
All inspections must be conducted by the
Company, at its own expense, within ten (10)
Business Days after receipt of the Certificate
of Completion and shall take place at a time
agreeable to the Parties. The Company shall
provide a written statement that the Small
Generating Facility has passed inspection or
shall notify the Customer of what steps it
must take to pass inspection as soon as
practicable after the inspection takes place;
or
2.3.2 If the Company does not schedule
an inspection of the Small Generating
Facility within ten (10) [b]Business [d]Days
after receiving the Certificate of Completion,
the witness test is deemed waived (unless the
Parties agree otherwise); or
2.3.3 The Company waives the right to
inspect the Small Generating Facility.
2.4 The Company has the right to
disconnect the Small Generating Facility in
the event of improper installation or failure
to return the Certificate of Completion.
2.5 Revenue quality metering equipment
must be installed and tested in accordance
with applicable ANSI standards.
3.0 Safe Operations and Maintenance
The Customer shall be fully responsible to
operate, maintain, and repair the Small
Generating Facility as required to ensure that
it complies at all times with the
interconnection standards to which it has
been certified.
4.0 Access
The Company shall have access to the
disconnect switch (if the disconnect switch
is required) and metering equipment of the
Small Generating Facility at all times. The
Company shall provide reasonable notice to
the Customer when possible prior to using its
right of access.
5.0 Disconnection
The Company may temporarily disconnect
the Small Generating Facility upon the
following conditions:
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5.1 For scheduled outages upon
reasonable notice.
5.2 For unscheduled outages or
emergency conditions.
5.3 If the Small Generating Facility does
not operate in the manner consistent with
these Terms and Conditions.
5.4 The Company shall inform the
Customer in advance of any scheduled
disconnection, or as is reasonable after an
unscheduled disconnection.
6.0 Indemnification
The Parties shall at all times indemnify,
defend, and save the other Party harmless
from, any and all damages, losses, claims,
including claims and actions relating to
injury to or death of any person or damage
to property, demand, suits, recoveries, costs
and expenses, court costs, attorney fees, and
all other obligations by or to third parties,
arising out of or resulting from the other
Party’s action or inactions of its obligations
under this agreement on behalf of the
indemnifying Party, except in cases of gross
negligence or intentional wrongdoing by the
indemnified Party.
7.0 Insurance
The Parties agree to follow all applicable
insurance requirements imposed by the state
in which the Point of Interconnection is
located. All insurance policies must be
maintained with insurers authorized to do
business in that state.
8.0 Limitation of Liability
Each party’s liability to the other party for
any loss, cost, claim, injury, liability, or
expense, including reasonable attorney’s fees,
relating to or arising from any act or omission
in its performance of this Agreement, shall be
limited to the amount of direct damage
actually incurred. In no event shall either
party be liable to the other party for any
indirect, incidental, special, consequential,
or punitive damages of any kind whatsoever,
except as allowed under paragraph 6.0.
9.0 Termination
The agreement to operate in parallel may
be terminated under the following
conditions:
9.1 By the Customer
By providing written notice to the
Company.
9.2 By the Company
If the Small Generating Facility fails to
operate for any consecutive 12 month period
or the Customer fails to remedy a violation
of these Terms and Conditions.
9.3 Permanent Disconnection
In the event this Agreement is terminated,
the Company shall have the right to
disconnect its facilities or direct the
Customer to disconnect its Small Generating
Facility.
9.4 Survival Rights
This Agreement shall continue in effect
after termination to the extent necessary to
allow or require either Party to fulfill rights
or obligations that arose under the
Agreement.
10.0 Assignment/Transfer of Ownership
of the Facility
This Agreement shall survive the transfer
of ownership of the Small Generating Facility
to a new owner when the new owner agrees
in writing to comply with the terms of this
Agreement and so notifies the Company.
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Attachment 6
Feasibility Study Agreement
This Agreement is made and entered into
thisll day of llll 20ll by and
between llll, a llll organized and
existing under the laws of the State of
llll, (‘‘Interconnection Customer,’’) and
llll, a llll organized and existing
under the laws of the State of llll,
(‘‘Transmission Provider’’). Interconnection
Customer and Transmission Provider each
may be referred to as a ‘‘Party,’’ or
collectively as the ‘‘Parties.’’
Recitals
Whereas, Interconnection Customer is
proposing to develop a Small Generating
Facility or generating capacity addition to an
existing Small Generating Facility consistent
with the Interconnection Request completed
by Interconnection Customer on llll;
and
Whereas, Interconnection Customer desires
to interconnect the Small Generating Facility
with [the] Transmission Provider’s
Transmission System; and
Whereas, Interconnection Customer has
requested [the] Transmission Provider to
perform a feasibility study to assess the
feasibility of interconnecting the proposed
Small Generating Facility with [the]
Transmission Provider’s Transmission
System, and of any Affected Systems;
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein the Parties agreed as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated or the
meanings specified in the standard Small
Generator Interconnection Procedures.
2.0 [The] Interconnection Customer elects
and [the] Transmission Provider shall cause
to be performed an interconnection
feasibility study consistent the standard
Small Generator Interconnection Procedures
in accordance with the Open Access
Transmission Tariff.
3.0 The scope of the feasibility study
shall be subject to the assumptions set forth
in Attachment A to this Agreement.
4.0 The feasibility study shall be based on
the technical information provided by [the]
Interconnection Customer in the
Interconnection Request, as may be modified
as the result of the scoping meeting. [The]
Transmission Provider reserves the right to
request additional technical information from
[the] Interconnection Customer as may
reasonably become necessary consistent with
Good Utility Practice during the course of the
feasibility study and as designated in
accordance with the standard Small
Generator Interconnection Procedures. If
[the] Interconnection Customer modifies its
Interconnection Request, the time to
complete the feasibility study may be
extended by agreement of the Parties.
5.0 In performing the study, [the]
Transmission Provider shall rely, to the
extent reasonably practicable, on existing
studies of recent vintage. [The]
Interconnection Customer shall not be
charged for such existing studies; however,
[the] Interconnection Customer shall be
E:\FR\FM\16APR2.SGM
16APR2
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responsible for charges associated with any
new study or modifications to existing
studies that are reasonably necessary to
perform the feasibility study.
6.0 The feasibility study report shall
provide the following analyses for the
purpose of identifying any potential adverse
system impacts that would result from the
interconnection of the Small Generating
Facility as proposed:
6.1 Initial identification of any circuit
breaker short circuit capability limits
exceeded as a result of the interconnection;
6.2 Initial identification of any thermal
overload or voltage limit violations resulting
from the interconnection;
6.3 Initial review of grounding
requirements and electric system protection;
and
6.4 Description and non-binding
estimated cost of facilities required to
interconnect the proposed Small Generating
Facility and to address the identified short
circuit and power flow issues.
7.0 The feasibility study shall model the
impact of the Small Generating Facility
regardless of purpose in order to avoid the
further expense and interruption of operation
for reexamination of feasibility and impacts
if [the] Interconnection Customer later
changes the purpose for which the Small
Generating Facility is being installed.
8.0 The study shall include the feasibility
of any interconnection at a proposed project
site where there could be multiple potential
Points of Interconnection, as requested by
[the] Interconnection Customer and at [the]
Interconnection Customer’s cost.
9.0 A deposit of the lesser of 50 percent
of good faith estimated feasibility study costs
or earnest money of $1,000 may be required
from [the] Interconnection Customer.
10.0 Once the feasibility study is
completed, a feasibility study report shall be
prepared and transmitted to [the]
Interconnection Customer. Barring unusual
circumstances, the feasibility study must be
completed and the feasibility study report
transmitted within thirty (30) Business Days
of [the] Interconnection Customer’s
agreement to conduct a feasibility study.
11.0 Any study fees shall be based on
[the] Transmission Provider’s actual costs
and will be invoiced to [the] Interconnection
Customer after the study is completed and
delivered and will include a summary of
professional time.
12.0 [The] Interconnection Customer
must pay any study costs that exceed the
deposit without interest within thirty (30)
[c]Calendar [d]Days on receipt of the invoice
or resolution of any dispute. If the deposit
exceeds the invoiced fees, [the] Transmission
Provider shall refund such excess within
thirty (30) [c]Calendar [d]Days of the invoice
without interest.
13.0 Governing Law, Regulatory
Authority, and Rules
The validity, interpretation and
enforcement of this Agreement and each of
its provisions shall be governed by the laws
of the state of llll(where the Point of
Interconnection is located), without regard to
its conflicts of law principles. This
Agreement is subject to all Applicable Laws
and Regulations. Each Party expressly
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20:59 Apr 15, 2024
Jkt 262001
reserves the right to seek changes in, appeal,
or otherwise contest any laws, orders, or
regulations of a Governmental Authority.
14.0 Amendment
The Parties may amend this Agreement by
a written instrument duly executed by both
Parties.
15.0 No Third-Party Beneficiaries
This Agreement is not intended to and
does not create rights, remedies, or benefits
of any character whatsoever in favor of any
persons, corporations, associations, or
entities other than the Parties, and the
obligations herein assumed are solely for the
use and benefit of the Parties, their
successors in interest and where permitted,
their assigns.
16.0 Waiver
16.1 The failure of a Party to this
Agreement to insist, on any occasion, upon
strict performance of any provision of this
Agreement will not be considered a waiver
of any obligation, right, or duty of, or
imposed upon, such Party.
16.2 Any waiver at any time by either
Party of its rights with respect to this
Agreement shall not be deemed a continuing
waiver or a waiver with respect to any other
failure to comply with any other obligation,
right, duty of this Agreement. Termination or
default of this Agreement for any reason by
Interconnection Customer shall not
constitute a waiver of [the] Interconnection
Customer’s legal rights to obtain an
interconnection from [the] Transmission
Provider. Any waiver of this Agreement
shall, if requested, be provided in writing.
17.0 Multiple Counterparts
This Agreement may be executed in two or
more counterparts, each of which is deemed
an original but all constitute one and the
same instrument.
18.0 No Partnership
This Agreement shall not be interpreted or
construed to create an association, joint
venture, agency relationship, or partnership
between the Parties or to impose any
partnership obligation or partnership liability
upon either Party. Neither Party shall have
any right, power or authority to enter into
any agreement or undertaking for, or act on
behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the
other Party.
19.0 Severability
If any provision or portion of this
Agreement shall for any reason be held or
adjudged to be invalid or illegal or
unenforceable by any court of competent
jurisdiction or other Governmental
Authority, (1) such portion or provision shall
be deemed separate and independent, (2) the
Parties shall negotiate in good faith to restore
insofar as practicable the benefits to each
Party that were affected by such ruling, and
(3) the remainder of this Agreement shall
remain in full force and effect.
20.0 Subcontractors
Nothing in this Agreement shall prevent a
Party from utilizing the services of any
subcontractor as it deems appropriate to
perform its obligations under this Agreement;
provided, however, that each Party shall
require its subcontractors to comply with all
applicable terms and conditions of this
Agreement in providing such services and
PO 00000
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Fmt 4701
Sfmt 4700
27227
each Party shall remain primarily liable to
the other Party for the performance of such
subcontractor.
20.1 The creation of any subcontract
relationship shall not relieve the hiring Party
of any of its obligations under this
Agreement. The hiring Party shall be fully
responsible to the other Party for the acts or
omissions of any subcontractor the hiring
Party hires as if no subcontract had been
made; provided, however, that in no event
shall [the] Transmission Provider be liable
for the actions or inactions of [the]
Interconnection Customer or its
subcontractors with respect to obligations of
[the] Interconnection Customer under this
Agreement. Any applicable obligation
imposed by this Agreement upon the hiring
Party shall be equally binding upon, and
shall be construed as having application to,
any subcontractor of such Party.
20.2 The obligations under this article
will not be limited in any way by any
limitation of subcontractor’s insurance.
21.0 Reservation of Rights
[The] Transmission Provider shall have the
right to make a unilateral filing with FERC
to modify this Agreement with respect to any
rates, terms and conditions, charges,
classifications of service, rule or regulation
under section 205 or any other applicable
provision of the Federal Power Act and
FERC’s rules and regulations thereunder, and
[the] Interconnection Customer shall have the
right to make a unilateral filing with FERC
to modify this Agreement under any
applicable provision of the Federal Power
Act and FERC’s rules and regulations;
provided that each Party shall have the right
to protest any such filing by the other Party
and to participate fully in any proceeding
before FERC in which such modifications
may be considered. Nothing in this
Agreement shall limit the rights of the Parties
or of FERC under sections 205 or 206 of the
Federal Power Act and FERC’s rules and
regulations, except to the extent that the
Parties otherwise agree as provided herein.
In witness whereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider}
lllllllllllllllllllll
Signed: lllllllllllllllll
Name (Printed): lllllllllllll
lllllllllllllllllllll
Title: llllllllllllllllll
{Insert name of Interconnection Customer}
lllllllllllllllllllll
Signed: lllllllllllllllll
Name (Printed): lllllllllllll
lllllllllllllllllllll
Title: llllllllllllllllll
Attachment A to
Feasibility Study Agreement
Assumptions Used in Conducting the
Feasibility Study
The feasibility study will be based upon
the information set forth in the
Interconnection Request and agreed upon in
the scoping meeting held on llll:
(1) Designation of Point of Interconnection
and configuration to be studied.
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
(2) Designation of alternative Points of
Interconnection and configuration.
(1) and (2) are to be completed by the
Interconnection Customer. Other
assumptions (listed below) are to be provided
by [the] Interconnection Customer and [the]
Transmission Provider.
Attachment 7
khammond on DSKJM1Z7X2PROD with RULES2
System Impact Study Agreement
This agreement is made and entered into
this ll day ofllll 20ll by and
betweenllllll, allll organized
and existing under the laws of the State of
llll, (‘‘Interconnection Customer,’’) and
llll, a llll organized and existing
under the laws of the State of llll,
(‘‘Transmission Provider’’). Interconnection
Customer and Transmission Provider each
may be referred to as a ‘‘Party,’’ or
collectively as the ‘‘Parties.’’
Recitals
Whereas, [the] Interconnection Customer is
proposing to develop a Small Generating
Facility or generating capacity addition to an
existing Small Generating Facility consistent
with the Interconnection Request completed
by [the] Interconnection Customer on
llll; and
Whereas, [the] Interconnection Customer
desires to interconnect the Small Generating
Facility with [the] Transmission Provider’s
Transmission System;
Whereas, [the] Transmission Provider has
completed a feasibility study and provided
the results of said study to [the]
Interconnection Customer (This recital to be
omitted if the Parties have agreed to forego
the feasibility study.); and
Whereas, [the] Interconnection Customer
has requested [the] Transmission Provider to
perform a system impact study(s) to assess
the impact of interconnecting the Small
Generating Facility with [the] Transmission
Provider’s Transmission System, and of any
Affected Systems;
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein the Parties agreed as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated or the
meanings specified in the standard Small
Generator Interconnection Procedures.
2.0 [The] Interconnection Customer elects
and [the] Transmission Provider shall cause
to be performed a system impact study(s)
consistent with the standard Small Generator
Interconnection Procedures in accordance
with the Open Access Transmission Tariff.
3.0 The scope of a system impact study
shall be subject to the assumptions set forth
in Attachment A to this Agreement.
4.0 A system impact study will be based
upon the results of the feasibility study and
the technical information provided by
Interconnection Customer in the
Interconnection Request. [The] Transmission
Provider reserves the right to request
additional technical information from [the]
Interconnection Customer as may reasonably
become necessary consistent with Good
Utility Practice during the course of the
system impact study. If [the] Interconnection
Customer modifies its designated Point of
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20:59 Apr 15, 2024
Jkt 262001
Interconnection, Interconnection Request, or
the technical information provided therein is
modified, the time to complete the system
impact study may be extended.
5.0 A system impact study shall consist
of a short circuit analysis, a stability analysis,
a power flow analysis, voltage drop and
flicker studies, protection and set point
coordination studies, and grounding reviews,
as necessary. A system impact study shall
state the assumptions upon which it is based,
state the results of the analyses, and provide
the requirement or potential impediments to
providing the requested interconnection
service, including a preliminary indication of
the cost and length of time that would be
necessary to correct any problems identified
in those analyses and implement the
interconnection. A system impact study shall
provide a list of facilities that are required as
a result of the Interconnection Request and
non-binding good faith estimates of cost
responsibility and time to construct.
6.0 A distribution system impact study
shall incorporate a distribution load flow
study, an analysis of equipment interrupting
ratings, protection coordination study,
voltage drop and flicker studies, protection
and set point coordination studies, grounding
reviews, and the impact on electric system
operation, as necessary.
7.0 Affected Systems may participate in
the preparation of a system impact study,
with a division of costs among such entities
as they may agree. All Affected Systems shall
be afforded an opportunity to review and
comment upon a system impact study that
covers potential adverse system impacts on
their electric systems, and [the] Transmission
Provider has twenty (20) additional Business
Days to complete a system impact study
requiring review by Affected Systems.
8.0 If [the] Transmission Provider uses a
queuing procedure for sorting or prioritizing
projects and their associated cost
responsibilities for any required Network
Upgrades, the system impact study shall
consider all generating facilities (and with
respect to paragraph 8.3 below, any
identified Upgrades associated with such
higher queued interconnection) that, on the
date the system impact study is
commenced—
8.1 Are directly interconnected with [the]
Transmission Provider’s electric system; or
8.2 Are interconnected with Affected
Systems and may have an impact on the
proposed interconnection; and
8.3 Have a pending higher queued
Interconnection Request to interconnect with
[the] Transmission Provider’s electric system.
9.0 A distribution system impact study, if
required, shall be completed and the results
transmitted to [the] Interconnection
Customer within thirty (30) Business Days
after this Agreement is signed by the Parties.
A transmission system impact study, if
required, shall be completed and the results
transmitted to [the] Interconnection
Customer within forty-five (45) Business Days
after this Agreement is signed by the Parties,
or in accordance with [the] Transmission
Provider’s queuing procedures.
10.0 A deposit of the equivalent of the
good faith estimated cost of a distribution
system impact study and the one half the
PO 00000
Frm 00224
Fmt 4701
Sfmt 4700
good faith estimated cost of a transmission
system impact study may be required from
[the] Interconnection Customer.
11.0 Any study fees shall be based on
[the] Transmission Provider’s actual costs
and will be invoiced to [the] Interconnection
Customer after the study is completed and
delivered and will include a summary of
professional time.
12.0 [The] Interconnection Customer
must pay any study costs that exceed the
deposit without interest within thirty (30)
[c]Calendar [d]Days on receipt of the invoice
or resolution of any dispute. If the deposit
exceeds the invoiced fees, [the] Transmission
Provider shall refund such excess within
thirty (30) [c]Calendar [d]Days of the invoice
without interest.
13.0 Governing Law, Regulatory
Authority, and Rules
The validity, interpretation and
enforcement of this Agreement and each of
its provisions shall be governed by the laws
of the state of llll (where the Point of
Interconnection is located), without regard to
its conflicts of law principles. This
Agreement is subject to all Applicable Laws
and Regulations. Each Party expressly
reserves the right to seek changes in, appeal,
or otherwise contest any laws, orders, or
regulations of a Governmental Authority.
14.0 Amendment
The Parties may amend this Agreement by
a written instrument duly executed by both
Parties.
15.0 No Third-Party Beneficiaries
This Agreement is not intended to and
does not create rights, remedies, or benefits
of any character whatsoever in favor of any
persons, corporations, associations, or
entities other than the Parties, and the
obligations herein assumed are solely for the
use and benefit of the Parties, their
successors in interest and where permitted,
their assigns.
16.0 Waiver
16.1 The failure of a Party to this
Agreement to insist, on any occasion, upon
strict performance of any provision of this
Agreement will not be considered a waiver
of any obligation, right, or duty of, or
imposed upon, such Party.
16.2 Any waiver at any time by either
Party of its rights with respect to this
Agreement shall not be deemed a continuing
waiver or a waiver with respect to any other
failure to comply with any other obligation,
right, duty of this Agreement. Termination or
default of this Agreement for any reason by
Interconnection Customer shall not
constitute a waiver of [the] Interconnection
Customer’s legal rights to obtain an
interconnection from [the] Transmission
Provider. Any waiver of this Agreement
shall, if requested, be provided in writing.
17.0 Multiple Counterparts
This Agreement may be executed in two or
more counterparts, each of which is deemed
an original but all constitute one and the
same instrument.
18.0 No Partnership
This Agreement shall not be interpreted or
construed to create an association, joint
venture, agency relationship, or partnership
between the Parties or to impose any
partnership obligation or partnership liability
E:\FR\FM\16APR2.SGM
16APR2
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
upon either Party. Neither Party shall have
any right, power or authority to enter into
any agreement or undertaking for, or act on
behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the
other Party.
19.0 Severability
If any provision or portion of this
Agreement shall for any reason be held or
adjudged to be invalid or illegal or
unenforceable by any court of competent
jurisdiction or other Governmental
Authority, (1) such portion or provision shall
be deemed separate and independent, (2) the
Parties shall negotiate in good faith to restore
insofar as practicable the benefits to each
Party that were affected by such ruling, and
(3) the remainder of this Agreement shall
remain in full force and effect.
20.0 Subcontractors
Nothing in this Agreement shall prevent a
Party from utilizing the services of any
subcontractor as it deems appropriate to
perform its obligations under this Agreement;
provided, however, that each Party shall
require its subcontractors to comply with all
applicable terms and conditions of this
Agreement in providing such services and
each Party shall remain primarily liable to
the other Party for the performance of such
subcontractor.
20.1 The creation of any subcontract
relationship shall not relieve the hiring Party
of any of its obligations under this
Agreement. The hiring Party shall be fully
responsible to the other Party for the acts or
omissions of any subcontractor the hiring
Party hires as if no subcontract had been
made; provided, however, that in no event
shall [the] Transmission Provider be liable
for the actions or inactions of [the]
Interconnection Customer or its
subcontractors with respect to obligations of
[the] Interconnection Customer under this
Agreement. Any applicable obligation
imposed by this Agreement upon the hiring
Party shall be equally binding upon, and
shall be construed as having application to,
any subcontractor of such Party.
20.2 The obligations under this article
will not be limited in any way by any
limitation of subcontractor’s insurance.
21.0 Reservation of Rights
[The] Transmission Provider shall have the
right to make a unilateral filing with FERC
to modify this Agreement with respect to any
rates, terms and conditions, charges,
classifications of service, rule or regulation
under section 205 or any other applicable
provision of the Federal Power Act and
FERC’s rules and regulations thereunder, and
[the] Interconnection Customer shall have the
right to make a unilateral filing with FERC
to modify this Agreement under any
applicable provision of the Federal Power
Act and FERC’s rules and regulations;
provided that each Party shall have the right
to protest any such filing by the other Party
and to participate fully in any proceeding
before FERC in which such modifications
may be considered. Nothing in this
Agreement shall limit the rights of the Parties
or of FERC under sections 205 or 206 of the
Federal Power Act and FERC’s rules and
regulations, except to the extent that the
Parties otherwise agree as provided herein.
VerDate Sep<11>2014
20:59 Apr 15, 2024
Jkt 262001
In witness thereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider}
lllllllllllllllllllll
Signed: lllllllllllllllll
Name (Printed): lllllllllllll
lllllllllllllllllllll
Title: llllllllllllllllll
{Insert name of Interconnection Customer}
lllllllllllllllllllll
Signed: lllllllllllllllll
Name (Printed): lllllllllllll
lllllllllllllllllllll
Title: llllllllllllllllll
Attachment A to System
Impact Study Agreement Assumptions Used
in Conducting the System Impact Study
The system impact study shall be based
upon the results of the feasibility study,
subject to any modifications in accordance
with the standard Small Generator
Interconnection Procedures, and the
following assumptions:
(1) Designation of Point of Interconnection
and configuration to be studied.
(2) Designation of alternative Points of
Interconnection and configuration.
(1) and (2) are to be completed by [the]
Interconnection Customer. Other
assumptions (listed below) are to be provided
by [the] Interconnection Customer and [the]
Transmission Provider.
Attachment 8
Facilities Study Agreement
This agreement is made and entered into
this ll day of llll 20ll by and
between llll, a llll organized and
existing under the laws of the State of
llll, (‘‘Interconnection Customer,’’) and
llll, a llll organized and existing
under the laws of the State of llll,
(‘‘Transmission Provider’’). Interconnection
Customer and Transmission Provider each
may be referred to as a ‘‘Party,’’ or
collectively as the ‘‘Parties.’’
Recitals
Whereas, [the] Interconnection Customer is
proposing to develop a Small Generating
Facility or generating capacity addition to an
existing Small Generating Facility consistent
with the Interconnection Request completed
by [the] Interconnection Customer on
llll; and
Whereas, [the] Interconnection Customer
desires to interconnect the Small Generating
Facility with [the] Transmission Provider’s
Transmission System;
Whereas, [the] Transmission Provider has
completed a system impact study and
provided the results of said study to [the]
Interconnection Customer; and
Whereas, [the] Interconnection Customer
has requested [the] Transmission Provider to
perform a facilities study to specify and
estimate the cost of the equipment,
engineering, procurement and construction
work needed to implement the conclusions
of the system impact study in accordance
with Good Utility Practice to physically and
electrically connect the Small Generating
PO 00000
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Fmt 4701
Sfmt 4700
27229
Facility with [the] Transmission Provider’s
Transmission System.
Now, therefore, in consideration of and
subject to the mutual covenants contained
herein the Parties agreed as follows:
1.0 When used in this Agreement, with
initial capitalization, the terms specified
shall have the meanings indicated or the
meanings specified in the standard Small
Generator Interconnection Procedures.
2.0 [The] Interconnection Customer elects
and [the] Transmission Provider shall cause
a facilities study consistent with the standard
Small Generator Interconnection Procedures
to be performed in accordance with the Open
Access Transmission Tariff.
3.0 The scope of the facilities study shall
be subject to data provided in Attachment A
to this Agreement.
4.0 The facilities study shall specify and
estimate the cost of the equipment,
engineering, procurement and construction
work (including overheads) needed to
implement the conclusions of the system
impact study(s). The facilities study shall
also identify (1) the electrical switching
configuration of the equipment, including,
without limitation, transformer, switchgear,
meters, and other station equipment, (2) the
nature and estimated cost of [the]
Transmission Provider’s Interconnection
Facilities and Upgrades necessary to
accomplish the interconnection, and (3) an
estimate of the time required to complete the
construction and installation of such
facilities.
5.0 [The] Transmission Provider may
propose to group facilities required for more
than one Interconnection Customer in order
to minimize facilities costs through
economies of scale, but any Interconnection
Customer may require the installation of
facilities required for its own Small
Generating Facility if it is willing to pay the
costs of those facilities.
6.0 A deposit of the good faith estimated
facilities study costs may be required from
[the] Interconnection Customer.
7.0 In cases where Upgrades are required,
the facilities study must be completed within
forty-five (45) Business Days of the receipt of
this Agreement. In cases where no Upgrades
are necessary, and the required facilities are
limited to Interconnection Facilities, the
facilities study must be completed within
thirty (30) Business Days.
8.0 Once the facilities study is completed,
a ‘‘draft’’ facilities study report shall be
prepared and transmitted to [the]
Interconnection Customer. Barring unusual
circumstances, the facilities study must be
completed and the ‘‘draft’’ facilities study
report transmitted within thirty (30) Business
Days of [the] Interconnection Customer’s
agreement to conduct a facilities study.
9.0 Interconnection Customer may,
within thirty (30) Calendar Days after receipt
of the draft report, provide written comments
to Transmission Provider, which
Transmission Provider shall include in the
final report. Transmission Provider shall
issue the final Interconnection Facilities
Study report within fifteen (15) Business
Days of receiving Interconnection Customer’s
comments or promptly upon receiving
Interconnection Customer’s statement that it
E:\FR\FM\16APR2.SGM
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khammond on DSKJM1Z7X2PROD with RULES2
will not provide comments. Transmission
Provider may reasonably extend such fifteenday period upon notice to Interconnection
Customer if Interconnection Customer’s
comments require Transmission Provider to
perform additional analyses or make other
significant modifications prior to the
issuance of the final Interconnection
Facilities Report. Upon request,
Transmission Provider shall provide
Interconnection Customer supporting
documentation, workpapers, and databases
or data developed in the preparation of the
Interconnection Facilities Study, subject to
confidentiality arrangements consistent with
Section 4.5 of the standard Small Generator
Interconnection Procedures.
10.0 Within ten (10) Business Days of
providing a draft Interconnection Facilities
Study report to Interconnection Customer,
Transmission Provider and Interconnection
Customer shall meet to discuss the results of
the Interconnection Facilities Study.
11.0 Any study fees shall be based on
[the] Transmission Provider’s actual costs
and will be invoiced to [the] Interconnection
Customer after the study is completed and
delivered and will include a summary of
professional time.
12.0 [The] Interconnection Customer
must pay any study costs that exceed the
deposit without interest within thirty (30)
[c]Calendar [d]Days on receipt of the invoice
or resolution of any dispute. If the deposit
exceeds the invoiced fees, [the] Transmission
Provider shall refund such excess within
thirty (30) [c]Calendar [d]Days of the invoice
without interest.
13.0 Governing Law, Regulatory
Authority, and Rules
The validity, interpretation and
enforcement of this Agreement and each of
its provisions shall be governed by the laws
of the state of llll (where the Point of
Interconnection is located), without regard to
its conflicts of law principles. This
Agreement is subject to all Applicable Laws
and Regulations. Each Party expressly
reserves the right to seek changes in, appeal,
or otherwise contest any laws, orders, or
regulations of a Governmental Authority.
14.0 Amendment
The Parties may amend this Agreement by
a written instrument duly executed by both
Parties.
15.0 No Third-Party Beneficiaries
This Agreement is not intended to and
does not create rights, remedies, or benefits
of any character whatsoever in favor of any
persons, corporations, associations, or
entities other than the Parties, and the
obligations herein assumed are solely for the
use and benefit of the Parties, their
VerDate Sep<11>2014
20:59 Apr 15, 2024
Jkt 262001
successors in interest and where permitted,
their assigns.
16.0 Waiver
16.1 The failure of a Party to this
Agreement to insist, on any occasion, upon
strict performance of any provision of this
Agreement will not be considered a waiver
of any obligation, right, or duty of, or
imposed upon, such Party.
16.2 Any waiver at any time by either
Party of its rights with respect to this
Agreement shall not be deemed a continuing
waiver or a waiver with respect to any other
failure to comply with any other obligation,
right, duty of this Agreement. Termination or
default of this Agreement for any reason by
Interconnection Customer shall not
constitute a waiver of [the] Interconnection
Customer’s legal rights to obtain an
interconnection from [the] Transmission
Provider. Any waiver of this Agreement
shall, if requested, be provided in writing.
17.0 Multiple Counterparts
This Agreement may be executed in two or
more counterparts, each of which is deemed
an original but all constitute one and the
same instrument.
18.0 No Partnership
This Agreement shall not be interpreted or
construed to create an association, joint
venture, agency relationship, or partnership
between the Parties or to impose any
partnership obligation or partnership liability
upon either Party. Neither Party shall have
any right, power or authority to enter into
any agreement or undertaking for, or act on
behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the
other Party.
19.0 Severability
If any provision or portion of this
Agreement shall for any reason be held or
adjudged to be invalid or illegal or
unenforceable by any court of competent
jurisdiction or other Governmental
Authority, (1) such portion or provision shall
be deemed separate and independent, (2) the
Parties shall negotiate in good faith to restore
insofar as practicable the benefits to each
Party that were affected by such ruling, and
(3) the remainder of this Agreement shall
remain in full force and effect.
20.0 Subcontractors
Nothing in this Agreement shall prevent a
Party from utilizing the services of any
subcontractor as it deems appropriate to
perform its obligations under this Agreement;
provided, however, that each Party shall
require its subcontractors to comply with all
applicable terms and conditions of this
Agreement in providing such services and
each Party shall remain primarily liable to
the other Party for the performance of such
subcontractor.
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20.1 The creation of any subcontract
relationship shall not relieve the hiring Party
of any of its obligations under this
Agreement. The hiring Party shall be fully
responsible to the other Party for the acts or
omissions of any subcontractor the hiring
Party hires as if no subcontract had been
made; provided, however, that in no event
shall [the] Transmission Provider be liable
for the actions or inactions of [the]
Interconnection Customer or its
subcontractors with respect to obligations of
[the] Interconnection Customer under this
Agreement. Any applicable obligation
imposed by this Agreement upon the hiring
Party shall be equally binding upon, and
shall be construed as having application to,
any subcontractor of such Party.
20.2 The obligations under this article
will not be limited in any way by any
limitation of subcontractor’s insurance.
21.0 Reservation of Rights
[The] Transmission Provider shall have the
right to make a unilateral filing with FERC
to modify this Agreement with respect to any
rates, terms and conditions, charges,
classifications of service, rule or regulation
under section 205 or any other applicable
provision of the Federal Power Act and
FERC’s rules and regulations thereunder, and
[the] Interconnection Customer shall have the
right to make a unilateral filing with FERC
to modify this Agreement under any
applicable provision of the Federal Power
Act and FERC’s rules and regulations;
provided that each Party shall have the right
to protest any such filing by the other Party
and to participate fully in any proceeding
before FERC in which such modifications
may be considered. Nothing in this
Agreement shall limit the rights of the Parties
or of FERC under sections 205 or 206 of the
Federal Power Act and FERC’s rules and
regulations, except to the extent that the
Parties otherwise agree as provided herein.
In witness whereof, the Parties have caused
this Agreement to be duly executed by their
duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider}
lllllllllllllllllllll
Signed lllllllllllllllll
Name (Printed): lllllllllllll
lllllllllllllllllllll
Title llllllllllllllllll
{Insert name of Interconnection Customer}
lllllllllllllllllllll
Signed lllllllllllllllll
Name (Printed): lllllllllllll
lllllllllllllllllllll
Title llllllllllllllllll
BILLING CODE 6717–01–P
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27231
Attachment A to
Facilities Study Agreement
Data to Be Provided by [the] Interconnection Customer
with the Facilities Study Agreement
Provide location plan and simplified one-line diagram of the plant and station facilities.
For staged projects, please indicate future generation, transmission circuits, etc.
On the one-line diagram, indicate the generation capacity attached at each
metering location. (Maximum load on CT/PT)
On the one-line diagram, indicate the location of auxiliary power. (Minimum load
on CT/PT) Amps
One set of metering is required for each generation connection to the new ring bus or
existing Transmission Provider station. Number of generation connections:
Will an alternate source of auxiliary power be available during CT/PT maintenance?
Yes
No
Will a transfer bus on the generation side of the metering require that each meter set be
designed for the total plant generation? Yes__
No
(Please indicate on the one-line diagram).
What type of control system or PLC will be located at the Small Generating Facility?
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What protocol does the control system or PLC use?
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Please provide a 7.5-minute quadrangle map of the site. Indicate the plant, station,
transmission line, and property lines.
Physical dimensions of the proposed interconnection station:
___Bus length from generation to interconnection station:
Line length from interconnection station to Transmission Provider's Transmission
System.
---
___Tower number observed in the field. (Painted on tower leg)*:
___Number of third party easements required for transmission lines*:
*Tobe completed in coordination with Transmission Provider.
Is the Small Generating Facility located in Transmission Provider's service area?
Yes
If No, please provide name oflocal provider:
No
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Begin Construction
Date: _ _ _ _ _ _ _ _ _ _ _ __
Generator step-up transformers
receive back feed power
Date: _ _ _ _ _ _ _ _ _ _ _ __
Generation Testing
Date: - - - - - - - - - - - - -
Commercial Operation
Date: - - - - - - - - - - - - -
20:59 Apr 15, 2024
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Please provide the following proposed schedule dates:
Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
BILLING CODE 6717–01–C
Appendix F: Changes to Pro Forma
SGIA
Small Generator Interconnection Agreement
(SGIA)
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(For Generating Facilities No Larger Than 20
MW)
Table of Contents
Article 1. Scope and Limitations of
Agreement
1.5 Responsibilities of the Parties
1.6 Parallel Operation Obligations
1.7 Metering
1.8 Reactive Power and Primary
Frequency Response
1.8.1 Power Factor Design Criteria
1.8.4 Primary Frequency Response
Article 2. Inspection, Testing, Authorization,
and Right of Access
2.1 Equipment Testing and Inspection
2.2 Authorization Required Prior to
Parallel Operation
2.3 Right of Access
Article 3. Effective Date, Term, Termination,
and Disconnection
3.1 Effective Date
3.2 Term of Agreement
3.3 Termination
3.4 Temporary Disconnection
3.4.1 Emergency Conditions
3.4.2 Routine Maintenance, Construction,
and Repair
3.4.3 Forced Outages
3.4.4 Adverse Operating Effects
3.4.5 Modification of the Small
Generating Facility
3.4.6 Reconnection
Article 4. Cost Responsibility for
Interconnection Facilities and
Distribution Upgrades
4.1 Interconnection Facilities
4.2 Distribution Upgrades
Article 5. Cost Responsibility for Network
Upgrades
5.1 Applicability
5.2 Network Upgrades
5.2.1 Repayment of Amounts Advanced
for Network Upgrades
5.3 Special Provisions for Affected
Systems
5.4 Rights Under Other Agreements
Article 6. Billing, Payment, Milestones, and
Financial Security
6.1 Billing and Payment Procedures and
Final Accounting
6.2 Milestones
6.3 Financial Security Arrangements
Article 7. Assignment, Liability, Indemnity,
Force Majeure, Consequential Damages,
and Default
7.1 Assignment
7.2 Limitation of Liability
7.3 Indemnity
7.4 Consequential Damages
7.5 Force Majeure
7.6 Default
Article 8. Insurance
Article 9. Confidentiality
Article 10. Disputes
Article 11. Taxes
Article 12. Miscellaneous
12.1 Governing Law, Regulatory
Authority, and Rules
12.2 Amendment
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12.3 No Third-Party Beneficiaries
12.4 Waiver
12.5 Entire Agreement
12.6 Multiple Counterparts
12.7 No Partnership
12.8 Severability
12.9 Security Arrangements
12.10 Environmental Releases
12.11 Subcontractors
12.12 Reservation of Rights
Article 13. Notices
13.1 General
13.2 Billing and Payment
13.3 Alternative Forms of Notice
13.4 Designated Operating Representative
13.5 Changes to the Notice Information
Article 14. Signatures
Attachment 1—Glossary of Terms
Attachment 2—Description and Costs of the
Small Generating Facility,
Interconnection Facilities, and Metering
Equipment
Attachment 3—One-line Diagram Depicting
the Small Generating Facility,
Interconnection Facilities, Metering
Equipment, and Upgrades
Attachment 4—Milestones
Attachment 5—Additional Operating
Requirements for [the] Transmission
Provider’s Transmission System and
Affected Systems Needed to Support
[the] Interconnection Customer’s Needs
Attachment 6—Transmission Provider’s
Description of its Upgrades and Best
Estimate of Upgrade Costs
This Interconnection Agreement
(‘‘Agreement’’) is made and entered into this
ll day of llll, 20ll, by llll
(‘‘Transmission Provider’’), and llll
(‘‘Interconnection Customer’’) each
hereinafter sometimes referred to
individually as ‘‘Party’’ or both referred to
collectively as the ‘‘Parties.’’
Transmission Provider Information
Transmission Provider: llllllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Phone: lllllllllllllllll
Fax: llllllllllllllllll
Interconnection Customer Information
Interconnection Customer: llllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Phone: lllllllllllllllll
Fax: llllllllllllllllll
Interconnection Customer Application No:
llll
In consideration of the mutual covenants
set forth herein, the Parties agree as follows:
Article 1. Scope and Limitations of
Agreement
1.1 Applicability
This Agreement shall be used for all
Interconnection Requests submitted under
the Small Generator Interconnection
Procedures (SGIP) except for those submitted
under the 10 kW Inverter Process contained
in SGIP Attachment 5.
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1.2 Purpose
This Agreement governs the terms and
conditions under which [the] Interconnection
Customer’s Small Generating Facility will
interconnect with, and operate in parallel
with, [the] Transmission Provider’s
Transmission System.
1.3 No Agreement to Purchase or Deliver
Power
This Agreement does not constitute an
agreement to purchase or deliver [the]
Interconnection Customer’s power. The
purchase or delivery of power and other
services that [the] Interconnection Customer
may require will be covered under separate
agreements, if any. [The] Interconnection
Customer will be responsible for separately
making all necessary arrangements
(including scheduling) for delivery of
electricity with the applicable Transmission
Provider.
1.4 Limitations
Nothing in this Agreement is intended to
affect any other agreement between [the]
Transmission Provider and [the]
Interconnection Customer.
1.5 Responsibilities of the Parties
1.5.1 The Parties shall perform all
obligations of this Agreement in accordance
with all Applicable Laws and Regulations,
Operating Requirements, and Good Utility
Practice.
1.5.2 [The] Interconnection Customer
shall construct, interconnect, operate and
maintain its Small Generating Facility and
construct, operate, and maintain its
Interconnection Facilities in accordance with
the applicable manufacturer’s recommended
maintenance schedule, and in accordance
with this Agreement, and with Good Utility
Practice.
1.5.3 [The] Transmission Provider shall
construct, operate, and maintain its
Transmission System and Interconnection
Facilities in accordance with this Agreement,
and with Good Utility Practice.
1.5.4 [The] Interconnection Customer
agrees to construct its facilities or systems in
accordance with applicable specifications
that meet or exceed those provided by the
National Electrical Safety Code, the
American National Standards Institute, IEEE,
Underwriter’s Laboratory, and Operating
Requirements in effect at the time of
construction and other applicable national
and state codes and standards. [The]
Interconnection Customer agrees to design,
install, maintain, and operate its Small
Generating Facility so as to reasonably
minimize the likelihood of a disturbance
adversely affecting or impairing the system or
equipment of [the] Transmission Provider
and any Affected Systems.
1.5.5 Each Party shall operate, maintain,
repair, and inspect, and shall be fully
responsible for the facilities that it now or
subsequently may own unless otherwise
specified in the Attachments to this
Agreement. Each Party shall be responsible
for the safe installation, maintenance, repair
and condition of their respective lines and
appurtenances on their respective sides of
the point of change of ownership. [The]
Transmission Provider and [the]
Interconnection Customer, as appropriate,
shall provide Interconnection Facilities that
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adequately protect [the] Transmission
Provider’s Transmission System, personnel,
and other persons from damage and injury.
The allocation of responsibility for the
design, installation, operation, maintenance
and ownership of Interconnection Facilities
shall be delineated in the Attachments to this
Agreement.
1.5.6 [The] Transmission Provider shall
coordinate with all Affected Systems to
support the interconnection.
1.5.7 [The] Interconnection Customer
shall ensure ‘‘frequency ride through’’
capability and ‘‘voltage ride through’’
capability of its Small Generating Facility.
[The] Interconnection Customer shall enable
these capabilities such that its Small
Generating Facility shall not disconnect
automatically or instantaneously from the
system or equipment of [the] Transmission
Provider and any Affected Systems for a
defined under-frequency or over-frequency
condition, or an under-voltage or overvoltage condition, as tested pursuant to
Section 2.1 of this agreement. The defined
conditions shall be in accordance with Good
Utility Practice and consistent with any
standards and guidelines that are applied to
other generating facilities in the Balancing
Authority Area on a comparable basis. The
Small Generating Facility’s protective
equipment settings shall comply with [the]
Transmission Provider’s automatic load-shed
program. [The] Transmission Provider shall
review the protective equipment settings to
confirm compliance with the automatic loadshed program. The term ‘‘ride through’’ as
used herein shall mean the ability of a Small
Generating Facility to stay connected to and
synchronized with the system or equipment
of [the] Transmission Provider and any
Affected Systems during system disturbances
within a range of conditions, in accordance
with Good Utility Practice and consistent
with any standards and guidelines that are
applied to other generating facilities in the
Balancing Authority Area on a comparable
basis. The term ‘‘frequency ride through’’ as
used herein shall mean the ability of a Small
Generating Facility to stay connected to and
synchronized with the system or equipment
of [the] Transmission Provider and any
Affected Systems during system disturbances
within a range of under-frequency and overfrequency conditions, in accordance with
Good Utility Practice and consistent with any
standards and guidelines that are applied to
other generating facilities in the Balancing
Authority Area on a comparable basis. The
term ‘‘voltage ride through’’ as used herein
shall mean the ability of a Small Generating
Facility to stay connected to and
synchronized with the system or equipment
of [the] Transmission Provider and any
Affected Systems during system disturbances
within a range of under-voltage and overvoltage conditions, in accordance with Good
Utility Practice and consistent with any
standards and guidelines that are applied to
other generating facilities in the Balancing
Authority Area on a comparable basis. For
abnormal frequency conditions and voltage
conditions within the ‘‘no trip zone’’ defined
by Reliability Standard PRC–024–3 or
successor mandatory ride through Applicable
Reliability Standards, the non-synchronous
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Small Generating Facility must ensure that,
within any physical limitations of the Small
Generating Facility, its control and protection
settings are configured or set to (1) continue
active power production during disturbance
and post disturbance periods at predisturbance levels unless reactive power
priority mode is enabled or unless providing
primary frequency response or fast frequency
response; (2) minimize reductions in active
power and remain within dynamic voltage
and current limits, if reactive power priority
mode is enabled, unless providing primary
frequency response or fast frequency
response; (3) not artificially limit dynamic
reactive power capability during
disturbances; and (4) return to predisturbance active power levels without
artificial ramp rate limits if active power is
reduced, unless providing primary frequency
response or fast frequency response.
1.6 Parallel Operation Obligations
Once the Small Generating Facility has
been authorized to commence parallel
operation, [the] Interconnection Customer
shall abide by all rules and procedures
pertaining to the parallel operation of the
Small Generating Facility in the applicable
Balancing Authority Area, including, but not
limited to; (1) the rules and procedures
concerning the operation of generation set
forth in the Tariff or by the applicable system
operator(s) for [the] Transmission Provider’s
Transmission System and; (2) the Operating
Requirements set forth in Attachment 5 of
this Agreement.
1.7 Metering
[The] Interconnection Customer shall be
responsible for [the] Transmission Provider’s
reasonable and necessary cost for the
purchase, installation, operation,
maintenance, testing, repair, and replacement
of metering and data acquisition equipment
specified in Attachments 2 and 3 of this
Agreement. [The] Interconnection Customer’s
metering (and data acquisition, as required)
equipment shall conform to applicable
industry rules and Operating Requirements.
1.8 Reactive Power and Primary
Frequency Response
1.8.1 Power Factor Design Criteria
1.8.1.1 Synchronous Generation. [The]
Interconnection Customer shall design its
Small Generating Facility to maintain a
composite power delivery at continuous
rated power output at the Point of
Interconnection at a power factor within the
range of 0.95 leading to 0.95 lagging, unless
[the] Transmission Provider has established
different requirements that apply to all
similarly situated synchronous generators in
the Balancing Authority Area on a
comparable basis.
1.8.1.2 Non-Synchronous Generation.
[The] Interconnection Customer shall design
its Small Generating Facility to maintain a
composite power delivery at continuous
rated power output at the high-side of the
generator substation at a power factor within
the range of 0.95 leading to 0.95 lagging,
unless [the] Transmission Provider has
established a different power factor range
that applies to all similarly situated nonsynchronous generators in the Balancing
Authority Area on a comparable basis. This
power factor range standard shall be dynamic
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and can be met using, for example, power
electronics designed to supply this level of
reactive capability (taking into account any
limitations due to voltage level, real power
output, etc.) or fixed and switched
capacitors, or a combination of the two. This
requirement shall only apply to newly
interconnecting non-synchronous generators
that have not yet executed a Facilities Study
Agreement as of the effective date of the
Final Rule establishing this requirement
(Order No. 827).
1.8.2 [The] Transmission Provider is
required to pay [the] Interconnection
Customer for reactive power that [the]
Interconnection Customer provides or
absorbs from the Small Generating Facility
when [the] Transmission Provider requests
[the] Interconnection Customer to operate its
Small Generating Facility outside the range
specified in Article 1.8.1. In addition, if [the]
Transmission Provider pays its own or
affiliated generators for reactive power
service within the specified range, it must
also pay [the] Interconnection Customer.
1.8.3 Payments shall be in accordance
with [the] Interconnection Customer’s
applicable rate schedule then in effect unless
the provision of such service(s) is subject to
a regional transmission organization or
independent system operator FERC-approved
rate schedule. To the extent that no rate
schedule is in effect at the time [the]
Interconnection Customer is required to
provide or absorb reactive power under this
Agreement, the Parties agree to expeditiously
file such rate schedule and agree to support
any request for waiver of the Commission’s
prior notice requirement in order to
compensate [the] Interconnection Customer
from the time service commenced.
1.8.4 Primary Frequency Response.
Interconnection Customer shall ensure the
primary frequency response capability of its
Small Generating Facility by installing,
maintaining, and operating a functioning
governor or equivalent controls. The term
‘‘functioning governor or equivalent
controls’’ as used herein shall mean the
required hardware and/or software that
provides frequency responsive real power
control with the ability to sense changes in
system frequency and autonomously adjust
the Small Generating Facility’s real power
output in accordance with the droop and
deadband parameters and in the direction
needed to correct frequency deviations.
Interconnection Customer is required to
install a governor or equivalent controls with
the capability of operating: (1) with a
maximum 5 percent droop and ±0.036 Hz
deadband; or (2) in accordance with the
relevant droop, deadband, and timely and
sustained response settings from an approved
Electric Reliability Organization reliability
standard providing for equivalent or more
stringent parameters. The droop
characteristic shall be: (1) based on the
nameplate capacity of the Small Generating
Facility, and shall be linear in the range of
frequencies between 59 to 61 Hz that are
outside of the deadband parameter; or (2)
based on an approved Electric Reliability
Organization reliability standard providing
for an equivalent or more stringent
parameter. The deadband parameter shall be:
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the range of frequencies above and below
nominal (60 Hz) in which the governor or
equivalent controls is not expected to adjust
the Small Generating Facility’s real power
output in response to frequency deviations.
The deadband shall be implemented: (1)
without a step to the droop curve, that is,
once the frequency deviation exceeds the
deadband parameter, the expected change in
the Small Generating Facility’s real power
output in response to frequency deviations
shall start from zero and then increase (for
under-frequency deviations) or decrease (for
over-frequency deviations) linearly in
proportion to the magnitude of the frequency
deviation; or (2) in accordance with an
approved Electric Reliability Organization
reliability standard providing for an
equivalent or more stringent parameter.
Interconnection Customer shall notify
Transmission Provider that the primary
frequency response capability of the Small
Generating Facility has been tested and
confirmed during commissioning. Once
Interconnection Customer has synchronized
the Small Generating Facility with the
Transmission System, Interconnection
Customer shall operate the Small Generating
Facility consistent with the provisions
specified in Sections 1.8.4.1 and 1.8.4.2 of
this Agreement. The primary frequency
response requirements contained herein shall
apply to both synchronous and nonsynchronous Small Generating Facilities.
1.8.4.1 Governor or Equivalent Controls.
Whenever the Small Generating Facility is
operated in parallel with the Transmission
System, Interconnection Customer shall
operate the Small Generating Facility with its
governor or equivalent controls in service
and responsive to frequency. Interconnection
Customer shall: (1) in coordination with
Transmission Provider and/or the relevant
Balancing Authority, set the deadband
parameter to: (1) a maximum of ±0.036 Hz
and set the droop parameter to a maximum
of 5 percent; or (2) implement the relevant
droop and deadband settings from an
approved Electric Reliability Organization
reliability standard that provides for
equivalent or more stringent parameters.
Interconnection Customer shall be required
to provide the status and settings of the
governor or equivalent controls to
Transmission Provider and/or the relevant
Balancing Authority upon request. If
Interconnection Customer needs to operate
the Small Generating Facility with its
governor or equivalent controls not in
service, Interconnection Customer shall
immediately notify Transmission Provider
and the relevant Balancing Authority, and
provide both with the following information:
(1) the operating status of the governor or
equivalent controls (i.e., whether it is
currently out of service or when it will be
taken out of service); (2) the reasons for
removing the governor or equivalent controls
from service; and (3) a reasonable estimate of
when the governor or equivalent controls
will be returned to service. Interconnection
Customer shall make Reasonable Efforts to
return its governor or equivalent controls into
service as soon as practicable.
Interconnection Customer shall make
Reasonable Efforts to keep outages of the
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Small Generating Facility’s governor or
equivalent controls to a minimum whenever
the Small Generating Facility is operated in
parallel with the Transmission System.
1.8.4.2 Timely and Sustained Response.
Interconnection Customer shall ensure that
the Small Generating Facility’s real power
response to sustained frequency deviations
outside of the deadband setting is
automatically provided and shall begin
immediately after frequency deviates outside
of the deadband, and to the extent the Small
Generating Facility has operating capability
in the direction needed to correct the
frequency deviation. Interconnection
Customer shall not block or otherwise inhibit
the ability of the governor or equivalent
controls to respond and shall ensure that the
response is not inhibited, except under
certain operational constraints including, but
not limited to, ambient temperature
limitations, physical energy limitations,
outages of mechanical equipment, or
regulatory requirements. The Small
Generating Facility shall sustain the real
power response at least until system
frequency returns to a value within the
deadband setting of the governor or
equivalent controls. A Commission-approved
Reliability Standard with equivalent or more
stringent requirements shall supersede the
above requirements.
1.8.4.3 Exemptions. Small Generating
Facilities that are regulated by the United
States Nuclear Regulatory Commission shall
be exempt from Sections 1.8.4, 1.8.4.1, and
1.8.4.2 of this Agreement. Small Generating
Facilities that are behind the meter
generation that is sized-to-load (i.e., the
thermal load and the generation are nearbalanced in real-time operation and the
generation is primarily controlled to
maintain the unique thermal, chemical, or
mechanical output necessary for the
operating requirements of its host facility)
shall be required to install primary frequency
response capability in accordance with the
droop and deadband capability requirements
specified in Section 1.8.4, but shall be
otherwise exempt from the operating
requirements in Sections 1.8.4, 1.8.4.1,
1.8.4.2, and 1.8.4.4 of this Agreement.
1.8.4.4 Electric Storage Resources.
Interconnection Customer interconnecting an
electric storage resource shall establish an
operating range in Attachment 5 of its SGIA
that specifies a minimum state of charge and
a maximum state of charge between which
the electric storage resource will be required
to provide primary frequency response
consistent with the conditions set forth in
Sections 1.8.4, 1.8.4.1, 1.8.4.2 and 1.8.4.3 of
this Agreement. Attachment 5 shall specify
whether the operating range is static or
dynamic, and shall consider: (1) the expected
magnitude of frequency deviations in the
interconnection; (2) the expected duration
that system frequency will remain outside of
the deadband parameter in the
interconnection; (3) the expected incidence
of frequency deviations outside of the
deadband parameter in the interconnection;
(4) the physical capabilities of the electric
storage resource; (5) operational limitations
of the electric storage resource due to
manufacturer specifications; and (6) any
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other relevant factors agreed to by
Transmission Provider and Interconnection
Customer, and in consultation with the
relevant transmission owner or Balancing
Authority as appropriate. If the operating
range is dynamic, then Attachment 5 must
establish how frequently the operating range
will be reevaluated and the factors that may
be considered during its reevaluation.
Interconnection Customer’s electric storage
resource is required to provide timely and
sustained primary frequency response
consistent with Section 1.8.4.2 of this
Agreement when it is online and dispatched
to inject electricity to the Transmission
System and/or receive electricity from the
Transmission System. This excludes
circumstances when the electric storage
resource is not dispatched to inject electricity
to the Transmission System and/or
dispatched to receive electricity from the
Transmission System. If Interconnection
Customer’s electric storage resource is
charging at the time of a frequency deviation
outside of its deadband parameter, it is to
increase (for over-frequency deviations) or
decrease (for under-frequency deviations) the
rate at which it is charging in accordance
with its droop parameter. Interconnection
Customer’s electric storage resource is not
required to change from charging to
discharging, or vice versa, unless the
response necessitated by the droop and
deadband settings requires it to do so and it
is technically capable of making such a
transition.
1.9 Capitalized terms used herein shall
have the meanings specified in the Glossary
of Terms in Attachment 1 or the body of this
Agreement.
Article 2. Inspection, Testing,
Authorization, and Right of Access
2.1 Equipment Testing and Inspection
2.1.1 [The] Interconnection Customer
shall test and inspect its Small Generating
Facility and Interconnection Facilities prior
to interconnection. [The] Interconnection
Customer shall notify [the] Transmission
Provider of such activities no fewer than five
(5) Business Days (or as may be agreed to by
the Parties) prior to such testing and
inspection. Testing and inspection shall
occur on a Business Day. [The] Transmission
Provider may, at its own expense, send
qualified personnel to the Small Generating
Facility site to inspect the interconnection
and observe the testing. [The]
Interconnection Customer shall provide [the]
Transmission Provider a written test report
when such testing and inspection is
completed.
2.1.2 [The] Transmission Provider shall
provide [the] Interconnection Customer
written acknowledgment that it has received
[the] Interconnection Customer’s written test
report. Such written acknowledgment shall
not be deemed to be or construed as any
representation, assurance, guarantee, or
warranty by [the] Transmission Provider of
the safety, durability, suitability, or reliability
of the Small Generating Facility or any
associated control, protective, and safety
devices owned or controlled by [the]
Interconnection Customer or the quality of
power produced by the Small Generating
Facility.
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2.2 Authorization Required Prior to
Parallel Operation
2.2.1 [The] Transmission Provider shall
use Reasonable Efforts to list applicable
parallel operation requirements in
Attachment 5 of this Agreement.
Additionally, [the] Transmission Provider
shall notify [the] Interconnection Customer of
any changes to these requirements as soon as
they are known. [The] Transmission Provider
shall make Reasonable Efforts to cooperate
with [the] Interconnection Customer in
meeting requirements necessary for [the]
Interconnection Customer to commence
parallel operations by the in-service date.
2.2.2 [The] Interconnection Customer shall
not operate its Small Generating Facility in
parallel with [the] Transmission Provider’s
Transmission System without prior written
authorization of [the] Transmission Provider.
[The] Transmission Provider will provide
such authorization once [the] Transmission
Provider receives notification that [the]
Interconnection Customer has complied with
all applicable parallel operation
requirements. Such authorization shall not be
unreasonably withheld, conditioned, or
delayed.
2.3 Right of Access
2.3.1 Upon reasonable notice, [the]
Transmission Provider may send a qualified
person to the premises of [the]
Interconnection Customer at or immediately
before the time the Small Generating Facility
first produces energy to inspect the
interconnection, and observe the
commissioning of the Small Generating
Facility (including any required testing),
startup, and operation for a period of up to
three (3) Business Days after initial start-up
of the unit. In addition, [the] Interconnection
Customer shall notify [the] Transmission
Provider at least five (5) Business Days prior
to conducting any on-site verification testing
of the Small Generating Facility.
2.3.2 Following the initial inspection
process described above, at reasonable hours,
and upon reasonable notice, or at any time
without notice in the event of an emergency
or hazardous condition, [the] Transmission
Provider shall have access to [the]
Interconnection Customer’s premises for any
reasonable purpose in connection with the
performance of the obligations imposed on it
by this Agreement or if necessary to meet its
legal obligation to provide service to its
customers.
2.3.3 Each Party shall be responsible for
its own costs associated with following this
article.
Article 3. Effective Date, Term,
Termination, and Disconnection
3.1 Effective Date
This Agreement shall become effective
upon execution by the Parties subject to
acceptance by FERC (if applicable), or if filed
unexecuted, upon the date specified by the
FERC. [The] Transmission Provider shall
promptly file this Agreement with the FERC
upon execution, if required.
3.2 Term of Agreement
This Agreement shall become effective on
the Effective Date and shall remain in effect
for a period of ten years from the Effective
Date or such other longer period as [the]
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Interconnection Customer may request and
shall be automatically renewed for each
successive one-year period thereafter, unless
terminated earlier in accordance with article
3.3 of this Agreement.
3.3 Termination
No termination shall become effective until
the Parties have complied with all
Applicable Laws and Regulations applicable
to such termination, including the filing with
FERC of a notice of termination of this
Agreement (if required), which notice has
been accepted for filing by FERC.
3.3.1 [The] Interconnection Customer
may terminate this Agreement at any time by
giving [the] Transmission Provider twenty
(20) Business Days written notice.
3.3.2 Either Party may terminate this
Agreement after Default pursuant to article
7.6.
3.3.3 Upon termination of this
Agreement, the Small Generating Facility
will be disconnected from [the] Transmission
Provider’s Transmission System. All costs
required to effectuate such disconnection
shall be borne by the terminating Party,
unless such termination resulted from the
non-terminating Party’s Default of this SGIA
or such non-terminating Party otherwise is
responsible for these costs under this SGIA.
3.3.4 The termination of this Agreement
shall not relieve either Party of its liabilities
and obligations, owed or continuing at the
time of the termination.
3.3.5 The provisions of this article shall
survive termination or expiration of this
Agreement.
3.4 Temporary Disconnection
Temporary disconnection shall continue
only for so long as reasonably necessary
under Good Utility Practice.
3.4.1 Emergency Conditions—
‘‘Emergency Condition’’ shall mean a
condition or situation: (1) that in the
judgment of the Party making the claim is
imminently likely to endanger life or
property; or (2) that, in the case of [the]
Transmission Provider, is imminently likely
(as determined in a non-discriminatory
manner) to cause a material adverse effect on
the security of, or damage to the
Transmission System, [the] Transmission
Provider’s Interconnection Facilities or the
Transmission Systems of others to which the
Transmission System is directly connected;
or (3) that, in the case of [the]
Interconnection Customer, is imminently
likely (as determined in a non-discriminatory
manner) to cause a material adverse effect on
the security of, or damage to, the Small
Generating Facility or [the] Interconnection
Customer’s Interconnection Facilities. Under
Emergency Conditions, [the] Transmission
Provider may immediately suspend
interconnection service and temporarily
disconnect the Small Generating Facility.
[The] Transmission Provider shall notify
[the] Interconnection Customer promptly
when it becomes aware of an Emergency
Condition that may reasonably be expected to
affect [the] Interconnection Customer’s
operation of the Small Generating Facility.
[The] Interconnection Customer shall notify
[the] Transmission Provider promptly when
it becomes aware of an Emergency Condition
that may reasonably be expected to affect
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[the] Transmission Provider’s Transmission
System or any Affected Systems. To the
extent information is known, the notification
shall describe the Emergency Condition, the
extent of the damage or deficiency, the
expected effect on the operation of both
Parties’ facilities and operations, its
anticipated duration, and the necessary
corrective action.
3.4.2 Routine Maintenance, Construction,
and Repair
[The] Transmission Provider may interrupt
interconnection service or curtail the output
of the Small Generating Facility and
temporarily disconnect the Small Generating
Facility from [the] Transmission Provider’s
Transmission System when necessary for
routine maintenance, construction, and
repairs on [the] Transmission Provider’s
Transmission System. [The] Transmission
Provider shall provide [the] Interconnection
Customer with five (5) Business Days notice
prior to such interruption. [The]
Transmission Provider shall use Reasonable
Efforts to coordinate such reduction or
temporary disconnection with [the]
Interconnection Customer.
3.4.3 Forced Outages
During any forced outage, [the]
Transmission Provider may suspend
interconnection service to effect immediate
repairs on [the] Transmission Provider’s
Transmission System. [The] Transmission
Provider shall use Reasonable Efforts to
provide [the] Interconnection Customer with
prior notice. If prior notice is not given, [the]
Transmission Provider shall, upon request,
provide [the] Interconnection Customer
written documentation after the fact
explaining the circumstances of the
disconnection.
3.4.4 Adverse Operating Effects
[The] Transmission Provider shall notify
[the] Interconnection Customer as soon as
practicable if, based on Good Utility Practice,
operation of the Small Generating Facility
may cause disruption or deterioration of
service to other customers served from the
same electric system, or if operating the
Small Generating Facility could cause
damage to [the] Transmission Provider’s
Transmission System or Affected Systems.
Supporting documentation used to reach the
decision to disconnect shall be provided to
[the] Interconnection Customer upon request.
If, after notice, [the] Interconnection
Customer fails to remedy the adverse
operating effect within a reasonable time,
[the] Transmission Provider may disconnect
the Small Generating Facility. [The]
Transmission Provider shall provide [the]
Interconnection Customer with five Business
Day notice of such disconnection, unless the
provisions of article 3.4.1 apply.
3.4.5 Modification of the Small
Generating Facility
[The] Interconnection Customer must
receive written authorization from [the]
Transmission Provider before making any
change to the Small Generating Facility that
may have a material impact on the safety or
reliability of the Transmission System. Such
authorization shall not be unreasonably
withheld. Modifications shall be done in
accordance with Good Utility Practice. If
[the] Interconnection Customer makes such
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modification without [the] Transmission
Provider’s prior written authorization, the
latter shall have the right to temporarily
disconnect the Small Generating Facility.
3.4.6 Reconnection
The Parties shall cooperate with each other
to restore the Small Generating Facility,
Interconnection Facilities, and [the]
Transmission Provider’s Transmission
System to their normal operating state as
soon as reasonably practicable following a
temporary disconnection.
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Article 4. Cost Responsibility for
Interconnection Facilities and Distribution
Upgrades
4.1 Interconnection Facilities
4.1.1 [The] Interconnection Customer
shall pay for the cost of the Interconnection
Facilities itemized in Attachment 2 of this
Agreement. [The] Transmission Provider
shall provide a best estimate cost, including
overheads, for the purchase and construction
of its Interconnection Facilities and provide
a detailed itemization of such costs. Costs
associated with Interconnection Facilities
may be shared with other entities that may
benefit from such facilities by agreement of
[the] Interconnection Customer, such other
entities, and [the] Transmission Provider.
4.1.2 [The] Interconnection Customer
shall be responsible for its share of all
reasonable expenses, including overheads,
associated with (1) owning, operating,
maintaining, repairing, and replacing its own
Interconnection Facilities, and (2) operating,
maintaining, repairing, and replacing [the]
Transmission Provider’s Interconnection
Facilities.
4.2 Distribution Upgrades
[The] Transmission Provider shall design,
procure, construct, install, and own the
Distribution Upgrades described in
Attachment 6 of this Agreement. If [the]
Transmission Provider and [the]
Interconnection Customer agree, [the]
Interconnection Customer may construct
Distribution Upgrades that are located on
land owned by [the] Interconnection
Customer. The actual cost of the Distribution
Upgrades, including overheads, shall be
directly assigned to [the] Interconnection
Customer.
Article 5. Cost Responsibility for Network
Upgrades
5.1 Applicability
No portion of this article 5 shall apply
unless the interconnection of the Small
Generating Facility requires Network
Upgrades.
5.2 Network Upgrades
[The] Transmission Provider or the
Transmission Owner shall design, procure,
construct, install, and own the Network
Upgrades described in Attachment 6 of this
Agreement. If [the] Transmission Provider
and [the] Interconnection Customer agree,
[the] Interconnection Customer may
construct Network Upgrades that are located
on land owned by [the] Interconnection
Customer. Unless [the] Transmission
Provider elects to pay for Network Upgrades,
the actual cost of the Network Upgrades,
including overheads, shall be borne initially
by [the] Interconnection Customer.
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5.2.1 Repayment of Amounts Advanced
for Network Upgrades
[The] Interconnection Customer shall be
entitled to a cash repayment, equal to the
total amount paid to [the] Transmission
Provider and Affected System operator, if
any, for Network Upgrades, including any tax
gross-up or other tax-related payments
associated with the Network Upgrades, and
not otherwise refunded to [the]
Interconnection Customer, to be paid to [the]
Interconnection Customer on a dollar-fordollar basis for the non-usage sensitive
portion of transmission charges, as payments
are made under [the] Transmission Provider’s
Tariff and Affected System’s Tariff for
transmission services with respect to the
Small Generating Facility. Any repayment
shall include interest calculated in
accordance with the methodology set forth in
FERC’s regulations at 18 CFR 35.19a(a)(2)(iii)
from the date of any payment for Network
Upgrades through the date on which [the]
Interconnection Customer receives a
repayment of such payment pursuant to this
subparagraph. [The] Interconnection
Customer may assign such repayment rights
to any person.
5.2.1.1 Notwithstanding the foregoing,
[the] Interconnection Customer, [the]
Transmission Provider, and any applicable
Affected System operators may adopt any
alternative payment schedule that is
mutually agreeable so long as [the]
Transmission Provider and said Affected
System operators take one of the following
actions no later than five years from the
Commercial Operation Date: (1) return to
[the] Interconnection Customer any amounts
advanced for Network Upgrades not
previously repaid, or (2) declare in writing
that [the] Transmission Provider or any
applicable Affected System operators will
continue to provide payments to [the]
Interconnection Customer on a dollar-fordollar basis for the non-usage sensitive
portion of transmission charges, or develop
an alternative schedule that is mutually
agreeable and provides for the return of all
amounts advanced for Network Upgrades not
previously repaid; however, full
reimbursement shall not extend beyond
twenty (20) years from the commercial
operation date.
5.2.1.2 If the Small Generating Facility
fails to achieve commercial operation, but it
or another generating facility is later
constructed and requires use of the Network
Upgrades, [the] Transmission Provider and
Affected System operator shall at that time
reimburse [the] Interconnection Customer for
the amounts advanced for the Network
Upgrades. Before any such reimbursement
can occur, [the] Interconnection Customer, or
the entity that ultimately constructs the
generating facility, if different, is responsible
for identifying the entity to which
reimbursement must be made.
5.3 Special Provisions for Affected
Systems
Unless [the] Transmission Provider
provides, under this Agreement, for the
repayment of amounts advanced to any
applicable Affected System operators for
Network Upgrades, [the] Interconnection
Customer and Affected System operator shall
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27237
enter into an agreement that provides for
such repayment. The agreement shall specify
the terms governing payments to be made by
[the] Interconnection Customer to Affected
System operator as well as the repayment by
Affected System operator.
5.4 Rights Under Other Agreements
Notwithstanding any other provision of
this Agreement, nothing herein shall be
construed as relinquishing or foreclosing any
rights, including but not limited to firm
transmission rights, capacity rights,
transmission congestion rights, or
transmission credits, that [the]
Interconnection Customer shall be entitled
to, now or in the future, under any other
agreement or tariff as a result of, or otherwise
associated with, the transmission capacity, if
any, created by the Network Upgrades,
including the right to obtain cash
reimbursements or transmission credits for
transmission service that is not associated
with the Small Generating Facility.
Article 6. Billing, Payment, Milestones, and
Financial Security
6.1 Billing and Payment Procedures and
Final Accounting
6.1.1 [The] Transmission Provider shall
bill [the] Interconnection Customer for the
design, engineering, construction, and
procurement costs of Interconnection
Facilities and Upgrades contemplated by this
Agreement on a monthly basis, or as
otherwise agreed by the Parties. [The]
Interconnection Customer shall pay each bill
within thirty (30) [c]Calendar [d]Days of
receipt, or as otherwise agreed to by the
Parties.
6.1.2 Within three months of completing
the construction and installation of [the]
Transmission Provider’s Interconnection
Facilities and/or Upgrades described in the
Attachments to this Agreement, [the]
Transmission Provider shall provide [the]
Interconnection Customer with a final
accounting report of any difference between
(1) [the] Interconnection Customer’s cost
responsibility for the actual cost of such
facilities or Upgrades, and (2) [the]
Interconnection Customer’s previous
aggregate payments to [the] Transmission
Provider for such facilities or Upgrades. If
[the] Interconnection Customer’s cost
responsibility exceeds its previous aggregate
payments, [the] Transmission Provider shall
invoice [the] Interconnection Customer for
the amount due and [the] Interconnection
Customer shall make payment to [the]
Transmission Provider within thirty (30)
[c]Calendar [d]Days. If [the] Interconnection
Customer’s previous aggregate payments
exceed its cost responsibility under this
Agreement, [the] Transmission Provider shall
refund to [the] Interconnection Customer an
amount equal to the difference within thirty
(30) [c]Calendar [d]Days of the final
accounting report.
6.2 Milestones
The Parties shall agree on milestones for
which each Party is responsible and list them
in Attachment 4 of this Agreement. A Party’s
obligations under this provision may be
extended by agreement. If a Party anticipates
that it will be unable to meet a milestone for
any reason other than a Force Majeure Event,
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it shall immediately notify the other Party of
the reason(s) for not meeting the milestone
and (1) propose the earliest reasonable
alternate date by which it can attain this and
future milestones, and (2) requesting
appropriate amendments to Attachment 4.
The Party affected by the failure to meet a
milestone shall not unreasonably withhold
agreement to such an amendment unless it
will suffer significant uncompensated
economic or operational harm from the
delay, (2) attainment of the same milestone
has previously been delayed, or (3) it has
reason to believe that the delay in meeting
the milestone is intentional or unwarranted
notwithstanding the circumstances explained
by the Party proposing the amendment.
6.3 Financial Security Arrangements
At least twenty (20) Business Days prior to
the commencement of the design,
procurement, installation, or construction of
a discrete portion of [the] Transmission
Provider’s Interconnection Facilities and
Upgrades, [the] Interconnection Customer
shall provide [the] Transmission Provider, at
[the] Interconnection Customer’s option, a
guarantee, a surety bond, letter of credit or
other form of security that is reasonably
acceptable to [the] Transmission Provider
and is consistent with the Uniform
Commercial Code of the jurisdiction where
the Point of Interconnection is located. Such
security for payment shall be in an amount
sufficient to cover the costs for constructing,
designing, procuring, and installing the
applicable portion of [the] Transmission
Provider’s Interconnection Facilities and
Upgrades and shall be reduced on a dollarfor-dollar basis for payments made to [the]
Transmission Provider under this Agreement
during its term. In addition:
6.3.1 The guarantee must be made by an
entity that meets the creditworthiness
requirements of [the] Transmission Provider,
and contain terms and conditions that
guarantee payment of any amount that may
be due from [the] Interconnection Customer,
up to an agreed-to maximum amount.
6.3.2 The letter of credit or surety bond
must be issued by a financial institution or
insurer reasonably acceptable to [the]
Transmission Provider and must specify a
reasonable expiration date.
Article 7. Assignment, Liability, Indemnity,
Force Majeure, Consequential Damages, and
Default
7.1 Assignment
This Agreement may be assigned by either
Party upon fifteen (15) Business Days prior
written notice and opportunity to object by
the other Party; provided that:
7.1.1 Either Party may assign this
Agreement without the consent of the other
Party to any affiliate of the assigning Party
with an equal or greater credit rating and
with the legal authority and operational
ability to satisfy the obligations of the
assigning Party under this Agreement,
provided that [the] Interconnection Customer
promptly notifies [the] Transmission
Provider of any such assignment;
7.1.2 [The] Interconnection Customer
shall have the right to assign this Agreement,
without the consent of [the] Transmission
Provider, for collateral security purposes to
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aid in providing financing for the Small
Generating Facility, provided that [the]
Interconnection Customer will promptly
notify [the] Transmission Provider of any
such assignment.
7.1.3 Any attempted assignment that
violates this article is void and ineffective.
Assignment shall not relieve a Party of its
obligations, nor shall a Party’s obligations be
enlarged, in whole or in part, by reason
thereof. An assignee is responsible for
meeting the same financial, credit, and
insurance obligations as [the] Interconnection
Customer. Where required, consent to
assignment will not be unreasonably
withheld, conditioned or delayed.
7.2 Limitation of Liability
Each Party’s liability to the other Party for
any loss, cost, claim, injury, liability, or
expense, including reasonable attorney’s fees,
relating to or arising from any act or omission
in its performance of this Agreement, shall be
limited to the amount of direct damage
actually incurred. In no event shall either
Party be liable to the other Party for any
indirect, special, consequential, or punitive
damages, except as authorized by this
Agreement.
7.3 Indemnity
7.3.1 This provision protects each Party
from liability incurred to third parties as a
result of carrying out the provisions of this
Agreement. Liability under this provision is
exempt from the general limitations on
liability found in article 7.2.
7.3.2 The Parties shall at all times
indemnify, defend, and hold the other Party
harmless from, any and all damages, losses,
claims, including claims and actions relating
to injury to or death of any person or damage
to property, demand, suits, recoveries, costs
and expenses, court costs, attorney fees, and
all other obligations by or to third parties,
arising out of or resulting from the other
Party’s action or failure to meet its
obligations under this Agreement on behalf
of the indemnifying Party, except in cases of
gross negligence or intentional wrongdoing
by the indemnified Party.
7.3.3 If an indemnified person is entitled
to indemnification under this article as a
result of a claim by a third party, and the
indemnifying Party fails, after notice and
reasonable opportunity to proceed under this
article, to assume the defense of such claim,
such indemnified person may at the expense
of the indemnifying Party contest, settle or
consent to the entry of any judgment with
respect to, or pay in full, such claim.
7.3.4 If an indemnifying party is obligated
to indemnify and hold any indemnified
person harmless under this article, the
amount owing to the indemnified person
shall be the amount of such indemnified
person’s actual loss, net of any insurance or
other recovery.
7.3.5 Promptly after receipt by an
indemnified person of any claim or notice of
the commencement of any action or
administrative or legal proceeding or
investigation as to which the indemnity
provided for in this article may apply, the
indemnified person shall notify the
indemnifying party of such fact. Any failure
of or delay in such notification shall not
affect a Party’s indemnification obligation
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unless such failure or delay is materially
prejudicial to the indemnifying party.
7.4 Consequential Damages
Other than as expressly provided for in this
Agreement, neither Party shall be liable
under any provision of this Agreement for
any losses, damages, costs or expenses for
any special, indirect, incidental,
consequential, or punitive damages,
including but not limited to loss of profit or
revenue, loss of the use of equipment, cost
of capital, cost of temporary equipment or
services, whether based in whole or in part
in contract, in tort, including negligence,
strict liability, or any other theory of liability;
provided, however, that damages for which
a Party may be liable to the other Party under
another agreement will not be considered to
be special, indirect, incidental, or
consequential damages hereunder.
7.5 Force Majeure
7.5.1 As used in this article, a Force
Majeure Event shall mean ‘‘any act of God,
labor disturbance, act of the public enemy,
war, insurrection, riot, fire, storm or flood,
explosion, breakage or accident to machinery
or equipment, any order, regulation or
restriction imposed by governmental,
military or lawfully established civilian
authorities, or any other cause beyond a
Party’s control. A Force Majeure Event does
not include an act of negligence or
intentional wrongdoing.’’
7.5.2 If a Force Majeure Event prevents a
Party from fulfilling any obligations under
this Agreement, the Party affected by the
Force Majeure Event (Affected Party) shall
promptly notify the other Party, either in
writing or via the telephone, of the existence
of the Force Majeure Event. The notification
must specify in reasonable detail the
circumstances of the Force Majeure Event, its
expected duration, and the steps that the
Affected Party is taking to mitigate the effects
of the event on its performance. The Affected
Party shall keep the other Party informed on
a continuing basis of developments relating
to the Force Majeure Event until the event
ends. The Affected Party will be entitled to
suspend or modify its performance of
obligations under this Agreement (other than
the obligation to make payments) only to the
extent that the effect of the Force Majeure
Event cannot be mitigated by the use of
Reasonable Efforts. The Affected Party will
use Reasonable Efforts to resume its
performance as soon as possible.
7.6 Default
7.6.1 No Default shall exist where such
failure to discharge an obligation (other than
the payment of money) is the result of a
Force Majeure Event as defined in this
Agreement or the result of an act or omission
of the other Party. Upon a Default, the nondefaulting Party shall give written notice of
such Default to the defaulting Party. Except
as provided in article 7.6.2, the defaulting
Party shall have sixty (60) [c]Calendar
[d]Days from receipt of the Default notice
within which to cure such Default; provided
however, if such Default is not capable of
cure within sixty (60) [c]Calendar [d]Days,
the defaulting Party shall commence such
cure within twenty (20) [c]Calendar [d]Days
after notice and continuously and diligently
complete such cure within six months from
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receipt of the Default notice; and, if cured
within such time, the Default specified in
such notice shall cease to exist.
7.6.2 If a Default is not cured as provided
in this article, or if a Default is not capable
of being cured within the period provided for
herein, the non-defaulting Party shall have
the right to terminate this Agreement by
written notice at any time until cure occurs,
and be relieved of any further obligation
hereunder and, whether or not that Party
terminates this Agreement, to recover from
the defaulting Party all amounts due
hereunder, plus all other damages and
remedies to which it is entitled at law or in
equity. The provisions of this article will
survive termination of this Agreement.
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Article 8. Insurance
8.1 [The] Interconnection Customer shall,
at its own expense, maintain in force general
liability insurance without any exclusion for
liabilities related to the interconnection
undertaken pursuant to this Agreement. The
amount of such insurance shall be sufficient
to insure against all reasonably foreseeable
direct liabilities given the size and nature of
the generating equipment being
interconnected, the interconnection itself,
and the characteristics of the system to which
the interconnection is made. [The]
Interconnection Customer shall obtain
additional insurance only if necessary as a
function of owning and operating a
generating facility. Such insurance shall be
obtained from an insurance provider
authorized to do business in the State where
the interconnection is located. Certification
that such insurance is in effect shall be
provided upon request of [the] Transmission
Provider, except that [the] Interconnection
Customer shall show proof of insurance to
[the] Transmission Provider no later than ten
(10) Business Days prior to the anticipated
commercial operation date. An
Interconnection Customer of sufficient creditworthiness may propose to self-insure for
such liabilities, and such a proposal shall not
be unreasonably rejected.
8.2 [The] Transmission Provider agrees to
maintain general liability insurance or selfinsurance consistent with [the] Transmission
Provider’s commercial practice. Such
insurance or self-insurance shall not exclude
coverage for [the] Transmission Provider’s
liabilities undertaken pursuant to this
Agreement.
8.3 The Parties further agree to notify
each other whenever an accident or incident
occurs resulting in any injuries or damages
that are included within the scope of
coverage of such insurance, whether or not
such coverage is sought.
Article 9. Confidentiality
9.1 Confidential Information shall mean
any confidential and/or proprietary
information provided by one Party to the
other Party that is clearly marked or
otherwise designated ‘‘Confidential.’’ For
purposes of this Agreement all design,
operating specifications, and metering data
provided by [the] Interconnection Customer
shall be deemed Confidential Information
regardless of whether it is clearly marked or
otherwise designated as such.
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9.2 Confidential Information does not
include information previously in the public
domain, required to be publicly submitted or
divulged by Governmental Authorities (after
notice to the other Party and after exhausting
any opportunity to oppose such publication
or release), or necessary to be divulged in an
action to enforce this Agreement. Each Party
receiving Confidential Information shall hold
such information in confidence and shall not
disclose it to any third party nor to the public
without the prior written authorization from
the Party providing that information, except
to fulfill obligations under this Agreement, or
to fulfill legal or regulatory requirements.
9.2.1 Each Party shall employ at least the
same standard of care to protect Confidential
Information obtained from the other Party as
it employs to protect its own Confidential
Information.
9.2.2 Each Party is entitled to equitable
relief, by injunction or otherwise, to enforce
its rights under this provision to prevent the
release of Confidential Information without
bond or proof of damages, and may seek
other remedies available at law or in equity
for breach of this provision.
9.3 Notwithstanding anything in this
article to the contrary, and pursuant to 18
CFR 1b.20, if FERC, during the course of an
investigation or otherwise, requests
information from one of the Parties that is
otherwise required to be maintained in
confidence pursuant to this Agreement, the
Party shall provide the requested information
to FERC, within the time provided for in the
request for information. In providing the
information to FERC, the Party may,
consistent with 18 CFR 388.112, request that
the information be treated as confidential and
non-public by FERC and that the information
be withheld from public disclosure. Parties
are prohibited from notifying the other Party
to this Agreement prior to the release of the
Confidential Information to FERC. The Party
shall notify the other Party to this Agreement
when it is notified by FERC that a request to
release Confidential Information has been
received by FERC, at which time either of the
Parties may respond before such information
would be made public, pursuant to 18 CFR
388.112. Requests from a state regulatory
body conducting a confidential investigation
shall be treated in a similar manner if
consistent with the applicable state rules and
regulations.
Article 10. Disputes
10.1 The Parties agree to attempt to
resolve all disputes arising out of the
interconnection process according to the
provisions of this article.
10.2 In the event of a dispute, either Party
shall provide the other Party with a written
Notice of Dispute. Such Notice shall describe
in detail the nature of the dispute.
10.3 If the dispute has not been resolved
within two (2) Business Days after receipt of
the Notice, either Party may contact FERC’s
Dispute Resolution Service (DRS) for
assistance in resolving the dispute.
10.4 The DRS will assist the Parties in
either resolving their dispute or in selecting
an appropriate dispute resolution venue (e.g.,
mediation, settlement judge, early neutral
evaluation, or technical expert) to assist the
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Parties in resolving their dispute. DRS can be
reached at 1–877–337–2237 or via the
internet at https://www.ferc.gov/legal/adr.asp.
10.5 Each Party agrees to conduct all
negotiations in good faith and will be
responsible for one-half of any costs paid to
neutral third-parties.
10.6 If neither Party elects to seek
assistance from the DRS, or if the attempted
dispute resolution fails, then either Party
may exercise whatever rights and remedies it
may have in equity or law consistent with the
terms of this Agreement.
Article 11. Taxes
11.1 The Parties agree to follow all
applicable tax laws and regulations,
consistent with FERC policy and Internal
Revenue Service requirements.
11.2 Each Party shall cooperate with the
other to maintain the other Party’s tax status.
Nothing in this Agreement is intended to
adversely affect [the] Transmission Provider’s
tax exempt status with respect to the
issuance of bonds including, but not limited
to, local furnishing bonds.
Article 12. Miscellaneous
12.1 Governing Law, Regulatory
Authority, and Rules
The validity, interpretation and
enforcement of this Agreement and each of
its provisions shall be governed by the laws
of the state of llll (where the Point of
Interconnection is located), without regard to
its conflicts of law principles. This
Agreement is subject to all Applicable Laws
and Regulations. Each Party expressly
reserves the right to seek changes in, appeal,
or otherwise contest any laws, orders, or
regulations of a Governmental Authority.
12.2 Amendment
The Parties may amend this Agreement by
a written instrument duly executed by both
Parties, or under article 12.12 of this
Agreement.
12.3 No Third-Party Beneficiaries
This Agreement is not intended to and
does not create rights, remedies, or benefits
of any character whatsoever in favor of any
persons, corporations, associations, or
entities other than the Parties, and the
obligations herein assumed are solely for the
use and benefit of the Parties, their
successors in interest and where permitted,
their assigns.
12.4 Waiver
12.4.1 The failure of a Party to this
Agreement to insist, on any occasion, upon
strict performance of any provision of this
Agreement will not be considered a waiver
of any obligation, right, or duty of, or
imposed upon, such Party.
12.4.2 Any waiver at any time by either
Party of its rights with respect to this
Agreement shall not be deemed a continuing
waiver or a waiver with respect to any other
failure to comply with any other obligation,
right, duty of this Agreement. Termination or
default of this Agreement for any reason by
Interconnection Customer shall not
constitute a waiver of [the] Interconnection
Customer’s legal rights to obtain an
interconnection from [the] Transmission
Provider. Any waiver of this Agreement
shall, if requested, be provided in writing.
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12.5 Entire Agreement
This Agreement, including all
Attachments, constitutes the entire
agreement between the Parties with reference
to the subject matter hereof, and supersedes
all prior and contemporaneous
understandings or agreements, oral or
written, between the Parties with respect to
the subject matter of this Agreement. There
are no other agreements, representations,
warranties, or covenants which constitute
any part of the consideration for, or any
condition to, either Party’s compliance with
its obligations under this Agreement.
12.6 Multiple Counterparts
This Agreement may be executed in two or
more counterparts, each of which is deemed
an original but all constitute one and the
same instrument.
12.7 No Partnership
This Agreement shall not be interpreted or
construed to create an association, joint
venture, agency relationship, or partnership
between the Parties or to impose any
partnership obligation or partnership liability
upon either Party. Neither Party shall have
any right, power or authority to enter into
any agreement or undertaking for, or act on
behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the
other Party.
12.8 Severability
If any provision or portion of this
Agreement shall for any reason be held or
adjudged to be invalid or illegal or
unenforceable by any court of competent
jurisdiction or other Governmental
Authority, (1) such portion or provision shall
be deemed separate and independent, (2) the
Parties shall negotiate in good faith to restore
insofar as practicable the benefits to each
Party that were affected by such ruling, and
(3) the remainder of this Agreement shall
remain in full force and effect.
12.9 Security Arrangements
Infrastructure security of electric system
equipment and operations and control
hardware and software is essential to ensure
day-to-day reliability and operational
security. FERC expects all Transmission
Providers, market participants, and
Interconnection Customers interconnected to
electric systems to comply with the
recommendations offered by the President’s
Critical Infrastructure Protection Board and,
eventually, best practice recommendations
from the electric reliability authority. All
public utilities are expected to meet basic
standards for system infrastructure and
operational security, including physical,
operational, and cyber-security practices.
12.10 Environmental Releases
Each Party shall notify the other Party, first
orally and then in writing, of the release of
any hazardous substances, any asbestos or
lead abatement activities, or any type of
remediation activities related to the Small
Generating Facility or the Interconnection
Facilities, each of which may reasonably be
expected to affect the other Party. The
notifying Party shall (1) provide the notice as
soon as practicable, provided such Party
makes a good faith effort to provide the
notice no later than 24 hours after such Party
becomes aware of the occurrence, and (2)
promptly furnish to the other Party copies of
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City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Phone: lllllllllllllllll
Fax: llllllllllllllllll
If to [the] Transmission Provider:
Transmission Provider: llllllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Phone: lllllllllllllllll
Fax: llllllllllllllllll
13.2 Billing and Payment
Billings and payments shall be sent to the
addresses set out below:
Interconnection Customer: llllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Transmission Provider: llllllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
13.3 Alternative Forms of Notice
Any notice or request required or
permitted to be given by either Party to the
other and not required by this Agreement to
be given in writing may be so given by
telephone, facsimile or email to the
telephone numbers and email addresses set
out below:
If to [the] Interconnection Customer:
Interconnection Customer: llllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Phone: lllllllllllllllll
Fax: llllllllllllllllll
If to [the] Transmission Provider:
Transmission Provider: llllllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Phone: lllllllllllllllll
Fax: llllllllllllllllll
13.4 Designated Operating Representative
The Parties may also designate operating
representatives to conduct the
Article 13. Notices
communications which may be necessary or
13.1 General
convenient for the administration of this
Unless otherwise provided in this
Agreement. This person will also serve as the
Agreement, any written notice, demand, or
point of contact with respect to operations
request required or authorized in connection
and maintenance of the Party’s facilities.
with this Agreement (‘‘Notice’’) shall be
Interconnection Customer’s Operating
deemed properly given if delivered in
Representative:
person, delivered by recognized national
Interconnection Customer: llllllll
currier service, or sent by first class mail,
Attention: llllllllllllllll
postage prepaid, to the person specified
Address: llllllllllllllll
below:
City: llllllllllllllllll
If to [the] Interconnection Customer:
State: llllllllllllllllll
Interconnection Customer: llllllll Zip: llllllllllllllllll
Attention: llllllllllllllll Phone: lllllllllllllllll
Address: llllllllllllllll Fax: llllllllllllllllll
any publicly available reports filed with any
governmental authorities addressing such
events.
12.11 Subcontractors
Nothing in this Agreement shall prevent a
Party from utilizing the services of any
subcontractor as it deems appropriate to
perform its obligations under this Agreement;
provided, however, that each Party shall
require its subcontractors to comply with all
applicable terms and conditions of this
Agreement in providing such services and
each Party shall remain primarily liable to
the other Party for the performance of such
subcontractor.
12.11.1 The creation of any subcontract
relationship shall not relieve the hiring Party
of any of its obligations under this
Agreement. The hiring Party shall be fully
responsible to the other Party for the acts or
omissions of any subcontractor the hiring
Party hires as if no subcontract had been
made; provided, however, that in no event
shall [the] Transmission Provider be liable
for the actions or inactions of [the]
Interconnection Customer or its
subcontractors with respect to obligations of
[the] Interconnection Customer under this
Agreement. Any applicable obligation
imposed by this Agreement upon the hiring
Party shall be equally binding upon, and
shall be construed as having application to,
any subcontractor of such Party.
12.11.2 The obligations under this article
will not be limited in any way by any
limitation of subcontractor’s insurance.
12.12 Reservation of Rights
[The] Transmission Provider shall have the
right to make a unilateral filing with FERC
to modify this Agreement with respect to any
rates, terms and conditions, charges,
classifications of service, rule or regulation
under section 205 or any other applicable
provision of the Federal Power Act and
FERC’s rules and regulations thereunder, and
[the] Interconnection Customer shall have the
right to make a unilateral filing with FERC
to modify this Agreement under any
applicable provision of the Federal Power
Act and FERC’s rules and regulations;
provided that each Party shall have the right
to protest any such filing by the other Party
and to participate fully in any proceeding
before FERC in which such modifications
may be considered. Nothing in this
Agreement shall limit the rights of the Parties
or of FERC under sections 205 or 206 of the
Federal Power Act and FERC’s rules and
regulations, except to the extent that the
Parties otherwise agree as provided herein.
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Transmission Provider’s Operating
Representative:
Transmission Provider: llllllllll
Attention: llllllllllllllll
Address: llllllllllllllll
City: llllllllllllllllll
State: llllllllllllllllll
Zip: llllllllllllllllll
Phone: lllllllllllllllll
Fax: llllllllllllllllll
13.5 Changes to the Notice Information
Either Party may change this information
by giving five (5) Business Days written
notice prior to the effective date of the
change.
Article 14. Signatures
In witness whereof, the Parties have caused
this Agreement to be executed by their
respective duly authorized representatives.
For [the] Transmission Provider
Name: lllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
For [the] Interconnection Customer
Name: lllllllllllllllll
Title: llllllllllllllllll
Date: llllllllllllllllll
khammond on DSKJM1Z7X2PROD with RULES2
Attachment 1
Glossary of Terms
Affected System—An electric system other
than [the] Transmission Provider’s
Transmission System that may be affected by
the proposed interconnection.
Applicable Laws and Regulations—All
duly promulgated applicable federal, state
and local laws, regulations, rules, ordinances,
codes, decrees, judgments, directives, or
judicial or administrative orders, permits and
other duly authorized actions of any
Governmental Authority.
Applicable Reliability Standards—The
requirements and guidelines of the Electric
Reliability Organization and the Balancing
Authority Area of the Transmission System
to which the Generating Facility is directly
interconnected.
Balancing Authority [shall mean]—[a]An
entity that integrates resource plans ahead of
time, maintains demand and resource
balance within a Balancing Authority Area,
and supports interconnection frequency in
real time.
Balancing Authority Area [shall mean]—
[t]The collection of generation, transmission,
and loads within the metered boundaries of
the Balancing Authority. The Balancing
Authority maintains load-resource balance
within this area.
Business Day—Monday through Friday,
excluding Federal Holidays.
Default—The failure of a breaching Party to
cure its breach under the Small Generator
Interconnection Agreement.
Distribution System—[The] Transmission
Provider’s facilities and equipment used to
transmit electricity to ultimate usage points
such as homes and industries directly from
nearby generators or from interchanges with
higher voltage transmission networks which
transport bulk power over longer distances.
The voltage levels at which Distribution
Systems operate differ among areas.
Distribution Upgrades—The additions,
modifications, and upgrades to [the]
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Transmission Provider’s Distribution System
at or beyond the Point of Interconnection to
facilitate interconnection of the Small
Generating Facility and render the
transmission service necessary to effect [the]
Interconnection Customer’s wholesale sale of
electricity in interstate commerce.
Distribution Upgrades do not include
Interconnection Facilities.
Good Utility Practice—Any of the
practices, methods and acts engaged in or
approved by a significant portion of the
electric industry during the relevant time
period, or any of the practices, methods and
acts which, in the exercise of reasonable
judgment in light of the facts known at the
time the decision was made, could have been
expected to accomplish the desired result at
a reasonable cost consistent with good
business practices, reliability, safety and
expedition. Good Utility Practice is not
intended to be limited to the optimum
practice, method, or act to the exclusion of
all others, but rather to be acceptable
practices, methods, or acts generally accepted
in the region.
Governmental Authority—Any federal,
state, local or other governmental regulatory
or administrative agency, court, commission,
department, board, or other governmental
subdivision, legislature, rulemaking board,
tribunal, or other governmental authority
having jurisdiction over the Parties, their
respective facilities, or the respective services
they provide, and exercising or entitled to
exercise any administrative, executive,
police, or taxing authority or power;
provided, however, that such term does not
include [the] Interconnection Customer, the
Interconnection Provider, or any Affiliate
thereof.
Interconnection Customer—Any entity,
including [the] Transmission Provider, the
Transmission Owner or any of the affiliates
or subsidiaries of either, that proposes to
interconnect its Small Generating Facility
with [the] Transmission Provider’s
Transmission System.
Interconnection Facilities—[The]
Transmission Provider’s Interconnection
Facilities and [the] Interconnection
Customer’s Interconnection Facilities.
Collectively, Interconnection Facilities
include all facilities and equipment between
the Small Generating Facility and the Point
of Interconnection, including any
modification, additions or upgrades that are
necessary to physically and electrically
interconnect the Small Generating Facility to
[the] Transmission Provider’s Transmission
System. Interconnection Facilities are sole
use facilities and shall not include
Distribution Upgrades or Network Upgrades.
Interconnection Request—[The]
Interconnection Customer’s request, in
accordance with the Tariff, to interconnect a
new Small Generating Facility, or to increase
the capacity of, or make a Material
Modification to the operating characteristics
of, an existing Small Generating Facility that
is interconnected with [the] Transmission
Provider’s Transmission System.
Material Modification—A modification
that has a material impact on the cost or
timing of any Interconnection Request with
a later queue priority date.
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27241
Network Upgrades—Additions,
modifications, and upgrades to [the]
Transmission Provider’s Transmission
System required at or beyond the point at
which the Small Generating Facility
interconnects with [the] Transmission
Provider’s Transmission System to
accommodate the interconnection of the
Small Generating Facility with [the]
Transmission Provider’s Transmission
System. Network Upgrades do not include
Distribution Upgrades.
Operating Requirements—Any operating
and technical requirements that may be
applicable due to Regional Transmission
Organization, Independent System Operator,
Balancing Authority Area, or Transmission
Provider’s requirements, including those set
forth in the Small Generator Interconnection
Agreement.
Party or Parties—[The] Transmission
Provider, Transmission Owner,
Interconnection Customer or any
combination of the above.
Point of Interconnection—The point where
the Interconnection Facilities connect with
[the] Transmission Provider’s Transmission
System.
Reasonable Efforts—With respect to an
action required to be attempted or taken by
a Party under the Small Generator
Interconnection Agreement, efforts that are
timely and consistent with Good Utility
Practice and are otherwise substantially
equivalent to those a Party would use to
protect its own interests.
Small Generating Facility—[The]
Interconnection Customer’s device for the
production and/or storage for later injection
of electricity identified in the
Interconnection Request, but shall not
include [the] Interconnection Customer’s
Interconnection Facilities.
Tariff—[The] Transmission Provider or
Affected System’s Tariff through which open
access transmission service and
Interconnection Service are offered, as filed
with the FERC, and as amended or
supplemented from time to time, or any
successor tariff.
Transmission Owner—The entity that
owns, leases or otherwise possesses an
interest in the portion of the Transmission
System at the Point of Interconnection and
may be a Party to the Small Generator
Interconnection Agreement to the extent
necessary.
Transmission Provider—The public utility
(or its designated agent) that owns, controls,
or operates transmission or distribution
facilities used for the transmission of
electricity in interstate commerce and
provides transmission service under the
Tariff. The term Transmission Provider
should be read to include the Transmission
Owner when the Transmission Owner is
separate from [the] Transmission Provider.
Transmission System—The facilities
owned, controlled or operated by [the]
Transmission Provider or the Transmission
Owner that are used to provide transmission
service under the Tariff.
Upgrades—The required additions and
modifications to [the] Transmission
Provider’s Transmission System at or beyond
the Point of Interconnection. Upgrades may
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be Network Upgrades or Distribution
Upgrades. Upgrades do not include
Interconnection Facilities.
Attachment 2
Description and Costs of the Small
Generating Facility, Interconnection
Facilities, and Metering Equipment
Equipment, including the Small Generating
Facility, Interconnection Facilities, and
metering equipment shall be itemized and
identified as being owned by [the]
Interconnection Customer, [the]
Transmission Provider, or the Transmission
Owner. [The] Transmission Provider will
provide a best estimate itemized cost,
including overheads, of its Interconnection
Facilities and metering equipment, and a best
estimate itemized cost of the annual
operation and maintenance expenses
associated with its Interconnection Facilities
and metering equipment.
Milestone/date
Agreed to by:
For [the] Transmission Provider llllll
Date llllllllllllllllll
For [the] Transmission Owner (If Applicable) lllllllllllllllllll
Date llllllllllllllllll
For [the] Interconnection Customer llll
Date llllllllllllllllll
Attachment 5
Additional Operating Requirements for [the]
Transmission Provider’s Transmission
System and Affected Systems Needed To
Support [the] Interconnection Customer’s
Needs
[The] Transmission Provider shall also
provide requirements that must be met by
[the] Interconnection Customer prior to
initiating parallel operation with [the]
Transmission Provider’s Transmission
System.
Attachment 6
Transmission Provider’s Description of Its
Upgrades and Best Estimate of Upgrade
Costs
khammond on DSKJM1Z7X2PROD with RULES2
[The] Transmission Provider shall describe
Upgrades and provide an itemized best
estimate of the cost, including overheads, of
the Upgrades and annual operation and
maintenance expenses associated with such
Upgrades. [The] Transmission Provider shall
functionalize Upgrade costs and annual
expenses as either transmission or
distribution related.
UNITED STATES OF AMERICA FEDERAL
ENERGY REGULATORY COMMISSION
Improvements to Generator Interconnection
Procedures and Agreements
(Issued March 21, 2024)
CHRISTIE, Commissioner, concurring:
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One-Line Diagram Depicting the Small
Generating Facility, Interconnection
Facilities, Metering Equipment, and
Upgrades
Attachment 4
Milestones
In-Service Date: lllllllllllll
Critical milestones and responsibility as
agreed to by the Parties:
Responsible party
(1) llllllllllllllllllll
(2) llllllllllllllllllll
(3) llllllllllllllllllll
(4) llllllllllllllllllll
(5) llllllllllllllllllll
(6) ll
(7) llllllllllllllllllll
(8) llllllllllllllllllll
(9) llllllllllllllllllll
(10) llllllllllllllllllll
Docket No. RM22–14–001
Attachment 3
llllllllllllllllllll
llllllllllllllllllll
llllllllllllllllllll
llllllllllllllllllll
llllllllllllllllllll
ll
llllllllllllllllllll
llllllllllllllllllll
llllllllllllllllllll
llllllllllllllllllll
1. I concur with Order No. 2023–A,1 which
largely sustains the findings and
determinations of its predecessor, Order No.
2023. I write separately to highlight two
issues in the order, which I previously
discussed in my concurrence to Order No.
2023.2
I. Enumerated Alternative Transmission
Technologies (Section II.E.2.a.iii)
2. Order No. 2023–A sustains the
determination in Order No. 2023 that
transmission providers have the sole
discretion in determining whether to use an
alternative transmission technology, or gridenhancing technology (GET), in the
interconnection process. As I explained in
my concurrence to Order No. 2023:
A GET may hold the potential of squeezing
more juice—literally—out of the existing
transmission grid. By increasing the capacity
of the existing grid, a GET could reduce or
even eliminate the need for the future
construction of new transmission assets. So
the potential for cost-savings from the use of
GETs is too important to ignore.3
I emphasized, however, that GETs are
operational applications, which should be
deployed when and where their efficacy can
be proven, and should not be mandated as
planning assumptions or as potential
substitutes for network upgrades caused by
interconnection requests.4 I also noted the
different financial incentives at play:
transmission owners will typically favor the
1 Improvements to Generator Interconnection
Procedures and Agreements, Order No. 2023–A,
186 FERC ¶ 61,199 (2024).
2 Improvements to Generator Interconnection
Procedures and Agreements, Order No. 2023, 88 FR
61014 (Sept. 6, 2023), 184 FERC ¶ 61,054 (2023)
(Christie, Comm’r, concurring at P 1) (Order No.
2023 Concurrence), https://www.ferc.gov/newsevents/news/e-1-commissioner-christieconcurrence-order-no-2023-interconnection-finalrule.
3 Id. P 2.
4 Id. P 5 (footnote omitted).
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construction of costly new transmission
assets over deploying GETs, whereas
companies who sell GETs and generation
developers—particularly those in RTOs/ISOs
that use participant funding to pay for the
costs of network upgrades caused by the
interconnecting customers—want GETs to be
mandated.5 Therefore, it was crucial to strike
the right balance in the order.6
3. And Order No. 2023 did just that. Order
No. 2023 required the evaluation of certain
listed GETs in the interconnection studies
process but did not require that a GET must
be deployed as an alternative to a necessary
network upgrade.7 Further, and most
importantly, Order No. 2023 made clear that
the determination in each case was to be
made at the sole discretion of the
transmission provider (i.e., RTO/ISOs or nonRTO transmission providers).8 This is crucial
because transmission providers are
responsible for resolving the reliability issues
caused by a particular interconnection, and
there is a risk that a GET could fail,
prompting a later, potentially more costly,
network upgrade.9 And, of course, for that
subsequent reliability upgrade, consumers
would likely get stuck with the bill, not the
generation developer.
4. Order No. 2023–A rightly sustains the
discretion that Order No. 2023 affords
transmission providers in determining
whether to use a GET. This level of discretion
continues to be justified because:
(1) the transmission provider is responsible
for determining whether using any of the
enumerated alternative transmission
technologies is an appropriate and reliable
network upgrade that allows the
interconnection customer to flow the output
of its generating facility onto the
transmission provider’s transmission system
5 Id.
PP 6–7.
P 8.
7 Id. P 9.
8 Id. P 10.
9 Id. P 11.
6 Id.
E:\FR\FM\16APR2.SGM
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Federal Register / Vol. 89, No. 74 / Tuesday, April 16, 2024 / Rules and Regulations
in a safe and reliable manner; (2) the
requirement to make such a determination
before allowing for the use of the enumerated
alternative transmission technologies
addresses concerns that their use may
impinge on reliability, delay network
upgrades instead of reducing the need for
them or obviating the need for them
altogether, or fail to address all transmission
system issues that a traditional network
upgrade would address; and (3) there is a
need to avoid time-consuming delays and
costly disputes or litigation over
interconnection costs that could arise as a
result of this reform.10
Order No. 2023–A also clarifies that
transmission providers must explain their
evaluation of GETs for feasibility, cost, and
time savings as an alternative to a traditional
network upgrade in their applicable study
report(s), and their use determinations must
be consistent with good utility practice,
applicable reliability standards, and
applicable laws and regulations.11 Thus, as I
observed, Order No. 2023 ‘‘strikes the
appropriate balance between requiring the
evaluation of GETs, but not mandating the
use of a GET in specific cases unless the
transmission provider—and only the
transmission provider—determines it would
work from a real-world applicability
standpoint.’’ 12 And Order No. 2023–A
preserves that balance.
II. Inappropriate Allocation of Certain Costs
to Consumers
5. I remain concerned that study delay
penalties on RTOs/ISOs and the costs of
transmission provider heatmaps used as a
tool for interconnection customers will be
inappropriately allocated to consumers even
though they both appear to provide much
more of a benefit to generation developers
than consumers.13 I address each in turn.
khammond on DSKJM1Z7X2PROD with RULES2
10 Order No. 2023–A, 186 FERC ¶ 61,199 at P 618
(citations omitted).
11 Id. P 619 (citation omitted); see also id. PP 626–
627.
12 Order No. 2023 Concurrence at P 12 (emphasis
added).
13 Id. P 17.
VerDate Sep<11>2014
20:59 Apr 15, 2024
Jkt 262001
A. Study Delay Penalties on RTO/ISOs
(Section II.D.1.c.iii)
6. Order No. 2023–A sustains the
imposition of penalties on transmission
providers who miss study deadlines. As I
expressed in my Order No. 2023
Concurrence, I have concerns about assessing
study penalties on RTOs/ISOs, which are
not-for-profit entities with no stockholders.14
7. Order No. 2023 left open the question of
how RTOs/ISOs will recover those study
delay penalties that are not automatically
imposed on a transmission-owning member
by explaining that RTOs/ISOs may submit an
FPA section 205 filing to propose a cost
recovery scheme for these penalties.15
Unfortunately, Order No. 2023–A continues
to punt this question, stating that it will
address any future RTO/ISO section 205
proposal to recover the costs of study delay
penalties on case-by-case basis.16 I urge that
any such RTO/ISO filing make protections to
consumers paramount. In any scenario, the
costs of penalties should not be imposed on
retail customers, for the obvious reason they
are not the cause of the penalties. I would
add that the fact that Order No. 2023–A still
fails to answer the fundamental question of
‘‘who pays?’’ illustrates the legal and policy
flaws in the penalty scheme as applied to
RTOs/ISOs. No doubt we will continue to
hear more about this issue.
B. Cost of Heatmap (Section II.C.1.c)
8. In addition, although I support the
heatmap requirement, I remain concerned
over its potential funding through
transmission rates.17 Order No. 2023–A
sustains the determination that transmission
providers must bear the costs associated with
their heatmaps or recover them through
transmission rates to the extent they are
recoverable consistent with Commission
accounting and ratemaking policy, finding
that interconnection customers are not the
sole or primary beneficiaries of the heatmap
requirement.18
14 Id.
P 18.
P 20.
No. 2023–A, 186 FERC ¶ 61,199 at P 465
(citation omitted).
17 Order No. 2023 Concurrence at PP 21–22.
18 Order No. 2023–A, 186 FERC ¶ 61,199 at P 106.
15 Id.
16 Order
PO 00000
Frm 00239
Fmt 4701
Sfmt 9990
27243
9. I agree with this rationale only with
respect to those regions in which
transmission providers which do not use
participant funding—i.e., in those regions
where the transmission provider’s load
ultimately reimburses (or more accurately,
subsidizes) interconnection customers for
their interconnection costs. As heatmaps
serve to identify viable points of
interconnection and improve queue
efficiency, they help to reduce
interconnection costs. Thus, ceteris paribus,
heatmaps will indirectly reduce the
magnitude of the reimbursements of
interconnection costs paid by load to
interconnection customers.
10. On the other hand, in regions in which
the transmission provider uses participant
funding—such as in PJM and MISO—I fail to
see how interconnection customers are not
the sole or primary beneficiaries of the
heatmap requirement. In those regions, as
interconnection customers are ultimately
responsible for interconnection costs—with
the exception of MISO’s (questionable, in my
opinion) assignment to load of 10% of the
cost of network upgrades 345 kV and above—
the savings that heatmaps provide would
inure to generation developers. I question,
therefore, whether the recovery of the cost of
heatmaps from load in those regions would
be just and reasonable. As I stated in my
Order No. 2023 Concurrence:
Commission policy may dictate that
interconnection queue efficiency benefits
transmission customers; however, that
should not result in the costs of a
requirement that best benefits
interconnection customers, and really
prospective interconnection customers that
may ultimately not seek to interconnect,
being recovered from consumers through
transmission rates carte blanche.19
For these reasons, I concur.
Mark C. Christie
Commissioner.
[FR Doc. 2024–06563 Filed 4–15–24; 8:45 am]
BILLING CODE 6717–01–P
19 Order No. 2023 Concurrence at P 22 (emphasis
in original).
E:\FR\FM\16APR2.SGM
16APR2
]]>Agencies
[Federal Register Volume 89, Number 74 (Tuesday, April 16, 2024)]
[Rules and Regulations]
[Pages 27006-27243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06563]
[[Page 27005]]
Vol. 89
Tuesday,
No. 74
April 16, 2024
Part II
Department of Energy
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Federal Energy Regulatory Commission
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18 CFR Part 35
Improvements to Generator Interconnection Procedures and Agreements;
Rule
Federal Register / Vol. 89 , No. 74 / Tuesday, April 16, 2024 / Rules
and Regulations
[[Page 27006]]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 35
[Docket No. RM22-14-001; Order No. 2023-A]
Improvements to Generator Interconnection Procedures and
Agreements
AGENCY: Federal Energy Regulatory Commission.
ACTION: Order on rehearing and clarification.
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SUMMARY: In this order, the Federal Energy Regulatory Commission
addresses arguments raised on rehearing, sets aside, in part, and
clarifies Order No. 2023, which amended the Commission's regulations
and its pro forma Large Generator Interconnection Procedures, pro forma
Large Generator Interconnection Agreement, pro forma Small Generator
Interconnection Procedures, and pro forma Small Generator
Interconnection Agreement to address interconnection queue backlogs,
improve certainty, and prevent undue discrimination for new
technologies.
DATES: This rule is effective May 16, 2024.
FOR FURTHER INFORMATION CONTACT:
Anne Marie Hirschberger (Legal Information), Office of the General
Counsel, 888 First Street NE, Washington, DC 20426, (202) 502-8387,
[email protected].
Sarah Greenberg (Legal Information), Office of the General Counsel, 888
First St. NE, Washington, DC 20426, (202) 502-6230,
[email protected].
Franklin Jackson (Technical Information), Office of Energy Market
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-6464,
[email protected].
Michael G. Henry, Office of Energy Policy and Innovation, 888 First
Street NE, Washington, DC 20426, (202) 502-8583,
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Discussion
A. Need for Reform
1. Order No. 2023
2. Requests for Rehearing and Clarification
3. Determination
B. Arguments Regarding Conflicts With Ongoing Queue Reform
Efforts and Evaluation of Variations on Compliance
1. Order No. 2023 Requirements
2. Requests for Rehearing and Clarification
3. Determination
C. Reforms To Implement a First-Ready, First-Served Cluster
Study Process
1. Public Interconnection Information
2. Cluster Study Process
3. Allocation of Cluster Network Upgrade Costs
4. Shared Network Upgrades
5. Increased Financial Commitments and Readiness Requirements
6. Transition Process
D. Reforms To Increase the Speed of Interconnection Queue
Processing
1. Elimination of Reasonable Efforts Standard and Implementation
of a Replacement Rate
2. Affected Systems
E. Reforms To Incorporate Technological Advancements Into the
Interconnection Process
1. Increasing Flexibility in the Generation Interconnection
Process
2. Incorporating the Enumerated Alternative Transmission
Technologies Into the Generator Interconnection Process
3. Modeling and Ride Through Requirements for Non-Synchronous
Generating Facilities
F. Compliance Procedures
1. Order No. 2023 Requirements
2. Requests for Rehearing and Clarification
3. Determination
III. Information Collection Statement
IV. Environmental Analysis
V. Regulatory Flexibility Act
VI. Document Availability
VII. Effective Date
I. Background
1. On July 28, 2023, the Federal Energy Regulatory Commission
(Commission) issued Order No. 2023.\1\ Order No. 2023 required all
public utility transmission providers to adopt revised pro forma Large
Generator Interconnection Procedures (LGIP), pro forma Large Generator
Interconnection Agreements (LGIA), pro forma Small Generator
Interconnection Procedures (SGIP), and pro forma Small Generator
Interconnection Agreements (SGIA).\2\ These revisions ensure that
interconnection customers are able to interconnect to the transmission
system in a reliable, efficient, transparent, and timely manner, and
will prevent undue discrimination.\3\ In Order No. 2023, the Commission
adopted a comprehensive package of reforms in three general categories:
(1) reforms to implement a first-ready, first-served cluster study
process, (2) reforms to increase the speed of interconnection queue
processing, and (3) reforms to incorporate technological advancements
into the interconnection process.
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\1\ Improvements to Generator Interconnection Procs. &
Agreements, Order No. 2023, 88 FR 61014 (Sept. 6, 2023), 184 FERC ]
61,054 (2023).
\2\ Id. P 1 n.1 (``Section 201(e) of the Federal Power Act (FPA)
defines ``public utility'' to mean ``any person who owns or operates
facilities subject to the jurisdiction of the Commission under this
subchapter.'' 16 U.S.C. 824(e). A non-public utility that seeks
voluntary compliance with the reciprocity condition of a tariff may
satisfy that condition by filing a tariff, which includes the pro
forma LGIP, the pro forma SGIP, the pro forma LGIA, and the pro
forma SGIA. See Standardization of Generator Interconnection
Agreements & Procs., Order No. 2003, 68 FR 49846 (Aug. 19, 2003),
104 FERC ] 61,103, at PP 1, 616 (2003), order on reh'g, Order No.
2003-A, 69 FR 15932 (Mar. 26, 2004), 106 FERC ] 61,220, order on
reh'g, Order No. 2003-B, 70 FR 265 (Jan. 4, 2005), 109 FERC ] 61,287
(2004), order on reh'g, Order No. 2003-C, 70 FR 37661 (June 30,
2005), 111 FERC ] 61,401 (2005), aff'd sub nom. Nat'l Ass'n of
Regul. Util. Comm'rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007) (NARUC
v. FERC). As stated in the pro forma LGIP, pro forma LGIA, pro forma
SGIP, and pro forma SGIA, transmission provider ``shall mean the
public utility (or its designated agent) that owns, controls, or
operates transmission or distribution facilities used for the
transmission of electric energy in interstate commerce and provides
transmission service under the [Transmission Provider's Tariff]. The
term . . . should be read to include the Transmission Owner when the
Transmission Owner is separate from the Transmission Provider.'' Pro
forma LGIP section 1; pro forma LGIA art. 1; pro forma SGIP attach.
1; pro forma SGIA attach. 1.'').
\3\ Order No. 2023, 184 FERC ] 61,054 at P 1.
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2. To implement a first-ready, first served cluster study process,
Order No. 2023: (1) required transmission providers to post public
interconnection information in an interactive heatmap to provide
interconnection customers information before they enter the queue; (2)
eliminated individual serial feasibility and system impact studies and
created a cluster study; (3) created a range of allowable allocations
of cluster study costs; (4) required transmission providers to use a
proportional impact method to assign network upgrade costs within a
cluster; (5) required increased financial commitments and readiness
requirements from interconnection customers, including increased study
deposits, site control, commercial readiness deposits, an LGIA deposit,
and required transmission providers to institute penalties for
withdrawn interconnection requests; and (6) created a transition
mechanism for moving to the cluster study process adopted in Order No.
2023 from the existing serial study process.\4\
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\4\ Id. P 5.
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3. To increase the speed of interconnection queue processing, Order
No. 2023: (1) eliminated the reasonable efforts standard for completing
interconnection studies and adopted study delay penalties applicable
when transmission providers fail to complete interconnection studies
[[Page 27007]]
by the deadlines in their tariff; and (2) established a more detailed
affected system study process in the pro forma LGIP, including pro
forma affected system agreements and uniform modeling standards.\5\
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\5\ Id. P 6.
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4. To incorporate technological advancements into the
interconnection process, Order No. 2023: (1) required transmission
providers to allow more than one generating facility to co-locate on a
shared site behind a single point of interconnection and share a single
interconnection request; (2) required transmission providers to
evaluate the proposed addition of a generating facility to an existing
interconnection request prior to deeming such an addition a material
modification; (3) required transmission providers to allow
interconnection customers to access the surplus interconnection service
process once the original interconnection customer has an executed LGIA
or requests the filing of an unexecuted LGIA; (4) required transmission
providers, at the request of the interconnection customer, to use
operating assumptions in interconnection studies that reflect the
proposed charging behavior of electric storage resources; (5) required
transmission providers to evaluate an enumerated list of alternative
transmission technologies during the study process; (6) required each
interconnection customer requesting to interconnect a non-synchronous
generating facility to submit to the transmission provider certain
specific models of the generating facility; (7) established ride
through requirements during abnormal frequency conditions and voltage
conditions within the ``no trip zone'' defined by NERC Reliability
Standard PRC-024-3 or successor mandatory ride through reliability
standards; and (8) required that all newly interconnecting large
generating facilities provide frequency and voltage ride through
capability consistent with any standards and guidelines that are
applied to other generating facilities in the balancing authority area
on a comparable basis.\6\
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\6\ Id. P 6.
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5. The Commission received 32 timely filed requests for rehearing
and/or clarification, and two additional requests for clarification.\7\
The rehearing requests raise issues related to nearly all reforms
adopted in Order No. 2023.
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\7\ Appendix A provides the short names of the entities that
filed requests for rehearing or clarification. Shell filed an
answer. Rule 713(d)(1) of the Commission's Rules of Practice and
Procedure (18 CFR 385.713(d)) prohibits an answer to a request for
rehearing. Accordingly, we deny Shell's motion to answer and reject
its answer.
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6. Pursuant to Allegheny Defense Project v. FERC,\8\ the rehearing
requests filed in this proceeding may be deemed denied by operation of
law. However, as permitted by section 313(a) of the Federal Power Act
(FPA),\9\ we are modifying the discussion in Order No. 2023, setting
aside the order, in part, and clarifying the order, as discussed
below.\10\
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\8\ 964 F.3d 1 (D.C. Cir. 2020) (en banc).
\9\ 16 U.S.C. 825l(a) (``Until the record in a proceeding shall
have been filed in a court of appeals, as provided in subsection
(b), the Commission may at any time, upon reasonable notice and in
such manner as it shall deem proper, modify or set aside, in whole
or in part, any finding or order made or issued by it under the
provisions of this chapter.'').
\10\ Allegheny Def. Project, 964 F.3d at 16-17. In Appendices C,
D, E, and F, we provide the revisions to the provisions of the pro
forma LGIP, pro forma LGIA, pro forma SGIP, and pro forma SGIA made
in this order on rehearing and clarification. Additionally, these
Appendices reflect several non-substantive corrections in these
appendices to address stylistic inconsistencies or clerical errors
in some of the new and revised pro forma provisions.
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7. Specifically, we set aside the order, in part, to specify that:
(1) where an interconnection customer is in the interconnection queue
of a transmission provider that currently uses, or is transitioning to,
a cluster study process and the transmission provider proposes on
compliance to adopt new readiness requirements for its annual cluster
study, the interconnection customer must comply with the transmission
provider's new readiness requirements within 60 days of the Commission-
approved effective date of the transmission provider's compliance
filing, where such readiness requirements are applicable given the
status of the individual interconnection customer in the queue; (2) a
network upgrade that is required for multiple interconnection customers
in a cluster may be considered a stand alone network upgrade if all
such interconnection customers mutually agree to exercise the option to
build; (3) transmission providers must complete their determination
that an interconnection request is valid by the close of the cluster
request window such that only interconnection customers with valid
interconnection requests proceed to the customer engagement window; and
(4) acceptable forms of security for the Commercial Readiness Deposit
and deposits prior to the Transitional Serial Study, Transitional
Cluster Study, Cluster Restudy and the Interconnection Facilities Study
should include not only cash or an irrevocable letter of credit, but
also surety bonds or other forms of financial security that are
reasonably acceptable to the transmission provider.
8. Additionally, we grant several clarifications on the following
topics, as further discussed below: (1) conflicts with ongoing queue
reform efforts; (2) public interconnection information; (3) cluster
study process; (4) allocation of cluster network upgrade costs; (5)
shared network upgrades; (6) withdrawal penalties; (7) study delay
penalty and appeal structure; (8) affected systems; (9) revisions to
the material modification process to require consideration of
generating facility additions; (10) availability of surplus
interconnection service; (11) operating assumptions for interconnection
studies; (12) consideration of the enumerated alternative transmission
technologies in interconnection studies; and (13) ride-through
requirements.
9. Finally, in light of the revisions made to the pro forma LGIP,
pro forma LGIA, pro forma SGIP, and pro forma SGIA herein, we extend
the deadline for transmission providers to submit compliance filings
until the effective date of this order (i.e., the new deadline for
compliance with Order No. 2023 will be 30 days after the publication of
this order in the Federal Register, and must include the further
revisions reflected in this order).
II. Discussion
A. Need for Reform
1. Order No. 2023
10. The Commission stated that it found substantial evidence in the
record to support the conclusion that the existing pro forma generator
interconnection procedures and agreements were unjust, unreasonable,
and unduly discriminatory or preferential.\11\ Therefore, pursuant to
FPA section 206, the Commission concluded that certain revisions to the
pro forma open access transmission tariff and the Commission's
regulations were necessary to ensure rates that are just, reasonable,
and not unduly discriminatory or preferential. Specifically, the
Commission found that the existing pro forma generator interconnection
procedures and agreements were insufficient to ensure that
interconnection customers are able to interconnect to the transmission
system in a reliable, efficient, transparent, and timely manner,
thereby ensuring that rates, terms, and conditions for Commission-
jurisdictional services are just, reasonable, and not unduly
discriminatory or preferential. The
[[Page 27008]]
Commission stated that, absent reform, the interconnection process will
continue to cause interconnection queue backlogs, longer development
timelines, and increased uncertainty regarding the cost and timing of
interconnecting to the transmission system. The Commission explained
that these backlogs and delays, and the resulting timing and cost
uncertainty, hinder the timely development of new generation and
thereby stifle competition in the wholesale electric markets resulting
in rates, terms, and conditions that are unjust, unreasonable, and
unduly discriminatory or preferential.
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\11\ Order No. 2023, 184 FERC ] 61,054 at P 37.
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11. The Commission cited recent data to support its findings that
the dramatic increase in the number of interconnection requests and
limited transmission capacity are increasing interconnection queue
backlogs across all regions of the country.\12\ This data indicated
that, as of the end of 2022, there were over 10,000 active
interconnection requests in interconnection queues throughout the
United States, representing over 2,000 gigawatts (GW) of potential
generation and storage capacity.\13\ These interconnection requests and
the generating facilities they represent amount to the largest
interconnection queue size on record, more than four times the total
volume (in GW) of the interconnection queues in 2010, and a 40%
increase over the interconnection queue size from just the year prior.
The Commission explained that these trends are not exclusive to any
specific region of the country; rather, every region, including
regional transmission organizations (RTO), independent system operators
(ISO), and non-RTOs/ISOs, has faced an increase in both interconnection
queue size and the length of time interconnection customers are
spending in the interconnection queue prior to commercial operation in
recent years. The Commission noted that the uncertainty and delays in
the interconnection queues have resulted in fewer than 25% of
interconnection requests, by capacity, reaching commercial operation
between 2000 and 2017 in any region of the country--with some regions
as low as 8%.
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\12\ Id. P 38 (citing Energy Markets & Policy- Berkeley Lab,
Queued Up: Characteristics of Power Plants Seeking Transmission
Interconnection, 7-8 (Apr. 2023) (Queued Up 2023), https://emp.lbl.gov/sites/default/files/queued_up_2022_04-06-2023.pdf;
Appendix B to Order No. 2023, which provided an overview of recent
data based on reporting by transmission providers in compliance with
Order No. 845).
\13\ Id. (citing Queued Up 2023).
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12. The Commission also cited recent data that interconnection
customers are waiting longer in the interconnection queue before
withdrawing their interconnection requests, even as overall
interconnection study timelines are increasing in many regions.\14\
Despite efforts to address these challenges, the Commission observed
that interconnection queue backlogs and delays have persisted and
worsened. For generating facilities built in 2022, wait times in the
interconnection queue saw a marked increase from 2.1 years for
generating facilities built in 2000-2010 to roughly five years for
generating facilities built in 2022.
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\14\ Id. P 39.
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13. The Commission explained that delays in the interconnection
study process are an important contributor to interconnection queue
backlogs nationwide.\15\ The Commission cited recent interconnection
study metrics transmission providers filed with the Commission, as
required by Order No. 845, which showed that of the 2,179
interconnection studies completed in 2022, 68% were issued late. At the
end of 2022, an additional 2,544 studies were delayed (i.e., ongoing
and past their deadline). All of the RTOs/ISOs except CAISO and most
non-RTO/ISO transmission providers (14 of 38) reported pending delayed
studies at the end of 2022.
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\15\ Id. P 40.
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14. The Commission found that numerous factors have contributed to
the increasing volume of interconnection requests, including a rapidly
changing resource mix, market forces, and emerging technologies.\16\
The Commission also found that available transmission capacity has been
largely or fully used in many regions, creating situations where
interconnection customers face significant network upgrade cost
assignments to interconnect their proposed generating facilities. As an
example, the Commission cited a U.S. DOE report that found that
interconnection costs in MISO doubled for generating facilities for
which the interconnection studies were completed between 2019 and 2021
as compared to those completed prior to 2019, and cost estimates
tripled for proposed generating facilities still active in the
interconnection queue between the same time periods.\17\ The Commission
also noted that other reports show similar cost increases in NYISO and
PJM.\18\ The Commission found that this combination of increased volume
of interconnection requests and insufficient transmission capacity and
therefore higher costs to interconnect, which can result in
interconnection request withdrawals, has resulted in longer
interconnection queue processing times and larger, more delayed
interconnection queues.
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\16\ Id. P 41.
\17\ Id. (citing Joachim Seel et al., Generator Interconnection
Cost Analysis in the Midcontinent Independent System Operator (MISO)
Territory, 1, 4-5 (Oct. 2022), https://emp.lbl.gov/interconnection_costs.).
\18\ Id. (citing Julia Mulvaney Kemp et al., Interconnection
Cost Analysis in the NYISO Territory (Mar. 2023), https://emp.lbl.gov/publications/interconnection-cost-analysis-nyiso
(showing that costs have doubled for generating facilities studied
since 2017, relative to costs for generating facilities studied from
2006 to 2016); Joachim Seel et al., Interconnection Cost Analysis in
the PJM Territory (Jan. 2023), https://emp.lbl.gov/publications/interconnection-cost-analysis-pjm (showing that costs for recent
``complete'' generating facilities have doubled on average relative
to costs from 2000-2019)).
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15. The Commission explained that interconnection queue backlogs
and delays have created uncertainty for interconnection customers
regarding the timing and cost of ultimately interconnecting to the
transmission system, which may lead to an increase in costs to
consumers.\19\ The Commission stated that delayed interconnection study
results or unexpected cost increases can disrupt numerous aspects of
generating facility development and such uncertainty, either on the
part of transmission providers or interconnection customers, is
ultimately passed through to consumers through higher transmission or
energy rates. The Commission explained that increases in energy rates
may result from wholesale customers having limited access to new and
more competitive supplies of generation and that, conversely, efficient
interconnection queues and well-functioning wholesale markets deliver
benefits to consumers by driving down wholesale electricity costs.
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\19\ Id. P 43.
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16. Overall, due to continuing and increasing interconnection queue
backlogs and study delays, the Commission found that the Commission's
existing rules contained in the pro forma LGIP, pro forma LGIA, pro
forma SGIP, and pro forma SGIA resulted in rates, terms, and conditions
for Commission-jurisdictional services that are unjust, unreasonable,
and unduly discriminatory or preferential.\20\ The Commission found
that the problems described above lead to an inability of
interconnection customers to interconnect to the transmission system in
a reliable, efficient, transparent, and timely manner, and
[[Page 27009]]
hindered the timely development of new generation, thereby stifling
competition in the wholesale electric markets. Therefore, the
Commission found that reform to the Commission's existing pro forma
generator interconnection procedures and agreements was necessary.
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\20\ Id. P 44.
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17. The Commission based its findings that the pro forma LGIP, pro
forma LGIA, pro forma SGIP, and pro forma SGIA must be reformed on the
following features: (1) the information (or lack thereof) available to
prospective interconnection customers and the commitments required of
them to enter and progress through the interconnection queue; (2) the
reliance on a serial first-come, first-served study process and the
reasonable efforts standard that transmission providers are held to for
meeting interconnection study deadlines; (3) the protocols (or lack
thereof) for affected system studies; (4) the provisions for studying
new generating facility technologies and evaluating the list of
alternative transmission technologies enumerated in Order No. 2023; and
(5) the modeling or performance requirements (or lack thereof) for non-
synchronous generating facilities, including wind, solar, and electric
storage facilities.\21\ The Commission further explained each of these
five features.
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\21\ Id. P 45.
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18. First, the Commission explained that, without a process by
which an interconnection customer can obtain information about
potential interconnection costs at a specific location or point of
interconnection prior to submitting an interconnection request, it is
difficult for interconnection customers to assess the commercial
viability of a specific proposed generating facility prior to entering
the interconnection queue.\22\ The Commission also found that the pro
forma interconnection procedures and agreements failed to include
meaningful financial commitments and readiness requirements to enter
and stay in the interconnection queue and lacked stringent requirements
to establish the commercial viability of proposed generating
facilities. As a result, the Commission explained, interconnection
customers often submit multiple interconnection requests for proposed
generating facilities at various points of interconnection, knowing
that not all of them will reach commercial operation, as an exploratory
mechanism to obtain information to allow the interconnection customer
to choose to proceed with the interconnection request representing the
most favorable site in terms of potential interconnection-related
costs.
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\22\ Id. P 46.
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19. Second, the Commission explained that the existing serial
first-come, first-served study process created incentives for
interconnection customers to submit exploratory or speculative
interconnection requests pursuant to which interconnection customers
seek to secure valuable queue positions as early as possible, even if
they are not prepared to move forward with the proposed generating
facility.\23\ Such generating facilities are often not commercially
viable: thus, the interconnection customers ultimately withdraw their
interconnection requests from the interconnection queue, which triggers
reassessments and possible restudies by the transmission provider that
can delay the timing and increase the cost to interconnect for lower-
queued interconnection requests. The Commission found that the lack of
access to information about a specific location or point of
interconnection prior to submitting an interconnection request, the
lack of any meaningful financial commitments in the pro forma
interconnection procedures and agreements for interconnection customers
to enter and stay in the interconnection queue, as well as the existing
serial first-come, first-served study process, together incentivized
interconnection customers to submit speculative interconnection
requests that contribute to interconnection study backlogs, delays, and
uncertainty, and, in turn, unjust and unreasonable Commission-
jurisdictional rates.\24\
---------------------------------------------------------------------------
\23\ Id. P 47.
\24\ Id. P 48.
---------------------------------------------------------------------------
20. The Commission also found that interconnection queue backlogs
and delays, and the accompanying uncertainty, have been further
compounded because transmission providers have limited incentive to
perform interconnection studies in a timely manner.\25\ The Commission
stated that, despite pervasive delays in completing interconnection
studies by transmission providers, transmission providers have faced
few, if any, consequences for failing to meet their tariff-imposed
study deadlines under the reasonable efforts standard. The Commission
therefore found that the existing pro forma LGIP requirement for
transmission providers to make a reasonable effort to meet
interconnection study deadlines contributes to the interconnection
study backlogs, delays, and uncertainty that erects barriers to new
generation, resulting in Commission-jurisdictional rates that are
unjust and unreasonable.
---------------------------------------------------------------------------
\25\ Id. P 50.
---------------------------------------------------------------------------
21. Third, the Commission found that, without requirements for how
and when transmission providers should complete affected system
studies, those studies often lag behind those completed by the
transmission provider to whose transmission system the interconnection
customer proposes to interconnect (the host transmission provider) and
are sometimes completed very late in the interconnection process,
causing an additional round of delays and cost uncertainty for
interconnection customers.\26\ Additionally, for transmission providers
that have procedures for how to complete affected system studies in
their tariffs or other documents (e.g., business practice manuals or
joint operating agreements), the Commission found that those procedures
are not consistent, may be hard for interconnection customers to
locate, and may not represent the actual practices in use by the
transmission provider, thus still creating uncertainty for
interconnection customers. As a result, the Commission found that the
lack of consistent requirements for affected system modeling and
procedures results in Commission-jurisdictional rates that are unjust,
unreasonable, and unduly discriminatory or preferential.
---------------------------------------------------------------------------
\26\ Id. P 51.
---------------------------------------------------------------------------
22. Fourth, the Commission found that the Commission's pro forma
LGIP failed to accommodate the operating characteristics and technical
capabilities of electric storage resources when it comes to specific
interconnection procedures and modeling.\27\ The Commission noted that
interconnection queues predominantly consist of new technologies which
have operating characteristics that differ from synchronous resources
and were not anticipated when the Commission established the pro forma
generator interconnection procedures and agreements in Order Nos. 2003
and 2006. The Commission noted that the existing pro forma generator
interconnection procedures and agreements did not contemplate the
operating characteristics or technical capabilities of electric storage
resources, leading to electric storage resources being studied under
inappropriate operating assumptions (e.g., charging at full capacity
during peak load conditions) that result in the assignment of
unnecessary network upgrades which increase costs to interconnection
customers. Therefore, the Commission found that the inability to modify
[[Page 27010]]
operating assumptions for electric storage resources pursuant to the
pro forma LGIP resulted in Commission-jurisdictional rates that are
unjust, unreasonable, and unduly discriminatory or preferential.
---------------------------------------------------------------------------
\27\ Id. P 52.
---------------------------------------------------------------------------
23. The Commission also found that the existing pro forma
interconnection procedures regarding material modifications did not
provide for consistent evaluation of technology additions to an
existing interconnection request, and that automatically deeming a
request to add a generating facility to an existing interconnection
request to be a material modification creates a significant barrier to
access to the transmission system.\28\
---------------------------------------------------------------------------
\28\ Id. P 53.
---------------------------------------------------------------------------
24. Finally, the Commission found that the pro forma LGIP and pro
forma SGIP failed to require the consideration of alternative
transmission technologies that can be used as network upgrades and can
be deployed more quickly and at a lower cost than, traditional network
upgrades.\29\ The Commission found that failing to require transmission
providers to evaluate the enumerated list of alternative transmission
technologies resulted in interconnection customers paying more than is
just and reasonable to reliably interconnect new generating facilities,
ultimately creating Commission-jurisdictional rates that are unjust,
unreasonable, and unduly discriminatory or preferential.
---------------------------------------------------------------------------
\29\ Id. P 54.
---------------------------------------------------------------------------
25. Fifth, the Commission found that the Commission's existing pro
forma LGIP and pro forma SGIP did not include a modeling requirement
for non-synchronous generating facilities, which is necessary to enable
the transmission provider to assess and model the facility's ability to
respond appropriately to transmission system disturbances.\30\ The
Commission explained that interconnection customers must submit
accurate and validated models, which will prevent study delays and
ensure that transmission providers identify the necessary
interconnection facilities and network upgrades to accommodate the
interconnection request and thus allow the appropriate assignment of
interconnection costs to the interconnection request. Therefore, the
Commission found that the lack of a modeling requirement for non-
synchronous generating facilities in the pro forma LGIP and pro forma
SGIP results in rates that are unjust, unreasonable, and unduly
discriminatory or preferential. Additionally, the Commission explained
that the physical characteristics of synchronous generating facilities
allow them to continue to inject electric current during transmission
system disturbances, as required by the pro forma LGIA and pro forma
SGIA.\31\ However, non-synchronous generating facilities did not face a
comparable requirement and many cease injecting current during system
disturbances through ``momentary cessation,'' which creates reliability
issues on the transmission system. The Commission stated that, without
requirements for non-synchronous generating facilities to remain
connected to and synchronized with the transmission system during
system disturbances, interconnection studies may not accurately model
expected behavior and identify the appropriate interconnection
facilities and network upgrades to accommodate the interconnection
request, skewing the assignment of interconnection costs. As a result,
the Commission found that the lack of comparable requirements for non-
synchronous generating facilities to remain ``connected to and
synchronized with the [t]ransmission [s]ystem'' in the pro forma LGIA
and pro forma SGIA results in rates that are unjust, unreasonable, and
unduly discriminatory or preferential.
---------------------------------------------------------------------------
\30\ Id. P 55.
\31\ Id. P 56.
---------------------------------------------------------------------------
26. The Commission further found that the reforms adopted in Order
No. 2023 will improve the efficiency of study processes, reduce
interconnection queue backlogs, and thereby ensure just, reasonable,
and not unduly discriminatory or preferential rates.\32\ The Commission
explained that the majority of the individual reforms that the
Commission adopted have already been implemented in one or more regions
in order to improve the interconnection process, demonstrating
incremental improvements. The Commission compiled a package of such
reforms that, in their entirety, have not yet been adopted by any
region, and will ensure that interconnection customers are able to
interconnect to the transmission system in a reliable, efficient,
transparent, and timely manner.
---------------------------------------------------------------------------
\32\ Id. P 59.
---------------------------------------------------------------------------
2. Requests for Rehearing and Clarification
27. Dominion seeks rehearing, asserting that the Commission
exceeded its FPA section 206 authority by declaring all existing
interconnection tariffs, including recently accepted reforms by PJM and
Dominion Energy South Carolina (DESC), as unjust, unreasonable, and
unduly discriminatory or preferential without substantial evidence.\33\
Dominion asserts that the Commission did not establish a sufficient
legal foundation to generically find that all tariffs are unjust and
unreasonable.\34\ Similarly, Indicated PJM TOs argue that the
Commission arbitrarily and capriciously relied on inapposite and stale
evidence to impose a generic replacement rate on early adopters of the
cluster study approach.\35\ PJM also argues that the generic findings
underlying Order No. 2023 cannot apply to its Interconnection Process
Reform Task Force (IPRTF) Tariff, which was filed and approved during
the time period between issuance of the NOPR and Order No. 2023.\36\
Therefore, PJM contends, the data underlying Order No. 2023 is stale as
to PJM and its use does not constitute reasoned decision-making based
on substantial evidence.
---------------------------------------------------------------------------
\33\ Dominion Rehearing Request at 2.
\34\ Id. at 14 (citing S.C. Pub. Serv. Auth. v. FERC, 762 F.3d
71, 65 (D.C. Cir. 2014) (S.C. Pub. Serv. Auth.) (``To regulate a
practice affecting rates pursuant to Section 206, the Commission
must find that the existing practice is `unjust, unreasonable,
unduly discriminatory or preferential,' and that the remedial
practice it imposes is `just and reasonable.' These findings must be
supported by `substantial evidence[.]'''); Emera Me. v. FERC, 854
F.3d 9, 25 (D.C. Cir. 2017) (Emera Me.) (``[A] finding that an
existing rate is unjust and unreasonable is the `condition
precedent' to FERC's exercise of its section 206 authority to change
that rate. Section 206, therefore, imposes a `dual burden' on FERC.
Without a showing that the existing rate is unlawful, FERC has no
authority to impose a new rate.'')).
\35\ Indicated PJM TOs Rehearing Request at 7, 17.
\36\ PJM Rehearing Request at 25-26.
---------------------------------------------------------------------------
28. Dominion acknowledges that the Commission is able to rely on
generic rulemakings to support an industry wide solution, but that
Order No. 2023 goes beyond the limits of this authority.\37\ Dominion
argues that Order No. 2023's mandate is unlike the generic rulemaking
upheld by the D.C. Circuit in Transmission Access Policy Study Group v.
FERC because the rule at issue in that case, Order No. 888, represented
a paradigm shift for which a generic rulemaking is appropriate.\38\
Dominion asserts that the other generic rulemakings upheld by the
courts similarly involve more wholesale reform than Order No. 2023,
such as the expansion and creation of new Order No. 1000 planning
obligations upheld in S.C. Pub. Serv. Auth., or the Order No. 637
requirement for gas pipelines to permit segmentation where
[[Page 27011]]
operationally feasible, upheld in Interstate Natural Gas Association of
America v. FERC.\39\ Dominion contends that the Commission's generic
findings in Order No. 2023 are disproportionate to the evidence the
Commission relies on. Similarly, Indicated PJM TOs assert that the
Commission's generic finding is overbroad because many RTOs/ISOs have
already adopted the core reforms in Order No. 2023.\40\
---------------------------------------------------------------------------
\37\ Dominion Rehearing Request at 12.
\38\ Id. (citing Transmission Access Pol'y Study Grp. v. FERC,
225 F.3d 667 (D.C. Cir. 2000) (TAPS), aff'd sub nom. N. Y. v. FERC,
535 U.S. 1 (2002)); see also Indicated PJM TOs Rehearing Request at
14.
\39\ Dominion Rehearing Request at 12-13 (citing S.C. Pub. Serv.
Auth., 762 F.3d at 67; Interstate Nat. Gas Ass'n of Am. v. FERC, 285
F.3d 18 (D.C. Cir. 2002) (INGAA)).
\40\ Indicated PJM TOs Rehearing Request at 7, 17-18 (citing PJM
Interconnection, L.L.C., 181 FERC ] 61,162 (2022)).
---------------------------------------------------------------------------
29. Dominion further argues that, while the courts have held that
the Commission can address case-by-case discrepancies between the
generic determination and specific tariffs during compliance filings,
this cannot be considered an unlimited way for the Commission to avoid
its obligation under the Administrative Procedure Act (APA) to rely on
substantial evidence when making FPA section 206 decisions.\41\
Dominion asserts that, because the Commission recently accepted
revisions to PJM's and DESC's tariffs to address the same issue that
Order No. 2023 attempts to address, the Commission must consider those
tariffs individually and may not sweep them up in a generic
determination based on evidence of queue backlogs made under previous
tariffs and regions.
---------------------------------------------------------------------------
\41\ Dominion Rehearing Request at 14 (citing INGAA, 285 F.3d at
37).
---------------------------------------------------------------------------
30. Dominion argues that Order No. 2023 was arbitrary and
capricious because it relied on out-of-date data and ignored contrary
data.\42\ Dominion asserts that, although the Commission is not
required to rely on ``empirical evidence,'' the Commission must support
its findings with substantial, up-to-date, evidence and cannot ignore
new circumstances.\43\ Dominion asserts that Order No. 2023 does not
reflect reasoned decision-making as it relates to PJM and DESC because
it relies on queue delays and backlogs that predate PJM's and DESC's
revised interconnection reforms and it does not consider those
currently effective interconnection reforms. Indicated PJM TOs point
out that the Order No. 845 data the Commission relied on is stale
because it concerns PJM's previous serial study process, and the
Commission's reliance on that data is inconsistent with its decision to
omit SPP's data from its consideration.\44\
---------------------------------------------------------------------------
\42\ Id. at 2.
\43\ Id. at 10 (citing S.C. Pub. Serv. Auth., 762 F.3d at 64-
65).
\44\ Indicated PJM TOs Rehearing Request at 18 n.45. Indicated
PJM TOs specifically point to Order No. 2023's citation to Order No.
845 data showing the number of delayed studies as of the end of
2022, ``with the vast majority of these studies (2,211)'' coming
from PJM, as stale data the Commission used to support the new
obligations Order No. 2023 will impose. Id. at 17.
---------------------------------------------------------------------------
31. Dominion argues that the Commission ignored evidence that PJM
and DESC had recently adopted interconnection reforms to address the
same problem addressed by Order No. 2023.\45\ Indicated PJM TOs state
that the Commission points repeatedly to problems associated with a
serial study approach, which are irrelevant to regions that already
implemented cluster studies.\46\ Dominion and Indicated PJM TOs argue
that the Commission should have considered whether PJM's, DESC's, and
other similarly situated transmission providers' reforms are working or
even had a chance to be fully implemented.\47\ Dominion argues that the
Commission cited no evidence to demonstrate that PJM's tariff is unjust
and unreasonable, and that it would be difficult to do so because PJM's
transitional process began on July 10, 2023, so there is no data
available to determine whether it is successful.\48\ Similarly,
Dominion notes that DESC's transition process began on June 13, 2022,
was based on 12 months of stakeholder engagement, and includes many
components of Order No. 2023. Dominion contends that reasoned decision-
making should at least require the Commission to consider all relevant
information, including information about the efficacy of reforms in
existing tariffs that are attempting to address the same problem the
Commission is relying upon to make its FPA section 206
determination.\49\
---------------------------------------------------------------------------
\45\ Dominion Rehearing Request at 12.
\46\ Indicated PJM TOs Rehearing Request at 18.
\47\ Id.; Dominion Rehearing Request at 13.
\48\ Dominion Rehearing Request at 8-9.
\49\ Id. at 13 (citing Greater Bos. Television Corp. v. Fed.
Communications Comm'n, 444 F.2d 841, 851 (D.C. Cir. 1970) (an agency
must give ``reasoned consideration to all the material facts and
issues'' and ``engage[] in reasoned decision making''); Tarpon
Transmission Co. v. FERC, 860 F.2d 439, 442 (D.C. Cir. 1988) (``We
cannot accept an agency determination unless it is the result of
reasoned and principled decisionmaking that can be ascertained from
the record.''); ANR Pipeline Co., 71 F.3d 897, 901 (D.C. Cir. 1995)
(``[W]here an agency departs from established precedent without a
reasoned explanation, its decision will be vacated as arbitrary and
capricious.''); Tenneco Gas v. FERC, 969 F.2d 1187, 1214 (D.C. Cir.
1992) (``Subsumed in the substantial evidence requirement is the
expectation that agencies will treat fully each of the pertinent
factors and issues before them.'' (internal citations omitted))).
---------------------------------------------------------------------------
32. Dominion also states that Order No. 2023 directly acknowledges
that CAISO and some non-RTO/ISO transmission providers had no delayed
studies at the end of 2022.\50\ Dominion argues that, instead of
supporting the Commission's finding that all interconnection processes
are unjust and unreasonable, Order No. 2023 acknowledges that the
problem is not as widespread as suggested and that intervening reforms
similar to what Order No. 2023 requires may already be addressing the
problem used to justify the FPA section 206 finding.
---------------------------------------------------------------------------
\50\ Id. at 15-16 (citing Order No. 2023, 184 FERC ] 61,054 at P
40).
---------------------------------------------------------------------------
33. Dominion states that, where an industry-wide solution is
imposed for a problem that only exists in isolated pockets, ``the
disproportion of remedy to ailment would, at least at some point,
become arbitrary and capricious.'' \51\ Dominion states that the Order
No. 2023 compliance obligation essentially requires all existing
processes to re-prove the justness and reasonableness of their
processes, creating a remedy that is ``disproportionate'' to the
identified problem.\52\
---------------------------------------------------------------------------
\51\ Id. at 13 (citing Assoc. Gas Distribs. v. FERC, 824 F.2d
981, 1019 (D.C. Cir. 1987) (Assoc. Gas)).
\52\ Id. at 7-8 (citing Order No. 2023, 184 FERC ] 61,054 at PP
1762-1764).
---------------------------------------------------------------------------
34. Dominion asks the Commission to confirm that, if compliance
filings are required of early adopters like PJM and DESC, the
Commission has the burden under FPA section 206 to find that existing
processes recently adopted are unjust and unreasonable.\53\ Dominion
asserts that the Commission must hew to the constraints created by FPA
section 206 and cannot shift the burden to individual early adopters to
defend their current rates.
---------------------------------------------------------------------------
\53\ Id. at 16 (citing INGAA, 285 F.3d at 37-39).
---------------------------------------------------------------------------
3. Determination
35. We sustain our finding in Order No. 2023 \54\ that the existing
pro forma generator interconnection procedures and agreements are
unjust, unreasonable, and unduly discriminatory or preferential.\55\ We
also continue to find that Order No. 2023's revisions to the pro forma
open access transmission tariff and the Commission's regulations are
necessary to ensure rates that are just, reasonable, and not unduly
discriminatory or preferential.
---------------------------------------------------------------------------
\54\ Order No. 2023, 184 FERC ] 61,054 at P 37.
\55\ 16 U.S.C. 824e(a); 18 CFR 385.206.
---------------------------------------------------------------------------
36. We note that Dominion's rehearing request misstates the
Commission's generic finding as ``declaring all existing
interconnection tariffs, including recently accepted reforms by PJM and
DESC, as unjust, unreasonable, and unduly
[[Page 27012]]
discriminatory or preferential.'' \56\ The findings in Order No. 2023
relate to the Commission's existing pro forma generator interconnection
procedures and agreements, which, among other things, relied on a
serial first-come, first-served study process.\57\ The Commission did
not make any findings regarding specific transmission provider's
tariffs, and it was not required to do so under FPA section 206.\58\
Issues regarding the individual tariffs of specific transmission
providers that currently deviate from the existing pro forma generator
interconnection procedures and agreements will be addressed on an
individual basis on compliance.\59\
---------------------------------------------------------------------------
\56\ Dominion Rehearing Request at 2.
\57\ Order No. 2023, 184 FERC ] 61,054 at P 37.
\58\ See, e.g., TAPS, 225 F.3d at 687-88 (upholding Commission
action under FPA section 206 premised on general systemic conditions
rather than evidence regarding individual utilities); S.C. Pub.
Serv. Auth., 762 F.3d at 67 (``[T]he Commission may rely on
`generic' or `general' findings of a systemic problem to support
imposition of an industry-wide solution.'') (citing INGAA, 285 F.3d
at 37); Assoc. Gas, 824 F.2d at 1008 (``The Commission is not
required to make individual findings, however, if it exercises its
Natural Gas Act Sec. 5 authority by means of a generic rule.'').
\59\ Order No. 2023, 184 FERC ] 61,054 at P 1765.
---------------------------------------------------------------------------
37. We disagree with Dominion's argument that Order No. 2023 goes
beyond the limits of our authority to rely on a generic rulemaking to
support an industry-wide solution. As noted above, Order No. 2023
adopts reforms to the existing pro forma interconnection procedures and
agreements, which themselves were adopted as an industry-wide reform to
identified, industry-wide problems.\60\ All three of the cases Dominion
relies on support the Commission's authority to issue Order No. 2023.
---------------------------------------------------------------------------
\60\ See id. PP 8-12 (explaining the need for and adopting pro
forma interconnection agreements and procedures); see also NARUC v.
FERC, 475 F.3d at 1279 (explaining, at the outset, the structural
connection between the nationwide reforms in Order No. 888 and those
in Order No. 2003).
---------------------------------------------------------------------------
38. When the D.C. Circuit upheld Order No. 888 in TAPS, the court
specifically explained that the Commission can rely on general findings
of systemic conditions to impose an industry-wide remedy under FPA
section 206.\61\ The court agreed with the Commission that specific
evidence regarding individual utilities' behavior is not required under
FPA section 206. Similarly, when upholding Order No. 637 in INGAA, the
D.C. Circuit stated that ``our cases have long held that the Commission
may rely on `generic' or `general' findings of a systemic problem to
support imposition of an industry-wide solution.'' \62\ The D.C.
Circuit explicitly rejected an argument that the Commission
impermissibly shifted the burden of proof merely by requiring pro forma
filings.\63\ Several years later, when upholding Order No. 1000 in S.C.
Pub. Serv. Auth., the D.C. Circuit once again affirmed the Commission's
ability to promulgate nationwide rules, in lieu of case-by-case
adjudication, to solve a nationwide problem.\64\ The court explained
that, even though some regions had already satisfied some requirements
of the rule, the deficiencies identified by the Commission did not only
exist in ``isolated pockets,'' and ``[a]bsent such an extreme
`disproportion of remedy to ailment,' the Commission could reasonably
proceed to address a systemic problem with an industry-wide solution.''
\65\ Nothing in this precedent indicates that the Commission's
authority to promulgate generic rulemakings under FPA section 206
depends upon the rule representing a paradigm shift. Rather, the
precedent is clear that, where the Commission finds a systemic,
nationwide problem that renders the rates, terms, and conditions for
Commission-jurisdictional services unjust, unreasonable, unduly
discriminatory, or preferential, the Commission has authority to
implement a nationwide solution.\66\
---------------------------------------------------------------------------
\61\ TAPS, 225 F.3d at 687-88.
\62\ INGAA, 285 F.3d at 37.
\63\ Id. at 38.
\64\ S.C. Pub. Serv. Auth., 762 F.3d at 67.
\65\ Id.
\66\ S.C. Pub. Serv. Auth., 762 F.3d at 67; TAPS, 225 F.3d at
687-88; INGAA, 285 F.3d at 37.
---------------------------------------------------------------------------
39. Here, substantial evidence indicates that interconnection queue
delays and backlogs are a nationwide problem, not a problem that only
exists in isolated pockets. As explained in Order No. 2023,
interconnection queue backlogs are increasing across all regions of the
country, and ``every single region has faced an increase in both
interconnection queue size and the length of time interconnection
customers are spending in the interconnection queue prior to commercial
operation in recent years. This is true for RTO/ISO and non-RTO/ISO
regions alike.'' \67\ ``[T]he uncertainty and delays in the
interconnection queues have resulted in fewer than 25% of
interconnection requests, by capacity, reaching commercial operation
between 2000 and 2017 in any region of the country--with some regions
as low as 8%.'' \68\ Appendix B to Order No. 2023 shows that most
transmission providers in the country were late in completing
interconnection studies in 2022.\69\ We acknowledge that the data
collected in compliance with Order No. 845 regarding PJM's queue
reflected PJM's previous study process, which was recently reformed.
However, excluding PJM's data would not change our overall conclusion
that interconnection queue backlogs and late interconnection studies
are a significant problem in most regions of the country. To the
contrary, we continue to find that ``the challenges being faced across
the country will be further compounded in the future,'' \70\ and that
the multiple factors contributing to interconnection queue backlogs,
longer development timelines, and increased uncertainty regarding the
cost and timing of interconnecting to the transmission system,
including increasing volume of interconnection requests, increased
complexity in interconnection studies, and insufficient transmission
capacity, are industry-wide challenges likely to persist and
potentially worsen in the future.\71\
---------------------------------------------------------------------------
\67\ Order No. 2023, 184 FERC ] 61,054 at P 38 (citing Queued Up
2023 at 7-9, 32).
\68\ Id. (citing Queued Up 2023 at 3, 21).
\69\ Id. at app. B.
\70\ Id. P 58.
\71\ Id. P 41.
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40. Moreover, due to the early stages of PJM's reforms, the instant
record does not contain any information regarding the effects of such
reforms, including whether PJM is meeting all study deadlines on time,
the overall length of time to reach interconnection, or the portion of
interconnection customers reaching commercial operation. Nor does the
record support that any region, including PJM, is unaffected by the
underlying factors that are persistent and increasing drivers of
widespread interconnection queue delays and backlogs. Therefore, we
continue to find that the systemic problems identified in Order No.
2023 warrant a nationwide solution.
41. In response to Dominion's contention that the Commission
ignored evidence regarding recent queue reform efforts, we note that
Order No. 2023 specifically referenced these ongoing queue reform
efforts. The Commission stated:
We recognize that many transmission providers have adopted or
are in the process of adopting similar reforms to those adopted in
this final rule. We do not intend to disrupt these ongoing
transition processes or stifle further innovation. On compliance,
transmission providers can propose deviations from the requirements
adopted in this final rule--including deviations seeking to minimize
interference with ongoing transition plans--and demonstrate how
those deviations satisfy the standards \72\ discussed
[[Page 27013]]
above, which the Commission will consider on a case-by-case
basis.\73\
---------------------------------------------------------------------------
\72\ Specifically, where transmission providers propose
variations to the Order No. 2023 transition process, the Commission
will evaluate such proposals under the consistent with or superior
to standard for non-RTO transmission providers and the independent
entity variation standard for RTOs/ISOs.
\73\ Order No. 2023, 184 FERC ] 61,054 at P 1765.
In fact, in the NOPR underlying Order No. 2023, the Commission made
clear that it reviewed these recent queue reform efforts, learned from
them, and considered them in formulating a number of its proposals.\74\
---------------------------------------------------------------------------
\74\ Improvements to Generator Interconnection Procs. &
Agreements, 87 FR 39934 (July 5, 2022), 179 FERC ] 61,194, at PP 86-
87, 112, 127, 132, 152-54 (2022) (NOPR).
---------------------------------------------------------------------------
42. However, as explained above, the Commission was not required to
make FPA section 206 findings specific to PJM or DESC's queue reforms.
The details of a specific transmission provider's tariff, and whether
its recent queue reform complies with the new requirements of Order No.
2023, are appropriately handled on an individual basis on compliance.
43. We disagree with Dominion's argument that Order No. 2023's
acknowledgement that some transmission providers had no delayed studies
in 2022 indicates that the problem is not as widespread as suggested.
The fact that a few transmission providers complete studies on time
does not mean that the problem exists only in isolated pockets. As the
D.C. Circuit explained in S.C. Pub. Serv. Auth., the fact that a
problem may not exist in every single region of the country ``is as
unastonishing as it is irrelevant, because petitioners have not shown
that the deficiencies identified by the Commission exist[] only in
isolated pockets.'' \75\
---------------------------------------------------------------------------
\75\ See S.C. Pub. Serv. Auth., 762 F.3d at 67 (citing Wis. Gas.
Co. v. FERC, 770 F.2d 1144, 1157 (D.C. Cir. 1985) (Wis. Gas.);
Assoc. Gas, 824 F.2d at 1019).
---------------------------------------------------------------------------
44. Moreover, substantial evidence indicates that these nationwide
interconnection queue delays and backlogs result in rates, terms, and
conditions in the wholesale electric markets that are unjust,
unreasonable, and unduly discriminatory or preferential.\76\
Interconnection queue delays and backlogs result in longer development
timelines, uncertainty regarding the cost and timing of interconnecting
to the transmission system, and ultimately higher rates, as ``wholesale
customers hav[e] limited access to new and more competitive supplies of
generation.'' \77\
---------------------------------------------------------------------------
\76\ Order No. 2023, 184 FERC ] 61,054 at PP 37, 44.
\77\ Id. PP 37, 43 (citing May Joint Task Force Tr. 74:9-21
(Andrew French) (stating that generator developers complain about
cost certainty); May Joint Task Force Tr. 23:18-25 (Jason Stanek)
(expressing frustration with the status quo and agreement that it is
``no longer tenable'' considering the inability of generators to
interconnect in a timely manner); Ameren Initial Comments at 2;
ELCON Initial Comments at 2; ELCON Initial Comments at 2; Xcel
Initial Comments at 8).
---------------------------------------------------------------------------
45. Further, we believe that the remedies adopted in Order No. 2023
are proportional to the issues identified. As explained in detail in
Order No. 2023, each of the reforms the Commission adopted are directly
related to the need to reform the pro forma generator interconnection
procedures and agreements to ensure that interconnection customers are
able to interconnect to the transmission system in a reliable,
efficient, transparent, and timely manner, and will prevent undue
discrimination.\78\
---------------------------------------------------------------------------
\78\ Id. PP 45-56.
---------------------------------------------------------------------------
46. Further, we also believe that a generic, nationwide rulemaking
is justified by the need for consistent interconnection policies that
apply to all public utility transmission providers.\79\ We continue to
find that it is necessary to apply the reforms in Order No. 2023 on a
nationwide basis to ensure that interconnection customers are able to
interconnect to the transmission system in a reliable, efficient,
transparent, and timely manner, and to prevent undue discrimination. We
further note that some of the critical reforms of Order No. 2023 could
only have been achieved through a nationwide rulemaking; for instance,
standardization of the affected systems study process requires rules
that apply to all jurisdictional transmission providers.
---------------------------------------------------------------------------
\79\ See Order No. 2003, 104 FERC ] 61,103 at P 11 (``[T]here is
a pressing need for a single set of [interconnection] procedures . .
. [which] will minimize opportunities for undue discrimination and
expedite the development of new generation, while protecting
reliability and ensuring that rates are just and reasonable.'').
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47. For the reasons stated above, we disagree with Dominion's
argument that the Commission bears the burden on compliance to find
that recently adopted existing processes that deviate from the pro
forma generator interconnection procedures and agreements are unjust
and unreasonable.\80\ We reiterate that the findings in Order No. 2023
relate to the Commission's existing pro forma generator interconnection
procedures and agreements.\81\ We note that, on compliance, the
Commission will apply the consistent with or superior to standard for
non-RTO transmission providers and the independent entity variation
standard for RTOs/ISOs when analyzing deviations from the Commission's
pro forma LGIP, pro forma LGIA, pro forma SGIP and/or pro forma
SGIA.\82\
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\80\ Elsewhere in this order, the Commission clarifies that
transmission providers need only re-file and seek approval for
previously approved variations where those provisions are modified
by Order No. 2023. See infra P 77.
\81\ Order No. 2023, 184 FERC ] 61,054 at P 37.
\82\ See Xcel Energy Servs. Inc. v. FERC, 41 F.4th 548, 557
(D.C. Cir. 2022) (``The Commission has used its discretion and
expertise to craft the ``consistent with or superior to'' test for
deviations from its pro forma rules.'') (citing Order No. 2003, 104
FERC ] 61,103 at P 826); see also Sacramento Mun. Util. Dist. v.
FERC, 428 F.3d 294, 296 (D.C. Cir. 2005) (explaining that utilities
can deviate from the terms of the pro forma tariff if such
deviations are consistent with or superior to the terms of the pro
forma tariff).
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48. In response to Indicated PJM TOs' contention that the
Commission failed to grapple with the fact that many RTOs/ISOs already
adopted the Commission's core substantive reforms before Order No. 2023
was issued, we acknowledge that many transmission providers have
adopted many of the reforms in Order No. 2023. As explained above, that
is not an accident. The Commission carefully examined recent queue
reform proposals to identify best practices to implement nationwide.
However, no transmission provider has yet adopted all of the reforms in
Order No. 2023. For example, no transmission provider has eliminated
the reasonable efforts standard for completing interconnection studies
on time. We continue to believe that this broad suite of reforms, as a
whole, is necessary to ensure that interconnection customers are able
to interconnect to the transmission system in a reliable, efficient,
transparent, and timely manner, thereby ensuring that rates, terms, and
conditions for Commission-jurisdictional services are just, reasonable,
and not unduly discriminatory or preferential.\83\
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\83\ Order No. 2023, 184 FERC ] 61,054 at P 59.
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49. Regarding Indicated PJM TOs' argument that the Commission
should have waited for recent queue reforms to be fully implemented
before determining whether additional reforms are required, we
disagree. Transmission providers across the country have been working
on regional queue reform for well over a decade.\84\ These proposals
are filed at varying intervals, and at any given time, multiple
transmission providers may be in the process of proposing or
implementing new queue processes. By the time one or two particular
transmission providers implement one set of queue reforms, it is likely
that other transmission providers would be in the process of proposing
or implementing their next queue reform. The Commission would
[[Page 27014]]
be waiting a very long time indeed if it could not issue a generic
rulemaking while any individual transmission provider pursues its own
regional queue reform.\85\
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\84\ Id. P 16, n.39.
\85\ Transmission Plan. & Cost Allocation by Transmission Owning
& Operating Pub. Utils., Order No. 1000, 76 FR 49842 (Aug. 11,
2011), 136 FERC ] 61,051, at P 50 (2011) (finding that the need to
generically establish rules addressing transmission planning, as
well as the long lead times and complex problems associated with
developing transmission facilities, made Commission action
appropriate and prudent rather than allowing the noted transmission
planning problems to persist).
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50. Furthermore, we note that the Commission has historically taken
a gradual approach to addressing problems with respect to
interconnection queue backlogs. In Order No. 845, for instance, the
Commission implemented a number of specific reforms, but held off on
other reforms in favor of collecting further information from
transmission providers.\86\ In doing so, the Commission noted that
``[t]his information could also be useful to the Commission in
determining if additional action is required to address interconnection
study delays.'' \87\ In Order No. 2023, the Commission determined that
additional action was required to address interconnection study
delays.\88\ The reforms in Order No. 845 have not eliminated the
problems of interconnection queue backlogs and delayed interconnection
studies; rather, these problems have only grown, notwithstanding the
Commission's previous reforms. We maintain that the reforms in Order
No. 2023 are necessary to ensure that interconnection customers are
able to interconnect to the transmission system in a reliable,
efficient, transparent, and timely manner, thereby ensuring that rates,
terms, and conditions for Commission-jurisdictional services are just,
reasonable, and not unduly discriminatory or preferential.
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\86\ Reform of Generator Interconnection Procs. & Agreements,
Order No. 845, 83 FR 21342 (May 9, 2018), 163 FERC ] 61,043, at P 24
(2018), order on reh'g, Order No. 845-A, 84 FR 8156 (Mar. 6, 2019),
166 FERC ] 61,137 (2019), order on reh'g, Order No. 845-B, 168 FERC
] 61,092 (2019).
\87\ Order No. 845, 163 FERC ] 61,043 at P 309.
\88\ Order No. 2023, 184 FERC ] 61,054 at P 3.
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B. Arguments Regarding Conflicts With Ongoing Queue Reform Efforts and
Evaluation of Variations on Compliance
1. Order No. 2023 Requirements
51. The Commission addressed commenters' concerns regarding Order
No. 2023's impact on early adopters of similar queue reforms or those
queues currently in transition to a cluster study process. The
Commission recognized that many of the individual reforms that the
Commission adopted in Order No. 2023 are incremental improvements that
one or more regions had already implemented.\89\ The Commission
explained that Order No. 2023 uses some of these individual and
incremental improvements as a basis for a broad suite of reforms that,
in their entirety, have not yet been adopted by any region.
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\89\ Id. P 59.
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52. Additionally, the Commission rejected requests to presume that
any transmission provider's tariff meets the requirements of Order No.
2023.\90\ The Commission recognized that many transmission providers
have adopted or are in the process of adopting similar reforms to those
adopted in Order No. 2023 and clarified that the Commission did not
intend to disrupt these ongoing transition processes or stifle further
innovation.\91\ The Commission emphasized that the provisions of Order
No. 2023 are not intended to interfere with the timely completion of
those in-progress cluster studies and transition processes.\92\ The
Commission explained that, on compliance, transmission providers can
propose deviations from the requirements adopted in Order No. 2023,
including deviations seeking to minimize interference with ongoing
transition plans,\93\ provided that the reason for the variation is
sufficiently justified, and may continue to propose solutions to
interconnection issues under FPA section 205.\94\
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\90\ Id. P 1765.
\91\ Id. PP 861, 1765.
\92\ Id. P 861.
\93\ Id. P 1765 (clarifying that transmission providers that
have already adopted a cluster study process or are currently
undergoing a transition to a cluster study process will not be
required to implement a new transition process).
\94\ Id. P 1767.
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53. Therefore, consistent with Order Nos. 888, 890, 2003, 2006, and
845, the Commission adopted the NOPR proposal to continue to apply the
consistent with or superior to standard when considering proposals from
non-RTO/ISO transmission providers to deviate from the requirements of
Order No. 2023.\95\ Consistent with Order Nos. 2003, 2006, and 845, the
Commission adopted the NOPR proposal to continue to use the
``independent entity variation'' standard when considering such
proposals from RTOs/ISOs.\96\ Consistent with Order Nos. 888, 890,
2003, 2006, and 845, the Commission adopted the NOPR proposal to
continue to allow non-RTO/ISO transmission providers to use the
regional differences rationale to seek variations made in response to
established (i.e., approved by the Applicable Reliability Council)
reliability requirements.\97\ The Commission explained that Order No.
2023 makes no changes to the standards used to judge requested
variations, as described in Order Nos. 888, 890, 2003, 2006, and 845.
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\95\ Id. P 1764 (citing Promoting Wholesale Competition Through
Open Access Non-Discriminatory Transmission Servs. By Pub. Utils,;
Recovery of Stranded Costs by Pub. Utils. & Transmitting Utils.,
Order No. 888, FERC Stats. & Regs. ] 31,036, at 31,769-770 (cross-
referenced at 75 FERC ] 61,080); Preventing Undue Discrimination &
Preference in Transmission Serv., Order No. 890, 72 FR 12226 (Mar.
15, 2007), 118 FERC ] 61,119 at P 109 (2007) (``[W]e reiterate that
any departures from the pro forma [open access transmission tariff]
proposed by an ISO or an RTO must be `consistent with or superior
to' the pro forma [open access transmission tariff] in this Final
Rule.''); Order No. 2003, 104 FERC ] 61,103 at P 825; Order No.
2006, 111 FERC ] 61,220 at PP 546-547; Order No. 845, 163 FERC ]
61,043 at P 43 (explaining that a transmission provider that is not
an RTO/ISO that seeks a variation from the requirements of the final
rule must present its justification for the variation as consistent
with or superior to the pro forma LGIA or pro forma LGIP)).
\96\ Id. (citing Order No. 2003, 104 FERC ] 61,103 at P 826
(``[w]ith respect to an RTO or ISO . . . we will allow it to seek
`independent entity variations' from the Final Rule . . . This is a
balanced approach that recognizes that an RTO or ISO has different
operating characteristics depending on its size and location and is
less likely to act in an unduly discriminatory manner than a
Transmission Provider that is a market participant.''); Order No.
2006, 111 FERC ] 61,220 at PP 447, 549; Order No. 845, 163 FERC ]
61,043 at P 556).
\97\ Id. (citing Order No. 888, FERC Stats. & Regs. ] 31,036, at
31,770; Order No. 890, 118 FERC ] 61,119 at P 109; Order No. 2003,
104 FERC ] 61,103 at P 826 (``if on compliance a non-RTO or ISO
Transmission Provider offers a variation from the Final Rule LGIP
and Final Rule LGIA, and the variation is in response to established
(i.e., approved by the Applicable Reliability Council) reliability
requirements, then it may seek to justify its variation using the
regional difference rationale.''); Order No. 2006, 111 FERC ] 61,220
at PP 546-547; Order No. 845, 163 FERC ] 61,043 at P 43).
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2. Requests for Rehearing and Clarification
54. Several entities request clarification regarding the scope of
the application of Order No. 2023 to transmission providers that have
already transitioned to, or that are in the process of transitioning
to, a cluster study process.\98\
---------------------------------------------------------------------------
\98\ Clean Energy Associations Rehearing Request at 51-52;
Dominion Rehearing Request at 17-18; IPP Coalition Rehearing Request
at 10-13; PacifiCorp Rehearing Request at 15-20; PJM Rehearing
Request at 1-3; Revised Early Adopters Coalition Rehearing Request
at 2-7; WIRES Rehearing Request at 12.
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55. Clean Energy Associations and IPP Coalition ask the Commission
to clarify that all existing cluster study processes must comport with
the requirements of Order No. 2023, whether the transmission provider
currently operates a cluster study process or is currently undergoing a
transition to a
[[Page 27015]]
cluster study process.\99\ Clean Energy Associations and IPP Coalition
argue that interconnection customers that are currently in a cluster
study process should be required to satisfy the requirements of Order
No. 2023, including site control requirements, within an identified
time horizon (e.g., 60-90 days of the compliance filing) or withdraw
from the interconnection queue without penalty.\100\ Clean Energy
Associations and IPP Coalition argue that, if some transmission
providers are not required to transition to a process that is compliant
with Order No. 2023, projects currently in the queue that are not ready
to proceed will not face the increased readiness requirements and delay
reforms to new queue requests, undermining the central purpose of Order
No. 2023.\101\
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\99\ Clean Energy Associations Rehearing Request at 51; IPP
Coalition Rehearing Request at 10-11.
\100\ Clean Energy Associations Rehearing Request at 51; IPP
Coalition Rehearing Request at 11-12.
\101\ Clean Energy Associations Rehearing Request at 53; IPP
Coalition Rehearing Request at 13.
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56. Clean Energy Associations and IPP Coalition argue that, absent
clarification, the Commission risks leaving in place a potentially
problematic oversight.\102\ Specifically, Clean Energy Associations and
IPP Coalition assert that the notion that transmission providers that
have adopted or are currently transitioning to a cluster study process
will not be required to implement a new transition process runs counter
to the requirement that transmission providers may seek approval, on a
case-by-case basis, to maintain variations from the pro forma LGIP and
pro forma LGIA.\103\ According to Clean Energy Associations and IPP
Coalition, the fact that a transmission provider has an existing
cluster study does not exempt that provider from its compliance
obligation or the need to update its process to reflect the material
elements of Order No. 2023.
---------------------------------------------------------------------------
\102\ Clean Energy Associations Rehearing Request at 51; IPP
Coalition Rehearing Request at 11.
\103\ Clean Energy Associations Rehearing Request at 51-52; IPP
Coalition Rehearing Request at 11 (both citing Order No. 2023, 184
FERC ] 61,054 at P 1530).
---------------------------------------------------------------------------
57. NV Energy requests that the Commission clarify whether the new
tariff changes are applicable to all interconnection customers,
including those that currently participate in a cluster study process
or have executed LGIAs.\104\ Specifically, NV Energy requests that the
Commission clarify if interconnection customers will be required to
update their respective study deposits, provide commercial readiness
deposits correlating to the amounts required at the various stages of
the process, and update their site control documentation in order to
remain in the queue.\105\ NV Energy requests a one-time ability for
existing interconnection customers of transmission providers who
currently conduct cluster studies to withdraw penalty-free from the
queue if they are unable to provide the updated study deposits, site
control, commercial readiness deposits, etc.
---------------------------------------------------------------------------
\104\ NV Energy Rehearing Request at 2 (citing Order 2023, 184
FERC ] 61,054 at P 861). NV Energy states that Order No. 2023 did
not mention grandfathering any of the existing interconnection
agreements. Id.
\105\ Id. at 3.
---------------------------------------------------------------------------
58. NV Energy additionally requests clarification on whether a
queued interconnection customer, whether in a current cluster study,
with an executed facilities study agreement, or with an executed LGIA,
must provide the heightened proof of site control by the effective date
of the new tariff changes.\106\ NV Energy seeks clarity on whether: (1)
existing queued interconnection customers are required to provide 90%
of site control if not impacted by a regulatory limitation and are
currently within the cluster study phase of the process; (2) existing
queued interconnection customers with executed facilities studies
agreements are required to provide 100% of site control if the site is
not impacted by a regulatory limitation; (3) existing queued
interconnection customers who are impacted by a regulatory limitation
are required to update their deposit in lieu of site control to the new
deposit amounts; and (4) existing queued interconnection customers with
executed LGIAs who are impacted by a regulatory limitation are required
to provide site control within 180 days of executing their respective
LGIAs.
---------------------------------------------------------------------------
\106\ Id.
---------------------------------------------------------------------------
59. EEI asks the Commission to clarify that Order No. 2023 does not
require transmission providers to re-file and seek approval for
portions of their existing LGIA and LGIP that have previously been
approved by the Commission and are not directly impacted by Order No.
2023.\107\ EEI argues that it would be inappropriate for the Commission
to require transmission providers to re-file and seek approval for such
portions of their existing LGIAs and LGIPs because the Commission
provided no notice that it was going to review or reconsider every
change it has previously approved for LGIAs and LGIPs, and thus
transmission providers were not given an opportunity to defend
previously approved changes.\108\ EEI argues that it would be a
significant administrative burden for transmission providers to re-
justify every change that the Commission has already approved.\109\
---------------------------------------------------------------------------
\107\ EEI Rehearing Request at 2-3, 16.
\108\ Id. at 16.
\109\ EEI states that this would include changes that were
approved by the Commission in response to other rulemakings, such as
Order No. 845. Id. at 16-17.
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60. PJM asks the Commission to provide a clearer signal as to how
it will take into account recently approved reforms such as PJM's
IPRTF.\110\ PJM states that its recent queue reform meets the
Commission's intent in promulgating Order No. 2023, substantially
satisfies its requirements, and is superior for the PJM region.\111\
PJM explains that there are differences between the implementation
mechanisms in its IPRTF Tariff and Order No. 2023, but that these
mechanisms serve the same goals and offer the same protections and
benefits.\112\
---------------------------------------------------------------------------
\110\ PJM Rehearing Request at 1-2.
\111\ Id. at 1, 19-20.
\112\ Id. at 19-23.
---------------------------------------------------------------------------
61. PJM states that it has begun its transition period, and unless
the Commission provides more clarity as to how it will review recently
approved queue reform processes in the Order No. 2023 compliance
process, it will create substantial uncertainty that will distract from
the effort to process the queue backlog.\113\ PJM seeks clarification
that it will not be required to implement Order No. 2023 in a manner
that would modify or undermine the procedures recently accepted by the
Commission, and that the Commission will review PJM's request for an
independent entity variation holistically, by examining whether the
package as a whole is consistent with or superior to the goals and
requirements of Order No. 2023 rather than forcing PJM to engage in an
item-by-item justification of every variation from the minutiae of
Order No. 2023's requirements.\114\ PJM explains that requiring it to
overhaul its tariff or justify each difference from the new pro forma
will risk that some elements will be retained while other balancing
elements will be changed, upsetting the balance that led to stakeholder
approval.\115\ PJM states that proceeding element by element through
compliance will also provide intervenors an opportunity to re-litigate
issues on which they did not prevail, which is contrary to judicial
principles and would be a poor use of time.\116\ PJM also explains that
the elements of its tariff are interdependent, such that a
[[Page 27016]]
piecemeal approach could undermine the entire tariff.
---------------------------------------------------------------------------
\113\ Id. at 2, 10.
\114\ Id. at 3, 15.
\115\ Id. at 15.
\116\ Id. at 16.
---------------------------------------------------------------------------
62. If the Commission does not provide the requested
clarifications, PJM seeks rehearing because the Commission should have
established a presumption that ongoing, recently approved
interconnection queue reform packages comply with Order No. 2023.\117\
PJM explains that Order No. 2023 is internally inconsistent because it
seeks to expedite the interconnection queue, and recognizes the efforts
of on-going queue reform, but refuses to grant a presumption, which
will cause delay and inefficiency.\118\ PJM argues that it would be
arbitrary and capricious and inconsistent with reasoned decision-making
to require modification of PJM's tariff based on a generic
rulemaking.\119\ PJM also argues that failure to grant this rehearing
will undermine confidence in the use of stakeholder processes.\120\
---------------------------------------------------------------------------
\117\ Id. at 3, 25-26.
\118\ Id. at 26.
\119\ Id. at 3-4.
\120\ Id. at 27.
---------------------------------------------------------------------------
63. To the extent that the Commission does not grant PJM's request
to provide a clear signal on rehearing that it will consider whether
the entire package of IPRTF reforms as a whole meets the goals of Order
No. 2023 rather than forcing PJM to engage in an extensive
justification of every variation from every detail in Order No. 2023,
PJM requests rehearing.\121\
---------------------------------------------------------------------------
\121\ Id. at 24.
---------------------------------------------------------------------------
64. Dominion argues that the Commission should cure the
deficiencies in Order No. 2023's approach to compliance for early
adopters like DESC and PJM.\122\ Dominion suggests that the Commission
could simply not require entities that have already transitioned or are
in the process of transitioning to a first-ready, first-served cluster
study construct to file compliance filings. Dominion alternatively
argues that the Commission could defer those entities' obligations to
modify their tariffs, pending an appropriate period of time to gather
evidence about whether their particular, Commission-approved reforms
need to be further modified. Dominion asserts that this approach would
be within the Commission's statutory bounds, is administratively
efficient, and maintains the settled expectations of the stakeholders
that worked diligently and collaboratively to develop transmission
provider-specific reforms. Dominion asserts that the Commission has on
several occasions directed entities to provide reports so that it can
monitor situations before deciding it is necessary to take action.\123\
Dominion argues that the Commission could then require such early
adopters to provide an additional report after a period of time
determined by the Commission, such as two full cluster cycles following
the transition, that would update the Commission on processing time
under the proposed rule.
---------------------------------------------------------------------------
\122\ Dominion Rehearing Request at 17.
\123\ Id. at 17-18 (citing, for example, One-Time Informational
Reports on Extreme Weather Vulnerability Assessments Climate Change,
Extreme Weather, & Elec. Sys. Reliability, Order No. 897, 88 FR
41477 (June 27, 2023), 183 FERC ] 61,192, at P 25 (2023) (requiring
one-time informational reports related to planning for the impacts
of extreme weather on system reliability); Hybrid Res., 174 FERC ]
61,034, at P 1 (2021) (requiring RTOs and ISOs to submit information
related to hybrid resources)).
---------------------------------------------------------------------------
65. Dominion argues that, if the reports demonstrate that early
adopters' processes are not meeting the goals of Order No. 2023, the
Commission would then have a sufficient record, through the reports, to
determine whether to direct further changes to conform with Order No.
2023.\124\ Dominion contends that this compliance path for early
adopters is superior to Order No. 2023's proposal and would allow
transmission providers to demonstrate that the desired aim of Order No.
2023--facilitating quicker, more efficient interconnection processes--
is being achieved.
---------------------------------------------------------------------------
\124\ Id. at 18.
---------------------------------------------------------------------------
66. Revised Early Adopter Coalition and PacifiCorp state that, to
the extent a transmission provider does not seek or is not granted a
variance for its existing interconnection reforms, such transmission
provider appears to be required to immediately adopt the reforms in
Order No. 2023 without any ability to start from a clean slate like
other transmission providers utilizing a transition study process or to
conclude any ongoing studies.\125\ Revised Early Adopters Coalition and
PacifiCorp argue that Order No. 2023 does not appear to allow early
adopters of interconnection reforms an option to open the initial
cluster request window under Order No. 2023 after the conclusion of the
study of existing interconnection requests.\126\ Revised Early Adopters
Coalition and PacifiCorp assert that, because many early adopters are
currently in the process of one or more cluster studies, not allowing
such early adopters to use a transition cluster study process is both
unworkable for such transmission providers and also contrary to Order
No. 2023's assurance that ``the provisions of this final rule are not
intended to interfere with the timely completion of those in-progress
cluster studies and transition processes.'' \127\
---------------------------------------------------------------------------
\125\ Revised Early Adopters Coalition Rehearing Request at 3;
PacifiCorp Rehearing Request at 16.
\126\ Revised Early Adopters Coalition Rehearing Request at 4;
PacifiCorp Rehearing Request at 16. Revised Early Adopters Coalition
note that the initial cluster request window under Order No. 2023
would open ``after the conclusion of the transition process set out
in Section 5.1 of this LGIP.'' Revised Early Adopters Coalition
Rehearing Request at 3-4 (citing Order No. 2023, 184 FERC ] 61,054
at app. C, pro forma LGIP section 3.4.1).
\127\ Revised Early Adopters Coalition Rehearing Request at 4,
7; PacifiCorp Rehearing Request at 16 (both citing Order No. 2023,
184 FERC ] 61,054 at P 861).
---------------------------------------------------------------------------
67. Revised Early Adopters Coalition and PacifiCorp state that
Order No. 2023 also appears to require early adopters to undertake an
initial cluster request window prior to completion of cluster studies
and/or restudies currently underway.\128\ Revised Early Adopters
Coalition and PacifiCorp argue that this would be an unexplained
departure from prior precedent and the Commission's own statements in
Order No. 2023.\129\ Revised Early Adopters Coalition and PacifiCorp
assert that this will also interfere with the timely completion of
current cluster studies because it will divert already strained
resources to preparing for and implementing Order No. 2023's new
provisions. Revised Early Adopters Coalition and PacifiCorp further
argue that this will put early adopters in the difficult, if not
impossible, situation of having to undertake new cluster studies under
Order No. 2023 that are reliant on outcomes of existing, not-yet-
completed, cluster studies.
---------------------------------------------------------------------------
\128\ Revised Early Adopters Coalition Rehearing Request at 6;
PacifiCorp Rehearing Request at 18.
\129\ Revised Early Adopters Coalition Rehearing Request at 2,
6; PacifiCorp Rehearing Request at 18 (both citing, for example,
Panhandle E. Pipe Line Co. v. FERC, 196 F.3d 1273, 1275 (D.C. Cir.
1999) (Panhandle) (``if [FERC] wishes to depart from its prior
policies, it must explain the reasons for its departure.'')).
---------------------------------------------------------------------------
68. Revised Early Adopters Coalition and PacifiCorp ask the
Commission to clarify that early adopters of similar interconnection
reforms, to the extent they do not seek or are not granted variances
for their existing interconnection reforms, may conclude their pending/
existing studies before transition to the new Order No. 2023
process.\130\ Revised Early Adopters Coalition and PacifiCorp
alternatively request that the Commission grant rehearing to permit
such study flexibility for those transmission providers who have
already adopted similar reforms to Order No. 2023. PacifiCorp argues
that, without this flexibility, new cluster studies pursuant to Order
No. 2023 may not be reliable as they will need to rely upon
[[Page 27017]]
assumptions, including ``higher priority requests'' that were studied
in prior interconnection studies and assumed to be in service.\131\
PacifiCorp emphasizes that this flexibility is imperative, given the
size of its queue--326 active interconnection requests, accounting for
over 59 gigawatts of requests.
---------------------------------------------------------------------------
\130\ Revised Early Adopters Coalition Rehearing Request at 2;
PacifiCorp Rehearing Request at 15.
\131\ PacifiCorp Rehearing Request at 19.
---------------------------------------------------------------------------
69. Revised Early Adopters Coalition and PacifiCorp further assert
that Order No. 2023 puts early adopters of interconnection reforms in a
uniquely disadvantaged position of having to simultaneously administer
two types of interconnection processes and, as a result, potentially
expose them to greater likelihood of penalties than other transmission
providers.\132\ Revised Early Adopters Coalition asserts that exposing
early adopters to such outsized risks would be arbitrary and capricious
as well as discriminatory.\133\
---------------------------------------------------------------------------
\132\ Id.; Revised Early Adopters Coalition Rehearing Request at
2-3, 6 (citing 5 U.S.C. 706(2)(A); Motor Vehicle Mfrs. Ass'n of the
U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)
(Motor Vehicle Manufacturers) (explaining that to survive review
under the arbitrary and capricious standard, an agency must examine
the relevant data and articulate a satisfactory explanation for its
action including a rational connection between the facts found and
the choice made.') (internal citations omitted)).
\133\ Revised Early Adopters Coalition Rehearing Request at 6.
---------------------------------------------------------------------------
70. Revised Early Adopters Coalition and PacifiCorp explain that,
if permitted the flexibility above, any transmission provider that
currently has one or more ongoing cluster studies pursuant to its
Commission-accepted cluster study processes, and who has not sought and
received a variance, would commence new cluster studies only after all
pending interconnection request cluster studies (or restudies) have
concluded and only under updated tariff provisions that are consistent
with or superior to Order No. 2023.\134\ Revised Early Adopters
Coalition and PacifiCorp state that allowing such providers to conclude
their existing cluster studies before transition to the new pro forma
study approach will preserve the interests of current interconnection
customers that have been participating in the existing cluster study
process as well as ease the administrative burden for such transmission
providers.
---------------------------------------------------------------------------
\134\ Id. at 6-7; PacifiCorp Rehearing Request at 19-20.
---------------------------------------------------------------------------
71. Revised Early Adopters Coalition and PacifiCorp also request,
in the alternative, that the Commission allow early adopters to use a
transition process similar to other transmission providers, if such a
process better suits their needs and facilitates expedient queue
processing.\135\ Revised Early Adopters Coalition and PacifiCorp
request that, either through clarification or rehearing, the Commission
ensure that early adopters have the flexibility to choose either Order
No. 2023's transition process or the ability to implement Order No
2023's reforms after completing any existing cluster studies and
restudies.
---------------------------------------------------------------------------
\135\ Revised Early Adopters Coalition Rehearing Request at 7;
PacifiCorp Rehearing Request at 20.
---------------------------------------------------------------------------
72. WIRES argues that Order No. 2023 also includes new requirements
that need clarification or further consideration by the
Commission.\136\ WIRES states that it generally agrees that the shift
from a serial study process to a cluster study process is likely to
result in greater efficiency and provide more certainty but argues that
the Commission has not explained how this new requirement will sync up
with ongoing efforts that are already under way. WIRES requests that
the Commission clarify how it plans to accommodate those ongoing
efforts.
---------------------------------------------------------------------------
\136\ WIRES Rehearing Request at 12.
---------------------------------------------------------------------------
3. Determination
73. We clarify that all transmission providers, including those
with existing cluster study processes, have a compliance obligation to
review and modify their current pro forma interconnection procedures
and pro forma interconnection agreements to comply with Order No. 2023.
However, we continue to find that transmission providers that have
already adopted a cluster study process or are currently undergoing a
transition to a cluster study process will not be required to implement
the transition process laid out in Order No. 2023,\137\ and thus
further clarify that such transmission providers are not required to
file pro forma LGIP section 5 (Procedures for Interconnection Requests
Submitted Prior to Effective Date of the Cluster Study) and the related
appendices in their compliance filings.
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\137\ Order No. 2023, 184 FERC ] 61,054 at P 861.
---------------------------------------------------------------------------
74. However, in response to the arguments raised by Revised Early
Adopters Coalition and PacifiCorp, we note that Order No. 2023 does not
prohibit such transmission providers from adopting the transition
process established in Order No. 2023. Therefore, a transmission
provider that does not seek or is not granted a variance for its
existing cluster study process and adopts the reforms in Order No. 2023
would be able to use the Order No. 2023 transition process. Where
transmission providers propose variations to the Order No. 2023
transition process, the Commission will evaluate such proposals under
the consistent with or superior to standard for non-RTO transmission
providers and the independent entity variation standard for RTOs/ISOs.
A transmission provider currently conducting a cluster study process
that does not propose to conduct an Order No. 2023 transition process
must comply with the remaining requirements of Order No. 2023 other
than the transition process.
75. We further grant clarification in response to requests seeking
to clarify the applicability of the Order No. 2023 readiness
requirements to a transmission provider currently conducting a cluster
study process. On compliance, unless it proposes a variation, such a
transmission provider must adopt the Order No. 2023 readiness
requirements; \138\ those new readiness requirements are then to be
applied based on the interconnection customer's progress in the queue
as of 60 calendar days after the Commission-approved effective date of
the transmission provider's compliance filing. Within 60 calendar days
of the Commission-approved effective date of the transmission
provider's Order No. 2023 compliance filing, interconnection customers
that have not executed an LGIA or requested an LGIA to be filed
unexecuted with the Commission must meet the transmission provider's
new readiness requirements for the relevant study phase, such as
updating their respective study deposits, providing commercial
readiness deposits correlating to the amounts required at the various
stages of the process, and demonstrating site control. Interconnection
customers that must meet the transmission provider's new readiness
requirements may withdraw within the 60 days after the Commission-
approved effective date of the transmission provider's Order No. 2023
compliance filing without being subject to Order No. 2023 withdrawal
penalties. If the interconnection customer chooses to withdraw outside
this 60-day timeline, the interconnection customer will be subject to
the new withdrawal penalties. To reflect these clarifications, we set
aside Order No. 2023, in part, and add new section 5.1.2 to the pro
forma LGIP.\139\
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\138\ Id. PP 490-813.
\139\ New pro forma LGIP section 5.1.2 (Transmission Providers
with Existing Cluster Study Processes or Currently in Transition)
states that if Transmission Provider is not conducting a transition
process under Section 5.1.1, it will continue processing
interconnection requests under its current Cluster Study Process.
Within 60 calendar days of the Commission-approved effective date of
Transmission Provider's Order No. 2023 compliance filing,
Interconnection Customers that have not executed an LGIA or
requested an LGIA to be filed unexecuted must meet the requirements
of Sections 3.4.2, 7.5, or 8.1 of this LGIP, based on
Interconnection Customer's Queue Position. Any Interconnection
Customer that fails to meet these requirements within 60 calendar
days of the Commission-approved effective date of this LGIP shall
have its Interconnection Request deemed withdrawn by Transmission
Provider pursuant to Section 3.7 of this LGIP. In such case,
Transmission Provider shall not assess the Interconnection Customer
any Withdrawal Penalty.
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[[Page 27018]]
76. In response to NV Energy, we clarify that the requirement to
meet the new site control requirements also requires that a queued
interconnection customer, whether in a current cluster study or with an
executed facilities study agreement (but not an interconnection
customer with an executed LGIA or that has requested an LGIA to be
filed unexecuted with the Commission), that is facing regulatory
limitations must also submit the applicable deposit and information
regarding the specific limitation within 60 days after the Commission-
approved effective date of the transmission provider's compliance
filing. An interconnection customer that withdraws within the 60-day
period instead of submitting the applicable deposit and information
will not be subject to Order No. 2023 withdrawal penalties.
77. We agree with EEI that transmission providers need only re-file
and seek approval for previously approved variations where those
provisions are modified by Order No. 2023. As the Commission explained
in Order No. 2023, the Commission adopted requirements that are part of
the pro forma LGIP, pro forma LGIA, pro forma SGIP, and pro forma SGIA
and the Commission therefore only addressed the interaction of the
requirements adopted with existing requirements that are part of the
pro forma process and not variations thereto.\140\ Transmission
providers may seek variations from Order No. 2023's requirements on
compliance provided the reason for the variation is sufficiently
justified.\141\ Transmission providers may also continue to propose
interconnection process enhancements beyond Order No. 2023 through a
separate filing under FPA section 205.
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\140\ Order No. 2023, 184 FERC ] 61,054 at P 1530.
\141\ Id. P 1767.
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78. We reject requests to presume that any transmission provider's
tariff meets the requirements of Order No. 2023.\142\ As explained
above, while the majority of reforms adopted herein are based on
individual and incremental improvements that one or more regions have
already implemented, no transmission provider has yet to adopt the
entirety of Order No. 2023's broad suite of reforms.\143\ Thus, we are
unpersuaded by PJM's arguments on rehearing that ongoing, recently
approved interconnection queue reform packages presumably already
comply with Order No. 2023. Applying a presumption to transmission
providers who recently adopted some similar reforms, but not all the
reforms contained herein, will only result in incomplete change that
fails to fulfill or further delays the comprehensive reform required by
Order No. 2023. Additionally, because the Commission continues to find
that the record supports a generic rulemaking,\144\ the Commission
reiterates that it did not need to make a finding specific to each
transmission provider's tariff to require compliance with Order No.
2023.\145\ Therefore, we also remain unpersuaded by Dominion's
arguments on rehearing to defer the tariff modifications of, or to not
require compliance filings from, transmission providers that have
already transitioned or are in the process of transitioning to a
cluster study process or to defer those entities' obligations to modify
their tariffs.
---------------------------------------------------------------------------
\142\ Id. P 1765.
\143\ Id. P 59.
\144\ Order No. 2023, 184 FERC ] 61,054 at P 1766; supra section
II.A.3.
\145\ See Order No. 2023, 184 FERC ] 61,054 at P 1766 (citing
TAPS, 225 F.3d at 687-88).
---------------------------------------------------------------------------
79. In response to requests for clarification regarding how the
Commission will review the compliance filings of entities that already
adopted reforms, we continue to find, consistent with the Commission's
statements in Order No. 2023, that transmission providers may explain
specific circumstances on compliance and justify why any deviations
from the pro forma LGIP, pro forma LGIA, pro forma SGIP, and pro forma
SGIA are either consistent with or superior to the reforms adopted in
Order No. 2023 for non-RTO transmission providers or merit an
independent entity variation for RTOs/ISOs.\146\ An item-by-item
justification must be offered for each variation from the pro forma
provisions modified in Order No. 2023; general statements alone are
insufficient under the consistent with or superior to or the
independent entity variation standard. Region-specific concerns like
those raised by PJM and Dominion are appropriately addressed on
compliance where the Commission will review the compliance filings on a
case-by-case basis.
---------------------------------------------------------------------------
\146\ Id. PP 1764-1765.
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C. Reforms To Implement a First-Ready, First-Served Cluster Study
Process
1. Public Interconnection Information
a. Order No. 2023 Requirements
80. In Order No. 2023, the Commission adopted section 6.1 (Publicly
Posted Interconnection Information) of the pro forma LGIP to require
transmission providers to maintain and make publicly available an
interactive visual representation of available interconnection capacity
(commonly known as a ``heatmap'') as well as a table of relevant
interconnection metrics that is produced in response to user-specified
input about their prospective generating facility.\147\ The table will
allow prospective interconnection customers to see certain estimates of
a potential generating facility's effect on the transmission provider's
transmission system. Specifically, the Commission required transmission
providers to post on their public website a heatmap of estimated
incremental injection capacity (in MW) available at each point of
interconnection to the whole transmission provider's footprint under N-
1 conditions, as well as provide a table of results in response to a
specific user's input showing the estimated impact of the addition of
the proposed project (based on the user-specified MW amount, voltage
level, and point of interconnection) for each monitored facility
impacted by the proposed project on: (1) the distribution factor; (2)
the MW impact (based on the proposed project size and the distribution
factor); (3) the percentage impact on the monitored facility (based on
the MW values of the proposed project and the monitored facility
rating); (4) the percentage of power flow on the monitored facility
before the proposed project; and (5) the percentage power flow on the
monitored facility after the injection of the proposed project. The
Commission required that heatmaps be calculated under N-1 conditions
and studied based on the power flow model of the transmission system
used in the most recent cluster study or restudy, and with the transfer
simulated from each point of interconnection to the whole transmission
provider's footprint (to approximate NRIS), and with the incremental
capacity at each point of interconnection decremented by the existing
and queued generation at that location (based on the existing or
requested interconnection service limit of such generation). The
Commission required transmission providers to
[[Page 27019]]
update their heatmaps within 30 calendars days after the completion of
each cluster study and cluster restudy. Further, the Commission
clarified that transmission providers are not required to make their
heatmaps available until after their transition period.\148\
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\147\ Id. P 135.
\148\ Id. P 141.
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b. Requests for Rehearing and Clarification
81. Clean Energy Associations ask the Commission to clarify that
transmission providers may use ERIS or NRIS assumptions for their
heatmaps, as appropriate for their particular region.\149\ Clean Energy
Associations argue that the requirement to use only NRIS assumptions
fails to account for regional differences and could reduce the value of
providing a heatmap. For example, Clean Energy Associations assert that
in SPP and MISO, ERIS is the primary driver of determining network
upgrades for new generation. If the Commission declines to grant
clarification, Clean Energy Associations seek rehearing of the
requirement to use NRIS assumptions for heatmaps.
---------------------------------------------------------------------------
\149\ Clean Energy Associations Rehearing Request at 48-49.
---------------------------------------------------------------------------
82. Non-RTO Providers request rehearing and modification of Order
No. 2023's requirement that non-RTO/ISO transmission providers develop
interactive heatmap websites.\150\ Non-RTO Providers assert that the
mandate is arbitrary and capricious and contrary to reasoned decision-
making. Non-RTO Providers state that the Commission did not perform an
adequate cost-benefit analysis to weigh the high cost and
administrative burden on non-RTO transmission providers against the
``limited and speculative benefits'' of the heatmaps for non-RTO/ISO
interconnection customers.\151\ Non-RTO Providers assert that the
mandate will require the 37 non-RTO/ISO regions \152\ to each develop
separate heatmap websites. Non-RTO Providers estimate that the
cumulative upfront cost for these 37 heatmap websites is $7.4 million,
and that the cumulative annual maintenance cost for the 37 heatmap
websites is $666,000. Non-RTO Providers assert that the heatmaps will
require regular attention from interconnection engineers who will
otherwise be focused on transitioning to cluster studies. Non-RTO
Providers contend that the heatmap requirement amounts to a penalty on
non-RTO/ISO transmission providers, who cannot socialize the costs as
broadly as RTOs/ISOs can.\153\ Non-RTO Providers request that the
Commission reverse the mandate on rehearing and (1) issue a modified
version of section 6.1 of the pro forma LGIP for non-RTO regions that
allows static public information postings of interconnection capacity
based on cluster study results and (2) adopt a voluntary approach for
the potential development and maintenance of interactive heatmaps in
non-RTO regions.
---------------------------------------------------------------------------
\150\ Non-RTO Providers Rehearing Request at 1-2.
\151\ Id. at 3.
\152\ Non-RTO Providers arrive at this number by subtracting the
RTOs/ISOs from the 44 transmission providers estimated to be
required to comply with Order No. 2023. Id. n.6.
\153\ Id. at 4.
---------------------------------------------------------------------------
83. Non-RTO Providers note that the heatmap concept is a novel
concept and that transmission providers have no special expertise in
website development.\154\ Non-RTO Providers contend that the legal
question on rehearing is whether the benefits of a proposed reform can
reasonably be said to outweigh the costs and assert that the Commission
did not provide sufficient legal foundation under FPA section 206 to
justify the mandate. Non-RTO Providers aver that the Commission did not
acknowledge that interactive websites make financial sense only when
done at scale. Therefore, Non-RTO Providers agree that the costs of the
requirement are justified for RTO/ISO regions, which would require
seven websites to serve approximately two-thirds of the nation's
transmission system, but not for non-RTO/ISO regions, which would have
to develop 37 websites to serve the remaining one-third of the
transmission system. Non-RTO Providers explain that the Commission
appears to prohibit non-RTO/ISO regions from developing joint, regional
heatmaps to reduce the number of websites needed, which they claim
demonstrates that the cost burden and administrative burden on
engineering staff to non-RTO/ISO regions was not adequately
considered.\155\
---------------------------------------------------------------------------
\154\ Id. at 4-5.
\155\ Id. at 5-6.
---------------------------------------------------------------------------
84. Non-RTO Providers contend that the Commission wrongly relies on
Clean Energy Associations' proposition that the heatmaps will be
automated to conclude that engineering resources will not be strained
by the heatmap requirement.\156\ Non-RTO Providers state that such
updates will require one or two full-time employees to prepare data for
the first three weeks of a given 30-day update period and send the
updated data to the vendor during the last week. Non-RTO Providers
contend that the N-1 conditions reflected by the heatmap will offer no
practical value to prospective interconnection customers but will
result in five times as many engineering staff in non-RTOs/ISOs making
heatmap updates compared to those in RTOs/ISOs.\157\ Non-RTO Providers
contend that the Commission did not adequately address these
discrepancies in arguing that non-RTOs/ISOs have the technical capacity
to create heatmaps.
---------------------------------------------------------------------------
\156\ Id. at 6 (citing Order No. 2023, 184 FERC ] 61,054 at P
89).
\157\ Id. at 6-7.
---------------------------------------------------------------------------
85. Further, Non-RTO Providers argue that the record does not
demonstrate that the incremental rate increase to non-RTO/ISO regions
from the heatmaps will be justified by meaningful overall queue
efficiency improvements for non-RTO/ISO customers in the long run.\158\
For example, Non-RTO Providers contend that the Commission failed to
consider that heatmaps could increase speculative interconnection
requests if many interconnection customers seek to interconnect at the
same uncongested points reflected by the heatmap. For the above
reasons, Non-RTO Providers argue that the connection between improving
queue efficiency and benefits to transmission customers is too tenuous
to support a FPA section 206 finding that the heatmap mandate is just
and reasonable for non-RTO transmission providers.\159\
---------------------------------------------------------------------------
\158\ Id. at 8.
\159\ Id. at 9.
---------------------------------------------------------------------------
86. Non-RTO Providers claim that the Commission erred by failing to
consider a non-interactive website alternative for the public
information posting mandate in non-RTO regions.\160\ Non-RTO Providers
state that the Commission never explains why such information needs to
be provided in an interactive heatmap format, rather than in static
public information postings regarding system conditions after each
cluster study or restudy.
---------------------------------------------------------------------------
\160\ Id.
---------------------------------------------------------------------------
87. In the alternative to granting rehearing, Non-RTO Providers
propose that the Commission revise section 6.1 of the pro forma LGIP to
allow static data postings and adopt a voluntary funding approach for
heatmap development in non-RTO Regions.\161\ In particular, Non-RTO
Providers state that they are not opposed to providing increased public
access to base case data after cluster studies have been performed that
shows the estimated incremental injection capacity (in megawatts)
available at each bus in the transmission provider's footprint under N-
1 conditions in table format. Non-RTO Providers explain that data in
this format could still be uniform and
[[Page 27020]]
standardized to the Commission's specifications.\162\ Non-RTO Providers
state that with the voluntary funding approach, website developers
aligned with any of the relevant stakeholders, including transmission
providers and prospective interconnection customers and even the
Commission itself, would be free to develop their own voluntary
interactive heatmaps based on this publicly available data.
---------------------------------------------------------------------------
\161\ Id. at 10.
\162\ Id. at 11.
---------------------------------------------------------------------------
88. NV Energy requests clarification on (1) whether the heatmap
must include proposed network upgrades with capacity amounts to reflect
the available transfer capacity or only the existing facilities and (2)
when a heatmap must be made available and posted to OASIS by
transmission providers that do not conduct a new transition
period.\163\ NV Energy asserts that, presently, the heatmap will
provide limited value and will be consistently red \164\ because
interconnection requests greatly exceed the available capacity or
load.\165\ NV Energy asks if the heatmap requirement for transmission
providers already conducting cluster studies could be implemented at
the same time as study penalties (after the third cluster study cycle/
three years), which would allow transmission providers to issue
requests for proposals for the necessary heatmap software for
implementation and would allow suspended projects to withdraw as well
as remove from the queue those that fail to (1) submit complete
applications, (2) meet various deadlines, and (3) reach commercial
readiness.
---------------------------------------------------------------------------
\163\ NV Energy Rehearing Request at 4.
\164\ An ``all red'' heatmap would indicate no available
interconnection capacity. See Order No. 2023, 184 FERC ] 61,054 at P
157.
\165\ NV Energy Rehearing Request at 4.
---------------------------------------------------------------------------
89. PacifiCorp likewise seeks clarification on when transmission
providers will be required to submit heatmaps for those transmission
providers that do not conduct a transition cluster study process
because the Commission is not requiring transmission providers to
submit heatmaps until after the transition period ends.\166\
---------------------------------------------------------------------------
\166\ PacifiCorp Rehearing Request at 22-23 (citing Order No.
2023, 184 FERC ] 61,054 at P 141).
---------------------------------------------------------------------------
90. Public Interest Organizations assert that the Commission erred
by not providing an adequate method for prospective interconnection
customers to obtain information about potential interconnection costs
at a specific location prior to submitting an interconnection request,
and that the limited information publicly available to interconnection
customers will lead to unjust, unreasonable, unduly discriminatory, and
preferential rates.\167\ Public Interest Organizations also note that
the level of cost uncertainty for different interconnection customers
is not balanced because transmission owner affiliates, particularly in
non-RTO/ISO regions, have greater access to interconnection cost
information relative to independent power producers. Public Interest
Organizations contend that the Commission's decision to not adopt the
proposed informational studies and optional solicitation studies make
Order No. 2023's adopted reforms insufficient to remedy its finding
that the pro forma interconnection procedures ``fail[ ] to contain a
process by which an interconnection customer can obtain information
about potential interconnection costs at a specific location or point
of interconnection prior to submitting an interconnection request.''
\168\ Public Interest Organizations explain that both the informational
studies and optional solicitation studies were specifically intended to
provide additional cost information to prospective interconnection
customers, while the public access information requirement was intended
to provide high-level information to assist interconnection customers
with comparing multiple points of interconnection and estimate
congestion.\169\
---------------------------------------------------------------------------
\167\ Public Interest Organizations Rehearing Request at 7.
\168\ Id. at 8 (citing Order No. 2023, 184 FERC ] 61,054 at PP
46, 152).
\169\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 68).
---------------------------------------------------------------------------
91. Public Interest Organizations state that many parties suggested
that the Commission add more data to the heatmap to provide information
for interconnection customers to readily identify network upgrades,
which would help them estimate the costs to interconnect their project
before they join the interconnection queue.\170\ Public Interest
Organizations note, for example, that NextEra suggested including
information on the circuit and ratings of equipment, and Public
Interest Organizations argued that the heatmaps should include
information on the number of megawatts that could be interconnected
without substantial costs, among other suggestions. Public Interest
Organizations argue that, without such additional data, interconnection
customers continue to bear the burden of determining potential costs,
and that not all interconnection customers possess the resources to use
software or hire consultants to extract meaningful data from the
heatmaps. Public Interest Organizations contend that the heatmap
requirement ultimately falls short of providing a reasonable method for
interconnection customers to predict potential network upgrade costs
prior to entering the queue, leading interconnection customers to make
the ``rational'' decision to submit multiple interconnection requests
to obtain information, which contributes to study delays and
withdrawals. For these reasons, Public Interest Organizations request
the Commission revisit the record to evaluate and adopt requirements
that transmission providers must also make available the additional
data that will allow all customers to estimate the potential network
upgrade costs using reasonable efforts.
---------------------------------------------------------------------------
\170\ Id. at 9-10.
---------------------------------------------------------------------------
92. Public Interest Organizations further assert that the
Commission's decision not to require more information be made publicly
available to potential interconnection customers is arbitrary and
capricious, contrary to the weight of the comments and record, and not
based on substantial evidence.\171\ Public Interest Organizations argue
that the Commission's finding that adding any additional data
requirements to assist interconnection customers is outweighed by the
potential burden to transmission providers failed to consider
countervailing evidence of the benefits of additional data. Public
Interest Organizations assert that the benefits of providing cost
information prior to interconnection customers submitting an
interconnection request is clear: fewer speculative interconnection
requests and therefore less backlogged queues. However, Public Interest
Organizations contend that MISO's heatmap demonstrates that a heatmap
alone is not enough. Public Interest Organizations also argue that the
marginal burden on transmission providers to provide additional heatmap
data is minimal as they can take advantage of automation.
---------------------------------------------------------------------------
\171\ Id. at 10-12.
---------------------------------------------------------------------------
93. PJM seeks rehearing of Order No. 2023's blanket requirement to
update the heatmap 30 calendar days after completion of each cluster
study because PJM states that it is unreasonable for such a large,
multi-state RTO like PJM with hundreds of expected interconnection
requests in each cluster.\172\ PJM states that publishing study results
to its interconnection screening tool, queue scope, requires detailed,
precise analysis using the latest inputs available at the time and
would hold PJM to an unrealistically strict and expedited
[[Page 27021]]
schedule of updating data, tools, simulations, and results, and the
fact that such publishing would be necessary several times a year is
burdensome and adds to the scope of study work required, taking
resources away from other processing efforts. PJM instead anticipates
annually published studies. PJM also states that ``the models'' are
already made available to interconnection customers via a Critical
Energy Infrastructure Information (CEII) request and can provide
information about points of interconnection.
---------------------------------------------------------------------------
\172\ PJM Rehearing Request at 23-24.
---------------------------------------------------------------------------
94. PJM requests rehearing of Order No. 2023's clarification in P
162, which it interprets as stating that transmission providers must
absorb heatmap costs but are not barred from seeking recovery of them
through their transmission rates (and paid by interconnection
customers).\173\ PJM states that interconnection customers, rather than
transmission providers or transmission customers, benefit from heatmap
posting, so there is no good reason that transmission providers must
always charge the costs of maintaining and posting heatmaps to
transmission service customers rather than considering other structures
such as fees for prospective developers not yet in the queue. PJM
states that this rule departs from the Commission's and judicial cost-
causation principles, requiring that costs should be paid by those who
benefit from their incurrence,\174\ and it does so (by assigning
heatmap costs to transmission providers or transmission customers)
without explanation, presents free-ridership issues, and would be
arbitrary and capricious.\175\ PJM asserts that not granting rehearing
of this item would set a precedent that transmission providers must
absorb or pass on to transmission customers costs that are caused by or
that benefit interconnection customers only.
---------------------------------------------------------------------------
\173\ Id. at 42-43.
\174\ Id. at 43 (citing Transmission Plan. & Cost Allocation by
Transmission Owning & Operating Pub. Utils., Order No. 1000-A, 77 FR
32184 (May 31, 2012), 139 FERC ] 61,132 at P 578). PJM includes an
excerpt from Commissioner Christie's concurrence to Order No. 2023,
which states, ``Commission policy may dictate that interconnection
queue efficiency benefits transmission customers; however, that
should not result in the costs of a requirement that best benefits
interconnection customers, and really prospective interconnection
customers that may ultimately not seek to interconnect, being
recovered from consumers through transmission rates carte blanche.
The Commission simply cannot ask retail consumers to foot the bill
for every single ``efficiency,'' especially where many of these
``efficiencies'' largely benefit generation developers and then get
folded into transmission rates and receive an ROE.'' Order No. 2023,
concur op. (Comm'r Christie) at P 22.
\175\ PJM Rehearing Request at 43-44 (citing Motor Vehicle
Manufacturers, 463 U.S. at 57; Sw. Airlines Co. v. FERC, 926 F.3d
851, 858 (D.C. Cir. 2019); Panhandle, 196 F.3d at 1275).
---------------------------------------------------------------------------
c. Determination
95. We deny Clean Energy Associations' request for the Commission
to clarify that transmission providers may use ERIS or NRIS assumptions
for their public heatmaps. As the Commission explained in Order No.
2023, generating facilities seeking NRIS are generally subject to more
stringent study requirements.\176\ Therefore, requiring transmission
providers to produce heatmap results that approximate NRIS assumptions
will provide actionable information on the viability of a given
proposed generating facility to both ERIS and NRIS customers. On the
other hand, requiring heatmaps to approximate ERIS assumptions would
not be helpful to NRIS customers. Even in regions where ERIS may be
more commonly selected or lead to a greater number of network upgrades,
we find that the use of stricter NRIS assumptions would more
consistently alert prospective interconnection customers to the
possibility of required network upgrades compared to ERIS assumptions.
We therefore find that using NRIS assumptions as a baseline would
prevent false negatives, in which the heatmap incorrectly indicates to
prospective interconnection customers that their projects would not
trigger network upgrades. This finding reasonably balances the
resources required of transmission providers in making heatmaps
available with the value of providing non-binding system impact
information to all prospective interconnection customers ahead of
entering the interconnection queue. We note, however, that Order No.
2023 states that ``if transmission providers find value in providing
additional or different information [than required by Order No. 2023],
they may propose such variations on compliance.'' \177\ Therefore, if a
transmission provider believes that it would be informative to
interconnection customers, it may propose on compliance an option for
heatmap users to view results using ERIS assumptions in addition to
NRIS assumptions. As such, we reiterate that ``heatmaps must be
calculated under N-1 conditions and studied based on the power flow
model of the transmission system with the transfer simulated from each
point of interconnection to the whole transmission provider's footprint
(to approximate NRIS), and with the incremental capacity at each point
of interconnection decremented by the existing and queued generation at
that location (based on the existing or requested interconnection
service limit of such generation).'' \178\ For the same reasons noted
above, we are unpersuaded by the arguments raised in Clean Energy
Associations' alternative request for rehearing.
---------------------------------------------------------------------------
\176\ Order No. 2023, 184 FERC ] 61,054 at P 148.
\177\ Id. P 156.
\178\ Id. P 135.
---------------------------------------------------------------------------
96. We are also unpersuaded by Non-RTO Providers' argument that the
Commission failed to properly evaluate the costs and benefits of the
heatmap requirement for non-RTO/ISO regions and that they cannot
socialize the costs as broadly as RTOs/ISOs. First, without a
comparison to estimated heatmap costs for RTO/ISO regions, Non-RTO
Providers' cost estimates do not support its assertion that the cost of
developing interactive heatmaps is more burdensome for non-RTO/ISO
regions.\179\ While RTO/ISO regions do have larger customer bases from
which to recover costs, their heatmaps will also reflect larger and
potentially more complex power systems and need to accommodate a larger
pool of users and, therefore, may cost more.
---------------------------------------------------------------------------
\179\ See, e.g., Ill. Commerce Comm'n v. FERC, 721 F.3d 764, 775
(7th Cir. 2013) (stating that not all benefits can be calculated in
advance, and if FERC cannot quantify the benefits to a particular
utility or utilities but ``has an articulable and plausible reason
to believe that the benefits are at least roughly commensurate with
those utilities' total electricity sales in [the] region,'' then the
Commission can approve the pricing scheme on that basis) (internal
citations omitted).
---------------------------------------------------------------------------
97. We further disagree that the labor requirements Non-RTO
Providers refer to will be overly burdensome relative to RTO/ISO
regions. First, as the Commission clarified in Order No. 2023,
transmission providers are not required to update their heatmaps on a
rolling 30-day basis, but rather within 30 days of the completion of a
cluster study or restudy.\180\ Thus, transmission providers will likely
update their heatmaps at most two times per year, accounting for one
cluster study and one cluster restudy.
---------------------------------------------------------------------------
\180\ Order No. 2023, 184 FERC ] 61,054 at P 141.
---------------------------------------------------------------------------
98. Second, to Non-RTO Providers' argument that annual heatmap
maintenance would divert attention from interconnection engineers who
would otherwise be focused on transitioning to cluster studies, we
reiterate that transmission providers are not required to make heatmaps
available until after their transition period, which will help ensure
that transmission providers' implementation of this final rule,
beginning with the transition period, has begun to reduce backlogged
interconnection queues.
[[Page 27022]]
99. Third, Non-RTO Providers' cost estimates are based on an
extrapolation of one transmission provider's initial estimate, and Non-
RTO Providers do not describe any assumptions of this estimate beyond
the assertion that, after each cluster study or restudy, it would take
two full-time engineers several weeks to ``prepare the data'' before
having a vendor update the heatmap.\181\ We are unpersuaded by this
assertion because, as Order No. 2023 states, transmission providers
must use the results of their most recent cluster study or restudy to
update the heatmap.\182\ Therefore, to update their heatmaps, little
additional analysis should be required beyond what transmission
providers have already completed for their cluster studies and
restudies. We recognize that engineering labor will likely be required
during heatmap website development, either directly, in developing the
software and processes, or in consultation with the firm developing the
heatmap. However, we believe that it is feasible for transmission
providers, or their heatmap developers, to develop their heatmap
websites to accept their base case files as inputs for each update such
that little to no modification of the base case files and data is
necessary. To that point, and Non-RTO Providers' concern that
transmission providers have no special expertise in website
development, we note that Order No. 2023 does not require transmission
providers themselves to develop the requisite software and processes,
and they may contract with firms whose expertise includes website
development and data management. Further, Order No. 2023 does not
preclude transmission providers from proposing on compliance to develop
joint, regional heatmaps.
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\181\ Non-RTO Providers Rehearing Request at 6.
\182\ Order No. 2023, 184 FERC ] 61,054 at PP 139-140.
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100. Finally, we disagree that Non-RTO Providers' proposal to
require that transmission providers post only static data and allow
other entities to voluntarily develop heatmaps accomplishes the goals
outlined in Order No. 2023. The purpose of the heatmap requirement is,
in part, to provide comparable information to all interconnection
customers, prior to entering the queue, regardless of the transmission
provider. Non-RTO Providers' proposal would not ensure such
comparability, but rather would favor interconnection customers that
have more resources to devote towards modeling and favor some
transmission providers' own proposed generation. Thus, interconnection
customers that cannot afford to process the static data Non-RTO
Providers propose to post would still need to submit speculative
interconnection requests to obtain information. Further, the voluntary
funding approach Non-RTO Providers propose would not ensure that non-
RTO/ISO regions have public interconnection information available and
therefore would discriminate against interconnection customers seeking
to interconnect outside of RTO/ISO regions.
101. In response to NV Energy's request for clarification on
whether heatmaps must include proposed network upgrades or only
existing facilities, we reiterate that heatmaps must be based on the
power flow model and base case assumptions used in the most recent
cluster study or restudy. Therefore, heatmaps will incorporate in-
service network upgrades and network upgrades proposed for clusters
higher queued than the most recent cluster study or restudy, as the
base case and power flow models for any cluster will include proposed
network upgrades for higher queued clusters.
102. We agree with NV Energy and PacifiCorp on the need for
clarification regarding when heatmaps must be made available by
transmission providers that do not conduct transition processes. We
therefore clarify that transmission providers that do not conduct
transition periods do not need to make their heatmap available until
360 calendar days after the Commission-approved effective date of the
transmission provider's Order No. 2023 compliance filing. This timeline
will give transmission providers that do not conduct transition periods
the same amount of time as transitioning transmission providers (i.e.,
completion of the transitional cluster study within 360 days after the
Commission-approved effective date of the compliance filing) to develop
their heatmaps. Further, while we agree that heatmaps for some
transmission providers may initially appear as all red, which indicates
no available interconnection capacity, we reiterate our finding that an
all red heatmap still ``sends a valuable signal to interconnection
customers regarding where proposed generating facilities may be more or
less economic to interconnect prior to entering the interconnection
queue.'' \183\ We are therefore unpersuaded that such a result
necessitates delaying the posting of the interactive heatmap.
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\183\ Id. P 157.
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103. We are also unpersuaded by NV Energy's request for
clarification that transmission providers that do not conduct
transition processes because they already use cluster studies should be
required to post publicly available heatmaps only after three cluster
cycles, similar to the transition to study delay penalties. This would
delay transmission providers already using cluster studies, and their
potential interconnection customers, from realizing the benefits of a
heatmap (e.g., a reduced volume of speculative interconnection
requests) for more than twice as long as those transmission providers
who do conduct a transition process and their potential interconnection
customers.
104. We are unpersuaded by Public Interest Organizations' assertion
that the Commission erred in not requiring transmission providers to
include additional data in their heatmaps that would assist
interconnection customers in estimating interconnection costs at
potential points of interconnection. We further disagree with Public
Interest Organizations' contention that the Commission did not fully
consider the record on this matter in coming to its decision. On the
contrary, as numerous commenters explain--and as the Commission stated
in Order No. 2023--cost estimates produced prior to an interconnection
customer entering the queue would be highly uncertain and subject to a
high degree of change depending on the actions of other interconnection
customers in the queue and study results, and therefore would provide
little to no value to interconnection customers in terms of improving
cost certainty.\184\ We believe this to be true regardless of whether
the transmission provider or the interconnection customer produces
those cost estimates. Further, Public Interest Organizations do not
argue that cost estimates should be directly incorporated into
transmission providers' heatmaps, but rather that transmission
providers should include additional information in their heatmaps that
would allow interconnection customers to ascertain information about
potential costs at points of interconnection. At the same time,
however, Public Interest Organizations argue that many interconnection
customers lack the resources to develop cost estimates based on
transmission providers' heatmaps. Thus, Public Interest Organizations'
proposal would not only increase the burden on transmission providers
but require interconnection
[[Page 27023]]
customers themselves to dedicate more resources towards developing cost
estimates that are likely to change once they enter the queue. We
therefore continue to find that the heatmap requirements set forth in
Order No. 2023 strike a reasonable balance between the burden on
transmission providers to develop and maintain heatmaps and the benefit
of providing interconnection customers with sufficient information to
identify viable points of interconnection, given that cost estimates
produced prior to entering the queue would be unreliable. We note,
however, that, consistent with the Commission's statements in Order No.
2023, transmission providers may explain specific circumstances on
compliance and justify why any deviations are either consistent with or
superior to the pro forma LGIP or merit an independent entity variation
in the context of RTOs/ISOs.\185\
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\184\ See id. P 138.
\185\ Id. P 1764.
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105. We are unpersuaded by PJM's request to modify the requirement
for transmission providers to update their heatmaps within 30 calendar
days of completing a cluster study or restudy. We find PJM's argument
regarding its queue scope tool to be inapposite. As the Commission
explained in Order No. 2023, because the heatmap should use the results
of the most recent cluster study or restudy, the heatmap requirement
should require minimal additional analysis beyond the cluster study or
restudy and should not necessitate detailed analysis.\186\ Transmission
providers must simply make the data and assumptions used in the
analyses they already completed available in a public, interactive
form. Updating heatmaps within 30 calendar days of completion of a
cluster study or restudy will also ensure that interconnection
customers can use the heatmap during the customer engagement window to
determine whether to proceed in the queue or withdraw. Finally, we
disagree that interconnection customers' ability to request CEII
achieves the same goal as the heatmap requirement. The heatmaps are
intended to improve transparency and ease the burden of producing
interconnection-related information for prospective interconnection
customers. On the other hand, requests for CEII typically require an
entity to submit certain identifying information and/or legal documents
like non-disclosure agreements and require the transmission provider to
review and verify such information, and weigh the need for the
information against the potential harm of its release, before
potentially granting access to a protected part of its website or OASIS
portal.\187\ Reliance on such a process would impose an unnecessary
burden on the prospective interconnection customer, the transmission
provider, and other interested stakeholders because, as commenters
explain, the information to be published in transmission providers'
heatmaps does not raise CEII concerns.\188\
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\186\ Id. PP 139-140.
\187\ PJM's CEII request process, for example, includes all
these process components. See https://www.pjm.com/library/request-access.
\188\ Order No. 2023, 184 FERC ] 61,054 at P 144.
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106. Further, we are unpersuaded by PJM's request to modify the
finding in Order No. 2023 that transmission providers must bear the
costs associated with their heatmaps or recover them through
transmission rates to the extent they are recoverable consistent with
Commission accounting and ratemaking policy. First, transmission
providers already maintain interconnection information and other
related information online for the purposes of transparency and
facilitating participation amongst various stakeholders. Thus, we
disagree with PJM's requested modification because transmission
providers may recover the costs associated with heatmaps through
transmission rates to the extent they are recoverable consistent with
Commission accounting and ratemaking policy. Second, we disagree that
interconnection customers are the sole or primary beneficiaries of the
heatmap requirement, and that transmission providers themselves do not
benefit from it. The heatmap requirement will reduce the number of
speculative interconnection requests submitted to transmission
providers by providing prospective interconnection customers with
information to evaluate the viability of their potential
interconnection requests, thus improving overall queue efficiency for
the benefit of both transmission providers and prospective
interconnection customers.
2. Cluster Study Process
a. Order No. 2023 Requirements
107. In Order No. 2023, the Commission revised the pro forma LGIP
and pro forma LGIA to require transmission providers to study
interconnection requests in clusters.\189\ The Commission adopted
numerous revisions to the pro forma LGIP and pro forma LGIA to
effectuate this change. Specifically, and as relevant here, the
Commission revised the definitions of material modification and stand
alone network upgrades, and defined interconnection facilities study
report.\190\ The Commission adopted section 3.1.2 (Submission) of the
pro forma LGIP to require an interconnection customer to select a
definitive point of interconnection when executing the cluster study
agreement.\191\ The Commission adopted section 3.4.1 (Cluster Request
Window), section 3.4.4 (Deficiencies in Interconnection Request), and
section 3.4.5 (Customer Engagement Window) of the pro forma LGIP to
provide a process for interconnection customers to submit a cluster
study interconnection request.\192\ The Commission adopted section
3.4.6 (Cluster Study Scoping Meetings) of the pro forma LGIP to require
transmission providers to hold a scoping meeting with interconnection
customers in the cluster.\193\ The Commission revised section 3.5.2
(Requirement to Post Interconnection Study Metrics) of the pro forma
LGIP to require transmission providers to post metrics for cluster
study and restudy processing time.\194\
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\189\ Id. P 177.
\190\ Id. P 192.
\191\ Id. P 200.
\192\ Id. P 223.
\193\ Id. P 245.
\194\ Id. P 259.
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108. The Commission adopted several revisions to the pro forma LGIP
related to the process by which interconnection customers can make an
interconnection request. The Commission revised section 4.1 (Queue
Position) of the pro forma LGIP to provide that all interconnection
requests within a cluster be considered equally queued and accordingly
modified the definition of queue position.\195\ The Commission renamed
and revised section 4.2 (General Study Process) of the pro forma LGIP
to require transmission providers to perform interconnection studies
within the cluster study process.\196\ The Commission revised section
4.4 (Modifications) of the pro forma LGIP to provide that moving a
point of interconnection shall result in the loss of a queue position
if it is deemed a material modification by the transmission
provider.\197\ The Commission also revised section 4.4.1 of the pro
forma LGIP to incorporate the material modification process as part of
the cluster study process.\198\ The Commission revised section 4.4.5 of
the pro forma LGIP to require that interconnection customers receive an
[[Page 27024]]
extension of fewer than three cumulative years of the generating
facility's commercial operation date without requiring them to request
such an extension from the transmission provider.\199\
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\195\ Id. PP 277, 283.
\196\ Id. P 278.
\197\ Id. P 283.
\198\ Id. P 285.
\199\ Id. P 293.
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109. The Commission adopted revisions to the pro forma LGIP to
implement several cluster study provisions. The Commission replaced
section 6 (Interconnection Feasibility Study) of the pro forma LGIP
with the new public interconnection information requirements as
discussed in section II.C.1 of Order No. 2023.\200\ The Commission
revised section 7 (Cluster Study) of the pro forma LGIP to set out the
requirements and scope of the cluster study agreement, as well as the
cluster study and restudy procedures.\201\ The Commission revised
section 7.4 (Cluster Study Procedures) of the pro forma LGIP to permit
transmission providers to use subgroups in their cluster study process
if they so choose.\202\ The Commission revised section 8.5 (Restudy) of
the pro forma LGIP to make clear that restudies can be triggered by the
withdrawal or modification by a higher- or equally-queued
interconnection requests.\203\ The Commission revised sections 11.1
(Tender) and 11.3 (Execution and Filing) of the pro forma LGIP
regarding the tendering, execution, and filing of the LGIA to
incorporate the site control demonstrations and LGIA deposit
requirements of Order No. 2023.\204\
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\200\ Id. P 316.
\201\ Id. P 317.
\202\ Id. P 363.
\203\ Id. P 335.
\204\ Id. P 344.
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b. Requests for Rehearing and Clarification
110. Clean Energy Associations contend that the Commission acted
arbitrarily and capriciously and failed to engage in reasoned decision-
making by changing the definition of stand alone network upgrades such
that only ``single customers'' are eligible to build them.\205\ Clean
Energy Associations claim that, when considered with the shift to a
cluster study process and other stated goals for the sharing of network
upgrade costs amongst interconnection customers, the revised definition
effectively forecloses the opportunity for any future interconnection
customer to exercise their discretion to build stand alone network
upgrades or identified transmission provider interconnection
facilities. Additionally, Clean Energy Associations aver that the
revisions ignore the relationship of the option to build to the project
sponsor, nearly eliminating the benefits of the option to build, such
as controlling project schedules.\206\ Finally, Clean Energy
Associations assert that the Commission's reasoning is based on a
hypothetical situation which has not occurred since Order No. 845, or
possibly ever.
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\205\ Clean Energy Associations Rehearing Request at 8-9.
\206\ Id. at 9-10.
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111. Clean Energy Associations argue that the Commission's
assertion that ``confusion and potentially lengthy negotiations and/or
disputes'' would result without revisions to the definition of stand
alone network upgrades is unsupported by the record of this
proceeding.\207\ Clean Energy Associations note that transmission
providers already using cluster studies have operated for years under
the Order No. 845 definition, demonstrating that the revisions were not
necessary. Clean Energy Associations explain that Order No. 2023
neither cites previous instances of confusion or lengthy disputes
regarding the construction of stand alone network upgrades, nor any
other facts or evidence that would support a finding that the current
definition is insufficient or inadequate. Clean Energy Associations
also note that one transmission provider using cluster studies
supported the concept of allowing stand alone network upgrades to be
shared among interconnection customers.\208\
---------------------------------------------------------------------------
\207\ Id. at 10 (citing Order No. 2023, 184 FERC ] 61,054 at P
193).
\208\ Id. at 11-12 (citing Order No. 2023, 184 FERC ] 61,054 at
P 185).
---------------------------------------------------------------------------
112. Clean Energy Associations contend that this aspect of Order
No. 2023 is arbitrary and capricious because the Commission fails to
acknowledge or adequately explain departures from its precedent.\209\
Clean Energy Associations note that Order No. 845 explains that the
option to build benefits the interconnection process by giving
interconnection customers more control and certainty, and that
interconnection customers are in the best position to determine if the
option to build in their interest. However, Clean Energy Associations
assert that the revised definition removes interconnection customers'
ability to exercise their discretion regarding the option to build for
the majority of network upgrades identified in a cluster study, and
modifies the status quo by reducing the number of network upgrades that
would qualify as stand alone network upgrades because the proportional
impact method of cost allocation will reduce the likelihood of finding
a single customer 100% responsible for a network upgrade.\210\ Clean
Energy Associations contend that this renders the Order No. 845 policy
moot and is inconsistent with the Commission's intent in Order No. 2023
to maintain the status quo.
---------------------------------------------------------------------------
\209\ Id. at 12-13.
\210\ Id. at 13-14.
---------------------------------------------------------------------------
113. Clean Energy Associations state that the Commission can
redress this error on rehearing by (1) reversing its decision to revise
the definition of stand alone network upgrade, and (2) requiring
transmission providers to address, in their compliance filings and
OATTs, the process through which interconnection customers with shared
network upgrades that qualify as stand alone network upgrades can
exercise their option to build.\211\ Alternatively, Clean Energy
Associations suggest that the Commission require transmission providers
to allow the interconnection customers amongst whom a stand alone
network upgrade was shared to unanimously exercise the option to build
and, then, to either select a third party to construct the upgrade or
to determine responsibility for doing so amongst themselves. Clean
Energy Associations assert that this would prevent the concern of
disputes among interconnection customers within a cluster. Clean Energy
Associations state that both of these options would be consistent with,
and would preserve, the policy set forth in Order No. 845, while also
addressing the Commission's concerns that disputes or confusion may
arise and further delay the interconnection process, while striking an
appropriate balance between the Commission's policy and efforts in
Order No. 845 and Order No. 2023, honoring both efforts and further
enhancing and benefiting the interconnection process.
---------------------------------------------------------------------------
\211\ Id. at 14-15.
---------------------------------------------------------------------------
114. Clean Energy Associations state that the Commission erred in
finding that modifications to project size can only be made during the
customer engagement window and that interconnection customers must
select a single, definitive point of interconnection at that time.\212\
Clean Energy Associations assert that the record does not support the
conclusion that the customer engagement window is sufficient for the
interconnection customer to enter the cluster study with confidence in
its project size and definitive point of interconnection and, thus,
this timeline does not reflect an appropriate balance that will reduce
the need for restudies and delays. Clean Energy Associations assert the
[[Page 27025]]
opposite--that the record indicates that failure to provide flexibility
to interconnection customers to modify project size and point of
interconnection after receipt of initial cluster study results will
increase the likelihood of withdrawals and cascading restudies by not
allowing interconnection customers to make beneficial adjustments
earlier in the interconnection process that could be determinative in a
project's decision to stay in the cluster or withdraw. Clean Energy
Associations disagree with the Commission's conclusion that the
extended 60 calendar day customer engagement window is sufficient to
provide interconnection customers with ``time to consider information
collected during this period of engagement with the transmission
provider,'' \213\ which will allow customers to determine when to
withdraw their interconnection requests and avoid penalties while
improving queue efficiency due to fewer late-stage cluster study
withdrawals. Clean Energy Associations assert that, prior to the
cluster study, it is difficult for an interconnection customer to make
any informed conclusion about expected costs of potential network
upgrades and such costs' impact on project viability, which the
interconnection customer must learn from the cluster study.
---------------------------------------------------------------------------
\212\ Id. at 15-16.
\213\ Id. at 17-18 (citing Order No. 2023, 184 FERC ] 61,054 at
P 233).
---------------------------------------------------------------------------
115. The 60-day customer engagement window, Clean Energy
Associations assert, only provides interconnection customers 46
calendar days to evaluate publicly posted information and make any
potential project modifications prior to entering the cluster study,
and any such early-acquired information will be incomplete, lacking
modeling data, new model sets, and other study assumptions such as
confidential merit order dispatch lists used by transmission providers
to set up power transfers from new generators, despite publicly posted
information by transmission providers.\214\ Clean Energy Associations
state that substantial information gained through the study process may
necessitate a change in point of interconnection, making choosing a
single point of interconnection implausible. They claim that not
requiring transmission owners to attend scoping meetings further limits
an interconnection customer's access to information. Clean Energy
Associations assert that an interconnection customer will not have
sufficient time and information to evaluate project viability during
the customer engagement window or modify project size and location in
response to pre-study information obtained during that window.
---------------------------------------------------------------------------
\214\ Id. at 18-19.
---------------------------------------------------------------------------
116. Clean Energy Associations assert that limiting post-initial
cluster study entry modifications to the interconnection request to
those the transmission provider deems not to be material ignores record
evidence that this practice will not result in a more reliable,
efficient, transparent, and timely interconnection process.\215\ Clean
Energy Associations assert that allowing flexibility in project size
reductions through the initial cluster study will allow for
optimization of projects based on official study results, resulting in
fewer withdrawals due to increased project viability and contribution
to reliability through reduced impacts to the transmission provider's
system, which it asserts will be less disruptive to the interconnection
process than a full withdrawal. Clean Energy Associations state that,
likewise, inability to change the point of interconnection or to submit
an alternate point of interconnection could cause delays and can
trigger the restudy of an entire cluster. Clean Energy Associations
assert that the record demonstrates that interconnection customers lack
sufficient time or information to optimize project characteristics
prior to entering the initial cluster study, and that flexibility to
make beneficial modifications after receipt of initial study results
would reduce rather than increase uncertainty, restudy, and
administrative burden.
---------------------------------------------------------------------------
\215\ Id. at 19-20.
---------------------------------------------------------------------------
117. Clean Energy Associations further state that the option to
instead pursue a material modification exemption does not provide
sufficient flexibility because: (1) it leaves this determination to the
discretion of the transmission provider; and (2) it ignores that minor
project modifications that could have slight impacts on other
interconnection customers in the same cluster might nonetheless be far
less disruptive than project withdrawal.\216\ Clean Energy Associations
argue that the material modification review is often based on ``opaque
assumptions'' available only to the transmission provider and may
divert resources at a relatively more intense part of the study
process.
---------------------------------------------------------------------------
\216\ Id. at 21-22.
---------------------------------------------------------------------------
118. Clean Energy Associations note that SPP, PJM, and MISO have
adopted provisions allowing 50%-100% reduction allowance and minor
point of interconnection changes, and also permit smaller size
adjustments similar to that found in pro forma LGIP section 4.4.2
through the initial cluster restudy, which Clean Energy Associations
state belie the Commission's assertion that the timing for
modifications in Order No. 2023 reflects a natural translation of the
timing for modification in the existing serial study process to a
cluster study process.\217\ Clean Energy Associations therefore request
that the Commission grant rehearing and modify the language in revised
pro forma LGIP section 4.4.1 to allow modifications to project size
(specifically, up to a 60% size reduction) prior to entering the
cluster restudy, and to allow minor modifications to project size
(specifically, up to a 15% size reduction) after the receipt of a
cluster restudy but prior to the start of the facilities study. Clean
Energy Associations further request that the Commission grant rehearing
and allow interconnection customers the option to present a primary and
alternative definitive point of interconnection in an electrically
proximate area, provided that the transmission provider and
transmission owner verify the alternative as acceptable during the
customer engagement window and prior to the scoping meeting.
---------------------------------------------------------------------------
\217\ Id. at 22.
---------------------------------------------------------------------------
119. IPP Coalition also asks the Commission to reconsider its
requirement that customers identify a single point of interconnection
and, instead, allow for an electrically proximate alternative point of
interconnection that is verified as acceptable by the transmission
provider during the cluster study customer engagement window and listed
in the cluster study agreement.\218\ IPP Coalition asserts that
electrically proximate point of interconnection locations can be
effectively implemented within a study process without materially
impacting a study process, and that this general standard should be
applied consistently to a potential change, whether it is sought by an
interconnection customer as part of the interconnection request or
ultimately required on the basis of a public policy decision.
---------------------------------------------------------------------------
\218\ IPP Coalition Rehearing Request at 7-8.
---------------------------------------------------------------------------
120. [Oslash]rsted requests that the Commission clarify that, in
circumstances where state or federal agency policy or regulation
requires a change to the point of interconnection, projects should be
restudied based upon the new regulatory or statutory requirements.\219\
Alternatively, [Oslash]rsted requests that the Commission clarify that,
in such circumstances, the transmission provider, the state, or the
[[Page 27026]]
interconnection customer may request a waiver of applicable tariff and
LGIA/LGIP provisions that might be affected in order to comply with the
federal or state regulatory requirement.
---------------------------------------------------------------------------
\219\ [Oslash]rsted Rehearing Request at 11.
---------------------------------------------------------------------------
121. Clean Energy Associations state that the Commission should
grant rehearing and amend Order No. 2023 to stipulate that, if an
interconnection customer submits an interconnection request at least 15
business days prior to the close of the cluster request window, and if
failure by the transmission provider to issue a deficiency notice
within five business days of receipt results in the interconnection
customer having fewer than 10 business days to respond to the
deficiency notice prior to the close of the customer request window,
the interconnection customer shall still be granted a full 10 business
days to respond prior to facing the consequences outlined in revised
pro forma LGIP section 3.4.4.\220\ Clean Energy Associations state
that, to ensure a full 10 business days to respond, an interconnection
customer would have to submit its interconnection request more than 15
business days before the close of the cluster request window to account
for the five business day window for the transmission provider to issue
a deficiency notice, and that even if an interconnection customer
submitted its interconnection request more than 15 business days before
the close of the cluster window, the interconnection customer may be
left with fewer than 10 business days to provide a response in the
event that the transmission provider failed to meet the five business
day notification requirement. Clean Energy Associations state that,
because of this oversight, an interconnection customer may, through no
fault of its own, have as little as one day to respond to a deficiency
notice. Clean Energy Associations argue that revised pro forma LGIP
section 3.4.4 includes significant consequences for interconnection
customers that fail to meet the 10 business-day deadline, but no
consequences for transmission providers that fail to meet the five-
business day deficiency notice deadline. Clean Energy Associations
argue that the Commission acted arbitrarily and capriciously and failed
to engage in reasoned decision-making by failing to account for
potential delay on the part of the transmission provider.
---------------------------------------------------------------------------
\220\ Clean Energy Associations Rehearing Request at 25-26.
---------------------------------------------------------------------------
122. Clean Energy Associations and [Oslash]rsted argue that the
Commission acted arbitrarily and capriciously and failed to engage in
reasoned decision-making when it declined to require transmission
owners to attend scoping meetings.\221\ Clean Energy Associations and
[Oslash]rsted state that requiring transmission owners to attend may
help RTOs/ISOs address potential challenges sooner, avoiding penalties
caused by transmission owner delays. Clean Energy Associations and
[Oslash]rsted assert that the purpose of the customer engagement window
is to provide interconnection customers with information to help them
determine the viability of their proposed generating facilities earlier
in the process, and without transmission owners in these meetings,
interconnection customers are deprived of critical information
necessary to determine the costs and commercial viability of their
projects.\222\ [Oslash]rsted additionally states that transmission
owners are fully responsible for design of network upgrades, including
both substation and system network upgrades, as well as play an
important role in informing point of interconnection decisions by
providing information about the existing grid conditions and
capabilities as well as information related to interconnection
requirements.\223\ [Oslash]rsted therefore argues that the transmission
owner is in the best position to give interconnection customers a sense
of the work required to expand the transmission facilities to
accommodate new interconnection customers, and that a failure to
include transmission owners in these meetings deprives interconnection
customers of critical information necessary to determine the costs and
commercial viability of their projects. [Oslash]rsted asserts that not
requiring transmission owners to attend the scoping meeting creates an
additional burden on both the interconnection customer and the
transmission owner because customer will need to schedule separate
meetings with the transmission owners to get additional information.
---------------------------------------------------------------------------
\221\ Id. at 26; [Oslash]rsted Rehearing Request at 3.
\222\ Clean Energy Associations Rehearing Request at 27-28;
[Oslash]rsted Rehearing Request at 3-4.
\223\ [Oslash]rsted Rehearing Request at 4-5.
---------------------------------------------------------------------------
123. EEI, NYISO, and NYTOs seek rehearing of Order No. 2023's
elimination of the feasibility study.\224\ EEI argues that carrying out
physical feasibility studies, which determine whether the project is
``physically constructable'' to the point of interconnection, early in
the interconnection process will allow for the early disqualification
of infeasible interconnection requests, which will save resources.\225\
NYTOs contend that analyzing feasibility is especially needed in highly
congested areas like New York City and Long Island, where geographic
and environmental limitations often restrict the ability to
interconnect new generation at certain locations, which cannot be
reflected in a heatmap.\226\ NYISO and NYTOs note that, because
physical feasibility issues are particularly important in New York,
NYISO needs to address early in the interconnection study process which
proposed projects will be eligible to make use of those limited points
of interconnection.\227\ NYISO and NYTOs assert that the Commission's
determination to eliminate the feasibility study and replace it with a
heatmap to provide project developers with a rough indication of
interconnection capacity before they submit their interconnection
requests will not address critical physical feasibility issues.
---------------------------------------------------------------------------
\224\ EEI Rehearing Request at 13-14; NYISO Rehearing Request at
11; NYTOs Rehearing Request at 6; see also WIRES Rehearing Request
at 12 (asking the Commission to clarify that feasibility studies can
continue to be performed under the ``Independent Entity Regional
Variation Standard'').
\225\ EEI Rehearing Request at 13-14.
\226\ NYTOs Rehearing Request at 8.
\227\ Id. at 7; NYISO Rehearing Request at 11.
---------------------------------------------------------------------------
124. EEI asks the Commission to clarify that provisional
interconnection service requests will continue to be processed as
received and outside the cluster study process.\228\ EEI states that
the Commission may have inadvertently failed to include provisional
service in its response to PacifiCorp's comments regarding processing
interconnection requests (including provisional service requests) in
Order No. 2023.
---------------------------------------------------------------------------
\228\ EEI Rehearing Request at 14-15.
---------------------------------------------------------------------------
125. EEI requests that the Commission clarify how the 150-day study
deadline applies to cascading restudies.\229\ EEI states that a
withdrawal has the potential to trigger the restudy of every subsequent
cluster, which will have to be conducted in turn. EEI specifically asks
the Commission to clarify that transmission providers have 150 days to
complete the restudy from the initiation of the restudy, rather than
from when the interconnection customers are informed that the restudy
is needed. EEI argues that this clarification is necessary so that
transmission providers have the full 150-day period for each restudy.
---------------------------------------------------------------------------
\229\ Id. at 15-16.
---------------------------------------------------------------------------
126. MISO asks the Commission to clarify that Order No. 2023's
statements that decline to allow transmission providers the flexibility
to set their own study deadlines were intended to respond to requests
to allow transmission providers to establish deadlines for specific
study clusters other than through deadlines fixed in
[[Page 27027]]
their tariffs, and were not intended to preempt transmission providers
from proposing to maintain existing tariff-defined study deadlines that
may differ from the pro forma LGIP's 150 day schedule.\230\ MISO
explains that it uses a three-phase process that has a different length
than the one phase process in the pro forma, and MISO's tariff includes
fixed study deadlines for each phase that are not subject to
discretionary adjustment.
---------------------------------------------------------------------------
\230\ MISO Rehearing Request at 26.
---------------------------------------------------------------------------
127. NYISO asserts that the one-size-fits-all, 150-calendar day
cluster study timeframe is arbitrary and capricious, does not reflect
reasoned decision-making, and is not based on substantial
evidence.\231\ NYISO states that the timeframes for the cluster restudy
and facilities studies are also arbitrary and capricious and deficient.
NYISO asserts that the Commission did not establish a basis for the
150-day timeframe, but rather stated that the timeframe for performing
the stability analyses, power flow analyses, and short circuit analyses
was based on the record without providing detail as to what in the
record supports that conclusion. NYISO also claims the Commission cites
to a limited number of parties, none of which it claims performs such
studies, in support of the 150-day timeframe.
---------------------------------------------------------------------------
\231\ NYISO Rehearing Request at 4-5.
---------------------------------------------------------------------------
128. NYISO contends that the Commission has not considered the
impact to the study timeline of any evaluations required to address
applicable reliability requirements.\232\ NYISO explains that in New
York, for example, the system impact study encompasses numerous steps
critical to evaluating reliability impacts of proposed generating
facilities, which must be performed to fully evaluate a proposed
interconnection under all Applicable Reliability Requirements. NYISO
notes that in New York, Applicable Reliability Requirements include
Northeast Power Coordinating Council rules and New York State
Reliability Council rules, which are often more stringent than NERC
rules because of New York's unique transmission system complexities,
including congestion around New York City and Long Island, and an
influx of offshore wind generation.
---------------------------------------------------------------------------
\232\ Id. at 6-7.
---------------------------------------------------------------------------
129. NYISO contends that the Commission has also failed to consider
how the size or complexity of the cluster could affect the study
timeframe.\233\ NYISO explains that the system impact study timeframe
is driven by the study scope (e.g., whether the study addresses
physical feasibility), the number of impacted parties, the complexity
of the project, and unique challenges at the project's point of
interconnection. NYISO further explains that, for a system impact study
to effectively evaluate a proposed interconnection, the transmission
provider requires accurate modeling data from an interconnection
customer, study cases built for the proposed project, and precise
thermal, voltage, steady state, and short circuit analyses. NYISO
explains that accomplishing this requires a potential several-month
collaboration with transmission owners to: (1) build applicable study
base cases and the associated auxiliary study files; (2) complete any
short circuit base cases necessary to determine point of
interconnection requirements; (3) build pre-and post-project steady-
state base cases that represent various system conditions (e.g., summer
peak load, winter peak load, and spring light load conditions).\234\
NYISO further explains that it: (1) collaborates with applicable
transmission owners and/or interconnection customers to determine
upgrade solutions that constitute the least cost solution to mitigate
reliability violations consistent with good utility practice and all
applicable reliability requirements; (2) must sometimes iteratively
redo the reliability analyses to ensure network upgrades can be
reliably interconnected; and (3) must conduct stability analysis,
transfer analysis, deliverability analysis, short circuit analysis,
NPCC/NYSRC bulk power system transmission facility testing analysis,
sub-synchronous torsional interaction screening analysis, and
additional analyses. NYISO states that the study results must be
summarized and shared with impacted parties and stakeholders and
reviewed by the appropriate NYISO committees and subcommittees. NYISO
avers that, if it had to comply with the 150-day timeline, it may
likely be forced to eliminate this review and approval process.\235\
---------------------------------------------------------------------------
\233\ Id. at 8.
\234\ Id. at 9-10.
\235\ Id. at 11.
---------------------------------------------------------------------------
130. Additionally, NYISO asserts that cluster studies are unlikely
to create the time savings expected by the Commission.\236\ NYISO
disagrees with the Commission's statement that the transmission
provider ``will be conducting only one interconnection study, or at
most a small number of interconnection studies, at a time, allowing
them to devote more resources to completing the studies in a timely
manner'' because, NYISO argues, this statement does not accurately
reflect the type and amount of work required for the cluster study that
it proposes and the resources that will need to be committed to such
study.\237\ NYISO explains that a large portion of cluster study work
is spent identifying network upgrades at or near points of
interconnection for individual projects or subsets of projects within
the cluster which, as NYISO asserts, effectively requires transmission
providers to perform individual studies within the broader cluster
study and requiring resources similar to that of a serial study.\238\
NYISO contends that only a small portion of cluster study work involves
assessing the impacts on the system of the cluster as a whole. NYISO
adds that each additional project in the cluster adds to the total
amount of work required because each project must be modeled.
---------------------------------------------------------------------------
\236\ Id. at 12.
\237\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 326).
\238\ Id. at 13.
---------------------------------------------------------------------------
131. Further, NYISO argues that efficiencies gained by
transitioning to a cluster study may be offset by increased
participation and resultant large clusters.\239\ NYISO contends that
the more stringent study deposit, commercial readiness, and site
control rules adopted in Order No. 2023 will not materially reduce the
number of projects entering interconnection queues. NYISO notes that it
and other RTOs/ISOs haves adopted similar rules without seeing a
corresponding decrease in projects entering and progressing through
their queues.\240\ NYISO states that, if the Commission does establish
a firm deadline for cluster study completion, it should define a
maximum number of projects in a cluster or allow for extending the 150-
day timeframe according to cluster size.
---------------------------------------------------------------------------
\239\ Id. at 14.
\240\ Id. (citing, for example, Midcontinent Independent System
Operator Presentation, Generator Interconnection Queue Improvements,
Planning Advisory Committee (July 19, 2023) (proposing increasing
initial milestone payment from $4000/MW to $10,000/MW), at: https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20GI%20Queue%20Improvements%20Proposal629634.pdf).
---------------------------------------------------------------------------
132. NYISO requests that the Commission allow RTOs/ISOs to propose
alternative study deadlines as independent entity variations.\241\
NYISO argues that requiring a single, firm study timeframe for all
transmission providers does not recognize that interconnection study
process requirements, challenges, reliability criteria, and queue size
will be different in each region. In the alternative, NYISO requests
that the Commission grant clarification that
[[Page 27028]]
Order No. 2023 was not intended to prevent RTOs/ISOs from proposing
region-specific study deadlines for some or all future studies in their
individual Order No. 2023 compliance filings.
---------------------------------------------------------------------------
\241\ Id. at 15-16.
---------------------------------------------------------------------------
133. NYISO also asks the Commission to confirm that, during the 45-
day cluster request window, the interconnection customer is limited to
one 10-business day opportunity (or shorter at the end of the request
window) to cure a deficiency in its application.\242\ Further, NYISO
asks the Commission to confirm that it did not intend to require the
transmission provider to issue a second deficiency notice even if time
allowed for such notice in the cluster request window and that, if the
interconnection customer fails to fully cure its application within its
single cure period, its application will be withdrawn. NYISO notes that
section 3.4.4 of the pro forma LGIP provides that: ``At any time, if
Transmission Provider finds that the technical data provided by
Interconnection Customer is incomplete or contains errors,
Interconnection Customer and Transmission Provider shall work
expeditiously and in good faith to remedy such issues.'' NYISO argues
that the Commission should clarify that this language is not intended
to extend the time period by which an interconnection customer must
address deficiencies for the transmission provider's acceptance of a
valid, complete interconnection request, but instead is simply intended
to permit the transmission provider and interconnection customer to
address any minor issues that may be discovered later in the
interconnection process, subject to applicable deadlines. NYISO
proposes revisions to section 3.4.4 of the pro forma LGIP which it
states would accomplish this clarification.
---------------------------------------------------------------------------
\242\ Id. at 44-45.
---------------------------------------------------------------------------
134. NYISO asks the Commission to confirm that the transmission
provider may complete its determination that an interconnection request
is valid into the customer engagement window, including assessing any
updated information provided by the interconnection customer, within
its permitted deficiency cure period in the cluster request
window.\243\ NYISO also requests confirmation that the transmission
provider is not required to permit interconnection customers to address
any further deficiencies identified in the customer engagement window.
Further, NYISO states the Commission should confirm that, if the
transmission provider determines in the customer engagement window that
an interconnection customer's updated interconnection request remains
deficient and is not valid, the transmission provider may withdraw the
project upon such determination. In particular, NYISO notes that
Paragraph 234 of Order No. 2023 appears to reject withdrawals for
interconnection requests that are not deemed valid until the close of
the customer engagement window. NYISO argues that this statement is
inconsistent with the Commission's requirements to not permit
interconnection customers to cure deficiencies during the customer
engagement window and to limit participation in the Scoping Meeting
during that window to only customers ``whose valid Interconnection
Requests were received in the Cluster Request Window.'' \244\
---------------------------------------------------------------------------
\243\ Id. at 45.
\244\ Id. (citing pro forma LGIP section 3.4.5).
---------------------------------------------------------------------------
135. NYISO requests rehearing of the requirement that transmission
providers post an anonymized list of the projects eligible to
participate in the cluster study during the customer engagement
window.\245\ NYISO argues that the requirement creates another
administrative burden on the transmission provider for which the
Commission has not provided a reasonable basis and could result in the
unequal public disclosure of certain information to only a subset of
developers. NYISO asserts that the Commission has not provided support
for this anonymity requirement, aside from a general assertion that
such requirement is appropriate ``to reduce opportunities for
developers to gain competitive advantage over others before
interconnection requests have been finalized and accepted by the
transmission provider.'' \246\ NYISO further states that the Commission
has not provided a description of any means by which publicly
identifying the developers of projects with valid interconnection
requests would provide the developer or other parties with a
competitive advantage. NYISO also explains that its OATT requires
transmission providers to publicly post queue information that includes
certain identifying information about valid interconnection requests.
NYISO argues that the proposed requirement would therefore require a
further administrative step for NYISO to have to conceal certain
information in its publicly posted queue, including the developer's
name and/or the status of the project, as well as take additional steps
to maintain the projects' anonymity, such as masking information in any
other public communications.\247\ Further, NYISO notes that the group
scoping meeting required during the customer engagement window will
reveal many of the cluster participants, and that even if developer
names are not provided during the meeting, many developers in a region
are aware of the employees of other developers in that region.
Therefore, NYISO argues that anonymity of developer names will not mask
the identity of the underlying developers from other cluster
participants but would simply give them an information advantage over
other developers. Finally, NYISO explains that in many cases, such
information would be public anyway, such as through a developer posting
its projects on its website or participating in public request for
proposals, permitting processes, Commission submissions, or other
federal, state, or local proceedings.
---------------------------------------------------------------------------
\245\ Id.
\246\ Id. at 46 (citing Order No. 2023, 184 FERC ] 61,054 at P
237).
\247\ Id. at 46-47.
---------------------------------------------------------------------------
136. NewSun argues that the 30-day timeline permitted following
receipt of the cluster study report for interconnection customers to
execute the facilities study agreement and provide deposits is
arbitrary and capricious because it is commercially unreasonable,
counterproductive to the Commission's goals of reducing withdrawals and
restudies, fails to address record evidence, and inconsistent with the
rationale provided in Order No. 2023.\248\ NewSun argues that the 30-
day timeline does not leave time for the proper review and discussion
of the study information, especially where third party information is
involved, or where the interconnection customer's understanding of the
information (even assuming the study was without errors) is contingent
upon study results meetings. NewSun explains that it takes time to, for
example, read the report, formulate questions, set up meetings with
consultants, run financial models, and engage with outside bankers and
financiers.\249\ NewSun asserts that companies with ``near infinite
resources can just play chicken with their balance sheets, many of whom
can merely post a letter of credit (by paying points) to proceed, and/
or make the strategic decision to hold their noses and stay in, hope it
works out, and just treat withdrawal penalties as a cost of doing
business,'' while companies like NewSun have to arrange cash-backed
[[Page 27029]]
letter of credit facilities which takes longer than 30 days to
arrange.\250\ NewSun states that forcing all interconnection customers,
big and small, to make such huge decisions in short windows creates
biases towards ``nose-holding behavior, fearful exits, and inability to
thoughtfully consider outcomes--or changes--much less to collaborate
and/or adapt to avoid delay-causing or costly upgrades.\251\
---------------------------------------------------------------------------
\248\ NewSun Rehearing Request at 7-8.
\249\ Id. at 8-9.
\250\ Id. at 9.
\251\ Id. at 10.
---------------------------------------------------------------------------
137. NewSun requests rehearing of the requirement that, if any
interconnection customer withdraws from the cluster after receiving the
cluster study report and the transmission provider concludes that such
withdrawal triggers a restudy, the transmission provider has 30 days
from the cluster study report meeting (or cluster restudy report
meeting, if applicable) to notify affected interconnection
customers.\252\ NewSun states that notice of restudy will occur up to
10 days after the interconnection customer is required to sign a
facilities study agreement and make the associated deposit 10% of the
estimated network upgrade costs. NewSun states that, because the time
frames for notice of restudy and for execution of the facilities study
agreement overlap, the interconnection customer almost certainly will
not know if a restudy--which entails potentially significant additional
delays and increases in interconnection costs--is required before it is
required to commit to a facilities study and making deposits that in
many cases will requiring financing of millions or even tens of
millions of dollars in financial security. NewSun asserts that, even if
the transmission provider somehow manages to give the interconnection
customers notice of intent to conduct a cluster restudy and tolls the
due date for the facilities study agreement and 10% network upgrade
deposit within 30 days of furnishing the cluster study report, the
interconnection customer will have only 20 days to increase the amount
on deposit to 5% of its estimated network upgrade costs. NewSun notes
that this decision point could require financing of millions of dollars
and, even in cases where monies may have already been financed, if
refunds are not received, they cannot be recycled or reused. NewSun
seeks rehearing of these timing issues and requests that the Commission
change the 30-calendar day timeline to 60 days, as well as make several
other changes to multiple timelines in Order No. 2023.\253\
---------------------------------------------------------------------------
\252\ Id. at 13 (citing pro forma LGIP section 7.5(3)-(4)).
\253\ Id. at 22-24.
---------------------------------------------------------------------------
138. PJM argues that the Commission erred in its apparent
requirement that transmission providers determine whether a change in a
project's point of interconnection is a material modification.\254\ PJM
explains that it interprets Order No. 2023 to mean that transmission
providers will need to evaluate every single request from
interconnection customers for a change to their point of
interconnection to determine whether it is a material modification. PJM
asserts, however, that analyzing each request would consume already
limited engineering time, and that most change requests come from
developers seeking to optimize their projects mid-process instead of
performing their due diligence in advance of entering the queue. PJM
also implies that most changes to points of interconnection would
result in a material modification. PJM asks the Commission to clarify
that transmission providers need not evaluate every single request to
change a point of interconnection to determine if it would be a
material modification. PJM recommends instead that the Commission allow
transmission providers to establish rules that (1) changes to a
project's point of interconnection may be made at certain defined
points in the cluster cycle, and (2) changes to points of
interconnection outside those defined times would be presumed material
modifications. PJM seeks rehearing on this issue if the Commission
declines to provide its requested clarification.
---------------------------------------------------------------------------
\254\ PJM Rehearing Request at 44-45.
---------------------------------------------------------------------------
139. NYTOs seek clarification of Order No. 2023's elimination of
queue priority and finding that all interconnection requests in a
cluster should hold equal priority.\255\ NYTOs explain that there is at
least one instance in which interconnection priority is necessary: if
it is not physically possible to connect all interconnection requests
at a single point of interconnection, but it is feasible to connect
some of the requests, then prioritization based on request dates should
be applied to determine which interconnection customers have priority
to proceed. NYTOs explain that this scenario occurs when the number of
interconnection requests exceeds the available points of
interconnection at a substation, and the substation cannot be expanded
due to physical space or environmental limitations. NYTOs explain that
allowing for this prioritization is critical in highly congested areas
like New York City and Long Island. NYTOs state that the Commission
should clarify that providing interconnection queue priority in this
situation is permissible, at least under the independent entity
variation. If the clarification is not provided, NYTOs request
rehearing on the grounds that in the absence of such priority, the
Commission acted arbitrarily and capriciously by failing to consider
all aspects of the problem.
---------------------------------------------------------------------------
\255\ NYTOs Rehearing Request at 9-10.
---------------------------------------------------------------------------
140. Several commenters request rehearing regarding reforms the
Commission did not adopt in Order No. 2023. AEP argues that the
Commission failed to adequately consider the need for, benefits of, and
record support for enhanced generation retirement replacement processes
and erred in deeming the generation retirement replacement process
beyond the scope of this proceeding.\256\ AEP states that four parties
commented on the importance of generator replacement programs and
argues that, while the Commission may not be able to direct with
specificity the generator replacement reforms required, it has
sufficient evidence to provide guidance on the basic requirements for
such programs.\257\ MISO asks the Commission to clarify that Order No.
2023 does not require transmission providers with Commission-approved
generator replacement processes to change, abandon, or re-justify these
processes on compliance.\258\ Alternatively, if the Commission did
intend to require transmission providers with existing generator
replacement processes to re-justify those processes, MISO requests
rehearing.\259\ AEP urges the Commission to include in the pro forma
LGIP an option for transmission providers to process some
interconnection requests outside the cluster study process where
required for LSEs to meet reserve margin requirements.\260\ AEP argues
that, if not included in the pro forma LGIP, AEP asks the Commission,
in the alternative, to remain open to the future consideration of
tariff revisions that allow for such outside-the-cluster reviews or
fast-track processing.\261\
---------------------------------------------------------------------------
\256\ AEP Rehearing Request at 6.
\257\ Id. at 24.
\258\ MISO Rehearing Request at 21-22.
\259\ Id. at 23.
\260\ AEP Rehearing Request at 24-25.
\261\ Id. at 25-26.
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c. Determination
141. We agree with Clean Energy Associations that revisions to the
definition of stand alone network
[[Page 27030]]
upgrades in the pro forma LGIP and pro forma LGIA and option to build
section of the pro forma LGIA are necessary to maintain the pre-Order
No. 2023 status quo opportunity for interconnection customers to
exercise the option to build as part of the cluster study process.
Accordingly, we set aside this aspect of Order No. 2023 and modify the
definition of stand alone network upgrades in section 1 (Definitions)
of the pro forma LGIP and pro forma LGIA as follows, with brackets
indicating deletions:
Stand Alone Network Upgrades shall mean Network Upgrades that
are not part of an Affected System that an Interconnection Customer
may construct without affecting day-to-day operations of the
Transmission System during their construction [and the following
conditions are met: (1) a Substation Network Upgrade must only be
required for a single Interconnection Customer in the Cluster and no
other Interconnection Customer in that Cluster is required to
interconnect to the same Substation Network Upgrades, and (2) a
System Network Upgrade must only be required for a single
Interconnection Customer in the Cluster, as indicated under the
Transmission Provider's Proportional Impact Method]. Both
Transmission Provider and Interconnection Customer must agree as to
what constitutes Stand Alone Network Upgrades and identify them in
Appendix A to the Standard Large Generator Interconnection
Agreement. If Transmission Provider and Interconnection Customer
disagree about whether a particular Network Upgrade is a Stand Alone
Network Upgrade, Transmission Provider must provide Interconnection
Customer a written technical explanation outlining why Transmission
Provider does not consider the Network Upgrade to be a Stand Alone
Network Upgrade within 15 days of its determination.
142. Accordingly, we also modify article 5.1.3 (Option to Build) of
the pro forma LGIA as follows, with italicized language indicating
additions:
Individual or Multiple Interconnection Customers shall have the
option to assume responsibility for the design, procurement and
construction of Transmission Provider's Interconnection Facilities
and Stand Alone Network Upgrades on the dates specified in Article
5.1.2, if the requirements of this Article 5.1.3 are met. When
multiple Interconnection Customers exercise this option, multiple
Interconnection Customers may agree to exercise this option provided
(1) all Transmission Provider's Interconnection Facilities and Stand
Alone Network upgrades constructed under this option are only
required for Interconnection Customers in a single Cluster and (2)
all impacted Interconnection Customers execute and provide to
Transmission Provider an agreement regarding responsibilities, and
payment for, the construction of Transmission Provider's
Interconnection Facilities and Stand Alone Network Upgrades planned
to be built under this option. Transmission Provider and the
individual Interconnection Customer or each of the multiple
Interconnection Customers must agree as to what constitutes Stand
Alone Network Upgrades and identify such Stand Alone Network
Upgrades in Appendix A. Except for Stand Alone Network Upgrades,
Interconnection Customer shall have no right to construct Network
Upgrades under this option.
143. We find that this revision to the definition of stand alone
network upgrades and addition to the option to build section in the pro
forma LGIA will allow interconnection customers to exercise the option
to build whether the stand alone network upgrade is attributable to a
single interconnection customer or a shared network upgrade shared by
multiple interconnection customers. These revisions will also avoid
potentially lengthy disputes between interconnection customers, which
was the Commission's original concern in Order No. 2023, because, for
interconnection customers with shared network upgrades that qualify as
stand alone network upgrades, interconnection customers must mutually
agree to such agreement outside the transmission provider's
interconnection process and thus will not slow down that process.\262\
We clarify that, for such circumstances, we expect such a written
agreement among the relevant interconnection customers to be reached
among the interconnection customers on their own and outside of the
transmission provider's interconnection process. Further, we clarify
that, if no mutual agreement is reached among the interconnection
customers, no interconnection customer will have the ability to
exercise the option to build a stand alone network upgrade that is a
shared network upgrade.
---------------------------------------------------------------------------
\262\ Order No. 2023, 184 FERC ] 61,054 at P 193.
---------------------------------------------------------------------------
144. We are unpersuaded by Clean Energy Associations' argument that
the Commission should modify the allowed reductions in project size in
pro forma LGIP sections 4.4.1 and 4.4.2. We find that implementing
Clean Energy Associations' requested change under a cluster study
process is likely to lead to delays in the interconnection study
process. Therefore, we continue to rely on the transmission provider to
assess such a change under pro forma LGIP section 4.4 (Modifications),
where the transmission provider would be able to assess whether
modifications to project size (e.g., up to a 60 percent reduction)
would have a material impact on the cost or timing of any
interconnection requests with an equal or later queue position.
145. We disagree with Clean Energy Associations' argument that the
customer engagement window is too short. We note that Order No. 2023
required transmission providers to develop a heatmap of public
interconnection information to provide interconnection customers with
information prior to submitting an interconnection request, which
should obviate the need for a longer engagement window. We further note
that Order No. 2023 adopted readiness requirements to encourage
interconnection customers to submit commercially viable interconnection
requests, so interconnection customers should be relatively confident
in the viability of their interconnection requests.\263\
---------------------------------------------------------------------------
\263\ Id. P 691.
---------------------------------------------------------------------------
146. We also are unpersuaded by Clean Energy Associations' request
regarding circumstances in which the transmission provider fails to
issue a deficiency notice within five business days. We find the
requested revision unnecessary because a transmission provider taking
longer than five business days to issue the deficiency notice would
violate its tariff requirements to issue such a notice within five
business days. We find that the requirement for interconnection
customers to cure deficiencies before the close of the cluster request
window is necessary to ensure the timely processing of the
interconnection queue.
147. We disagree with [Oslash]rsted's and Clean Energy
Associations' requests to require transmission owners (when not the
transmission provider) to attend scoping meetings. The pro forma LGIP
contemplates that the transmission owner and transmission provider may
be the same entity, except in the case of an RTO/ISO, in which case the
transmission owner does not have operational control of the facilities
and does not perform cluster studies. We note that transmission
providers have incentive, particularly in light of the study delay
penalties adopted in Order No. 2023, to facilitate interconnection
customers' access to information they need in order to efficiently
navigate the interconnection study process. Accordingly, we will not
require transmission owners to attend scoping meetings where the
transmission owner and transmission provider are separate entities.
However, RTOs/ISOs may seek an independent entity variation and propose
to require attendance of any entities they feel are necessary to
provide critical information to interconnection customers.
[[Page 27031]]
148. We disagree with requests that the Commission include a
feasibility study as part of the interconnection process. The NOPR did
not propose, and Order No. 2023 did not adopt, a feasibility study. We
reiterate our findings in Order No. 2023 that the move from a serial
interconnection process to the new cluster study process, coupled with
the Commission's heatmap requirements, render the feasibility study
redundant and an unnecessary burden on transmission provider resources.
149. However, in response to requests for clarification that
transmission providers can continue performing feasibility studies as
an independent entity variation, we reiterate that transmission
providers may explain specific circumstances on compliance and justify
why any deviations are either consistent with or superior to the pro
forma LGIP, pro forma LGIA, pro forma SGIP, and/or pro forma SGIA or
merit an independent entity variation in the context of RTOs/ISOs.
150. In response to EEI's request that the Commission clarify that
provisional interconnection service requests continue to be processed
as received, we clarify that Order No. 2023 did not modify the process
for transmission providers to study provisional interconnection service
requests.
151. In response to EEI's request that the Commission clarify how
the 150-day study deadline applies to restudies, we clarify that
transmission providers have 150 days from the point that they inform
interconnection customers of the restudy to complete each restudy,
which must occur within 30 calendar days after the cluster study report
meeting. We further clarify that, in the case of multiple restudies, we
expect that the transmission provider will not definitively know
whether to initiate a restudy of later-in-time clusters--and thus
inform those interconnection customers that restudy is needed--until it
has completed the initial restudy.
152. In response to Clean Energy Associations and IPP Coalition, we
continue to find, as the Commission did in Order No. 2023, that
interconnection customers must select a definitive point of
interconnection to be studied when executing the cluster study
agreement. As the Commission explained in Order No. 2023, requiring
interconnection customers to select one definitive point of
interconnection when executing the cluster study agreement allows the
interconnection customer to submit its interconnection request with a
proposed point of interconnection, participate in the scoping meeting
during the customer engagement window, and receive feedback on its
proposed point of interconnection. We continue to believe that this
strikes the right balance between allowing for flexibility and
potential adjustments to the point of interconnection, based on
discussion with the transmission provider and the transmission
provider's detailed knowledge of its transmission system, and providing
transmission providers with the information necessary to conduct the
cluster study, thus reducing the potential for restudies that would be
required if interconnection customers could change their points of
interconnection later in the process.\264\
---------------------------------------------------------------------------
\264\ Id. P 200.
---------------------------------------------------------------------------
153. Similarly, we continue to believe that allowing multiple
points of interconnection (whether they are ``electrically proximate''
or not) to be studied before the interconnection customer is required
to select the definitive point of interconnection fails to take into
account the fact that, if an interconnection customer changes the
definitive point of interconnection after the cluster study, it may
impact the study results of the other interconnection customers in the
cluster and could lead to restudies and delays. It may be the case that
an ``electrically proximate'' point of interconnection location can be
effectively implemented within a study process without materially
impacting a study process, and the current process allows the
transmission provider to determine whether that change to the point of
interconnection will be considered a material modification. We find
this sufficient to address IPP Coalition's concern.
154. We find [Oslash]rsted's request for clarification regarding
circumstances where a regulatory limitation requires a change to the
point of interconnection to be beyond the scope of Order No. 2023. The
Commission did not adopt a process to change the point of
interconnection when there is a regulatory limitation in Order No.
2023. In such a circumstance, changes to the point of interconnection
are addressed in section 4.4 of the pro forma LGIP, which governs
modifications to an interconnection request.
155. We disagree with PJM's request for clarification, and in the
alternative, rehearing, that transmission providers need not evaluate
whether every request to change an interconnection customer's point of
interconnection is a material modification. First, while we agree that
evaluating a change of point of interconnection will require
engineering labor, we note that the availability of the public
interactive heatmap will provide interconnection customers with far
more transparency into the viability of the points of interconnection
on the transmission provider's system prior to entering the
interconnection queue. Thus, we expect the heatmap requirement to
reduce the frequency with which interconnection customers request
changes to their point of interconnection, as they will be better
informed prior to submitting an interconnection request. The pro forma
LGIP defines ``material modifications'' as ``those modifications that
have a material impact on the cost or timing of any Interconnection
Request with an equal or later Queue Position.'' \265\ Other than that
provision, we leave the determination of what constitutes a material
modification to the transmission providers' currently-effective
processes for determining materiality. We are unpersuaded that (1)
interconnection customers should be limited to one change to their
point of interconnection and (2) that all changes to points of
interconnection should be presumed to be material outside of certain
points in the cluster study, because interconnection customers already
have a relatively limited window in which to request changes to points
of interconnection. Pro forma LGIP sections 3.1.2, 4.4, and 4.4.3 make
clear that a request to change an interconnection customer's point of
interconnection that comes after the return of the executed cluster
study agreement shall constitute a material modification. We find these
provisions to address PJM's concern regarding point of interconnection
change requests that arise from ``project developers seeking to
optimize their projects in mid-process'' \266\ by limiting most point
of interconnection change requests to early in the study process and
presuming those later in the study process to be material
modifications. We also find that this approach strikes a reasonable
balance between the use of engineering labor to advance feasible
projects and reducing late-stage interconnection request modifications
or withdrawals that could slow down the study process or lead to
restudy. For these reasons, we find that the existing pro forma LGIP
provisions referenced above adequately address PJM's concerns, and
therefore no clarification or rehearing is necessary.
---------------------------------------------------------------------------
\265\ Pro forma LGIP, section 1 (Definitions).
\266\ PJM Rehearing Request at 44.
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156. As we explain in detail below in section D.1.c.ii, we are
unpersuaded by NYISO's assertions that the 150-day cluster study
deadline is unjust and unreasonable and that the Commission's
[[Page 27032]]
determination reflects arbitrary and capricious decision-making. As we
note below, and consistent with the Commission's statements in Order
No. 2023, transmission providers may explain specific circumstances on
compliance and justify why any deviations are either consistent with or
superior to the pro forma LGIP or merit an independent entity variation
in the context of RTOs/ISOs. Accordingly, we grant MISO's and NYISO's
requests for clarification that Order No. 2023 does not preempt
transmission providers from proposing tariff-defined study deadlines
that may differ from the pro forma LGIP's 150-day schedule. Rather, the
statements MISO and NYISO refer to in Order No. 2023 decline to allow
transmission providers flexibility to set ad-hoc deadlines beyond their
standard, tariff-defined deadlines.
157. NYISO requests that the Commission clarify that, during the
45-day cluster request window, interconnection customers are limited to
one 10-business day opportunity to cure a deficiency in their
applications. We disagree with NYISO's interpretation of the applicable
pro forma LGIP language and note that NYISO offers no argument to
support this interpretation. We therefore clarify that interconnection
customers must receive as many cure periods as needed to remedy a
deficient interconnection request, as long as the end of such cure
periods fall prior to the last day of the 45-day cluster request
window. In other words, if an interconnection customer fails to fully
cure its application within the first cure period, transmission
providers must issue a second (or third) deficiency notice to an
interconnection customer during the cluster request window, if time
allows. We clarify that, if a transmission provider finds an
interconnection request to be deficient less than 10 days before the
close of the cluster request window, the interconnection customer may
have until the close of the cluster request window to cure those
deficiencies.\267\
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\267\ See Order No. 2023, 184 FERC ] 61,054 at P 226.
---------------------------------------------------------------------------
158. NYISO seeks clarification regarding the sentence in section
3.4.4 of the pro forma LGIP, which reads ``At any time, if Transmission
Provider finds that the technical data provided by Interconnection
Customer is incomplete or contains errors, Interconnection Customer and
Transmission Provider shall work expeditiously and in good faith to
remedy such issues.'' We grant NYISO's requested clarification that
this language is not meant to extend the time period by which an
interconnection customer must address deficiencies for the transmission
provider's acceptance of a valid, complete interconnection request, but
instead is simply intended to permit the transmission provider and
interconnection customer to address any issues that may be discovered
in the interconnection process, subject to applicable deadlines. In
other words, the interconnection customer and transmission provider
shall work expeditiously and in good faith to remedy any errors or
incomplete information (that do not merit finding the interconnection
request deficient) either during the cluster request window or later,
i.e., during the customer engagement window. We decline to modify the
pro forma LGIP as proposed by NYISO because it is unnecessary.
159. NYISO seeks further clarification around when a transmission
provider must complete its determination that an interconnection
request is valid, the timeline in which an interconnection customer may
cure deficiencies in its application, and treatment of interconnection
requests deemed invalid during the customer engagement window. We
clarify that the transmission provider must complete its determination
that an interconnection request is valid by the close of the cluster
request window, and therefore, interconnection customers must also cure
deficient interconnection requests by the close of the cluster request
window. In other words, only interconnection customers with valid
interconnection requests, for which there is no need to cure
deficiencies, proceed to the customer engagement window. As such,
transmission providers may not continue determining whether
interconnection requests are valid into the customer engagement window.
This means that there is no need for transmission providers to deem
interconnection requests withdrawn during the customer engagement
window, as all invalid interconnection requests will already have been
deemed withdrawn at the close of the cluster request window. We
acknowledge NYISO's confusion regarding Paragraph 234 of Order No.
2023, which rejects the notion of withdrawing invalid interconnection
requests before the end of the customer engagement window. We set aside
Paragraph 234 of Order No. 2023 and clarify that an interconnection
customer's cure period ends at the close of the cluster request window
at the latest. Nevertheless, interconnection customers with valid
interconnection requests may work with the transmission provider, per
section 3.4.4 of the pro forma LIGP and as explained above, to resolve
minor errors or incompletions in technical data throughout the process,
without the need for the transmission provider to deem an
interconnection request deficient, invalid, or withdrawn. To improve
clarity with regard to these issues, we modify section 3.4.5 of the pro
forma LGIP as follows, with italics indicating additions and brackets
indicating deletions:
At the end of the Customer Engagement Window, all
Interconnection Requests deemed valid that have executed a Cluster
Study Agreement in the form of Appendix 2 to this LGIP shall be
included in the Cluster Study. Any Interconnection Requests for
which the Interconnection Customer has not executed a Cluster Study
Agreement [not deemed valid at the close of the Customer Engagement
Window] shall be deemed withdrawn (without the cure period provided
under Section 3.7 of this LGIP) by Transmission Provider, the
application fee shall be forfeited to the Transmission Provider, and
the Transmission Provider shall return the study deposit and
Commercial Readiness Deposit to Interconnection Customer.
Immediately following the Customer Engagement Window, Transmission
Provider shall initiate the Cluster Study described in Section 7 of
this LGIP.
160. We also modify pro forma LGIP section 3.4.4 to clarify that
all items in pro forma LGIP section 3.4.2 must be received during the
cluster request window. Taken together, these modifications make clear
that the condition to proceed from the cluster request window to the
customer engagement window is a valid interconnection request, and the
condition to proceed from the customer engagement window is an executed
cluster study agreement.
161. We are unpersuaded by NYISO's arguments to modify the
requirement for transmission providers to post an anonymized list of
the projects eligible to participate in the cluster study during the
customer engagement window. NYISO's position is that the requirement
would complicate NYISO's own specific processes, rather than the
processes of transmission providers more broadly. Consistent with the
Commission's statements in Order No. 2023, transmission providers may
explain specific circumstances on compliance and justify why any
deviations are either consistent with or superior to the pro forma
LGIP, pro forma LGIA, pro forma SGIP, and/or pro forma SGIA or merit an
independent entity variation in the context of RTOs/ISOs.
162. We disagree with NewSun's request to extend the 30-calendar
day
[[Page 27033]]
period for an interconnection customer to execute the facilities study
agreement. The NOPR did not propose, and Order No. 2023 did not adopt,
any modifications to section 8.1 of the pro forma LGIP regarding the
30-calendar day period. We believe that 30 calendar days is a
sufficient amount of time to meet the requirements of pro forma LGIP
section 8.1. We believe that 30-calendar day timeframe balances
providing certainty about the timeline for the interconnection process
and ensuring that studies progress in a timely manner while providing
sufficient time for an interconnection customer to execute the
facilities study agreement and submit the appropriate deposit. We note
that, while the Commission implemented changes in Order No. 2023 such
as the commercial readiness deposit in pro forma LGIP section 8.1 that
increase certain burdens on interconnection customers with the goal of
discouraging speculative requests, the Commission also implemented
changes such as the new study delay penalty structure that reasonably
incentivizes transmission providers to ensure the timely processing of
interconnection requests.\268\
---------------------------------------------------------------------------
\268\ See id. P 962. We also note that MISO and SPP currently
only provide for 15 days to enter the facilities study phase (called
Decision Point 2 in their respective generator interconnection
procedures), and they each require a 20% commercial readiness
deposit to enter the facilities study, whereas Order No. 2023 only
requires a 10% deposit.
---------------------------------------------------------------------------
163. However, we are persuaded by NewSun's arguments regarding the
overlapping timelines for the notice of restudy and execution of the
facilities study agreement (with associated deposits). Therefore, we
modify sections 7.3 and 8.1 of the pro forma LGIP to remove the
requirement for transmission providers to tender an interconnection
facilities study agreement simultaneously with issuance of a cluster
study (or restudy) report. We modify section 8.1 of the pro forma LGIP
to clarify that transmission providers shall tender the interconnection
facilities study agreement within 5 business days after the
transmission provider notifies interconnection customers that no
further restudies are required. This modification addresses NewSun's
concern that an interconnection customer will not know if a restudy is
required before the interconnection customer is required to commit to a
facilities study and make the required deposits.
164. Regarding NYTOs' request for clarification about equal queue
priority, we continue to find that, under the pro forma LGIP,
interconnection requests studied in the same cluster have equal queue
priority.\269\ To address the situation that NYTOs describe, which
appears specific to New York, we reiterate that NYISO, as an ISO, may
explain its specific circumstances on compliance and justify why any
deviations merit an independent entity variation.
---------------------------------------------------------------------------
\269\ Id. P 858.
---------------------------------------------------------------------------
165. We are not persuaded by arguments raised by several commenters
regarding reforms not adopted in Order No. 2023. We are not persuaded
by AEP's argument that the Commission should have included a generator
replacement process in the pro forma LGIP. The NOPR did not propose
such a process, and we continue to believe that the record in this
proceeding is insufficient to require such a process generically. To
AEP's alternative request for clarification, we clarify that nothing in
Order No. 2023 limits transmission providers' ability to make an FPA
section 205 filing, and we will continue to assess such filings on a
case-by-case basis. In response to MISO, we clarify that Order No. 2023
does not require transmission providers to change, eliminate, or re-
justify existing Commission-approved generator replacement processes on
compliance. We reiterate our determination in Order No. 2023 that
comments concerning generator replacement processes are beyond the
scope of Order No. 2023.\270\
---------------------------------------------------------------------------
\270\ See id. PP 1736, 1743.
---------------------------------------------------------------------------
166. We also disagree with AEP's argument that the Commission
should include an option for processing some interconnection requests
outside the cluster study process. We continue to find, as the
Commission did in Order No. 2023, that, based on the record before us,
establishing a separate interconnection process outside the cluster
study process could detract from transmission providers' efforts to
efficiently process cluster studies.\271\
---------------------------------------------------------------------------
\271\ Id. P 392.
---------------------------------------------------------------------------
167. Finally, we revise the pro forma LGIP to correct inadvertent
errors and add minor, clarifying edits as follows. First, we revise
section 3.4.6 to correct an inadvertent omission of the word ``or'' to
clarify that the non-disclosure agreement used for the group cluster
study scoping meeting will provide for confidentiality of identifying
information or commercially sensitive information, consistent with the
discussion in Order No. 2023.\272\ Second, we also revise pro forma
LGIP section 7.5 to clarify that cluster restudies can be triggered by
withdrawal of a higher-queued interconnection customer, and that
interconnection customers being restudied are responsible for the cost
of any restudy, except as provided in section 3.7. Third, we revise pro
forma LGIP section 3.5.2.4 to clarify that the requirement to track and
post metrics on interconnection queue withdrawals includes each stage
of the study process. Fourth, we revise pro forma LGIP section 3.4.6 to
remove the phrase ``and one or more available alternative Point(s) of
Interconnection,'' consistent with the discussion in Order No.
2023.\273\ Fifth, we revise the pro forma LGIP definition of
``interconnection study'' to reference all interconnection studies
discussed in the pro forma LGIP.
---------------------------------------------------------------------------
\272\ Id. P 247.
\273\ Id. P 202 (declining to permit interconnection customers
to submit multiple alternative points of interconnection).
---------------------------------------------------------------------------
3. Allocation of Cluster Network Upgrade Costs
a. Order No. 2023 Requirements
168. In Order No. 2023, the Commission added new section 4.2.1
(Cost Allocation for Interconnection Facilities and Network Upgrades)
to the pro forma LGIP to require that transmission providers (1)
allocate network upgrade costs based on the proportional impact method
and (2) allocate the costs of substation network upgrades on a per
capita basis.\274\ To implement this requirement, the Commission added
definitions for proportional impact method, substation network
upgrades, and system network upgrades to the pro forma LGIP and pro
forma LGIA and modified the existing definition of stand alone network
upgrades. The Commission also required transmission providers to
allocate the costs of interconnection facilities (i.e., both the
interconnection customer's interconnection facilities and transmission
provider's interconnection facilities) on a per capita basis.\275\ The
Commission further provided that interconnection customers may agree to
share interconnection facilities, that the per capita cost allocation
will apply only where interconnection customers agree to share
interconnection facilities, and that interconnection customers may
choose a different cost sharing arrangement upon mutual agreement.
---------------------------------------------------------------------------
\274\ Id. P 453.
\275\ Id. P 454.
---------------------------------------------------------------------------
169. The Commission found that transmission providers must provide
tariff provisions that describe the method they will use for allocating
costs of each type of network upgrade, but
[[Page 27034]]
specific metrics and thresholds for implementing the allocation, or
other specific technical information, may be included in business
practice manuals, or publicly posted on the transmission provider's
website.\276\ The Commission found that, in particular, the technical
information surrounding implementation of the proportional impact
method by a particular transmission provider does not need to be
included in the transmission provider's tariff under the rule of reason
because these provisions are properly classified as implementation
details that do not significantly affect rates, terms, and conditions
of service.
---------------------------------------------------------------------------
\276\ Id. P 462.
---------------------------------------------------------------------------
170. In response to requests for the Commission to direct
transmission providers to use a specific type of proportional impact
method or distribution factor analysis and apply minimum distribution
factor thresholds that will be used to evaluate NRIS and ERIS requests,
the Commission stated that it was unpersuaded that such level of
prescription is needed to ensure just, reasonable, and not unduly
discriminatory or preferential rates.\277\ The Commission stated that,
instead, it believes that flexibility for transmission providers to
develop such details as part of their compliance filings--and in their
business practice manuals, where consistent with the rule of reason--is
important to ensure that the proportional impact method used by each
transmission provider reflects the characteristics of its region (e.g.,
types of network upgrade facilities identified in the region, or
preferred analyses in the region for determining the share of the need
for the specific network upgrade type).
---------------------------------------------------------------------------
\277\ Id. P 463.
---------------------------------------------------------------------------
b. Requests for Rehearing and Clarification
171. Generation Developers request clarification that Order No.
2023 does not prejudge whether any implementation detail regarding the
proportional impact method needs to be included in the tariff rather
than in a business practice manual, and that Order No. 2023 gives
transmission providers flexibility to develop a method consistent with
the Commission's rule of reason.\278\ Generation Developers express
concern that Order No. 2023 could be misinterpreted such that any
implementation detail regarding the proportional impact method does not
significantly affect rates and thus need not be included in the tariff.
Generation Developers aver that the Commission has recognized that the
rule of reason must be applied on a case-by-case basis and thus it
would be inappropriate to make a generic determination that any
specific detail can be placed in a business practice manual.\279\
Generation Developers further argue that the Commission currently lacks
the information necessary to make such a determination because whether
a specific threshold or metric will significantly affect rates depends
on several factors that will be detailed in the transmission provider's
Order No. 2023 compliance filings.
---------------------------------------------------------------------------
\278\ Generation Developers Rehearing Request at 3-5.
\279\ Id. at 4 (citing Cal. Indep. Sys. Operator Corp., 141 FERC
] 61,237, at P 35 (2012)).
---------------------------------------------------------------------------
172. Longroad Energy requests rehearing of Order No. 2023's
decision to not require minimum impact thresholds for purposes of the
proportional impact method.\280\ Longroad Energy argues that minimum
impact thresholds are necessary to ensure that interconnection
customers are not required to finance network upgrades for which they
have a de minimis impact.\281\ Longroad Energy avers that the absence
of a minimum impact threshold is administratively burdensome for
transmission providers because they must track a larger number of
interconnection requests. Longroad Energy asserts that interconnection
customers may be exposed to construction delays for network upgrades
for which they only have a de minimis impact. Longroad Energy notes
that the Commission has accepted minimum impact thresholds in other
instances.\282\ Longroad Energy further argues that minimum impact
thresholds are necessary to prevent any withdrawing interconnection
request from materially impacting the remaining interconnection
customers and thus triggering a withdrawal penalty.\283\ Finally,
Longroad Energy requests clarification that Order No. 2023 does not
preclude a transmission provider from using minimum impact thresholds.
---------------------------------------------------------------------------
\280\ Longroad Energy Rehearing Request at 4-9.
\281\ Id. at 5-6.
\282\ Id. at 7-8 (citing Tenaska Clear Creek Wind, LLC v. Sw.
Power Pool, Inc., 177 FERC ] 61,200, order on compliance and reh'g,
180 FERC ] 61,160, at P 99 (2021), reh'g denied by operation of law,
181 FERC ] 62,090 (2022), order addressing arguments on reh'g and
denying motion for stay, 182 FERC ] 61,084, at PP 33, 36 (2023);
Midcontinent Indep. Sys. Operator, Inc., 171 FERC ] 61,236, at PP
44, 56, reh'g denied by operation of law, 172 FERC ] 62,102, order
addressing arguments on reh'g, 172 FERC ] 61,235 (2020)).
\283\ Id. at 8-9.
---------------------------------------------------------------------------
173. Clean Energy Associations request clarification that
substation network upgrade cost allocation is based on the number of
interconnection facilities (i.e., generator tie lines) connecting to
the substation at the point of interconnection and not based on the
number of generating facilities connecting to the substation.\284\
Clean Energy Associations explain that it is the number of
interconnection facilities, not the number of generating facilities,
that drive substation expansion. Clean Energy Associations request that
the Commission clarify that the transmission provider should first
allocate substation network upgrade costs on a per capita basis for
each interconnection facility connecting to the substation, and
secondly divide those costs between the multiple generating facilities
using that interconnection facility.
---------------------------------------------------------------------------
\284\ Clean Energy Associations Rehearing Request at 54-55.
---------------------------------------------------------------------------
174. Clean Energy Associations also request clarification that
substation network upgrades are at distinctive voltage levels.\285\
Clean Energy Associations explain that definitive selection of a point
of interconnection requires a voltage level to be specified as well as
a substation, and that expansion costs for different voltage levels are
normally unrelated and may be very different.
---------------------------------------------------------------------------
\285\ Id. at 55-56.
---------------------------------------------------------------------------
c. Determination
175. In response to Generation Developers' request for
clarification regarding the location of details on the implementation
of the proportional impact method, we clarify that, consistent with the
rule of reason, the Commission will consider the details of the
transmission provider's proposed proportional impact method and whether
those details should be in the tariff in its individual Order No. 2023
compliance filing.
176. We are unpersuaded by Longroad Energy's request for rehearing
to require all transmission providers to use minimum impact thresholds.
We reiterate the Commission's finding in Order No. 2023 that it is
appropriate for transmission providers to propose such details in their
Order No. 2023 compliance filings to ensure that the method used by
each transmission provider reflects the characteristics of its
region.\286\ For example, different regions may identify different
types of network upgrades or have preferred analyses for identifying
specific network upgrade types. We disagree with Longroad Energy's
assertion that minimum impact thresholds are necessary to prevent any
withdrawal
[[Page 27035]]
from triggering a withdrawal penalty, as the transmission provider must
still assess whether the withdrawal has a material impact on the cost
or timing of equal or lower-queued interconnection requests in
accordance with section 3.7.1 of the pro forma LGIP. In response to
Longroad Energy's request for clarification, we clarify that Order No.
2023 does not preclude transmission providers from proposing a minimum
impact threshold.
---------------------------------------------------------------------------
\286\ Order No. 2023, 184 FERC ] 61,054 at P 463.
---------------------------------------------------------------------------
177. In response to Clean Energy Associations' request for
clarification regarding substation network upgrade cost allocation, we
clarify that the cost allocation is based on the number of
interconnection facilities connecting to the substation located at the
point of interconnection. Accordingly, to allocate such costs per
capita to each generating facility in accordance with section 4.2.1.1.a
of the pro forma LGIP, the transmission provider must first allocate
the costs of substation network upgrades on a per capita basis for each
interconnection facility connecting to the substation, and then
allocate those costs on a per capita basis between each generating
facility using the interconnection facility.
178. We also grant Clean Energy Associations' request for
clarification that substation network upgrades are at distinct voltage
levels. Accordingly, we modify section 4.2.1.1.a of the pro forma LGIP
as follows, with brackets indicating deletions and italics indicating
additions:
Substation Network Upgrades, including all switching stations,
shall be allocated first to Interconnection Facilities
interconnecting to the substation at the same voltage level, and
then per capita to each Generating Facility sharing the
Interconnection Facility [interconnecting at the same substation].
4. Shared Network Upgrades
a. Order No. 2023 Requirements
179. In Order No. 2023, the Commission declined to adopt the NOPR
proposal to implement cost sharing of network upgrades between
interconnection customers in an earlier cluster and interconnection
customers in a subsequent cluster.\287\ The Commission stated that it
declined to adopt the NOPR proposal because of its potentially
significant administrative burden and because Order No. 2023's cluster
network upgrade cost allocation reform would address the ``first mover/
free rider'' issue that motivated the NOPR proposal.
---------------------------------------------------------------------------
\287\ Id. PP 486-488.
---------------------------------------------------------------------------
b. Requests for Rehearing and Clarification
180. Shell requests clarification that Order No. 2023 does not
prohibit existing mechanisms of inter-cluster cost sharing of network
upgrades and that the Commission will not prohibit inter-cluster cost
sharing in the future.\288\ Shell avers that network upgrade cost
sharing between initial and subsequent interconnection customers is
common in the industry, for example in the ISO-NE market.
---------------------------------------------------------------------------
\288\ Shell Rehearing Request at 14-15.
---------------------------------------------------------------------------
c. Determination
181. We clarify that Order No. 2023 does not require transmission
providers to eliminate, change, or re-justify existing tariff
mechanisms regarding cost sharing of network upgrades between earlier-
in-time and later-in-time clusters because such provisions are not
impacted by the requirements of Order No. 2023. We reiterate that
transmission providers need only seek approval to maintain previously
approved variations from the pro forma LGIP and pro forma LGIA if such
variations are impacted by the requirements of Order No. 2023.
5. Increased Financial Commitments and Readiness Requirements
a. Financial Security Generally
i. Order No. 2023 Requirements
182. In Order No. 2023, the Commission modified sections 3.4.2(vi),
5.1.1.1, 5.1.1.2, 7.5, and 8.1(3) of the pro forma LGIP to require that
an interconnection customer pay the commercial readiness deposit and
deposits prior to the transitional serial study, transitional cluster
study, cluster restudy and the interconnection facilities study via
cash or a letter of credit.\289\ The Commission also established a pro
forma two-party affected system facilities construction agreement in
Appendix 11 to the pro forma LGIP and a pro forma multiparty affected
system facilities construction agreement in Appendix 12 to the pro
forma LGIP.\290\ In section 4.1 of Appendix 11 to the pro forma LGIP
and section 4.1 of Appendix 12 to the pro forma LGIP, the Commission
required that an affected system interconnection customer provide
financial security to the transmission provider in an amount sufficient
to cover the costs for constructing, procuring, and installing the
applicable portion of affected system network upgrade(s) in the form of
a guarantee, a surety bond, a letter of credit or other form of
security that is reasonably acceptable to transmission provider, at the
affected system interconnection customer's option.
---------------------------------------------------------------------------
\289\ Order No. 2023, 184 FERC ] 61,054 at P 690.
\290\ Id. P 1193.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
183. Clean Energy Associations request clarification or, in the
alternative, rehearing that acceptable forms of security for the
commercial readiness deposit, transitional serial study deposit, and
transitional cluster study deposit are not limited to only irrevocable
letters of credit and cash.\291\ Clean Energy Associations assert that
the Commission did not explain the decision to list these forms of
security to the exclusion of other forms, such as surety bonds or other
forms of security that may be acceptable to the transmission provider,
and ignored comments in the record explicitly requesting flexibility
for these alternative forms of security to be considered.
---------------------------------------------------------------------------
\291\ Clean Energy Associations Rehearing Request at 63-65.
---------------------------------------------------------------------------
184. Similarly, Longroad Energy requests rehearing to allow
generator interconnection customers to pay deposits or provide security
in the form of cash, irrevocable letter of credit, surety bond, or
other reasonably acceptable form of financial security, at the
generator interconnection customer's discretion.\292\ Additionally, if
the interconnection customer submits its required deposit or security
in the form of a letter of credit or surety bond, and ultimately some
or all of the security is drawn by the transmission provider, Longroad
Energy argues that the interconnection customer should be given the
option to pay the amount due in cash rather than drawing on the letter
of credit or bond. Longroad Energy argues that limiting the acceptable
forms of financial assurance to only irrevocable letters of credit and
cash is arbitrary and capricious and an unexplained departure from
Commission precedent in Order No. 2003.\293\ In addition to the
deposits mentioned by Clean Energy Associations, Longroad Energy
requests rehearing regarding the acceptable form of security for the
deposits prior to the cluster restudy and the interconnection
facilities study.\294\ Longroad Energy notes that Order No. 2023
explicitly allows surety bonds or other forms of reasonably acceptable
financial security for affected system network upgrade
[[Page 27036]]
deposits but not other deposits, which is unduly discriminatory.\295\
---------------------------------------------------------------------------
\292\ Longroad Energy Rehearing Request at 12.
\293\ Id. at 9-14.
\294\ Id. at 10-11.
\295\ Id. at 12-13.
---------------------------------------------------------------------------
iii. Determination
185. We are persuaded by Clean Energy Associations and Longroad
Energy's arguments on rehearing. We believe that allowing surety bonds
or other forms of financial security that are reasonably acceptable to
the transmission provider for the commercial readiness deposit and all
study deposits will help ensure that interconnection customers do not
face unjust and unreasonable or unduly discriminatory hurdles to the
interconnection of new generation through limitations on the acceptable
forms of financial security. We find that acceptable forms of security
for the commercial readiness deposit and deposits prior to the
transitional serial study, transitional cluster study, cluster restudy
and the interconnection facilities study should include not only cash
or an irrevocable letter of credit, but also surety bonds or other
forms of financial security that are reasonably acceptable to the
transmission provider. Accordingly, we modify sections 3.4.2, 5.1.1.1,
5.1.1.2, 7.5, and 8.1 of the pro forma LGIP to reflect this finding.
186. However, we are not persuaded by Longroad Energy's request
that, if the interconnection customer submits its required deposit or
security in the form of a letter of credit or surety bond, the
interconnection customer should be given the option to pay any amount
drawn by the transmission provider in cash rather than drawing on the
letter of credit or surety bond. Longroad Energy did not provide
sufficient reasoning or evidence as to why this clarification is
necessary to ensure just and reasonable and not unduly discriminatory
or preferential rates. However, we clarify that we do not preclude
transmission providers from allowing interconnection customers to pay
cash in lieu of drawing on a previously submitted letter of credit or
surety bond.
b. Increased Study Deposits
i. Order No. 2023 Requirements
187. In Order No. 2023, the Commission adopted the following study
deposit framework in section 3.1.1.1 (Study Deposit) of the pro forma
LGIP: \296\
---------------------------------------------------------------------------
\296\ Order No. 2023, 184 FERC ] 61,054 at PP 502-503; pro forma
LGIP section 3.1.1.1.
------------------------------------------------------------------------
Size of proposed generating facility
associated with interconnection request Amount of deposit
------------------------------------------------------------------------
>20 MW <80 MW............................. $35,000 + $1,000/MW.
>=80 MW <200 MW........................... $150,000.
>=200 MW.................................. $250,000.
------------------------------------------------------------------------
The Commission required transmission providers to collect this
study deposit once, upon entry into the cluster.\297\
---------------------------------------------------------------------------
\297\ Order No. 2023, 184 FERC ] 61,054 at P 505.
---------------------------------------------------------------------------
ii. Determination
188. Given that interconnection customers developing small
generating facilities requesting NRIS submit their interconnection
requests under the relevant transmission providers' LGIP,\298\ we
modify 3.1.1.1 as follows to clarify the applicable study deposits in
such instances:
---------------------------------------------------------------------------
\298\ Small Generator Interconnection Agreements & Procs., Order
No. 792, 78 FR 73240 (Dec. 5, 2013), 145 FERC ] 61,159, at PP 232,
235 (2013).
------------------------------------------------------------------------
Size of proposed generating facility
associated with interconnection request Amount of deposit
under the pro forma LGIP
------------------------------------------------------------------------
<80 MW.................................... $35,000 + $1,000/MW.
>=80 MW <200 MW........................... $150,000.
>=200 MW.................................. $250,000.
------------------------------------------------------------------------
189. We also modify section 3.1.1.1 of the pro forma LGIP to
clarify that the $5,000 application fee is non-refundable. We also
modify section 13.3 of the pro forma LGIP to remove language ``or
offset against the cost of any future Interconnection Studies
associated with the applicable Cluster prior to beginning of any such
future Interconnection Studies,'' given that the study deposit
structure under Order No. 2023 includes an initial study deposit at the
beginning of the study process, rather than separate deposits before
each phase of study.
c. Demonstration of Site Control
i. Order No. 2023 Requirements
190. In Order No. 2023, the Commission adopted revisions to the pro
forma LGIP and pro forma LGIA to add more stringency to the site
control requirements and to help prevent speculative interconnection
requests from entering the interconnection queue.\299\ The Commission
found that, taken together, these reforms will help ensure that
commercially viable interconnection requests with demonstrated site
control or with demonstrated regulatory limitations will be able to
enter the interconnection queue, thereby reducing the negative impacts
of speculative interconnection requests.
---------------------------------------------------------------------------
\299\ Order No. 2023, 184 FERC ] 61,054 at P 583.
---------------------------------------------------------------------------
191. As relevant to the requests for rehearing and clarification,
in Order No. 2023, the Commission revised: (1) the definition for
``site control'' in section 1 of the pro forma LGIP and in article 1 of
the pro forma LGIA; \300\ and (2) section 3.4.2 of the pro forma LGIP
to include a limited option for interconnection customers to submit a
deposit in lieu of site control when they submit their interconnection
request--only if qualifying regulatory limitations prohibit the
interconnection customer from obtaining site control.\301\
---------------------------------------------------------------------------
\300\ Id. P 584 (``Site Control shall mean the exclusive land
right to develop, construct, operate, and maintain the Generating
Facility over the term of expected operation of the Generating
Facility. Site Control may be demonstrated by documentation
establishing: (1) ownership of, a leasehold interest in, or a right
to develop a site of sufficient size to construct and operate the
Generating Facility; (2) an option to purchase or acquire a
leasehold site of sufficient size to construct and operate the
Generating Facility for such purpose; or (3) any other documentation
that clearly demonstrates the right of Interconnection Customer to
exclusively occupy a site of sufficient size to construct and
operate the Generating Facility. Transmission Provider will maintain
acreage requirements for each Generating Facility type on its OASIS
or public website.'').
\301\ Id. P 605.
---------------------------------------------------------------------------
192. Also relevant to the requests for clarification, in Order No.
2023, the Commission clarified that deposits in lieu of site control
for interconnection customers with regulatory limitations are
refundable and cannot be applied to the costs of interconnection
studies or withdrawal penalties.\302\ The Commission also clarified
that the site control demonstration requirements apply only to the land
needed for the generating facility and explained that, because it did
not propose site control requirements for interconnection facilities in
the NOPR, it declined to address comments suggesting alternative site
control requirements for interconnection facilities or network
upgrades.\303\
---------------------------------------------------------------------------
\302\ Id. P 612.
\303\ Id. P 604.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
193. IPP Coalition requests rehearing and urges the Commission to
establish a requirement for full site control over generator
interconnection facilities without a deposit in lieu of site control
demonstration option at the facilities study phase.\304\ IPP Coalition
contends that Order No. 2023 limited site control requirements to ``the
land needed for
[[Page 27037]]
the generating facility'' and declined to extend any site control
requirements to the interconnection customer's interconnection
facilities without substantive consideration and a reasoned response to
the comments urging such a requirement,\305\ which is contrary to
reasoned decision-making principles in violation of the APA. IPP
Coalition argues that requiring site control for interconnection
facilities would increase the quality of interconnection study results
and increase certainty for interconnection customers as the
interconnection process becomes more costly and risky to navigate. IPP
Coalition further argues that the record reflects that such a
requirement could prevent gaming and reduce the risk of more
speculative projects delaying the interconnection process.\306\
---------------------------------------------------------------------------
\304\ IPP Coalition Rehearing Request at 6.
\305\ Id. at 3-4 (citing AEE Initial Comments at 18; AEP Initial
Comments at 21-23; Cypress Creek Initial Comments at 22; Enel
Initial Comments at 41-42; MISO Initial Comments at 56; National
Grid Initial Comments at 22-23; and Shell Reply Comments at 23).
\306\ Id. at 4-5 (citing Order No. 2023, 184 FERC ] 61,054 at PP
537-539).
---------------------------------------------------------------------------
194. Clean Energy Associations ask the Commission to clarify that
the revised definition of site control in the pro forma LGIP and pro
forma LGIA is not meant to impose term requirements on site
control.\307\ Further, Clean Energy Associations urge the Commission to
clarify and modify the definition of site control to prevent future
confusion and misinterpretation by transmission providers regarding any
term requirements for site control. Clean Energy Associations assert
that Order No. 2023 revised the definition of site control in a way
that is not discussed in the order or in the preceding NOPR to include
the words ``right to develop, construct, operate, and maintain the
Generating Facility over the term of expected operation of the
Generation Facility'' (emphasis added).\308\ Clean Energy Associations
assert that this revision implies that a lease option or other form of
site control must have a term that is valid for the entire life of the
generating facility. Clean Energy Associations argue that such a term
is contrary to standard industry practice,\309\ is unnecessary to
ensure that developers have sufficient rights to develop, construct,
operate, and maintain their generating facilities, and unnecessarily
increases the cost of development, resulting in rates to consumers that
are unjust and unreasonable.\310\
---------------------------------------------------------------------------
\307\ Clean Energy Associations Rehearing Request at 63.
\308\ Id. at 61.
\309\ Clean Energy Associations states that the standard
industry practice is to execute a development lease with a
development term and an extended term. Clean Energy Associations
explain that the development term typically lasts until the start of
construction, is less than ten years, and expires if not extended by
the interconnection customer. Clean Energy Associations further
explain that, when an interconnection customer is ready to begin
construction, the lease grants the customer the unilateral right to
enter the extended term at a pre-determined higher payment rate. Id.
\310\ Id. at 62-63.
---------------------------------------------------------------------------
195. ACP requests that the Commission clarify that, in their
compliance filings, transmission providers may seek to expand
opportunities for interconnection customers to submit deposits in lieu
of demonstrating 90% site control when submitting an interconnection
request to address other exigent circumstances beyond regulatory
constraints.\311\ ACP argues that land acquisition in dense urban areas
where battery storage facilities are more frequently sited is much more
difficult and costly to achieve at the time an interconnection request
is submitted than is typically the case for project sites much further
from load. ACP asserts that denying such flexibility on compliance
could result in key battery storage projects and other projects near
load being unable to move forward, endangering grid reliability where
and when those resources are most needed.\312\ ACP argues that this
clarification would not alter any aspect of Order No. 2023 but would
provide valuable information to transmission providers and
interconnection customers in developing effective compliance
filings.\313\
---------------------------------------------------------------------------
\311\ ACP Clarification Request at 1-3.
\312\ Id. at 3 (also arguing that lease options available in
dense urban areas typically have shorter terms than the phases of
interconnection studies that determine project feasibility and
capacity deliverability, which in turn can serve to justify more
definitive site control).
\313\ Id. at 4.
---------------------------------------------------------------------------
196. In the event the point of interconnection must change due to a
new government policy or regulatory requirement, [Oslash]rsted requests
clarification that any deposits submitted in lieu of site control would
still be treated as refundable and the project would not be subject to
withdrawal penalties if the change cannot be accommodated.\314\
---------------------------------------------------------------------------
\314\ [Oslash]rsted Rehearing Request at 11.
---------------------------------------------------------------------------
iii. Determination
197. We are unpersuaded by IPP Coalition's request for rehearing of
the Commission's decision to apply site control demonstration
requirements only to the land needed for the generating facility. We
reiterate that the Commission did not propose site control requirements
for interconnection facilities in the NOPR. While we note that some
comments were submitted on this topic,\315\ we continue to find the
record insufficient for the Commission to assess alternative site
control requirements for interconnection facilities and impose them on
a nationwide basis. We also note that some of the comments that were
submitted argued that interconnection customers require flexibility
when siting interconnection facilities because the route for such
facilities may not be identified until the very end of the
interconnection process.\316\
---------------------------------------------------------------------------
\315\ Order No. 2023, 184 FERC ] 61,054 at PP 535-539.
\316\ Id. P 535.
---------------------------------------------------------------------------
198. We are also unpersuaded by Clean Energy Associations' request
for clarification and to modify the definition of site control to avoid
imposing term limits. We disagree with Clean Energy Associations that
Order No. 2023 revised the definition of site control in a way that was
not discussed in the NOPR and note that the proposed definition of site
control in the NOPR included the words ``right to develop, construct,
operate, and maintain the Generating Facility over the term of expected
operation of the Generation Facility.'' \317\ We find that allowing
interconnection customers to submit site control documentation with a
term shorter than the expected operation of the generating facility
would increase risks for all parties. For example, in the event a
shorter lease expires, an interconnection customer could face property
rights disputes that threaten its ability to operate its generating
facility, which in turn, could jeopardize the transmission provider's
ability to reliably operate its transmission system. Consistent with
Order No. 2023, we find that it is the interconnection customer's
responsibility to obtain exclusive site control over the term of
expected operation of the generating facility.
---------------------------------------------------------------------------
\317\ NOPR, 179 FERC ] 61,194, at app. B, section 1.
---------------------------------------------------------------------------
199. We are further unpersuaded by ACP's request for clarification.
We reiterate that, because a deposit in lieu of site control does not
demonstrate that an interconnection customer has the exclusive right to
develop a site, it does not indicate that an interconnection customer
is ready to proceed with construction and commercial operation of the
generating facility. As a result, we believe that allowing transmission
providers to expand the option for interconnection customers to submit
a deposit in lieu of demonstrating site
[[Page 27038]]
control to address other exigent circumstances, beyond regulatory
limitations, would not help to prevent speculative, commercially non-
viable interconnection requests from entering the interconnection
queue. In cases where it is particularly challenging or costly to
achieve exclusive site control, the interconnection customer may not be
ready to proceed with the construction and commercial operation of the
generating facility, and therefore it may be inappropriate to submit an
interconnection request for such a facility. Thus, we decline to
clarify that transmission providers may expand the option for
interconnection customers to submit a deposit in lieu of demonstrating
site control.
200. In the event a new regulatory limitation requires a change to
the point of interconnection that cannot be accommodated and results in
an interconnection request being withdrawn, we grant [Oslash]rsted's
request for clarification and clarify that any deposits submitted by
the interconnection customer in lieu of site control must be
refundable. Nevertheless, the interconnection customer may be subject
to a withdrawal penalty. We acknowledge that certain interconnection
customers, such as offshore wind resources, may be required to modify
their point of interconnection, after they have already submitted an
interconnection request, in response to a state or federal policy or
regulation. However, the Commission did not adopt a process for
interconnection customers to modify their point of interconnection due
to a regulatory limitation in Order No. 2023. An interconnection
customer can request to modify its interconnection request pursuant to
section 4.4 of the pro forma LGIP, but if the transmission provider
determines that the change to the point of interconnection is a
material modification, and the interconnection customer elects to
withdraw its interconnection request, the interconnection customer may
be subject to a withdrawal penalty.
d. Commercial Readiness
i. Order No. 2023 Requirements
201. In Order No. 2023, the Commission revised sections 3.4.2, 7.5,
8.1, and 11.3 of the pro forma LGIP to require interconnection
customers to submit commercial readiness deposits to help reduce the
submission of speculative, commercially non-viable interconnection
requests into interconnection queues.\318\ The Commission found that,
because the interconnection customer's total commercial readiness
deposit held by the transmission provider increases as the
interconnection process proceeds, this approach will encourage
interconnection customers not ready to proceed through the
interconnection process--or whose projects become commercially non-
viable during the interconnection process--to withdraw earlier in the
process, thereby lessening the incidence of late-stage withdrawals that
result in delays and restudies.\319\
---------------------------------------------------------------------------
\318\ Order No. 2023, 184 FERC ] 61,054 at P 690.
\319\ Id. P 691.
---------------------------------------------------------------------------
202. The Commission declined to adopt the non-financial commercial
readiness demonstrations proposed in the NOPR because they were not
necessary to address the need for reform--providing additional
deterrence of speculative, commercially non-viable interconnection
requests--given the significant, increasing commercial readiness
deposits adopted instead.\320\ The Commission also indicated that the
non-financial commercial readiness demonstrations proposed in the NOPR
may not necessarily serve as appropriate indicators of a proposed
generating facility's commercial viability on a national basis, or may
not match the timelines of state procurement efforts.\321\
Additionally, the Commission expressed concern that the proposed non-
financial commercial readiness demonstrations could incentivize power
purchasers in some regions to execute purchase contracts with
interconnection customers whose generating facilities will later be
determined to be commercially non-viable.\322\
---------------------------------------------------------------------------
\320\ Id. P 694.
\321\ Id. PP 695-696.
\322\ Id. P 698.
---------------------------------------------------------------------------
203. Because the Commission did not adopt the non-financial
commercial readiness demonstrations proposed in the NOPR, the
Commission found that it was unnecessary to address commenter concerns
that certain non-financial commercial readiness demonstrations could
provide an unduly discriminatory or preferential advantage to projects
being developed by transmission providers or their affiliates.\323\
Although the Commission found that commercial readiness deposits are
sufficient to address the need for reform in this proceeding, the
Commission stated that this finding does not preclude transmission
providers from proposing to adopt non-financial commercial readiness
demonstrations on compliance, provided they meet the requirements of
the relevant standards (i.e., an independent entity variation or the
``consistent with and superior to'' standard) when requesting a
variation.\324\
---------------------------------------------------------------------------
\323\ Id. P 700.
\324\ Id. P 701.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
204. Clean Energy Associations request that the Commission clarify
Order No. 2023 by indicating the evaluation framework to determine if
non-financial commercial readiness criteria are unduly discriminatory
or preferential.\325\ Clean Energy Associations urge the Commission to
clarify how it will ensure that any additional non-financial commercial
readiness demonstrations that a transmission provider may propose will
not provide an unduly or preferential advantage to projects being
developed by the transmission provider or its affiliates. Clean Energy
Associations further request that the Commission clarify whether it
will require a proposing transmission provider to use the pro forma
readiness requirements before, or along with, implementing non-
financial demonstrations. In the alternative, Clean Energy Associations
seek rehearing on the basis that the Commission failed to meaningfully
respond to evidence that the non-financial commercial readiness
demonstrations present ample opportunity for non RTO/ISO transmission
providers to discriminate against independent power producers.\326\
Clean Energy Associations argue that it is nearly impossible for
independent power producers to enter the queue by making a non-
financial demonstration of commercial readiness, whereas transmission
providers may be able to use non-financial readiness demonstrations to
grant their own projects preferential contracts, resulting in undue
discrimination against independent power producers.\327\
---------------------------------------------------------------------------
\325\ Clean Energy Associations Rehearing Request at 67.
\326\ Id. (citing ACORE Reply Comments at 4; ACPA And Renew
Northeast Reply Comments at 4-6; AEE Initial Comments at 20; AEE
Reply Comments at 12; Alliant Energy Initial Comments at 5-6; Clean
Energy Associations Initial Comments at 34-35; CREA/New Sun Initial
Comments at 57; CREA and NewSun Energy Reply Comments at 22-45;
Cypress Creek Initial Comments at 22-23; Enel Initial Comments at
44; ENGIE Initial Comments at 5; ENGIE Reply Comments at 2-3; EPSA
Initial Comments at 9; Fervo Energy Reply Comments at 6-7; New
Jersey Commission Reply Comments at 6-8; NextEra Initial Comments at
25; NextEra Reply Comments at 14-16; Pine Gate Initial Comments at
27; PIOs Initial Comments at 29-30; R Street Initial Comments at 13;
SEIA Initial Comments at 25; and Vistra Initial Comments at 6).
\327\ Id. at 68-69 (citing Order No. 2023, 184 FERC ] 61,054 at
P 667).
---------------------------------------------------------------------------
[[Page 27039]]
iii. Determination
205. We are unpersuaded by Clean Energy Associations' arguments on
rehearing that the Commission must establish an evaluation framework to
determine if non-financial commercial readiness criteria are unduly
discriminatory or preferential. The Commission did not adopt non-
financial commercial readiness demonstrations in Order No. 2023, and
therefore such an evaluation framework is not needed to evaluate
compliance with Order No. 2023. Rather, we reiterate the Commission's
finding that non-financial commercial readiness demonstrations are not
necessary to address the need for reform--providing additional
deterrence of speculative, commercially non-viable interconnection
requests--given the significant, increasing commercial readiness
deposits the Commission adopted in Order No. 2023. Given that the
Commission did not adopt non-financial commercial readiness
demonstrations, we do not need to respond to arguments that such
demonstrations could be unduly discriminatory. As such, we are not
prejudging any compliance proposals that might include non-financial
commercial readiness demonstrations, and transmission providers may
explain specific circumstances on compliance and justify why any
deviations from Order No. 2023 are either consistent with or superior
to the pro forma LGIP or merit an independent entity variation in the
context of RTOs/ISOs.\328\
---------------------------------------------------------------------------
\328\ Order No. 2023, 184 FERC ] 61,054 at P 1764.
---------------------------------------------------------------------------
e. Withdrawal Penalties
i. Order No. 2023 Requirements
206. In Order No. 2023, the Commission added the term ``withdrawal
penalty'' to section 1 of the pro forma LGIP; revised section 3.7 of
the pro forma LGIP; and added sections 3.7.1, 3.7.1.1, and 3.7.1.2
related to withdrawal penalties to the pro forma LGIP.\329\ The
Commission required transmission providers to apply withdrawal
penalties to an interconnection customer if: (1) the interconnection
customer withdraws its interconnection request at any point in the
interconnection process; (2) the interconnection customer's
interconnection request has been deemed withdrawn by the transmission
provider at any point in the interconnection process; or (3) the
interconnection customer's generating facility does not reach
commercial operation (such as when an interconnection customer's LGIA
is terminated prior to reaching commercial operation).\330\ However, a
withdrawal penalty must only be assessed if the withdrawal has a
material impact on the cost or timing of any interconnection requests
with an equal or lower queue position. The Commission stated that the
interconnection customer will also be exempt from paying a withdrawal
penalty if (1) the interconnection customer withdraws its
interconnection request after receiving the most recent cluster study
report and the network upgrade costs assigned to the interconnection
customer's request have increased 25% compared to the previous cluster
study report, or (2) the interconnection customer withdraws its
interconnection request after receiving the individual facilities study
report and the network upgrade costs assigned to the interconnection
customer's request have increased by more than 100% compared to costs
identified in the cluster study report.\331\
---------------------------------------------------------------------------
\329\ Id. P 780.
\330\ Id. P 783.
\331\ Id. P 784.
---------------------------------------------------------------------------
207. The Commission required a transmission provider to assess a
withdrawal penalty on an interconnection customer with a proposed
generating facility that does not reach commercial operation based
either on the actual study costs or on a percentage of the
interconnection customer's assigned network upgrade costs, depending on
what phase the interconnection customer withdraws its interconnection
request.\332\ Thus, the withdrawal penalty for an interconnection
customer will be calculated as the greater of the study deposit or: (1)
two times the study cost if the interconnection customer withdraws
during the cluster study or after receipt of a cluster study report;
(2) 5% of the interconnection customer's identified network upgrade
costs if the interconnection customer withdraws during the cluster
restudy or after receipt of any applicable restudy reports; (3) 10% of
the interconnection customer's identified network upgrade costs if the
interconnection customer withdraws during the facilities study, after
receipt of the individual facilities study report, or after receipt of
the draft LGIA; or (4) 20% of the interconnection customer's identified
network upgrade costs if, after executing, or requesting to file
unexecuted, the LGIA, the interconnection customer's LGIA is terminated
before its generating facility achieves commercial operation.
---------------------------------------------------------------------------
\332\ Id. P 791.
---------------------------------------------------------------------------
208. The Commission required transmission providers to use the
withdrawal penalty funds as follows: (1) to fund studies and restudies
in the same cluster; (2) if withdrawal penalty funds remain, to offset
net increases in costs borne by other remaining interconnection
customers from the same cluster for network upgrades shared by both the
withdrawing and non-withdrawing interconnection customers prior to the
withdrawal; and (3) if any withdrawal penalty funds remain, to be
returned to the withdrawing interconnection customer.\333\
---------------------------------------------------------------------------
\333\ Id. P 798.
---------------------------------------------------------------------------
209. Section 3.7.1.2.1 of the pro forma LGIP describes the
transmission provider's handling of withdrawal penalty funds and the
first step of distributing them to fund studies and restudies.\334\ For
a single cluster, the transmission provider shall hold all withdrawal
penalty funds until all interconnection customers in that cluster have:
(1) withdrawn or been deemed withdrawn; (2) executed an LGIA; or (3)
requested an LGIA to be filed unexecuted. Any withdrawal penalty funds
collected shall first be used to fund studies for interconnection
customers in the same cluster that have executed an LGIA or requested
an LGIA to be filed unexecuted. Distribution of the withdrawal penalty
funds for such study costs shall not exceed the total actual study
costs.
---------------------------------------------------------------------------
\334\ Id. P 801.
---------------------------------------------------------------------------
210. The Commission adopted section 3.7.1.2.2 of the pro forma
LGIP, which provides that if, after the first distribution step is
complete, withdrawal penalty funds remain, the transmission provider
must proceed to the second step of distributing them to offset net
increases in network upgrade cost assignments driven by the
withdrawal.\335\ The transmission provider will determine if the
withdrawn interconnection customers, at any point in the cluster study
process, shared cost assignment for one or more network upgrades with
any remaining interconnection customers in the same cluster based on
the cluster study report, cluster restudy report(s), interconnection
facilities study report, and any subsequent issued restudy report for
the cluster.
---------------------------------------------------------------------------
\335\ Id. P 802.
---------------------------------------------------------------------------
211. If the transmission provider determines that withdrawn
interconnection customers shared cost assignment for network upgrades
with remaining interconnection customers in the same cluster, the
transmission provider will calculate the remaining interconnection
customers' net increase in costs (i.e., financial impact) due to a
shared cost assignment for network
[[Page 27040]]
upgrades with the withdrawn interconnection customer.\336\ It will then
distribute withdrawal penalty funds as described in section 3.7.1.2.3
of the pro forma LGIP, depending on whether the withdrawal occurred
before the withdrawing interconnection customer executed an LGIA (i.e.,
during the cluster study process) or afterward.
---------------------------------------------------------------------------
\336\ Id. P 803.
---------------------------------------------------------------------------
212. If the transmission provider determines that more than one
interconnection customer in the same cluster was financially impacted
by the same withdrawn interconnection customer, the transmission
provider will apply the relevant withdrawn interconnection customer's
withdrawal penalty to reduce the financial impact to each impacted
interconnection customer based on each withdrawn interconnection
customer's proportional share of the financial impact.\337\ Each
interconnection customer's proportional share will be determined by
either the proportional impact method if the net cost increase is
related to a system network upgrade or on a per capita basis if the net
cost increase is related to a substation network upgrade.
---------------------------------------------------------------------------
\337\ Id. P 804.
---------------------------------------------------------------------------
213. Section 3.7.1.2.4 of the pro forma LGIP details the process by
which the transmission provider will provide amended LGIAs to any
interconnection customers in the cluster that qualify for distribution
of withdrawal penalty funds under this framework.\338\ To account for
withdrawals that occurred during the cluster study process, the
transmission provider must do the following: within 30 calendar days of
all interconnection customers in the same cluster having: (1) withdrawn
or been deemed withdrawn; (2) executed an LGIA; or (3) requested an
LGIA to be filed unexecuted, determine if, and to what extent, any
interconnection customers qualify to have their increased network
upgrade costs offset by withdrawal penalty funds and provide such
interconnection customers with an amended LGIA that provides the
reduction in network upgrade cost assignment and associated reduction
to the interconnection customer's financial security requirements.
---------------------------------------------------------------------------
\338\ Id. P 805.
---------------------------------------------------------------------------
214. To account for withdrawals that occurred in the same cluster
after the withdrawing interconnection customer executed an LGIA, or
requests the filing of an unexecuted LGIA, the transmission provider
must do the following: within 30 calendar days of such withdrawal or
termination, determine if, and to what extent, any interconnection
customers qualify to have their increased network upgrade costs offset
by withdrawal penalty funds and provide such interconnection customers
with an amended LGIA that provides the reduction in network upgrade
cost assignment and associated reduction to the interconnection
customer's financial security requirements.\339\
---------------------------------------------------------------------------
\339\ Id. P 806.
---------------------------------------------------------------------------
215. For any given withdrawal, if the transmission provider
determines that there are no network upgrade cost assignments in the
withdrawn interconnection customer's cluster shared with the withdrawn
interconnection customer, or if the transmission provider determines
that the withdrawn interconnection customer's withdrawal did not cause
a net increase in the shared cost assignment for any remaining
interconnection customers in the cluster, the transmission provider
must return the remaining withdrawal penalty to the withdrawn
interconnection customer.\340\ Such remaining withdrawal penalties will
be returned to withdrawn interconnection customers based on the
proportion of each withdrawn interconnection customer's contribution to
the total amount of withdrawal penalty funds collected for the cluster.
The transmission provider must make such disbursement within 60
calendar days of the date on which all interconnection customers in the
same cluster have either: (1) withdrawn or been deemed withdrawn; (2)
executed an LGIA; or (3) requested an LGIA to be filed unexecuted.
---------------------------------------------------------------------------
\340\ Id. P 807.
---------------------------------------------------------------------------
216. Finally, section 3.7.1.2.5 of the pro forma LGIP provides that
if, after the first and second distribution steps are complete, some or
all of an interconnection customer's withdrawal penalty remains, the
transmission provider must return the balance of the withdrawn
interconnection customer's withdrawal penalty funds to the withdrawn
interconnection customer.\341\
---------------------------------------------------------------------------
\341\ Id. P 809.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
217. NYISO states that the Commission's withdrawal penalty
structure adopted in Order No. 2023 does not reflect reasoned decision-
making as it is unnecessarily complicated and establishes significant
new administrative burdens on the transmission provider that are at
odds with the intent of Order No. 2023 to enable transmission providers
to more efficiently and timely process interconnection requests.\342\
NYISO states that the Commission's framework substantially deviates
from its straightforward proposal in the NOPR, in which the
transmission provider would solely use the collected penalties to
offset study costs for the cluster. NYISO asserts that the Commission
has not provided a reasonable basis for expanding this process to
insert an additional layer to address offsetting increases in network
upgrade costs for shared network upgrades. NYISO states that the new
requirements will require the transmission provider to keep track of
multiple penalty streams tied to each withdrawing developer, of which
there will likely be a substantial number, across multiple studies
while also requiring the performance of extensive analysis concerning
the impact of the withdrawal of each of these projects on the remaining
projects. NYISO asserts that the Commission should select one approach
that can be reasonably implemented without requiring the commitment of
significant additional resources or, alternatively, should permit each
transmission provider to determine how such collected penalty costs can
be best put to use in its region.\343\
---------------------------------------------------------------------------
\342\ NYISO Rehearing Request at 47-48.
\343\ Id. at 48-49.
---------------------------------------------------------------------------
218. NYISO states that, if the Commission elects to retain its
withdrawal penalty approach, NYISO requests rehearing and/or
clarification of certain elements of these requirements.\344\ First,
NYISO states that the Commission should clearly establish that
withdrawal penalties cannot exceed the dollar amount secured by
transmission providers. NYISO asserts that transmission providers
cannot be responsible for and should not have to incur the
administrative resource and expense of having to hunt down or to enter
into litigation with withdrawn interconnection customers to obtain any
withdrawal penalties that they fail to pay, and should not be required
to pass on any gaps in uncollected penalty amounts to their market
participants. NYISO therefore argues that the Commission should modify
the withdrawal penalty rules: (1) to permit the transmission provider
to require increases in deposits from interconnection customers when it
becomes evident that the secured amount is not sufficient to offset
penalty amounts; and/or (2) to establish that, in the event of a gap
between the secured amount and withdrawal penalties, the transmission
provider is not required to
[[Page 27041]]
pay out any uncollected amount under the penalty distribution rules or
to recover such difference from its market participants.
---------------------------------------------------------------------------
\344\ Id. at 49-50.
---------------------------------------------------------------------------
219. Clean Energy Associations request rehearing and state that,
while they support the inclusion of the penalty-free withdrawal
provisions as a necessary protection for interconnection customers, the
thresholds set by the Commission are unjust and unreasonable and will
result in significant uncertainty for interconnection customers and
inefficient queue processing.\345\ Clean Energy Associations first
argue that the 100% increase in network upgrade costs threshold for
penalty-free withdrawal from the interconnection queue at the
facilities study stage (compared to costs identified in a previous
cluster study report) requires interconnection customers to withstand
an unjust and unreasonable cost increase at such a late stage. Clean
Energy Associations state that requiring a 100% increase after the
facilities study for a penalty-free withdrawal is arbitrary and
capricious, as well as unjust and unreasonable because it would serve
to effectively penalize interconnection customers for determinations
beyond their control, at a late phase when costs should become more
certain--not subject to potential doubling. Clean Energy Associations
assert that this is inconsistent with Order No. 2023's goal and
justification for subjecting interconnection customers to increasing
cost and risk in the form of higher milestone payments and withdrawal
penalties as they move through the stages of the interconnection
process, which is intended to incentivize interconnection customers to
drop out as soon as they learn that their projects are commercially
non-viable.\346\ Clean Energy Associations submit that the Commission
should lower this threshold to a 50% cost increase post-study for a
penalty-free withdrawal, consistent with the penalty-free withdrawal
provisions approved in SPP, MISO, and PJM.\347\
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\345\ Clean Energy Associations Rehearing Request at 29-30.
\346\ Id. at 30-31 (citing Order No. 2023, 184 FERC ] 61,054 at
P 691).
\347\ Id. at 31 (citations omitted).
---------------------------------------------------------------------------
220. NYISO explains that the Order No. 2023 withdrawal penalty
requirements establish certain exceptions to an interconnection
customer's responsibility for withdrawal penalties, including in cases
in which the transmission provider determines that ``the withdrawal
does not have a material impact on the cost or timing of any
Interconnection Request with an equal or lower Queue Position.'' \348\
NYISO argues that the Commission should eliminate this material impact
threshold exception, which it argues is inconsistent with the
Commission's rationale for the withdrawal penalties, is not well
defined, and will create an additional administrative, time-intensive
burden on transmission providers. NYISO states that an interconnection
customer's withdrawal at the conclusion of a study phase made use of
the transmission provider's limited time and resources to the detriment
of other interconnection customers that are ready to proceed and the
overall time for completing the study phase, and that this harm occurs
regardless of whether or not the actual study results indicate that the
withdrawal of its project has a material impact on the cost or timing
of other interconnection requests.
---------------------------------------------------------------------------
\348\ NYISO Rehearing Request at 50-51.
---------------------------------------------------------------------------
221. NYISO further states that the Commission neither defined nor
provided guidance concerning what constitutes a material impact,
leaving it instead to the transmission provider to determine.\349\
NYISO argues that this creates significant inefficiencies and
administrative burdens to require transmission providers to assess each
withdrawing project--which could potentially be dozens--at each study
phase and determine on a case-by-case basis what individual impact that
project has on the cost and timing of any interconnection request with
an equal or lower queue position. NYISO states that this would require
reviewing such impacts for not only all other projects participating in
the cluster, but also all other lower queued large and small generating
facilities in a transmission provider's interconnection queue. NYISO
argues that this time intensive analysis required upon each withdrawal
is counter to one of the primary goals of Order No. 2023: to increase
efficiencies in the interconnection process.
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\349\ Id. at 51.
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222. Clean Energy Associations also seek clarification to provide
consistency and objectivity regarding what constitutes a material
impact resulting from a withdrawal.\350\ Clean Energy Associations urge
the Commission to clarify that transmission providers must develop
criteria to use in assessing materiality and include such criteria in
their compliance filings and tariffs, and suggest modifications to pro
forma LGIP section 3.7.1.\351\ Clean Energy Associations assert that
such clarification would still allow transmission providers the
deference to make materiality determinations, but would also provide
interconnection customers with a clear understanding of how materiality
will be determined by each provider, while also ensuring consistent
treatment of interconnection customers by transmission providers and
consistent application of the required withdrawal penalty approach.
Clean Energy Associations also ask the Commission to clarify that, when
a transmission provider makes a materiality determination after a
withdrawal, that such determination or other information associated
therewith be made available along with and at the same time as the
penalty revenue posting required by revised pro forma LGIP section
3.7.1.2. Clean Energy Associations argue that, absent the mechanisms
requested in this clarification, the Commission and interconnection
customers would have little or no visibility into transmission
providers' implementation of the immateriality exemption, the
inconsistent application of which could have significant impacts on
competition and could result in undue discrimination and preferential
treatment amongst similarly situated interconnection customers.
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\350\ Clean Energy Associations Rehearing Request at 56.
\351\ Id. at 58-59.
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223. WIRES states that Order No. 2023 provides that any withdrawal
penalty funds collected by the transmission provider are to be
distributed among the remaining interconnection customers in the
relevant cluster.\352\ Specifically, WIRES explains that Order No. 2023
indicates that such withdrawal penalties are to be used to reduce any
net increases to the existing network upgrade cost assignments to
remaining customers that saw increased costs as a result of the
withdrawing customer. WIRES states that, read together with new section
3.7.1.2.2 of the pro forma, the new rule provides that penalty revenues
are not directly returned to non-withdrawing customers; rather, the
transmission provider is to use those funds to reduce the costs of
network upgrades that are ultimately assigned to non-withdrawing
interconnection customers. WIRES states that, because penalty revenues
do not appear to be directly returned to non-withdrawing customers, it
is unclear how the rule requires the transmission provider to use those
funds to reduce the interconnection customers' network upgrade cost
assignment. As a consequence, WIRES asserts that Order No. 2023 could
be read to require the
[[Page 27042]]
transmission provider to reduce its construction costs included in
rates associated with the network upgrade and preclude it from earning
a return on the full cost of the network upgrades that transmission
owners develop to serve the needs of the cluster. WIRES claims that, in
effect, the withdrawal penalty crediting mechanism could infringe upon
a transmission provider's right to self-fund network upgrades and earn
a return of and on their investment. WIRES argues that the Commission's
proposed rule never specified, much less suggested, that withdrawal
penalties would be used to offset network upgrade costs, and the
Commission should clarify that the Order No. 2023 withdrawal penalty
distribution may be used to offset payment amounts by the remaining
interconnection customers to the transmission owner but does not affect
the overall revenue requirement for the network upgrades.
---------------------------------------------------------------------------
\352\ WIRES Rehearing Request at 9-10.
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224. WIRES states that the Commission could also clarify that the
withdrawal penalty funds are to be distributed directly to remaining
interconnection customers as cash payments, which it claims would
achieve the Commission's apparent objectives without impermissibly
interfering with a transmission owner's right to fund network
upgrades.\353\ WIRES states that, absent the Commission granting the
above clarification, WIRES seeks rehearing on the basis that the
Commission failed to provide adequate notice and opportunity for public
comment on the consequences, impacts, and legality of, and possible
alternatives to, this new withdrawal penalty distribution scheme prior
to issuing Order No. 2023 as required by the Administrative Procedure
Act, and failed to consider the effects of its withdrawal distribution
penalty.
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\353\ Id. at 11.
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225. NYISO requests that the Commission confirm or otherwise
clarify the timeframes for the specific withdrawal penalty application
process steps from the date on which all interconnection customers in
the cluster have either withdrawn or been deemed withdrawn, executed an
LGIA, or requested the LGIA be filed unexecuted.\354\ NYISO states that
it understands the transmission provider to have the following
responsibilities within either 30 or 60 calendar days of this start
date. NYISO understands that the transmission provider must within 30
days: (1) determine the use of the collected withdrawal penalty funds
for study costs; (2) refund study costs; (3) determine the use of any
remaining collected withdrawal penalty funds for net increases to
network upgrade costs; and (4) provide an amended LGIA in the case of
any offset of increases to network upgrade costs. NYISO states that it
further understands that the transmission provider must return any
remaining security to interconnection customer within 60 calendar days.
NYISO requests that the Commission confirm these are the intended
deadlines or clarify the actual deadlines for these responsibilities.
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\354\ NYISO Rehearing Request at 52-53.
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226. NYISO next states that pro forma LGIP section 3.7.1.2.1
indicates that the transmission provider must use the collected
withdrawal penalties first ``to fund studies conducted under the
cluster study process,'' and that the cluster study process is defined
to include all of the interconnection studies and re-studies.\355\
However, NYISO states that section 3.7.1.2.1 elsewhere describes
distributing withdrawal penalties only in the context of the cluster
study. NYISO asks the Commission to clarify whether this tariff
language was intended to apply solely to distribution of penalty funds
for cluster study costs or for all the interconnection studies--e.g.,
cluster re-studies and the interconnection facilities study.
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\355\ Id. at 53 (citing revised pro forma LGIP section 1).
---------------------------------------------------------------------------
227. NYISO also asks the Commission to clarify whether the
requirements in pro forma LGIP section 3.7.1.2.2 for refunding any
penalty amounts not used to offset study costs and net increases in
upgrade costs are intended to be the same or different from the
requirements for distributing such remaining penalty funds under
section 3.7.1.2.5.\356\ NYISO requests that the Commission provide an
expanded version of the helpful example it provided in Paragraph 808 of
Order No. 2023 that walks through the different potential variations of
this process.
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\356\ Id.
---------------------------------------------------------------------------
228. Clean Energy Associations and Shell ask the Commission to
clarify the scope of the withdrawal penalty contained in revised pro
forma LGIP sections 5.1.1.1 and 5.1.1.2.\357\ Clean Energy Associations
state that the withdrawal penalty definition's reference to revised pro
forma LGIP section 3.7.1, and its subsection 3.7.1.1, leads to a
conclusion that every withdrawal penalty is to be calculated consistent
with revised pro forma LGIP section 3.7.1.\358\ Clean Energy
Associations and Shell state that section 5 of the revised pro forma
LGIP procedures for the transitional cluster study process refers to
the withdrawal penalty provisions of section 3.7, but that certain
cross references are unclear.\359\ Clean Energy Associations argue that
the Commission should clarify whether the term ``Withdrawal Penalty''
in revised pro forma LGIP sections 5.1.1.1 and 5.1.1.2 either: (1)
should not be capitalized so that the revised pro forma LGIP section 1
defined term ``Withdrawal Penalty,'' and its corresponding reference to
the calculation in pro forma LGIP section 3.7.1, do not apply to
withdrawals during the transition process; or (2) a new term
``Transitional Withdrawal Penalty'' should be defined as a specific
withdrawal penalty that applies only during the transition process and
is calculated pursuant to Revised pro forma LGIP sections 5.1.1.1 and
5.1.1.2.\360\ Clean Energy Associations and Shell further argue that
the Commission also should clarify whether the term ``study cost,'' as
used in the calculation of the transitional withdrawal penalty,
includes the cost of the entire cluster study or the study cost that
has been assigned to the withdrawing interconnection customer up to the
point of its withdrawal.
---------------------------------------------------------------------------
\357\ Clean Energy Associations Rehearing Request at 59-60;
Shell Rehearing Request at 10.
\358\ Clean Energy Associations Rehearing Request at 60.
\359\ Id.; Shell Rehearing Request at 10.
\360\ Clean Energy Associations Rehearing Request at 60-61; see
also Shell Rehearing Request at 11.
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229. Clean Energy Associations ask the Commission to clarify that
the new penalty-free withdrawal thresholds will apply to transitional
projects.\361\ Clean Energy Associations argue that this clarification
will increase project certainty and fairly allow projects that go
through the transition to proceed in good faith without the risk that
new results that show substantially higher costs will not allow them to
withdraw penalty-free.
---------------------------------------------------------------------------
\361\ Clean Energy Associations Rehearing Request at 74-75.
---------------------------------------------------------------------------
iii. Determination
230. We deny NYISO's rehearing request as it pertains to the
withdrawal penalty structure. Specifically, we disagree with NYISO's
assertion that the withdrawal penalty structure adopted in Order No.
2023 is unnecessarily complicated and burdensome on transmission
providers and that it does not reflect reasoned decision-making. While
NYISO asserts that the requirement to distribute withdrawal penalties
to remaining interconnection customers facing net increases of costs
[[Page 27043]]
for shared network upgrades will complicate and slow the
interconnection study process, we continue to find that the benefits of
reducing the harm of such cost shifts outweighs the potential for added
complexity. We continue to maintain that incorporating such a mechanism
will decrease the risk that very large cost shifts due to withdrawals
result in cascading withdrawals,\362\ which in turn create substantial
uncertainty, cost, and inefficiency for the interconnection study
process. Moreover, the tracking of withdrawal penalty funds is
necessary to ensure that funds related to individual interconnection
customers' withdrawals are appropriately allocated. The concern of
ensuring transparency to interconnection customers regarding such funds
outweighs the perceived burden to transmission providers, especially
because transmission providers are likely to track the impact of an
interconnection customer's withdrawal regardless: this is valuable
information to the transmission provider because withdrawals could lead
to a study delay and accompanying penalty for the transmission provider
and such information could be useful to the transmission provider in an
appeal.
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\362\ Order No. 2023, 184 FERC ] 61,054 at P 799.
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231. We grant NYISO's request to clarify that withdrawal penalties
cannot exceed the dollar amount collected from interconnection
customers that have withdrawn from the interconnection study process
secured by transmission providers. As stated in section 3.7.1.2.1 of
the pro forma LGIP, withdrawal penalty funds are collected from the
cluster for the purposes of (1) funding studies conducted under the
cluster study process for interconnection customers in the same cluster
that have executed the LGIA or requested the LGIA to be filed
unexecuted, and (2) reducing net increases, for interconnection
customers in the same cluster, in interconnection customers' network
upgrade cost assignment and associated financial security requirements.
The total amount of funds used for (1) and (2) must not exceed the
total amount of withdrawal penalty funds collected from the cluster. We
accordingly modify the language in pro forma LGIP section 3.7.1.2.1 to
reflect this clarification. Given this clarification, we need not adopt
NYISO's request for additional modifications.
232. We are unpersuaded by Clean Energy Associations' request for
rehearing as it pertains to the 100% increase in network upgrade costs
requirement after the facilities study phase for penalty-free
withdrawal. We disagree that the thresholds for penalty-free withdrawal
laid out in Order No. 2023 expose interconnection customers to unjust
and unreasonable cost increases. We continue to find that the trigger
thresholds are set at an amount providing sufficient room for estimates
to change as the cluster evolves while limiting interconnection
customer exposure to withdrawal penalties when such estimates change by
a significant amount. We acknowledge that the thresholds for penalty-
free withdrawal are higher at later stages of the interconnection study
process, but continue to find that this structure is reasonable, given
the greater harms of late-stage withdrawals and the importance of
incentivizing earlier withdrawal of non-viable interconnection
requests. An interconnection customer will know to factor in both the
cost estimates and the potential withdrawal penalty but also the
exemption trigger thresholds as it makes the business decision to
proceed in the interconnection queue. Accordingly, we retain the
penalty-free withdrawal threshold exemptions set forth in Order No.
2023.
233. We disagree with NYISO's and Clean Energy Associations'
requests for the Commission to define materiality in the context of the
withdrawal penalty exceptions in pro forma LGIP section 3.7.1.
Consistent with the Commission's finding in Order No. 2003,\363\ we
find it unnecessary to revise pro forma LGIP section 3.7.1 to specify
what constitutes a material impact on the cost or timing of any
interconnection request with an equal queue position. We also note a
discrepancy between the pro forma LGIP language in section 3.7.1 and
the withdrawal penalty framework as described in Order No. 2023.
Accordingly, we revise section 3.7.1 such that there will be no
withdrawal penalty assessed if the withdrawal does not have a material
impact on any interconnection request in the same cluster. Withdrawal
penalty funds are allocated to those interconnection customers in the
same cluster as the withdrawing interconnection customer, so we find it
necessary for clarity to remove the reference to lower-queued
interconnection customers, as adopted in Order No. 2023. We note that
the materiality of the impact caused by a withdrawal could depend on
the factors pertaining to the individual project (size, location, type)
and other projects in the cluster (proximity to the withdrawing
project, size of remaining projects relative to the withdrawing
project), as well as the configuration of the transmission provider's
transmission system. Therefore, we leave it to the transmission
provider to make this determination of materiality. We are also
unpersuaded by Clean Energy Associations' request for clarification
that, when a transmission provider makes a materiality determination
after a withdrawal regarding a delay in timing or increase in cost of
network upgrades of other proposed generating facilities in the same
cluster, such determination or other information associated therewith
be made available along with and at the same time as the penalty
revenue posting required by revised pro forma LGIP section 3.7.1.2. The
benefit to the interconnection customers would not outweigh the
substantial burden on transmission providers to detail the materiality
determination for each individual withdrawal.
---------------------------------------------------------------------------
\363\ Order No. 2003, 106 FERC ] 61,220 at P 168.
---------------------------------------------------------------------------
234. In response to WIRES, we clarify that using the Order No. 2023
withdrawal penalties to offset financial security payment amounts
provided to the transmission provider by the remaining interconnection
customers would not reduce the total network upgrade cost that a
transmission provider places in rate base. When the Order No. 2023
withdrawal penalties are used to offset financial security payment
amounts, some network upgrade payments will come from the withdrawal
penalties and some will come from the remaining interconnection
customer, but the fact that a portion of the network upgrade payment
comes from withdrawal penalties does not reduce the total network
upgrade cost that a transmission provider places in rate base. Order
No. 2023 provides that an interconnection customer's reduced network
upgrade cost obligation will be effectuated by the transmission
provider amending the interconnection customer's LGIA or reducing the
network upgrade cost estimate provided to the interconnection customer
if there is not yet an LGIA to provide a reduction in network upgrade
cost assignment and an associated reduction in the interconnection
customer's financial security requirement.\364\ Given this
clarification, we believe it unnecessary to address WIRES' alternative
request for clarification that these withdrawal penalty disbursements
must be distributed as cash payments. For the same reasons, we believe
it unnecessary to address WIRES' alternative request for rehearing
[[Page 27044]]
regarding notice of the new withdrawal penalty regime.
---------------------------------------------------------------------------
\364\ Order No. 2023, 184 FERC ] 61,054 at P 806.
---------------------------------------------------------------------------
235. We are persuaded by NYISO's request to clarify the timeframes
for the specific withdrawal penalty application process steps. The
transmission provider is required to complete the following steps
within 30 calendar days of all interconnection customers in the cluster
having either withdrawn or been deemed withdrawn, executed an LGIA, or
requested the LGIA be filed unexecuted: (1) apply a refund to invoiced
study costs for interconnection customers that remain in the cluster
(per pro forma LGIP section 3.7.1.2.1); (2) determine whether withdrawn
interconnection customers, at any point in the cluster study process,
shared cost assignment for one or more network upgrades with any
remaining interconnection customers in the same cluster (per pro forma
LGIP section 3.7.1.2.2); (3) where the withdrawn interconnection
customers have shared a cost assignment for one or more network
upgrades with any remaining interconnection customers in the same
cluster, transmission provider is to perform the calculations described
in pro forma LGIP subsection 3.7.1.2.3(a) to determine the reduction in
the remaining interconnection customers' net increase in network
upgrade costs and associated financial security requirements (per pro
forma LGIP section 3.7.1.2.4); and (4) where applicable, provide
interconnection customers with an amended LGIA that provides the
reduction in network upgrade cost assignment and associated reduction
to the interconnection customer's financial security requirements (per
pro forma LGIP section 3.7.1.2.4).
236. Where the transmission provider conducts step (2) above and
determines that a withdrawn interconnection customer did not share cost
assignments with remaining interconnection customers or cause a net
increase in the cost assignment for any remaining interconnection
customers in the same cluster, the transmission provider must return
any remaining withdrawal penalty funds to the withdrawn interconnection
customer(s) within 60 calendar days of all interconnection customers in
the cluster having either withdrawn or been deemed withdrawn, executed
an LGIA, or requested the LGIA be filed unexecuted (per pro forma LGIP
section 3.7.1.2.2). The 60-day period here allows the transmission
provider time to focus on steps 1-4 in the previous paragraph before it
must disburse funds to withdrawn interconnection customers.
237. We grant NYISO's request to clarify that pro forma LGIP
section 3.7.1.2.1 requires the transmission provider to use the
collected withdrawal penalties first to fund all the interconnection
studies conducted for interconnection customers in the cluster--
including cluster restudies and the interconnection facilities study.
We accordingly modify the language in section 3.7.1.2.1 of the pro
forma LGIP to be inclusive of these studies.
238. We grant NYISO's request to clarify the difference between the
requirements to return withdrawal penalty funds to withdrawn
interconnection customers in pro forma LGIP sections 3.7.1.2.2 and
3.7.1.2.5. Pro forma LGIP section 3.7.1.2.2 establishes that, where the
interconnection customer's withdrawal does not cause a net increase in
the shared cost assignment for any remaining interconnection customers'
network upgrades in the same cluster, the withdrawal penalty funds
returned to the withdrawn interconnection customers will be net of the
amount used to pay the study costs for interconnection customers in the
same cluster that did not withdraw. Pro forma LGIP section 3.7.1.2.5
addresses the case where any interconnection customer's withdrawal does
cause a net increase in the shared cost assignment for any remaining
interconnection customers' network upgrades. In this case, the
withdrawal penalty funds returned to the withdrawn interconnection
customers will be net of both the study costs and the amount paid to
offset net increases in shared cost assignments for network upgrades.
239. We are not persuaded by NYISO's request for an expanded
version of the withdrawal penalty example included in Order No. 2023
because another purely illustrative example is unnecessary.
240. We agree with Clean Energy Associations and Shell regarding
the withdrawal penalty contained in pro forma LGIP sections 5.1.1.1 and
5.1.1.2. We agree that it is necessary to distinguish the transition
process withdrawal penalty of nine times study costs from the
withdrawal penalty assessed under the normal cluster study process
which is calculated based on pro forma LGIP section 3.7.1. Accordingly,
we modify section 1 to define ``transitional withdrawal penalty,''
\365\ and modify pro forma LGIP sections 5.1.1, 5.1.1.1, and 5.1.1.2 to
reference the transitional withdrawal penalty.
---------------------------------------------------------------------------
\365\ Transitional Withdrawal Penalty shall mean the penalty
assessed by Transmission Provider to an Interconnection Customer
that has entered the Transitional Cluster Study or Transitional
Serial Interconnection Facilities Study and chooses to withdraw or
is deemed withdrawn from Transmission Provider's interconnection
queue or whose Generating Facility does not otherwise reach
Commercial Operation. The calculation of the Transitional Withdrawal
Penalty is set forth in sections 5.1.1.1 and 5.1.1.2 of this LGIP.
---------------------------------------------------------------------------
241. We grant Clean Energy Associations' and Shell's requests for
clarification of whether the term ``study cost,'' as used in the
calculation of the transitional withdrawal penalty, includes the cost
of the entire cluster study or the study cost that has been assigned to
the withdrawing interconnection customer up to the point of withdrawal,
inclusive of any costs incurred in the transition process under the
transitional serial facilities study or transitional cluster study. We
clarify that study costs include all costs incurred by the
interconnection customer in the transmission provider's existing
interconnection study process prior to the Commission-approved
effective date of the transmission provider's Order No. 2023 compliance
filing. For example, where a transmission provider was operating under
the previous pro forma LGIP, the study costs would include the amount
incurred by the interconnection customer for the completion of its
interconnection feasibility study, interconnection system impact study,
and the interconnection facilities study. As explained in Order No.
2023 and pro forma LGIP sections 5.1.1.1 and 5.1.1.2, study costs for
purposes of calculating this withdrawal penalty will also include any
costs incurred in the transition process under the transitional serial
facilities study or transitional cluster study.
242. In response to Clean Energy Associations, we decline to
clarify that the penalty-free withdrawal thresholds will apply to
transitional projects. We find it important to the goal of reducing
speculative behavior that any interconnection customer that enters the
transition process is required to pay a penalty if it does not reach
commercial operation. We note that interconnection customers can elect
not to enter the transition process and instead enter the transmission
provider's first annual cluster study where the withdrawal penalty
exemptions will be applied. We also note that the penalty-free
exemption provisions are more appropriate for the normal cluster study
process where the withdrawal penalty could be much higher than the nine
times study costs amount assessed as the transitional withdrawal
penalty.
243. We also add minor, clarifying edits to pro forma LGIP section
3.7.1
[[Page 27045]]
and 3.7.1.1(a) to reference cluster restudies, where appropriate.
6. Transition Process
a. Order No. 2023 Requirements
244. In Order No. 2023, the Commission established a transition
process for moving to the first-ready, first-served cluster study
process.\366\ The Commission required transmission providers to offer
existing interconnection customers up to three transition options,
depending on which phase of the serial study process their
interconnection requests are in: (1) a transitional serial study, (2) a
transitional cluster study, and (3) withdrawal from the interconnection
queue without penalty.
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\366\ Order No. 2023, 184 FERC ] 61,054 at P 855.
---------------------------------------------------------------------------
245. The Commission agreed with commenters that, given current
interconnection queue backlogs in multiple regions, it is essential
that the Commission craft a transition process to give interconnection
customers, along with other market participants time to adjust to new
processes and requirements.\367\ The Commission explained that the
transition process will create an efficient way to prioritize and
process interconnection requests based on how far they have advanced
through the interconnection process and their level of commercial
readiness.
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\367\ Id. P 856.
---------------------------------------------------------------------------
246. The Commission required transmission providers to offer the
transitional serial study option to interconnection customers that have
been tendered a facilities study agreement, even if they have not yet
executed the agreement, as of 30 calendar days after the filing date of
the transmission provider's initial filing to comply with Order No.
2023.\368\ Similarly, the Commission required transmission providers to
offer the transitional cluster study option to interconnection
customers with an assigned queue position as of 30 calendar days after
the filing date of the transmission provider's initial filing to comply
with Order No. 2023. The Commission found that the adopted transition
process appropriately balances the need to move expeditiously to the
new cluster study process with the need to respect the investments and
expectations of interconnection customers at an advanced stage in the
existing interconnection process.\369\
---------------------------------------------------------------------------
\368\ Id. P 855.
\369\ Id. P 856.
---------------------------------------------------------------------------
247. The Commission stated that interconnection customers will have
120 calendar days after the publication of Order No. 2023 to achieve
eligibility for the transition process (90 calendar days for
transmission providers to submit compliance filings, plus the 30-
calendar day eligibility cut-off).\370\ The Commission also required
the transmission provider to tender the appropriate transitional study
agreements to eligible interconnection customers no later than the
Commission-approved effective date of the transmission provider's
compliance filing with Order No. 2023.\371\ The Commission stated that
this will help ensure that interconnection customers are informed about
their eligibility for the transitional studies (including the
associated requirements and deadlines) in a timely manner.
---------------------------------------------------------------------------
\370\ Id. P 866. On rehearing, the Commission extended the
compliance date to 150 calendar days of the effective date of the
final rule but did not adjust the transition date. Improvements to
Generator Interconnection Procs. & Agreements, 185 FERC ] 61,063
(2023).
\371\ Order No. 2023, 184 FERC ] 61,054 at P 867.
---------------------------------------------------------------------------
248. The Commission also adopted transition process deposits,
withdrawal penalties, and deadlines.\372\ The Commission required that:
(1) interconnection customers electing the transitional serial study
must provide a deposit equal to 100% of the interconnection facility
and network upgrade costs allocated to the interconnection customer in
the system impact study; and (2) interconnection customers electing the
transitional cluster study must provide a deposit equal to $5
million.\373\ The Commission explained that the transition process is
anticipated to involve more interconnection customers than standard
annual clusters (due to existing interconnection queue backlogs), which
greatly increases the risk of late-stage withdrawals. The Commission
found that adopting deposit requirements for the transitional studies
higher than those adopted for the cluster study process will help to
ensure that the transitional process is used by interconnection
customers that intend to proceed with their proposed generating
facilities. In response to arguments that the proposed deposit amounts
are arbitrary and/or excessive, the Commission explained that the
deposit amounts are ``based on expected costs to the extent practicable
and that only a portion of these deposits are ultimately at-risk.''
\374\ The Commission noted that the withdrawal penalty is set at nine
times the study cost with the remainder of deposits to be refunded. The
Commission also noted that existing interconnection customers that are
currently in an interconnection queue can opt to withdraw their
interconnection requests without penalty and wait for the first
standard cluster study with associated lower deposit requirements.
---------------------------------------------------------------------------
\372\ Id. P 855.
\373\ Id. P 859.
\374\ Id.
---------------------------------------------------------------------------
249. In response to EDF Renewable's claim that the transitional
serial study deposit conflicts with the Commission's intentions in
Order No. 2003,\375\ the Commission found that the heightened need to
avoid late-stage withdrawals during the transition process--a need that
the Commission could not have anticipated in Order No. 2003--warrants
the use of this requirement for the transitional serial study.\376\
---------------------------------------------------------------------------
\375\ EDF Renewables Initial Comments at 9 (stating that Order
No. 2003 specifically rejected requiring interconnection customers,
at the time of execution of the transitional serial study agreement,
to provide a deposit equal to 100% of the interconnection facility
and network upgrade costs allocated to them in the system impact
study report in favor of requiring security for discrete portions of
these costs).
\376\ Order No. 2023, 184 FERC ] 61,054 at P 859.
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250. As noted earlier, the Commission established a transitional
study withdrawal penalty equaling nine times the study cost.\377\ The
Commission explained that the withdrawal penalty plays an important
role in deterring speculative interconnection requests in both the
standard cluster study and the transition process. The Commission
disagreed with commenters that call for a lower penalty to apply during
the transition process, given that the risk of withdrawals is
heightened during the transition process. The Commission noted that,
regardless of the cause, a withdrawal may cause harm to other
interconnection customers in the transition process and therefore found
it appropriate to impose penalties on those that choose to withdraw,
notwithstanding that withdrawal may at times be due to circumstances
beyond the interconnection customer's control. The Commission explained
that interconnection customers will bear the risk of withdrawal
penalties and should consider that risk in deciding whether to elect to
join a transition process.
---------------------------------------------------------------------------
\377\ Id. P 860.
---------------------------------------------------------------------------
b. Requests for Rehearing and Clarification
251. Clean Energy Associations ask that the Commission grant
rehearing to revise the deposit amounts required for customers entering
the transitional serial or transitional cluster process, and revise the
withdrawal penalty amounts for customers that proceed through the
transitional process.\378\ Clean Energy
[[Page 27046]]
Associations argue that the Commission acted arbitrarily and
capriciously by imposing excessive and arbitrary deposit requirements
and withdrawal penalties on interconnection customers electing to
proceed through transitional studies. Clean Energy Associations assert
that the Commission ignored substantial record evidence, failed to
``articulate a rational connection between the facts found and the
choice made,'' and failed to respond meaningfully to the arguments of
commenters.\379\
---------------------------------------------------------------------------
\378\ Clean Energy Associations Rehearing Request at 36-39.
\379\ Id. at 36 (citing Motor Vehicle Manufacturers, 463 U.S. at
43 (action arbitrary and capricious if agency ``failed to consider
an important aspect of the problem'' or ``offered an explanation for
its decision that runs counter to the evidence before the agency'');
Allentown Mack Sales & Serv., Inc. v. Nat'l Labor Relations Bd., 522
U.S. 359 (1998); Del. Div. of Pub. Advoc. v. FERC, 3 F.4th 461, at
469 (D.C. Cir. 2021) (Delaware Public Advocate); Pub. Utils. Comm'n
of Cal. v. FERC, 462 F.3d 1027, 1051 (9th Cir. 2006); PPL
Wallingford Energy v. FERC, 419 F.3d 1134, 1198 (D.C. Cir. 2005); N.
States Power Co. v. FERC, 30 F.3d 177, 180 (D.C. Cir. 1994)).
---------------------------------------------------------------------------
252. Clean Energy Associations argue that the Commission failed to
provide any record evidence to support the $5 million deposit amount
required for an interconnection customer to proceed to a transitional
cluster study, nor did it meaningfully respond to contrary evidence
that the transitional serial study deposit would be unduly burdensome
or have unintended consequences that frustrate the purpose of Order No.
2023.\380\ Clean Energy Associations argue that there is no discussion
in the record of how Order No. 2023's calculus relates to expected
costs, nor practical limitations to more accurately estimating those
costs.\381\ Clean Energy Associations assert that the $5 million amount
originates from a single utility's claim that $5 million is consistent
with interconnection costs on its system, and not from Commission
reasoning or evidence that this figure is appropriate on a pro forma
basis. Clean Energy Associations argue that establishment of a flat
deposit amount is inconsistent with the Commission's own determination
elsewhere in Order No. 2023, where the Commission found that study
deposits under the new cluster study process should differ based on
project size and estimated network upgrade costs, depending on the
stage of the process.\382\ Clean Energy Associations also contend that
this deposit requirement could become a barrier to entry for smaller
projects that do not have the ability to put up a $5 million deposit,
and for which a $5 million deposit would have little linkage to actual
upgrade costs or project economics, which the Commission acknowledged
was the appropriate driver for deposit amounts.
---------------------------------------------------------------------------
\380\ Id. at 37 (citing Advanced Energy Economy Initial Comments
at 19-20; Clean Energy Associations Initial Comments at 43; CREA and
NewSun Energy Initial Comments at 81; EDF Renewables Initial
Comments at 9; Pine Gate Initial Comments at 36).
\381\ Id. at 38-39 (citing Order No. 2023, 184 FERC ] 61,054 at
P 859; Del. Div. of Pub. Advoc., 3 F.4th at 469).
\382\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at PP 502,
690).
---------------------------------------------------------------------------
253. Clean Energy Associations also argue that the Commission
inappropriately disregarded EDF Renewable's concern that Order No. 2023
conflicts with Order No. 2003, which specifically rejected a proposal
to require customers to post security up front for the total cost of
such facilities.\383\ Clean Energy Associations note that the
Commission justifies its alternative approach due to the heightened
need to avoid late-stage withdrawals during the transition process, but
argues that the Commission failed to provide substantial evidence to
further explain or support this heightened need.
---------------------------------------------------------------------------
\383\ Id. at 39 (citing Order No. 2003, 104 FERC ] 61,103 at PP
1, 171, 596).
---------------------------------------------------------------------------
254. Clean Energy Associations request rehearing of the transition
process set forth in revised pro forma LGIP section 5.1.1.2 because
they argue that the scope of the transition cluster group established
by the Commission is too broad.\384\ Clean Energy Associations assert
that the Commission unjustly and unreasonably groups customers that
submitted interconnection requests on the eve of the transmission
providers' Order No. 2023 compliance filing with customers that have
been pending in the queue for substantially longer periods of
time.\385\ Clean Energy Associations state that recently-accepted queue
reform transmission procedures have commonly implemented a ``cut-off''
date for transitional study entry that coincides with notice of the
relevant reforms.\386\ Clean Energy Associations argue that this
prevents ``mixing'' future interconnection customers' applications with
existing interconnection customers relative to transitional studies.
Clean Energy Associations argue that treating new and future
interconnection customers the same as customers that have been waiting
for an extended period of time to begin their studies is unjust and
unreasonable.
---------------------------------------------------------------------------
\384\ Id. at 44 (citing Order No. 2023, 184 FERC ] 61,054 at P
1583).
\385\ Id. at 44-45 (citing Order No. 2023, 184 FERC ] 61,054 at
P 6 (Comm'r Christie, Concurring)).
\386\ Id. at 45 (noting PJM's recently implemented generator
interconnection process tariff reforms, with a transition process
that made projects assigned queue positions in the existing
interconnection queue between April 1, 2018 through September 30,
2021, subject to ``Transition Period Rules,'' requiring a ``retool''
study and commercial readiness deposits and site control evidence)
(citing PJM Interconnection, L.L.C., 181 FERC ] 61,162 at PP 1, 8,
31, reh'g denied by operation of law, 182 FERC ] 62,055, order
addressing arguments raised on reh'g, 184 FERC ] 61,006 (2023)).
---------------------------------------------------------------------------
255. Clean Energy Associations and Shell request that the
Commission revise the transitional cluster study process and sections
5.1.1.2 to set the July 28, 2023 issuance date of Order No. 2023 as the
date of eligibility for transitional cluster study participation.\387\
Shell asserts that pro forma LGIP section 5.1.1.2 is too broad because
it treats new and future generator interconnection customers the same
as interconnection customers that may have been waiting in the queue
for years.\388\ Shell contends that the regulatory expectations of
existing and new customers subject to queue reform are fundamentally
different because existing customers submitted their requests under one
queue structure and new customers will submit their requests with
reasonable notice of the new structure. Shell argues that allowing the
transitional cluster study to remain open for several months beyond the
Order No. 2023 issuance date may provide an opportunity for
interconnection customers to develop strategies that will overwhelm
specific transitional cluster studies with unnecessarily high volumes
of new interconnection requests, which may enable them to alter the
progress of the transitional cluster study by strategically withdrawing
a specific subset of these generator interconnection requests at each
decision point.\389\ Shell asserts that this is akin to the queue
speculation the Commission is trying to discourage pursuant to Order
No. 2023. Shell states that this may allow new interconnection requests
to manipulate the transitional cluster study process, thereby
triggering multiple restudies until they achieve a result that favors
their projects.
---------------------------------------------------------------------------
\387\ Id. at 46; Shell Rehearing Request at 6.
\388\ Shell Rehearing Request at 4-5.
\389\ Id. at 6-7.
---------------------------------------------------------------------------
256. Clean Energy Associations also ask the Commission to clarify
that any interconnection requests submitted after the Order No. 2023
issuance date will be placed in the first cluster study that follows
the transitional cluster study.\390\ Shell states that compliance
filings that include interconnection requests in a transitional cluster
study queued after
[[Page 27047]]
the deadline should explain why their proposed cut-off date for the
transitional cluster study will advance the goals of facilitating the
reduction of queue backlogs in a more efficient and cost-effective
manner.\391\
---------------------------------------------------------------------------
\390\ Clean Energy Associations Rehearing Request at 46.
\391\ Shell Rehearing Request at 7.
---------------------------------------------------------------------------
c. Determination
257. We are unpersuaded by Clean Energy Associations' request to
revise the deposit amounts required for customers entering the
transitional serial or transitional cluster process, and to revise the
withdrawal penalty amounts for customers that proceed through the
transitional process. As the Commission explained in Order No. 2023,
the transition process is anticipated to involve more interconnection
customers than standard annual clusters due to existing interconnection
queue backlogs.\392\ With more interconnection customers than normal,
there is an increased risk of late-stage withdrawals leading to
restudies and delays that would further frustrate the goals of Order
No. 2023. We continue to find that adopting deposit requirements for
the transition studies that are higher than those adopted for the
cluster study process will help to lower the risk of restudies and
delays resulting from late-stage withdrawals from the transition
studies. This requirement is necessary to ensure that the transition
process is used by interconnection customers that accept the heightened
financial risks and nevertheless remain confident in the commercial
viability of their proposed generating facilities.
---------------------------------------------------------------------------
\392\ Order No. 2023, 184 FERC ] 61,054 at P 859.
---------------------------------------------------------------------------
258. We further note that the Commission explained in Order No.
2023 that the transitional deposit amounts are based on expected costs
``to the extent practicable.'' \393\ In the case of the transitional
cluster study, it is not practical to create deposits based on
individualized estimates of network upgrade costs because, unlike the
transitional serial study, projects entering the transitional cluster
study are not required to have any previous study results on which such
estimates could be based. Therefore, the Commission reasonably relied
upon available evidence as to general network upgrade cost
estimates.\394\ We further note that no comments in the record provided
a more persuasive estimate.
---------------------------------------------------------------------------
\393\ Id. P 860.
\394\ See Pub. Serv. Co. of Colo., Transmittal Letter, Docket
No. ER19-2774-000, at 86-87 (filed Sept. 9, 2019) (explaining that
$5 million is ``likely on the low end'' of estimated network upgrade
costs that may be allocated to any individual interconnection
customer); Pub. Serv. Co. of Colo., 169 FERC ] 61,182, at P 65 n.83
(2019) (approving transitional cluster study deposit at $5 million);
Tri-State Generation & Transmission Ass'n, Inc., 173 FERC ] 61,015,
at PP 19, 56 (2020) (same); Tri-State Generation & Transmission
Ass'n, Inc., 174 FERC ] 61,021, at P 19 (2021) (same).
---------------------------------------------------------------------------
259. Additionally, we disagree with Clean Energy Associations'
argument that a flat deposit is inconsistent with other Order No. 2023
requirements because we find that the need for strict transition
requirements warrants the use of a flat deposit. Furthermore, as the
Commission explained, only a portion of these deposits are ultimately
at risk, and there is no withdrawal penalty if existing interconnection
customers currently in the queue opt to withdraw and wait for the first
standard cluster study with associated lower deposit requirements
rather than proceed in the transitional cluster.\395\ For similar
reasons, we also decline to modify the withdrawal penalty amount. In
light of the heightened risk of withdrawals leading to restudies and
delays during the transition process, we disagree with Clean Energy
Associations' argument that the withdrawal penalty is excessive and
arbitrary.
---------------------------------------------------------------------------
\395\ Order No. 2023, 184 FERC ] 61,054 at P 859.
---------------------------------------------------------------------------
260. We are not persuaded by Clean Energy Associations' and Shell's
calls to set an earlier cut-off date, the issuance date of Order No.
2023, as the date for eligibility for transitional cluster study
participation. Clean Energy Associations and Shell argue that an
earlier cut-off date would be fair to those generators who have been
waiting in interconnection queues for years and submitted their
interconnection request under a different queue structure. However, the
fact that more recent interconnection requests may be included in the
transitional cluster does not in and of itself render the eligibility
cut-off date unjust and unreasonable. As the Commission has stated in
multiple queue reform proceedings, ``any cut-off date inevitably will
[exclude certain interconnection customers].'' \396\ Likewise, the
inverse of this statement holds true: any cut-off date inevitably will
include certain interconnection customers. The Commission's decision to
set the eligibility cut-off date as 30 calendar days after the filing
date of the transmission provider's initial compliance filing was
reasonable.
---------------------------------------------------------------------------
\396\ PJM Interconnection, L.L.C., 181 FERC ] 61,162 at P 60;
Tri-State Generation & Transmission Ass'n, Inc, 175 FERC ] 61,128,
at P 14 (2021); PacifiCorp, 173 FERC ] 61,016, at P 25 (2020).
---------------------------------------------------------------------------
261. Additionally, Commission precedent does not require a certain
cluster size, nor do Clean Energy Associations and Shell provide
evidence to suggest that the size of the transitional cluster would be
unworkable. Rather, because there are stricter requirements to join the
transitional cluster than those adopted for the cluster study
process,\397\ it is unlikely that non-ready projects would be able to
join the transitional cluster. Furthermore, due to existing
interconnection queue backlogs, the Commission anticipated that the
transition process will involve more interconnection customers than
standard annual clusters and established the transition date along with
the accompanying requirements to enter the transition with this
knowledge in mind. The alternative, moving the eligibility date
earlier, would simply shift interconnection customers into the first
cluster following the transitional cluster. We lack a basis in the
record to conclude, as Clean Energy Associations and Shell appear to
argue, that a somewhat larger transitional cluster is not just and
reasonable, but a somewhat larger post-transition cluster would be just
and reasonable.
---------------------------------------------------------------------------
\397\ Compare pro forma LGIP section 5.1.1.2 (Transitional
Cluster Study) and section 3.4.2 (Initiating an Interconnection
Request).
---------------------------------------------------------------------------
262. We are also unpersuaded by Shell's assertion that the current
eligibility cut-off date could lead to a queue rush. Such a concern is
speculative. We reiterate that the higher deposit requirements for the
transitional cluster study process than those adopted for the non-
transitional cluster study process helps ensure that the transitional
process is used by interconnection customers that intend to proceed
with their proposed generating facilities.
263. Lastly, we add definitions to the pro forma LGIP for the terms
``Transitional Cluster Study Agreement'' and ``Transitional Serial
Interconnection Facilities Study Agreement.''
D. Reforms To Increase the Speed of Interconnection Queue Processing
1. Elimination of Reasonable Efforts Standard and Implementation of a
Replacement Rate
a. Order No. 2023 Requirements
264. In Order No. 2023, the Commission revised sections 2.2,
3.5.4(i), 7.4, 8.3, and Attachment A to Appendix 3 (formerly Appendix
4) of the pro forma LGIP to eliminate the reasonable efforts standard
for conducting cluster studies, cluster restudies, facilities studies,
and affected system studies by the tariff-specified deadlines.\398\ The
Commission added new section 3.9 to the pro forma LGIP
[[Page 27048]]
to implement a study delay penalty structure. Specifically, delays of
cluster studies beyond the tariff-specified deadline will incur a
penalty of $1,000 per business day; delays of cluster restudies beyond
the tariff-specified deadline will incur a penalty of $2,000 per
business day; delays of affected system studies beyond the tariff-
specified deadline will incur a penalty of $2,000 per business day; and
delays of facilities studies beyond the tariff-specified deadline will
incur a penalty of $2,500 per business day. The Commission explained
that, among other things, these penalty amounts are intended to
incentivize transmission providers to meet study deadlines and that the
structure of increasing penalties reflects the progressively greater
harm caused by delayed studies at later interconnection stages.\399\
---------------------------------------------------------------------------
\398\ Order No. 2023, 184 FERC ] 61,054 at P 962.
\399\ Id. PP 974-978.
---------------------------------------------------------------------------
265. The Commission also specified that the study delay penalty
regime contains the following safeguards for transmission providers:
(1) no study delay penalties will be assessed until the third cluster
study cycle (including any transitional cluster study cycle, but not
transitional serial studies) after the Commission-approved effective
date of the transmission provider's filing in compliance with Order No.
2023; (2) there will be a 10-business day grace period, such that no
study delay penalties will be assessed for a study that is delayed by
10 business days or fewer; (3) deadlines may be extended for a
particular study by 30 business days by mutual agreement of the
transmission provider and all interconnection customers with
interconnection requests in the relevant study; (4) study delay
penalties will be capped at 100% of the initial study deposits received
for all of the interconnection requests in the relevant study; and (5)
transmission providers will have the ability to appeal any study delay
penalties to the Commission, with the Commission determining whether
good cause exists to grant the relief requested on appeal.\400\
---------------------------------------------------------------------------
\400\ Id. P 972.
---------------------------------------------------------------------------
266. The Commission further included the following features in the
study delay penalty structure: (1) transmission providers must
distribute study delay penalties to interconnection customers in the
relevant study that did not withdraw, or were not deemed withdrawn,
from the interconnection queue before the missed study deadline on a
pro rata per interconnection request basis to offset their study costs;
(2) non-RTO/ISO transmission providers and transmission-owning members
of RTOs/ISOs may not recover study delay penalties through transmission
rates; (3) RTOs/ISOs may submit an FPA section 205 filing to propose a
default structure for recovering study delay penalties and/or to
recover the costs of any specific study delay penalties; \401\ and (4)
transmission providers must post quarterly on their OASIS or other
publicly accessible website (a) the total amount of study delay
penalties from the previous reporting quarter and (b) the highest study
delay penalty paid to a single interconnection customer in the previous
reporting quarter.\402\ The Commission also added new section
(f)(1)(ii) to 18 CFR 35.28(f)(1) to specify that any public utility
that conducts interconnection studies shall be subject to and eligible
to appeal penalties following that public utility's failure to complete
an interconnection study by the appropriate deadline.\403\
---------------------------------------------------------------------------
\401\ The typical standard of review under FPA section 205 would
apply to these filings: i.e., the filer must show that any proposal
to recover study delay penalties is just, reasonable, and not unduly
discriminatory or preferential. See 16 U.S.C. 824d.
\402\ Order No. 2023, 184 FERC ] 61,054 at P 963.
\403\ Id. P 995.
---------------------------------------------------------------------------
267. The Commission explained that the lengthy interconnection
study delays and interconnection queue backlogs throughout the country
support a conclusion that the reasonable efforts standard does not
provide an adequate incentive for transmission providers to complete
interconnection studies on time.\404\ The Commission stated that there
is every reason to believe that many of the factors contributing to
significant interconnection queue backlogs and delay--including the
rapidly changing resource mix, market forces, and emerging
technologies--will persist. The Commission explained that the
reasonable efforts standard worsens current-day challenges, as it fails
to ensure that transmission providers are keeping pace with the
changing and complex dynamics of today's interconnection queues.\405\
Therefore, in response to those ongoing challenges and based on the
record, the Commission found that the elimination of the reasonable
efforts standard and its replacement with firm deadlines and penalties
are needed to remedy unjust and unreasonable rates and ensure that
interconnection customers are able to interconnect to the transmission
system in a reliable, efficient, transparent, and timely manner.\406\
---------------------------------------------------------------------------
\404\ Id. P 966.
\405\ Id. P 967.
\406\ Id. P 968.
---------------------------------------------------------------------------
268. The Commission noted that its conclusions were not based on a
finding that transmission providers have necessarily acted in bad faith
or that their actions are the sole reason for the queue delays.\407\
The Commission explained that it adopted numerous other reforms to
appropriately incentivize interconnection customers to help reduce
interconnection delays that may result from their conduct. However, the
Commission found that the elimination of the reasonable efforts
standard and the adoption of firm deadlines and penalties for late
studies are needed to create an incentive for transmission providers,
which will help reduce interconnection delays and ensure that
Commission-jurisdictional rates are just, reasonable, and not unduly
discriminatory or preferential. The Commission further found that
distribution of these penalties to interconnection customers in the
relevant studies was appropriate as a means of offsetting these
customers' study costs. The Commission further explained that the study
delay penalty regime balances the harm to interconnection customers of
interconnection study delays and the associated need to incentivize
transmission providers to timely complete interconnection studies with
the burdens on transmission providers of conducting interconnection
studies and potentially facing penalties for delays, including those
that may be caused or exacerbated by factors beyond their control.\408\
---------------------------------------------------------------------------
\407\ Id. P 966.
\408\ Id. P 972.
---------------------------------------------------------------------------
269. As noted above, the Commission adopted a process for
transmission providers to appeal any study delay penalties they
incur.\409\ The Commission explained that any such appeal must be filed
no later than 45 calendar days after the late study has been completed.
The Commission stated that it will evaluate whether good cause exists
to grant relief from the study delay penalty and will issue an order
granting or denying relief. The Commission noted that in evaluating
whether there is good cause to grant such relief, the Commission may
consider, among other factors: (1) extenuating circumstances outside
the transmission provider's control, such as delays in affected system
study results; (2) efforts of the transmission provider to mitigate
delays; and (3) the extent to which the transmission provider has
proposed process enhancements either in the stakeholder process or at
the Commission to prevent future delays. The Commission further
provided that the filing of an appeal will stay the
[[Page 27049]]
transmission providers' obligation to distribute the study delay
penalty funds to interconnection customers until 45 calendar days after
(1) the deadline for filing a rehearing request has ended, if no
requests for rehearing of the Commission's decision on the appeal have
been filed, or (2) the date that any requests for rehearing of the
Commission's decision on the appeal are no longer pending before the
Commission. The Commission explained that the appeals process balances
the need to ensure that transmission providers have an incentive to
meet interconnection study deadlines with protections to ensure that
any such penalties are fair and not triggered if good cause justifies
the delay.\410\ The Commission further explained that the protections
embedded in this appeal process address commenters' concerns that there
should be adequate process and/or fact-finding before imposing a study
delay penalty on transmission providers.
---------------------------------------------------------------------------
\409\ Id. P 987.
\410\ Id. P 988.
---------------------------------------------------------------------------
270. Additionally, the Commission specified that transmission
providers must distribute study delay penalties to the interconnection
customers and affected system interconnection customers included in the
relevant study that did not withdraw, or were not deemed withdrawn,
from the interconnection queue before the missed study deadline.\411\
The Commission explained that, unless the transmission provider files
an appeal to the study penalty, the study delay penalty must be
distributed no later than 45 calendar days after the late study has
been completed. The Commission further specified that a study delay
penalty for a delayed cluster study or cluster restudy must be
distributed on a pro rata basis per interconnection request to all
interconnection customers in the cluster, while a study delay penalty
for a delayed facilities study must be distributed to the
interconnection customer whose facilities were being studied, and a
study delay penalty for a delayed affected system study must be
distributed to the affected system interconnection customer(s) whose
generating facility was being studied by an affected system
transmission provider. The Commission provided that the study delay
penalties are on a per business day basis and will be distributed
equally to each delayed interconnection customer per the requirements
above. The Commission explained that this distribution defrays the
study costs of the interconnection customers affected by that
delay.\412\
---------------------------------------------------------------------------
\411\ Id. P 990.
\412\ Id. P 991.
---------------------------------------------------------------------------
271. The Commission also declined to adopt the NOPR's proposed
force majeure penalty exception.\413\ The Commission explained that
this exemption is unwarranted given the adoption of an appeal
mechanism, which provides transmission providers the opportunity to
explain to the Commission any circumstances that caused the delay,
including any events that qualify as force majeure.\414\
---------------------------------------------------------------------------
\413\ Id. PP 963, 1003.
\414\ Id. P 1003.
---------------------------------------------------------------------------
b. Elimination of the Reasonable Efforts Standard
i. Requests for Rehearing
272. Many rehearing requests argue that the decision to eliminate
the reasonable efforts standard is not supported by substantial record
evidence.\415\ They argue that the Commission failed to meet its FPA
section 206 burden because the Commission failed to show that (1) this
standard is causing or materially contributing to delays or (2) the
elimination of this standard will increase the timely provision of
interconnection service, especially given the other factors that may
cause study delays.\416\ NYTOs argue that Order No. 2023's observation
that, under the reasonable efforts standard, interconnection studies
have been delayed ``conflates correlation with causation.'' \417\
Others argue that the Commission failed to address the root cause of
study delays--namely, the volume of interconnection requests, which
they claim Order No. 2023 will increase.\418\ Avangrid disputes Order
No. 2023's conclusion that the other reforms adopted therein are
expected to ease the burdens on transmission providers by streamlining
and reducing the number of interconnection studies.\419\
---------------------------------------------------------------------------
\415\ AEP Rehearing Request at 10; Avangrid Rehearing Request at
8-9; MISO TOs Rehearing Request at 11-13; NYISO Rehearing Request at
39-40; NYTOs Rehearing Request at 15-19; PJM Rehearing Request at
30; WIRES Rehearing Request at 4-6.
\416\ AEP Rehearing Request at 11-13; Avangrid Rehearing Request
at 8-9, 13-14; MISO TOs Rehearing Request at 11-13; NYTOs Rehearing
Request at 15-17; WIRES Rehearing Request at 4-6.
\417\ NYTOs Rehearing Request at 15-17 (asserting that the
Commission has not undertaken a ``root cause assessment'' to
determine the extent to which the reasonable efforts standard causes
or contributes to study delays or shown that this standard is a
``material contributing cause of study delays''); see id. at 18-19
(noting the Commission's recognition that there are factors outside
of the transmission providers' control that may contribute to
delays, that timeframes for such studies have historically been
treated by transmission providers as estimates, and that
transmission customers may cause delays); see also Avangrid
Rehearing Request at 8-9; Dominion Rehearing Request at 19; NYISO
Rehearing Request at 40; WIRES Rehearing Request at 4-6.
\418\ Avangrid Rehearing Request at 9-11; NYTOs Rehearing
Request at 14; PJM Rehearing Request at 30.
\419\ Avangrid Rehearing Request at 11-13 (``[T]here is scant
evidence in the record that the easing of burdens will be sufficient
to justify the broad imposition of arbitrary, strict, one-size-fits-
all deadlines and penalties for non-attainment.'').
---------------------------------------------------------------------------
273. Several of the rehearing requests assert that the Commission
has not demonstrated that interconnection study delays and backlogs are
connected to transmission provider actions, such as wrongdoing,
incompetence, lack of appropriate incentives, bad faith, or failure to
exercise due diligence.\420\ SPP and ITC claim that there are already
many strong incentives to timely perform interconnection studies and
the record does not contain the necessary support to conclude that a
lack of incentives, as opposed to various other factors outside of
transmission providers' control, are the cause for interconnection
queue backlogs or study delays.\421\ Many rehearing requests detail
numerous factors contributing to delays and backlogs that they assert
are outside of the transmission provider's control (e.g., the volume of
interconnection requests, complexity of studies, staffing shortages,
the shortage of qualified engineers, withdrawals triggering the need
for restudies, delayed data from interconnection customers, affected
system coordination, a rapidly changing resource mix, market forces,
and emerging technologies) and argue that these conditions will
persist, such that study delay penalties on transmission providers
cannot be effective and are unsupported.\422\
---------------------------------------------------------------------------
\420\ AEP Rehearing Request at 12-13; Dominion Rehearing Request
at 18; EEI Rehearing Request at 4-7 (noting that the Commission
identifies other factors as contributing to such delays and backlogs
and has never found a transmission provider at fault for delays in
the interconnection process); ITC Rehearing Request at 5; PacifiCorp
Rehearing Request at 4-7 (noting that the Commission confirmed that
it was not finding that transmission providers necessarily acted in
bad faith or were the sole reason for queue delays); SPP Rehearing
Request at 5-6 (noting that the Commission has never found a
transmission provider to have violated the reasonable efforts
standard, and commenters did not provide evidence that transmission
providers have failed to use reasonable efforts).
\421\ ITC Rehearing Request at 6; SPP Rehearing Request at 6-7.
\422\ Avangrid Rehearing Request at 4-5, 12-13; Dominion
Rehearing Request at 19-22; MISO TOs Rehearing Request at 14;
PacifiCorp Rehearing Request at 11-13; SPP Rehearing Request at 6-7.
Dominion also asserts that Order No. 2023 will increase demand for
qualified engineers, such that hiring additional staff may not be
feasible. Dominion Rehearing Request at 20-21.
---------------------------------------------------------------------------
[[Page 27050]]
274. AEP, EEI, and MISO TOs contend that the Commission's
elimination of the reasonable efforts standard and its replacement with
the deadline and penalty framework is based on notions of fairness or
equity between transmission providers and interconnection customers,
but they contend that this is an inadequate basis for reform.\423\ EEI
asserts that penalties assessed against transmission providers
therefore cannot be effective in reducing such delays and
backlogs.\424\
---------------------------------------------------------------------------
\423\ AEP Rehearing Request at 11-12; EEI Rehearing Request at
5, 7 (asserting that the Commission eliminated the reasonable
efforts standard and imposed penalties to ``ensure that transmission
providers are `doing their part' '' and to establish ``a strange
kind of parity in its reforms''); MISO TOs Rehearing Request at 19
(arguing that the Commission has not found bad faith on the part of
transmission providers or that they are the sole reason for delays
and transmission providers--unlike interconnection customers, who
have control over burdens that the Commission has imposed on them--
will be penalized regardless of whether they had control of the
factors causing a study delay); see also Indicated PJM TOs Rehearing
Request at 39-40 (claiming that the Commission failed to address
their comments that the testimony of Chairman LeVar of the Utah
Public Service Commission does not support the use of penalties as
incentives).
\424\ EEI Rehearing Request at 6-7.
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275. Certain rehearing requests also cite the purported benefits of
the reasonable efforts standard, including the consistency of that
standard with good utility practice and the flexibility afforded by
that standard, urging that the reasonable efforts standard remains just
and reasonable.\425\ As a result, ITC argues that the ``reasonable
efforts'' standard ensures that transmission providers treat other
parties comparably to how they will protect their own interests.\426\
NYTOs assert that the reasonable efforts standard is just and
reasonable because each generator project and interconnection request
is unique, such that flexibility is warranted in the face of the
challenges posed by the study process, the uniqueness of each study
request, mounting volumes of such requests, and because delays in that
process may not be the fault of transmission providers.\427\ EEI argues
that retaining the reasonable efforts standard is particularly
appropriate given the other requirements of Order No. 2023, contending
that flexibility will be necessary given the complexity of the cluster
study process, the new technologies that must be evaluated, and new
NERC standards.\428\ Indicated PJM TOs assert that the reasonable
efforts standard provides the optimal balance of incentives to complete
studies in a timely manner and the reasonable flexibility for planners
to take the time needed to ensure grid reliability will be maintained
in a cost-effective manner.\429\
---------------------------------------------------------------------------
\425\ Id. at 8-9; Indicated PJM TOs Rehearing Request at 5-6;
ITC Rehearing Request at 4; MISO TOs Rehearing Request at 8-10;
NYTOs Rehearing Request at 17-20.
\426\ ITC Rehearing Request at 4 (arguing that this strikes an
appropriate balance between competing interests); see also MISO TOs
Rehearing Request at 8-10 (similar argument); id. at 20-24 (arguing
that the Commission has long recognized the need for flexibility in
the study process, which reflects why a ``no fault'' and less
flexible regime of automatic penalties is illogical, particularly
given increasing workload and complexity of interconnection
studies).
\427\ NYTOs Rehearing Request at 17-20; cf. id. at 26 (asserting
that rigid deadlines and penalties are inconsistent with flexibility
that Order No. 2023 claims to support).
\428\ EEI Rehearing Request at 8-9.
\429\ Indicated PJM TOs Rehearing Request at 5-6.
---------------------------------------------------------------------------
276. Many of the rehearing requests assert that the Commission
failed to demonstrate that there are steps that transmission providers
can take that will, in fact, improve the timeliness of study processes
and challenge the Commission's determination that transmission
providers can feasibly take steps to better ensure timely
interconnection request processing, such as deploying resources,
exploring administrative efficiencies, and using innovative study
approaches.\430\ They contend that this determination is vague, poorly
supported, and based on ``notions that transmission providers are not
sufficiently imaginative'' or that they will be easily able to find and
hire qualified staff and deploy automation and computing solutions in
short order.\431\ EEI asserts that replacing the reasonable efforts
standard with deadlines and penalties cannot alter the number of
requests submitted or the number of qualified individuals that can
perform these studies.\432\ SPP observes that qualified engineers may
not want to work for transmission providers if they risk being
identified as a cause of study delays that result in penalties or face
potential liability.\433\
---------------------------------------------------------------------------
\430\ See Order No. 2023, 184 FERC ] 61,054 at P 967.
\431\ AEP Rehearing Request at 12; EEI Rehearing Request at 6-7;
MISO TOs Rehearing Request at 18 (arguing that the Commission
acknowledges the shortage of qualified engineers but simply
dismisses this problem); PJM Rehearing Request at 32-33; SPP
Rehearing Request at 7; WIRES Rehearing Request at 7-8 (contending
that these steps are ``more hopeful thinking than discrete, tangible
actions'').
\432\ EEI Rehearing Request at 6.
\433\ SPP Rehearing Request at 7.
---------------------------------------------------------------------------
277. A number of the rehearing requests also contend that the
Commission should have allowed the other reforms in Order No. 2023 to
take effect before eliminating the reasonable efforts standard and
adopting a structure of study deadlines and penalties.\434\ AEP argues
that the Commission should require transmission providers to augment
the reports required under section 3.5 of the pro forma LGIP and Order
No. 845 to require information regarding the effects of cluster study
reforms, giving the Commission real world data regarding the causes of
interconnection study delays.\435\
---------------------------------------------------------------------------
\434\ AEP Rehearing Request at 15-16; Avangrid Rehearing Request
at 9; EEI Rehearing Request at 5; NYTOs Rehearing Request at 17, 20-
22 (``Only if the variables outside of a transmission provider's
control are removed will the Commission have a sufficient
evidentiary foundation to make the determinations required under
Section 206 with respect to whether the Reasonable Efforts standard
is unjust and unreasonable as applied in context of actual
performance.''); PacifiCorp Rehearing Request at 4-5.
\435\ AEP Rehearing Request at 15-16 (setting forth AEP's view
on how to augment those reports and noting other areas where
reporting requirements were required and arguing that such reporting
would incentivize transmission providers to perform studies in a
timely fashion).
---------------------------------------------------------------------------
278. Some rehearing requests also argue that the Commission relied
on stale and inapposite evidence to support the elimination of the
reasonable efforts standard and replacement with the deadline and
penalty structure.\436\ Indicated PJM TOs assert that the vast majority
of study delays reflected in the Order No. 845 data for the end of 2022
came from PJM, which had recently transitioned to a first-ready, first-
served cluster cycle approach effective in January 2023.\437\ Indicated
PJM TOs also assert that the Commission relied on a stale record from
Order No. 890 as support for imposing penalties on RTOs/ISOs that fail
to meet deadlines.\438\ PacifiCorp similarly contends that the evidence
the Commission relied on relates to delays in the serial study process,
rather than the new cluster-based process, and ``implementation of
penalties, therefore, is attempting to fix a problem that has not been
shown to exist.'' \439\ NYISO
[[Page 27051]]
argues that the data the Commission relied on concerns missed study
deadlines in ``RTO/ISO regions that have been contending with
unprecedented numbers of new interconnection requests and/or have
recently made substantial improvements to their interconnection
procedures that are not reflected in earlier metrics.'' \440\
---------------------------------------------------------------------------
\436\ Indicated PJM TOs Rehearing Request at 17-18; NYISO
Rehearing Request at 39-40; PacifiCorp Rehearing Request at 7-8.
\437\ Indicated PJM TOs Rehearing Request at 17-18 (arguing
that, while the Commission points to deficiencies with serial study
approaches, they do not apply to regions that have already
implemented cluster studies and that those regions should be allowed
to fully implement those new approaches).
\438\ Id. at 18-19 (arguing that the ``world has changed'' in
certain respects since Order No. 890 was issued, that the Order No.
890 deadlines were consistent with what was historically achievable,
and the penalties in Order No. 890 were less draconian than those
imposed by Order No. 2023).
\439\ PacifiCorp Rehearing Request at 7-8 (referencing Nat'l
Fuel Gas Supply Corp. v. FERC, 468 F.3d 831, 842 (D.C. Cir. 2006)
(National Fuel), in which the D.C. Circuit vacated the prior version
of the Commission's Standards of Conduct on the basis that, inter
alia, the purported record evidence FERC relied upon were rulemaking
comments that did not identify any actual examples of wrongdoing).
\440\ NYISO Rehearing Request at 39-40.
---------------------------------------------------------------------------
279. Indicated PJM TOs and NYISO also argue that the Commission
failed to justify eliminating the reasonable efforts standard and
imposition of deadlines and penalties through a generic
rulemaking.\441\ Indicated PJM TOs contend that the Commission lacked
substantial evidence to make a generic finding that all existing
interconnection study regimes--some of which already use the cluster
study approach--are unjust and unreasonable to the extent those regimes
rely on the reasonable efforts standard rather than imposing deadlines
and penalties.\442\ Indicated PJM TOs further assert the Commission
cannot use general or generic findings to enact an industry-wide
solution for a problem that exists only in isolated pockets and that
study delays are not sufficiently widespread to justify the
Commission's generic approach.\443\ NYISO argues that it is not
reasoned decision-making to assume that all transmission providers need
stronger incentives to timely complete studies and asserts that state
regulators in New York support retaining some form of the reasonable
efforts standard.\444\
---------------------------------------------------------------------------
\441\ Id. at 40; Indicated PJM TOs Rehearing Request at 13-17.
\442\ Indicated PJM TOs Rehearing Request at 13-17.
\443\ Id. at 14 (citing S.C. Pub. Serv. Auth., 762 F.3d at 66-
67; Assoc. Gas, 824 F.2d at 1019; Wis. Gas., 770 F.2d at 1151,
1168); see also id. at 15-16 (discussing the Order No. 845 data,
noting that 14 of 24 non-RTOs/ISOs experienced no study delays; as
to RTOs/ISOs, CAISO experienced no study delays, SPP's data was
excluded, and urging that PJM's data should also have been
excluded).
\444\ NYISO Rehearing Request at 40.
---------------------------------------------------------------------------
ii. Determination
280. The gravity of the problem of increased interconnection queue
backlogs and delays, leading to unjust and unreasonable rates, prompted
the Commission in Order No. 2023 to adopt a comprehensive set of
reforms to the interconnection process, including reforms to the
reasonable efforts standard for the completion of interconnection
studies.\445\ As to that standard, the Commission explained that
``interconnection queue backlogs and delays, and the accompanying
uncertainty, are further compounded because transmission providers have
limited incentive to perform interconnection studies in a timely
manner.'' \446\ Under this standard, ``[t]here are no explicit
consequences in the pro forma LGIP for transmission providers that fail
to meet their study deadlines,'' \447\ allowing ``significant
discretion to the transmission providers in extending their own
deadlines.'' \448\ As the Commission found, ``[t]his outcome stands in
stark contrast to interconnection customers that face financial and
commercial consequences due to late interconnection study results and
may be considered withdrawn from the interconnection queue for failing
to meet their tariff-imposed deadlines.'' \449\
---------------------------------------------------------------------------
\445\ The Commission explained in Order No. 2023 how
interconnection queue backlogs result in unjust and unreasonable
rates, including by hindering the development of new generation,
stifling competition in wholesale electric markets, and creating
uncertainty that increases costs. See, e.g., Order No. 2023, 184
FERC ] 61,054 at PP 3, 27-29, 37-60; supra section II.A. We disagree
with arguments that the Commission failed to adequately explain or
that the record does not support this conclusion. See, e.g.,
Indicated PJM TOs Rehearing Request at 29-30.
\446\ Order No. 2023, 184 FERC ] 61,054 at P 50.
\447\ Id. P 872.
\448\ Id. P 50 (noting that despite ``pervasive delays in
completing interconnection studies by transmission providers . . .
transmission providers have faced few, if any, consequences for
failing to meet their tariff-imposed study deadlines under the
reasonable efforts standard'').
\449\ Id. (concluding that the reasonable efforts standard
results in rates that are unjust and unreasonable).
---------------------------------------------------------------------------
281. The history of the Commission's action with respect to
interconnection queue backlogs, and particularly interconnection study
delays as a contributor to such backlogs, reflects that the Commission
has taken a gradual approach to addressing these problems. In Order No.
2003, the Commission first imposed the reasonable efforts standard for
the timely completion of interconnection studies, without adopting firm
deadlines or a structure of automatic penalties for delays.\450\ As the
Commission observed in Order No. 2023, the reasonable efforts standard
allowed transmission providers significant discretion to extend their
own deadlines for the completion of interconnection studies.\451\ In
2018, in Order No. 845, the Commission rejected requests to eliminate
the reasonable efforts standard in favor of firm interconnection study
deadlines,\452\ explaining that reliance on increased reporting was a
preferable approach because the ``current record'' did not support
elimination of the reasonable efforts standard, such that doing so
would be inappropriate ``[a]t this time.'' \453\ The Commission
likewise decided not to implement automatic penalties for delayed
studies, recognizing the extent to which delays could be caused by
factors outside of transmission providers' control, instead adopting
measures to ``improve transparency by highlighting where
interconnection study delays are most common and the causes of delays
in these regions.'' \454\ It further stated that ``[t]his information
could also be useful to the Commission in determining if additional
action is required to address interconnection study delays.'' \455\
---------------------------------------------------------------------------
\450\ Order No. 2003, 104 FERC ] 61,103 (pro forma LGIP sections
7.4, 8.3).
\451\ Order No. 2023, 184 FERC ] 61,054 at P 50.
\452\ See Order No. 845, 163 FERC ] 61,043 at PP 315-21; id. at
322 (noting that the Commission had not proposed, in its notice of
proposed rulemaking for Order No. 845, such firm study deadlines).
\453\ Id. P 323.
\454\ Id. P 309 (``Such information could highlight systemic
problems for individual transmission providers and interconnection
customers.'').
\455\ Id.
---------------------------------------------------------------------------
282. Order No. 2023 reflects a determination that such additional
action is required. The reforms in Order No. 845 have not eliminated
the problems of interconnection queue backlogs and delayed
interconnection studies. These problems have only grown,
notwithstanding the Commission's previous reforms.\456\
---------------------------------------------------------------------------
\456\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 38-43
(summarizing evidence of growing queue backlogs and study delays as
contributors to those backlogs); supra section II.A.3.
---------------------------------------------------------------------------
283. Broadly speaking, the Commission's conclusion that there is a
need to reform the Commission's pro forma interconnection procedures
and agreements received overwhelming support.\457\ However, as
summarized above, many of the rehearing requests challenge the
elimination of the reasonable efforts standard set forth in sections
2.2, 3.5.4(i), 7.4, 8.3, and Attachment A to Appendix 4 of the pro
forma LGIP,\458\ leading to the adoption of firm study deadlines,
claiming that the Commission failed to meet its burden to justify this
specific reform under FPA section 206.\459\ Many of these rehearing
requests argue that the Commission recognized that there are many
factors outside the control of transmission providers that can
contribute to backlogs and delays in the
[[Page 27052]]
interconnection study process.\460\ In pointing to these other factors,
the rehearing requests contend that holding transmission providers to
standards of performance in terms of ensuring the timely completion of
interconnection studies cannot be effective to ensure the timely
completion of those studies. We disagree with this argument and
continue to find that the elimination of the reasonable efforts
standard, and its replacement with firm study deadlines, is warranted
under FPA section 206 in order to address the unjust and unreasonable
rates resulting from interconnection queue delays and backlogs.
---------------------------------------------------------------------------
\457\ See Order No. 2023, 184 FERC ] 61,054 at P 30.
\458\ Id. P 965; see also id. P 964 (``We adopt these reforms to
remedy the unjust and unreasonable rates stemming from
interconnection queue backlogs and to ensure that interconnection
customers are able to interconnect to the transmission system in a
reliable, efficient, transparent, and timely manner.'').
\459\ See supra section II.D.1.b.i.
\460\ See Order No. 2023, 184 FERC ] 61,054 at P 966.
---------------------------------------------------------------------------
284. We are not persuaded by attempts to minimize the
responsibility transmission providers have for--and the ways in which
they can effectuate--the timely completion of interconnection studies.
Attempts to do so fail to recognize the key role transmission providers
play in timely interconnection study completion: the transmission
provider conducting the study is the entity with the most control over
whether the study deadline is met.\461\ As the entity that conducts the
study, transmission providers have control over (among other things):
the resources allocated to the study process; the actual conduct of the
study, e.g., the use of advanced computing or other methods to improve
efficiency; coordination with interconnection customers and
consultants; and providing the conclusions of the study.\462\ They are
the entities with the most complete knowledge of the transmission
system to which the generator will be interconnecting.\463\ Moreover,
transmission providers have significant authority to help ensure that
other entities do not unduly delay the results of the interconnection
study, including by deeming withdrawn the requests of interconnection
customers that fail to adhere to the requirements of the pro forma
LGIP.\464\
---------------------------------------------------------------------------
\461\ See id. P 995.
\462\ See, e.g., id. PP 967, 975, 1007 (noting transmission
providers' ability deploy resources, hire additional personnel,
invest in new software, and employ innovative study approaches).
\463\ See, e.g., id. P 201 (noting ``the transmission provider's
detailed knowledge of its transmission system''); Order No. 1000,
136 FERC ] 61,051 at P 260 (``[W]e acknowledge that incumbent
transmission providers may have unique knowledge of their own
transmission systems . . . .'').
\464\ See pro forma LGIP section 3.7 (``Transmission Provider
shall deem the Interconnection Request to be withdrawn and shall
provide written notice to Interconnection Customer of the deemed
withdrawal and an explanation of the reasons for such deemed
withdrawal . . . . Withdrawal shall result in the loss of
Interconnection Customer's Queue Position. If an Interconnection
Customer disputes the withdrawal and loss of its Queue Position,
then during Dispute Resolution, Interconnection Customer's
Interconnection Request is eliminated from the queue until such time
that the outcome of Dispute Resolution would restore its Queue
Position.'').
---------------------------------------------------------------------------
285. That there are other factors that may also affect the timely
completion of interconnection studies--and that these factors may not
be within transmission providers' control, in whole or in part--does
not negate the substantial control that transmission providers have
over this process. To the contrary, the existence of multiple factors
influencing interconnection study timeliness favors addressing the
problem of interconnection queue backlogs from multiple angles, as with
the comprehensive approach adopted in Order No. 2023. Even where
multiple factors may cause or contribute to delays of interconnection
studies, transmission providers are responsible for conducting the
studies and their actions or inaction in doing so can cause or
contribute to such delays.
286. Overall, the record reflects a problem of delayed study
results contributing to interconnection queue backlogs,\465\ numerous
comments asserting that the reasonable efforts standard fails to ensure
that transmission providers take adequate steps to ensure study
timeliness,\466\ and evidence of significant, growing backlogs leading
to unjust and unreasonable rates. Based on our statutory obligation to
remedy these unjust and unreasonable rates, and also in light of the
significant level of control transmission providers exercise over the
timeliness of the study process, we continue to find that the
elimination of the reasonable efforts standard, and its replacement
with firm study deadlines, is warranted as part of a package of
comprehensive reforms to address interconnection queue delays and
backlogs.
---------------------------------------------------------------------------
\465\ See Order No. 2023, 184 FERC ] 61,054 at P 40; see also
supra P 39. While the rehearing requests generally point to factors
that are beyond transmission providers' control (for instance,
awaiting affected system study results or deficient information from
interconnection customers), the record does not demonstrate that
these are, in fact, the factors exclusively or even primarily
causing study delays. See, e.g., Order No. 2023, 184 FERC ] 61,054
at P 50.
\466\ See, e.g., ACE NY Initial Comments at 11-12 (``The
Commission's review of the reported Order No. 845 metrics helps to
corroborate the anecdotal experiences of interconnection customers
throughout the nation and demonstrates the widespread failure to
complete interconnection studies consistent with the timelines
identified in the pro forma LGIP.''); CAISO Initial Comments at 25
(``The reasonable efforts standard has only served as the exception
that swallows the rule of study deadlines.''); EPSA Initial Comments
at 10-11 (acknowledging that other factors may contribute to delays
but ``there have also been vast failures by Transmission Providers
to process interconnection studies and provide necessary information
to prospective and existing interconnection customers in a timely
manner''); Invenergy Initial Comments at 29-30 (``[I]nterconnection
studies are routinely delayed by several years. This is an ongoing
problem and may reflect, among other things, an apparently low
priority placed on adequate staffing and the lack of any
accountability under the existing interconnection procedures.'');
Public Interest Organizations Initial Comments at 33 (``[T]he slow
pace at which interconnection requests are evaluated has contributed
to a ballooning of interconnection queues across the country. . . .
[B]inding deadlines are the most effective option for ensuring that
prospective generation receives timely responses to interconnection
requests.'').
---------------------------------------------------------------------------
287. Consistent with this approach, we are not persuaded by
arguments that the Commission conflated correlation and causation in
concluding that unjust and unreasonable rates resulting from
interconnection queue delays and backlogs, and delayed interconnection
study completion, supported elimination of the reasonable efforts
standard. In this vein, several of the rehearing requests assert that
other factors, principally the volume and complexity of interconnection
requests, are the real causes of such backlogs and delays, and that
eliminating the reasonable efforts standard will not reduce the volume
of such requests. We note, however, that Order No. 2023 did not claim
that the reasonable efforts standard was the only driving force behind
missed study deadlines. Order No. 2023 recognized that study delays are
caused by a number of factors,\467\ and adopted a comprehensive package
of reforms aimed at alleviating many of those factors from various
angles.\468\ The reasonable efforts standard is but one of these
factors.
---------------------------------------------------------------------------
\467\ Order No. 2023, 184 FERC ] 61,054 at PP 40-45.
\468\ See id. PP 45-56. For example, Order No. 2023 acknowledged
that affected system study delays are a key contributor to overall
delays in the interconnection queue, and adopted several specific
reforms aimed at standardizing and streamlining affected system
study processes. See id. P 51. Order No. 2023 also acknowledged that
speculative interconnection requests contribute to study delays and
queue backlogs, and adopted commercial readiness deposits and site
control requirements aimed at alleviating this factor. See id. PP
47-48.
---------------------------------------------------------------------------
288. The Commission in Order No. 2023 took significant other steps
to address the volume of interconnection requests including to reduce
the number of speculative requests and to improve the efficiency of
interconnection studies and interconnection queue processing.\469\ But
to the extent that factors contributing to study delays,
[[Page 27053]]
including higher volumes or complexity of interconnection requests, are
still expected to persist,\470\ this does not warrant failing to pursue
other available solutions to reduce such backlogs that are within
transmission providers' control, especially in light of the magnitude
and growth of the overall interconnection queue backlog.\471\
---------------------------------------------------------------------------
\469\ See id. P 968; see also id. P 966 (``Indeed, throughout
this final rule, we adopt numerous reforms to appropriately
incentivize interconnection customers to help reduce interconnection
delays that may result from their conduct.'').
\470\ See id. P 966 (``There is every reason to believe that
many of the factors contributing to significant interconnection
queue backlogs and delay--including the rapidly changing resource
mix, market forces, and emerging technologies--will persist.'').
\471\ See id. P 968 (``In this Section, we adopt reforms to
ensure that transmission providers are doing their part as well by
eliminating the reasonable efforts standard . . . . Based on the
record, we find that the elimination of the reasonable efforts
standard and its replacement with firm deadlines and penalties are
needed to remedy unjust and unreasonable rates . . . .''); see also
id. P 966 (reform to the reasonable efforts standard was warranted
based on ``ongoing challenges'' that ``will persist'').
---------------------------------------------------------------------------
289. Eliminating the reasonable efforts standard, which allowed for
self-extensions of interconnection study deadlines and lacked
appropriate incentives for transmission providers to help ensure study
timeliness, is one such further solution.\472\ In its place, the
Commission has specified standards of performance in the form of
deadlines, accompanied by a penalty. This penalty is a self-
implementing performance incentive (subject to appropriate safeguards)
that also effectively adjusts what transmission providers can charge
for interconnection studies that fail to meet those standards. This
incentive will help ensure that transmission providers exercise the
control they have over the interconnection process as to the timely
conduct of those studies,\473\ and thereby contribute to alleviating
the problem of interconnection queue backlogs, including to address
increased volumes of interconnection requests.\474\ As explained below
and in Order No. 2023, these deadlines should be achievable and--where
there may be factors outside of a transmission provider's control that
influence whether these deadlines can be met--the Commission has
adopted appropriate safeguards to account for this possibility.
---------------------------------------------------------------------------
\472\ See id. P 967 (noting that this standard ``worsens
current-day challenges'' and there are ``steps within transmission
providers' control, from deploying transmission providers' resources
to exploring administrative efficiencies and innovative study
approaches, to better ensure timely processing of interconnection
studies to remedy existing deficiencies'').
\473\ See, e.g., Cent. Hudson Gas & Elec. Corp. v. FERC, 783
F.3d 92, 109 (2d Cir. 2015) (Cent. Hudson) (``FERC may permissibly
rely on economic theory alone to support its conclusions so long as
it has applied the relevant economic principles in a reasonable
manner and adequately explained its reasoning''); Sacramento Mun.
Util. Dist. v. FERC, 616 F.3d 520, 531 (2010) (Sacramento) (``[I]t
was perfectly legitimate for the Commission to base its findings
about the benefits of marginal loss charges on basic economic theory
. . . .''); Assoc. Gas, 824 F.2d at 1008-09 (``Agencies do not need
to conduct experiments in order to rely on the prediction that an
unsupported stone will fall . . . .'').
\474\ Indicated PJM TOs single out one piece of evidence that
the Commission cited in the NOPR as supporting use of such
incentives, the testimony of Chairman LeVar of the Utah Public
Service Commission, claiming that the Commission failed to address
their comments that this testimony does not support the use of
penalties as incentives. See Indicated PJM TOs Rehearing Request at
39-40; Indicated PJM TOs Initial Comments at 38. We continue to find
that this testimony is one piece of evidence that supports imposing
such incentives: although Chairman LeVar testified that fines are
not always the best approach, he described the need to impose
consequences on transmission providers as ``a pretty intuitive,
important step,'' testified that there ``needs to be some clear,
predictable consequence for transmission providers not meeting their
obligations,'' and identified such consequences as ``the first step
in queue reform.'' May Joint Task Force Tr. 89:6-25.
---------------------------------------------------------------------------
290. The rehearing requests misunderstand the Commission's approach
in claiming that eliminating the reasonable efforts standard and
adopting firm study deadlines cannot be warranted absent findings of
intentional delay, bad faith, misconduct, or a ``lack of effort'' by
transmission providers that fails to meet the reasonable efforts
standard. Such findings are not necessary predicates to concluding that
the interconnection study process must occur more expeditiously in
order to help remedy the problem of unjust and unreasonable rates
caused by interconnection queue backlogs. Nor are they predicates to
concluding that the reasonable efforts standard was not accomplishing
this goal, and that there are steps within transmission providers'
control that can facilitate the timely completion of interconnection
studies on timeframes set forth in Order No. 2023.\475\
---------------------------------------------------------------------------
\475\ PacifiCorp's comparison of this case to Nat'l Fuel Gas
Supply Co. v. FERC, 468 F.3d 831, 842 (vacating Commission standards
of conduct that had been justified in part by a claimed record of
abuse, where the court found no such record was apparent), is
therefore not apt. See PacifiCorp Rehearing Request at 7. The
Commission has not relied on claims of wrongdoing, bad faith, or
abuse to justify the reforms in Order No. 2023, but rather acted
based the substantial record that interconnection queue backlogs,
driven in part by untimely interconnection studies, are resulting in
unjust and unreasonable rates and transmission providers' have the
ability to better ensure study timeliness.
---------------------------------------------------------------------------
291. Similarly, we are not persuaded by arguments that the
structure adopted in Order No. 2023 is disproportionate to the problems
identified in that order or that study delays are not sufficiently
widespread to justify adoption of penalties for study delays. As
discussed above in section II.A., we find that Order No. 2023's generic
finding that the existing pro forma interconnection procedures and
agreements were unjust, unreasonable, unduly discriminatory or
preferential was supported by substantial evidence. The D.C. Circuit
has been clear that the Commission can rely on general findings of
systemic conditions to impose an industry-wide remedy, unless the
deficiencies identified exist only in isolated pockets: \476\ the
record here indicates that interconnection study delays are a
nationwide problem, not one that exists only in isolated pockets.\477\
Therefore, we continue to conclude that industry-wide reform is
appropriate. Furthermore, interconnection study delays and queue
backlogs are severe,\478\ and we continue to find that the deadline and
penalty regime adopted in Order No. 2023 is proportional to the scope
of the problem.
---------------------------------------------------------------------------
\476\ TAPS, 225 F.3d at 687-88; INGAA, 285 F.3d at 37; S.C. Pub.
Serv. Auth., 762 F.3d at 67.
\477\ See supra section II.A.3.
\478\ Order No. 2023, 184 FERC ] 61,054 at PP 38, 40, & app. B.
---------------------------------------------------------------------------
292. It appears that, in arguing that study delays are not
sufficiently widespread to justify a generically applicable incentive
structure, Indicated PJM TOs misread the Order No. 845 data cited in
Order No. 2023: Indicated PJM TOs state that the Commission
acknowledges that at the end of 2022, 14 (of 24) non-RTO/ISO
transmission providers experienced no study delays.\479\ However, the
Commission actually stated, and the data shows, that at the end of
2022, 14 (of 24) non-RTO/ISO transmission providers had delayed studies
still pending at the end of the year.\480\ Furthermore, of the studies
completed over the course of 2022, the data indicates that 16 non-RTO
transmission providers completed one or more interconnection study past
the deadline.\481\ As stated above in section II.A.2., we recognize
that PJM's data reflects its previous, serial study process. However,
even excluding both PJM and SPP, the data show that three of the four
remaining RTOs/ISOs reported delayed studies at the end of 2022.\482\
Moreover, although we find the data even excluding PJM and SPP's
backlogs is sufficient to show that study delays are not a problem that
exists only in isolated pockets, the existing interconnection study
backlogs in SPP and PJM reinforce that it is imperative that these
entities, too, conduct their cluster study processes in a timely
fashion, as will be facilitated by firm
[[Page 27054]]
study deadlines.\483\ The data indicate that study delays are not a
problem that only exists in isolated pockets.
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\479\ Indicated PJM TOs Rehearing Request at 15-16.
\480\ Order No. 2023, 184 FERC ] 61,054 at P 40 & app. B tbl. 3.
\481\ Id.
\482\ Id. at app. B.
\483\ See id. P 40, app. B, tbls. 2 & 4; NOPR, 179 FERC ]
61,194, at app. A, tbl. 1 n.489 (noting that SPP's ``normal
interconnection queue processing has been modified to address its
large queue backlog and transition to a new interconnection study
process'').
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293. We disagree with arguments that it was disproportionate or
inappropriate for the Commission to make a generic finding eliminating
the reasonable efforts standard and adopting firm study deadlines,
given that some regions have already adopted cluster study processes
and are, therefore, generally in accord with a number of other reforms
adopted in Order No. 2023. The data do not indicate that cluster
studies alone are sufficient to remedy interconnection queue backlogs.
To the contrary, a number of transmission providers that have already
adopted cluster studies still experience substantial study delays.\484\
While cluster studies are a key component of the Order No. 2023
reforms, clustering alone has not proved sufficient to solve the
problems the Commission identified in Order No. 2023. We conclude that
the elimination of the reasonable efforts standard, which has not yet
been adopted by any transmission providers, is an appropriate and
important component of the package of reforms in Order No. 2023 to
remedy study delays and queue backlogs.
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\484\ Order No. 2023, 184 FERC ] 61,054 at P 40 (indicating that
multiple transmission providers that have already adopted cluster
studies--including, among others, MISO, APS, Dominion, Duke, El
Paso, PNM, and PSCo--still have study delays).
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294. We disagree with arguments that the Commission relied on stale
data to support the elimination of the reasonable efforts standard and
the adoption of deadlines and study delay penalties. It appears that
these rehearing requests are premised on speculation that future data
might tell a different story than the data the Commission relied upon
in Order No. 2023. Such speculation about potential future data does
not render current data stale.\485\ Order No. 2023 relied on the most
recent data available, from 2020-2022.\486\ Even if this dataset is not
perfect, imperfection does not amount to arbitrary decision-
making.\487\ We also note that, for purposes of judicial review, the
record consists of the information that was before the Commission at
the time Order No. 2023 was issued.\488\ Particularly given the trends
of worsening queue delays and backlogs, which we have found are likely
to persist in the absence of Commission action,\489\ and the gravity of
the problem of such delays in interconnecting new generation, the
Commission was not required to wait for pending developments before
issuing Order No. 2023, nor are we required to retract Order No. 2023
in order to supplement the Commission's decision with new data.\490\
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\485\ See ICC v. Jersey City, 322 U.S. 503, 514 (1944)
(``Administrative consideration of evidence . . . always creates a
gap between the time the record is closed and the time the
administrative decision is promulgated . . . [if] litigants might
demand rehearings . . . because some new circumstance has arisen . .
. there would be little hope that the administrative process could
ever be consummated[.]''); Wis. Elec. Power Co. v. Costle, 715 F.2d
323, 327 (7th Cir. 1983) (finding that the record was not stale just
because it did not include data collected five days before the
agency issued its decision); Vill. of Logan v. U.S. Dep't of
Interior, 577 F. App'x 760, 770 (10th Cir. 2014) (``Defendants
likewise cannot be faulted for failing to consider a study that was
published after the [agency decision] was published[.]'').
\486\ See Order No. 2023, 184 FERC ] 61,054 at app. B
(summarizing data from 2020-2022); id. at P 38 (citing Queued Up
2023 at 7-8). Cases in which courts have found data to be stale
involve significantly older data. See N. Plains Res. Council, Inc.
v. Surface Transp. Bd., 668 F.3d 1067, 1086 (9th Cir. 2011) (finding
that ten-year-old data was stale); Lands Council v. Powell, 395 F.3d
1019, 1031 (9th Cir. 2005) (finding that six-year-old data was
stale).
\487\ See White Stallion Energy Ctr., LLC v. EPA, 748 F.3d 1222,
1248 (D.C. Cir. 2014) (agency's ``data-collection process was
reasonable, even if it may not have resulted in a perfect
dataset''); In re Polar Bear ESA Listing, 709 F.3d 1, 13 (D.C. Cir.
2013) (``That a model is limited or imperfect is not, in itself, a
reason to remand agency decisions based upon it.''); Allied Local &
Reg'l Mfrs. Caucus v. EPA, 215 F.3d 61, 71 (D.C. Cir. 2000) (``We
generally defer to an agency's decision to proceed on the basis of
imperfect scientific information''); State of N.C. v. FERC, 112 F.3d
1175, 1190 (D.C. Cir. 1997) (``The mere fact that the Commission
relied on necessarily imperfect information . . . does not render
[its decision] arbitrary.''); Chemical Mfrs. Ass'n v. EPA, 28 F.3d
1259, 1265 (D.C. Cir. 1994) (agency may nonetheless use model ``even
when faced with data indicating that it is not a perfect fit'').
\488\ See Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def.
Council, Inc., 435 U.S. 519, 554-55 (1978) (Vt. Yankee) (explaining
that an agency decision ``had to be judged by the information then
available to it[.]'').
\489\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at P 966.
\490\ See Marsh v. Oregon Nat. Res. Council, 490 U.S. 360, 373
(1989) (``agenc[ies] need not supplement [a decision] every time new
information comes to light[.]''); Friends of the River v. FERC, 720
F.2d 93, 109 (D.C. Cir. 1983) (``Were we to order the Commission to
reassess its decisions every time new forecasts were released, we
would risk immobilizing the agency.'').
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295. We disagree with Indicated PJM TOs' claim that Order No. 2023
relied on the stale record from Order No. 890, even though the world
has changed substantially since 2007. Order No. 2023 cited Order No.
890 as precedent reflecting that the Commission has authority to (1)
implement a study delay penalty structure for RTOs/ISOs for missed
tariff deadlines notwithstanding their non-profit status,\491\ and (2)
prohibit non-RTO transmission provider and transmission-owning members
of RTOs/ISOs from recovering penalty amounts through transmission
rates.\492\ Order No. 2023 further acknowledged differences between the
transmission service studies addressed in Order No. 890 and
interconnection studies and accounted for these differences in
developing this study delay penalty regime.\493\
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\491\ See Order No. 2023, 184 FERC ] 61,054 at P 876.
\492\ See id. P 992.
\493\ See id. P 1013.
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296. We also disagree with rehearing requests that argue that the
elimination of the reasonable efforts standard and the adoption of a
structure of performance standards, in the form of deadlines, and
performance incentives, in the form of penalties, is premature, and
that the Commission should have waited until other reforms took effect
before considering whether to implement this reform, or should have
instead simply augmented the reporting approach set forth in Order No.
845. While the Commission could have taken a more gradual approach in
addressing interconnection queue backlogs, we find that such an
approach would not represent a just and reasonable replacement rate.
Indeed, not only have our prior reforms failed to adequately control
interconnection backlogs and delays, but the problem has instead
significantly worsened, leading to unjust and unreasonable rates. Thus,
notwithstanding that certain commenters may prefer a different
approach--and particularly favor one that preserves for as long as
possible the ability of transmission providers to extend their own
deadlines to complete interconnection studies--we sustain Order No.
2023's finding that the reasonable efforts standard is contributing to
those unjust and unreasonable rates such that reform of that standard
is warranted now.\494\ As a result, we also continue to find that Order
No. 2023's approach of addressing the problem of interconnection queue
backlogs and delays from multiple angles is both permissible and
warranted given the
[[Page 27055]]
extreme challenges identified in section II.A, above, and Order No.
2023.\495\
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\494\ Notably, the rehearing requests cite no authority
precluding the Commission from adopting the more comprehensive
approach embodied in Order No. 2023. See Flyers Rts. Educ. Fund,
Inc. v. U. S. Dep't of Transp., 810 F. App'x 1, 3 (D.C. Cir. 2020)
(explaining that FCC v. Fox Television Stations, Inc., 556 U.S. 502
(2009) ``permits, but does not require, an agency to act
incrementally.''); WildEarth Guardians v. U.S. E.P.A., 751 F.3d 649,
655-56 (D.C. Cir. 2014) (summarizing Defenders of Wildlife v.
Gutierrez, 532 F.3d 913 (D.C. Cir. 2008), upholding a decision to
focus on a comprehensive approach).
\495\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 3, 27-
29, 37-60.
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297. Moreover, under FPA section 206, the Commission need only find
that the existing pro forma is unjust and unreasonable and that the
replacement rate is just and reasonable; the Commission need not
demonstrate that the replacement rate is the only just and reasonable
approach.\496\ We continue to find that a comprehensive approach,
including the elimination of the reasonable efforts standard and
adoption of performance standards and incentives (study deadlines and
penalties), is necessary to remedy the unjust and unreasonable rates
resulting from interconnection queue backlogs and is just and
reasonable. We also note that arguments that this reform is premature
are based on the premise that the other reforms in Order No. 2023 will
be sufficient to remedy study delays. But at the same time, parties
argue on rehearing that they cannot meet study deadlines, even with the
other reforms in Order No. 2023. Both cannot be true. Either the other
reforms in Order No. 2023 will be sufficient to ensure transmission
providers can meet study deadlines, in which case they will not incur
penalties under this regime, or--consistent with the Commission's
conclusions in Order No. 2023 and herein--the other reforms will not be
sufficient to ensure transmission providers meet study deadlines. In
contrast, the Commission has here determined that a package of
reforms--including both the elimination of the reasonable efforts
standard and the other reforms required by the final rule--represents a
reasonable and well-supported decision regarding the appropriate
replacement rate.
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\496\ See Emera Me., 854 F.3d at 22-23 (explaining the two-step
analysis under section 206 and that, on the second prong, there is a
substantial spread of potentially just and reasonable rates).
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298. With regard to arguments that the Commission's adoption of a
deadline and penalty structure does not take into account that some
transmission providers have engaged in stakeholder processes on queue
reform, we note that Order No. 2023 acknowledged these efforts.\497\
However, we disagree that these efforts mean that the Commission cannot
or should not implement further reforms. In the regions where
stakeholder reforms are ultimately successful in reducing queue
backlogs and preventing delayed studies, the penalties adopted in Order
No. 2023 may never be relevant. However, as explained above, many
regions of the country are still seeing significant and even growing
queue backlogs and study delays. It is clear that further action is
warranted.
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\497\ Order No. 2023, 184 FERC ] 61,054 at PP 16, 59, 1765-67.
Because Order No. 2023 adopted the NOPR proposal to continue to
apply the ``consistent with or superior to'' and ``independent
entity variation standards,'' see id. P 1764, the transmission
providers that have engaged in these processes may still benefit
from them, although we cannot prejudge any particular compliance
filings.
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299. The rehearing requests also mischaracterize Order No. 2023 in
claiming that the Commission eliminated the reasonable efforts standard
based on ensuring parity or fairness, rather than evidence. Given the
magnitude and growth of the interconnection queue backlog, the
Commission adopted a comprehensive approach to remedying the unjust and
unreasonable rates caused by that backlog.\498\ Order No. 2023's
references to ensuring that transmission providers were ``doing their
part'' \499\ and ``striking a balance'' \500\ were made in this
context, reflecting that transmission providers have a role to play in
addressing this backlog. This comprehensive approach recognizes the
importance of addressing each of the principal factors contributing to
interconnection queue backlogs, including those--like study
timeliness--that are within the control, whether in whole or in part,
of transmission providers. We are, therefore, not persuaded by
arguments that the existence of factors beyond the control of
transmission providers that may delay interconnection studies means
that the elimination of the reasonable efforts standard, and its
replacement with firm study deadlines and incentives in the form of
penalties, cannot or will not be effective in reducing study delays.
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\498\ See id. P 968 (discussing the other reforms the Commission
was adopting).
\499\ Id.
\500\ Id. P 972 (``The study delay penalty structure adopted in
this final rule balances the harm to interconnection customers of
interconnection study delays and the associated need to incentivize
transmission providers to timely complete interconnection studies
with the burdens on transmission providers of conducting
interconnection studies and potentially facing penalties for delays,
including those that may be caused or exacerbated by factors beyond
their control.'').
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300. We further conclude that contentions that the reasonable
efforts standard carries benefits, including the flexibility to account
for the complexities and variability of interconnection requests that
may arise in the study process, do not demonstrate that this standard
remains just and reasonable. While there is some benefit to such
flexibility, this benefit does not outweigh the need for reform the
Commission has discussed and particularly does not change the fact that
interconnection queue backlogs and study delays are resulting in unjust
and unreasonable rates. Indeed, unwarranted flexibility to the
detriment of timely study completion represents a defect in the
reasonable efforts standard in light of the record demonstrating such
backlogs: it allows transmission providers too much discretion to
extend their own study deadlines. We thus disagree with arguments
claiming that the reasonable efforts standard is sufficient to hold
transmission providers accountable and appealing to the flexible nature
of the reasonable efforts standard as purportedly demonstrating that it
remains just and reasonable.
301. Furthermore, we do not agree that the deadline and penalty
structure set forth in Order No. 2023 is inflexible, as certain
rehearing requests attempt to portray that structure in contrasting it
with the reasonable efforts standard. Order No. 2023's deadline and
penalty structure reasonably accounts for the interests of transmission
providers, including in maintaining flexibility and accounting for the
complexities of the interconnection study process,\501\ in light of the
need for reform to set clear standards for timeliness and effective
measures to ensure those standards are met.\502\ How each transmission
provider determines to meet interconnection study deadlines is left up
to that transmission provider. We find that this approach is
appropriate given the variation in the operations of the transmission
providers and how they conduct the study process, and that they have
the most complete knowledge as to what actions to better ensure study
timeliness will be most effective as to their specific processes.
Rather than imposing a top-down approach that mandates specific
actions, the Commission in Order No. 2023 provided flexibility to
transmission providers as to how they achieve those standards,\503\
along with appropriate safeguards.
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\501\ See, e.g., supra section II.D.1.a. (summarizing the
safeguards established in Order No. 2023, particularly including the
appeals process).
\502\ See also infra PP 374-382 (rejecting arguments that the
deadline and penalty structure adopted by Order No. 2023 is not just
and reasonable based on purported negative consequences of that
structure).
\503\ Cf., e.g., Transp. Div. of the Int'l Ass'n of Sheet Metal,
Air, Rail & Transp. Workers v. Fed. R.R. Admin., 10 F.4th 869, 876
(D.C. Cir. 2021) (affirming a performance-based approach, rather
than prescriptive approach, as reasonable).
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302. We disagree with arguments that the Commission has not
demonstrated that there are steps that transmission
[[Page 27056]]
providers can take to improve the timeliness of study processing,
particularly given the factors that are outside of or not fully within
their control, such that implementing a structure of performance
standards and penalties to incentivize transmission to providers meet
study deadlines is not just and reasonable. As described above,
transmission providers exercise significant control over the study
process through which they can influence whether the studies are timely
completed.\504\ It is not the case that there is no nexus between the
speed of the interconnection queue and the incentives imposed on
transmission providers to timely complete interconnection studies. In
Order No. 2023, the Commission explained that transmission providers
should be able to implement reforms to ensure that their study process
is efficient and to help meet the deadlines set forth in that rule,
including examples of steps that they may be able to take.\505\ To the
extent that transmission providers suggest that it is generically
infeasible to allocate additional resources to ensure the timely
completion of interconnection studies because that will require them to
bear increased study costs, we are not persuaded by these concerns. As
Order No. 2023 stated, ``interconnection customers, rather than
transmission providers, ultimately bear the costs of interconnection
studies.'' \506\ The allocation of such additional resources includes
the allocation of additional personnel or consultants, as appropriate
and available. Moreover, increased availability of qualified personnel
may be driven, over time, by increased demand on the part of
transmission providers. To the extent that transmission providers seek
to retain additional personnel but there are extenuating circumstances
rendering necessary personnel unavailable, leading to the assessment of
penalties, transmission providers can explain the specific facts of
their situation in an appeal to the Commission.
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\504\ See supra P 284.
\505\ See Order No. 2023, 184 FERC ] 61,054 at PP 967, 975,
1004, 1007 (identifying steps including the management of
operational resources, implementing reforms to increase the
efficiency of study processing, investing in new software, and
hiring additional personnel).
\506\ Id. P 1007 (``To the extent that it is more costly to
complete studies in a timely and accurate fashion, these
interconnection study costs will be passed on to interconnection
customers.''). Nothing in Order No. 2023 or herein requires or
suggests that transmission providers should attempt to hold
personnel liable or punish them for study delays, and we therefore
are not persuaded by SPP's claim that that qualified engineers may
not want to work for transmission providers if they risk being
identified as a cause of study delays that result in penalties.
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303. In addition, claims that transmission providers cannot take
reasonable steps to achieve the deadlines set forth in Order No. 2023
are premised on incorrectly portraying the substantive deadlines set in
Order No. 2023 and the circumstances under which penalties will be
assessed as unduly burdensome or punitive. In imposing these deadlines,
the Commission was mindful of the burdens on transmission providers in
conducting interconnection studies.\507\ Moreover, in Order No. 2023
the Commission adopted a reasonable approach to selecting the deadlines
in the pro forma interconnection procedures and, as further explained
in greater detail below, we continue to conclude that the record
supports that those deadlines should be achievable for the pro forma
study process.\508\ The safeguards the Commission selected--including,
but not limited to, the ability to appeal a penalty--further respond to
transmission providers' objections, including the extent to which study
delays may be due to factors outside of their control.\509\
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\507\ See, e.g., id. P 1004 (explaining that the Commission was
adopting reforms from the NOPR such that it expected ``that a
transmission provider that faces the potential of a study delay
penalty for failing to meet interconnection study deadlines will be
able to allocate sufficient resources to conduct interconnection
studies, in addition to implementing reforms to ensure that its
study process is efficient'' and declining to adopt certain
proposals that might have resulted in greater burdens on
transmission providers).
\508\ See infra PP 318-320 (explaining that the pro forma study
process should not impose a greater aggregate burden on transmission
providers than the serial study process and discussing the available
data reflecting the ability of transmission providers that have
adopted a cluster study approach to conduct those studies within the
timeframes set forth in Order No. 2023).
\509\ See Order No. 2023, 184 FERC ] 61,054 at P 987 (``In
evaluating whether there is good cause to grant such relief, the
Commission may consider, among other factors: (1) extenuating
circumstances outside the transmission provider's control, such as
delays in affected system study results; (2) efforts of the
transmission provider to mitigate delays; and (3) the extent to
which the transmission provider has proposed process enhancements
either in the stakeholder process or at the Commission to prevent
future delay''); id. at 979 (providing a lengthy transition period
to allow transmission providers time to adapt to the new processes).
---------------------------------------------------------------------------
c. Adoption of a Study Deadline and Penalty Structure Replacement Rate
304. Having adopted the NOPR proposal to eliminate the reasonable
efforts standard in Order No. 2023, the Commission was then required to
adopt a replacement rate.\510\ It found that a structure in which
transmission providers are required to meet firm study deadlines (a
standard to measure performance) and subject to penalties (an incentive
to meet the tariff-prescribed firm study deadlines) with appropriate
safeguards, was a just and reasonable approach.\511\ This regulation of
the interconnection study process is consistent with the Commission's
long-standing regulation of the interconnection process, including the
terms of the relationship between interconnection customers and
transmission providers.
---------------------------------------------------------------------------
\510\ See id. P 970.
\511\ See id. PP 970-72.
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305. Courts have affirmed that this regulation of the
interconnection process, and specifically the interaction between
interconnection customers and transmission providers as necessary to
avoid a degradation in service leading to unjust and unreasonable
rates, falls squarely within the Commission's ratemaking
authority.\512\ For instance, in NARUC v. FERC, the D.C. Circuit
affirmed the Commission's authority to issue Order No. 2003, observing
that ``Order No. 2003 asserts jurisdiction over the terms of
interconnection between generators and transmission providers'' \513\
and citing the connection between those terms and the prices for
regulated service. Indeed, the Commission established both the
timelines for interconnection studies and the reasonable efforts
standard in Order No. 2003,\514\ which reflects the Commission's long-
standing regulation of the timeliness of the interconnection study
process.\515\
---------------------------------------------------------------------------
\512\ See, e.g., S.C. Pub. Serv. Auth., 762 F.3d at 63; NARUC v.
FERC, 475 F.3d at 1279-1280; see also FERC v. Elec. Power Supply
Ass'n, 577 U.S. 260, 266 (2016) (EPSA) (discussing the Commission's
authority to ``regulate `the transmission of electric energy in
interstate commerce' and `the sale of electric energy at wholesale
in interstate commerce' under FPA section 201(b), 16 U.S.C. 824(b),
and describing FPA sections 205 and 206 as affording FERC authority
to ``oversee all prices for those interstate transactions and all
rules and practices affecting such prices''); see also id. at 277.
\513\ NARUC v. FERC, 475 F.3d at 1279 (``By establishing
standard agreements FERC has exercised its jurisdiction over the
terms of those relationships.''); see id. at 1280; ESI Energy, LLC
v. FERC, 892 F.3d 321, 324 (``[E]very time a new generator of
electricity asked to use a transmission network owned by another--to
interconnect the two entities--disputes between the generator and
the owner of the transmission grid would arise, delaying completion
of the interconnection process,'' which disputes ``delay[ed] entry
into the market by new generators,'' thus ``providing an unfair
competitive advantage to utilities owning both transmission and
generation facilities.'').
\514\ See Order No. 2003, 104 FERC ] 61,103, at app. C, LGIP
section 1 (defining ``Reasonable Efforts''; id. sections 6.3, 7.4,
8.3 (providing for the use of reasonable efforts to complete study
processes within specified timeframes).
\515\ The Commission further has regulated the charges for the
interconnection study process through setting the study deposit
amount, see pro forma LGIP section 3.1.1, and the recovery of the
costs for interconnection studies, see Order No. 2023, 184 FERC ]
61,054, pro forma LGIP sections 7.1, 8.1, 9.4, 13.3, app. 2 at
section 6, app. 7 at section 7, app. 8 at sections 7-8, app. 9 at
section 6, app. 10 at section 6 (reflecting revisions to the pro
forma LGIP and appendices set forth in Order No. 2003).
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[[Page 27057]]
306. The deadline and penalty structure set forth in Order No. 2023
is a replacement of the Commission's prior study timelines, including
the reasonable efforts standard, with another standard directed toward
that same end.\516\ Specifically, the deadline and penalty structure
implemented in Order No. 2023 governs the terms of the relationship
between the interconnection customer and transmission provider
regarding the costs that transmission providers can recover for
interconnection studies that fail to meet certain standards. Given that
interconnection queue backlogs--which are driven, in part, by study
delays--result in unjust and unreasonable rates through, e.g.,
increased costs and decreased competition,\517\ the study delay penalty
structure is a means of ensuring just and reasonable rates, consistent
with the Commission's authority under FPA section 206. Moreover,
delayed interconnection studies impose costs on interconnection
customers,\518\ such that the value of the interconnection study to
such customers is linked to its timely performance. The implementation
of study delay penalties reflects this fact, and--particularly because
the penalties are distributed to interconnection customers in
proportion to their study costs \519\--regulates what a transmission
provider can charge for an interconnection study, accounting for study
timeliness, as a matter of ensuring just and reasonable rates.
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\516\ See Order No. 2023, 184 FERC ] 61,054 at P 50.
\517\ See id. PP 37, 43, 50, 963.
\518\ See id. PP 43, 972.
\519\ See id. PP 984, 990; infra P 439 (discussing the
distribution of penalties to interconnection customers).
---------------------------------------------------------------------------
307. The approach adopted in Order No. 2023 of employing penalties
as an incentive for regulated actors to ensure adequate service,
pursuant to the Commission's statutory mandate to ensure just and
reasonable rates under FPA sections 205 and 206, is not novel. The
Commission has previously accepted tariff mechanisms incorporating the
use of penalties for failure to meet a performance standard as a
component of a just and reasonable rate.\520\ Order No. 890's
implementation of operational penalties for routinely delayed
transmission studies similarly reflects a structure using such
penalties to accomplish the Commission's ratemaking objectives.\521\
---------------------------------------------------------------------------
\520\ See, e.g., Advanced Energy Mgmt. All. v. FERC, 860 F.3d
656, 665 (D.C. Cir. 2017) (AEMA) (affirming Commission approval of
revised market rules under which ``a resource that fails to meet its
capacity commitment during an emergency hour must pay a penalty'');
Belmont Mun. Light Dep't v. FERC, 38 F.4th 173, 177 (D.C. Cir.
2022); Energy Harbor LLC, 185 FERC ] 61,203, at P 2 (2023)
(explaining that ``PJM's Capacity Performance construct creates a
penalty and bonus structure for Capacity Resources to deliver energy
and reserves'' under certain conditions); PJM Interconnection,
L.L.C., 155 FERC ] 61,157, at P 18 (2016) (further describing this
capacity construct); ISO New England Inc., 174 FERC ] 61,252, at PP
3-4 (2021) (discussing ISO-NE's ``pay-for-performance'' capacity
market design); ISO New England Inc., 165 FERC ] 61,266, at PP 1, 22
(2018) (accepting proposal to allow ISO-NE to levy a monthly
``Failure to Cover Charge Rate,'' described as a ``just and
reasonable penalty rate,'' explaining that it will incentivize
resources to cover that obligation); cf. PJM Rehearing Request at 30
(acknowledging that various ``RTO tariffs and other tariffs contain
various penalty provisions''); Order No. 2003, 104 FERC ] 61,103 at
PP 857, 898 (considering whether to provide for liquidated damages
for delayed interconnection studies in the pro forma LGIP, and
declining to do so, but observing that liquidated damages provisions
are within the Commission's statutory authority).
\521\ See, e.g., Order No. 890, 118 FERC ] 61,119 at P 1340
(describing this structure and explaining that transmission
providers ``must have a meaningful stake in meeting study time
frames''); id. P 1347 (explaining the Commission's rationale for the
penalty amounts selected as ``in line with the cost the transmission
provider would incur to focus additional resources on processing''
study requests and as an effective incentive to comply with study
deadlines); Order No. 2023, 184 FERC ] 61,054 at PP 1013, 1015 &
nn.1958-60 (discussing the penalty structure implemented under Order
No. 890 for transmission service studies and automatic penalties for
``traffic ticket'' violations).
---------------------------------------------------------------------------
308. To that end, the Commission adopted the study deadline and
penalty structure pursuant to its authority under FPA section 206.\522\
In doing so, it stated that its approach was not based on a finding of
bad faith on the part of transmission providers,\523\ or intended to
create a punitive structure,\524\ but instead reflected the need for
adequate incentives for transmission providers to take the steps within
their control to help alleviate unjust and unreasonable rates stemming
from interconnection queue delays and backlogs.\525\ In this respect,
the implementation of the study deadline and penalty structure in Order
No. 2023 reflects that--as a component of a comprehensive package of
reforms to remedy the problem of severe interconnection queue delays
and backlogs--transmission providers will be held to appropriate
standards, with stated consequences for failure to meet those
standards, as is also the case with interconnection customers.\526\ As
discussed in detail below,\527\ the implementation of this incentive
structure pursuant to FPA section 206 is further consistent with
Supreme Court precedent differentiating civil penalties that are
imposed as punishment to redress a wrong to the public versus those
that serve other purposes, such as the regulation of the interaction
between parties to serve a compensatory function.\528\ Order No. 2023's
deadline and penalty structure falls within the latter category,
supported by the Commission's well-established FPA authority over the
interconnection process to avoid degradation of service, its authority
to regulate the relationship of the parties involved in that process,
and its authority to ensure just and reasonable rates under FPA section
206.
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\522\ Order No. 2023, 184 FERC ] 61,054 at P 1014.
\523\ See id. P 966.
\524\ See, e.g., id. P 999 (``[W]e believe that the study delay
penalty structure strikes a reasonable balance by providing an
adequate incentive without being punitive'').
\525\ See id. PP 37-43, 50, 970-72.
\526\ See, e.g., supra section II.A.3 (discussing the need for
comprehensive reform to address this problem); pro forma LGIP
sections 3.4, 3.5, 3.7, 3.7.1 (reflecting examples of such
consequences applicable to interconnection customers, including that
their interconnection requests may be deemed withdrawn, loss of
queue position, and application of the withdrawal penalty).
\527\ See infra section II.D.1.c.iv.
\528\ See Kokesh v. SEC, 581 U.S. 455, 461 (2017) (Kokesh).
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i. Interconnection Study Deadlines
(a) Requests for Rehearing
309. Several of the rehearing requests contend that the imposition
of fixed, uniform study deadlines is arbitrary and capricious because
it fails to account for the specific circumstances of the cluster being
studied, particularly given the complexity and variability of the study
process.\529\ For instance, Avangrid and EEI argue that the
Commission's 150-day cluster study deadline is a ``one-size-fits-all''
approach that disregards that clusters of interconnection studies will
vary widely in size and complexity, and there are numerous variables
outside of transmission providers' control that contribute to
delays.\530\ Indicated PJM TOs argue that the Commission failed to
consider the uneven and unpredictable timing of interconnection
requests.\531\
---------------------------------------------------------------------------
\529\ Avangrid Rehearing Request at 4-5; EEI Rehearing Request
at 10; Indicated PJM TOs Rehearing Request at 16; NYISO Rehearing
Request at 4; NYTOs Rehearing Request at 13-15; 26-27 (arguing that
there are conflicting directives in Order No. 2023 that support
regional flexibility but also provide for study penalties following
strict deadlines that do not account for unique challenges and
dynamics in different regions, which it claims could hinder ongoing
regional queue reform initiatives and stifle innovation); SPP
Rehearing Request at 9-10.
\530\ Avangrid Rehearing Request at 4-5; EEI Rehearing Request
at 10.
\531\ Indicated PJM TOs Rehearing Request at 16 (citing factors
driving variability in the number and timing of interconnection
requests in different locations); id. at 30-31 (arguing that the
evidence of widespread study delays show that the aggressive
deadlines are unreasonable, unrealistic, and arbitrary, particularly
given the increased burdens that can be expected going forward,
including new NERC standards; arguing that uniform study deadlines
are not justified).
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[[Page 27058]]
310. Relatedly, Indicated PJM TOs also assert that the uniform
study deadline and penalty framework is unduly discriminatory against
transmission owners in regions with substantial renewable generation in
development, because such regions with long queues will experience
greater risk of penalties due to factors they cannot control.\532\
Dominion asserts that, within RTOs and ISOs, there may be disparate
outcomes in different zones because of an uneven distribution of
interconnection requests, such that different transmission owners or
transmission providers will face very different risks.\533\
---------------------------------------------------------------------------
\532\ Id. at 31-32.
\533\ Dominion Rehearing Request at 24-25.
---------------------------------------------------------------------------
311. A number of the rehearing requests also challenge the specific
deadlines the Commission selected--including, in particular, the 150-
day cluster study deadline--as insufficiently supported and/or too
short, risking a less efficient interconnection process.\534\ MISO TOs
and NYISO argue that the deadlines imposed in Order No. 2023 have not
been shown to be appropriate and achievable or are not supported by
evidence.\535\ NYISO argues that study deadlines should be tailored to
each region.\536\ NYISO and PJM argue that a 150-day timeframe for the
cluster study is not achievable in their regions in particular.\537\
PacifiCorp asserts that the Commission should extend the 150-day
cluster study and restudy deadlines by 45 days to provide transmission
providers adequate time to address third-party delays.\538\
---------------------------------------------------------------------------
\534\ EEI Rehearing Request at 9-10 (``Experience has shown that
reliability and deliverability studies take longer than 50 days and
that the development of binding cost estimates may be complex,
especially in high-density urban areas.''); MISO TOs Rehearing
Request at 11-12; NYISO Rehearing Request at 5-6; NYTOs Rehearing
Request at 13-15; PacifiCorp Rehearing Request at 5, 15; PJM
Rehearing Request at 32.
\535\ MISO TOs Rehearing Request at 11-12 (also arguing that the
Commission has not shown why a uniform deadline is appropriate
irrespective of ``the cluster size, scope, geography, make up,
proposed resource mix, and other circumstances of the particular
cluster'' and that the automatic imposition of penalties exacerbates
the problem posed by the deadlines); NYTOs Rehearing Request at 13-
15 (citing N.Y. v. EPA, 964 F.3d 1214, 1224 (D.C. Cir. 2020) and
All. for Cannabis Therapeutics v. DEA., 930 F.2d 936, 940 (D.C. Cir.
1991) for the propositions that standards that are not reasonably
attainable and conditions which are ``impossible to fulfill'' are
arbitrary and capricious).
\536\ NYISO Rehearing Request at 5-6; see also id. at 15-17
(arguing that the Commission should allow RTOs/ITOs to propose
alternative study deadlines as independent entity variations, and
that failure to do so unreasonably treats all transmission providers
similarly, regardless of how they may be differently situated); id.
at 40 (``[T]he Commission has not adequately addressed, or explained
its response to, arguments that study deadlines themselves are
unreasonable.'').
\537\ Id. at 6-11 (describing the applicable New York
reliability requirements and discussing particular challenges
applicable to New York); PJM Rehearing Request at 32 (``This simply
is not possible in a region such as the PJM Region, where the
typical queue over a one-year period in the last few years has
included in excess of 1,000 projects'').
\538\ PacifiCorp Rehearing Request at 5, 15.
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312. Avangrid, NYISO, and PJM contend that the efficiency gains
that can be expected from the other reforms set forth in Order No. 2023
will not render the deadlines imposed by that decision more
achievable.\539\ NYISO and PJM contend that the study entry
requirements are not likely to materially deter participation in
cluster studies, claiming that certain RTOs/ISOs--including NYISO--have
already adopted similar requirements without a noticeable reduction in
the number of study participants.\540\
---------------------------------------------------------------------------
\539\ Avangrid Rehearing Request at 12; NYISO Rehearing Request
at 12-15 (arguing that much of the work in cluster studies still
concerns individual projects or subsets of projects, and thus
require many of the same resources as would be necessary to conduct
individual studies); see also id. at 34 (contending that the
Commission assumes, without evidence, that other improvements will
fully offset the burdens imposed by Order No. 2023 on transmission
providers); PJM Rehearing Request at 32.
\540\ NYISO Rehearing Request at 14-15 (asserting that the entry
requirements and withdrawal penalties adopted by Order No. 2023 for
cluster studies are comparatively modest and likely to be only
minimal deterrent to speculative projects); PJM Rehearing Request at
32 (noting that MISO received more than 960 requests following the
close of its 2022 Definitive Planning Process cycle that closed in
2022).
---------------------------------------------------------------------------
313. Dominion, MISO TOs, and NYISO also challenge the effectiveness
of one of the safeguards that the Commission imposed: the ability to
extend a study deadline for 30 days, upon agreement of all
interconnection customers.\541\ Dominion argues that there is no
incentive for interconnection customers to agree to such an extension
where they would otherwise be entitled to a share of the penalty
assessed against a transmission provider.\542\ MISO TOs note that
obtaining this relief requires unanimity among all interconnection
customers.\543\
---------------------------------------------------------------------------
\541\ Dominion Rehearing Request at 24; MISO TOs Rehearing
Request at 18-19; NYISO Rehearing Request at 35.
\542\ Dominion Rehearing Request at 24.
\543\ MISO TOs Rehearing Request at 18-19 (contending that this
safeguard is therefore ``wholly illusory''); see also NYISO
Rehearing Request at 35 (arguing that a 30-day extension is not a
reasonable safeguard; noting that it will be conducting
interconnection studies potentially involving more than 100
interconnection requests and arguing that each interconnection
customer will have an incentive to oppose an extension since their
study costs would be offset by penalty charges).
---------------------------------------------------------------------------
(b) Determination
314. We are not persuaded by the rehearing requests challenging the
study deadlines set forth in Order No. 2023. The timelines set forth in
Order No. 2023 are reforms to the Commission's pro forma LGIP, against
which individual compliance filings will be assessed.\544\ In Order No.
2023, the Commission declined to ``adopt suggestions to allow
transmission providers flexibility to set their own study deadlines,''
instead imposing standard deadlines for the specific study processes
set forth in the pro forma LGIP.\545\ As explained below, we continue
to find that the deadlines set in Order No. 2023 for the pro forma
study process are just and reasonable and represent a reasonable policy
determination that appropriately balances multiple competing
considerations.\546\
---------------------------------------------------------------------------
\544\ See Order No. 2023, 184 FERC ] 61,054 at P 10 (``We note
that the compliance obligations that result from this final rule
will be evaluated in light of the independent entity variation
standard for [RTOs] and [ISOs] and the consistent with or superior
to standard for non-RTO/ISO transmission providers.''); id. P 1764;
see also Order No. 2003 104 FERC ] 61,103 at P 26 (discussing the
standards for non-independent and independent transmission providers
to seek variations from the terms of the pro forma LGIP and LGIA);
Preventing Undue Discrimination & Preference in Transmission Serv.,
Order No. 890-B, 123 FERC ] 61,299, at PP 95, 101 (2008) (``The
Commission clarifies, in response to NYISO, that transmission
providers are free to make filings under FPA section 205 to seek
variations from the pro forma OATT and demonstrate that alternative
tariff provisions are consistent with or superior to the pro forma
OATT.''); N.Y. Indep. Sys. Operator, Inc., 125 FERC ] 61,274, at P
24 & n.23 (2008) (``NYISO proposed to increase the transmission
study deadlines from 60 days to 120 days. The Commission accepted
the filing . . . .'').
\545\ Order No. 2023, 184 FERC ] 61,054 at P 331 (explaining
that allowing transmission providers to propose their own deadlines
in the first instance ``would undermine the purpose of ensuring that
transmission providers complete interconnection studies by standard
deadlines prescribed by their tariffs and would thus be insufficient
to ensure that interconnection customers are able to interconnect to
the transmission system in a reliable, efficient, transparent, and
timely manner'').
\546\ Transmission providers are also allowed to propose
variations from the requirements of Order No. 2023, under the
applicable standard, including as to the deadlines set for the pro
forma study processes, although we cannot prejudge any such filings.
See id. P 1764.
---------------------------------------------------------------------------
315. We continue to conclude that the timeframes in Order No. 2023
for the completion of studies, including the 150-day timeframe for the
completion of cluster studies, are just and reasonable for the pro
forma study approach set forth in Order No. 2023.\547\ The underlying
reason for the reforms in Order No. 2023, including the deadlines
imposed on transmission providers to
[[Page 27059]]
conduct studies, is that interconnection queue backlogs are causing
unjust and unreasonable rates and that these backlogs must, therefore,
be remedied pursuant to our statutory mandate.\548\ We find that the
timelines set forth in Order No. 2023 appropriately address
transmission providers' role and control in the interconnection study
process and strike a reasonable balance between the transmission
provider and other interests, such as those of interconnection
customers, in addressing such unjust and unreasonable rates. As
explained in greater detail below, we further find that these timelines
are reasonably achievable to accomplish the pro forma study processes
set forth in Order No. 2023. We therefore disagree that these timelines
are too short or inappropriately uniform.
---------------------------------------------------------------------------
\547\ See id. PP 324, 326.
\548\ Id. P 964; see also 16 U.S.C. 824e(a); Coal. of MISO
Transmission Customers v. FERC, 45 F.4th 1004, 1020 (D.C. Cir. 2022)
(``[T]he Commission is under a statutory mandate to ensure that all
rates are just and reasonable . . . .'').
---------------------------------------------------------------------------
316. As the Commission explained in Order No. 2023, ``[t]he pro
forma LGIP [set forth in Order No. 2003] requires that transmission
providers use reasonable efforts to complete: (1) feasibility studies
within 45 calendar days; (2) system impact studies within 90 calendar
days; and (3) facilities studies within 90 or 180 calendar days.''
\549\ Under the Commission's pro forma LGIP set forth in Order No.
2003, the interconnection study process for large generating facilities
was a ``serial first-come, first-served study process by which
transmission providers study interconnection requests individually in
the order the transmission provider received them.'' \550\ Under this
process, the transmission provider had 135 total days to conduct both
the feasibility study and system impact study for each interconnection
request, with each study conducted separately.
---------------------------------------------------------------------------
\549\ Order No. 2023, 184 FERC ] 61,054 at P 13. Challenges to
the timelines for interconnection studies set forth in Order No.
2023 are focused on the deadlines for conducting cluster studies,
rather than facilities studies. Order No. 2023 provides 90 or 180
days to conduct facilities studies, which is consistent with the
timeframe specified in Order No. 2003 under the reasonable efforts
standard. See pro forma LGIP section 8.3. Thus, Order No. 2023
effectively eliminates the ability of transmission providers to
unilaterally grant themselves extensions as to the deadline for
facilities studies, but provides other avenues for relief in the
form of the safeguards adopted in Order No. 2023. We continue to
conclude that this is a just and reasonable result.
\550\ NOPR, 179 FERC ] 61,194 at P 18.
---------------------------------------------------------------------------
317. Order No. 2023 eliminated the requirement to conduct a
separate feasibility study under section 6 of the pro forma LGIP,\551\
and provides a modestly longer timeframe (150 days) to conduct the
cluster study and another 150 days to conduct any necessary restudy.
The 150-day period to conduct the cluster study runs from the
conclusion of a new 60-day customer engagement window, during which
time the transmission provider can begin to coordinate with customers
that have submitted interconnection requests that will be included in a
particular study and ensure that the provider is considering only valid
interconnection requests.\552\
---------------------------------------------------------------------------
\551\ Order No. 2023, 184 FERC ] 61,054 at PP 67, 92, 316.
Instead, the stability analysis, short circuit analysis, and power
flow analysis that were previously part of the feasibility study and
conducted on a serial basis, see id. at PP 297, 317; pro forma LGIP
section 7.3, are now conducted as components of the cluster study
and restudy process.
\552\ See LGIP section 3.4.5 (describing tasks to be performed
in the Customer Engagement Window and that interconnection requests
not deemed valid at the close of this window shall be deemed
withdrawn, with no cure period); Order No. 2023, 184 FERC ] 61,054
at PP 223, 233-34.
---------------------------------------------------------------------------
318. We acknowledge that conducting a cluster study of many
interconnection requests may involve increased complexity or require an
increased commitment of resources in a given study timeframe as
compared to conducting a single, individual study of a particular
interconnection request under the serial process.\553\ However,
arguments to this effect do not take into account the full package of
reforms aimed at improving efficiency of the study process, supporting
our determination that the 150-day cluster study and cluster restudy
deadlines reflect a reasonable balance of competing interests.
---------------------------------------------------------------------------
\553\ See Order No. 2023, 184 FERC ] 61,054 at P 326 (``While we
have extended the timeline from that provided in the individual
serial study process, we believe that 150 calendar days is a
reasonable extension to account for the more complex study.'').
---------------------------------------------------------------------------
319. Indeed, various reforms in Order No. 2023 are directed toward
ensuring that transmission providers can conduct their interconnection
studies more efficiently under the cluster study process than the pro
forma study approach previously applicable under Order No. 2003.\554\
For instance, the Commission found that the cluster study ``process
will increase efficiency because transmission providers can perform
larger interconnection studies encompassing many proposed generating
facilities, rather than separate studies for each individual
interconnection customer.'' \555\ Under this approach, transmission
providers will be able to focus their resources on a single study,
rather than conducting multiple individual studies.\556\ For that
reason, even if cluster studies prove more complex, that point does not
undercut the Commission's conclusion that they can be performed in the
time allotted in the pro forma LGIP. The Commission also explained that
a cluster study process is likely to result in fewer interconnection
customer withdrawals--which can result in cascading restudies, delays,
and wasted resources which could otherwise be used productively--
because ``conducting a single cluster study and cluster restudy will
minimize delays that arise from proposed generating facility
interdependencies under the existing serial study process.'' \557\ The
Commission also adopted further measures to increase efficiency,
including to ``disincentivize interconnection customers from submitting
interconnection requests for speculative generating facilities and
ensure that ready, more viable proposed generating facilities can
proceed through the study process.'' \558\
---------------------------------------------------------------------------
\554\ Id. PP 326, 1004.
\555\ Id. P 177.
\556\ Id. P 326 (``We also note that transmission providers will
be conducting only one interconnection study, or at most a small
number of interconnection studies, at a time, allowing them to
devote more resources to completing the studies in a timely
manner.'').
\557\ Id. P 177.
\558\ Id. (discussing the cluster study process, combined with
``the increased financial commitments and requirements to enter the
interconnection queue, such as a demonstration of site control'');
see also id. P 977 (noting the ``the new site control requirements,
commercial readiness deposits, and withdrawal penalties we adopt in
this final rule, which also become increasingly stringent as the
study process progresses''); cf. also LGIP sections 3.4.5, 3.7
(providing that, at the close of the customer engagement window,
only valid interconnection request are included in the study
process; further providing that interconnection requests may be
deemed withdrawn if interconnection customers fail to adhere to the
requirements of the LGIP).
---------------------------------------------------------------------------
320. Thus, for the pro forma LGIP approach set forth in Order No.
2023, we conclude that conducting cluster studies and restudies should
not, in terms of the total transmission provider resources required, be
materially more burdensome than conducting serial studies and expect
that the process should, in fact, be more efficient. We acknowledge
that conducting a cluster study in 150 days may require a more
concerted deployment of transmission provider resources than conducting
serial studies, because cluster studies typically involve the
evaluation of multiple interconnection requests, rather than allowing a
full 135 days to separately evaluate each interconnection request.
However, even absent the efficiency gains the adopted in Order No.
2023, the record here does
[[Page 27060]]
not reflect that conducting a cluster study will be, in aggregate, more
burdensome, let alone significantly more burdensome, than conducting a
study of each interconnection request on an individualized basis.
Moreover, balancing this concern regarding the burdens associated with
cluster studies against interconnection customers' need for timely
processing of their requests, interconnection queue backlogs, and the
unjust and unreasonable rates resulting from such backlogs, we conclude
that this is a necessary reform in order to improve the timeliness of
interconnection study processing and should be within transmission
providers' capabilities.\559\
---------------------------------------------------------------------------
\559\ Order No. 2023, 184 FERC ] 61,054 at P 1007.
---------------------------------------------------------------------------
321. Data reported as required by Order No. 845 by the non-RTO/ISO
transmission providers that conducted cluster studies in 2022 also
supports our conclusion that the deadlines for conducting cluster
studies, restudies, and facilities studies are just and
reasonable.\560\ While the approaches of each transmission provider to
conducting cluster studies vary and no transmission provider
represented in this data employs precisely the pro forma study approach
set forth in Order No. 2023, we find that this data provides a valid
basis of comparison to assess the deadlines set in Order No. 2023. In
general, this represents the most recent data set available at the time
the record closed and these transmission providers' approach to cluster
studies reflect some of the key substantive reforms required in Order
No. 2023.\561\
---------------------------------------------------------------------------
\560\ See app. B.
\561\ Moreover, that several transmission providers with
somewhat variable approaches to cluster studies completed system
impact studies in fewer than 150 days, on average, corroborates
that--in general--it is possible to conduct such studies on this
time frame.
---------------------------------------------------------------------------
322. The data reflects that five (of eight) such transmission
providers were able, applying a cluster study approach, to complete
system impact studies in an average of fewer than 150 days. In several
cases, they did so for clusters containing significant numbers of
interconnection requests. Thus, the experience of these transmission
providers supports that it is reasonably feasible to complete cluster
studies in the timeframe specified by Order No. 2023. Particularly
given the other reforms provided in Order No. 2023 to increase the
efficiency of this process, the ability of transmission providers to
increase efficiency and devote more resources to this process, and the
need to ensure timely processing of interconnection studies in order to
ensure just and reasonable rates, this data supports our conclusion
that the deadlines set by Order No. 2023 to complete such studies are
just and reasonable.
323. We acknowledge that three of the transmission providers
represented in this data exceeded this timeframe, in some cases by a
substantial amount. This, however, does not rebut the evidence from
other transmission providers that these deadlines are reasonably
achievable. Moreover, that these transmission providers did not
complete their studies in fewer than 150 days, operating under a regime
governed by the reasonable efforts standard and the ability to self-
extend such deadlines, does not demonstrate that they could not have
done so if appropriately incentivized to meet these performance
standards, as under the deadline and penalty structure adopted in Order
No. 2023.\562\
---------------------------------------------------------------------------
\562\ See, e.g., Cent. Hudson, 783 F.3d at 109 (holding that the
Commission may permissibly rely on economic theory so long as it has
applied the relevant economic principles in a reasonable manner and
adequately explained its reasoning); Sacramento, 616 F.3d at 531
(``[I]t was perfectly legitimate for the Commission to base its
findings about the benefits of marginal loss charges on basic
economic theory, given that it explained and applied the relevant
economic principles in a reasonable manner.'').
---------------------------------------------------------------------------
324. We also find that the safeguards provided in Order No. 2023
help ensure that the balance struck by Order No. 2023 in setting the
timeframes for the pro forma interconnection study process is
reasonable because transmission providers will not unduly incur
penalties for failing to meet these timeframes. Two of those
safeguards, namely the ten-business day grace period and the potential
availability of a 30-day extension upon agreement of the
interconnection customers in the cluster study,\563\ help accommodate
the possible need for extensions to study deadlines. The significant
transition period that the Commission afforded before study delay
penalties might be assessed allows transmission providers ``time to
adapt to the new processes'' and ``will help ensure that transmission
providers' implementation of this final rule has begun to reduce
backlogged interconnection queues.'' \564\ The appeals process allows
transmission providers the opportunity to demonstrate that, under their
individualized circumstances, they should receive relief from the
application of penalties for failing to meet the deadlines set in Order
No. 2023.\565\ To the extent that transmission providers assert that
factors allegedly outside of their control may render it difficult or
infeasible to meet the interconnection study deadlines, this appeals
process is the avenue to raise those considerations in particular cases
and seek relief.\566\ Moreover, as addressed above, where transmission
providers conclude that the 150-day deadline for the pro forma study
process is not appropriate for their particular study processes, they
can raise this issue in their compliance filings, under the appropriate
standard. Thus, we continue to conclude that the deadlines imposed by
Order No. 2023 are reasonable as to the pro forma LGIP approach to
interconnection studies set forth therein.
---------------------------------------------------------------------------
\563\ See Order No. 2023, 184 FERC ] 61,054 at PP 963, 981-83;
see also infra P 335 (recognizing that the 30-day extension is not
guaranteed in all cases but disagreeing with claims that it will be
ineffective in practice).
\564\ Order No. 2023, 184 FERC ] 61,054 at P 979.
\565\ Id. PP 987-89.
\566\ See also infra P 363 (noting that concerns that
transmission providers may not be afforded relief in the appeals
process, where they believe such relief would be warranted, are
premature).
---------------------------------------------------------------------------
325. The challenges on rehearing arguing that the timeframes set
forth to conduct interconnection studies are too short or
inappropriately uniform do not persuade us that these deadlines are not
reasonable for the timely completion of the pro forma study process. We
disagree with arguments that the Commission failed to adequately set
forth its rationale for adopting these deadlines, and find that our
reasons for adopting these deadlines have been adequately explained,
including through our discussion herein. Arguments that the deadlines
are too short are largely conclusory, do not support a finding that the
deadlines set for the pro forma LGIP processes are not generally
achievable as to those processes, and fail to establish that these
deadlines--in light of the overall structure of Order No. 2023,
including the relevant safeguards and ability to seek variations--
reflect an unreasonable balance of the competing interests.
326. We are unpersuaded by arguments that uniform study deadlines
are inappropriate. First, these arguments disregard the mechanisms in
Order No. 2023 to account for variability, including the safeguards
attendant to the potential assessment of penalties and the ability to
seek variations from the pro forma LGIP in the compliance process.
Second, general assertions that some transmission providers may have
higher workloads than others do not establish that the relevant
deadlines will not, as a general matter, be sufficient to allow most
transmission providers to conduct the relevant studies. Third, to the
extent that some transmission
[[Page 27061]]
providers have higher workloads associated with interconnection
requests than other providers, the deadlines in Order No. 2023
incentivize those transmission providers to devote resources
commensurate with those workloads to the timely processing of the
interconnection requests in their queue. On that point, it bears
repeating that the Commission has determined that the status quo is
leading to unjust and unreasonable rates. As such, while the reforms in
Order No. 2023 may require transmission providers to reprioritize their
allocation of resources, we find that such reallocation may be
necessary to satisfy the statutory mandate.
327. In response to arguments that the Commission ignored the
uneven and unpredictable timing of interconnection requests, we
conclude that Order No. 2023 adequately accounts for these
considerations. First, interconnection requests will be submitted
during an annual cluster request window, which is a 45-calendar day
period with the start date to be determined by each transmission
provider: under this structure, the timing of interconnection requests
will not be unpredictable.\567\ Second, we acknowledge that the number
of interconnection requests submitted in a given cluster request window
is unpredictable and impacts the deployment of resources that may be
required to complete that cluster of interconnection studies.\568\
However, we continue to find that it is necessary for transmission
providers to have explicit and firm deadlines prescribed by their
tariffs to ensure customers are able to interconnect to the
transmission system in a reliable, efficient, transparent, and timely
manner.\569\ These deadlines, subject to the safeguards articulated in
Order No. 2023 (including the appeals process), represent a just and
reasonable approach that balances the competing interests of
transmission providers and other entities, and should be reasonably
achievable for the pro forma study approach adopted in Order No. 2023.
And as noted above, Order No. 2023 does not foreclose transmission
providers from proposing different deadlines as part of their
compliance filings and supporting such proposals using either the
consistent with or superior to or independent entity variation
standard, as appropriate.
---------------------------------------------------------------------------
\567\ Order No. 2023, 184 FERC ] 61,054 at PP 223, 236.
\568\ Cf. id. P 324 (``We note that depending on the cluster
size, cluster studies may not always consume the entire 150 calendar
days, and if a cluster study is complete prior to this deadline,
transmission providers have flexibility to provide the cluster study
report at that time prior to the deadline indicated in its
LGIP[.]'')
\569\ Id. P 331.
---------------------------------------------------------------------------
328. NYISO specifically asserts that the 150-day deadline for
completing cluster studies is not adequate to accommodate NYISO's
process.\570\ In support, it introduces a new affidavit describing
NYISO's performance of interconnection studies, and the timing
associated with the relevant tasks.\571\ Acknowledging that the
Commission does not typically consider new evidence on rehearing, NYISO
asserts that the Nguyen Affidavit is not new evidence because it
``provides clarifying details regarding publicly available information
about the NYISO's Commission-approved interconnection procedures that
the NYISO has already described in this proceeding.'' \572\ It further
claims that, even if the Nguyen Affidavit constitutes new evidence, the
Commission should accept it to because NYISO could not have reasonably
anticipated certain alleged factual misunderstandings regarding the
interconnection study process, the potential benefits of
interconnection studies, and the level of collaboration required to
complete studies in New York in Order No. 2023.
---------------------------------------------------------------------------
\570\ See NYISO Rehearing Request at 5-6 (arguing that the
Commission has not established a basis for the 150-day deadline for
cluster studies and should allow each transmission provider to
propose its own study deadline); id. at 6-12 (arguing that a 150-day
study timeframe is not consistent the process NYISO follows).
\571\ See id., attach. I (Nguyen Aff.).
\572\ NYISO Rehearing Request at 7 n.15; see also NRG Power
Mktg., LLC v. FERC, 862 F.3d 108, 116-17 (D.C. Cir. 2017) (citing
PJM Interconnection, L.L.C., 108 FERC ] 61,187, at P 49 (2004)
(``Parties seeking rehearing of Commission orders are not permitted
to include additional evidence in support of their position,
particularly when such evidence is available at the time of the
initial filing.''); NO Gas Pipeline v. FERC, 756 F.3d 764, 770 (D.C.
Cir. 2014) (NO Gas) (``FERC regularly rejects requests for rehearing
that raise issues not previously presented where there is no showing
that the issue is `based on matters not available for consideration
. . . at the time of the final decision.' '').
---------------------------------------------------------------------------
329. We are not persuaded that the Nguyen Affidavit is properly
before us. To the extent that the Nguyen Affidavit contains material
not otherwise present in the record, it is new evidence. And NYISO has
not shown that the evidence in this affidavit could not have been
presented previously; this affidavit is not prompted by information
that only recently became available or concerns driven by a material
change in circumstance.\573\ Indeed, NYISO's argument that the
Commission should consider this evidence is, essentially, that it
believes the Commission erred \574\ but--if so--NYISO's proper recourse
would be to demonstrate that purported error based on the existing
record.
---------------------------------------------------------------------------
\573\ See 18 CFR 713.385(c)(3); Pub. Ser. Co. of N.M., 181 FERC
] 61,013, at P 12 & n.25 (2022).
\574\ We also disagree with NYISO's generalized assertion that
the Commission misunderstood the interconnection study process, the
benefits of such studies, or the level of collaboration involved in
such studies.
---------------------------------------------------------------------------
330. Regardless, we would not be persuaded by NYISO's arguments
even if we were to consider the Nguyen Affidavit in assessing them. The
question before the Commission in establishing the deadlines for the
pro forma study process set forth in Order No. 2023 is whether those
deadlines are reasonable as applied to that process. NYISO's argument
does not address this question. Rather, NYISO's position is that the
150-day timeframe is not sufficient for NYISO's specific
interconnection process, which it has adopted under the independent
entity variation standard and which differs significantly from the
process specified in Order No. 2023.\575\ NYISO itself obliquely
recognizes this point, asserting that ``NYISO anticipates that it will
seek an independent entity variation from this study timeframe to
better align with the study scope it will propose for the unique
interconnection issues in New York.'' \576\ As noted above, we will
consider such arguments in individual transmission provider compliance
proceedings.
---------------------------------------------------------------------------
\575\ See, e.g., NYISO Rehearing Request at 6-11; NYISO Initial
Comments at 2-3 (``Among the significant variations, the NYISO
already uses a first-ready, first served approach for managing
projects in its interconnection queue and uses a cluster Class Year
Study as the final, hallmark study in its LFIP.''); NYISO Initial
Comments, app. A at 1 (explaining that ``NYISO's interconnection
procedures include numerous independent-entity variations accepted
by the Commission that are specifically tailored to the distinct
circumstances in New York and the NYISO's wholesale market rules and
planning processes.''); National Grid Initial Comments at 13-14
(discussing the NYISO ``Class Year Study'' approach and asserting
that 150 days may not be sufficient for this process).
\576\ NYISO Rehearing Request at 4.
---------------------------------------------------------------------------
331. NYISO more generally asserts that the efficiencies associated
with a cluster study approach that the Commission identified in Order
No. 2023 may be offset by increased volumes of interconnection requests
that might participate in each cluster study.\577\ NYISO further claims
that additional financial requirements to enter the interconnection
queue have not, in its experience, materially decreased the number of
projects entering the queue.\578\ Similarly,
[[Page 27062]]
Avangrid claims that there is insufficient evidence that the easing of
burdens on transmission providers, under Order No. 2023's reforms, will
be adequate to justify the deadlines imposed by Order No. 2023.\579\
---------------------------------------------------------------------------
\577\ Id. at 12-14.
\578\ Id. at 14-15 (stating that increasing study deposits and
adding regulatory milestone deposits has not resulted in a
corresponding decrease in projects entering the queue; also citing
MISO's July 19, 2023, proposal to impose more stringent entry
requirements); see also PJM Rehearing Request at 32 (asserting that
MISO received more than 960 requests following the close of its 2022
Definitive Planning Process cycle that closed in 2022).
\579\ Avangrid Rehearing Request at 12.
---------------------------------------------------------------------------
332. These arguments do not persuade us that the pro forma
deadlines selected in Order No. 2023 for the conduct of interconnection
studies are not just and reasonable. Neither NYISO nor Avangrid
disputes that there will be efficiency gains from transitioning to
cluster studies, which was a reform broadly supported by commenters. We
further expect that the more stringent requirements to enter the
interconnection queue set forth in Order No. 2023, including but not
limited to financial requirements,\580\ will help reduce speculative
interconnection requests. To the extent that volumes of interconnection
requests remain high, this counsels in favor of--not against--ensuring
that that transmission providers exercise the control they have over
the process to help ensure interconnection studies proceed more
expeditiously. As discussed, these reforms are necessary to ensure the
timely processing of interconnection requests and thereby remedy the
problem of unjust and unreasonable rates resulting from queue delays
and backlogs.
---------------------------------------------------------------------------
\580\ NYISO discusses the effects of increased deposits, but
Order No. 2023 also imposed site control requirements and withdrawal
penalties that we expect will also deter speculative interconnection
requests. Moreover, the MISO PowerPoint presentation that NYISO
cites is best understood as reflecting MISO's view that more
stringent queue requirements will help reduce speculative
interconnection requests. See MISO Presentation, Generator
Interconnection Queue Improvements, Planning Advisory Committee
(July 19, 2023), https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20GI%20Queue%20Improvements%20Proposal629634.pdf (proposing to increase such requirements and referring to its
current tariff rules as incentivizing speculative projects because
they require a ``small financial commitment'' and have ``ineffective
withdrawal rules'' that allow withdrawn requests ``to get most of
their money back, with interest, due to lack of penalties'').
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333. Indicated PJM TOs rely on a non-sequitur in claiming that the
existence of widespread study delays in 2022 is evidence that the
deadlines set in Order No. 2023 are ``inherently unreasonable.'' \581\
The mere existence of past study delays, under a standard that allowed
transmission providers significant discretion to extend those
deadlines, does not show that any given set of deadlines to perform
studies are unachievable or unreasonable.\582\ It particularly does not
demonstrate that the deadlines for the specific pro forma LGIP process
set forth in Order No. 2023, with the accompanying reforms to improve
efficiency, are not reasonable.\583\
---------------------------------------------------------------------------
\581\ Indicated PJM TOs Rehearing Request at 30.
\582\ Indeed, this is a one-size-fits-all argument that could be
directed toward essentially any effort to impose an interconnection
study deadline as a means of expediting the study process.
\583\ Indicated PJM TOs also cite new NERC standards that may
require additional study elements, broadly claiming that this will
add to transmission providers' workloads, Indicated PJM TOs
Rehearing Request at 30-31, but do not explain why any additional
workload associated with these standards would render the deadlines
set in Order No. 2023 unjust and unreasonable.
---------------------------------------------------------------------------
334. Dominion, MISO TOs, and NYISO assert that the ability to
extend a study deadline for 30 days by mutual agreement of the
transmission provider and all interconnection customers with
interconnection requests in the relevant study will not be effective in
practice.\584\ They contend that interconnection customers lack
incentives to agree to such an extension, particularly given that they
will be the beneficiaries of any assessed penalty, and that it will be
particularly infeasible to secure agreement from all interconnection
customers to such an extension.
---------------------------------------------------------------------------
\584\ Dominion Rehearing Request at 24; MISO TOs Rehearing
Request at 18-19; NYISO Rehearing Request at 35.
---------------------------------------------------------------------------
335. We are not persuaded by speculation that interconnection
customers will adopt an unreasonably adversarial approach to requests
for modest extensions to study deadlines. The interconnection process
is one that, by its nature, tends to require cooperation and
collaboration, and all parties have a continuing interest in this
process functioning smoothly.\585\ Moreover, because interconnection
customers have a particular interest in reliable interconnection
studies, interconnection customers are not well served by refusing to
accede to a transmission provider's reasonable request for an extension
that is necessary, particularly in light of unique circumstances, to
ensure accurate study results.\586\ Likewise, there may be
circumstances in which a modest extension of a cluster study would save
time, for all interconnection customers in a study, for example by
helping reduce the need for a restudy.\587\ The prospect that
interconnection customers may receive penalties for late studies is not
likely to override this need for collaboration and cooperation,
particularly given that any award of penalties to interconnection
customers is uncertain (given the availability of an appeal) and any
such penalties will be split among all interconnection customers
involved in the study. Moreover, this 30-day extension is just one
safeguard among several, to extend deadlines that we generally conclude
should be achievable on their own terms, such that we would still reach
the same result even if invocation of this safeguard turns out to be
uncommon in practice.
---------------------------------------------------------------------------
\585\ See, e.g., EEI Initial Comments at 16 (describing the
interconnection study process as benefitting from collaboration, in
which transmission providers ``work with project developers as they
refine their requests, redesign projects, or modify study parameters
for optimum results''); Eversource Initial Comments at 25 (similarly
describing interconnection as a collaborative process between the
interconnection customer and transmission provider); Indicated PJM
TOs Rehearing Request at 37 (describing the ``cooperative
engagement'' between transmission owners and interconnection
customers and providing examples of such collaboration to resolve
issues arising in the study process).
\586\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at P 30
(noting that the ``vast majority of commenters overwhelmingly
agree'' that reform of the Commission's pro forma interconnection
procedures and agreements is necessary ``to ensure that
interconnection customers are able to interconnect to the
transmission system in a reliable, efficient, transparent, and
timely manner''); MISO Initial Comments at 78 (``Errors or omissions
discovered later may drive the need for a restudy, causing
unscheduled surprises for Interconnection Customers who have already
made decisions based on the results of a rushed study.''); SPP
Initial Comments at 12 (``Interconnection Customers have expressed
to SPP that timely results that are inaccurate are useless and that
it is imperative that they be able to rely on study results to make
sound business decisions.''); cf. Order No. 2023, 184 FERC ] 61,054
at P 1007 (rejecting arguments that imposing study deadlines and
penalties will necessarily reduce study accuracy).
\587\ In addition, any such extension would be time-limited and
transparent, allowing interconnection customers to better plan
around such extensions as compared to ad hoc self-extensions under
the reasonable efforts standard. Cf. Fervo Reply Comments at 7-8
(explaining that under the status quo with the reasonable efforts
standard, interconnection customers face uncertainty, which imposes
barriers to entry); NARUC Initial Comments at 14 (explaining that
missed deadlines create uncertainty in bringing new generation
online); SEIA Initial Comments at 32 (noting that backlogs deprive
developers of needed business certainty, which can lead to issues
like losing site control rights and financing).
---------------------------------------------------------------------------
336. NYISO challenges the 10 day grace period, under which no
penalties would be assessed for a study delayed by no more than 10
business days, claiming that this grace period does not provide
meaningful relief to transmission providers that will study large
numbers of interconnection requests.\588\ This challenge is not
persuasive. The grace period is one component of the penalty
structure--and, again, one safeguard among several--through which Order
No. 2023 strikes an appropriate balance between
[[Page 27063]]
creating an incentive for transmission providers to help ensure that
interconnection studies are completed in a timely fashion, while not
being punitive. Specifically, the grace period, in particular, provides
a ``level of flexibility for transmission providers to address
unforeseen circumstances or complexities that arise in the study
process,'' \589\ which may necessitate modest delays. This grace period
was not intended to provide an automatic, lengthy extension to the
study deadlines.
---------------------------------------------------------------------------
\588\ NYISO Rehearing Request at 35 (arguing also that the grace
period should not be uniform given variability in study workloads
and challenges to the study deadlines themselves).
\589\ Order No. 2023, 184 FERC ] 61,054 at P 981.
---------------------------------------------------------------------------
337. Likewise, the longer transition period the Commission adopted
does not, as NYISO claims, simply ``postpone[ ] the RTO/ISO penalty
cost recovery problem.'' \590\ Rather, the transition period \591\ is
another measure to ensure that the structure adopted in Order No. 2023
provides incentives that are appropriate, but fair. The transition
period allows time for transmission providers to address and adapt to
the requirements of Order No. 2023, reduce backlogs, and address other
issues (which may include, for example, FPA section 205 filings to
address RTO/ISO penalty cost recovery).\592\ The transition process
will thus help ensure that the standards for timeliness set by Order
No. 2023 are reasonably achievable before penalties are assessed.
Neither of NYISO's arguments regarding the ten-day grace period or the
transition period demonstrates any defect in Order No. 2023's deadline
and penalty structure.
---------------------------------------------------------------------------
\590\ NYISO Rehearing Request at 37.
\591\ Under the transition process, in Order No. 2023, the
Commission specified that transmission providers already using a
cluster study process will not be subject to penalties until the
third cluster study cycle after the transmission providers'
compliance filing becomes effective. Order No. 2023, 184 FERC ]
61,054 at P 980.
\592\ Id. PP 979-80.
---------------------------------------------------------------------------
ii. Reasonableness of the Study Delay Penalty and Appeal Structure
(a) Requests for Rehearing
338. Many of the rehearing requests state that Order No. 2023
assigns penalties to transmission providers without an assessment of
fault, as a ``strict liability'' matter, until they demonstrate their
lack of fault through the appeals process.\593\ These rehearing
requests variously contend that this is unjust and unreasonable,
arbitrary and capricious, unsupported by substantial evidence,
inequitable, and/or offends due process. Many of them object to this
framework as placing the burden on the transmission provider or
transmission owner to demonstrate an entitlement to relief from the
assessed penalty.
---------------------------------------------------------------------------
\593\ See, e.g., MISO TOs Rehearing Request at 27-29; NYISO
Rehearing Request at 29-30 (arguing that ``[t]he Commission may not
reasonably presume that RTOs/ISOs should be penalized at the same
time that it recognizes that overwhelming record evidence
demonstrates that other parties will often be solely or
substantially responsible for delays'' and that RTO/ISO
interconnection metrics compliance reports under Order No. 845 are
specific evidence of how a variety of complex and interactive
factors can cause study delays); NYTOs Rehearing Request at 11-12,
23 (citing factors that may drive delays due to following Good
Utility Practice; asserting that only if the variables outside of a
transmission provider's control are removed can the Commission have
a sufficient evidentiary basis to determine the reasonable efforts
standard is unjust and unreasonable); PacifiCorp Rehearing Request
at 8-9.
---------------------------------------------------------------------------
339. Avangrid argues that the Commission has deemed transmission
providers who fail to meet the deadlines set forth in Order No. 2023
guilty unless they can prove their innocence and thereby denies
transmission providers and transmission owners due process.\594\
Avangrid argues that the appeals process is inequitable because it does
not ensure exoneration where a transmission provider is not at fault,
such as in the case of force majeure.\595\ Avangrid further asserts
that the lack of clarity concerning when relief will be granted
violates the fair notice doctrine and renders the appeals process
unjust and unreasonable.
---------------------------------------------------------------------------
\594\ Avangrid Rehearing Request at 12-13.
\595\ Id. at 15.
---------------------------------------------------------------------------
340. Indicated PJM TOs argue that the imposition of penalties
subject to an appeal mechanism applying a good cause standard
contravenes due process requirements.\596\ They assert that it is not
clear how the appeals process would apply to transmission owners
seeking relief from a penalty after an RTO or ISO has determined that
the transmission owner is responsible for some or all of the
penalty.\597\ Indicated PJM TOs claim that an RTO/ISO assignment of a
penalty cannot receive deference in a proceeding where a transmission
owner seeks relief from a penalty.\598\
---------------------------------------------------------------------------
\596\ Indicated PJM TOs Rehearing Request at 23.
\597\ Id. at 23-24 (arguing that it is ``not clear whether the
Commission intends to impose the burden of proof on transmission
owners to demonstrate that the assignment of costs by the
transmission provider was unreasonable'' or whether transmission
owners can show good cause by showing that the transmission provider
or another entity caused the delay).
\598\ Id. at 24 (arguing that the appeals process must be
conducted de novo); see also id. at 24-25 (asserting that the other
safeguards to the imposition of penalties that the Commission
adopted in Order No. 2023 are inadequate to alleviate these
concerns).
---------------------------------------------------------------------------
341. MISO TOs argue that the Commission erred in creating a ``no-
fault, strict liability regime'' whereas tort law reflects that strict
liability is only warranted in circumstances involving very dangerous
activities, such as product liability for harm caused.\599\ MISO TOs
also claim that the penalty and appeals structure conflicts with
Commission penalty procedures in enforcement cases by imposing a
penalty automatically unless the transmission provider pursues an
appeal, resulting in a deprivation of due process. They further contend
that the appeals process is lacking in detail and fails to address
these concerns because it puts the onus on the transmission provider to
appeal penalties--which the Commission does not review de novo--and
requires transmission providers to expend resources to seek relief for
penalties caused by the actions of others.\600\
---------------------------------------------------------------------------
\599\ MISO TOs Rehearing Request at 31-32 (citing Acosta
Orellana v. CropLife Int'l, 711 F. Supp. 2d 81, 105 (D.D.C. 2010)).
\600\ Id. at 34-36 (arguing that this inappropriately shifts the
Commission's burden to prove a violation to the transmission
provider to disprove it and asserting that it is not clear under
what statutory provision, or under what authority, the penalty
appeal will be conducted).
---------------------------------------------------------------------------
342. PacifiCorp claims that ``[t]he assessment of a civil penalty
before any agency adjudication is made violates the due process clause
of the Fifth Amendment to the U.S. Constitution.'' \601\ PacifiCorp
also objects that the transmission provider has the burden to show
``good cause'' and that the Commission suggested that ``if the
transmission provider offers proof that it did not cause the study
delay at issue, that is only `potentially' exculpatory.'' \602\
PacifiCorp further contends that Order No. 2023 lacks a cogent
explanation of the showing necessary to avoid a penalty, which offends
due process requirements and renders the appeal a moving target.\603\
---------------------------------------------------------------------------
\601\ PacifiCorp Rehearing Request at 8-9; see also id. at 4-5
(``The Final Rule violates the due process clause of the Fifth
Amendment to the U.S. Constitution by assessing penalties with no
development of a factual record about whether the transmission
provider did anything wrong.'').
\602\ Id. at 9 (citing Order No. 2023, 184 FERC ] 61,054 at P
993).
\603\ Id. (asserting that the Commission has well-established
standards for tariff waivers but has not been clear that the
traditional waiver standards apply).
---------------------------------------------------------------------------
343. NYISO contends that the appeals process wrongly places the
burden on RTOs/ISOs to demonstrate that they are not at fault, when
there are good reasons to anticipate that RTOs/ISO will not actually be
responsible for many study delays.\604\ Moreover, NYISO asserts that,
while the Commission has set forth certain factors it will consider, it
does
[[Page 27064]]
not provide guidance as to what exactly a transmission provider must do
to establish good cause for relief.\605\
---------------------------------------------------------------------------
\604\ NYISO Rehearing Request at 32-33 (noting that due process
requirements dictate fair and proportionate penalties, rather than
excessively punitive penalties) (citing Enf't of Statutes, Ords.,
Rules & Reguls., 132 FERC ] 61,216, at P 222 (2008); Enf't of
Statutes, Reguls. & Ords., 123 FERC ] 61,156, at PP 50-71 (2008)).
\605\ Id. at 33-34 (claiming that the burden will be
``unreasonably heavy'' given that the Commission decided not to
adopt a structure providing for penalties only when a factor causing
delay can conclusively be determined to be within a transmission
provider's control).
---------------------------------------------------------------------------
344. WIRES states that the penalty structure adopted by Order No.
2023 is not just and reasonable because it is a strict liability
approach that sanctions transmission providers for missing deadlines
for reasons beyond the control of those providers.\606\ WIRES asserts
that strict liability for penalties can only reasonably be imposed if
transmission providers have full control over the interconnection study
process, but the Commission has acknowledged that this is not the
case.\607\
---------------------------------------------------------------------------
\606\ WIRES Rehearing Request at 6-7.
\607\ Id. (arguing that penalties cannot reduce delays that
occur for reasons beyond the transmission providers' control).
---------------------------------------------------------------------------
345. NYTOs argue that the deadline and penalty structure, with the
right to seek relief through an appeal, is vague and impermissibly
presumes fault without conducting a de novo review of whether a penalty
is warranted.\608\ NYTOs claim that, in Order No. 2023, the Commission
has reserved its discretion to uphold a penalty even in the absence of
substantial evidence that a sanctioned transmission provider was at
fault, and that the Commission will grant whatever relief it determines
is appropriate.\609\
---------------------------------------------------------------------------
\608\ NYTOs Rehearing Request at 12-13.
\609\ Id. at 12; see also id. at 27 (asserting that Order No.
2023 does not confirm that transmission providers will not be
penalized when a delay is not their fault, and that the cost of an
appeal may cause transmission providers to accede to minor
penalties).
---------------------------------------------------------------------------
346. PJM argues that the Commission failed to adequately explain
its refusal to adopt a structure in which transmission providers incur
penalties only where a study delay is due to a factor that can be
conclusively demonstrated to be within a transmission provider's
control, and that it failed to show that this approach was consistent
with due process.\610\ PJM asserts that the appeals process is not just
and reasonable and violates the constitutional guarantee of due process
if it only provides due process ``to some extent.'' \611\ PJM argues
that ``[i]f a transmission provider knows it will be penalized for any
delay in interconnection studies regardless of its role in the delays,
and will have to appeal that penalty and demonstrate that the penalty
imposed on it should not be assessed, i.e., that it is guilty until it
can prove its innocence, it might reasonably ask what deterrence or
incentive purpose the penalty actually serves.'' \612\
---------------------------------------------------------------------------
\610\ PJM Rehearing Request at 31 (arguing that the Commission
has recognized the need to protect due process rights in other
instances; citing Enf't of Statutes, Reguls. & Ords., 123 FERC ]
61,156 at PP 40, 51; 16 U.S.C. 825o-1).
\611\ Id. (asserting that Order No. 2023 stated that ``details
such as whether the penalized transmission provider actually is
responsible for the study delay are `addressed to some extent
through the ability to appeal.' '' (quoting Order No. 2023, 184 FERC
] 61,054 at P 989)).
\612\ Id. at 31-32.
---------------------------------------------------------------------------
347. Certain of the rehearing requests also assert that the appeals
process set forth in Order No. 2023 is too vaguely defined. Avangrid
refers to the appeal as a ``vaguely-defined waiver process.'' \613\
MISO TOs assert that ``the appeals process is rife with ambiguity,
making it unworkable and overly time-consuming'' and lacks detail on
the process for an appeal, including the form and forum, whether
interventions will be permitted, whether discovery will be allowed, and
under what statutory provision the appeal is conducted.\614\ NYISO
asserts that the Commission did not indicate whether it would use fact-
finding neutrals, paper hearing procedures, or some other method to
conduct appeals of penalties, or how appeals would be further reviewed
on rehearing or under the APA.\615\ NYTOs state that the Commission
failed to explain how the process will work, including whether--in
assessing good cause--the Commission will apply the standard applicable
to tariff waivers, the burdens of proof, how genuine issues of material
fact will be adjudicated, clear standards for granting relief, and the
parameters of the appeals process.\616\
---------------------------------------------------------------------------
\613\ Avangrid Rehearing Request at 12-13.
\614\ MISO TOs Rehearing Request at 35-36.
\615\ NYISO Rehearing Request at 33-34.
\616\ NYTOs Rehearing Request at 24-25 & n.67 (asserting that
courts have found that due process requires hearing procedures for
the adjudication of genuine disputes of material fact; arguing that
the ``good cause'' standard is a novel ratemaking standard that the
Commission fails to justify).
---------------------------------------------------------------------------
348. A number of the rehearing requests assert that the Commission
should have adopted exceptions to the assessment of penalties for
failure to meet the required deadlines. Several of these rehearing
requests challenge the Commission's decision not to provide an
exception to such penalties for circumstances involving force
majeure.\617\ PacifiCorp argues, more broadly, that because study
delays are often driven by third parties or factors beyond the control
of transmission providers, the Commission should have adopted self-
effectuating exemptions for study delays that are outside of a
transmission provider's control.\618\ In support, PacifiCorp contends
that failing to provide such exemptions ``(1) ignores the frequency at
which delays are caused by third parties and; (2) mistakenly assumes:
(a) transmission providers can take actions to mitigate delays caused
by third parties, and (b) it is prudent for transmission providers to
increase expenditures in an effort to offset causes for delays that are
outside of their control.'' \619\
---------------------------------------------------------------------------
\617\ See Avangrid Rehearing Request at 15 (arguing that the
appeals process is inequitable because it does not ensure
exoneration where a transmission provider is not at fault, such as
in the case of force majeure or where the delay may be due to
multiple factors); EEI Rehearing Request at 8 (arguing that the
Commission failed to provide an exception for force majeure, which
has a specific definition in the pro forma LGIP and pro forma LGIA
reflecting circumstances beyond a parties' control, and asserting
that where a transmission provider has declared force majeure
assessing a penalty and requiring an appeal is an unnecessary burden
and will take time away from completing pending studies); NYISO
Rehearing Request at 37-38 (arguing that the Commission erroneously
failed to adopt the force majeure exception given the purported
flaws associated with the appeals process); NYTOs Rehearing Request
at 27 (requesting clarification on this point); PJM Rehearing
Request at 31-32 (``Moreover, the Final Rule fails to explain how
removing force majeure as a reason penalties would not apply and
refusing to impose penalties `only where a factor can be
conclusively demonstrated to be within a transmission provider's
control' is logical'').
\618\ PacifiCorp Rehearing Request at 13-15 (``Transmission
providers therefore should not: (1) be penalized if, as portrayed in
the example above, it takes more than 150 Calendar Days to complete
as the study due to responding to such interconnection customer
actions; or (2) expend resources and effort to submit an appeal when
the transmission provider is prudently incorporating changes from
one or more interconnection customers . . . .'').
\619\ Id. at 15.
---------------------------------------------------------------------------
349. Indicated PJM TOs and NYTOs also take issue with the
Commission's statement that appeals of penalties for missing study
deadlines ``should not be filed under FPA section 206.'' \620\
Indicated PJM TOs assert that, to the extent that the Commission
intends to withhold the right to seek relief under FPA section 206,
``[t]he Commission cannot deprive any aggrieved party of the right to
file a complaint under FPA section 206'' \621\ or limit the scope of
such challenges.\622\ NYTOs state that ``the appeals process specified
by the Order, which requires appeals to be
[[Page 27065]]
pursued under the Commission's procedural rules and not under section
206, effectively imposes a mandatory waiver of transmission providers'
statutory rights, which is contrary to law.'' \623\
---------------------------------------------------------------------------
\620\ Indicated PJM TOs Rehearing Request at 26 (citing Order
No. 2023, 184 FERC ] 61,054 at P 987 n.1911); NYTOs Rehearing
Request at 23.
\621\ Indicated PJM TOs Rehearing Request at 26 (citing Papago
Tribal Util. Auth. v. FERC, 723 F.2d 950, 953 (D.C. Cir. 1983)
(noting the Commission's ``indefeasible right . . . under [FPA
section] 206 to replace rates that are contrary to the public
interest''); Me. Pub. Util. Comm'n v. FERC, 454 F.3d 278, 283 (D.C.
Cir. 2006) (same)).
\622\ Id. (``The scope of a challenge could not be limited by
the factors the Commission identified as affecting a ``good cause''
determination, nor could it be limited to whether the transmission
owner caused or contributed to the study delay.'').
\623\ NYTOs Rehearing Request at 23 (citing Atl. City Elec. Co.
v. FERC, 295 F.3d 1, 10 (D.C. Cir. 2002) (Atl. City I)); see also
id. at 13.
---------------------------------------------------------------------------
350. Many of the rehearing requests argue that replacing the
reasonable efforts standard with the deadline and penalty structure set
forth in Order No. 2023 will have negative, unintended consequences.
Avangrid contends that this structure will result in transmission
providers focusing on ``processing speed and `checking the boxes'
specified in Order No. 2023 over providing flexibility and
collaboration with interconnecting generators on challenging issues
unique to their situations.'' \624\ Indicated PJM TOs add that this
structure will divert attention from optimal system planning.\625\ MISO
TOs and SPP emphasize that interconnection studies must be conducted
with precision to avoid inefficiency or costly mistakes.\626\ NYISO
argues that this structure will incentivize transmission providers to
prioritize meeting deadlines over ensuring the quality and completeness
of studies and that inferior studies conducted under time pressure
could lead to suboptimal results or negatively impact reliability.\627\
WIRES further asserts that this structure will require transmission
providers to take a more rigid approach to managing the interconnection
queue, reducing flexibility to allow interconnection customers to
redesign projects or modify their requests, and inhibit efforts to
streamline the interconnection process.\628\
---------------------------------------------------------------------------
\624\ Avangrid Rehearing Request at 13.
\625\ Indicated PJM TOs Rehearing Request at 34-37 (asserting
that transmission providers have no incentive to delay
interconnection studies and that it is ``is poor policy on the part
of the Commission to confront transmission planners with the
potential option of either avoiding concrete penalties associated
with a strict arbitrary deadline or taking more time to ensure that
a study is complete and comprehensive'' and noting the shortage of
qualified engineers).
\626\ MISO TOs Rehearing Request at 10, 16-17; SPP Rehearing
Request at 6, 8-9 (discussing examples of the consequences of
inaccurate or suboptimal studies).
\627\ NYISO Rehearing Request at 27-29 (arguing that the
Commission failed to provide a reasoned response to these concerns,
but instead dismissed them by asserting transmission providers can
increase timely study processing without necessarily facing such
tradeoffs); see also id. at 19 (arguing that this problem is
particularly acute for NYISO ``because New York State is pursuing
what is arguably the most ambitious clean energy agenda in the
country,'' driving high volumes of interconnection requests and that
New York City also presents the most complex reliability challenges
in the country).
\628\ WIRES Rehearing Request at 7-8.
---------------------------------------------------------------------------
351. Certain rehearing requests assert that the deadline and
penalty structure in Order No. 2023 will foster a combative atmosphere
and discord, potentially leading to delays. Avangrid asserts that this
structure incentivizes transmission providers to no longer use
reasonable efforts to work with interconnection customers to fulfill
the completeness of their application information and improve
effectiveness, but instead declare interconnection customers in breach
for delays and remove them from the interconnection process.\629\ PJM
asserts that the Commission failed to address arguments that this
structure would undermine collaboration, with RTOs and transmission
owners instead focusing on the need to simply protect against legal
exposure.\630\ Indicated PJM TOs assert that this structure will lead
to acrimony--particularly in the regions where the interconnection
queues are the longest--that will counter any efficiency gains.\631\
SPP similarly argues that Order No. 2023 leaves open the question of
how transmission providers would recover study delay penalties assessed
to them, and could erode the working relationship of RTOs and the
transmission owners in their footprint.\632\
---------------------------------------------------------------------------
\629\ Avangrid Rehearing Request at 14-15.
\630\ PJM Rehearing Request at 32-33.
\631\ Indicated PJM TOs Rehearing Request at 37-38.
\632\ SPP Rehearing Request at 8.
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352. Several of the rehearing requests argue that the deadline and
penalty structure will create administrative or other burdens on
transmission providers, which may be counterproductive because it will
consume the same resources that would otherwise be used to perform
interconnection studies. AEP argues that study delay penalties will
overcomplicate the interconnection process and increase litigation,
administrative burden, and costs.\633\ MISO TOs, PacifiCorp, and SPP
claim that imposing penalties on transmission providers will make it
more difficult to complete studies in a timely fashion because such
penalties will deprive them of funds that could be used for qualified
engineering personnel, and pursuing an appeal will create
administrative burdens.\634\ PJM claims that the Commission failed to
address difficulties in assigning fault for delays, which will likely
lead to litigation.\635\ PJM also argues that the penalty structure
will add time consuming study and reporting requirements, including
administration to track study metrics, pursue penalty appeals, and
collect and disburse penalty amounts. Indicated PJM TOs assert that the
burdens imposed by the deadline and penalty structure will further
strain already scarce utility resources, given other industry trends
that will likely increase transmission providers' workloads.\636\
---------------------------------------------------------------------------
\633\ AEP Rehearing Request at 28-29.
\634\ MISO TOs Rehearing Request at 17-18 (noting also the
shortage of qualified personnel and that the Commission did not
point to evidence of better software that would allow transmission
providers to escape study delay penalties); id. at 35 (noting that
the same personnel that perform interconnection studies will likely
be the fact witnesses in any Commission penalty appeal proceeding);
PacifiCorp Rehearing Request at 11-13 (arguing that it is highly
likely that appeals will be filed faster and more frequently than
the Commission can process them and noting that interconnection
customers will be incentivized to protest appeals, which will
increase administrative and resource costs of pursuing such
appeals); SPP Rehearing Request at 7, 9 (arguing also that this will
create a litigious environment that threatens timely study
completion).
\635\ PJM Rehearing Request at 32-33.
\636\ Indicated PJM TOs Rehearing Request at 38 (citing the need
to analyze advanced transmission technologies and increased burdens
surrounding modeling, and also noting that the same staff who are
responsible for processing interconnection requests will need to be
deployed to address disputes regarding interconnection study
timeliness).
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353. Indicated PJM TOs also note that managing new study deadlines
by deploying additional resources will come at a cost to transmission
providers.\637\ Indicated PJM TOs contend that the Commission failed to
consider the extent of such costs and their impacts in Order No. 2023.
Indicated PJM TOs also argue that the Commission failed to respond to
the argument that the NOPR misrepresented statements by Utah Public
Service Commission Chairman LeVar as providing support for study delay
penalties.
---------------------------------------------------------------------------
\637\ Id. at 39-40.
---------------------------------------------------------------------------
354. Indicated PJM TOs and NYTOs assert that Order No. 2023's
deadline and penalty structure will negatively affect transmission
providers' own efforts at reforming the interconnection process.\638\
Indicated PJM TOs claim that imposing this structure on regions that
have already adopted cluster-study processes, but chose to retain the
reasonable efforts standard, sends the message that their efforts to
reach consensus as to appropriate reforms do not matter.\639\ NYTOs
assert that strictly enforcing deadlines and penalties, without
exceptions, will hinder ongoing regional queue reform efforts, perhaps
stifling innovation and necessary
[[Page 27066]]
changes to address circumstances applicable in each region.\640\
---------------------------------------------------------------------------
\638\ Id. at 16-17; NYTOs Rehearing Request at 27.
\639\ Indicated PJM TOs Rehearing Request at 17.
\640\ NYTOs Rehearing Request at 27.
---------------------------------------------------------------------------
355. Dominion contends that the Commission failed to consider
whether the study deposits assessed for interconnection studies would
be sufficient to support the increased personnel costs required to
complete those studies by the deadlines set forth in Order No.
2023.\641\ Dominion further claims that there may be perverse
incentives for interconnection customers to delay the completion of
studies, given that customers can benefit from the penalty funds
awarded to them, and Order No. 2023 does not penalize such customers
for delays.
---------------------------------------------------------------------------
\641\ Dominion Rehearing Request at 23-24 (``There is also no
discussion in Order No. 2023 as to how cost recovery for these
expenses would be recovered other than through the study
deposits.''); see also id., attach. A (Affidavit of James R.
Bailey).
---------------------------------------------------------------------------
356. Certain of the rehearing requests also assert that the
deadline and penalty structure set forth in Order No. 2023 is one-
sided, and therefore unduly discriminatory or unjust and unreasonable,
noting that interconnection customers (or other parties) are not
subject to potential penalties for the role they may play in delayed
interconnection studies.\642\ Avangrid also contends that Order 2023's
incentives are one-sided, with interconnecting generators having both
``carrot'' incentives (in the form of profits from having generation
interconnected) and ``stick'' incentives, but transmission providers
and transmission owners, who perform generator interconnection
activities (often on a non-profit basis) are limited to avoiding the
``stick'' of a study delay penalty.\643\ Indicated PJM TOs assert that
the Commission's reasoning for declining to assess such penalties
against interconnection customers--that transmission providers may deem
non-compliant interconnection requests withdrawn--underestimates the
difficulty of removing an interconnection customer that fails to meet
deadlines from the queue, particularly given that customers may seek
redress at the Commission.\644\
---------------------------------------------------------------------------
\642\ See Avangrid Rehearing Request at 14; Indicated PJM TOs
Rehearing Request at 27-29; id. at 29 (arguing that while
modification of Order No. 2023 to subject interconnection customers
to penalties is necessary, it would only complicate the process
further and is an additional reason the penalty structure is not
workable); MISO TOs Rehearing Request at 28-29; NYTOs Rehearing
Request at 23-24.
\643\ Avangrid Rehearing Request at 7.
\644\ Indicated PJM TOs Rehearing Request at 28.
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357. Avangrid, MISO TOs, and NYTOs assert that the assessment of
penalties for failing to meet a study deadline without regard to fault
is confiscatory, asserting that this renders the penalties regulatory
takings in violation of the Takings Clause of the Constitution.\645\
Avangrid and NYTOs further contend that the penalty framework may
potentially deny recovery of costs incurred for interconnection studies
performed using good utility practice.\646\ MISO TOs assert that the
penalty framework may require transmission providers to perform
interconnection studies ``for free, simply if they miss a deadline.''
\647\
---------------------------------------------------------------------------
\645\ Avangrid Rehearing Request at 16 (citing FPC v. Hope
Natural Gas Co., 320 U.S. 591, 603 (1944) (Hope); Ameren Servs. Co.
v. FERC, 880 F.3d 571, 580 (D.C. Cir. 2018) (Ameren)); MISO TOs
Rehearing Request at 33-34; NYTOs Rehearing Request at 25-26.
\646\ Avangrid Rehearing Request at 16; NYTOs Rehearing Request
at 25-26 (``In properly balancing the interests of investors and
consumers, the Commission is required to allow the public utility
transmission provider to recover its reasonably incurred operating
expenses.'' (citing Hope, 320 U.S. at 603; Bluefield Water Works &
Improvement Co. v. Pub. Serv. Comm'n of the State of W.Va., 262 U.S.
679, 690 (1923); Ameren, 880 F.3d at 580, 581-82, 584-85; Jersey
Cent. Power & Light Co., 810 F.2d 1168, 1175 (D.C. Cir. 1987)
(Jersey Cent.)); see also id. at 28 (``penalties are shifted to
transmission owner members of RTOs/ISOs without regard to fault,
equity and the Takings Clause demand that the transmission owners
should be allowed to recover such costs'').
\647\ MISO TOs Rehearing Request at 33-34 (``The FPA does not
permit the Commission to compel utilities to provide service to
others for free.'' (citing Ameren, 880 F.3d at 582)).
---------------------------------------------------------------------------
(b) Determination
358. We disagree with the rehearing requests that argue that Order
No. 2023's penalty structure is unjust and unreasonable, violates due
process, or is otherwise inequitable because it is a ``strict
liability'' structure that assigns penalties to transmission providers
regardless of fault. To begin with, the imposition of standards of
performance--namely, deadlines--on transmission providers to conduct
interconnection studies was based on the need for reform to ensure the
timely processing of such studies given the control that transmission
providers exercise over the study process. Likewise, the deadlines were
selected based on timeframes that, as a general matter, should be
reasonably achievable for transmission providers under the pro forma
LGIP process, including other reforms adopted in Order No. 2023. As a
result, based on the record and the Commission's findings in this
proceeding, we have concluded that a failure to meet these deadlines
presumptively reflects that a transmission provider has failed to
respond appropriately to the need for timely interconnection study
processing such that a penalty is warranted in order to ensure just and
reasonable rates. That penalty reduces what transmission providers can
charge for interconnection studies that fail to meet the performance
standards set forth in Order No. 2023.
359. Moreover, the characterization of this structure as ``strict
liability'' is inaccurate because section 3.9(3) of the pro forma LGIP
provides a robust framework for transmission providers to appeal any
study delay penalties to the Commission. Under that framework, and
unlike a ``strict liability'' regime, transmission providers can raise
case-specific facts and circumstances for the Commission's
consideration in determining whether there is good cause to grant
relief from a penalty. The list of factors that the Commission set
forth in Order No. 2023 reflects that transmission providers have the
opportunity to demonstrate that a penalty for a late study is not
warranted, including based on considerations of the transmission
provider's conduct or lack of fault for any delay.\648\ In fact, the
Commission will consider affording relief based not just on the
transmission provider's conduct in any particular study, but also their
efforts to prevent future delays. This list of factors, while
reflecting the considerations that the Commission deems most likely to
be pertinent to establishing good cause for relief from a penalty, is
also non-exhaustive such that transmission providers may raise, for the
Commission's consideration, any other circumstances that they deem
pertinent to a request for relief.\649\ Any final Commission order
finding that there is not good cause for relief from a penalty is
subject to rehearing, as appropriate, and may also be subject to
judicial review, pursuant to FPA section 313.\650\
---------------------------------------------------------------------------
\648\ Order No. 2023, 184 FERC ] 61,054 at P 987 (``[T]he
Commission may consider, among other factors: (1) extenuating
circumstances outside the transmission provider's control, such as
delays in affected system study results; (2) efforts of the
transmission provider to mitigate delays; and (3) the extent to
which the transmission provider has proposed process enhancements
either in the stakeholder process or at the Commission to prevent
future delays . . . .'').
\649\ In this respect, the ``good cause'' standard allows the
Commission to consider the totality of the circumstances resulting
in any delay, as appropriate given the variety of facts and
circumstances that may arise; balances competing interests while
addressing concerns that the Commission provide for adequate due
process and fact-finding; and will help avoid punitive results. See
id. PP 987-89; cf. NYTOs Rehearing Request at 24 (arguing that the
``good cause'' standard is a novel standard that the Commission in
Order No. 2023 failed to justify).
\650\ 16 U.S.C. 825l (setting forth the procedures for a party
aggrieved by an order issued by the Commission to obtain judicial
review of such orders).
---------------------------------------------------------------------------
360. Arguments in the rehearing requests that the deadline and
penalty structure set forth in Order No. 2023
[[Page 27067]]
violates due process are not well developed, as they largely fail to
address the governing legal standards,\651\ or explain how Order No.
2023 is inconsistent with judicial or Commission precedent,\652\ in
this respect. Moreover, the Commission's adoption of the deadline and
penalty structure in Order No. 2023 reflects an exercise of its
ratemaking authority under FPA section 206, setting performance
standards associated with the conduct of interconnection studies and
financial consequences for the failure to meet those standards.\653\ In
this context, the Commission exercised its discretion to adopt an
appeals process. Although commenters have not established what, if any,
constitutional due process rights they might possess in this context,
we need not reach this question. Rather, based on the arguments that
have been presented and the record before us, we find that the deadline
and penalty structure in Order No. 2023 does not violate any
transmission providers' potential rights to due process and is just and
reasonable.
---------------------------------------------------------------------------
\651\ See, e.g., Mathews v. Eldridge, 424 U.S. 319 (1976)
(Mathews).
\652\ A limited exception is that certain of the rehearing
requests contend that the Commission's approach is inconsistent with
its enforcement policies. See NYISO Rehearing Request at 29-30; PJM
Rehearing Request at 31; infra P 417 (explaining that those
enforcement policies are not applicable in the ratemaking context).
\653\ See supra section II.D.1.c; infra section II.D.1.c.iv.
---------------------------------------------------------------------------
361. In particular, even assuming arguendo that transmission
providers have due process rights relating to the appeals process the
Commission chose to adopt in Order No. 2023, the hallmarks of due
process are fair notice and an opportunity to be heard.\654\
Transmission providers have received fair notice and an extensive
opportunity to be heard through this notice-and-comment rulemaking
proceeding as to, among other things, the conduct that (absent an
appeal demonstrating good cause for relief) will result in a
penalty,\655\ the amount of the potential penalty,\656\ and the ability
to seek relief from a penalty through the appeals process.\657\ The
appeals process provides a further opportunity, prior to any obligation
to distribute an assessed study penalty,\658\ for transmission
providers to be heard regarding whether relief from a particular
assessment of a penalty, on the facts of a given case, is
warranted.\659\ A party aggrieved by a Commission order addressing such
an appeal--which order will state the Commission's reasoning for any
denial of relief--has yet another opportunity to be heard by seeking
rehearing of that order.
---------------------------------------------------------------------------
\654\ Mathews, 424 U.S. at 348-49 (``The essence of due process
is the requirement that a person in jeopardy of serious loss (be
given) notice of the case against him and opportunity to meet it.
All that is necessary is that the procedures be tailored, in light
of the decision to be made, to the capacities and circumstances of
those who are to be heard to insure that they are given a meaningful
opportunity to present their case.'' (citations and quotation marks
omitted)).
\655\ See Order No. 2023, 184 FERC ] 61,054 at PP 962-63, 979-
83.
\656\ See id. PP 962, 973, 984.
\657\ See id. P 987.
\658\ See id. (``The filing of an appeal will stay the
transmission providers' obligation to distribute the study delay
penalty funds to interconnection customers until 45 calendar days
after (1) the deadline for filing a rehearing request has ended, if
no requests for rehearing of the Commission's decision or the appeal
have been filed, or (2) the date that any requests for rehearing of
the Commission's decision on the appeal are no longer pending before
the Commission.'').
\659\ See Opp Cotton Mills, Inc. v. Adm'r of Wage & Hour Div.,
312 U.S. 126, 152-53 (1941) (``The demands of due process do not
require a hearing, at the initial stage or at any particular point
or at more than one point in time in an administrative proceeding so
long as the requisite hearing is held before the final order becomes
effective.'').
---------------------------------------------------------------------------
362. Transmission providers also have fair notice \660\ of the
factors that the Commission has concluded are most likely to be
pertinent to demonstrating good cause for relief.\661\ We disagree that
the Commission must specify ``exactly'' what transmission providers
must do to demonstrate good cause for relief or that failing to do so
renders the appeal impermissibly vague or a ``moving target'' that
offends due process. The Commission's decisions addressing appeals will
also be subject to the standard requirements of administrative law
regarding reasoned decision-making, including that the Commission
develop a consistent body of precedent in considering such appeals and
explain any deviation from that precedent in a reasoned fashion.\662\
---------------------------------------------------------------------------
\660\ See, e.g., Fed. Express Corp. v. U.S. Dep't of Com., 39
F.4th 756, 773 (D.C. Cir. 2022) (explaining that ``[t]he Due Process
Clause's fair notice requirement generally requires only that the
government make the requirements of the law public and afford the
citizenry a reasonable opportunity to familiarize itself with its
terms and to comply'' and that even trained lawyers may find it
necessary to consult legal dictionaries, treatises, and precedent);
Ramsingh v. Transport. Sec. Admin., 40 F.4th 625, 636 (D.C. Cir.
2022) (``An enactment violates the Due Process Clause if it is so
vague that it fails to give ordinary people fair notice of the
conduct it punishes, or so standardless that it invites arbitrary
enforcement.'' (quotation marks omitted)).
\661\ Order No. 2023, 184 FERC ] 61,054 at P 987. Having set
forth these factors as most likely to be pertinent to a showing of
good cause, we do not intend to apply our traditional waiver factors
and confirm that the appeals process, as a tariff-specified
mechanism to seek relief from penalties, is distinct from seeking a
waiver of a tariff provision. See PacifiCorp Rehearing Request at 9-
10 (asserting that the Commission had not been clear as to whether
such waiver standards would apply).
\662\ See, e.g., Fairless Energy, LLC v. FERC, 77 F.4th 1140,
1147 (D.C. Cir. 2023) (agencies must generally conform to prior
practice and decisions or explain the reasons for departure from
precedent).
---------------------------------------------------------------------------
363. Indeed, arguments speculating that the Commission might, in
the appeals process, decline to afford relief where a transmission
provider believes the facts warrant relief, are premature. Arguments
that the Commission should or must grant relief from a penalty (such
that failure to do so is arbitrary and capricious, violates due
process, or is otherwise unlawful) can be raised in the context of the
appeals process in a given case, rehearing, and--if appropriate--
judicial review, where the particular facts of the case at issue have
been developed.\663\ The Commission is not at this time presented with
determining, and declines to prejudge, whether any particular set of
facts will necessarily warrant relief, as such considerations are best
left to a case-by-case assessment.\664\
---------------------------------------------------------------------------
\663\ See, e.g., Ohio Forestry Ass'n, Inc. v. Sierra Club, 523
U.S. 726, 732-33 (1998) (explaining that, in assessing whether an
argument is ripe for resolution, courts consider ``(1) whether
delayed review would cause hardship to the plaintiffs; (2) whether
judicial intervention would inappropriately interfere with further
administrative action; and (3) whether the courts would benefit from
further factual development of the issues presented''); Abbott
Lab'ys v. Gardner, 387 U.S. 136, 148-49 (1967) (explaining that the
basic rationale the ripeness requirement ``is to prevent the courts,
through avoidance of premature adjudication, from entangling
themselves in abstract disagreements over administrative policies,
and also to protect the agencies from judicial interference until an
administrative decision has been formalized and its effects felt in
a concrete way by the challenging parties'').
\664\ See N. Y. State Comm'n on Cable Television v. F.C.C., 749
F.2d 804, 815 (D.C. Cir. 1984) (``The decision whether to proceed by
rulemaking or adjudication lies within the Commission's discretion''
(citing N.L.R.B. v. Bell Aerospace Co. Div. of Textron, 416 U.S.
267, 293 (1974))).
---------------------------------------------------------------------------
364. A number of the rehearing requests assert that the appeals
process impermissibly places the burden of seeking relief from a
penalty on the transmission provider, rather than requiring that the
penalty be determined ``de novo'' before the Commission.\665\ Here,
too, the rehearing requests cite no legal authority supporting this
argument that the appeals process, for this reason, is unjust and
unreasonable, offends due process, or is otherwise unlawful. In Order
No. 2023, the Commission determined, as a rulemaking and based on the
record before it, that in the
[[Page 27068]]
context of what constitutes a just and reasonable rate, failure to meet
performance standards for the timely completion of interconnection
studies warrants a penalty that effectively reduces what transmission
providers can charge for interconnection studies that fail to meet
those standards. The appeals process is a safeguard in which the
transmission provider is the proponent of a requested order seeking
relief from the penalty.\666\ Requiring the transmission provider to
demonstrate good cause for relief is also just and reasonable under the
circumstances. The application of a penalty in defined amounts for
failure to meet study deadlines, absent a showing of good cause for
relief, helps to ensure that transmission providers are on notice of
the instances when penalties apply and in what magnitude, and that they
will take seriously the prospect of a penalty. Transmission providers
are also the entities with the most control over, and most knowledge
regarding, the conduct of the study process and the reasons that the
process may be delayed, such that it is reasonable to put the burden on
transmission providers to establish a basis for relief from a penalty.
---------------------------------------------------------------------------
\665\ See Order No. 2023, 184 FERC ] 61,054 at P 989 (``We
disagree with Indicated PJM TOs that a complete de novo review is
needed to assess study delay penalties. We find that the good cause
standard adopted in this final rule provides an adequate framework
through which the Commission can evaluate whether it is appropriate
to grant relief from any applicable penalties.'').
\666\ See, e.g., 5 U.S.C. 556(d) (``Except as otherwise provided
by statute, the proponent of a rule or order has the burden of
proof.''). Similarly, under FPA sections 205 and 206, the burden of
proof typically rests with the proponent of a Commission order. See
16 U.S.C. 824e(b); FirstEnergy Serv. Co. v. FERC, 758 F.3d 346, 353
(D.C. Cir. 2014); Midwest Indep. Transmission Sys. Operator, Inc.,
148 FERC ] 61,206, at P 51 (2014).
---------------------------------------------------------------------------
365. Likewise, we are not persuaded by arguments that, because
there are other factors that can contribute to interconnection study
delays, the imposition of penalties on transmission providers, under
the structure set forth in Order No. 2023, is not just and reasonable.
We disagree that adopting performance standards and incentives, in the
form of deadlines and penalties, in Order No. 2023 cannot be just and
reasonable unless the Commission first addresses and removes every
other variable that may influence the timely completion of
interconnection studies. As discussed above, the existence of multiple
factors that may delay interconnection studies is a consideration that
favors taking a comprehensive approach to address the unjust and
unreasonable rates resulting from interconnection queue backlogs.
Having found that the reasonable efforts standard was failing to ensure
adequate incentives for transmission providers for timely study
completion, we have also found that imposing deadlines \667\ subject to
penalties for late interconnection studies--subject to appropriate
safeguards \668\--will help ensure that transmission providers take the
steps that are within their control to ensure study timeliness.
---------------------------------------------------------------------------
\667\ See supra section II.D.1.c.i (explaining why the selected
deadlines are just and reasonable).
\668\ See supra PP 359, 361 (explaining, inter alia, that the
appeal process is a safeguard to address considerations relevant to
individual cases that may warrant relief).
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366. Arguments that the procedures for an appeal are too vaguely
defined are not meritorious. The Commission has broad discretion as to
procedural matters,\669\ and we conclude that the exercise of that
discretion on a case-by-case basis is appropriate, including because
doing so will help avoid undue administrative burdens attendant to
employing set procedures in appeals that may not require those
procedures. Similarly, as to NYTO's argument that cases involving
genuine disputes of material fact require hearing beyond evaluation of
a written record,\670\ the Commission can order such hearings in cases
that require them. If parties believe that particular procedures in a
given appeal are necessary or would be beneficial, they can so inform
the Commission in the context of that case.\671\
---------------------------------------------------------------------------
\669\ See Vt. Yankee, 435 U.S. at 524-25 (agencies have broad
discretion over the formulation of their procedures); Mich. Pub.
Power Agency v. FERC, 963 F.2d 1574, 1578-79 (D.C. Cir. 1992) (the
Commission has discretion to mold its procedures to the exigencies
of the particular case); Woolen Mill Assoc. v. FERC, 917 F.2d 589,
592 (D.C. Cir. 1990) (the decision as to whether to conduct an
evidentiary hearing is in the Commission's discretion).
\670\ See NYTO Rehearing Request at 24 n.67.
\671\ Similar to our reasoning above, see supra P 363, arguments
contending that a particular procedure may be required in a
particular case are premature.
---------------------------------------------------------------------------
367. We disagree with arguments that the Commission inappropriately
discouraged transmission providers from filing appeals of study delay
penalties under FPA section 206. Order No. 2023 only clarified that,
when a transmission provider that conducts interconnection studies
appeals study delay penalties incurred automatically under 18 CFR
35.28(f)(1)(ii) or Sec. 3.9 of the pro forma LGIP, that appeal should
not be filed under FPA section 206.\672\ The appeals process
supplements, rather than diminishes, the transmission provider's
ability to make a section 206 filing. To the extent that commenters are
concerned about the ability of a transmission owner to challenge a
penalty assigned to it by a transmission provider,\673\ we note that
nothing in Order No. 2023 prevents any entity from protesting a
transmission providers' FPA section 205 filing that seeks to assign
penalties or seeks to create a default structure for recovery of
penalty costs. Nor does Order No. 2023 prevent any entity from
challenging a transmission provider's assignment of study delay
penalties to that entity under FPA section 206. Nothing in Order No.
2023 prevents any entity from exercising any statutory filing rights.
---------------------------------------------------------------------------
\672\ Order No. 2023, 184 FERC ] 61,054 at PP 963, 987 n.1911.
\673\ Indicated PJM TOs Rehearing Request at 26 (``transmission
owners should be entitled to challenge the propriety or size of the
penalty amount assigned to it either `automatically' or by a
transmission provider as an unjust, unreasonable, or unduly
discriminatory rate based on grounds of its own choosing.).
---------------------------------------------------------------------------
368. We also disagree with NYTOs' suggestion that the requirement
for transmission providers to pursue appeals under the Commission's
procedural rules and not under FPA section 206 ``effectively imposes a
mandatory waiver of transmission providers' statutory rights, which is
contrary to law.'' \674\ The Commission did not foreclose transmission
providers' abilities to exercise their statutory rights, but rather
provided the appeals process as the avenue for transmission providers
to seek relief under the just and reasonable tariff process established
by Order No. 2023, applying the ``good cause'' standard, which provides
more flexibility and is more favorable to transmission providers than
requiring them to show that the penalty would be ``unjust and
unreasonable'' under FPA section 206. Because Order No. 2023 provided a
specific tariff-based mechanism for appeals, the filing of such appeals
under FPA section 206 is unnecessary.\675\
---------------------------------------------------------------------------
\674\ NYTOs Rehearing Request at 23 (citing Atl. City I, 295
F.3d at 10).
\675\ Transmission providers have initiated complaints under FPA
section 206 alleging that their own tariff provisions are unjust and
unreasonable, but this procedure is generally used when there is no
other mechanism by which a transmission provider could change or
challenge such tariff provisions. For example, PJM has initiated FPA
section 206 complaints regarding its own Operating Agreement because
it does not have FPA section 205 filing authority to file market
rule changes to the Operating Agreement without supermajority
stakeholder approval. See, e.g., PJM Intra-PJM Tariffs, Sec. 8.4,
OA Sec. 8.4 (Manner of Acting) (1.0.0); PJM Interconnection,
L.L.C., 180 FERC ] 61,051, at PP 8-9 (2022).
---------------------------------------------------------------------------
369. We sustain the decision, in Order No. 2023, not to create
generic exceptions for study delay penalties or to exempt transmission
providers from such penalties in cases where they assert that force
majeure applies, for the reasons articulated in Order No. 2023.\676\ In
further support, we find that creating ``self-effectuating'' exceptions
[[Page 27069]]
to penalties where a delay is caused by factors outside of the control
of the transmission provider is not a preferable approach to the
appeals process, particularly given that there may be disputes as to
whether and to what extent a delay was within a transmission provider's
control. Creating an exemption for circumstances of force majeure is an
example of this problem, as there may be disputes as to whether the
declaration of force majeure was valid or the extent to which a delay
is attributable to the alleged force majeure. The appeals process is a
just and reasonable approach to addressing these issues.
---------------------------------------------------------------------------
\676\ See Order No. 2023, 184 FERC ] 61,054 at PP 1003, 1019,
1024 (explaining that transmission providers could raise these
issues in an appeal). For the same reasons, we deny NYTO's request
for clarification on this point.
---------------------------------------------------------------------------
370. MISO TOs' argument that strict liability under tort law is
only imposed in circumstances involving very dangerous activities is
not persuasive. As discussed above,\677\ the adoption of a deadline and
penalty structure in Order No. 2023 is supported by the record in this
case and does not reflect a ``strict liability'' approach that is
analogous to these tort law regimes. Nor did the Commission rely on
tort law governing hazardous activities to support Order No. 2023.\678\
---------------------------------------------------------------------------
\677\ See supra PP 358-359.
\678\ Cf. Order No. 2023, 184 FERC ] 61,054 at PP 1001, 1013,
1015 (discussing Commission precedent for the approach in Order No.
2023 including traffic ticket penalties and penalties under Order
No. 890); infra section II.D.1.c.v (same); infra section II.D.1.c.iv
(discussing Order No. 2023 as an application of the Commission's
ratemaking authority).
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371. We disagree with arguments that Order No. 2023 created a
strict liability structure. The portion of Order No. 2023 quoted by
NYISO's request for rehearing in this respect \679\ was addressing the
ability to appeal--the mechanism through which transmission providers'
responsibility for delay in individual cases can be assessed.\680\ We
have already explained, in both Order No. 2023 and herein, why the
presumptive imposition of penalties on transmission providers should
they fail to meet their study deadlines, with a subsequent evaluation
of whether relief is warranted in a particular case, reflects reasoned
decision-making and is a just and reasonable approach.
---------------------------------------------------------------------------
\679\ See NYISO Rehearing Request at 29-30.
\680\ Order No. 2023, 184 FERC ] 61,054 at P 989. The Commission
was particularly explaining that it would be inappropriate to adopt
a structure providing for penalties ``only where a factor can be
conclusively demonstrated to be within a transmission provider's
control, as this would impose significant administrative burden.''
Id.
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372. We also disagree with arguments that Order No. 2023's
implementation of a study delay penalty structure is unjust and
unreasonable, or unduly discriminatory or preferential, because it
limits the assessment of penalties for late studies to transmission
providers rather than also extending them to other entities--including
interconnection customers--that may contribute to delays of
interconnection studies. We similarly disagree with claims that Order
No. 2023's incentives are impermissibly one-sided. Interconnection
customers and transmission providers are not similarly situated with
respect to the conduct of interconnection studies: transmission
providers control and are responsible for the conduct of those studies,
while other entities, including interconnection customers, generally
are not.\681\ Moreover, transmission providers are further differently
situated from interconnection customers because interconnection
customers already are subject to significant incentives to avoid
delaying the study process that transmission providers do not face.
These include interconnection customers' interest in achieving timely
commercial operation of their facilities, that failure to meet their
obligations in the interconnection process may result in their
interconnection requests being deemed withdrawn,\682\ and that they may
be subject to withdrawal penalties.\683\ The adoption of a penalty
structure for transmission providers that fail to meet the study
timeframes set by Order No. 2023 reflects, in part, that transmission
providers lacked adequate incentives to ensure study timeliness and the
role they can play in ensuring the timeliness of interconnection study
processes.\684\ It further reflects that the value of interconnection
studies depends in part on their timely completion and, therefore, that
it is reasonable that transmission providers may recover less for these
studies where they are delayed without good cause.\685\ Thus, we
disagree that we must apply the study delay penalties set by Order No.
2023 to these other entities.
---------------------------------------------------------------------------
\681\ See, e.g., Ark. Elec. Energy Consumers v. FERC, 290 F.3d
362, 367 (D.C. Cir. 2002) (``A rate is not `unduly' preferential or
`unreasonably' discriminatory if the utility can justify the
disparate effect.''); Cities of Bethany v. FERC, 727 F.2d 1131, 1139
(D.C. Cir. 1984) (Cities of Bethany); El Paso Nat. Gas Co., 104 FERC
] 61,045, at P 115 (2003) (``Discrimination is undue when there is a
difference in rates or services among similarly situated customers
that is not justified by some legitimate factor.'').
\682\ Being deemed withdrawn from the interconnection queue
carries significant consequences for an interconnection customer,
and--while the interconnection customer may dispute that decision--
loss of queue position occurs automatically after a failure to cure
(if an opportunity to cure is allowed) and lasts ``until such time
that the outcome of Dispute Resolution would restore its Queue
Position.'' Pro forma LGIP section 3.7. We are therefore not
persuaded by Indicated PJM TOs' suggestion that this will not be a
significant consideration discouraging interconnection customers
from delaying interconnection studies. See Indicated PJM TOs
Rehearing Request at 28.
\683\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 37, 43,
50, 780-84, 1020; pro forma LGIP section 3.7.
\684\ See Order No. 2023, 184 FERC ] 61,054 at PP 50, 968, 972.
\685\ See id. P 972 (``The study delay penalty structure adopted
in this final rule balances the harm to interconnection customers of
interconnection study delays and the associated need to incentivize
transmission providers to timely complete interconnection studies
with the burdens on transmission providers of conducting
interconnection studies and potentially facing penalties for delays,
including those that may be caused or exacerbated by factors beyond
their control.'').
---------------------------------------------------------------------------
373. We are also not persuaded by arguments that under Order No.
2023's deadline and penalty structure, interconnection customers are
incentivized to affirmatively delay the completion of interconnection
studies. As explained in Order No. 2023, the economic harms to the
interconnection customer of delayed study completion significantly
outweigh any incentive to delay the interconnection process.\686\
Moreover, the appeals process available to transmission providers
undermines any incentive for strategic delay on the part of
interconnection customers because it provides an opportunity for
transmission providers to argue for relief from penalties, including
because delays were caused by factors beyond their control, such as the
actions of interconnection customers. And even if a transmission
provider is subject to a penalty, those amounts will be distributed
among all the interconnection customers included in the relevant study
that did not withdraw, which further reduces the purported incentive
for any individual interconnection customer to cause delays, as they
will not receive the entirety of any penalty assessed to the
transmission provider.
---------------------------------------------------------------------------
\686\ Id. P 1020.
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374. Many of the rehearing requests contend that the study deadline
and penalty structure under Order No. 2023 will have certain negative
consequences. As explained below, we continue to find this structure to
be just and reasonable, notwithstanding these arguments. In many cases
we disagree that these purported negative consequences will manifest
and, to the extent there may be such consequences, we continue to find
that Order No. 2023's deadline and penalty structure is just and
reasonable.
375. The Commission in Order No. 2023 concluded that there is not
an inherent trade-off between firm study deadlines with study delay
penalties
[[Page 27070]]
versus ``interconnection study flexibility and accuracy, as well as
system reliability.'' \687\ As explained in Order No. 2023, we are not
persuaded by arguments on rehearing that such deadlines and penalties
will necessarily incentivize speed and meeting deadlines over accuracy,
with deleterious results. These arguments present a false dichotomy
between the accuracy of interconnection studies and their timely
completion,\688\ fail to give appropriate weight to the reliability and
economic risks associated with failure to timely interconnect new
generating facilities,\689\ and fail to consider the safeguards adopted
in the deadline and penalty structure that allow transmission providers
avenues of relief from the strict application of study deadlines.\690\
---------------------------------------------------------------------------
\687\ Id. P 1007.
\688\ See id. (``We reiterate that it is within transmission
providers' ability to improve interconnection study processes and
policies and take other measures, such as hiring additional staff,
to efficiently process interconnection queues without sacrificing
accuracy, flexibility, or reliability.''); id. (also noting that
transmission providers can recover increased costs of
interconnection studies); see also supra section II.D.1.c.i
(explaining that the deadlines selected for the completion of
interconnection studies are just and reasonable).
\689\ See Order No. 2023, 184 FERC ] 61,054 at P 1007 (``[W]e
further agree that the failure to bring new generating facilities
online in a timely manner can also create reliability and economic
risk.'').
\690\ See id. (``[T]he study delay penalty structure includes
significant safeguards for the transmission provider, such as the
transition period, the 10-business day grace period, the penalty
cap, the ability to extend deadlines by mutual agreement, and the
ability to appeal any study delay penalties to the Commission.'');
id. P 1005 (``If, for whatever reason, the transmission provider is
not able to meet firm study deadlines, that is an issue the
transmission provider is free to raise in appealing any penalties it
incurs.'').
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376. We are also not persuaded that Order No. 2023's deadline and
penalty structure will foster a combative atmosphere, potentially
increasing delays. As noted above, the interconnection process is one
that has generally been characterized by cooperation.\691\
Interconnection customers and transmission providers--who are all
generally professional and sophisticated parties--share a reciprocal
interest in the smooth functioning of the interconnection process.
While it is possible that, in some cases, the increased accountability
on transmission providers for timely interconnection study completion
may mean that transmission providers are less inclined to accede to
interconnection customer actions that may delay the study process, we
find that--given the need to ensure timely interconnection study
completion to ensure just and reasonable rates--this possibility is an
acceptable consequence of Order No. 2023.\692\ Indeed, it reflects that
transmission providers can use the knowledge and control they have with
respect to the study process to ensure that individual interconnection
customers are not allowed to unduly delay the overall study
process.\693\ As to claims that the deadline and penalty structure may
motivate transmission providers, including RTOs/ISOs and transmission
owners, to focus on the need to protect against exposure to penalties
and undermine constructive collaboration among them, the principal way
for these entities to minimize that exposure will be to endeavor to
complete interconnection studies in a timely fashion, which is the
purpose of the deadline and penalty structure. In this respect, the
interests of RTOs/ISOs and transmission owners will be aligned, and we
expect that Order No. 2023 will not undermine the incentives for
cooperation among RTOs/ISOs and transmission owners.
---------------------------------------------------------------------------
\691\ See supra P 335.
\692\ The various safeguards attendant to the deadline and
penalty structure should also limit the likelihood that transmission
providers feel constrained to take an unduly stringent response to
reasonable interconnection customer requests.
\693\ In this respect, the adoption of a deadline and penalty
structure for transmission providers to ensure timely study
completion may translate into increased accountability for
interconnection customers not to delay the study process.
---------------------------------------------------------------------------
377. Several of the rehearing requests contend that adoption of
interconnection study deadlines and penalties, with an appeals process,
will divert resources that would otherwise be used for interconnection
studies. We sustain the Commission's rejection of these arguments, for
the reasons already stated in Order No. 2023.\694\ We particularly note
that it is not the case that the funds used to pay for penalties (or to
appeal such penalties) necessarily must be diverted from those used to
perform interconnection studies.\695\ Indeed, although we do not
prejudge the facts of any particular case, it would not appear to be
generally rational or appropriate for a transmission provider to
respond to the assessment of a penalty for a late interconnection study
by diverting significant resources from future interconnection studies
in a way that will increase the likelihood that it will incur
additional penalties.
---------------------------------------------------------------------------
\694\ See Order No. 2023, 184 FERC ] 61,054 at P 1005; see also
id. P 1007 (noting that the costs of timely completing
interconnection studies are ultimately borne by interconnection
customers)
\695\ See, id. P 992 (noting that at-fault transmission
provider's shareholders may pay the penalty).
---------------------------------------------------------------------------
378. Similarly, while several rehearing requests contend that
managing deadlines and penalties, as well as the appeals process, may
create burdens on transmission providers, we conclude that--
particularly given the need for replacement of the reasonable efforts
standard with a standard that will better ensure the timeliness of
interconnection study completion--the deadline and penalty structure is
just and reasonable notwithstanding such burdens. Here, too, we do not
believe it would be rational or appropriate for a transmission provider
to divert significant resources from the timely completion of
interconnection studies to the appeals process. As stated above, when
considering appeals the Commission intends to exercise its discretion
as to procedural matters on a case-by-case basis, which will help
reduce the burdens attendant to pursuing an appeal.\696\ Moreover, many
alternative mechanisms directed toward ensuring study timeliness would
consume transmission provider resources to explain why they are not
responsible for study delays, and likewise invite arguments from other
entities addressing such responsibility, but would have lesser utility
in responding to the problem of interconnection queue backlogs.\697\ In
addition, the amounts of the penalties \698\ are not so large that we
expect that transmission providers will unduly divert large amounts of
resources to an appeal of penalties, particularly those assessed for
relatively short delays.\699\ While the administrative appeals process
may draw protests, e.g., by interconnection customers, resulting in
litigation, filing those protests and engaging in such litigation will
also consume resources for the filing parties and any penalty funds
assessed to the transmission provider will be allocated among the
relevant interconnection customers.
[[Page 27071]]
This decreases the incentive to file protests in cases where delays are
small and penalty amounts are low or where there is not a genuine,
credible dispute as to where responsibility for a delay of an
interconnection study properly resides.\700\ We conclude that the
burdens that Order No. 2023 places on transmission providers do not
render the rule unjust and unreasonable.
---------------------------------------------------------------------------
\696\ See supra P 366.
\697\ See infra PP 429-430 (discussing why the Commission found
that differences between deadline and penalty structure under Order
No. 2023 and the structure under Order No. 890 were warranted).
\698\ See Order No. 2023, 184 FERC ] 61,054 at P 962 (``[D]elays
of cluster studies beyond the tariff-specified deadline will incur a
penalty of $1,000 per business day; delays of cluster restudies
beyond the tariff-specified deadline will incur a penalty of $2,000
per business day; delays of affected system studies beyond the
tariff-specified deadline will incur a penalty of $2,000 per
business day; and delays of facilities studies beyond the tariff-
specified deadline will incur a penalty of $2,500 per business
day.'').
\699\ The 10-day grace period also helps to address concerns
that, for relatively short delays leading to minor penalties,
transmission providers may wish to forego the burdens of seeking
such an appeal. See NYTOs Rehearing Request at 27. It is, of course,
up to transmission providers to manage their resources and determine
whether taking an appeal of a minor penalty is in their best
interest.
\700\ We are also not persuaded by PacifiCorp's suggestion that
the appeals process is not workable because ``it is highly likely
that appeals will be filed faster and more frequently than the
Commission can process them,'' PacifiCorp Rehearing Request at 12,
which is founded on speculation that transmission providers will
frequently fail to meet their deadlines leading to such appeals, and
that such appeals will be onerous to process.
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379. While Dominion argues that higher study deposits may be
necessary to address increased personnel costs resulting from the
penalty regime, Dominion fails to acknowledge that the Commission has
already significantly increased the required study deposits for
interconnection customers in Order No. 2023,\701\ and that study costs
exceeding study deposits can be recovered from interconnection
customers.\702\ We are therefore not persuaded by this argument.
---------------------------------------------------------------------------
\701\ See pro forma LGIP section 3.1.1.1. To the extent that
study deposits must be further increased, beyond these levels, the
Commission can consider that going forward, including in response to
compliance proposals or--if necessary--further reforms to the pro
forma LGIP.
\702\ Order No. 2023, 184 FERC ] 61,054 at P 1007; see also,
e.g., pro forma LGIP sections 7.1, 8.1, 9.4, 13.3, app. 2 at section
6, app. 7 at section 7, app. 8 at sections 7-8, app. 9 at section 6,
app. 10 at section 6.
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380. We do not agree with Indicated PJM TOs' contention that
adopting a structure of deadlines and penalties for regions that have
already adopted a cluster study process sends a message that their
stakeholder processes do not matter. That the Commission found, in
generic proceedings, that a suite of reforms to its pro forma LGIP and
pro forma LGIA approach to interconnection were necessary to ensure
just and reasonable rates does not reflect any disparagement of an
individual entity's or region's efforts at similar reforms, such as the
adoption of cluster studies. The Commission has found that adoption of
a cluster study approach is such a just and reasonable reform, but that
additional reforms are also necessary. Adopting Indicated PJM TOs'
contrary view in this case would--in effect--be to conclude that the
Commission should have adopted a self-imposed limit on acting through a
generic proceeding out of deference to stakeholder processes that have
resulted in only a partial solution to the problem at hand, contrary to
the Commission's FPA section 206 authority and obligation to ensure
just and reasonable rates.\703\
---------------------------------------------------------------------------
\703\ This argument also overlooks transmission providers'
ability to propose alternative reforms, as informed by their
stakeholder processes, under the ``consistent with or superior to''
or ``independent entity variation'' standards, as applicable. See
Order No. 2023, 184 FERC ] 61,054 at P 1764.
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381. We are further not convinced by NYTOs' claim that if Order No.
2023's deadlines and penalties are strictly enforced without exceptions
(such as demonstration of compliance with Good Utility Practice or the
presence of force majeure), it will hinder ongoing regional queue
reform initiatives. This argument is conclusory and unexplained as to
why strict application of deadlines and penalties without such
exceptions would have this alleged effect.\704\ Regardless, Order No.
2023 does not provide for an unduly inflexible approach by allowing for
numerous flexibilities including the appeals process, as explained
above.
---------------------------------------------------------------------------
\704\ Cf. id. P 967 (``The reasonable efforts standard worsens
current-day challenges, as it fails to ensure that transmission
providers are keeping pace with the changing and complex dynamics of
today's interconnection queues.'').
---------------------------------------------------------------------------
382. We are not persuaded by PJM's claim that under Order No. 2023
transmission providers will incur penalties on a strict liability
basis, reducing their deterrence and incentive effects. As already
discussed, Order No. 2023 does not adopt a ``strict liability''
approach to penalties.\705\ More fundamentally, PJM fails to explain
why a penalty as a presumptive matter, based on objective conduct, that
is then subject to an appeal, would reduce the incentive to avoid
triggering the penalty.\706\ Indeed, PJM's argument here appears
circular: in support of its claim that the penalty structure in Order
No. 2023 will reduce the deterrence and incentive effects of a penalty,
PJM offers nothing more than a characterization of that structure and
assertion that this structure will cause transmission providers to
question the deterrence or incentive purpose of the penalty.
---------------------------------------------------------------------------
\705\ See supra PP -360. Indeed, PJM acknowledges that
transmission providers have the ability to ``demonstrate that the
penalty imposed on it should not be assessed.'' PJM Rehearing
Request at 31.
\706\ The economically rational response to a potential penalty,
even one that is presumptively applied subject to an appeal, is to
take the steps necessary to avoid or reduce the penalty, to the
extent that the cost of taking such steps is lower than the expected
value of the reduction in the amount of the penalty.
---------------------------------------------------------------------------
383. NYISO also claims that the Commission increased penalty levels
from the levels proposed by the NOPR without sufficient explanation. It
asserts that the example the Commission provided in support of doing
so--explaining that, under the NOPR approach, a full six months of
study delay (roughly 126 business days) would result in an estimated
penalty of only $63,000 \707\--does not support this result or show
that the penalties adopted in Order No. 2023 will be non-punitive.\708\
We sustain the Commission's determination to increase the study delay
penalties as specified in Order No. 2023.\709\ This example reflects
that, under the NOPR penalty amount, a transmission provider that takes
roughly twice as long as allowed to perform a cluster study would incur
a relatively modest penalty,\710\ which we find would not provide an
appropriate incentive to spur the investments or allocation of
resources necessary to facilitate timely study completion, or strike an
appropriate balance between transmission provider and interconnection
customer interests.\711\ One point of comparison supporting this
conclusion is to consider that a single proposed 250 MW generating
facility is required to tender $755,000 (i.e., a $5,000 application
fee, a $250,000 study deposit, and a $500,000 commercial readiness
deposit in cash or as an irrevocable a letter of credit) to enter the
study process under the Commission's pro forma LGIP.\712\ That facility
must then progressively increase its investment in the process through
increasing deposits, study costs, and potential withdrawal penalties,
not to mention the dedication of resources to develop the project and
shepherd it through the interconnection process.\713\
[[Page 27072]]
Viewed in this context, we disagree that the revised penalty amounts
are punitive on their own, and they are particularly not punitive when
considered in light of the safeguards \714\ provided and avenues for
RTO/ISO penalty cost recovery.
---------------------------------------------------------------------------
\707\ See Order No. 2023, 184 FERC ] 61,054 at P 975.
\708\ NYISO Rehearing Request at 37 (arguing that this does not
demonstrate that the Commission has set non-punitive penalty levels,
particularly as applied to RTOs/ISOs).
\709\ See Order No. 2023, 184 FERC ] 61,054 at PP 973-78.
\710\ Cf., e.g., pro forma LGIP section 3.1.1.1 (specify study
deposit amounts for each interconnection request).
\711\ See Order No. 2023, 184 FERC ] 61,054 at P 975 (``We view
such a penalty as insufficient considering that the purpose of the
penalty is to incentivize timely study completion that may be
achieved, for example, by hiring additional personnel or investing
in new software.''); cf., e.g., EPSA, 577 U.S. at 295 (ratemaking
involves both technical understanding and policy judgment); Cities
of Bethany, 727 F.2d at 1138 (explaining that because ``ratemaking
is less of a science than it is an art'' such that ``substantial
deference'' to the Commission's expert judgment is warranted (citing
Alabama Elec. Co-op., Inc. v. FERC, 684 F.2d 20, 27 (D.C. Cir.
1982)).
\712\ See pro forma LGIP section 3.1.1.1 (requiring $5,000
application fee and a $250,000 study deposit for interconnection
requests greater than or equal to 200 MW) and section 3.4.2(vi)
(requiring a commercial readiness deposit of twice the study
deposit).
\713\ See, e.g., pro forma LGIP sections 7.5(1)(b), 8.1(3), 11.3
(requiring adjustments to commercial readiness deposits to equal an
increasing percentage of interconnection customer's assigned network
upgrade cost as the customer progresses through the interconnection
process); section 13.3 (requiring the interconnection customer to
pay for interconnection study costs); and section 3.7.1 (unless
certain exemptions apply, requiring interconnection customer that
withdraws from the interconnection process to pay a withdrawal
penalty that increases as the customer progresses through the
interconnection process).
\714\ Order No. 2023, 184 FERC ] 61,054 at P 976 (``Based on the
record before us, we believe the $1,000/$2,000/$2,500 per business
day penalty structure, combined with the transition, grace period,
cap on penalties, and ability to appeal that we adopt below, strikes
an appropriate balance because it creates an incentive for
transmission providers to meet study deadlines while not being
overly punitive.'').
---------------------------------------------------------------------------
384. We disagree with Indicated PJM TOs' and Dominion's contentions
that the penalty and deadline framework is unduly discriminatory,
citing the uneven distribution of interconnection requests among
transmission providers, such that some transmission providers may face
a heightened risk of penalties as compared to other transmission
providers. At the outset, given the structure of Order No. 2023--under
which we have imposed deadlines that should be reasonably achievable,
replaced the serial study process with cluster studies, and afforded
several safeguards, including the appeals process \715\--it is not
necessarily the case that some transmission providers will be more
likely to have to pay penalties than others based on the uneven
distribution of interconnection requests. Moreover, transmission
providers may propose variations from the requirements of Order No.
2023, under the applicable standard, which provides a further vehicle
to ensure that the late study deadline and penalty structure does not
unduly burden certain transmission providers as compared to others.
---------------------------------------------------------------------------
\715\ Dominion and Indicated PJM TOs' arguments also presuppose
that, in any appeal, the Commission would find there is not good
cause for relief from penalties, on the facts of the relevant case.
That the Commission can consider the individualized factors in a
particular case to determine whether to grant relief from penalties
is another avenue to ensure that undue discrimination does not
occur.
---------------------------------------------------------------------------
385. But even accepting, arguendo, the premise of this argument
that such disparate outcomes might occur, we disagree that this would
necessarily render Order No. 2023's penalty structure unduly
discriminatory. The increased possibility for penalties to be assessed
in regions facing higher volumes of interconnection requests
necessarily results from the increased likelihood of delayed results in
those regions. That, however, correspondingly reflects in an increased
need in these regions to ensure timely processing of those
requests.\716\ Thus, any increased possibility of penalties in those
regions is a just and reasonable and not unduly discriminatory
result.\717\
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\716\ Similarly, where transmission providers are facing
comparatively high volumes of interconnection requests in a given
cluster study, there are more interconnection customers who will
face uncertainty and increased costs due to any delays.
\717\ See, e.g., AEMA, 860 F.3d at 670-71 (``The law provides no
basis to claim the Commission cannot approve uniform performance
requirements simply because those requirements will be easier to
satisfy for some generators than for others. . . . Using an annual
performance standard is a reflection of the Commission's policy
judgment as to the level of capacity performance the market
requires, not an undue privileging of one resource's costs over
another's.''); BP Energy Co. v. FERC, 828 F.3d 959, 967 (D.C. Cir.
2016) (``No undue discrimination exists where there is `a rational
basis for treating [two entities] differently' and such differential
treatment is `based on relevant, significant facts which are
explained.'' (quoting Complex Consol. Edison Co. of N.Y., Inc. v.
FERC, 165 F.3d 992, 1012-13 (D.C. Cir. 1999))); Town of Norwood,
Mass. v. FERC, 202 F.3d 393, 402 (1st Cir. 2000) (explaining that
``differential treatment does not necessarily amount to undue
preference where the difference in treatment can be explained by
some factor deemed acceptable by the regulators (and the courts)''
(emphasis in original) (citing Cities of Newark v. FERC, 763 F.2d
533, 546 (3d Cir. 1985))).
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386. We reject arguments from Avangrid, MISO TOs, and NYTOs that
incurring a penalty for failure to meet an interconnection study
deadline is confiscatory, compelling transmission providers to provide
service while not allowing them to recover their costs,\718\ because
these arguments were not raised in the comments received in response to
the NOPR but have instead been raised for the first time on rehearing.
We typically reject arguments raised for the first time on rehearing,
unless those arguments could not have been previously presented, e.g.,
claims based on information that only recently became available or
concerns prompted by a change in material circumstances.\719\
Commenters had the opportunity to argue that the study deadline and
penalty structure is confiscatory in response to the NOPR but did not
do so. We find that these arguments are, therefore, not properly before
us.\720\
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\718\ Although Avangrid and NYTOs assert that study delay
penalties are ``regulatory takings,'' their arguments focus on the
purportedly confiscatory nature of the study delay penalties and
they do not otherwise argue that the penalties are regulatory
takings under the relevant legal standard. See, e.g., N. Y. Indep.
Sys. Operator, Inc., 151 FERC ] 61,075, 61,534, at PP 64-67 (2015)
(discussing the three-factor test to determine whether an action
constitutes a regulatory taking under Penn Cent. Transport. Co. v.
City of New York, which requires consideration of ``[t]he economic
impact of the regulation on the claimant and, particularly, the
extent to which the regulation has interfered with distinct
investment-backed expectations;'' and ``the character of the
governmental action.'' 438 U.S. 104, 123 (1978)).
\719\ See Ala. Power Co., 179 FERC ] 61,128, at P 15 (2022); KEI
(Me.) Power Mgmt. (III) LLC, 173 FERC ] 61,069, at P 38 n.77 (2020);
Tex. E. Transmission, LP, 141 FERC ] 61,043, at P 19 (2012) (``We do
so because (1) our regulations preclude other parties from
responding to a request for rehearing and (2) such behavior is
disruptive to the administrative process because it has the effect
of moving the target for parties seeking a final administrative
decision.'' (quotation marks omitted)); Calpine Oneta Power v. Am.
Elec. Power Serv. Corp., 114 FERC ] 61,030, at P 7 (2006); Iroquois
Gas Transmission Sys., L.P., 86 FERC ] 61,261, at 61,949 (1999));
Ocean State Power II, 69 FERC ] 61,146, at 61,548 (1994); NO Gas
Pipeline, 756 F.3d at 770 (``We finally note that Jersey City's
alleged constitutional claim of actual bias is also barred as
untimely. Jersey City has shown us nothing of record to establish
that it raised this issue before FERC's issuance of the initial
order.''); see also 18 CFR 385.713(c)(3) (providing that any request
for rehearing must ``[s]et forth the matters relied upon by the
party requesting rehearing, if rehearing is sought based on matters
not available for consideration by the Commission at the time of the
final decision or final order.'').
\720\ See U.S. v. L. A. Tucker Truck Lines, Inc., 344 U.S. 33,
37 (1952) (``Simple fairness to those who are engaged in the tasks
of administration, and to litigants, requires as a general rule that
courts should not topple over administrative decisions unless the
administrative body not only has erred but has erred against
objection made at the time appropriate under its practice.''); cf.
Reytblatt v. U.S. Nuclear Regul. Comm'n, 105 F.3d 715, 723 (D.C.
Cir. 1997) (agencies are not required to respond to untimely
comments).
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387. Even had these arguments been properly raised, these arguments
would also be premature because they depend on speculative assertions
that the result of applying penalties to transmission providers will be
confiscatory.\721\ For a transmission provider to establish this
premise will necessarily depend on the facts of each individual case.
Transmission providers will have the opportunity to argue on appeal
that there is good cause to grant relief from the penalty, for example,
because delays in completing interconnection studies were due to
factors beyond their control
[[Page 27073]]
and that, as a result, they should be entitled to recovery of their
costs of performing such studies; and that failure to allow such
recovery would be confiscatory.
---------------------------------------------------------------------------
\721\ See Avangrid Rehearing Request at 16 (similarly arguing
that penalties that ``potentially denies recovery of reasonable
costs incurred for interconnection studies performed according to
Good Utility Practice''); MISO TOs Rehearing Request at 33-34
(arguing that ``[t]he FPA does not permit the Commission to compel
utilities to provide service to others for free'' and that applying
a penalty in a ``strict liability'' fashion to transmission
providers ``when the fault is not theirs'' is particularly
problematic); NYTOs Rehearing Request at 25-26 (arguing that
penalties will be ``confiscatory'' because transmission providers
may not be provided ``cost recovery plus a reasonable return on
prudent investment'' such that the imposition of penalties will
``conscript public utility transmission providers into performing
services without just and reasonable compensation'').
---------------------------------------------------------------------------
388. In the alternative, even if we were to consider these
arguments as properly raised as a procedural matter and ripe for
consideration at this time, we would reject them. While transmission
providers have historically recovered the full costs of interconnection
studies from interconnection customers, the structure adopted in Order
No. 2023 reflects a different approach under which the amount
transmission providers can charge for such studies will be effectively
reduced if transmission providers fail to meet the relevant
deadlines.\722\ As the Supreme Court explained in FPC v. Hope Natural
Gas Co., ratemaking involves ``a balancing of the investor and the
consumer interests,'' \723\ under which regulated utilities are
generally entitled to a reasonable opportunity to recover their
prudently incurred costs, but are not guaranteed such cost
recovery.\724\
---------------------------------------------------------------------------
\722\ For the reasons provided herein and in Order No. 2023, we
find that this approach, under which transmission providers will be
held to appropriate performance standards and incentivized to
complete studies in a timely fashion, is permitted under FPA section
206, see supra section II.D.1.c; infra section II.D.1.c.iv, is just
and reasonable, and reflects a preferable policy approach in light
of the gravity of the problem of interconnection queue delays and
backlogs.
\723\ Hope320 U.S. at 603; see also Jersey Cent., 810 F.2d at
1177-78. Hope interpreted the Natural Gas Act, whereas the instant
proceedings concern the FPA. Nevertheless, ``courts rely
interchangeably on cases construing each of these Acts when
interpreting the other,'' including the standards articulated by the
Court in Hope. See Jersey Cent., 810 F.2d at 1175.
\724\ See Hope, 320 U.S. at 603 (ratemaking does not guarantee
that the regulated utility will produce net revenues).
---------------------------------------------------------------------------
389. Order No. 2023's deadline and penalty structure reflects this
balancing of interests, providing a reasonable opportunity for cost
recovery dependent on the transmission provider's performance in
providing the service at issue. It allows the opportunity for full cost
recovery for the conduct of interconnection studies, should
transmission providers meet the relevant standards of performance
(deadlines) for the timely conduct of those studies. Should
transmission providers fail to meet those standards, the penalties
reduce the compensation available, consistent with interconnection
customers' interests in the timely completion of those studies and the
extent to which delays in the completion of those studies contribute to
interconnection queue backlogs, resulting in unjust and unreasonable
rates to consumers. Even then, however, transmission providers may
still obtain relief from penalties through the appeals process,
including by arguing that factors outside of their control rather than
their own conduct caused the delay, further confirming their reasonable
opportunity to recover their costs.\725\ Avangrid, MISO TOs, and NYTOs
do not demonstrate that the deadline and penalty structure under Order
No. 2023 is confiscatory.
---------------------------------------------------------------------------
\725\ The arguments that Order No. 2023 is confiscatory or works
a regulatory taking also depend on claims that the penalty structure
set forth in Order No. 2023 is ``strict liability'' or that the
deadlines selected for the completion of studies are ``unjustified
and arbitrary.'' See Avangrid Rehearing Request at 16; MISO TOs
Rehearing Request at 33e. As explained above, these arguments are
not meritorious. See supra section II.D.1.c.i; PP 359-360.
---------------------------------------------------------------------------
iii. RTO/ISO Issues
(a) Requests for Rehearing
390. Several parties on rehearing raise challenges to the
Commission's treatment of RTOs/ISOs under the deadline and penalty
structure. NYISO asserts that imposing penalties on RTOs/ISOs is
inappropriate because such penalties will be disproportionate or
ineffective, and may pose an existential risk to RTOs/ISOs given their
non-profit nature, lack of shareholders, and the risk that they will be
denied recovery of their costs.\726\ NYISO argues that Commission
precedent prevents passing penalty costs to customers, but RTOs/ISOs
lack shareholders to absorb the costs such that penalties pose an
existential risk--and that the Commission arbitrarily and capriciously
dismissed these concerns.\727\ NYISO claims that the ability to make
FPA section 205 filings to recover costs associated with penalties
(whether through individual filings or a default structure) does not
eliminate the risk that penalties pose, because such proposals will
likely be contested and may be rejected.\728\ NYISO also observes that
Order No. 2023 ``asserts for the first time that RTOs/ISOs actually are
authorized to pay penalty costs, seemingly without first making any
kind of section 205 filing, by using funds that are not related to
transmission services,'' but claims that the Commission ignores that
any funds collected by RTOs/ISOs must come from market
participants.\729\ NYISO asserts that it is not clear why the
Commission would allow recovery of penalty costs automatically from
non-transmission charges but require FPA section 205 filings to recover
costs from transmission customers.\730\ NYISO also claims it is unduly
discriminatory to subject them to the same penalty regime as
traditional transmission providers.\731\
---------------------------------------------------------------------------
\726\ NYISO Rehearing Request at 17-18 (asserting that this
penalty structure as applied to RTOs/ISOs is ``unjust, unreasonable,
unduly discriminatory, and violative of due process, and would
impede the Commission's policy goals'').
\727\ Id. at 21-23 (arguing that NYISO and similarly-situated
RTOs/ISOs cannot pay penalties without recovering costs from
customers in some form and that being denied permission to recover
such costs could threaten their financial viability).
\728\ Id. at 23-24 (noting that in N.Y. Indep. Sys. Operator,
Inc., 127 FERC ] 61,196, at P 36 (2009), the Commission indicated
that Commission review serves as a check on NYISO's ability to pass
through a penalty and that denial of relief or other appropriate
action is a possibility).
\729\ Id. at 25.
\730\ Id. at 25-26 (noting that NYISO anticipates that there
will be objections to allowing automatic recovery via non-
transmission related charges, such that recovery through this avenue
is also not guaranteed).
\731\ Id. at 38-39 (arguing that ``the same penalties are
harsher when applied to the RTO/ISO'' because of potential
uncertainties around the ability of RTOs/ISOs to recover penalty
costs and the risks penalties pose to RTOs/ISOs).
---------------------------------------------------------------------------
391. AEP argues that the Commission's approach to penalties as
applied to RTOs/ISOs--providing that the transmission owner responsible
for conducting a late study in an RTO/ISO will directly incur the
penalty and allowing recovery of penalty costs incurred by RTOs/ISOs
through FPA section 205 filings--underestimates the complexity of
assigning fault for study delays.\732\ AEP argues that assigning fault
for study delays is not a straightforward proposition in RTOs/ISOs,
noting the collaborative nature of the study process and citing an
example from a recent SPP informational report that identified multiple
drivers of delays, at least two of which were outside of SPP's control.
AEP argues that the Commission failed to justify the imposition of
administrative and litigative burdens on RTOs and ISOs related to
assigning fault for delays to the completion of interconnection
studies.\733\ AEP also contends that the Commission appears to have
restricted the appeal process to the party that conducts the
interconnection study, such that other contributors to fault--to whom
the RTO/ISO assigns some portion of the penalty--may be unable to
appeal.\734\ In addition, AEP argues that, at a minimum, the Commission
should reconsider who has standing to appeal penalties under the Order
No. 2023 procedures and broaden the
[[Page 27074]]
standard to include parties taking part in the study process that are
not tasked with conducting a study.
---------------------------------------------------------------------------
\732\ AEP Rehearing Request at 17-19.
\733\ Id. at 18-19 (arguing that imposing such burdens is
particularly unwarranted because the record does not support that
penalties will reduce delays and if penalties are not assigned to
the right entity, penalties cannot constitute an effective
incentive).
\734\ Id. at 19-20 (citing Order No. 2023, 184 FERC ] 61,054 at
P 963).
---------------------------------------------------------------------------
392. As to the direct assignment of study delay penalties,
Indicated PJM TOs contend that penalties cannot be automatically
assigned in this fashion and the Commission is incorrect to suggest
that such assignment could occur with little to no factfinding.\735\
Indicated PJM TOs assert that, to the extent that the Commission
intends to assign the penalty only to the singular entity that
performed the study, it is not clear how the penalty would be assigned
if the study is primarily executed by the RTO/ISO but also depends on a
collaborative effort between the RTO/ISO and transmission owners. On
the other hand, they argue that, to the extent the Commission intends
that penalties be directly assigned to the entity with the ``most
control'' over the study (or allocated proportionately based on the
level of control or responsibility for the delay), significant
factfinding will be required, given the collaborative nature of the
process. Indicated PJM TOs also note that interconnection customers may
be responsible for delays, reinforcing the need for a factual analysis
to determine which entity had ``more control'' over a study and caused
or contributed to the study delay.\736\ In addition, Indicated PJM TOs
assert that Order No. 2023 empowers RTOs/ISOs to determine a
transmission owner's responsibility for study delay penalties, such
that RTOs/ISOs will have incentives to blame transmission owners for
delays, rather than assigning fault to themselves or mitigating delays,
and forcing transmission owners to appeal penalties.\737\ Furthermore,
they argue that the Commission cannot delegate to third parties (i.e.,
RTOs/ISOs) the obligation to ensure the justness and reasonableness of
rates.\738\
---------------------------------------------------------------------------
\735\ Indicated PJM TOs Rehearing Request at 9-10.
\736\ Id. at 11, 21.
\737\ Id. at 25.
\738\ Id. at 22.
---------------------------------------------------------------------------
393. MISO TOs also contend that, in providing for the direct
assignment of penalties where the transmission-owning members of an
RTO/ISO perform interconnection studies, the Commission failed to
consider the complexity of the study process and how fault for delays
can rest with more than one entity.\739\ They argue that, in the RTO
context, both the RTO and transmission owner perform critical tasks for
the completion of studies and factors outside of their control may
cause delays.
---------------------------------------------------------------------------
\739\ MISO TOs Rehearing Request at 30-31.
---------------------------------------------------------------------------
394. NYISO claims that the automatic assignment of penalties to
transmission-owning members of RTOs/ISOs for studies that they conduct
is not a reasoned solution to how penalties should apply to RTOs/ISOs,
likewise citing the complexities of how the study process works in
practice and collaborative nature of that process.\740\ NYISO argues
that allocating responsibility for delays will be highly subjective and
contentious, leading to adversarial postures and undermining necessary
cooperation. NYISO further argues that if ``transmission owners bear
100% of the penalty for any study that they have any involvement with
then there will foreseeably be transmission owner challenges to every
penalty assignment'' and that assigning penalties to transmission
owners ``only to the extent that they contributed to a missed
deadline'' will require a determination of relative
responsibility.\741\
---------------------------------------------------------------------------
\740\ NYISO Rehearing Request at 35-37 (``In the NYISO,
transmission owners perform some part of all interconnection
studies, and none are performed entirely by transmission owners.'').
\741\ Id. at 36.
---------------------------------------------------------------------------
395. Dominion also questions the automatic allocation of the
penalty for missing deadlines to the transmission owner versus the RTO/
ISO.\742\ Pointing to the collaborative nature of the study process in
PJM, Dominion challenges the Commission's blanket assumption that the
interconnection transmission owner conducting the study has the most
control over the study.
---------------------------------------------------------------------------
\742\ Dominion Rehearing Request at 25.
---------------------------------------------------------------------------
396. A number of the rehearing requests assert that the deadline
and penalty structure does not impose proper or effective incentives on
RTOs/ISOs. Avangrid asserts that the Commission failed to establish how
this structure would incentivize RTOs/ISOs to meet fixed deadlines, but
rather ``asks the non-profit transmission provider to propose how it
would penalize itself.'' \743\ NYSPSC argues that the Commission failed
to explain how, given the mechanisms it discussed for RTOs/ISOs to
recover the costs of penalties, RTOs/ISOs will be subject to an
incentive to meet the study deadlines set in Order No. 2023, asserting
that if RTOs/ISOs can pass-through penalty costs to market participants
they will be indifferent to those penalties.\744\ NYTOs argue that
allowing RTOs/ISOs to avoid penalty costs ``contradicts the intended
incentive, making the penalty ineffective and therefore arbitrary and
capricious.'' \745\ Avangrid also notes that allowing RTOs/ISOs to
collect penalties from market participants ``provides no financial
motivation to the ISO to change behavior to meet deadlines, as the ISO
would merely be passing along the penalty costs to others.'' \746\
---------------------------------------------------------------------------
\743\ Avangrid Rehearing Request at 6 (noting that the
Commission indicated that RTOs/ISOs could submit FPA section 205
filings).
\744\ NYSPSC Rehearing Request at 6-8 (arguing the Commission
recognized, for non-RTO/ISO transmission providers and transmission-
owning members of RTOs/ISOs, the need to have ``skin in the game''
by making shareholders accountable and urging the Commission to
consider other mechanisms to incentivize RTOs/ISOs).
\745\ NYTOs Rehearing Request at 28 (citing Garcia v. U.S. Bd.
of Parole, 409 F. Supp. 1230, 1239 (N.D. Ill. 1976)).
\746\ Avangrid Rehearing Request at 6-7.
---------------------------------------------------------------------------
397. Avangrid, NYISO, NYSPC, and NYTOs assert that RTOs/ISOs may
attempt to recover the cost of penalties in a manner that is not
consistent with principles of cost causation or is otherwise unjust and
unreasonable. Avangrid argues that allowing RTOs/ISOs to collect
penalties from market participants violates cost causation principles
and expresses concerns that RTOs/ISOs may attempt to allocate 100% of
the penalty to a transmission owner that contributes to a delay in only
a minor fashion, particularly if the RTO/ISO has no other way to
recover the penalty costs. NYISO argues that RTOs/ISOs must recover
costs associated with a penalty regime from their customers, and that
penalties would simply punish customers that have nothing to do with
missed deadlines.\747\ NYSPSC contends that it is unjust and
unreasonable to allow RTOs/ISOs to seek to recover the costs associated
with penalties from administrative fees charged to market participants,
as these are beyond the costs necessary to provide electric service to
customers and should not be borne by them.\748\ NYTOs claim that
``passing penalties to transmission owner members of RTOs/ISOs when
those providers are not responsible for a delay violates cost causation
and is not just and reasonable.'' \749\
---------------------------------------------------------------------------
\747\ NYISO Rehearing Request at 18.
\748\ NYSPC Rehearing Request at 8-9.
\749\ NYTOs Rehearing Request at 28.
---------------------------------------------------------------------------
398. NYISO argues that that it was unlawful for the Commission in
Order No. 2023 to not further address the question of how RTOs/ISOs
will recover the costs of study delay penalties that are not
automatically imposed on a transmission-owning member, asserting that
this question was raised in comments, acknowledged by the Commission,
and is central to Order No. 2023's penalty regime.\750\ Similarly,
[[Page 27075]]
Dominion asserts that the Commission has not articulated a sensible
approach to RTO/ISO penalty costs that is supported by substantial
evidence in the first instance, but is instead inappropriately
deferring the issue to future RTO/ISO filings to propose a penalty
allocation structure.\751\
---------------------------------------------------------------------------
\750\ NYISO Rehearing Request at 19-20 (``The Commission should
not defer the question to future section 205 or penalty appeal
proceedings. It must resolve the problem now.'').
\751\ Dominion Rehearing Request at 25-26.
---------------------------------------------------------------------------
399. MISO argues that Order No. 2023 should be revised to provide
that RTOs are not required to pay any penalties until there is a
Commission accepted mechanism to collect such penalties--and that the
Commission failed to respond to comments raising this concern in a
reasoned fashion.\752\ MISO notes that the Commission recognizes that
RTOs have no ability to pay study delay penalties without collecting
them from another party and asserts that, until there is a mechanism in
place to collect the funds to pay study delay penalties in RTOS, the
RTOs may lack the authority and funds to collect and pay the penalties.
However, MISO also notes that section 3.9 of the pro forma LGIP
provides for distribution of penalties no later than 45 calendar days
after the late study has been completed or 45 calendar days after the
completion of any appeal and rehearing of the penalty.
---------------------------------------------------------------------------
\752\ MISO Rehearing Request at 8-11.
---------------------------------------------------------------------------
(b) Determination
400. As an initial matter, we disagree with arguments that applying
the penalty regime to RTOs/ISOs is inappropriate or unduly
discriminatory because RTOs/ISOs do not have shareholders or guaranteed
means of absorbing penalty costs whereas non-RTO/ISO transmission
providers do. We believe that it would be inappropriate to
categorically exempt RTOs/ISOs from the study delay penalties adopted
in Order No. 2023.\753\ RTOs/ISOs manage interconnection queues and
process interconnection studies like non-RTO transmission providers.
The available evidence indicates that study delays are just as
significant a problem in RTOs/ISOs as non-RTO/ISO regions.\754\ RTOs/
ISOs, just like non-RTOs, are facing increases in interconnection queue
size, study duration, and length of time interconnection customers are
spending in the queue.\755\ As noted above, Order No. 2023 explained
the gravity of the national problem of interconnection queue
backlogs,\756\ and we continue to believe that this is a dire problem
that requires nationally implemented solutions.
---------------------------------------------------------------------------
\753\ See also Order No. 890, 118 FERC ] 61,119 at P 1353.
\754\ See Order No. 2023, 184 FERC ] 61,054 at app. B.
\755\ Queued Up 2023 at 9, 27, 32.
\756\ Order No. 2023, 184 FERC ] 61,054 at PP 37-58.
---------------------------------------------------------------------------
401. Moreover, while we agree that there are differences between
RTOs/ISOs and non-RTO transmission providers, we conclude that the
penalty regime adopted in Order No. 2023 sufficiently accounts for the
differences. First, in RTOs/ISOs, where an interconnection study is
performed by a transmission-owning member of the RTO/ISO (as is often
the case for facilities studies), under Order No. 2023 the penalty for
missing a study deadline is incurred by that transmission-owning
member, not the RTO/ISO.\757\ Second, as to penalties that are incurred
directly by the RTO/ISO, the RTO/ISO is permitted to seek cost recovery
of penalty costs from their transmission-owning members or other market
participants, whereas non-RTO/ISO transmission providers are not.
Additionally, RTOs/ISOs, as well as non-RTOs, can appeal the imposition
of penalties in specific instances. In light of these avenues for an
RTO/ISO to avoid or reduce the prospect that it is responsible for
payment of a penalty, we find that any residual uncertainty as to an
RTO/ISO's ability to recover penalty costs is outweighed by the
critical need for all transmission providers, including RTOs/ISOs, to
process interconnection studies in a timely manner. Furthermore,
particularly given that the daily amount of the penalties is not
punitive and that the penalties will be capped, we do not view the
possibility that RTOs/ISOs may face some uncertainty in recovering
penalty costs as an existential threat.
---------------------------------------------------------------------------
\757\ Id. P 995.
---------------------------------------------------------------------------
402. We are not persuaded by the following arguments to eliminate
or modify the penalty regime: (1) RTOs/ISOs will not be incentivized to
meet study deadlines; (2) the complexity of studies in RTOs/ISOs may
lead to inappropriate assignment of cost responsibility; or (3) where
RTOs/ISOs have dispute resolution processes, these procedures may delay
assignment of fault. We continue to find that allowing RTOs/ISOs to
recover penalty costs is warranted because RTOs/ISOs are differently
situated than non-RTO transmission providers in terms of their ability
to bear penalty costs, as RTOs/ISOs are non-profit entities and do not
have shareholders. Therefore, it is appropriate for RTOs/ISOs to be
permitted to seek to recover the cost of penalties they incur. We
disagree that this structure will not incentivize RTOs/ISOs to mitigate
study delays. Comments on the NOPR explained that RTOs/ISOs have good
reason to try to avoid collecting penalty costs from their
transmission-owning members, as that could create tension between RTOs/
ISOs and their transmission-owning members.\758\ RTO/ISOs have an
interest in limiting unnecessary charges to their member transmission
owners or other market participants because the case for participating
in RTO/ISOs, which remains voluntary and subject to state law, is
founded on the increased efficiencies and cost-savings of RTO/ISO
membership. If RTO/ISOs ignore opportunities within their control to
eliminate or reduce the risk of incurring penalties, they erode these
benefits.
---------------------------------------------------------------------------
\758\ See id. P 921; OPSI Initial Comments at 9.
---------------------------------------------------------------------------
403. As a result, the record indicates that RTOs/ISOs will be
incentivized to avoid incurring penalties in the first instance. And to
the extent that an RTO/ISO does incur a penalty cost, it will be
incentivized to appeal that penalty, where appropriate, to avoid the
need to collect that penalty cost. For these reasons, we find that the
incentive structure created by Order No. 2023 will function as the
Commission contemplated, helping to ensure just and reasonable rates.
404. In response to the argument that assigning penalties directly
to the transmission owner that conducted the study is complicated
because of the collaboration between the RTO and its transmission-
owning members, we note that penalties will only be directly assigned
to the applicable transmission owner within an RTO/ISO where there is
an identifiable transmission-owning member who is formally responsible
for conducting the applicable study. In other words, even where there
is collaboration between entities, it is only if the transmission-
owning member is the formally designated ``lead'' of the process that
the transmission-owning member will directly incur the study delay
penalty. To contrast, where there is no identifiable transmission-
owning member that is formally responsible for leading the
interconnection study, the penalty will be incurred by the RTO/ISO
itself.
405. We decline to implement MISO's suggestion that Order No. 2023
be revised to provide that RTOs/ISOs should not be required to pay any
penalties until there is a Commission-accepted mechanism to recover
such penalties. Order No. 2023 provides that RTOs/ISOs may--but are not
required to--submit section 205 filings to propose cost recovery
mechanisms to recover the costs of penalties they
[[Page 27076]]
incur.\759\ Revising the penalty structure as MISO suggests would leave
open the possibility that RTOs/ISOs could avoid the penalty regime
altogether by simply not proposing any cost recovery mechanism.
Additionally, Order No. 2023 notes that RTOs/ISOs have multiple options
for collecting necessary funds, and that one of these options is to
submit an FPA section 205 filing after-the-fact to assign the cost of a
specific study delay penalty. MISO's suggested revision is inconsistent
with that potential avenue for cost recovery.
---------------------------------------------------------------------------
\759\ Order No. 2023, 184 FERC ] 61,054 at P 994.
---------------------------------------------------------------------------
406. We find speculative arguments that RTOs/ISOs may attempt to
recover penalties in a manner inconsistent with cost causation. RTOs/
ISOs may propose under FPA section 205 either a default structure for
recovering penalty costs or file section 205 proceedings to recover the
costs of individual penalty costs. We will not prejudge those filings.
Any arguments that those hypothetical proposals might violate cost
causation principles are best addressed in the context of the specific
proposal and should be raised in those FPA section 205 proceedings.
407. We disagree with arguments that it is unlawful for the
Commission to defer resolution of how RTOs/ISOs can recover penalties
to future section 205 filings. In Order No. 2023, the Commission
responded to comments on the penalty regime as it relates to RTOs/ISOs
by identifying potential avenues for RTOs/ISOs to recover penalties and
modifying the NOPR proposal where appropriate.\760\ We do not believe
that it is unlawful to allow section 205 filings to implement specific
details of this regime. We further disagree that the particulars of how
RTOs/ISOs recover penalty costs are integral to this rulemaking, which
is focused on the overarching penalty structure that will apply
nationwide. The specifics of RTO/ISO cost recovery will be highly fact
dependent based on regional tariff variations. We continue to believe
that it is appropriate to address cost recovery issues in individual
proceedings that can take into account the variations in tariffs in
each RTO/ISO region.
---------------------------------------------------------------------------
\760\ Id. PP 994-1001.
---------------------------------------------------------------------------
iv. Statutory Authority To Implement a Study Delay Penalty Structure
Under FPA Section 206
(a) Requests for Rehearing
408. Certain of the rehearing requests challenge the Commission's
authority to adopt the deadline and penalty structure set forth in
Order No. 2023 and/or contend that it is contrary to or not supported
by Commission precedent. NYTOs and PacifiCorp claim that the penalty
structure is ultra vires because the Commission's civil penalty
authority resides in FPA sections 316 \761\ and 316A,\762\ and that the
Commission is impermissibly reading such authority into section 206,
which contains no civil penalty authority.\763\ PacifiCorp argues that
the Commission is attempting to ``get around due process and other
limits on its civil penalty authority by claiming it is only engaged in
a rate-setting exercise'' but ``[a] civil penalty is a civil penalty.''
\764\ NYTOs also assert that, under the Commission's policy statements
on enforcement and compliance, penalties are meted out for wrongdoing
or misconduct.\765\ Thus, NYTOs claim, the Commission cannot adopt a
structure in which transmission providers will incur penalties where
the willful and knowing mens rea requirement is absent, or where the
transmission provider is not at fault for a study delay.
---------------------------------------------------------------------------
\761\ 16 U.S.C. 825o.
\762\ 16 U.S.C. 825o-1.
\763\ NYTOs Rehearing Request at 22-23; PacifiCorp Rehearing
Request at 10-11 (asserting that the Commission cites no precedent
for civil penalties under section 206; also claiming that the
Commission failed to address whether a study timely violation was
itself a tariff violation).
\764\ PacifiCorp Rehearing Request at 11.
\765\ NYTOs Rehearing Request at 22 (citing Enf't of Statutes,
Ords., Rules, & Reguls., 113 FERC ] 61,068, at PP 14, 26 (2005);
Kokesh, 581 U.S. at 461 (government-assessed penalties are ``for the
purpose of punishment, and to deter others from offending in like
manner.'')).
---------------------------------------------------------------------------
409. PJM asserts that the study delay penalty structure violates
FPA section 315 \766\ because that section governs forfeitures for
willful failures to comply with a Commission order, rule, or regulation
or timely file a required report, and requires that such forfeitures be
remitted to the United States Treasury.\767\ PJM concedes that RTO
tariffs, including its own, and other tariffs contain various penalty
provisions; however, PJM attempts to differentiate these provisions by
asserting that here, the Commission is imposing a mandate on
transmission providers to include such a provision in their tariffs
involuntarily, calling it a penalty, and using the compliance process
to bypass the penalty provisions that Congress established in section
315 of the FPA.
---------------------------------------------------------------------------
\766\ 16 U.S.C. 825n.
\767\ PJM Rehearing Request at 29-30.
---------------------------------------------------------------------------
410. AEP asserts that the penalty structure set forth in Order No.
2023 is unlawful because it constitutes monetary damages--defraying the
study costs of the interconnection customers affected by a delay--and
the Commission lacks authority to grant such damages.\768\ AEP also
contends that the Commission's decision to adopt a penalty structure
for late studies is contrary to precedent, including Order No. 2003 and
Order No. 845, in which the Commission rejected proposed requirements
to impose liquidated damages or automatic penalties if a transmission
provider failed to meet deadlines.\769\
---------------------------------------------------------------------------
\768\ AEP Rehearing Request at 7-8 (citing Bachofer v. Calpine
Corp., 134 FERC ] 61,100, at P 9 (2011); New England Power Pool, 98
FERC ] 61,299, at 62,290 n.6 (2002); TranSource, LLC v. PJM
Interconnection, L.L.C., 168 FERC ] 61,119 at n.896 (2019)).
\769\ Id. at 8-9 (asserting that the Commission failed to
explain this change) (citing Order No. 2003, 104 FERC ] 61,103 at PP
883, 898; Order No. 2003-A, 106 FERC ] 61,220 at P 249; Order No.
845, 163 FERC ] 61,043 at P 309; N.Y. Indep. Sys. Operator, Inc.,
108 FERC ] 61,159, at PP 77-78 (2004)).
---------------------------------------------------------------------------
(b) Determination
411. We are not convinced by PacifiCorp's, NYTOs', or PJM's
arguments that the Commission lacked authority to implement Order No.
2023's performance standard and incentive structure by relying on
deadlines and penalties because, they argue, the Commission's civil
penalty authority resides exclusively in certain provisions of the FPA.
To begin with, these arguments were not raised prior to rehearing, as
required by the Commission's Rule of Practice and Procedure
713(c)(3).\770\ Here, because the NOPR proposed the elimination of the
reasonable efforts standard and its replacement with a materially
similar penalty structure to that adopted in Order No. 2023,\771\
nothing precluded commenters from raising these arguments prior to the
issuance of Order No. 2023--yet they did not do so. Thus, here too,
these arguments are not properly before us.
---------------------------------------------------------------------------
\770\ See supra P 386 & nn. 723-724; 18 CFR 385.713(c)(3)
(providing that any request for rehearing must ``[s]et forth the
matters relied upon by the party requesting rehearing, if rehearing
is sought based on matters not available for consideration by the
Commission at the time of the final decision or final order'').
\771\ See NOPR, 179 FERC ] 61,194 at PP 161-73.
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412. Regardless, even considering these arguments on their
substance, we find that they are not meritorious. As discussed above,
the deadline and penalty structure adopted in Order No. 2023 reflects
an exercise of the Commission's authority under FPA section 206,
consistent with its longstanding regulation of the interconnection
process.\772\ PJM, NYTOs, and PacifiCorp fail to acknowledge this
authority or precedent. Instead, they view FPA sections 315, 316, and
316A's grant of
[[Page 27077]]
authority to assess a particular kind of monetary sanction--a civil
penalty pursuant to statutorily-granted enforcement authority--as
necessarily reflecting an across-the-board restriction of the
Commission's other authority, including its FPA section 206 ratemaking
authority. For instance, NYTOs cite the Supreme Court's decision in
Kokesh v. SEC as standing for the proposition that ``government-
assessed penalties are `for the purpose of punishment, and to deter
others from offending in like manner,' '' \773\ while PacifiCorp
asserts that ``a civil penalty is a civil penalty.'' \774\ These
arguments fail to recognize that not all monetary sanctions, even when
labeled as penalties, are civil penalties and that monetary sanctions
can serve different purposes, have different structures, and flow from
different sources of authority.
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\772\ See supra section II.D.1.c.
\773\ NYTOs Rehearing Request at 22-23 n.60 (quoting Kokesh, 581
U.S. at 461); see also id. at 22-23 nn. 56, 61 (citing Cal. Indep.
Sys. Operator Corp. v. FERC, 372 F.3d 395, 398 (D.C. Cir. 2004) (the
Commission's authority is defined by Congress); Altamont Gas
Transmission Co. v. FERC, 92 F.3d 1239, 1248 (D.C. Cir. 1996) (the
Commission cannot do indirectly what it could not do directly)).
\774\ PacifiCorp Rehearing Request at 11.
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413. The Supreme Court's decision in Kokesh \775\ supports our
conclusion that the fact that a financial sanction is assessed for
conduct--here, failure to complete a study by the required deadline--
does not render it a civil penalty of the sort that conflicts with or
exceeds Congress's enactment of statutory civil penalty authorities in
the FPA. In Kokesh, the Supreme Court differentiated between penalties,
even those expressly labeled as ``penal,'' that are imposed as
punishment versus other pecuniary sanctions. It explained that this
inquiry turned on whether (1) the wrong sought to be redressed is a
wrong to the public (an offense committed against the State) or a wrong
to the individual and (2) whether it was imposed for the purpose of
punishment and to deter others from offending in like manner, as
opposed to compensating a victim for a loss.\776\ Similarly, in Meeker
v. Lehigh Valley Railroad Company, the Court held that an order by the
Interstate Commerce Commission, which directed a railroad company to
refund and pay damages to a shipping company for excessive shipping
rates, was not imposing a penalty for purposes of the statute of
limitations, given that the payment was to redress a private injury,
rather than punitive.\777\ Here, Order No. 2023 implemented a system of
deadlines and penalties for late studies not to redress a wrong to the
public, as under FPA sections 315, 316, and 316A, or to punish, but
instead to effectively adjust what transmission providers can charge
based on study timeliness.
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\775\ In Kokesh, the Court considered whether the general
statute of limitations applicable for ``action, suit or proceeding
for the enforcement of any civil fine, penalty, or forfeiture,
pecuniary or otherwise,'' 28 U.S.C. 2462, applied to claims for
disgorgement as a sanction for violating a federal securities law.
581 U.S. at 457.
\776\ Id. at 461 (quoting Huntington v. Attrill, 146 U.S. 657,
667 (1892)).
\777\ 236 U.S. 412, 423 (1915) (``The words `penalty or
forfeiture' in this section refer to something imposed in a punitive
way for an infraction of a public law, and do not include a
liability imposed solely for the purpose of redressing a private
injury, even though the wrongful act be a public offense, and
punishable as such. Here the liability sought to be enforced was not
punitive, but strictly remedial . . . .'').
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414. Specifically, Order No. 2023's deadline and penalty structure
was adopted to define substantive terms of the commercial relationship
between particular parties--transmission providers and interconnection
customers--in the Commission-jurisdictional context of regulating
interconnection, ensuring just and reasonable rates, and avoiding
degradation of service.\778\ The Commission in Order No. 2023 did not
invoke a need to punish or to label transmission providers as
wrongdoers as a rationale for its action and, in fact, stated that it
was ``not finding that transmission providers have necessarily acted in
bad faith.'' \779\ The Commission established safeguards to avoid
punitive results, including the cap on penalties \780\ and the appeals
process.\781\ The appeals process also takes into account the broader
economic effects of regulating this interaction between interconnection
customers and transmission providers by ensuring that transmission
providers are not held to unduly strict standards that could result in
economically inefficient outcomes or unjust and unreasonable
rates.\782\ Likewise, and contrary to PJM's claim that the failure to
remit the penalties under Order No. 2023 to the Treasury demonstrates
that these penalties are beyond the Commission's authority, the fact
that the penalties are disbursed to interconnection customers
distinguishes them from the sort of sanctions addressed in Kokesh and
authorized in FPA sections 315, 316, and 316A.\783\ And, as the
Commission recognized, delayed interconnection studies impose financial
harm on interconnection customers,\784\ reinforcing that the penalties
under Order No. 2023 help to ensure that the transmission provider is
compensated for performing interconnection studies based on whether it
achieves (or the extent that it fails to achieve) performance standards
relating to the timeliness of those studies.\785\
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\778\ See supra section II.D.1.c (explaining that the penalty
structure reflects how the interconnection relationship may impact
overall rates for consumers and the costs to interconnection
customers of late studies, in terms of defining the charges
transmission providers may assess for such studies as a function of
their timeliness); Kokesh, 581 U.S. at 463 (explaining that one
factor that favored concluding that disgorgement was a penalty
falling within 28 U.S.C. 2462 was that the SEC was acting to protect
the public interest, writ large, rather than standing in the shoes
of particular parties, reflecting that the violation for which the
remedy was sought was committed against the United States, rather
than aggrieved individuals); cf. Oneok, Inc. v. Learjet, Inc., 575
U.S. 373, 385 (2015) (discussing, in the context of preemption, the
importance of looking to the aim of an initiative in assessing
whether it crosses a jurisdictional boundary).
\779\ Order No. 2023, 184 FERC ] 61,054 at P 966; see Gabelli v.
SEC., 568 U.S. 442, 451-52 (2013).
\780\ See Kokesh, 581 U.S. at 466-67 (finding it significant
that disgorgement sometimes exceeds the profits gained as the result
of a violation, in rejecting an argument that disgorgement was
remedial rather than punitive); cf. also Liu v. Sec. & Exch. Comm'n,
140 S. Ct. 1936, 1940, 1947 (2020) (holding that ``a disgorgement
award that does not exceed a wrongdoer's net profits and is awarded
for victims is equitable relief permissible under [15 U.S.C.
78u(d)(5)]'').
\781\ See Order No. 2023, 184 FERC ] 61,054 at PP 875, 972, 984-
85.
\782\ Cf. id. P 1003 (noting that the appeals process is an
avenue to account for delays beyond a transmission provider's
control, such as those due to force majeure, which could excuse a
failure to perform at a particular standard).
\783\ Kokesh, 581 U.S. at 464-65 (explaining that in many cases
SEC disgorgement is not compensatory, because disgorged profits are
not necessarily paid to investors but rather paid to the district
court and may ultimately be paid to the Treasury); see also id. at
462-63.
\784\ See Order No. 2023, 184 FERC ] 61,054 at P 971.
\785\ Cf. Kokesh, 581 U.S. at 462-63 (discussing cases in which
liability was found to remedy private wrongs, with payments made to
the party suffering the injury, as essentially compensatory not
imposing penalties).
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415. Thus, and consistent with our broad discretion in determining
how to ensure just and reasonable rates,\786\ we continue to find that
the study delay penalty structure implemented in Order No. 2023 is an
appropriate exercise of our authority under FPA section 206. Likewise,
we also are not persuaded by related arguments asserting that the study
delay penalty structure is
[[Page 27078]]
otherwise in tension with the civil penalty provisions in the FPA or
contradicts the Commission's policies on enforcement.
---------------------------------------------------------------------------
\786\ See, e.g., Morgan Stanley Cap. Grp. Inc. v. Pub. Util.
Dist. No. 1 of Snohomish Cnty., Wash., 554 U.S. 527, 532 (2008)
(explaining that the just and reasonable standard is ``obviously
incapable of precise definition'' such that the Commission is
afforded ``great deference'' in its rate decisions); Mobil Oil Expl.
& Producing Se. Inc. v. United Distrib. Cos., 498 U.S. 211, 214
(1991) (explaining that the just and reasonable standard, ``far from
binding the Commission . . . accords it broad ratemaking authority''
and does not compel a particular approach); MISO Transmission Owners
v. FERC, 45 F.4th at 261 (``FERC is entitled to adopt any
methodology it believes will help it ensure that rates are just and
reasonable, so long as it doesn't adopt that methodology in an
arbitrary and capricious manner.'') (citing S. Cal. Edison Co. v.
FERC, 717 F.3d 177, 182 (D.C. Cir. 2013)).
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416. For instance, PJM argues that, in contrast to other tariff
penalty provisions adopted pursuant to FPA section 205, the Commission
in Order No. 2023 ``impos[ed] a mandate on transmission providers to
include such a provision in their tariffs involuntarily,'' thereby
bypassing the penalty provision in FPA section 315.\787\ As just
discussed, the study delay penalty structure does not bypass any
penalty provisions of the FPA but, instead, was adopted pursuant to the
Commission's independent ratemaking authority. Moreover, PJM fails to
explain its assertion that the scope of permissible tariff mechanisms
to ensure such rates are just and reasonable should substantially
differ between FPA sections 205 and 206.\788\ We do not find this
argument supported by the statute, particularly given that a purpose of
section 206 is to allow the Commission to replace, by its own
initiative, rates that may have resulted from section 205 filings but
have since become unjust and unreasonable.
---------------------------------------------------------------------------
\787\ PJM Rehearing Request at 30.
\788\ PJM's implication that penalties have only been previously
adopted under FPA section 205 is also incorrect. See Order No. 890,
118 FERC ] 61,119 at PP 40, 1324-57, order on reh'g, Order No. 890-
A, 121 FERC ] 61,297, order on reh'g, Order No. 890-B, 123 FERC ]
61,299, order on reh'g, Order No. 890-C, 126 FERC ] 61,228, order on
clarification, Order No. 890-D, 129 FERC ] 61,126 (adopting, through
generic proceedings under FPA section 206, a penalty structure that
is similar in several respects to that adopted in Order No. 2023).
---------------------------------------------------------------------------
417. We are also not persuaded by NYTO's reliance on the
Commission's policy statements in the enforcement context.\789\ These
policy statements are not directed toward the study delay penalty
structure set forth in Order No. 2023 as an exercise of the
Commission's authority under FPA section 206, but instead address how
the Commission will consider civil penalties and other remedies
pursuant to its separate enforcement authorities granted under other
sections of the FPA. As to similar arguments by MISO TOs, PJM, and
NYISO asserting that the study delay penalty structure set forth in
Order No. 2023 is in tension with Commission policy in enforcement
cases,\790\ the study delay penalty structure adopted in Order No. 2023
is not an implementation of the Commission's enforcement authority
under FPA sections 315, 316, or 316A. Moreover, and contrary to these
arguments, the Commission has adopted appropriate mechanisms to ensure
that the study delay penalty structure is not punitive and can account
for the facts of particular cases, as discussed above.
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\789\ See NYTOs Rehearing Request at 22 & n.60 (``Under the
Commission's policy statements on enforcement and compliance,
penalties are meted out for wrongdoing and misconduct.'' (citing
Enf't of Statutes, Ords., Rules, and Reguls., 113 FERC ] 61,068 at
PP 14, 26); see also id. at 27.
\790\ See MISO TOs Rehearing Request at 31 (asserting that the
study delay penalty structure results in a deprivation of due
process whereas ``both the Commission's Office of Enforcement and
NERC Reliability Standard enforcement involve fact finding and
affording the targeted entity the opportunity to present evidence to
demonstrate lack of fault or mitigating circumstances before a
penalty is imposed''); NYISO Rehearing Request at 31 & n.89 (arguing
that ``the Commission may not establish penalties that are
excessively punitive in relation to the severity of a violation''
and citing Commission policies in the enforcement context); PJM
Rehearing Request at 31 n.67.
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418. We disagree with PacifiCorp's claim that the Commission erred
in Order No. 2023 because it failed to address a comment questioning
whether a violation of the study deadlines giving rise to penalties
under Order No. 2023 could also be treated as a tariff violation under
the FPA. As an invocation of the Commission's ratemaking authority
under section 206, Order No. 2023 did not address or invoke the
Commission's civil enforcement authority, practices, or policies. The
Commission may consider whether a particular failure to meet a study
deadline meets the statutory, regulatory, and policy considerations to
constitute a tariff violation warranting enforcement action in an
appropriate case, on the facts presented. Attempting to further resolve
this issue at this time is beyond the scope of this proceeding.
419. We further disagree with AEP's claim that the Commission lacks
authority to adopt the study delay penalty structure set forth in Order
No. 2023 on the theory that Commission precedent forbids it from
awarding monetary damages. None of the cases AEP cites addressed a
penalty structure similar to that presented here, supported by the
Commission's authority to ensure just and reasonable rates. Rather, in
Bachofer v. Calpine Corp., the Commission found that it lacked
jurisdiction to address claims for property damage due to the alleged
actions of a generation facility, that such allegations ``are more
appropriately addressed in some other forum,'' and that ``monetary
damages are also beyond the scope of the Commission's authority under
Part II of the Federal Power Act.'' \791\ In TranSource, LLC v. PJM
Interconnection, L.L.C., the Commission explained that monetary relief
for ``lost business opportunities and other litigation-related
expense'' allegedly suffered by TranSource was beyond the scope of
relief the Commission could award.\792\ New England Power Pool involved
a rehearing request directed toward the effective date of certain
tariff changes, where no waiver of the Commission's prior notice
requirements had been sought, and reflected that the Commission cannot
engage in retroactive ratemaking.\793\ Here, the Commission is not
confronted by claims seeking post-hoc, consequential monetary damages
to make a specific party whole following alleged wrongdoing. Rather, it
is exercising its FPA section 206 authority to prospectively and
generically regulate the commercial relationship between
interconnection customers and transmission providers, including as to
the appropriate charges for interconnection studies.
---------------------------------------------------------------------------
\791\ 134 FERC ] 61,100 at P 9.
\792\ 168 FERC ] 61,119 at P 285 & n.896.
\793\ 98 FERC ] 61,299 at 62,290 & n.6.
---------------------------------------------------------------------------
v. Commission Precedent
(a) Requests for Rehearing
420. MISO TOs assert that the Commission failed to heed its
precedent in Order No. 2003, which rejected liquidated damages for
study delays, because that approach might undermine the transmission
provider's ability to economically administer its study process.\794\
Likewise, MISO TOs also point to Order No. 845, asserting that the
Commission there rejected requests to include penalties for study
delays, recognizing that often the transmission provider will not be at
fault for such delays.\795\ MISO TOs also contend that, as recently as
November 29, 2022, the Commission affirmed the reasonable efforts
standard and rejected firm study deadlines and does not discuss in
Order No. 2023 why it now abandons that result.\796\ Additionally, MISO
TOs claim that Order Nos. 890 and 890-A reflect that the Commission
imposed study delay penalties only when transmission providers
routinely failed to meet deadlines, failed to meet deadlines for a
certain number of studies, and were imposed only after they had the
opportunity to present evidence of extenuating circumstances.\797\ MISO
[[Page 27079]]
TOs contrast Order No. 2023's penalty structure with that in Order No.
890, arguing that it does not make sense to grant less flexibility to
transmission providers for conducting interconnection studies than
transmission studies, given that interconnection studies are more
complex, more numerous, and involve more requests to be studied.\798\
---------------------------------------------------------------------------
\794\ MISO TOs Rehearing Request at 24-25 (arguing that the
Commission failed to respond to MISO TOs comments on this point).
\795\ Id. at 25 (arguing that the Commission failed to
articulate a meaningful response, but instead simply asserts that it
is attempting to remedy unjust and unreasonable rates and ensure
interconnection in a reliable, efficient, transparent, and timely
manner; contending that the penalty structure will not accomplish
these aims).
\796\ Id. at 26 (citing PJM Interconnection, L.L.C., 181 FERC ]
61,162 at P 138).
\797\ Id. at 20-24 (noting that in Order 890-A, the Commission
clarified that such penalties would apply only to transmission
providers unable to justify their repeated failure to meet deadlines
and discussed the factors that might excuse such failures).
\798\ Id. at 23-24; see also NYISO Rehearing Request at 31-32.
---------------------------------------------------------------------------
421. NYISO and Indicated PJM TOs assert that the Commission was
wrong in Order No. 2023 to compare the penalty structure it adopted to
``traffic ticket'' penalties, asserting that such penalties are applied
solely based on objective criteria that can be applied automatically,
whereas study delays raise more complex questions regarding the fault
for any delay.\799\ NYISO contends that the Commission failed to
address, in a reasoned fashion, NYISO's argument that reliability
penalties are distinguishable from the penalty structure adopted under
Order No. 2023 because reliability penalties are generally non-
financial and, when such penalties apply, there are numerous mechanisms
in place to avoid unfairly harsh results.\800\
---------------------------------------------------------------------------
\799\ NYISO Rehearing Request at 31 (stating that ``[t]he fact
that the Commission recognized the need for an appeals process to
resolve inevitable factual disputes about penalties demonstrates
that the traffic ticket model is not relevant''); Indicated PJM TOs
Rehearing Request at 19-21.
\800\ NYISO Rehearing Request at 31-32 (asserting that the
appeals process, which the Commission discussed in response to these
arguments, is not an adequate process because it is inchoate and
unreasonably presumes fault on the part of transmission providers
and presumes that penalties are warranted for delays); see id. at 31
n.85 (``Violators may avoid penalties for a variety of reasons
including demonstrating a culture of compliance, cooperating with
investigations, and taking effective remedial actions. Thus, the
reliability penalty regime incorporates due process.'').
---------------------------------------------------------------------------
422. Indicated PJM TOs also claim that Order No. 2023's penalty
structure is unlawful because it impermissibly attempts to override
RTO/ISO governing documents.\801\ In particular, they assert that the
PJM Consolidated Transmission Owners Agreement (PJM CTOA) does not
authorize PJM to assign penalty amounts to PJM transmission owners.
According to Indicated PJM TOs, under the Atlantic City precedent, the
Commission cannot prevent transmission providers from deciding how to
propose to recover their costs and cannot direct transmission providers
to make cost recovery filings in any prescribed manner (here, in
alleged contravention of the CTOA).\802\
---------------------------------------------------------------------------
\801\ Indicated PJM TOs Rehearing Request at 8-12 (citing Atl.
City I, 295 F.3d at 10 (``Nor may FERC prohibit public utilities
from filing changes in the first instance.''); Atl. City Elec. Co.
v. FERC, 329 F.3d 856, 859 (2003) (per curiam) (Atl. City II)
(``FERC has no jurisdiction to enter limitations requiring utilities
to surrender their rights under Sec. 205 of the FPA to make filings
to initiate rate changes.'')).
\802\ Id. at 11-12.
---------------------------------------------------------------------------
(b) Determination
423. We are not persuaded by arguments that the deadline and
penalty structure in Order No. 2023 is inconsistent with the
Commission's precedent or that, to the extent it differs from other
penalty structures in the Commission's precedent, that departure is
insufficiently explained. For instance, certain parties argue that in
Order No. 845 the Commission acknowledged that study delays may be
attributable to factors not within the control of transmission
providers and that the Commission in Order No. 845 declined to
implement automatic penalties for study delays.\803\ The Commission in
Order No. 2023, however, explained the reasons for its change in
approach: that its determination was based on the evidence in the
record, including evidence of worsening queue delays based on the
reporting data collected under Order No. 845 and that failure on the
part of transmission providers to timely complete studies was a
significant reason for those delays.\804\ Thus, even though it remains
the case that there are factors outside of a transmission providers'
control that may contribute to interconnection study delays, on this
record the Commission reasonably concluded that elimination of the
reasonable efforts standard and adoption of a study delay penalty
structure is warranted notwithstanding that it took a different
approach in Order No. 845.\805\ We sustain that determination.
---------------------------------------------------------------------------
\803\ See AEP Rehearing Request at 7-8; MISO TOs Rehearing
Request at 24-25.
\804\ Order No. 2023, 184 FERC ] 61,054 at P 1012; see supra PP
281-282.
\805\ In particular, the Commission has established the appeals
process to take into account the possibility that an interconnection
study is delayed due to factors beyond the control of the
transmission provider.
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424. We are also not convinced that the adoption of penalties for
late interconnection studies conflicts with Order No. 2003, in which
the Commission declined to include a liquidated damages provision in
the pro forma LGIP, observing that it ``may undermine the Transmission
Provider's ability to economically administer its study process.''
\806\ At the outset, to the extent that the rehearing requests rely on
the Commission's decision not to include the proposed liquidated
damages provision in Article 5.1 of the pro forma LGIA, that proposed
liquidated damages provision is distinguishable in that it is related
to a transmission provider's failure to complete construction of
interconnection facilities in a timely fashion.\807\ Furthermore, even
in this context, the Commission simply declined to impose a liquidated
damages provision in the pro forma LGIP, but was clear that such
provisions were permissible in LGIAs upon agreement of the
parties.\808\
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\806\ Order No. 2003, 104 FERC ] 61,103 at P 898.
\807\ See id. PP 851-52 (describing the liquidated damages
provision proposed the Commission proposed to include in Article
5.1); id. P 854 (explaining that while there were some common issues
regarding the two liquidated damages provisions the Commission was
considering, ``the provisions serve different functions''); id. PP
868-85 (discussing the proposed LGIA liquidated damages provision,
and the Commission's rationale for declining to adopt it).
\808\ See, e.g., Order No. 2003-A, 106 FERC ] 61,220 at P 249;
see also N.Y. Indep. Sys. Operator, Inc. 108 FERC ] 61,159 at PP 77-
78 (liquidated damages are permissible upon agreement of the
parties).
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425. Moreover, the Commission in Order No. 2023 did not take action
based on the record that was available in 2003. Instead, the Commission
has adopted the specific deadline and penalty structure set forth in
Order No. 2023, as clarified herein, based on the record before us in
this proceeding. This record is informed by an additional two decades
of experience,\809\ which justify the need for the reforms adopted in
Order No. 2023, including the adoption of study delay penalties.\810\
The Commission has also taken steps (e.g., site control requirements,
commercial readiness deposits, and withdrawal penalties) directed
toward reducing the number of speculative interconnection requests and
has discussed the costs to interconnection customers of interconnection
queue backlogs and late interconnection studies.\811\ The penalty
structure adopted in Order No. 2023 further includes several
safeguards,
[[Page 27080]]
including the appeal mechanism to seek relief from penalties, and we do
not believe that the penalty structure will be punitive.\812\ On the
record before us now, we continue to find that a structure where
penalties are incurred for late interconnection studies is warranted
notwithstanding that the Commission declined to adopt a proposal for
liquidated damages for study delays on a different record twenty years
ago.
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\809\ See Order No. 2023, 184 FERC ] 61,054 at P 3 (``The
electricity sector has transformed significantly since the issuance
of Order Nos. 2003 and 2006 . . . . These new challenges are
creating large interconnection queue backlogs and uncertainty
regarding the cost and timing of interconnecting to the transmission
system, increasing costs for consumers.'').
\810\ Even in Order No. 2003--when it was not confronting the
magnitude of interconnection queue backlogs and late studies
occurring now--the Commission recognized ``value of providing an
incentive to complete Interconnection Studies.'' Order No. 2003, 104
FERC ] 61,103 at P 898. It also concluded that it had statutory
authority to adopt liquidated damages provisions. Id. P 857.
\811\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 3, 27,
37-40, 43, 50.
\812\ Id. P 972.
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426. MISO TOs also point to a Commission decision from the end of
2022 in which--MISO TOs claim--the Commission ``affirmed the reasonable
efforts standard and eschewed the adoption of firm study deadlines.''
\813\ In that decision, however, the Commission approved PJM's FPA
section 205 proposal because, at that time, the reasonable efforts
standard was ``the currently applicable standard under the Commission's
pro forma LGIP and LGIA,'' noting that in Order No. 845 the Commission
had declined to eliminate the reasonable efforts standard.\814\ The
Commission has now determined, based on the record in this proceeding
and under FPA section 206, that the reasonable efforts standard is no
longer just and reasonable and specified the replacement standards, and
transmission providers (including PJM) are required to submit
compliance filings to adopt the requirements of Order No. 2023, as
modified herein.
---------------------------------------------------------------------------
\813\ MISO TOs Rehearing Request at 26 (citing PJM
Interconnection, L.L.C., 181 FERC ] 61,162 at P 138).
\814\ PJM Interconnection, L.L.C., 181 FERC ] 61,162 at P 138
(``Accordingly, at this time, we decline to require PJM to adopt
firm study deadlines instead of its proposed `Reasonable Efforts'
standard.'' (emphasis added)). Because the Commission relied on the
fact that the reasonable efforts standard was the then-applicable
pro forma standard, nothing in that case conflicts with our decision
here.
---------------------------------------------------------------------------
427. We disagree with Indicated PJM TOs' and NYISO's claims that
the Commission erred in comparing the penalty structure under Order No.
2023 to traffic ticket penalties, asserting that such traffic ticket
penalties are assessed solely based on objective criteria. Under Order
No. 2023's penalty structure, penalties are incurred based on
objectively identifiable criteria set forth in the tariff (failure to
complete the study in the required timeframe) and transmission
providers are not subject to sanctions or consequences other than the
penalty set forth in the tariff and approved by the Commission.\815\
While Indicated PJM TOs and NYISO argue that, in light of the appeal
process, the ultimate imposition of the penalty is not based on
objectively identifiable behavior, the approach adopted in Order No.
2023 is consistent with the Commission's traffic ticket penalty
precedent which includes an ``appeals process'' under which the
Commission considers ``all relevant circumstances.'' \816\
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\815\ See Cal. Indep. Sys. Operator Corp., 134 FERC ] 61,050, at
P 34 (2011) (``[T]hree qualifications must be met: (1) The activity
must be expressly set forth in the tariff; (2) The activity must
involve objectively identifiable behavior; and (3) The activity does
not subject the actor to sanctions or consequences other than those
expressly approved by the Commission and set forth in the tariff,
with the right of appeal to the Commission.'').
\816\ Id. P 37.
---------------------------------------------------------------------------
428. Nor, contrary to Indicated PJM TOs' claim, is any aspect of
the penalty structure impermissibly ``delegate[d] . . . to third
parties'' such as ``jurisdictional utilities.'' \817\ As just
discussed, the trigger for penalties occurs through objective criteria,
which were determined by the Commission on the record in this
proceeding. The appeals process is conducted by the Commission. To the
extent that RTOs/ISOs seek to recover the costs of penalties assessed
to them through section 205 filings, whether through individual filings
or a default structure, the Commission will review those filings to
determine whether they are just and reasonable, and not unduly
discriminatory or preferential.\818\
---------------------------------------------------------------------------
\817\ Indicated PJM TOs Rehearing Request at 22.
\818\ Indicated PJM TOs also argue that the Commission ``cannot
delegate authority to RTOs and ISOs to determine the reasonableness
of study delay penalty allocations'' such that it would be
inappropriate to ``giv[e] deference to the RTO's/ISO's decision in a
`good cause' proceeding.'' Indicated PJM TOs Rehearing Request at
24. This argument conflates appeals of penalties incurred by RTOs/
ISOs with how those penalties may be allocated as a matter of RTO/
ISO cost recovery under FPA section 205 proposals. Moreover, as just
explained, the Commission has not impermissibly delegated its
authority to RTOs/ISOs.
---------------------------------------------------------------------------
429. As to NYISO's argument that Order No. 890's transmission study
penalties are not relevant to the Commission's adoption of the penalty
structure in Order No. 2023, NYISO does not refute the numerous
similarities between these two structures. These include that, in Order
No. 890, the Commission: imposed set time frames for the completion of
transmission studies and found that transmission providers must have a
meaningful stake in meeting those deadlines; \819\ included a process
to waive penalties in unique circumstances but declined to create broad
categories of exemptions from penalties; \820\ rejected arguments that
imposing deadlines and penalties will necessarily decrease study
quality or harm system reliability; \821\ discussed other reforms that
would help achieve transmission deadlines, but did not take piecemeal
action by waiting to observe the effects of those reforms; \822\
provided for the distribution of penalties to transmission customers;
\823\ did not exempt RTOs; \824\ and prohibited transmission providers
from recovering study delay penalties through their transmission
rates.\825\ In light of these similarities, we continue to conclude
that Order No. 890 is relevant Commission precedent supporting the
study delay penalty structure adopted in Order No. 2023.\826\
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\819\ Order No. 890, 118 FERC ] 61,119 at P 1340; Order No. 890-
A, 121 FERC ] 61,297 at P 741.
\820\ Order No. 890, 118 FERC ] 61,119 at PP 1342-43, 1349;
Order No. 890-A, 121 FERC ] 61,297 at PP 743-45.
\821\ Order No. 890, 118 FERC ] 61,119 at P 1345; Order No. 890-
A, 121 FERC ] 61,297 at P 742.
\822\ Order No. 890, 118 FERC ] 61,119 at P 1346.
\823\ Id. P 1351.
\824\ Id. P 1353.
\825\ Id. P 1357; see also Order No. 890-A, 121 FERC ] 61,297 at
PP 486, 754-57 (noting that the Commission could consider case-
specific cost recovery proposals from RTOs/ISOs under FPA section
205).
\826\ NYISO's argument that it does not conduct the kinds of
transmission studies that Order No. 890 addressed and that such
studies are ``not a major issue for most other RTOs/ISOs,'' NYISO
Initial Comments at 36; see also NYISO Rehearing Request at 32 n.87,
does not negate these similarities for purposes of determining a
just and reasonable pro forma approach to ensuring interconnection
study timeliness under Order No. 2023. See Order No. 2023, 184 FERC
] 61,054 at P 1001 (rejecting NYISO's argument); cf.id. PP 965-72
(finding that the imposition of study delay penalties was just and
reasonable and would not be punitive as to transmission providers);
id. PP 1004-07, 1013.
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430. The Commission in Order No. 2023 also recognized that there
were differences between the penalty structure in Order No. 2023 as
compared to Order No. 890, but found that they were ``warranted by the
significant and growing interconnection queue backlogs.'' \827\ In
other words, far from NYISO's suggestion that the Commission was
unreasonably citing ``the fact that interconnection studies are more
numerous, complex, and susceptible to delays than transmission studies
as a reason for treating the two identically,'' \828\ the Commission
was here explaining why the differences between these two structures
were appropriate.\829\ We continue to find
[[Page 27081]]
those differences warranted, based on the same considerations
articulated in Order No. 2023,\830\ notwithstanding arguments that the
approach in Order No. 2023 represents a departure from the approach the
Commission took in Order No. 890. These considerations reflect greater
need for direct, clear, and straightforward incentives for transmission
providers to achieve interconnection study timeliness than were
pertinent in the context of transmission studies in Order No. 890.
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\827\ Order No. 2023, 184 FERC ] 61,054 at P 1013 (noting that
interconnection studies ``are more numerous, complex, and
susceptible to delays'' and ``there is a growing number of
interconnection customers affected by study delays. We believe that
these factors underscore the need for transmission providers to meet
study deadlines and the need to provide an incentive, in the form of
study delay penalties'').
\828\ NYISO Rehearing Request at 32 n.87.
\829\ See also supra PP 281-282 (explaining how previous reforms
had failed to ensure timely interconnection study queue processing
or resolve significant interconnection queue backlogs). This
explanation for the differences between Order No. 2023 and Order No.
890 also addresses the substance of NYISO's comment in which it also
observed such differences. See NYISO Rehearing Request at 32 n.87;
NYISO Initial Comments at 36 (arguing that the penalty structure
proposed in the NOPR differed from that in Order No. 890 because
transmission study penalties were not imposed automatically, without
notification to the Commission). We further note that NYISO's
characterization of Order No. 2023 as strict liability is
inaccurate, and that the appeal process in particular addresses
these concerns. See supra PP -360.
\830\ Order No. 2023, 184 FERC ] 61,054 at P 1013 (``[C]ompared
to transmission service requests, interconnection studies are more
numerous, complex, and susceptible to delays. Further, as noted
above, there is a growing number of interconnection customers
affected by study delays. We believe that these factors underscore
the need for transmission providers to meet study deadlines.'').
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431. We also find that the Commission adequately responded to
NYISO's argument that ``reliability penalties are generally non-
financial and that when financial penalties do apply there are numerous
mechanisms in place to avoid unfairly harsh results,'' particularly a
``risk-based evaluation of all the facts and circumstances related to
an individual violation.'' \831\ Under Order No. 2023, transmission
providers have ``the opportunity to seek relief from a penalty by
filing an appeal, which the Commission will closely scrutinize and in
response to which the Commission will issue an order.'' \832\ We have
elsewhere rejected arguments that this appeals process is impermissibly
``inchoate'' and arguments that Order No. 2023 unreasonably presumes
that ``transmission providers are at fault for study delays and that
all study delays warrant penalties.'' \833\
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\831\ NYISO Rehearing Request at 31-32 & n.85.
\832\ Order No. 2023, 184 FERC ] 61,054 at P 1001.
\833\ NYISO Rehearing Request at 31; see, e.g., supra section
II.D.1.c.ii.
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432. Indicated PJM TOs' contention that Order No. 2023 is unlawful
because the Commission has attempted therein to override RTO/ISO
governing documents, in contravention of Atlantic City I and Atlantic
City II,\834\ is misplaced.\835\ Indicated PJM TOs are misreading
Atlantic City I and Atlantic City II, which do not stand for the
proposition that a particular RTO/ISO's approach to its own governance
can override the Commission's authority under FPA section 206 to set
just and reasonable rates. Rather, in Atlantic City I, the Commission
had required modifications to a proposed ISO structure including ``to
eliminate a provision allowing utilities `to unilaterally file to make
changes in rate design, terms or conditions of jurisdictional
services,' except that they could still unilaterally seek a change in
the transmission revenue requirements.'' \836\ As a result of these
required modifications, changes in rate design could not be made
through unilateral FPA section 205 filings by individual utilities, but
instead ``only the ISO could propose changes in rate design.'' \837\
The court held that the Commission erred in doing so, explaining that
the Commission lacked statutory authority ``to require the utility
petitioners to cede rights expressly given to them in section 205 of
the Federal Power Act.'' \838\
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\834\ See Indicated PJM TOs Rehearing Request at 6 (arguing that
``the PJM CTOA does not authorize PJM to assign penalty amounts to
PJM transmission owners'' and, under these cases ``the Commission
cannot prevent public utilities from deciding how to recover their
costs and cannot direct public utilities to make cost recovery
filings in any prescribed manner''); id. at 8-12.
\835\ We note that this argument overstates the effect of Order
No. 2023, which did not ``direct'' any RTOs/ISOs, including PJM, to
make cost recovery filings at all, let alone do so according to any
particular structure. See Order No. 2023, 184 FERC ] 61,054 at P 994
(providing that RTOs/ISOs ``may'' submit FPA section 205 filings and
that they may propose a default structure or make individual section
205 filings to recover costs); id. P 998 (noting potential avenues
to fund study delay penalties, such as collecting administrative
fees).
\836\ Atl. City I, 295 F.3d at 7; see also id. at 6-7
(explaining that the proposed agreement permitted the ``transmission
owners to file changes in transmission service rate design and non-
rate terms and conditions to the tariff under section 205,'' subject
to potential rejection of a proposed change by the independent PJM
Board by majority vote).
\837\ Id. at 7.
\838\ Id. at 9; see also id. at 10 (explaining that the
Commission was ``purport[ing] to deny the utility petitioners any
ability to initiate rate design changes with respect to services
provided with their own assets,'' thereby ``eliminat[ing] the very
thing that the statute was designed to protect--the ability of the
utility owner to set the rates it will charge prospective customers,
and change them at will, subject to review by the Commission.''
(quotation marks omitted); id. at 11 (holding that the Commission
cannot deny ``the petitioners their rights provided for by a statute
enacted by both houses of Congress and signed into law by the
[p]resident''); Atl. City II, 329 F.3d at 859 (``[W]e reaffirm and
clarify our prior decision that FERC has no jurisdiction to enter
limitations requiring utilities to surrender their rights under
Sec. 205 of the FPA to make filings to initiate rate changes.'').
---------------------------------------------------------------------------
433. Thus, the basis for the court's remands in Atlantic City I and
Atlantic City II was that the Commission exceeded its jurisdiction in
requiring utilities to surrender, to an RTO/ISO, their FPA section 205
right to propose changes to rate designs. These cases do not establish
that the Commission's power under FPA section 206, following
appropriate findings, to ``determine the just and reasonable rate,
charge, classification, rule, regulation, practice, or contract to be
thereafter observed and in force'' \839\ is subordinate to a particular
RTO/ISO's governing documents. To the contrary, the court acknowledged
the Commission's authority to require transmission providers to file
particular rates upon a finding that existing rates are unlawful, under
FPA section 206.\840\
---------------------------------------------------------------------------
\839\ 16 U.S.C. 824e(a).
\840\ See, e.g., Atl. City I, 295 F.3d at 10 (``The courts have
repeatedly held that FERC has no power to force public utilities to
file particular rates unless it first finds the existing filed rates
unlawful. . . . [T]he power to initiate rate changes rests with the
utility and cannot be appropriated by FERC in the absence of a
finding that the existing rate was unlawful.'' (emphasis added)).
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vi. Alternative Approaches and Miscellaneous Issues
(a) Requests for Rehearing
434. A number of the rehearing requests assert that the Commission
could have taken an alternative approach to eliminating the reasonable
efforts standard and adopting the deadline and penalty structure set
forth in Order No. 2023. EEI urges that the Commission could have
instead ``ensure[d] transmission providers are afforded specified
timeframes to complete certain tasks during studies.'' \841\ MISO TOs
assert that the Commission should have taken an approach that parallels
the one adopted for transmission studies in Order No. 890 of monitoring
for chronic delays, investigating causes, and then imposing a
remedy.\842\ NYISO argues that the Commission could instead allow
``individual RTO/ISO regions to propose alternative rules as
independent entity variations'' or build on Order No. 845 by updating
and enhancing its reporting requirements, which would allow more
targeted actions to address problems.\843\
---------------------------------------------------------------------------
\841\ EEI Rehearing Request at 9 (arguing that this approach
acknowledges that one entity's actions often cannot commence until
another entity's work is completed).
\842\ MISO TOs Rehearing Request at 36-37.
\843\ NYISO Rehearing Request at 20-21.
---------------------------------------------------------------------------
435. NYISO asserts that Order No. 2023's adoption of a 10 business-
day grace period does not provide meaningful relief to transmission
providers, like NYISO, that will be required to study large numbers of
interconnection requests, and that affording the same grace period to
all transmission providers despite differing
[[Page 27082]]
workloads is not reasoned decision-making.\844\ It further argues that
the transition period the Commission adopted in Order No. 2023 simply
postpones the problems with RTO/ISO penalty cost recovery, without
resolving that problem.\845\ And NYISO claims that the Commission
significantly increased penalty levels from the levels proposed by the
NOPR, without a reasoned basis for doing so.\846\
---------------------------------------------------------------------------
\844\ Id. at 35.
\845\ Id. at 37.
\846\ Id. (asserting that the Commission's example estimating a
$63,000 penalty for a six-month delay under the NOPR structure does
not show that the penalties assessed under Order No. 2023 will be
proportionate or non-punitive, particularly as to not-for-profit
RTOs/ISOs).
---------------------------------------------------------------------------
436. Indicated PJM TOs argue that pro rata disbursement of
penalties to interconnection customers is unduly discriminatory, given
that study deposits increase based on the size of the generating
facility making the interconnection request.\847\ They assert that
Order No. 2023 disregards the different costs associated with larger
generating facilities and seeks to treat interconnection customers with
substantially fewer costs as equals, which they claim is inconsistent
with precedent.\848\
---------------------------------------------------------------------------
\847\ Indicated PJM TOs Rehearing Request at 40-41.
\848\ Id. at 40 (citing Ala. Elec. Coop., 684 F.2d at 28).
---------------------------------------------------------------------------
437. Invenergy argues that the Commission erred in failing to
provide for penalties when an affected system misses a pre-study
deadline, such as the 20 business day deadline to indicate whether it
will conduct an affected system study, or the 15 business day deadline
to provide a cost estimate and schedule for that study.\849\ Invenergy
notes that, in contrast to the 150-day deadline for cluster studies,
which is measured from the end of the customer engagement window, an
affected system will be expected to meet pre-study deadlines only when
and if the host transmission provider provides a notice that it has
been identified as an affected system for a particular interconnection
customer.\850\ Invenergy argues that the Commission should apply a
$2,000 per business day penalty on affected systems for failing to meet
pre-study deadlines. Clean Energy Associations present similar
arguments in a request for clarification.\851\
---------------------------------------------------------------------------
\849\ Invenergy Rehearing Request at 2-3.
\850\ Id. (asserting that there is a ``risk that the failure of
an Affected System to meet pre-study deadlines will delay
commencement of the Affected System study (and thus the start of the
150-day clock applicable to that study)'').
\851\ See Clean Energy Associations Rehearing Request at 76-77.
---------------------------------------------------------------------------
438. MISO argues that Order No. 2023 should be revised to provide
that RTOs that conduct multiple system impact studies may include a
combined timeline for cluster studies for penalty purposes.\852\ MISO
also argues that the Commission should modify the transition period to
properly account for delays in clusters that pre-date the effective
date of Order No. 2023, because delays in such clusters could cause
backlogs that will affect future studies.\853\ It claims that doing so
is necessary to avoid retroactive effects that penalize RTOs for delays
prior to Order No. 2023's effective date, which would contravene the
filed rate doctrine and the rule against retroactive ratemaking.
---------------------------------------------------------------------------
\852\ MISO Rehearing Request at 11-14.
\853\ Id. at 15-16.
---------------------------------------------------------------------------
(b) Determination
439. In Order No. 2023, the Commission stated that transmission
providers should distribute any collected study delay penalties ``to
interconnection customers in the relevant study on a pro rata per
interconnection request basis to offset their study costs.'' \854\
Indicated PJM TOs assert that this approach is unduly discriminatory
because it results in equal treatment of differently situated
customers, specifically those that paid larger study deposits or that
may have larger final study costs versus those that paid smaller study
deposits or that may have smaller final study costs.\855\ While the
Commission in Order No. 2023 stated that disbursement of
interconnection study delay penalties would be on a ``pro rata'' (i.e.,
proportionate) basis per interconnection request, it did not further
specify how penalties would be distributed. We clarify here that study
delay penalties must be distributed on a pro rata basis proportionate
to the final study costs paid by each interconnection customer in the
relevant study. This approach ensures that the distribution of the
penalty (i.e., the amount of the ``offset'' each interconnection
customer receives) is related to the costs paid by the interconnection
customer for the relevant study.
---------------------------------------------------------------------------
\854\ Order No. 2023, 184 FERC ] 61,054 at P 963; see also id.
at P 990; pro forma LGIP section 3.9.
\855\ Indicated PJM TOs Rehearing Request at 40-41.
---------------------------------------------------------------------------
440. We decline Invenergy's request that the Commission grant
rehearing and find that the study delay penalty of $2,000 per business
day applies to the pre-study deadlines for affected systems.\856\ The
penalties the Commission adopted in Order No. 2023 focus on the process
of conducting interconnection studies, and how delays in that process
contribute to interconnection queue backlogs. The record in this
proceeding does not contain sufficient information regarding persistent
delays in the pre-study process for affected systems that contribute to
interconnection queue backlogs to persuade us to extend the study delay
penalties to such pre-study deadlines.\857\ We further find that
imposing penalties on affected system transmission providers would
result in unduly discriminatory treatment of similarly situated
entities: host transmission providers are also required to meet pre-
study deadlines in the pro forma LGIP,\858\ including deadlines for
communications with affected system transmission providers, but incur
no penalties for missing those deadlines.
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\856\ For the same reasons discussed in this paragraph, we also
reject Clean Energy Associations' similar argument couched as a
request for clarification.
\857\ The opportunities for delay that Invenergy cites are
associated with tasks that--particularly compared to the conduct of
an interconnection study--are relatively straightforward: providing
notice of intent to conduct an affected system study and a non-
binding cost estimate and schedule for that study. See id. It is
therefore not apparent that there should be significant delays
associated with these tasks as a general matter, and we will not
presume that affected systems will tactically delay such tasks to
avoid triggering other deadlines. If such delays arise we may
consider further action.
\858\ See, e.g., pro forma LGIP sections 3.1, 3.4, 3.6.
---------------------------------------------------------------------------
441. In Order No. 2023, the Commission explained that it
``decline[d] to adopt alternative proposals [instead of the deadline
and penalty approach set forth in Order No. 2023] suggested by various
commenters,'' \859\ and we sustain that decision here in response to
similar arguments on rehearing.\860\ As to MISO TOs' argument that the
Commission should grant rehearing and adopt an approach similar to the
approach taken in Order No. 890, the Commission considered the
differences from the approach set forth in Order No. 890. It determined
that these differences were
[[Page 27083]]
warranted,\861\ and--on rehearing--we affirm that conclusion. The study
delay penalty structure appropriately responds to the problem of
interconnection study delays contributing to unjust and unreasonable
rates by creating strong, direct, and clear incentives on transmission
providers while recognizing that the value of interconnection studies
is related to their timeliness. Moreover, given that interconnection
study delays are already a significant and widespread problem, we find
that it would not be appropriate to further delay imposing meaningful
incentives while we further ``monitor for chronic study delays'' \862\
by individual transmission providers. Likewise, we find that ``updating
and enhancing [Order No. 845's] reporting requirements'' to ``create
even more transparency,'' as NYISO urges,\863\ or that, instead of
imposing deadlines supported by penalties, the Commission simply
provide ``specified timeframes to complete certain tasks during
studies'' as EEI suggests,\864\ would not be sufficient to address the
problem of interconnection queue backlogs and repeatedly delayed
interconnection studies.\865\
---------------------------------------------------------------------------
\859\ Order No. 2023, 184 FERC ] 61,054 at P 1025.
\860\ Even assuming that one or more of these alternative
approaches might also address the problem of late interconnection
studies contributing to interconnection queue backlogs, leading to
unjust and unreasonable rates, this does not demonstrate that the
deadline and penalty structure in Order No. 2023 is not just and
reasonable. See Petal Gas Storage, LLC v. FERC, 496 F.3d 695, 703
(D.C. Cir. 2007) (``[The Commission]is not required to choose the
best solution, only a reasonable one.''); ExxonMobil Oil Corp. v.
FERC, 487 F.3d 945, 955 (D.C. Cir. 2007) (``We need not decide
whether the Commission has adopted the best possible policy as long
as the agency has acted within the scope of its discretion and
reasonably explained its actions.''); Midwest Indep. Transmission
Sys. Operator, Inc., 127 FERC ] 61,109, at P 20 (2009) (``It is well
established that there can be more than one just and reasonable rate
. . . .'').
\861\ See Order No. 2023, 184 FERC ] 61,054 at P 1013 (noting
that interconnection studies ``are more numerous, complex, and
susceptible to delays'' and ``there is a growing number of
interconnection customers affected by study delays. We believe that
these factors underscore the need for transmission providers to meet
study deadlines and the need to provide an incentive, in the form of
study delay penalties''); id. P 1025.
\862\ MISO TOs Rehearing Request at 36.
\863\ NYISO Rehearing Request at 21.
\864\ EEI Rehearing Request at 9.
\865\ See Order No. 2023, 184 FERC ] 61,054 at P 1025; supra PP
281-282 (explaining that the Commission's previous efforts to
address interconnection queue backlogs through Order No. 845's
reporting requirements have not been sufficient to remedy this
problem, which has worsened since those efforts were undertaken).
The Commission has already addressed NYISO's suggestion that ``the
Commission could allow individual RTO/ISO regions to propose
alternative rules as independent entity variations in their Order
No. 2023 compliance filings.'' NYISO Rehearing Request at 20-21; see
Order No. 2023, 184 FERC ] 61,054 at P 1764. We do not, and cannot,
prejudge whether such requested variations will be acceptable.
---------------------------------------------------------------------------
442. We also decline AEP's request to expand appeal rights beyond
the transmission provider that is directly assigned the penalty. In
instances where an RTO/ISO incurs a penalty and seeks to recover the
cost of that penalty from transmission-owning members, such
transmission owners would have the right to intervene in any proceeding
under FPA section 205 or file a complaint challenging the recovery of
that penalty cost under FPA section 206, as appropriate. We believe
that this adequately protects the interests of transmission-owning
members of RTOs/ISOs.
443. MISO argues that the Commission should modify the transition
period to account for delays in clusters that pre-date the effective
date of Order No. 2023 and can cause backlogs that will affect future
studies, claiming that this modification is necessary because delays in
prior study clusters may affect studies in future clusters.\866\
According to MISO, it must be allowed to ``clear all pre-effective date
`baked-in' delays before penalties begin'' in order to avoid
``statutory retroactive effects by penalizing RTOs based on delays that
occur prior to its effective date.'' \867\ We do not agree. Order No.
2023 is directed toward future cluster studies, and--in fact--already
provides a generous transition period to adapt and address existing
backlogs, as a matter of ensuring that the impacts of the deadline and
penalty structure are not unduly burdensome or punitive. It is not
clear to us how the prospective application of penalties to the third
cluster study cycle after a transmission provider's compliance filing
becomes effective implicates concerns about retroactivity or the filed
rate doctrine.\868\ More generally, all transmission providers,
including RTOs/ISOs, retain the option to argue on compliance why their
particular circumstances warrant variations from Order No. 2023 using
the appropriate standard.
---------------------------------------------------------------------------
\866\ See MISO Rehearing Request at 15-16.
\867\ Id. at 16.
\868\ Neither of the cases MISO cites supports the notion that,
where the Commission regulates future activity, retroactivity and
filed rate concerns may arise simply because pre-existing facts
might influence the ease of compliance with the Commission's
forward-looking regulation. See Ark. La. Gas Co. v. Hall, 453 U.S.
571, 573 (1981) (considering whether the filed rate doctrine
``forbids a state court to calculate damages in a breach-of-contract
action based on an assumption that had a higher rate been filed, the
Commission would have approved it''); Old Dominion Elec. Coop. v.
FERC, 892 F.3d 1223, 1226 (D.C. Cir. 2018) (affirming Commission
decision that it could ``waive provisions of the governing tariff
retroactively so that [Old Dominion] could recover its costs'').
---------------------------------------------------------------------------
vii. Requests for Clarification
(a) Summary of Requests for Clarification
444. AEP asks the Commission to clarify that the study delay
penalties will not incur interest prior to distribution of the penalty
funds and that the entity (i.e., transmission provider or transmission
owner) conducting the study will have no obligation to pay interest on
study delay penalties.\869\
---------------------------------------------------------------------------
\869\ AEP Rehearing Request at 21.
---------------------------------------------------------------------------
445. Joint RTOs ask the Commission to clarify that Order No. 2023's
one-phase cluster study was not intended to require RTOs or others that
conduct multiple system impact studies in a multi-phase study process
(e.g., MISO, SPP, and PJM) to impose penalties for each delayed system
impact study on an individual basis.\870\ They argue that an RTO with a
multi-phase interconnection process should be allowed to propose on
compliance that the penalty for delayed interconnection studies will be
assessed based on whether the RTO has complied with the aggregate
timeline provided for all of the system impact studies in a
cluster.\871\ They also seek clarification from the Commission that, in
establishing study completion timelines in their tariffs (to the extent
such timelines do not already exist), they may propose specific factors
they would apply in assessing the complexity of individual clusters for
the purposes of establishing such timelines and the application of
penalties for exceeding such timelines.\872\
---------------------------------------------------------------------------
\870\ Joint RTOs Rehearing Request at 10.
\871\ Id. at 10-11 (noting that in its three-phase study
process, MISO is required to complete a preliminary, revised, and
final system impact study in 65, 75, and 50 calendar days,
respectively).
\872\ Id. at 12.
---------------------------------------------------------------------------
446. Joint RTOs and PJM seek clarification that all penalties for
delayed studies will apply on a per cluster basis, per business day
rather than per interconnection customer in the cluster, per business
day.\873\
---------------------------------------------------------------------------
\873\ Id.; PJM Rehearing Request at 28.
---------------------------------------------------------------------------
447. Joint RTOs ask the Commission to clarify that the RTO/ISO
penalty recovery options provided in Order No. 2023 are not mutually
exclusive, nor intended to be an exhaustive list, and that an RTO/ISO
may propose using a combination of such options.\874\ They also ask the
Commission to clarify that, where interconnection customers contributed
to the study delay, any resulting penalty may be collected from such
interconnection customers under the penalty collection mechanism(s)
that an RTO/ISO may adopt pursuant to Order No. 2023 and that an RTO/
ISO may propose to limit any penalty distribution to those
interconnection customers that have not contributed to a study delay.
In addition, Joint RTOs ask the Commission to clarify that, in cases
where a transmission-owing member(s) conducted the late study, the
tariff mechanisms by which payments flow can be addressed in individual
compliance filings where transmission providers can account for their
regional processes. Lastly, Joint RTOs ask the Commission to clarify
that RTOs/ISOs
[[Page 27084]]
are not required to collect any penalty prior to concluding the appeals
process under section 3.9(3) of the pro forma LGIP.
---------------------------------------------------------------------------
\874\ Joint RTOs Rehearing Request at 13-14.
---------------------------------------------------------------------------
448. NYTOs request clarification that Order No. 2023's prohibition
against transmission owners recovering delay penalties in rates does
not preclude a transmission owner from recovering such penalty costs
that were caused by, and initially assessed to, the RTO/ISO.\875\
---------------------------------------------------------------------------
\875\ NYTOs Rehearing Request at 29 (arguing that
``[t]ransmission providers' investors should not bear such third-
party risks and costs, especially when they have no ownership stake
in the non-profit RTO/ISO,'' and that ``forcing such a burden
breaches basic cost causation principles, is arbitrary and
capricious, and is an uncompensated taking'').
---------------------------------------------------------------------------
449. NYISO asks the Commission to clarify that Order No. 2023
authorizes RTOs/ISOs to recover study penalty costs from consumers
without first seeking the Commission's permission, so long as they do
so through non-transmission-related charges, such as administrative
fees assessed against market participants.\876\
---------------------------------------------------------------------------
\876\ NYISO Rehearing Request at 26.
---------------------------------------------------------------------------
450. NYISO asks the Commission to clarify that the Commission will
allow penalty waivers when a transmission provider is not solely
responsible for a study delay \877\ or in cases where identifying the
extent to which different parties are to blame for a late study would
be difficult and time-consuming.\878\ NYISO also asks the Commission to
clarify that reasonable penalty waiver requests will be compatible with
its traditional four-prong waiver analysis.\879\
---------------------------------------------------------------------------
\877\ Id. at 40 (for example, if it were shown that
interconnection customers substantially caused a study delay with
transmission owners and/or an RTO/ISO playing comparatively smaller
roles or other potentially likely scenarios).
\878\ Id. at 41 (arguing that it would be better for all parties
and the Commission to avoid complex contested appeal proceedings).
\879\ Id. (for example, if a study delay impacts numerous
interconnection customers, that will not mean that a waiver request
would be denied because it is ``not limited in scope'').
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451. NYISO requests clarification that RTOs/ISOs may include study
penalty cost recovery proposals in their individual compliance
filings.\880\ Specifically, it asks the Commission to clarify that
``default structure'' penalty cost recovery proposals may be included
in Order No. 2023 compliance filings in addition to FPA section 205
filings.\881\ NYISO argues that the Commission has traditionally
afforded RTOs/ISOs considerable flexibility regarding the scope of
compliance filings made in response to major new rules and that it
would be unduly discriminatory for the Commission to leave RTOs/ISOs
that need stakeholder approval to file tariff revisions with less
ability to recover study penalty costs than those that do not.\882\
---------------------------------------------------------------------------
\880\ Id. at 41-42.
\881\ Id. at 42 (explaining that, because it must obtain super
majority stakeholder approval to submit tariff revisions under FPA
section 205, it and other similarly situated RTOs/ISOs would be
prevented from filing ``default structure'' recovery mechanisms if a
minority of their stakeholders opposed them).
\882\ Id. at 43.
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(b) Determination
452. We grant AEP's request for clarification that study delay
penalties will not incur interest prior to distribution of the penalty
funds and that the entity conducting the study (i.e., transmission
provider or transmission owner) will have no obligation to pay interest
on study delay penalties. Assessing interest during the pendency of an
appeal could be viewed as penalizing the transmission provider for
making the appeal, particularly to the extent that the transmission
provider does not control the timeline for resolution of the appeal.
453. We deny requests for clarification of how the penalty process
would apply to RTOs/ISOs with multi-phase interconnection procedures
that include multiple sequential cluster studies. Order No. 2023 did
not contemplate such sequential phased cluster study procedures: thus,
any such procedures and attendant penalty processes are outside the
scope of the rule. However, the Commission recognized that many
transmission providers have adopted or are in the process of adopting
similar reforms to those adopted in Order No. 2023 and noted that it
did not intend to disrupt these ongoing transition processes.\883\ On
compliance, transmission providers can propose deviations from the
requirements adopted in Order No. 2023 and demonstrate how those
deviations meet the relevant standard.\884\
---------------------------------------------------------------------------
\883\ Order No. 2023, 184 FERC ] 61,054 at P 1765.
\884\ Id. PP 1764-1765 (citing Order No. 2003, 104 FERC ] 61,103
at P 825; Order No. 2006, 111 FERC ] 61,220 at PP 546-547; Order No.
845, 163 FERC ] 61,043 at P 43 (explaining that a transmission
provider that is not an RTO/ISO that seeks a variation from the
requirements of the final rule must present its justification for
the variation as consistent with or superior to the pro forma LGIA
or pro forma LGIP); Order No. 2003, 104 FERC ] 61,103 at P 826
(``[w]ith respect to an RTO or ISO . . . we will allow it to seek
`independent entity variations' from the Final Rule . . .)).
---------------------------------------------------------------------------
454. We grant requests for clarification that all penalties for
delayed studies will apply on a per-study basis, per business day that
the study is delayed past the tariff-specific deadline, rather than per
interconnection customer. As noted in Order No. 2023, delays of cluster
studies beyond the tariff-specified deadline will incur a penalty of
$1,000 per business day; delays of cluster restudies beyond the tariff-
specified deadline will incur a penalty of $2,000 per business day;
delays of affected system studies beyond the tariff-specified deadline
will incur a penalty of $2,000 per business day; and delays of
facilities studies beyond the tariff-specified deadline will incur a
penalty of $2,500 per business day.\885\
---------------------------------------------------------------------------
\885\ Order No. 2023, 184 FERC ] 61,054 at P 973.
---------------------------------------------------------------------------
455. We grant Joint RTOs' request for clarification regarding the
mutual exclusivity of RTO/ISO penalty recovery options and reiterate
that Order No. 2023 did not require adoption of any specific RTO/ISO
penalty recovery mechanism. Order No. 2023 recognized that RTOs/ISOs
have several options for collecting study delay penalties, such as
submitting FPA section 205 filings to seek recovery for study delay
penalties from transmission owners contributing to study delays or
proposing to either establish a tariff mechanism for assigning costs
generally or for assigning costs for specific study delay
penalties.\886\ These options were not intended to be mutually
exclusive or exhaustive; rather, the Commission recognized RTOs/ISOs'
flexibility to propose penalty recovery mechanisms that work for their
regions.
---------------------------------------------------------------------------
\886\ Id. P 998.
---------------------------------------------------------------------------
456. We deny Joint RTOs' request to clarify that, where
interconnection customers contribute to a study delay, any resulting
penalty may be collected from such interconnection customers under the
penalty collection mechanisms that an RTO/ISO may adopt pursuant to
Order No. 2023. Indeed, the Commission explicitly stated in Order No.
2023 that it ``decline[d] to allow any transmission provider to recover
study delay penalties from interconnection customers to the extent the
interconnection customers cause delays.'' \887\ We note, however, that
to the extent that study delays result from an interconnection
customer's actions, transmission providers may record the length of
those delays and report that information in any appeal of study delay
penalties filed with the Commission.\888\ Further, in the event that an
interconnection request is incomplete or an interconnection customer
misses a deadline, those interconnection requests are subject to the
withdrawal provisions of pro forma LGIP section 3.7.
---------------------------------------------------------------------------
\887\ Id. P 993.
\888\ See id. P 1019.
---------------------------------------------------------------------------
457. We deny Joint RTOs' request to clarify that an RTO/ISO may
propose to
[[Page 27085]]
limit any penalty distribution to those interconnection customers that
have not contributed to a study delay. We note that we agree with the
principle that interconnection customers who contribute to study delays
should not benefit from penalty payments the same as other
interconnection customers who were affected by, but did not contribute
to, the delayed study. However, the appeals process established by
Order No. 2023 provides a strong safeguard against that scenario.
Specifically, transmission providers will be able to appeal any
penalties to the Commission and show that there is good cause to grant
relief from such penalties. As Order No. 2023 noted, to the extent that
study delays result from an interconnection customer's actions,
transmission providers may record the length of those delays and report
that information in any appeal of study delay penalties filed with the
Commission.\889\ Thus, if the record shows that a study delay is caused
solely by the actions or inactions of interconnection customers, the
Commission is likely to grant relief from that penalty, meaning that
there will be no penalty to distribute to interconnection customers.
---------------------------------------------------------------------------
\889\ Id.
---------------------------------------------------------------------------
458. We recognize that a study delay might be caused only in part
by an interconnection customer and in part by the actions of the
transmission provider, in which case the transmission provider could
incur a penalty that would then be distributed to all interconnection
customers affected by the delay. Even so, we provide two reasons why
the at-fault interconnection customer in that situation would likely
still not benefit from penalty payments. First, interconnection
customers that contribute to study delays, for example because they
fail to timely submit information needed to commence a study, are not
likely to remain in the queue past the missed study deadline. This is
because all interconnection customers have strict deadlines during the
study process and, as Order No. 2023 noted, if an interconnection
customer fails to adhere to all requirements in the pro forma LGIP
(except in the case of disputes), the transmission provider may deem
the interconnection customer's interconnection request to be withdrawn
pursuant to section 3.7 of the pro forma LGIP, in which case they would
be ineligible to receive study delay penalty payments. Second, in the
unlikely scenario that interconnection customers that contribute to
study delays remain in the queue past the missed study deadline, and a
study penalty is incurred by the transmission provider, the
transmission provider would be able to provide, in an appeal to the
Commission, facts sufficient to assess the length of the delay caused
by the interconnection customers, because any missed LGIP deadlines and
subsequent delays should be well-documented. Thus, the Commission
could, for example, reduce the penalty by the length of the delay (in
business days) that is attributable to the interconnection customers.
In this case, the penalty distributed to all interconnection customers
would exclude the number of business days the study was delayed due to
the actions of the at-fault interconnection customers and would only be
calculated based on the number of business days the study was delayed
due to the actions of the transmission provider. In this fashion, the
interconnection customers that contributed to the delay would not
benefit from their contributions to the study delay.
459. For these reasons, we believe that the burden of establishing
such a penalty distribution limitation would outweigh the benefit. This
process would create additional litigation around penalties beyond the
established appeals process, which would take up more of the parties'
and Commission's resources. As discussed above, given the low
likelihood that interconnection customers who contribute to study
delays would be eligible for distribution of the penalty amount
assessed for such delays, we do not find that the additional
administrative burden is warranted.
460. We deny Joint RTOs' request for clarification that, in cases
where the transmission-owning member(s) conducted the late study, the
mechanisms by which payments flow can be addressed in individual
compliance filings where transmission providers can account for their
regional tariff processes. In Order No. 2023, the Commission adopted 18
CFR 35.28(f)(1)(ii) to specify that, for RTOs/ISOs in which the
transmission-owning members perform certain interconnection studies,
the study delay penalties under the new pro forma LGIP will be incurred
directly by the transmission-owning member(s) that conducted the late
study, thereby mooting the issue of how RTOs/ISOs recover those
specific penalties. RTOs/ISOs will thus not be required to make any
filings establishing how late study penalty payments flow from at-fault
transmission owners. However, we note that RTOs/ISOs may explain
specific circumstances on compliance and justify any deviations under
the independent entity variation standard.
461. We grant Joint RTOs' request for clarification that
transmission providers are not required to collect or earmark any late
study penalty prior to concluding the appeals process under section
3.9(3) of the pro forma LGIP. We agree that this is not required
because collecting or earmarking study penalties before the appeals
process runs its course would be administratively burdensome and could
entail unnecessary refund processes.
462. In response to NYISO's request for clarification that the
Commission will entertain requests for appeal of a penalty in various
situations, we clarify that the Commission did not limit the evidence
that a transmission provider might present in its appeal. The
Commission will evaluate each appeal on a case-by-case basis and
determine whether good cause has been shown to grant relief from any
applicable penalties.
463. We deny NYISO's request for clarification that reasonable
penalty waiver requests will be compatible with the Commission's
traditional four-prong waiver analysis. The four-prong waiver analysis
will not be the relevant standard used in the penalty appeals process;
rather, as the Commission made clear in Order No. 2023, the Commission
will evaluate whether good cause exists to grant relief from the study
delay penalty and will issue an order granting or denying relief.\890\
We continue to find that the good cause standard provides an adequate
framework through which the Commission can evaluate whether it is
appropriate to grant relief from any applicable penalties.
---------------------------------------------------------------------------
\890\ Id. PP 987, 989.
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464. We deny NYISO's request to clarify that ``default structure''
penalty cost recovery proposals may be included in Order No. 2023
compliance filings in addition to FPA section 205 filings. Order No.
2023 declined to adopt the NOPR proposal to require RTOs/ISOs to submit
requests to recover the costs of specific study delay penalties;
instead, Order No. 2023 stated that RTOs/ISOs may make such filings
under FPA section 205 in the future if they choose.\891\ We find it
inappropriate to invite such proposals on compliance because the
Commission did not make an FPA section 206 finding that any such
default penalty structure would be just, reasonable, and not unduly
discriminatory or preferential. In response to NYISO's concerns about
obtaining majority stakeholder approval
[[Page 27086]]
for FPA section 205 filings, we note that, to the extent it is
concerned that the lack of a mechanism for the transmission provider to
recover the costs of delay penalties renders its tariff unjust and
unreasonable, NYISO has the opportunity to file an FPA section 206
complaint.
---------------------------------------------------------------------------
\891\ Id. P 994.
---------------------------------------------------------------------------
465. We deny NYTOs' request to clarify that Order No. 2023's
prohibition against transmission providers recovering delay penalties
in rates does not preclude a transmission owner from recovering such
penalty costs that were caused by, and initially assessed to, the RTO/
ISO. NYTOs are concerned that RTOs/ISOs will pass penalties to
transmission owner members when those providers are not responsible for
a delay. We find this concern premature because the Commission does not
yet have before it any FPA section 205 proposals by an RTO/ISO to
recover the costs of study delay penalties. We continue to find that
concerns about any RTO/ISO proposal to recover the costs of study delay
penalties are best addressed on a case-by-case basis in the relevant
FPA section 205 proceedings.\892\
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\892\ Id. P 996.
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2. Affected Systems
a. Affected Systems Study Process
i. Order No. 2023 Requirements
466. In Order No. 2023, the Commission adopted an affected system
study process and added several related definitions to the pro forma
LGIP.\893\ The Commission found that a detailed affected system study
process in the pro forma LGIP would: (1) prevent the use of ad hoc
approaches that may give rise to interconnection customers being
treated in an unjust, unreasonable, and unduly discriminatory or
preferential manner; (2) provide interconnection customers greater
certainty regarding expectations throughout the interconnection
process, including greater cost certainty, which will lead to fewer
late-stage withdrawals and fewer delays; (3) ensure that the affected
system study process moves along expediently, providing clarity, cost
certainty, and increased transparency throughout the study process,
which will minimize opportunities for undue discrimination, through
firm affected system study deadlines; and (4) ensure that
interconnection customers are able to interconnect to the transmission
system in a reliable, efficient, transparent, and timely manner.
---------------------------------------------------------------------------
\893\ Id. P 1110.
---------------------------------------------------------------------------
467. The Commission adopted several definitions in section 1 of the
pro forma LGIP related to the affected system reforms, specifically,
``affected system facilities construction agreement,'' ``affected
system interconnection customer,'' ``affected system network
upgrades,'' ``affected system queue position,'' ``affected system
study,'' ``affected system study agreement,'' ``affected system study
report,'' ``multiparty affected system facilities construction
agreement,'' and ``multiparty affected system study agreement.'' \894\
---------------------------------------------------------------------------
\894\ Id. P 1112; see pro forma LGIP section 1.
---------------------------------------------------------------------------
468. The Commission adopted section 3.6.1 (Initial Notification) of
the pro forma LGIP, which requires the transmission provider to notify
the affected system operator within 10 business days of the first
instance of an identified potential affected system impact, which may
occur at the completion of either the cluster study or the cluster
restudy.\895\
---------------------------------------------------------------------------
\895\ Order No. 2023 184 FERC ] 61,054 at P 1119; see pro forma
LGIP section 3.6.1.
---------------------------------------------------------------------------
469. The Commission next adopted several requirements for the
transmission provider when it is acting as the affected system
transmission provider (i.e., when the transmission provider is studying
the impacts on its own transmission system of proposed interconnections
to other transmission providers' transmission systems) in pro forma
LGIP section 9 (Affected System Study).\896\ First, the Commission
adopted section 9.2 (Response to Initial Notification) of the pro forma
LGIP, which requires the affected system transmission provider to
respond to notification of a potential affected system impact in
writing within 20 business days indicating whether it intends to
conduct an affected system study.\897\ Section 9.2 also requires that,
within 15 business days of the affected system transmission provider's
affirmative response of its intent to conduct an affected system study,
the affected system transmission provider must share a non-binding good
faith estimate of the cost and schedule to complete the affected system
study.
---------------------------------------------------------------------------
\896\ Order No. 2023, 184 FERC ] 61,054 at P 1113; see pro forma
LGIP section 9.1.
\897\ Order No. 2023, 184 FERC ] 61,054 at P 1120; see pro forma
LGIP section 9.2.
---------------------------------------------------------------------------
470. The Commission next adopted section 9.3 (Affected System Queue
Position) of the pro forma LGIP.\898\ Under section 9.3, the
interconnection requests of affected system interconnection customers
that have executed an affected system study agreement will be higher-
queued than the interconnection requests of those host system
interconnection customers that have not yet received their cluster
study results, and lower-queued than those interconnection customers
that have already received their cluster study results. All affected
system interconnection requests studied within the same affected system
cluster will be equally queued.
---------------------------------------------------------------------------
\898\ Order No. 2023, 184 FERC ] 61,054 at P 1138; see pro forma
LGIP section 9.3.
---------------------------------------------------------------------------
471. The Commission next adopted section 9.4 (Affected System Study
Agreement/Multiparty Affected System Study Agreement) of the pro forma
LGIP to require that the transmission provider tender the affected
system study agreement within 10 business days of sharing the schedule
for the study with the affected system interconnection customers.\899\
Section 9.4 also requires the affected system interconnection customer
to compensate the affected system transmission provider for the actual
costs of the affected system study, and the difference between the
affected system study deposit and actual cost of the affected system
study will be detailed in an invoice and paid by or refunded to the
affected system interconnection customer within 30 calendar days of the
receipt of such invoice.\900\ An affected system interconnection
customer's failure to pay the difference between these amounts will
result in loss of that affected system interconnection customer's
affected system queue position. Section 9.4 also requires that the
affected system transmission provider notify the host transmission
provider of the affected system interconnection customer's breach of
its obligations under this section, should such breach occur.\901\
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\899\ Order No. 2023, 184 FERC ] 61,054 at P 1154; see pro forma
LGIP section 9.4.
\900\ Order No. 2023, 184 FERC ] 61,054 at P 1157.
\901\ Id. P 1159.
---------------------------------------------------------------------------
472. The Commission next adopted section 9.5 (Execution of Affected
System Study Agreement/Multiparty Affected System Study Agreement) of
the pro forma LGIP, which provides the affected system interconnection
customer with 10 business days from the date of receipt of the affected
system study agreement to execute and deliver it to the affected system
transmission provider.\902\ Section 9.5 also provides that, if the
affected system interconnection customer does not provide all required
technical data when it delivers the affected system study agreement,
the affected system transmission provider shall notify the affected
system interconnection customer of the deficiency within five business
days of the receipt of the
[[Page 27087]]
affected system study agreement, and the affected system
interconnection customer has 10 business days to cure the deficiency
after receipt of such notice (provided that the deficiency does not
include failure to deliver the executed affected system study agreement
or deposit).
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\902\ Id. P 1158; see pro forma LGIP section 9.5.
---------------------------------------------------------------------------
473. The Commission next adopted section 9.6 (Scope of Affected
System Study) of the pro forma LGIP, which requires the affected system
study to consider the base case as well as all higher-queued generating
facilities on the affected system transmission provider's transmission
system and to consist of a power flow, stability, and short circuit
analysis.\903\ Section 9.6 also requires the affected system study to
provide a list of affected system network upgrades that are required
because of the affected system interconnection customer's proposed
interconnection, a non-binding good faith estimate of cost
responsibility, and a non-binding good faith estimated time to
construct.
---------------------------------------------------------------------------
\903\ Order No. 2023, 184 FERC ] 61,054 at P 1160; see pro forma
LGIP section 9.6.
---------------------------------------------------------------------------
474. The Commission next adopted section 9.7 of the pro forma LGIP
(Affected System Study Procedures), which requires clustering of
affected system interconnection customers for study purposes where
multiple interconnection requests that are part of a single cluster in
the host system's cluster study process cause the need for an affected
system study.\904\ Section 9.7 also requires the affected system
transmission provider to complete the affected system study and provide
the affected system interconnection customer with affected system study
results within 150 calendar days after receipt of the affected system
study agreement. Section 9.7 also requires the affected system
transmission provider to provide the affected system study report to
the host transmission provider at the same time it provides the report
to the affected system interconnection customer. The affected system
transmission provider must notify the affected system interconnection
customer that an affected system study will be late.\905\ Lastly, pro
forma LGIP section 9.7 requires affected system transmission providers
to study all affected system interconnection requests using ERIS
modeling standards.\906\
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\904\ Order No. 2023, 184 FERC ] 61,054 at P 1133; see pro forma
LGIP section 9.7.
\905\ Order No. 2023, 184 FERC ] 61,054 at P 1135.
\906\ Id. P 1276.
---------------------------------------------------------------------------
475. The Commission added a new section 11.2.1 to the pro forma
LGIP (Delay in LGIA Execution, or Filing Unexecuted, to Await Affected
System Study Report).\907\ Under this section, if the interconnection
customer does not receive its affected system study results before the
deadline in its host system for LGIA execution, or the deadline to
request that the LGIA be filed unexecuted, the host transmission
provider must, at the interconnection customer's request, delay the
deadline for the interconnection customer to finalize its LGIA.\908\
The interconnection customer will have 30 calendar days after receipt
of the affected system study report to execute the LGIA, or request
that the LGIA be filed unexecuted. Additionally, if the interconnection
customer prefers to proceed to the execution of its LGIA, or request
that the LGIA be filed unexecuted, before it has received its affected
system study results, it may notify the host transmission provider of
its intent to proceed with the execution of the LGIA, or request that
the LGIA be filed unexecuted.\909\ If the host transmission provider
determines that further delay to the LGIA execution date would cause a
material impact on the cost or timing of an equal- or lower-queued
interconnection customer, the transmission provider must notify the
relevant interconnection customer of such impact and establish that the
new deadline is 30 calendar days after such notice is provided.
---------------------------------------------------------------------------
\907\ Id. P 1123; see pro forma LGIP section 11.2.1.
\908\ Any interconnection customer that is not awaiting the
results of an affected system study must proceed under the timelines
set forth in pro forma LGIP section 11.1.
\909\ Order No. 2023, 184 FERC ] 61,054 at P 1124.
---------------------------------------------------------------------------
476. The Commission adopted section 9.8 of the pro forma LGIP
(Meeting with Transmission Provider), which requires the affected
system transmission provider and the affected system interconnection
customer to meet within 10 business days of the affected system
transmission provider tendering the affected system study report to the
affected system interconnection customer.\910\
---------------------------------------------------------------------------
\910\ Id. P 1169; see pro forma LGIP section 9.8.
---------------------------------------------------------------------------
477. The Commission adopted section 9.9 of the pro forma LGIP
(Affected System Cost Allocation), which requires the allocation of
affected system network upgrade costs using a proportional impact
method in accordance with pro forma LGIP section 4.2.1(1)(b).\911\
---------------------------------------------------------------------------
\911\ Order No. 2023, 184 FERC ] 61,054 at P 1149; see pro forma
LGIP section 9.9.
---------------------------------------------------------------------------
478. The Commission adopted section 9.10 of the pro forma LGIP
(Tender of Affected System Facilities Construction Agreement/Multiparty
Affected System Facilities Construction Agreement).\912\ Under section
9.10, an affected system transmission provider must tender an affected
system facilities construction agreement to the affected system
interconnection customer within 30 calendar days of providing the
affected system study report. The affected system transmission provider
must provide 10 business days after receipt of the affected system
facilities construction agreement for the affected system
interconnection customer to execute the agreement or have the affected
system transmission provider file it unexecuted with the Commission.
---------------------------------------------------------------------------
\912\ Order No. 2023, 184 FERC ] 61,054 at P 1165; see pro forma
LGIP section 9.10.
---------------------------------------------------------------------------
479. The Commission adopted section 9.11 of the pro forma LGIP
(Restudy) to include a maximum 60-calendar day restudy period for any
affected system restudies.\913\ Section 9.11 also adopts a 30-calendar
day notification requirement for the affected system transmission
provider to notify the affected system interconnection customer of the
need for affected system restudy upon discovery of such need.\914\
---------------------------------------------------------------------------
\913\ Order No. 2023, 184 FERC ] 61,054 at P 1170; see pro forma
LGIP section 9.11.
\914\ Order No. 2023, 184 FERC ] 61,054 at P 1171.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
480. Clean Energy Associations and Invenergy ask the Commission to
clarify that there are deadlines for determining that an affected
system study will be conducted.\915\ Clean Energy Associations and
Invenergy note that Order No. 2023 requires transmission providers to
notify affected system transmission providers of potential affected
system impacts at the completion of the cluster study or cluster
restudy, and affected system transmission providers have 20 business
days to determine whether or not to conduct an affect system study.
However, Clean Energy Associations and Invenergy state that it is
unclear whether an affected system may decline to conduct an affected
system study after the initial notification but later elect to conduct
an affected system study after the cluster restudy, even if no new
potential affected system impact is found. Clean Energy Associations
and Invenergy argue that affected system transmission providers may
have an incentive to perform affected system studies as late as
possible to: (1) give priority to queue requests on their own system;
(2) avoid the volume of studies created by restudies; or (3) reduce the
amount of necessary studies to reduce
[[Page 27088]]
the risk of study delay penalties. Clean Energy Associations and
Invenergy explain that interconnection customers need to know as soon
as possible if affected system studies will be performed and what the
results of those studies are. Clean Energy Associations and Invenergy
argue that, while it is possible that new information about an affected
system impact could show up when the host transmission provider
conducts its restudy (which would then require the affected system to
conduct its own study), the affected system should not be permitted to
wait until the restudy stage to make its determination to perform
studies unless new information has been identified in the restudy.
Clean Energy Associations and Invenergy therefore request clarification
that, if an affected system declines to perform an affected system
study after the cluster study and host transmission provider's
notification of an impact on the affected system, the affected system
is not eligible to run a study after the cluster restudy unless the
cluster restudy results in information that was not identified in the
initial notification.
---------------------------------------------------------------------------
\915\ Clean Energy Associations Rehearing Request at 78-79;
Invenergy Rehearing Request at 18-19.
---------------------------------------------------------------------------
481. Clean Energy Associations and Invenergy agree with Order No.
2023's directive that, if the interconnection customer does not have
the results of the affected system study prior to finalizing the LGIA,
the interconnection customer may request that the host transmission
provider delay finalizing the LGIA.\916\ However, Clean Energy
Associations and Invenergy argue that a host transmission provider
should not be able to reject that request if it determines that
delaying the LGIA pending completion of the affected system study would
materially impact the cost or timing of equal or lower-queued
interconnection customers. Clean Energy Associations and Invenergy
explain that, when an interconnection customer executes its LGIA, it
should be able to rely on those costs and other agreement provisions
without significant changes, and that allowing the host transmission
provider to reject requests for delaying LGIA execution is directly at
odds with the Commission's goal of ensuring that interconnection
customers have adequate time to evaluate their costs prior to
committing to the LGIA. When the affected system costs are not known,
Clean Energy Associations and Invenergy explain, it exacerbates the
cost uncertainty and late-stage upgrades that Order No. 2023 sought to
ameliorate.\917\ Further, they argue, allowing the host transmission
provider alone to determine when the material threshold is met creates
potential for undue discrimination. Therefore, Clean Energy
Associations and Invenergy request that the Commission strike the last
sentence in revised pro forma LGIP, section 11.2.1.
---------------------------------------------------------------------------
\916\ Clean Energy Associations Rehearing Request at 79;
Invenergy Rehearing Request at 4 (both citing Order No. 2023, 184
FERC ] 61,054 at PP 1124-1125).
\917\ Clean Energy Associations Rehearing Request at 80;
Invenergy Rehearing Request at 5.
---------------------------------------------------------------------------
482. Clean Energy Associations and Invenergy also seek
clarification of pro forma LGIP section 11.2.1, which states that the
interconnection customer is not required to post security under the
LGIA and fund network upgrades if the deadline for LGIA execution, or
to request that the LGIA be filed unexecuted, is delayed.\918\ Clean
Energy Associations state that the ability to not post security or fund
network upgrades should also apply when the host transmission provider
determines a material impact from delay and requires that the
interconnection customer move forward with LGIA execution. If the
Commission does not grant this request, Clean Energy Associations and
Invenergy contend that the Commission should clarify that, when an
interconnection customer is not allowed to delay LGIA execution under
the material impact standard, the interconnection customer will receive
a refund of the deposit upon deciding to not move forward with the
interconnection after receiving the affected system studies.
---------------------------------------------------------------------------
\918\ Clean Energy Associations Rehearing Request at 80-81;
Invenergy Rehearing Request at 5-6.
---------------------------------------------------------------------------
483. Duke Southeast Utilities ask for clarification of the
requirement for a host transmission provider to notify an affected
system transmission provider within 10 days of the completion of a
cluster study or restudy of potential affected system impacts
identified in the study.\919\ Specifically, Duke Southeast Utilities
ask the Commission to clarify the meaning of the ``completion of'' a
cluster study or restudy, referring to a number of possible
interpretations, including: (1) the date stated on the study report;
(2) the date the report is provided to interconnection customers; (3)
the date the report is posted to OASIS; and (4) the date of the cluster
study report meeting. Duke Southeast Utilities assert that a lack of
clarity will lead to lack of uniformity in how transmission providers
calculate their 10-day deadline. Further, Duke Southeast Utilities note
that, because affected system transmission providers have 20 days to
decide whether to conduct an affected system study, and host
transmission providers have 30 days after the cluster study report
meeting to decide whether to conduct a cluster restudy, there is
potential for an affected system transmission provider to have begun
conducting an affected system study before being notified that the host
transmission provider will conduct a cluster restudy. Duke Southeast
Utilities request clarification on whether an affected system
transmission provider may terminate an affected system study once it
learns of the host transmission provider's restudy, or whether it must
continue with the affected system study. Duke Southeast Utilities
explain that continuing an affected system study in this case would
cause affected system interconnection customers to pay for an
unnecessary study.
---------------------------------------------------------------------------
\919\ Duke Southeast Utilities Rehearing Request at 2-4.
---------------------------------------------------------------------------
484. Clean Energy Associations and Invenergy ask for rehearing or
clarification with respect to the exclusion of affected system network
upgrade costs from the penalty-free withdrawal calculation in pro forma
LGIP section 3.7.1, which allows for penalty-free withdrawal if the
withdrawal follows significant, unanticipated increases in network
upgrade cost estimates.\920\ Clean Energy Associations request
rehearing and argue that failing to include affected system network
upgrade costs in withdrawal penalty exemption calculations will
discourage generating facilities that experience significant cost
increases from withdrawing from the interconnection process in a timely
way.\921\ Clean Energy Associations state that an interconnection
customer will be incentivized to remain in the queue despite
significant cost increases from the transmission provider and affected
system transmission provider in the hopes that either other
interconnection customers withdraw, or other conditions change such
that the generating facility faces reduced network upgrade and affected
system network upgrade costs and becomes financially viable again.
Clean Energy Associations further state that it is unreasonable to
penalize an interconnection customer for proceeding when its costs
increase dramatically due to affected system interconnection study
results. Clean Energy Associations state that affected system study
results are not known at the conclusion of the cluster study and are
also subject to errors or significant
[[Page 27089]]
inaccuracies. Invenergy argues that the differing treatment in
withdrawal penalties for host transmission system studies versus
affected system studies is arbitrary and capricious and not a result of
reasoned decision-making.\922\
---------------------------------------------------------------------------
\920\ Clean Energy Associations Rehearing Request at 34;
Invenergy Rehearing Request at 7.
\921\ Clean Energy Associations Rehearing Request at 34-35.
\922\ Invenergy Rehearing Request at 7.
---------------------------------------------------------------------------
485. Clean Energy Associations and Invenergy further argue that the
Commission erred by failing to set any penalty-free withdrawal
threshold based upon costs identified in an affected system study,
which would result in essentially uncapped liability for
interconnection customers.\923\
---------------------------------------------------------------------------
\923\ Id. at 6; Clean Energy Associations Rehearing Request at
31.
---------------------------------------------------------------------------
486. Clean Energy Associations and Invenergy disagree with the
Commission's statement that the use of ERIS modeling standard to
conduct affected system studies should reduce the number and total cost
of affected system network upgrades assigned to affected system
interconnection customers.\924\ Clean Energy Associations argue that
the ERIS modeling standard in no way guarantees a small number of
assigned affected system network upgrades or total assigned network
upgrade costs to any one affected system interconnection customer, and
that significant impacts can occur in both large and small transmission
systems.\925\ Invenergy similarly argues that the ERIS modeling
standard does not guarantee fewer assigned costs, and that even if
using ERIS modeling decreases the number of interconnection customers
receiving significant affected system upgrade costs, the lack of
penalty-free withdrawal for when affected system network upgrade costs
remain significant is unjust and unreasonable.\926\ Invenergy states
that the Commission's reasoning does not ameliorate the differing
treatment of interconnection customers with significant network
upgrades and those with significant affected system network upgrades
merely because significant affected system upgrade costs might occur
less often.
---------------------------------------------------------------------------
\924\ Clean Energy Associations Rehearing Request at 33;
Invenergy Rehearing Request at 7-8 (both citing Order No. 2023, 184
FERC ] 61,054 at P 1151).
\925\ Clean Energy Associations Rehearing Request at 33.
\926\ Invenergy Rehearing Request at 7-8.
---------------------------------------------------------------------------
487. Clean Energy Associations request that the Commission match
the penalty-free withdrawal cost increase thresholds for both the host
and affected systems at the facilities study phase at 50%.\927\ In the
alternative, Clean Energy Associations argue that the Commission should
allow penalty-free withdrawal for interconnection customers based upon
the same 100% cost increase on the affected system as on the host
transmission system. Invenergy requests that the Commission modify pro
forma LGIP section 3.7.1 to include that an interconnection customer
may withdraw penalty free after receiving the affected system study and
the affected system network upgrade costs identified in the report have
increased the interconnection customer's costs by more than 25%
compared to the costs assigned by the host system.\928\ Invenergy
asserts that such modification is consistent with MISO's withdrawal
process, which progressively increases when interconnection customers
may withdraw penalty free, including for affected system network
upgrade costs.\929\
---------------------------------------------------------------------------
\927\ Clean Energy Associations Rehearing Request at 36.
\928\ Invenergy Rehearing Request at 9.
\929\ Id. at 9-10 (citing MISO, Open Access Transmission, Energy
and Operating Markets Tariff, attach. X (Generator Interconnection
Procedures (GIP)) (161.0.0), Sec. 7.6.2.4).
---------------------------------------------------------------------------
488. SPP states that the Commission's decision to require affected
system operators to study all interconnection requests on neighboring
systems using the ERIS modeling standard is unsupported.\930\ SPP
argues that limiting affected system transmission providers to use of
the ERIS standard will result in significant equity issues when certain
generating facilities that are deemed firm by one transmission provider
will not be required to mitigate issues on another transmission
provider's system unless they impact a constraint at a level
significantly higher than internal generating facilities requesting
firm service. SPP asserts that Order No. 2023 ignores this issue by
claiming to ensure that all affected system interconnection customers
are studied similarly, while the root issue of the inequity (i.e., the
point at which deliverability is determined) remains unaddressed. SPP
states that the Commission's rationalization, that studying affected
system impacts using ERIS lowers affected system network upgrade costs
and makes requests less likely to withdraw at a late stage, conflicts
with the Commission's long-standing policy that interconnection
customers should be responsible for the costs of all network upgrades
that would not be required ``but for'' their interconnection.
---------------------------------------------------------------------------
\930\ SPP Rehearing Request at 12-14.
---------------------------------------------------------------------------
489. SPP contends that the Commission's reliance on MISO's use of
only ERIS in affected system studies fails to recognize that SPP
assesses deliverability through the transmission service process.\931\
As such, SPP asserts that MISO has the opportunity to assess the
impacts on its system of firm deliverability granted to generating
facilities on the SPP system through transmission service study
coordination. SPP states that it does not get the same opportunity as
MISO, who determines and grants deliverability on its own system
through its awarding of NRIS during the interconnection process without
a subsequent request for transmission service. SPP concludes that the
Commission's failure to recognize this problem renders Order No. 2023
both discriminatory toward interconnection customers in RTOs/ISOs like
SPP and arbitrary and capricious.
---------------------------------------------------------------------------
\931\ Id. at 14.
---------------------------------------------------------------------------
490. Similarly, PJM asserts that, because it studies affected
system interconnection customers to ensure deliverability anywhere on
PJM's transmission system, studying affected systems interconnection
customers based on a lesser standard than that applied to directly
connected interconnection customers would be unduly discriminatory and
inconsistent with how PJM plans its transmission system.\932\ PJM
requests clarification that the requirement for all affected system
studies to be performed using ERIS will not apply to affected system
studies that PJM performs under the interconnection reforms accepted by
the Commission in November 2022.
---------------------------------------------------------------------------
\932\ PJM Rehearing Request at 24.
---------------------------------------------------------------------------
491. SPP notes that Order No. 2023 directly contradicts recent
Commission precedent holding that use of NRIS modeling standards in
affected system studies is just and reasonable where the
interconnection customer requested NRIS-level interconnection service
on the host transmission system.\933\ SPP asserts that, by failing to
acknowledge its prior holdings and relying on a blanket unsupported
assertion that any significant impact would generally be captured by an
ERIS study, the Commission's determination in Order No. 2023
constitutes an arbitrary and capricious departure from prior precedent.
---------------------------------------------------------------------------
\933\ SPP Rehearing Request at 16-17 (citing Tenaska Clear Creek
Wind, LLC v. Sw. Power Pool, Inc., 180 FERC ] 61,160 at P 62; EDF
Renewable Energy Inc. v. Midcontinent Indep. Sys. Operator, Inc.,
168 FERC ] 61,173, at P 86 (2019)).
---------------------------------------------------------------------------
iii. Determination
492. In response to Clean Energy Associations' and Invenergy's
requests for clarification that there are deadlines for determining
that an affected system study will be conducted, we clarify that there
are such deadlines. Pursuant to
[[Page 27090]]
pro forma LGIP section 9.2, the affected system transmission provider
is required to respond in writing within 20 business days of receipt of
the initial notification from the host transmission provider that
interconnection requests may impact the affected system transmission
provider's transmission system. From the point of written notification
of the intention to conduct the affected system study, the affected
system transmission provider then has 15 business days to share a non-
binding good faith estimate of the cost and schedule to complete the
affected system study.
493. We reject Clean Energy Associations' and Invenergy's requests
for clarification that, if an affected system transmission provider
declines to perform an affected system study after the cluster study
and the host transmission provider's notification of an impact on the
affected system, the affected system transmission provider is
ineligible to run a study after the cluster restudy unless the cluster
restudy results in information that was not identified in the initial
notification. We understand Clean Energy Associations' and Invenergy's
concern to be that affected system transmission providers may have an
incentive to perform affected system studies as late as possible, and
therefore might decline to conduct an affected system study after the
initial notification but later elect to conduct an affected system
study, even if no new potential affected system impact is found. We
expect affected system transmission providers to adhere to the affected
system study process timelines prescribed in Order No. 2023. We
therefore expect that an affected system transmission provider will
respond within 20 business days following notification, pursuant to pro
forma LGIP section 9.2, if it intends to conduct an affected system
study based on the initial host transmission provider notification, and
there is no need for the further clarification requested.
494. We are not persuaded by Clean Energy Associations' request to
strike the last sentence of pro forma LGIP section 11.2.1, which allows
a transmission provider to reject an interconnection customer's request
for extension of the deadline to execute its LGIA (or request that the
LGIA be filed unexecuted) if the transmission provider determines that
such delay would cause a material impact on the cost or timing of an
equal- or lower-queued interconnection customer. We also disagree with
Invenergy's assertion that the material exception language in pro forma
LGIP section 11.2.1 makes Order No. 2023 arbitrary and capricious and
not the result of reasoned decision-making. We find that allowing a
transmission provider to determine what constitutes a material impact
on interconnection customers in a single cluster due to another
interconnection customer's delay in LGIA execution appropriately
balances the benefits of delay due to one interconnection customer's
network upgrade cost certainty with the potential burdens on other
interconnection customers in that cluster as a result of such delay.
Allowing the transmission provider discretion in determining what
constitutes a material impact provides a necessary degree of
flexibility for each transmission provider. We disagree with Clean
Energy Associations that this provision undermines the goal of LGIA
cost certainty for interconnection customers because there is no
requirement for affected system network upgrade costs to be known at
the time of LGIA execution: the costs included in the LGIA are
estimates and always subject to true-up once final costs are known,
pursuant to pro forma LGIA article 12.2 (Final Invoice). The goal is a
better estimate of costs at the time of LGIA execution, and the
material impact language in pro forma LGIP section 11.2.1 provides a
check to ensure a balance between multiple interconnection customers'
competing needs for certainty.
495. We reject Clean Energy Associations' and Invenergy's requests
for clarification that the interconnection customer should be exempt
from the requirement to post security or fund network upgrades when the
host transmission provider determines a material impact from delay and
requires that the interconnection customer moves forward with LGIA
execution. We further disagree with Clean Energy Associations'
assertion that we should clarify that when an interconnection customer
is not allowed to delay LGIA execution under the material impact
standard the interconnection customer will receive a refund of the
deposit upon deciding to not move forward with the interconnection
after receiving the affected system studies. Once an interconnection
customer executes an LGIA, or requests that it be filed unexecuted, it
must fulfill its obligations under the LGIA, which include the
requirements to provide financial security and fund assigned network
upgrades.\934\ Similarly, an interconnection customer that has
finalized its LGIA is not entitled to a refund of its deposit.\935\ We
note that the transmission provider may only require an interconnection
customer to finalize its LGIA, despite waiting for its affected system
study report, because it materially impacts other interconnection
customers. Allowing an interconnection customer to avoid its financial
responsibilities under a finalized LGIA or to have its deposit refunded
upon withdrawal after it has finalized its LGIA would nullify the
purpose of requiring the interconnection customer to finalize its
LGIA--to provide greater certainty to other interconnection customers
that would be materially impacted by the interconnection request's
delay or withdrawal. To the contrary, allowing an interconnection
customer to evade these financial risks increases the likelihood it
proceeds to finalize its LGIA although its proposed generating facility
may no longer be commercially viable. The other materially impacted
interconnection customers, who, for example, may share network upgrade
costs with the delayed interconnection customer, would face greater
risk of cost increases or timing delays should the delayed
interconnection request later be withdrawn, even as they are required
to finalize their LGIAs.\936\
---------------------------------------------------------------------------
\934\ See pro forma LGIA arts. 11.5, 12.1.
\935\ See pro forma LGIP section 11.3.
\936\ See infra P 502.
---------------------------------------------------------------------------
496. In response to Duke Southeast Utilities' request for
clarification of the requirement for a host transmission provider to
notify an affected system transmission provider within 10 days of the
completion of a cluster study or restudy of potential affected system
impacts identified in the study, we clarify that the meaning of the
``completion of'' a cluster study or restudy is the date the cluster
study report or cluster restudy report is provided to interconnection
customers.
497. In response to Duke Southeast Utilities' request for
clarification regarding whether an affected system transmission
provider may terminate an affected system study once it learns of the
host transmission provider's restudy or whether it must continue with
the affected system study, we clarify that an affected system
transmission provider may pause an affected system study that is
planned or in progress if the host transmission provider decides to
conduct a cluster restudy. We also clarify that, if a host transmission
provider decides to conduct a cluster restudy, then the affected system
transmission provider may delay the affected system study until after
the completion of the cluster restudy, following which the host
transmission provider will notify the affected system transmission
provider that the cluster
[[Page 27091]]
restudy is complete and of any possible affected system impacts. The
cluster restudy may result in further withdrawals on the host
transmission system, which in turn, would impact the affected system
study results, possibly resulting in an affected system restudy.
Allowing an affected system transmission provider to delay the affected
system study in the event that the host transmission provider is
conducting a cluster restudy will prevent unnecessary studies, and
potentially cascading restudies, and the resultant costs to
interconnection customers, in the affected system transmission
provider's queue.
498. To ensure that the affected system transmission provider is
timely informed of the host transmission provider's decision to conduct
a cluster restudy, we add to pro forma LGIP section 3.6.2 (Notification
of Cluster Restudy) the requirement that the host transmission provider
notify any relevant affected system operators of a cluster restudy at
the same time that it notifies the interconnection customers in the
cluster restudy. Through this modification, the affected system
transmission provider will receive notification of the cluster restudy
before commencement or completion of a planned or in-progress affected
system study and can use that information to decide whether to move
forward with the affected system study or to delay the affected system
study until the host transmission provider completes the cluster
restudy. We also add pro forma LGIP section 9.2.2 (Response to
Notification of Cluster Restudy) to allow the affected system
transmission provider five business days from receiving notification of
the cluster restudy to send a written notification to the relevant
affected system interconnection customers and the host transmission
provider if it intends to delay commencement or completion of a planned
or in-progress affected system study until after the completion of the
cluster restudy. If the affected system transmission provider decides
to delay the affected system study, then it is not required to perform
its obligations under pro forma LGIP section 9 until the time that it
receives notification from the host transmission provider that the
cluster restudy is complete. In contrast, if the affected system
transmission provider decides to move forward with its affected system
study despite the cluster restudy, then it must meet all obligations to
proceed with the affected system study process under pro forma LGIP
section 9.
499. Additionally, we modify pro forma LGIP section 9.5 (Execution
of Affected System Study Agreement/Multiparty Affected System Study
Agreement) to remove the requirement for an affected system
interconnection customer to execute and return its previously received
affected system study agreement/multiparty affected system study
agreement and submit its affected system study deposit if the affected
system transmission provider decides to delay the affected system
study, pursuant to pro forma LGIP section 9.2.2. We find this
modification necessary because the affected system transmission
provider will provide the affected system interconnection customer with
a new affected system study agreement/multiparty affected system study
agreement in this circumstance, and the previously tendered agreement
will be moot.
500. We add a new pro forma LGIP section 3.6.3 (Notification of
Cluster Restudy Completion) to require that, upon the completion of the
host transmission provider's cluster restudy, the host transmission
provider will notify the affected system transmission provider the
completion of the cluster restudy and of a potential affected system
impact caused by an interconnection request within 10 business days of
the completion of the cluster restudy, regardless of whether that
potential affected system impact was previously identified. At the time
of the notification of the completion of the cluster restudy to the
affected system operator, the host transmission provider must provide
the interconnection customer with a list of potential affected systems,
along with relevant contact information.
501. Moreover, we clarify that, upon the receipt of notification of
any potential affected system impacts from interconnection customers in
the cluster restudy, the affected system transmission provider must
respond in writing to such interconnection customers within 20 business
days whether it intends to conduct an affected system study.
Accordingly, we rename former pro forma LGIP section 9.2 (Response to
Initial Notification) to ``Response to Notifications'' and move the
requirements into new section 9.2.1 (Response to Initial Notification).
We revise the requirements to clarify that an affected system
transmission provider's obligations under section 9.2.1 apply whether
in response to a notification that an affected system interconnection
customer's proposed interconnection to its host transmission provider
may impact the affected system based on a cluster study or a cluster
restudy. Finally, we revise a reference in pro forma LGIP section 9.4
(Affected System Study Agreement/Multiparty Affected System Study
Agreement) from section 9.2 to section 9.2.1.
502. We disagree with Clean Energy Associations' and Invenergy's
assertions that Order No. 2023 was arbitrary and capricious because it
failed to allow interconnection customers to withdraw penalty-free from
the interconnection queue if such withdrawal follows significant,
unanticipated increases in affected system network upgrade cost
estimates. Although the affected system study process reforms seek to
coordinate the host system and affected system studies, there is no
guarantee that affected system network upgrade costs will be known even
at the time of LGIA finalization, particularly where the affected
system is non-jurisdictional and, therefore, not governed by the pro
forma LGIP affected systems processes. The possibility of a long lag
between delivery of host system facilities study report and affected
system study report could lead to uncertainty for other interconnection
customers in the same cluster who are not awaiting affected system
study reports and thus must finalize their LGIAs pursuant to pro forma
LGIP section 11.2.1. Allowing late-stage, penalty-free withdrawal for
interconnection customers after potentially delayed receipt of the
affected system study report could substantially harm those
interconnection customers who had to finalize their LGIAs and share
network upgrade costs with the withdrawing interconnection customer.
Such a practice of penalty-free withdrawal after other interconnection
customers in the same cluster have finalized their LGIAs would give
greater weight to cost certainty of a few interconnection customers who
are awaiting affected system study results than to the many
interconnection customers who did not impact an affected system and had
to finalize their LGIAs. Furthermore, penalty-free withdrawal of
interconnection customers after they have received their affected
system study results and after other interconnection customers in the
same cluster have finalized their LGIAs could lead to one of the very
problems Order No. 2023 sought to mitigate--cascading withdrawals and
restudies--which can result in cost increases and delays, which in turn
can prompt further late-stage withdrawals.\937\ It is, therefore, more
important for all interconnection customers in a cluster to have
greater certainty that, once interconnection customers decide whether
to proceed after the final facilities study report,
[[Page 27092]]
withdrawals are less likely, than for one or few interconnection
customers in a cluster to have cost estimate certainty inclusive of
affected system study results.
---------------------------------------------------------------------------
\937\ Order No. 2023, 184 FERC ] 61,054 at P 49.
---------------------------------------------------------------------------
503. We expect that the affected system study process reforms in
Order No. 2023 should reduce affected system network upgrade costs.
Specifically, as Clean Energy Associations and Invenergy point out, the
Commission stated in Order No. 2023 that the use of ERIS to conduct
affected system studies should reduce the number and total cost of
affected system network upgrades assigned to interconnection customers
with affected system impacts. We did not, as Invenergy implies, state
that the use of ERIS in affected system studies guarantees fewer
assigned costs. As the Commission noted in Order No. 2023,
interconnection customers inherently assume some risk.\938\
Interconnection customers will calculate that risk into their decision
as to whether to stay in the queue following the receipt of their
facilities study reports, and we note that interconnection customers
are always able to withdraw, pursuant to pro forma LGIP section 3.7, if
their project becomes uneconomical based on significant affected system
network upgrade costs. We also note that the language in pro forma LGIP
section 3.7.1 applies to network upgrades costs assigned to the
interconnection request, and, because an affected system network
upgrade is a subset of network upgrades, affected system network
upgrade cost estimates should be included in the total cost increase if
listed in the facilities study report. In such a situation, if the
network upgrades costs (including the affected system network upgrade
costs) in the facilities study report were more than 100% higher than
the cluster study report, then the interconnection customer may be
eligible for penalty-free withdrawals.
---------------------------------------------------------------------------
\938\ Id. P 1151.
---------------------------------------------------------------------------
504. We are unpersuaded by Clean Energy Associations' and
Invenergy's assertions that, even if ERIS modeling decreases the number
of interconnection customers receiving significant affected system
network upgrades costs, this does not ameliorate the differing
treatment between interconnection customers with significant network
upgrades and those with significant affected system network upgrades.
An interconnection customer that is notified of significant network
upgrades and one that is notified of significant affected system
network upgrades are not differently situated, as alleged, because
affected system network upgrade costs may occur less often, but rather
because of the timing within the interconnection study process that
such notices occur, and the increased impacts on other interconnection
customers of allowing for penalty-free withdrawal late within that
process. As discussed above, because allowing late-stage, penalty-free
withdrawal for interconnection customers after potentially delayed
receipt of the affected system study report could substantially harm
those interconnection customers who had to finalize their LGIAs and
share network upgrade costs with the withdrawing interconnection
customer, the differing requirements are justified.
505. We, therefore, are not persuaded to extend penalty-free
withdrawal provisions to interconnection customers for affected system
network upgrade cost increases beyond a certain threshold. As noted, in
the interest of greater cost certainty for all interconnection
customers, we maintain that penalty-free withdrawal exemptions
triggered by cost increases above a certain threshold are not
applicable after the finalization of the LGIA for any interconnection
customers in the same cluster, even an interconnection customer that
must finalize its LGIA before receiving its affected system study
report. We also disagree that the lack of penalty-free withdrawal
thresholds essentially results in uncapped liability because the
interconnection customer may still withdraw and face only the
withdrawal penalty.
506. We disagree with Clean Energy Associations' and Invenergy's
arguments that failing to include affected system network upgrade costs
in withdrawal penalty exemption calculations will discourage generating
facilities that experience significant cost increases from withdrawing
from the interconnection process in a timely manner. As long as the
interconnection customer fulfills its obligations under the pro forma
LGIP, it may opt to stay in the queue until it decides that its project
is uneconomical. If the interconnection customer decides after
receiving its affected system study report that significant cost
increases render its project uneconomical, nothing in the pro forma
LGIP prohibits it from withdrawing from the queue at that time.
Moreover, if affected system network upgrade costs were included as a
basis for withdrawal penalty-free in all cases, this could encourage
interconnection customers waiting for their affected systems study
results to remain in the queue, even if they have determined that their
proposed generating facility is no longer commercially viable, because
the possibility of significant affected systems network upgrade costs
in such study could allow for withdrawal penalty-free.
507. We disagree with SPP's assertion that requiring affected
system transmission providers to use ERIS in affected system studies
will result in significant equity issues because of the differences in
how neighboring transmission providers study generators requesting firm
transmission service. SPP states that each RTO/ISO evaluates
deliverability of resources pursuant to its individual Commission-
approved processes and relies on the differences between SPP's and
MISO's interconnection and transmission service study processes as
evidence for its need to use NRIS for affected system interconnection
requests requesting NRIS on their host system to ensure deliverability.
However, as the Commission found in Order No. 2003 and reiterated in
Order No. 2023, interconnection service is an element of, but separate
from the delivery component of, transmission service, and, in the
majority of circumstances, interconnection alone is unlikely to affect
the reliability of an affected system transmission provider's
transmission system.\939\ Furthermore, the differences between SPP's
and MISO's interconnection and transmission study processes that SPP
describes do not undermine the bases on which the Commission determined
that continuing to permit affected system transmission providers to
study affected system interconnection customers using NRIS assumptions
would allow unjust and unreasonable rates to persist.\940\ A primary
basis on which the Commission found the ERIS requirement just and
reasonable is that even when an interconnection customer seeks NRIS on
the host system, it does not seek--and an affected system transmission
provider has no obligation to continually ensure--deliverability on the
affected system.\941\ To instead permit an affected system transmission
provider to use NRIS assumptions risks
[[Page 27093]]
``an affected system interconnection customer [facing] increased costs
without a commensurate increase in service.'' \942\ We continue to find
that adopting the ERIS requirement for affected system transmission
providers will provide important benefits \943\ even where the details
of study processes may differ somewhat across transmission providers,
and that such requirement is sufficient to capture reliability impacts
of affected system interconnection requests on the affected
system.\944\
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\939\ Id. P 1288 (citing Order No. 2003, 104 FERC ] 61,103 at PP
118-120; Order No. 2003-A, 106 FERC ] 61,220 at P 113); see also
Tenn. Power Co., 90 FERC ] 61,238, at 61,761 (2000) (finding that
interconnection is an element of transmission service but that the
interconnection component of transmission service may be requested
separately from the delivery component (i.e., interconnection is
distinct from transmission service)); see also Fervo Energy Initial
Comments at 6, Shell Initial Comments at 32, Utah Municipal Power
Initial Comments at 6 (all stating that the use of ERIS in affected
system studies will reduce the assignment of unnecessary network
upgrades).
\940\ Id. P 1278.
\941\ Id. P 1277. See also infra n.1193.
\942\ Order No. 2023, 184 FERC ] 61,054 at P 1278.
\943\ Id. at PP 1278-1280 (identifying as benefits that affected
system interconnection customers (1) will not be required to
construct significant network upgrades on the affected system while
not receiving deliverability on that system due to curtailment or
congestion on the affected system; (2) will not face significant
upfront costs to construct affected system network upgrades, which
could lead to late-stage withdrawals given that interconnection
customers will not receive affected system study results until late
in the interconnection process; and (3) will be studied in a
consistent and transparent manner across transmission provider
regions, thus avoiding potentially dramatically different affected
system network upgrades costs due to varying modeling standards
without any factual or service differences to justify discriminatory
treatment).
\944\ Id. PP 1285, 1290. As Order No. 2023 explained
transmission providers may explain specific circumstances on
compliance and justify why any deviations are either ``consistent
with or superior to'' the pro forma LGIP or merit an independent
entity variation in the context of RTOs/ISOs. Id. P 1764.
---------------------------------------------------------------------------
508. We similarly reject PJM's request for clarification that Order
No. 2023's requirement for affected system transmission providers to
use ERIS when conducting affected system studies will not apply to
PJM's affected system studies. We reject this clarification because it
is essentially a request for the Commission to allow PJM to deviate
from the requirements outlined in Order No. 2023 based on its
individual interconnection study procedures. Consistent with the
Commission's statements in Order No. 2023, transmission providers may
explain specific circumstances on compliance and justify why any
deviations are either `consistent with or superior to' the pro forma
LGIP or merit an independent entity variation in the context of RTOs/
ISOs.\945\
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\945\ Id.
---------------------------------------------------------------------------
509. We also disagree with SPP's assertion that the Commission's
rationale for requiring ERIS conflicts with the Commission's long-
standing policy that interconnection customers should be responsible
for the costs of all network upgrades that would not be required ``but
for'' their interconnection. This policy only requires interconnection
customers to pay initially the costs of network upgrades that would not
have been needed but for the interconnection of the interconnection
customer's generating facility.\946\ The Commission has not defined a
particular technical approach that must be implemented in order to
reasonably capture these ``but for'' network upgrade costs; instead,
the Commission has accepted varying approaches as just and reasonable
and not unduly discriminatory or preferential.\947\ In Order No. 2023,
the Commission found that ``any significant impact would generally be
captured by an ERIS study'' and such study would ``ensure any
reliability impacts on the affected system are mitigated to accommodate
the affected systems interconnection customer's proposed generating
facility to the host system.'' \948\ Accordingly, requiring use of an
ERIS study to assign affected system network upgrades to affected
system interconnection customers does not conflict with the
Commission's ``but for'' pricing policy.
---------------------------------------------------------------------------
\946\ Order No. 2003, 104 FERC ] 61,103 at P 694 (finding that
``it is appropriate for the Interconnection Customer to pay
initially the full cost of . . . Network Upgrades that would not be
needed but for the interconnection'').
\947\ We note that MISO's joint operating agreement with SPP
states that MISO will use ERIS to study the impact of SPP's
interconnection customers on MISO's system. See Southwest Power Pool
Inc., Rate and Schedules and Seams Agreement Tariff, MISO-SPP Joint
Operating Agreement, Sec. 9.4 (Analysis of Interconnection
Requests) Sec. 9.4.d.iii (7.0.0); Xcel Energy Servs., Inc. v. FERC,
77 F.4th 1057, 1064 (D.C. Cir. 2023) (finding that the plain text of
SPP's Attachment Z2, Section II.B, was ambiguous with respect to
what methodology could be used to calculate charges under the ``but
for'' standard in the tariff).
\948\ Order No. 2023, 184 FERC ] 61,054 at P 1285.
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510. We disagree with SPP's assertion that the Commission's
reliance on MISO's use of ERIS in affected system studies fails to
recognize that SPP assesses deliverability through the transmission
service process. Order No. 2023 relies on MISO's use of ERIS in
affected system studies simply to demonstrate that, as noted by MISO
itself, this requirement does not result in reliability issues and will
not cause unnecessary curtailment or redispatch on affected
systems.\949\
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\949\ Id. P 1285 (citing MISO Initial Comments at 98).
---------------------------------------------------------------------------
511. We are unpersuaded by SPP's claim that the findings in Order
No. 2023 contradict recent Commission precedent holding that the use of
NRIS modeling standards in affected system studies is just and
reasonable where the interconnection customer requested NRIS-level
interconnection service on the host transmission system.\950\ While the
Commission previously allowed affected system transmission providers to
justify their own approach to selecting the modeling standard used to
evaluate affected system impacts, we found in Order No. 2023 that the
assignment of significant affected system network upgrades under an
NRIS study without a commensurate increase in service would result in
unjust and unreasonable rates.\951\ This is because the affected system
transmission provider has no obligation to ensure that the output from
an affected system interconnection customer's generating facility is
integrated on the affected system similar to generating facilities that
serve the affected system transmission provider's native load customers
or network resources.\952\ The Commission found that the mismatch
between costs and services received would occur because the affected
system transmission provider has no obligation to ensure that the
output from the affected system interconnection customer's generating
facility is studied so that it could be integrated on the affected
system similar to generating facilities that serve the affected system
transmission provider's native load or customers and could lead to
curtailment of the generating facility or there could be congestion on
the affected system preventing deliverability of the generating
facility's output.\953\ Thus, we sustain Order No. 2023's finding that
being assigned significant affected system network upgrades under an
NRIS study, without the obligation for the affected system transmission
provider to ensure that the output from an affected system
interconnection customer's generating facility is integrated on the
affected system similar to generating facilities that serve the
affected system transmission provider's native load customers or
network resources, results in unjust and unreasonable rates by
increasing the cost for affected system interconnection customers
without a
[[Page 27094]]
commensurate increase in service.\954\ Given this finding, the
Commission's previous permissiveness in allowing transmission providers
to justify their own approach to affected system study modeling
criteria is no longer appropriate.
---------------------------------------------------------------------------
\950\ See Tenaska Clear Creek Wind, LLC v. Sw. Power Pool, Inc.,
180 FERC ] 61,160; EDF Renewable Energy Inc. v. Midcontinent Indep.
Sys. Operator, Inc., 168 FERC ] 61,173.
\951\ Order No. 2023, 184 FERC ] 61,054 at P 1288.
\952\ The pro forma LGIP defines NRIS service as ``an
Interconnection Service that allows the Interconnection Customer to
integrate its Large Generating Facility with the Transmission
Provider's Transmission System (1) in a manner comparable to that in
which the Transmission Provider integrates its generating facilities
to serve native load customers; or (2) in an RTO or ISO with market-
based congestion management, in the same manner as Network
Resources. Network Resource Interconnection Service in and of itself
does not convey transmission service.'' Pro forma LGIP section 1.
\953\ Order No. 2023, 184 FERC ] 61,054 at P 1278.
\954\ Id. P 1288; F.C.C. v. Fox Television Stations, Inc., 556
U.S. 502, 536 (2009) (``The question in each case is whether the
agency's reasons for the change, when viewed in light of the data
available to it, and when informed by the experience and expertise
of the agency, suffice to demonstrate that the new policy rests upon
principles that are rational, neutral, and in accord with the
agency's proper understanding of its authority.'').
---------------------------------------------------------------------------
512. Additionally, we note that the issue raised in EDF Renewable
Energy Inc. v. Midcontinent Indep. Sys. Operator, Inc. was not whether
the use of NRIS in affected system studies results in just and
reasonable and not unduly discriminatory or preferential treatment of
affected system interconnection customers. Rather, the issue was
whether lack of transparency as to whether MISO, SPP, and PJM, as
affected system transmission providers, would conduct affected system
studies using NRIS or ERIS standards results in unjust and unreasonable
rates. The Commission addressed in its holding the complainants' core
concerns regarding transparency, finding, on the record in that
proceeding, that there was not sufficient evidence to demonstrate that
current modeling practices in those RTOs were unjust and
unreasonable.\955\ In any event, the Commission has sufficiently
explained its evolution in thinking, as discussed above.
---------------------------------------------------------------------------
\955\ EDF Renewable Energy Inc. v. Midcontinent Indep. Sys.
Operator, Inc., 168 FERC ] 61,173 at P 86.
---------------------------------------------------------------------------
b. Affected System Pro Forma Agreements
i. Order No. 2023 Requirements
513. The Commission adopted several pro forma agreements to improve
the efficiency and transparency of the interactions among the parties
during the affected system study process. The Commission first adopted
a pro forma affected system study agreement in new Appendix 9 of the
pro forma LGIP and a pro forma multiparty affected system study
agreement in new Appendix 10 of the pro forma LGIP.\956\ These pro
forma affected system study agreements stipulate how to study the
impact of interconnecting generating facilities on an affected system
to identify network upgrades needed to accommodate the interconnection
request. The Commission next adopted a pro forma affected system
facilities construction agreement in new Appendix 11 of the pro forma
LGIP and a pro forma multiparty affected system facilities construction
agreement in new Appendix 12 of the pro forma LGIP.\957\ These pro
forma affected system facilities construction agreements standardize
the terms and conditions regarding construction of affected system
network upgrades.
---------------------------------------------------------------------------
\956\ Order No. 2023, 184 FERC ] 61,054 at PP 1171, 1232; see
pro forma LGIP, apps. 9, 10.
\957\ Order No. 2023, 184 FERC ] 61,054 at P 1233; see pro forma
LGIP, apps. 10, 11.
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ii. Requests for Rehearing and Clarification
514. Duke Southeast Utilities take issue with article 3.2.2.1
(Repayment) of the pro forma affected system facilities construction
agreement, which states that the affected system interconnection
customer shall be entitled to a cash repayment of the amount it paid
for any affected system network upgrades.\958\
---------------------------------------------------------------------------
\958\ Duke Southeast Utilities Rehearing Request at 4.
---------------------------------------------------------------------------
515. Duke Southeast Utilities state that, despite conceding that
the repayment policy for affected system network upgrades was a NOPR
proposal, the Commission declined to address arguments on the merits of
this policy on the basis that the Commission simply proposed to
memorialize the Commission's existing policy in a pro forma agreement
for affected systems.\959\ Duke Southeast Utilities contend that the
Commission's refusal to engage on this critical question was wrong on
the law and renders this portion of Order No. 2023 reversible error.
Duke Southeast Utilities state that the Commission's central argument
is that the cost allocation question is beyond the scope of Order No.
2023 because the Commission did not propose to change its existing
policy. Duke Southeast Utilities assert that the Commission's
``existing policy'' is the subject of significant debate and ongoing
litigation in the courts.\960\ Duke Southeast Utilities state that they
have steadfastly maintained that, before Order No. 2023, there was no
such existing policy that required affected system operators to
reimburse distant interconnection customers. Duke Southeast Utilities
explain that, first, because there was no pro forma affected system
facilities construction agreement before now, transmission owners
fashioned their own agreements and filed them with the Commission. Duke
Southeast Utilities state that the Commission had routinely accepted
such affected system agreements without reimbursement provisions, which
it clearly would not have done if such filed agreements violated an
``existing policy'' of the Commission.\961\
---------------------------------------------------------------------------
\959\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at PP 1211,
1244).
\960\ Id. at 5 (citing Duke Energy Progress, LLC v. FERC,
Petitions for Review, Case No. 21-1272, (D.C. Cir., Dec. 27, 2021),
Case No. 22-1072 (D.C. Cir., May 4, 2022), Case No. 22-1284 (D.C.
Cir., Nov. 3, 2022), Case No. 22-1327 (D.C. Cir., Dec. 20, 2022);
Duke Energy Progress, LLC v. FERC, Petition for Review, Case No. 23-
1114 (D.C. Cir. Apr. 14, 2023)).
\961\ Id. (citing S. Co. Servs., Inc., Docket No. ER21-1701-000
(June 10, 2021) (delegated letter order); S. Co. Servs., Inc.,
Docket No. ER20-2825-000 (Oct. 9, 2020) (delegated letter order);
Duke Energy Fla., LLC, Docket No. ER20-2419-000 (Sept. 2, 2020)
(delegated letter order) (accepting two agreements); Fla. Power &
Light Co., Docket No. ER19-2445-000 (Aug. 30, 2019) (delegated
letter order); MidAmerican Energy Co., Docket No. ER09-1654-000
(Oct. 22, 2009) (delegated letter order)).
---------------------------------------------------------------------------
516. Duke Southeast Utilities explain that, second, while the
Commission has claimed that Order No. 2003 and the LGIA contain a
requirement that affected system operators reimburse distant
interconnection customers, the Commission was equally clear that the
LGIA adopted in Order No. 2003 by its terms does not apply to affected
system operators.\962\ Duke Southeast Utilities state that, in Midwest
Independent Transmission System Operator, Inc., the Commission accepted
an agreement between an affected system and an interconnection customer
that allocated 50% of the network upgrade costs to the interconnection
customer without reimbursement.\963\ Duke Southeast Utilities state
that, in the process of accepting that agreement, the Commission
rejected the interconnection customer's argument that Order No. 2003
entitled it to 100% reimbursement, because the affected system there
``was not a party to the interconnection agreement and cannot be bound
by a contract to which it is not a party'' and because ``Order [ ] 2003
[ ] acknowledges that an Affected System is not bound by the Final Rule
[Large Generator Interconnection Procedures] and interconnection
agreement.'' \964\ Duke Southeast Utilities conclude that it is
therefore clear that there was no ``existing policy'' that would
justify the Commission's refusal to engage this question in the present
rulemaking.
---------------------------------------------------------------------------
\962\ Id.
\963\ Id. at 5-6 (citing Midcontinent Indep. Trans. Sys.
Operator, Inc., 120 FERC ] 61,066, at PP 16, 23-25 (2007) (Midwest
ISO)).
\964\ Id. at 6 (citing Midwest ISO, 120 FERC ] 61,066 at P 25
(capitalization altered) (citation omitted)).
---------------------------------------------------------------------------
517. Duke Southeast Utilities state that the Commission adopted a
brand new agreement--the pro forma affected system facilities
construction agreement--that includes a mandatory reimbursement
requirement without acknowledging its past practice of accepting such
agreements without
[[Page 27095]]
reimbursement language.\965\ Duke Southeast Utilities assert that the
Commission has repeatedly accepted proposed affected system agreements
that allocate affected system network upgrade costs to affected system
interconnection customers without reimbursement.\966\ Duke Southeast
Utilities argue that this reflects the Commission's practice of
accepting as just and reasonable and not unduly discriminatory affected
system agreements in which the affected system interconnection customer
has no right to reimbursement. Duke Southeast Utilities contend that
the Commission's failure to explain its change of course on its
reimbursement policy without addressing the precedent from which it
departs is a direct violation of the APA.\967\
---------------------------------------------------------------------------
\965\ Id. at 8.
\966\ Id. (citing Duke Energy Progress, LLC, 177 FERC ] 61,001,
at P 7 & n.16 (2021) (listing numerous examples cited by DEP with
full allocation), appeal pending, Petition for Review, Case No. 21-
1272, order on reh'g, 179 FERC ] 61,007 (2022), appeal pending,
Petition for Review, Case No. 22-107).
\967\ Id. (citing 5 U.S.C. 551 et seq).
---------------------------------------------------------------------------
518. Duke Southeast Utilities contend that, under this repayment
provision, customers on the affected system must bear higher
transmission costs to pay for network upgrades they do not need (by
reimbursing interconnection customers who provide upfront funding), so
that an interconnection customer can interconnect on a neighboring
transmission system.\968\ Duke Southeast Utilities state that, in the
case of the Duke Southeast Utilities, and as shown in the rulemaking
comments filed by North Carolina state regulators and consumer advocate
bodies, this often means that the retail customers of North Carolina
are forced to subsidize generating facilities interconnecting to, and
selling into, PJM.\969\ Duke Southeast Utilities assert that the
Commission was not entitled to willfully ignore changed circumstances
and refuse to provide meaningful answers to arguments presented by
North Carolina stakeholders.\970\ Duke Southeast Utilities state that
the Commission (1) acted arbitrarily and capriciously by failing to
address the various commenters' concerns, and such actions without
substantial evidence in support is grounds for reversal on its own
under the APA \971\ and (2) violated section 205 of the FPA by
mandating a new pro forma cost allocation agreement without
meaningfully considering the needs of impacted customers.\972\
---------------------------------------------------------------------------
\968\ Id. at 4.
\969\ Id. at 4, 10 (citing Joint Comments of the North Carolina
Utilities Commission and the North Carolina Utilities Commission
Public Staff, at 23, Docket No. RM22-14-000 (filed Oct. 13, 2022).
The North Carolina Commission and Staff further provided that the
total of the affected system costs for DEP of recent projects in the
DENC territory that have already been studied is currently estimated
at $126 million and there are several additional PJM queues for
which affected system studies have yet to be completed and are
projected to interconnect a total of 7,312 MW. Id. at 21-22.
\970\ Id. at 6.
\971\ Id. at 7.
\972\ Id. at 9.
---------------------------------------------------------------------------
519. Duke Southeast Utilities state that the Commission has not
conducted an analysis based on the specific facts and record presented
in this case to justify allocating these network upgrade costs to Duke
Southeast Utilities' existing transmission customers.\973\ Duke
Southeast Utilities state that Order No. 2023 contains no explanation
or evidence that the Commission considered the impacts to native
transmission customers at all. Duke Southeast Utilities assert that, if
the Commission undertook such a balancing of interests, it had a
responsibility under the APA to explain itself.\974\ Duke Southeast
Utilities argue that, on rehearing, the Commission should explain in
detail what this analysis entailed.\975\
---------------------------------------------------------------------------
\973\ Id. at 10.
\974\ Id. at 10-11 (citing Gen. Chem. Corp. v. U.S., 817 F.2d
844, 857 (D.C. Cir. 1987) (finding an administrative agency order
arbitrary and capricious because the agency's analysis was
``internally inconsistent and inadequately explained.''))
\975\ Id. at 11.
---------------------------------------------------------------------------
520. Duke Southeast Utilities argues that the Commission's cost
allocation decision is inconsistent with the cost causation principle,
which states that all approved rates must reflect to some degree the
costs actually caused by the customer who must pay them \976\ and that
benefits must be at least roughly commensurate with costs.\977\
---------------------------------------------------------------------------
\976\ Id. at 11-12 (citing Order No. 845-A, 166 FERC ] 61,137 at
P 78 (citation omitted); Ill. Commerce Comm'n, 576 F.3d 470, at 476
(7th Cir. 2009)).
\977\ Id. (citing Ill. Commerce Comm'n, 756 F.3d 556, at 562
(7th Cir. 2014)).
---------------------------------------------------------------------------
521. Duke Southeast Utilities state that the Commission declined in
Order No. 2023 to respond to Duke Southeast Utilities' arguments that
the reimbursement policy goes against the Commission's cost causation
principles.\978\ Duke Southeast Utilities state that the mere fact is
that, ``but for'' the affected system interconnection customers'
interconnection with the host transmission provider, there would be no
need for the affected system network upgrades. Duke Southeast Utilities
contend that customers on the affected system will not benefit from the
interconnection of the affected system interconnection customers onto
the interconnecting transmission provider's transmission system from an
energy and capacity perspective because the affected system is not
receiving energy and capacity from the host transmission provider:
therefore, Duke Southeast Utilities' retail customers will not be
receiving the generation. Duke Southeast Utilities state that the
required network upgrades also provide no benefit to the customers of
the affected system from a transmission perspective because they are
not needed ``but for'' the affected system interconnection customers
interconnection to the host transmission provider.
---------------------------------------------------------------------------
\978\ Id. at 12-13 (citing Order No. 2023, 184 FERC ] 61,054 at
PP 1243-44).
---------------------------------------------------------------------------
522. Duke Southeast Utilities' argue that, in the context of
affected system network upgrades, the Commission should require
affected system interconnection customers to fund the cost of affected
system network upgrades because (a) such network upgrades would not be
necessary but for the affected system interconnection request and (b)
doing so would allocate the network upgrades costs to the party that
caused the costs to be incurred and reaps the resulting benefits--the
affected system interconnection customers.\979\
---------------------------------------------------------------------------
\979\ Id. at 13.
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iii. Determination
523. We disagree with Duke Southeast Utilities' characterization
that the Commission conceded that the affected system network upgrade
reimbursement provisions in the pro forma affected system facilities
construction agreements were a ``NOPR proposal;'' rather, the
Commission merely acknowledged that in the NOPR it included the
existing affected system network upgrade reimbursement in the newly
proposed pro forma affected system facilities construction agreements.
The Commission did not state that the affected system network upgrade
reimbursement was a ``NOPR proposal'' of new regulations.
524. In response to Duke Southeast Utilities' request for rehearing
of the affected system network upgrade reimbursement provisions in the
pro forma affected system facilities construction agreements, we note
that, although we are not changing existing Commission policy, we
continue to find that policy to be just, reasonable, and not unduly
discriminatory or preferential. We disagree with Duke Southeast
Utilities' assertion that, before Order No. 2023, there was no such
existing affected system network
[[Page 27096]]
upgrade reimbursement policy. As the Commission concluded in Order No.
2003, and we affirm here, the Commission's interconnection pricing
policy as it applies to a non-independent affected system transmission
provider should be consistent with the policy the Commission adopted
for non-independent host transmission providers.\980\ Specifically,
under the Commission's interconnection pricing policy, the costs of
interconnection facilities are the responsibility of the
interconnection customer and the costs of network upgrades are funded
initially by the interconnection customer (unless the transmission
provider elects to fund them), and the interconnection customer is
entitled to a cash equivalent refund equal to the total amount paid for
the network upgrades.\981\
---------------------------------------------------------------------------
\980\ Order No. 2003, 106 FERC ] 61,220 at P 738; Order No.
2003-A, 106 FERC ] 61,220 at P 636.
\981\ Order No. 2003, 106 FERC ] 61,220 at PP 676, 693.
---------------------------------------------------------------------------
525. We find that it is important for the repayment provisions for
affected system interconnection customers to be consistent with the
manner that the transmission provider repays its own interconnection
customers. For example, the Commission in Order No. 2003 explained that
non-independent transmission providers have an incentive to frustrate
rival interconnection customers, and, absent a reimbursement
requirement, such transmission providers might discriminate against
independent interconnection customers by, for example, finding that a
disproportionate share of the costs of expansions needed to serve its
own power customers is attributable to competing interconnection
customers.\982\ This rationale applies equally to affected system
transmission providers.
---------------------------------------------------------------------------
\982\ Id. P 696.
---------------------------------------------------------------------------
526. Affected system transmission providers might source generation
from the host transmission provider's transmission system to serve its
own load, and such affected system transmission provider's interests
might benefit from additional network upgrades to facilitate
transactions across the seam between transmission providers. If that is
the case, the affected system transmission provider would have an
incentive to impose additional burdensome and unnecessary affected
system network upgrades on affected system interconnection customers;
however, because under Commission policy the affected system
transmission providers are required to reimburse the affected system
interconnection customer for those network upgrade costs, the incentive
for discriminatory behavior is absent.
527. The Commission also found in Order No. 2003 that the
reimbursement requirement would enhance competition by promoting new
generation.\983\ We similarly find that the requirement for affected
system transmission providers to repay affected system interconnection
customers will enhance competition because it will discourage affected
system transmission providers from assigning unnecessary affected
system network upgrade costs to interconnection customers if the
transmission provider ultimately must reimburse the affected system
interconnection customer for such costs.\984\ In doing so, we continue
to maintain that such additional generation and related enhanced
competition will generally cause the average embedded cost transmission
rate to decline for all remaining customers.\985\
---------------------------------------------------------------------------
\983\ Id. PP 694-696.
\984\ See id. P 696.
\985\ Order No. 2003-A, 106 FERC ] 61,220 at P 581 (stating that
the Commission's ``experience indicates that the incremental rate
associated with network upgrades required to interconnect a new
generator (dividing the costs of any necessary network upgrades by
the projected transmission usage by the new generator) will
generally be less that the embedded average cost rate (including the
costs of the new facilities in the numerator and the additional
usage of the system in the denominator).'').
---------------------------------------------------------------------------
528. We also continue to find, as we did in Order Nos. 2003 and
2003-A, that ``network facilities are not `sole use' facilities but
facilities that benefit all Transmission Customers . . . the addition
[of a network upgrade facility] represents a system expansion used by
and benefiting all users due to the integrated nature of the grid.''
\986\
---------------------------------------------------------------------------
\986\ Order No. 2003, 106 FERC ] 61,220 at PP 21, 65, Order No.
2003-A, 106 FERC ] 61,220 at P 585; see also Pub Serv. Co. Colo., 59
FERC ] 61,311 (1992), reh'g denied, 62 FERC ] 61,013 (1993); W.
Mass. Elec. Co., 77 FERC ] 61,268, at 62,119 (1996).
---------------------------------------------------------------------------
529. In response to Duke Southeast Utilities' assertion that the
Commission has routinely accepted affected system agreements without
affected system network upgrade reimbursement provisions, we clarify
that such acceptances were in error and in contravention of Commission
policy as established in Order No. 2003.\987\ In Docket No. ER20-2419-
000, the two service agreements at issue involved system protection
facilities, the costs of which, per Duke Southeast Utilities' tariff,
are directly assignable to an interconnection customer without
reimbursement.\988\
---------------------------------------------------------------------------
\987\ See Duke Energy Progress, LLC, 181 FERC ] 61,197, at P 39
(2022); Duke Energy Progress, LLC, 177 FERC ] 61,001 at P 37.
\988\ Duke Energy Fla., LLC, Docket No. ER20-2419-000 (Sept. 20,
2020) (delegated letter order).
---------------------------------------------------------------------------
530. We also disagree with Duke Southeast Utilities' assertion that
the Commission has been clear that the pro forma LGIA adopted in Order
No. 2003 does not apply to affected system operators. We reiterate that
Order No. 2003's reimbursement requirements are reflected both in the
preamble of Order No. 2003 and pro forma LGIA Article 11.4, which Order
No. 2003 explicitly made applicable to all jurisdictional affected
system operators.\989\
---------------------------------------------------------------------------
\989\ Order No. 2003, 106 FERC ] 61,220 at P 738; see also Duke
Energy Progress, LLC, 177 FERC ] 61,001, on reh'g, 179 FERC ]
61,007, at P 33 (``Order No. 2003 explicitly requires jurisdictional
affected system operators to reimburse interconnection customers for
network upgrade costs.'').
---------------------------------------------------------------------------
531. The Midwest Independent Transmission System Operator, Inc.
proceeding that Duke Southeast Utilities cites is inapposite to the
status quo as established in Order No. 2003. First, the affected system
transmission owner was not a party to the agreement in that proceeding
and was not required to reimburse the interconnection customer in a
region that had transitioned to participant funding prior to the filing
of the interconnection agreement at issue in that proceeding.\990\
Second, the affected system ``operator'' was a transmission owner
within the MISO footprint, not a transmission provider in a separate
service territory with its own tariff.\991\ Furthermore, in Order No.
2003, the Commission limited the use of participant funding to
independent transmission providers, such as MISO, because of its
concern that for a non-independent transmission provider, such as Duke
Southeast Utilities, the implementation of participant funding creates
opportunities for undue discrimination.\992\ The Commission also stated
that, if the affected system operator is an independent transmission
provider, then it has flexibility regarding its interconnection pricing
policy (including participant funding) that the affected system
operator may propose while as discussed above, an affected system
operator that is not independent must be consistent with the policy
adopted for non-independent transmission providers (i.e.,
[[Page 27097]]
reimbursement).\993\ This circumstance does not even speak to Order No.
2003's network upgrade reimbursement requirement for jurisdictional
affected system operators, much less undermine it.
---------------------------------------------------------------------------
\990\ Midwest Indep. Transmission Sys. Operator, Inc., 120 FERC
] 61,066, at PP 24-25.
\991\ In MISO, the definition of affected system encompasses an
electric transmission or distribution system other than the
transmission owner's transmission system that is affected by an
interconnection request. MISO, FERC Electric Tariff, attach. X
(Generator Interconnection Procedures (GIP)), (161.0.0) Sec. 1.
\992\ Order No. 2003, 106 FERC ] 61,220 at P 696.
\993\ Order No. 2003-A, 106 FERC ] 61,220 at PP 636-637.
---------------------------------------------------------------------------
532. In response to Duke Southeast Utilities' allegation that the
Commission failed to address commenters' concerns in Order No. 2023, we
are not obligated to respond to each argument that goes to issues
outside the scope of the proceeding one-by-one.\994\ We reiterate that
the affected system network upgrade reimbursement provisions in the pro
forma affected system facilities construction agreements are a
codification of existing Commission policy and are not a new policy
proposal. Order No. 2023 is not a vehicle for challenging existing
Commission policy \995\ and, accordingly, the Commission did not need
to address each individual argument attempting to undermine existing
Commission policy because Order No. 2023 did not revise the
Commission's existing reimbursement policy.
---------------------------------------------------------------------------
\994\ See Pub. Serv. Elec. & Gas Co. v. FERC, 989 F.3d 10, 20
(D.C. Cir. 2021) (finding that the Commission need only respond to
significant comments raised on rehearing and is free to ignore
insignificant ones (citing NARUC v. FERC, 475 F.3d at 1285).
\995\ See Order No. 2003, 104 FERC ] 61,103 at PP 738-739; see
also pro forma LGIA art. 11.4.
---------------------------------------------------------------------------
533. Finally, we remove from the pro forma affected system
facilities construction agreements sections 3.1.2.2 (Recommencing of
Work) and 3.1.2.3 (Right to Suspend Due to Default). We find that these
provisions are inconsistent with the pro forma LGIA and, accordingly,
are unnecessary.
c. Miscellaneous
i. Requests for Rehearing and Clarification
534. MISO asks the Commission to require MISO, PJM, and SPP to
coordinate their affected systems revisions on compliance.\996\ MISO
explains that Order No. 2023 only encourages, but does not require,
``voluntary coordination between transmission providers who share
transmission system seams and whose customers frequently impact each
other's systems.'' \997\ MISO argues that this could potentially allow
neighboring RTOs/ISOs to independently develop affected systems
approaches that could conflict with each other's procedures and disrupt
or sideline existing joint operating agreement coordination
processes.\998\ MISO states that MISO, PJM, and SPP would need to
intervene in each other's compliance proceedings to monitor proposed
revisions and protest if needed, which would be less efficient than the
current joint affected system coordination process. MISO adds that
misalignment on affected systems studies between MISO, PJM, and SPP
could lead to delayed study penalties. Further, MISO explains that the
Commission has previously required coordinated filings by RTO/ISOs
proposing identical changes to their joint operating agreements. MISO
states that it addressed these concerns in its comments but asserts
that Order No. 2023 did not meaningfully respond to them and failed to
acknowledge the unique status of MISO, PJM, and SPP's affected system
coordination procedures. Rather, MISO explains that Order No. 2023
states that the Commission ``is not persuaded that any potential
efficiencies of such coordination outweigh the burdens that may be
placed on host transmission providers.'' \999\ MISO argues that
ignoring these arguments violates the requirement of reasoned decision-
making and asserts that it is arbitrary and capricious that the
Commission did not justify its departure from its precedent of
requiring coordination between transmission providers.
---------------------------------------------------------------------------
\996\ MISO Rehearing Request at 17.
\997\ Id. at 18 (citing Order No. 2023, 184 FERC ] 61,054 at P
1172).
\998\ Id. at 19-20.
\999\ Id. at 21 (citing Order No. 2023, 184 FERC ] 61,054 at P
1172).
---------------------------------------------------------------------------
535. Shell requests clarification that affected system transmission
providers must reimburse affected system interconnection customers for
affected system network upgrades, not only when those network upgrades
are identified via a traditional affected system study, but also when
identified through a seams study.\1000\ Shell explains that seams
studies integrate generator interconnection and regional and inter-
regional transmission planning and cost allocation. Shell asserts that
it would be unjust, unreasonable, and unduly discriminatory to
reimburse interconnection customers for affected systems network
upgrades identified under the revised pro forma, but not those
identified under a seams arrangement.
---------------------------------------------------------------------------
\1000\ Shell Rehearing Request at 13-14.
---------------------------------------------------------------------------
536. Southeastern Utilities agree with the Commission that, in most
cases, an affected system transmission provider will receive the
opportunity to study a delivery request if the ``affected system
interconnection customer subsequently seeks deliverability on either
the host system or an affected system.'' \1001\ However, Southeastern
Utilities explain that, in some cases, the host transmission provider
may not perform a transmission service study before power flows from a
generating facility based on an NRIS request, and in those cases, it is
not clear how or when the affected system transmission provider would
have the opportunity to study the transmission service request. For
example, Southeastern Utilities note that MISO's business practice
manual allows MISO to accept a network service request ``without
further analysis'' if the generating facility implicated in the request
is a MISO aggregate deliverable resource that is identified during an
NRIS deliverability study.\1002\ Therefore, Southeastern Utilities ask
the Commission to clarify that, in the event a host transmission
provider performs a delivery analysis as part of its interconnection
study, the affected system transmission provider can also study both
interconnection and delivery requirements because the affected system
transmission provider may not have an opportunity to study a
transmission service request related to the generating facility.\1003\
Southeastern Utilities argue that this clarification is needed to
better consider impacts on their systems from delivery of power on
neighboring systems. If the Commission does not provide clarification,
Southeastern Utilities request rehearing on this matter. Southeastern
Utilities argue that prohibiting affected system transmission providers
to perform a delivery study along with an interconnection study under
the circumstances it describes would be arbitrary and capricious and
contrary to law for failing to consider all aspects of the issue under
consideration, inconsistent with the Commission's stated rationale, and
would jeopardize system reliability.
---------------------------------------------------------------------------
\1001\ Southeastern Utilities Clarification and Rehearing
Request at 4 (citing Order 2023, 184 FERC ] 61,054 at P 1288).
\1002\ Id. (citing MISO, BPM-020-r29 (Transmission Planning
Business Practices Manual), section 5.2.3 (May 2023)).
\1003\ Id. at 5-6.
---------------------------------------------------------------------------
ii. Determination
537. We reject MISO's request that the Commission require MISO,
PJM, and SPP to coordinate their affected systems revisions on
compliance. We disagree with MISO's argument that failing to include a
directive for joint operating parties to coordinate affected systems
was arbitrary and capricious. Order No. 2023 sets the requirements in
the pro forma LGIP for the affected system study process. As MISO
acknowledges
[[Page 27098]]
in its rehearing request, the RTOs'/ISOs' joint operating agreements
are ``unique'' and thus are not part of the Commission's pro forma
LGIP. We recognize that MISO has joint operating agreements with SPP
and PJM that may need to be updated to reflect the requirements of
Order No. 2023, and to the extent that revisions are needed, then we
expect that MISO, PJM, and SPP will propose revisions to their joint
operating agreements to ensure that there are no conflicts among their
joint operating agreements, their LGIPs, and Order No. 2023's
requirements.
538. We also disagree with MISO's argument that failing to include
a directive for joint operating parties to coordinate affected systems
is a departure from Commission precedent. We note that MISO points to a
complaint that was specifically filed against MISO's, PJM's, and SPP's
joint operating agreements and tariffs. However, here, we are revising
the Commission's pro forma LGIP. Order No. 2023 does not modify or
address individual seams arrangements, which are not part of the
Commission's pro forma LGIP. We agree that alignment among neighboring
processes is important, and we continue to encourage voluntary
coordination between transmission providers who share transmission
seams.\1004\
---------------------------------------------------------------------------
\1004\ Order No. 2023, 184 FERC ] 61,054 at PP 1172, 1194.
---------------------------------------------------------------------------
539. We also reject Shell's request for clarification that affected
system transmission providers must reimburse affected system
interconnection customers for affected system network upgrades whether
identified via a traditional affected system study or through a seams
study, because such clarification is outside of the scope of Order No.
2023. As discussed above, Order No. 2023 modifies the Commission's pro
forma LGIP to establish a standardized affected system study process.
Additionally, as discussed above, we note that Order No. 2023 does not
alter the Commission's existing reimbursement requirements for affected
system network upgrades.
540. We reject Southeastern Utilities' request for rehearing that,
in the event a host transmission provider does not perform a delivery
analysis as part of its interconnection study, the affected system
transmission provider can also study both interconnection and delivery
requirements. In Order No. 2023, the Commission found, and we continue
to find, that an affected system transmission provider must use ERIS
studies on affected system interconnection requests regardless of the
level of service requested on the host system. Southeastern Utilities
argue that there are some instances where the affected system
transmission provider will not have the opportunity to study the impact
of the generating facility in the context of the associated
transmission service request before any power flow from that generating
facility and notes, as an example, that MISO does not conduct a
deliverability study for network service requests when an
interconnection customer requests NRIS. However, as discussed in Order
No. 2023, the ERIS modeling requirement applies to the pro forma LGIP
affected system study process and the Commission explicitly stated that
it would not address whether a transmission provider has adequate
transmission service studies.\1005\ As discussed above, the Commission
found in Order No. 2003 and reiterated in Order No. 2023 that
interconnection service is an element of, but separate from the
delivery component of, transmission service.\1006\
---------------------------------------------------------------------------
\1005\ Id. P 1290.
\1006\ Id. P 1288 (citing Order No. 2003, 104 FERC ] 61,103 at P
118; Order No. 2003-A, 106 FERC ] 61,220 at P 113).
---------------------------------------------------------------------------
E. Reforms To Incorporate Technological Advancements Into the
Interconnection Process
1. Increasing Flexibility in the Generation Interconnection Process
a. Co-Located Generating Facilities Behind One Point of Interconnection
i. Order No. 2023 Requirements
541. In Order No. 2023, the Commission revised pro forma LGIP
section 3.1.2 to require transmission providers to allow more than one
generating facility to co-locate on a shared site behind a single point
of interconnection and share a single interconnection request.\1007\
The Commission clarified that interconnection customers have the choice
to structure their interconnection requests for co-located generating
facilities according to their preference (i.e., as separate
interconnection requests or as a shared interconnection request) and
that Order No. 2023 does not require interconnection customers to share
a single interconnection request for multiple generating facilities
located on the same site.\1008\ The Commission also clarified that co-
located generating facilities can be owned by a single interconnection
customer with multiple generating facilities sharing a site, or by
multiple interconnection customers that have a contract or other
agreement that allows for shared land use.\1009\
---------------------------------------------------------------------------
\1007\ Id. P 1346.
\1008\ Id. PP 1351-1352.
\1009\ Id. P 1355.
---------------------------------------------------------------------------
542. The Commission found that co-located generating facilities, in
spite of being prevalent in current interconnection queues, face
barriers to interconnection under existing interconnection procedures,
and that this reform will effectively remove such barriers.\1010\ The
Commission further found that requiring transmission providers to allow
interconnection customers to submit a single interconnection request
that represents multiple generating facilities that are located behind
a single point of interconnection is required to ensure just and
reasonable rates. The Commission stated that this reform will improve
efficiency for transmission providers in the study process by reducing
the number of interconnection requests in the interconnection queue and
will reduce costs for interconnection customers because they will only
submit a single set of deposits to enter the interconnection queue. The
Commission also stated that this reform will improve interconnection
queue efficiency without imposing an adverse impact on the efficacy of
interconnection study results or other interconnection customers.\1011\
---------------------------------------------------------------------------
\1010\ Id. P 1349.
\1011\ Id. P 1350.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
543. MISO urges the Commission to clarify that the requirement to
allow co-located resources to share an interconnection request is
limited to co-located resources owned by the same interconnection
customer.\1012\ MISO states that requiring or even allowing separate
interconnection customers to combine their projects into a single
interconnection request would create numerous opportunities for
conflict and interconnection management challenges. MISO argues, for
example, that, if one of two interconnection customers sharing an
interconnection request fails to adhere to the requirements of MISO's
LGIP and must be withdrawn, MISO would need to develop an extensive set
of revisions to the LGIP and new procedures for separating one
interconnection customer's facilities out of a shared interconnection
request. MISO asserts that it is not necessary to require a
transmission provider to allow separate interconnection customers to
share an interconnection request for separate projects just to allow
them to co-locate
[[Page 27099]]
behind a common point of interconnection. Therefore, MISO asks the
Commission to clarify that allowing multiple interconnection customers
to share an interconnection request is merely one mechanism to achieve
Order No. 2023's goal allowing interconnection customers to co-locate
their generating facilities and that transmission providers are not
required to use that particular mechanism provided they adopt
procedures to allow the intended result.
---------------------------------------------------------------------------
\1012\ MISO Rehearing Request at 23-25.
---------------------------------------------------------------------------
544. NYTOs ask the Commission to clarify the definition of stand
alone network upgrades and the option to build standalone network
upgrades in situations of co-located generating facilities.\1013\
Specifically, NYTOs note that Order No. 2023 maintains the definition
of stand alone network upgrades as ``only those required for a single
interconnection customer,'' \1014\ but also requires transmission
providers to allow interconnection customers to submit a single
interconnection request that represents multiple generating facilities
that are located behind a single point of interconnection.\1015\
Therefore, NYTOs urge the Commission to clarify application of the
option to build stand alone network upgrades when required for a shared
interconnection request.
---------------------------------------------------------------------------
\1013\ NYTOs Rehearing Request at 39.
\1014\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 193).
\1015\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 1349).
---------------------------------------------------------------------------
iii. Determination
545. We are unpersuaded by MISO's arguments that the requirement to
allow co-located resources to share an interconnection request should
be limited to co-located resources owned by the same interconnection
customer. We sustain our findings in Order No. 2023 that transmission
providers must allow more than one generating facility to co-locate on
a shared site behind a single point of interconnection and share a
single interconnection request, and that such co-located generating
facilities can be owned by a single interconnection customer with
multiple generating facilities sharing a site, or by multiple
interconnection customers that have a contract or other agreement that
allows for shared land use.\1016\ We continue to find that this reform
will improve efficiency for transmission providers in the study process
by reducing the number of interconnection requests in the
interconnection queue and will reduce costs for interconnection
customers because they will only submit a single set of deposits to
enter the interconnection queue. For these reasons, we continue to
believe that this reform will improve efficiency for both transmission
providers and interconnection customers, and that this reform is
necessary to ensure just and reasonable rates.
---------------------------------------------------------------------------
\1016\ Order No. 2023, 184 FERC ] 61,054 at P 1355.
---------------------------------------------------------------------------
546. Regarding the situation that MISO describes, in which one of
the co-located generating facilities sharing an interconnection request
is withdrawn or requested to be withdrawn, we do not believe that
revisions to the pro forma LGIP are needed to separate the facilities
in the shared interconnection request. Rather, we believe that
transmission providers should determine whether the entire shared
interconnection request should proceed or be withdrawn using the
existing withdrawal provisions in section 3.7 of the pro forma LGIP or
the existing material modification procedures in section 4.4 of the pro
forma LGIP. If a transmission provider would like to propose revisions
to its LGIP to allow one co-located generating facility sharing an
interconnection request to withdraw from the queue while allowing
another co-located generating facility sharing the same interconnection
request to proceed in the interconnection queue, it may do so in an FPA
section 205 filing.
547. In response to NYTOs' request for clarification, we believe
that the revisions to the definition of stand alone network upgrades
earlier in this order in response to Clean Energy Associations' request
for rehearing should resolve NYTOs' concern and clarify the option to
build stand alone network upgrades when required for a shared
interconnection request.\1017\
---------------------------------------------------------------------------
\1017\ See supra section II.C.2.c.
---------------------------------------------------------------------------
b. Revisions to the Modification Process To Require Consideration of
Generating Facility Additions
i. Order No. 2023 Requirements
548. In Order No. 2023, the Commission revised section 4.4.3 of the
pro forma LGIP to require transmission providers to evaluate the
proposed addition of a generating facility at the same point of
interconnection prior to deeming such an addition a material
modification, if the addition does not change the originally requested
interconnection service level.\1018\ The Commission found that
automatically deeming a request to add a generating facility to an
existing interconnection request to be a material modification without
such evaluation creates a significant barrier to access to the
transmission system and renders existing interconnection processes
unjust and unreasonable.\1019\
---------------------------------------------------------------------------
\1018\ Order No. 2023, 184 FERC ] 61,054 at P 1406.
\1019\ Id. P 1407.
---------------------------------------------------------------------------
549. The Commission clarified that interconnection customers may
continue to request changes to proposed generating facilities at any
time in the interconnection process; however, transmission providers
are only required to evaluate whether a request to add a generating
facility to an existing interconnection request is material if the
request is submitted before the interconnection customer returns the
executed facilities study agreement to the transmission provider. Once
the executed facilities study agreement is returned, the transmission
provider may decide to automatically treat requests to add a generating
facility to an existing interconnection request as material
modifications without review.\1020\ The Commission also created an
exception from these requirements for transmission providers that
employ fuel-based dispatch assumptions.\1021\
---------------------------------------------------------------------------
\1020\ Id. PP 1409-1410.
\1021\ Id. P 1411.
---------------------------------------------------------------------------
550. The Commission clarified that, per pro forma LGIP section
4.4.1, prior to the return of the cluster study agreement from the
transmission provider to the interconnection customer, a decrease of up
to 60% of electrical output (MW) must not be considered a material
modification.\1022\ In addition, per pro forma LGIP section 4.4.2,
prior to the return of the executed interconnection facilities study,
an additional 15% decrease of electrical output of the proposed project
must not be considered a material modification if the change occurred
either through a decrease in plant size (MW) or a decrease in
interconnection service level accomplished by applying transmission
provider-approved injection-limiting equipment.
---------------------------------------------------------------------------
\1022\ Id. P 1417.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
551. PJM seeks rehearing of this reform because it believes that
the Commission fails to address the concerns PJM raised in its NOPR
comments that locating an additional facility at the site of the first
project can affect other interconnection customers, especially if the
additional facility has a different fuel type than the initial
facility.\1023\ PJM adds that the Commission's determination is
arbitrary and capricious because a project developer who is unsure
which facilities it seeks to interconnect at the time of its
application is not ready to
[[Page 27100]]
proceed and performing a material modification analysis is time-
consuming: therefore, this requirement is inconsistent with Order No.
2023's stated goal of facilitating a prompt study process that allows
ready projects to move forward.
---------------------------------------------------------------------------
\1023\ PJM Rehearing Request at 41-42.
---------------------------------------------------------------------------
552. Shell seeks rehearing regarding the deadlines by which an
interconnection customer can reduce the size of its generating
facilities without the change being deemed a material
modification.\1024\ Shell notes that Order No. 2023 allows an initial
60% size reduction prior to the interconnection customer executing the
cluster study agreement. Shell states that, because Order No. 2023
eliminated the feasibility study from the interconnection study
process, interconnection customers no longer have a basis at that point
in the study process from which to determine if they should decrease
the size of their generating facility. Shell argues that the Commission
should revise pro forma LGIP section 4.4.1 to allow interconnection
customers to reduce their project size after the initial cluster study
report and prior to the start of the subsequent cluster re-study or
facilities study.
---------------------------------------------------------------------------
\1024\ Shell Rehearing Request at 7.
---------------------------------------------------------------------------
553. Clean Energy Associations ask the Commission to clarify that
changing solar modules or wind turbines, adding storage capacity, or
making minor adjustment to inverter performance are presumptively
immaterial if the project's planned export and import capacity remains
the same.\1025\ Clean Energy Associations state that finalizing
procurement is highly reliant on the results and timing of the
interconnection studies and argue that this clarification is necessary
to ensure that project developers are not effectively forced into
locking in inefficient equipment early in the interconnection process.
---------------------------------------------------------------------------
\1025\ Clean Energy Associations Rehearing Request at 75-76.
---------------------------------------------------------------------------
iii. Determination
554. We disagree with PJM that the Commission did not sufficiently
address PJM's concerns that locating an additional facility at the site
of the first project could affect other interconnection customers. In
Order No. 2023, the Commission established a procedural requirement for
transmission providers to evaluate the proposed addition of a
generating facility at the same point of interconnection prior to
deeming such an addition a material modification, if the addition does
not change the originally requested interconnection service
level.\1026\ The Commission did not require any particular substantive
outcome following this evaluation; rather, transmission providers may
still find that a proposed modification involving the proposed addition
of a generating facility at the same point of interconnection would
have a material impact on the cost or timing of any interconnection
request with an equal or later queue position, and therefore
constitutes a material modification. While such evaluation likely
entails some additional burden on the transmission provider, we
continue to find that this outcome is warranted given the
countervailing benefits. Specifically, we sustain our finding that
transmission providers automatically deeming a request to add a
generating facility to an existing interconnection request to be a
material modification creates a significant barrier to access to the
transmission system and renders existing interconnection processes
unjust and unreasonable.\1027\ Further, we continue to find that this
reform will ensure that interconnection customers are able to
interconnect to the transmission system in a reliable, efficient,
transparent, and timely manner, and will prevent undue discrimination.
---------------------------------------------------------------------------
\1026\ Order No. 2023, 184 FERC ] 61,054 at P 1406.
\1027\ Id. P 1407.
---------------------------------------------------------------------------
555. We are not persuaded by Shell's arguments on rehearing that
the Commission should allow a 60% size reduction after the initial
cluster study report and prior to the start of the subsequent cluster
re-study or facilities study. We find that allowing every
interconnection customer in a cluster a 60% size reduction after the
initial cluster study report will significantly impact the amount of
uncertainty faced by interconnection customers in a cluster--because
each change in proposed generating facility size may shift network
upgrade costs to other interconnection customers, who in turn, may
elect to re-size--and may lead to withdrawals and restudies. Rather, we
reiterate our finding that, per pro forma LGIP section 4.4.1, prior to
the return of the cluster study agreement from the transmission
provider to the interconnection customer, the proposed decrease of up
to 60% of a generating facility's electrical output (MW) must not be
considered a material modification.\1028\ We clarify that this
allowable decrease of up to 60% of a generating facility's electrical
output may occur during the customer engagement window (i.e., prior to
the return of the cluster study agreement from the transmission
provider to the interconnection customer). Further, we note that
interconnection customers have an additional opportunity to propose a
decrease in the output of the generation facility after the cluster
study report: per pro forma LGIP section 4.4.2, prior to the return of
the executed interconnection facilities study, an additional 15%
decrease of electrical output of the proposed project must not be
considered a material modification if the change occurred either
through a decrease in plant size (MW) or a decrease in interconnection
service level accomplished by applying transmission provider-approved
injection-limiting equipment.
---------------------------------------------------------------------------
\1028\ Id. P 1417.
---------------------------------------------------------------------------
556. We find Clean Energy Associations' requested clarification
that changing solar modules or wind turbines, adding storage capacity,
or making minor adjustments to inverter performance are presumptively
immaterial if the project's planned export and import capacity remains
the same, is outside the scope of this rulemaking. In Order No. 2023,
the Commission did not establish a presumption of immateriality for any
specific changes to an interconnection request that do not impact the
requested interconnection service level. Rather, the Commission
established a procedural requirement for transmission providers to
evaluate the proposed addition of a generating facility at the same
point of interconnection prior to deeming such an addition a material
modification, if the addition does not change the originally requested
interconnection service level.\1029\ We decline to establish any
presumption of immateriality here for specific changes to an
interconnection request that do not impact the requested
interconnection service level. We do note that Order No. 845
established the technological change procedure to provide for the
evaluation of whether a technological advancement can be incorporated
into an interconnection request without the change being considered a
material modification (i.e., whether the change is a permissible
technological advancement).\1030\ Any such technical change procedures
are in the transmission provider's tariff, and Order No. 2023 did not
affect them.
---------------------------------------------------------------------------
\1029\ Id. P 1406.
\1030\ Order No. 845, 163 FERC ] 61,043 at PP 510-536.
---------------------------------------------------------------------------
[[Page 27101]]
c. Availability of Surplus Interconnection Service
i. Order No. 2023 Requirements
557. In Order No. 2023, the Commission revised section 3.3.1 of the
pro forma LGIP to require transmission providers to allow
interconnection customers to access the surplus interconnection service
process once the original interconnection customer has an executed LGIA
or requests the filing of an unexecuted LGIA.\1031\ The Commission
found that this reform will enable interconnection customers with
unused interconnection service to let other generating facilities use
that interconnection service earlier than is currently allowed and,
therefore, increase overall efficiency of the interconnection queue and
in turn ensure just and reasonable rates.\1032\ The Commission
clarified that this reform does not modify how the surplus
interconnection service process is conducted, but rather addresses when
a request for surplus interconnection service may be submitted.\1033\
The Commission further clarified that the original interconnection
customer must have an LGIA in place, either executed or requested to be
filed unexecuted with the Commission, prior to the transmission
provider tendering any LGIA for surplus interconnection service.\1034\
---------------------------------------------------------------------------
\1031\ Order No. 2023, 184 FERC ] 61,054 at P 1436.
\1032\ Id. P 1437.
\1033\ Id. P 1447.
\1034\ Id. P 1445.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
558. PJM requests clarification or, in the alternative, rehearing
of Order No. 2023's requirement regarding surplus interconnection
service.\1035\ PJM asserts that, when the initial interconnection
customer signs an LGIA, none of the network upgrades or customer
interconnection facilities will have been built, such that there will
be no service, much less ``surplus'' service, available. PJM argues
that the requirement would introduce additional administrative burden,
thereby detracting from the timely completion of interconnection
studies and increasing the potential for study delay penalties, while
providing little additional benefit to interconnection customers.\1036\
PJM adds that studying co-located generating facilities of different
fuel types is appropriate within the same cluster study rather than at
disjointed points in time given that such generating facilities can
have very different electrical characteristics. Therefore, PJM seeks
clarification that it is entitled to an independent entity variation to
not provide surplus interconnection service at such an early stage of
project development or to not provide the service at any stage if it
demonstrates that surplus interconnection service requests are
inconsistent with its cluster study processes and will hinder efficient
and timely clustered interconnection studies. In the alternative, PJM
seeks rehearing of the requirement for being arbitrary and capricious
because the expansion of surplus interconnection service runs contrary
to Order No. 2023's goal of speeding up interconnection processes.
---------------------------------------------------------------------------
\1035\ PJM Rehearing Request at 35-36 (citing Order No. 2023,
184 FERC ] 61,054 at P 1438).
\1036\ Id. at 37-38.
---------------------------------------------------------------------------
559. SPP asks the Commission to clarify that Order No. 2023
requires transmission providers to allow interconnection customers to
apply for surplus interconnection service once the underlying GIA is
executed or filed unexecuted, not that transmission providers must
allow interconnection customers to begin receiving surplus
interconnection service at that point.\1037\ Because surplus
interconnection service fundamentally relies upon another
interconnection service request, SPP asks the Commission to clarify
that Order No. 2023 does not obligate transmission providers to provide
surplus interconnection service earlier than they provide
interconnection service to the underlying interconnection service
request. In the alternative, SPP requests rehearing of the requirement
because it would be impossible for transmission providers to provide
surplus interconnection service before providing service for the
underlying interconnection request and would threaten system
reliability.
---------------------------------------------------------------------------
\1037\ SPP Rehearing Request at 21.
---------------------------------------------------------------------------
iii. Determination
560. We are unpersuaded by PJM's arguments on rehearing that the
Commission should eliminate this reform because it would detract from
the timely completion of interconnection studies without providing any
measurable benefit to interconnection customers. We reiterate that the
reform solely modifies when an interconnection customer can submit a
request for surplus interconnection service, allowing interconnection
customers to access the surplus interconnection service process once
the initial interconnection customer has an executed LGIA or requests
the filing of an unexecuted LGIA. Surplus interconnection service is
defined as any unneeded portion of interconnection service established
in an LGIA, such that if surplus interconnection service is utilized,
the total amount of interconnection service at the point of
interconnection would remain the same.\1038\ PJM notes that, when the
initial interconnection customer signs an LGIA, the interconnection
facilities and network upgrades to accommodate the initial
interconnection customer's generating facility will not yet have been
built. At that point, however, it will be known whether there is any
unneeded portion of interconnection service established in the LGIA
that a surplus interconnection customer could utilize. For this reason,
we disagree with PJM that interconnection customers should not be
allowed to request surplus interconnection service once the initial
interconnection customer signs an LGIA. We continue to find that this
reform will enable interconnection customers with unused
interconnection service to allow other generating facilities to use
that interconnection service earlier than was previously allowed and,
therefore, will increase the overall efficiency of the interconnection
queue. We continue to find that this reform will ensure that
interconnection customers are able to interconnect to the transmission
system in a reliable, efficient, transparent, and timely manner, and
will prevent undue discrimination.
---------------------------------------------------------------------------
\1038\ Pro forma LGIP section 1.
---------------------------------------------------------------------------
561. We also decline to grant PJM's request for clarification that
PJM is entitled to an independent entity variation to not provide
surplus interconnection service. Consistent with the Commission's
statements in Order No. 2023, transmission providers may explain
specific circumstances on compliance and justify why any deviations are
either consistent with or superior to the pro forma LGIP or merit an
independent entity variation in the context of RTOs/ISOs.
562. We grant SPP's request for clarification that Order No. 2023
requires transmission providers to allow interconnection customers to
apply for surplus interconnection service once the underlying LGIA is
executed or filed unexecuted, not that transmission providers must
allow interconnection customers to begin receiving surplus
interconnection service at that point. As the Commission stated in
Order No. 2023, and as SPP describes, this reform modifies when a
request for surplus interconnection service may be submitted.\1039\ We
reiterate the
[[Page 27102]]
clarification in Order No. 2023 that the initial interconnection
customer must have an LGIA in place, either executed or requested to be
filed unexecuted with the Commission, prior to the transmission
provider tendering any LGIA for surplus interconnection service.\1040\
---------------------------------------------------------------------------
\1039\ Order No. 2023, 184 FERC ] 61,054 at P 1447.
\1040\ Id. P 1445.
---------------------------------------------------------------------------
d. Operating Assumptions for Interconnection Studies
i. Order No. 2023 Requirements
563. In Order No. 2023, the Commission revised sections 3.1.2,
3.2.1.2, 3.2.2.2, 3.3.1, 3.4.2, 4.4.3, 7.3, 8.2, and Appendix 1 of the
pro forma LGIP and article 17.2 and Appendix H of the pro forma LGIA to
require transmission providers, at the request of the interconnection
customer, to use operating assumptions in interconnection studies that
reflect the proposed charging behavior of electric storage resources
\1041\ (whether standalone, co-located generating facilities,\1042\ or
part of a hybrid generating facility \1043\)--i.e., whether the
interconnecting generating facility will or will not charge during peak
load conditions--unless good utility practice, including applicable
reliability standards,\1044\ otherwise requires the use of different
operating assumptions.\1045\ The Commission clarified that studying
electric storage resources, at the request of the interconnection
customer, according to their planned operating assumptions refers only
to the operating assumptions for withdrawals of energy (e.g., the
charging of an electric storage resource) in interconnection studies.
The Commission further clarified that the reforms described in that
determination section of Order No. 2023 and the related sections of the
pro forma LGIP apply to all interconnecting electric storage resources,
whether they are standalone, co-located generating facilities, or part
of a hybrid generating facility.\1046\
---------------------------------------------------------------------------
\1041\ An electric storage resource is a generating facility
capable of receiving electric energy from the grid and storing it
for later injection of electricity. See id. P 1509 n.2854.
\1042\ Co-located generating facilities are more than one
generating facility that are located on the same site and that are
connected at the same point of interconnection that are operated and
dispatched as separate generating facilities. See id. P 1346 n.
2552.
\1043\ A hybrid generating facility is a generating facility
composed of more than one device of different technology types for
the production and/or storage for later injection of electricity
that are located on the same site and are operated and dispatched as
a single integrated generating facility. See id. P 604 n.1204.
\1044\ Applicable reliability standards means ``the requirements
and guidelines of the Electric Reliability Organization and the
Balancing Authority Area of the Transmission System to which the
Generating Facility is directly interconnected.'' See pro forma LGIP
section 1 (Definitions).
\1045\ Order No. 2023, 184 FERC ] 61,054 at P 1509.
\1046\ Id. n.2858.
---------------------------------------------------------------------------
564. The Commission stated that, if an interconnection customer
fails to operate its electric storage resource in accordance with the
operating assumptions memorialized in the interconnection customer's
LGIA, the procedure for termination of the LGIA pursuant to articles
17.1.1 and 17.1.2 of the pro forma LGIA is appropriate.\1047\ The
Commission further found that an electric storage resource that
operates contrary to the operating assumptions specified in its LGIA
must not be considered in breach of its LGIA by the transmission
provider if its operation is at the direction of the transmission
provider to maintain the reliable and efficient operation of the
transmission system.
---------------------------------------------------------------------------
\1047\ Id. P 1521.
---------------------------------------------------------------------------
565. The Commission found that, by more accurately reflecting the
technical capabilities of electric storage resources in interconnection
studies through the use of appropriate operating assumptions, this
reform will ensure the reliable interconnection of new electric storage
resources without overestimating their impact on the transmission
system, thereby ensuring just and reasonable rates by avoiding
excessive and unnecessary network upgrades that may hinder the timely
development of new generating facilities that stifles competition in
the wholesale market.\1048\ The Commission also found that this reform
reduces unduly discriminatory or preferential barriers to the
interconnection of electric storage resources.
---------------------------------------------------------------------------
\1048\ Id. P 1510.
---------------------------------------------------------------------------
566. The Commission found that, taken together, the revisions to
the pro forma LGIP and pro forma LGIA adopted in Order No. 2023 will
ensure that interconnection customers adhere to the operating
assumptions used to study their electric storage resource and
ameliorate concerns about possible reliability problems expressed by
commenters.\1049\ The Commission further found that: (1) control
devices can prevent electric storage resources from charging during
peak load conditions; (2) modern electric storage resources can respond
to signals from the transmission provider within seconds; (3) electric
storage resources generally do not have an economic incentive to charge
during peak load conditions; and (4) the consequence of being
considered in breach of the LGIA provides an additional incentive for
electric storage resources to follow the agreed-upon operating
assumptions memorialized in their LGIA. Further, the Commission noted
that some transmission providers already assume in their
interconnection studies that electric storage resources will not charge
during peak load conditions.\1050\ The Commission emphasized that,
irrespective of these changes to operating assumptions, all electric
storage resources must continue to meet all requirements in the pro
forma LGIP and pro forma LGIA, as well as all applicable reliability
standards.
---------------------------------------------------------------------------
\1049\ Id. P 1522.
\1050\ Id. n.2865 (citing to Bonneville Initial Comments at 23;
MISO Comments at 117; PacifiCorp, 182 FERC ] 61,131 (2023)
(accepting, subject to condition, revisions to PacifiCorp's LGIP and
LGIA to allow PacifiCorp to study electric storage resources in its
interconnection study process using operating assumptions that more
accurately reflect their expected operation)).
---------------------------------------------------------------------------
567. The Commission found that the speed and control with which
electric storage resources can respond to signals from transmission
providers sufficiently distinguishes the charging behavior of electric
storage resources from that of firm customer end-use load.\1051\
Therefore, for purposes of determining any network upgrades necessary
to accommodate the reliable interconnection of electric storage
resources, the Commission found that the charging of electric storage
resources should not be modeled equivalently to firm customer end-use
load in interconnection studies if the interconnection customer
memorializes its operating assumptions in the LGIA and installs control
technologies, if required, to limit its operations as specified. The
Commission further clarified that the transmission provider must not
assign network upgrade costs to the interconnection customer based on
those worst-case operating assumptions (e.g., charging at maximum
capacity during peak load conditions) where there is agreement from the
interconnection customer to, if required, implement operating
restrictions including installing or demonstrating that the generating
facility already has control technologies (software and/or hardware) to
limit its operations during peak load conditions.\1052\
---------------------------------------------------------------------------
\1051\ Id. P 1523.
\1052\ Id. P 1525.
---------------------------------------------------------------------------
568. Additionally, in Order No. 2023 the Commission declined to
extend the reform to apply to additional generating facility
technologies (e.g., natural gas, solar, wind) or to other operating
assumptions, including the injection of power.\1053\ The Commission
encouraged
[[Page 27103]]
transmission providers to examine on an individual basis what operating
assumptions used to study the injection of power may be appropriate to
render the study process more accurate. The Commission also clarified
that this requirement does not apply to transmission service requests
and that Order No. 2023 does not modify the process for requesting
transmission service.\1054\
---------------------------------------------------------------------------
\1053\ Id. P 1529.
\1054\ Id. P 1526.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
569. Joint RTOs and PJM request rehearing of the operating
assumptions reform because they assert that the Commission failed to
respond meaningfully to the concerns raised that the use of customer-
provided operating assumptions in interconnection studies (1) is not
consistent with how planning studies are performed, (2) will add
additional administrative burdens for transmission providers, and (3)
may jeopardize reliability and shift costs to load.\1055\ Joint RTOs
also urge the Commission to revise or clarify Order No. 2023 to allow
RTOs/ISOs to develop generally applicable procedures for addressing
storage charging assumptions rather than burdensome ad hoc analyses for
each interconnection customer.\1056\ Joint RTOs argue that the
operating assumptions reform is impractical and creates reliability
problems due to the complexities of the required studies and lack of
feasible enforcement mechanisms, and will burden real-time operations
to limit these units to assumptions they provided as part of their
interconnection application.\1057\
---------------------------------------------------------------------------
\1055\ Joint RTOs Rehearing Request at 3, 6; PJM Rehearing
Request at 12, 38.
\1056\ Joint RTOs Rehearing Request at 6.
\1057\ Id. at 4.
---------------------------------------------------------------------------
570. Joint RTOs and PJM assert that transmission providers have no
ability to monitor in real time if an interconnection customer violates
its operating limits, which could threaten reliability, and contend
that Order No. 2023 does not explain how transmission providers would
police storage resources' operations and enforce the operating
assumptions on which their interconnection studies were based.\1058\
Joint RTOs and PJM add that, to the extent electric storage resources
exceed their operating parameters in real time, the costs of network
upgrades would fall unfairly upon load because, once interconnected,
load (rather than the interconnection customer) is responsible for the
costs of upgrading the system to maintain the unit's deliverability
over its lifetime.\1059\ Joint RTOs and PJM state that interconnection
studies are not designed to incorporate the real-time dispatch of
resources or withdrawals of load or storage resources, arguing that the
Commission fails to distinguish how storage resources differ from other
generating facilities so as to justify this unwarranted departure from
the principles which underlie planning and interconnection analyses.
Joint RTOs and PJM also argue that implementing this reform, including
the requirement to provide an interconnection customer with an
explanation of why the submitted operating assumptions are insufficient
or inappropriate and allow the interconnection customer to revise and
resubmit the operating assumptions, is likely to add more time to the
interconnection study process and engender arguments of unequal
treatment by other resources within a cluster.\1060\ PJM adds that
Order No. 2023 is unduly discriminatory and provides no clear basis for
favoring storage projects over all other types of generating resources
or other types of load.\1061\
---------------------------------------------------------------------------
\1058\ Id. at 7-8; PJM Rehearing Request at 40.
\1059\ Joint RTOs Rehearing Request at 5-6; PJM Rehearing
Request at 40-41.
\1060\ Joint RTOs Rehearing Request at 6-7; PJM Rehearing
Request at 39.
\1061\ PJM Rehearing Request at 38-39.
---------------------------------------------------------------------------
571. NYISO requests rehearing of the operating assumptions reform
because it is inconsistent with the NYISO-administered markets given
that storage resources participating as installed capacity suppliers
are required to bid, schedule, and/or declare unavailable their entire
withdrawal operating range during the day-ahead market, or otherwise
may be subject to financial penalties.\1062\ NYISO adds that grid or
market conditions may make it desirable for storage resources to charge
during peak demand hours and/or during NYISO's peak load window, for
example to capture energy production during peak output of solar
generating facilities.\1063\ NYISO argues that the reform will add
significant new complexity to interconnection studies and increase the
time required to complete such studies, which is at odds with the
intent of Order No. 2023 to expedite such studies by establishing firm
deadlines subject to penalties.\1064\ NYISO asserts that requiring a
transmission provider to consider the individual operating assumptions
of each storage project would require that it create additional off-
peak system base cases that are tailored for each individual project as
the standardized set of system base cases may not represent the system
conditions where the developer of the storage project opts to charge.
---------------------------------------------------------------------------
\1062\ NYISO Rehearing Request at 3, 54-55.
\1063\ Id. at 54 (citing NYISO, Market Administration and
Control Area Services Tariff, Sec. 5.12 (MST Requirements
Applicable to Installed Capacity Supply) (41.0.0) Sec. 5.12.14).
\1064\ Id. at 55-56.
---------------------------------------------------------------------------
572. In contrast, Public Interest Organizations argue that the
Commission erred in limiting the reform to only the operating
parameters for withdrawals of energy by storage resources and declining
to extend it to storage injections or other technologies.\1065\ Public
Interest Organizations contend that the Commission's reasoning that the
potential reliability impacts and administrative burden of extending
the reform to injections of energy is arbitrary and capricious given
(1) the broad support among commenters that the failure to use
realistic operating assumptions for injections of power can result in
unnecessary network upgrades, stifle competition, and create unduly
discriminatory barriers and (2) the ample evidence presented of how the
reliability impacts of injections are already being sufficiently
managed by grid operators during real-time operations. Public Interest
Organizations aver that, without consideration of operating parameters
in interconnection studies, certain interconnection customers will be
forced to pay for increasingly excessive and unnecessary upgrades that
will sit unused, which will ultimately lead to a less efficient power
system and unjust and unreasonable electricity costs for
ratepayers.\1066\
---------------------------------------------------------------------------
\1065\ Public Interest Organizations Rehearing Request at 17-18.
\1066\ Id. at 19-20.
---------------------------------------------------------------------------
573. Clean Energy Associations request clarification, or in the
alternative rehearing, so that the pro forma LGIP requires that the
interconnection customer and transmission provider mutually agree in
the cluster study agreement as to (1) which loading cases are applied
to storage charging and discharging and (2) what power level or
percentage output or percentage charging is applied to each case.\1067\
Clean Energy Associations also ask the Commission to require
transmission providers to identify which loading case triggered
identified upgrades in the cluster study results. Further, to ensure
that interconnection customers and transmission providers have clarity
[[Page 27104]]
about the operating constraints that apply in an LGIA, Clean Energy
Associations urge the Commission to specify requirements for operating
assumptions in the cluster study agreement as well as what the
transmission provider must deliver to the electric storage resource
owner interconnection customer in cluster study results, rather than
having the utility state when their peak load applies. Clean Energy
Associations state that, because Order No. 2023 does not provide for
any means to address situations in which the interconnection customer
and transmission provider continue to have a disagreement after the
revision and resubmittal of the operating assumptions during the
customer engagement window, they seek clarification or, in the
alternative rehearing, that interconnection customers may submit
conflicting situations to the Commission along with a request to file
the applicable study agreement unexecuted, with a request that the
Commission determine which operating assumption should be used in the
applicable study.
---------------------------------------------------------------------------
\1067\ Clean Energy Associations Rehearing Request at 70-73.
---------------------------------------------------------------------------
574. Clean Energy Associations ask the Commission to clarify that
the planned operating assumptions of electric storage resources must be
considered as part of the interconnection process.\1068\ Clean Energy
Associations assert that planned operating assumptions should also be
considered part of transmission service requests. Clean Energy
Associations also ask the Commission to clarify that the operating
assumption requirement applies not just to standalone storage, but to
hybrid and co-located resources as well. Clean Energy Associations add
that, given the Commission's findings regarding the capabilities and
incentives of energy storage resources, the Commission should clarify
that modeling energy storage charging equivalently to firm customer
end-use load for purposes of determining network upgrades is
inconsistent with good utility practice going forward.\1069\
---------------------------------------------------------------------------
\1068\ Id. at 69-70.
\1069\ Id. at 72-73.
---------------------------------------------------------------------------
iii. Determination
575. We are not persuaded by PJM's and Joint RTOs' arguments on
rehearing. First, we disagree with PJM and Joint RTOs that the
Commission did not sufficiently articulate how electric storage
resources are distinct from other types of generating facilities, why
this reform is needed to ensure just and reasonable rates, and why this
reform is not unduly discriminatory or preferential. As the Commission
stated in Order No. 2023, electric storage resources have operating
parameters that differ from traditional types of generating facilities
for which the generator interconnection process was originally
designed, namely their ability to both inject power and withdraw
power.\1070\ The instant reform is directed specifically and
exclusively at how transmission providers study the withdrawal of power
from electric storage resources (i.e., the unique feature of electric
storage resources compared to other types of generating facilities)
within the generator interconnection process.
---------------------------------------------------------------------------
\1070\ Order No. 2023, 184 FERC ] 61,054 at P 1448.
---------------------------------------------------------------------------
576. As the record indicates, the existing practice of some
transmission providers is to study withdrawals of power from electric
storage resources during peak load conditions equivalently to firm
customer end-use load, and this practice results in excessive and
unnecessary network upgrades and may hinder the timely development of
new generation, thereby stifling competition in the wholesale markets,
and resulting in rates, terms, and conditions that are unjust and
unreasonable.\1071\ We continue to find that the speed and control with
which electric storage resources can respond to signals from
transmission providers sufficiently distinguishes the charging behavior
of electric storage resources from that of firm customer end-use load,
and that reflecting the technical capabilities of electric storage
resources through the use of appropriate operating assumptions in
interconnection studies reduces unduly discriminatory or preferential
barriers to the interconnection of electric storage resources.\1072\
---------------------------------------------------------------------------
\1071\ See, e.g., AEE Initial Comments at 42; Alliant Energy
Initial Comments at 8; Clean Energy Associations Initial Comments at
52-53; Hydropower Commenters Initial Comments at 21-22; Longroad
Reply Comments at 10-12; NARUC Initial Comments at 36-37; NESCOE
Reply Comments at 18; Pine Gate Initial Comments at 51, 54; Public
Interest Organizations Initial Comments at 47; rPlus Initial
Comments at 6; SEIA Initial Comments at 40; SEIA Reply Comments at
27.
\1072\ Order No. 2023, 184 FERC ] 61,054 at P 1523.
---------------------------------------------------------------------------
577. We are unpersuaded by PJM's and Joint RTOs' arguments that
reflecting whether an interconnecting electric storage resource will or
will not charge during peak load conditions is fundamentally
incompatible with interconnection studies. We reiterate that Order No.
2023 requires transmission providers, at the request of the
interconnection customer, to reflect in their interconnection studies
whether an interconnecting electric storage resource will or will not
charge during peak load conditions (unless good utility practice,
including applicable reliability standards, otherwise requires the use
of different operating assumptions).\1073\ We clarify that the instant
reform does not require transmission providers to develop new base
cases for each interconnecting electric storage resource to reflect
when that resource intends to charge. Rather, the reform requires
transmission providers to reflect whether an electric storage resource
will or will not charge in any studies of peak load conditions in the
interconnection process. Transmission providers regularly evaluate the
impact of an interconnecting generating facility on the transmission
system during anticipated peak load conditions as part of their
interconnection studies, and we note that some transmission providers
already assume in their interconnection studies that electric storage
resources will not charge during peak load conditions.\1074\ Further,
we agree with commenters in this record that, when transmission
providers' interconnection studies rely on the assumption that all
electric storage resources will withdraw power at their maximum
capacity during peak load conditions (i.e., modeling the charging of
electric storage resources equivalently to firm end-use customer
demand), this practice fails to recognize the real-time attributes of
electric storage resources, such as the ability to respond within
seconds to dispatch signals from the transmission provider.\1075\
---------------------------------------------------------------------------
\1073\ Id. P 1509.
\1074\ See Bonneville Initial Comments at 23; MISO Comments at
117; see also PacifiCorp, 182 FERC ] 61,131 (accepting, subject to
condition, revisions to PacifiCorp's LGIP and LGIA to allow
PacifiCorp to study electric storage resources in its
interconnection study process using operating assumptions that more
accurately reflect their expected operation).
\1075\ See, e.g., Clean Energy Alliance Initial Comments at 14-
15; NARUC Initial Comments at 37; NESCOE Reply Comments at 18;
PacifiCorp Initial Comments at 41; Pattern Energy Initial Comments
at 12; Pine Gate Initial Comments at 51; SEIA Initial Comments at
40; Union of Concerned Scientists Reply Comments at 10-11.
---------------------------------------------------------------------------
578. We disagree with PJM and Joint RTOs that this requirement will
compromise reliability because, they argue, transmission providers are
unable to monitor and enforce interconnection customer-provided
operating assumptions. We continue to maintain that this reform will
ensure the reliable operation of the transmission system because: (1)
control devices are able to prevent electric storage resources from
charging during peak load conditions; (2) modern electric storage
resources are able to respond to signals from the transmission provider
within seconds; (3) electric storage resources generally
[[Page 27105]]
do not have an economic incentive to charge during peak load
conditions; and (4) the consequence of being considered in breach of
the LGIA provides an additional incentive for electric storage
resources to follow the agreed-upon operating assumptions memorialized
in their LGIA, unless otherwise directed by the transmission provider.
Further, we believe that ensuring that an electric storage resource
adheres to the operating assumptions memorialized in its LGIA presents
substantially similar concerns to ensuring that any generating facility
stays within its interconnection service level (e.g., a generating
facility that requests interconnection service less than its full
generating facility capacity). We emphasize again that, irrespective of
these changes to operating assumptions, all electric storage resources
must continue to meet all requirements in the pro forma LGIP and pro
forma LGIA, as well as all applicable reliability standards.
579. We disagree with Joint RTOs and PJM that, if an electric
storage resource fails to adhere to its operating assumptions during
real-time operations, load will be required to bear the costs of
network upgrades needed to maintain deliverability of the electric
storage resource over its lifetime. As the Commission stated in Order
No. 2023, if an interconnection customer fails to operate its electric
storage resource in accordance with the operating assumptions
memorialized in the interconnection customer's LGIA (absent
instructions from the transmission provider to the contrary), the
transmission provider may consider the electric storage resource to be
in breach and may pursue termination of the LGIA pursuant to article 17
of the LGIA.\1076\
---------------------------------------------------------------------------
\1076\ Order No. 2023, 184 FERC ] 61,054 at P 1521.
---------------------------------------------------------------------------
580. Regarding Joint RTOs' and PJM's argument that this reform will
add administrative burdens for transmission providers, we continue to
find that the benefits of this reform--reducing unduly discriminatory
or preferential barriers to the interconnection of electric storage
resources--outweigh the added burden to transmission providers. We
decline to grant Joint RTOs' request for clarification that the Joint
RTOs are entitled to an independent entity variation to develop
generally applicable procedures for addressing storage charging
assumptions rather than the reform as constructed in Order No. 2023.
Consistent with the Commission's statements in Order No. 2023,
transmission providers may explain specific circumstances on compliance
and justify why any deviations are either consistent with or superior
to the pro forma LGIP or merit an independent entity variation in the
context of RTOs/ISOs.
581. We are not persuaded by NYISO's arguments on rehearing. We
note that NYISO's arguments relate to NYISO's specific market rules and
do not necessarily apply to the reform more broadly. In Order No. 2023,
the Commission clarified that, if done so at the direction of the
transmission provider to maintain the reliable and efficient operation
of the transmission system, an electric storage resource that operates
contrary to the operating assumptions specified in its LGIA must not be
considered in breach of its LGIA by the transmission provider.\1077\ We
believe this clarification ensures that the instant reform will work in
concert with RTOs'/ISOs' existing congestion management practices.
Additionally, we reiterate the clarification above that the instant
reform does not require transmission providers to develop new base
cases for each interconnecting electric storage resource to reflect
when that resource intends to charge, as NYISO suggests. Rather, the
reform requires transmission providers to reflect whether an electric
storage resource will or will not charge in any studies of peak load
conditions in the interconnection process. However, if NYISO continues
to believe the instant reform conflicts with its market rules, NYISO
may explain the specific circumstances on compliance and justify why
any deviations merit an independent entity variation.
---------------------------------------------------------------------------
\1077\ Id. P 1521.
---------------------------------------------------------------------------
582. We are unpersuaded by Public Interest Organizations' arguments
on rehearing that the Commission should extend this reform to apply to
operating assumptions for injections of power from electric storage
resources and other technologies. Although several commenters urged the
use of more accurate operating assumptions for injections of power from
certain types of generating facilities, we believe that the current
record does not sufficiently support extending the instant reform to
injections of power from all types of generating facilities and does
not provide sufficient information on the incremental burden that such
a reform could place on transmission providers' study methods and
timelines. Further, we are concerned that extending the reform to apply
to operating assumptions for injections of power from only some types
of generating facilities and not all types of generating facilities
that are capable of injecting power could potentially be unduly
discriminatory or preferential. We continue to encourage transmission
providers to examine on an individual basis what operating assumptions
used to study the injection of power from generating facilities may be
appropriate to render the study process more accurate. Similarly, we
continue to acknowledge that fuel-based dispatch assumptions may be
able to address some of the identified challenges associated with
inaccurate modeling assumptions for all generating facility types and
encourage transmission providers to evaluate the merits of adopting
them.\1078\
---------------------------------------------------------------------------
\1078\ Id. P 1529.
---------------------------------------------------------------------------
583. We decline to grant Clean Energy Associations' requested
clarification that the pro forma LGIP requires the interconnection
customer and transmission provider to mutually agree in the cluster
study agreement as to (1) which loading cases are applied to storage
charging and discharging and (2) what power level or % output or %
charging is applied to each case. The instant reform is directed
specifically and exclusively at how transmission providers study the
withdrawal of power from electric storage resources within the
generator interconnection process (namely, whether an electric storage
resource will or will not charge during peak load conditions). The
Commission did not require transmission providers to revise how they
study injections of power from electric storage resources, and we
decline to do so now. For the same reason, we are unpersuaded by Clean
Energy Associations' rehearing request on the same issue.
584. We also decline to grant Clean Energy Associations' requested
clarification that, in situations in which the interconnection customer
and transmission provider disagree about operating assumptions, the
interconnection customers may request to file the applicable study
agreement with the Commission unexecuted, with a request that the
Commission determine which operating assumptions should be used in the
applicable study. In such a situation, we find it more appropriate for
the interconnection customer to instead use the dispute resolution
procedures in section 13.5 of the pro forma LGIP. For the same reason,
we are unpersuaded by Clean Energy Associations' rehearing request on
the same issue.
585. We decline to grant Energy Associations' requested
clarification that the planned operating assumptions of electric
storage resources must be considered as part of the
[[Page 27106]]
interconnection process and in transmission service requests. In Order
No. 2023, the Commission explained that the instant reform does not
require transmission providers to study charging as part of the
interconnection process if they do not already to so, and we decline to
require so now.\1079\ We reiterate that, if a transmission provider
does not determine the network upgrades needed to accommodate the
charging of an electric storage resource through the interconnection
process (e.g., the transmission provider determines such upgrades as
part of the transmission service request process), then the
transmission provider must demonstrate on compliance why this reform
does not apply to that particular transmission provider. Additionally,
the Commission clarified in Order No. 2023 that the instant reform does
not apply to transmission service requests, and Order No. 2023 does not
modify the process for requesting transmission service.
---------------------------------------------------------------------------
\1079\ Id. P 1526.
---------------------------------------------------------------------------
586. In response to Clean Energy Associations' requested
clarification that all aspects of the operating assumption reform of
Order No. 2023 \1080\ apply not just to standalone storage, but also to
hybrid and co-located generating facilities that contain an electric
storage resource, we reiterate the clarification the Commission made in
Order No. 2023: ``For clarity, we note that the reforms described in
this determination section and the related sections of the pro forma
LGIP apply to all interconnecting electric storage resources, whether
they are standalone, co-located generating facilities, or part of a
hybrid generating facility.'' \1081\
---------------------------------------------------------------------------
\1080\ Id. PP 1509-1533.
\1081\ Id. P 1509 n.2858.
---------------------------------------------------------------------------
587. We decline to grant Clean Energy Associations' requested
clarification that modeling the charging of an electric storage
resource equivalently to firm customer end-use load for purposes of
determining network upgrades is inconsistent with good utility
practice. We reiterate our finding that, for purposes of determining
any network upgrades necessary to accommodate the reliable
interconnection of electric storage resources, the charging of electric
storage resources should not be modeled equivalently to firm customer
end-use load in interconnection studies if the interconnection customer
agrees to memorialize its operating assumptions in the LGIA and
installs control technologies, if required by the transmission
provider, to limit its operations as specified.\1082\ However, there
are still situations in which we believe it is acceptable, and Order
No. 2023 allows, for a transmission provider to continue to model an
electric storage resource in interconnection studies as charging during
peak load conditions, for example: (1) if the interconnection customer
does not request during the interconnection process that the
transmission provider study the electric storage resource as not
charging during peak load conditions; (2) if the interconnection
customer declines the transmission provider's request to install or
demonstrate that it has installed control technologies sufficient to
prevent it from charging during peak load conditions unless otherwise
directed by the transmission provider; or (3) if the interconnection
customer declines the transmission provider's request to memorialize
the requested operating assumptions in its LGIA.
---------------------------------------------------------------------------
\1082\ Id. P 1523.
---------------------------------------------------------------------------
2. Incorporating the Enumerated Alternative Transmission Technologies
Into the Generator Interconnection Process
a. Consideration of the Enumerated Alternative Transmission
Technologies in Interconnection Studies Upon Request of the
Interconnection Customer
i. Order No. 2023 Requirements
588. In Order No. 2023, the Commission revised section 7.3 of the
pro forma LGIP, and sections 3.3.6 and 3.4.10 of the pro forma
SGIP.\1083\ The Commission required transmission providers to evaluate
the following enumerated list of alternative transmission technologies:
static synchronous compensators, static VAR compensators, advanced
power flow control devices, transmission switching, synchronous
condensers, voltage source converters, advanced conductors, and tower
lifting. The Commission revised pro forma LGIP section 7.3 to require
transmission providers to evaluate the list of alternative transmission
technologies enumerated in Order No. 2023 during the cluster study,
including any restudies, of the generator interconnection process in
all instances (i.e., for all interconnection customers in a cluster),
without the need for a request from an interconnection customer. The
Commission required transmission providers to evaluate each alternative
transmission technology listed in pro forma LGIP section 7.3 and to
determine, in the transmission provider's sole discretion, whether it
should be used, consistent with good utility practice, applicable
reliability standards, and other applicable regulatory requirements.
Finally, the Commission required transmission providers to include, in
the pro forma LGIP cluster study report, an explanation of the results
of the evaluation of the enumerated alternative transmission
technologies for feasibility, cost, and time savings as an alternative
to a traditional network upgrade.
---------------------------------------------------------------------------
\1083\ Id. P 1578.
---------------------------------------------------------------------------
589. The Commission modified the enumerated list of alternative
transmission technologies from the NOPR proposal to: (1) retain
synchronous, static VAR compensators, advanced power flow control, and
transmission switching in the list; (2) add synchronous condensers,
voltage source converters, advanced conductors, and tower lifting to
the list; and (3) remove dynamic line ratings from the list.\1084\
Generally, the Commission found that these enumerated alternative
transmission technologies are those with the most potential to be
useful to reduce interconnection costs by providing lower cost network
upgrades to interconnect new generating facilities and thus required
transmission providers to evaluate these technologies in the
interconnection process for their feasibility, cost, and time savings
potential.
---------------------------------------------------------------------------
\1084\ Id. P 1579.
---------------------------------------------------------------------------
590. The Commission revised sections 3.3.6 and 3.4.10 of the pro
forma SGIP, consistent with the pro forma LGIP requirement, to require
transmission providers to evaluate the enumerated alternative
transmission technologies when performing interconnection studies for
small generating facilities, without the need for a request from an
interconnection customer.\1085\ The Commission required such
evaluations to occur during the pro forma SGIP feasibility study and
system impact study of the generator interconnection process. The
Commission found that it is appropriate for these evaluations to occur
during the relevant pro forma SGIP studies where network upgrades are
identified, consistent with the pro forma LGIP requirement. The
Commission required transmission providers to evaluate each alternative
transmission technology listed in pro forma SGIP sections 3.3.6 and
3.4.10 and determine, in the transmission provider's sole discretion,
whether it should be used, consistent with good utility practice,
applicable reliability standards, and other applicable regulatory
requirements.
---------------------------------------------------------------------------
\1085\ Id. P 1580.
---------------------------------------------------------------------------
591. Finally, the Commission required transmission providers to
include, in the feasibility study report and system impact study
report, an explanation of
[[Page 27107]]
the results of the evaluation of the enumerated alternative
transmission technologies for feasibility, cost, and time savings as an
alternative to a traditional network upgrade.\1086\ The Commission
noted that this reform is one of the few reforms in Order No. 2023 that
applies to small generating facilities, in addition to large generating
facilities. The Commission found that the enumerated alternative
transmission technologies that it required transmission providers to
evaluate in their interconnection studies are appropriate for
evaluation in the pro forma SGIP context because they are scalable and
that the enumerated alternative transmission technologies have the
potential to provide similar benefits in the context of both small and
large generating facilities, including cost and time savings.
---------------------------------------------------------------------------
\1086\ Id. P 1581.
---------------------------------------------------------------------------
592. Based on the record, the Commission found that alternative
transmission technologies have the potential to provide benefits to
optimize the transmission system in specific scenarios.\1087\ The
Commission found that failing to evaluate the enumerated alternative
transmission technologies renders Commission-jurisdictional rates
unjust and unreasonable and fails to ensure that interconnection
customers are able to interconnect in a reliable, efficient,
transparent, and timely manner.\1088\
---------------------------------------------------------------------------
\1087\ Id. P 1583 (noting arguments that selecting alternative
transmission technologies: may reduce interconnection costs by
providing lower cost transmission solutions to interconnecting new
generating facilities; may allow faster interconnection by providing
solutions that can be implemented more quickly; may allow better use
of the existing transmission system, enhance reliability, reduce
withdrawals, restudies, and overall interconnection delays; would
decrease network upgrade costs that will reduce the number of
withdrawals from interconnection queues, ultimately creating a more
efficient interconnection process by reducing the number of
restudies triggered by withdrawals; and would offer additional value
because they are scalable and modular to address evolving needs and
can be redeployed as those needs continue to change).
\1088\ Id. (citing NOPR, 179 FERC ] 61,194 at P 296; see Clean
Energy Associations Reply Comments at 9-10; Environmental Defense
Fund Initial Comments at 7; Fervo Reply Comments at 9; NARUC Initial
Comments at 38).
---------------------------------------------------------------------------
593. The Commission found that the record demonstrated that the
requirements adopted in Order No. 2023 will not overly burden
transmission providers.\1089\ The Commission also maintained that the
requirement that transmission providers evaluate the enumerated
alternative transmission technologies for an entire cluster--rather
than on an individual interconnection customer-request basis--and the
modifications to the enumerated list of alternative transmission
technologies will ease the burden on transmission providers, thereby
lessening the risk that they are unable to complete studies by the
required deadlines.\1090\ The Commission noted that it was not
dictating how a transmission provider must evaluate each enumerated
alternative transmission technology on the list in each instance. The
Commission recognized that in some cases transmission providers may be
able to rapidly determine if a certain enumerated alternative
transmission technology is inappropriate for further study.
---------------------------------------------------------------------------
\1089\ Id. P 1586 (citing AEE Initial Comments at 44; ENGIE
Initial Comments at 13; ACORE Reply Comments at 3-4).
\1090\ Id. P 1590.
---------------------------------------------------------------------------
594. The Commission also found that the benefits of evaluating and
implementing the enumerated alternative transmission technologies
outweigh any potential burden or the potential of increased study
times.\1091\ The Commission stated that, as recognized by commenters
and explained earlier in Order No. 2023, the evaluation and use, at the
transmission provider's sole discretion, of the enumerated alternative
transmission technologies could decrease network upgrade costs,
withdrawals, and restudies, thereby increasing the efficiency of the
interconnection process overall. For these reasons, the Commission
disagreed with commenters who argued that requiring transmission
providers to evaluate the enumerated alternative transmission
technologies is contrary to the NOPR's goal of increasing the speed of
interconnection queue processing.
---------------------------------------------------------------------------
\1091\ Id. P 1586 (citing AEE Initial Comments at 44; ENGIE
Initial Comments at 13; ACORE Reply Comments at 3-4).
---------------------------------------------------------------------------
595. The Commission explained that Order No. 2023 did not create a
presumption in favor of substituting alternative transmission
technologies for necessary traditional network upgrades, either
categorically or in specific cases.\1092\ The Commission stated that
Order No. 2023 is agnostic as to whether, in a specific case, an
alternative transmission technology is an acceptable alternative to a
traditional network upgrade.\1093\ The Commission explained that the
rule mandates a process of evaluation of alternatives to traditional
network upgrades, not outcomes in specific cases.\1094\
---------------------------------------------------------------------------
\1092\ Id. PP 1582, 1584 (citing PJM Initial Comments at 68
(``PJM therefore cautions the Commission not to conflate the
operational benefits of alternative transmission technologies . . .
with the need to address significant capacity enhancement needs
(short and long-term) or long-range transmission needs under rapid
growth or changing resource mix scenarios.''); MISO Initial Comments
at 120 (``However, the Commission fails to recognize that these
technologies may be evaluated in the generator interconnection
process already but may nonetheless not be adopted as they are not
the appropriate solution to a Transmission Issue related to an
interconnection.'')).
\1093\ Id. P 1582 (citing MISO Initial Comments at 121-22
(``Further, although these technologies may be evaluated, the
technologies identified by the Commission still may not provide the
appropriate solution from a planning perspective. Many of the
technologies identified are appropriately considered as operational
tools or short-term solutions but are not necessarily appropriate
for planning to support a particular generator interconnection.'')
(citation omitted)).
\1094\ Id. PP 1582, 1584.
---------------------------------------------------------------------------
596. The Commission stated that the requirement is to evaluate the
enumerated alternative transmission technologies in the interconnection
process for feasibility, cost, and time savings and to determine
whether, in the transmission provider's sole discretion, an alternative
transmission technology should be used as a solution--consistent with
good utility practice, applicable reliability standards, and other
applicable regulatory requirements.\1095\ The Commission found that it
is appropriate to continue to rely on transmission providers to use
good utility practice, applicable reliability standards, and other
applicable regulatory requirements, in their evaluations of alternative
transmission technologies, including the enumerated list, because the
specific evaluation may depend on the transmission provider's
individual transmission system, cluster makeup, and other
factors.\1096\
---------------------------------------------------------------------------
\1095\ Id. PP 1584, 1587, 1589.
\1096\ Id. P 1589 (adding that ``the transmission provider--
consistent with good utility practice, applicable reliability
standards, and other applicable regulatory requirements--retains the
sole discretion to determine whether a particular technology in the
enumerated list of alternative transmission technologies is
appropriate and reliable as a network upgrade, or not, for a given
cluster.'').
---------------------------------------------------------------------------
597. The Commission explained that the transmission provider must
determine whether using any of the enumerated alternative transmission
technologies is an appropriate and reliable network upgrade ``that
would allow the interconnection customer to flow the output of its
generating facility onto the transmission provider's transmission
system in a safe and reliable manner.'' \1097\ The Commission
[[Page 27108]]
further explained that the requirement to make such a determination
before allowing for the use of the enumerated alternative transmission
technologies addresses concerns that their use may impinge on
reliability, delay network upgrades instead of reducing the need for
them or obviating the need for them altogether, or fail to address all
transmission system issues that a traditional network upgrade would
address. The Commission recognized the need to avoid time-consuming
delays and costly disputes or litigation over interconnection costs
that could arise as a result of this reform.\1098\ Therefore, the
Commission found that, if a transmission provider evaluates the
enumerated alternative transmission technologies as required herein
and, in its sole discretion, determines not to use any enumerated
alternative transmission technologies as an alternative to a
traditional network upgrade, the transmission provider has complied
with Order No. 2023, including tariffs filed pursuant thereto.
---------------------------------------------------------------------------
\1097\ Id. P 1582 (citing Order No. 2003, 104 FERC ] 61,103 at P
767 (``Both Energy Resource Interconnection Service and Network
Resource Interconnection Service provide for the construction of
Network Upgrades that would allow the Interconnection Customer to
flow the output of its Generating Facility onto the Transmission
Provider's Transmission System in a safe and reliable manner'');
Order No. 2003-A, 106 FERC ] 61,220 at P 404; pro forma LGIA art.
9.3 (``Transmission Provider shall cause the Transmission System and
the Transmission Provider's Interconnection Facilities to be
operated, maintained and controlled in a safe and reliable manner
and in accordance with this LGIA''); Midwest Indep. Transmission
Sys. Operator, Inc., 138 FERC ] 61,233, at P 190, reh'g denied, 139
FERC ] 61,253, partial reh'g granted on other grounds, 150 FERC ]
61,035). See also pro forma LGIA art. 9.4 (``Interconnection
Customer shall at its own expense operate, maintain and control the
Large Generating Facility and Interconnection Customer's
Interconnection Facilities in a safe and reliable manner and in
accordance with this LGIA'')).
\1098\ Order No. 2023, 184 FERC ] 61,054 at P 1587 (citing SPP
Initial Comments at 26 (``Even though the Commission has stated that
transmission providers retain the discretion regarding whether to
use such technologies, the very fact that the transmission provider
is required to evaluate them will lead to disputes if the
transmission provider then exercises that discretion.'')).
---------------------------------------------------------------------------
598. The Commission explained that transmission providers are
required to include an explanation of the results of the evaluation of
the required alternative transmission technologies for feasibility,
cost, and time savings as an alternative to a traditional network
upgrade in the applicable study report.\1099\ The Commission found the
required explanation of the results of the transmission provider's
evaluation included in the applicable study report provides sufficient
transparency without placing a further burden on transmission providers
that would delay the processing of interconnection requests.
---------------------------------------------------------------------------
\1099\ Id. P 1590.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
599. SPP seeks rehearing of the requirement for transmission
providers to evaluate certain enumerated alternative transmission
technologies in the interconnection study process because SPP argues
that this requirement will burden transmission providers and lengthen
the interconnection process.\1100\ SPP also asserts that the Commission
does not provide adequate guidance on what metrics would be sufficient
to support the use or non-use of a specific alternative technology,
which SPP contends will invite litigation from interconnection
customers and further lengthen the interconnection process. WATT
Coalition also contends that, to comply with the FPA, the Commission
must grant rehearing to set a meaningful standard for evaluation and
ensure that alternative transmission technologies are used if they are
the most cost-effective and fastest interconnection upgrade
solution.\1101\
---------------------------------------------------------------------------
\1100\ SPP Rehearing Request at 19.
\1101\ WATT Coalition Rehearing Request at 24.
---------------------------------------------------------------------------
600. PJM asks the Commission to clarify that Order No. 2023's
requirement for transmission providers to explain their evaluation of
the enumerated alternative transmission technologies in their cluster
study reports does not apply when a transmission provider already
includes all the enumerated technologies in its studies.\1102\ PJM
argues that this reporting requirement is administratively burdensome
with no corresponding benefit because PJM already studies all of the
enumerated technologies in its interconnection process. PJM also
asserts that Order No. 2023's requirement that transmission providers
evaluate the enumerated alternative transmission technologies will be
burdensome because interconnection customers are likely to demand re-
evaluation of the technologies.
---------------------------------------------------------------------------
\1102\ PJM Rehearing Request at 45-46.
---------------------------------------------------------------------------
601. Clean Energy Associations, Public Interest Organizations, and
WATT Coalition request rehearing of Order No. 2023's requirement that
transmission providers have sole discretion over the evaluation and use
of an enumerated alternative transmission technologies.\1103\ Public
Interest Organizations argue that Order No. 2023's requirement that
transmission providers' decisions be consistent with good utility
practice, applicable reliability standards, and other applicable
regulatory requirements is vague and will allow transmission providers
to reject the enumerated alternative transmission technologies, even
when studies demonstrate them to be lower cost and faster than
traditional network upgrades.\1104\ Public Interest Organizations
further argue that, because transmission providers have sole discretion
over implementing the enumerated alternative transmission technologies,
the study process will be a mere formality that allows the transmission
provider to reject an enumerated alternative transmission technology,
even if its own studies have demonstrated that they are the least cost
and/or fastest solutions. Public Interest Organizations contend that
requiring traditional network upgrades when a transmission provider's
own study has found that an enumerated alternative transmission
technology would be cheaper and/or faster imposes excessive costs on
consumers, leading to unjust and unreasonable rates, and unduly
discriminates against providers of alternative transmission
technologies.
---------------------------------------------------------------------------
\1103\ Clean Energy Associations Rehearing Request at 48; Public
Interest Organizations Rehearing Request at 13-15; WATT Coalition
Rehearing Request at 1-2, 14-15, 24-30.
\1104\ Public Interest Organizations Rehearing Request at 13-15.
---------------------------------------------------------------------------
602. Clean Energy Associations contend that giving transmission
providers sole discretion insulates transmission providers from
challenges to inadequate evaluations or unjustified adoption
decisions.\1105\ Clean Energy Associations assert that, absent some
form of review and recourse, transmission providers might only
cursorily evaluate alternative transmission technologies and
interconnection customers will have no opportunity to respond to unjust
and unreasonable charges. Clean Energy Associations argue that the FPA
requires a more nuanced analysis than Order No. 2023's requirement that
determinations be consistent with good utility practice, applicable
reliability standards, and other applicable regulatory requirements.
Clean Energy Associations ask the Commission to allow challenges to the
transmission provider's evaluation of the enumerated alternative
transmission technologies as a means to ensure meaningful consideration
of these technologies.
---------------------------------------------------------------------------
\1105\ Clean Energy Associations Rehearing Request at 46-48.
---------------------------------------------------------------------------
603. WATT Coalition argues that Order No. 2023 unlawfully gives
transmission providers unfettered discretion to disregard and
disadvantage alternative transmission technologies as
[[Page 27109]]
network upgrades.\1106\ WATT Coalition argues that the Commission
undermined its decision to provide a pre-defined list of alternative
transmission technologies evaluated as a matter of course in every
cluster study by failing to require meaningful consideration of
alternative transmission technologies and by placing alternative
transmission technologies at an artificial disadvantage to
``traditional'' network upgrades.\1107\ WATT Coalition asserts that
enshrining a preferential advantage for more expensive and longer lead-
time traditional network upgrades, at the expense of more efficient,
cost-effective, and quicker solutions, will increase rates and slow
down the interconnection process. WATT Coalition points to dynamic line
ratings' ability to resolve a thermal overload, rather than spending
$50 million on a line rebuild, to demonstrate that requiring a
traditional network upgrade would unduly discriminate against
interconnection customers and in favor of transmission providers,
impose excessive costs on interconnection customers (and ultimately
consumers), and work against Order No. 2023's goal of making the
interconnection process more efficient. WATT Coalition argues that,
contrary to the FPA, the Commission has deprived interconnection
customers of the opportunity to interconnect at a just and reasonable
rate and unduly discriminates against interconnection customers to the
benefit of transmission providers.
---------------------------------------------------------------------------
\1106\ WATT Coalition Rehearing Request at 1-2, 14 (arguing that
Order No. 2023 violates APA section 706(2)(A)).
\1107\ Id. at 24-25 (citing Order No. 2023, 184 FERC ] 61,054 at
P 1585).
---------------------------------------------------------------------------
604. WATT Coalition questions the Commission's reliance on MISO's
initial comments as ground for allowing transmission providers to use
their sole discretion consistent with ``good utility practice'' and
``applicable regulatory standards.'' \1108\ WATT Coalition argues that
MISO's comments merely quoted the NOPR, which suggested that the use of
alternative transmission technologies may not meet these standards,
without providing justification. WATT Coalition contends that requiring
transmission providers to ``use good utility practice, applicable
reliability standards, and other applicable regulatory requirements''
is insufficient because making such a determination is not the same as
determining whether that decision is consistent with the FPA, which is
a transmission provider's most fundamental responsibility.\1109\ WATT
Coalition argues that the Commission made no attempt to explain whether
it believes satisfying those standards will, in all cases, produce a
lawful result under the FPA.\1110\ WATT Coalition argues that the
Commission has no authority to grant transmission providers the ability
to unduly discriminate or implement a rate that is unjust and
unreasonable.\1111\ WATT Coalition asserts that the Commission's
failure to explain and support that decision violates the APA.\1112\
---------------------------------------------------------------------------
\1108\ Id. at 26.
\1109\ Id. at 27 (quoting Order No. 2023, 184 FERC ] 61,054 at P
1589).
\1110\ Id. at 26.
\1111\ Id. at 27 (quoting Order No. 2023, 184 FERC ] 61,054 at P
1589).
\1112\ Id. at 26.
---------------------------------------------------------------------------
605. WATT Coalition adds that Order No. 2023 deprives
interconnection customers of a meaningful opportunity to inform the
evaluations and appears to close off any input or challenge to
transmission provider evaluation.\1113\ WATT Coalition asks the
Commission to grant rehearing to allow interconnection customers to
engage in the transmission provider's alternative transmission
technologies evaluations and ensure that they are both technically
sound and consistent with the FPA. WATT Coalition suggests allowing
either the interconnection customer or the transmission provider to
request such an evaluation at any point during the interconnection
study process as more information becomes available. WATT Coalition
asks the Commission to allow developers to conduct their own analysis
in response to an initial interconnection study result to demonstrate
that a FERC-enumerated technology, or another technology, can reduce
interconnection costs or timelines and require transmission providers
to evaluate those solutions. WATT Coalition states that interconnection
customers' right to register objections and identify deficiencies in a
transmission provider's identification of network upgrades in
interconnection studies must extend to an interconnection study's
evaluation of alternative transmission technologies, not just
traditional network upgrades.\1114\ WATT Coalition asserts that
including interconnection customer input on the evaluation of
alternative transmission technologies after the initial phase of the
cluster study, with a requirement for the transmission provider's
decision regarding deployment to be in line with the FPA, would achieve
just and reasonable rates.\1115\
---------------------------------------------------------------------------
\1113\ Id. at 29 (citing Order No. 2023, 184 FERC ] 61,054 at P
1587).
\1114\ Id. (citing, e.g., MISO Business Practice Manual 015
Section 5.3.1).
\1115\ Id. at 24, 30.
---------------------------------------------------------------------------
606. If the Commission does not grant rehearing, WATT Coalition
requests that the Commission make two clarifications.\1116\ First, WATT
Coalition asks the Commission to clarify that interconnection customers
have the right and opportunity to identify potential deficiencies and
errors in a transmission provider's evaluation of alternative
transmission technologies in a cluster study, and the transmission
provider must address those potential deficiencies and errors in its
cluster study report. WATT Coalition states that the Commission must
correct the implication that a transmission provider's evaluation and
determination to deploy or not deploy alternative transmission
technologies are immune from challenge by allowing interconnection
customers to review the initial evaluation and provide their own
analysis to inform the transmission provider's decision. Second, WATT
Coalition asks the Commission to clarify that it did not intend to
exempt transmission providers' consideration of, and determinations
regarding, the use of alternative transmission technologies in a
cluster study from compliance with the FPA, making clear that complying
with ``good utility practice'' does not supersede the foundational
requirements of the FPA.
---------------------------------------------------------------------------
\1116\ Id. at 30.
---------------------------------------------------------------------------
607. A number of parties seek rehearing or clarification regarding
the technologies included in the list of the enumerated alternative
transmission technologies that transmission providers are required to
evaluate. SPP asks the Commission to reconsider the inclusion of
transmission switching in the list of enumerated alternative
transmission technologies, arguing that it is a short-term operational
tool that is inappropriate for use in long-term planning
applications.\1117\ VEIR asks the Commission to clarify the scope of
the technologies that are considered advanced conductors under Order
No. 2023.\1118\ VEIR argues that, although Order No. 2023 does not
describe the advanced conductors that must be studied, it is consistent
with the Commission's intent and the intent of the Energy Policy Act of
2005 for the Commission to clarify that there are a range of
permissible present and future technologies that ``significantly
increase transmission capacity and allow for the interconnection of new
generating facilities without the construction of
[[Page 27110]]
new network upgrades.'' \1119\ VEIR contends that this clarification
will help ensure that Commission regulations will help stimulate
innovation--rather than freeze it within the confines of an existing
set of technologies--consistent with the Commission's overall mandate
that alternative transmission technologies be considered by
transmission providers seeking to provide reliable transmission
solutions in the most cost effective manner. VEIR adds that this
clarification will ensure that the term ``advanced conductors''
contemplates a wide-range of present and future transmission line
technologies, such as VEIR's technology, whose power flow capacities
exceed the power flow capacities of conventional transmission line
technologies, thus achieving the Commission's objectives for
transmission providers to evaluate technologies that are deployed more
quickly and at a lower cost than other network upgrades.\1120\
---------------------------------------------------------------------------
\1117\ SPP Rehearing Request at 20.
\1118\ VEIR Rehearing Request at 3-6.
\1119\ Id. at 4-5 (quoting Order No. 2023, 184 FERC ] 61,054 at
P 1597 (citing Energy Policy Act of 2005, 42 U.S.C. 16422(a), (b))).
VEIR points to several definitions of advanced conductors: (1)
advanced conductor technology include advanced composite conductors
high temperature low-sag conductors, and fiber optic temperature
sensing conductors, 42 U.S.C. 16422(a); (2) advanced conductors and
cables include advanced overhead conductors that are facilities that
``employ advanced aluminum alloys, steel, and composite material in
novel ways that provide enhanced performance over conventional
overhead conductors,'' advanced-transmission-technologies-report
(energy.gov), at p. 26, and (3) advanced conductors and cables are
``superconducting cables'' composed of materials that have near zero
resistance at extremely low temperatures, offering little to no
electrical losses if used in transmission, advanced-transmission-
technologies-report (energy.gov), at p. 26.
\1120\ VEIR Rehearing Request at 5-6.
---------------------------------------------------------------------------
608. Clean Energy Associations and WATT Coalition request rehearing
of Order No. 2023's exclusion of dynamic line ratings from the
enumerated list of alternative transmission technologies.\1121\ WATT
Coalition claims that the Commission excluded dynamic line ratings,
while retaining four other technologies in the NOPR and adding four
that were not included in the NOPR, without a reasoned basis for why
dynamic line ratings provided less relative potential to be useful in
reducing interconnection costs.\1122\ WATT Coalition argues that it is
arbitrary and capricious and contrary to law to exclude dynamic line
ratings on the basis that they ``may'' not be as beneficial, while at
the same time conceding that other technologies that were included on
the list have certain limitations that render them no more or less
useful than dynamic line ratings. WATT Coalition states that dynamic
line ratings are regularly a cost-effective solution in generator
interconnection. WATT Coalition claims that its comments on the value
of dynamic line ratings in planning, including interconnection, and
statements in support of dynamic line ratings are not addressed in the
Commission's reasoning.\1123\ WATT Coalition states that the only
citation the Commission provided to support its determination to
exclude dynamic line ratings refers only to the few adverse comments
submitted by PJM Transmission Owners, ISO-NE, NYTOs, PacifiCorp, Tri-
State, and the Chamber of Commerce.\1124\ WATT Coalition argues that
the Commission did not address the Environmental Defense Fund's
argument that excluding dynamic line ratings is not consistent with
transmission providers' least-cost obligation and concerns about
technology implementation do not warrant failing to consider
alternative transmission technologies.\1125\ Clean Energy Associations
assert that the Commission's general justification that alternative
transmission technology could decrease network upgrade costs,
withdrawals, and restudies, which increases the efficiency of the
interconnection process, applies to dynamic line ratings, arguing that
the Commission acknowledges that dynamic line ratings could be
beneficial to the interconnection process.\1126\
---------------------------------------------------------------------------
\1121\ Clean Energy Associations Rehearing Request at 44; WATT
Coalition Rehearing Request at 1-31.
\1122\ WATT Coalition Rehearing Request at 13-14 (citing Order
No. 2023, 184 FERC ] 61,054 at PP 1578, 1598).
\1123\ Id. at 19-20 (citing WATT Coalition Reply Comments at 7-
15, 16-17).
\1124\ Id. at 20 (citing Order No. 2023, 184 FERC ] 61,054 at P
1598 (citing PJM Transmission Owners Initial Comments at 56; ISO-NE
Initial Comments at 41; NYTOs Initial Comments at 32-33; PacifiCorp
Initial Comments at 4; Tri-State Initial Comments at 23; Chamber of
Commerce Initial Comments at 12-13)).
\1125\ Id. at 20-21 (Environmental Defense Fund NOPR Reply
Comments at 11-12).
\1126\ Clean Energy Associations Rehearing Request at 41.
---------------------------------------------------------------------------
609. Clean Energy Associations and WATT Coalition contend that the
Commission did not address the benefits of dynamic line ratings set
forth in the record.\1127\ WATT Coalition notes the Commission
previously recognized the potential of dynamic line ratings to provide
benefits to the interconnection process.\1128\ WATT Coalition further
notes that, in Order No. 881, the Commission took initial steps to
reduce barriers to operational deployment by requiring RTO/ISOs to
``establish and implement the systems and procedures necessary to allow
transmission owners to electronically update transmission line ratings
at least hourly.'' \1129\ WATT Coalition argues that dynamic line
ratings is a solution that could bring projects into viability if
permitted by the transmission owner.\1130\
---------------------------------------------------------------------------
\1127\ Id. at 40-42; WATT Coalition Rehearing Request at 6-11,
20-21. See WATT Coalition Rehearing Request at 6-9 (pointing to use
of dynamic line ratings in Europe, Australia and Sweden, including
the European Network of Transmission System Operators for
Electricity Technopedia rating dynamic line ratings as ``system
ready for full-scale deployment;''; to the U.S. Canada Power System
Outage Task Force recommendation for NERC to use dynamic line
ratings to prevent and mitigate outages; to the U.S. Department of
Energy support for the deployment of dynamic line ratings in the
United States (e.g., the Oncor Electric Delivery Company pilot); to
U.S. utilities piloting dynamic line ratings and the 95th Edison
Award in 2023 to PPL Electric Utilities for the first operational
deployment of dynamic line ratings in the United States, and to the
use of dynamic line ratings in the place of a 200MW standalone
battery in MISO).
\1128\ Id. at 9-11 (citing NOPR, 179 FERC ] 61,194 at PP 289-
290, 294-95; FERC, Grid-Enhancing Technologies, Notice of Workshop,
Docket No. AD19-19-000 (Sept. 9, 2019); Bldg. for the Future Through
Elec. Reg'l Transmission Planning & Cost Allocation & Generator
Interconnection, 86 FR 40266 (July 15, 2021), 176 FERC ] 61,024 at P
158 (2021)).
\1129\ Id. at 13 (citing Order No. 2023, 184 FERC ] 61,054 at P
1598; Managing Transmission Line Ratings, Order No. 881, 87 FR 2244
(Jan. 13, 2022), 177 FERC 61,179 at P 251 (2021)).
\1130\ Id. at 9.
---------------------------------------------------------------------------
610. WATT Coalition contends that the Commission has failed to meet
its burden to provide an explanation supported by evidence in the
record for its suggestion that dynamic line ratings are better applied
in operations and planning.\1131\ WATT Coalition adds that, because
transmission planning and interconnection processes typically use
similar or identical study processes (for example, steady state, short
circuit, and stability analysis) and share common models of the
transmission system representing expected future system conditions such
as Summer Peak or High Wind Low Load, it is not logical to expect the
consideration of dynamic line ratings to benefit transmission planning
and interconnection in a demonstrably different manner.
---------------------------------------------------------------------------
\1131\ Id. at 21-22.
---------------------------------------------------------------------------
611. However, WATT Coalition argues that the relative value of
dynamic line ratings in interconnection versus transmission planning is
irrelevant.\1132\ WATT Coalition contends that the Commission made no
determination as to the absolute value of dynamic line ratings in the
interconnection context, which it argues is the relevant inquiry in
determining whether the interconnection reforms are just and
reasonable.\1133\ WATT Coalition argues
[[Page 27111]]
that, if dynamic line ratings are highly beneficial in one and
extremely beneficial in the other, it should be adopted in both, not
excluded from the former.\1134\ WATT Coalition adds that the example
the Commission gave for why dynamic line ratings may be less beneficial
in the interconnection context is flawed. WATT Coalition argues that
the assertion that its value ``depends on favorable weather and
congestion parameters'' is wrong. WATT Coalition explains that many
lines are chronically underrated, regardless of weather and congestion
parameters, ``congestion parameters'' themselves are often inaccurate
precisely because dynamic line ratings are not used on a line.
---------------------------------------------------------------------------
\1132\ Id. at 22.
\1133\ Id. at 22-23 (citing Am. Clean Power Ass'n v. FERC, 54
F.4th 722 (D.C. Cir. 2022) (finding that the Commission failed to
reasonably explain its decision, noting it gave short shrift to the
Petitioner's concern)).
\1134\ Id. at 22 (pointing to the background information
demonstrating that dynamic line ratings have specific and
appreciable value in generator interconnection).
---------------------------------------------------------------------------
612. WATT Coalition claims that the following statement in Order
No. 2023 is inaccurate and does not reflect the record:
[W]hile dynamic line ratings may relieve congestion to increase
available interconnection service temporarily or in the short-term,
they may not be an adequate substitute for building interconnection
facilities and/or traditional network upgrades identified through
the interconnection study process that are needed to reliably
interconnect a generating facility to the transmission system during
all hours.\1135\
---------------------------------------------------------------------------
\1135\ Id. at 23 (citing Order No. 2023, 184 FERC ] 61,054 at P
1598).
WATT Coalition states that dynamic line ratings are not a temporary
or short-term fix; they are a long-term fix for the specific parameters
of the cluster study. WATT Coalition explains that, if system
conditions change subsequent to the cluster study such that additional
investment in the transmission system is needed, that does not mean
that the value of dynamic line ratings is diminished. WATT Coalition
states that any other alternative transmission technology or even
traditional upgrade could see its value change based on system
conditions in the same way. WATT Coalition argues that implementing
network upgrades when dynamic line ratings would satisfy the identified
need will cause overbuilding the system and saddling interconnection
customers and consumers with unnecessary costs.
613. WATT Coalition contends that these unnecessary costs mean that
the Commission's decision is also contrary to the FPA.\1136\ WATT
Coalition argues that the Commission has failed to demonstrate that the
rates established through this order will be just and reasonable
because it lacks justification for the exclusion of dynamic line
ratings and fails to respond to the comments arguing that including
dynamic line ratings would reduce costs to consumers. WATT Coalition
claims that, if the Commission included dynamic line ratings in all
studies, all generators would potentially see their interconnection
costs reduced and timelines shortened. WATT Coalition argues that, by
excluding dynamic line ratings, generators in windy regions especially
will be disadvantaged because one of the core solutions for increasing
transmission capacity rapidly will not be evaluated in their
interconnection studies. WATT Coalition notes Advanced Energy Economy's
comment that, ``[w]hile not all interconnections may benefit from [grid
enhancing technologies], evaluating their use at every opportunity
ensures that their contributions and savings will not be lost.'' \1137\
WATT Coalition contends that the Commission erred by instead ensuring
that dynamic line ratings' contributions and savings will be lost,
interconnection customers will pay vastly higher costs for network
upgrades, and consumers ultimately will pay higher rates as a
result.\1138\
---------------------------------------------------------------------------
\1136\ Id.
\1137\ Id. (citing Advanced Energy Economy NOPR Reply Comments
at 41-42).
\1138\ Id. at 23-24.
---------------------------------------------------------------------------
614. Clean Energy Associations request rehearing of Order No.
2023's exclusion of energy storage serving as a transmission asset from
the enumerated list of alternative transmission technologies.\1139\
Clean Energy Associations argue that excluding storage resources
because ``the evaluation of whether a storage resource performs a
transmission function requires a case-by-case analysis'' does not
constitute reasoned decision-making because the Commission directs the
transmission providers to conduct a case-by-case evaluation of the
alternative transmission technologies included in Order No. 2023's list
of enumerated technologies.\1140\ Clean Energy Associations assert
that, without a specific requirement to evaluate dynamic line ratings
and energy storage, these technologies will be excluded from the
interconnection process despite the record demonstrating that these
technologies can improve interconnection process efficiency.\1141\
---------------------------------------------------------------------------
\1139\ Clean Energy Associations Rehearing Request at 44.
\1140\ Id. at 42-43 (citing Order No. 2023, 184 FERC ] 61,054 at
PP 1582, 1584).
\1141\ Id. at 43-44.
---------------------------------------------------------------------------
iii. Determination
615. We are not persuaded by SPP's request to revisit the
requirement to evaluate the enumerated list of alternative transmission
technologies, which SPP argues will burden transmission providers and
lengthen the interconnection process. As explained in Order No. 2023,
the Commission found that the record supported a finding that these
alternative transmission technologies can provide benefits to optimize
the transmission system in specific scenarios.\1142\ SPP has not
convinced us otherwise. We also find it unnecessary to provide metrics
for determining what would support the use, or non-use of, an
alternative transmission technology to avoid litigation and lengthening
the interconnection process, as SPP requests. In Order No. 2023, the
Commission recognized the need to avoid time-consuming delays and
costly disputes or litigation over interconnection costs that could
arise as a result of this reform.\1143\ Consequently, the Commission
found that, if a transmission provider evaluates the enumerated
alternative transmission technologies as required herein and, in its
sole discretion, determines not to use any enumerated alternative
transmission technologies as an alternative to a traditional network
upgrade, the transmission provider has complied with Order No. 2023,
including tariffs filed pursuant to Order No. 2023. Similarly, we
disagree with WATT's contention that Order No. 2023 does not set a
standard for evaluation and does not ensure that alternative
transmission technologies are used if they are the most cost-effective
and fastest interconnection upgrade solution. In Order No. 2023, as
modified below, the Commission set forth the standard for evaluation,
explaining that the requirement is to evaluate the enumerated
alternative transmission technologies in the interconnection process
for feasibility, cost, and time savings and to determine whether, in
the transmission provider's sole discretion, an alternative
transmission technology should be used as a solution--consistent with
good utility practice, applicable reliability standards, and applicable
laws and
[[Page 27112]]
regulations.\1144\ This standard will ensure transmission providers
identify network upgrades in a manner that ensures just and reasonable
rates.
---------------------------------------------------------------------------
\1142\ Order No. 2023, 184 FERC ] 61,054 at P 1583 (citing NOPR,
179 FERC ] 61,194 at PP 294-295).
\1143\ Id. P 1587 (citing SPP Initial Comments at 26 (``Even
though the Commission has stated that transmission providers retain
the discretion regarding whether to use such technologies, the very
fact that the transmission provider is required to evaluate them
will lead to disputes if the transmission provider then exercises
that discretion.'')).
\1144\ Id. PP 1578, 1579, 1581, 1587, 1590.
---------------------------------------------------------------------------
616. We deny PJM's requested clarification about whether Order No.
2023 requires transmission providers that already include all the
enumerated technologies in its studies to explain their evaluation of
the enumerated alternative transmission technologies in their cluster
study reports. Consistent with the Commission's statements in Order No.
2023, transmission providers may explain specific circumstances on
compliance and justify why any deviations are either consistent with or
superior to the pro forma LGIP or merit an independent entity variation
in the context of RTOs/ISOs.\1145\
---------------------------------------------------------------------------
\1145\ Id. P 1764.
---------------------------------------------------------------------------
617. We disagree with PJM that the requirement in Order No. 2023
for transmission providers to evaluate the enumerated alternative
transmission technologies will be burdensome because interconnection
customers are likely to demand re-evaluation of the technologies. The
Commission determined that, if a transmission provider evaluates the
enumerated alternative transmission technologies as required herein
and, in its sole discretion, determines not to use any enumerated
alternative transmission technologies as an alternative to a
traditional network upgrade, and explains its evaluation of the
enumerated alternative transmission technologies in the applicable
study report(s), the transmission provider has complied with Order No.
2023, including tariffs filed pursuant thereto. We continue to find
that these limitations on review address concerns about time-consuming
delays and costly disputes or litigation.
618. In response to Clean Energy Associations', Public Interest
Organizations', and WATT Coalition's requests for rehearing regarding
transmission provider discretion, we sustain the discretion that Order
No. 2023 affords transmission providers in determining whether to use
an alternative transmission technology for several reasons. First, we
continue to find that this level of discretion is justified because (1)
the transmission provider is responsible for determining whether using
any of the enumerated alternative transmission technologies is an
appropriate and reliable network upgrade that allows the
interconnection customer to flow the output of its generating facility
onto the transmission provider's transmission system in a safe and
reliable manner; \1146\ (2) the requirement to make such a
determination before allowing for the use of the enumerated alternative
transmission technologies addresses concerns that their use may impinge
on reliability, delay network upgrades instead of reducing the need for
them or obviating the need for them altogether, or fail to address all
transmission system issues that a traditional network upgrade would
address; \1147\ and (3) there is a need to avoid time-consuming delays
and costly disputes or litigation over interconnection costs that could
arise as a result of this reform.\1148\
---------------------------------------------------------------------------
\1146\ Id. P 1589.
\1147\ Id. P 1587.
\1148\ Id. P 1764.
---------------------------------------------------------------------------
619. Second, contrary to WATT Coalition's and Clean Energy
Associations' assertions, Order No. 2023 does not give transmission
providers unfettered discretion to disregard alternative transmission
technologies. In spite of the discretion provided to transmission
providers, they must explain their evaluation of the enumerated
alternative transmission technologies for feasibility, cost, and time
savings as an alternative to a traditional network upgrade in their
applicable study report(s), and their use determinations must be
consistent with good utility practice, applicable reliability
standards, and applicable laws and regulations.\1149\ An
interconnection customer may contest a transmission provider's
evaluation and use determination, just as it does with respect to
traditional network upgrades.\1150\ This ensures that the transmission
provider's explanation of its evaluation of the enumerated alternative
transmission technologies for feasibility, cost, and time savings as an
alternative to a traditional network upgrade in its applicable study
report(s) as well as its determinations regarding the use of a network
upgrade and/or an alternative transmission technology are consistent
with the FPA and the transmission provider's tariff.
---------------------------------------------------------------------------
\1149\ See infra PP 621-627.
\1150\ See, e.g., Sw. Power Pool, Inc., 171 FERC ] 61,068, order
on reh'g, 172 FERC ] 61,286 (2020).
---------------------------------------------------------------------------
620. Finally, the level of discretion that Order No. 2023 affords
transmission providers is consistent with the general discretion the
Commission affords transmission providers to maintain a reliable
system.\1151\ The transmission provider is the only entity responsible
for determining appropriate and reliable network upgrades for its
transmission system. Applying this general interconnection status quo
ante to the determination of whether an alternative transmission
technology could serve as a network upgrade inevitably means that the
transmission provider is the only entity responsible for determining
``whether using any of the enumerated alternative transmission
technologies is an appropriate and reliable network upgrade `that would
allow the interconnection customer to flow the output of its generating
facility onto the transmission provider's transmission system in a safe
and reliable manner.' '' \1152\ In fact, the transmission provider may
be subject to penalties if its transmission system does not function in
a reliable manner as required by the provisions of the Reliability
Standards.\1153\ Thus, Commission precedent supports a finding that the
transmission provider is the entity with sole discretion as to which
network upgrades must be constructed to ensure the safe and reliable
operation of the transmission system as a new generating facility
interconnects.\1154\ The term ``sole discretion'' does not absolve the
transmission provider from making a use determination that is
consistent with the FPA and its tariff.
---------------------------------------------------------------------------
\1151\ Order No. 2003-A, 106 FERC ] 61,220 at P 404; pro forma
LGIA art. 9.3 (``Transmission Provider shall cause the Transmission
System and the Transmission Provider's Interconnection Facilities to
be operated, maintained and controlled in a safe and reliable manner
and in accordance with this LGIA''); Interconnection for Wind
Energy, 111 FERC ] 61,353, at P51, reh'g granted in part on other
grounds, 113 FERC ] 61,254 (2005) (``because the Transmission
Provider is responsible for the safe and reliable operation of its
transmission system (pursuant to NERC and regional reliability
council standards), it is in the best position to establish if
reactive power is needed in individual circumstances''); Big Sandy
Peaker Plant, LLC v. PJM Interconnection, L.L.C., 154 FERC ] 61,216,
at P 50 (2016) (the Commission gives ``reliability-related
discretion to [ISOs], and [will] not second-guess their decisions in
that regard'').
\1152\ Order No. 2023, 184 FERC ] 61,054 at PP 1582, 1584, 1589.
\1153\ See, e.g., Reliability Standard TOP-001-5, ``Transmission
Operations,'' which requires each Transmission Operator to act to
maintain the reliability of its Transmission Operator Area; see also
Interconnection for Wind Energy, 113 FERC ] 61,254, at P 42 (2005)
(``Transmission Providers are required to complete a detailed System
Impact Study, and are required to ensure that NERC reliability
standards are met in all instances.'').
\1154\ Order No. 2023, 184 FERC ] 61,054 at P 1582 (citing Order
No. 2003, 104 FERC ] 61,103 at P 767; Order No. 2003-A, 106 FERC ]
61,220 at P 404; pro forma LGIA arts. 9.3, 9.4).
---------------------------------------------------------------------------
621. We sustain the performance standards that Order No. 2023
applies to a transmission provider's evaluation of each alternative
transmission technology listed in pro forma LGIP section 7.3 and pro
forma SGIP sections 3.3.6 and 3.4.10 and to its determination whether
it should be used. Specifically, Order No. 2023 requires that a
[[Page 27113]]
transmission provider evaluate each alternative transmission technology
listed in pro forma LGIP section 7.3 and pro forma SGIP sections 3.3.6
and 3.4.10 and determine whether it should be used ``consistent with
good utility practice, applicable reliability standards, and other
applicable regulatory requirements.'' \1155\ Order No. 2023 also
adopted corresponding modifications to the pro forma LGIP and pro forma
SGIP. Below, we discuss further modifications to these pro forma
documents.
---------------------------------------------------------------------------
\1155\ Id. PP 1578, 1580, 1582, 1584, 1587, 1589. Below, we
discuss modifying this standard to refer to ``applicable laws and
regulations'' rather than ``other applicable regulatory
requirements.'' See infra PP 624, 626-627.
---------------------------------------------------------------------------
622. As discussed above, Order No. 2023 requires transmission
providers to conduct their alternative transmission technology
evaluations and use determinations consistent with good utility
practice, applicable reliability standards, and other applicable
regulatory requirements. We address each performance standard in turn.
First, we disagree with Public Interest Organizations that ``good
utility practice'' is vague or ambiguous because that term is defined
in the pro forma LGIP \1156\ and the pro forma SGIP.\1157\
---------------------------------------------------------------------------
\1156\ Pro forma LGIP section 1 (Definitions).
\1157\ Pro forma SGIP attach. 1 (Glossary of Terms).
---------------------------------------------------------------------------
623. Second, we disagree with Public Interest Organizations that
``applicable reliability standards'' is vague or ambiguous because that
term is defined in the pro forma LGIP.\1158\ We note, however, that,
unlike the pro forma LGIP, ``applicable reliability standards'' is not
defined in the pro forma SGIP. Therefore, consistent with the
definition in the pro forma LGIP and Order No. 2023, we modify the pro
forma SGIP to define ``Applicable Reliability Standards'' as ``the
requirements and guidelines of the Electric Reliability Organization
and the Balancing Authority Area of the Transmission System to which
the Generating Facility is directly interconnected.'' \1159\ We also
find that the words ``applicable reliability standards'' were
inadvertently not included in the performance standards that Order No.
2023 added to pro forma LGIP section 7.3 and pro forma SGIP sections
3.3.6 and 3.4.10. Therefore, we include that term in those pro forma
sections now.
---------------------------------------------------------------------------
\1158\ Pro forma LGIP section 1 (Definitions).
\1159\ See id.
---------------------------------------------------------------------------
624. Finally, we find that the use of the catchall phrase ``other
applicable regulatory requirements'' is vague or ambiguous. Unlike the
two standards discussed above, this phrase is not defined in either the
pro forma LGIP or the pro forma SGIP. In order to remedy this
deficiency, we modify Order No. 2023 to replace ``other applicable
regulatory requirements'' with the term ``applicable laws and
regulations,'' which is a defined term in the pro forma LGIP. We note,
however, that, unlike the pro forma LGIP, ``applicable laws and
regulations'' is not defined in the pro forma SGIP. Therefore,
consistent with the definition in the pro forma LGIP and Order No.
2023, we modify the pro forma SGIP to define ``applicable laws and
regulations'' as ``all duly promulgated applicable federal, state and
local laws, regulations, rules, ordinances, codes, decrees, judgments,
directives, or judicial or administrative orders, permits and other
duly authorized actions of any Governmental Authority.'' \1160\ We also
modify pro forma LGIP section 7.3 and pro forma SGIP sections 3.3.6 and
3.4.10 to reflect this change in terminology.
---------------------------------------------------------------------------
\1160\ See id.
---------------------------------------------------------------------------
625. Finally, we find that, although Order No. 2023 applies the
performance standards to both the transmission provider's evaluation of
the enumerated alternative transmission technologies and the
determination to use the technology,\1161\ pro forma LGIP section 7.3
does not apply the standards to the former. We therefore modify pro
forma LGIP section 7.3 to remedy this deficiency.
---------------------------------------------------------------------------
\1161\ Order No. 2023, 184 FERC ] 61,054 at P 1589.
---------------------------------------------------------------------------
626. Based on these findings, we modify pro forma LGIP section 7.3,
in relevant part, as follows: ``Transmission Provider shall evaluate
each identified alternative transmission technology and determine
whether the above technologies should be used, consistent with Good
Utility Practice, Applicable Reliability Standards, and [other
applicable regulatory requirements]Applicable Laws and Regulations.''
627. We also modify pro forma SGIP sections 3.3.6 and 3.4.10, in
relevant part, as follows: ``Transmission Provider shall evaluate each
identified alternative transmission technology and determine whether it
should be used, consistent with Good Utility Practice, Applicable
Reliability Standards, and [other applicable regulatory
requirements]Applicable Laws and Regulations.''
628. We disagree with Clean Energy Associations, Public Interest
Organizations and WATT Coalition that requiring a transmission provider
to evaluate the list of enumerated alternative transmission
technologies and determine the use of those technologies consistent
with these performance standards will negatively impact an
interconnection customer's ability to challenge a transmission
provider's actions. As explained above, the performance standards
applied in this context are the same as, or similar to, those that
apply to other sections of the pro forma LGIP and pro forma SGIP.
Therefore, the use of these performance standards in this context does
not in and of itself change an interconnection customer's ability to
challenge a transmission provider's conduct. As discussed above, an
interconnection customer may challenge a transmission provider's
evaluation of the enumerated alternative transmission technologies and
its determination about whether to use alternative transmission
technologies as it can challenge other conduct in the pro forma LGIP
and pro forma SGIP that is allegedly inconsistent with the performance
standards.\1162\
---------------------------------------------------------------------------
\1162\ See supra P 619.
---------------------------------------------------------------------------
629. We do not believe that WATT's suggestion to allow an
interconnection customer to provide input on the evaluation of
alternative transmission technologies after the initial phase of the
cluster study within the pro forma LGIP is necessary. The existing
interconnection procedures already provide the opportunity for
interconnection customer input with respect to all aspects of a cluster
study after the cluster study report is completed, which necessarily
provides an opportunity for input as to the evaluation of the
enumerated alternative transmission technologies. Specifically, pro
forma LGIP section 7.4 provides that, ``[w]ithin ten (10) Business Days
of simultaneously furnishing a Cluster Study Report to each
Interconnection Customer within the Cluster and posting such report on
OASIS, Transmission Provider shall convene a Cluster Study Report
Meeting.'' Pro forma LGIP section 7.5 provides a similar opportunity
for input after the completion of a cluster restudy report. WATT
Coalition does not explain how an additional opportunity to provide
input after the initial phase of a cluster study would be beneficial
and ensure just and reasonable rates. We find that, to the contrary,
WATT's request for an additional opportunity to provide input would
slow down the interconnection process, which would undermine the
Commission's efforts to ensure a reliable, efficient, transparent, and
timely interconnection process.
630. We address in turn rehearing parties' requests for rehearing
and/or clarification related to the list of enumerated alternative
transmission
[[Page 27114]]
technologies in Order No. 2023. We are not persuaded by SPP's request
to reconsider the inclusion of transmission switching in the list of
enumerated alternative transmission technologies. While transmission
switching may be used more often in short-term, operational timeframes,
we continue to find that it is just and reasonable to include
transmission switching on the list of technologies that transmission
providers are required to evaluate because it could provide topology
solutions that relieve transmission constraints for the duration of the
requested interconnection service and does not rely only on transient
conditions. As discussed above, Order No. 2023 did not create a
presumption in favor of substituting alternative transmission
technologies for necessary traditional network upgrades, either
categorically or in specific cases.\1163\
---------------------------------------------------------------------------
\1163\ Order No. 2023, 184 FERC ] 61,054 at PP 1582, 1584.
---------------------------------------------------------------------------
631. We are persuaded by VEIR's arguments raised on rehearing and
clarify that there are a range of permissible present and future
advanced conductor technologies that fall within this class of
technologies that transmission providers are required to evaluate
pursuant to Order No. 2023. We agree that this clarification will
ensure that the term ``advanced conductors'' includes present and
future transmission line technologies whose power flow capacities
exceed the power flow capacities of conventional transmission line
technologies, thus achieving the Commission's objectives in Order No.
2023. Consistent with VEIR's request for clarification, we further
clarify that advanced conductors are advanced relative to conventional
aluminum conductor steel reinforced conductors and include, but are not
limited to, superconducting cables, advanced composite conductors, high
temperature low-sag conductors, fiber optic temperature sensing
conductors, and advanced overhead conductors.\1164\
---------------------------------------------------------------------------
\1164\ See VEIR Rehearing Request at 3-6 (citing 42 U.S.C.
16422(a); U.S. Department of Energy December 2020 Report (Advanced
Transmission Technologies)).
---------------------------------------------------------------------------
632. We sustain the Commission's decision in Order No. 2023 not to
include dynamic line ratings in the enumerated list of alternative
transmission technologies that a transmission provider must evaluate.
In Order No. 2023, the Commission properly exercised its discretion to
determine just and reasonable rates and balanced various factors to
establish a list of alternative transmission technologies that
transmission providers are required to evaluate.\1165\ Specifically,
the Commission balanced two competing objectives in its effort to
ensure just and reasonable rates: (1) the speed of interconnection
queue processing times and (2) the cost and the speed at which network
upgrades can be constructed. In particular, the Commission recognized
that evaluating the enumerated alternative transmission technologies in
the cluster studies has the potential to identify network upgrade
solutions that are cheaper and faster to construct but, all else equal,
may also increase interconnection study processing times by increasing
the scope and complexity of the cluster studies.\1166\
---------------------------------------------------------------------------
\1165\ Order No. 2023, 184 FERC ] 61,054 at P 1586.
\1166\ We acknowledge that the Commission found that ``in some
cases transmission providers may be able to rapidly determine if a
certain enumerated alternative transmission technology is
inappropriate for further study.'' See id. P 1590. In such
instances, the transmission provider would be able to exclude
dynamic line ratings as a possible solution for certain reliability
violations identified in the cluster study. In so doing,
interconnection queue processing times would be unaffected.
---------------------------------------------------------------------------
633. The list of alternative transmission technologies enumerated
in Order No. 2023 that transmission providers must evaluate includes
those technologies that can serve as network upgrade solutions even in
high stress conditions and scenarios in which weather conditions are
less favorable. Unlike the alternative transmission technologies on the
list, dynamic line ratings are dependent on weather conditions (e.g.,
wind speed and direction and solar irradiance level). If weather
conditions change, the interconnection customer and the load reliant on
that interconnection customer are both at risk of the interconnection
customer's energy not being deliverable during real-time operations.
Given that interconnection studies for NRIS incorporate a range of
simulations assuming worst-case conditions,\1167\ worst-case line
rating input assumptions are appropriate in this context as inputs to
interconnection studies, as explained further below. Because dynamic
line ratings use non-worst case scenario input assumptions, it is not
arbitrary and capricious to exempt dynamic line ratings from the
enumerated list of technologies that must be considered in
interconnection studies.
---------------------------------------------------------------------------
\1167\ Order No. 2003-A, 106 FERC ] 61,220 at P 500.
---------------------------------------------------------------------------
634. WATT Coalition further asserts that line ratings in
interconnection studies are chronically underrated, and that, without
dynamic line ratings, lower wind assumptions are used, causing
transmission lines to be rated lower in planning studies. This
assertion does not properly address how transmission providers conduct
interconnection studies. Under the current approach to interconnection
studies, which the Commission did not fundamentally change in Order No.
2023, transmission providers study requests for NRIS using line ratings
that assume worst case inputs in order to ensure reliability under the
most restrictive operating conditions anticipated to occur.\1168\
---------------------------------------------------------------------------
\1168\ Id.
---------------------------------------------------------------------------
635. We also disagree that the evaluation of potential benefits of
dynamic line ratings in transmission planning and interconnection
should be analogous. Operational studies, transmission planning
studies, and interconnection studies have distinct goals. The objective
of an interconnection study, which is inherently a type of reliability
study, is to identify interconnection facilities and/or traditional
network upgrades that are needed to safely and reliably interconnect a
generating facility to the transmission system.\1169\ Contrary to WATT
Coalition's assertion, there is limited record evidence that dynamic
line ratings are well-suited to meeting the reliability goals of
interconnection studies, and several commenters express concerns that
dynamic line ratings cannot reliably serve as network upgrades.\1170\
In particular, dynamic line ratings only alter line ratings as
operational conditions, such as wind speed and direction or solar
irradiance level, warrant as forecasted over a particular timeframe.
Therefore, dynamic line ratings cannot guarantee that an increased line
rating will be available at any particular time, including times of
system stress such as those studied to evaluate the reliability impact
of an interconnection request.
---------------------------------------------------------------------------
\1169\ See, e.g., LGIP section 7.3 (``[t]he [c]luster [s]tudy
shall evaluate the impact of the proposed interconnection on the
reliability of the [t]ransmission [s]ystem.'').
\1170\ Order No. 2023, 184 FERC ] 61,054 at P 1545 (citing AECI
Initial Comments at 9; AEP Initial Comments at 51; Avangrid Initial
Comments at 36; Southern Initial Comments at 29; U.S. Chamber of
Commerce Initial Comments at 12).
---------------------------------------------------------------------------
636. In terms of evidence, WATT Coalition provides instances in
which dynamic line ratings have been studied as a pilot project or have
been used in operations and some theoretical examples of how dynamic
line ratings can raise line ratings and thus could be helpful in
interconnection; however, WATT Coalition does not provide evidence that
interconnection studies have relied upon dynamic line ratings in the
place of a network upgrade to resolve potential reliability violations.
[[Page 27115]]
We are not persuaded by the examples that WATT Coalition uses as the
basis for its rehearing request for both procedural and substantive
reasons. First, WATT Coalition provides a few examples for the first
time on rehearing that could have been provided earlier in the
proceeding, which is impermissible under the Commission's
precedent.\1171\
---------------------------------------------------------------------------
\1171\ See supra PP 386, 609 n.1145.
---------------------------------------------------------------------------
637. Second, substantively, WATT Coalition's reliance on the
scenarios is also misplaced. In particular, in the case of high-wind
scenarios cited by WATT Coalition, it is possible that a dynamic line
rating studied in lieu of a traditional network upgrade would be able
to resolve a thermal overload in a high-wind scenario. However, under
NRIS, ``[t]ransmission [p]roviders must study the [t]ransmission
[s]ystem at peak load, under a variety of severely stressed conditions
to determine whether, with the [g]enerating [f]acility at full output,
the aggregate of generation in the local area can be delivered to the
aggregate of load, consistent with [t]ransmission [p]rovider's
reliability criteria and procedures.'' \1172\ As a weather dependent
technology, if there are thermal overloads or other contingencies not
connected to a high-wind scenario, dynamic line ratings cannot
necessarily ensure the needed local area deliverability to the
aggregate of load.\1173\
---------------------------------------------------------------------------
\1172\ Order No. 2003-A, 106 FERC ] 61,220 at P 500 (also
stating that, ``[h]owever, [NRIS] does not necessarily provide the
[i]nterconnection [c]ustomer with the capability to physically
deliver the output of its [g]enerating [f]acility to any particular
load without incurring congestion costs. Nor does [NRIS] convey a
right to deliver the output of the [g]enerating [f]acility to any
particular customer.'').
\1173\ Id. See also Order No. 881, 177 FERC ] 61,179 at P 35
(explaining that ``while current transmission line rating practices
usually understate transfer capability, they can also overstate
transfer capability . . .'').
---------------------------------------------------------------------------
638. We are also not persuaded by WATT Coalition's contention that
Order No. 2023's statements that dynamic line ratings may relieve
congestion by increasing available interconnection capacity only
temporarily or in the short-term are incorrect and that, instead,
dynamic line ratings are a long-term solution for the specific
parameter of the cluster study. The issue is not whether dynamic line
ratings can provide additional transmission capacity at a specific
point in time; rather, the issue is whether, as a weather dependent
technology, they can be relied upon to replace the need for a different
network upgrade by ensuring the necessary local area deliverability to
the aggregate of load if there are thermal overloads or other
contingencies not connected to a high-wind scenario. Moreover, because
transmission providers generally consider worst-case scenarios in
interconnection studies, such transmission providers would still have
to use worst-case line rating input assumptions, which are typically
the seasonal line rating (assuming high air temperature, full sun, and
low or no wind) on a system using dynamic line ratings, not the highest
dynamic rating that would apply in more favorable conditions (e.g., low
air temperature, no sun, strong sustained winds). For these reasons,
WATT Coalition's rehearing arguments do not refute Order No. 2023's
finding that dynamic line ratings ``may be less beneficial in the
interconnection context.'' \1174\ As explained above, in Order No.
2023, the Commission balanced various factors (i.e., the potential
benefits of studying the technology with the burden on the transmission
provider and the increase in study times) and established a list of
alternative transmission technologies that are most likely to ensure
just and reasonable rates.\1175\
---------------------------------------------------------------------------
\1174\ WATT Coalition Rehearing Request at 21-23 (quoting Order
No. 2023, 184 FERC ] 61,054 at P 1598).
\1175\ Order No. 2023, 184 FERC ] 61,054 at P 1586.
---------------------------------------------------------------------------
639. We disagree with WATT Coalition's assertion that the
Commission did not engage in reasoned decision-making by excluding
dynamic line ratings from this enumerated list of alternative
transmission technologies. In Order No. 2023, the Commission explained
that, because the benefits of evaluating dynamic line ratings did not
outweigh the burden and the potential increase in study times, dynamic
line ratings were less beneficial than other alternative transmission
technologies in the interconnection context and did not include it on
the final enumerated list. Regarding the burden, for example, both MISO
and the MISO TOs highlighted the additional studies and requirements
that an obligation to evaluate dynamic line ratings would impose on the
first phase of the interconnection study process.\1176\ These entities
further highlighted that these additional obligations could also
necessitate further debate about the impact that such dynamic line
ratings may have on the rest of the transmission system and were in
contrast to the need to accelerate the interconnection process. After
having determined that the existing pro forma LGIP and pro forma SGIP
are not just and reasonable, the Commission must determine, based on
substantial evidence, a replacement rate that is just, reasonable and
not unduly preferential.\1177\ Thus, the Commission both provided a
reasoned explanation for excluding dynamic line ratings from the final
enumerated list of alternative transmission technologies and
established a just and reasonable replacement rate. Further, we note,
that the Commission did not ``exclude'' dynamic line ratings from
consideration in cluster studies, as WATT Coalition claims. Order No.
2023 specifically provided that transmission providers are permitted to
go beyond the enumerated list and can do so without changing their
tariffs.\1178\
---------------------------------------------------------------------------
\1176\ Id. P 1549 (citing MISO TOs Initial Comments at 30; MISO
Initial Comments at 11).
\1177\ FPA section 206 requires that, when the Commission finds
a rate subject to its jurisdiction to be ``unjust, unreasonable,
unduly discriminatory or preferential, the Commission shall
determine the just and reasonable rate, charge, classification,
rule, regulation, practice, or contract to be thereafter observed
and in force, and shall fix the same by order.'' 16 U.S.C. 824e; see
also Del. Pub. Serv. Comm'n v. PJM Interconnection, L.L.C, 166 FERC
] 61,161, at P 16 (2019) (``In finding [certain tariff provisions]
unjust and unreasonable . . . pursuant to FPA section 206, the
Commission is required to establish the just and reasonable
replacement rate.'').
\1178\ Order No. 2023, 184 FERC ] 61,054 at P 1600. While we are
declining to include dynamic line ratings among the enumerated
technologies for the reasons explained herein, we note that dynamic
line ratings may have greater utility when studying an
interconnection customer requesting ERIS because such a customer is
opting for ``as available'' service. See Order No. 2003-A, 106 FERC
] 61,220 at P 499. By contrast, for NRIS, ``[t]ransmission
[p]roviders must study the [t]ransmission [s]ystem at peak load,
under a variety of severely stressed conditions to determine
whether, with the [g]enerating [f]acility at full output, the
aggregate of generation in the local area can be delivered to the
aggregate of load, consistent with [t]ransmission [p]rovider's
reliability criteria and procedures.'' Order No. 2003-A, 106 FERC ]
61,220 at P 500.
---------------------------------------------------------------------------
640. We are not persuaded by Clean Energy Associations' arguments
that energy storage serving as a transmission asset should be included
in the enumerated list of alternative transmission technologies. We
agree with Clean Energy Associations that energy storage, like other
alternative transmission technologies on the list, would need to be
evaluated on a case-by-case basis to determine if the technology can
serve in the place of a network upgrade. However, we continue to find
that, as discussed in Order No. 2023, energy storage requires an
additional case-by-case analysis that distinguishes it from the
enumerated list of alternative transmission technologies: storage
resources must also be evaluated to determine whether a storage
resource performs a transmission function through a case-by-case
analysis of either how a particular storage resource would be operated
or the requirements set forth in a tariff governing selection of such
[[Page 27116]]
storage resources.\1179\ That analysis would determine whether the
storage resource's cost can be recovered in transmission rate base or
as a network upgrade. This additional analysis distinguishes energy
storage from the other technologies on the enumerated list of
alternative transmission technologies and is the basis for its
exclusion from the list. We reiterate, however, that Order No. 2023
does not preclude a transmission provider from studying or evaluating
any technology that was not included in the enumerated list of
alternative transmission technologies.\1180\
---------------------------------------------------------------------------
\1179\ Order No. 2023, 184 FERC ] 61,054 at P 1599. In Order No.
2023, the Commission pointed to the process in SPP, which takes into
account five considerations that, together, ensure that a selected
storage resource will serve a transmission function. Id. (citing Sw.
Power Pool, Inc., 183 FERC ] 61,153, at P 29 (2023)).
\1180\ Id. P 1600.
---------------------------------------------------------------------------
3. Modeling and Ride Through Requirements for Non-Synchronous
Generating Facilities
a. Modeling Requirements
i. Order No. 2023 Requirements
641. In Order No. 2023, the Commission revised Attachment A to
Appendix 1 of the pro forma LGIP and Attachment 2 of the pro forma SGIP
to require each interconnection customer requesting to interconnect a
non-synchronous generating facility to submit to the transmission
provider: (1) a validated user-defined root mean square (RMS) positive
sequence dynamic model; (2) an appropriately parameterized generic
library RMS positive sequence dynamic model, including a model block
diagram of the inverter control system and plant control system, that
corresponds to a model listed in a new table of acceptable models or a
model otherwise approved by the Western Electricity Coordinating
Council (WECC); and (3) a validated electromagnetic transient (EMT)
model, if the transmission provider performs an EMT study as part of
the interconnection study process.\1181\
---------------------------------------------------------------------------
\1181\ Id. P 1659.
---------------------------------------------------------------------------
642. The Commission also adopted the NOPR proposals to: (1) define
a user-defined model as any set of programming code created by
equipment manufacturers or developers that captures the latest features
of controllers that are mainly software-based and represent the
entities' control strategies but does not necessarily correspond to any
particular generic library model, as contained in Attachment A to
Appendix 1 of the pro forma LGIP and Attachment 2 of the pro forma
SGIP; (2) revise Attachment A to Appendix 1 of the pro forma LGIP and
Attachment 2 of the pro forma SGIP to add a table of acceptable generic
library models, based on the current WECC list of approved dynamic
models for renewable energy generating facilities; and (3) revise
section 4.4.4 of the pro forma LGIP and section 1.4 of the pro forma
SGIP to require that any proposed modification of the interconnection
request be accompanied by updated models of the proposed generating
facility.\1182\
---------------------------------------------------------------------------
\1182\ Id. P 1660.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
643. Invenergy asks the Commission to modify the pro forma LGIP,
Appendix 1, Attachment A to state that, if a validated EMT model is not
available, a preliminary EMT model may be provided, and, if a validated
EMT model is determined to be necessary, the interconnection customer
shall submit the validated EMT model no later than needed for the
cluster restudy.\1183\ Invenergy argues that requiring validation of
EMT models at the time of the interconnection application will impede
an interconnection customer's ability to use an advanced product with
higher annual energy production values because such products will not
be validated.\1184\ Invenergy explains that the only equipment with an
available, validated EMT model is equipment that has been in the market
for some years, and it is unreasonable to require an interconnection
customer to submit a validated EMT model at the time of interconnection
application even if the proposed commercial operation date may be in
five or six years. Invenergy asserts that it is unclear whether a
project developer might be able to provide EMT models for different
equipment later in the process as newer equipment becomes field tested
without the transmission provider determining that it is a material
modification, leading some developers to forego using state-of-the-art
technology otherwise available under the commercial operation deadline.
---------------------------------------------------------------------------
\1183\ Invenergy Rehearing Request at 13.
\1184\ Id. at 10-12.
---------------------------------------------------------------------------
644. Invenergy contends that the Commission's alternative to a
validated EMT model that the customer could pursue is not
accurate.\1185\ Invenergy asserts that the interconnection customer
cannot attest to the accuracy of model information because model
information is provided by the manufacturer, and equipment
manufacturers will not attest to model data until the field test is
done, which is later in the process. Invenergy argues that requiring
validation is not necessary to achieve the Commission's goal of
ensuring that accurate information is used in studies. In particular,
Invenergy notes that preliminary models contain the same information as
a validated model and are developed based on real design codes but have
not been field tested.
---------------------------------------------------------------------------
\1185\ Id. at 12-13.
---------------------------------------------------------------------------
645. Invenergy contends that, much like EMT models, requiring
validated RMS models at the beginning of the interconnection process
will force developers to use older technology and thus stifle
innovation and waste time and resources.\1186\ Invenergy also argues
that the Commission's requirement is not necessary to ensure accurate
model information. Therefore, Invenergy asks the Commission to modify
the pro forma LGIP, Appendix 1, Attachment A and pro forma SGIP,
Attachment 2, to state that, if a validated RMS model is not available,
a preliminary RMS model may be provided and the interconnection
customer shall submit the validated RMS model no later than needed for
the cluster restudy.
---------------------------------------------------------------------------
\1186\ Id. at 14.
---------------------------------------------------------------------------
646. [Oslash]rsted argues that the Commission's decision to require
a validated EMT model when seeking to interconnect is arbitrary and
capricious and not supported by reasoned decision-making.\1187\
[Oslash]rsted contends that accurate models for nonsynchronous
resources may not be available early in the interconnection process due
to rapid advances in inverter and control technologies and that some
resources may need customization requiring interconnection customers to
make decisions about specific types of technology they may use later in
the interconnection process. [Oslash]rsted claims that the Commission's
requirement does not provide a path forward for such resources and
could deter the use of new and more efficient technologies or delay
interconnection of needed resources.
---------------------------------------------------------------------------
\1187\ [Oslash]rsted Rehearing Request at 6-7.
---------------------------------------------------------------------------
647. [Oslash]rsted also argues that transmission providers
generally do not conduct EMT studies until much later in the
interconnection process, resulting in minimal value in the
interconnection customer providing and subsequently updating EMT models
at the time of interconnection application.\1188\ [Oslash]rsted asserts
that EMT study results typically reveal the need for items such as
control
[[Page 27117]]
tuning rather than additional transmission system upgrades, but this
requires an EMT model that accurately represents how the plant is
installed and configured as well as transmission system data that can
only be provided by the transmission provider, so the Commission's
requirement is not likely to provide information that is useful for
reliability studies and will waste time and resources for both the
interconnection customer and the transmission provider.\1189\
---------------------------------------------------------------------------
\1188\ Id. at 7-8.
\1189\ Id. at 8-9.
---------------------------------------------------------------------------
648. [Oslash]rsted asks the Commission to clarify how to provide a
validated model for equipment that does not yet exist.\1190\
[Oslash]rsted suggests, as example, that the interconnection customer
or vendor could self-attest that, to the best of their knowledge, the
equipment response is expected to be consistent with the RMS and the
EMT models provided at the time of interconnection study.
---------------------------------------------------------------------------
\1190\ Id. at 9.
---------------------------------------------------------------------------
649. PacifiCorp asks the Commission to add two models to the table
of acceptable models that are approved by WECC and relate to ride
through requirements.\1191\ PacifiCorp states that these qualify as
validated user-defined root mean squared positive sequency dynamic
models and their inclusion will allow transmission providers to
accurately model the ride through characteristics of these resources
and help understand if the resource will be tripped for any
transmission related event away from the resource.
---------------------------------------------------------------------------
\1191\ PacifiCorp Rehearing Request at 23-24.
---------------------------------------------------------------------------
iii. Determination
650. We are unpersuaded by Invenergy's request for rehearing
regarding potential barriers to validation of EMT models at the time of
the interconnection application. Pursuant to Order No. 2023's
definition of a validated model, the interconnection customer has a
number of options that do not require field data, such as an
attestation that the models accurately reflect the expected behavior of
a proposed generating facility based on the interconnection customer's
best understanding at the time of the interconnection request.\1192\
Therefore, we are not persuaded that the interconnection customer is
unable to provide this attestation, even for advanced products.
---------------------------------------------------------------------------
\1192\ Order No. 2023, 184 FERC ] 61,054 at P 1675.
---------------------------------------------------------------------------
651. We also find it unnecessary to grant Invenergy's request to
modify the pro forma LGIP, Appendix 1, Attachment A and pro forma SGIP,
Attachment 2, to state that, if a validated EMT or RMS model is not
available, a preliminary model may be provided, and the interconnection
customer shall submit the validated model no later than needed for the
cluster restudy. As noted above, such preliminary models are acceptable
under Order No. 2023's definition of a validated model, as long as it
is based on the actual programming code used by the manufacturer to
program equipment.
652. We deny [Oslash]rsted's request for clarification regarding
how to provide a validated model for equipment that does not yet exist.
An interconnection request that fails to specify the equipment to be
used, including, for example, the inverter manufacturer, model name,
number, and version, is not a complete application.\1193\ However, we
acknowledge that equipment, including inverters, may advance over the
period of time an interconnection customer proceeds through the queue.
We note that section 4.6 of the pro forma LGIP contains the
transmission provider's technological change procedure, which is
designed to allow transmission providers to evaluate equipment changes
to an interconnection request.\1194\
---------------------------------------------------------------------------
\1193\ See pro forma LGIP, attach. A to app. 1.
\1194\ Order No. 2023, 184 FERC ] 61,054 at P 1682.
---------------------------------------------------------------------------
653. We are unpersuaded by Invenergy's request for rehearing
regarding whether a project developer might be able to provide EMT
models for different equipment later in the process as newer equipment
becomes field tested without the transmission provider determining that
it is a material modification. Order No. 2023 was clear that section
4.4 of the pro forma LGIP and section 1.4 of the pro forma SGIP set
forth procedures for modifications to an interconnection request,
including the evaluation of technical changes to a request, and such
changes may be determined to be a material modification.\1195\
Furthermore, as noted above, section 4.6 of the pro forma LGIP contains
the transmission provider's technological change procedure, which is
designed to allow transmission providers to evaluate equipment changes
to an interconnection request.
---------------------------------------------------------------------------
\1195\ Id.
---------------------------------------------------------------------------
654. We are unpersuaded by [Oslash]rsted's rehearing request
regarding the timing of EMT model availability. While the Commission
has approved proposals to perform an EMT study following execution of
the LGIA, the pro forma LGIP and pro forma SGIP contain no such
study.\1196\ We sustain the finding in Order No. 2023 that requiring
models to be submitted with the interconnection request is consistent
with the principles underpinning other requirements in the pro forma
LGIP and pro forma SGIP. Allowing model validation at a point further
into the interconnection process could lead to restudies and subsequent
delays that would frustrate the efficiency gained by the other reforms
in Order No. 2023.\1197\
---------------------------------------------------------------------------
\1196\ See Sw. Power Pool Inc., 181 FERC ] 61,018, at P 8
(2022).
\1197\ Order No. 2023, 184 FERC ] 61,054 at P 1669.
---------------------------------------------------------------------------
655. We are unpersuaded by PacifiCorp's request for the Commission
to add two models to the table of acceptable models that are approved
by WECC and relate to ride through requirements.\1198\ PacifiCorp
presents this issue for the first time in its rehearing request. In
general, we reject rehearing requests that raise a new issue, unless we
find that the issue could not have been previously presented.\1199\ We
are not persuaded that PacifiCorp could not have raised this issue
earlier in this proceeding. However, we also note that transmission
providers may explain specific circumstances on compliance and justify
why any deviations are either consistent with or superior to the pro
forma LGIP or merit an independent entity variation in the context of
RTOs/ISOs.
---------------------------------------------------------------------------
\1198\ PacifiCorp Rehearing Request at 23-24. It is unclear
which models PacifiCorp would like to add, but it appears that they
might be LHFRT (Low/High Frequency Ride Through) and LHVRT (Low/High
Voltage Ride Through).
\1199\ See supra P 386.
---------------------------------------------------------------------------
b. Ride Through Requirements
i. Order No. 2023 Requirements
656. The Commission revised article 9.7.3 of the pro forma LGIA and
article 1.5.7 of the pro forma SGIA to require that, during abnormal
frequency conditions and voltage conditions within the ``no trip zone''
defined by Reliability Standard PRC-024-3 or successor mandatory ride
through reliability standards, the non-synchronous generating facility
must ensure that, within any physical limitations of the generating
facility, its control and protection settings are configured or set to:
(1) continue active power production during disturbance and post
disturbance periods at pre-disturbance levels unless providing primary
frequency response or fast frequency response; (2) minimize reductions
in active power and remain within dynamic voltage and current limits,
if reactive power priority mode is enabled, unless providing primary
frequency response or fast frequency response; (3) not artificially
limit
[[Page 27118]]
dynamic reactive power capability during disturbances; and (4) return
to pre-disturbance active power levels without artificial ramp rate
limits if active power is reduced, unless providing primary frequency
response or fast frequency response.\1200\
---------------------------------------------------------------------------
\1200\ Order No. 2023, 184 FERC ] 61,054 at P 1715.
---------------------------------------------------------------------------
ii. Requests for Rehearing and Clarification
657. Invenergy argues that the proposed ride through requirements
impose requirements on non-synchronous generators that they may not be
able to meet because the generator can only maintain active current,
not power, and may not have a choice to choose between reactive and
real power output during a disturbance due to equipment
limitations.\1201\ Invenergy asserts that requiring a non-synchronous
generator to produce active power instead of providing reactive support
is very likely to exacerbate, rather than alleviate, the disturbance.
Therefore, Invenergy asks the Commission to modify section 9.7.3 of the
pro forma LGIA to limit the prioritization of active power to frequency
response disturbances and clarify that the default ride-though rule for
other disturbances can be prioritizing reactive power. Invenergy also
asks the Commission to consider establishing a technical conference to
obtain information directly from the standards setting bodies, the
companies that design and supply the equipment, and other engineering
experts to support the Commission's determinations.
---------------------------------------------------------------------------
\1201\ Invenergy Rehearing Request at 16-17.
---------------------------------------------------------------------------
658. Similarly, Clean Energy Associations ask the Commission to
clarify that the text ``within any physical limitations of the
generating facility'' allows a resource that is responding to a
disturbance in reactive power priority mode to reduce its active power
production if it does not have sufficient headroom to increase reactive
power to provide required voltage support, without violating the
requirement to continue active power production during disturbance and
post disturbance periods at pre-disturbance levels.\1202\
---------------------------------------------------------------------------
\1202\ Clean Energy Associations Rehearing Request at 83.
---------------------------------------------------------------------------
iii. Determination
659. We are not persuaded by Invenergy's request to modify section
9.7.3 of the pro forma LGIA to limit the prioritization of active power
to frequency response disturbances and clarify that the default ride-
though rule for other disturbances can be prioritizing reactive power.
As further explained below, Order No. 2023 allows a non-synchronous
generating facility with physical limitations to prioritize reactive
power. The extent to which a non-synchronous generating facility
prioritizes real or reactive power is best handled on a case-by-case
basis based on the transmission provider's evaluation of the
reliability needs of its system, because different transmission systems
and different operating conditions may require different responses from
interconnected resources, as opposed to a default response.
660. We grant Clean Energy Associations' request for clarification.
In Order No. 2023, the Commission noted that the modified reform
accommodates existing technical capabilities and physical limitations
of non-synchronous generating facilities by providing for reductions in
active power to prioritize reactive power.\1203\ A generating
facility's inability to prioritize reactive power without a reduction
in active power is considered one of the ``physical limitations of the
generating facility'' that provides an exception, albeit limited, to
the requirement that the generating facility continue active power
production during disturbance and post disturbance periods at pre-
disturbance levels.
---------------------------------------------------------------------------
\1203\ Order No. 2023, 184 FERC ] 61,054 at P 1717.
---------------------------------------------------------------------------
661. However, given the importance of prioritization of reactive
power, we are persuaded that additional clarity is necessary.
Accordingly, we revise section 9.7.3 of the pro forma LGIA and article
1.5.7 of the pro forma SGIA to state that a non-synchronous generating
facility must ensure that, within any physical limitations of the
generating facility:
. . . its control and protection settings are configured or set to
(1) continue active power production during disturbance and post
disturbance periods at pre-disturbance levels, unless reactive power
priority mode is enabled or unless providing primary frequency
response or fast frequency response. . . .
662. Given this modification, we do not believe a technical
conference, as suggested by Invenergy, is necessary at this time.
F. Compliance Procedures
1. Order No. 2023 Requirements
663. The Commission required transmission providers to submit
compliance filings within 90 calendar days of the publication date of
Order No. 2023 in the Federal Register, rather than the proposed 180
days from the effective date of Order No. 2023.
2. Requests for Rehearing and Clarification
664. A number of entities asked the Commission to extend the
deadline for compliance established in Order No. 2023.\1204\
---------------------------------------------------------------------------
\1204\ See AEP Rehearing Request at 26-28 (requesting more time
for compliance); Dominion Rehearing Request at 26-30 (requesting a
year to submit compliance filings); EEI Rehearing Request at 10-11
(requesting the compliance deadline be set to 180 days from the
effective date of the final rule); PacifiCorp Rehearing Request at
20-22 (requesting the compliance deadline be set to 180 days from
the effective date of the final rule, or alternatively, 120 days);
PJM Rehearing Request at 46-48 (requesting the Commission delay
compliance such that the 90 day clock would start upon the
Commission's issuance of an order on rehearing).
---------------------------------------------------------------------------
665. Indicated PJM TOs argue that Order No. 2023 is unduly
discriminatory and will inappropriately impose substantial
administrative burdens on all transmission providers, even though
transmission providers who have already adopted cluster study processes
are not similarly situated to those transmission providers who have not
adopted such processes.\1205\
---------------------------------------------------------------------------
\1205\ Indicated PJM TOs Rehearing Request at 17.
---------------------------------------------------------------------------
666. Dominion states that it understands that the Commission
intended tariff revisions made in compliance with Order No. 2023 to be
prospective, but Dominion argues that the Commission did not provide
guidance as to what effective date transmission providers should use
for purposes of their compliance filing.\1206\ Dominion asks the
Commission to clarify that any compliance filings can be made effective
in a way that will align with cluster processing dates, such as the
start of a new processing window. Dominion asserts that such an
effective date would allow the required revisions to be implemented on
a going-forward and efficient basis and would not require any mid-
process changes by requiring revisions to go into effect in the middle
of a cluster window.
---------------------------------------------------------------------------
\1206\ Dominion Rehearing Request at 30 (citing Order No. 2023,
184 FERC ] 61,054 at P 1769 (``This final rule will be effective as
described above; however, the pro forma LGIP, pro forma LGIA, pro
forma SGIP], and pro forma SGIP requirements in transmission
providers' tariffs will not be effective until the Commission-
approved effective date of the transmission provider's filing in
compliance with this final rule.'')).
---------------------------------------------------------------------------
3. Determination
667. On October 25, 2023, the Commission addressed arguments on
rehearing regarding extending the deadline for compliance established
in Order No. 2023.\1207\ The Commission
[[Page 27119]]
extended the compliance deadline to require compliance filings to be
submitted within 210 calendar days of the publication of Order No. 2023
in the Federal Register (i.e., within 149 calendar days of the
effective date of Order No. 2023, or April 3, 2024). To incorporate the
changes made herein, we further extend the deadline until the effective
date of this order (i.e., the deadline for compliance with Order No.
2023 will be 30 days after the publication of this order in the Federal
Register, and must include the further revisions reflected in this
order).
---------------------------------------------------------------------------
\1207\ Order on Motions and Addressing Limited Arguments Raised
on Rehearing and Setting Aside Prior Order, In Part, Docket No.
RM22-14 (Oct. 25, 2023).
---------------------------------------------------------------------------
668. We disagree with arguments that Order No. 2023 imposes an
inappropriately large compliance burden on regions already generally in
accord with the approach adopted in Order No. 2023, or that it is
unduly discriminatory to impose the same compliance obligations on both
entities that have already adopted cluster study processes and those
that have not. We find that the compliance burden imposed by Order No.
2023 is appropriate given the scope of the problem at hand. It is not
unduly discriminatory to require all transmission providers subject to
the Commission's jurisdiction to comply with Commission rules.
669. Regarding Dominion's request for clarification, we confirm
that transmission providers may propose effective dates in their
compliance filings that align with their existing queue processing
dates, such as the start of a new processing window. We will consider
these requests on a case-by-case basis in each individual compliance
filing. To the extent Order No. 2023 suggested, by referencing MISO's
compliance filing, that transmission providers may not be granted an
effective date that predates the Commission order on compliance,\1208\
we clarify that the Commission will consider, and may grant, requests
from transmission providers for an effective date that predates the
Commission's order on their compliance filing, on a case-by-case basis.
---------------------------------------------------------------------------
\1208\ Order No. 2023, 184 FERC ] 61,054 at P 1769.
---------------------------------------------------------------------------
III. Information Collection Statement
670. The information collection requirements contained in this
final rule are subject to review by the Office of Management and Budget
(OMB) under section 3507(d) of the Paperwork Reduction Act of
1995.\1209\ OMB's regulations require approval of certain information
collection requirements imposed by agency rules.\1210\ Respondents
subject to the filing requirements of this order on rehearing will not
be penalized for failing to respond to the collection of information
unless the collection of information displays a valid OMB control
number.
---------------------------------------------------------------------------
\1209\ 44 U.S.C. 3507(d).
\1210\ 5 CFR 1320.11.
---------------------------------------------------------------------------
671. Previously, the Commission submitted to OMB the information
collection requirements arising from Order No. 2023 and OMB approved
those requirements. In this order on rehearing, the Commission makes no
substantive changes to those requirements, but does make some
modifications to the Commission's standard large generator
interconnection procedures and agreements (i.e., the pro forma LGIP and
pro forma LGIA) and the Commission's standard small generator
interconnection procedures and agreement (i.e., the pro forma SGIP and
pro forma SGIA) that every public utility transmission provider is
required to include in their tariff under section 35.28 of the
Commission's regulations.\1211\ This order on rehearing in Docket No.
RM22-14-001 requires each transmission provider to amend its tariff to
implement the modifications adopted in this order on rehearing and
submit a compliance filing to the Commission for approval of those
modifications. Therefore, the Commission finds it necessary to make a
formal submission to OMB for review and approval under section 3507(d)
of the Paperwork Reduction Act of 1995.\1212\
---------------------------------------------------------------------------
\1211\ 18 CFR 35.28(f)(1).
\1212\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------
672. The modifications in the Docket No. RM22-14-001 affect the
following currently approved information collections: FERC-516,
Electric Rate Schedules and Tariff Filings (Control No. 1902-0096); and
FERC-516A, Standardization of Small Generator Interconnection
Agreements and Procedures (Control No. 1902-0203). The Commission, in
this order on rehearing, is updating the burden \1213\ estimates
associated with FERC-516 and FERC-516A information collections to
reflect the incremental burden of complying with the new requirements
set forth in this order.
---------------------------------------------------------------------------
\1213\ 5 CFR 1320.3(b)(1).
---------------------------------------------------------------------------
673. Summary of the Revisions to the Collection of Information due
to the order on rehearing in Docket No. RM22-14-001:
FERC-516: This order on rehearing revises the Commission's
pro forma LGIP and LGIA and requires each public utility to amend its
LGIP and LGIA. The amendments pertain to the first ready, first served
cluster study process, withdrawal penalties, affected systems study
process, the evaluation of alternative transmission technologies, and
the maintenance of power production during abnormal frequency
conditions and certain voltage conditions.
FERC-516A: This order on rehearing amends the Commission's
standard small generator interconnection procedures and agreement
(i.e., the pro forma SGIP and pro forma SGIA) regarding the evaluation
of alternative transmission technologies and the maintenance of power
production during abnormal frequency conditions and certain voltage
conditions.
Title: Electric Rate Schedules and Tariff Filings (FERC-
516), and Standardization of Small Generator Interconnection Agreements
and Procedures (FERC-516A).
Action: Revision of information collections in accordance
with Docket No. RM22-14-001.
OMB Control Nos.: 1902-0096 (FERC-516) and 1902-0203
(FERC-516A).
Respondents: Public utility transmission providers,
including RTOs/ISOs.
Frequency of Information Collection: One time during Year
1.
Necessity of Information: The LGIP, LGIA, SGIP, and SGIA
modifications in this order on rehearing ensure that interconnection
customers can interconnect to the transmission system in a reliable,
efficient, transparent, and timely manner, and prevent undue
discrimination. The modifications are intended to ensure that the
generator interconnection process is just, reasonable, and not unduly
discriminatory or preferential.
Internal Review: We have reviewed the requirements set
forth in this order on rehearing that impose information collection
burdens and have determined that such requirements are necessary. These
requirements conform to the Commission's need for efficient information
collection, communication, and management within the energy industry.
We have specific, objective support for the burden estimates associated
with the information collection requirements.
Public Reporting Burden: As with Order No. 2023, we
estimate that 44 transmission providers, including RTOs/ISOs, will be
subject to this order on rehearing. The burden and cost estimates below
reflect the incremental burden of complying with this order on
rehearing, which will require a single
[[Page 27120]]
compliance filing to be submitted to the Commission. We estimate no
ongoing information collection burden because there is either no
information collection aspect of the requirement or the requirements
would merely supplant existing ones. The Commission estimates that the
order on rehearing in Docket No. RM22-14-001 will adjust the burden and
cost of FERC-516 and FERC-516A as follows:
---------------------------------------------------------------------------
\1214\ Commission staff estimate that respondents' hourly wages
plus benefits are comparable to those of FERC employees (2024).
Therefore, the 2024 FERC hourly cost estimate in this analysis is
$100 per hour ($207,786 per year).
\1215\ Order No. 2023 erroneously reported 44 ongoing responses
for Affected Systems Study Process reforms. This was an error and
the current number of estimated ongoing responses is zero. However,
the burden cost per response and total burden estimates for Affected
Systems Study Process reforms were correctly calculated and
reported.
Table 1--Information Collection Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes due to order on rehearing in Docket No. RM22-14-001
---------------------------------------------------------------------------------------------------------------------------------------------------------
Annual number of Average burden (hr.) &
Reforms Number of responses per Total number of cost ($) per response Total annual burden hours &
respondents respondent responses (rounded) \1214\ total annual cost ($) (rounded)
(1).............. (2).............. (1) * (2) = (3)....... (4)....................... (3) * (4) = (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FERC-516
--------------------------------------------------------------------------------------------------------------------------------------------------------
First Ready, First Served 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 2 hr; $200........ Year 1: 88 hr;
Cluster Study. Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ $8,800
Ongoing: 0
Allocation of Cluster Network 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Upgrade Costs. Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Affected System Study Process 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 2 hr; $200........ Year 1: 88 hr; $8,800
Ongoing: 0....... Ongoing: 0 \1215\..... Ongoing: 0................ Ongoing: 0
Study Deposits and LGIA 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100 Year 1: 44 hr; $4,400 Ongoing:
Deposit. Ongoing: 0....... Ongoing: 0............ Ongoing: 0. 0
Commercial Readiness......... 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 3 hrs;............ Year 1: 132 hr;
Ongoing: 0....... Ongoing: 0............ $300...................... $13,200
Ongoing: 0................ Ongoing: 0
Withdrawal Penalties......... 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 2 hr; $200........ Year 1: 88 hr; $8,800
Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Elimination of Reasonable 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Efforts Standard. Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Transition Process........... 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Co-Located Generating 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Facilities Behind One Point Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
of Interconnection with
Shared Interconnection
Requests.
Ride Through Requirements.... 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Incorporating Enumerated 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Alternative Transmission Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Technologies into the
Generator Interconnection
Process.
--------------------------------------------------------------------------------------------------------------------------
Total New Burden for FERC- Year 1: 484 responses
516 (due to Docket No.
RM22-14-001).
Year 1: 704 hr; $70,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ongoing: 0
Ongoing: 0 hr; 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
FERC-516A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ride Through Requirements.... 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Incorporating Enumerated 44 (TPs)......... Year 1: 1........ Year 1: 44............ Year 1: 1 hr; $100........ Year 1: 44 hr; $4,400
Alternative Transmission Ongoing: 0....... Ongoing: 0............ Ongoing: 0................ Ongoing: 0
Technologies into the
Generator Interconnection
Process.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total New Burden for FERC- Year 1: 88 responses; Ongoing: 0
516A (due to Docket No.
RM22-14-001).
Year 1: 88 hr; $8,800; Ongoing: 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Grand Total (FERC-516 Year 1: 572 responses; Ongoing: 0
plus FERC-516A,
including all
respondents).
Year 1: 792 hr; $79,200; Ongoing: 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Grand Total Average Per
Entity Cost (44 TPs).
Year 1: $1,800; Ongoing: 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
674. Interested persons may obtain information on the reporting
requirements by contacting Jean Sonneman via email at
[email protected] or telephone (202) 502-6362.
IV. Environmental Analysis
675. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\1216\ We
conclude that neither an Environmental Assessment nor an Environmental
Impact Statement is required for this final rule under Sec.
380.4(a)(15) of the Commission's regulations, which provides a
categorical exemption for approval of actions under sections 205 and
206 of
[[Page 27121]]
the FPA relating to the filing of schedules containing all rates and
charges for the transmission or sale of electric energy subject to the
Commission's jurisdiction, plus the classification, practices,
contracts, and regulations that affect rates, charges, classification,
and services.\1217\
---------------------------------------------------------------------------
\1216\ Reguls. Implementing the Nat'l. Env't Pol'y Act, Order
No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Preambles
1986-1990 ] 30,783 (1987) (cross-referenced at 41 FERC ] 61,284).
\1217\ 18 CFR 380.4(a)(15).
---------------------------------------------------------------------------
V. Regulatory Flexibility Act
676. The Regulatory Flexibility Act of 1980 \1218\ requires a
description and analysis of proposed and final rules that will have
significant economic impact on a substantial number of small entities.
The Commission continues to certify that the reforms adopted in this
order on rehearing would not have a significant economic impact on a
substantial number of small entities.
---------------------------------------------------------------------------
\1218\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------
677. The Small Business Administration (SBA) sets the threshold for
what constitutes a small business. Under SBA's size standards,\1219\
transmission providers and RTOs/ISOs fall under the category of
Electric Bulk Power Transmission and Control (NAICS code 221121), that
has a size threshold of under 950 employees including the entity and
its associates.\1220\ This order on rehearing modifies the Commission's
standard large generator interconnection procedures and agreements
(i.e., the pro forma LGIP and pro forma LGIA) and the Commission's
standard small generator interconnection procedures and agreement
(i.e., the pro forma SGIP and pro forma SGIA) that every public utility
transmission provider is required to include in their tariff under
section 35.28 of the Commission's regulations, regardless of the size
of the entity.\1221\
---------------------------------------------------------------------------
\1219\ 13 CFR 121.201.
\1220\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act, which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. The
Small Business Administration's regulations define the threshold for
a small Electric Bulk Power Transmission and Control entity (NAICS
code 221121) to be 950 employees (``the maximum allowed for a
concern and its affiliates to be considered small''). See 13 CFR
121.201; see also 5 U.S.C. Sec. 601(3) (citing to section 3 of the
Small Business Act, 15 U.S.C. Sec. 632).
\1221\ 18 CFR 35.28(f)(1).
---------------------------------------------------------------------------
678. As with Order No. 2023, we estimate that there are 44
transmission providers affected by the reforms proposed in this order
on rehearing. Furthermore, we estimate that six of the 44 total
transmission providers, approximately 14% (rounded), are small
entities.
679. We estimate that one-time costs (in Year 1) associated with
the reforms required by this order on rehearing for one transmission
provider (as shown in the table in the Information Collection Statement
above) would be $1,800. Following Year 1, we estimate that there will
be no ongoing costs for transmission providers. According to SBA
guidance, the determination of significance of impact ``should be seen
as relative to the size of the business, the size of the competitor's
business, and the impact the regulation has on larger competitors.''
\1222\ The Year 1 estimated cost of this order on rehearing reflects
2.5% of the Year 1 estimated cost of Order No. 2023, which the
Commission found to not have a significant economic impact. Further,
this order on rehearing will create no ongoing costs for transmission
providers in addition to those in Order No. 2023. We therefore do not
consider the estimated cost of $1,800 per transmission provider due to
this order on rehearing to be a significant economic impact. As a
result, as the Commission concluded in Order 2023, we certify that the
reforms proposed in this order on rehearing would not have a
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------
\1222\ U.S. Small Business Administration, A Guide for
Government Agencies How to Comply with the Regulatory Flexibility
Act, at 18 (Aug. 2017), https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf.
---------------------------------------------------------------------------
VI. Document Availability
680. In addition to publishing the full text of this document in
the Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (https://www.ferc.gov).
681. From FERC's Home Page on the internet, this information is
available on eLibrary. The full text of this document is available on
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or
downloading. To access this document in eLibrary, type the docket
number excluding the last three digits of this document in the docket
number field.
682. User assistance is available for eLibrary and the FERC's
website during normal business hours from FERC Online Support at (202)
502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
[email protected].
VII. Effective Date
683. This order is effective May 16, 2024.
By the Commission. Commissioner Christie is concurring with a
separate statement attached.
Issued: March 22, 2024.
Debbie-Anne A. Reese,
Acting Secretary.
Note: The following appendices will not appear in the Code of
Federal Regulations.
Appendix A: Abbreviated Names of Rehearing Parties
American Clean Power Association............ ACP.
American Electric Power Service Corporation. AEP.
Avangrid, Inc............................... Avangrid.
California Independent System Operator CAISO.
Corporation.
Advanced Energy United, American Clean Power Clean Energy Associations.
Association, and Solar Energy Industries
Association.
Dominion Energy Services, Inc............... Dominion.
Duke Energy Carolinas, LLC; Duke Energy Duke Southeast Utilities.
Progress, LLC; and Duke Energy Florida, LLC.
Edison Electric Institute................... EEI.
National Grid Renewables Development, LLC, Generation Developers.
Clearway Energy Group LLC, and Pine Gate
Renewables, LLC.
Cypress Creek Renewables, LLC, New Leaf IPP Coalition.
Energy, Inc., and Enel Green Power.
Indicated PJM Transmission Owners........... Indicated PJM TOs.
Invenergy Solar Development North America Invenergy.
LLC; Invenergy Thermal Development LLC;
Invenergy Wind Development North America
LLC; and Invenergy Transmission LLC.
[[Page 27122]]
ITC Holdings Corp., on behalf of its ITC.
operating subsidiaries International
Transmission Company d/b/a ITC
Transmission, Michigan Electric
Transmission Company, LLC, ITC Midwest LLC,
and ITC Great Plains, LLC.
PJM Interconnection, LLC, Midcontinent Joint RTOs.
Independent System Operator, Inc., and
Southwest Power Pool, Inc.
Longroad Energy Holdings, LLC............... Longroad Energy.
Midcontinent Independent System Operator, MISO.
Inc.
MISO Transmission Owners.................... MISO TOs.
New York Independent System Operator, Inc... NYISO.
New York Public Service Commission.......... NYSPSC.
New York Transmission Owners................ NYTOs.
NewSun Energy LLC........................... NewSun.
Dominion Energy South Carolina, Inc., Non-RTO Providers.
Florida Power & Light Company, and Public
Service Company of Colorado.
Nevada Power Company and Sierra Pacific NV Energy.
Power Company.
[Oslash]rsted North America, LLC............ [Oslash]rsted.
PacifiCorp.................................. PacifiCorp.
PJM Interconnection, L.L.C.................. PJM.
Sustainable FERC Project, Sierra Club, Public Interest Organizations.
Natural Resources Defense Council,
Earthjustice, Acadia Center, Environmental
Defense Fund, National Audubon Society,
Southern Environmental Law Center, and
Southface.
Dominion Energy South Carolina, Inc., Revised Early Adopters Coalition.
PacifiCorp, and Tri-State Generation and
Transmission Association, Inc.
Shell Energy North America (US), L.P., Shell Shell.
New Energies US, LLC, and Savion, LLC.
Duke Energy Carolinas, LLC, Duke Energy Southeastern Utilities.
Progress, LLC, Louisville Gas and Electric
Company and Kentucky Utilities Company,
PowerSouth Energy Cooperative, and Southern
Company Services, Inc., acting as agent for
Alabama Power Company, Georgia Power
Company, and Mississippi Power Company.
Southwest Power Pool, Inc................... SPP.
VEIR Inc.................................... VEIR.
Working for Advanced Transmission WATT Coalition.
Technologies Coalition.
WIRES....................................... WIRES.
----------------------------------------------------------------------------------------------------------------
Appendix B: Interconnection Study Metrics
Table 1--2022 Interconnection Study Metrics From Non-RTOs/ISOs With a Clustered System Impact Study
----------------------------------------------------------------------------------------------------------------
Number of
interconnection Average number of Number of
requests with days to complete facilities Average number of
Transmission provider completed clustered system studies days to complete
clustered system impact study completed facilities study
impact studies
----------------------------------------------------------------------------------------------------------------
Arizona Public Service................. 21 511 19 144
Avista Corp............................ 22 61 7 136
Dominion Energy South Carolina......... 0 .................. 0 ..................
Duke Energy Carolinas.................. 14 N/A 1 185
El Paso Electric Co.................... 5 76 1 76
Nevada Power........................... 67 119 36 120
PacifiCorp............................. 189 146 13 90
Public Service Company of Colorado..... 25 246 16 143
Public Service Company of New Mexico... 17 507 4 168
Tri-State Generation and Transmission 10 119 10 85
\1223\................................
----------------------------------------------------------------------------------------------------------------
Appendix C: Changes to the Pro Forma LGIP
Note: Deletions are in brackets and additions are in italics.
Standard Large Generator Interconnection Procedures (LGIP)
Including
Standard Large Generator Interconnection Agreement (LGIA)
Standard Large Generator Interconnection Procedures (LGIP)
(Applicable to Generating Facilities That Exceed 20 MW)
---------------------------------------------------------------------------
\1223\ Data drawn from the following sources, respectively:
https://www.oasis.oati.com/azps/ (Arizona Public Service); https://www.oasis.oati.com/avat/ (Avista Corp.); https://www.oasis.oati.com/SCEG/ (Dominion Energy South Carolina); https://www.oasis.oati.com/duk/ (Duke Energy Carolinas); https://www.oasis.oati.com/epe/ (El Paso Electric Co.); https://www.oasis.oati.com/NEVP/ (Nevada Power); https://www.oasis.oati.com/PPW/ (PacifiCorp);
https://www.oasis.oati.com/psco/ (Public Service Company
of Colorado); https://www.oasis.oati.com/PNM/ (Public Service
Company of New Mexico); and https://www.oasis.oati.com/tsgt/ (Tri-State Generation and Transmission).
---------------------------------------------------------------------------
Table of Contents
Section 1. Definitions
Section 2. Scope and Application
2.1 Application of Standard Large Generator Interconnection
Procedures
[[Page 27123]]
2.2 Comparability
2.3 Base Case Data
2.4 No Applicability to Transmission Service
Section 3. Interconnection Requests
3.1 Interconnection Requests
3.1.1 Study Deposits
3.1.2 Submission
3.2 Identification of Types of Interconnection Services
3.2.1 Energy Resource Interconnection Service
3.2.2 Network Resource Interconnection Service
3.3 Utilization of Surplus Interconnection Service
3.3.1 Surplus Interconnection Service Requests
3.4 Valid Interconnection Request
3.4.1 Cluster Request Window
3.4.2 Initiating an Interconnection Request
3.4.3 Acknowledgment of Interconnection Request
3.4.4 Deficiencies in Interconnection Request
3.4.5 Customer Engagement Window
3.4.6 Cluster Study Scoping Meeting
3.5. OASIS Posting
3.5.1 OASIS Posting
3.5.2 Requirement to Post Interconnection Study Metrics
3.6 Coordination with Affected Systems
3.7 Withdrawal
3.8 Identification of Contingent Facilities
Section 4. Interconnection Request Evaluation Process
4.1 Queue Position
4.1.1 Assignment of Queue Position
4.1.2 Higher Queue Position
4.2. General Study Process
4.2.1 Cost Allocation for Interconnection Facilities and Network
Upgrades
4.3 Transferability of Queue Position
4.4 Modifications
4.4.6 Technological Change Procedures
Section 5. Procedures for Interconnection Requests Submitted Prior
to Effective Date of the Cluster Study Revisions
5.1 Procedures for Transitioning to the Cluster Study Process
5.2 New Transmission Provider
Section 6. Interconnection Information Access
6.1 Publicly Posted Interconnection Information
Section 7. Cluster Study
7.1 Cluster Study Agreement
7.2 Execution of Cluster Study Agreement
7.3 Scope of Cluster Study
7.4 Cluster Study Procedures
7.5 Cluster Study Restudies
Section 8. Interconnection Facilities Study
8.1 Interconnection Facilities Study Agreement
8.2 Scope of Interconnection Facilities Study
8.3 Interconnection Facilities Study Procedures
8.4 Meeting With Transmission Provider
8.5 Restudy
Section 9. Affected System Study
9.1 Applicability
9.2 Response to Initial Notification
9.3 Affected System Queue Position
9.4 Affected System Study Agreement/Multiparty Affected System
Study Agreement
9.5 Execution of Affected System Study Agreement/Multiparty
Affected System Study Agreement
9.6 Scope of Affected System Study
9.7 Affected System Study Procedures
9.8 Meeting With Transmission Provider
9.9 Affected System Cost Allocation
9.10 Tender of Affected Systems Facilities Construction
Agreement/Multiparty Affected System Facilities Construction
Agreement
9.11 Restudy
Section 10. Optional Interconnection Study
10.1 Optional Interconnection Study Agreement
10.2 Scope of Optional Interconnection Study
10.3 Optional Interconnection Study Procedures
Section 11. Standard Large Generator Interconnection Agreement
(LGIA)
11.1 Tender
11.2 Negotiation
11.2.1 Delay in LGIA Execution, or Filing Unexecuted, To Await
Affected System Study Report
11.3 Execution and Filing
11.4 Commencement of Interconnection Activities
Section 12. Construction of Transmission Provider's Interconnection
Facilities and Network Upgrades
12.1 Schedule
12.2 Construction Sequencing
12.2.1 General
12.2.2 Advance Construction of Network Upgrades That are an
Obligation of an Entity Other Than Interconnection Customer
12.2.3 Advancing Construction of Network Upgrades that are Part
of an Expansion Plan of [the] Transmission Provider
12.2.4 Amended Interconnection Cluster Study Report
Section 13. Miscellaneous
13.1 Confidentiality
13.1.1 Scope
13.1.2 Release of Confidential Information
13.1.3 Rights
13.1.4 No Warranties
13.1.5 Standard of Care
13.1.6 Order of Disclosure
13.1.7 Remedies
13.1.8 Disclosure to FERC, its Staff, or a State
13.2 Delegation of Responsibility
13.3 Obligation for Study Costs
13.4 Third Parties Conducting Studies
13.5 Disputes
13.5.1 Submission
13.5.2 External Arbitration Procedures
13.5.3 Arbitration Decisions
13.5.4 Costs
13.5.5 Non-Binding Dispute Resolution Procedures
13.6 Local Furnishing Bonds
13.6.1 Transmission Providers That Own Facilities Financed by
Local Furnishing Bonds
13.6.2 Alternative Procedures for Requesting Interconnection
Service
13.7 Engineering & Procurement (`E&P') Agreement
Appendix 1--Interconnection Request for a Large Generating Facility
Appendix 2--Cluster Study Agreement
Appendix 3--Interconnection Facilities Study Agreement
Appendix 4--Optional Interconnection Study Agreement
Appendix 5--Standard Large Generator Interconnection Agreement
Appendix 6--Interconnection Procedures for a Wind Generating Plant
Appendix 7--Transitional Cluster Study Agreement
Appendix 8--Transitional Serial Interconnection Facilities Study
Agreement
Appendix 9--Two-Party Affected System Study Agreement
Appendix 10--Multiparty Affected System Study Agreement
Appendix 11--Two-Party Affected System Facilities Construction
Agreement
Appendix 12--Multiparty Affected System Facilities Construction
Agreement
Section 1. Definitions
Adverse System Impact shall mean the negative effects due to
technical or operational limits on conductors or equipment being
exceeded that may compromise the safety and reliability of the electric
system.
Affected System shall mean an electric system other than
Transmission Provider's Transmission System that may be affected by the
proposed interconnection.
Affected System Facilities Construction Agreement shall mean the
agreement contained in Appendix 11 to this LGIP that is made between
Transmission Provider and Affected System Interconnection Customer to
facilitate the construction of and to set forth cost responsibility for
necessary Affected System Network Upgrades on Transmission Provider's
Transmission System.
Affected System Interconnection Customer shall mean any entity that
submits an interconnection request for a generating facility to a
transmission system other than Transmission Provider's Transmission
System that may cause the need for Affected System Network Upgrades on
[the] Transmission Provider's Transmission System.
Affected System Network Upgrades shall mean the additions,
modifications, and upgrades to Transmission Provider's Transmission
System required to accommodate Affected System Interconnection
Customer's proposed interconnection to a transmission system other than
Transmission Provider's Transmission System.
Affected System Operator shall mean the entity that operates an
Affected System.
Affected System Queue Position shall mean the queue position of an
Affected System Interconnection Customer in Transmission Provider's
interconnection queue relative to Transmission Provider's
Interconnection Customers' Queue Positions.
Affected System Study shall mean the evaluation of Affected System
Interconnection Customers' proposed interconnection(s) to a
transmission system other than Transmission Provider's Transmission
System that have an impact on Transmission Provider's Transmission
System, as described in Section 9 of this LGIP.
[[Page 27124]]
Affected System Study Agreement shall mean the agreement contained
in Appendix 9 to this LGIP that is made between Transmission Provider
and Affected System Interconnection Customer to conduct an Affected
System Study pursuant to Section 9 of this LGIP.
Affected System Study Report shall mean the report issued following
completion of an Affected System Study pursuant to Section 9.[6]7 of
this LGIP.
Affiliate shall mean, with respect to a corporation, partnership or
other entity, each such other corporation, partnership or other entity
that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
corporation, partnership or other entity.
Ancillary Services shall mean those services that are necessary to
support the transmission of capacity and energy from resources to loads
while maintaining reliable operation of [the] Transmission Provider's
Transmission System in accordance with Good Utility Practice.
Applicable Laws and Regulations shall mean all duly promulgated
applicable federal, state and local laws, regulations, rules,
ordinances, codes, decrees, judgments, directives, or judicial or
administrative orders, permits and other duly authorized actions of any
Governmental Authority.
Applicable Reliability Standards shall mean the requirements and
guidelines of the Electric Reliability Organization and the Balancing
Authority Area of the Transmission System to which the Generating
Facility is directly interconnected.
Balancing Authority shall mean an entity that integrates resource
plans ahead of time, maintains demand and resource balance within a
Balancing Authority Area, and supports interconnection frequency in
real time.
Balancing Authority Area shall mean the collection of generation,
transmission, and loads within the metered boundaries of the Balancing
Authority. The Balancing Authority maintains load-resource balance
within this area.
Base Case shall mean the base case power flow, short circuit, and
stability data bases used for the Interconnection Studies by
Transmission Provider or Interconnection Customer.
Breach shall mean the failure of a Party to perform or observe any
material term or condition of the Standard Large Generator
Interconnection Agreement.
Breaching Party shall mean a Party that is in Breach of the
Standard Large Generator Interconnection Agreement.
Business Day shall mean Monday through Friday, excluding Federal
Holidays.
Calendar Day shall mean any day including Saturday, Sunday or a
Federal Holiday.
Cluster shall mean a group of one or more Interconnection Requests
that are studied together for the purpose of conducting a Cluster
Study.
Cluster Request Window shall mean the time period set forth in
Section 3.4.1 of this LGIP.
Cluster Restudy shall mean a restudy of a Cluster Study conducted
pursuant to Section 7.5 of this LGIP.
Cluster Restudy Report shall mean the report issued following
completion of a Cluster Restudy pursuant to Section 7.5 of this LGIP.
Cluster Restudy Report Meeting shall mean the meeting held to
discuss the results of a Cluster Restudy pursuant to Section 7.5 of
this LGIP.
[Cluster Restudy Report shall mean the report issued following
completion of a Cluster Restudy pursuant to Section 7.5 of this LGIP.]
Cluster Study shall mean the evaluation of one or more
Interconnection Requests within a Cluster as described in Section 7 of
this LGIP.
Cluster Study Agreement shall mean the agreement contained in
Appendix 2 to this LGIP for conducting the Cluster Study.
Cluster Study Process shall mean the following processes, conducted
in sequence: the Cluster Request Window; the Customer Engagement Window
and Scoping Meetings therein; the Cluster Study; any needed Cluster
Restudies; and the Interconnection Facilities Study.
Cluster Study Report shall mean the report issued following
completion of a Cluster Study pursuant to Section 7 of this LGIP.
Cluster Study Report Meeting shall mean the meeting held to discuss
the results of a Cluster Study pursuant to Section 7 of this LGIP.
Clustering shall mean the process whereby one or more
Interconnection Requests are studied together, instead of serially, as
described in Section 7 of this LGIP.
Commercial Operation shall mean the status of a Generating Facility
that has commenced generating electricity for sale, excluding
electricity generated during Trial Operation.
Commercial Operation Date of a unit shall mean the date on which
the Generating Facility commences Commercial Operation as agreed to by
the Parties pursuant to Appendix E to the Standard Large Generator
Interconnection Agreement.
Commercial Readiness Deposit shall mean a deposit paid as set forth
in Sections 3.4.2, 7.5, and 8.1 of this LGIP.
Confidential Information shall mean any confidential, proprietary
or trade secret information of a plan, specification, pattern,
procedure, design, device, list, concept, policy or compilation
relating to the present or planned business of a Party, which is
designated as confidential by the Party supplying the information,
whether conveyed orally, electronically, in writing, through
inspection, or otherwise.
Contingent Facilities shall mean those unbuilt Interconnection
Facilities and Network Upgrades upon which the Interconnection
Request's costs, timing, and study findings are dependent, and if
delayed or not built, could cause a need for restudies of the
Interconnection Request or a reassessment of the Interconnection
Facilities and/or Network Upgrades and/or costs and timing.
Customer Engagement Window shall mean the time period set forth in
Section 3.4.5 of this LGIP.
Default shall mean the failure of a Breaching Party to cure its
Breach in accordance with Article 17 of the Standard Large Generator
Interconnection Agreement.
Dispute Resolution shall mean the procedure for resolution of a
dispute between the Parties in which they will first attempt to resolve
the dispute on an informal basis.
Distribution System shall mean [the] Transmission Provider's
facilities and equipment used to transmit electricity to ultimate usage
points such as homes and industries directly from nearby generators or
from interchanges with higher voltage transmission networks which
transport bulk power over longer distances. The voltage levels at which
distribution systems operate differ among areas.
Distribution Upgrades shall mean the additions, modifications, and
upgrades to [the] Transmission Provider's Distribution System at or
beyond the Point of Interconnection to facilitate interconnection of
the Generating Facility and render the transmission service necessary
to effect Interconnection Customer's wholesale sale of electricity in
interstate commerce. Distribution Upgrades do not include
Interconnection Facilities.
Effective Date shall mean the date on which the Standard Large
Generator Interconnection Agreement becomes effective upon execution by
the Parties subject to acceptance by FERC, or if filed unexecuted, upon
the date specified by FERC.
Electric Reliability Organization shall mean the North American
Electric Reliability Corporation (NERC) or its successor organization.
Emergency Condition shall mean a condition or situation: (1) that
in the judgment of the Party making the claim is imminently likely to
endanger life or property; or (2) that, in the case of a Transmission
Provider, is imminently likely (as determined in a non-discriminatory
manner) to cause a material adverse effect on the security of, or
damage to Transmission Provider's Transmission System, Transmission
Provider's Interconnection Facilities or the electric systems of others
to which [the] Transmission Provider's Transmission System is directly
connected; or (3) that, in the case of Interconnection Customer, is
imminently likely (as determined in a non-discriminatory manner) to
cause a material adverse effect on the security of, or damage to, the
Generating Facility or Interconnection Customer's Interconnection
Facilities. System restoration and black start shall be considered
Emergency Conditions; provided that Interconnection Customer is not
obligated by the Standard Large Generator Interconnection Agreement to
possess black start capability.
Energy Resource Interconnection Service shall mean an
Interconnection Service that allows [the] Interconnection Customer to
connect its Generating Facility to [the] Transmission Provider's
Transmission System to be eligible to deliver the Generating Facility's
electric output using the existing firm or nonfirm capacity of [the]
Transmission Provider's Transmission System on an as available basis.
Energy Resource Interconnection Service in and of itself does not
convey transmission service.
[[Page 27125]]
Engineering & Procurement (E&P) Agreement shall mean an agreement
that authorizes [the] Transmission Provider to begin engineering and
procurement of long lead-time items necessary for the establishment of
the interconnection in order to advance the implementation of the
Interconnection Request.
Environmental Law shall mean Applicable Laws or Regulations
relating to pollution or protection of the environment or natural
resources.
Federal Power Act shall mean the Federal Power Act, as amended, 16
U.S.C. Sec. Sec. 791a et seq.
FERC shall mean the Federal Energy Regulatory Commission
(Commission) or its successor.
Force Majeure shall mean any act of God, labor disturbance, act of
the public enemy, war, insurrection, riot, fire, storm or flood,
explosion, breakage or accident to machinery or equipment, any order,
regulation or restriction imposed by governmental, military or lawfully
established civilian authorities, or any other cause beyond a Party's
control. A Force Majeure event does not include acts of negligence or
intentional wrongdoing by the Party claiming Force Majeure.
Generating Facility shall mean Interconnection Customer's device(s)
for the production and/or storage for later injection of electricity
identified in the Interconnection Request, but shall not include
Interconnection Customer's Interconnection Facilities.
Generating Facility Capacity shall mean the net capacity of the
Generating Facility or the aggregate net capacity of the Generating
Facility where it includes more than one device for the production and/
or storage for later injection of electricity.
Good Utility Practice shall mean any of the practices, methods and
acts engaged in or approved by a significant portion of the electric
industry during the relevant time period, or any of the practices,
methods and acts which, in the exercise of reasonable judgment in light
of the facts known at the time the decision was made, could have been
expected to accomplish the desired result at a reasonable cost
consistent with good business practices, reliability, safety and
expedition. Good Utility Practice is not intended to be limited to the
optimum practice, method, or act to the exclusion of all others, but
rather to be acceptable practices, methods, or acts generally accepted
in the region.
Governmental Authority shall mean any federal, state, local or
other governmental regulatory or administrative agency, court,
commission, department, board, or other governmental subdivision,
legislature, rulemaking board, tribunal, or other governmental
authority having jurisdiction over the Parties, their respective
facilities, or the respective services they provide, and exercising or
entitled to exercise any administrative, executive, police, or taxing
authority or power; provided, however, that such term does not include
Interconnection Customer, Transmission Provider, or any Affiliate
thereof.
Hazardous Substances shall mean any chemicals, materials or
substances defined as or included in the definition of ``hazardous
substances,'' ``hazardous wastes,'' ``hazardous materials,''
``hazardous constituents,'' ``restricted hazardous materials,''
``extremely hazardous substances,'' ``toxic substances,'' ``radioactive
substances,'' ``contaminants,'' ``pollutants,'' ``toxic pollutants'' or
words of similar meaning and regulatory effect under any applicable
Environmental Law, or any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any applicable
Environmental Law.
Initial Synchronization Date shall mean the date upon which the
Generating Facility is initially synchronized and upon which Trial
Operation begins.
In-Service Date shall mean the date upon which [the]
Interconnection Customer reasonably expects it will be ready to begin
use of [the] Transmission Provider's Interconnection Facilities to
obtain back feed power.
Interconnection Customer shall mean any entity, including [the]
Transmission Provider, Transmission Owner or any of the Affiliates or
subsidiaries of either, that proposes to interconnect its Generating
Facility with [the] Transmission Provider's Transmission System.
Interconnection Customer's Interconnection Facilities shall mean
all facilities and equipment, as identified in Appendix A of the
Standard Large Generator Interconnection Agreement, that are located
between the Generating Facility and the Point of Change of Ownership,
including any modification, addition, or upgrades to such facilities
and equipment necessary to physically and electrically interconnect the
Generating Facility to Transmission Provider's Transmission System.
Interconnection Customer's Interconnection Facilities are sole use
facilities.
Interconnection Facilities shall mean Transmission Provider's
Interconnection Facilities and Interconnection Customer's
Interconnection Facilities. Collectively, Interconnection Facilities
include all facilities and equipment between the Generating Facility
and the Point of Interconnection, including any modification, additions
or upgrades that are necessary to physically and electrically
interconnect the Generating Facility to Transmission Provider's
Transmission System. Interconnection Facilities are sole use facilities
and shall not include Distribution Upgrades, Stand Alone Network
Upgrades or Network Upgrades.
Interconnection Facilities Study shall mean a study conducted by
Transmission Provider or a third party consultant for Interconnection
Customer to determine a list of facilities (including Transmission
Provider's Interconnection Facilities and Network Upgrades as
identified in the Cluster Study), the cost of those facilities, and the
time required to interconnect the Generating Facility with Transmission
Provider's Transmission System. The scope of the study is defined in
Section 8 of this LGIP.
Interconnection Facilities Study Agreement shall mean the form of
agreement contained in Appendix 3 of this LGIP for conducting the
Interconnection Facilities Study.
Interconnection Facilities Study Report shall mean the report
issued following completion of an Interconnection Facilities Study
pursuant to Section 8 of this LGIP.
Interconnection Request shall mean an Interconnection Customer's
request, in the form of Appendix 1 to this LGIP, in accordance with the
Tariff, to interconnect a new Generating Facility, or to increase the
capacity of, or make a Material Modification to the operating
characteristics of, an existing Generating Facility that is
interconnected with [the] Transmission Provider's Transmission System.
Interconnection Service shall mean the service provided by [the]
Transmission Provider associated with interconnecting [the]
Interconnection Customer's Generating Facility to [the] Transmission
Provider's Transmission System and enabling it to receive electric
energy and capacity from the Generating Facility at the Point of
Interconnection, pursuant to the terms of the Standard Large Generator
Interconnection Agreement and, if applicable, [the] Transmission
Provider's Tariff.
Interconnection Study shall mean any of the following studies: the
Cluster Study, the Cluster Restudy, the Surplus Interconnection Service
[System Impact] Study, [and] the Interconnection Facilities Study, the
Affected System Study, Optional Interconnection Study, and Material
Modification assessment, described in this LGIP.
IRS shall mean the Internal Revenue Service.
Joint Operating Committee shall be a group made up of
representatives from Interconnection Customers and [the] Transmission
Provider to coordinate operating and technical considerations of
Interconnection Service.
Large Generating Facility shall mean a Generating Facility having a
Generating Facility Capacity of more than 20 MW.
LGIA Deposit shall mean the deposit Interconnection Customer
submits when returning the executed LGIA, or within ten (10) Business
Days of requesting that the LGIA be filed unexecuted at the Commission,
in accordance with Section 11.3 of this LGIP.
Loss shall mean any and all losses relating to injury to or death
of any person or damage to property, demand, suits, recoveries, costs
and expenses, court costs, attorney fees, and all other obligations by
or to third parties, arising out of or resulting from the other Party's
performance, or non-performance of its obligations under the Standard
Large Generator Interconnection Agreement on behalf of the Indemnifying
Party, except in cases of gross negligence or intentional wrongdoing by
the Indemnifying Party.
Material Modification shall mean those modifications that have a
material impact on the cost or timing of any Interconnection Request
with an equal or later Queue Position.
Metering Equipment shall mean all metering equipment installed or
to be installed at the Generating Facility pursuant to the Standard
Large Generator Interconnection Agreement at the metering points,
including but not limited to
[[Page 27126]]
instrument transformers, MWh-meters, data acquisition equipment,
transducers, remote terminal unit, communications equipment, phone
lines, and fiber optics.
Multiparty Affected System Facilities Construction Agreement shall
mean the agreement contained in Appendix 12 to this LGIP that is made
among Transmission Provider and multiple Affected System
Interconnection Customers to facilitate the construction of and to set
forth cost responsibility for necessary Affected System Network
Upgrades on Transmission Provider's Transmission System.
Multiparty Affected System Study Agreement shall mean the agreement
contained in Appendix 10 to this LGIP that is made among Transmission
Provider and multiple Affected System Interconnection Customers to
conduct an Affected System Study pursuant to Section 9 of this LGIP.
Network Resource shall mean any designated generating resource
owned, purchased, or leased by a Network Customer under the Network
Integration Transmission Service Tariff. Network Resources do not
include any resource, or any portion thereof, that is committed for
sale to third parties or otherwise cannot be called upon to meet the
Network Customer's Network Load on a non-interruptible basis.
Network Resource Interconnection Service shall mean an
Interconnection Service that allows [the] Interconnection Customer to
integrate its Large Generating Facility with [the] Transmission
Provider's Transmission System (1) in a manner comparable to that in
which [the] Transmission Provider integrates its generating facilities
to serve native load customers; or (2) in an RTO or ISO with market
based congestion management, in the same manner as Network Resources.
Network Resource Interconnection Service in and of itself does not
convey transmission service.
Network Upgrades shall mean the additions, modifications, and
upgrades to [the] Transmission Provider's Transmission System required
at or beyond the point at which the Interconnection Facilities connect
to [the] Transmission Provider's Transmission System to accommodate the
interconnection of the Large Generating Facility to [the] Transmission
Provider's Transmission System.
Notice of Dispute shall mean a written notice of a dispute or claim
that arises out of or in connection with the Standard Large Generator
Interconnection Agreement or its performance.
Optional Interconnection Study shall mean a sensitivity analysis
based on assumptions specified by [the] Interconnection Customer in the
Optional Interconnection Study Agreement.
Optional Interconnection Study Agreement shall mean the form of
agreement contained in Appendix 4 of this LGIP for conducting the
Optional Interconnection Study.
Party or Parties shall mean Transmission Provider, Transmission
Owner, Interconnection Customer or any combination of the above.
Permissible Technological Advancement {Transmission Provider
inserts definition here{time} .
Point of Change of Ownership shall mean the point, as set forth in
Appendix A to the Standard Large Generator Interconnection Agreement,
where [the] Interconnection Customer's Interconnection Facilities
connect to [the] Transmission Provider's Interconnection Facilities.
Point of Interconnection shall mean the point, as set forth in
Appendix A to the Standard Large Generator Interconnection Agreement,
where the Interconnection Facilities connect to [the] Transmission
Provider's Transmission System.
Proportional Impact Method shall mean a technical analysis
conducted by Transmission Provider to determine the degree to which
each Generating Facility in the Cluster Study contributes to the need
for a specific System Network Upgrade.
Provisional Interconnection Service shall mean Interconnection
Service provided by Transmission Provider associated with
interconnecting [the] Interconnection Customer's Generating Facility to
Transmission Provider's Transmission System and enabling that
Transmission System to receive electric energy and capacity from the
Generating Facility at the Point of Interconnection, pursuant to the
terms of the Provisional Large Generator Interconnection Agreement and,
if applicable, the Tariff.
Provisional Large Generator Interconnection Agreement shall mean
the interconnection agreement for Provisional Interconnection Service
established between Transmission Provider and/or [the] Transmission
Owner and [the] Interconnection Customer. This agreement shall take the
form of the Standard Large Generator Interconnection Agreement,
modified for provisional purposes.
Queue Position shall mean the order of a valid Interconnection
Request, relative to all other pending valid Interconnection Requests,
established pursuant to Section 4.1 of this LGIP.
Reasonable Efforts shall mean, with respect to an action required
to be attempted or taken by a Party under the Standard Large Generator
Interconnection Agreement, efforts that are timely and consistent with
Good Utility Practice and are otherwise substantially equivalent to
those a Party would use to protect its own interests.
Scoping Meeting shall mean the meeting between representatives of
Interconnection Customer(s) and Transmission Provider conducted for the
purpose of discussing the proposed Interconnection Request and any
alternative interconnection options, exchanging information including
any transmission data and earlier study evaluations that would be
reasonably expected to impact such interconnection options, refining
information and models provided by Interconnection Customer(s),
discussing the Cluster Study materials posted to OASIS pursuant to
Section 3.5 of this LGIP, and analyzing such information.
Site Control shall mean the exclusive land right to develop,
construct, operate, and maintain the Generating Facility over the term
of expected operation of the Generating Facility. Site Control may be
demonstrated by documentation establishing: (1) ownership of, a
leasehold interest in, or a right to develop a site of sufficient size
to construct and operate the Generating Facility; (2) an option to
purchase or acquire a leasehold site of sufficient size to construct
and operate the Generating Facility; or (3) any other documentation
that clearly demonstrates the right of Interconnection Customer to
exclusively occupy a site of sufficient size to construct and operate
the Generating Facility. Transmission Provider will maintain acreage
requirements for each Generating Facility type on its OASIS or public
website.
Small Generating Facility shall mean a Generating Facility that has
a Generating Facility Capacity of no more than 20 MW.
Stand Alone Network Upgrades shall mean Network Upgrades that are
not part of an Affected System that [an] Interconnection Customer may
construct without affecting day-to-day operations of the Transmission
System during their construction [and the following conditions are met:
(1) a Substation Network Upgrade must only be required for a single
Interconnection Customer in the Cluster and no other Interconnection
Customer in that Cluster is required to interconnect to the same
Substation Network Upgrades, and (2) a System Network Upgrade must only
be required for a single Interconnection Customer in the Cluster, as
indicated under the Transmission Provider's Proportional Impact
Method]. Both Transmission Provider and Interconnection Customer must
agree as to what constitutes Stand Alone Network Upgrades and identify
them in Appendix A to the Standard Large Generator Interconnection
Agreement. If Transmission Provider and Interconnection Customer
disagree about whether a particular Network Upgrade is a Stand Alone
Network Upgrade, Transmission Provider must provide Interconnection
Customer a written technical explanation outlining why Transmission
Provider does not consider the Network Upgrade to be a Stand Alone
Network Upgrade within fifteen (15) Business [d]Days of its
determination.
Standard Large Generator Interconnection Agreement (LGIA) shall
mean the form of interconnection agreement applicable to an
Interconnection Request pertaining to a Large Generating Facility that
is included in [the] Transmission Provider's Tariff.
Standard Large Generator Interconnection Procedures (LGIP) shall
mean the interconnection procedures applicable to an Interconnection
Request pertaining to a Large Generating Facility that are included in
[the] Transmission Provider's Tariff.
Substation Network Upgrades shall mean Network Upgrades that are
required at the substation located at the Point of Interconnection.
Surplus Interconnection Service shall mean any unneeded portion of
Interconnection Service established in a Standard Large Generator
Interconnection Agreement, such that if Surplus Interconnection Service
is utilized, the total amount of Interconnection Service at the Point
of Interconnection would remain the same.
System Network Upgrades shall mean Network Upgrades that are
required beyond the substation located at the Point of Interconnection.
[[Page 27127]]
System Protection Facilities shall mean the equipment, including
necessary protection signal communications equipment, required to
protect (1) [the] Transmission Provider's Transmission System from
faults or other electrical disturbances occurring at the Generating
Facility and (2) the Generating Facility from faults or other
electrical system disturbances occurring on [the] Transmission
Provider's Transmission System or on other delivery systems or other
generating systems to which [the] Transmission Provider's Transmission
System is directly connected.
Tariff shall mean [the] Transmission Provider's Tariff through
which open access transmission service and Interconnection Service are
offered, as filed with FERC, and as amended or supplemented from time
to time, or any successor tariff.
Transitional Cluster Study shall mean an Interconnection Study
evaluating a Cluster of Interconnection Requests during the transition
to the Cluster Study Process, as set forth in Section 5.1.1.2 of this
LGIP.
Transitional Cluster Study Agreement shall mean the agreement
contained in Appendix 7 to this LGIP that is made between Transmission
Provider and Interconnection Customer to conduct a Transitional Cluster
Study pursuant to Section 5.1.1.2 of this LGIP.
Transitional Cluster Study Report shall mean the report issued
following completion of a Transitional Cluster Study pursuant to
Section 5.1.1.2 of this LGIP.
Transitional Serial Interconnection Facilities Study shall mean an
Interconnection Facilities Study evaluating an Interconnection Request
on a serial basis during the transition to the Cluster Study Process,
as set forth in Section 5.1.1.1 of this LGIP.
Transitional Serial Interconnection Facilities Study Agreement
shall mean the agreement contained in Appendix 8 to this LGIP that is
made between Transmission Provider and Interconnection Customer to
conduct a Transitional Serial Interconnection Facilities Study pursuant
to Section 5.1.1.1 of this LGIP.
Transitional Serial Interconnection Facilities Study Report shall
mean the report issued following completion of a Transitional Serial
Interconnection Facilities Study pursuant to Section 5.1.1.1 of this
LGIP.
Transitional Withdrawal Penalty shall mean the penalty assessed by
Transmission Provider to Interconnection Customer that has entered the
Transitional Cluster Study or Transitional Serial Interconnection
Facilities Study and chooses to withdraw or is deemed withdrawn from
Transmission Provider's interconnection queue or whose Generating
Facility does not otherwise reach Commercial Operation. The calculation
of the Transitional Withdrawal Penalty is set forth in Sections 5.1.1.1
and 5.1.1.2 of this LGIP.
Transmission Owner shall mean an entity that owns, leases or
otherwise possesses an interest in the portion of the Transmission
System at the Point of Interconnection and may be a Party to the
Standard Large Generator Interconnection Agreement to the extent
necessary.
Transmission Provider shall mean the public utility (or its
designated agent) that owns, controls, or operates transmission or
distribution facilities used for the transmission of electricity in
interstate commerce and provides transmission service under the Tariff.
The term Transmission Provider should be read to include the
Transmission Owner when the Transmission Owner is separate from [the]
Transmission Provider.
Transmission Provider's Interconnection Facilities shall mean all
facilities and equipment owned, controlled, or operated by Transmission
Provider from the Point of Change of Ownership to the Point of
Interconnection as identified in Appendix A to the Standard Large
Generator Interconnection Agreement, including any modifications,
additions or upgrades to such facilities and equipment. Transmission
Provider's Interconnection Facilities are sole use facilities and shall
not include Distribution Upgrades, Stand Alone Network Upgrades or
Network Upgrades.
Transmission System shall mean the facilities owned, controlled or
operated by [the] Transmission Provider or Transmission Owner that are
used to provide transmission service under the Tariff.
Trial Operation shall mean the period during which Interconnection
Customer is engaged in on-site test operations and commissioning of the
Generating Facility prior to Commercial Operation.
Withdrawal Penalty shall mean the penalty assessed by Transmission
Provider to an Interconnection Customer that chooses to withdraw or is
deemed withdrawn from Transmission Provider's interconnection queue or
whose Generating Facility does not otherwise reach Commercial
Operation. The calculation of the Withdrawal Penalty is set forth in
Section 3.7.1 of this LGIP.
Section 2. Scope and Application
2.1 Application of Standard Large Generator Interconnection Procedures
Sections 2 through 13 of this LGIP apply to processing an
Interconnection Request pertaining to a Large Generating Facility.
2.2 Comparability
Transmission Provider shall receive, process and analyze all
Interconnection Requests in a timely manner as set forth in this LGIP.
Transmission Provider shall process and analyze Interconnection
Requests from all Interconnection Customers comparably, regardless of
whether the Generating Facilities are owned by Transmission Provider,
its subsidiaries or Affiliates or others.
2.3 Base Case Data
Transmission Provider shall maintain base power flow, short circuit
and stability databases, including all underlying assumptions, and
contingency list on either its OASIS site or a password-protected
website, subject to confidentiality provisions in LGIP Section 13.1. In
addition, Transmission Provider shall maintain network models and
underlying assumptions on either its OASIS site or a password-protected
website. Such network models and underlying assumptions should
reasonably represent those used during the most recent
[i]Interconnection [s]Study and be representative of current system
conditions. If Transmission Provider posts this information on a
password-protected website, a link to the information must be provided
on Transmission Provider's OASIS site. Transmission Provider is
permitted to require that Interconnection Customers, OASIS site users
and password-protected website users sign a confidentiality agreement
before the release of commercially sensitive information or Critical
Energy Infrastructure Information in the Base Case data. Such databases
and lists, hereinafter referred to as Base Cases, shall include all (1)
generation projects and (2) transmission projects, including merchant
transmission projects that are proposed for the Transmission System for
which a transmission expansion plan has been submitted and approved by
the applicable authority.
2.4 No Applicability to Transmission Service
Nothing in this LGIP shall constitute a request for transmission
service or confer upon an Interconnection Customer any right to receive
transmission service.
Section 3. Interconnection Requests
3.1 Interconnection Requests
3.1.1 Study Deposits
3.1.1.1 Study Deposit
Interconnection Customer shall submit to Transmission Provider,
during a Cluster Request Window, an Interconnection Request in the form
of Appendix 1 to this LGIP, a[n] non-refundable application fee of
$5,000, and a refundable study deposit of:
(a) $35,000 plus $1,000 per MW for Interconnection Requests [>= 20
MW] < 80 MW; or
(b) $150,000 for Interconnection Requests >= 80 MW < 200 MW; or
(c) $250,000 for Interconnection Requests >= 200 MW.
Transmission Provider shall apply the study deposit toward the cost
of the Cluster Study Process.
3.1.2 Submission
Interconnection Customer shall submit a separate Interconnection
Request for each site. Where multiple Generating Facilities share a
site, Interconnection Customer(s) may submit separate Interconnection
Requests or a single Interconnection Request. An Interconnection
Request to evaluate one site at two different voltage levels shall be
treated as two Interconnection Requests.
At Interconnection Customer's option, Transmission Provider and
Interconnection Customer will identify alternative Point(s) of
Interconnection and configurations at a Scoping Meeting within the
Customer Engagement Window to evaluate in this process and attempt to
eliminate alternatives in a reasonable fashion given resources and
information available. Interconnection Customer will select the
definitive Point of Interconnection to be studied no later than the
execution of the Cluster Study Agreement. For purposes of clustering
Interconnection Requests, Transmission Provider may propose changes to
the requested Point of Interconnection to
[[Page 27128]]
facilitate efficient interconnection of Interconnection Customers at
common Point(s) of Interconnection. Transmission Provider shall notify
Interconnection Customers in writing of any intended changes to the
requested Point of Interconnection within the Customer Engagement
Window, and the Point of Interconnection shall only change upon mutual
agreement.
Transmission Provider shall have a process in place to consider
requests for Interconnection Service below the Generating Facility
Capacity. These requests for Interconnection Service shall be studied
at the level of Interconnection Service requested for purposes of
Interconnection Facilities, Network Upgrades, and associated costs, but
may be subject to other studies at the full Generating Facility
Capacity to ensure safety and reliability of the system, with the study
costs borne by Interconnection Customer. If after the additional
studies are complete, Transmission Provider determines that additional
Network Upgrades are necessary, then Transmission Provider must: (1)
specify which additional Network Upgrade costs are based on which
studies; and (2) provide a detailed explanation of why the additional
Network Upgrades are necessary. Any Interconnection Facility and/or
Network Upgrade costs required for safety and reliability also would be
borne by Interconnection Customer. Interconnection Customers may be
subject to additional control technologies as well as testing and
validation of those technologies consistent with Article 6 of the LGIA.
The necessary control technologies and protection systems shall be
established in Appendix C of that executed, or requested to be filed
unexecuted, LGIA.
Transmission Provider shall have a process in place to study
Generating Facilities that include at least one electric storage
resource using operating assumptions (i.e., whether the interconnecting
Generating Facility will or will not charge at peak load) that reflect
the proposed charging behavior of the Generating Facility as requested
by Interconnection Customer, unless Transmission Provider determines
that Good Utility Practice, including Applicable Reliability Standards,
otherwise requires the use of different operating assumptions. If
Transmission Provider finds Interconnection Customer's requested
operating assumptions conflict with Good Utility Practice, Transmission
Provider must provide Interconnection Customer an explanation in
writing of why the submitted operating assumptions are insufficient or
inappropriate by no later than thirty (30) Calendar Days before the end
of the Customer Engagement Window and allow Interconnection Customer to
revise and resubmit requested operating assumptions one time at least
ten (10) Calendar Days prior to the end of the Customer Engagement
Window. Transmission Provider shall study these requests for
Interconnection Service, with the study costs borne by Interconnection
Customer, using the submitted operating assumptions for purposes of
Interconnection Facilities, Network Upgrades, and associated costs.
These requests for Interconnection Service also may be subject to other
studies at the full Generating Facility Capacity to ensure safety and
reliability of the system, with the study costs borne by
Interconnection Customer. Interconnection Customer's Generating
Facility may be subject to additional control technologies as well as
testing and validation of such additional control technologies
consistent with Article 6 of the LGIA. The necessary control
technologies and protection systems shall be set forth in Appendix C of
[the] Interconnection Customer's LGIA.
3.2 Identification of Types of Interconnection Services
At the time the Interconnection Request is submitted,
Interconnection Customer must request either Energy Resource
Interconnection Service or Network Resource Interconnection Service, as
described; provided, however, any Interconnection Customer requesting
Network Resource Interconnection Service may also request that it be
concurrently studied for Energy Resource Interconnection Service, up to
the point when an Interconnection Facilities Study Agreement is
executed. Interconnection Customer may then elect to proceed with
Network Resource Interconnection Service or to proceed under a lower
level of interconnection service to the extent that only certain
upgrades will be completed.
3.2.1 Energy Resource Interconnection Service
3.2.1.1 The Product
Energy Resource Interconnection Service allows Interconnection
Customer to connect the Large Generating Facility to the Transmission
System and be eligible to deliver the Large Generating Facility's
output using the existing firm or non-firm capacity of the Transmission
System on an ``as available'' basis. Energy Resource Interconnection
Service does not in and of itself convey any right to deliver
electricity to any specific customer or Point of Delivery.
3.2.1.2 The Study
The study consists of short circuit/fault duty, steady state
(thermal and voltage) and stability analyses. The short circuit/fault
duty analysis would identify direct Interconnection Facilities required
and the Network Upgrades necessary to address short circuit issues
associated with the Interconnection Facilities. The stability and
steady state studies would identify necessary upgrades to allow full
output of the proposed Large Generating Facility, except for Generating
Facilities that include at least one electric storage resource that
request to use operating assumptions pursuant to Section 3.1.2, unless
[the] Transmission Provider determines that Good Utility Practice,
including Applicable Reliability Standards, otherwise requires the use
of different operating assumptions, and would also identify the maximum
allowed output, at the time the study is performed, of the
interconnecting Large Generating Facility without requiring additional
Network Upgrades.
3.2.2 Network Resource Interconnection Service
3.2.2.1 The Product
Transmission Provider must conduct the necessary studies and
construct the Network Upgrades needed to integrate the Large Generating
Facility (1) in a manner comparable to that in which Transmission
Provider integrates its generating facilities to serve native load
customers; or (2) in an ISO or RTO with market based congestion
management, in the same manner as Network Resources. Network Resource
Interconnection Service [A]allows Interconnection Customer's Large
Generating Facility to be designated as a Network Resource, up to the
Large Generating Facility's full output, on the same basis as existing
Network Resources interconnected to Transmission Provider's
Transmission System, and to be studied as a Network Resource on the
assumption that such a designation will occur.
3.2.2.2 The Study
The Interconnection Study for Network Resource Interconnection
Service shall assure that Interconnection Customer's Large Generating
Facility meets the requirements for Network Resource Interconnection
Service and as a general matter, that such Large Generating Facility's
interconnection is also studied with Transmission Provider's
Transmission System at peak load, under a variety of severely stressed
conditions, to determine whether, with the Large Generating Facility at
full output, except for Generating Facilities that include at least one
electric storage resource that request to use, and for which
Transmission Provider approves, operating assumptions pursuant to
Section 3.1.2, the aggregate of generation in the local area can be
delivered to the aggregate of load on Transmission Provider's
Transmission System, consistent with Transmission Provider's
reliability criteria and procedures. This approach assumes that some
portion of existing Network Resources are displaced by the output of
Interconnection Customer's Large Generating Facility. Network Resource
Interconnection Service in and of itself does not convey any right to
deliver electricity to any specific customer or Point of Delivery.
[The] Transmission Provider may also study the Transmission System
under non-peak load conditions. However, upon request by [the]
Interconnection Customer, [the] Transmission Provider must explain in
writing to [the] Interconnection Customer why the study of non-peak
load conditions is required for reliability purposes.
3.3 Utilization of Surplus Interconnection Service
Transmission Provider must provide a process that allows an
Interconnection Customer to utilize or transfer Surplus Interconnection
Service at an existing Point of Interconnection. The original
Interconnection Customer or one of its affiliates shall have priority
to utilize Surplus Interconnection Service. If the existing
Interconnection Customer or one of its affiliates does not exercise its
priority, then that service may be made available to other potential
Interconnection Customers.
[[Page 27129]]
3.3.1 Surplus Interconnection Service Requests
Surplus Interconnection Service requests may be made by the
existing Interconnection Customer or one of its affiliates or may be
submitted once Interconnection Customer has executed the LGIA or
requested that the LGIA be filed unexecuted. Surplus Interconnection
Service requests also may be made by another Interconnection Customer.
Transmission Provider shall provide a process for evaluating
Interconnection Requests for Surplus Interconnection Service. Studies
for Surplus Interconnection Service shall consist of reactive power,
short circuit/fault duty, stability analyses, and any other appropriate
studies. Steady-state (thermal/voltage) analyses may be performed as
necessary to ensure that all required reliability conditions are
studied. If the Surplus Interconnection Service was not studied under
off-peak conditions, off-peak steady state analyses shall be performed
to the required level necessary to demonstrate reliable operation of
the Surplus Interconnection Service. If the original system impact
study report or Cluster Study Report is not available for the Surplus
Interconnection Service, both off-peak and peak analysis may need to be
performed for the existing Generating Facility associated with the
request for Surplus Interconnection Service. The reactive power, short
circuit/fault duty, stability, and steady-state analyses for Surplus
Interconnection Service will identify any additional Interconnection
Facilities and/or Network Upgrades necessary.
Transmission Provider shall study Surplus Interconnection Service
requests for a Generating Facility that includes at least one electric
storage resource using operating assumptions (i.e., whether the
interconnecting Generating Facility will or will not charge at peak
load) that reflect the proposed charging behavior of the Generating
Facility as requested by Interconnection Customer, unless Transmission
Provider determines that Good Utility Practice, including Applicable
Reliability Standards, otherwise requires the use of different
operating assumptions.
3.4 Valid Interconnection Request
3.4.1 Cluster Request Window
Transmission Provider shall accept Interconnection Requests during
a forty-five (45) Calendar Day period (the Cluster Request Window). The
initial Cluster Request Window shall open for Interconnection Requests
beginning {Transmission Provider to provide number of Calendar
Days{time} after the conclusion of the transition process set out in
Section 5.1 of this LGIP and successive Cluster Request Windows shall
open annually every {Transmission Provider to provide Month and Day
(e.g., January 1){time} thereafter.
3.4.2 Initiating an Interconnection Request
An Interconnection Customer seeking to join a Cluster shall submit
its Interconnection Request to Transmission Provider within, and no
later than the close of, the Cluster Request Window. Interconnection
Requests submitted outside of the Cluster Request Window will not be
considered. To initiate an Interconnection Request, Interconnection
Customer must submit all of the following:
(i) [a]Applicable study deposit amount, pursuant to Section 3.1.1.1
of this LGIP,
(ii) [a]A completed application in the form of Appendix 1,
(iii) [d]Demonstration of no less than ninety percent (90%) Site
Control or (1) a signed affidavit from an officer of the company
indicating that Site Control is unobtainable due to regulatory
limitations as such term is defined by [the] Transmission Provider; and
(2) documentation sufficiently describing and explaining the source and
effects of such regulatory limitations, including a description of any
conditions that must be met to satisfy the regulatory limitations and
the anticipated time by which Interconnection Customer expects to
satisfy the regulatory requirements and (3) a deposit in lieu of Site
Control of $10,000 per MW, subject to a minimum of $500,000 and a
maximum of $2,000,000. Interconnection Requests from multiple
Interconnection Customers for multiple Generating Facilities that share
a site must include a contract or other agreement that allows for
shared land use[.],
(iv) Generating Facility Capacity (MW) (and requested
Interconnection Service level if the requested Interconnection Service
is less than the Generating Facility Capacity),
(v) If applicable, (1) the requested operating assumptions (i.e.,
whether the interconnecting Generating Facility will or will not charge
at peak load) to be used by Transmission Provider that reflect the
proposed charging behavior of the Generating Facility that includes at
least one electric storage resource, and (2) a description of any
control technologies (software and/or hardware) that will limit the
operation of the Generating Facility to the operating assumptions
submitted by Interconnection Customer[.],
(vi) A Commercial Readiness Deposit equal to two times the study
deposit described in Section 3.1.1.1 of this LGIP in the form of an
irrevocable letter of credit, [or] cash, a surety bond, or other form
of security that is reasonably acceptable to Transmission Provider.
This Commercial Readiness Deposit is refunded to Interconnection
Customer according to Section 3.7 of this LGIP,
(vii) A Point of Interconnection, and
(viii) Whether the Interconnection Request shall be studied for
Network Resource Interconnection Service or for Energy Resource
Interconnection Service, consistent with Section 3.2 of this LGIP.
An Interconnection Customer that submits a deposit in lieu of Site
Control due to demonstrated regulatory limitations must demonstrate
that it is taking identifiable steps to secure the necessary regulatory
approvals from the applicable federal, state, and/or tribal entities
before execution of the Cluster Study Agreement. Such deposit will be
held by Transmission Provider until Interconnection Customer provides
the required Site Control demonstration for its point in the Cluster
Study Process. Interconnection Customers facing qualifying regulatory
limitations must demonstrate one[-] hundred percent (100%) Site Control
within one[-] hundred eighty (180) Calendar Days of the effective date
of the LGIA.
Interconnection Customer shall promptly inform Transmission
Provider of any material change to Interconnection Customer's
demonstration of Site Control under Section 3.4.2(iii) of this LGIP. If
Transmission Provider determines, based on Interconnection Customer's
information, that Interconnection Customer no longer satisfies the Site
Control requirement, Transmission Provider shall give Interconnection
Customer ten (10) Business Days to demonstrate satisfaction with the
applicable requirement subject to Transmission Provider's approval.
Absent such, Transmission Provider shall deem the Interconnection
Request withdrawn pursuant to Section 3.7 of this LGIP.
The expected In-Service Date of the new Large Generating Facility
or increase in capacity of the existing Generating Facility shall be no
more than the process window for the regional expansion planning period
(or in the absence of a regional planning process, the process window
for Transmission Provider's expansion planning period) not to exceed
seven (7) years from the date the Interconnection Request is received
by Transmission Provider, unless Interconnection Customer demonstrates
that engineering, permitting and construction of the new Large
Generating Facility or increase in capacity of the existing Generating
Facility will take longer than the regional expansion planning period.
The In-Service Date may succeed the date the Interconnection Request is
received by Transmission Provider by a period up to ten (10) years, or
longer where Interconnection Customer and Transmission Provider agree,
such agreement not to be unreasonably withheld.
3.4.3 Acknowledgment of Interconnection Request
Transmission Provider shall acknowledge receipt of the
Interconnection Request within five (5) Business Days of receipt of the
request and attach a copy of the received Interconnection Request to
the acknowledgement.
3.4.4 Deficiencies in Interconnection Request
An Interconnection Request will not be considered to be a valid
request until all items in Section 3.4.2 of this LGIP have been
received by Transmission Provider during the Cluster Request Window. If
an Interconnection Request fails to meet the requirements set forth in
Section 3.4.2 of this LGIP, Transmission Provider shall notify
Interconnection Customer within five (5) Business Days of receipt of
the initial Interconnection Request of the reasons for such failure and
that the Interconnection Request does not constitute a valid request.
Interconnection Customer shall provide Transmission Provider the
additional requested information needed to constitute a valid request
within ten (10) Business Days after receipt of such notice but no later
than the close of the Cluster Request Window. At any time, if
Transmission Provider finds that the technical data provided by
Interconnection Customer is incomplete or contains errors,
Interconnection Customer and Transmission Provider shall work
[[Page 27130]]
expeditiously and in good faith to remedy such issues. In the event
that Interconnection Customer fails to comply with this Section 3.4.4
of this LGIP, Transmission Provider[s] shall deem the Interconnection
Request withdrawn (without the cure period provided under Section 3.7
of this LGIP), the application fee is forfeited to [the] Transmission
Provider, and the study deposit and Commercial Readiness Deposit shall
be returned to Interconnection Customer.
3.4.5 Customer Engagement Window
Upon the close of each Cluster Request Window, Transmission
Provider shall open a sixty (60) Calendar Day period (Customer
Engagement Window). During the Customer Engagement Window, Transmission
Provider shall hold a Scoping Meeting with all interested
Interconnection Customers. Notwithstanding the preceding requirements
and upon written consent of all Interconnection Customers within the
Cluster, Transmission Provider may shorten the Customer Engagement
Window and begin the Cluster Study. Within ten (10) Business Days of
the opening of the Customer Engagement Window, Transmission Provider
shall post on its OASIS a list of Interconnection Requests for that
Cluster. The list shall identify, for each anonymized Interconnection
Request: (1) the requested amount of Interconnection Service; (2) the
location by county and state; (3) the station or transmission line or
lines where the interconnection will be made; (4) the projected In-
Service Date; (5) the type of Interconnection Service requested; and
(6) the type of Generating Facility or Facilities to be constructed,
including fuel types, such as coal, natural gas, solar, or wind. [The]
Transmission Provider must ensure that project information is
anonymized and does not reveal the identity or commercial information
of [i]Interconnection [c]Customers with submitted requests. During the
Customer Engagement Window, Transmission Provider shall provide to
Interconnection Customer a non-binding updated good faith estimate of
the cost and timeframe for completing the cluster Study and a Cluster
Study Agreement to be executed prior to the close of the Customer
Engagement Window.
At the end of the Customer Engagement Window, all Interconnection
Requests deemed valid that have executed a Cluster Study Agreement in
the form of Appendix 2 to this LGIP shall be included in the Cluster
Study. Any Interconnection Requests for which Interconnection Customer
has not executed a Cluster Study Agreement [not deemed valid at the
close of the Customer Engagement Window] shall be deemed withdrawn
(without the cure period provided under Section 3.7 of this LGIP) by
Transmission Provider, the application fee shall be forfeited to [the]
Transmission Provider, and [the] Transmission Provider shall return the
study deposit and Commercial Readiness Deposit to Interconnection
Customer. Immediately following the Customer Engagement Window,
Transmission Provider shall initiate the Cluster Study described in
Section 7 of this LGIP.
3.4.6 Cluster Study Scoping Meeting
During the Customer Engagement Window, Transmission Provider shall
hold a Scoping Meeting with all Interconnection Customers whose valid
Interconnection Requests were received in that Cluster Request Window.
The purpose of the Cluster Study Scoping Meeting shall be to
discuss alternative interconnection options, to exchange information
including any transmission data and earlier study evaluations that
would reasonably be expected to impact such interconnection options, to
discuss the Cluster Study materials posted to OASIS pursuant to Section
3.5 of this LGIP, if applicable, and to analyze such information.
Transmission Provider and Interconnection Customer(s) will bring to the
meeting such technical data, including, but not limited to: (i) general
facility loadings, (ii) general instability issues, (iii) general short
circuit issues, (iv) general voltage issues, and (v) general
reliability issues as may be reasonably required to accomplish the
purpose of the meeting. Transmission Provider and Interconnection
Customer(s) will also bring to the meeting personnel and other
resources as may be reasonably required to accomplish the purpose of
the meeting in the time allocated for the meeting. On the basis of the
meeting, Interconnection Customer(s) shall designate its Point of
Interconnection [and one or more available alternative Point(s) of
Interconnection]. The duration of the meeting shall be sufficient to
accomplish its purpose. If the Cluster Study Scoping Meeting consists
of more than one Interconnection Customer, Transmission Provider shall
issue, no later than fifteen (15) Business Days after the commencement
of the Customer Engagement Window, and Interconnection Customer shall
execute a non-disclosure agreement prior to a group Cluster Study
Scoping Meeting, which will provide for confidentiality of identifying
information or commercially sensitive information pertaining to any
other Interconnection Customers.
3.5. OASIS Posting
3.5.1 OASIS Posting
Transmission Provider will maintain on its OASIS a list of all
Interconnection Requests. The list will identify, for each
Interconnection Request: (i) the maximum summer and winter megawatt
electrical output; (ii) the location by county and state; (iii) the
station or transmission line or lines where the interconnection will be
made; (iv) the projected In-Service Date; (v) the status of the
Interconnection Request, including Queue Position; (vi) the type of
Interconnection Service being requested; [and] (vii) the availability
of any studies related to the Interconnection Request; (viii) the date
of the Interconnection Request; (ix) the type of Generating Facility to
be constructed; and (x) for Interconnection Requests that have not
resulted in a completed interconnection, an explanation as to why it
was not completed. Except in the case of an Affiliate, the list will
not disclose the identity of Interconnection Customer until
Interconnection Customer executes an LGIA or requests that Transmission
Provider file an unexecuted LGIA with FERC. Before holding a Scoping
Meeting with its Affiliate, Transmission Provider shall post on OASIS
an advance notice of its intent to do so. Transmission Provider shall
post to its OASIS site any deviations from the study timelines set
forth herein. Interconnection Study reports and Optional
Interconnection Study reports shall be posted to Transmission
Provider's OASIS site subsequent to the meeting between Interconnection
Customer and Transmission Provider to discuss the applicable study
results. Transmission Provider shall also post any known deviations in
the Large Generating Facility's In-Service Date.
3.5.2 Requirement To Post Interconnection Study Metrics
Transmission Provider will maintain on its OASIS or its website
summary statistics related to processing Interconnection Studies
pursuant to Interconnection Requests, updated quarterly. If
Transmission Provider posts this information on its website, a link to
the information must be provided on Transmission Provider's OASIS site.
For each calendar quarter, Transmission Provider[s] must calculate and
post the information detailed in Sections 3.5.2.1 through 3.5.2.4 of
this LGIP.
3.5.2.1 Interconnection Cluster Study Processing Time
(A) Number of Interconnection Requests that had Cluster Studies
completed within Transmission Provider's coordinated region during the
reporting quarter,
(B) Number of Interconnection Requests that had Cluster Studies
completed within Transmission Provider's coordinated region during the
reporting quarter that were completed more than one hundred fifty (150)
Calendar Days after the close of the Customer Engagement Window,
(C) At the end of the reporting quarter, the number of active valid
Interconnection Requests with ongoing incomplete Cluster Studies where
such Interconnection Requests had executed a Cluster Study Agreement
received by Transmission Provider more than one hundred fifty (150)
Calendar Days before the reporting quarter end,
(D) Mean time (in days), Cluster Studies completed within
Transmission Provider's coordinated region during the reporting
quarter, from the commencement of the Cluster Study to the date when
Transmission Provider provided the completed Cluster Study Report to
Interconnection Customer,
(E) Mean time (in days), Cluster Studies were completed within
Transmission Provider's coordinated region during the reporting
quarter, from the close of the Cluster Request Window to the date when
Transmission Provider provided the completed Cluster Study Report to
Interconnection Customer,[.]
(F) Percentage of Cluster Studies exceeding one hundred fifty (150)
Calendar Days to complete this reporting quarter, calculated as the sum
of Section 3.5.2.1(B) plus Section 3.5.2.1(C) divided by the sum of
Section 3.5.2.1(A) plus Section 3.5.2.1(C) of this LGIP.
3.5.2.2 Cluster Restudies Processing Time
(A) Number of Interconnection Requests that had Cluster Restudies
completed within
[[Page 27131]]
Transmission Provider's coordinated region during the reporting
quarter,
(B) Number of Interconnection Requests that had Cluster Restudies
completed within Transmission Provider's coordinated region during the
reporting quarter that were completed more than one hundred fifty (150)
Calendar Days after Transmission Provider notifies Interconnection
Customers in the Cluster that a Cluster Restudy is required pursuant to
Section 7.5(4) of this LGIP,
(C) At the end of the reporting quarter, the number of active valid
Interconnection Requests with ongoing incomplete Cluster Restudies
where Transmission Provider notified Interconnection Customers in the
Cluster that a Cluster Restudy is required pursuant to Section 7.5(4)
of this LGIP more than one hundred fifty (150) Calendar Days before the
reporting quarter end,
(D) Mean time (in days), Cluster Restudies completed within
Transmission Provider's coordinated region during the reporting
quarter, from the date when Transmission Provider notifies
Interconnection Customers in the Cluster that a Cluster Restudy is
required pursuant to Section 7.5(4) of this LGIP to the date when
Transmission Provider provided the completed Cluster Restudy Report to
Interconnection Customer,
(E) Mean time (in days), Cluster Restudies completed within
Transmission Provider's coordinated region during the reporting
quarter, from the close of the Cluster Request Window to the date when
Transmission Provider provided the completed Cluster Restudy Report to
Interconnection Customer,[.]
(F) Percentage of Cluster Restudies exceeding one hundred fifty
(150) Calendar Days to complete this reporting quarter, calculated as
the sum of Section 3.5.2.2(B) plus Section 3.5.2.2(C) divided by the
sum of Section 3.5.2.2(A) plus Section 3.5.2.2(C)[)] of this LGIP.
3.5.2.3 Interconnection Facilities Studies Processing Time
(A) Number of Interconnection Requests that had Interconnection
Facilities Studies that are completed within Transmission Provider's
coordinated region during the reporting quarter,
(B) Number of Interconnection Requests that had Interconnection
Facilities Studies that are completed within Transmission Provider's
coordinated region during the reporting quarter that were completed
more than {timeline as listed in Transmission Provider's LGIP{time}
after receipt by Transmission Provider of [the] Interconnection
Customer's executed Interconnection Facilities Study Agreement,
(C) At the end of the reporting quarter, the number of active valid
Interconnection Service requests with ongoing incomplete
Interconnection Facilities Studies where such Interconnection Requests
had executed Interconnection Facilities Studies Agreement received by
Transmission Provider more than {timeline as listed in Transmission
Provider's LGIP{time} before the reporting quarter end,
(D) Mean time (in days), for Interconnection Facilities Studies
completed within Transmission Provider's coordinated region during the
reporting quarter, calculated from the date when Transmission Provider
received the executed Interconnection Facilities Study Agreement to the
date when Transmission Provider provided the completed Interconnection
Facilities Study to [the] Interconnection Customer,
(E) Mean time (in days), Interconnection Facilities Studies
completed within Transmission Provider's coordinated region during the
reporting quarter, from the close of the Cluster Request Window to the
date when Transmission Provider provided the completed Interconnection
Facilities Study to Interconnection Customer,[.]
(F) Percentage of delayed Interconnection Facilities Studies this
reporting quarter, calculated as the sum of Section 3.5.2.3(B) plus
Section 3.5.2.3(C) divided by the sum of Section 3.5.2.3(A) plus
Section 3.5.2.3(C)[)] of this LGIP.
3.5.2.4 Interconnection Service Requests Withdrawn From Interconnection
Queue
(A) Number of Interconnection Requests withdrawn from Transmission
Provider's interconnection queue during the reporting quarter,
(B) Number of Interconnection Requests withdrawn from Transmission
Provider's interconnection queue during the reporting quarter before
completion of any [i]Interconnection [s]Studies or execution of any
[i]Interconnection [s]Study agreements,
(C) Number of Interconnection Requests withdrawn from Transmission
Provider's interconnection queue during the reporting quarter before
completion of a Cluster Study,
(D) Number of Interconnection Requests withdrawn from Transmission
Provider's interconnection queue during the reporting quarter before
completion of an Interconnection Facilities Study,
(E) Number of Interconnection Requests withdrawn from Transmission
Provider's interconnection queue after completion of an Interconnection
Facilities Study but before execution of an [generator interconnection
agreement] LGIA or Interconnection Customer requests the filing of an
unexecuted, new [interconnection agreement] LGIA,
(F) Number of Interconnection Requests withdrawn from Transmission
Provider's interconnection queue after execution of an LGIA or
Interconnection Customer requests the filing of an unexecuted, new LGIA
([F]G) Mean time (in days), for all withdrawn Interconnection
Requests, from the date when the request was determined to be valid to
when Transmission Provider received the request to withdraw from the
queue.
3.5.3
Transmission Provider is required to post on OASIS or its website
the measures in [paragraph] Section 3.5.2.1(A) through [paragraph]
Section 3.5.2.4([F]G) for each calendar quarter within thirty (30)
Calendar [d]Days of the end of the calendar quarter. Transmission
Provider will keep the quarterly measures posted on OASIS or its
website for three (3) calendar years with the first required report to
be in the first quarter of 2020. If Transmission Provider retains this
information on its website, a link to the information must be provided
on Transmission Provider's OASIS site.
3.5.4
In the event that any of the values calculated in [paragraphs]
Sections 3.5.2.1(E), 3.5.2.2(E) or 3.5.2.3(E) exceeds twenty-five [25]
percent (25%) for two (2) consecutive calendar quarters, Transmission
Provider will have to comply with the measures below for the next four
(4) consecutive calendar quarters and must continue reporting this
information until Transmission Provider reports four (4) consecutive
calendar quarters without the values calculated in Sections 3.5.2.1(E),
3.5.2.2(E) or 3.5.2.3(E) exceeding [25] twenty-five percent (25%) for
two (2) consecutive calendar quarters:
(i) Transmission Provider must submit a report to the Commission
describing the reason for each Cluster Study, Cluster Restudy, or
individual Interconnection Facilities Study pursuant to one or more
Interconnection Request(s) that exceeded its deadline (i.e., 150, 90 or
180 Calendar [d]Days) for completion. Transmission Provider must
describe the reasons for each study delay and any steps taken to remedy
these specific issues and, if applicable, prevent such delays in the
future. The report must be filed at the Commission within forty-five
(45) Calendar [d]Days of the end of the calendar quarter.
(ii) Transmission Provider shall aggregate the total number of
employee-hours and third party consultant hours expended towards
[i]Interconnection [s]Studies within its coordinated region that
quarter and post on OASIS or its website. If Transmission Provider
posts this information on its website, a link to the information must
be provided on Transmission Provider's OASIS site. This information is
to be posted within thirty (30) Calendar [d]Days of the end of the
calendar quarter.
3.6 Coordination With Affected Systems
Transmission Provider will coordinate the conduct of any studies
required to determine the impact of the Interconnection Request on
Affected Systems with Affected System Operators. Interconnection
Customer will cooperate with Transmission Provider and Affected System
Operator in all matters related to the conduct of studies and the
determination of modifications to Affected Systems.
A Transmission Provider whose system may be impacted by a proposed
interconnection on another transmission provider's transmission system
shall cooperate with [the] transmission provider with whom
interconnection has been requested in all matters related to the
conduct of studies and the determination of modifications to
Transmission Provider's Transmission System.
3.6.1 Initial Notification
Transmission Provider must notify Affected System Operator of a
potential Affected System impact caused by an Interconnection Request
within ten (10) Business Days of the completion of the Cluster Study[
or, if the potential Affected System impact is only determined in the
Cluster Restudy, the completion of the Cluster Restudy].
[[Page 27132]]
At the time of initial notification, Transmission Provider must
provide Interconnection Customer with a list of potential Affected
Systems, along with relevant contact information.
3.6.2 Notification of Cluster Restudy
Transmission Provider must notify Affected System Operator of a
Cluster Restudy concurrently with its notification of such Cluster
Restudy to Interconnection Customers.
3.6.3 Notification of Cluster Restudy Completion
Upon the completion of Transmission Provider's Cluster Restudy,
Transmission Provider will notify Affected System Operator of a
potential Affected System impact caused by an Interconnection Request
within ten (10) Business Days of the completion of the Cluster Restudy,
regardless of whether that potential Affected System impact was
previously identified. At the time of the notification of the
completion of the Cluster Restudy to the Affected System Operator,
Transmission Provider must provide Interconnection Customer with a list
of potential Affected System Operators, along with relevant contact
information.
3.7 Withdrawal
Interconnection Customer may withdraw its Interconnection Request
at any time by written notice of such withdrawal to Transmission
Provider. In addition, if Interconnection Customer fails to adhere to
all requirements of this LGIP, except as provided in Section 13.5
(Disputes), Transmission Provider shall deem the Interconnection
Request to be withdrawn and shall provide written notice to
Interconnection Customer of the deemed withdrawal and an explanation of
the reasons for such deemed withdrawal. Upon receipt of such written
notice, Interconnection Customer shall have fifteen (15) Business Days
in which to either respond with information or actions that cures the
deficiency or to notify Transmission Provider of its intent to pursue
Dispute Resolution.
Withdrawal shall result in the loss of Interconnection Customer's
Queue Position. If an Interconnection Customer disputes the withdrawal
and loss of its Queue Position, then during Dispute Resolution,
Interconnection Customer's Interconnection Request is eliminated from
the queue until such time that the outcome of Dispute Resolution would
restore its Queue Position. An Interconnection Customer that withdraws
or is deemed to have withdrawn its Interconnection Request shall pay to
Transmission Provider all costs that Transmission Provider prudently
incurs with respect to that Interconnection Request prior to
Transmission Provider's receipt of notice described above.
Interconnection Customer must pay all monies due to Transmission
Provider before it is allowed to obtain any Interconnection Study data
or results.
If Interconnection Customer withdraws its Interconnection Request
or is deemed withdrawn by Transmission Provider under Section 3.7 of
this LGIP, Transmission Provider shall (i) update the OASIS Queue
Position posting; (ii) impose the Withdrawal Penalty described in
Section 3.7.1 of this LGIP; and (iii) refund to Interconnection
Customer any portion of the refundable portion of Interconnection
Customer's study deposit that exceeds the costs that Transmission
Provider has incurred, including interest calculated in accordance with
Section 35.19a(a)(2) of FERC's regulations. Transmission Provider shall
also refund any portion of the Commercial Readiness Deposit not applied
to the Withdrawal Penalty and, if applicable, the deposit in lieu of
site control. In the event of such withdrawal, Transmission Provider,
subject to the confidentiality provisions of Section 13.1 of this LGIP,
shall provide, at Interconnection Customer's request, all information
that Transmission Provider developed for any completed study conducted
up to the date of withdrawal of the Interconnection Request.
3.7.1 Withdrawal Penalty
Interconnection Customer shall be subject to a Withdrawal Penalty
if it withdraws its Interconnection Request or is deemed withdrawn, or
the Generating Facility does not otherwise reach Commercial Operation
unless: (1) the withdrawal does not have a material impact on the cost
or timing of any Interconnection Request [with an equal or lower Queue
Position]in the same Cluster; (2) Interconnection Customer withdraws
after receiving Interconnection Customer's most recent Cluster Restudy
Report and the Network Upgrade costs assigned to the Interconnection
Request identified in that report have increased by more than twenty-
five percent (25%) compared to costs identified in Interconnection
Customer's preceding Cluster Study Report or Cluster Restudy Report; or
(3) Interconnection Customer withdraws after receiving Interconnection
Customer's Interconnection Facilities Study Report and the Network
Upgrade costs assigned to the Interconnection Request identified in
that report have increased by more than one hundred percent (100%)
compared to costs identified in the Cluster Study Report or Cluster
Restudy Report.
3.7.1.1 Calculation of the Withdrawal Penalty
If Interconnection Customer withdraws its Interconnection Request
or is deemed withdrawn prior to the commencement of the initial Cluster
Study, Interconnection Customer shall not be subject to a Withdrawal
Penalty. If Interconnection Customer withdraws, is deemed withdrawn, or
otherwise does not reach Commercial Operation at any point after the
commencement of the initial Cluster Study, that Interconnection
Customer's Withdrawal Penalty will be the greater of: (1) [the]
Interconnection Customer's study deposit required under Section 3.1.1.1
of this LGIP; or (2) as follows in (a)-(d):
(a) If Interconnection Customer withdraws or is deemed withdrawn
during the Cluster Study or after receipt of a Cluster Study Report,
but prior to commencement of the Cluster Restudy or Interconnection
Facilities Study if no Cluster Restudy is required, Interconnection
Customer shall be charged two (2) times its actual allocated cost of
all studies performed for Interconnection Customers in the Cluster up
until that point in the [i]Interconnection [s]Study process.
(b) If Interconnection Customer withdraws or is deemed withdrawn
during the Cluster Restudy or after receipt of any applicable restudy
reports issued pursuant to Section 7.5 of this LGIP, but prior to
commencement of the Interconnection Facilities Study, Interconnection
Customer shall be charged five percent (5%) its estimated Network
Upgrade costs.
(c) If Interconnection Customer withdraws or is deemed withdrawn
during the Interconnection Facilities Study, after receipt of the
Interconnection Facilities Study Report issued pursuant to Section 8.3
of this LGIP, or after receipt of the draft LGIA but before
Interconnection Customer has executed an LGIA or has requested that its
LGIA be filed unexecuted, and has satisfied the other requirements
described in Section 11.3 of this LGIP (i.e., Site Control
demonstration, LGIA Deposit, reasonable evidence of one or more
milestones in the development of the Generating Facility),
Interconnection Customer shall be charged ten percent (10%) its
estimated Network Upgrade costs.
(d) If Interconnection Customer has executed an LGIA or has
requested that its LGIA be filed unexecuted and has satisfied the other
requirements described in Section 11.3 of this LGIP (i.e., Site Control
demonstration, LGIA Deposit, reasonable evidence of one or more
milestones in the development of the Generating Facility) and
subsequently withdraws its Interconnection Request or if
Interconnection Customer's Generating Facility otherwise does not reach
Commercial Operation, that Interconnection Customer's Withdrawal
Penalty shall be twenty percent (20%) its estimated Network Upgrade
costs.
3.7.1.2 Distribution of the Withdrawal Penalty
3.7.1.2.1 Initial Distribution of Withdrawal Penalties Prior to
Assessment of Network Upgrade Costs Previously Shared With Withdrawn
Interconnection Customers in the Same Cluster
For a single [c]Cluster, Transmission Provider shall hold all
Withdrawal Penalty funds until all Interconnection Customers in that
Cluster have either: (1) withdrawn or been deemed withdrawn; (2)
executed an LGIA; or (3) requested an LGIA to be filed unexecuted. Any
Withdrawal Penalty funds collected from the Cluster shall first be used
to fund studies conducted under the Cluster Study Process for
Interconnection Customers in the same Cluster that have executed the
LGIA or requested the LGIA to be filed unexecuted. Next, after the
Withdrawal Penalty funds are applied to relevant study costs in the
same Cluster, Transmission Provider will apply the remaining Withdrawal
Penalty funds to reduce net increases, for Interconnection Customers in
the same Cluster, in Interconnection Customers' Network Upgrade cost
assignment and associated financial security requirements under Article
11.5 of the pro forma LGIA attributable to the impacts of withdrawn
Interconnection Customers that shared an obligation with the remaining
[[Page 27133]]
Interconnection Customers to fund a Network Upgrade, as described in
more detail in Sections 3.7.1.2.3 and 3.7.1.2.4. The total amount of
funds used to fund these studies under the Cluster Study Process or
those applied to any net increases in Network Upgrade costs for
Interconnection Customers in the same Cluster shall not exceed the
total amount of Withdrawal Penalty funds collected from the Cluster.
Withdrawal Penalty funds shall first be applied as a refund to
invoiced study costs for Interconnection Customers in the same Cluster
that did not withdraw within thirty (30) Calendar Days of such
Interconnection Customers executing their LGIA or requesting to have
their LGIA filed unexecuted. Distribution of Withdrawal Penalty funds
within one specific Cluster [Study ]for study costs shall not exceed
the total actual Cluster Study Process costs for the Cluster.
Withdrawal Penalty funds applied to study costs shall be allocated
within the same Cluster to Interconnection Customers in a manner
consistent with [the] Transmission Provider's method in Section 13.3 of
this LGIP for allocating the costs of [i]Interconnection [s]Studies
conducted on a clustered basis. Transmission Provider shall post the
balance of Withdrawal Penalty funds held by Transmission Provider but
not yet dispersed on its OASIS site and update this posting on a
quarterly basis.
If an Interconnection Customer withdraws after it executes, or
requests the unexecuted filing of, its LGIA, Transmission Provider
shall first apply such Interconnection Customer's Withdrawal Penalty
funds to any restudy costs required due to [the] Interconnection
Customer's withdrawal as a credit to as-yet-to be invoiced study costs
to be charged to the remaining Interconnection Customers in the same
Cluster in a manner consistent with [the] Transmission Provider's
method in Section 13.3 of this LGIP for allocating the costs of
[i]Interconnection [s]Studies conducted on a clustered basis.
Distribution of the Withdrawal Penalty funds for such restudy costs
shall not exceed the total actual restudy costs.
3.7.1.2.2 Assessment of Network Upgrade Costs Previously Shared With
Withdrawn Interconnection Customers in the Same Cluster
If Withdrawal Penalty funds remain for the same Cluster after the
Withdrawal Penalty funds are applied to relevant study costs,
Transmission Provider will determine if the withdrawn Interconnection
Customers, at any point in the Cluster Study Process, shared cost
assignment for one or more Network Upgrades with any remaining
Interconnection Customers in the same Cluster based on the Cluster
Study Report, Cluster Restudy Report(s), Interconnection Facilities
Study Report, and any subsequent issued restudy report issued for the
Cluster.
In [s]Section 3.7.1.2 of this LGIP, shared cost assignments for
Network Upgrades refers to the cost of Network Upgrades still needed
for the same Cluster for which an Interconnection Customer, prior to
withdrawing its Interconnection Request, shared the obligation to fund
along with Interconnection Customers that have executed an LGIA, or
requested the LGIA to filed unexecuted.
If Transmission Provider's assessment determines that there are no
shared cost assignments for any Network Upgrades in the same Cluster
for the withdrawn Interconnection Customer, or determines that the
withdrawn Interconnection Customer's withdrawal did not cause a net
increase in the shared cost assignment for any remaining
Interconnection Customers' Network Upgrade(s) in the same Cluster,
Transmission Provider will return any remaining Withdrawal Penalty
funds to the withdrawn Interconnection Customer(s). Such remaining
Withdrawal Penalty funds will be returned to withdrawn Interconnection
Customers based on the proportion of each withdrawn Interconnection
Customer's contribution to the total amount of Withdrawal Penalty funds
collected for the Cluster (i.e., the total amount before the initial
disbursement required under Section 3.7.1.2.1 of this LGIP).
Transmission Provider must make such disbursement within sixty (60)
Calendar Days of the date on which all Interconnection Customers in the
same Cluster have either: (1) withdrawn or been deemed withdrawn; (2)
executed an LGIA; or (3) requested an LGIA to be filed unexecuted. For
the withdrawn Interconnection Customers that Transmission Provider
determines have caused a net increase in the shared cost assignment for
one or more Network Upgrade(s) in the same Cluster under [subs]Section
3.7.1.2.3(a) of this LGIP, Transmission Provider will determine each
such withdrawn Interconnection Customers' Withdrawal Penalty funds
remaining balance that will be applied toward net increases in Network
Upgrade shared costs calculated under [subs]Sections 3.7.1.2.3(a) and
3.7.1.2.3(b) of this LGIP based on each such withdrawn Interconnection
Customer's proportional contribution to the total amount of Withdrawal
Penalty funds collected for the same Cluster (i.e., the total amount
before the initial disbursement requirement under Section 3.7.1.2.1 of
this LGIP).
If [the] Transmission Provider's assessment determines that there
are shared cost assignments for Network Upgrades in the same Cluster,
Transmission Provider will calculate the remaining Interconnection
Customers' net increase in cost assignment for Network Upgrades due to
a shared cost assignment for Network Upgrades with the withdrawn
Interconnection Customer and distribute Withdrawal Penalty funds as
described in Section 3.7.1.2.3, depending on whether the withdrawal
occurred before the withdrawing Interconnection Customer executed the
LGIA (or filed unexecuted), as described in [subs]Section 3.7.1.2.3(a)
of this LGIP, or after such execution (or filing unexecuted) of an
LGIA, as described in [subs]Section 3.7.1.2.3(b) of this LGIP.
As discussed in [subs]Section 3.7.1.2.4 of this LGIP, Transmission
Provider will amend executed (or filed unexecuted) LGIAs of the
remaining Interconnection Customers in the same Cluster to apply the
remaining Withdrawal Penalty funds to reduce net increases in
Interconnection Customers' Network Upgrade cost assignment and
associated financial security requirements under Article 11.5 of the
pro forma LGIA attributable to the impacts of withdrawn Interconnection
Customers on Interconnection Customers remaining in the same Cluster
that had a shared cost assignment for Network Upgrades with the
withdrawn Interconnection Customers.
3.7.1.2.3 Impact Calculations
3.7.1.2.3(a) Impact Calculation for Withdrawals During the Cluster
Study Process
If an Interconnection Customer withdraws before it executes, or
requests the unexecuted filing of, its LGIA, [the] Transmission
Provider will distribute in the following manner the Withdrawal Penalty
funds to reduce the Network Upgrade cost impact on the remaining
Interconnection Customers in the same Cluster who had a shared cost
assignment for a Network Upgrade with the withdrawn Interconnection
Customer.
To calculate the reduction in the remaining Interconnection
Customers' net increase in Network Upgrade costs and associated
financial security requirements under Article 11.5 of the pro forma
LGIA, [the] Transmission Provider will determine the financial impact
of a withdrawing Interconnection Customer on other Interconnection
Customers in the same Cluster that shared an obligation to fund the
same Network Upgrade(s). Transmission Provider shall calculate this
financial impact once all [the] Interconnection Customers in the same
Cluster either: (1) have withdrawn or have been deemed withdrawn; (2)
executed an LGIA; or (3) request an LGIA to be filed unexecuted.
Transmission Provider will perform the financial impact calculation
using the following steps.
First, Transmission Provider must determine which withdrawn
Interconnection Customers shared an obligation to fund Network Upgrades
with Interconnection Customers from the same Cluster that have LGIAs
that are executed or have been requested to be filed unexecuted. Next,
Transmission Provider shall perform the calculation of the financial
impact of a withdrawal on another Interconnection Request in the same
Cluster by performing a comparison of the Network Upgrade cost
estimates between each of the following:
(1) Cluster Study phase to Cluster Restudy phase (if Cluster
Restudy was necessary);
(2) Cluster Restudy phase to Interconnection Facilities Study phase
(if a Cluster Restudy was necessary);
(3) Cluster Study phase to Interconnection Facilities Study phase
(if no Cluster Restudy was performed);
(4) Interconnection Facilities Study phase to any subsequent
restudy that was performed before the execution or filing of an
unexecuted LGIA;
(5) the restudy to the executed, or filed unexecuted, LGIA (if a
restudy was performed after the Interconnection Facilities Study phase
and before the execution or filing of an unexecuted LGIA).
If, based on the above calculations, Transmission Provider
determines:
(i) that the costs assigned to an Interconnection Customer in the
same Cluster for Network Upgrades that a
[[Page 27134]]
withdrawn Interconnection Customer shared cost assignment for increased
between any two studies, and
(ii) after the impacted Interconnection Customer's LGIA was
executed or filed unexecuted, [the] Interconnection Customer's cost
assignment for the relevant Network Upgrade is greater than it was
prior to the withdrawal of [the] Interconnection Customer in the same
Cluster that shared cost assignment for the Network Upgrade, then
Transmission Provider shall apply the withdrawn Interconnection
Customer's Withdrawal Penalty funds that has not already been applied
to study costs in the amount of the financial impact by reducing, in
the same Cluster, the remaining Interconnection Customer's Network
Upgrade costs and associated financial security requirements under
Article 11.5 of the pro forma LGIA.
If Transmission Provider determines that more than one
Interconnection Customer in the same Cluster was financially impacted
by the same withdrawn Interconnection Customer, Transmission Provider
will apply the relevant withdrawn Interconnection Customer's Withdrawal
Penalty funds that has not already been applied to study costs to
reduce the financial impact to each Interconnection Customer based on
each Interconnection Customer's proportional share of the financial
impact, as determined by either the [p]Proportional [i]Impact [m]Method
if it is a System Network Upgrade or on a per capita basis if it is a
Substation Network Upgrade, as described under Section 4.2.1 of this
LGIP.
3.7.1.2.3(b) Impact Calculation for Withdrawals in the Same Cluster
After the Cluster Study Process
If an Interconnection Customer withdraws after it executes, or
requests the unexecuted filing of, its LGIA, Transmission Provider will
distribute in the following manner the remaining Withdrawal Penalty
funds to reduce the Network Upgrade cost impact on the remaining
Interconnection Customers in the same Cluster who had a shared cost
assignment with the withdrawn Interconnection Customer for one or more
Network Upgrades.
Transmission Provider will determine the financial impact on the
remaining Interconnection Customers in the same Cluster within thirty
(30) [c]Calendar [d]Days after the withdrawal occurs. [The]
Transmission Provider will determine that financial impact by comparing
the Network Upgrade cost funding obligations [the] Interconnection
Customers shared with the withdrawn Interconnection Customer before the
withdrawal of [the] Interconnection Customer and after the withdrawal
of [the] Interconnection Customer. If that comparison indicates an
increase in Network Upgrade costs for an Interconnection Customer,
Transmission Provider shall apply the withdrawn Interconnection
Customer's Withdrawal Penalty funds to the increased costs each
impacted Interconnection Customer in the same Cluster experienced
associated with such Network Upgrade(s) in proportion to each
Interconnection Customer's increased cost assignment, as determined by
Transmission Provider.
3.7.1.2.4 Amending LGIA To Apply Reductions to Interconnection
Customer's Assigned Network Upgrade Costs and Associated Financial
Security Requirement With Respect to Withdrawals in the Same Cluster
Within thirty (30) Calendar Days of all Interconnection Customers
in the same Cluster having: (1) withdrawn or been deemed withdrawn; (2)
executed an LGIA; or (3) requested an LGIA to be filed unexecuted,
Transmission Provider must perform the calculations described in
[subs]Section 3.7.1.2.3(a) of this LGIP and provide such
Interconnection Customers with an amended LGIA that provides the
reduction in Network Upgrade cost assignment and associated reduction
to [the] Interconnection Customer's financial security requirements,
under Article 11.5 of the pro forma LGIA, due from [the]
Interconnection Customer to [the] Transmission Provider.
Where an Interconnection Customer executes the LGIA (or requests
the filing of an unexecuted LGIA) and is later withdrawn or its LGIA is
terminated, Transmission Provider must, within thirty (30) Calendar
Days of such withdrawal or termination, perform the calculations
described in [subs]Section 3.7.1.2.3(b) of this LGIP and provide such
Interconnection Customers in the same Cluster with an amended LGIA that
provides the reduction in Network Upgrade cost assignment and
associated reduction to [the] Interconnection Customer's financial
security requirements, under Article 11.5 of the pro forma LGIA, due
from [the] Interconnection Customer to Transmission Provider.
Any repayment by Transmission Provider to Interconnection Customer
under Article 11.4 of the pro forma LGIA of amounts advanced for
Network Upgrades after the Generating Facility achieves Commercial
Operation shall be limited to [the] Interconnection Customer's total
amount of Network Upgrade costs paid and associated financial security
provided to Transmission Provider under Article 11.5 of the pro forma
LGIA.
3.7.1.2.5 Final Distribution of Withdrawal Penalty Funds
If Withdrawal Penalty funds remain for the Cluster after the
Withdrawal Penalty funds are applied to relevant study costs and net
increases in shared cost assignments for Network Upgrades to remaining
Interconnection Customers, Transmission Provider will return any
remaining Withdrawal Penalty funds to the withdrawn Interconnection
Customers in the same Cluster net of the amount of each withdrawn
Interconnection Customer's Withdrawal Penalty funds applied to study
costs and net increases in shared cost assignments for Network Upgrades
to remaining Interconnection Customers.
3.8 Identification of Contingent Facilities
Transmission Provider shall post in this section a method for
identifying the Contingent Facilities to be provided to Interconnection
Customer at the conclusion of the Cluster Study and included in
Interconnection Customer's Large Generator Interconnection Agreement.
The method shall be sufficiently transparent to determine why a
specific Contingent Facility was identified and how it relates to the
Interconnection Request. Transmission Provider shall also provide, upon
request of Interconnection Customer, the estimated Interconnection
Facility and/or Network Upgrade costs and estimated in-service
completion time of each identified Contingent Facility when this
information is readily available and not commercially sensitive.
3.9 Penalties for Failure To Meet Study Deadlines
(1) Transmission Provider shall be subject to a penalty if it fails
to complete a Cluster Study, Cluster Restudy, Interconnection
Facilities Study, or Affected Systems Study by the applicable deadline
set forth in this LGIP. Transmission Provider must pay the penalty for
each late Cluster Study, Cluster Restudy, and Interconnection
Facilities Study on a pro rata basis per Interconnection Request to all
Interconnection Customer(s) included in the relevant study that did not
withdraw, or were not deemed withdrawn, from Transmission Provider's
interconnection queue before the missed study deadline, in proportion
to each Interconnection Customer's final study cost. Transmission
Provider must pay the penalty for a late Affected Systems Study on a
pro rata basis per interconnection request to all Affected System
Interconnection Customer(s) included in the relevant Affected System
Study that did not withdraw, or were not deemed withdrawn, from the
host transmission provider's interconnection queue before the missed
study deadline, in proportion to each Interconnection Customer's final
study cost. The study delay penalty for each late study shall be
distributed no later than forty-five (45) Calendar Days after the late
study has been completed.
(2) For penalties assessed in accordance with this Section, the
penalty amount will be equal to: $1,000 per Business Day for delays of
Cluster Studies beyond the applicable deadline set forth in this LGIP;
$2,000 per Business Day for delays of Cluster Re[-S]studies beyond the
applicable deadline set forth in this LGIP; $2,000 per Business Day for
delays of Affected System Studies beyond the applicable deadline set
forth in this LGIP; and $2,500 per Business Day for delays of
Interconnection Facilities Studies beyond the applicable deadline set
forth in this LGIP. The total amount of a penalty assessed under this
Section shall not exceed: (a) one hundred percent (100%) of the initial
study deposit(s) received for all of the Interconnection Requests in
the Cluster for Cluster Studies and Cluster Restudies; (b) one hundred
percent (100%) of the initial study deposit received for the single
Interconnection Request in the study for Interconnection Facilities
Studies; and (c) one hundred percent (100%) of the study deposit(s)
that Transmission Provider collects for conducting the Affected System
Study.
(3) Transmission Provider may appeal to the Commission any
penalties imposed under this Section. Any such appeal must be filed no
later than forty-five (45) Calendar
[[Page 27135]]
Days after the late study has been completed. While an appeal to the
Commission is pending, Transmission Provider shall remain liable for
the penalty, but need not distribute the penalty until forty-five (45)
Calendar Days after (1) the deadline for filing a rehearing request has
ended, if no requests for rehearing of the appeal have been filed, or
(2) the date that any requests for rehearing of the Commission's
decision on the appeal are no longer pending before the Commission. The
Commission may excuse Transmission Provider from penalties under this
Section for good cause.
(4) No penalty will be assessed under this Section where a study is
delayed by ten (10) Business Days or less. If the study is delayed by
more than ten (10) Business Days, the penalty amount will be calculated
from the first Business Day [the] Transmission Provider misses the
applicable study deadline.
(5) If (a) Transmission Provider needs to extend the deadline for a
particular study subject to penalties under this Section and (b) all
Interconnection Customers or Affected System Interconnection Customers
included in the relevant study mutually agree to such an extension, the
deadline for that study shall be extended thirty (30) Business Days
from the original deadline. In such a scenario, no penalty will be
assessed for Transmission Provider missing the original deadline.
(6) No penalties shall be assessed until the third Cluster Study
cycle (including any Transitional Cluster Study cycle, but not
Transitional Serial Interconnection Facilities Studies) after the
Commission-approved effective date of Transmission Provider's filing
made in compliance with the Final Rule in Docket No. RM22-14-000.
(7) Transmission Provider must maintain on its OASIS or its public
website summary statistics related to penalties assessed under this
Section, updated quarterly. For each calendar quarter, Transmission
Provider must calculate and post (1) the total amount of penalties
assessed under this Section during the previous reporting quarter and
(2) the highest penalty assessed under this Section paid to a single
Interconnection Customer or Affected System Interconnection Customer
during the previous reporting quarter. Transmission Provider must post
on its OASIS or its website these penalty amounts for each calendar
quarter within thirty (30) Calendar Days of the end of the calendar
quarter. Transmission Provider must maintain the quarterly measures
posted on its OASIS or its website for three (3) calendar years with
the first required posting to be the third Cluster Study cycle
(including any Transitional Cluster Study cycle, but not Transitional
Serial Interconnection Facilities Studies) after Transmission Provider
transitions to the Cluster Study Process.
Section 4. Interconnection Request Evaluation Process
Once an Interconnection Customer has submitted a valid
Interconnection Request pursuant to Section 3.4 of this LGIP, such
Interconnection Request shall become part of [the] Transmission
Provider's interconnection queue for further processing pursuant to the
following procedures.
4.1 Queue Position
4.1.1 Assignment of Queue Position
Transmission Provider shall assign a Queue Position as follows: the
Queue Position within the queue shall be assigned based upon the date
and time of receipt of all items required pursuant to the provisions of
Section 3.4 of this LGIP. All Interconnection Requests submitted and
validated in a single Cluster Request Window shall be considered
equally queued.
4.1.2 Higher Queue Position
A higher Queue Position assigned to an Interconnection Request is
one that has been placed ``earlier'' in the queue in relation to
another Interconnection Request that is assigned a lower Queue
Position. All requests studied in a single Cluster shall be considered
equally queued. Interconnection Customers that are part of Clusters
initiated earlier in time than an instant [Q]queue shall be considered
to have a higher Queue Position than Interconnection Customers that are
part of Clusters initiated later than an instant [Q]queue.
4.2 General Study Process
Interconnection Studies performed within the Cluster Study Process
shall be conducted in such a manner to ensure the efficient
implementation of the applicable regional transmission expansion plan
in light of the Transmission System's capabilities at the time of each
study and consistent with Good Utility Practice.
Transmission Provider may use subgroups in the Cluster Study
Process. In all instances in which Transmission Provider elects to use
subgroups in the [c]Cluster [s]Study [p]Process, Transmission Provider
must publish the criteria used to define and determine subgroups on its
OASIS or public website.
4.2.1 Cost Allocation for Interconnection Facilities and Network
Upgrades
(1) For Network Upgrades identified in Cluster Studies,
Transmission Provider shall calculate each Interconnection Customer's
share of the costs as follows:
(a) Substation Network Upgrades, including all switching stations,
shall be allocated first per capita to Interconnection Facilities
interconnecting to the substation at the same voltage level, and then
per capita to each Generating Facility sharing the Interconnection
Facility [interconnecting at the same substation].
(b) System Network Upgrades shall be allocated based on the
proportional impact of each individual Generating Facility in the
Cluster Study on the need for a specific System Network Upgrade.
{Transmission Provider shall include in this section a description of
how cost for each facility type designated as a network upgrade will be
allocated using its proportional impact method.{time}
(c) An Interconnection Customer that funds Substation Network
Upgrades and/or System Network Upgrades shall be entitled to
transmission credits as provided in Article 11.4 of the LGIA.
(2) The costs of any needed Interconnection Facilities identified
in the Cluster Study Process will be directly assigned to [the]
Interconnection Customer(s) using such facilities. Where
Interconnection Customers in the Cluster agree to share Interconnection
Facilities, the cost of such Interconnection Facilities shall be
allocated based on the number of Generating Facilities sharing use of
such Interconnection Facilities on a per capita basis (i.e., on a per
Generating Facility basis), unless Parties mutually agree to a
different cost sharing arrangement.
4.3 Transferability of Queue Position
An Interconnection Customer may transfer its Queue Position to
another entity only if such entity acquires the specific Generating
Facility identified in the Interconnection Request and the Point of
Interconnection does not change.
4.4 Modifications
Interconnection Customer shall submit to Transmission Provider, in
writing, modifications to any information provided in the
Interconnection Request. Interconnection Customer shall retain its
Queue Position if the modifications are in accordance with Sections
4.4.1, 4.4.2, or 4.4.5 of this LGIP, or are determined not to be
Material Modifications pursuant to Section 4.4.3 of this LGIP.
Notwithstanding the above, during the course of the Interconnection
Studies, either Interconnection Customer or Transmission Provider may
identify changes to the planned interconnection that may improve the
costs and benefits (including reliability) of the interconnection, and
the ability of the proposed change to accommodate the Interconnection
Request. To the extent the identified changes are acceptable to
Transmission Provider and Interconnection Customer, such acceptance not
to be unreasonably withheld, Transmission Provider shall modify the
Point of Interconnection prior to return of the executed Cluster Study
Agreement, and Interconnection Customer shall retain its Queue
Position.
4.4.1 Prior to the return of the executed Cluster Study Agreement
to Transmission Provider, modifications permitted under this Section
shall include specifically: (a) a decrease of up to [60] sixty percent
(60%) of electrical output (MW) of the proposed project, through either
(1) a decrease in plant size or (2) a decrease in Interconnection
Service level (consistent with the process described in Section 3.1 of
this LGIP) accomplished by applying Transmission Provider-approved
injection-limiting equipment; (b) modifying the technical parameters
associated with the Large Generating Facility technology or the Large
Generating Facility step-up transformer impedance characteristics; and
(c) modifying the interconnection configuration. For plant increases,
the incremental increase in plant output will go in the next Cluster
[Study]Request Window for the purposes of cost allocation and study
analysis.
4.4.2 Prior to the return of the executed Interconnection
Facilities Study Agreement to Transmission Provider, the modifications
permitted under this Section shall include specifically: (a) additional
[15] fifteen percent (15%) decrease of electrical output of the
[[Page 27136]]
proposed project through either (1) a decrease in plant size (MW) or
(2) a decrease in Interconnection Service level (consistent with the
process described in Section 3.1) accomplished by applying Transmission
Provider-approved injection-limiting equipment; (b) Large Generating
Facility technical parameters associated with modifications to Large
Generating Facility technology and transformer impedances; provided,
however, the incremental costs associated with those modifications are
the responsibility of the requesting Interconnection Customer; and (c)
a Permissible Technological Advancement for the Large Generating
Facility after the submission of the Interconnection Request. Section
4.4.6 of this LGIP specifies a separate technological change procedure
including the requisite information and process that will be followed
to assess whether [the] Interconnection Customer's proposed
technological advancement under Section 4.4.2(c) of this LGIP is a
Material Modification. Section 1 of this LGIP contains a definition of
Permissible Technological Advancement.
4.4.3 Prior to making any modification other than those
specifically permitted by Sections 4.4.1, 4.4.2, and 4.4.5 of this
LGIP, Interconnection Customer may first request that Transmission
Provider evaluate whether such modification is a Material Modification.
In response to Interconnection Customer's request, Transmission
Provider shall evaluate the proposed modifications prior to making them
and inform Interconnection Customer in writing of whether the
modifications would constitute a Material Modification. Any change to
the Point of Interconnection, except those deemed acceptable under
Sections 3.1.2 or 4.4 of this LGIP or so allowed elsewhere, shall
constitute a Material Modification. Interconnection Customer may then
withdraw the proposed modification or proceed with a new
Interconnection Request for such modification. Transmission Provider
shall study the addition of a Generating Facility that includes at
least one electric storage resource using operating assumptions (i.e.,
whether the interconnecting Generating Facility will or will not charge
at peak load) that reflect the proposed charging behavior of the
Generating Facility as requested by Interconnection Customer, unless
Transmission Provider determines that Good Utility Practice, including
Applicable Reliability Standards, otherwise requires the use of
different operating assumptions.
{Transmission Providers using fuel-based dispatch assumptions in
Interconnection Studies are not required to include Section 4.4.3.1
because it does not apply to them{time}
4.4.3.1 Interconnection Customer may request, and Transmission
Provider shall evaluate, the addition to the Interconnection Request of
a Generating Facility with the same Point of Interconnection indicated
in the initial Interconnection Request, if the addition of the
Generating Facility does not increase the requested Interconnection
Service level. Transmission Provider must evaluate such modifications
prior to deeming them a Material Modification, but only if
Interconnection Customer submits them prior to the return of the
executed Interconnection Facilities Study Agreement by Interconnection
Customer to Transmission Provider. Interconnection Customers requesting
that such a modification be evaluated must demonstrate the required
Site Control at the time such request is made.
4.4.4 Upon receipt of Interconnection Customer's request for
modification permitted under this Section 4.4 of this LGIP,
Transmission Provider shall commence and perform any necessary
additional studies as soon as practicable, but in no event shall
Transmission Provider commence such studies later than thirty (30)
Calendar Days after receiving notice of Interconnection Customer's
request. Any additional studies resulting from such modification shall
be done at Interconnection Customer's cost. Any such request for
modification of the Interconnection Request must be accompanied by any
resulting updates to the models described in Attachment A to Appendix 1
of this LGIP.
4.4.5 Extensions of less than three (3) cumulative years in the
Commercial Operation Date of the Large Generating Facility to which the
Interconnection Request relates are not material and should be handled
through construction sequencing. For purposes of this section, the
Commercial Operation Date reflected in the initial Interconnection
Request shall be used to calculate the permissible extension prior to
Interconnection Customer executing an LGIA or requesting that the LGIA
be filed unexecuted. After an LGIA is executed or requested to be filed
unexecuted, the Commercial Operation Date reflected in the LGIA shall
be used to calculate the permissible extension. Such cumulative
extensions may not exceed three years including both extensions
requested after execution of the LGIA by Interconnection Customer or
the filing of an unexecuted LGIA by Transmission Provider and those
requested prior to execution of the LGIA by Interconnection Customer or
the filing of an unexecuted LGIA by Transmission Provider.
4.4.6 Technological Change Procedures
{Insert technological change procedure here{time}
Section 5. Procedures for Interconnection Requests Submitted Prior to
Effective Date of the Cluster Study Revisions
5.1 Procedures for Transitioning to the Cluster Study Process
5.1.1 Any Interconnection Customer assigned a Queue Position as of
thirty (30) Calendar Days after {Transmission Provider to insert filing
date{time} (the filing date of this LGIP) shall retain that Queue
Position subject to the requirements in Sections 5.1.1.1 and 5.1.1.2 of
this LGIP. Any Interconnection Customer that fails to meet these
requirements shall have its Interconnection Request deemed withdrawn by
Transmission Provider pursuant to Section 3.7 of this LGIP. In such
case, Transmission Provider shall not assess [the] Interconnection
Customer any Withdrawal Penalty.
Any Interconnection Customer that has received a final
Interconnection Facilities Study Report before the commencement of the
studies under the transition process set forth in this [s]Section shall
be tendered an LGIA pursuant to Section 11 of this LGIP, and shall not
be required to enter this transition process.
5.1.1.1 Transitional Serial Study
An Interconnection Customer that has been tendered an
Interconnection Facilities Study Agreement as of thirty (30) Calendar
Days after {Transmission Provider to insert filing date{time} (the
filing date of this LGIP) may opt to proceed with an Interconnection
Facilities Study. Transmission Provider shall tender each eligible
Interconnection Customer a Transitional Serial Interconnection
Facilities Study Agreement, in the form of Appendix 8 to this LGIP, no
later than the Commission-approved effective date of this LGIP.
Transmission Provider shall proceed with the Interconnection Facilities
Study, provided that [the] Interconnection Customer: (1) meets each of
the following requirements; and (2) executes the Transitional Serial
Interconnection Facilities Study Agreement within sixty (60) Calendar
Days of the Commission-approved effective date of this LGIP. If an
eligible Interconnection Customer does not meet these requirements, its
Interconnection Request shall be deemed withdrawn without penalty.
Transmission Provider must commence the Transitional Serial
Interconnection Facilities Study at the conclusion of this sixty (60)
Calendar Day period. Transitional Serial Interconnection Facilities
Study costs shall be allocated according to the method described in
Section 13.3 of this LGIP.
All of the following must be included when an Interconnection
Customer returns the Transitional Serial Interconnection Facilities
Study Agreement:
(1) A deposit equal to one hundred percent (100%) of the costs
identified for Transmission Provider's Interconnection Facilities and
Network Upgrades in Interconnection Customer's system impact study
report. If Interconnection Customer does not withdraw, the deposit
shall be trued up to actual costs once they are known and applied to
future construction costs described in Interconnection Customer's
eventual LGIA. Any amounts in excess of the actual construction costs
shall be returned to Interconnection Customer within thirty (30)
Calendar Days of the issuance of a final invoice for construction
costs, in accordance with Article 12.2 of the pro forma LGIA. If
Interconnection Customer withdraws or otherwise does not reach
Commercial Operation, Transmission Provider shall refund the remaining
deposit after the final invoice for study costs and Transitional
Withdrawal Penalty is settled. The deposit shall be in the form of an
irrevocable letter of credit,[ or] cash, a surety bond, or other form
of security that is reasonably acceptable to Transmission Provider,
where cash deposits shall be treated according to Section 3.7 of this
LGIP.
(2) Exclusive Site Control for 100% of the proposed Generating
Facility.
Transmission Provider shall conduct each Transitional Serial
Interconnection Facilities Study and issue the associated Transitional
Serial Interconnection Facilities Study Report within one hundred fifty
(150)
[[Page 27137]]
Calendar Days of the Commission-approved effective date of this LGIP.
After Transmission Provider issues each Transitional
Interconnection Facilities Study Report, Interconnection Customer shall
proceed pursuant to Section 11 of this LGIP. If Interconnection
Customer withdraws its Interconnection Request or if Interconnection
Customer's Generating Facility otherwise does not reach Commercial
Operation, a Transitional Withdrawal Penalty shall be imposed on
Interconnection Customer equal to nine (9) times Interconnection
Customer's total study cost incurred since entering [the] Transmission
Provider's interconnection queue (including the cost of studies
conducted under Section 5 of this LGIP).
5.1.1.2 Transitional Cluster Study
An Interconnection Customer with an assigned Queue Position as of
thirty (30) Calendar Days after {Transmission Provider to insert filing
date{time} (the filing date of this LGIP) may opt to proceed with a
Transitional Cluster Study. Transmission Provider shall tender each
eligible Interconnection Customer a Transitional Cluster Study
Agreement, in the form of Appendix 7 to this LGIP, no later than the
Commission-approved effective date of this LGIP. Transmission Provider
shall proceed with the Transitional Cluster Study that includes each
Interconnection Customer that: (1) meets each of the following
requirements listed as (1)-(3) in this section; and (2) executes the
Transitional Cluster Study Agreement within sixty (60) Calendar Days of
the Commission-approved effective date of this LGIP. All
Interconnection Requests that enter the Transitional Cluster Study
shall be considered to have an equal Queue Position that is lower than
Interconnection Customer(s) proceeding with Transitional Serial
Interconnection Facilities Study. If an eligible Interconnection
Customer does not meet these requirements, its Interconnection Request
shall be deemed withdrawn without penalty. Transmission Provider must
commence the Transitional Cluster Study at the conclusion of this sixty
(60) Calendar Day period. All identified Transmission Provider's
Interconnection Facilities and Network Upgrade costs shall be allocated
according to Section 4.2.1 of this LGIP. Transitional Cluster Study
costs shall be allocated according to the method described in Section
13.3 of this LGIP.
Interconnection Customer may make a one-time extension to its
requested Commercial Operation Date upon entry into the Transitional
Cluster Study, where any such extension shall not result in a
Commercial Operation Date later than December 31, 2027.
All of the following must be included when an Interconnection
Customer returns the Transitional Cluster Study Agreement:
(1) A selection of either Energy Resource Interconnection Service
or Network Resource Interconnection Service.
(2) A deposit of five million dollars ($5,000,000) in the form of
an irrevocable letter of credit,[ or] cash, a surety bond, or other
form of security that is reasonably acceptable to Transmission
Provider, where cash deposits will be treated according to Section 3.7
of this LGIP. If Interconnection Customer does not withdraw, the
deposit shall be reconciled with and applied towards future
construction costs described in the LGIA. Any amounts in excess of the
actual construction costs shall be returned to Interconnection Customer
within thirty (30) Calendar Days of the issuance of a final invoice for
construction costs, in accordance with Article 12.2 of the pro forma
LGIA. If Interconnection Customer withdraws or otherwise does not reach
Commercial Operation, Transmission Provider must refund the remaining
deposit once the final invoice for study costs and Transitional
Withdrawal Penalty is settled.
(3) Exclusive Site Control for 100% of the proposed Generating
Facility.
Transmission Provider shall conduct the Transitional Cluster Study
and issue both an associated interim Transitional Cluster Study Report
and an associated final Transitional Cluster Study Report. The interim
Transitional Cluster Study Report shall provide the following
information:
--identification of any circuit breaker short circuit capability limits
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations
resulting from the interconnection;
--identification of any instability or inadequately damped response to
system disturbances resulting from the interconnection; and
--Transmission Provider's Interconnection Facilities and Network
Upgrades that are expected to be required as a result of the
Interconnection Request(s) and a non-binding, good faith estimate of
cost responsibility and a non-binding, good faith estimated time to
construct.
In addition to the information provided in the interim Transitional
Cluster Study Report, the final Transitional Cluster Study Report shall
provide a description of, estimated cost of, and schedule for
construction of [the] Transmission Provider's Interconnection
Facilities and Network Upgrades required to interconnect the Generating
Facility to the Transmission System that resolve issues identified in
the interim Transitional Cluster Study Report.
The interim and final Transitional Cluster Study Reports shall be
issued within three hundred (300) and three hundred sixty (360)
Calendar Days of the Commission-approved effective date of this LGIP,
respectively, and shall be posted on Transmission Provider's OASIS
consistent with the posting of other study results pursuant to Section
3.5.1 of this LGIP. Interconnection Customer shall have thirty (30)
Calendar Days to comment on the interim Transitional Cluster Study
Report, once it has been received.
After Transmission Provider issues the final Transitional Cluster
Study Report, Interconnection Customer shall proceed pursuant to
Section 11 of this LGIP. If Interconnection Customer withdraws its
Interconnection Request or if Interconnection Customer's Generating
Facility otherwise does not reach Commercial Operation, a Transitional
Withdrawal Penalty will be imposed on[m] Interconnection Customer equal
to nine (9) times Interconnection Customer's total study cost incurred
since entering [the] Transmission Provider's interconnection queue
(including the cost of studies conducted under Section 5 of this LGIP).
5.1.2 Transmission Providers With Existing Cluster Study Processes or
Currently in Transition
If Transmission Provider is not conducting a transition process
under Section 5.1.1, it will continue processing Interconnection
Requests under its current Cluster Study Process. Within sixty (60)
Calendar Days of the Commission-approved effective date of this LGIP,
Interconnection Customers that have not executed an LGIA or requested
an LGIA to be filed unexecuted must meet the requirements of Sections
3.4.2, 7.5, or 8.1 of this LGIP, based on Interconnection Customer's
Queue Position.
Any Interconnection Customer that fails to meet these requirements
within sixty (60) Calendar Days of the Commission-approved effective
date of this LGIP shall have its Interconnection Request deemed
withdrawn by Transmission Provider pursuant to Section 3.7 of this
LGIP. In such case, Transmission Provider shall not assess
Interconnection Customer any Withdrawal Penalty.
5.2 New Transmission Provider
If Transmission Provider transfers control of its Transmission
System to a successor Transmission Provider during the period when an
Interconnection Request is pending, the original Transmission Provider
shall transfer to the successor Transmission Provider any amount of the
deposit or payment with interest thereon that exceeds the cost that it
incurred to evaluate the request for interconnection. Any difference
between such net amount and the deposit or payment required by this
LGIP shall be paid by or refunded to [the] Interconnection Customer, as
appropriate. The original Transmission Provider shall coordinate with
the successor Transmission Provider to complete any Interconnection
Study, as appropriate, that the original Transmission Provider has
begun but has not completed. If Transmission Provider has tendered a
draft LGIA to Interconnection Customer but Interconnection Customer has
not either executed the LGIA or requested the filing of an unexecuted
LGIA with FERC, unless otherwise provided, Interconnection Customer
must complete negotiations with the successor Transmission Provider.
Section 6. Interconnection Information Access
6.1 Publicly Posted Interconnection Information
Transmission Provider shall maintain and make publicly available:
(1) an interactive visual representation of the estimated incremental
injection capacity (in megawatts) available at each point of
interconnection in Transmission Provider's footprint under N-1
conditions, and (2) a table of metrics concerning the estimated impact
of a potential Generating Facility on Transmission Provider's
Transmission System based on a user-specified addition of a particular
number of megawatts at a particular voltage level at a particular point
[[Page 27138]]
of interconnection. At a minimum, for each transmission facility
impacted by the user-specified megawatt addition, the following
information will be provided in the table: (1) the distribution factor;
(2) the megawatt impact (based on the megawatt values of the proposed
Generating Facility and the distribution factor); (3) the percentage
impact on each impacted transmission facility (based on the megawatt
values of the proposed Generating Facility and the facility rating);
(4) the percentage of power flow on each impacted transmission facility
before the injection of the proposed project; (5) the percentage power
flow on each impacted transmission facility after the injection of the
proposed Generating Facility. These metrics must be calculated based on
the power flow model of the Transmission System with the transfer
simulated from each point of interconnection to the whole Transmission
Provider's footprint (to approximate Network Resource Interconnection
Service), and with the incremental capacity at each point of
interconnection decremented by the existing and queued Generating
Facilities (based on the existing or requested interconnection service
limit of the generation). These metrics must be updated within thirty
(30) Calendar Days after the completion of each Cluster Study and
Cluster Restudy. This information must be publicly posted, without a
password or a fee. The website will define all underlying assumptions,
including the name of the most recent Cluster Study or Restudy used in
the Base Case.
Section 7. Cluster Study
7.1 Cluster Study Agreement
No later than five (5) Business Days after the close of a Cluster
Request Window, Transmission Provider shall tender to each
Interconnection Customer that submitted a valid Interconnection Request
a Cluster Study Agreement in the form of Appendix 2 to this LGIP. The
Cluster Study Agreement shall require Interconnection Customer to
compensate Transmission Provider for the actual cost of the Cluster
Study pursuant to Section 13.3 of this LGIP. The specifications,
assumptions, or other provisions in the appendices of the Cluster Study
Agreement provided pursuant to Section 7.1 of this LGIP shall be
subject to change by Transmission Provider following the conclusion of
the Scoping Meeting.
7.2 Execution of Cluster Study Agreement
Interconnection Customer shall execute the Cluster Study Agreement
and deliver the executed Cluster Study Agreement to Transmission
Provider no later than the close of the Customer Engagement Window.
If Interconnection Customer does not provide all required technical
data when it delivers the Cluster Study Agreement, Transmission
Provider shall notify Interconnection Customer of the deficiency within
five (5) Business Days of the receipt of the executed Cluster Study
Agreement and Interconnection Customer shall cure the deficiency within
ten (10) Business Days of receipt of the notice, provided, however,
such deficiency does not include failure to deliver the executed
Cluster Study Agreement or [S]study [D]deposit.
7.3 Scope of Cluster Study
The Cluster Study shall evaluate the impact of the proposed
interconnection on the reliability of the Transmission System. The
Cluster Study will consider the Base Case as well as all Generating
Facilities (and with respect to (iii) below, any identified Network
Upgrades associated with such higher queued interconnection) that, on
the date the Cluster Study is commenced: (i) are directly
interconnected to the Transmission System; (ii) are interconnected to
Affected Systems and may have an impact on the Interconnection Request;
(iii) have a pending higher queued Interconnection Request to
interconnect to the Transmission System; and (iv) have no Queue
Position but have executed an LGIA or requested that an unexecuted LGIA
be filed with FERC.
For purposes of determining necessary Interconnection Facilities
and Network Upgrades, the Cluster Study shall use the level of
Interconnection Service requested by Interconnection Customers in the
Cluster, except where [the] Transmission Provider otherwise determines
that it must study the full Generating Facility Capacity due to safety
or reliability concerns.
The Cluster Study will consist of power flow, stability, and short
circuit analyses, the results of which are documented in a single
Cluster Study Report, as applicable. At the conclusion of the Cluster
Study, Transmission Provider shall issue a Cluster Study Report. The
Cluster Study Report will state the assumptions upon which it is based;
state the results of the analyses; and provide the requirements or
potential impediments to providing the requested [i]Interconnection
[s]Service, including a preliminary indication of the cost and length
of time that would be necessary to correct any problems identified in
those analyses and implement the interconnection. The Cluster Study
Report shall identify the Interconnection Facilities and Network
Upgrades expected to be required to reliably interconnect the
Generating Facilities in that Cluster Study at the requested
Interconnection Service level and shall provide non-binding cost
estimates for required Network Upgrades. The Cluster Study Report shall
identify each Interconnection Customer's estimated allocated costs for
Interconnection Facilities and Network Upgrades pursuant to the method
in Section 4.2.1 of this LGIP. Transmission Provider shall hold an open
stakeholder meeting pursuant to Section 7.4 of this LGIP.
For purposes of determining necessary Interconnection Facilities
and Network Upgrades, the Cluster Study shall use operating assumptions
(i.e., whether the interconnecting Generating Facility will or will not
charge at peak load) that reflect the proposed charging behavior of a
Generating Facility that includes at least one electric storage
resource as requested by Interconnection Customer, unless Transmission
Provider determines that Good Utility Practice, including Applicable
Reliability Standards, otherwise requires the use of different
operating assumptions. Transmission Provider may require the inclusion
of control technologies sufficient to limit the operation of the
Generating Facility per the operating assumptions as set forth in the
Interconnection Request and to respond to dispatch instructions by
Transmission Provider. As determined by Transmission Provider,
Interconnection Customer may be subject to testing and validation of
those control technologies consistent with Article 6 of the LGIA.
[The Cluster Study Report will provide a list of facilities that
are required as a result of the Interconnection Requests within the
Cluster and a non-binding good faith estimate of cost responsibility
and a non-binding good faith estimated time to construct.]
[Upon issuance of a Cluster Study Report, or Cluster Restudy
Report, if any, Transmission Provider shall simultaneously tender a
draft Interconnection Facilities Study Agreement to each
Interconnection Customer within the Cluster, subject to the conditions
in Section 8.1 of this LGIP.]
The Cluster Study shall evaluate the use of static synchronous
compensators, static VAR compensators, advanced power flow control
devices, transmission switching, synchronous condensers, voltage source
converters, advanced conductors, and tower lifting. Transmission
Provider shall evaluate each identified alternative transmission
technology and determine whether the above technologies should be used,
consistent with Good Utility Practice, Applicable Reliability
Standards, and Applicable Laws and Regulations[other applicable
regulatory requirements]. Transmission Provider shall include an
explanation of the results of [the] Transmission Provider's evaluation
for each technology in the Cluster Study Report.
The Cluster Study Report will provide a list of facilities that are
required as a result of the Interconnection Requests within the Cluster
and a non-binding good faith estimate of cost responsibility and a non-
binding good faith estimated time to construct.
7.4 Cluster Study Procedures
Transmission Provider shall coordinate the Cluster Study with any
Affected System Operator that is affected by the Interconnection
Request pursuant to Section 3.6 of this LGIP. Transmission Provider
shall utilize existing studies to the extent practicable when it
performs the Cluster Study. Interconnection Requests for a Cluster
Study may be submitted only within the Cluster Request Window and
Transmission Provider shall initiate the Cluster Study [p]Process
pursuant to Section 7 of this LGIP.
Transmission Provider shall complete the Cluster Study within one
hundred fifty (150) Calendar Days of the close of the Customer
Engagement Window.
Within ten (10) Business Days of simultaneously furnishing a
Cluster Study Report to each Interconnection Customer within the
Cluster and posting such report on OASIS, Transmission Provider shall
convene a Cluster Study Report Meeting.
At the request of Interconnection Customer or at any time
Transmission Provider determines that it will not meet the required
time frame for completing the Cluster Study, Transmission Provider
shall notify Interconnection Customers as to the schedule status of the
Cluster Study. If Transmission Provider is unable to complete the
Cluster Study within the time period, it shall notify
[[Page 27139]]
Interconnection Customers and provide an estimated completion date with
an explanation of the reasons why additional time is required. Upon
request, Transmission Provider shall provide Interconnection Customers
all supporting documentation, workpapers and relevant pre-
Interconnection Request and post-Interconnection Request power flow,
short circuit and stability databases for the Cluster Study, subject to
confidentiality arrangements consistent with Section 13.1 of this LGIP.
7.5 Cluster Study Restudies
(1) Within twenty (20) Calendar Days after the Cluster Study Report
Meeting, Interconnection Customer must provide the following:
(a) Demonstration of continued Site Control pursuant to Section
3.4.2(iii) of this LGIP; and
(b) An additional deposit that brings the total Commercial
Readiness Deposit submitted to Transmission Provider to five percent
(5%) of [the] Interconnection Customer's Network Upgrade cost
assignment identified in the Cluster Study in the form of an
irrevocable letter of credit,[ or] cash, a surety bond, or other form
of security that is reasonably acceptable to Transmission Provider.
Transmission Provider shall refund the deposit to Interconnection
Customer upon withdrawal in accordance with Section 3.7 of this LGIP.
Interconnection Customer shall promptly inform Transmission
Provider of any material change to Interconnection Customer's
demonstration of Site Control under Section 3.4.2(iii) of this LGIP.
Upon Transmission Provider determining that Interconnection Customer no
longer satisfies the Site Control requirement, Transmission Provider
shall notify Interconnection Customer. Within ten (10) Business Days of
such notification, Interconnection Customer must demonstrate compliance
with the applicable requirement subject to Transmission Provider's
approval, not to be unreasonably withheld. Absent such demonstration,
Transmission Provider shall deem the subject Interconnection Request
withdrawn pursuant to Section 3.7 of this LGIP.
(2) If no Interconnection Customer withdraws from the Cluster after
completion of the Cluster Study or Cluster Restudy or is deemed
withdrawn pursuant to Section 3.7 of this LGIP after completion of the
Cluster Study or Cluster Restudy, Transmission Provider shall notify
Interconnection Customers in the Cluster that a Cluster Restudy is not
required.
(3) If one or more Interconnection Customers withdraw from the
Cluster or are deemed withdrawn pursuant to Section 3.7 of this LGIP,
Transmission Provider shall determine if a Cluster Restudy is necessary
within thirty (30) Calendar Days after the Cluster Study Report
Meeting. If Transmission Provider determines a Cluster Restudy is not
necessary, Transmission Provider shall notify Interconnection Customers
in the Cluster that a Cluster Restudy is not required and Transmission
Provider shall provide an updated Cluster Study Report within thirty
(30) Calendar Days of such determination.
(4) If one or more Interconnection Customers withdraws from the
Cluster or is deemed withdrawn pursuant to Section 3.7 of this LGIP,
and Transmission Provider determines a Cluster Restudy is necessary as
a result, Transmission Provider shall notify Interconnection Customers
in the Cluster and post on OASIS that a Cluster Restudy is required
within thirty (30) Calendar Days after the Cluster Study Report
Meeting. Transmission Provider shall continue with such restudies until
Transmission Provider determines that no further restudies are
required. If an Interconnection Customer withdraws or is deemed
withdrawn pursuant to Section 3.7 of this LGIP during the
Interconnection Facilities Study, or after other Interconnection
Customers in the same Cluster have executed LGIAs, or requested that
unexecuted LGIAs be filed, and Transmission Provider determines a
Cluster Restudy is necessary, the Cluster shall be restudied. If a
Cluster Restudy is required due to a higher queued project withdrawing
from the queue, or a modification of a higher or equally queued project
subject to Section 4.4 of this LGIP, Transmission Provider shall so
notify affected Interconnection Customers in writing. Except as
provided in Section 3.7 of this LGIP in the case of withdrawing
Interconnection Customers, any cost of Restudy shall be borne by
Interconnection Customers being restudied.
(5) The scope of any Cluster Restudy shall be consistent with the
scope of an initial Cluster Study pursuant to Section 7.3 of this LGIP.
Transmission Provider shall complete the Cluster Restudy within one
hundred fifty (150) Calendar Days of [the] Transmission Provider
informing [the] Interconnection Customers in the [c]Cluster that
restudy is needed. The results of the Cluster Restudy shall be combined
into a single report (Cluster Restudy Report). Transmission Provider
shall hold a meeting with [the] Interconnection Customers in the
[c]Cluster (Cluster Restudy Report Meeting) within ten (10) Business
Days of simultaneously furnishing the Cluster Restudy Report to each
Interconnection Customer in the Cluster Restudy and publishing the
Cluster Restudy Report on OASIS.
If additional restudies are required, Interconnection Customer and
Transmission Provider shall follow the procedures of this Section 7.5
of this LGIP until such time that Transmission Provider determines that
no further restudies are required. Transmission Provider shall notify
each Interconnection Customer within the Cluster when no further
restudies are required.
Section 8. Interconnection Facilities Study
8.1 Interconnection Facilities Study Agreement
[Simultaneously with the delivery of the Cluster Study Report, or
Cluster Restudy Report if applicable,] Within five (5) Business Days
following Transmission Provider notifying each Interconnection Customer
within the Cluster that no further Cluster Restudy is required (per
Section 7.5 of this LGIP), Transmission Provider shall provide to
Interconnection Customer an Interconnection Facilities Study Agreement
in the form of Appendix 3 to this LGIP. Interconnection Customer shall
compensate Transmission Provider for the actual cost of the
Interconnection Facilities Study. Within five (5) Business Days
following the Cluster Report Meeting or Cluster Restudy Report Meeting
if applicable, Transmission Provider shall provide to Interconnection
Customer a non-binding good faith estimate of the cost and timeframe
for completing the Interconnection Facilities Study. Interconnection
Customer shall execute the Interconnection Facilities Study Agreement
and deliver the executed Interconnection Facilities Study Agreement to
Transmission Provider within thirty (30) Calendar Days after its
receipt, together with:
(1) Any required technical data;
(2) Demonstration of one-hundred percent (100%) Site Control or
demonstration of a regulatory limitation and applicable deposit in lieu
of Site Control provided to [the] Transmission Provider in accordance
with [s]Section 3.4.2 of this LGIP; and
(3) An additional deposit that brings the total Commercial
Readiness Deposit submitted to [the] Transmission Provider to ten
percent (10%) of [the] Interconnection Customer's Network Upgrade cost
assignment identified in the Cluster Study or Cluster Restudy, if
applicable, in the form of an irrevocable letter of credit,[ or] cash,
a surety bond, or other form of security that is reasonably acceptable
to Transmission Provider. Transmission Provider shall refund the
deposit to Interconnection Customer upon withdrawal in accordance with
Section 3.7 of this LGIP.
Interconnection Customer shall promptly inform Transmission
Provider of any material change to Interconnection Customer's
demonstration of Site Control under Section 3.4.2(iii) of this LGIP.
Upon Transmission Provider determining separately that Interconnection
Customer no longer satisfies the Site Control requirement, Transmission
Provider shall notify Interconnection Customer. Within ten (10)
Business Days of such notification, Interconnection Customer must
demonstrate compliance with the applicable requirement subject to
Transmission Provider's approval, not to be unreasonably withheld.
Absent such demonstration, Transmission Provider shall deem the subject
Interconnection Request withdrawn pursuant to Section 3.7 of this LGIP.
8.2 Scope of Interconnection Facilities Study
The Interconnection Facilities Study shall be specific to each
Interconnection Request and performed on an individual, i.e., non-
clustered, basis. The Interconnection Facilities Study shall specify
and provide a non-binding estimate of the cost of the equipment,
engineering, procurement and construction work needed to implement the
conclusions of the Cluster Study Report (and any associated restudies)
in accordance with Good Utility Practice to physically and electrically
connect the Interconnection Facilities to the Transmission System. The
Interconnection Facilities Study shall also identify the electrical
switching configuration of the connection equipment, including, without
limitation: the transformer, switchgear, meters, and other
[[Page 27140]]
station equipment; the nature and estimated cost of any Transmission
Provider's Interconnection Facilities and Network Upgrades necessary to
accomplish the interconnection; and an estimate of the time required to
complete the construction and installation of such facilities. The
Interconnection Facilities Study will also identify any potential
control equipment for (1) requests for Interconnection Service that are
lower than the Generating Facility Capacity, and/or (2) requests to
study a Generating Facility that includes at least one electric storage
resource using operating assumptions (i.e., whether the interconnecting
Generating Facility will or will not charge at peak load) that reflect
its proposed charging behavior, as requested by Interconnection
Customer, unless Transmission Provider determines that Good Utility
Practice, including Applicable Reliability Standards, otherwise require
the use of different operating assumptions.
8.3 Interconnection Facilities Study Procedures
Transmission Provider shall coordinate the Interconnection
Facilities Study with any Affected System Operator pursuant to Section
3.6 of this LGIP. Transmission Provider shall utilize existing studies
to the extent practicable in performing the Interconnection Facilities
Study. Transmission Provider shall complete the study and issue a draft
Interconnection Facilities Study Report to Interconnection Customer
within the following number of days after receipt of an executed
Interconnection Facilities Study Agreement: ninety (90) Calendar Days
after receipt of an executed Interconnection Facilities Study
Agreement, with no more than a +/- [20] twenty percent (20%) cost
estimate contained in the report; or one hundred eighty (180) Calendar
Days, if Interconnection Customer requests a +/- [10] ten percent (10%)
cost estimate.
At the request of Interconnection Customer or at any time
Transmission Provider determines that it will not meet the required
time frame for completing the Interconnection Facilities Study,
Transmission Provider shall notify Interconnection Customer as to the
schedule status of the Interconnection Facilities Study. If
Transmission Provider is unable to complete the Interconnection
Facilities Study and issue a draft Interconnection Facilities Study
Report within the time required, it shall notify Interconnection
Customer and provide an estimated completion date and an explanation of
the reasons why additional time is required.
Interconnection Customer may, within thirty (30) Calendar Days
after receipt of the draft Interconnection Facilities Study Report,
provide written comments to Transmission Provider, which Transmission
Provider shall include in completing the final Interconnection
Facilities Study Report. Transmission Provider shall issue the final
Interconnection Facilities Study Report within fifteen (15) Business
Days of receiving Interconnection Customer's comments or promptly upon
receiving Interconnection Customer's statement that it will not provide
comments. Transmission Provider may reasonably extend such fifteen (15)
Business Day period upon notice to Interconnection Customer if
Interconnection Customer's comments require Transmission Provider to
perform additional analyses or make other significant modifications
prior to the issuance of the final Interconnection Facilities Study
Report. Upon request, Transmission Provider shall provide
Interconnection Customer supporting documentation, workpapers, and
databases or data developed in the preparation of the Interconnection
Facilities Study, subject to confidentiality arrangements consistent
with Section 13.1 of this LGIP.
8.4 Meeting with Transmission Provider
Within ten (10) Business Days of providing a draft Interconnection
Facilities Study Report to Interconnection Customer, Transmission
Provider and Interconnection Customer shall meet to discuss the results
of the Interconnection Facilities Study.
8.5 Restudy
If [R]restudy of the Interconnection Facilities Study is required
due to a higher or equally queued project withdrawing from the queue or
a modification of a higher or equally queued project pursuant to
Section 4.4 of this LGIP, Transmission Provider shall so notify
Interconnection Customer in writing. Transmission Provider shall ensure
that such [R]restudy takes no longer than sixty (60) Calendar Days from
the date of notice. Except as provided in Section 3.7 of this LGIP in
the case of withdrawing Interconnection Customers, any cost of
[R]restudy shall be borne by Interconnection Customer being restudied.
Section 9. Affected System Study
9.1 Applicability
This Section 9 outlines the duties of Transmission Provider when it
receives notification that an Affected System Interconnection
Customer's proposed interconnection to its host transmission provider
may impact Transmission Provider's Transmission System.
9.2 Response to Notifications
9.2.1 Response to Initial Notification
When Transmission Provider receives initial notification either
following the Cluster Study or a Cluster Restudy that an Affected
System Interconnection Customer's proposed interconnection to its host
transmission provider may impact Transmission Provider's Transmission
System, Transmission Provider must respond in writing within twenty
(20) Business Days whether it intends to conduct an Affected System
Study.
By fifteen (15) Business Days after [the] Transmission Provider
responds with its affirmative intent to conduct an Affected System
Study, Transmission Provider shall share with Affected System
Interconnection Customer(s) and the Affected System Interconnection
Customer's host transmission provider a non-binding good faith estimate
of the cost and the schedule to complete the Affected System Study.
9.2.2 Response to Notification of Cluster Restudy
Within five (5) Business Days of receipt of notification of Cluster
Restudy, Transmission Provider will send written notification to
Affected System Interconnection Customer(s) involved in the Cluster
Restudy and the host transmission provider that Transmission Provider
intends to delay a planned or in-progress Affected System Study until
after completion of the Cluster Restudy. If Transmission Provider
decides to delay the Affected System Study, it is not required to meet
its obligations under Section 9 of this LGIP until the time that it
receives notification from the host transmission provider that the
Cluster Restudy is complete. If Transmission Provider decides to move
forward with its Affected System Study despite the Cluster Restudy,
then it must meet all requirements under Section 9 of this LGIP.
9.3 Affected System Queue Position
Transmission Provider must assign an Affected System Queue Position
to Affected System Interconnection Customer(s) that require(s) an
Affected System Study. Such Affected System Queue Position shall be
assigned based upon the date of execution of the Affected System Study
Agreement. Relative to [the] Transmission Provider's Interconnection
Customers, this Affected System Queue Position shall be higher-queued
than any Cluster that has not yet received its Cluster Study Report and
shall be lower-queued than any Cluster that has already received its
Cluster Study Report. Consistent with Section 9.7 of this LGIP,
Transmission Provider shall study the Affected System Interconnection
Customer(s) via Clustering, and all Affected System Interconnection
Customers studied in the same Cluster under Section 9.7 of this LGIP
shall be equally queued. For Affected System Interconnection Customers
that are equally queued, the Affected System Queue Position shall have
no bearing on the assignment of Affected System Network Upgrades
identified in the applicable Affected System Study. The costs of the
Affected System Network Upgrades shall be allocated among the Affected
System Interconnection Customers in accordance with Section 9.9 of this
LGIP.
9.4 Affected System Study Agreement/Multiparty Affected System Study
Agreement
Unless otherwise agreed, Transmission Provider shall provide to
Affected System Interconnection Customer(s) an Affected System Study
Agreement/Multiparty Affected System Study Agreement, in the form of
Appendix 9 or Appendix 10 to this LGIP, as applicable, within ten (10)
Business Days of Transmission Provider sharing the schedule for the
Affected System Study per Section 9.2.1 of this LGIP.
Upon Affected System Interconnection Customer(s)' receipt of the
Affected System Study Report, Affected System Interconnection
Customer(s) shall compensate Transmission Provider for the actual cost
of the Affected System Study. Any difference between the study deposit
and the actual cost of the Affected System Study shall be paid by or
refunded to the
[[Page 27141]]
Affected System Interconnection Customer(s). Any invoices for the
Affected System Study shall include a detailed and itemized accounting
of the cost of the study. Affected System Interconnection Customer(s)
shall pay any excess costs beyond the already-paid Affected System
Study deposit or be reimbursed for any costs collected over the actual
cost of the Affected System Study within thirty (30) Calendar Days of
receipt of an invoice thereof. If Affected System Interconnection
Customer(s) fail to pay such undisputed costs within the time allotted,
it shall lose its Affected System Queue Position. Transmission Provider
shall notify Affected System Interconnection Customer's host
transmission provider of such failure to pay.
9.5 Execution of Affected System Study Agreement/Multiparty Affected
System Study Agreement
Affected System Interconnection Customer(s) shall execute the
Affected System Study Agreement/Multiparty Affected System Study
Agreement, deliver the executed Affected System Study Agreement/
Multiparty Affected System Study Agreement to Transmission Provider,
and provide the Affected System Study deposit within ten (10) Business
Days of receipt. If Transmission Provider notifies Affected System
Interconnection Customer(s) that it will delay the Affected System
Study pursuant to Section 9.2.2 of this LGIP, Affected System
Interconnection Customer(s) are neither required to execute and return
the previously tendered Affected System Study/Multiparty Affected
System Study Agreement nor provide the Affected System Study deposit
for the previously tendered Affected System Study/Multiparty Affected
System Study Agreement.
If Affected System Interconnection Customer does not provide all
required technical data when it delivers the Affected System Study
Agreement/Multiparty Affected System Study Agreement, Transmission
Provider shall notify the deficient Affected System Interconnection
Customer, as well as the host transmission provider with which Affected
System Interconnection Customer seeks to interconnect, of the technical
data deficiency within five (5) Business Days of the receipt of the
executed Affected System Study Agreement/Multiparty Affected System
Study Agreement and the deficient Affected System Interconnection
Customer shall cure the technical deficiency within ten (10) Business
Days of receipt of the notice: provided, however, that such deficiency
does not include failure to deliver the executed Affected System Study
Agreement/Multiparty Affected System Study Agreement or deposit for the
Affected System Study Agreement/Multiparty Affected System Study
Agreement. If Affected System Interconnection Customer does not cure
the technical data deficiency within the cure period or fails to
execute the Affected System Study Agreement/Multiparty Affected System
Study Agreement or provide the deposit, the Affected System
Interconnection Customer shall lose its Affected System Queue Position.
9.6 Scope of Affected System Study
The Affected System Study shall evaluate the impact that any
Affected System Interconnection Customer's proposed interconnection to
another transmission provider's transmission system will have on the
reliability of Transmission Provider's Transmission System. The
Affected System Study shall consider the Base Case as well as all
Generating Facilities (and with respect to (iii) below, any identified
Affected System Network Upgrades associated with such higher-queued
Interconnection Request) that, on the date the Affected System Study is
commenced: (i) are directly interconnected to Transmission Provider's
Transmission System; (ii) are directly interconnected to another
transmission provider's transmission system and may have an impact on
Affected System Interconnection Customer's interconnection request;
(iii) have a pending higher-queued Interconnection Request to
interconnect to Transmission Provider's Transmission System; and (iv)
have no queue position but have executed an LGIA or requested that an
unexecuted LGIA be filed with FERC. Transmission Provider has no
obligation to study impacts of Affected System Interconnection
Customers of which it is not notified.
The Affected System Study shall consist of a power flow, stability,
and short circuit analysis. The Affected System Study Report will:
state the assumptions upon which it is based; state the results of the
analyses; and provide the potential impediments to Affected System
Interconnection Customer's receipt if interconnection service on its
host transmission provider's transmission system, including a
preliminary indication of the cost and length of time that would be
necessary to correct any problems identified in those analyses and
implement the interconnection. For purposes of determining necessary
Affected System Network Upgrades, the Affected System Study shall
consider the level of interconnection service requested in megawatts by
Affected System Interconnection Customer, unless otherwise required to
study the full generating facility capacity due to safety or
reliability concerns. The Affected System Study Report shall provide a
list of facilities that are required as a result of Affected System
Interconnection Customer's proposed interconnection to another
transmission provider's system, a non-binding good faith estimate of
cost responsibility, and a non-binding good faith estimated time to
construct. The Affected System Study may consist of a system impact
study, a facilities study, or some combination thereof.
9.7 Affected System Study Procedures
Transmission Provider shall use Clustering in conducting the
Affected System Study and shall use existing studies to the extent
practicable, when multiple Affected System Interconnection Customers
that are part of a single Cluster may cause the need for Affected
System Network Upgrades. Transmission Provider shall complete the
Affected System Study and provide the Affected System Study Report to
Affected System Interconnection Customer(s) and the host transmission
provider with whom interconnection has been requested within one
hundred fifty (150) Calendar Days after the receipt of the Affected
System Study Agreement and deposit.
At the request of Affected System Interconnection Customer,
Transmission Provider shall notify Affected System Interconnection
Customer as to the status of the Affected System Study. If Transmission
Provider is unable to complete the Affected System Study within the
requisite time period, it shall notify Affected System Interconnection
Customer(s), as well as [the] transmission provider with which Affected
System Interconnection Customer seeks to interconnect, and shall
provide an estimated completion date with an explanation of the reasons
why additional time is required. If Transmission Provider does not meet
the deadlines in this [s]Section, Transmission Provider shall be
subject to the financial penalties as described in Section 3.9 of this
LGIP. Upon request, Transmission Provider shall provide Affected System
Interconnection Customer(s) with all supporting documentation,
workpapers and relevant power flow, short circuit and stability
databases for the Affected System Study, subject to confidentiality
arrangements consistent with Section 13.1 of this LGIP.
Transmission Provider must study an Affected System Interconnection
Customer using the Energy Resource Interconnection Service modeling
standard used for Interconnection Requests on its own Transmission
System, regardless of the level of interconnection service that
Affected System Interconnection Customer is seeking from the host
transmission provider with whom it seeks to interconnect.
9.8 Meeting with Transmission Provider
Within ten (10) Business Days of providing the Affected System
Study Report to Affected System Interconnection Customer(s),
Transmission Provider and Affected System Interconnection Customer(s)
shall meet to discuss the results of the Affected System Study.
9.9 Affected System Cost Allocation
Transmission Provider shall allocate Affected System Network
Upgrade costs identified during the Affected System Study to Affected
System Interconnection Customer(s) using a proportional impact method,
consistent with Section 4.2.1(1)(b) of this LGIP.
9.10 Tender of Affected Systems Facilities Construction Agreement/
Multiparty Affected System Facilities Construction Agreement
Transmission Provider shall tender to Affected System
Interconnection Customer(s) an Affected System Facilities Construction
Agreement/Multiparty Affected System Facilities Construction Agreement,
as applicable, in the form of Appendix 11 or 12 to this LGIP, within
thirty (30) Calendar Days of providing the Affected System Study
Report. Within ten (10) Business Days of the receipt of the Affected
System Facilities Construction Agreement/Multiparty Affected System
Facilities Construction Agreement, the Affected System Interconnection
Customer(s) must execute the agreement or
[[Page 27142]]
request the agreement to be filed unexecuted with FERC. Transmission
Provider shall execute the agreement or file the agreement unexecuted
within five (5) Business Days after receiving direction from Affected
System Interconnection Customer(s). Affected System Interconnection
Customer's failure to execute the Affected System Facilities
Construction Agreement/Multiparty Affected System Facilities
Construction Agreement, or failure to request the agreement to be filed
unexecuted with FERC, shall result in the loss of its Affected System
Queue Position.
9.11 Restudy
If restudy of the Affected System Study is required, Transmission
Provider shall notify Affected System Interconnection Customer(s) in
writing within thirty (30) Calendar Days of discovery of the need for
restudy. Such restudy shall take no longer than sixty (60) Calendar
Days from the date of notice. Any cost of restudy shall be borne by the
Affected System Interconnection Customer(s) being restudied.
Section 10. Optional Interconnection Study
10.1 Optional Interconnection Study Agreement
On or after the date when Interconnection Customer receives Cluster
Study results, Interconnection Customer may request, and Transmission
Provider shall perform a reasonable number of Optional Interconnection
Studies. The request shall describe the assumptions that
Interconnection Customer wishes Transmission Provider to study within
the scope described in Section 10.2 of this LGIP. Within five (5)
Business Days after receipt of a request for an Optional
Interconnection Study, Transmission Provider shall provide to
Interconnection Customer an Optional Interconnection Study Agreement in
the form of Appendix 4.
The Optional Interconnection Study Agreement shall: (i) specify the
technical data that Interconnection Customer must provide for each
phase of the Optional Interconnection Study, (ii) specify
Interconnection Customer's assumptions as to which Interconnection
Requests with earlier queue priority dates will be excluded from the
Optional Interconnection Study case and assumptions as to the type of
I[i]nterconnection S[s]ervice for Interconnection Requests remaining in
the Optional Interconnection Study case, and (iii) Transmission
Provider's estimate of the cost of the Optional Interconnection Study.
To the extent known by Transmission Provider, such estimate shall
include any costs expected to be incurred by any Affected System
Operator whose participation is necessary to complete the Optional
Interconnection Study. Notwithstanding the above, Transmission Provider
shall not be required as a result of an Optional Interconnection Study
request to conduct any additional Interconnection Studies with respect
to any other Interconnection Request.
Interconnection Customer shall execute the Optional Interconnection
Study Agreement within ten (10) Business Days of receipt and deliver
the Optional Interconnection Study Agreement, the technical data and a
$10,000 deposit to Transmission Provider.
10.2 Scope of Optional Interconnection Study
The Optional Interconnection Study will consist of a sensitivity
analysis based on the assumptions specified by Interconnection Customer
in the Optional Interconnection Study Agreement. The Optional
Interconnection Study will also identify Transmission Provider's
Interconnection Facilities and the Network Upgrades, and the estimated
cost thereof, that may be required to provide transmission service or
Interconnection Service based upon the results of the Optional
Interconnection Study. The Optional Interconnection Study shall be
performed solely for informational purposes. Transmission Provider
shall use Reasonable Efforts to coordinate the study with any Affected
Systems that may be affected by the types of Interconnection Services
that are being studied. Transmission Provider shall utilize existing
studies to the extent practicable in conducting the Optional
Interconnection Study.
10.3 Optional Interconnection Study Procedures
The executed Optional Interconnection Study Agreement, the
prepayment, and technical and other data called for therein must be
provided to Transmission Provider within ten (10) Business Days of
Interconnection Customer receipt of the Optional Interconnection Study
Agreement. Transmission Provider shall use Reasonable Efforts to
complete the Optional Interconnection Study within a mutually agreed
upon time period specified within the Optional Interconnection Study
Agreement. If Transmission Provider is unable to complete the Optional
Interconnection Study within such time period, it shall notify
Interconnection Customer and provide an estimated completion date and
an explanation of the reasons why additional time is required. Any
difference between the study payment and the actual cost of the study
shall be paid to Transmission Provider or refunded to Interconnection
Customer, as appropriate. Upon request, Transmission Provider shall
provide Interconnection Customer supporting documentation and
workpapers and databases or data developed in the preparation of the
Optional Interconnection Study, subject to confidentiality arrangements
consistent with Section 13.1 of this LGIP.
Section 11. Standard Large Generator Interconnection Agreement (LGIA)
11.1 Tender
Interconnection Customer shall tender comments on the draft
Interconnection Facilities Study Report within thirty (30) Calendar
Days of receipt of the report. Within thirty (30) Calendar Days after
the comments are submitted or after Interconnection Customer notifies
Transmission Provider that it will not provide comments, Transmission
Provider shall tender a draft LGIA, together with draft appendices. The
draft LGIA shall be in the form of Transmission Provider's FERC-
approved standard form LGIA, which is in Appendix 5. Interconnection
Customer shall execute and return the LGIA and completed draft
appendices within thirty (30) Calendar Days, unless (1) the sixty (60)
Calendar Day negotiation period under Section 11.2 of this LGIP has
commenced, or (2) LGIA execution, or filing unexecuted, has been
delayed to await the Affected System Study Report pursuant to Section
11.2.1 of this LGIP.
11.2 Negotiation
Notwithstanding Section 11.1 of this LGIP, at the request of
Interconnection Customer, Transmission Provider shall begin
negotiations with Interconnection Customer concerning the appendices to
the LGIA at any time after Interconnection Customer executes the
Interconnection Facilities Study Agreement. Transmission Provider and
Interconnection Customer shall negotiate concerning any disputed
provisions of the appendices to the draft LGIA for not more than sixty
(60) Calendar Days after tender of the final Interconnection Facilities
Study Report. If Interconnection Customer determines that negotiations
are at an impasse, it may request termination of the negotiations at
any time after tender of the draft LGIA pursuant to Section 11.1 of
this LGIP and request submission of the unexecuted LGIA with FERC or
initiate Dispute Resolution procedures pursuant to Section 13.5 of this
LGIP. If Interconnection Customer requests termination of the
negotiations, but within sixty (60) Calendar Days thereafter fails to
request either the filing of the unexecuted LGIA or initiate Dispute
Resolution, it shall be deemed to have withdrawn its Interconnection
Request. Unless otherwise agreed by the Parties, if Interconnection
Customer has not executed the LGIA, requested filing of an unexecuted
LGIA, or initiated Dispute Resolution procedures pursuant to Section
13.5 of this LGIP within sixty (60) Calendar Days of tender of draft
LGIA, it shall be deemed to have withdrawn its Interconnection Request.
Transmission Provider shall provide to Interconnection Customer a final
LGIA within fifteen (15) Business Days after the completion of the
negotiation process.
11.2.1 Delay in LGIA Execution, or Filing Unexecuted, To Await Affected
System Study Report
If Interconnection Customer has not received its Affected System
Study Report from the Affected System Operator prior to the date that
it would be required to execute its LGIA (or request that its LGIA be
filed unexecuted) pursuant to Section 11.1 of this LGIP, Transmission
Provider shall, upon request of Interconnection Customer, extend this
deadline to thirty (30) Calendar Days after Interconnection Customer's
receipt of the Affected System Study Report. If Interconnection
Customer, after delaying LGIA execution, or requesting unexecuted
filing, to await Affected System Study [Results]Report, decides to
proceed to LGIA execution, or request unexecuted filing, without those
results, it may notify Transmission Provider of its intent to proceed
with LGIA execution (or request that its LGIA be filed unexecuted)
pursuant to Section 11.1 of this LGIP. If Transmission Provider
determines that further delay to the
[[Page 27143]]
LGIA execution date would cause a material impact on the cost or timing
of an equal- or lower-queued [i]Interconnection [c]Customer,
Transmission Provider must notify Interconnection Customer of such
impacts and set the deadline to execute the LGIA (or request that the
LGIA be filed unexecuted) to thirty (30) Calendar Days after such
notice is provided.
11.3 Execution and Filing
Simultaneously with submitting the executed LGIA to Transmission
Provider, or within ten (10) Business Days after [the] Interconnection
Customer requests that [the] Transmission Provider file the LGIA
unexecuted at the Commission, Interconnection Customer shall provide
Transmission Provider with the following: (1) demonstration of
continued Site Control pursuant to Section 8.1(2) of this LGIP; and (2)
the LGIA Deposit equal to twenty percent (20%) of Interconnection
Customer's estimated Network Upgrade costs identified in the draft LGIA
minus the total amount of Commercial Readiness Deposits that
Interconnection Customer has provided to Transmission Provider for its
Interconnection Request. Transmission Provider shall use LGIA Deposit
as (or as a portion of) [the] Interconnection Customer's security
required under LGIA Article 11.5. Interconnection Customer may not
request to suspend its LGIA under LGIA Article 5.16 until
Interconnection Customer has provided (1) and (2) to Transmission
Provider. If Interconnection Customer fails to provide (1) and (2) to
Transmission Provider within the thirty (30) Calendar Days allowed for
returning the executed LGIA and appendices under LGIP Section 11.1, or
within ten (10) Business Days after Interconnection Customer requests
that Transmission Provider file the LGIA unexecuted at the Commission
as allowed in this Section 11.3 of this LGIP, the Interconnection
Request will be deemed withdrawn pursuant to Section 3.7 of this LGIP.
At the same time, Interconnection Customer also shall provide
reasonable evidence that one or more of the following milestones in the
development of the Large Generating Facility, at Interconnection
Customer election, has been achieved (unless such milestone is
inapplicable due to the characteristics of the Generating Facility):
(i) the execution of a contract for the supply or transportation of
fuel to the Large Generating Facility; (ii) the execution of a contract
for the supply of cooling water to the Large Generating Facility; (iii)
execution of a contract for the engineering for, procurement of major
equipment for, or construction of, the Large Generating Facility; (iv)
execution of a contract (or comparable evidence) for the sale of
electric energy or capacity from the Large Generating Facility; or (v)
application for an air, water, or land use permit.
Interconnection Customer shall either: (i) execute two originals of
the tendered LGIA and return them to Transmission Provider; or (ii)
request in writing that Transmission Provider file with FERC an LGIA in
unexecuted form. As soon as practicable, but not later than ten (10)
Business Days after receiving either the two executed originals of the
tendered LGIA (if it does not conform with a FERC-approved [standard
form of interconnection agreement] Standard Large Generator
Interconnection Agreement) or the request to file an unexecuted LGIA,
Transmission Provider shall file the LGIA with FERC, together with its
explanation of any matters as to which Interconnection Customer and
Transmission Provider disagree and support for the costs that
Transmission Provider proposes to charge to Interconnection Customer
under the LGIA. An unexecuted LGIA should contain terms and conditions
deemed appropriate by Transmission Provider for the Interconnection
Request. If the Parties agree to proceed with design, procurement, and
construction of facilities and upgrades under the agreed-upon terms of
the unexecuted LGIA, they may proceed pending FERC action.
11.4 Commencement of Interconnection Activities
If Interconnection Customer executes the final LGIA, Transmission
Provider and Interconnection Customer shall perform their respective
obligations in accordance with the terms of the LGIA, subject to
modification by FERC. Upon submission of an unexecuted LGIA,
Interconnection Customer and Transmission Provider shall promptly
comply with the unexecuted LGIA, subject to modification by FERC.
Section 12. Construction of Transmission Provider's Interconnection
Facilities and Network Upgrades
12.1 Schedule
Transmission Provider and Interconnection Customer shall negotiate
in good faith concerning a schedule for the construction of
Transmission Provider's Interconnection Facilities and the Network
Upgrades.
12.2 Construction Sequencing
12.2.1 General
In general, the In-Service Date of an Interconnection Customer[s]
seeking interconnection to the Transmission System will determine the
sequence of construction of Network Upgrades.
12.2.2 Advance Construction of Network Upgrades That Are an Obligation
of an Entity Other Than Interconnection Customer
An Interconnection Customer with an LGIA, in order to maintain its
In-Service Date, may request that Transmission Provider advance to the
extent necessary the completion of Network Upgrades that: (i) were
assumed in the Interconnection Studies for such Interconnection
Customer, (ii) are necessary to support such In-Service Date, and (iii)
would otherwise not be completed, pursuant to a contractual obligation
of an entity other than Interconnection Customer that is seeking
interconnection to the Transmission System, in time to support such In-
Service Date. Upon such request, Transmission Provider will use
Reasonable Efforts to advance the construction of such Network Upgrades
to accommodate such request; provided that Interconnection Customer
commits to pay Transmission Provider: (i) any associated expediting
costs and (ii) the cost of such Network Upgrades.
Transmission Provider will refund to Interconnection Customer both
the expediting costs and the cost of Network Upgrades, in accordance
with Article 11.4 of the LGIA. Consequently, the entity with a
contractual obligation to construct such Network Upgrades shall be
obligated to pay only that portion of the costs of the Network Upgrades
that Transmission Provider has not refunded to Interconnection
Customer. Payment by that entity shall be due on the date that it would
have been due had there been no request for advance construction.
Transmission Provider shall forward to Interconnection Customer the
amount paid by the entity with a contractual obligation to construct
the Network Upgrades as payment in full for the outstanding balance
owed to Interconnection Customer. Transmission Provider then shall
refund to that entity the amount that it paid for the Network Upgrades,
in accordance with Article 11.4 of the LGIA.
12.2.3 Advancing Construction of Network Upgrades That Are Part of an
Expansion Plan of [the] Transmission Provider
An Interconnection Customer with an LGIA, in order to maintain its
In-Service Date, may request that Transmission Provider advance to the
extent necessary the completion of Network Upgrades that: (i) are
necessary to support such In-Service Date and (ii) would otherwise not
be completed, pursuant to an expansion plan of Transmission Provider,
in time to support such In-Service Date. Upon such request,
Transmission Provider will use Reasonable Efforts to advance the
construction of such Network Upgrades to accommodate such request;
provided that Interconnection Customer commits to pay Transmission
Provider any associated expediting costs. Interconnection Customer
shall be entitled to transmission credits, if any, for any expediting
costs paid.
12.2.4 Amended Interconnection Cluster Study Report
An Interconnection Cluster Study Report will be amended to
determine the facilities necessary to support the requested In-Service
Date. This amended study report will include those transmission and
Large Generating Facilities that are expected to be in service on or
before the requested In-Service Date.
Section 13. Miscellaneous
13.1 Confidentiality
Confidential Information shall include, without limitation, all
information relating to a Party's technology, research and development,
business affairs, and pricing, and any information supplied by either
of the Parties to the other prior to the execution of an LGIA.
Information is Confidential Information only if it is clearly
designated or marked in writing as confidential on the face of the
document, or, if the information is conveyed orally or by inspection,
if the Party providing the information orally informs the Party
receiving the information that the information is confidential.
If requested by either Party, the other Party shall provide in
writing, the basis for asserting that the information referred to in
[[Page 27144]]
this Article warrants confidential treatment, and the requesting Party
may disclose such writing to the appropriate Governmental Authority.
Each Party shall be responsible for the costs associated with affording
confidential treatment to its information.
13.1.1 Scope
Confidential Information shall not include information that the
receiving Party can demonstrate: (1) is generally available to the
public other than as a result of a disclosure by the receiving Party;
(2) was in the lawful possession of the receiving Party on a non-
confidential basis before receiving it from the disclosing Party; (3)
was supplied to the receiving Party without restriction by a third
party, who, to the knowledge of the receiving Party after due inquiry,
was under no obligation to the disclosing Party to keep such
information confidential; (4) was independently developed by the
receiving Party without reference to Confidential Information of the
disclosing Party; (5) is, or becomes, publicly known, through no
wrongful act or omission of the receiving Party or Breach of the LGIA;
or (6) is required, in accordance with Section 13.1.6 of this LGIP,
Order of Disclosure, to be disclosed by any Governmental Authority or
is otherwise required to be disclosed by law or subpoena, or is
necessary in any legal proceeding establishing rights and obligations
under the LGIA. Information designated as Confidential Information will
no longer be deemed confidential if the Party that designated the
information as confidential notifies the other Party that it no longer
is confidential.
13.1.2 Release of Confidential Information
Neither Party shall release or disclose Confidential Information to
any other person, except to its Affiliates (limited by the Standards of
Conduct requirements), employees, consultants, or to parties who may be
or considering providing financing to or equity participation with
Interconnection Customer, or to potential purchasers or assignees of
Interconnection Customer, on a need-to-know basis in connection with
these procedures, unless such person has first been advised of the
confidentiality provisions of this Section 13.1 and has agreed to
comply with such provisions. Notwithstanding the foregoing, a Party
providing Confidential Information to any person shall remain primarily
responsible for any release of Confidential Information in
contravention of this Section 13.1.
13.1.3 Rights
Each Party retains all rights, title, and interest in the
Confidential Information that each Party discloses to the other Party.
The disclosure by each Party to the other Party of Confidential
Information shall not be deemed a waiver by either Party or any other
person or entity of the right to protect the Confidential Information
from public disclosure.
13.1.4 No Warranties
By providing Confidential Information, neither Party makes any
warranties or representations as to its accuracy or completeness. In
addition, by supplying Confidential Information, neither Party
obligates itself to provide any particular information or Confidential
Information to the other Party nor to enter into any further agreements
or proceed with any other relationship or joint venture.
13.1.5 Standard of Care
Each Party shall use at least the same standard of care to protect
Confidential Information it receives as it uses to protect its own
Confidential Information from unauthorized disclosure, publication or
dissemination. Each Party may use Confidential Information solely to
fulfill its obligations to the other Party under these procedures or
its regulatory requirements.
13.1.6 Order of Disclosure
If a court or a Government Authority or entity with the right,
power, and apparent authority to do so requests or requires either
Party, by subpoena, oral deposition, interrogatories, requests for
production of documents, administrative order, or otherwise, to
disclose Confidential Information, that Party shall provide the other
Party with prompt notice of such request(s) or requirement(s) so that
the other Party may seek an appropriate protective order or waive
compliance with the terms of the LGIA. Notwithstanding the absence of a
protective order or waiver, the Party may disclose such Confidential
Information which, in the opinion of its counsel, the Party is legally
compelled to disclose. Each Party will use Reasonable Efforts to obtain
reliable assurance that confidential treatment will be accorded any
Confidential Information so furnished.
13.1.7 Remedies
The Parties agree that monetary damages would be inadequate to
compensate a Party for the other Party's Breach of its obligations
under this Section 13.1. Each Party accordingly agrees that the other
Party shall be entitled to equitable relief, by way of injunction or
otherwise, if the first Party Breaches or threatens to Breach its
obligations under this Section 13.1, which equitable relief shall be
granted without bond or proof of damages, and the receiving Party shall
not plead in defense that there would be an adequate remedy at law.
Such remedy shall not be deemed an exclusive remedy for the Breach of
this Section 13.1, but shall be in addition to all other remedies
available at law or in equity. The Parties further acknowledge and
agree that the covenants contained herein are necessary for the
protection of legitimate business interests and are reasonable in
scope. No Party, however, shall be liable for indirect, incidental, or
consequential or punitive damages of any nature or kind resulting from
or arising in connection with this Section 13.1.
13.1.8 Disclosure to FERC, its Staff, or a State
Notwithstanding anything in this Section 13.1 to the contrary, and
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of an
investigation or otherwise, requests information from one of the
Parties that is otherwise required to be maintained in confidence
pursuant to the LGIP, the Party shall provide the requested information
to FERC or its staff, within the time provided for in the request for
information. In providing the information to FERC or its staff, the
Party must, consistent with 18 CFR 388.112, request that the
information be treated as confidential and non-public by FERC and its
staff and that the information be withheld from public disclosure.
Parties are prohibited from notifying the other Party prior to the
release of the Confidential Information to FERC or its staff. The Party
shall notify the other Party to the LGIA when it[s] is notified by FERC
or its staff that a request to release Confidential Information has
been received by FERC, at which time either of the Parties may respond
before such information would be made public, pursuant to 18 CFR
388.112. Requests from a state regulatory body conducting a
confidential investigation shall be treated in a similar manner,
consistent with applicable state rules and regulations.
13.1.9
Subject to the exception in Section 13.1.8 of this LGIP, any
information that a Party claims is competitively sensitive, commercial
or financial information (``Confidential Information'') shall not be
disclosed by the other Party to any person not employed or retained by
the other Party, except to the extent disclosure is (i) required by
law; (ii) reasonably deemed by the disclosing Party to be required to
be disclosed in connection with a dispute between or among the Parties,
or the defense of litigation or dispute; (iii) otherwise permitted by
consent of the other Party, such consent not to be unreasonably
withheld; or (iv) necessary to fulfill its obligations under this LGIP
or as a transmission service provider or a Balancing Authority Area
operator including disclosing the Confidential Information to an RTO or
ISO or to a subregional, regional or national reliability organization
or planning group. The Party asserting confidentiality shall notify the
other Party in writing of the information it claims is confidential.
Prior to any disclosures of the other Party's Confidential Information
under this subparagraph, or if any third party or Governmental
Authority makes any request or demand for any of the information
described in this subparagraph, the disclosing Party agrees to promptly
notify the other Party in writing and agrees to assert confidentiality
and cooperate with the other Party in seeking to protect the
Confidential Information from public disclosure by confidentiality
agreement, protective order or other reasonable measures.
13.1.10
This provision shall not apply to any information that was or is
hereafter in the public domain (except as a result of a Breach of this
provision).
13.1.11
Transmission Provider shall, at Interconnection Customer's
election, destroy, in a confidential manner, or return the Confidential
Information provided at the time of Confidential Information is no
longer needed.
[[Page 27145]]
13.2 Delegation of Responsibility
Transmission Provider may use the services of subcontractors as it
deems appropriate to perform its obligations under this LGIP.
Transmission Provider shall remain primarily liable to Interconnection
Customer for the performance of such subcontractors and compliance with
its obligations of this LGIP. The subcontractor shall keep all
information provided confidential and shall use such information solely
for the performance of such obligation for which it was provided and no
other purpose.
13.3 Obligation for Study Costs
In the event an Interconnection Customer withdraws its
Interconnection Request prior to the commencement of the Cluster Study,
Interconnection Customer must pay Transmission Provider the actual
costs of processing its Interconnection Request. In the event an
Interconnection Customer withdraws after the commencement of the
Cluster Study, Transmission Provider shall charge and Interconnection
Customer shall pay the actual costs of the Interconnection Studies. The
costs of any interconnection study conducted on a clustered basis shall
be allocated among each Interconnection Customer within the cluster as
follows: {Transmission Provider shall include in this section a
description of how the cost of any clustered interconnection study will
be allocated.{time}
Any difference between the study deposit and the actual cost of the
[applicable] Interconnection Studies[y] shall be paid by or refunded
to, except as otherwise provided herein, to Interconnection Customers
[or offset against the cost of any future Interconnection Studies
associated with the applicable Cluster prior to beginning of any such
future Interconnection Studies]. Any invoices for Interconnection
Studies shall include a detailed and itemized accounting of the cost of
each Interconnection Study. Interconnection Customers shall pay any
such undisputed costs within thirty (30) Calendar Days of receipt of an
invoice therefor. If [an] Interconnection Customer fails to pay such
undisputed costs within the time allotted, its Interconnection Request
shall be deemed withdrawn from the Cluster Study Process and will be
subject to Withdrawal Penalties pursuant to Section 3.7 of this LGIP.
13.4 Third Parties Conducting Studies
If (i) at the time of the signing of an Interconnection Study
Agreement there is disagreement as to the estimated time to complete an
Interconnection Study, (ii) Interconnection Customer receives notice
pursuant to Sections 6.3, 7.4 or 8.3 of this LGIP that Transmission
Provider will not complete an Interconnection Study within the
applicable timeframe for such Interconnection Study, or (iii)
Interconnection Customer receives neither the Interconnection Study nor
a notice under Sections 6.3, 7.4 or 8.3 of this LGIP within the
applicable timeframe for such Interconnection Study, then
Interconnection Customer may require Transmission Provider to utilize a
third party consultant reasonably acceptable to Interconnection
Customer and Transmission Provider to perform such Interconnection
Study under the direction of Transmission Provider. At other times,
Transmission Provider may also utilize a third party consultant to
perform such Interconnection Study, either in response to a general
request of Interconnection Customer, or on its own volition.
In all cases, use of a third party consultant shall be in accord
with Article 26 of the LGIA (Subcontractors) and limited to situations
where Transmission Provider determines that doing so will help maintain
or accelerate the study process for Interconnection Customer's pending
Interconnection Request and not interfere with Transmission Provider's
progress on Interconnection Studies for other pending Interconnection
Requests. In cases where Interconnection Customer requests use of a
third party consultant to perform such Interconnection Study,
Interconnection Customer and Transmission Provider shall negotiate all
of the pertinent terms and conditions, including reimbursement
arrangements and the estimated study completion date and study review
deadline. Transmission Provider shall convey all workpapers, data
bases, study results and all other supporting documentation prepared to
date with respect to the Interconnection Request as soon as soon as
practicable upon Interconnection Customer's request subject to the
confidentiality provision in Section 13.1 of this LGIP. In any case,
such third party contract may be entered into with either
Interconnection Customer or Transmission Provider at Transmission
Provider's discretion. In the case of (iii) Interconnection Customer
maintains its right to submit a claim to Dispute Resolution to recover
the costs of such third party study. Such third party consultant shall
be required to comply with this LGIP, Article 26 of the LGIA
(Subcontractors), and the relevant Tariff procedures and protocols as
would apply if Transmission Provider were to conduct the
Interconnection Study and shall use the information provided to it
solely for purposes of performing such services and for no other
purposes. Transmission Provider shall cooperate with such third party
consultant and Interconnection Customer to complete and issue the
Interconnection Study in the shortest reasonable time.
13.5 Disputes
13.5.1 Submission
In the event either Party has a dispute, or asserts a claim, that
arises out of or in connection with the LGIA, the LGIP, or their
performance, such Party (the ``disputing Party'') shall provide the
other Party with written notice of the dispute or claim (``Notice of
Dispute''). Such dispute or claim shall be referred to a designated
senior representative of each Party for resolution on an informal basis
as promptly as practicable after receipt of the Notice of Dispute by
the other Party. In the event the designated representatives are unable
to resolve the claim or dispute through unassisted or assisted
negotiations within thirty (30) Calendar Days of the other Party's
receipt of the Notice of Dispute, such claim or dispute may, upon
mutual agreement of the Parties, be submitted to arbitration and
resolved in accordance with the arbitration procedures set forth below.
In the event the Parties do not agree to submit such claim or dispute
to arbitration, each Party may exercise whatever rights and remedies it
may have in equity or at law consistent with the terms of this LGIA.
13.5.2 External Arbitration Procedures
Any arbitration initiated under these procedures shall be conducted
before a single neutral arbitrator appointed by the Parties. If the
Parties fail to agree upon a single arbitrator within ten (10) Calendar
Days of the submission of the dispute to arbitration, each Party shall
choose one arbitrator who shall sit on a three-member arbitration
panel. The two arbitrators so chosen shall within twenty (20) Calendar
Days select a third arbitrator to chair the arbitration panel. In
either case, the arbitrators shall be knowledgeable in electric utility
matters, including electric transmission and bulk power issues, and
shall not have any current or past substantial business or financial
relationships with any party to the arbitration (except prior
arbitration). The arbitrator(s) shall provide each of the Parties an
opportunity to be heard and, except as otherwise provided herein, shall
conduct the arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (``Arbitration Rules'')
and any applicable FERC regulations or RTO rules; provided, however, in
the event of a conflict between the Arbitration Rules and the terms of
this Section 13, the terms of this Section 13 shall prevail.
13.5.3 Arbitration Decisions
Unless otherwise agreed by the Parties, the arbitrator(s) shall
render a decision within ninety (90) Calendar Days of appointment and
shall notify the Parties in writing of such decision and the reasons
therefor. The arbitrator(s) shall be authorized only to interpret and
apply the provisions of the LGIA and LGIP and shall have no power to
modify or change any provision of the LGIA and LGIP in any manner. The
decision of the arbitrator(s) shall be final and binding upon the
Parties, and judgment on the award may be entered in any court having
jurisdiction. The decision of the arbitrator(s) may be appealed solely
on the grounds that the conduct of the arbitrator(s), or the decision
itself, violated the standards set forth in the Federal Arbitration Act
or the Administrative Dispute Resolution Act. The final decision of the
arbitrator must also be filed with FERC if it affects jurisdictional
rates, terms and conditions of service, Interconnection Facilities, or
Network Upgrades.
13.5.4 Costs
Each Party shall be responsible for its own costs incurred during
the arbitration process and for the following costs, if applicable: (1)
the cost of the arbitrator chosen by the Party to sit on the three
member panel and one half of the cost of the third arbitrator chosen;
or (2) one half the cost of the single arbitrator jointly chosen by the
Parties.
13.5.5 Non-Binding Dispute Resolution Procedures
If a Party has submitted a Notice of Dispute pursuant to Section
13.5.1 of this LGIP, and
[[Page 27146]]
the Parties are unable to resolve the claim or dispute through
unassisted or assisted negotiations within the thirty (30) Calendar
Days provided in that section, and the Parties cannot reach mutual
agreement to pursue the Section 13.5 arbitration process, a Party may
request that Transmission Provider engage in Non-binding Dispute
Resolution pursuant to this [s]Section by providing written notice to
Transmission Provider (``Request for Non-binding Dispute Resolution'').
Conversely, either Party may file a Request for Non-binding Dispute
Resolution pursuant to this [s]Section without first seeking mutual
agreement to pursue the Section 13.5 arbitration process. The process
in this Section 13.5.5 shall serve as an alternative to, and not a
replacement of, the Section 13.5 arbitration process. Pursuant to this
process, a Transmission Provider must within thirty (30) Calendar
[d]Days of receipt of the Request for Non-binding Dispute Resolution
appoint a neutral decision-maker that is an independent subcontractor
that shall not have any current or past substantial business or
financial relationships with either Party. Unless otherwise agreed by
the Parties, the decision-maker shall render a decision within sixty
(60) Calendar Days of appointment and shall notify the Parties in
writing of such decision and reasons therefore. This decision-maker
shall be authorized only to interpret and apply the provisions of the
LGIP and LGIA and shall have no power to modify or change any provision
of the LGIP and LGIA in any manner. The result reached in this process
is not binding, but, unless otherwise agreed, the Parties may cite the
record and decision in the non-binding dispute resolution process in
future dispute resolution processes, including in a Section 13.5
arbitration, or in a Federal Power Act section 206 complaint. Each
Party shall be responsible for its own costs incurred during the
process and the cost of the decision-maker shall be divided equally
among each Party to the dispute.
13.6 Local Furnishing Bonds
13.6.1 Transmission Providers That Own Facilities Financed by Local
Furnishing Bonds
This provision is applicable only to a Transmission Provider that
has financed facilities for the local furnishing of electric energy
with tax-exempt bonds, as described in Section 142(f) of the Internal
Revenue Code (``local furnishing bonds''). Notwithstanding any other
provision of this LGIA and LGIP, Transmission Provider shall not be
required to provide Interconnection Service to Interconnection Customer
pursuant to this LGIA and LGIP if the provision of such Transmission
Service would jeopardize the tax-exempt status of any local furnishing
bond(s) used to finance Transmission Provider's facilities that would
be used in providing such Interconnection Service.
13.6.2 Alternative Procedures for Requesting Interconnection Service
If Transmission Provider determines that the provision of
Interconnection Service requested by Interconnection Customer would
jeopardize the tax-exempt status of any local furnishing bond(s) used
to finance its facilities that would be used in providing such
Interconnection Service, it shall advise [the] Interconnection Customer
within thirty (30) Calendar Days of receipt of the Interconnection
Request.
Interconnection Customer thereafter may renew its request for
interconnection using the process specified in [Article]Section 5.2(ii)
of [the] Transmission Provider's Tariff.
13.7 Engineering & Procurement (`E&P') Agreement
Prior to executing an LGIA, an Interconnection Customer may, in
order to advance the implementation of its interconnection, request and
Transmission Provider shall offer Interconnection Customer, an E&P
Agreement that authorizes Transmission Provider to begin engineering
and procurement of long lead-time items necessary for the establishment
of the interconnection. However, Transmission Provider shall not be
obligated to offer an E&P Agreement if Interconnection Customer is in
Dispute Resolution as a result of an allegation that Interconnection
Customer has failed to meet any milestones or comply with any
prerequisites specified in other parts of the LGIP. The E&P Agreement
is an optional procedure and it will not alter Interconnection
Customer's Queue Position or In-Service Date. The E&P Agreement shall
provide for Interconnection Customer to pay the cost of all activities
authorized by Interconnection Customer and to make advance payments or
provide other satisfactory security for such costs.
Interconnection Customer shall pay the cost of such authorized
activities and any cancellation costs for equipment that is already
ordered for its interconnection, which cannot be mitigated as hereafter
described, whether or not such items or equipment later become
unnecessary. If Interconnection Customer withdraws its Interconnection
Request or either Party terminates the E&P Agreement, to the extent the
equipment ordered can be canceled under reasonable terms,
Interconnection Customer shall be obligated to pay the associated
cancellation costs. To the extent that the equipment cannot be
reasonably canceled, Transmission Provider may elect: (i) to take title
to the equipment, in which event Transmission Provider shall refund
Interconnection Customer any amounts paid by Interconnection Customer
for such equipment and shall pay the cost of delivery of such
equipment, or (ii) to transfer title to and deliver such equipment to
Interconnection Customer, in which event Interconnection Customer shall
pay any unpaid balance and cost of delivery of such equipment.
Appendix 1 to LGIP
Interconnection Request for a Large Generating Facility
1. The undersigned Interconnection Customer submits this request to
interconnect its Large Generating Facility with Transmission Provider's
Transmission System pursuant to a Tariff.
2. This Interconnection Request is for (check one):
__ A proposed new Large Generating Facility.
__ An increase in the generating capacity or a Material
Modification of an existing Generating Facility.
3. The type of interconnection service requested (check one):
__ Energy Resource Interconnection Service.
__ Network Resource Interconnection Service.
4. __ Check here only if Interconnection Customer requesting
Network Resource Interconnection Service also seeks to have its
Generating Facility studied for Energy Resource Interconnection
Service.
5. Interconnection Customer provides the following information:
a. Address or location or the proposed new Large Generating
Facility site (to the extent known) or, in the case of an existing
Generating Facility, the name and specific location of the existing
Generating Facility;
b. Maximum summer at __ degrees C and winter at __ degrees C
megawatt electrical output of the proposed new Large Generating
Facility or the amount of megawatt increase in the generating capacity
of an existing Generating Facility;
c. General description of the equipment configuration;
d. Commercial Operation Date (Day, Month, and Year);
e. Name, address, telephone number, and email address of
Interconnection Customer's contact person;
f. Approximate location of the proposed Point of Interconnection
(optional);
g. Interconnection Customer Data (set forth in Attachment A);
h. Primary frequency response operating range for electric storage
resources;
i. Requested capacity (in MW) of Interconnection Service (if lower
than the Generating Facility Capacity);
j. If applicable, (1) the requested operating assumptions (i.e.,
whether the interconnecting Generating Facility will or will not charge
at peak load) to be used by Transmission Provider that reflect the
proposed charging behavior of a Generating Facility that includes at
least one electric storage resource, and (2) a description of any
control technologies (software and/or hardware) that will limit the
operation of the Generating Facility to its intended operation.
6. Applicable deposit amount as specified in the LGIP.
7. Evidence of Site Control as specified in the LGIP (check one).
__ Is attached to this Interconnection Request.
__ Will be provided at a later date in accordance with this LGIP.
8. This Interconnection Request shall be submitted to the
representative indicated below:
{To be completed by Transmission Provider{time}
9. Representative of Interconnection Customer to contact:
{To be completed by Interconnection Customer{time}
10. This Interconnection Request is submitted by:
Name of Interconnection Customer:--------------------------------------
[[Page 27147]]
By (signature):--------------------------------------------------------
Name (type or print):--------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
BILLING CODE 6717-01-P
Attachment A to Appendix 1
Interconnection Request
[GRAPHIC] [TIFF OMITTED] TR16AP24.000
[[Page 27148]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.001
[[Page 27149]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.002
[[Page 27150]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.003
[[Page 27151]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.004
[[Page 27152]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.005
BILLING CODE 6717-01-C
Note: A completed General Electric Company Power Systems Load
Flow (PSLF) data sheet or other compatible formats, such as IEEE and
PTI power flow models, must be
[[Page 27153]]
supplied with the Interconnection Request. If other data sheets are
more appropriate to the proposed device, then they shall be provided
and discussed at Scoping Meeting.
Induction Generators
(*) Field Volts:-------------------------------------------------------
(*) Field Amperes:-----------------------------------------------------
(*) Motoring Power (kW):-----------------------------------------------
(*) Neutral Grounding Resistor (If Applicable):------------------------
(*) I2\2\t or K (Heating Time Constant):--------------------
(*) Rotor Resistance:--------------------------------------------------
(*) Stator Resistance:-------------------------------------------------
(*) Stator Reactance:--------------------------------------------------
(*) Rotor Reactance:---------------------------------------------------
(*) Magnetizing Reactance:---------------------------------------------
(*) Short Circuit Reactance:-------------------------------------------
(*) Exciting Current:--------------------------------------------------
(*) Temperature Rise:--------------------------------------------------
(*) Frame Size:--------------------------------------------------------
(*) Design Letter:-----------------------------------------------------
(*) Reactive Power Required In Vars (No Load):-------------------------
(*) Reactive Power Required In Vars (Full Load):-----------------------
(*) Total Rotating Inertia, H: Per Unit on KVA Base--------------------
Note: Please consult Transmission Provider prior to submitting
the Interconnection Request to determine if the information
designated by (*) is required.
Models for Non-Synchronous Generators
For a non-synchronous Large Generating Facility, Interconnection
Customer shall provide (1) a validated user-defined root mean squared
(RMS) positive sequence dynamics model; (2) an appropriately
parameterized generic library RMS positive sequence dynamics model,
including model block diagram of the inverter control and plant control
systems, as defined by the selection in Table 1 or a model otherwise
approved by the Western Electricity Coordinating Council, that
corresponds to Interconnection Customer's Large Generating Facility;
and (3) if applicable, a validated electromagnetic transient model if
Transmission Provider performs an electromagnetic transient study as
part of the interconnection study process. A user-defined model is a
set of programming code created by equipment manufacturers or
developers that captures the latest features of controllers that are
mainly software based and represents the entities' control strategies
but does not necessarily correspond to any generic library model.
Interconnection Customer must also demonstrate that the model is
validated by providing evidence that the equipment behavior is
consistent with the model behavior (e.g., an attestation from
Interconnection Customer that the model accurately represents the
entire Large Generating Facility; attestations from each equipment
manufacturer that the user defined model accurately represents the
component of the Large Generating Facility; or test data).
Table 1--Acceptable Generic Library RMS Positive Sequence Dynamics Models
----------------------------------------------------------------------------------------------------------------
GE PSLF Siemens PSS/E* PowerWorld simulator Description
----------------------------------------------------------------------------------------------------------------
pvd1.................... ....................... PVD1.................. Distributed PV system model.
der_a................... DERAU1................. DER_A................. Distributed energy resource model.
regc_a.................. REGCAU1, REGCA1........ REGC_A................ Generator/converter model.
regc_b.................. REGCBU1................ REGC_B................ Generator/converter model.
wt1g.................... WT1G1.................. WT1G and WT1G1........ Wind turbine model for Type-1 wind
turbines (conventional directly
connected induction generator).
wt2g.................... WT2G1.................. WT2G and WT2G1........ Generator model for generic Type-2
wind turbines.
wt2e.................... WT2E1.................. WT2E and WT2E1........ Rotor resistance control model for
wound-rotor induction wind-turbine
generator wt2g.
reec_a.................. REECAU1, REECA1........ REEC_A................ Renewable energy electrical control
model.
reec_c.................. REECCU1................ REEC_C................ Electrical control model for battery
energy storage system.
reec_d.................. REECDU1................ REEC_D................ Renewable energy electrical control
model.
wt1t.................... WT12T1................. WT1T and WT12T1....... Wind turbine model for Type-1 wind
turbines (conventional directly
connected induction generator).
wt1p_b.................. wt1p_b................. WT12A1U_B............. Generic wind turbine pitch controller
for WTGs of Types 1 and 2.
wt2t.................... WT12T1................. WT2T.................. Wind turbine model for Type-2 wind
turbines (directly connected
induction generator wind turbines
with an external rotor resistance).
wtgt_a.................. WTDTAU1, WTDTA1........ WTGT_A................ Wind turbine drive train model.
wtga_a.................. WTARAU1, WTARA1........ WTGA_A................ Simple aerodynamic model.
wtgp_a.................. WTPTAU1, WTPTA1........ WTGPT_A............... Wind Turbine Generator Pitch
controller.
wtgq_a.................. WTTQAU1, WTTQA1........ WTGTRQ_A.............. Wind Turbine Generator Torque
controller.
wtgwgo_a................ WTGWGOAU............... WTGWGO_A.............. Supplementary control model for Weak
Grids.
wtgibffr_a.............. WTGIBFFRA.............. WTGIBFFR_A............ Inertial-base fast frequency response
control.
wtgp_b.................. WTPTBU1................ WTGPT_B............... Wind Turbine Generator Pitch
controller.
wtgt_b.................. WTDTBU1................ WTGT_B................ Drive train model.
repc_a.................. Type 4: REPCAU1 (v33), REPC_A................ Power Plant Controller.
REPCA1 (v34).
Type 3: REPCTAU1 (v33),
REPCTA1 (v34).
repc_b.................. PLNTBU1................ REPC_B................ Power Plant Level Controller for
controlling several plants/devices.
In regard to Siemens PSS/E*: Names of
other models for interface with
other devices:
REA3XBU1, REAX4BU1--for interface
with Type 3 and 4 renewable
machines.
SWSAXBU1--for interface with SVC
(modeled as switched shunt in
powerflow).
SYNAXBU1--for interface with
synchronous condenser.
FCTAXBU1--for interface with FACTS
device.
repc_c.................. REPCCU................. REPC_C................ Power plant controller.
----------------------------------------------------------------------------------------------------------------
[[Page 27154]]
Appendix 2 to LGIP
Cluster Study Agreement
This Agreement is made and entered into this __day of____, 20__ by
and between ____, a ____ organized and existing under the laws of the
State of____, (``Interconnection Customer,'') and ____a ____ organized
and existing under the laws of the State of __, (``Transmission
Provider''). Interconnection Customer and Transmission Provider each
may be referred to as a ``Party,'' or collectively as the ``Parties.''
Recitals
Whereas, Interconnection Customer is proposing to develop a Large
Generating Facility or generating capacity addition to an existing
Generating Facility consistent with the Interconnection Request
submitted by Interconnection Customer dated ____; and
Whereas, Interconnection Customer desires to interconnect the Large
Generating Facility with the Transmission System; and
Whereas, Interconnection Customer has requested Transmission
Provider to perform a Cluster Study to assess the impact of
interconnecting the Large Generating Facility to the Transmission
System, and of any Affected Systems; and
Now, therefore, in consideration of and subject to the mutual
covenants contained herein the Parties agreed as follows:
1.0 When used in this Agreement, with initial capitalization, the
terms specified shall have the meanings indicated in this LGIP.
2.0 Interconnection Customer elects and Transmission Provider shall
cause to be performed a Cluster Study consistent with Section 7.0 of
this LGIP in accordance with the Tariff.
3.0 The scope of the Cluster Study shall be subject to the
assumptions set forth in Attachment A to this Agreement.
4.0 The Cluster Study will be based upon the technical information
provided by Interconnection Customer in the Interconnection Request,
subject to any modifications in accordance with Section 4.4 of this
LGIP. Transmission Provider reserves the right to request additional
technical information from Interconnection Customer as may reasonably
become necessary consistent with Good Utility Practice during the
course of the Cluster Study.
5.0 The Cluster Study Report shall provide the following
information:
--identification of any circuit breaker short circuit capability limits
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations
resulting from the interconnection;
--identification of any instability or inadequately damped response to
system disturbances resulting from the interconnection and
--description and non-binding, good faith estimated cost of facilities
required to interconnect the Large Generating Facility to the
Transmission System and to address the identified short circuit,
instability, and power flow issues.
6.0 Transmission Provider's good faith estimate for the time of
completion of the Cluster Study is {insert date{time} .
Upon receipt of the Cluster Study Report, Transmission Provider
shall charge and Interconnection Customer shall pay its share of the
actual costs of the Cluster Study, consistent with Section 13.3 of this
LGIP.
Any difference between the deposit and the actual cost of the study
shall be paid by or refunded to Interconnection Customer, as
appropriate.
7.0 Miscellaneous. The Cluster Study Agreement shall include
standard miscellaneous terms including, but not limited to,
indemnities, representations, disclaimers, warranties, governing law,
amendment, execution, waiver, enforceability and assignment, that
reflect best practices in the electric industry, that are consistent
with regional practices, Applicable Laws and Regulations and the
organizational nature of each Party. All of these provisions, to the
extent practicable, shall be consistent with the provisions of this
LGIP and the LGIA.
In witness thereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or Transmission Owner, if
applicable{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Attachment A to Appendix 2
Cluster Study Agreement
Assumptions Used in Conducting the Cluster Study
The Cluster Study will be based upon the technical information
provided by [the] Interconnection Customer in the Interconnection
Request, subject to any modifications in accordance with Section 4.4 of
this LGIP, and the following assumptions:
Designation of Point of Interconnection and configuration to be
studied.
Designation of alternative Point(s) of Interconnection and
configuration.
{Above assumptions to be completed by Interconnection Customer and
other assumptions to be provided by Interconnection Customer and
Transmission Provider{time}
Appendix 3 to LGIP
Interconnection Facilities Study Agreement
This agreement is made and entered into this __ day of ____, 20__by
and between ____, a ____organized and existing under the laws of the
State of ____, (``Interconnection Customer,'') and ____ a ____
organized and existing under the laws of the State of ____,
(``Transmission Provider''). Interconnection Customer and Transmission
Provider each may be referred to as a ``Party,'' or collectively as the
``Parties.''
Recitals
Whereas, Interconnection Customer is proposing to develop a Large
Generating Facility or generating capacity addition to an existing
Generating Facility consistent with the Interconnection Request
submitted by Interconnection Customer dated _ ; and
Whereas, Interconnection Customer desires to interconnect the Large
Generating Facility with the Transmission System; and
Whereas, Transmission Provider has completed a[n Interconnection]
Cluster Study (the ``Cluster Study'') and provided the results of said
study to Interconnection Customer; and
Whereas, Interconnection Customer has requested Transmission
Provider to perform an Interconnection Facilities Study to specify and
estimate the cost of the equipment, engineering, procurement and
construction work needed to implement the conclusions of the Cluster
Study in accordance with Good Utility Practice to physically and
electrically connect the Large Generating Facility to the Transmission
System.
Now, Therefore, in consideration of and subject to the mutual
covenants contained herein the Parties agreed as follows:
1.0 When used in this Agreement, with initial capitalization, the
terms specified shall have the meanings indicated in Transmission
Provider's FERC-approved LGIP.
2.0 Interconnection Customer elects and Transmission Provider shall
cause an Interconnection Facilities Study consistent with Section 8.0
of this LGIP to be performed in accordance with the Tariff.
3.0 The scope of the Interconnection Facilities Study shall be
subject to the assumptions set forth in Attachment A and the data
provided in Attachment B to this Agreement.
4.0 The Interconnection Facilities Study Report (i) shall provide a
description, estimated cost of (consistent with Attachment A), schedule
for required facilities to interconnect the Large Generating Facility
to the Transmission System and (ii) shall address the short circuit,
instability, and power flow issues identified in the Cluster Study.
5.0 Interconnection Customer shall provide a Commercial Readiness
Deposit per Section 8.1 of this LGIP to enter the Interconnection
Facilities Study. The time for completion of the Interconnection
Facilities Study is specified in Attachment A.
6.0 Miscellaneous. The Interconnection Facilities Study Agreement
shall include standard miscellaneous terms including, but not limited
to, indemnities, representations, disclaimers, warranties, governing
law, amendment, execution, waiver, enforceability and assignment, that
reflect best practices in the electric industry, and that are
consistent with regional practices, Applicable Laws and Regulations,
and the organizational nature of each Party. All of these provisions,
to the extent practicable, shall be consistent with the provisions of
the LGIP and the LGIA.
In witness whereof, the Parties have caused this Agreement to be
duly executed by their
[[Page 27155]]
duly authorized officers or agents on the day and year first above
written.
{Insert name of Transmission Provider or Transmission Owner, if
applicable{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Attachment A To Appendix 3
Interconnection Facilities Study Agreement
Interconnection Customer Schedule Election for Conducting the
Interconnection Facilities Study
Transmission Provider shall complete the study and issue a draft
Interconnection Facilities Study Report to Interconnection Customer
within the following number of days after receipt of an executed copy
of this Interconnection Facilities Study Agreement:
--ninety (90) Calendar Days with no more than a +/- 20 percent cost
estimate contained in the report, or
--one hundred eighty (180) Calendar Days with no more than a +/- 10
percent cost estimate contained in the report.
Attachment B to Appendix 3
Interconnection Facilities Study Agreement
BILLING CODE 6717-01-P
[[Page 27156]]
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[[Page 27157]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.007
[[Page 27158]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.008
BILLING CODE 6717-01-C
Appendix 4 to LGIP
Optional Interconnection Study Agreement
This agreement is made and entered into this __ day of ____, 20__
by and between ____, a ____ organized and existing under the laws of
the State of ____, (``Interconnection Customer,'') and ____ a ____
organized and existing under the laws of the State of __-__,
(``Transmission Provider''). Interconnection Customer and Transmission
Provider each may be referred to as a ``Party,'' or collectively as the
``Parties.''
Recitals
Whereas, Interconnection Customer is proposing to develop a Large
Generating Facility or generating capacity addition to an existing
Generating Facility consistent with the Interconnection Request
submitted by Interconnection Customer dated ____; and
Whereas, Interconnection Customer is proposing to establish an
interconnection with the Transmission System; and
Whereas, Interconnection Customer has submitted to Transmission
Provider an Interconnection Request; and
Whereas, on or after the date when Interconnection Customer
receives the Cluster Study results, Interconnection Customer has
further requested that Transmission Provider prepare an Optional
Interconnection Study;
Now, therefore, in consideration of and subject to the mutual
covenants contained herein the Parties agree as follows:
1.0 When used in this Agreement, with initial capitalization, the
terms specified shall have the meanings indicated in Transmission
Provider's FERC-approved LGIP.
2.0 Interconnection Customer elects and Transmission Provider shall
cause an Optional Interconnection Study consistent with Section 10.0 of
this LGIP to be performed in accordance with the Tariff.
3.0 The scope of the Optional Interconnection Study shall be
subject to the assumptions set forth in Attachment A to this Agreement.
4.0 The Optional Interconnection Study shall be performed solely
for informational purposes.
5.0 The Optional Interconnection Study report shall provide a
sensitivity analysis based on the assumptions specified by
Interconnection Customer in Attachment A to this Agreement. The
Optional Interconnection Study will identify Transmission Provider's
Interconnection Facilities and the Network Upgrades, and the estimated
cost thereof, that may be required to provide transmission service or
interconnection service based upon the assumptions specified by
Interconnection Customer in Attachment A.
6.0 Interconnection Customer shall provide a deposit of $10,000 for
the performance of the Optional Interconnection Study. Transmission
Provider's good faith estimate for the time of completion of the
Optional Interconnection Study is {insert date{time} .
Upon receipt of the Optional Interconnection Study, Transmission
Provider shall charge and Interconnection Customer shall pay the actual
costs of the Optional Study.
Any difference between the initial payment and the actual cost of
the study shall be paid by or refunded to Interconnection Customer, as
appropriate.
7.0 Miscellaneous. The Optional Interconnection Study Agreement
shall include standard miscellaneous terms including, but not limited
to, indemnities, representations, disclaimers, warranties, governing
law, amendment, execution, waiver, enforceability and assignment, that
reflect best practices in the electric industry, and that are
consistent with regional practices, Applicable Laws and Regulations,
and the organizational nature of each Party. All of these provisions,
to the extent practicable, shall be consistent with the provisions of
the LGIP and the LGIA.
In witness whereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or Transmission Owner, if
applicable{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Appendix 5 to LGIP
Large Generator Interconnection Agreement (See LGIA)
Appendix 6 to LGIP
Interconnection Procedures for a Wind Generating Plant
Appendix 6 sets forth procedures specific to a wind generating
plant. All other requirements of this LGIP continue to apply to wind
generating plant interconnections.
A. Special Procedures Applicable to Wind Generators
The wind plant Interconnection Customer, in completing the
Interconnection Request required by Section 3.3 of this LGIP, may
provide to [the] Transmission Provider a set of preliminary electrical
design specifications depicting the wind plant as a single equivalent
generator. Upon satisfying these and other applicable Interconnection
Request conditions, the wind plant may enter the queue and receive the
base case data as provided for in this LGIP.
No later than six months after submitting an Interconnection
Request completed in this manner, the wind plant Interconnection
Customer must submit completed detailed electrical design
specifications and other data (including collector system layout data)
needed to allow [the] Transmission Provider to complete the Cluster
Study.
Appendix 7 to LGIP
Transitional Cluster Study Agreement
This agreement is made and entered into this __ day of ____, 20__
by and between ____, a ____ organized and existing under the laws of
the State of ____ (``Interconnection Customer''), and ____, a ____
organized and existing under the laws of the State of ____
(``Transmission Provider''). Interconnection
[[Page 27159]]
Customer and Transmission Provider each may be referred to as a
``Party,'' or collectively as the ``Parties.''
Recitals
Whereas, Interconnection Customer is proposing to develop a Large
Generating Facility or generating capacity addition to an existing
Generating Facility consistent with the Interconnection Request
submitted by Interconnection Customer dated ____;
Whereas, Interconnection Customer desires to interconnect the Large
Generating Facility with the Transmission System; and
Whereas, Interconnection Customer has requested Transmission
Provider to perform a ``Transitional Cluster Study,'' which combines
the Cluster Study and Interconnection Facilities Study, in a single
cluster study, followed by any needed restudies, to specify and
estimate the cost of the equipment, engineering, procurement, and
construction work needed to physically and electrically connect the
Large Generating Facility to Transmission Provider's Transmission
System; and
Whereas, Interconnection Customer has a valid Queue Position as of
the {Transmission Provider to insert Commission-approved effective date
of compliance filing{time} .
Now, therefore, in consideration of and subject to the mutual
covenants contained herein, the Parties agree as follows:
1.0 When used in this Agreement, with initial capitalization, the
terms specified shall have the meanings indicated in this LGIP.
2.0 Interconnection Customer elects, and Transmission Provider
shall cause to be performed, a Transitional Cluster Study.
3.0 The Transitional Cluster Study shall be based upon the
technical information provided by Interconnection Customer in the
Interconnection Request. Transmission Provider reserves the right to
request additional technical information from Interconnection Customer
as may reasonably become necessary consistent with Good Utility
Practice during the course of the Transitional Cluster Study and
Interconnection Customer shall provide such data as quickly as
reasonable.
4.0 Pursuant to Section 5.1.1.2 of this LGIP, the interim
Transitional Cluster Study Report shall provide the information below:
--identification of any circuit breaker short circuit capability limits
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations
resulting from the interconnection;
--identification of any instability or inadequately damped response to
system disturbances resulting from the interconnection; and
--Transmission Provider's Interconnection Facilities and Network
Upgrades that are expected to be required as a result of the
Interconnection Request(s) and a non-binding, good faith estimate of
cost responsibility and a non-binding, good faith estimated time to
construct.
5.0 Pursuant to Section 5.1.1.2 of this LGIP, the final
Transitional Cluster Study Report shall: (1) provide all the
information included in the interim Transitional Cluster Study Report;
(2) provide a description of, estimated cost of, and schedule for
required facilities to interconnect the Generating Facility to the
Transmission System; and (3) address the short circuit, instability,
and power flow issues identified in the interim Transitional Cluster
Study Report.
6.0 Interconnection Customer has met the requirements described in
Section 5.1.1.2 of this LGIP.
7.0 Interconnection Customer previously provided a deposit for the
performance of Interconnection Studies. Upon receipt of the final
Transitional Cluster Study Report, Transmission Provider shall charge
and Interconnection Customer shall pay the actual costs of the
Transitional Cluster Study. Any difference between the study deposit
and the actual cost of the study shall be paid by or refunded to
Interconnection Customer, in accordance with the provisions of Section
13.3 of this LGIP.
8.0 Miscellaneous. The Transitional Cluster Study Agreement shall
include standard miscellaneous terms including, but not limited to,
indemnities, representations, disclaimers, warranties, governing law,
amendment, execution, waiver, enforceability and assignment, that
reflect best practices in the electric industry, and that are
consistent with regional practices, Applicable Laws and Regulations,
and the organizational nature of each Party. All of these provisions,
to the extent practicable, shall be consistent with the provisions of
this LGIP and the LGIA.
In witness whereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or Transmission Owner, if
applicable{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Appendix 8 to LGIP
Transitional Serial Interconnection Facilities Study Agreement
This agreement is made and entered into this __ day of __, 20__, by
and between ____, a ____ organized and existing under the laws of the
State of ____ (``Interconnection Customer'') and ____, a ____ organized
and existing under the laws of the State of ____ (``Transmission
Provider''). Interconnection Customer and Transmission Provider each
may be referred to as a ``Party,'' or collectively as the ``Parties.''
Recitals
Whereas, Interconnection Customer is proposing to develop a Large
Generating Facility or generating capacity addition to an existing
Large Generating Facility consistent with the Interconnection Request
submitted by Interconnection Customer dated __; and
Whereas, Interconnection Customer desires to interconnect the Large
Generating Facility with the Transmission System; and
Whereas, Interconnection Customer has requested Transmission
Provider to continue processing its Interconnection Facilities Study to
specify and estimate the cost of the equipment, engineering,
procurement, and construction work needed to implement the conclusions
of the final interconnection system impact study (from the previously
effective serial study process) in accordance with Good Utility
Practice to physically and electrically connect the Large Generating
Facility to the Transmission System; and
Whereas, Transmission Provider has provided an Interconnection
Facilities Study Agreement to [the] Interconnection Customer on or
before {Transmission Provider to insert Commission-approved effective
date of compliance filing{time} .
Now, therefore, in consideration of and subject to the mutual
covenants contained herein, the Parties agree as follows:
1.0 When used in this Agreement, with initial capitalization, the
terms specified shall have the meanings indicated in this LGIP.
2.0 Interconnection Customer elects and Transmission Provider shall
cause to be performed an Interconnection Facilities Study consistent
with Section 8 of this LGIP.
3.0 The scope of the Interconnection Facilities Study shall be
subject to the assumptions set forth in Attachment A to this Agreement,
which shall be the same assumptions as the previous Interconnection
Facilities Study Agreement executed by [the] Interconnection Customer.
4.0 The Interconnection Facilities Study Report shall: (1) provide
a description, estimated cost of (consistent with Attachment A), and
schedule for required facilities to interconnect the Large Generating
Facility to the Transmission System; and (2) address the short circuit,
instability, and power flow issues identified in the most recently
published Cluster Study Report.
5.0 Interconnection Customer has met the requirements described in
Section 5.1.1.1 of this LGIP. The time for completion of the
Interconnection Facilities Study is specified in Attachment A, and
shall be no later than one hundred fifty (150) Calendar Days after
{Transmission Provider to insert Commission-approved effective date
[accepted on]of compliance filing{time} .
6.0 Interconnection Customer previously provided a deposit of ____
dollars ($__) for the performance of the Interconnection Facilities
Study.
7.0 Upon receipt of the Interconnection Facilities Study results,
Transmission Provider shall charge and Interconnection Customer shall
pay the actual costs of the Interconnection Facilities Study.
8.0 Any difference between the study deposit and the actual cost of
the study shall be paid by or refunded to Interconnection Customer, as
appropriate.
9.0 Miscellaneous. The Interconnection Facilities Study Agreement
shall include standard miscellaneous terms including, but not limited
to, indemnities, representations, disclaimers, warranties, governing
law, amendment, execution, waiver, enforceability and assignment, that
reflect best practices in the electric industry, and that are
consistent with regional practices,
[[Page 27160]]
Applicable Laws and Regulations, and the organizational nature of each
Party. All of these provisions, to the extent practicable, shall be
consistent with the provisions of this LGIP and this LGIA.
In witness whereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider or Transmission Owner, if
applicable{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Attachment A to Appendix 8
Transitional Serial Interconnection Facilities Study Agreement
Assumptions Used in Conducting the Transitional Serial Interconnection
Facilities Study
{Assumptions to be completed by Interconnection Customer and
Transmission Provider{time}
Appendix 9 to LGIP
Two-Party Affected System Study Agreement
This agreement is made and entered into this __ day of ____, 20, by
and between ____, a ____ organized and existing under the laws of the
State of ____ (Affected System Interconnection Customer) and ____, a
organized and existing under the laws of the State of ____
(Transmission Provider). Affected System Interconnection Customer and
Transmission Provider each may be referred to as a ``Party,'' or
collectively as the ``Parties.''
Recitals
Whereas, Affected System Interconnection Customer is proposing to
develop a {description of generating facility or generating capacity
addition to an existing generating facility{time} consistent with the
interconnection request submitted by Affected System Interconnection
Customer to {name of host transmission provider{time} , dated ____, for
which {name of host transmission provider{time} found impacts on
Transmission Provider's Transmission System; and
Whereas, Affected System Interconnection Customer desires to
interconnect the {generating facility{time} with {name of host
transmission provider{time} 's transmission system;
Now, therefore, in consideration of and subject to the mutual
covenants contained herein, the Parties agree as follows:
1.0 When used in this Agreement, with initial capitalization, the
terms specified shall have the meanings indicated in this LGIP.
2.0 Transmission Provider shall coordinate with Affected System
Interconnection Customer to perform an Affected System Study consistent
with Section 9 of this LGIP.
3.0 The scope of the Affected System Study shall be subject to the
assumptions set forth in Attachment A to this Agreement.
4.0 The Affected System Study will be based upon the technical
information provided by Affected System Interconnection Customer and
{name of host transmission provider{time} . Transmission Provider
reserves the right to request additional technical information from
Affected System Interconnection Customer as may reasonably become
necessary consistent with Good Utility Practice during the course of
the Affected System Study.
5.0 The Affected System Study shall provide the following
information:
--identification of any circuit breaker short circuit capability limits
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations
resulting from the interconnection;
--identification of any instability or inadequately damped response to
system disturbances resulting from the interconnection;
--non-binding, good faith estimated cost and time required to construct
facilities required on Transmission Provider's Transmission System to
accommodate the interconnection of the {generating facility{time} to
the transmission system of the host transmission provider; and
--description of how such facilities will address the identified short
circuit, instability, and power flow issues.
6.0 Affected System Interconnection Customer shall provide a
deposit of __ for performance of the Affected System Study. Upon
receipt of the results of the Affected System Study by the Affected
System Interconnection Customer, Transmission Provider shall charge,
and Affected System Interconnection Customer shall pay, the actual cost
of the Affected System Study. Any difference between the deposit and
the actual cost of the Affected System Study shall be paid by or
refunded to Affected System Interconnection Customer, as appropriate,
including interest calculated in accordance with section 35.19a(a)(2)
of FERC's regulations.
7.0 This Agreement shall include standard miscellaneous terms
including, but not limited to, indemnities, representations,
disclaimers, warranties, governing law, amendment, execution, waiver,
enforceability, and assignment, which reflect best practices in the
electric industry, that are consistent with regional practices,
Applicable Laws and Regulations and the organizational nature of each
Party. All of these provisions, to the extent practicable, shall be
consistent with the provisions of the LGIP.
In witness thereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Affected System Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Project No. __
Attachment A to Appendix 9
Two-Party Affected System Study Agreement
Assumptions Used in Conducting the Affected System Study
The Affected System Study will be based upon the following
assumptions:
{Assumptions to be completed by Affected System Interconnection
Customer and Transmission Provider{time}
Appendix 10 to LGIP
Multiparty Affected System Study Agreement
This agreement is made and entered into this __ day of ____, 20 __,
by and among ____, a ____ organized and existing under the laws of the
State of ____ (Affected System Interconnection Customer); ____, a ____
organized and existing under the laws of the State of ____ (Affected
System Interconnection Customer); and ____, a ____ organized and
existing under the laws of the State of ____ (Transmission Provider).
Affected System Interconnection Customers and Transmission Provider
each may be referred to as a ``Party,'' or collectively as the
``Parties.'' When it is not important to differentiate among them,
Affected System Interconnection Customers each may be referred to as
``Affected System Interconnection Customer'' or collectively as the
``Affected System Interconnection Customers.''
Recitals
Whereas, Affected System Interconnection Customers are proposing to
develop {description of generating facilities or generating capacity
additions to an existing generating facility{time} , consistent with
the interconnection requests submitted by Affected System
Interconnection Customers to {name of host transmission
provider{time} , dated ____, for which {name of host transmission
provider{time} found impacts on Transmission Provider's Transmission
System; and
Whereas, Affected System Interconnection Customers desire to
interconnect the {generating facilities{time} with {name of host
transmission provider{time} 's transmission system;
Now, therefore, in consideration of and subject to the mutual
covenants contained herein, the Parties agree as follows:
1.0 When used in this Agreement, with initial capitalization, the
terms specified shall have the meanings indicated in this LGIP.
2.0 Transmission Provider shall coordinate with Affected System
Interconnection Customers to perform an Affected System Study
consistent with Section 9 of this LGIP.
[[Page 27161]]
3.0 The scope of the Affected System Study shall be subject to the
assumptions set forth in Attachment A to this Agreement.
4.0 The Affected System Study will be based upon the technical
information provided by Affected System Interconnection Customers and
{name of host transmission provider{time} . Transmission Provider
reserves the right to request additional technical information from
Affected System Interconnection Customers as may reasonably become
necessary consistent with Good Utility Practice during the course of
the Affected System Study.
5.0 The Affected System Study shall provide the following
information:
--identification of any circuit breaker short circuit capability limits
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations
resulting from the interconnection;
--identification of any instability or inadequately damped response to
system disturbances resulting from the interconnection;
--non-binding, good faith estimated cost and time required to construct
facilities required on Transmission Provider's Transmission System to
accommodate the interconnection of the {generating facilities{time} to
the transmission system of the host transmission provider; and
--description of how such facilities will address the identified short
circuit, instability, and power flow issues.
6.0 Affected System Interconnection Customers shall each provide a
deposit of __ for performance of the Affected System Study. Upon
receipt of the results of the Affected System Study by the Affected
System Interconnection Customers, Transmission Provider shall charge,
and Affected System Interconnection Customers shall pay, the actual
cost of the Affected System Study. Any difference between the deposit
and the actual cost of the Affected System Study shall be paid by or
refunded to Affected System Interconnection Customers, as appropriate,
including interest calculated in accordance with section 35.19a(a)(2)
of FERC's regulations.
7.0 This Agreement shall include standard miscellaneous terms
including, but not limited to, indemnities, representations,
disclaimers, warranties, governing law, amendment, execution, waiver,
enforceability, and assignment, which reflect best practices in the
electric industry, that are consistent with regional practices,
Applicable Laws and Regulations, and the organizational nature of each
Party. All of these provisions, to the extent practicable, shall be
consistent with the provisions of the LGIP.
In witness thereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Affected System Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Project No. __
{Insert name of Affected System Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Project No. __
Attachment A to Appendix 10
Multiparty Affected System Study Agreement
Assumptions Used in Conducting the Multiparty Affected System Study
The Affected System Study will be based upon the following
assumptions:
{Assumptions to be completed by Affected System Interconnection
Customers and Transmission Provider{time}
Appendix 11 to LGIP
Two-Party Affected System Facilities Construction Agreement
This agreement is made and entered into this __ day of ____, 20__,
by and between ____, organized and existing under the laws of the State
of ____ (Affected System Interconnection Customer) and ____, an entity
organized and existing under the laws of the State of ____
(Transmission Provider). Affected System Interconnection Customer and
Transmission Provider each may be referred to as a ``Party'' or
collectively as the ``Parties.''
Recitals
Whereas, Affected System Interconnection Customer is proposing to
develop a {description of generating facility or generating capacity
addition to an existing generating facility{time} consistent with the
interconnection request submitted by Affected System Interconnection
Customer to {name of host transmission provider{time} , dated ____, for
which {name of host transmission provider{time} found impacts on
Transmission Provider's Transmission System; and
Whereas, Affected System Interconnection Customer desires to
interconnect the {generating facility{time} to {name of host
transmission provider{time} 's transmission system; and
Whereas, additions, modifications, and upgrade(s) must be made to
certain existing facilities of Transmission Provider's Transmission
System to accommodate such interconnection; and
Whereas, Affected System Interconnection Customer has requested,
and Transmission Provider has agreed, to enter into this Agreement for
the purpose of facilitating the construction of necessary Affected
System Network Upgrade(s);
Now, therefore, in consideration of and subject to the mutual
covenants contained herein, the Parties agree as follows:
Article 1--Definitions
When used in this Agreement, with initial capitalization, the terms
specified and not otherwise defined in this Agreement shall have the
meanings indicated in this LGIP.
Article 2--Term of Agreement
2.1 Effective Date. This Agreement shall become effective upon
execution by the Parties subject to acceptance by FERC (if applicable),
or if filed unexecuted, upon the date specified by FERC.
2.2 Term.
2.2.1 General. This Agreement shall become effective as provided in
Article 2.1 and shall continue in full force and effect until the
earlier of (1) the final repayment, where applicable, by Transmission
Provider of the amount funded by Affected System Interconnection
Customer for Transmission Provider's design, procurement, construction
and installation of the Affected System Network Upgrade(s) provided in
Appendix A; (2) the Parties agree to mutually terminate this Agreement;
(3) earlier termination is permitted or provided for under Appendix A
of this Agreement; or (4) Affected System Interconnection Customer
terminates this Agreement after providing Transmission Provider with
written notice at least sixty (60) Calendar Days prior to the proposed
termination date, provided that Affected System Interconnection
Customer has no outstanding contractual obligations to Transmission
Provider under this Agreement. No termination of this Agreement shall
be effective until the Parties have complied with all Applicable Laws
and Regulations applicable to such termination. The term of this
Agreement may be adjusted upon mutual agreement of the Parties if (1)
the commercial operation date for the {generating facility{time} is
adjusted in accordance with the rules and procedures established by
{name of host transmission provider{time} or (2) the in-service date
for the Affected System Network Upgrade(s) is adjusted in accordance
with the rules and procedures established by Transmission Provider.
2.2.2 Termination Upon Default. Default shall mean the failure of a
Breaching Party to cure its Breach in accordance with Article 5 of this
Agreement where Breach and Breaching Party are defined in Article 5.
Defaulting Party shall mean the Party that is in Default. In the event
of a Default by a Party, the non-Defaulting Party shall have the
termination rights described in Articles 5 and 6; provided, however,
Transmission Provider may not terminate this Agreement if Affected
System Interconnection Customer is the Defaulting Party and compensates
Transmission Provider within thirty (30) Calendar Days for the amount
of damages billed to Affected System Interconnection Customer by
Transmission Provider for any such damages, including costs and
expenses, incurred by Transmission Provider as a result of such
Default.
2.2.3 Consequences of Termination. In the event of a termination by
either Party, other than a termination by Affected System
Interconnection Customer due to a Default by Transmission Provider,
Affected System Interconnection Customer shall be responsible for the
payment to Transmission
[[Page 27162]]
Provider of all amounts then due and payable for construction and
installation of the Affected System Network Upgrade(s) (including,
without limitation, any equipment ordered related to such
construction), plus all out-of-pocket expenses incurred by Transmission
Provider in connection with the construction and installation of the
Affected System Network Upgrade(s), through the date of termination,
and, in the event of the termination of the entire Agreement, any
actual costs which Transmission Provider reasonably incurs in (1)
winding up work and construction demobilization and (2) ensuring the
safety of persons and property and the integrity and safe and reliable
operation of Transmission Provider's Transmission System. Transmission
Provider shall use Reasonable Efforts to minimize such costs.
2.2.4 Reservation of Rights. Transmission Provider shall have the
right to make a unilateral filing with FERC to modify this Agreement
with respect to any rates, terms and conditions, charges,
classifications of service, rule or regulation under section 205 or any
other applicable provision of the Federal Power Act and FERC's rules
and regulations thereunder, and Affected System Interconnection
Customer shall have the right to make a unilateral filing with FERC to
modify this Agreement pursuant to section 206 or any other applicable
provision of the Federal Power Act and FERC's rules and regulations
thereunder; provided that each Party shall have the right to protest
any such filing by the other Party and to participate fully in any
proceeding before FERC in which such modifications may be considered.
Nothing in this Agreement shall limit the rights of the Parties or of
FERC under sections 205 or 206 of the Federal Power Act and FERC's
rules and regulations thereunder, except to the extent that the Parties
otherwise mutually agree as provided herein.
2.3 Filing. Transmission Provider shall file this Agreement (and
any amendment hereto) with the appropriate Governmental Authority, if
required. Affected System Interconnection Customer may request that any
information so provided be subject to the confidentiality provisions of
Article 8. If Affected System Interconnection Customer has executed
this Agreement, or any amendment thereto, Affected System
Interconnection Customer shall reasonably cooperate with Transmission
Provider with respect to such filing and to provide any information
reasonably requested by Transmission Provider needed to comply with
applicable regulatory requirements.
2.4 Survival. This Agreement shall continue in effect after
termination, to the extent necessary, to provide for final billings and
payments and for costs incurred hereunder, including billings and
payments pursuant to this Agreement; to permit the determination and
enforcement of liability and indemnification obligations arising from
acts or events that occurred while this Agreement was in effect; and to
permit each Party to have access to the lands of the other Party
pursuant to this Agreement or other applicable agreements, to
disconnect, remove, or salvage its own facilities and equipment.
2.5 Termination Obligations. Upon any termination pursuant to this
Agreement, Affected System Interconnection Customer shall be
responsible for the payment of all costs or other contractual
obligations incurred prior to the termination date, including
previously incurred capital costs, penalties for early termination, and
costs of removal and site restoration.
Article 3--Construction of Affected System Network Upgrade(s)
3.1 Construction.
3.1.1 Transmission Provider Obligations. Transmission Provider
shall (or shall cause such action to) design, procure, construct, and
install, and Affected System Interconnection Customer shall pay,
consistent with Article 3.2, the costs of all Affected System Network
Upgrade(s) identified in Appendix A. All Affected System Network
Upgrade(s) designed, procured, constructed, and installed by
Transmission Provider pursuant to this Agreement shall satisfy all
requirements of applicable safety and/or engineering codes and comply
with Good Utility Practice, and further, shall satisfy all Applicable
Laws and Regulations. Transmission Provider shall not be required to
undertake any action which is inconsistent with its standard safety
practices, its material and equipment specifications, its design
criteria and construction procedures, its labor agreements, or any
Applicable Laws and Regulations.
3.1.2 Suspension of Work.
3.1.2.1 Right to Suspend. Affected System Interconnection Customer
must provide to Transmission Provider written notice of its request for
suspension. Only the milestones described in the Appendices of this
Agreement are subject to suspension under this Article 3.1.2. Affected
System Network Upgrade(s) will be constructed on the schedule described
in the Appendices of this Agreement unless: (1) construction is
prevented by the order of a Governmental Authority; (2) the Affected
System Network Upgrade(s) are not needed by any other Interconnection
Customer; or (3) Transmission Provider determines that a Force Majeure
event prevents construction. In the event of (1), (2), or (3), any
security paid to Transmission Provider under Article 4.1 of this
Agreement shall be released by Transmission Provider upon the
determination by Transmission Provider that the Affected System Network
Upgrade(s) will no longer be constructed. If suspension occurs,
Affected System Interconnection Customer shall be responsible for the
costs which Transmission Provider incurs (i) in accordance with this
Agreement prior to the suspension; (ii) in suspending such work,
including any costs incurred to perform such work as may be necessary
to ensure the safety of persons and property and the integrity of
Transmission Provider's Transmission System and, if applicable, any
costs incurred in connection with the cancellation of contracts and
orders for material which Transmission Provider cannot reasonably
avoid; and (iii) reasonably incurs in winding up work and construction
demobilization; provided, however, that, prior to canceling any such
contracts or orders, Transmission Provider shall obtain Affected System
Interconnection Customer's authorization. Affected System
Interconnection Customer shall be responsible for all costs incurred in
connection with Affected System Interconnection Customer's failure to
authorize cancellation of such contracts or orders.
Interest on amounts paid by Affected System Interconnection
Customer to Transmission Provider for the design, procurement,
construction, and installation of the Affected System Network
Upgrade(s) shall not accrue during periods in which Affected System
Interconnection Customer has suspended construction under this Article
3.1.2.
Transmission Provider shall invoice Affected System Interconnection
Customer pursuant to Article 4 and will use Reasonable Efforts to
minimize its costs. In the event Affected System Interconnection
Customer suspends work by Affected System Transmission Provider
required under this Agreement pursuant to this Article 3.1.2.1, and has
not requested Affected System Transmission Provider to recommence the
work required under this Agreement on or before the expiration of three
(3) years following commencement of such suspension, this Agreement
shall be deemed terminated. The three-year period shall begin on the
date the suspension is requested, or the date of the written notice to
Affected System Transmission Provider, whichever is earlier, if no
effective date of suspension is specified.
[3.1.2.2 Recommencing of Work. If Affected System Interconnection
Customer requests that Transmission Provider recommence construction of
Affected System Network Upgrade(s), Transmission Provider shall have no
obligation to afford such work the priority it would have had but for
the prior actions of Affected System Interconnection Customer to
suspend the work. In such event, Affected System Interconnection
Customer shall be responsible for any costs incurred in recommencing
the work. All recommenced work shall be completed pursuant to an
amended schedule for the interconnection agreed to by the Parties.
Transmission Provider has the right to conduct a restudy of the
Affected System Study if conditions have materially changed subsequent
to the request to suspend. Affected System Interconnection Customer
shall be responsible for the costs of any studies or restudies
required.]
[3.1.2.3 Right to Suspend Due to Default. Transmission Provider
reserves the right, upon written notice to Affected System
Interconnection Customer, to suspend, at any time, work by Transmission
Provider due to Default by Affected System Interconnection Customer.
Affected System Interconnection Customer shall be responsible for any
additional expenses incurred by Transmission Provider associated with
the construction and installation of the Affected System Network
Upgrade(s) (as set forth in Article 2.2.3) upon the occurrence of
either a Breach that Affected System Interconnection Customer is unable
to cure-
[[Page 27163]]
pursuant to Article 5 or a Default pursuant to Article 5. Any form of
suspension by Transmission Provider shall not be barred by Articles
2.2.2, 2.2.3, or 5.2.2, nor shall it affect Transmission Provider's
right to terminate the work or this Agreement pursuant to Article 6.]
3.1.3 Construction Status. Transmission Provider shall keep
Affected System Interconnection Customer advised periodically as to the
progress of its design, procurement and construction efforts, as
described in Appendix A. Affected System Interconnection Customer may,
at any time and reasonably, request a progress report from Transmission
Provider. If, at any time, Affected System Interconnection Customer
determines that the completion of the Affected System Network
Upgrade(s) will not be required until after the specified in-service
date, Affected System Interconnection Customer will provide written
notice to Transmission Provider of such later date upon which the
completion of the Affected System Network Upgrade(s) would be required.
Transmission Provider may delay the in-service date of the Affected
System Network Upgrade(s) accordingly.
3.1.4 Timely Completion. Transmission Provider shall use Reasonable
Efforts to design, procure, construct, install, and test the Affected
System Network Upgrade(s) in accordance with the schedule set forth in
Appendix A, which schedule may be revised from time to time by mutual
agreement of the Parties. If any event occurs that will affect the time
or ability to complete the Affected System Network Upgrade(s),
Transmission Provider shall promptly notify Affected System
Interconnection Customer. In such circumstances, Transmission Provider
shall, within fifteen (15) Calendar Days of such notice, convene a
meeting with Affected System Interconnection Customer to evaluate the
alternatives available to Affected System Interconnection Customer.
Transmission Provider shall also make available to Affected System
Interconnection Customer all studies and work papers related to the
event and corresponding delay, including all information that is in the
possession of Transmission Provider that is reasonably needed by
Affected System Interconnection Customer to evaluate alternatives,
subject to confidentiality arrangements consistent with Article 8.
Transmission Provider shall, at Affected System Interconnection
Customer's request and expense, use Reasonable Efforts to accelerate
its work under this Agreement to meet the schedule set forth in
Appendix A, provided that (1) Affected System Interconnection Customer
authorizes such actions, such authorization to be withheld,
conditioned, or delayed by Affected System Interconnection Customer
only if it can demonstrate that the acceleration would have a material
adverse effect on it; and (2) the Affected System Interconnection
Customer funds costs associated therewith in advance.
3.2 Interconnection Costs.
3.2.1 Costs. Affected System Interconnection Customer shall pay to
Transmission Provider costs (including taxes and financing costs)
associated with seeking and obtaining all necessary approvals and of
designing, engineering, constructing, and testing the Affected System
Network Upgrade(s), as identified in Appendix A, in accordance with the
cost recovery method provided herein. Unless Transmission Provider
elects to fund the Affected System Network Upgrade(s), they shall be
initially funded by Affected System Interconnection Customer.
3.2.1.1 Lands of Other Property Owners. If any part of the Affected
System Network Upgrade(s) is to be installed on property owned by
persons other than Affected System Interconnection Customer or
Transmission Provider, Transmission Provider shall, at Affected System
Interconnection Customer's expense, use efforts similar in nature and
extent to those that it typically undertakes on its own behalf or on
behalf of its Affiliates, including use of its eminent domain authority
to the extent permitted and consistent with Applicable Laws and
Regulations and, to the extent consistent with such Applicable Laws and
Regulations, to procure from such persons any rights of use, licenses,
rights-of-way, and easements that are necessary to construct, operate,
maintain, test, inspect, replace, or remove the Affected System Network
Upgrade(s) upon such property.
3.2.2 Repayment.
3.2.2.1 Repayment. Consistent with Articles 11.4.1 and 11.4.2 of
[the] Transmission Provider's pro forma LGIA, Affected System
Interconnection Customer shall be entitled to a cash repayment by
Transmission Provider of the amount paid to Transmission Provider, if
any, for the Affected System Network Upgrade(s), including any tax
gross-up or other tax-related payments associated with the Affected
System Network Upgrade(s), and not refunded to Affected System
Interconnection Customer pursuant to Article 3.3.1 or otherwise. The
Parties may mutually agree to a repayment schedule, to be outlined in
Appendix A, not to exceed twenty (20) years from the commercial
operation date, for the complete repayment for all applicable costs
associated with the Affected System Network Upgrade(s). Any repayment
shall include interest calculated in accordance with the methodology
set forth in FERC's regulations at 18 CFR 35.19 a(a)(2)(iii) from the
date of any payment for Affected System Network Upgrade(s) through the
date on which Affected System Interconnection Customer receives a
repayment of such payment pursuant to this subparagraph. Interest shall
not accrue during periods in which Affected System Interconnection
Customer has suspended construction pursuant to Article 3.1.2. Affected
System Interconnection Customer may assign such repayment rights to any
person.
3.2.2.2 Impact of Failure to Achieve Commercial Operation. If the
Affected System Interconnection Customer's generating facility fails to
achieve commercial operation, but it or another generating facility is
later constructed and makes use of the Affected System Network
Upgrade(s), Transmission Provider shall at that time reimburse Affected
System Interconnection Customer for the amounts advanced for the
Affected System Network Upgrade(s). Before any such reimbursement can
occur, Affected System Interconnection Customer (or the entity that
ultimately constructs the generating facility, if different), is
responsible for identifying the entity to which the reimbursement must
be made.
3.3 Taxes.
3.3.1 Indemnification for Contributions in Aid of Construction.
With regard only to payments made by Affected System Interconnection
Customer to Transmission Provider for the installation of the Affected
System Network Upgrade(s), Transmission Provider shall not include a
gross-up for income taxes in the amounts it charges Affected System
Interconnection Customer for the installation of the Affected System
Network Upgrade(s) unless (1) Transmission Provider has determined, in
good faith, that the payments or property transfers made by Affected
System Interconnection Customer to Transmission Provider should be
reported as income subject to taxation, or (2) any Governmental
Authority directs Transmission Provider to report payments or property
as income subject to taxation. Affected System Interconnection Customer
shall reimburse Transmission Provider for such costs on a fully
grossed-up basis, in accordance with this Article, within thirty (30)
Calendar Days of receiving written notification from Transmission
Provider of the amount due, including detail about how the amount was
calculated.
The indemnification obligation shall terminate at the earlier of
(1) the expiration Of the ten (10)-year testing period and the
applicable statute of limitation, as it may be extended by Transmission
Provider upon request of the Internal Revenue Service, to keep these
years open for audit or adjustment, or (2) the occurrence of a
subsequent taxable event and the payment of any related indemnification
obligations as contemplated by this Article. Notwithstanding the
foregoing provisions of this Article 3.3.1, and to the extent permitted
by law, to the extent that the receipt of such payments by Transmission
Provider is determined by any Governmental Authority to constitute
income by Transmission Provider subject to taxation, Affected System
Interconnection Customer shall protect, indemnify, and hold harmless
Transmission Provider and its Affiliates, from all claims by any such
Governmental Authority for any tax, interest, and/or penalties
associated with such determination. Upon receiving written notification
of such determination from the Governmental Authority, Transmission
Provider shall provide Affected System Interconnection Customer with
written notification within thirty (30) Calendar Days of such
determination and notification. Transmission Provider, upon the timely
written request by Affected System Interconnection Customer and at
Affected System Interconnection Customer's expense, shall appeal,
protest, seek abatement of, or otherwise oppose such determination.
Transmission Provider reserves the right to make all decisions with
regard to the prosecution of such appeal, protest, abatement, or other
contest, including the compromise or settlement of the claim; provided
that Transmission Provider shall
[[Page 27164]]
cooperate and consult in good faith with Affected System
Interconnection Customer regarding the conduct of such contest.
Affected System Interconnection Customer shall not be required to pay
Transmission Provider for the tax, interest, and/or penalties prior to
the seventh (7th) Calendar Day before the date on which Transmission
Provider (1) is required to pay the tax, interest, and/or penalties or
other amount in lieu thereof pursuant to a compromise or settlement of
the appeal, protest, abatement, or other contest; (2) is required to
pay the tax, interest, and/or penalties as the result of a final, non-
appealable order by a Governmental Authority; or (3) is required to pay
the tax, interest, and/or penalties as a prerequisite to an appeal,
protest, abatement, or other contest. In the event such appeal,
protest, abatement, or other contest results in a determination that
Transmission Provider is not liable for any portion of any tax,
interest, and/or penalties for which Affected System Interconnection
Customer has already made payment to Transmission Provider,
Transmission Provider shall promptly refund to Affected System
Interconnection Customer any payment attributable to the amount
determined to be non-taxable, plus any interest (calculated in
accordance with 18 CFR 35.19a(a)(2)(iii)) or other payments
Transmission Provider receives or which Transmission Provider may be
entitled with respect to such payment. Affected System Interconnection
Customer shall provide Transmission Provider with credit assurances
sufficient to meet Affected System Interconnection Customer's estimated
liability for reimbursement of Transmission Provider for taxes,
interest, and/or penalties under this Article 3.3.1. Such estimated
liability shall be stated in Appendix A.
To the extent that Transmission Provider is a limited liability
company and not a corporation, and has elected to be taxed as a
partnership, then the following shall apply: Transmission Provider
represents, and the Parties acknowledge, that Transmission Provider is
a limited liability company and is treated as a partnership for federal
income tax purposes. Any payment made by Affected System
Interconnection Customer to Transmission Provider for Affected System
Network Upgrade(s) is to be treated as an upfront payment. It is
anticipated by the Parties that any amounts paid by Affected System
Interconnection Customer to Transmission Provider for Affected System
Network Upgrade(s) will be reimbursed to Affected System
Interconnection Customer in accordance with the terms of this
Agreement, provided Affected System Interconnection Customer fulfills
its obligations under this Agreement.
3.3.2 Private Letter Ruling. At Affected System Interconnection
Customer's request and expense, Transmission Provider shall file with
the Internal Revenue Service a request for a private letter ruling as
to whether any property transferred or sums paid, or to be paid, by
Affected System Interconnection Customer to Transmission Provider under
this Agreement are subject to federal income taxation. Affected System
Interconnection Customer will prepare the initial draft of the request
for a private letter ruling and will certify under penalties of perjury
that all facts represented in such request are true and accurate to the
best of Affected System Interconnection Customer's knowledge.
Transmission Provider and Affected System Interconnection Customer
shall cooperate in good faith with respect to the submission of such
request.
3.3.3 Other Taxes. Upon the timely request by Affected System
Interconnection Customer, and at Affected System Interconnection
Customer's sole expense, Transmission Provider shall appeal, protest,
seek abatement of, or otherwise contest any tax (other than federal or
state income tax) asserted or assessed against Transmission Provider
for which Affected System Interconnection Customer may be required to
reimburse Transmission Provider under the terms of this Agreement.
Affected System Interconnection Customer shall pay to Transmission
Provider on a periodic basis, as invoiced by Transmission Provider,
Transmission Provider's documented reasonable costs of prosecuting such
appeal, protest, abatement, or other contest. Affected System
Interconnection Customer and Transmission Provider shall cooperate in
good faith with respect to any such contest. Unless the payment of such
taxes is a prerequisite to an appeal or abatement or cannot be
deferred, no amount shall be payable by Affected System Interconnection
Customer to Transmission Provider for such taxes until they are
assessed by a final, non-appealable order by any court or agency of
competent jurisdiction. In the event that a tax payment is withheld and
ultimately due and payable after appeal, Affected System
Interconnection Customer will be responsible for all taxes, interest
and penalties, other than penalties attributable to any delay caused by
Transmission Provider. Each Party shall cooperate with the other Party
to maintain each Party's tax status. Nothing in this Agreement is
intended to adversely affect any Party's tax-exempt status with respect
to the issuance of bonds including, but not limited to, local
furnishing bonds, as described in section 142(f) of the Internal
Revenue Code.
Article 4--Security, Billing, and Payments
4.1 Provision of Security. By the earlier of (1) thirty (30)
Calendar Days prior to the due date for Affected System Interconnection
Customer's first payment under the payment schedule specified in
Appendix A, or (2) the first date specified in Appendix A for the
ordering of equipment by Transmission Provider for installing the
Affected System Network Upgrade(s), Affected System Interconnection
Customer shall provide Transmission Provider, at Affected System
Interconnection Customer's option, a guarantee, a surety bond, letter
of credit or other form of security that is reasonably acceptable to
Transmission Provider. Such security for payment shall be in an amount
sufficient to cover the costs for constructing, procuring, and
installing the applicable portion of Affected System Network Upgrade(s)
and shall be reduced on a dollar-for-dollar basis for payments made to
Transmission Provider for these purposes.
The guarantee must be made by an entity that meets the
creditworthiness requirements of Transmission Provider and contain
terms and conditions that guarantee payment of any amount that may be
due from Affected System Interconnection Customer, up to an agreed-to
maximum amount. The letter of credit must be issued by a financial
institution reasonably acceptable to Transmission Provider and must
specify a reasonable expiration date. The surety bond must be issued by
an insurer reasonably acceptable to Transmission Provider and must
specify a reasonable expiration date.
4.2 Invoice. Each Party shall submit to the other Party, on a
monthly basis, invoices of amounts due, if any, for the preceding
month. Each invoice shall state the month to which the invoice applies
and fully describe the services and equipment provided. The Parties may
discharge mutual debts and payment obligations due and owing to each
other on the same date through netting, in which case all amounts a
Party owes to the other Party under this Agreement, including interest
payments, shall be netted so that only the net amount remaining due
shall be paid by the owing Party.
4.3 Payment. Invoices shall be rendered to the paying Party at the
address specified by the Parties. The Party receiving the invoice shall
pay the invoice within thirty (30) Calendar Days of receipt. All
payments shall be made in immediately available funds payable to the
other Party, or by wire transfer to a bank named and account designated
by the invoicing Party. Payment of invoices by a Party will not
constitute a waiver of any rights or claims that Party may have under
this Agreement.
4.4 Final Invoice. Within six (6) months after completion of the
construction of the Affected System Network Upgrade(s), Transmission
Provider shall provide an invoice of the final cost of the construction
of the Affected System Network Upgrade(s) and shall set forth such
costs in sufficient detail to enable Affected System Interconnection
Customer to compare the actual costs with the estimates and to
ascertain deviations, if any, from the cost estimates. Transmission
Provider shall refund, with interest (calculated in accordance with 18
CFR 35.19a(a)(2)(iii)), to Affected System Interconnection Customer any
amount by which the actual payment by Affected System Interconnection
Customer for estimated costs exceeds the actual costs of construction
within thirty (30) Calendar Days of the issuance of such final
construction invoice.
4.5 Interest. Interest on any unpaid amounts shall be calculated in
accordance with 18 CFR 35.19a(a)(2)(iii).
4.6 Payment During Dispute. In the event of a billing dispute among
the Parties, Transmission Provider shall continue to construct the
Affected System Network Upgrade(s) under this Agreement as long as
Affected System Interconnection Customer: (1) continues to make all
payments not in dispute; and (2) pays to Transmission Provider or into
an independent escrow account the portion of the invoice in dispute,
pending resolution of such dispute. If Affected System Interconnection
Customer
[[Page 27165]]
fails to meet these two requirements, then Transmission Provider may
provide notice to Affected System Interconnection Customer of a Default
pursuant to Article 5. Within thirty (30) Calendar Days after the
resolution of the dispute, the Party that owes money to another Party
shall pay the amount due with interest calculated in accordance with
the methodology set forth in 18 CFR 35.19a(a)(2)(iii).
Article 5--Breach, Cure and Default
5.1 Events of Breach. A Breach of this Agreement shall include the:
(a) Failure to pay any amount when due;
(b) Failure to comply with any material term or condition of this
Agreement, including but not limited to any material Breach of a
representation, warranty, or covenant made in this Agreement;
(c) Failure of a Party to provide such access rights, or a Party's
attempt to revoke access or terminate such access rights, as provided
under this Agreement; or
(d) Failure of a Party to provide information or data to another
Party as required under this Agreement, provided the Party entitled to
the information or data under this Agreement requires such information
or data to satisfy its obligations under this Agreement.
5.2 Definition. Breaching Party shall mean the Party that is in
Breach.
5.3 Notice of Breach, Cure, and Default. Upon the occurrence of an
event of Breach, the Party not in Breach, when it becomes aware of the
Breach, shall give written notice of the Breach to the Breaching Party
and to any other person representing a Party to this Agreement
identified in writing to the other Party in advance. Such notice shall
set forth, in reasonable detail, the nature of the Breach, and where
known and applicable, the steps necessary to cure such Breach.
5.3.1 Upon receiving written notice of the Breach hereunder, the
Breaching Party shall have a period to cure such Breach (hereinafter
referred to as the ``Cure Period'') which shall be sixty (60) Calendar
Days.
5.3.2 In the event the Breaching Party fails to cure within the
Cure Period, the Breaching Party will be in Default of this Agreement,
and the non-Defaulting Party may terminate this Agreement in accordance
with Article 6.2 of this Agreement or take whatever action at law or in
equity as may appear necessary or desirable to enforce the performance
or observance of any rights, remedies, obligations, agreement, or
covenants under this Agreement.
5.4 Rights in the Event of Default. Notwithstanding the foregoing,
upon the occurrence of a Default, the non-Defaulting Party shall be
entitled to exercise all rights and remedies it may have in equity or
at law.
Article 6--Termination of Agreement
6.1 Expiration of Term. Except as otherwise specified in this
Article 6, the Parties' obligations under this Agreement shall
terminate at the conclusion of the term of this Agreement.
6.2 Termination. In addition to the termination provisions set
forth in Article 2.2, a Party may terminate this Agreement upon the
Default of the other Party in accordance with Article 5.2.2 of this
Agreement. Subject to the limitations set forth in Article 6.3, in the
event of a Default, the termination of this Agreement by the non-
Defaulting Party shall require a filing at FERC of a notice of
termination, which filing must be accepted for filing by FERC.
6.3 Disposition of Facilities Upon Termination of Agreement.
6.3.1 Transmission Provider Obligations. Upon termination of this
Agreement, unless otherwise agreed to by the Parties in writing,
Transmission Provider:
(a) shall, prior to the construction and installation of any
portion of the Affected System Network Upgrade(s) and to the extent
possible, cancel any pending orders of, or return, such equipment or
material for such Affected System Network Upgrade(s);
(b) may keep in place any portion of the Affected System Network
Upgrade(s) already constructed and installed; and,
(c) shall perform such work as may be necessary to ensure the
safety of persons and property and to preserve the integrity of
Transmission Provider's Transmission System (e.g., construction
demobilization to return the system to its original state, wind-up
work).
6.3.2 Affected System Interconnection Customer Obligations. Upon
billing by Transmission Provider, Affected System Interconnection
Customer shall reimburse Transmission Provider for any costs incurred
by Transmission Provider in performance of the actions required or
permitted by Article 6.3.1 and for the cost of any Affected System
Network Upgrade(s) described in Appendix A. Transmission Provider shall
use Reasonable Efforts to minimize costs and shall offset the amounts
owed by any salvage value of facilities, if applicable. Affected System
Interconnection Customer shall pay these costs pursuant to Article 4.3
of this Agreement.
6.3.3 Pre-construction or Installation. Upon termination of this
Agreement and prior to the construction and installation of any portion
of the Affected System Network Upgrade(s), Transmission Provider may,
at its option, retain any portion of such Affected System Network
Upgrade(s) not cancelled or returned in accordance with Article
6.3.1(a), in which case Transmission Provider shall be responsible for
all costs associated with procuring such Affected System Network
Upgrade(s). To the extent that Affected System Interconnection Customer
has already paid Transmission Provider for any or all of such costs,
Transmission Provider shall refund Affected System Interconnection
Customer for those payments. If Transmission Provider elects to not
retain any portion of such facilities, Transmission Provider shall
convey and make available to Affected System Interconnection Customer
such facilities as soon as practicable after Affected System
Interconnection Customer's payment for such facilities.
6.4 Survival of Rights. Termination or expiration of this Agreement
shall not relieve either Party of any of its liabilities and
obligations arising hereunder prior to the date termination becomes
effective, and each Party may take whatever judicial or administrative
actions as appear necessary or desirable to enforce its rights
hereunder. The applicable provisions of this Agreement will continue in
effect after expiration, or early termination hereof to the extent
necessary to provide for (1) final billings, billing adjustments, and
other billing procedures set forth in this Agreement; (2) the
determination and enforcement of liability and indemnification
obligations arising from acts or events that occurred while this
Agreement was in effect; and (3) the confidentiality provisions set
forth in Article 8.
Article 7--Subcontractors
7.1 Subcontractors. Nothing in this Agreement shall prevent a Party
from utilizing the services of subcontractors, as it deems appropriate,
to perform its obligations under this Agreement; provided, however,
that each Party shall require its subcontractors to comply with all
applicable terms and conditions of this Agreement in providing such
services, and each Party shall remain primarily liable to the other
Party for the performance of such subcontractor.
7.1.1 Responsibility of Principal. The creation of any subcontract
relationship shall not relieve the hiring Party of any of its
obligations under this Agreement. In accordance with the provisions of
this Agreement, each Party shall be fully responsible to the other
Party for the acts or omissions of any subcontractor it hires as if no
subcontract had been made. Any applicable obligation imposed by this
Agreement upon a Party shall be equally binding upon, and shall be
construed as having application to, any subcontractor of such Party.
7.1.2 No Third-Party Beneficiary. Except as may be specifically set
forth to the contrary herein, no subcontractor or any other party is
intended to be, nor will it be deemed to be, a third-party beneficiary
of this Agreement.
7.1.3 No Limitation by Insurance. The obligations under this
Article 7 will not be limited in any way by any limitation of any
insurance policies or coverages, including any subcontractor's
insurance.
Article 8--Confidentiality
8.1 Confidentiality. Confidential Information shall include,
without limitation, all information relating to a Party's technology,
research and development, business affairs, and pricing, and any
information supplied to the other Party prior to the execution of this
Agreement.
Information is Confidential Information only if it is clearly
designated or marked in writing as confidential on the face of the
document, or, if the information is conveyed orally or by inspection,
if the Party providing the information orally informs the Party
receiving the information that the information is confidential. The
Parties shall maintain as confidential any information that is provided
and identified by a Party as Critical Energy Infrastructure Information
(CEII), as that term is defined in 18 CFR 388.113(c).
Such confidentiality will be maintained in accordance with this
Article 8. If requested by the receiving Party, the disclosing Party
shall provide in writing, the basis for
[[Page 27166]]
asserting that the information referred to in this Article warrants
confidential treatment, and the requesting Party may disclose such
writing to the appropriate Governmental Authority. Each Party shall be
responsible for the costs associated with affording confidential
treatment to its information.
8.1.1 Term. During the term of this Agreement, and for a period of
three (3) years after the expiration or termination of this Agreement,
except as otherwise provided in this Article 8 or with regard to CEII,
each Party shall hold in confidence and shall not disclose to any
person Confidential Information. CEII shall be treated in accordance
with FERC policies and regulations.
8.1.2 Scope. Confidential Information shall not include information
that the receiving Party can demonstrate: (1) is generally available to
the public other than as a result of a disclosure by the receiving
Party; (2) was in the lawful possession of the receiving Party on a
non-confidential basis before receiving it from the disclosing Party;
(3) was supplied to the receiving Party without restriction by a non-
Party, who, to the knowledge of the receiving Party after due inquiry,
was under no obligation to the disclosing Party to keep such
information confidential; (4) was independently developed by the
receiving Party without reference to Confidential Information of the
disclosing Party; (5) is, or becomes, publicly known, through no
wrongful act or omission of the receiving Party or Breach of this
Agreement; or (6) is required, in accordance with Article 8.1.6 of this
Agreement, to be disclosed by any Governmental Authority or is
otherwise required to be disclosed by law or subpoena, or is necessary
in any legal proceeding establishing rights and obligations under this
Agreement. Information designated as Confidential Information will no
longer be deemed confidential if the Party that designated the
information as confidential notifies the receiving Party that it no
longer is confidential.
8.1.3 Release of Confidential Information. No Party shall release
or disclose Confidential Information to any other person, except to its
Affiliates (limited by the Standards of Conduct requirements),
subcontractors, employees, agents, consultants, or to non-Parties that
may be or are considering providing financing to or equity
participation with Affected System Interconnection Customer, or to
potential purchasers or assignees of Affected System Interconnection
Customer, on a need-to-know basis in connection with this Agreement,
unless such person has first been advised of the confidentiality
provisions of this Article 8 and has agreed to comply with such
provisions. Notwithstanding the foregoing, a Party providing
Confidential Information to any person shall remain primarily
responsible for any release of Confidential Information in
contravention of this Article 8.
8.1.4 Rights. Each Party shall retain all rights, title, and
interest in the Confidential Information that it discloses to the
receiving Party. The disclosure by a Party to the receiving Party of
Confidential Information shall not be deemed a waiver by the disclosing
Party or any other person or entity of the right to protect the
Confidential Information from public disclosure.
8.1.5 Standard of Care. Each Party shall use at least the same
standard of care to protect Confidential Information it receives as it
uses to protect its own Confidential Information from unauthorized
disclosure, publication, or dissemination. Each Party may use
Confidential Information solely to fulfill its obligations to the other
Party under this Agreement or its regulatory requirements.
8.1.6 Order of Disclosure. If a court or a Government Authority or
entity with the right, power, and apparent authority to do so requests
or requires either Party, by subpoena, oral deposition,
interrogatories, requests for production of documents, administrative
order, or otherwise, to disclose Confidential Information, that Party
shall provide the disclosing Party with prompt notice of such
request(s) or requirement(s) so that the disclosing Party may seek an
appropriate protective order or waive compliance with the terms of this
Agreement. Notwithstanding the absence of a protective order or waiver,
the Party may disclose such Confidential Information which, in the
opinion of its counsel, the Party is legally compelled to disclose.
Each Party will use Reasonable Efforts to obtain reliable assurance
that confidential treatment will be accorded any Confidential
Information so furnished.
8.1.7 Termination of Agreement. Upon termination of this Agreement
for any reason, each Party shall, within ten (10) Business Days of
receipt of a written request from the other Party, use Reasonable
Efforts to destroy, erase, or delete (with such destruction, erasure,
and deletion certified in writing to the requesting Party) or return to
the requesting Party any and all written or electronic Confidential
Information received from the requesting Party, except that each Party
may keep one copy for archival purposes, provided that the obligation
to treat it as Confidential Information in accordance with this Article
8 shall survive such termination.
8.1.8 Remedies. The Parties agree that monetary damages would be
inadequate to compensate a Party for the other Party's Breach of its
obligations under this Article 8. Each Party accordingly agrees that
the disclosing Party shall be entitled to equitable relief, by way of
injunction or otherwise, if the receiving Party Breaches or threatens
to Breach its obligations under this Article 8, which equitable relief
shall be granted without bond or proof of damages, and the breaching
Party shall not plead in defense that there would be an adequate remedy
at law. Such remedy shall not be deemed an exclusive remedy for the
Breach of this Article 8, but it shall be in addition to all other
remedies available at law or in equity. The Parties further acknowledge
and agree that the covenants contained herein are necessary for the
protection of legitimate business interests and are reasonable in
scope. Neither Party, however, shall be liable for indirect,
incidental, or consequential or punitive damages of any nature or kind
resulting from or arising in connection with this Article 8.
8.1.9 Disclosure to FERC, its Staff, or a State Regulatory Body.
Notwithstanding anything in this Article 8 to the contrary, and
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of an
investigation or otherwise, requests information from a Party that is
otherwise required to be maintained in confidence pursuant to this
Agreement, the Party shall provide the requested information to FERC or
its staff, within the time provided for in the request for information.
In providing the information to FERC or its staff, the Party must,
consistent with 18 CFR 388.112, request that the information be treated
as confidential and non-public by FERC and its staff and that the
information be withheld from public disclosure. Parties are prohibited
from notifying the other Party to this Agreement prior to the release
of the Confidential Information to FERC or its staff. The Party shall
notify the other Party to the Agreement when it is notified by FERC or
its staff that a request to release Confidential Information has been
received by FERC, at which time either of the Parties may respond
before such information would be made public, pursuant to 18 CFR
388.112. Requests from a state regulatory body conducting a
confidential investigation shall be treated in a similar manner if
consistent with the applicable state rules and regulations.
8.1.10 Subject to the exception in Article 8.1.9, any information
that a disclosing Party claims is competitively sensitive, commercial,
or financial information under this Agreement shall not be disclosed by
the receiving Party to any person not employed or retained by the
receiving Party, except to the extent disclosure is (1) required by
law; (2) reasonably deemed by the disclosing Party to be required to be
disclosed in connection with a dispute between or among the Parties, or
the defense of litigation or dispute; (3) otherwise permitted by
consent of the disclosing Party, such consent not to be unreasonably
withheld; or (4) necessary to fulfill its obligations under this
Agreement or as [the] Transmission Provider or a balancing authority,
including disclosing the Confidential Information to a regional or
national reliability organization. The Party asserting confidentiality
shall notify the receiving Party in writing of the information that
Party claims is confidential. Prior to any disclosures of that Party's
Confidential Information under this subparagraph, or if any non-Party
or Governmental Authority makes any request or demand for any of the
information described in this subparagraph, the Party that received the
Confidential Information from the disclosing Party agrees to promptly
notify the disclosing Party in writing and agrees to assert
confidentiality and cooperate with the disclosing Party in seeking to
protect the Confidential Information from public disclosure by
confidentiality agreement, protective order, or other reasonable
measures.
Article 9--Information Access and Audit Rights
9.1 Information Access. Each Party shall make available to the
other Party information
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necessary to verify the costs incurred by the other Party for which the
requesting Party is responsible under this Agreement and carry out
obligations and responsibilities under this Agreement, provided that
the Parties shall not use such information for purposes other than
those set forth in this Article 9.1 and to enforce their rights under
this Agreement.
9.2 Audit Rights. Subject to the requirements of confidentiality
under Article 8 of this Agreement, the accounts and records related to
the design, engineering, procurement, and construction of the Affected
System Network Upgrade(s) shall be subject to audit during the period
of this Agreement and for a period of twenty-four (24) months following
Transmission Provider's issuance of a final invoice in accordance with
Article 4.4. Affected System Interconnection Customer at its expense
shall have the right, during normal business hours, and upon prior
reasonable notice to Transmission Provider, to audit such accounts and
records. Any audit authorized by this Article 9.2 shall be performed at
the offices where such accounts and records are maintained and shall be
limited to those portions of such accounts and records that relate to
obligations under this Agreement.
Article 10--Notices
10.1--General. Any notice, demand, or request required or permitted
to be given by a Party to the other Party, and any instrument required
or permitted to be tendered or delivered by a Party in writing to
another Party, may be so given, tendered, or delivered, as the case may
be, by depositing the same with the United States Postal Service with
postage prepaid, for transmission by certified or registered mail,
addressed to the Parties, or personally delivered to the Parties, at
the address set out below:
To Transmission Provider:
To Affected System Interconnection Customer:
10.2 Billings and Payments. Billings and payments shall be sent to
the addresses shown in Article 10.1 unless otherwise agreed to by the
Parties.
10.3 Alternative Forms of Notice. Any notice or request required or
permitted to be given by a Party to the other Party and not required by
this Agreement to be given in writing may be so given by telephone,
facsimile or email to the telephone numbers and email addresses set out
below:
To Transmission Provider:
To Affected System Interconnection Customer:
10.4 Execution and Filing. Affected System Interconnection Customer
shall either: (i) execute two originals of this tendered Agreement and
return them to Transmission Provider; or (ii) request in writing that
Transmission Provider file with FERC this Agreement in unexecuted form.
As soon as practicable, but not later than ten (10) Business Days after
receiving either the two executed originals of this tendered Agreement
(if it does not conform with a FERC-approved standard form of this
Agreement) or the request to file this Agreement unexecuted,
Transmission Provider shall file this Agreement with FERC, together
with its explanation of any matters as to which Affected System
Interconnection Customer and Transmission Provider disagree and support
for the costs that Transmission Provider proposes to charge to Affected
System Interconnection Customer under this Agreement. An unexecuted
version of this Agreement should contain terms and conditions deemed
appropriate by Transmission Provider for the Affected System
Interconnection Customer's generating facility. If the Parties agree to
proceed with design, procurement, and construction of facilities and
upgrades under the agreed-upon terms of the unexecuted version of this
Agreement, they may proceed pending FERC action.
Article 11--Miscellaneous
11.1 This Agreement shall include standard miscellaneous terms
including, but not limited to, indemnities, representations,
disclaimers, warranties, governing law, amendment, execution, waiver,
enforceability and assignment, which reflect best practices in the
electric industry, that are consistent with regional practices,
Applicable Laws and Regulations and the organizational nature of each
Party. All of these provisions, to the extent practicable, shall be
consistent with the provisions of this LGIP.
{Signature Page to Follow{time}
In witness whereof, the Parties have executed this Agreement in
multiple originals, each of which shall constitute and be an original
Agreement among the Parties.
Transmission Provider
{Transmission Provider{time}
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Affected System Interconnection Customer
{Affected System Interconnection Customer{time}
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Project No. __
Attachment A to Appendix 11
Two-Party Affected System Facilities Construction Agreement
Affected System Network Upgrade(s), Cost Estimates and Responsibility,
Construction Schedule and Monthly Payment Schedule
This Appendix A is a part of the Affected System Facilities
Construction Agreement between Affected System Interconnection Customer
and Transmission Provider.
1.1 Affected System Network Upgrade(s) to be installed by
Transmission Provider.
{description{time}
1.2 First Equipment Order (including permitting).
{description{time}
1.2.1. Permitting and Land Rights--Transmission Provider Affected
System Network Upgrade(s)
{description{time}
1.3 Construction Schedule. Where applicable, construction of the
Affected System Network Upgrade(s) is scheduled as follows and will be
periodically updated as necessary:
Table 1--Transmission Provider Construction Activities
----------------------------------------------------------------------------------------------------------------
Milestone No. Description Start date End date
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Note: Construction schedule assumes that Transmission Provider
has obtained final authorizations and security from Affected System
Interconnection Customer and all necessary permits from Governmental
Authorities as necessary prerequisites to commence construction of
any of the Affected System Network Upgrade(s).
1.4 Payment Schedule.
1.4.1 Timing of and Adjustments to Affected System Interconnection
Customer's Payments and Security.
{description{time}
1.4.2 Monthly Payment Schedule. Affected System Interconnection
Customer's payment schedule is as follows.
{description{time}
[[Page 27168]]
Table 2--Affected System Interconnection Customer's Payment/Security
Obligations for Affected System Network Upgrade(s)
------------------------------------------------------------------------
Milestone No. Description Date
------------------------------------------------------------------------
------------------------------------------------------------------------
Note: Affected System Interconnection Customer's payment or
provision of security as provided in this Agreement operates as a
condition precedent to Transmission Provider's obligations to
construct any Affected System Network Upgrade(s), and failure to
meet this schedule will constitute a Breach pursuant to Article 5.1
of this Agreement.
1.5 Permits, Licenses, and Authorizations.
{description{time}
Attachment B to Appendix 11
Two-Party Affected System Facilities Construction Agreement
Notification of Completed Construction
This Appendix B is a part of the Affected Systems Facilities
Construction Agreement between Affected System Interconnection Customer
and Transmission Provider. Where applicable, when Transmission Provider
has completed construction of the Affected System Network Upgrade(s),
Transmission Provider shall send notice to Affected System
Interconnection Customer in substantially the form following:
{Date{time}
{Affected System Interconnection Customer Address{time}
Re: Completion of Affected System Network Upgrade(s)
Dear {Name or Title{time} :
This letter is sent pursuant to the Affected System Facilities
Construction Agreement between {Transmission Provider{time} and
{Affected System Interconnection Customer{time} , dated ________, 20__.
On {Date{time} , Transmission Provider completed to its
satisfaction all work on the Affected System Network Upgrade(s)
required to facilitate the safe and reliable interconnection and
operation of Affected System Interconnection Customer's {description of
generating facility{time} . Transmission Provider confirms that the
Affected System Network Upgrade(s) are in place.
Thank you.
{Signature{time}
{Transmission Provider Representative{time}
Attachment C to Appendix 11
Two-Party Affected System Facilities Construction Agreement
Exhibits
This Appendix C is a part of the Affected System Facilities
Construction Agreement [among] between Affected System Interconnection
Customer and Transmission Provider.
Exhibit A1--Transmission Provider Site Map
Exhibit A2--Site Plan
Exhibit A3--Affected System Network Upgrade(s) Plan & Profile
Exhibit A4--Estimated Cost of Affected System Network Upgrade(s)
------------------------------------------------------------------------
Facilities to be
Location constructed by Estimate in
transmission provider dollars
------------------------------------------------------------------------
Total
------------------------------------------------------------------------
Appendix 12 to LGIP
Multiparty Affected System Facilities Construction Agreement
This Agreement is made and entered into this __ day of ______,
20__, by and among ________, organized and existing under the laws of
the State of ______ (Affected System Interconnection Customer); ______,
a ______ organized and existing under the laws of the State of ______
(Affected System Interconnection Customer); and ______, an entity
organized and existing under the laws of the State of _____
(Transmission Provider). Affected System Interconnection Customers and
Transmission Provider each may be referred to as a ``Party'' or
collectively as the ``Parties.'' When it is not important to
differentiate among them, Affected System Interconnection Customers
each may be referred to as ``Affected System Interconnection Customer''
or collectively as ``Affected System Interconnection Customers.''
Recitals
Whereas, Affected System Interconnection Customers are proposing to
develop {description of generating facilities or generating capacity
additions to an existing generating facility{time} , consistent with
the interconnection requests submitted by Affected System
Interconnection Customers to {name of host transmission
provider{time} , dated ______, for which {name of host transmission
provider{time} found impacts on Transmission Provider's Transmission
System; and
Whereas, Affected System Interconnection Customers desire to
interconnect the {generating facilities{time} to {name of host
transmission provider{time} 's transmission system; and
Whereas, additions, modifications, and upgrade(s) must be made to
certain existing facilities of Transmission Provider's Transmission
System to accommodate such interconnection; and
Whereas, Affected System Interconnection Customers have requested,
and Transmission Provider has agreed, to enter into this Agreement for
the purpose of facilitating the construction of necessary Affected
System Network Upgrade(s);
Now, Therefore, in consideration of and subject to the mutual
covenants contained herein, the Parties agree as follows:
Article 1--Definitions
When used in this Agreement, with initial capitalization, the terms
specified and not otherwise defined in this Agreement shall have the
meanings indicated in this LGIP.
Article 2--Term of Agreement
2.1 Effective Date. This Agreement shall become effective upon
execution by the Parties subject to acceptance by FERC (if applicable),
or if filed unexecuted, upon the date specified by FERC.
2.2 Term.
2.2.1 General. This Agreement shall become effective as provided in
Article 2.1 and shall continue in full force and effect until the
earlier of (1) the final repayment, where applicable, by Transmission
Provider of the amount funded by Affected System Interconnection
Customers for Transmission Provider's design, procurement,
construction, and installation of the Affected System Network
Upgrade(s) provided in Appendix A; (2) the Parties agree to mutually
terminate this Agreement; (3) earlier termination is permitted or
provided for under Appendix A of this Agreement; or (4) Affected System
Interconnection Customers terminate this Agreement after providing
Transmission Provider with written notice at least sixty (60) Calendar
Days prior to the proposed termination date, provided that Affected
System Interconnection Customers have no outstanding contractual
obligations to Transmission Provider under this Agreement. No
termination of this Agreement shall be effective until the Parties have
complied with all Applicable Laws and Regulations applicable to such
termination. The term of this Agreement may be adjusted upon mutual
agreement of the Parties if the commercial operation date(s) for the
{generating facilities{time} is adjusted in accordance with the rules
and procedures established by {name of host transmission
provider{time} or the in-service date for the Affected System Network
Upgrade(s) is adjusted in accordance with the rules and procedures
established by Transmission Provider.
[[Page 27169]]
2.2.2 Termination Upon Default. Default shall mean the failure of a
Breaching Party to cure its Breach in accordance with Article 5 of this
Agreement where Breach and Breaching Party are defined in Article 5.
Defaulting Party shall mean the Party that is in Default. In the event
of a Default by a Party, each non-Defaulting Party shall have the
termination rights described in Articles 5 and 6; provided, however,
Transmission Provider may not terminate this Agreement if an Affected
System Interconnection Customer is the Defaulting Party and compensates
Transmission Provider within thirty (30) Calendar Days for the amount
of damages billed to Affected System Interconnection Customer(s) by
Transmission Provider for any such damages, including costs and
expenses incurred by Transmission Provider as a result of such Default.
Notwithstanding the foregoing, Default by one or more Affected System
Interconnection Customers shall not provide the other Affected System
Interconnection Customer(s), either individually or in concert, with
the right to terminate the entire Agreement. The non-Defaulting Party/
Parties may, individually or in concert, initiate the removal of an
Affected System Interconnection Customer that is a Defaulting Party
from this Agreement. Transmission Provider shall not terminate this
Agreement or the participation of any Affected System Interconnection
Customer without provision being made for Transmission Provider to be
fully reimbursed for all of its costs incurred under this Agreement.
2.2.3 Consequences of Termination. In the event of a termination by
a Party, other than a termination by Affected System Interconnection
Customer(s) due to a Default by Transmission Provider, each Affected
System Interconnection Customer whose participation in this Agreement
is terminated shall be responsible for the payment to Transmission
Provider of all amounts then due and payable for construction and
installation of the Affected System Network Upgrade(s) (including,
without limitation, any equipment ordered related to such
construction), plus all out-of-pocket expenses incurred by Transmission
Provider in connection with the construction and installation of the
Affected System Network Upgrade(s), through the date of termination,
and, in the event of the termination of the entire Agreement, any
actual costs which Transmission Provider reasonably incurs in (1)
winding up work and construction demobilization and (2) ensuring the
safety of persons and property and the integrity and safe and reliable
operation of Transmission Provider's Transmission System. Transmission
Provider shall use Reasonable Efforts to minimize such costs. The cost
responsibility of other Affected System Interconnection Customers shall
be adjusted, as necessary, based on the payments by an Affected System
Interconnection Customer that is terminated from the Agreement.
2.2.4 Reservation of Rights. Transmission Provider shall have the
right to make a unilateral filing with FERC to modify this Agreement
with respect to any rates, terms and conditions, charges,
classifications of service, rule or regulation under section 205 or any
other applicable provision of the Federal Power Act and FERC's rules
and regulations thereunder, and Affected System Interconnection
Customers shall have the right to make a unilateral filing with FERC to
modify this Agreement pursuant to section 206 or any other applicable
provision of the Federal Power Act and FERC's rules and regulations
thereunder; provided that each Party shall have the right to protest
any such filing by the other Party and to participate fully in any
proceeding before FERC in which such modifications may be considered.
Nothing in this Agreement shall limit the rights of the Parties or of
FERC under sections 205 or 206 of the Federal Power Act and FERC's
rules and regulations thereunder, except to the extent that the Parties
otherwise mutually agree as provided herein.
2.3 Filing. Transmission Provider shall file this Agreement (and
any amendment hereto) with the appropriate Governmental Authority, if
required. Affected System Interconnection Customers may request that
any information so provided be subject to the confidentiality
provisions of Article 8. Each Affected System Interconnection Customer
that has executed this Agreement, or any amendment thereto, shall
reasonably cooperate with Transmission Provider with respect to such
filing and to provide any information reasonably requested by
Transmission Provider needed to comply with applicable regulatory
requirements.
2.4 Survival. This Agreement shall continue in effect after
termination, to the extent necessary, to provide for final billings and
payments and for costs incurred hereunder, including billings and
payments pursuant to this Agreement; to permit the determination and
enforcement of liability and indemnification obligations arising from
acts or events that occurred while this Agreement was in effect; and to
permit each Party to have access to the lands of the other Party
pursuant to this Agreement or other applicable agreements, to
disconnect, remove, or salvage its own facilities and equipment.
2.5 Termination Obligations. Upon any termination pursuant to this
Agreement or termination of the participation in this Agreement of an
Affected System Interconnection Customer, each Affected System
Interconnection Customer shall be responsible for the payment of its
proportionate share of all costs or other contractual obligations
incurred prior to the termination date, including previously incurred
capital costs, penalties for early termination, and costs of removal
and site restoration. The cost responsibility of the other Affected
System Interconnection Customers shall be adjusted as necessary.
Article 3--Construction of Affected System Network Upgrade(s)
3.1 Construction.
3.1.1 Transmission Provider Obligations. Transmission Provider
shall (or shall cause such action to) design, procure, construct, and
install, and Affected System Interconnection Customers shall pay,
consistent with Article 3.2, the costs of all Affected System Network
Upgrade(s) identified in Appendix A. All Affected System Network
Upgrade(s) designed, procured, constructed, and installed by
Transmission Provider pursuant to this Agreement shall satisfy all
requirements of applicable safety and/or engineering codes and comply
with Good Utility Practice, and further, shall satisfy all Applicable
Laws and Regulations. Transmission Provider shall not be required to
undertake any action which is inconsistent with its standard safety
practices, its material and equipment specifications, its design
criteria and construction procedures, its labor agreements, or any
Applicable Laws and Regulations.
3.1.2 Suspension of Work.
3.1.2.1 Right to Suspend. Affected System Interconnection Customers
must jointly provide to Transmission Provider written notice of their
request for suspension. Only the milestones described in the Appendices
of this Agreement are subject to suspension under this Article 3.1.2.
Affected System Network Upgrade(s) will be constructed on the schedule
described in the Appendices of this Agreement unless: (1) construction
is prevented by the order of a Governmental Authority; (2) the Affected
System Network Upgrade(s) are not needed by any other Interconnection
Customer; or (3) Transmission Provider determines that a Force Majeure
event prevents construction. In the event of (1), (2), or (3), any
security paid to Transmission Provider under Article 4.1 of this
Agreement shall be released by Transmission Provider upon the
determination by Transmission Provider that the Affected System Network
Upgrade(s) will no longer be constructed. If suspension occurs,
Affected System Interconnection Customers shall be responsible for the
costs which Transmission Provider incurs (i) in accordance with this
Agreement prior to the suspension; (ii) in suspending such work,
including any costs incurred to perform such work as may be necessary
to ensure the safety of persons and property and the integrity of
Transmission Provider's Transmission System and, if applicable, any
costs incurred in connection with the cancellation of contracts and
orders for material which Transmission Provider cannot reasonably
avoid; and (iii) reasonably incurs in winding up work and construction
demobilization; provided, however, that, prior to canceling any such
contracts or orders, Transmission Provider shall obtain Affected System
Interconnection Customers' authorization. Affected System
Interconnection Customers shall be responsible for all costs incurred
in connection with Affected System Interconnection Customers' failure
to authorize cancellation of such contracts or orders.
Interest on amounts paid by Affected System Interconnection
Customers to Transmission Provider for the design, procurement,
construction, and installation of the Affected System Network
Upgrade(s) shall not accrue during periods in which Affected System
Interconnection Customers have suspended construction under this
Article 3.1.2.
Transmission Provider shall invoice Affected System Interconnection
Customers
[[Page 27170]]
pursuant to Article 4 and will use Reasonable Efforts to minimize its
costs. In the event Affected System Interconnection Customers suspend
work by Affected System Transmission Provider required under this
Agreement pursuant to this Article 3.1.2.1, and have not requested
Affected System Transmission Provider to recommence the work required
under this Agreement on or before the expiration of three (3) years
following commencement of such suspension, this Agreement shall be
deemed terminated. The three-year period shall begin on the date the
suspension is requested, or the date of the written notice to Affected
System Transmission Provider, whichever is earlier, if no effective
date of suspension is specified.
[3.1.2.2 Recommencing of Work. If Affected System Interconnection
Customers request that Transmission Provider recommence construction of
Affected System Network Upgrade(s), Transmission Provider shall have no
obligation to afford such work the priority it would have had but for
the prior actions of Affected System Interconnection Customers to
suspend the work. In such event, Affected System Interconnection
Customers shall be responsible for any costs incurred in recommencing
the work. All recommenced work shall be completed pursuant to an
amended schedule for the interconnection agreed to by the Parties.
Transmission Provider has the right to conduct a restudy of the
Affected System Study if conditions have materially changed subsequent
to the request to suspend. Affected System Interconnection Customers
shall be responsible for the costs of any studies or restudies
required.]
[3.1.2.3 Right to Suspend Due to Default. Transmission Provider
reserves the right, upon written notice to Affected System
Interconnection Customers, to suspend, at any time, work by
Transmission Provider due to a Default by Affected System
Interconnection Customer(s). Defaulting-Affected System Interconnection
Customer(s) shall be responsible for any additional expenses incurred
by Transmission Provider associated with the construction and
installation of the Affected System Network Upgrade(s) (as set forth in
Article 2.2.3) upon the occurrence of a Default pursuant to Article 5.
Any form of suspension by Transmission Provider shall not be barred by
Articles 2.2.2, 2.2.3, or 5.2.2, nor shall it affect Transmission
Provider's right to terminate the work or this Agreement pursuant to
Article 6.]
3.1.3 Construction Status. Transmission Provider shall keep
Affected System Interconnection Customers advised periodically as to
the progress of its design, procurement, and construction efforts, as
described in Appendix A. An Affected System Interconnection Customer
may, at any time and reasonably, request a progress report from
Transmission Provider. If, at any time, an Affected System
Interconnection Customer determines that the completion of the Affected
System Network Upgrade(s) will not be required until after the
specified in-service date, such Affected System Interconnection
Customer will provide written notice to all other Parties of such later
date for which the completion of the Affected System Network Upgrade(s)
would be required. Transmission Provider may delay the in-service date
of the Affected System Network Upgrade(s) accordingly, but only if
agreed to by all other Affected System Interconnection Customers.
3.1.4 Timely Completion. Transmission Provider shall use Reasonable
Efforts to design, procure, construct, install, and test the Affected
System Network Upgrade(s) in accordance with the schedule set forth in
Appendix A, which schedule may be revised from time to time by mutual
agreement of the Parties. If any event occurs that will affect the time
or ability to complete the Affected System Network Upgrade(s),
Transmission Provider shall promptly notify all other Parties. In such
circumstances, Transmission Provider shall, within fifteen (15)
Calendar Days of such notice, convene a meeting with Affected System
Interconnection Customers to evaluate the alternatives available to
Affected System Interconnection Customers. Transmission Provider shall
also make available to Affected System Interconnection Customers all
studies and work papers related to the event and corresponding delay,
including all information that is in the possession of transmission
Provider that is reasonably needed by Affected System Interconnection
Customers to evaluate alternatives, subject to confidentiality
arrangements consistent with Article 8. Transmission Provider shall, at
any Affected System Interconnection Customer's request and expense, use
Reasonable Efforts to accelerate its work under this Agreement to meet
the schedule set forth in Appendix A, provided that (1) Affected System
Interconnection Customers jointly authorize such actions, such
authorizations to be withheld, conditioned, or delayed by a given
Affected System Interconnection Customer only if it can demonstrate
that the acceleration would have a material adverse effect on it; and
(2) the requesting Affected System Interconnection Customer(s) funds
the costs associated therewith in advance, or all Affected System
Interconnection Customers agree in advance to fund such costs based on
such other allocation method as they may adopt.
3.2 Interconnection Costs.
3.2.1 Costs. Affected System Interconnection Customers shall pay to
Transmission Provider costs (including taxes and financing costs)
associated with seeking and obtaining all necessary approvals and of
designing, engineering, constructing, and testing the Affected System
Network Upgrade(s), as identified in Appendix A, in accordance with the
cost recovery method provided herein. Except as expressly otherwise
agreed, Affected System Interconnection Customers shall be collectively
responsible for these costs, based on their proportionate share of cost
responsibility, as provided in Appendix A. Unless Transmission Provider
elects to fund the Affected System Network Upgrade(s), they shall be
initially funded by the applicable Affected System Interconnection
Customer.
3.2.1.1 Lands of Other Property Owners. If any part of the Affected
System Network Upgrade(s) is to be installed on property owned by
persons other than Affected System Interconnection Customers or
Transmission Provider, Transmission Provider shall, at Affected System
Interconnection Customers' expense, use efforts similar in nature and
extent to those that it typically undertakes on its own behalf or on
behalf of its Affiliates, including use of its eminent domain authority
to the extent permitted and consistent with Applicable Laws and
Regulations and, to the extent consistent with such Applicable Laws and
Regulations, to procure from such persons any rights of use, licenses,
rights-of-way, and easements that are necessary to construct, operate,
maintain, test, inspect, replace, or remove the Affected System Network
Upgrade(s) upon such property.
3.2.2 Repayment.
3.2.2.1 Repayment. Consistent with articles 11.4.1 and 11.4.2 of
[the] Transmission Provider's pro forma LGIA, each Affected System
Interconnection Customer shall be entitled to a cash repayment by
Transmission Provider of the amount each Affected System
Interconnection Customer paid to Transmission Provider, if any, for the
Affected System Network Upgrade(s), including any tax gross-up or other
tax-related payments associated with the Affected System Network
Upgrade(s), and not refunded to Affected System Interconnection
Customer pursuant to Article 3.3.1 or otherwise. The Parties may
mutually agree to a repayment schedule, to be outlined in Appendix A,
not to exceed twenty (20) years from the commercial operation date, for
the complete repayment for all applicable costs associated with the
Affected System Network Upgrade(s). Any repayment shall include
interest calculated in accordance with the methodology set forth in
FERC's regulations at 18 CFR 35.19 a(a)(2)(iii) from the date of any
payment for Affected System Network Upgrade(s) through the date on
which Affected System Interconnection Customers receive a repayment of
such payment pursuant to this subparagraph. Interest shall not accrue
during periods in which Affected System Interconnection Customers have
suspended construction pursuant to Article 3.1.2.1. Affected System
Interconnection Customers may assign such repayment rights to any
person.
3.2.2.2 Impact of Failure to Achieve Commercial Operation. If an
Affected System Interconnection Customer's generating facility fails to
achieve commercial operation, but it or another generating facility is
later constructed and makes use of the Affected System Network
Upgrade(s), Transmission Provider shall at that time reimburse such
Affected System Interconnection Customers for the portion of the
Affected System Network Upgrade(s) it funded. Before any such
reimbursement can occur, Affected System Interconnection Customer (or
the entity that ultimately constructs the generating facility, if
different), is responsible for identifying the entity to which the
reimbursement must be made.
3.3 Taxes.
3.3.1 Indemnification for Contributions in Aid of Construction.
With regard only to
[[Page 27171]]
payments made by Affected System Interconnection Customers to
Transmission Provider for the installation of the Affected System
Network Upgrade(s), Transmission Provider shall not include a gross-up
for income taxes in the amounts it charges Affected System
Interconnection Customers for the installation of the Affected System
Network Upgrade(s) unless (1) Transmission Provider has determined, in
good faith, that the payments or property transfers made by Affected
System Interconnection Customers to Transmission Provider should be
reported as income subject to taxation, or (2) any Governmental
Authority directs Transmission Provider to report payments or property
as income subject to taxation. Affected System Interconnection
Customers shall reimburse Transmission Provider for such costs on a
fully grossed-up basis, in accordance with this Article, within thirty
(30) Calendar Days of receiving written notification from Transmission
Provider of the amount due, including detail about how the amount was
calculated.
The indemnification obligation shall terminate at the earlier of
(1) the expiration of the ten (10)-year testing period and the
applicable statute of limitation, as it may be extended by Transmission
Provider upon request of the Internal Revenue Service, to keep these
years open for audit or adjustment, or (2) the occurrence of a
subsequent taxable event and the payment of any related indemnification
obligations as contemplated by this Article. Notwithstanding the
foregoing provisions of this Article 3.3.1, and to the extent permitted
by law, to the extent that the receipt of such payments by Transmission
Provider is determined by any Governmental Authority to constitute
income by Transmission Provider subject to taxation, Affected System
Interconnection Customers shall protect, indemnify, and hold harmless
Transmission Provider and its Affiliates, from all claims by any such
Governmental Authority for any tax, interest, and/or penalties
associated with such determination. Upon receiving written notification
of such determination from the Governmental Authority, Transmission
Provider shall provide Affected System Interconnection Customers with
written notification within thirty (30) Calendar Days of such
determination and notification. Transmission Provider, upon the timely
written request by any one or more Affected System Interconnection
Customer(s) and at the expense of such Affected System Interconnection
Customer(s), shall appeal, protest, seek abatement of, or otherwise
oppose such determination. Transmission Provider reserves the right to
make all decisions with regard to the prosecution of such appeal,
protest, abatement or other contest, including the compromise or
settlement of the claim; provided that Transmission Provider shall
cooperate and consult in good faith with the requesting Affected System
Interconnection Customer(s) regarding the conduct of such contest.
Affected System Interconnection Customer(s) shall not be required to
pay Transmission Provider for the tax, interest, and/or penalties prior
to the seventh (7th) Calendar Day before the date on which Transmission
Provider (1) is required to pay the tax, interest, and/or penalties or
other amount in lieu thereof pursuant to a compromise or settlement of
the appeal, protest, abatement, or other contest; (2) is required to
pay the tax, interest, and/or penalties as the result of a final, non-
appealable order by a Governmental Authority; or (3) is required to pay
the tax, interest, and/or penalties as a prerequisite to an appeal,
protest, abatement, or other contest. In the event such appeal,
protest, abatement, or other contest results in a determination that
Transmission Provider is not liable for any portion of any tax,
interest, and/or penalties for which any Affected System
Interconnection Customer(s) has already made payment to Transmission
Provider, Transmission Provider shall promptly refund to such Affected
System Interconnection Customer(s) any payment attributable to the
amount determined to be non-taxable, plus any interest (calculated in
accordance with 18 CFR 35.19a(a)(2)(iii)) or other payments
Transmission Provider receives or to which Transmission Provider may be
entitled with respect to such payment. Each Affected System
Interconnection Customer shall provide Transmission Provider with
credit assurances sufficient to meet each Affected System
Interconnection Customer's estimated liability for reimbursement of
Transmission Provider for taxes, interest, and/or penalties under this
Article 3.3.1. Such estimated liability shall be stated in Appendix A.
To the extent that Transmission Provider is a limited liability
company and not a corporation, and has elected to be taxed as a
partnership, then the following shall apply: Transmission Provider
represents, and the Parties acknowledge, that Transmission Provider is
a limited liability company and is treated as a partnership for federal
income tax purposes. Any payment made by Affected System
Interconnection Customers to Transmission Provider for Affected System
Network Upgrade(s) is to be treated as an upfront payment. It is
anticipated by the Parties that any amounts paid by each Affected
System Interconnection Customer to Transmission Provider for Affected
System Network Upgrade(s) will be reimbursed to such Affected System
Interconnection Customer in accordance with the terms of this
Agreement, provided such Affected System Interconnection Customer
fulfills its obligations under this Agreement.
3.3.2 Private Letter Ruling. At the request and expense of any
Affected System Interconnection Customer(s), Transmission Provider
shall file with the Internal Revenue Service a request for a private
letter ruling as to whether any property transferred or sums paid, or
to be paid, by such Affected System Interconnection Customer(s) to
Transmission Provider under this Agreement are subject to federal
income taxation. Each Affected System Interconnection Customer desiring
such a request will prepare the initial draft of the request for a
private letter ruling and will certify under penalties of perjury that
all facts represented in such request are true and accurate to the best
of such Affected System Interconnection Customer's knowledge.
Transmission Provider and such Affected System Interconnection
Customer(s) shall cooperate in good faith with respect to the
submission of such request.
3.3.3 Other Taxes. Upon the timely request by any one or more
Affected System Interconnection Customer(s), and at such Affected
System Interconnection Customer(s)' sole expense, Transmission Provider
shall appeal, protest, seek abatement of, or otherwise contest any tax
(other than federal or state income tax) asserted or assessed against
Transmission Provider for which such Affected System Interconnection
Customer(s) may be required to reimburse Transmission Provider under
the terms of this Agreement. Affected System Interconnection
Customer(s) who requested the action shall pay to Transmission Provider
on a periodic basis, as invoiced by Transmission Provider, Transmission
Provider's documented reasonable costs of prosecuting such appeal,
protest, abatement, or other contest. The requesting Affected System
Interconnection Customer(s) and Transmission Provider shall cooperate
in good faith with respect to any such contest. Unless the payment of
such taxes is a prerequisite to an appeal or abatement or cannot be
deferred, no amount shall be payable by Affected System Interconnection
Customer(s) to Transmission Provider for such taxes until they are
assessed by a final, non-appealable order by any court or agency of
competent jurisdiction. In the event that a tax payment is withheld and
ultimately due and payable after appeal, Affected System
Interconnection Customer(s) will be responsible for all taxes,
interest, and penalties, other than penalties attributable to any delay
caused by Transmission Provider. Each Party shall cooperate with the
other Party to maintain each Party's tax status. Nothing in this
Agreement is intended to adversely affect any Party's tax-exempt status
with respect to the issuance of bonds including, but not limited to,
local furnishing bonds, as described in section 142(f) of the Internal
Revenue Code.
Article 4
Security, Billing, and Payments
4.1 Provision of Security. By the earlier of (1) thirty (30)
Calendar Days prior to the due date for each Affected System
Interconnection Customer's first payment under the payment schedule
specified in Appendix A, or (2) the first date specified in Appendix A
for the ordering of equipment by Transmission Provider for installing
the Affected System Network Upgrade(s), each Affected System
Interconnection Customer shall provide Transmission Provider, at each
Affected System Interconnection Customer's option, a guarantee, a
surety bond, letter of credit, or other form of security that is
reasonably acceptable to Transmission Provider. Such security for
payment shall be in an amount sufficient to cover the costs for
constructing, procuring, and installing the applicable portion of
Affected System Network Upgrade(s) and shall be reduced on a dollar-
for-dollar basis for payments made to Transmission Provider for these
purposes.
The guarantee must be made by an entity that meets the
creditworthiness requirements of Transmission Provider and contain
terms and conditions that guarantee payment of
[[Page 27172]]
any amount that may be due from such Affected System Interconnection
Customer, up to an agreed-to maximum amount. The letter of credit must
be issued by a financial institution reasonably acceptable to
Transmission Provider and must specify a reasonable expiration date.
The surety bond must be issued by an insurer reasonably acceptable to
Transmission Provider and must specify a reasonable expiration date.
4.2 Invoice. Each Party shall submit to the other Parties, on a
monthly basis, invoices of amounts due, if any, for the preceding
month. Each invoice shall state the month to which the invoice applies
and fully describe the services and equipment provided. The Parties may
discharge mutual debts and payment obligations due and owing to each
other on the same date through netting, in which case all amounts a
Party owes to another Party under this Agreement, including interest
payments, shall be netted so that only the net amount remaining due
shall be paid by the owing Party.
4.3 Payment. Invoices shall be rendered to the paying Party at the
address specified by the Parties. The Party receiving the invoice shall
pay the invoice within thirty (30) Calendar Days of receipt. All
payments shall be made in immediately available funds payable to the
other Party, or by wire transfer to a bank named and account designated
by the invoicing Party. Payment of invoices by a Party will not
constitute a waiver of any rights or claims that Party may have under
this Agreement.
4.4 Final Invoice. Within six (6) months after completion of the
construction of the Affected System Network Upgrade(s) Transmission
Provider shall provide an invoice of the final cost of the construction
of the Affected System Network Upgrade(s) and shall set forth such
costs in sufficient detail to enable each Affected System
Interconnection Customer to compare the actual costs with the estimates
and to ascertain deviations, if any, from the cost estimates.
Transmission Provider shall refund, with interest (calculated in
accordance with 18 CFR 35.19a(a)(2)(iii)), to each Affected System
Interconnection Customer any amount by which the actual payment by
Affected System Interconnection Customer for estimated costs exceeds
the actual costs of construction within thirty (30) Calendar Days of
the issuance of such final construction invoice.
4.5 Interest. Interest on any unpaid amounts shall be calculated in
accordance with 18 CFR 35.19a(a)(2)(iii).
4.6 Payment During Dispute. In the event of a billing dispute among
the Parties, Transmission Provider shall continue to construct the
Affected System Network Upgrade(s) under this Agreement as long as each
Affected System Interconnection Customer: (1) continues to make all
payments not in dispute; and (2) pays to Transmission Provider or into
an independent escrow account the portion of the invoice in dispute,
pending resolution of such dispute. If any Affected System
Interconnection Customer fails to meet these two requirements, then
Transmission Provider may provide notice to such Affected System
Interconnection Customer of a Default pursuant to Article 5. Within
thirty (30) Calendar Days after the resolution of the dispute, the
Party that owes money to another Party shall pay the amount due with
interest calculated in accordance with the methodology set forth in 18
CFR 35.19a(a)(2)(iii).
Article 5
Breach, Cure, and Default
5.1 Events of Breach. A Breach of this Agreement shall include the:
(a) Failure to pay any amount when due;
(b) Failure to comply with any material term or condition of this
Agreement, including but not limited to any material Breach of a
representation, warranty, or covenant made in this Agreement;
(c) Failure of a Party to provide such access rights, or a Party's
attempt to revoke access or terminate such access rights, as provided
under this Agreement; or
(d) Failure of a Party to provide information or data to another
Party as required under this Agreement, provided the Party entitled to
the information or data under this Agreement requires such information
or data to satisfy its obligations under this Agreement.
5.2 Definition. Breaching Party shall mean the Party that is in
Breach.
5.3 Notice of Breach, Cure, and Default. Upon the occurrence of an
event of Breach, any Party aggrieved by the Breach, when it becomes
aware of the Breach, shall give written notice of the Breach to the
Breaching Party and to any other person representing a Party to this
Agreement identified in writing to the other Party in advance. Such
notice shall set forth, in reasonable detail, the nature of the Breach,
and where known and applicable, the steps necessary to cure such
Breach.
5.2.1 Upon receiving written notice of the Breach hereunder, the
Breaching Party shall have a period to cure such Breach (hereinafter
referred to as the ``Cure Period'') which shall be sixty (60) Calendar
Days. If an Affected System Interconnection Customer is the Breaching
Party and the Breach results from a failure to provide payments or
security under Article 4.1 of this Agreement, the other Affected System
Interconnection Customers, either individually or in concert, may cure
the Breach by paying the amounts owed or by providing adequate
security, without waiver of contribution rights against the breaching
Affected System Interconnection Customer. Such cure for the Breach of
an Affected System Interconnection Customer is subject to the
reasonable consent of Transmission Provider. Transmission Provider may
also cure such Breach by funding the proportionate share of the
Affected System Network Upgrade costs related to the Breach of Affected
System Interconnection Customer. Transmission Provider must notify all
Parties that it will exercise this option within thirty (30) Calendar
Days of notification that an Affected System Interconnection Customer
has failed to provide payments or security under Article 4.1.
5.2.2 In the event the Breach is not cured within the Cure Period,
the Breaching Party will be in Default of this Agreement, and the non-
Defaulting Parties may (1) act in concert to amend the Agreement to
remove an Affected System Interconnection Customer that is in Default
from this Agreement for cause and to make other changes as necessary,
or (2) either in concert or individually take whatever action at law or
in equity as may appear necessary or desirable to enforce the
performance or observance of any rights, remedies, obligations,
agreement, or covenants under this Agreement.
5.3 Rights in the Event of Default. Notwithstanding the foregoing,
upon the occurrence of Default, the non-Defaulting Parties shall be
entitled to exercise all rights and remedies it may have in equity or
at law.
Article 6
Termination of Agreement
6.1 Expiration of Term. Except as otherwise specified in this
Article 6, the Parties' obligations under this Agreement shall
terminate at the conclusion of the term of this Agreement.
6.2 Termination and Removal. Subject to the limitations set forth
in Article 6.3, in the event of a Default, termination of this
Agreement, as to a given Affected System Interconnection Customer or in
its entirety, shall require a filing at FERC of a notice of
termination, which filing must be accepted for filing by FERC.
6.3 Disposition of Facilities Upon Termination of Agreement.
6.3.1 Transmission Provider Obligations. Upon termination of this
Agreement, unless otherwise agreed to by the Parties in writing,
Transmission Provider:
(a) shall, prior to the construction and installation of any
portion of the Affected System Network Upgrade(s) and to the extent
possible, cancel any pending orders of, or return, such equipment or
material for such Affected System Network Upgrade(s);
(b) may keep in place any portion of the Affected System Network
Upgrade(s) already constructed and installed; and,
(c) shall perform such work as may be necessary to ensure the
safety of persons and property and to preserve the integrity of
Transmission Provider's Transmission System (e.g., construction
demobilization to return the system to its original state, wind-up
work).
6.3.2 Affected System Interconnection Customer Obligations. Upon
billing by Transmission Provider, each Affected System Interconnection
Customer shall reimburse Transmission Provider for its share of any
costs incurred by Transmission Provider in performance of the actions
required or permitted by Article 6.3.1 and for its share of the cost of
any Affected System Network Upgrade(s) described in Appendix A.
Transmission Provider shall use Reasonable Efforts to minimize costs
and shall offset the amounts owed by any salvage value of facilities,
if applicable. Each Affected System Interconnection Customer shall pay
these costs pursuant to Article 4.3 of this Agreement.
6.3.3 Pre-construction or Installation. Upon termination of this
Agreement and prior to the construction and installation of any portion
of the Affected System Network Upgrade(s), Transmission Provider may,
at its
[[Page 27173]]
option, retain any portion of such Affected System Network Upgrade(s)
not cancelled or returned in accordance with Article 6.3.1(a), in which
case Transmission Provider shall be responsible for all costs
associated with procuring such Affected System Network Upgrade(s). To
the extent that an Affected System Interconnection Customer has already
paid Transmission Provider for any or all of such costs, Transmission
Provider shall refund Affected System Interconnection Customer for
those payments. If Transmission Provider elects to not retain any
portion of such facilities, and one or more of Affected System
Interconnection Customers wish to purchase such facilities,
Transmission Provider shall convey and make available to the applicable
Affected System Interconnection Customer(s) such facilities as soon as
practicable after Affected System Interconnection Customer(s)' payment
for such facilities.
6.4 Survival of Rights. Termination or expiration of this Agreement
shall not relieve any Party of any of its liabilities and obligations
arising hereunder prior to the date termination becomes effective, and
each Party may take whatever judicial or administrative actions as
appear necessary or desirable to enforce its rights hereunder. The
applicable provisions of this Agreement will continue in effect after
expiration, or early termination hereof, to the extent necessary to
provide for (1) final billings, billing adjustments, and other billing
procedures set forth in this Agreement; (2) the determination and
enforcement of liability and indemnification obligations arising from
acts or events that occurred while this Agreement was in effect; and
(3) the confidentiality provisions set forth in Article 8.
Article 7
Subcontractors
7.1 Subcontractors. Nothing in this Agreement shall prevent a Party
from utilizing the services of subcontractors, as it deems appropriate,
to perform its obligations under this Agreement; provided, however,
that each Party shall require its subcontractors to comply with all
applicable terms and conditions of this Agreement in providing such
services, and each Party shall remain primarily liable to the other
Parties for the performance of such subcontractor.
7.1.1 Responsibility of Principal. The creation of any subcontract
relationship shall not relieve the hiring Party of any of its
obligations under this Agreement. In accordance with the provisions of
this Agreement, each Party shall be fully responsible to the other
Parties for the acts or omissions of any subcontractor it hires as if
no subcontract had been made. Any applicable obligation imposed by this
Agreement upon a Party shall be equally binding upon, and shall be
construed as having application to, any subcontractor of such Party.
7.1.2 No Third-Party Beneficiary. Except as may be specifically set
forth to the contrary herein, no subcontractor or any other party is
intended to be, nor will it be deemed to be, a third-party beneficiary
of this Agreement.
7.1.3 No Limitation by Insurance. The obligations under this
Article 7 will not be limited in any way by any limitation of any
insurance policies or coverages, including any subcontractor's
insurance.
Article 8
Confidentiality
8.1 Confidentiality. Confidential Information shall include,
without limitation, all information relating to a Party's technology,
research and development, business affairs, and pricing, and any
information supplied to the other Parties prior to the execution of
this Agreement.
Information is Confidential Information only if it is clearly
designated or marked in writing as confidential on the face of the
document, or, if the information is conveyed orally or by inspection,
if the Party providing the information orally informs the Party
receiving the information that the information is confidential. The
Parties shall maintain as confidential any information that is provided
and identified by a Party as Critical Energy Infrastructure Information
(CEII), as that term is defined in 18 CFR 388.113(c).
Such confidentiality will be maintained in accordance with this
Article 8. If requested by the receiving Party, the disclosing Party
shall provide in writing, the basis for asserting that the information
referred to in this Article warrants confidential treatment, and the
requesting Party may disclose such writing to the appropriate
Governmental Authority. Each Party shall be responsible for the costs
associated with affording confidential treatment to its information.
8.1.1 Term. During the term of this Agreement, and for a period of
three (3) years after the expiration or termination of this Agreement,
except as otherwise provided in this Article 8 or with regard to CEII,
each Party shall hold in confidence and shall not disclose to any
person Confidential Information. CEII shall be treated in accordance
with FERC policies and regulations.
8.1.2 Scope. Confidential Information shall not include information
that the receiving Party can demonstrate: (1) is generally available to
the public other than as a result of a disclosure by the receiving
Party; (2) was in the lawful possession of the receiving Party on a
non-confidential basis before receiving it from the disclosing Party;
(3) was supplied to the receiving Party without restriction by a non-
Party, who, to the knowledge of the receiving Party after due inquiry,
was under no obligation to the disclosing Party to keep such
information confidential; (4) was independently developed by the
receiving Party without reference to Confidential Information of the
disclosing Party; (5) is, or becomes, publicly known, through no
wrongful act or omission of the receiving Party or Breach of this
Agreement; or (6) is required, in accordance with Article 8.1.6 of this
Agreement, to be disclosed by any Governmental Authority or is
otherwise required to be disclosed by law or subpoena, or is necessary
in any legal proceeding establishing rights and obligations under this
Agreement. Information designated as Confidential Information will no
longer be deemed confidential if the Party that designated the
information as confidential notifies the receiving Party that it no
longer is confidential.
8.1.3 Release of Confidential Information. No Party shall release
or disclose Confidential Information to any other person, except to its
Affiliates (limited by the Standards of Conduct requirements),
subcontractors, employees, agents, consultants, or to non-Parties that
may be or are considering providing financing to or equity
participation with Affected System Interconnection Customer(s), or to
potential purchasers or assignees of Affected System Interconnection
Customer(s), on a need-to-know basis in connection with this Agreement,
unless such person has first been advised of the confidentiality
provisions of this Article 8 and has agreed to comply with such
provisions. Notwithstanding the foregoing, a Party providing
Confidential Information to any person shall remain primarily
responsible for any release of Confidential Information in
contravention of this Article 8.
8.1.4 Rights. Each Party shall retain all rights, title, and
interest in the Confidential Information that it discloses to the
receiving Party. The disclosure by a Party to the receiving Party of
Confidential Information shall not be deemed a waiver by the disclosing
Party or any other person or entity of the right to protect the
Confidential Information from public disclosure.
8.1.5 Standard of Care. Each Party shall use at least the same
standard of care to protect Confidential Information it receives as it
uses to protect its own Confidential Information from unauthorized
disclosure, publication, or dissemination. Each Party may use
Confidential Information solely to fulfill its obligations to the other
Party under this Agreement or its regulatory requirements.
8.1.6 Order of Disclosure. If a court or a Government Authority or
entity with the right, power, and apparent authority to do so requests
or requires any Party, by subpoena, oral deposition, interrogatories,
requests for production of documents, administrative order, or
otherwise, to disclose Confidential Information, that Party shall
provide the disclosing Party with prompt notice of such request(s) or
requirement(s) so that the disclosing Party may seek an appropriate
protective order or waive compliance with the terms of this Agreement.
Notwithstanding the absence of a protective order or waiver, the Party
may disclose such Confidential Information which, in the opinion of its
counsel, the Party is legally compelled to disclose. Each Party will
use Reasonable Efforts to obtain reliable assurance that confidential
treatment will be accorded any Confidential Information so furnished.
8.1.7 Termination of Agreement. Upon termination of this Agreement
for any reason, each Party shall, within ten (10) Business Days of
receipt of a written request from the other Party, use Reasonable
Efforts to destroy, erase, or delete (with such destruction, erasure,
and deletion certified in writing to the requesting Party) or return to
the requesting Party any and all written or electronic Confidential
Information received from the requesting Party, except that each
[[Page 27174]]
Party may keep one copy for archival purposes, provided that the
obligation to treat it as Confidential Information in accordance with
this Article 8 shall survive such termination.
8.1.8 Remedies. The Parties agree that monetary damages would be
inadequate to compensate a Party for another Party's Breach of its
obligations under this Article 8. Each Party accordingly agrees that
the disclosing Party shall be entitled to equitable relief, by way of
injunction or otherwise, if the receiving Party Breaches or threatens
to Breach its obligations under this Article 8, which equitable relief
shall be granted without bond or proof of damages, and the Breaching
Party shall not plead in defense that there would be an adequate remedy
at law. Such remedy shall not be deemed an exclusive remedy for the
Breach of this Article 8, but it shall be in addition to all other
remedies available at law or in equity. The Parties further acknowledge
and agree that the covenants contained herein are necessary for the
protection of legitimate business interests and are reasonable in
scope. No Party, however, shall be liable for indirect, incidental, or
consequential or punitive damages of any nature or kind resulting from
or arising in connection with this Article 8.
8.1.9 Disclosure to FERC, its Staff, or a State Regulatory Body.
Notwithstanding anything in this Article 8 to the contrary, and
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of an
investigation or otherwise, requests information from a Party that is
otherwise required to be maintained in confidence pursuant to this
Agreement, the Party shall provide the requested information to FERC or
its staff, within the time provided for in the request for information.
In providing the information to FERC or its staff, the Party must,
consistent with 18 CFR 388.112, request that the information be treated
as confidential and non-public by FERC and its staff and that the
information be withheld from public disclosure. Parties are prohibited
from notifying the other Parties to this Agreement prior to the release
of the Confidential Information to FERC or its staff. The Party shall
notify the other Parties to the Agreement when it is notified by FERC
or its staff that a request to release Confidential Information has
been received by FERC, at which time either of the Parties may respond
before such information would be made public, pursuant to 18 CFR
388.112. Requests from a state regulatory body conducting a
confidential investigation shall be treated in a similar manner if
consistent with the applicable state rules and regulations.
8.1.10 Subject to the exception in Article 8.1.9, any information
that a disclosing Party claims is competitively sensitive, commercial,
or financial information under this Agreement shall not be disclosed by
the receiving Party to any person not employed or retained by the
receiving Party, except to the extent disclosure is (1) required by
law; (2) reasonably deemed by the disclosing Party to be required to be
disclosed in connection with a dispute between or among the Parties, or
the defense of litigation or dispute; (3) otherwise permitted by
consent of the disclosing Party, such consent not to be unreasonably
withheld; or (4) necessary to fulfill its obligations under this
Agreement or as Transmission Provider or a balancing authority,
including disclosing the Confidential Information to a regional or
national reliability organization. The Party asserting confidentiality
shall notify the receiving Party in writing of the information that
Party claims is confidential. Prior to any disclosures of that Party's
Confidential Information under this subparagraph, or if any non-Party
or Governmental Authority makes any request or demand for any of the
information described in this subparagraph, the Party that received the
Confidential Information from the disclosing Party agrees to promptly
notify the disclosing Party in writing and agrees to assert
confidentiality and cooperate with the disclosing Party in seeking to
protect the Confidential Information from public disclosure by
confidentiality agreement, protective order, or other reasonable
measures.
Article 9
Information Access and Audit Rights
9.1 Information Access. Each Party shall make available to the
other Parties information necessary to verify the costs incurred by the
other Parties for which the requesting Party is responsible under this
Agreement and carry out obligations and responsibilities under this
Agreement, provided that the Parties shall not use such information for
purposes other than those set forth in this Article 9.1 and to enforce
their rights under this Agreement.
9.2 Audit Rights. Subject to the requirements of confidentiality
under Article 8 of this Agreement, the accounts and records related to
the design, engineering, procurement, and construction of the Affected
System Network Upgrade(s) shall be subject to audit during the period
of this Agreement and for a period of twenty-four (24) months following
Transmission Provider's issuance of a final invoice in accordance with
Article 4.4. Affected System Interconnection Customers may, jointly or
individually, at the expense of the requesting Party(ies), during
normal business hours, and upon prior reasonable notice to Transmission
Provider, audit such accounts and records. Any audit authorized by this
Article 9.2 shall be performed at the offices where such accounts and
records are maintained and shall be limited to those portions of such
accounts and records that relate to obligations under this Agreement.
Article 10
Notices
10.1 General. Any notice, demand, or request required or permitted
to be given by a Party to the other Parties, and any instrument
required or permitted to be tendered or delivered by a Party in writing
to another Party, may be so given, tendered, or delivered, as the case
may be, by depositing the same with the United States Postal Service
with postage prepaid, for transmission by certified or registered mail,
addressed to the Parties, or personally delivered to the Parties, at
the address set out below:
To Transmission Provider:
To Affected System Interconnection Customers:
10.2 Billings and Payments. Billings and payments shall be sent to
the addresses shown in Article 10.1 unless otherwise agreed to by the
Parties.
10.3 Alternative Forms of Notice. Any notice or request required or
permitted to be given by a Party to the other Parties and not required
by this Agreement to be given in writing may be so given by telephone,
facsimile, or email to the telephone numbers and email addresses set
out below:
To Transmission Provider:
To Affected System Interconnection Customers:
10.4 Execution and Filing. Affected System Interconnection
Customers shall either: (i) execute two originals of this tendered
Agreement and return them to Transmission Provider; or (ii) request in
writing that Transmission Provider file with FERC this Agreement in
unexecuted form. As soon as practicable, but not later than ten (10)
Business Days after receiving either the two executed originals of this
tendered Agreement (if it does not conform with a FERC-approved
standard form of this Agreement) or the request to file this Agreement
unexecuted, Transmission Provider shall file this Agreement with FERC,
together with its explanation of any matters as to which Affected
System Interconnection Customers and Transmission Provider disagree and
support for the costs that Transmission Provider proposes to charge to
Affected System Interconnection Customers under this Agreement. An
unexecuted version of this Agreement should contain terms and
conditions deemed appropriate by Transmission Provider for the Affected
System Interconnection Customers' generating facilities. If the Parties
agree to proceed with design, procurement, and construction of
facilities and upgrades under the agreed-upon terms of the unexecuted
version of this Agreement, they may proceed pending FERC action.
Article 11
Miscellaneous
11.1 This Agreement shall include standard miscellaneous terms
including, but not limited to, indemnities, representations,
disclaimers, warranties, governing law, amendment, execution, waiver,
enforceability, and assignment, which reflect best practices in the
electric industry, that are consistent with regional practices,
Applicable Laws and Regulations, and the organizational nature of each
Party. All of these provisions, to the extent practicable, shall be
consistent with the provisions of this LGIP.
{Signature Page to Follow{time}
In witness whereof, the Parties have executed this Agreement in
multiple originals, each of which shall constitute and be an original
Agreement among the Parties.
Transmission Provider
{Transmission Provider{time}
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
[[Page 27175]]
Title:-----------------------------------------------------------------
Affected System Interconnection Customer
{Affected System Interconnection Customer{time}
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Project No.------------------------------------------------------------
Affected System Interconnection Customer
{Affected System Interconnection Customer{time}
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Project No.------------------------------------------------------------
Attachment A to Appendix 12
Multiparty Affected System Facilities Construction Agreement
Affected System Network Upgrade(s), Cost Estimates and Responsibility,
Construction Schedule, and Monthly Payment Schedule
This Appendix A is a part of the Multiparty Affected System
Facilities Construction Agreement [between] among Affected System
Interconnection Customers and Transmission Provider.
1.1 Affected System Network Upgrade(s) to be installed by
Transmission Provider.
{description{time}
1.2 First Equipment Order (including permitting).
{description{time}
1.2.1. Permitting and Land Rights--Transmission Provider Affected
System Network Upgrade(s)
{description{time}
1.3 Construction Schedule. Where applicable, construction of the
Affected System Network Upgrade(s) is scheduled as follows and will be
periodically updated as necessary:
Table 3--Transmission Provider Construction Activities
----------------------------------------------------------------------------------------------------------------
Milestone No. Description Start Date End Date
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Note: Construction schedule assumes that Transmission Provider
has obtained final authorizations and security from Affected System
Interconnection Customers and all necessary permits from
Governmental Authorities as necessary prerequisites to commence
construction of any of the Affected System Network Upgrade(s).
1.4 Payment Schedule.
1.4.1 Timing of and Adjustments to Affected System Interconnection
Customers' Payments and Security.
{description{time}
1.4.2 Monthly Payment Schedule. Affected System Interconnection
Customers' payment schedule is as follows.
{description{time}
Table 4--Affected System Interconnection Customers' Payment/Security
Obligations for Affected System Network Upgrade(s)
------------------------------------------------------------------------
Milestone No. Description Date
------------------------------------------------------------------------
------------------------------------------------------------------------
* Affected System Interconnection Customers' proportionate
responsibility for each payment is as follows:
Affected System Interconnection Customer 1 __._%
Affected System Interconnection Customer 2 __._%
Affected System Interconnection Customer N __._%
Note: Affected System Interconnection Customers' payment or
provision of security as provided in this Agreement operates as a
condition precedent to Transmission Provider's obligations to
construct any Affected System Network Upgrade(s), and failure to
meet this schedule will constitute a Breach pursuant to Article 5.1
of this Agreement.
1.5 Permits, Licenses, and Authorizations.
{description{time}
Attachment B to Appendix 12
Multiparty Affected System Facilities Construction Agreement
Notification of Completed Construction
This Appendix B is a part of the Multiparty Affected System
Facilities Construction Agreement among Affected System
Interconnection Customers and Transmission Provider. Where
applicable, when Transmission Provider has completed construction of
the Affected System Network Upgrade(s), Transmission Provider shall
send notice to Affected System Interconnection Customers in
substantially the form following:
{Date{time}
{Affected System Interconnection Customers Addresses{time}
Re: Completion of Affected System Network Upgrade(s)
Dear {Name or Title{time} :
This letter is sent pursuant to the Multiparty Affected System
Facilities Construction Agreement among {Transmission
Provider{time} and {Affected System Interconnection
Customers{time} , dated , 20.
On {Date{time} , Transmission Provider completed to its
satisfaction all work on the Affected System Network Upgrade(s)
required to facilitate the safe and reliable interconnection and
operation of Affected System Interconnection Customer's generating
facilities. Transmission Provider confirms that the Affected System
Network Upgrade(s) are in place.
Thank you.
{Signature{time}
{Transmission Provider Representative{time}
Attachment C to Appendix 12
Multiparty Affected System Facilities Construction Agreement
EXHIBITS
This Appendix C is a part of the Multiparty Affected System
Facilities Construction Agreement among Affected System
Interconnection Customers and Transmission Provider.
Exhibit A1--Transmission Provider Site Map
Exhibit A2--Site Plan
Exhibit A3--Affected System Network Upgrade(s) Plan & Profile
Exhibit A4--Estimated Cost of Affected System Network Upgrade(s)
------------------------------------------------------------------------
Facilities to
be constructed Estimate in
Location by transmission dollars
provider
------------------------------------------------------------------------
Total:
------------------------------------------------------------------------
Appendix D: Changes to pro forma LGIA
Appendix 5 to the Standard Large Generator Interconnection Procedures
Standard Large Generator Interconnection Agreement (LGIA)
Table of Contents
Article 1. Definitions
Article 2. Effective Date, Term, and Termination
2.1 Effective Date
2.2 Term of Agreement
2.3 Termination Procedures
2.3.1 Written Notice
2.3.2 Default
2.4 Termination Costs
2.5 Disconnection.
2.6 Survival
[[Page 27176]]
Article 3. Regulatory Filings
3.1 Filing
Article 4. Scope of Service
4.1 Interconnection Product Options
4.1.1 Energy Resource Interconnection Service
4.1.2 Network Resource Interconnection Service
4.2 Provision of Service
4.3 Performance Standards
4.4 No Transmission Delivery Service
4.5 Interconnection Customer Provided Services
Article 5. Interconnection Facilities Engineering, Procurement, and
Construction
5.1 Options
5.1.1 Standard Option
5.1.2 Alternate Option
5.1.3 Option to Build
5.1.4 Negotiated Option
5.2 General Conditions Applicable to Option To Build
5.3 Liquidated Damages
5.4 Power System Stabilizers
5.5 Equipment Procurement
5.6 Construction Commencement
5.7 Work Progress
5.8 Information Exchange
5.9 Other Interconnection Options
5.9.1 Limited Operation
5.9.2 Provisional Interconnection Service
5.10 Interconnection Customer's Interconnection Facilities (`ICIF')
5.10.1 Interconnection Customer's Interconnection Facility
Specifications
5.10.2 Transmission Provider's Review
5.10.3 ICIF Construction
5.11 Transmission Provider's Interconnection Facilities Construction
5.12 Access Rights
5.13 Lands of Other Property Owners
5.14 Permits
5.15 Early Construction of Base Case Facilities
5.16 Suspension
5.17 Taxes
5.17.1 Interconnection Customer Payments Not Taxable
5.17.2 Representations and Covenants
5.17.3 Indemnification for the Cost Consequences of Current Tax
Liability Imposed Upon [the] Transmission Provider
5.17.4 Tax Gross-Up Amount
5.17.5 Private Letter Ruling or Change or Clarification of Law
5.17.6 Subsequent Taxable Events
5.17.7 Contests
5.17.8 Refund
5.17.9 Taxes Other Than Income Taxes
5.17.10 Transmission Owners Who Are Not Transmission Providers
5.18 Tax Status
5.19 Modification
5.19.1 General
5.19.2 Standards
5.19.3 Modification Costs
Article 6. Testing and Inspection
6.1 Pre-Commercial Operation Date Testing and Modifications
6.2 Post-Commercial Operation Date Testing and Modifications
6.3 Right to Observe Testing
6.4 Right to Inspect
Article 7. Metering
7.1 General
7.2 Check Meters
7.3 Standards
7.4 Testing of Metering Equipment
7.5 Metering Data
Article 8. Communications
8.1 Interconnection Customer Obligations
8.2 Remote Terminal Unit
8.3 No Annexation
8.4 Provision of Data from a Variable Energy Resource
Article 9. Operations
9.1 General
9.2 Balancing Authority Area Notification
9.3 Transmission Provider Obligations
9.4 Interconnection Customer Obligations
9.5 Start-Up and Synchronization
9.6 Reactive Power and Primary Frequency Response
9.6.1 Power Factor Design Criteria
9.6.2 Voltage Schedules
9.6.3 Payment for Reactive Power
9.6.4 Primary Frequency Response
9.7 Outages and Interruptions
9.7.1 Outages
9.7.2 Interruption of Service
9.7.3 Ride Through Capability and Performance
9.7.4 System Protection and Other Control Requirements
9.7.5 Requirements for Protection
9.7.6 Power Quality
9.8 Switching and Tagging Rules
9.9 Use of Interconnection Facilities by Third Parties
9.9.1 Purpose of Interconnection Facilities
9.9.2 Third Party Users
9.10 Disturbance Analysis Data Exchange
Article 10. Maintenance
10.1 Transmission Provider Obligations
10.2 Interconnection Customer Obligations
10.3 Coordination
10.4 Secondary Systems
10.5 Operating and Maintenance Expenses
Article 11. Performance Obligation
11.1 Interconnection Customer Interconnection Facilities
11.2 Transmission Provider's Interconnection Facilities
11.3 Network Upgrades and Distribution Upgrades
11.4 Transmission Credits
11.4.1 Repayment of Amounts Advanced for Network Upgrades
11.4.2 Special Provisions for Affected Systems
11.5 Provision of Security
11.6 Interconnection Customer Compensation
11.6.1 Interconnection Customer Compensation for Actions During
Emergency Condition
Article 12. Invoice
12.1 General
12.2 Final Invoice
12.3 Payment
12.4 Disputes
Article 13. Emergencies
13.1 Definition
13.2 Obligations
13.3 Notice
13.4 Immediate Action
13.5 Transmission Provider Authority
13.5.1 General
13.5.2 Reduction and Disconnection
13.6 Interconnection Customer Authority
13.7 Limited Liability
Article 14. Regulatory Requirements and Governing Law
14.1 Regulatory Requirements
14.2 Governing Law
Article 15. Notices
15.1 General
15.2 Billings and Payments
15.3 Alternative Forms of Notice
15.4 Operations and Maintenance Notice
Article 16. Force Majeure
16.1 Force Majeure
Article 17. Default
17.1 Default
17.1.1 General
17.1.2 Right to Terminate
17.2 Violation of Operating Assumptions for Generating Facilities
Article 18. Indemnity, Consequential Damages and Insurance
18.1 Indemnity
18.1.1 Indemnified Person
18.1.2 Indemnifying Party
18.1.3 Indemnity Procedures
18.2 Consequential Damages
18.3 Insurance
Article 19. Assignment
19.1 Assignment
Article 20. Severability
20.1 Severability
Article 21. Comparability
21.1 Comparability
Article 22. Confidentiality
22.1 Confidentiality
22.1.1 Term
22.1.2 Scope
22.1.3 Release of Confidential Information
22.1.4 Rights
22.1.5 No Warranties
22.1.6 Standard of Care
22.1.7 Order of Disclosure
22.1.8 Termination of Agreement
22.1.9 Remedies
22.1.10 Disclosure to FERC, its Staff, or a State
Article 23. Environmental Releases
Article 24. Information Requirements
24.1 Information Acquisition
24.2 Information Submission by Transmission Provider
24.3 Updated Information Submission by Interconnection Customer
24.4 Information Supplementation
Article 25. Information Access and Audit Rights
25.1 Information Access
25.2 Reporting of Non-Force Majeure Events
25.3 Audit Rights
25.4 Audit Rights Periods
25.4.1 Audit Rights Period for Construction-Related Accounts and
Records
25.4.2 Audit Rights Period for All Other Accounts and Records
25.5 Audit Results
Article 26. Subcontractors
26.1 General
26.2 Responsibility of Principal
26.3 No Limitation by Insurance
Article 27. Disputes
27.1 Submission
27.2 External Arbitration Procedures
27.3 Arbitration Decisions
27.4 Costs
Article 28. Representations, Warranties, and Covenants
28.1 General
28.1.1 Good Standing
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28.1.2 Authority
28.1.3 No Conflict
28.1.4 Consent and Approval
Article 29. Joint Operating Committee
29.1 Joint Operating Committee
Article 30. Miscellaneous
30.1 Binding Effect
30.2 Conflicts
30.3 Rules of Interpretation
30.4 Entire Agreement
30.5 No Third Party Beneficiaries
30.6 Waiver
30.7 Headings
30.8 Multiple Counterparts
30.9 Amendment
30.10 Modification by the Parties
30.11 Reservation of Rights
30.12 No Partnership
Appendix A--Interconnection Facilities, Network Upgrades, and
Distribution Upgrades
Appendix B--Milestones
Appendix C--Interconnection Details
Appendix D--Security Arrangements Details
Appendix E--Commercial Operation Date
Appendix F--Addresses for Delivery of Notices and Billings
Appendix G--Interconnection Requirements for a Wind Generating Plant
Appendix H--Operating Assumptions for Generating Facility
Standard Large Generator Interconnection Agreement
This Standard Large Generator Interconnection Agreement
(``Agreement'') is made and entered into this __ day of ____ 20__,
by and between ________, a ________ organized and existing under the
laws of the State/Commonwealth of _____ (``Interconnection
Customer'' with a Large Generating Facility), and ________ , a
______ organized and existing under the laws of the State/
Commonwealth of _____ (``Transmission Provider and/or Transmission
Owner''). Interconnection Customer and Transmission Provider each
may be referred to as a ``Party'' or collectively as the
``Parties.''
Recitals
Whereas, Transmission Provider operates the Transmission System;
and
Whereas, Interconnection Customer intends to own, lease and/or
control and operate the Generating Facility identified as a Large
Generating Facility in Appendix C to this Agreement; and
Whereas, Interconnection Customer and Transmission Provider have
agreed to enter into this Agreement for the purpose of
interconnecting the Large Generating Facility with the Transmission
System;
Now, Therefore, in consideration of and subject to the mutual
covenants contained herein, it is agreed:
When used in this Standard Large Generator Interconnection
Agreement, terms with initial capitalization that are not defined in
Article 1 shall have the meanings specified in the Article in which
they are used or the Open Access Transmission Tariff (Tariff).
Article 1. Definitions
Adverse System Impact shall mean the negative effects due to
technical or operational limits on conductors or equipment being
exceeded that may compromise the safety and reliability of the
electric system.
Affected System shall mean an electric system other than [the]
Transmission Provider's Transmission System that may be affected by
the proposed interconnection.
Affected System Operator shall mean the entity that operates an
Affected System.
Affiliate shall mean, with respect to a corporation, partnership
or other entity, each such other corporation, partnership or other
entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with, such corporation, partnership or other entity.
Ancillary Services shall mean those services that are necessary
to support the transmission of capacity and energy from resources to
loads while maintaining reliable operation of [the] Transmission
Provider's Transmission System in accordance with Good Utility
Practice.
Applicable Laws and Regulations shall mean all duly promulgated
applicable federal, state and local laws, regulations, rules,
ordinances, codes, decrees, judgments, directives, or judicial or
administrative orders, permits and other duly authorized actions of
any Governmental Authority.
Applicable Reliability Standards shall mean the requirements and
guidelines of the Electric Reliability Organization and the
Balancing Authority Area of the Transmission System to which the
Generating Facility is directly interconnected.
Balancing Authority shall mean an entity that integrates
resource plans ahead of time, maintains demand and resource balance
within a Balancing Authority Area, and supports interconnection
frequency in real time.
Balancing Authority Area shall mean the collection of
generation, transmission, and loads within the metered boundaries of
the Balancing Authority. The Balancing Authority maintains load-
resource balance within this area.
Base Case shall mean the base case power flow, short circuit,
and stability data bases used for the Interconnection Studies by
Transmission Provider or Interconnection Customer.
Breach shall mean the failure of a Party to perform or observe
any material term or condition of the Standard Large Generator
Interconnection Agreement.
Breaching Party shall mean a Party that is in Breach of the
Standard Large Generator Interconnection Agreement.
Business Day shall mean Monday through Friday, excluding Federal
Holidays.
Calendar Day shall mean any day including Saturday, Sunday or a
Federal Holiday.
Cluster shall mean a group of one or more Interconnection
Requests that are studied together for the purpose of conducting a
Cluster Study.
Cluster Restudy shall mean a restudy of a Cluster Study
conducted pursuant to Section 7.5 of the LGIP.
Cluster Study shall mean the evaluation of one or more
Interconnection Requests within a Cluster as described in Section 7
of the LGIP.
Clustering shall mean the process whereby one or more
Interconnection Requests are studied together, instead of serially,
as described in Section 7 of the LGIP.
Commercial Operation shall mean the status of a Generating
Facility that has commenced generating electricity for sale,
excluding electricity generated during Trial Operation.
Commercial Operation Date of a unit shall mean the date on which
the Generating Facility commences Commercial Operation as agreed to
by the Parties pursuant to Appendix E to the Standard Large
Generator Interconnection Agreement.
Confidential Information shall mean any confidential,
proprietary or trade secret information of a plan, specification,
pattern, procedure, design, device, list, concept, policy or
compilation relating to the present or planned business of a Party,
which is designated as confidential by the Party supplying the
information, whether conveyed orally, electronically, in writing,
through inspection, or otherwise.
Contingent Facilities shall mean those unbuilt Interconnection
Facilities and Network Upgrades upon which the Interconnection
Request's costs, timing, and study findings are dependent, and if
delayed or not built, could cause a need for restudies of the
Interconnection Request or a reassessment of the Interconnection
Facilities and/or Network Upgrades and/or costs and timing.
Default shall mean the failure of a Breaching Party to cure its
Breach in accordance with Article 17 of the Standard Large Generator
Interconnection Agreement.
Dispute Resolution shall mean the procedure for resolution of a
dispute between the Parties in which they will first attempt to
resolve the dispute on an informal basis.
Distribution System shall mean [the] Transmission Provider's
facilities and equipment used to transmit electricity to ultimate
usage points such as homes and industries directly from nearby
generators or from interchanges with higher voltage transmission
networks which transport bulk power over longer distances. The
voltage levels at which distribution systems operate differ among
areas.
Distribution Upgrades shall mean the additions, modifications,
and upgrades to [the] Transmission Provider's Distribution System at
or beyond the Point of Interconnection to facilitate interconnection
of the Generating Facility and render the transmission service
necessary to effect Interconnection Customer's wholesale sale of
electricity in interstate commerce. Distribution Upgrades do not
include Interconnection Facilities.
Effective Date shall mean the date on which the Standard Large
Generator Interconnection Agreement becomes effective upon execution
by the Parties subject to acceptance by FERC, or if filed
unexecuted, upon the date specified by FERC.
Electric Reliability Organization shall mean the North American
Electric Reliability Corporation (NERC) or its successor
organization.
[[Page 27178]]
Emergency Condition shall mean a condition or situation: (1)
that in the judgment of the Party making the claim is imminently
likely to endanger life or property; or (2) that, in the case of a
Transmission Provider, is imminently likely (as determined in a non-
discriminatory manner) to cause a material adverse effect on the
security of, or damage to Transmission Provider's Transmission
System, Transmission Provider's Interconnection Facilities or the
electric systems of others to which [the] Transmission Provider's
Transmission System is directly connected; or (3) that, in the case
of Interconnection Customer, is imminently likely (as determined in
a non-discriminatory manner) to cause a material adverse effect on
the security of, or damage to, the Generating Facility or
Interconnection Customer's Interconnection Facilities. System
restoration and black start shall be considered Emergency
Conditions; provided, that Interconnection Customer is not obligated
by the Standard Large Generator Interconnection Agreement to possess
black start capability.
Energy Resource Interconnection Service shall mean an
Interconnection Service that allows [the] Interconnection Customer
to connect its Generating Facility to [the] Transmission Provider's
Transmission System to be eligible to deliver the Generating
Facility's electric output using the existing firm or nonfirm
capacity of [the] Transmission Provider's Transmission System on an
as available basis. Energy Resource Interconnection Service in and
of itself does not convey transmission service.
Engineering & Procurement (E&P) Agreement shall mean an
agreement that authorizes [the] Transmission Provider to begin
engineering and procurement of long lead-time items necessary for
the establishment of the interconnection in order to advance the
implementation of the Interconnection Request.
Environmental Law shall mean Applicable Laws or Regulations
relating to pollution or protection of the environment or natural
resources.
Federal Power Act shall mean the Federal Power Act, as amended,
16 U.S.C. Sec. Sec. 791a et seq.
FERC shall mean the Federal Energy Regulatory Commission
(Commission) or its successor.
Force Majeure shall mean any act of God, labor disturbance, act
of the public enemy, war, insurrection, riot, fire, storm or flood,
explosion, breakage or accident to machinery or equipment, any
order, regulation or restriction imposed by governmental, military
or lawfully established civilian authorities, or any other cause
beyond a Party's control. A Force Majeure event does not include
acts of negligence or intentional wrongdoing by the Party claiming
Force Majeure.
Generating Facility shall mean Interconnection Customer's
devices for the production and/or storage for later injection of
electricity identified in the Interconnection Request, but shall not
include Interconnection Customer's Interconnection Facilities.
Generating Facility Capacity shall mean the net capacity of the
Generating Facility or the aggregate net capacity of the Generating
Facility where it includes more than one device for the production
and/or storage for later injection of electricity.
Good Utility Practice shall mean any of the practices, methods
and acts engaged in or approved by a significant portion of the
electric industry during the relevant time period, or any of the
practices, methods and acts which, in the exercise of reasonable
judgment in light of the facts known at the time the decision was
made, could have been expected to accomplish the desired result at a
reasonable cost consistent with good business practices,
reliability, safety and expedition. Good Utility Practice is not
intended to be limited to the optimum practice, method, or act to
the exclusion of all others, but rather to be acceptable practices,
methods, or acts generally accepted in the region.
Governmental Authority shall mean any federal, state, local or
other governmental regulatory or administrative agency, court,
commission, department, board, or other governmental subdivision,
legislature, rulemaking board, tribunal, or other governmental
authority having jurisdiction over the Parties, their respective
facilities, or the respective services they provide, and exercising
or entitled to exercise any administrative, executive, police, or
taxing authority or power; provided, however, that such term does
not include Interconnection Customer, Transmission Provider, or any
Affiliate thereof.
Hazardous Substances shall mean any chemicals, materials or
substances defined as or included in the definition of ``hazardous
substances,'' ``hazardous wastes,'' ``hazardous materials,''
``hazardous constituents,'' ``restricted hazardous materials,''
``extremely hazardous substances,'' ``toxic substances,''
``radioactive substances,'' ``contaminants,'' ``pollutants,''
``toxic pollutants'' or words of similar meaning and regulatory
effect under any applicable Environmental Law, or any other
chemical, material or substance, exposure to which is prohibited,
limited or regulated by any applicable Environmental Law.
Initial Synchronization Date shall mean the date upon which the
Generating Facility is initially synchronized and upon which Trial
Operation begins.
In-Service Date shall mean the date upon which [the]
Interconnection Customer reasonably expects it will be ready to
begin use of [the] Transmission Provider's Interconnection
Facilities to obtain back feed power.
Interconnection Customer shall mean any entity, including [the]
Transmission Provider, Transmission Owner or any of the Affiliates
or subsidiaries of either, that proposes to interconnect its
Generating Facility with [the] Transmission Provider's Transmission
System.
Interconnection Customer's Interconnection Facilities shall mean
all facilities and equipment, as identified in Appendix A of the
Standard Large Generator Interconnection Agreement, that are located
between the Generating Facility and the Point of Change of
Ownership, including any modification, addition, or upgrades to such
facilities and equipment necessary to physically and electrically
interconnect the Generating Facility to [the] Transmission
Provider's Transmission System. Interconnection Customer's
Interconnection Facilities are sole use facilities.
Interconnection Facilities shall mean Transmission Provider's
Interconnection Facilities and Interconnection Customer's
Interconnection Facilities. Collectively, Interconnection Facilities
include all facilities and equipment between the Generating Facility
and the Point of Interconnection, including any modification,
additions or upgrades that are necessary to physically and
electrically interconnect the Generating Facility to Transmission
Provider's Transmission System. Interconnection Facilities are sole
use facilities and shall not include Distribution Upgrades, Stand
Alone Network Upgrades or Network Upgrades.
Interconnection Facilities Study shall mean a study conducted by
Transmission Provider or a third party consultant for
Interconnection Customer to determine a list of facilities
(including Transmission Provider's Interconnection Facilities and
Network Upgrades as identified in the Cluster Study), the cost of
those facilities, and the time required to interconnect the
Generating Facility with Transmission Provider's Transmission
System. The scope of the study is defined in Section 8 of the LGIP.
Interconnection Facilities Study Agreement shall mean the form
of agreement contained in Appendix 3 of the Standard Large Generator
Interconnection Procedures for conducting the Interconnection
Facilities Study.
Interconnection Request shall mean an Interconnection Customer's
request, in the form of Appendix 1 to the LGIP, in accordance with
the Tariff, to interconnect a new Generating Facility, or to
increase the capacity of, or make a Material Modification to the
operating characteristics of, an existing Generating Facility that
is interconnected with [the] Transmission Provider's Transmission
System.
Interconnection Service shall mean the service provided by [the]
Transmission Provider associated with interconnecting [the]
Interconnection Customer's Generating Facility to [the] Transmission
Provider's Transmission System and enabling it to receive electric
energy and capacity from the Generating Facility at the Point of
Interconnection, pursuant to the terms of the Standard Large
Generator Interconnection Agreement and, if applicable, [the]
Transmission Provider's Tariff.
Interconnection Study shall mean any of the following studies:
the Cluster Study, the Cluster Restudy, the Surplus Interconnection
Service [System Impact] Study, [and] the Interconnection Facilities
Study, the Affected System Study, Optional Interconnection Study,
and Material Modification assessment, described in the LGIP.
IRS shall mean the Internal Revenue Service.
Joint Operating Committee shall be a group made up of
representatives from Interconnection Customers and [the]
[[Page 27179]]
Transmission Provider to coordinate operating and technical
considerations of Interconnection Service.
Large Generating Facility shall mean a Generating Facility
having a Generating Facility Capacity of more than 20 MW.
LGIA Deposit shall mean the deposit Interconnection Customer
submits when returning the executed LGIA, or within ten (10)
Business Days of requesting that the LGIA be filed unexecuted at the
Commission, in accordance with Section 11.3 of the LGIP.
Loss shall mean any and all losses relating to injury to or
death of any person or damage to property, demand, suits,
recoveries, costs and expenses, court costs, attorney fees, and all
other obligations by or to third parties, arising out of or
resulting from the other Party's performance, or non-performance of
its obligations under the Standard Large Generator Interconnection
Agreement on behalf of the Indemnifying Party, except in cases of
gross negligence or intentional wrongdoing by the Indemnifying
Party.
Material Modification shall mean those modifications that have a
material impact on the cost or timing of any Interconnection Request
with an equal or later Queue Position.
Metering Equipment shall mean all metering equipment installed
or to be installed at the Generating Facility pursuant to the
Standard Large Generator Interconnection Agreement at the metering
points, including but not limited to instrument transformers, MWh-
meters, data acquisition equipment, transducers, remote terminal
unit, communications equipment, phone lines, and fiber optics.
Network Resource shall mean any designated generating resource
owned, purchased, or leased by a Network Customer under the Network
Integration Transmission Service Tariff. Network Resources do not
include any resource, or any portion thereof, that is committed for
sale to third parties or otherwise cannot be called upon to meet the
Network Customer's Network Load on a non-interruptible basis.
Network Resource Interconnection Service shall mean an
Interconnection Service that allows [the] Interconnection Customer
to integrate its Large Generating Facility with [the] Transmission
Provider's Transmission System (1) in a manner comparable to that in
which [the] Transmission Provider integrates its generating
facilities to serve native load customers; or (2) in an RTO or ISO
with market based congestion management, in the same manner as
Network Resources. Network Resource Interconnection Service in and
of itself does not convey transmission service.
Network Upgrades shall mean the additions, modifications, and
upgrades to [the] Transmission Provider's Transmission System
required at or beyond the point at which the Interconnection
Facilities connect to [the] Transmission Provider's Transmission
System to accommodate the interconnection of the Large Generating
Facility to [the] Transmission Provider's Transmission System.
Notice of Dispute shall mean a written notice of a dispute or
claim that arises out of or in connection with the Standard Large
Generator Interconnection Agreement or its performance.
Optional Interconnection Study shall mean a sensitivity analysis
based on assumptions specified by [the] Interconnection Customer in
the Optional Interconnection Study Agreement.
Optional Interconnection Study Agreement shall mean the form of
agreement contained in Appendix 4 of the LGIP for conducting the
Optional Interconnection Study.
Party or Parties shall mean Transmission Provider, Transmission
Owner, Interconnection Customer or any combination of the above.
Point of Change of Ownership shall mean the point, as set forth
in Appendix A to the Standard Large Generator Interconnection
Agreement, where [the] Interconnection Customer's Interconnection
Facilities connect to [the] Transmission Provider's Interconnection
Facilities.
Point of Interconnection shall mean the point, as set forth in
Appendix A to the Standard Large Generator Interconnection
Agreement, where the Interconnection Facilities connect to [the]
Transmission Provider's Transmission System.
Proportional Impact Method shall mean a technical analysis
conducted by Transmission Provider to determine the degree to which
each Generating Facility in the Cluster Study contributes to the
need for a specific System Network Upgrade.
Provisional Interconnection Service shall mean Interconnection
Service provided by Transmission Provider associated with
interconnecting [the] Interconnection Customer's Generating Facility
to Transmission Provider's Transmission System and enabling that
Transmission System to receive electric energy and capacity from the
Generating Facility at the Point of Interconnection, pursuant to the
terms of the Provisional Large Generator Interconnection Agreement
and, if applicable, the Tariff.
Provisional Large Generator Interconnection Agreement shall mean
the interconnection agreement for Provisional Interconnection
Service established between Transmission Provider and/or the
Transmission Owner and [the] Interconnection Customer. This
agreement shall take the form of the Standard Large Generator
Interconnection Agreement, modified for provisional purposes.
Queue Position shall mean the order of a valid Interconnection
Request, relative to all other pending valid Interconnection
Requests, established pursuant to Section 4.1 of this LGIP.
Reasonable Efforts shall mean, with respect to an action
required to be attempted or taken by a Party under the Standard
Large Generator Interconnection Agreement, efforts that are timely
and consistent with Good Utility Practice and are otherwise
substantially equivalent to those a Party would use to protect its
own interests.
Scoping Meeting shall mean the meeting between representatives
of Interconnection Customer(s) and Transmission Provider conducted
for the purpose of discussing the proposed Interconnection Request
and any alternative interconnection options, exchanging information
including any transmission data and earlier study evaluations that
would be reasonably expected to impact such interconnection options,
refining information and models provided by Interconnection
Customer(s), discussing the Cluster Study materials posted to OASIS
pursuant to Section 3.5 of the LGIP, and analyzing such information.
Site Control shall mean the exclusive land right to develop,
construct, operate, and maintain the Generating Facility over the
term of expected operation of the Generating Facility. Site Control
may be demonstrated by documentation establishing: (1) ownership of,
a leasehold interest in, or a right to develop a site of sufficient
size to construct and operate the Generating Facility; (2) an option
to purchase or acquire a leasehold site of sufficient size to
construct and operate the Generating Facility for such purpose; or
(3) any other documentation that clearly demonstrates the right of
Interconnection Customer to exclusively occupy a site of sufficient
size to construct and operate the Generating Facility. Transmission
Provider will maintain acreage requirements for each Generating
Facility type on its OASIS or public website.
Small Generating Facility shall mean a Generating Facility that
has a Generating Facility Capacity of no more than 20 MW.
Stand Alone Network Upgrades shall mean Network Upgrades that
are not part of an Affected System that an Interconnection Customer
may construct without affecting day-to-day operations of the
Transmission System during their construction [and the following
conditions are met: (1) a Substation Network Upgrade must only be
required for a single Interconnection Customer in the Cluster and no
other Interconnection Customer in that Cluster is required to
interconnect to the same Substation Network Upgrades, and (2) a
System Network Upgrade must only be required for a single
Interconnection Customer in the Cluster, as indicated under
Transmission Provider's Proportional Impact Method]. Both
Transmission Provider and Interconnection Customer must agree as to
what constitutes Stand Alone Network Upgrades and identify them in
Appendix A to the Standard Large Generator Interconnection
Agreement. If Transmission Provider and Interconnection Customer
disagree about whether a particular Network Upgrade is a Stand Alone
Network Upgrade, Transmission Provider must provide Interconnection
Customer a written technical explanation outlining why Transmission
Provider does not consider the Network Upgrade to be a Stand Alone
Network Upgrade within fifteen (15) Business [d]Days of its
determination.
Standard Large Generator Interconnection Agreement (LGIA) shall
mean the form of interconnection agreement applicable to an
Interconnection Request pertaining to a Large Generating Facility
that is included in [the] Transmission Provider's Tariff.
Standard Large Generator Interconnection Procedures (LGIP) shall
mean the interconnection procedures applicable to an Interconnection
Request pertaining to a Large Generating Facility that are included
in [the] Transmission Provider's Tariff.
Substation Network Upgrades shall mean Network Upgrades that are
required at the
[[Page 27180]]
substation located at the Point of Interconnection.
Surplus Interconnection Service shall mean any unneeded portion
of Interconnection Service established in a Standard Large Generator
Interconnection Agreement, such that if Surplus Interconnection
Service is utilized the total amount of Interconnection Service at
the Point of Interconnection would remain the same.
System Network Upgrades shall mean Network Upgrades that are
required beyond the substation located at the Point of
Interconnection.
System Protection Facilities shall mean the equipment, including
necessary protection signal communications equipment, required to
protect (1) [the] Transmission Provider's Transmission System from
faults or other electrical disturbances occurring at the Generating
Facility and (2) the Generating Facility from faults or other
electrical system disturbances occurring on [the] Transmission
Provider's Transmission System or on other delivery systems or other
generating systems to which [the] Transmission Provider's
Transmission System is directly connected.
Tariff shall mean [the] Transmission Provider's Tariff through
which open access transmission service and Interconnection Service
are offered, as filed with FERC, and as amended or supplemented from
time to time, or any successor tariff.
Transmission Owner shall mean an entity that owns, leases or
otherwise possesses an interest in the portion of the Transmission
System at the Point of Interconnection and may be a Party to the
Standard Large Generator Interconnection Agreement to the extent
necessary.
Transmission Provider shall mean the public utility (or its
designated agent) that owns, controls, or operates transmission or
distribution facilities used for the transmission of electricity in
interstate commerce and provides transmission service under the
Tariff. The term Transmission Provider should be read to include the
Transmission Owner when the Transmission Owner is separate from
[the] Transmission Provider.
Transmission Provider's Interconnection Facilities shall mean
all facilities and equipment owned, controlled, or operated by
Transmission Provider from the Point of Change of Ownership to the
Point of Interconnection as identified in Appendix A to the Standard
Large Generator Interconnection Agreement, including any
modifications, additions or upgrades to such facilities and
equipment. Transmission Provider's Interconnection Facilities are
sole use facilities and shall not include Distribution Upgrades,
Stand Alone Network Upgrades or Network Upgrades.
Transmission System shall mean the facilities owned, controlled
or operated by [the] Transmission Provider or Transmission Owner
that are used to provide transmission service under the Tariff.
Trial Operation shall mean the period during which
Interconnection Customer is engaged in on-site test operations and
commissioning of the Generating Facility prior to Commercial
Operation.
Variable Energy Resource shall mean a device for the production
of electricity that is characterized by an energy source that: (1)
is renewable; (2) cannot be stored by the facility owner or
operator; and (3) has variability that is beyond the control of the
facility owner or operator.
Withdrawal Penalty shall mean the penalty assessed by
Transmission Provider to an Interconnection Customer that chooses to
withdraw or is deemed withdrawn from Transmission Provider's
interconnection queue or whose Generating Facility does not
otherwise reach Commercial Operation. The calculation of the
Withdrawal Penalty is set forth in Section 3.7.1 of the LGIP.
Article 2. Effective Date, Term, and Termination
2.1 Effective Date. This LGIA shall become effective upon
execution by the Parties subject to acceptance by FERC (if
applicable), or if filed unexecuted, upon the date specified by
FERC. Transmission Provider shall promptly file this LGIA with FERC
upon execution in accordance with Article 3.1, if required.
2.2 Term of Agreement. Subject to the provisions of Article 2.3,
this LGIA shall remain in effect for a period of ten (10) years from
the Effective Date or such other longer period as Interconnection
Customer may request (Term to be specified in individual agreements)
and shall be automatically renewed for each successive one-year
period thereafter.
2.3 Termination Procedures.
2.3.1 Written Notice. This LGIA may be terminated by
Interconnection Customer after giving Transmission Provider ninety
(90) Calendar Days advance written notice, or by Transmission
Provider notifying FERC after the Generating Facility permanently
ceases Commercial Operation.
2.3.2 Default. Either Party may terminate this LGIA in
accordance with Article 17.
2.3.3 Notwithstanding Articles 2.3.1 and 2.3.2, no termination
shall become effective until the Parties have complied with all
Applicable Laws and Regulations applicable to such termination,
including the filing with FERC of a notice of termination of this
LGIA, which notice has been accepted for filing by FERC.
2.4 Termination Costs. If a Party elects to terminate this
Agreement pursuant to Article 2.3 above, each Party shall pay all
costs incurred (including any cancellation costs relating to orders
or contracts for Interconnection Facilities and equipment) or
charges assessed by the other Party, as of the date of the other
Party's receipt of such notice of termination, that are the
responsibility of the Terminating Party under this LGIA. In the
event of termination by a Party, the Parties shall use commercially
Reasonable Efforts to mitigate the costs, damages and charges
arising as a consequence of termination. Upon termination of this
LGIA, unless otherwise ordered or approved by FERC:
2.4.1 With respect to any portion of Transmission Provider's
Interconnection Facilities that have not yet been constructed or
installed, Transmission Provider shall to the extent possible and
with Interconnection Customer's authorization cancel any pending
orders of, or return, any materials or equipment for, or contracts
for construction of, such facilities; provided that in the event
Interconnection Customer elects not to authorize such cancellation,
Interconnection Customer shall assume all payment obligations with
respect to such materials, equipment, and contracts, and
Transmission Provider shall deliver such material and equipment,
and, if necessary, assign such contracts, to Interconnection
Customer as soon as practicable, at Interconnection Customer's
expense. To the extent that Interconnection Customer has already
paid Transmission Provider for any or all such costs of materials or
equipment not taken by Interconnection Customer, Transmission
Provider shall promptly refund such amounts to Interconnection
Customer, less any costs, including penalties incurred by
Transmission Provider to cancel any pending orders of or return such
materials, equipment, or contracts.
If an Interconnection Customer terminates this LGIA, it shall be
responsible for all costs incurred in association with that
Interconnection Customer's interconnection, including any
cancellation costs relating to orders or contracts for
Interconnection Facilities and equipment, and other expenses
including any Network Upgrades for which Transmission Provider has
incurred expenses and has not been reimbursed by Interconnection
Customer.
2.4.2 Transmission Provider may, at its option, retain any
portion of such materials, equipment, or facilities that
Interconnection Customer chooses not to accept delivery of, in which
case Transmission Provider shall be responsible for all costs
associated with procuring such materials, equipment, or facilities.
2.4.3 With respect to any portion of the Interconnection
Facilities, and any other facilities already installed or
constructed pursuant to the terms of this LGIA, Interconnection
Customer shall be responsible for all costs associated with the
removal, relocation or other disposition or retirement of such
materials, equipment, or facilities.
2.5 Disconnection. Upon termination of this LGIA, the Parties
will take all appropriate steps to disconnect the Large Generating
Facility from the Transmission System. All costs required to
effectuate such disconnection shall be borne by the terminating
Party, unless such termination resulted from the non-terminating
Party's Default of this LGIA or such non-terminating Party otherwise
is responsible for these costs under this LGIA.
2.6 Survival. This LGIA shall continue in effect after
termination to the extent necessary to provide for final billings
and payments and for costs incurred hereunder, including billings
and payments pursuant to this LGIA; to permit the determination and
enforcement of liability and indemnification obligations arising
from acts or events that occurred while this LGIA was in effect; and
to permit each Party to have access to the lands of the other Party
pursuant to this LGIA or other applicable agreements, to disconnect,
remove or salvage its own facilities and equipment.
[[Page 27181]]
Article 3. Regulatory Filings
3.1 Filing. Transmission Provider shall file this LGIA (and any
amendment hereto) with the appropriate Governmental Authority, if
required. Interconnection Customer may request that any information
so provided be subject to the confidentiality provisions of Article
22. If Interconnection Customer has executed this LGIA, or any
amendment thereto, Interconnection Customer shall reasonably
cooperate with Transmission Provider with respect to such filing and
to provide any information reasonably requested by Transmission
Provider needed to comply with applicable regulatory requirements.
Article 4. Scope of Service
4.1 Interconnection Product Options. Interconnection Customer
has selected the following (checked) type of Interconnection
Service:
4.1.1 Energy Resource Interconnection Service.
4.1.1.1 The Product. Energy Resource Interconnection Service
allows Interconnection Customer to connect the Large Generating
Facility to the Transmission System and be eligible to deliver the
Large Generating Facility's output using the existing firm or non-
firm capacity of the Transmission System on an ``as available''
basis. To the extent Interconnection Customer wants to receive
Energy Resource Interconnection Service, Transmission Provider shall
construct facilities identified in Attachment A.
4.1.1.2 Transmission Delivery Service Implications.
Under Energy Resource Interconnection Service, Interconnection
Customer will be eligible to inject power from the Large Generating
Facility into and deliver power across the interconnecting
Transmission Provider's Transmission System on an ``as available''
basis up to the amount of MWs identified in the applicable stability
and steady state studies to the extent the upgrades initially
required to qualify for Energy Resource Interconnection Service have
been constructed. Where eligible to do so (e.g., PJM, ISO-NE,
NYISO), Interconnection Customer may place a bid to sell into the
market up to the maximum identified Large Generating Facility
output, subject to any conditions specified in the interconnection
service approval, and the Large Generating Facility will be
dispatched to the extent Interconnection Customer's bid clears. In
all other instances, no transmission delivery service from the Large
Generating Facility is assured, but Interconnection Customer may
obtain Point-to-Point Transmission Service, Network Integration
Transmission Service, or be used for secondary network transmission
service, pursuant to Transmission Provider's Tariff, up to the
maximum output identified in the stability and steady state studies.
In those instances, in order for Interconnection Customer to obtain
the right to deliver or inject energy beyond the Large Generating
Facility Point of Interconnection or to improve its ability to do
so, transmission delivery service must be obtained pursuant to the
provisions of Transmission Provider's Tariff. [The] Interconnection
Customer's ability to inject its Large Generating Facility output
beyond the Point of Interconnection, therefore, will depend on the
existing capacity of Transmission Provider's Transmission System at
such time as a transmission service request is made that would
accommodate such delivery. The provision of firm Point-to-Point
Transmission Service or Network Integration Transmission Service may
require the construction of additional Network Upgrades.
4.1.2 Network Resource Interconnection Service.
4.1.2.1 The Product. Transmission Provider must conduct the
necessary studies and construct the Network Upgrades needed to
integrate the Large Generating Facility (1) in a manner comparable
to that in which Transmission Provider integrates its generating
facilities to serve native load customers; or (2) in an ISO or RTO
with market based congestion management, in the same manner as all
Network Resources. To the extent Interconnection Customer wants to
receive Network Resource Interconnection Service, Transmission
Provider shall construct the facilities identified in Attachment A
to this LGIA.
4.1.2.2 Transmission Delivery Service Implications. Network
Resource Interconnection Service allows Interconnection Customer's
Large Generating Facility to be designated by any Network Customer
under the Tariff on Transmission Provider's Transmission System as a
Network Resource, up to the Large Generating Facility's full output,
on the same basis as existing Network Resources interconnected to
Transmission Provider's Transmission System, and to be studied as a
Network Resource on the assumption that such a designation will
occur. Although Network Resource Interconnection Service does not
convey a reservation of transmission service, any Network Customer
under the Tariff can utilize its network service under the Tariff to
obtain delivery of energy from the interconnected Interconnection
Customer's Large Generating Facility in the same manner as it
accesses Network Resources. A Large Generating Facility receiving
Network Resource Interconnection Service may also be used to provide
Ancillary Services after technical studies and/or periodic analyses
are performed with respect to the Large Generating Facility's
ability to provide any applicable Ancillary Services, provided that
such studies and analyses have been or would be required in
connection with the provision of such Ancillary Services by any
existing Network Resource. However, if an Interconnection Customer's
Large Generating Facility has not been designated as a Network
Resource by any load, it cannot be required to provide Ancillary
Services except to the extent such requirements extend to all
generating facilities that are similarly situated. The provision of
Network Integration Transmission Service or firm Point-to-Point
Transmission Service may require additional studies and the
construction of additional upgrades. Because such studies and
upgrades would be associated with a request for delivery service
under the Tariff, cost responsibility for the studies and upgrades
would be in accordance with FERC's policy for pricing transmission
delivery services.
Network Resource Interconnection Service does not necessarily
provide Interconnection Customer with the capability to physically
deliver the output of its Large Generating Facility to any
particular load on Transmission Provider's Transmission System
without incurring congestion costs. In the event of transmission
constraints on Transmission Provider's Transmission System,
Interconnection Customer's Large Generating Facility shall be
subject to the applicable congestion management procedures in
Transmission Provider's Transmission System in the same manner as
Network Resources.
There is no requirement either at the time of study or
interconnection, or at any point in the future, that Interconnection
Customer's Large Generating Facility be designated as a Network
Resource by a Network Service Customer under the Tariff or that
Interconnection Customer identify a specific buyer (or sink). To the
extent a Network Customer does designate the Large Generating
Facility as a Network Resource, it must do so pursuant to
Transmission Provider's Tariff.
Once an Interconnection Customer satisfies the requirements for
obtaining Network Resource Interconnection Service, any future
transmission service request for delivery from the Large Generating
Facility within Transmission Provider's Transmission System of any
amount of capacity and/or energy, up to the amount initially
studied, will not require that any additional studies be performed
or that any further upgrades associated with such Large Generating
Facility be undertaken, regardless of whether or not such Large
Generating Facility is ever designated by a Network Customer as a
Network Resource and regardless of changes in ownership of the Large
Generating Facility. However, the reduction or elimination of
congestion or redispatch costs may require additional studies and
the construction of additional upgrades.
To the extent Interconnection Customer enters into an
arrangement for long term transmission service for deliveries from
the Large Generating Facility outside Transmission Provider's
Transmission System, such request may require additional studies and
upgrades in order for Transmission Provider to grant such request.
4.2 Provision of Service. Transmission Provider shall provide
Interconnection Service for the Large Generating Facility at the
Point of Interconnection.
4.3 Performance Standards. Each Party shall perform all of its
obligations under this LGIA in accordance with Applicable Laws and
Regulations, Applicable Reliability Standards, and Good Utility
Practice, and to the extent a Party is required or prevented or
limited in taking any action by such regulations and standards, such
Party shall not be deemed to be in Breach of this LGIA for its
compliance therewith. If such Party is a Transmission Provider or
Transmission Owner, then that Party shall amend the LGIA and submit
the amendment to FERC for approval.
[[Page 27182]]
4.4 No Transmission Delivery Service. The execution of this LGIA
does not constitute a request for, nor the provision of, any
transmission delivery service under Transmission Provider's Tariff,
and does not convey any right to deliver electricity to any specific
customer or Point of Delivery.
4.5 Interconnection Customer Provided Services. The services
provided by Interconnection Customer under this LGIA are set forth
in Article 9.6 and Article 13.5.1. Interconnection Customer shall be
paid for such services in accordance with Article 11.6.
Article 5. Interconnection Facilities Engineering, Procurement, and
Construction
5.1 Options. Unless otherwise mutually agreed to between the
Parties, Interconnection Customer shall select the In-Service Date,
Initial Synchronization Date, and Commercial Operation Date; and
either the Standard Option or Alternate Option set forth below, and
such dates and selected option shall be set forth in Appendix B,
Milestones. At the same time, Interconnection Customer shall
indicate whether it elects to exercise the Option to Build set forth
in Article 5.1.3 below. If the dates designated by Interconnection
Customer are not acceptable to Transmission Provider, Transmission
Provider shall so notify Interconnection Customer within thirty (30)
Calendar Days. Upon receipt of the notification that Interconnection
Customer's designated dates are not acceptable to Transmission
Provider, [the] Interconnection Customer shall notify Transmission
Provider within thirty (30) Calendar Days whether it elects to
exercise the Option to Build if it has not already elected to
exercise the Option to Build.
5.1.1 Standard Option. Transmission Provider shall design,
procure, and construct Transmission Provider's Interconnection
Facilities and Network Upgrades, using Reasonable Efforts to
complete Transmission Provider's Interconnection Facilities and
Network Upgrades by the dates set forth in Appendix B, Milestones.
Transmission Provider shall not be required to undertake any action
which is inconsistent with its standard safety practices, its
material and equipment specifications, its design criteria and
construction procedures, its labor agreements, and Applicable Laws
and Regulations. In the event Transmission Provider reasonably
expects that it will not be able to complete Transmission Provider's
Interconnection Facilities and Network Upgrades by the specified
dates, Transmission Provider shall promptly provide written notice
to Interconnection Customer and shall undertake Reasonable Efforts
to meet the earliest dates thereafter.
5.1.2 Alternate Option. If the dates designated by
Interconnection Customer are acceptable to Transmission Provider,
Transmission Provider shall so notify Interconnection Customer
within thirty (30) Calendar Days, and shall assume responsibility
for the design, procurement and construction of Transmission
Provider's Interconnection Facilities by the designated dates.
If Transmission Provider subsequently fails to complete
Transmission Provider's Interconnection Facilities by the In-Service
Date, to the extent necessary to provide back feed power; or fails
to complete Network Upgrades by the Initial Synchronization Date to
the extent necessary to allow for Trial Operation at full power
output, unless other arrangements are made by the Parties for such
Trial Operation; or fails to complete the Network Upgrades by the
Commercial Operation Date, as such dates are reflected in Appendix
B, Milestones; Transmission Provider shall pay Interconnection
Customer liquidated damages in accordance with Article 5.3,
Liquidated Damages, provided, however, the dates designated by
Interconnection Customer shall be extended day for day for each day
that the applicable RTO or ISO refuses to grant clearances to
install equipment.
5.1.3 Option to Build. Individual or Multiple Interconnection
Customer shall have the option to assume responsibility for the
design, procurement and construction of Transmission Provider's
Interconnection Facilities and Stand Alone Network Upgrades on the
dates specified in Article 5.1.2, if the requirements of this
Article 5.1.3 are met. When multiple Interconnection Customers
exercise this option, multiple Interconnection Customers may agree
to exercise this option provided (1) all Transmission Provider's
Interconnection Facilities and Stand Alone Network upgrades
constructed under this option are only required for Interconnection
Customers in a single Cluster and (2) all impacted Interconnection
Customers execute and provide to Transmission Provider an agreement
regarding responsibilities and payment for the construction of
Transmission Provider's Interconnection Facilities and Stand Alone
Network Upgrades planned to be built under this option. Transmission
Provider and the individual Interconnection Customer or each of the
multiple Interconnection Customers must agree as to what constitutes
Stand Alone Network Upgrades and identify such Stand Alone Network
Upgrades in Appendix A. Except for Stand Alone Network Upgrades,
Interconnection Customer shall have no right to construct Network
Upgrades under this option.
5.1.4 Negotiated Option. If the dates designated by
Interconnection Customer are not acceptable to Transmission
Provider, the Parties shall in good faith attempt to negotiate terms
and conditions (including revision of the specified dates and
liquidated damages, the provision of incentives, or the procurement
and construction of all facilities other than Transmission
Provider's Interconnection Facilities and Stand Alone Network
Upgrades if [the] Interconnection Customer elects to exercise the
Option to Build under Article 5.1.3). If the Parties are unable to
reach agreement on such terms and conditions, then pursuant to
Article 5.1.1 (Standard Option), Transmission Provider shall assume
responsibility for the design, procurement and construction of all
facilities other than Transmission Provider's Interconnection
Facilities and Stand Alone Network Upgrades if [the] Interconnection
Customer elects to exercise the Option to Build.
5.2 General Conditions Applicable to Option to Build. If
Interconnection Customer assumes responsibility for the design,
procurement and construction of Transmission Provider's
Interconnection Facilities and Stand Alone Network Upgrades,
(1) Interconnection Customer shall engineer, procure equipment,
and construct Transmission Provider's Interconnection Facilities and
Stand Alone Network Upgrades (or portions thereof) using Good
Utility Practice and using standards and specifications provided in
advance by Transmission Provider;
(2) Interconnection Customer's engineering, procurement and
construction of Transmission Provider's Interconnection Facilities
and Stand Alone Network Upgrades shall comply with all requirements
of law to which Transmission Provider would be subject in the
engineering, procurement or construction of Transmission Provider's
Interconnection Facilities and Stand Alone Network Upgrades;
(3) Transmission Provider shall review and approve the
engineering design, equipment acceptance tests, and the construction
of Transmission Provider's Interconnection Facilities and Stand
Alone Network Upgrades;
(4) prior to commencement of construction, Interconnection
Customer shall provide to Transmission Provider a schedule for
construction of Transmission Provider's Interconnection Facilities
and Stand Alone Network Upgrades, and shall promptly respond to
requests for information from Transmission Provider;
(5) at any time during construction, Transmission Provider shall
have the right to gain unrestricted access to Transmission
Provider's Interconnection Facilities and Stand Alone Network
Upgrades and to conduct inspections of the same;
(6) at any time during construction, should any phase of the
engineering, equipment procurement, or construction of Transmission
Provider's Interconnection Facilities and Stand Alone Network
Upgrades not meet the standards and specifications provided by
Transmission Provider, Interconnection Customer shall be obligated
to remedy deficiencies in that portion of Transmission Provider's
Interconnection Facilities and Stand Alone Network Upgrades;
(7) Interconnection Customer shall indemnify Transmission
Provider for claims arising from Interconnection Customer's
construction of Transmission Provider's Interconnection Facilities
and Stand Alone Network Upgrades under the terms and procedures
applicable to Article 18.1 Indemnity;
(8) Interconnection Customer shall transfer control of
Transmission Provider's Interconnection Facilities and Stand Alone
Network Upgrades to Transmission Provider;
(9) Unless Parties otherwise agree, Interconnection Customer
shall transfer ownership of Transmission Provider's Interconnection
Facilities and Stand-Alone Network Upgrades to Transmission
Provider;
(10) Transmission Provider shall approve and accept for
operation and maintenance
[[Page 27183]]
Transmission Provider's Interconnection Facilities and Stand Alone
Network Upgrades to the extent engineered, procured, and constructed
in accordance with this Article 5.2; and
(11) Interconnection Customer shall deliver to Transmission
Provider ``as-built'' drawings, information, and any other documents
that are reasonably required by Transmission Provider to assure that
the Interconnection Facilities and Stand-Alone Network Upgrades are
built to the standards and specifications required by Transmission
Provider.
(12) If Interconnection Customer exercises the Option to Build
pursuant to Article 5.1.3, Interconnection Customer shall pay
Transmission Provider the agreed upon amount of {$
PLACEHOLDER{time} for Transmission Provider to execute the
responsibilities enumerated to Transmission Provider under Article
5.2. Transmission Provider shall invoice Interconnection Customer
for this total amount to be divided on a monthly basis pursuant to
Article 12.
5.3 Liquidated Damages. The actual damages to Interconnection
Customer, in the event Transmission Provider's Interconnection
Facilities or Network Upgrades are not completed by the dates
designated by Interconnection Customer and accepted by Transmission
Provider pursuant to subparagraphs 5.1.2 or 5.1.4, above, may
include Interconnection Customer's fixed operation and maintenance
costs and lost opportunity costs. Such actual damages are uncertain
and impossible to determine at this time. Because of such
uncertainty, any liquidated damages paid by Transmission Provider to
Interconnection Customer in the event that Transmission Provider
does not complete any portion of Transmission Provider's
Interconnection Facilities or Network Upgrades by the applicable
dates, shall be an amount equal to \1/2\ of 1 percent per day of the
actual cost of Transmission Provider's Interconnection Facilities
and Network Upgrades, in the aggregate, for which Transmission
Provider has assumed responsibility to design, procure and
construct.
However, in no event shall the total liquidated damages exceed
20 percent of the actual cost of Transmission Provider's
Interconnection Facilities and Network Upgrades for which
Transmission Provider has assumed responsibility to design, procure,
and construct. The foregoing payments will be made by Transmission
Provider to Interconnection Customer as just compensation for the
damages caused to Interconnection Customer, which actual damages are
uncertain and impossible to determine at this time, and as
reasonable liquidated damages, but not as a penalty or a method to
secure performance of this LGIA. Liquidated damages, when the
Parties agree to them, are the exclusive remedy for [the]
Transmission Provider's failure to meet its schedule.
No liquidated damages shall be paid to Interconnection Customer
if: (1) Interconnection Customer is not ready to commence use of
Transmission Provider's Interconnection Facilities or Network
Upgrades to take the delivery of power for the Large Generating
Facility's Trial Operation or to export power from the Large
Generating Facility on the specified dates, unless Interconnection
Customer would have been able to commence use of Transmission
Provider's Interconnection Facilities or Network Upgrades to take
the delivery of power for Large Generating Facility's Trial
Operation or to export power from the Large Generating Facility, but
for Transmission Provider's delay; (2) Transmission Provider's
failure to meet the specified dates is the result of the action or
inaction of Interconnection Customer or any other Interconnection
Customer who has entered into an LGIA with Transmission Provider or
any cause beyond Transmission Provider's reasonable control or
reasonable ability to cure; (3) [the] Interconnection Customer has
assumed responsibility for the design, procurement and construction
of Transmission Provider's Interconnection Facilities and Stand
Alone Network Upgrades; or (4) the Parties have otherwise agreed.
5.4 Power System Stabilizers. Interconnection Customer shall
procure, install, maintain and operate Power System Stabilizers in
accordance with the guidelines and procedures established by the
Electric Reliability Organization. Transmission Provider reserves
the right to reasonably establish minimum acceptable settings for
any installed Power System Stabilizers, subject to the design and
operating limitations of the Large Generating Facility. If the Large
Generating Facility's Power System Stabilizers are removed from
service or not capable of automatic operation, Interconnection
Customer shall immediately notify Transmission Provider's system
operator, or its designated representative. The requirements of this
paragraph shall not apply to wind generators.
5.5 Equipment Procurement. If responsibility for construction of
Transmission Provider's Interconnection Facilities or Network
Upgrades is to be borne by Transmission Provider, then Transmission
Provider shall commence design of Transmission Provider's
Interconnection Facilities or Network Upgrades and procure necessary
equipment as soon as practicable after all of the following
conditions are satisfied, unless the Parties otherwise agree in
writing:
5.5.1 Transmission Provider has completed the Interconnection
Facilities Study pursuant to the Interconnection Facilities Study
Agreement;
5.5.2 Transmission Provider has received written authorization
to proceed with design and procurement from Interconnection Customer
by the date specified in Appendix B, Milestones; and
5.5.3 Interconnection Customer has provided security to
Transmission Provider in accordance with Article 11.5 by the dates
specified in Appendix B, Milestones.
5.6 Construction Commencement. Transmission Provider shall
commence construction of Transmission Provider's Interconnection
Facilities and Network Upgrades for which it is responsible as soon
as practicable after the following additional conditions are
satisfied:
5.6.1 Approval of the appropriate Governmental Authority has
been obtained for any facilities requiring regulatory approval;
5.6.2 Necessary real property rights and rights-of-way have been
obtained, to the extent required for the construction of a discrete
aspect of Transmission Provider's Interconnection Facilities and
Network Upgrades;
5.6.3 Transmission Provider has received written authorization
to proceed with construction from Interconnection Customer by the
date specified in Appendix B, Milestones; and
5.6.4 Interconnection Customer has provided security to
Transmission Provider in accordance with Article 11.5 by the dates
specified in Appendix B, Milestones.
5.7 Work Progress. The Parties will keep each other advised
periodically as to the progress of their respective design,
procurement and construction efforts. Either Party may, at any time,
request a progress report from the other Party. If, at any time,
Interconnection Customer determines that the completion of
Transmission Provider's Interconnection Facilities will not be
required until after the specified In-Service Date, Interconnection
Customer will provide written notice to Transmission Provider of
such later date upon which the completion of Transmission Provider's
Interconnection Facilities will be required.
5.8 Information Exchange. As soon as reasonably practicable
after the Effective Date, the Parties shall exchange information
regarding the design and compatibility of the Parties'
Interconnection Facilities and compatibility of the Interconnection
Facilities with Transmission Provider's Transmission System, and
shall work diligently and in good faith to make any necessary design
changes.
5.9 Other Interconnection Options.
5.9.1 Limited Operation. If any of Transmission Provider's
Interconnection Facilities or Network Upgrades are not reasonably
expected to be completed prior to the Commercial Operation Date of
the Large Generating Facility, Transmission Provider shall, upon the
request and at the expense of Interconnection Customer, perform
operating studies on a timely basis to determine the extent to which
the Large Generating Facility and Interconnection Customer's
Interconnection Facilities may operate prior to the completion of
Transmission Provider's Interconnection Facilities or Network
Upgrades consistent with Applicable Laws and Regulations, Applicable
Reliability Standards, Good Utility Practice, and this LGIA.
Transmission Provider shall permit Interconnection Customer to
operate the Large Generating Facility and Interconnection Customer's
Interconnection Facilities in accordance with the results of such
studies.
5.9.2 Provisional Interconnection Service. Upon the request of
Interconnection Customer, and prior to completion of requisite
Interconnection Facilities, Network Upgrades, Distribution Upgrades,
or System Protection Facilities Transmission Provider may execute a
Provisional Large Generator Interconnection Agreement or
[[Page 27184]]
Interconnection Customer may request the filing of an unexecuted
Provisional Large Generator Interconnection Agreement with [the]
Interconnection Customer for limited Interconnection Service at the
discretion of Transmission Provider based upon an evaluation that
will consider the results of available studies. Transmission
Provider shall determine, through available studies or additional
studies as necessary, whether stability, short circuit, thermal,
and/or voltage issues would arise if Interconnection Customer
interconnects without modifications to the Generating Facility or
Transmission System. Transmission Provider shall determine whether
any Interconnection Facilities, Network Upgrades, Distribution
Upgrades, or System Protection Facilities that are necessary to meet
the requirements of the Electric Reliability Organization, or any
applicable Regional Entity for the interconnection of a new,
modified and/or expanded Generating Facility are in place prior to
the commencement of Interconnection Service from the Generating
Facility. Where available studies indicate that such,
Interconnection Facilities, Network Upgrades, Distribution Upgrades,
and/or System Protection Facilities that are required for the
interconnection of a new, modified and/or expanded Generating
Facility are not currently in place, Transmission Provider will
perform a study, at [the] Interconnection Customer's expense, to
confirm the facilities that are required for Provisional
Interconnection Service. The maximum permissible output of the
Generating Facility in the Provisional Large Generator
Interconnection Agreement shall be studied and updated {on a
frequency determined by Transmission Provider and at [the]
Interconnection Customer's expense{time} . Interconnection Customer
assumes all risk and liabilities with respect to changes between the
Provisional Large Generator Interconnection Agreement and the Large
Generator Interconnection Agreement, including changes in output
limits and Interconnection Facilities, Network Upgrades,
Distribution Upgrades, and/or System Protection Facilities cost
responsibilities.
5.10 Interconnection Customer's Interconnection Facilities
(`ICIF'). Interconnection Customer shall, at its expense, design,
procure, construct, own and install the ICIF, as set forth in
Appendix A, Interconnection Facilities, Network Upgrades and
Distribution Upgrades.
5.10.1 Interconnection Customer's Interconnection Facility
Specifications. Interconnection Customer shall submit initial
specifications for the ICIF, including System Protection Facilities,
to Transmission Provider at least one hundred eighty (180) Calendar
Days prior to the Initial Synchronization Date; and final
specifications for review and comment at least ninety (90) Calendar
Days prior to the Initial Synchronization Date. Transmission
Provider shall review such specifications to ensure that the ICIF
are compatible with the technical specifications, operational
control, and safety requirements of Transmission Provider and
comment on such specifications within thirty (30) Calendar Days of
Interconnection Customer's submission. All specifications provided
hereunder shall be deemed confidential.
5.10.2 Transmission Provider's Review. Transmission Provider's
review of Interconnection Customer's final specifications shall not
be construed as confirming, endorsing, or providing a warranty as to
the design, fitness, safety, durability or reliability of the Large
Generating Facility, or the ICIF. Interconnection Customer shall
make such changes to the ICIF as may reasonably be required by
Transmission Provider, in accordance with Good Utility Practice, to
ensure that the ICIF are compatible with the technical
specifications, operational control, and safety requirements of
Transmission Provider.
5.10.3 ICIF Construction. The ICIF shall be designed and
constructed in accordance with Good Utility Practice. Within one
hundred twenty (120) Calendar Days after the Commercial Operation
Date, unless the Parties agree on another mutually acceptable
deadline, Interconnection Customer shall deliver to Transmission
Provider ``as-built'' drawings, information and documents for the
ICIF, such as: a one-line diagram, a site plan showing the Large
Generating Facility and the ICIF, plan and elevation drawings
showing the layout of the ICIF, a relay functional diagram, relaying
AC and DC schematic wiring diagrams and relay settings for all
facilities associated with Interconnection Customer's step-up
transformers, the facilities connecting the Large Generating
Facility to the step-up transformers and the ICIF, and the
impedances (determined by factory tests) for the associated step-up
transformers and the Large Generating Facility. [The]
Interconnection Customer shall provide Transmission Provider
specifications for the excitation system, automatic voltage
regulator, Large Generating Facility control and protection
settings, transformer tap settings, and communications, if
applicable.
5.11 Transmission Provider's Interconnection Facilities
Construction. Transmission Provider's Interconnection Facilities
shall be designed and constructed in accordance with Good Utility
Practice. Upon request, within one hundred twenty (120) Calendar
Days after the Commercial Operation Date, unless the Parties agree
on another mutually acceptable deadline, Transmission Provider shall
deliver to Interconnection Customer the following ``as-built''
drawings, information and documents for Transmission Provider's
Interconnection Facilities {include appropriate drawings and relay
diagrams{time} .
Transmission Provider will obtain control of Transmission
Provider's Interconnection Facilities and Stand Alone Network
Upgrades upon completion of such facilities.
5.12 Access Rights. Upon reasonable notice and supervision by a
Party, and subject to any required or necessary regulatory
approvals, a Party (``Granting Party'') shall furnish at no cost to
the other Party (``Access Party'') any rights of use, licenses,
rights of way and easements with respect to lands owned or
controlled by the Granting Party, its agents (if allowed under the
applicable agency agreement), or any Affiliate, that are necessary
to enable the Access Party to obtain ingress and egress to
construct, operate, maintain, repair, test (or witness testing),
inspect, replace or remove facilities and equipment to: (i)
interconnect the Large Generating Facility with the Transmission
System; (ii) operate and maintain the Large Generating Facility, the
Interconnection Facilities and the Transmission System; and (iii)
disconnect or remove the Access Party's facilities and equipment
upon termination of this LGIA. In exercising such licenses, rights
of way and easements, the Access Party shall not unreasonably
disrupt or interfere with normal operation of the Granting Party's
business and shall adhere to the safety rules and procedures
established in advance, as may be changed from time to time, by the
Granting Party and provided to the Access Party.
5.13 Lands of Other Property Owners. If any part of Transmission
Provider or Transmission Owner's Interconnection Facilities and/or
Network Upgrades is to be installed on property owned by persons
other than Interconnection Customer or Transmission Provider or
Transmission Owner, Transmission Provider or Transmission Owner
shall at Interconnection Customer's expense use efforts, similar in
nature and extent to those that it typically undertakes on its own
behalf or on behalf of its Affiliates, including use of its eminent
domain authority, and to the extent consistent with state law, to
procure from such persons any rights of use, licenses, rights of way
and easements that are necessary to construct, operate, maintain,
test, inspect, replace or remove Transmission Provider or
Transmission Owner's Interconnection Facilities and/or Network
Upgrades upon such property.
5.14 Permits. Transmission Provider or Transmission Owner and
Interconnection Customer shall cooperate with each other in good
faith in obtaining all permits, licenses, and authorizations that
are necessary to accomplish the interconnection in compliance with
Applicable Laws and Regulations. With respect to this paragraph,
Transmission Provider or Transmission Owner shall provide permitting
assistance to Interconnection Customer comparable to that provided
to Transmission Provider's own, or an Affiliate's generation.
5.15 Early Construction of Base Case Facilities. Interconnection
Customer may request Transmission Provider to construct, and
Transmission Provider shall construct, using Reasonable Efforts to
accommodate Interconnection Customer's In-Service Date, all or any
portion of any Network Upgrades required for Interconnection
Customer to be interconnected to the Transmission System which are
included in the Base Case of the Interconnection Facilities Study
for Interconnection Customer, and which also are required to be
constructed for another Interconnection Customer, but where such
construction is not scheduled to be completed in time to achieve
Interconnection Customer's In-Service Date.
5.16 Suspension. Interconnection Customer reserves the right,
upon written
[[Page 27185]]
notice to Transmission Provider, to suspend at any time all work by
Transmission Provider associated with the construction and
installation of Transmission Provider's Interconnection Facilities
and/or Network Upgrades required under this LGIA with the condition
that Transmission System shall be left in a safe and reliable
condition in accordance with Good Utility Practice and Transmission
Provider's safety and reliability criteria. In such event,
Interconnection Customer shall be responsible for all reasonable and
necessary costs which Transmission Provider (i) has incurred
pursuant to this LGIA prior to the suspension and (ii) incurs in
suspending such work, including any costs incurred to perform such
work as may be necessary to ensure the safety of persons and
property and the integrity of the Transmission System during such
suspension and, if applicable, any costs incurred in connection with
the cancellation or suspension of material, equipment and labor
contracts which Transmission Provider cannot reasonably avoid;
provided, however, that prior to canceling or suspending any such
material, equipment or labor contract, Transmission Provider shall
obtain Interconnection Customer's authorization to do so.
Transmission Provider shall invoice Interconnection Customer for
such costs pursuant to Article 12 and shall use due diligence to
minimize its costs. In the event Interconnection Customer suspends
work by Transmission Provider required under this LGIA pursuant to
this Article 5.16, and has not requested Transmission Provider to
recommence the work required under this LGIA on or before the
expiration of three (3) years following commencement of such
suspension, this LGIA shall be deemed terminated. The three-year
period shall begin on the date the suspension is requested, or the
date of the written notice to Transmission Provider, if no effective
date is specified.
5.17 Taxes.
5.17.1 Interconnection Customer Payments Not Taxable. The
Parties intend that all payments or property transfers made by
Interconnection Customer to Transmission Provider for the
installation of Transmission Provider's Interconnection Facilities
and the Network Upgrades shall be non-taxable, either as
contributions to capital, or as an advance, in accordance with the
Internal Revenue Code and any applicable state income tax laws and
shall not be taxable as contributions in aid of construction or
otherwise under the Internal Revenue Code and any applicable state
income tax laws.
5.17.2 Representations and Covenants. In accordance with IRS
Notice 2001-82 and IRS Notice 88-129, Interconnection Customer
represents and covenants that (i) ownership of the electricity
generated at the Large Generating Facility will pass to another
party prior to the transmission of the electricity on the
Transmission System, (ii) for income tax purposes, the amount of any
payments and the cost of any property transferred to Transmission
Provider for Transmission Provider's Interconnection Facilities will
be capitalized by Interconnection Customer as an intangible asset
and recovered using the straight-line method over a useful life of
twenty (20) years, and (iii) any portion of Transmission Provider's
Interconnection Facilities that is a ``dual-use intertie,'' within
the meaning of IRS Notice 88-129, is reasonably expected to carry
only a de minimis amount of electricity in the direction of the
Large Generating Facility. For this purpose, ``de minimis amount''
means no more than 5 percent of the total power flows in both
directions, calculated in accordance with the ``5 percent test'' set
forth in IRS Notice 88-129. This is not intended to be an exclusive
list of the relevant conditions that must be met to conform to IRS
requirements for non-taxable treatment.
At Transmission Provider's request, Interconnection Customer
shall provide Transmission Provider with a report from an
independent engineer confirming its representation in clause (iii),
above. Transmission Provider represents and covenants that the cost
of Transmission Provider's Interconnection Facilities paid for by
Interconnection Customer will have no net effect on the base upon
which rates are determined.
5.17.3 Indemnification for the Cost Consequences of Current Tax
Liability Imposed Upon [the] Transmission Provider. Notwithstanding
Article 5.17.1, Interconnection Customer shall protect, indemnify
and hold harmless Transmission Provider from the cost consequences
of any current tax liability imposed against Transmission Provider
as the result of payments or property transfers made by
Interconnection Customer to Transmission Provider under this LGIA
for Interconnection Facilities, as well as any interest and
penalties, other than interest and penalties attributable to any
delay caused by Transmission Provider.
Transmission Provider shall not include a gross-up for the cost
consequences of any current tax liability in the amounts it charges
Interconnection Customer under this LGIA unless (i) Transmission
Provider has determined, in good faith, that the payments or
property transfers made by Interconnection Customer to Transmission
Provider should be reported as income subject to taxation or (ii)
any Governmental Authority directs Transmission Provider to report
payments or property as income subject to taxation; provided,
however, that Transmission Provider may require Interconnection
Customer to provide security for Interconnection Facilities, in a
form reasonably acceptable to Transmission Provider (such as a
parental guarantee or a letter of credit), in an amount equal to the
cost consequences of any current tax liability under this Article
5.17. Interconnection Customer shall reimburse Transmission Provider
for such costs on a fully grossed-up basis, in accordance with
Article 5.17.4, within thirty (30) Calendar Days of receiving
written notification from Transmission Provider of the amount due,
including detail about how the amount was calculated.
The indemnification obligation shall terminate at the earlier of
(1) the expiration of the ten year testing period and the applicable
statute of limitation, as it may be extended by Transmission
Provider upon request of the IRS, to keep these years open for audit
or adjustment, or (2) the occurrence of a subsequent taxable event
and the payment of any related indemnification obligations as
contemplated by this Article 5.17.
5.17.4 Tax Gross-Up Amount. Interconnection Customer's liability
for the cost consequences of any current tax liability under this
Article 5.17 shall be calculated on a fully grossed-up basis. Except
as may otherwise be agreed to by the parties, this means that
Interconnection Customer will pay Transmission Provider, in addition
to the amount paid for the Interconnection Facilities and Network
Upgrades, an amount equal to (1) the current taxes imposed on
Transmission Provider (``Current Taxes'') on the excess of (a) the
gross income realized by Transmission Provider as a result of
payments or property transfers made by Interconnection Customer to
Transmission Provider under this LGIA (without regard to any
payments under this Article 5.17) (the ``Gross Income Amount'') over
(b) the present value of future tax deductions for depreciation that
will be available as a result of such payments or property transfers
(the ``Present Value Depreciation Amount''), plus (2) an additional
amount sufficient to permit Transmission Provider to receive and
retain, after the payment of all Current Taxes, an amount equal to
the net amount described in clause (1).
For this purpose, (i) Current Taxes shall be computed based on
Transmission Provider's composite federal and state tax rates at the
time the payments or property transfers are received and
Transmission Provider will be treated as being subject to tax at the
highest marginal rates in effect at that time (the ``Current Tax
Rate''), and (ii) the Present Value Depreciation Amount shall be
computed by discounting Transmission Provider's anticipated tax
depreciation deductions as a result of such payments or property
transfers by Transmission Provider's current weighted average cost
of capital. Thus, the formula for calculating Interconnection
Customer's liability to Transmission Owner pursuant to this Article
5.17.4 can be expressed as follows: (Current Tax Rate x (Gross
Income Amount--Present Value of Tax Depreciation))/(1-Current Tax
Rate). Interconnection Customer's estimated tax liability in the
event taxes are imposed shall be stated in Appendix A,
Interconnection Facilities, Network Upgrades and Distribution
Upgrades.
5.17.5 Private Letter Ruling or Change or Clarification of Law.
At Interconnection Customer's request and expense, Transmission
Provider shall file with the IRS a request for a private letter
ruling as to whether any property transferred or sums paid, or to be
paid, by Interconnection Customer to Transmission Provider under
this LGIA are subject to federal income taxation. Interconnection
Customer will prepare the initial draft of the request for a private
letter ruling, and will certify under penalties of perjury that all
facts represented in such request are true and accurate to the best
of Interconnection Customer's knowledge. Transmission Provider and
Interconnection Customer shall cooperate in good faith with respect
to the submission of such request.
[[Page 27186]]
Transmission Provider shall keep Interconnection Customer fully
informed of the status of such request for a private letter ruling
and shall execute either a privacy act waiver or a limited power of
attorney, in a form acceptable to the IRS, that authorizes
Interconnection Customer to participate in all discussions with the
IRS regarding such request for a private letter ruling. Transmission
Provider shall allow Interconnection Customer to attend all meetings
with IRS officials about the request and shall permit
Interconnection Customer to prepare the initial drafts of any
follow-up letters in connection with the request.
5.17.6 Subsequent Taxable Events. If, within 10 years from the
date on which the relevant Transmission Provider's Interconnection
Facilities are placed in service, (i) Interconnection Customer
Breaches the covenants contained in Article 5.17.2, (ii) a
``disqualification event'' occurs within the meaning of IRS Notice
88-129, or (iii) this LGIA terminates and Transmission Provider
retains ownership of the Interconnection Facilities and Network
Upgrades, Interconnection Customer shall pay a tax gross-up for the
cost consequences of any current tax liability imposed on
Transmission Provider, calculated using the methodology described in
Article 5.17.4 and in accordance with IRS Notice 90-60.
5.17.7 Contests. In the event any Governmental Authority
determines that Transmission Provider's receipt of payments or
property constitutes income that is subject to taxation,
Transmission Provider shall notify Interconnection Customer, in
writing, within thirty (30) Calendar Days of receiving notification
of such determination by a Governmental Authority. Upon the timely
written request by Interconnection Customer and at Interconnection
Customer's sole expense, Transmission Provider may appeal, protest,
seek abatement of, or otherwise oppose such determination. Upon
Interconnection Customer's written request and sole expense,
Transmission Provider may file a claim for refund with respect to
any taxes paid under this Article 5.17, whether or not it has
received such a determination. Transmission Provider reserves the
right to make all decisions with regard to the prosecution of such
appeal, protest, abatement or other contest, including the selection
of counsel and compromise or settlement of the claim, but
Transmission Provider shall keep Interconnection Customer informed,
shall consider in good faith suggestions from Interconnection
Customer about the conduct of the contest, and shall reasonably
permit Interconnection Customer or an Interconnection Customer
representative to attend contest proceedings.
Interconnection Customer shall pay to Transmission Provider on a
periodic basis, as invoiced by Transmission Provider, Transmission
Provider's documented reasonable costs of prosecuting such appeal,
protest, abatement or other contest. At any time during the contest,
Transmission Provider may agree to a settlement either with
Interconnection Customer's consent or after obtaining written advice
from nationally-recognized tax counsel, selected by Transmission
Provider, but reasonably acceptable to Interconnection Customer,
that the proposed settlement represents a reasonable settlement
given the hazards of litigation. Interconnection Customer's
obligation shall be based on the amount of the settlement agreed to
by Interconnection Customer, or if a higher amount, so much of the
settlement that is supported by the written advice from nationally-
recognized tax counsel selected under the terms of the preceding
sentence. The settlement amount shall be calculated on a fully
grossed-up basis to cover any related cost consequences of the
current tax liability. Any settlement without Interconnection
Customer's consent or such written advice will relieve
Interconnection Customer from any obligation to indemnify
Transmission Provider for the tax at issue in the contest.
5.17.8 Refund. In the event that (a) a private letter ruling is
issued to Transmission Provider which holds that any amount paid or
the value of any property transferred by Interconnection Customer to
Transmission Provider under the terms of this LGIA is not subject to
federal income taxation, (b) any legislative change or
administrative announcement, notice, ruling or other determination
makes it reasonably clear to Transmission Provider in good faith
that any amount paid or the value of any property transferred by
Interconnection Customer to Transmission Provider under the terms of
this LGIA is not taxable to Transmission Provider, (c) any
abatement, appeal, protest, or other contest results in a
determination that any payments or transfers made by Interconnection
Customer to Transmission Provider are not subject to federal income
tax, or (d) if Transmission Provider receives a refund from any
taxing authority for any overpayment of tax attributable to any
payment or property transfer made by Interconnection Customer to
Transmission Provider pursuant to this LGIA, Transmission Provider
shall promptly refund to Interconnection Customer the following:
(i) any payment made by Interconnection Customer under this
Article 5.17 for taxes that is attributable to the amount determined
to be non-taxable, together with interest thereon,
(ii) interest on any amounts paid by Interconnection Customer to
Transmission Provider for such taxes which Transmission Provider did
not submit to the taxing authority, calculated in accordance with
the methodology set forth in FERC's regulations at 18 CFR
35.19a(a)(2)(iii) from the date payment was made by Interconnection
Customer to the date Transmission Provider refunds such payment to
Interconnection Customer, and
(iii) with respect to any such taxes paid by Transmission
Provider, any refund or credit Transmission Provider receives or to
which it may be entitled from any Governmental Authority, interest
(or that portion thereof attributable to the payment described in
clause (i), above) owed to Transmission Provider for such
overpayment of taxes (including any reduction in interest otherwise
payable by Transmission Provider to any Governmental Authority
resulting from an offset or credit); provided, however, that
Transmission Provider will remit such amount promptly to
Interconnection Customer only after and to the extent that
Transmission Provider has received a tax refund, credit or offset
from any Governmental Authority for any applicable overpayment of
income tax related to Transmission Provider's Interconnection
Facilities.
The intent of this provision is to leave the Parties, to the
extent practicable, in the event that no taxes are due with respect
to any payment for Interconnection Facilities and Network Upgrades
hereunder, in the same position they would have been in had no such
tax payments been made.
5.17.9 Taxes Other Than Income Taxes. Upon the timely request by
Interconnection Customer, and at Interconnection Customer's sole
expense, Transmission Provider may appeal, protest, seek abatement
of, or otherwise contest any tax (other than federal or state income
tax) asserted or assessed against Transmission Provider for which
Interconnection Customer may be required to reimburse Transmission
Provider under the terms of this LGIA. Interconnection Customer
shall pay to Transmission Provider on a periodic basis, as invoiced
by Transmission Provider, Transmission Provider's documented
reasonable costs of prosecuting such appeal, protest, abatement, or
other contest. Interconnection Customer and Transmission Provider
shall cooperate in good faith with respect to any such contest.
Unless the payment of such taxes is a prerequisite to an appeal or
abatement or cannot be deferred, no amount shall be payable by
Interconnection Customer to Transmission Provider for such taxes
until they are assessed by a final, non-appealable order by any
court or agency of competent jurisdiction. In the event that a tax
payment is withheld and ultimately due and payable after appeal,
Interconnection Customer will be responsible for all taxes, interest
and penalties, other than penalties attributable to any delay caused
by Transmission Provider.
5.17.10 Transmission Owners Who Are Not Transmission Providers.
If Transmission Provider is not the same entity as the Transmission
Owner, then (i) all references in this Article 5.17 to Transmission
Provider shall be deemed also to refer to and to include the
Transmission Owner, as appropriate, and (ii) this LGIA shall not
become effective until such Transmission Owner shall have agreed in
writing to assume all of the duties and obligations of Transmission
Provider under this Article 5.17 of this LGIA.
5.18 Tax Status. Each Party shall cooperate with the other to
maintain the other Party's tax status. Nothing in this LGIA is
intended to adversely affect any Transmission Provider's tax exempt
status with respect to the issuance of bonds including, but not
limited to, Local Furnishing Bonds.
5.19 Modification.
5.19.1 General. Either Party may undertake modifications to its
facilities. If a Party plans to undertake a modification that
reasonably may be expected to affect the other Party's facilities,
that Party shall provide to the other Party sufficient information
regarding such modification so
[[Page 27187]]
that the other Party may evaluate the potential impact of such
modification prior to commencement of the work. Such information
shall be deemed to be confidential hereunder and shall include
information concerning the timing of such modifications and whether
such modifications are expected to interrupt the flow of electricity
from the Large Generating Facility. The Party desiring to perform
such work shall provide the relevant drawings, plans, and
specifications to the other Party at least ninety (90) Calendar Days
in advance of the commencement of the work or such shorter period
upon which the Parties may agree, which agreement shall not
unreasonably be withheld, conditioned or delayed.
In the case of Large Generating Facility modifications that do
not require Interconnection Customer to submit an Interconnection
Request, Transmission Provider shall provide, within thirty (30)
Calendar Days (or such other time as the Parties may agree), an
estimate of any additional modifications to the Transmission System,
Transmission Provider's Interconnection Facilities or Network
Upgrades necessitated by such Interconnection Customer modification
and a good faith estimate of the costs thereof.
5.19.2 Standards. Any additions, modifications, or replacements
made to a Party's facilities shall be designed, constructed and
operated in accordance with this LGIA and Good Utility Practice.
5.19.3 Modification Costs. Interconnection Customer shall not be
directly assigned for the costs of any additions, modifications, or
replacements that Transmission Provider makes to Transmission
Provider's Interconnection Facilities or the Transmission System to
facilitate the interconnection of a third party to Transmission
Provider's Interconnection Facilities or the Transmission System, or
to provide transmission service to a third party under Transmission
Provider's Tariff. Interconnection Customer shall be responsible for
the costs of any additions, modifications, or replacements to
Interconnection Customer's Interconnection Facilities that may be
necessary to maintain or upgrade such Interconnection Customer's
Interconnection Facilities consistent with Applicable Laws and
Regulations, Applicable Reliability Standards or Good Utility
Practice.
Article 6. Testing and Inspection
6.1 Pre-Commercial Operation Date Testing and Modifications.
Prior to the Commercial Operation Date, Transmission Provider shall
test Transmission Provider's Interconnection Facilities and Network
Upgrades and Interconnection Customer shall test the Large
Generating Facility and Interconnection Customer's Interconnection
Facilities to ensure their safe and reliable operation. Similar
testing may be required after initial operation. Each Party shall
make any modifications to its facilities that are found to be
necessary as a result of such testing. Interconnection Customer
shall bear the cost of all such testing and modifications.
Interconnection Customer shall generate test energy at the Large
Generating Facility only if it has arranged for the delivery of such
test energy.
6.2 Post-Commercial Operation Date Testing and Modifications.
Each Party shall at its own expense perform routine inspection and
testing of its facilities and equipment in accordance with Good
Utility Practice as may be necessary to ensure the continued
interconnection of the Large Generating Facility with the
Transmission System in a safe and reliable manner. Each Party shall
have the right, upon advance written notice, to require reasonable
additional testing of the other Party's facilities, at the
requesting Party's expense, as may be in accordance with Good
Utility Practice.
6.3 Right to Observe Testing. Each Party shall notify the other
Party in advance of its performance of tests of its Interconnection
Facilities. The other Party has the right, at its own expense, to
observe such testing.
6.4 Right to Inspect. Each Party shall have the right, but shall
have no obligation to: (i) observe the other Party's tests and/or
inspection of any of its System Protection Facilities and other
protective equipment, including Power System Stabilizers; (ii)
review the settings of the other Party's System Protection
Facilities and other protective equipment; and (iii) review the
other Party's maintenance records relative to the Interconnection
Facilities, the System Protection Facilities and other protective
equipment. A Party may exercise these rights from time to time as it
deems necessary upon reasonable notice to the other Party. The
exercise or non-exercise by a Party of any such rights shall not be
construed as an endorsement or confirmation of any element or
condition of the Interconnection Facilities or the System Protection
Facilities or other protective equipment or the operation thereof,
or as a warranty as to the fitness, safety, desirability, or
reliability of same. Any information that a Party obtains through
the exercise of any of its rights under this Article 6.4 shall be
deemed to be Confidential Information and treated pursuant to
Article 22 of this LGIA.
Article 7. Metering
7.1 General. Each Party shall comply with the Electric
Reliability Organization requirements. Unless otherwise agreed by
the Parties, Transmission Provider shall install Metering Equipment
at the Point of Interconnection prior to any operation of the Large
Generating Facility and shall own, operate, test and maintain such
Metering Equipment. Power flows to and from the Large Generating
Facility shall be measured at or, at Transmission Provider's option,
compensated to, the Point of Interconnection. Transmission Provider
shall provide metering quantities, in analog and/or digital form, to
Interconnection Customer upon request. Interconnection Customer
shall bear all reasonable documented costs associated with the
purchase, installation, operation, testing and maintenance of the
Metering Equipment.
7.2 Check Meters. Interconnection Customer, at its option and
expense, may install and operate, on its premises and on its side of
the Point of Interconnection, one or more check meters to check
Transmission Provider's meters. Such check meters shall be for check
purposes only and shall not be used for the measurement of power
flows for purposes of this LGIA, except as provided in Article 7.4
below. The check meters shall be subject at all reasonable times to
inspection and examination by Transmission Provider or its designee.
The installation, operation and maintenance thereof shall be
performed entirely by Interconnection Customer in accordance with
Good Utility Practice.
7.3 Standards. Transmission Provider shall install, calibrate,
and test revenue quality Metering Equipment in accordance with
applicable ANSI standards.
7.4 Testing of Metering Equipment. Transmission Provider shall
inspect and test all Transmission Provider-owned Metering Equipment
upon installation and at least once every two (2) years thereafter.
If requested to do so by Interconnection Customer, Transmission
Provider shall, at Interconnection Customer's expense, inspect or
test Metering Equipment more frequently than every two (2) years.
Transmission Provider shall give reasonable notice of the time when
any inspection or test shall take place, and Interconnection
Customer may have representatives present at the test or inspection.
If at any time Metering Equipment is found to be inaccurate or
defective, it shall be adjusted, repaired or replaced at
Interconnection Customer's expense, in order to provide accurate
metering, unless the inaccuracy or defect is due to Transmission
Provider's failure to maintain, then Transmission Provider shall
pay. If Metering Equipment fails to register, or if the measurement
made by Metering Equipment during a test varies by more than two
percent from the measurement made by the standard meter used in the
test, Transmission Provider shall adjust the measurements by
correcting all measurements for the period during which Metering
Equipment was in error by using Interconnection Customer's check
meters, if installed. If no such check meters are installed or if
the period cannot be reasonably ascertained, the adjustment shall be
for the period immediately preceding the test of the Metering
Equipment equal to one-half the time from the date of the last
previous test of the Metering Equipment.
7.5 Metering Data. At Interconnection Customer's expense, the
metered data shall be telemetered to one or more locations
designated by Transmission Provider and one or more locations
designated by Interconnection Customer. Such telemetered data shall
be used, under normal operating conditions, as the official
measurement of the amount of energy delivered from the Large
Generating Facility to the Point of Interconnection.
Article 8. Communications
8.1 Interconnection Customer Obligations. Interconnection
Customer shall maintain satisfactory operating communications with
Transmission Provider's Transmission System dispatcher or
representative designated by Transmission Provider. Interconnection
Customer shall
[[Page 27188]]
provide standard voice line, dedicated voice line and facsimile
communications at its Large Generating Facility control room or
central dispatch facility through use of either the public telephone
system, or a voice communications system that does not rely on the
public telephone system. Interconnection Customer shall also provide
the dedicated data circuit(s) necessary to provide Interconnection
Customer data to Transmission Provider as set forth in Appendix D,
Security Arrangements Details. The data circuit(s) shall extend from
the Large Generating Facility to the location(s) specified by
Transmission Provider. Any required maintenance of such
communications equipment shall be performed by Interconnection
Customer. Operational communications shall be activated and
maintained under, but not be limited to, the following events:
system paralleling or separation, scheduled and unscheduled
shutdowns, equipment clearances, and hourly and daily load data.
8.2 Remote Terminal Unit. Prior to the Initial Synchronization
Date of the Large Generating Facility, a Remote Terminal Unit, or
equivalent data collection and transfer equipment acceptable to the
Parties, shall be installed by Interconnection Customer, or by
Transmission Provider at Interconnection Customer's expense, to
gather accumulated and instantaneous data to be telemetered to the
location(s) designated by Transmission Provider through use of a
dedicated point-to-point data circuit(s) as indicated in Article
8.1. The communication protocol for the data circuit(s) shall be
specified by Transmission Provider. Instantaneous bi-directional
analog real power and reactive power flow information must be
telemetered directly to the location(s) specified by Transmission
Provider.
Each Party will promptly advise the other Party if it detects or
otherwise learns of any metering, telemetry or communications
equipment errors or malfunctions that require the attention and/or
correction by the other Party. The Party owning such equipment shall
correct such error or malfunction as soon as reasonably feasible.
8.3 No Annexation. Any and all equipment placed on the premises
of a Party shall be and remain the property of the Party providing
such equipment regardless of the mode and manner of annexation or
attachment to real property, unless otherwise mutually agreed by the
Parties.
8.4 Provision of Data from a Variable Energy Resource. [The]
Interconnection Customer whose Generating Facility contains at least
one Variable Energy Resource shall provide meteorological and forced
outage data to [the] Transmission Provider to the extent necessary
for [the] Transmission Provider's development and deployment of
power production forecasts for that class of Variable Energy
Resources. [The] Interconnection Customer with a Variable Energy
Resource having wind as the energy source, at a minimum, will be
required to provide [the] Transmission Provider with site-specific
meteorological data including: temperature, wind speed, wind
direction, and atmospheric pressure. [The] Interconnection Customer
with a Variable Energy Resource having solar as the energy source,
at a minimum, will be required to provide [the] Transmission
Provider with site-specific meteorological data including:
temperature, atmospheric pressure, and irradiance. [The]
Transmission Provider and Interconnection Customer whose Generating
Facility contains a Variable Energy Resource shall mutually agree to
any additional meteorological data that are required for the
development and deployment of a power production forecast. [The]
Interconnection Customer whose Generating Facility contains a
Variable Energy Resource also shall submit data to [the]
Transmission Provider regarding all forced outages to the extent
necessary for [the] Transmission Provider's development and
deployment of power production forecasts for that class of Variable
Energy Resources. The exact specifications of the meteorological and
forced outage data to be provided by [the] Interconnection Customer
to [the] Transmission Provider, including the frequency and timing
of data submittals, shall be made taking into account the size and
configuration of the Variable Energy Resource, its characteristics,
location, and its importance in maintaining generation resource
adequacy and transmission system reliability in its area. All
requirements for meteorological and forced outage data must be
commensurate with the power production forecasting employed by [the]
Transmission Provider. Such requirements for meteorological and
forced outage data are set forth in Appendix C, Interconnection
Details, of this LGIA, as they may change from time to time.
Article 9. Operations
9.1 General. Each Party shall comply with the Electric
Reliability Organization requirements. Each Party shall provide to
the other Party all information that may reasonably be required by
the other Party to comply with Applicable Laws and Regulations and
Applicable Reliability Standards.
9.2 Balancing Authority Area Notification. At least three months
before Initial Synchronization Date, Interconnection Customer shall
notify Transmission Provider in writing of the Balancing Authority
Area in which the Large Generating Facility will be located. If
Interconnection Customer elects to locate the Large Generating
Facility in a Balancing Authority Area other than the Balancing
Authority Area in which the Large Generating Facility is physically
located, and if permitted to do so by the relevant transmission
tariffs, all necessary arrangements, including but not limited to
those set forth in Article 7 and Article 8 of this LGIA, and remote
Balancing Authority Area generator interchange agreements, if
applicable, and the appropriate measures under such agreements,
shall be executed and implemented prior to the placement of the
Large Generating Facility in the other Balancing Authority Area.
9.3 Transmission Provider Obligations. Transmission Provider
shall cause the Transmission System and Transmission Provider's
Interconnection Facilities to be operated, maintained and controlled
in a safe and reliable manner and in accordance with this LGIA.
Transmission Provider may provide operating instructions to
Interconnection Customer consistent with this LGIA and Transmission
Provider's operating protocols and procedures as they may change
from time to time. Transmission Provider will consider changes to
its operating protocols and procedures proposed by Interconnection
Customer.
9.4 Interconnection Customer Obligations. Interconnection
Customer shall at its own expense operate, maintain and control the
Large Generating Facility and Interconnection Customer's
Interconnection Facilities in a safe and reliable manner and in
accordance with this LGIA. Interconnection Customer shall operate
the Large Generating Facility and Interconnection Customer's
Interconnection Facilities in accordance with all applicable
requirements of the Balancing Authority Area of which it is part, as
such requirements are set forth in Appendix C, Interconnection
Details, of this LGIA. Appendix C, Interconnection Details, will be
modified to reflect changes to the requirements as they may change
from time to time. Either Party may request that the other Party
provide copies of the requirements set forth in Appendix C,
Interconnection Details, of this LGIA.
9.5 Start-Up and Synchronization. Consistent with the Parties'
mutually acceptable procedures, Interconnection Customer is
responsible for the proper synchronization of the Large Generating
Facility to Transmission Provider's Transmission System.
9.6 Reactive Power and Primary Frequency Response.
9.6.1 Power Factor Design Criteria.
9.6.1.1 Synchronous Generation. Interconnection Customer shall
design the Large Generating Facility to maintain a composite power
delivery at continuous rated power output at the Point of
Interconnection at a power factor within the range of 0.95 leading
to 0.95 lagging, unless Transmission Provider has established
different requirements that apply to all synchronous generators in
the Balancing Authority Area on a comparable basis.
9.6.1.2 Non-Synchronous Generation. Interconnection Customer
shall design the Large Generating Facility to maintain a composite
power delivery at continuous rated power output at the high-side of
the generator substation at a power factor within the range of 0.95
leading to 0.95 lagging, unless Transmission Provider has
established a different power factor range that applies to all non-
synchronous generators in the Balancing Authority Area on a
comparable basis. This power factor range standard shall be dynamic
and can be met using, for example, power electronics designed to
supply this level of reactive capability (taking into account any
limitations due to voltage level, real power output, etc.) or fixed
and switched capacitors, or a combination of the two. This
requirement shall only apply to newly interconnecting non-
synchronous generators that have not yet executed a Facilities Study
Agreement as of the effective date of the Final Rule establishing
this requirement (Order No. 827).
[[Page 27189]]
9.6.2 Voltage Schedules. Once Interconnection Customer has
synchronized the Large Generating Facility with the Transmission
System, Transmission Provider shall require Interconnection Customer
to operate the Large Generating Facility to produce or absorb
reactive power within the design limitations of the Large Generating
Facility set forth in Article 9.6.1 (Power Factor Design Criteria).
Transmission Provider's voltage schedules shall treat all sources of
reactive power in the Balancing Authority Area in an equitable and
not unduly discriminatory manner. Transmission Provider shall
exercise Reasonable Efforts to provide Interconnection Customer with
such schedules at least one (1) day in advance, and may make changes
to such schedules as necessary to maintain the reliability of the
Transmission System. Interconnection Customer shall operate the
Large Generating Facility to maintain the specified output voltage
or power factor at the Point of Interconnection within the design
limitations of the Large Generating Facility set forth in Article
9.6.1 (Power Factor Design Criteria). If Interconnection Customer is
unable to maintain the specified voltage or power factor, it shall
promptly notify the System Operator.
9.6.2.1 Voltage Regulators. Whenever the Large Generating
Facility is operated in parallel with the Transmission System and
voltage regulators are capable of operation, Interconnection
Customer shall operate the Large Generating Facility with its
voltage regulators in automatic operation. If the Large Generating
Facility's voltage regulators are not capable of such automatic
operation, Interconnection Customer shall immediately notify
Transmission Provider's system operator, or its designated
representative, and ensure that such Large Generating Facility's
reactive power production or absorption (measured in MVARs) are
within the design capability of the Large Generating Facility's
generating unit(s) and steady state stability limits.
Interconnection Customer shall not cause its Large Generating
Facility to disconnect automatically or instantaneously from the
Transmission System or trip any generating unit comprising the Large
Generating Facility for an under or over frequency condition unless
the abnormal frequency condition persists for a time period beyond
the limits set forth in ANSI/IEEE Standard C37.106, or such other
standard as applied to other generators in the Balancing Authority
Area on a comparable basis.
9.6.3 Payment for Reactive Power. Transmission Provider is
required to pay Interconnection Customer for reactive power that
Interconnection Customer provides or absorbs from the Large
Generating Facility when Transmission Provider requests
Interconnection Customer to operate its Large Generating Facility
outside the range specified in Article 9.6.1, provided that if
Transmission Provider pays its own or affiliated generators for
reactive power service within the specified range, it must also pay
Interconnection Customer. Payments shall be pursuant to Article 11.6
or such other agreement to which the Parties have otherwise agreed.
9.6.4 Primary Frequency Response. Interconnection Customer shall
ensure the primary frequency response capability of its Large
Generating Facility by installing, maintaining, and operating a
functioning governor or equivalent controls. The term ``functioning
governor or equivalent controls'' as used herein shall mean the
required hardware and/or software that provides frequency responsive
real power control with the ability to sense changes in system
frequency and autonomously adjust the Large Generating Facility's
real power output in accordance with the droop and deadband
parameters and in the direction needed to correct frequency
deviations. Interconnection Customer is required to install a
governor or equivalent controls with the capability of operating:
(1) with a maximum 5 percent droop and 0.036 Hz
deadband; or (2) in accordance with the relevant droop, deadband,
and timely and sustained response settings from an approved Electric
Reliability Organization reliability standard providing for
equivalent or more stringent parameters. The droop characteristic
shall be: (1) based on the nameplate capacity of the Large
Generating Facility, and shall be linear in the range of frequencies
between 59 to 61 Hz that are outside of the deadband parameter; or
(2) based an approved Electric Reliability Organization reliability
standard providing for an equivalent or more stringent parameter.
The deadband parameter shall be: the range of frequencies above and
below nominal (60 Hz) in which the governor or equivalent controls
is not expected to adjust the Large Generating Facility's real power
output in response to frequency deviations. The deadband shall be
implemented: (1) without a step to the droop curve, that is, once
the frequency deviation exceeds the deadband parameter, the expected
change in the Large Generating Facility's real power output in
response to frequency deviations shall start from zero and then
increase (for under-frequency deviations) or decrease (for over-
frequency deviations) linearly in proportion to the magnitude of the
frequency deviation; or (2) in accordance with an approved Electric
Reliability Organization reliability standard providing for an
equivalent or more stringent parameter. Interconnection Customer
shall notify Transmission Provider that the primary frequency
response capability of the Large Generating Facility has been tested
and confirmed during commissioning. Once Interconnection Customer
has synchronized the Large Generating Facility with the Transmission
system, Interconnection Customer shall operate the Large Generating
Facility consistent with the provisions specified in [Sections]
articles 9.6.4.1 and 9.6.4.2 of this Agreement. The primary
frequency response requirements contained herein shall apply to both
synchronous and non-synchronous Large Generating Facilities.
9.6.4.1 Governor or Equivalent Controls. Whenever the Large
Generating Facility is operated in parallel with the Transmission
System, Interconnection Customer shall operate the Large Generating
Facility with its governor or equivalent controls in service and
responsive to frequency. Interconnection Customer shall: (1) in
coordination with Transmission Provider and/or the relevant
balancing authority, set the deadband parameter to: (1) a maximum of
0.036 Hz and set the droop parameter to a maximum of 5
percent; or (2) implement the relevant droop and deadband settings
from an approved Electric Reliability Organization reliability
standard that provides for equivalent or more stringent parameters.
Interconnection Customer shall be required to provide the status and
settings of the governor or equivalent controls to Transmission
Provider and/or the relevant balancing authority upon request. If
Interconnection Customer needs to operate the Large Generating
Facility with its governor or equivalent controls not in service,
Interconnection Customer shall immediately notify Transmission
Provider and the relevant balancing authority, and provide both with
the following information: (1) the operating status of the governor
or equivalent controls (i.e., whether it is currently out of service
or when it will be taken out of service); (2) the reasons for
removing the governor or equivalent controls from service; and (3) a
reasonable estimate of when the governor or equivalent controls will
be returned to service. Interconnection Customer shall make
Reasonable Efforts to return its governor or equivalent controls
into service as soon as practicable. Interconnection Customer shall
make Reasonable Efforts to keep outages of the Large Generating
Facility's governor or equivalent controls to a minimum whenever the
Large Generating Facility is operated in parallel with the
Transmission System.
9.6.4.2 Timely and Sustained Response. Interconnection Customer
shall ensure that the Large Generating Facility's real power
response to sustained frequency deviations outside of the deadband
setting is automatically provided and shall begin immediately after
frequency deviates outside of the deadband, and to the extent the
Large Generating Facility has operating capability in the direction
needed to correct the frequency deviation. Interconnection Customer
shall not block or otherwise inhibit the ability of the governor or
equivalent controls to respond and shall ensure that the response is
not inhibited, except under certain operational constraints
including, but not limited to, ambient temperature limitations,
physical energy limitations, outages of mechanical equipment, or
regulatory requirements. The Large Generating Facility shall sustain
the real power response at least until system frequency returns to a
value within the deadband setting of the governor or equivalent
controls. A Commission-approved reliability standard with equivalent
or more stringent requirements shall supersede the above
requirements.
9.6.4.3 Exemptions. Large Generating Facilities that are
regulated by the United States Nuclear Regulatory Commission shall
be exempt from [Sections]articles 9.6.4, 9.6.4.1, and 9.6.4.2 of
this Agreement. Large Generating Facilities that are behind the
meter generation that is sized-to-load (i.e., the thermal load and
the generation are near-balanced in real-time operation and the
generation is primarily controlled to maintain the unique thermal,
chemical, or
[[Page 27190]]
mechanical output necessary for the operating requirements of its
host facility) shall be required to install primary frequency
response capability in accordance with the droop and deadband
capability requirements specified in [Section]article 9.6.4, but
shall be otherwise exempt from the operating requirements in
[Sections]articles 9.6.4, 9.6.4.1, 9.6.4.2, and 9.6.4.4 of this
Agreement.
9.6.4.4[.] Electric Storage Resources. Interconnection Customer
interconnecting a Generating Facility that contains an electric
storage resource shall establish an operating range in Appendix C of
its LGIA that specifies a minimum state of charge and a maximum
state of charge between which the electric storage resource will be
required to provide primary frequency response consistent with the
conditions set forth in [Sections] articles 9.6.4, 9.6.4.1, 9.6.4.2
and 9.6.4.3 of this Agreement. Appendix C shall specify whether the
operating range is static or dynamic, and shall consider (1) the
expected magnitude of frequency deviations in the interconnection;
(2) the expected duration that system frequency will remain outside
of the deadband parameter in the interconnection; (3) the expected
incidence of frequency deviations outside of the deadband parameter
in the interconnection; (4) the physical capabilities of the
electric storage resource; (5) operational limitations of the
electric storage resource due to manufacturer specifications; and
(6) any other relevant factors agreed to by Transmission Provider
and Interconnection Customer, and in consultation with the relevant
transmission owner or balancing authority as appropriate. If the
operating range is dynamic, then Appendix C must establish how
frequently the operating range will be reevaluated and the factors
that may be considered during its reevaluation.
Interconnection Customer's electric storage resource is required
to provide timely and sustained primary frequency response
consistent with [Section]article 9.6.4.2 of this Agreement when it
is online and dispatched to inject electricity to the Transmission
System and/or receive electricity from the Transmission System. This
excludes circumstances when the electric storage resource is not
dispatched to inject electricity to the Transmission System and/or
dispatched to receive electricity from the Transmission System. If
Interconnection Customer's electric storage resource is charging at
the time of a frequency deviation outside of its deadband parameter,
it is to increase (for over-frequency deviations) or decrease (for
under-frequency deviations) the rate at which it is charging in
accordance with its droop parameter. Interconnection Customer's
electric storage resource is not required to change from charging to
discharging, or vice versa, unless the response necessitated by the
droop and deadband settings requires it to do so and it is
technically capable of making such a transition.
9.7 Outages and Interruptions.
9.7.1 Outages.
9.7.1.1 Outage Authority and Coordination. Each Party may in
accordance with Good Utility Practice in coordination with the other
Party remove from service any of its respective Interconnection
Facilities or Network Upgrades that may impact the other Party's
facilities as necessary to perform maintenance or testing or to
install or replace equipment. Absent an Emergency Condition, the
Party scheduling a removal of such facility(ies) from service will
use Reasonable Efforts to schedule such removal on a date and time
mutually acceptable to the Parties. In all circumstances, any Party
planning to remove such facility(ies) from service shall use
Reasonable Efforts to minimize the effect on the other Party of such
removal.
9.7.1.2 Outage Schedules. Transmission Provider shall post
scheduled outages of its transmission facilities on the OASIS.
Interconnection Customer shall submit its planned maintenance
schedules for the Large Generating Facility to Transmission Provider
for a minimum of a rolling twenty-four month period. Interconnection
Customer shall update its planned maintenance schedules as
necessary. Transmission Provider may request Interconnection
Customer to reschedule its maintenance as necessary to maintain the
reliability of the Transmission System; provided, however, adequacy
of generation supply shall not be a criterion in determining
Transmission System reliability. Transmission Provider shall
compensate Interconnection Customer for any additional direct costs
that Interconnection Customer incurs as a result of having to
reschedule maintenance, including any additional overtime, breaking
of maintenance contracts or other costs above and beyond the cost
Interconnection Customer would have incurred absent Transmission
Provider's request to reschedule maintenance. Interconnection
Customer will not be eligible to receive compensation, if during the
twelve (12) months prior to the date of the scheduled maintenance,
Interconnection Customer had modified its schedule of maintenance
activities.
9.7.1.3 Outage Restoration. If an outage on a Party's
Interconnection Facilities or Network Upgrades adversely affects the
other Party's operations or facilities, the Party that owns or
controls the facility that is out of service shall use Reasonable
Efforts to promptly restore such facility(ies) to a normal operating
condition consistent with the nature of the outage. The Party that
owns or controls the facility that is out of service shall provide
the other Party, to the extent such information is known,
information on the nature of the Emergency Condition, an estimated
time of restoration, and any corrective actions required. Initial
verbal notice shall be followed up as soon as practicable with
written notice explaining the nature of the outage.
9.7.2 Interruption of Service. If required by Good Utility
Practice to do so, Transmission Provider may require Interconnection
Customer to interrupt or reduce deliveries of electricity if such
delivery of electricity could adversely affect Transmission
Provider's ability to perform such activities as are necessary to
safely and reliably operate and maintain the Transmission System.
The following provisions shall apply to any interruption or
reduction permitted under this Article 9.7.2:
9.7.2.1 The interruption or reduction shall continue only for so
long as reasonably necessary under Good Utility Practice;
9.7.2.2 Any such interruption or reduction shall be made on an
equitable, non-discriminatory basis with respect to all generating
facilities directly connected to the Transmission System;
9.7.2.3 When the interruption or reduction must be made under
circumstances which do not allow for advance notice, Transmission
Provider shall notify Interconnection Customer by telephone as soon
as practicable of the reasons for the curtailment, interruption, or
reduction, and, if known, its expected duration. Telephone
notification shall be followed by written notification as soon as
practicable;
9.7.2.4 Except during the existence of an Emergency Condition,
when the interruption or reduction can be scheduled without advance
notice, Transmission Provider shall notify Interconnection Customer
in advance regarding the timing of such scheduling and further
notify Interconnection Customer of the expected duration.
Transmission Provider shall coordinate with Interconnection Customer
using Good Utility Practice to schedule the interruption or
reduction during periods of least impact to Interconnection Customer
and Transmission Provider;
9.7.2.5 The Parties shall cooperate and coordinate with each
other to the extent necessary in order to restore the Large
Generating Facility, Interconnection Facilities, and the
Transmission System to their normal operating state, consistent with
system conditions and Good Utility Practice.
9.7.3 Ride Through Capability and Performance. The Transmission
System is designed to automatically activate a load-shed program as
required by the Electric Reliability Organization in the event of an
under-frequency system disturbance. Interconnection Customer shall
implement under-frequency and over-frequency relay set points for
the Large Generating Facility as required by the Electric
Reliability Organization to ensure frequency ``ride through''
capability of the Transmission System. Large Generating Facility
response to frequency deviations of pre-determined magnitudes, both
under-frequency and over-frequency deviations, shall be studied and
coordinated with Transmission Provider in accordance with Good
Utility Practice. Interconnection Customer shall also implement
under-voltage and over-voltage relay set points, or equivalent
electronic controls, as required by the Electric Reliability
Organization to ensure voltage ``ride through'' capability of the
Transmission System. The term ``ride through'' as used herein shall
mean the ability of a Generating Facility to stay connected to and
synchronized with the Transmission System during system disturbances
within a range of under-frequency, over-frequency, under-voltage,
and over-voltage conditions, in accordance with Good Utility
Practice and consistent with any standards and guidelines that are
applied to other Generating Facilities in the Balancing Authority
Area on a comparable basis. For abnormal frequency conditions and
[[Page 27191]]
voltage conditions within the ``no trip zone'' defined by
Reliability Standard PRC-024-3 or successor mandatory ride through
reliability standards, the non-synchronous Large Generating Facility
must ensure that, within any physical limitations of the Large
Generating Facility, its control and protection settings are
configured or set to (1) continue active power production during
disturbance and post disturbance periods at pre-disturbance levels,
unless reactive power priority mode is enabled or unless providing
primary frequency response or fast frequency response; (2) minimize
reductions in active power and remain within dynamic voltage and
current limits, if reactive power priority mode is enabled, unless
providing primary frequency response or fast frequency response; (3)
not artificially limit dynamic reactive power capability during
disturbances; and (4) return to pre-disturbance active power levels
without artificial ramp rate limits if active power is reduced,
unless providing primary frequency response or fast frequency
response.
9.7.4 System Protection and Other Control Requirements.
9.7.4.1 System Protection Facilities. Interconnection Customer
shall, at its expense, install, operate and maintain System
Protection Facilities as a part of the Large Generating Facility or
Interconnection Customer's Interconnection Facilities. Transmission
Provider shall install at Interconnection Customer's expense any
System Protection Facilities that may be required on Transmission
Provider's Interconnection Facilities or the Transmission System as
a result of the interconnection of the Large Generating Facility and
Interconnection Customer's Interconnection Facilities.
9.7.4.2 Each Party's protection facilities shall be designed and
coordinated with other systems in accordance with Good Utility
Practice.
9.7.4.3 Each Party shall be responsible for protection of its
facilities consistent with Good Utility Practice.
9.7.4.4 Each Party's protective relay design shall incorporate
the necessary test switches to perform the tests required in Article
6. The required test switches will be placed such that they allow
operation of lockout relays while preventing breaker failure schemes
from operating and causing unnecessary breaker operations and/or the
tripping of Interconnection Customer's units.
9.7.4.5 Each Party will test, operate and maintain System
Protection Facilities in accordance with Good Utility Practice.
9.7.4.6 Prior to the In-Service Date, and again prior to the
Commercial Operation Date, each Party or its agent shall perform a
complete calibration test and functional trip test of the System
Protection Facilities. At intervals suggested by Good Utility
Practice and following any apparent malfunction of the System
Protection Facilities, each Party shall perform both calibration and
functional trip tests of its System Protection Facilities. These
tests do not require the tripping of any in-service generation unit.
These tests do, however, require that all protective relays and
lockout contacts be activated.
9.7.5 Requirements for Protection. In compliance with Good
Utility Practice, Interconnection Customer shall provide, install,
own, and maintain relays, circuit breakers and all other devices
necessary to remove any fault contribution of the Large Generating
Facility to any short circuit occurring on the Transmission System
not otherwise isolated by Transmission Provider's equipment, such
that the removal of the fault contribution shall be coordinated with
the protective requirements of the Transmission System. Such
protective equipment shall include, without limitation, a
disconnecting device or switch with load-interrupting capability
located between the Large Generating Facility and the Transmission
System at a site selected upon mutual agreement (not to be
unreasonably withheld, conditioned or delayed) of the Parties.
Interconnection Customer shall be responsible for protection of the
Large Generating Facility and Interconnection Customer's other
equipment from such conditions as negative sequence currents, over-
or under-frequency, sudden load rejection, over- or under-voltage,
and generator loss-of-field. Interconnection Customer shall be
solely responsible to disconnect the Large Generating Facility and
Interconnection Customer's other equipment if conditions on the
Transmission System could adversely affect the Large Generating
Facility.
9.7.6 Power Quality. Neither Party's facilities shall cause
excessive voltage flicker nor introduce excessive distortion to the
sinusoidal voltage or current waves as defined by ANSI Standard
C84.1-1989, in accordance with IEEE Standard 519, or any applicable
superseding electric industry standard. In the event of a conflict
between ANSI Standard C84.1-1989, or any applicable superseding
electric industry standard, ANSI Standard C84.1-1989, or the
applicable superseding electric industry standard, shall control.
9.8 Switching and Tagging Rules. Each Party shall provide the
other Party a copy of its switching and tagging rules that are
applicable to the other Party's activities. Such switching and
tagging rules shall be developed on a non-discriminatory basis. The
Parties shall comply with applicable switching and tagging rules, as
amended from time to time, in obtaining clearances for work or for
switching operations on equipment.
9.9 Use of Interconnection Facilities by Third Parties.
9.9.1 Purpose of Interconnection Facilities. Except as may be
required by Applicable Laws and Regulations, or as otherwise agreed
to among the Parties, the Interconnection Facilities shall be
constructed for the sole purpose of interconnecting the Large
Generating Facility to the Transmission System and shall be used for
no other purpose.
9.9.2 Third Party Users. If required by Applicable Laws and
Regulations or if the Parties mutually agree, such agreement not to
be unreasonably withheld, to allow one or more third parties to use
Transmission Provider's Interconnection Facilities, or any part
thereof, Interconnection Customer will be entitled to compensation
for the capital expenses it incurred in connection with the
Interconnection Facilities based upon the pro rata use of the
Interconnection Facilities by Transmission Provider, all third party
users, and Interconnection Customer, in accordance with Applicable
Laws and Regulations or upon some other mutually-agreed upon
methodology. In addition, cost responsibility for ongoing costs,
including operation and maintenance costs associated with the
Interconnection Facilities, will be allocated between
Interconnection Customer and any third party users based upon the
pro rata use of the Interconnection Facilities by Transmission
Provider, all third party users, and Interconnection Customer, in
accordance with Applicable Laws and Regulations or upon some other
mutually agreed upon methodology. If the issue of such compensation
or allocation cannot be resolved through such negotiations, it shall
be submitted to FERC for resolution.
9.10 Disturbance Analysis Data Exchange. The Parties will
cooperate with one another in the analysis of disturbances to either
the Large Generating Facility or Transmission Provider's
Transmission System by gathering and providing access to any
information relating to any disturbance, including information from
oscillography, protective relay targets, breaker operations and
sequence of events records, and any disturbance information required
by Good Utility Practice.
Article 10. Maintenance
10.1 Transmission Provider Obligations. Transmission Provider
shall maintain the Transmission System and Transmission Provider's
Interconnection Facilities in a safe and reliable manner and in
accordance with this LGIA.
10.2 Interconnection Customer Obligations. Interconnection
Customer shall maintain the Large Generating Facility and
Interconnection Customer's Interconnection Facilities in a safe and
reliable manner and in accordance with this LGIA.
10.3 Coordination. The Parties shall confer regularly to
coordinate the planning, scheduling and performance of preventive
and corrective maintenance on the Large Generating Facility and the
Interconnection Facilities.
10.4 Secondary Systems. Each Party shall cooperate with the
other in the inspection, maintenance, and testing of control or
power circuits that operate below 600 volts, AC or DC, including,
but not limited to, any hardware, control or protective devices,
cables, conductors, electric raceways, secondary equipment panels,
transducers, batteries, chargers, and voltage and current
transformers that directly affect the operation of a Party's
facilities and equipment which may reasonably be expected to impact
the other Party. Each Party shall provide advance notice to the
other Party before undertaking any work on such circuits, especially
on electrical circuits involving circuit breaker trip and close
contacts, current transformers, or potential transformers.
10.5 Operating and Maintenance Expenses. Subject to the
provisions herein addressing the use of facilities by others, and
except for operations and maintenance expenses associated with
modifications made
[[Page 27192]]
for providing interconnection or transmission service to a third
party and such third party pays for such expenses, Interconnection
Customer shall be responsible for all reasonable expenses including
overheads, associated with: (1) owning, operating, maintaining,
repairing, and replacing Interconnection Customer's Interconnection
Facilities; and (2) operation, maintenance, repair and replacement
of Transmission Provider's Interconnection Facilities.
Article 11. Performance Obligation
11.1 Interconnection Customer Interconnection Facilities.
Interconnection Customer shall design, procure, construct, install,
own and/or control Interconnection Customer Interconnection
Facilities described in Appendix A, Interconnection Facilities,
Network Upgrades and Distribution Upgrades, at its sole expense.
11.2 Transmission Provider's Interconnection Facilities.
Transmission Provider or Transmission Owner shall design, procure,
construct, install, own and/or control [the] Transmission Provider's
Interconnection Facilities described in Appendix A, Interconnection
Facilities, Network Upgrades and Distribution Upgrades, at the sole
expense of [the] Interconnection Customer.
11.3 Network Upgrades and Distribution Upgrades. Transmission
Provider or Transmission Owner shall design, procure, construct,
install, and own the Network Upgrades and Distribution Upgrades
described in Appendix A, Interconnection Facilities, Network
Upgrades and Distribution Upgrades. Interconnection Customer shall
be responsible for all costs related to Distribution Upgrades.
Unless Transmission Provider or Transmission Owner elects to fund
the capital for the Network Upgrades, they shall be solely funded by
Interconnection Customer.
11.4 Transmission Credits.
11.4.1 Repayment of Amounts Advanced for Network Upgrades.
Interconnection Customer shall be entitled to a cash repayment,
equal to the total amount paid to Transmission Provider and Affected
System Operator, if any, for the Network Upgrades, including any tax
gross-up or other tax-related payments associated with Network
Upgrades, and not refunded to Interconnection Customer pursuant to
Article 5.17.8 or otherwise, to be paid to Interconnection Customer
on a dollar-for-dollar basis for the non-usage sensitive portion of
transmission charges, as payments are made under Transmission
Provider's Tariff and Affected System's Tariff for transmission
services with respect to the Large Generating Facility. Any
repayment shall include interest calculated in accordance with the
methodology set forth in FERC's regulations at 18 CFR
35.19a(a)(2)(iii) from the date of any payment for Network Upgrades
through the date on which [the] Interconnection Customer receives a
repayment of such payment pursuant to this subparagraph.
Interconnection Customer may assign such repayment rights to any
person.
Notwithstanding the foregoing, Interconnection Customer,
Transmission Provider, and Affected System Operator may adopt any
alternative payment schedule that is mutually agreeable so long as
Transmission Provider and Affected System Operator take one of the
following actions no later than five years from the Commercial
Operation Date: (1) return to Interconnection Customer any amounts
advanced for Network Upgrades not previously repaid, or (2) declare
in writing that Transmission Provider or Affected System Operator
will continue to provide payments to Interconnection Customer on a
dollar-for-dollar basis for the non-usage sensitive portion of
transmission charges, or develop an alternative schedule that is
mutually agreeable and provides for the return of all amounts
advanced for Network Upgrades not previously repaid; however, full
reimbursement shall not extend beyond twenty (20) years from the
Commercial Operation Date.
If the Large Generating Facility fails to achieve commercial
operation, but it or another Generating Facility is later
constructed and makes use of the Network Upgrades, Transmission
Provider and Affected System Operator shall at that time reimburse
Interconnection Customer for the amounts advanced for the Network
Upgrades. Before any such reimbursement can occur, [the]
Interconnection Customer, or the entity that ultimately constructs
the Generating Facility, if different, is responsible for
identifying the entity to which reimbursement must be made.
11.4.2 Special Provisions for Affected Systems. Unless
Transmission Provider provides, under the LGIA, for the repayment of
amounts advanced to Affected System Operator for Network Upgrades,
Interconnection Customer and Affected System Operator shall enter
into an agreement that provides for such repayment. The agreement
shall specify the terms governing payments to be made by
Interconnection Customer to the Affected System Operator as well as
the repayment by the Affected System Operator.
11.4.3 Notwithstanding any other provision of this LGIA, nothing
herein shall be construed as relinquishing or foreclosing any
rights, including but not limited to firm transmission rights,
capacity rights, transmission congestion rights, or transmission
credits, that Interconnection Customer, shall be entitled to, now or
in the future under any other agreement or tariff as a result of, or
otherwise associated with, the transmission capacity, if any,
created by the Network Upgrades, including the right to obtain cash
reimbursements or transmission credits for transmission service that
is not associated with the Large Generating Facility.
11.5 Provision of Security. At least thirty (30) Calendar Days
prior to the commencement of the procurement, installation, or
construction of a discrete portion of a Transmission Provider's
Interconnection Facilities, Network Upgrades, or Distribution
Upgrades, Interconnection Customer shall provide Transmission
Provider, at Interconnection Customer's option, a guarantee, a
surety bond, letter of credit or other form of security that is
reasonably acceptable to Transmission Provider and is consistent
with the Uniform Commercial Code of the jurisdiction identified in
Article 14.2.1. Such security for payment, as specified in Appendix
B of this LGIA, shall be in an amount sufficient to cover the costs
for constructing, procuring and installing the applicable portion of
Transmission Provider's Interconnection Facilities, Network
Upgrades, or Distribution Upgrades and shall be reduced on a dollar-
for-dollar basis for payments made to Transmission Provider for
these purposes. Transmission Provider must use the LGIA Deposit
required in Section 11.3 of the LGIP before requiring
Interconnection Customer to submit security in addition to that LGIA
Deposit. Transmission Provider must specify, in Appendix B of this
LGIA, the dates for which Interconnection Customer must provide
additional security for construction of each discrete portion of
Transmission Provider's Interconnection Facilities, Network
Upgrades, or Distribution Upgrades and Interconnection Customer must
provide such additional security.
In addition:
11.5.1 The guarantee must be made by an entity that meets the
creditworthiness requirements of Transmission Provider, and contain
terms and conditions that guarantee payment of any amount that may
be due from Interconnection Customer, up to an agreed-to maximum
amount.
11.5.2 The letter of credit must be issued by a financial
institution reasonably acceptable to Transmission Provider and must
specify a reasonable expiration date.
11.5.3 The surety bond must be issued by an insurer reasonably
acceptable to Transmission Provider and must specify a reasonable
expiration date.
11.6 Interconnection Customer Compensation. If Transmission
Provider requests or directs Interconnection Customer to provide a
service pursuant to Articles 9.6.3 (Payment for Reactive Power), or
13.5.1 of this LGIA, Transmission Provider shall compensate
Interconnection Customer in accordance with Interconnection
Customer's applicable rate schedule then in effect unless the
provision of such service(s) is subject to an RTO or ISO FERC-
approved rate schedule. Interconnection Customer shall serve
Transmission Provider or RTO or ISO with any filing of a proposed
rate schedule at the time of such filing with FERC. To the extent
that no rate schedule is in effect at the time [the] Interconnection
Customer is required to provide or absorb any Reactive Power under
this LGIA, Transmission Provider agrees to compensate
Interconnection Customer in such amount as would have been due
Interconnection Customer had the rate schedule been in effect at the
time service commenced; provided, however, that such rate schedule
must be filed at FERC or other appropriate Governmental Authority
within sixty (60) Calendar Days of the commencement of service.
11.6.1 Interconnection Customer Compensation for Actions During
Emergency Condition. Transmission Provider or RTO or ISO shall
compensate Interconnection Customer for its provision of real and
reactive power and other Emergency Condition services that
Interconnection Customer provides to support the Transmission System
during an Emergency Condition in accordance with Article 11.6.
[[Page 27193]]
Article 12. Invoice
12.1 General. Each Party shall submit to the other Party, on a
monthly basis, invoices of amounts due for the preceding month. Each
invoice shall state the month to which the invoice applies and fully
describe the services and equipment provided. The Parties may
discharge mutual debts and payment obligations due and owing to each
other on the same date through netting, in which case all amounts a
Party owes to the other Party under this LGIA, including interest
payments or credits, shall be netted so that only the net amount
remaining due shall be paid by the owing Party.
12.2 Final Invoice. Within six months after completion of the
construction of Transmission Provider's Interconnection Facilities
and the Network Upgrades, Transmission Provider shall provide an
invoice of the final cost of the construction of Transmission
Provider's Interconnection Facilities and the Network Upgrades and
shall set forth such costs in sufficient detail to enable
Interconnection Customer to compare the actual costs with the
estimates and to ascertain deviations, if any, from the cost
estimates. Transmission Provider shall refund to Interconnection
Customer any amount by which the actual payment by Interconnection
Customer for estimated costs exceeds the actual costs of
construction within thirty (30) Calendar Days of the issuance of
such final construction invoice.
12.3 Payment. Invoices shall be rendered to the paying Party at
the address specified in Appendix F. The Party receiving the invoice
shall pay the invoice within thirty (30) Calendar Days of receipt.
All payments shall be made in immediately available funds payable to
the other Party, or by wire transfer to a bank named and account
designated by the invoicing Party. Payment of invoices by either
Party will not constitute a waiver of any rights or claims either
Party may have under this LGIA.
12.4 Disputes. In the event of a billing dispute between
Transmission Provider and Interconnection Customer, Transmission
Provider shall continue to provide Interconnection Service under
this LGIA as long as Interconnection Customer: (i) continues to make
all payments not in dispute; and (ii) pays to Transmission Provider
or into an independent escrow account the portion of the invoice in
dispute, pending resolution of such dispute. If Interconnection
Customer fails to meet these two requirements for continuation of
service, then Transmission Provider may provide notice to
Interconnection Customer of a Default pursuant to Article 17. Within
thirty (30) Calendar Days after the resolution of the dispute, the
Party that owes money to the other Party shall pay the amount due
with interest calculated in accord with the methodology set forth in
FERC's regulations at 18 CFR 35.19a(a)(2)(iii).
Article 13. Emergencies
13.1 Definition. ``Emergency Condition'' shall mean a condition
or situation: (i) that in the judgment of the Party making the claim
is imminently likely to endanger life or property; or (ii) that, in
the case of Transmission Provider, is imminently likely (as
determined in a non-discriminatory manner) to cause a material
adverse effect on the security of, or damage to the Transmission
System, Transmission Provider's Interconnection Facilities or the
Transmission Systems of others to which the Transmission System is
directly connected; or (iii) that, in the case of Interconnection
Customer, is imminently likely (as determined in a non-
discriminatory manner) to cause a material adverse effect on the
security of, or damage to, the Large Generating Facility or
Interconnection Customer's Interconnection Facilities' System
restoration and black start shall be considered Emergency
Conditions; provided, that Interconnection Customer is not obligated
by this LGIA to possess black start capability.
13.2 Obligations. Each Party shall comply with the Emergency
Condition procedures of the applicable ISO/RTO, the Electric
Reliability Organization, Applicable Laws and Regulations, and any
emergency procedures agreed to by the Joint Operating Committee.
13.3 Notice. Transmission Provider shall notify Interconnection
Customer promptly when it becomes aware of an Emergency Condition
that affects Transmission Provider's Interconnection Facilities or
the Transmission System that may reasonably be expected to affect
Interconnection Customer's operation of the Large Generating
Facility or Interconnection Customer's Interconnection Facilities.
Interconnection Customer shall notify Transmission Provider promptly
when it becomes aware of an Emergency Condition that affects the
Large Generating Facility or Interconnection Customer's
Interconnection Facilities that may reasonably be expected to affect
the Transmission System or Transmission Provider's Interconnection
Facilities. To the extent information is known, the notification
shall describe the Emergency Condition, the extent of the damage or
deficiency, the expected effect on the operation of Interconnection
Customer's or Transmission Provider's facilities and operations, its
anticipated duration and the corrective action taken and/or to be
taken. The initial notice shall be followed as soon as practicable
with written notice.
13.4 Immediate Action. Unless, in Interconnection Customer's
reasonable judgment, immediate action is required, Interconnection
Customer shall obtain the consent of Transmission Provider, such
consent to not be unreasonably withheld, prior to performing any
manual switching operations at the Large Generating Facility or
Interconnection Customer's Interconnection Facilities in response to
an Emergency Condition either declared by Transmission Provider or
otherwise regarding the Transmission System.
13.5 Transmission Provider Authority.
13.5.1 General. Transmission Provider may take whatever actions
or inactions with regard to the Transmission System or Transmission
Provider's Interconnection Facilities it deems necessary during an
Emergency Condition in order to (i) preserve public health and
safety, (ii) preserve the reliability of the Transmission System or
Transmission Provider's Interconnection Facilities, (iii) limit or
prevent damage, and (iv) expedite restoration of service.
Transmission Provider shall use Reasonable Efforts to minimize
the effect of such actions or inactions on the Large Generating
Facility or Interconnection Customer's Interconnection Facilities.
Transmission Provider may, on the basis of technical considerations,
require the Large Generating Facility to mitigate an Emergency
Condition by taking actions necessary and limited in scope to remedy
the Emergency Condition, including, but not limited to, directing
Interconnection Customer to shut-down, start-up, increase or
decrease the real or reactive power output of the Large Generating
Facility; implementing a reduction or disconnection pursuant to
Article 13.5.2; directing Interconnection Customer to assist with
blackstart (if available) or restoration efforts; or altering the
outage schedules of the Large Generating Facility and
Interconnection Customer's Interconnection Facilities.
Interconnection Customer shall comply with all of Transmission
Provider's operating instructions concerning Large Generating
Facility real power and reactive power output within the
manufacturer's design limitations of the Large Generating Facility's
equipment that is in service and physically available for operation
at the time, in compliance with Applicable Laws and Regulations.
13.5.2 Reduction and Disconnection. Transmission Provider may
reduce Interconnection Service or disconnect the Large Generating
Facility or Interconnection Customer's Interconnection Facilities,
when such, reduction or disconnection is necessary under Good
Utility Practice due to Emergency Conditions. These rights are
separate and distinct from any right of curtailment of Transmission
Provider pursuant to Transmission Provider's Tariff. When
Transmission Provider can schedule the reduction or disconnection in
advance, Transmission Provider shall notify Interconnection Customer
of the reasons, timing and expected duration of the reduction or
disconnection. Transmission Provider shall coordinate with
Interconnection Customer using Good Utility Practice to schedule the
reduction or disconnection during periods of least impact to
Interconnection Customer and Transmission Provider. Any reduction or
disconnection shall continue only for so long as reasonably
necessary under Good Utility Practice. The Parties shall cooperate
with each other to restore the Large Generating Facility, the
Interconnection Facilities, and the Transmission System to their
normal operating state as soon as practicable consistent with Good
Utility Practice.
13.6 Interconnection Customer Authority. Consistent with Good
Utility Practice and the LGIA and the LGIP, Interconnection Customer
may take actions or inactions with regard to the Large Generating
Facility or Interconnection Customer's Interconnection Facilities
during an Emergency Condition in order to (i) preserve public health
and safety, (ii) preserve the reliability of the Large Generating
Facility or Interconnection Customer's Interconnection Facilities,
(iii)
[[Page 27194]]
limit or prevent damage, and (iv) expedite restoration of service.
Interconnection Customer shall use Reasonable Efforts to minimize
the effect of such actions or inactions on the Transmission System
and Transmission Provider's Interconnection Facilities. Transmission
Provider shall use Reasonable Efforts to assist Interconnection
Customer in such actions.
13.7 Limited Liability. Except as otherwise provided in Article
11.6.1 of this LGIA, neither Party shall be liable to the other for
any action it takes in responding to an Emergency Condition so long
as such action is made in good faith and is consistent with Good
Utility Practice.
Article 14. Regulatory Requirements and Governing Law
14.1 Regulatory Requirements. Each Party's obligations under
this LGIA shall be subject to its receipt of any required approval
or certificate from one or more Governmental Authorities in the form
and substance satisfactory to the applying Party, or the Party
making any required filings with, or providing notice to, such
Governmental Authorities, and the expiration of any time period
associated therewith. Each Party shall in good faith seek and use
its Reasonable Efforts to obtain such other approvals. Nothing in
this LGIA shall require Interconnection Customer to take any action
that could result in its inability to obtain, or its loss of, status
or exemption under the Federal Power Act, the Public Utility Holding
Company Act of 1935, as amended, or the Public Utility Regulatory
Policies Act of 1978.
14.2 Governing Law.
14.2.1 The validity, interpretation and performance of this LGIA
and each of its provisions shall be governed by the laws of the
state where the Point of Interconnection is located, without regard
to its conflicts of law principles.
14.2.2 This LGIA is subject to all Applicable Laws and
Regulations.
14.2.3 Each Party expressly reserves the right to seek changes
in, appeal, or otherwise contest any laws, orders, rules, or
regulations of a Governmental Authority.
Article 15. Notices
15.1 General. Unless otherwise provided in this LGIA, any
notice, demand or request required or permitted to be given by
either Party to the other and any instrument required or permitted
to be tendered or delivered by either Party in writing to the other
shall be effective when delivered and may be so given, tendered or
delivered, by recognized national courier, or by depositing the same
with the United States Postal Service with postage prepaid, for
delivery by certified or registered mail, addressed to the Party, or
personally delivered to the Party, at the address set out in
Appendix F, Addresses for Delivery of Notices and Billings.
Either Party may change the notice information in this LGIA by
giving five (5) Business Days written notice prior to the effective
date of the change.
15.2 Billings and Payments. Billings and payments shall be sent
to the addresses set out in Appendix F.
15.3 Alternative Forms of Notice. Any notice or request required
or permitted to be given by a Party to the other and not required by
this Agreement to be given in writing may be so given by telephone,
facsimile or email to the telephone numbers and email addresses set
out in Appendix F.
15.4 Operations and Maintenance Notice. Each Party shall notify
the other Party in writing of the identity of the person(s) that it
designates as the point(s) of contact with respect to the
implementation of Articles 9 and 10.
Article 16. Force Majeure
16.1 Force Majeure.
16.1.1 Economic hardship is not considered a Force Majeure
event.
16.1.2 Neither Party shall be considered to be in Default with
respect to any obligation hereunder, (including obligations under
Article 4), other than the obligation to pay money when due, if
prevented from fulfilling such obligation by Force Majeure. A Party
unable to fulfill any obligation hereunder (other than an obligation
to pay money when due) by reason of Force Majeure shall give notice
and the full particulars of such Force Majeure to the other Party in
writing or by telephone as soon as reasonably possible after the
occurrence of the cause relied upon. Telephone notices given
pursuant to this article shall be confirmed in writing as soon as
reasonably possible and shall specifically state full particulars of
the Force Majeure, the time and date when the Force Majeure occurred
and when the Force Majeure is reasonably expected to cease. The
Party affected shall exercise due diligence to remove such
disability with reasonable dispatch, but shall not be required to
accede or agree to any provision not satisfactory to it in order to
settle and terminate a strike or other labor disturbance.
Article 17. Default
17.1 Default
17.1.1 General. No Default shall exist where such failure to
discharge an obligation (other than the payment of money) is the
result of Force Majeure as defined in this LGIA or the result of an
act of omission of the other Party. Upon a Breach, the non-breaching
Party shall give written notice of such Breach to the breaching
Party. Except as provided in Article 17.1.2, the breaching Party
shall have thirty (30) Calendar Days from receipt of the Default
notice within which to cure such Breach; provided however, if such
Breach is not capable of cure within thirty (30) Calendar Days, the
breaching Party shall commence such cure within thirty (30) Calendar
Days after notice and continuously and diligently complete such cure
within ninety (90) Calendar Days from receipt of the Default notice;
and, if cured within such time, the Breach specified in such notice
shall cease to exist.
17.1.2 Right to Terminate. If a Breach is not cured as provided
in this article, or if a Breach is not capable of being cured within
the period provided for herein, the non-breaching Party shall have
the right to declare a Default and terminate this LGIA by written
notice at any time until cure occurs, and be relieved of any further
obligation hereunder and, whether or not that Party terminates this
LGIA, to recover from the breaching Party all amounts due hereunder,
plus all other damages and remedies to which it is entitled at law
or in equity. The provisions of this article will survive
termination of this LGIA.
17.2 Violation of Operating Assumptions for Generating
Facilities. If Transmission Provider requires Interconnection
Customer to memorialize the operating assumptions for the charging
behavior of a Generating Facility that includes at least one
electric storage resource in Appendix H of this LGIA, Transmission
Provider may consider Interconnection Customer to be in Breach of
the LGIA if Interconnection Customer fails to operate the Generating
Facility in accordance with those operating assumptions for charging
behavior. However, if Interconnection Customer operates contrary to
the operating assumptions for charging behavior specified in
Appendix H of this LGIA at the direction of Transmission Provider,
Transmission Provider shall not consider Interconnection Customer in
Breach of this LGIA.
Article 18. Indemnity, Consequential Damages and Insurance
18.1 Indemnity. The Parties shall at all times indemnify,
defend, and hold the other Party harmless from, any and all damages,
losses, claims, including claims and actions relating to injury to
or death of any person or damage to property, demand, suits,
recoveries, costs and expenses, court costs, attorney fees, and all
other obligations by or to third parties, arising out of or
resulting from the other Party's action or inactions of its
obligations under this LGIA on behalf of the Indemnifying Party,
except in cases of gross negligence or intentional wrongdoing by the
indemnified Party.
18.1.1 Indemnified Person. If an Indemnified Person is entitled
to indemnification under this Article 18 as a result of a claim by a
third party, and the Indemnifying Party fails, after notice and
reasonable opportunity to proceed under Article 18.1, to assume the
defense of such claim, such Indemnified Person may at the expense of
the Indemnifying Party contest, settle or consent to the entry of
any judgment with respect to, or pay in full, such claim.
18.1.2 Indemnifying Party. If an Indemnifying Party is obligated
to indemnify and hold any Indemnified Person harmless under this
Article 18, the amount owing to the Indemnified Person shall be the
amount of such Indemnified Person's actual Loss, net of any
insurance or other recovery.
18.1.3 Indemnity Procedures. Promptly after receipt by an
Indemnified Person of any claim or notice of the commencement of any
action or administrative or legal proceeding or investigation as to
which the indemnity provided for in Article 18.1 may apply, the
Indemnified Person shall notify the Indemnifying Party of such fact.
Any failure of or delay in such notification shall not affect a
Party's indemnification obligation unless such failure or delay is
materially prejudicial to the Indemnifying Party.
The Indemnifying Party shall have the right to assume the
defense thereof with
[[Page 27195]]
counsel designated by such Indemnifying Party and reasonably
satisfactory to the Indemnified Person. If the defendants in any
such action include one or more Indemnified Persons and the
Indemnifying Party and if the Indemnified Person reasonably
concludes that there may be legal defenses available to it and/or
other Indemnified Persons which are different from or additional to
those available to the Indemnifying Party, the Indemnified Person
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action
on its own behalf. In such instances, the Indemnifying Party shall
only be required to pay the fees and expenses of one additional
attorney to represent an Indemnified Person or Indemnified Persons
having such differing or additional legal defenses.
The Indemnified Person shall be entitled, at its expense, to
participate in any such action, suit or proceeding, the defense of
which has been assumed by the Indemnifying Party. Notwithstanding
the foregoing, the Indemnifying Party (i) shall not be entitled to
assume and control the defense of any such action, suit or
proceedings if and to the extent that, in the opinion of the
Indemnified Person and its counsel, such action, suit or proceeding
involves the potential imposition of criminal liability on the
Indemnified Person, or there exists a conflict or adversity of
interest between the Indemnified Person and the Indemnifying Party,
in such event the Indemnifying Party shall pay the reasonable
expenses of the Indemnified Person, and (ii) shall not settle or
consent to the entry of any judgment in any action, suit or
proceeding without the consent of the Indemnified Person, which
shall not be reasonably withheld, conditioned or delayed.
18.2 Consequential Damages. Other than the Liquidated Damages
heretofore described, in no event shall either Party be liable under
any provision of this LGIA for any losses, damages, costs or
expenses for any special, indirect, incidental, consequential, or
punitive damages, including but not limited to loss of profit or
revenue, loss of the use of equipment, cost of capital, cost of
temporary equipment or services, whether based in whole or in part
in contract, in tort, including negligence, strict liability, or any
other theory of liability; provided, however, that damages for which
a Party may be liable to the other Party under another agreement
will not be considered to be special, indirect, incidental, or
consequential damages hereunder.
18.3 Insurance. Each party shall, at its own expense, maintain
in force throughout the period of this LGIA, and until released by
the other Party, the following minimum insurance coverages, with
insurers authorized to do business in the state where the Point of
Interconnection is located:
18.3.1 Employers' Liability and Workers' Compensation Insurance
providing statutory benefits in accordance with the laws and
regulations of the state in which the Point of Interconnection is
located.
18.3.2 Commercial General Liability Insurance including premises
and operations, personal injury, broad form property damage, broad
form blanket contractual liability coverage (including coverage for
the contractual indemnification) products and completed operations
coverage, coverage for explosion, collapse and underground hazards,
independent contractors coverage, coverage for pollution to the
extent normally available and punitive damages to the extent
normally available and a cross liability endorsement, with minimum
limits of One Million Dollars ($1,000,000) per occurrence/One
Million Dollars ($1,000,000) aggregate combined single limit for
personal injury, bodily injury, including death and property damage.
18.3.3 Comprehensive Automobile Liability Insurance for coverage
of owned and non-owned and hired vehicles, trailers or semi-trailers
designed for travel on public roads, with a minimum, combined single
limit of One Million Dollars ($1,000,000) per occurrence for bodily
injury, including death, and property damage.
18.3.4 Excess Public Liability Insurance over and above the
Employers' Liability Commercial General Liability and Comprehensive
Automobile Liability Insurance coverage, with a minimum combined
single limit of Twenty Million Dollars ($20,000,000) per occurrence/
Twenty Million Dollars ($20,000,000) aggregate.
18.3.5 The Commercial General Liability Insurance, Comprehensive
Automobile Insurance and Excess Public Liability Insurance policies
shall name the other Party, its parent, associated and Affiliate
companies and their respective directors, officers, agents, servants
and employees (``Other Party Group'') as additional insured. All
policies shall contain provisions whereby the insurers waive all
rights of subrogation in accordance with the provisions of this LGIA
against the Other Party Group and provide thirty (30) Calendar Days
advance written notice to the Other Party Group prior to anniversary
date of cancellation or any material change in coverage or
condition.
18.3.6 The Commercial General Liability Insurance, Comprehensive
Automobile Liability Insurance and Excess Public Liability Insurance
policies shall contain provisions that specify that the policies are
primary and shall apply to such extent without consideration for
other policies separately carried and shall state that each insured
is provided coverage as though a separate policy had been issued to
each, except the insurer's liability shall not be increased beyond
the amount for which the insurer would have been liable had only one
insured been covered. Each Party shall be responsible for its
respective deductibles or retentions.
18.3.7 The Commercial General Liability Insurance, Comprehensive
Automobile Liability Insurance and Excess Public Liability Insurance
policies, if written on a Claims First Made Basis, shall be
maintained in full force and effect for two (2) years after
termination of this LGIA, which coverage may be in the form of tail
coverage or extended reporting period coverage if agreed by the
Parties.
18.3.8 The requirements contained herein as to the types and
limits of all insurance to be maintained by the Parties are not
intended to and shall not in any manner, limit or qualify the
liabilities and obligations assumed by the Parties under this LGIA.
18.3.9 Within ten (10) Business [d]Days following execution of
this LGIA, and as soon as practicable after the end of each fiscal
year or at the renewal of the insurance policy and in any event
within ninety (90) Calendar [d]Days thereafter, each Party shall
provide certification of all insurance required in this LGIA,
executed by each insurer or by an authorized representative of each
insurer.
18.3.10 Notwithstanding the foregoing, each Party may self-
insure to meet the minimum insurance requirements of Articles 18.3.2
through 18.3.8 to the extent it maintains a self-insurance program;
provided that, such Party's senior secured debt is rated at
investment grade or better by Standard & Poor's and that its self-
insurance program meets the minimum insurance requirements of
Articles 18.3.2 through 18.3.8. For any period of time that a
Party's senior secured debt is unrated by Standard & Poor's or is
rated at less than investment grade by Standard & Poor's, such Party
shall comply with the insurance requirements applicable to it under
Articles 18.3.2 through 18.3.9. In the event that a Party is
permitted to self-insure pursuant to this article, it shall notify
the other Party that it meets the requirements to self-insure and
that its self-insurance program meets the minimum insurance
requirements in a manner consistent with that specified in Article
18.3.9.
18.3.11 The Parties agree to report to each other in writing as
soon as practical all accidents or occurrences resulting in injuries
to any person, including death, and any property damage arising out
of this LGIA.
Article 19. Assignment
19.1 Assignment. This LGIA may be assigned by either Party only
with the written consent of the other; provided that either Party
may assign this LGIA without the consent of the other Party to any
Affiliate of the assigning Party with an equal or greater credit
rating and with the legal authority and operational ability to
satisfy the obligations of the assigning Party under this LGIA; and
provided further that Interconnection Customer shall have the right
to assign this LGIA, without the consent of Transmission Provider,
for collateral security purposes to aid in providing financing for
the Large Generating Facility, provided that Interconnection
Customer will promptly notify Transmission Provider of any such
assignment. Any financing arrangement entered into by
Interconnection Customer pursuant to this article will provide that
prior to or upon the exercise of the secured party's, trustee's or
mortgagee's assignment rights pursuant to said arrangement, the
secured creditor, the trustee or mortgagee will notify Transmission
Provider of the date and particulars of any such exercise of
assignment right(s), including providing [the] Transmission Provider
with proof that it meets the requirements of Articles 11.5 and 18.3.
Any attempted assignment that violates this article is void and
ineffective. Any assignment under this LGIA shall not relieve a
Party of its obligations, nor shall a Party's obligations be
enlarged, in whole or in part,
[[Page 27196]]
by reason thereof. Where required, consent to assignment will not be
unreasonably withheld, conditioned or delayed.
Article 20. Severability
20.1 Severability. If any provision in this LGIA is finally
determined to be invalid, void or unenforceable by any court or
other Governmental Authority having jurisdiction, such determination
shall not invalidate, void or make unenforceable any other
provision, agreement or covenant of this LGIA; provided that if
Interconnection Customer (or any third party, but only if such third
party is not acting at the direction of Transmission Provider) seeks
and obtains such a final determination with respect to any provision
of the Alternate Option (Article 5.1.2), or the Negotiated Option
(Article 5.1.4), then none of these provisions shall thereafter have
any force or effect and the Parties' rights and obligations shall be
governed solely by the Standard Option (Article 5.1.1).
Article 21. Comparability
21.1 Comparability. The Parties will comply with all applicable
comparability and code of conduct laws, rules and regulations, as
amended from time to time.
Article 22. Confidentiality
22.1 Confidentiality. Confidential Information shall include,
without limitation, all information relating to a Party's
technology, research and development, business affairs, and pricing,
and any information supplied by either of the Parties to the other
prior to the execution of this LGIA.
Information is Confidential Information only if it is clearly
designated or marked in writing as confidential on the face of the
document, or, if the information is conveyed orally or by
inspection, if the Party providing the information orally informs
the Party receiving the information that the information is
confidential.
If requested by either Party, the other Party shall provide in
writing, the basis for asserting that the information referred to in
this Article 22 warrants confidential treatment, and the requesting
Party may disclose such writing to the appropriate Governmental
Authority. Each Party shall be responsible for the costs associated
with affording confidential treatment to its information.
22.1.1 Term. During the term of this LGIA, and for a period of
three (3) years after the expiration or termination of this LGIA,
except as otherwise provided in this Article 22, each Party shall
hold in confidence and shall not disclose to any person Confidential
Information.
22.1.2 Scope. Confidential Information shall not include
information that the receiving Party can demonstrate: (1) is
generally available to the public other than as a result of a
disclosure by the receiving Party; (2) was in the lawful possession
of the receiving Party on a non-confidential basis before receiving
it from the disclosing Party; (3) was supplied to the receiving
Party without restriction by a third party, who, to the knowledge of
the receiving Party after due inquiry, was under no obligation to
the disclosing Party to keep such information confidential; (4) was
independently developed by the receiving Party without reference to
Confidential Information of the disclosing Party; (5) is, or
becomes, publicly known, through no wrongful act or omission of the
receiving Party or Breach of this LGIA; or (6) is required, in
accordance with Article 22.1.7 of the LGIA, Order of Disclosure, to
be disclosed by any Governmental Authority or is otherwise required
to be disclosed by law or subpoena, or is necessary in any legal
proceeding establishing rights and obligations under this LGIA.
Information designated as Confidential Information will no longer be
deemed confidential if the Party that designated the information as
confidential notifies the other Party that it no longer is
confidential.
22.1.3 Release of Confidential Information. Neither Party shall
release or disclose Confidential Information to any other person,
except to its Affiliates (limited by the Standards of Conduct
requirements), subcontractors, employees, consultants, or to parties
who may be or considering providing financing to or equity
participation with Interconnection Customer, or to potential
purchasers or assignees of Interconnection Customer, on a need-to-
know basis in connection with this LGIA, unless such person has
first been advised of the confidentiality provisions of this Article
22 and has agreed to comply with such provisions. Notwithstanding
the foregoing, a Party providing Confidential Information to any
person shall remain primarily responsible for any release of
Confidential Information in contravention of this Article 22.
22.1.4 Rights. Each Party retains all rights, title, and
interest in the Confidential Information that each Party discloses
to the other Party. The disclosure by each Party to the other Party
of Confidential Information shall not be deemed a waiver by either
Party or any other person or entity of the right to protect the
Confidential Information from public disclosure.
22.1.5 No Warranties. By providing Confidential Information,
neither Party makes any warranties or representations as to its
accuracy or completeness. In addition, by supplying Confidential
Information, neither Party obligates itself to provide any
particular information or Confidential Information to the other
Party nor to enter into any further agreements or proceed with any
other relationship or joint venture.
22.1.6 Standard of Care. Each Party shall use at least the same
standard of care to protect Confidential Information it receives as
it uses to protect its own Confidential Information from
unauthorized disclosure, publication or dissemination. Each Party
may use Confidential Information solely to fulfill its obligations
to the other Party under this LGIA or its regulatory requirements.
22.1.7 Order of Disclosure. If a court or a Government Authority
or entity with the right, power, and apparent authority to do so
requests or requires either Party, by subpoena, oral deposition,
interrogatories, requests for production of documents,
administrative order, or otherwise, to disclose Confidential
Information, that Party shall provide the other Party with prompt
notice of such request(s) or requirement(s) so that the other Party
may seek an appropriate protective order or waive compliance with
the terms of this LGIA. Notwithstanding the absence of a protective
order or waiver, the Party may disclose such Confidential
Information which, in the opinion of its counsel, the Party is
legally compelled to disclose. Each Party will use Reasonable
Efforts to obtain reliable assurance that confidential treatment
will be accorded any Confidential Information so furnished.
22.1.8 Termination of Agreement. Upon termination of this LGIA
for any reason, each Party shall, within ten (10) Calendar Days of
receipt of a written request from the other Party, use Reasonable
Efforts to destroy, erase, or delete (with such destruction,
erasure, and deletion certified in writing to the other Party) or
return to the other Party, without retaining copies thereof, any and
all written or electronic Confidential Information received from the
other Party.
22.1.9 Remedies. The Parties agree that monetary damages would
be inadequate to compensate a Party for the other Party's Breach of
its obligations under this Article 22. Each Party accordingly agrees
that the other Party shall be entitled to equitable relief, by way
of injunction or otherwise, if the first Party Breaches or threatens
to Breach its obligations under this Article 22, which equitable
relief shall be granted without bond or proof of damages, and the
receiving Party shall not plead in defense that there would be an
adequate remedy at law. Such remedy shall not be deemed an exclusive
remedy for the Breach of this Article 22, but shall be in addition
to all other remedies available at law or in equity. The Parties
further acknowledge and agree that the covenants contained herein
are necessary for the protection of legitimate business interests
and are reasonable in scope. No Party, however, shall be liable for
indirect, incidental, or consequential or punitive damages of any
nature or kind resulting from or arising in connection with this
Article 22.
22.1.10 Disclosure to FERC, its Staff, or a State.
Notwithstanding anything in this Article 22 to the contrary, and
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of
an investigation or otherwise, requests information from one of the
Parties that is otherwise required to be maintained in confidence
pursuant to this LGIA, the Party shall provide the requested
information to FERC or its staff, within the time provided for in
the request for information. In providing the information to FERC or
its staff, the Party must, consistent with 18 CFR 388.112, request
that the information be treated as confidential and non-public by
FERC and its staff and that the information be withheld from public
disclosure. Parties are prohibited from notifying the other Party to
this LGIA prior to the release of the Confidential Information to
FERC or its staff. The Party shall notify the other Party to the
LGIA when it is notified by FERC or its staff that a request to
release Confidential Information has been received by FERC, at which
time either of the Parties may respond before such information would
be made public, pursuant to 18 CFR 388.112. Requests from a state
regulatory body conducting a
[[Page 27197]]
confidential investigation shall be treated in a similar manner if
consistent with the applicable state rules and regulations.
22.1.11 Subject to the exception in Article 22.1.10, any
information that a Party claims is competitively sensitive,
commercial or financial information under this LGIA (``Confidential
Information'') shall not be disclosed by the other Party to any
person not employed or retained by the other Party, except to the
extent disclosure is (i) required by law; (ii) reasonably deemed by
the disclosing Party to be required to be disclosed in connection
with a dispute between or among the Parties, or the defense of
litigation or dispute; (iii) otherwise permitted by consent of the
other Party, such consent not to be unreasonably withheld; or (iv)
necessary to fulfill its obligations under this LGIA or as a
transmission service provider or a Balancing Authority Area operator
including disclosing the Confidential Information to an RTO or ISO
or to a regional or national reliability organization. The Party
asserting confidentiality shall notify the other Party in writing of
the information it claims is confidential. Prior to any disclosures
of the other Party's Confidential Information under this
subparagraph, or if any third party or Governmental Authority makes
any request or demand for any of the information described in this
subparagraph, the disclosing Party agrees to promptly notify the
other Party in writing and agrees to assert confidentiality and
cooperate with the other Party in seeking to protect the
Confidential Information from public disclosure by confidentiality
agreement, protective order or other reasonable measures.
Article 23. Environmental Releases
23.1 Each Party shall notify the other Party, first orally and
then in writing, of the release of any Hazardous Substances, any
asbestos or lead abatement activities, or any type of remediation
activities related to the Large Generating Facility or the
Interconnection Facilities, each of which may reasonably be expected
to affect the other Party. The notifying Party shall: (i) provide
the notice as soon as practicable, provided such Party makes a good
faith effort to provide the notice no later than twenty-four hours
after such Party becomes aware of the occurrence; and (ii) promptly
furnish to the other Party copies of any publicly available reports
filed with any Governmental Authorities addressing such events.
Article 24. Information Requirements
24.1 Information Acquisition. Transmission Provider and
Interconnection Customer shall submit specific information regarding
the electrical characteristics of their respective facilities to
each other as described below and in accordance with Applicable
Reliability Standards.
24.2 Information Submission by Transmission Provider. The
initial information submission by Transmission Provider shall occur
no later than one hundred eighty (180) Calendar Days prior to Trial
Operation and shall include Transmission System information
necessary to allow Interconnection Customer to select equipment and
meet any system protection and stability requirements, unless
otherwise agreed to by the Parties. On a monthly basis Transmission
Provider shall provide Interconnection Customer a status report on
the construction and installation of Transmission Provider's
Interconnection Facilities and Network Upgrades, including, but not
limited to, the following information: (1) progress to date; (2) a
description of the activities since the last report (3) a
description of the action items for the next period; and (4) the
delivery status of equipment ordered.
24.3 Updated Information Submission by Interconnection Customer.
The updated information submission by Interconnection Customer,
including manufacturer information, shall occur no later than one
hundred eighty (180) Calendar Days prior to the Trial Operation.
Interconnection Customer shall submit a completed copy of the Large
Generating Facility data requirements contained in Appendix 1 to the
LGIP. It shall also include any additional information provided to
Transmission Provider for the Cluster Study and Facilities Study.
Information in this submission shall be the most current Large
Generating Facility design or expected performance data. Information
submitted for stability models shall be compatible with Transmission
Provider standard models. If there is no compatible model,
Interconnection Customer will work with a consultant mutually agreed
to by the Parties to develop and supply a standard model and
associated information.
If Interconnection Customer's data is materially different from
what was originally provided to Transmission Provider pursuant to
the Interconnection Study Agreement between Transmission Provider
and Interconnection Customer, then Transmission Provider will
conduct appropriate studies to determine the impact on Transmission
Provider Transmission System based on the actual data submitted
pursuant to this Article 24.3. Interconnection Customer shall not
begin Trial Operation until such studies are completed.
24.4 Information Supplementation. Prior to the Operation Date,
the Parties shall supplement their information submissions described
above in this Article 24 with any and all ``as-built'' Large
Generating Facility information or ``as-tested'' performance
information that differs from the initial submissions or,
alternatively, written confirmation that no such differences exist.
[The] Interconnection Customer shall conduct tests on the Large
Generating Facility as required by Good Utility Practice such as an
open circuit ``step voltage'' test on the Large Generating Facility
to verify proper operation of the Large Generating Facility's
automatic voltage regulator.
Unless otherwise agreed, the test conditions shall include: (1)
Large Generating Facility at synchronous speed; (2) automatic
voltage regulator on and in voltage control mode; and (3) a five
percent change in Large Generating Facility terminal voltage
initiated by a change in the voltage regulators reference voltage.
Interconnection Customer shall provide validated test recordings
showing the responses of Large Generating Facility terminal and
field voltages. In the event that direct recordings of these
voltages is impractical, recordings of other voltages or currents
that mirror the response of the Large Generating Facility's terminal
or field voltage are acceptable if information necessary to
translate these alternate quantities to actual Large Generating
Facility terminal or field voltages is provided. Large Generating
Facility testing shall be conducted and results provided to
Transmission Provider for each individual generating unit in a
station.
Subsequent to the Operation Date, Interconnection Customer shall
provide Transmission Provider any information changes due to
equipment replacement, repair, or adjustment. Transmission Provider
shall provide Interconnection Customer any information changes due
to equipment replacement, repair or adjustment in the directly
connected substation or any adjacent Transmission Provider-owned
substation that may affect Interconnection Customer's
Interconnection Facilities equipment ratings, protection or
operating requirements. The Parties shall provide such information
no later than thirty (30) Calendar Days after the date of the
equipment replacement, repair or adjustment.
Article 25. Information Access and Audit Rights
25.1 Information Access. Each Party (the ``disclosing Party'')
shall make available to the other Party information that is in the
possession of the disclosing Party and is necessary in order for the
other Party to: (i) verify the costs incurred by the disclosing
Party for which the other Party is responsible under this LGIA; and
(ii) carry out its obligations and responsibilities under this
LGIA. The Parties shall not use such information for purposes other
than those set forth in this Article 25.1 and to enforce their
rights under this LGIA.
25.2 Reporting of Non-Force Majeure Events. Each Party (the
``notifying Party'') shall notify the other Party when the notifying
Party becomes aware of its inability to comply with the provisions
of this LGIA for a reason other than a Force Majeure event. The
Parties agree to cooperate with each other and provide necessary
information regarding such inability to comply, including the date,
duration, reason for the inability to comply, and corrective actions
taken or planned to be taken with respect to such inability to
comply. Notwithstanding the foregoing, notification, cooperation or
information provided under this article shall not entitle the Party
receiving such notification to allege a cause for anticipatory
breach of this LGIA.
25.3 Audit Rights. Subject to the requirements of
confidentiality under Article 22 of this LGIA, each Party shall have
the right, during normal business hours, and upon prior reasonable
notice to the other Party, to audit at its own expense the other
Party's accounts and records pertaining to either Party's
performance or either Party's satisfaction of obligations under this
LGIA. Such audit rights shall include audits of the other Party's
costs, calculation of invoiced amounts, Transmission Provider's
efforts to allocate responsibility for the provision of
[[Page 27198]]
reactive support to the Transmission System, Transmission Provider's
efforts to allocate responsibility for interruption or reduction of
generation on the Transmission System, and each Party's actions in
an Emergency Condition. Any audit authorized by this article shall
be performed at the offices where such accounts and records are
maintained and shall be limited to those portions of such accounts
and records that relate to each Party's performance and satisfaction
of obligations under this LGIA. Each Party shall keep such accounts
and records for a period equivalent to the audit rights periods
described in Article 25.4.
25.4 Audit Rights Periods.
25.4.1 Audit Rights Period for Construction-Related Accounts and
Records. Accounts and records related to the design, engineering,
procurement, and construction of Transmission Provider's
Interconnection Facilities and Network Upgrades shall be subject to
audit for a period of twenty-four months following Transmission
Provider's issuance of a final invoice in accordance with Article
12.2.
25.4.2 Audit Rights Period for All Other Accounts and Records.
Accounts and records related to either Party's performance or
satisfaction of all obligations under this LGIA other than those
described in Article 25.4.1 shall be subject to audit as follows:
(i) for an audit relating to cost obligations, the applicable audit
rights period shall be twenty-four months after the auditing Party's
receipt of an invoice giving rise to such cost obligations; and (ii)
for an audit relating to all other obligations, the applicable audit
rights period shall be twenty-four months after the event for which
the audit is sought.
25.5 Audit Results. If an audit by a Party determines that an
overpayment or an underpayment has occurred, a notice of such
overpayment or underpayment shall be given to the other Party
together with those records from the audit which support such
determination.
Article 26. Subcontractors
26.1 General. Nothing in this LGIA shall prevent a Party from
utilizing the services of any subcontractor as it deems appropriate
to perform its obligations under this LGIA; provided, however, that
each Party shall require its subcontractors to comply with all
applicable terms and conditions of this LGIA in providing such
services and each Party shall remain primarily liable to the other
Party for the performance of such subcontractor.
26.2 Responsibility of Principal. The creation of any
subcontract relationship shall not relieve the hiring Party of any
of its obligations under this LGIA. The hiring Party shall be fully
responsible to the other Party for the acts or omissions of any
subcontractor the hiring Party hires as if no subcontract had been
made; provided, however, that in no event shall Transmission
Provider be liable for the actions or inactions of Interconnection
Customer or its subcontractors with respect to obligations of
Interconnection Customer under Article 5 of this LGIA. Any
applicable obligation imposed by this LGIA upon the hiring Party
shall be equally binding upon, and shall be construed as having
application to, any subcontractor of such Party.
26.3 No Limitation by Insurance. The obligations under this
Article 26 will not be limited in any way by any limitation of
subcontractor's insurance.
Article 27. Disputes
27.1 Submission. In the event either Party has a dispute, or
asserts a claim, that arises out of or in connection with this LGIA
or its performance, such Party (the ``disputing Party'') shall
provide the other Party with written notice of the dispute or claim
(``Notice of Dispute''). Such disp ute or claim shall be referred to
a designated senior representative of each Party for resolution on
an informal basis as promptly as practicable after receipt of the
Notice of Dispute by the other Party. In the event the designated
representatives are unable to resolve the claim or dispute through
unassisted or assisted negotiations within thirty (30) Calendar Days
of the other Party's receipt of the Notice of Dispute, such claim or
dispute may, upon mutual agreement of the Parties, be submitted to
arbitration and resolved in accordance with the arbitration
procedures set forth below. In the event the Parties do not agree to
submit such claim or dispute to arbitration, each Party may exercise
whatever rights and remedies it may have in equity or at law
consistent with the terms of this LGIA.
27.2 External Arbitration Procedures. Any arbitration initiated
under this LGIA shall be conducted before a single neutral
arbitrator appointed by the Parties. If the Parties fail to agree
upon a single arbitrator within ten (10) Calendar Days of the
submission of the dispute to arbitration, each Party shall choose
one arbitrator who shall sit on a three-member arbitration panel.
The two arbitrators so chosen shall within twenty (20) Calendar Days
select a third arbitrator to chair the arbitration panel. In either
case, the arbitrators shall be knowledgeable in electric utility
matters, including electric transmission and bulk power issues, and
shall not have any current or past substantial business or financial
relationships with any party to the arbitration (except prior
arbitration). The arbitrator(s) shall provide each of the Parties an
opportunity to be heard and, except as otherwise provided herein,
shall conduct the arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association
(``Arbitration Rules'') and any applicable FERC regulations or RTO
rules; provided, however, in the event of a conflict between the
Arbitration Rules and the terms of this Article 27, the terms of
this Article 27 shall prevail.
27.3 Arbitration Decisions. Unless otherwise agreed by the
Parties, the arbitrator(s) shall render a decision within ninety
(90) Calendar Days of appointment and shall notify the Parties in
writing of such decision and the reasons therefor. The arbitrator(s)
shall be authorized only to interpret and apply the provisions of
this LGIA and shall have no power to modify or change any provision
of this Agreement in any manner. The decision of the arbitrator(s)
shall be final and binding upon the Parties, and judgment on the
award may be entered in any court having jurisdiction. The decision
of the arbitrator(s) may be appealed solely on the grounds that the
conduct of the arbitrator(s), or the decision itself, violated the
standards set forth in the Federal Arbitration Act or the
Administrative Dispute Resolution Act. The final decision of the
arbitrator must also be filed with FERC if it affects jurisdictional
rates, terms and conditions of service, Interconnection Facilities,
or Network Upgrades.
27.4 Costs. Each Party shall be responsible for its own costs
incurred during the arbitration process and for the following costs,
if applicable: (1) the cost of the arbitrator chosen by the Party to
sit on the three member panel and one half of the cost of the third
arbitrator chosen; or (2) one half the cost of the single arbitrator
jointly chosen by the Parties.
Article 28. Representations, Warranties, and Covenants
28.1 General. Each Party makes the following representations,
warranties and covenants:
28.1.1 Good Standing. Such Party is duly organized, validly
existing and in good standing under the laws of the state in which
it is organized, formed, or incorporated, as applicable; that it is
qualified to do business in the state or states in which the Large
Generating Facility, Interconnection Facilities and Network Upgrades
owned by such Party, as applicable, are located; and that it has the
corporate power and authority to own its properties, to carry on its
business as now being conducted and to enter into this LGIA and
carry out the transactions contemplated hereby and perform and carry
out all covenants and obligations on its part to be performed under
and pursuant to this LGIA.
28.1.2 Authority. Such Party has the right, power and authority
to enter into this LGIA, to become a Party hereto and to perform its
obligations hereunder. This LGIA is a legal, valid and binding
obligation of such Party, enforceable against such Party in
accordance with its terms, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and by
general equitable principles (regardless of whether enforceability
is sought in a proceeding in equity or at law).
28.1.3 No Conflict. The execution, delivery and performance of
this LGIA does not violate or conflict with the organizational or
formation documents, or bylaws or operating agreement, of such
Party, or any judgment, license, permit, order, material agreement
or instrument applicable to or binding upon such Party or any of its
assets.
28.1.4 Consent and Approval. Such Party has sought or obtained,
or, in accordance with this LGIA will seek or obtain, each consent,
approval, authorization, order, or acceptance by any Governmental
Authority in connection with the execution, delivery and performance
of this LGIA, and it will provide to any Governmental Authority
notice of any actions under this LGIA that are required by
Applicable Laws and Regulations.
[[Page 27199]]
Article 29. Joint Operating Committee
29.1 Joint Operating Committee. Except in the case of ISOs and
RTOs, Transmission Provider shall constitute a Joint Operating
Committee to coordinate operating and technical considerations of
Interconnection Service. At least six (6) months prior to the
expected Initial Synchronization Date, Interconnection Customer and
Transmission Provider shall each appoint one representative and one
alternate to the Joint Operating Committee. Each Interconnection
Customer shall notify Transmission Provider of its appointment in
writing. Such appointments may be changed at any time by similar
notice. The Joint Operating Committee shall meet as necessary, but
not less than once each calendar year, to carry out the duties set
forth herein. The Joint Operating Committee shall hold a meeting at
the request of either Party, at a time and place agreed upon by the
representatives. The Joint Operating Committee shall perform all of
its duties consistent with the provisions of this LGIA. Each Party
shall cooperate in providing to the Joint Operating Committee all
information required in the performance of the Joint Operating
Committee's duties. All decisions and agreements, if any, made by
the Joint Operating Committee, shall be evidenced in writing. The
duties of the Joint Operating Committee shall include the following:
29.1.1 Establish data requirements and operating record
requirements.
29.1.2 Review the requirements, standards, and procedures for
data acquisition equipment, protective equipment, and any other
equipment or software.
29.1.3 Annually review the one (1) year forecast of maintenance
and planned outage schedules of Transmission Provider's and
Interconnection Customer's facilities at the Point of
Interconnection.
29.1.4 Coordinate the scheduling of maintenance and planned
outages on the Interconnection Facilities, the Large Generating
Facility and other facilities that impact the normal operation of
the interconnection of the Large Generating Facility to the
Transmission System.
29.1.5 Ensure that information is being provided by each Party
regarding equipment availability.
29.1.6 Perform such other duties as may be conferred upon it by
mutual agreement of the Parties.
Article 30. Miscellaneous
30.1 Binding Effect. This LGIA and the rights and obligations
hereof, shall be binding upon and shall inure to the benefit of the
successors and assigns of the Parties hereto.
30.2 Conflicts. In the event of a conflict between the body of
this LGIA and any attachment, appendices or exhibits hereto, the
terms and provisions of the body of this LGIA shall prevail and be
deemed the final intent of the Parties.
30.3 Rules of Interpretation. This LGIA, unless a clear contrary
intention appears, shall be construed and interpreted as follows:
(1) the singular number includes the plural number and vice versa;
(2) reference to any person includes such person's successors and
assigns but, in the case of a Party, only if such successors and
assigns are permitted by this LGIA, and reference to a person in a
particular capacity excludes such person in any other capacity or
individually; (3) reference to any agreement (including this LGIA),
document, instrument or tariff means such agreement, document,
instrument, or tariff as amended or modified and in effect from time
to time in accordance with the terms thereof and, if applicable, the
terms hereof; (4) reference to any Applicable Laws and Regulations
means such Applicable Laws and Regulations as amended, modified,
codified, or reenacted, in whole or in part, and in effect from time
to time, including, if applicable, rules and regulations promulgated
thereunder; (5) unless expressly stated otherwise, reference to any
Article, Section or Appendix means such Article of this LGIA or such
Appendix to this LGIA, or such Section to the LGIP or such Appendix
to the LGIP, as the case may be; (6) ``hereunder'', ``hereof'',
``herein'', ``hereto'' and words of similar import shall be deemed
references to this LGIA as a whole and not to any particular Article
or other provision hereof or thereof; (7) ``including'' (and with
correlative meaning ``include'') means including without limiting
the generality of any description preceding such term; and (8)
relative to the determination of any period of time, ``from'' means
``from and including,'' ``to'' means ``to but excluding'' and
``through'' means ``through and including.''
30.4 Entire Agreement. This LGIA, including all Appendices and
Schedules attached hereto, constitutes the entire agreement between
the Parties with reference to the subject matter hereof, and
supersedes all prior and contemporaneous understandings or
agreements, oral or written, between the Parties with respect to the
subject matter of this LGIA. There are no other agreements,
representations, warranties, or covenants which constitute any part
of the consideration for, or any condition to, either Party's
compliance with its obligations under this LGIA.
30.5 No Third Party Beneficiaries. This LGIA is not intended to
and does not create rights, remedies, or benefits of any character
whatsoever in favor of any persons, corporations, associations, or
entities other than the Parties, and the obligations herein assumed
are solely for the use and benefit of the Parties, their successors
in interest and, where permitted, their assigns.
30.6 Waiver. The failure of a Party to this LGIA to insist, on
any occasion, upon strict performance of any provision of this LGIA
will not be considered a waiver of any obligation, right, or duty
of, or imposed upon, such Party.
Any waiver at any time by either Party of its rights with
respect to this LGIA shall not be deemed a continuing waiver or a
waiver with respect to any other failure to comply with any other
obligation, right, duty of this LGIA. Termination or Default of this
LGIA for any reason by Interconnection Customer shall not constitute
a waiver of Interconnection Customer's legal rights to obtain an
interconnection from Transmission Provider. Any waiver of this LGIA
shall, if requested, be provided in writing.
30.7 Headings. The descriptive headings of the various Articles
of this LGIA have been inserted for convenience of reference only
and are of no significance in the interpretation or construction of
this LGIA.
30.8 Multiple Counterparts. This LGIA may be executed in two or
more counterparts, each of which is deemed an original but all
constitute one and the same instrument.
30.9 Amendment. The Parties may by mutual agreement amend this
LGIA by a written instrument duly executed by the Parties.
30.10 Modification by the Parties. The Parties may by mutual
agreement amend the Appendices to this LGIA by a written instrument
duly executed by the Parties. Such amendment shall become effective
and a part of this LGIA upon satisfaction of all Applicable Laws and
Regulations.
30.11 Reservation of Rights. Transmission Provider shall have
the right to make a unilateral filing with FERC to modify this LGIA
with respect to any rates, terms and conditions, charges,
classifications of service, rule or regulation under section 205 or
any other applicable provision of the Federal Power Act and FERC's
rules and regulations thereunder, and Interconnection Customer shall
have the right to make a unilateral filing with FERC to modify this
LGIA pursuant to section 206 or any other applicable provision of
the Federal Power Act and FERC's rules and regulations thereunder;
provided that each Party shall have the right to protest any such
filing by the other Party and to participate fully in any proceeding
before FERC in which such modifications may be considered. Nothing
in this LGIA shall limit the rights of the Parties or of FERC under
sections 205 or 206 of the Federal Power Act and FERC's rules and
regulations thereunder, except to the extent that the Parties
otherwise mutually agree as provided herein.
30.12 No Partnership. This LGIA shall not be interpreted or
construed to create an association, joint venture, agency
relationship, or partnership between the Parties or to impose any
partnership obligation or partnership liability upon either Party.
Neither Party shall have any right, power, or authority to enter
into any agreement or undertaking for, or act on behalf of, or to
act as or be an agent or representative of, or to otherwise bind,
the other Party.
In witness whereof, the Parties have executed this LGIA in
duplicate originals, each of which shall constitute and be an
original effective Agreement between the Parties.
{Insert name of Transmission Provider or Transmission Owner, if
applicable{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time}
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
[[Page 27200]]
Appendix A to LGIA
Interconnection Facilities, Network Upgrades and Distribution Upgrades
1. Interconnection Facilities:
(a) {insert Interconnection Customer's Interconnection
Facilities{time} :
(b) {insert Transmission Provider's Interconnection
Facilities{time} :
2. Network Upgrades:
(a) {insert Stand Alone Network Upgrades{time} :
(b) {insert Substation Network Upgrades{time} :
(c) {insert System Network Upgrades{time} :
3. Distribution Upgrades:
Appendix B to LGIA
Milestones
Site Control
Check box if applicable { {time}
Interconnection Customer with qualifying regulatory limitations
must demonstrate 100% Site Control by {Transmission Provider to
insert date one hundred eighty (180) Calendar [d]Days from the
effective date of this LGIA{time} or the LGIA may be terminated per
Article 17 (Default) of this LGIA and [the] Interconnection Customer
may be subject to Withdrawal Penalties per Section 3.7.1.1 of [the]
Transmission Provider's LGIP (Calculation of the Withdrawal
Penalty).
Appendix C to LGIA
Interconnection Details
Appendix D to LGIA
Security Arrangements Details
Infrastructure security of Transmission System equipment and
operations and control hardware and software is essential to ensure
day-to-day Transmission System reliability and operational security.
FERC will expect all Transmission Providers, market participants,
and Interconnection Customers interconnected to the Transmission
System to comply with the recommendations offered by the President's
Critical Infrastructure Protection Board and, eventually, best
practice recommendations from the electric reliability authority.
All public utilities will be expected to meet basic standards for
system infrastructure and operational security, including physical,
operational, and cyber-security practices.
Appendix E to LGIA
Commercial Operation Date
This Appendix E is a part of the LGIA between Transmission
Provider and Interconnection Customer.
{Date{time}
{Transmission Provider Address{time}
Re: ____ Large Generating Facility
Dear ____:
On {Date{time} {Interconnection Customer{time} has completed
Trial Operation of Unit No. __. This letter confirms that
{Interconnection Customer{time} commenced Commercial Operation of
Unit No. __ at the Large Generating Facility, effective as of {Date
plus one day{time} .
Thank you.
{Signature{time}
{Interconnection Customer Representative{time}
Appendix F to LGIA
Addresses for Delivery of Notices and Billings
Notices:[.]
Transmission Provider:
{To be supplied.{time}
Interconnection Customer:
{To be supplied.{time}
Billings and Payments:
Transmission Provider:
{To be supplied.{time}
Interconnection Customer:
{To be supplied.{time}
Alternative Forms of Delivery of Notices (telephone, facsimile
or email):
Transmission Provider:
{To be supplied.{time}
Interconnection Customer:
{To be supplied.{time}
Appendix G
Interconnection Requirements for a Wind Generating Plant
Appendix G sets forth requirements and provisions specific to a
wind generating plant or a Generating Facility that contains a wind
generating plant. All other requirements of this LGIA continue to
apply to wind generating plant interconnections.
A. Technical Standards Applicable to a Wind Generating Plant
i. Low Voltage Ride-Through (LVRT) Capability
A wind generating plant shall be able to remain online during
voltage disturbances up to the time periods and associated voltage
levels set forth in the standard below. The LVRT standard provides
for a transition period standard and a post-transition period
standard.
Transition Period LVRT Standard
The transition period standard applies to wind generating plants
subject to FERC Order 661 that have either: (i) interconnection
agreements signed and filed with the Commission, filed with the
Commission in unexecuted form, or filed with the Commission as non-
conforming agreements between January 1, 2006 and December 31, 2006,
with a scheduled in-service date no later than December 31, 2007, or
(ii) wind generating turbines subject to a wind turbine procurement
contract executed prior to December 31, 2005, for delivery through
2007.
1. Wind generating plants are required to remain in-service
during three-phase faults with normal clearing (which is a time
period of approximately 4-9 cycles) and single line to ground faults
with delayed clearing, and subsequent post-fault voltage recovery to
prefault voltage unless clearing the fault effectively disconnects
the generator from the system. The clearing time requirement for a
three-phase fault will be specific to the wind generating plant
substation location, as determined by and documented by [the]
transmission provider. The maximum clearing time the wind generating
plant shall be required to withstand for a three-phase fault shall
be 9 cycles at a voltage as low as 0.15 p.u., as measured at the
high side of the wind generating plant step-up transformer (i.e. the
transformer that steps the voltage up to the transmission
interconnection voltage or ``GSU''), after which, if the fault
remains following the location-specific normal clearing time for
three-phase faults, the wind generating plant may disconnect from
the transmission system.
2. This requirement does not apply to faults that would occur
between the wind generator terminals and the high side of the GSU or
to faults that would result in a voltage lower than 0.15 per unit on
the high side of the GSU serving the facility.
3. Wind generating plants may be tripped after the fault period
if this action is intended as part of a special protection system.
4. Wind generating plants may meet the LVRT requirements of this
standard by the performance of the generators or by installing
additional equipment (e.g., Static VAr Compensator, etc.) within the
wind generating plant or by a combination of generator performance
and additional equipment.
5. Existing individual generator units that are, or have been,
interconnected to the network at the same location at the effective
date of the Appendix G LVRT
Standard are exempt from meeting the Appendix G LVRT Standard
for the remaining life of the existing generation equipment.
Existing individual generator units that are replaced are required
to meet the Appendix G LVRT Standard.
Post-Transition Period LVRT Standard
All wind generating plants subject to FERC Order No. 661 and not
covered by the transition period described above must meet the
following requirements:
1. Wind generating plants are required to remain in-service
during three-phase faults with normal clearing (which is a time
period of approximately 4-9 cycles) and single line to ground faults
with delayed clearing, and subsequent post-fault voltage recovery to
prefault voltage unless clearing the fault effectively disconnects
the generator from the system. The clearing time requirement for a
three-phase fault will be specific to the wind generating plant
substation location, as determined by and documented by [the]
transmission provider. The maximum clearing time the wind generating
plant shall be required to withstand for a three-phase fault shall
be 9 cycles after which, if the fault remains following the
location-specific normal clearing time for three-phase faults, the
wind generating plant may disconnect from the transmission system. A
wind generating plant shall remain interconnected during such a
fault on the transmission system for a voltage level as low as zero
volts, as measured at the high voltage side of the wind GSU.
2. This requirement does not apply to faults that would occur
between the wind generator terminals and the high side of the GSU.
3. Wind generating plants may be tripped after the fault period
if this action is intended as part of a special protection system.
4. Wind generating plants may meet the LVRT requirements of this
standard by the performance of the generators or by installing
[[Page 27201]]
additional equipment (e.g., Static VAR Compensator) within the wind
generating plant or by a combination of generator performance and
additional equipment.
Existing individual generator units that are, or have been,
interconnected to the network at the same location at the effective
date of the Appendix G LVRT Standard are exempt from meeting the
Appendix G LVRT Standard for the remaining life of the existing
generation equipment. Existing individual generator units that are
replaced are required to meet the Appendix G LVRT Standard.
ii. Power Factor Design Criteria (Reactive Power)
The following reactive power requirements apply only to a newly
interconnecting wind generating plant that has executed a Facilities
Study Agreement as of the effective date of the Final Rule
establishing the reactive power requirements for non-synchronous
generators in [Section]article 9.6.1 of this LGIA (Order No. 827). A
wind generating plant to which this provision applies shall maintain
a power factor within the range of 0.95 leading to 0.95 lagging,
measured at the Point of Interconnection as defined in this LGIA, if
[the] Transmission Provider's Cluster Study shows that such a
requirement is necessary to ensure safety or reliability. The power
factor range standard can be met by using, for example, power
electronics designed to supply this level of reactive capability
[606] (taking into account any limitations due to voltage level,
real power output, etc.) or fixed and switched capacitors if agreed
to by [the] Transmission Provider, or a combination of the two.
[The] Interconnection Customer shall not disable power factor
equipment while the wind plant is in operation. Wind plants shall
also be able to provide sufficient dynamic voltage support in lieu
of the power system stabilizer and automatic voltage regulation at
the generator excitation system if the [System Impact] Cluster Study
shows this to be required for system safety or reliability.
iii. Supervisory Control and Data Acquisition (SCADA) Capability
The wind plant shall provide SCADA capability to transmit data
and receive instructions from [the] Transmission Provider to protect
system reliability. [The] Transmission Provider and the wind plant
Interconnection Customer shall determine what SCADA information is
essential for the proposed wind plant, taking into account the size
of the plant and its characteristics, location, and importance in
maintaining generation resource adequacy and transmission system
reliability in its area.
Appendix H to LGIA
Operating Assumptions for Generating Facility
Check box if applicable { {time}
Operating Assumptions:
{insert operating assumptions that reflect the charging behavior
of the Generating Facility that includes at least one electric
storage resource{time}
Appendix E: Changes to Pro Forma SGIP
Small Generator Interconnection Procedures (SGIP)
(For Generating Facilities No Larger Than 20 MW)
Table of Contents
Section 1. Application
1.1 Applicability
1.2 Pre-Application
1.3 Interconnection Request
1.4 Modification of the Interconnection Request
1.5 Site Control
1.6 Queue Position
1.7 Interconnection Requests Submitted Prior to the Effective
Date of the SGIP
Section 2. Fast Track Process
2.1 Applicability
2.2 Initial Review
2.3 Customer Options Meeting
2.4 Supplemental Review
Section 3. Study Process
3.1 Applicability
3.2 Scoping Meeting
3.3 Feasibility Study
3.4 System Impact Study
3.5 Facilities Study
Section 4. Provisions that Apply to All Interconnection Requests
4.1 Reasonable Efforts
4.2 Disputes
4.3 Interconnection Metering
4.4 Commissioning
4.5. Confidentiality
4.6 Comparability
4.7 Record Retention
4.8 Interconnection Agreement
4.9 Coordination with Affected Systems
4.10 Capacity of the Small Generating Facility
Attachment 1--Glossary of Terms
Attachment 2--Small Generator Interconnection Request
Attachment 3--Certification Codes and Standards
Attachment 4--Certification of Small Generator Equipment Packages
Attachment 5--Application, Procedures, and Terms and Conditions for
Interconnecting a Certified Invertor-Based Small Generating Facility
No Larger than 10 kW (``10 kW Inverter Process'').
Attachment 6--Feasibility Study Agreement
Attachment 7--System Impact Study Agreement
Attachment 8--Facilities Study Agreement
Section 1. Application
1.1 Applicability
1.1.1 A request to interconnect a certified Small Generating
Facility (See Attachments 3 and 4 for description of certification
criteria) to [the] Transmission Provider's Distribution System shall
be evaluated under the section 2 Fast Track Process if the
eligibility requirements of section 2.1 are met. A request to
interconnect a certified inverter-based Small Generating Facility no
larger than 10 kilowatts (kW) shall be evaluated under the
Attachment 5 10 kW Inverter Process. A request to interconnect a
Small Generating Facility no larger than 20 megawatts (MW) that does
not meet the eligibility requirements of section 2.1, or does not
pass the Fast Track Process or the 10 kW Inverter Process, shall be
evaluated under the section 3 Study Process. If [the]
Interconnection Customer wishes to interconnect its Small Generating
Facility using Network Resource Interconnection Service, it must do
so under the Standard Large Generator Interconnection Procedures and
execute the Standard Large Generator Interconnection Agreement.
1.1.2 Capitalized terms used herein shall have the meanings
specified in the Glossary of Terms in Attachment 1 or the body of
these procedures.
1.1.3 Neither these procedures nor the requirements included
hereunder apply to Small Generating Facilities interconnected or
approved for interconnection prior to sixty (60) Business Days after
the effective date of these procedures.
1.1.4 Prior to submitting its Interconnection Request
(Attachment 2), [the] Interconnection Customer may ask [the]
Transmission Provider's interconnection contact employee or office
whether the proposed interconnection is subject to these procedures.
[The] Transmission Provider shall respond within fifteen (15)
Business Days.
1.1.5 Infrastructure security of electric system equipment and
operations and control hardware and software is essential to ensure
day-to-day reliability and operational security. The Federal Energy
Regulatory Commission expects all Transmission Providers, market
participants, and Interconnection Customers interconnected with
electric systems to comply with the recommendations offered by the
President's Critical Infrastructure Protection Board and best
practice recommendations from the electric reliability authority.
All public utilities are expected to meet basic standards for
electric system infrastructure and operational security, including
physical, operational, and cyber-security practices.
1.1.6 References in these procedures to interconnection
agreement are to the Small Generator Interconnection Agreement
(SGIA).
1.2 Pre-Application
1.2.1 [The] Transmission Provider shall designate an employee or
office from which information on the application process and on an
Affected System can be obtained through informal requests from [the]
Interconnection Customer presenting a proposed project for a
specific site. The name, telephone number, and email address of such
contact employee or office shall be made available on [the]
Transmission Provider's internet website. Electric system
information provided to [the] Interconnection Customer should
include relevant system studies, interconnection studies, and other
materials useful to an understanding of an interconnection at a
particular point on [the] Transmission Provider's Transmission
System, to the extent such provision does not violate
confidentiality provisions of prior agreements or critical
infrastructure requirements. [The] Transmission Provider shall
comply with reasonable requests for such information.
1.2.2 In addition to the information described in section 1.2.1,
which may be
[[Page 27202]]
provided in response to an informal request, an Interconnection
Customer may submit a formal written request form along with a non-
refundable fee of $300 for a pre-application report on a proposed
project at a specific site. [The] Transmission Provider shall
provide the pre-application data described in section 1.2.3 to [the]
Interconnection Customer within twenty (20) Business Days of receipt
of the completed request form and payment of the $300 fee. The pre-
application report produced by [the] Transmission Provider is non-
binding, does not confer any rights, and [the] Interconnection
Customer must still successfully apply to interconnect to [the]
Transmission Provider's system. The written pre-application report
request form shall include the information in sections 1.2.2.1
through 1.2.2.8 below to clearly and sufficiently identify the
location of the proposed Point of Interconnection.
1.2.2.1 Project contact information, including name, address,
phone number, and email address.
1.2.2.2 Project location (street address with nearby cross
streets and town)
1.2.2.3 Meter number, pole number, or other equivalent
information identifying proposed Point of Interconnection, if
available.
1.2.2.4 Generator Type (e.g., solar, wind, combined heat and
power, etc.)
1.2.2.5 Size (alternating current kW)
1.2.2.6 Single or three phase generator configuration
1.2.2.7 Stand-alone generator (no onsite load, not including
station service--Yes or No?)
1.2.2.8 Is new service requested? Yes or No? If there is
existing service, include the customer account number, site minimum
and maximum current or proposed electric loads in kW (if available)
and specify if the load is expected to change.
1.2.3 Using the information provided in the pre-application
report request form in section 1.2.2, [the] Transmission Provider
will identify the substation/area bus, bank or circuit likely to
serve the proposed Point of Interconnection. This selection by [the]
Transmission Provider does not necessarily indicate, after
application of the screens and/or study, that this would be the
circuit the project ultimately connects to. [The] Interconnection
Customer must request additional pre-application reports if
information about multiple Points of Interconnection is requested.
Subject to section 1.2.4, the pre-application report will include
the following information:
1.2.3.1 Total capacity (in MW) of substation/area bus, bank or
circuit based on normal or operating ratings likely to serve the
proposed Point of Interconnection.
1.2.3.2 Existing aggregate generation capacity (in MW)
interconnected to a substation/area bus, bank or circuit (i.e.,
amount of generation online) likely to serve the proposed Point of
Interconnection.
1.2.3.3 Aggregate queued generation capacity (in MW) for a
substation/area bus, bank or circuit (i.e., amount of generation in
the queue) likely to serve the proposed Point of Interconnection.
1.2.3.4 Available capacity (in MW) of substation/area bus or
bank and circuit likely to serve the proposed Point of
Interconnection (i.e., total capacity less the sum of existing
aggregate generation capacity and aggregate queued generation
capacity).
1.2.3.5 Substation nominal distribution voltage and/or
transmission nominal voltage if applicable.
1.2.3.6 Nominal distribution circuit voltage at the proposed
Point of Interconnection.
1.2.3.7 Approximate circuit distance between the proposed Point
of Interconnection and the substation.
1.2.3.8 Relevant line section(s) actual or estimated peak load
and minimum load data, including daytime minimum load as described
in section 2.4.4.1.1 below and absolute minimum load, when
available.
1.2.3.9 Number and rating of protective devices and number and
type (standard, bi-directional) of voltage regulating devices
between the proposed Point of Interconnection and the substation/
area. Identify whether the substation has a load tap changer.
1.2.3.10 Number of phases available at the proposed Point of
Interconnection. If a single phase, distance from the three-phase
circuit.
1.2.3.11 Limiting conductor ratings from the proposed Point of
Interconnection to the distribution substation.
1.2.3.12 Whether the Point of Interconnection is located on a
spot network, grid network, or radial supply.
1.2.3.13 Based on the proposed Point of Interconnection,
existing or known constraints such as, but not limited to,
electrical dependencies at that location, short circuit interrupting
capacity issues, power quality or stability issues on the circuit,
capacity constraints, or secondary networks.
1.2.4 The pre-application report need only include existing
data. A pre-application report request does not obligate [the]
Transmission Provider to conduct a study or other analysis of the
proposed generator in the event that data is not readily available.
If [the] Transmission Provider cannot complete all or some of a pre-
application report due to lack of available data, the Transmission
Provider shall provide [the] Interconnection Customer with a pre-
application report that includes the data that is available. The
provision of information on ``available capacity'' pursuant to
section 1.2.3.4 does not imply that an interconnection up to this
level may be completed without impacts since there are many
variables studied as part of the interconnection review process, and
data provided in the pre-application report may become outdated at
the time of the submission of the complete Interconnection Request.
Notwithstanding any of the provisions of this section, [the]
Transmission Provider shall, in good faith, include data in the pre-
application report that represents the best available information at
the time of reporting.
1.3 Interconnection Request
[The] Interconnection Customer shall submit its Interconnection
Request to [the] Transmission Provider, together with the processing
fee or deposit specified in the Interconnection Request. The
Interconnection Request shall be date- and time-stamped upon
receipt. The original date- and time-stamp applied to the
Interconnection Request at the time of its original submission shall
be accepted as the qualifying date- and time-stamp for the purposes
of any timetable in these procedures. [The] Interconnection Customer
shall be notified of receipt by [the] Transmission Provider within
three (3) Business Days of receiving the Interconnection Request.
[The] Transmission Provider shall notify [the] Interconnection
Customer within ten (10) Business Days of the receipt of the
Interconnection Request as to whether the Interconnection Request is
complete or incomplete. If the Interconnection Request is
incomplete, [the] Transmission Provider shall provide along with the
notice that the Interconnection Request is incomplete, a written
list detailing all information that must be provided to complete the
Interconnection Request. [The] Interconnection Customer will have
ten (10) Business Days after receipt of the notice to submit the
listed information or to request an extension of time to provide
such information. If [the] Interconnection Customer does not provide
the listed information or a request for an extension of time within
the deadline, the Interconnection Request will be deemed withdrawn.
An Interconnection Request will be deemed complete upon submission
of the listed information to [the] Transmission Provider.
1.4 Modification of the Interconnection Request
Any modification to machine data or equipment configuration or
to the interconnection site of the Small Generating Facility not
agreed to in writing by [the] Transmission Provider and [the]
Interconnection Customer may be deemed a withdrawal of the
Interconnection Request and may require submission of a new
Interconnection Request, unless proper notification of each Party by
the other and a reasonable time to cure the problems created by the
changes are undertaken. Any such modification of the Interconnection
Request must be accompanied by any resulting updates to the models
described in Attachment 2 of this SGIP.
1.5 Site Control
Documentation of site control must be submitted with the
Interconnection Request. Site control may be demonstrated through:
1.5.1 Ownership of, a leasehold interest in, or a right to
develop a site for the purpose of constructing the Small Generating
Facility;
1.5.2 An option to purchase or acquire a leasehold site for such
purpose; or
1.5.3 An exclusivity or other business relationship between
[the] Interconnection Customer and the entity having the right to
sell, lease, or grant [the] Interconnection Customer the right to
possess or occupy a site for such purpose.
1.6 Queue Position
[The] Transmission Provider shall assign a Queue Position based
upon the date- and time-stamp of the Interconnection Request. The
Queue Position of each Interconnection Request will be used to
determine the cost responsibility for the Upgrades necessary to
accommodate the interconnection. [The]
[[Page 27203]]
Transmission Provider shall maintain a single queue per geographic
region. At [the] Transmission Provider's option, Interconnection
Requests may be studied serially or in clusters for the purpose of
the system impact study.
1.7 Interconnection Requests Submitted Prior to the Effective
Date of the SGIP
Nothing in this SGIP affects an Interconnection Customer's Queue
Position assigned before the effective date of this SGIP. The
Parties agree to complete work on any interconnection study
agreement executed prior the effective date of this SGIP in
accordance with the terms and conditions of that interconnection
study agreement. Any new studies or other additional work will be
completed pursuant to this SGIP.
Section 2. Fast Track Process
2.1 Applicability
The Fast Track Process is available to an Interconnection
Customer proposing to interconnect its Small Generating Facility
with [the] Transmission Provider's Distribution System if the Small
Generating Facility's capacity does not exceed the size limits
identified in the table below. Small Generating Facilities below
these limits are eligible for Fast Track review. However, Fast Track
eligibility is distinct from the Fast Track Process itself, and
eligibility does not imply or indicate that a Small Generating
Facility will pass the Fast Track screens in section 2.2.1 below or
the Supplemental Review screens in section 2.4.4 below.
Fast Track eligibility is determined based upon the generator
type, the size of the generator, voltage of the line and the
location of and the type of line at the Point of Interconnection.
All Small Generating Facilities connecting to lines greater than 69
kilovolt (kV) are ineligible for the Fast Track Process regardless
of size. All synchronous and induction machines must be no larger
than 2 MW to be eligible for the Fast Track Process, regardless of
location. For certified inverter-based systems, the size limit
varies according to the voltage of the line at the proposed Point of
Interconnection. Certified inverter-based Small Generating
Facilities located within 2.5 electrical circuit miles of a
substation and on a mainline (as defined in the table below) are
eligible for the Fast Track Process under the higher thresholds
according to the table below. In addition to the size threshold,
[the] Interconnection Customer's proposed Small Generating Facility
must meet the codes, standards, and certification requirements of
Attachments 3 and 4 of these procedures, or [the] Transmission
Provider has to have reviewed the design or tested the proposed
Small Generating Facility and is satisfied that it is safe to
operate.
Fast Track Eligibility for Inverter-Based Systems
----------------------------------------------------------------------------------------------------------------
Fast track eligibility
on a mainline \1\ and
Line voltage Fast track eligibility <=2.5 electrical
regardless of location circuit miles from
substation \2\
----------------------------------------------------------------------------------------------------------------
<5 kV......................................................... <=500 kW <=500 kW
>=5 kV and <15 kV............................................. <=2 MW <=3 MW
>=15 kV and <30 kV............................................ <=3 MW <=4 MW
>=30 kV and <=69 kV........................................... <=4 MW <=5 MW
----------------------------------------------------------------------------------------------------------------
2.2 Initial Review
---------------------------------------------------------------------------
\1\ For purposes of this table, a mainline is the three-phase
backbone of a circuit. It will typically constitute lines with wire
sizes of 4/0 American wire gauge, 336.4 kcmil, 397.5 kcmil, 477
kcmil and 795 kcmil.
\2\ An Interconnection Customer can determine this information
about its proposed interconnection location in advance by requesting
a pre-application report pursuant to section 1.2.
---------------------------------------------------------------------------
Within fifteen (15) Business Days after [the] Transmission
Provider notifies [the] Interconnection Customer it has received a
complete Interconnection Request, [the] Transmission Provider shall
perform an initial review using the screens set forth below, shall
notify [the] Interconnection Customer of the results, and include
with the notification copies of the analysis and data underlying
[the] Transmission Provider's determinations under the screens.
2.2.1 Screens
2.2.1.1 The proposed Small Generating Facility's Point of
Interconnection must be on a portion of [the] Transmission
Provider's Distribution System that is subject to the Tariff.
2.2.1.2 For interconnection of a proposed Small Generating
Facility to a radial distribution circuit, the aggregated
generation, including the proposed Small Generating Facility, on the
circuit shall not exceed 15% of the line section annual peak load as
most recently measured at the substation. A line section is that
portion of a Transmission Provider's electric system connected to a
customer bounded by automatic sectionalizing devices or the end of
the distribution line.
2.2.1.3 For interconnection of a proposed Small Generating
Facility to the load side of spot network protectors, the proposed
Small Generating Facility must utilize an inverter-based equipment
package and, together with the aggregated other inverter-based
generation, shall not exceed the smaller of 5% of a spot network's
maximum load or 50 kW.\3\
---------------------------------------------------------------------------
\3\ A spot network is a type of distribution system found within
modern commercial buildings to provide high reliability of service
to a single customer. (Standard Handbook for Electrical Engineers,
11th edition, Donald Fink, McGraw Hill Book Company).
---------------------------------------------------------------------------
2.2.1.4 The proposed Small Generating Facility, in aggregation
with other generation on the distribution circuit, shall not
contribute more than 10% to the distribution circuit's maximum fault
current at the point on the high voltage (primary) level nearest the
proposed point of change of ownership.
2.2.1.5 The proposed Small Generating Facility, in aggregate
with other generation on the distribution circuit, shall not cause
any distribution protective devices and equipment (including, but
not limited to, substation breakers, fuse cutouts, and line
reclosers), or Interconnection Customer equipment on the system to
exceed 87.5% of the short circuit interrupting capability; nor shall
the interconnection be proposed for a circuit that already exceeds
87.5% of the short circuit interrupting capability.
2.2.1.6 Using the table below, determine the type of
interconnection to a primary distribution line. This screen includes
a review of the type of electrical service provided to the
Interconnecting Customer, including line configuration and the
transformer connection to limit the potential for creating over-
voltages on [the] Transmission Provider's electric power system due
to a loss of ground during the operating time of any anti-islanding
function.
----------------------------------------------------------------------------------------------------------------
Type of interconnection to
Primary distribution line type primary distribution line Result/criteria
----------------------------------------------------------------------------------------------------------------
Three-phase, three wire............... 3-phase or single phase, phase- Pass screen.
to-phase.
Three-phase, four wire................ Effectively-grounded 3 phase Pass screen.
or Single-phase, line-to-
neutral.
----------------------------------------------------------------------------------------------------------------
[[Page 27204]]
2.2.1.7 If the proposed Small Generating Facility is to be
interconnected on single-phase shared secondary, the aggregate
generation capacity on the shared secondary, including the proposed
Small Generating Facility, shall not exceed 20 kW.
2.2.1.8 If the proposed Small Generating Facility is single-
phase and is to be interconnected on a center tap neutral of a 240
volt service, its addition shall not create an imbalance between the
two sides of the 240 volt service of more than 20% of the nameplate
rating of the service transformer.
2.2.1.9 The Small Generating Facility, in aggregate with other
generation interconnected to the transmission side of a substation
transformer feeding the circuit where the Small Generating Facility
proposes to interconnect shall not exceed 10 MW in an area where
there are known, or posted, transient stability limitations to
generating units located in the general electrical vicinity (e.g.,
three or four transmission busses from the point of
interconnection).
2.2.1.10 No construction of facilities by [the] Transmission
Provider on its own system shall be required to accommodate the
Small Generating Facility.
2.2.2 If the proposed interconnection passes the screens, the
Interconnection Request shall be approved and [the] Transmission
Provider will provide [the] Interconnection Customer an executable
interconnection agreement within five (5) Business Days after the
determination.
2.2.3 If the proposed interconnection fails the screens, but
[the] Transmission Provider determines that the Small Generating
Facility may nevertheless be interconnected consistent with safety,
reliability, and power quality standards, [the] Transmission
Provider shall provide [the] Interconnection Customer an executable
interconnection agreement within five (5) Business Days after the
determination.
2.2.4 If the proposed interconnection fails the screens, and
[the] Transmission Provider does not or cannot determine from the
initial review that the Small Generating Facility may nevertheless
be interconnected consistent with safety, reliability, and power
quality standards unless [the] Interconnection Customer is willing
to consider minor modifications or further study, [the] Transmission
Provider shall provide [the] Interconnection Customer with the
opportunity to attend a customer options meeting.
2.3 Customer Options Meeting
If [the] Transmission Provider determines the Interconnection
Request cannot be approved without (1) minor modifications at
minimal cost, (2) a supplemental study or other additional studies
or actions, or (3) incurring significant cost to address safety,
reliability, or power quality problems, [the] Transmission Provider
shall notify [the] Interconnection Customer of that determination
within five (5) Business Days after the determination and provide
copies of all data and analyses underlying its conclusion. Within
ten (10) Business Days of [the] Transmission Provider's
determination, [the] Transmission Provider shall offer to convene a
customer options meeting with [the] Transmission Provider to review
possible Interconnection Customer facility modifications or the
screen analysis and related results, to determine what further steps
are needed to permit the Small Generating Facility to be connected
safely and reliably. At the time of notification of [the]
Transmission Provider's determination, or at the customer options
meeting, [the] Transmission Provider shall:
2.3.1 Offer to perform facility modifications or minor
modifications to [the] Transmission Provider's electric system
(e.g., changing meters, fuses, relay settings) and provide a non-
binding good faith estimate of the limited cost to make such
modifications to [the] Transmission Provider's electric system. If
[the] Interconnection Customer agrees to pay for the modifications
to the Transmission Provider's electric system, [the] Transmission
Provider will provide [the] Interconnection Customer with an
executable interconnection agreement within ten (10) Business Days
of the customer options meeting; or
2.3.2 Offer to perform a supplemental review in accordance with
section 2.4 and provide a non-binding good faith estimate of the
costs of such review; or
2.3.3 Obtain [the] Interconnection Customer's agreement to
continue evaluating the Interconnection Request under the section 3
Study Process.
2.4 Supplemental Review
2.4.1 To accept the offer of a supplemental review, [the]
Interconnection Customer shall agree in writing and submit a deposit
for the estimated costs of the supplemental review in the amount of
[the] Transmission Provider's good faith estimate of the costs of
such review, both within fifteen (15) Business Days of the offer. If
the written agreement and deposit have not been received by [the]
Transmission Provider within that timeframe, the Interconnection
Request shall continue to be evaluated under the section 3 Study
Process unless it is withdrawn by [the] Interconnection Customer.
2.4.2 [The] Interconnection Customer may specify the order in
which [the] Transmission Provider will complete the screens in
section 2.4.4.
2.4.3 [The] Interconnection Customer shall be responsible for
[the] Transmission Provider's actual costs for conducting the
supplemental review. [The] Interconnection Customer must pay any
review costs that exceed the deposit within twenty (20) Business
Days of receipt of the invoice or resolution of any dispute. If the
deposit exceeds the invoiced costs, [the] Transmission Provider will
return such excess within twenty (20) Business Days of the invoice
without interest.
2.4.4 Within thirty (30) Business Days following receipt of the
deposit for a supplemental review, [the] Transmission Provider shall
(1) perform a supplemental review using the screens set forth below;
(2) notify in writing [the] Interconnection Customer of the results;
and (3) include with the notification copies of the analysis and
data underlying [the] Transmission Provider's determinations under
the screens. Unless [the] Interconnection Customer provided
instructions for how to respond to the failure of any of the
supplemental review screens below at the time [the] Interconnection
Customer accepted the offer of supplemental review, [the]
Transmission Provider shall notify [the] Interconnection Customer
following the failure of any of the screens, or if it is unable to
perform the screen in section 2.4.4.1, within two (2) Business Days
of making such determination to obtain [the] Interconnection
Customer's permission to: (1) continue evaluating the proposed
interconnection under this section 2.4.4; (2) terminate the
supplemental review and continue evaluating the Small Generating
Facility under section 3; or (3) terminate the supplemental review
upon withdrawal of the Interconnection Request by [the]
Interconnection Customer.
2.4.4.1 Minimum Load Screen: Where 12 months of line section
minimum load data (including onsite load but not station service
load served by the proposed Small Generating Facility) are
available, can be calculated, can be estimated from existing data,
or determined from a power flow model, the aggregate Generating
Facility capacity on the line section is less than 100% of the
minimum load for all line sections bounded by automatic
sectionalizing devices upstream of the proposed Small Generating
Facility. If minimum load data is not available, or cannot be
calculated, estimated or determined, [the] Transmission Provider
shall include the reason(s) that it is unable to calculate, estimate
or determine minimum load in its supplemental review results
notification under section 2.4.4.
2.4.4.1.1 The type of generation used by the proposed Small
Generating Facility will be taken into account when calculating,
estimating, or determining circuit or line section minimum load
relevant for the application of screen 2.4.4.1. Solar photovoltaic
(PV) generation systems with no battery storage use daytime minimum
load (i.e., 10 a.m. to 4 p.m. for fixed panel systems and 8 a.m. to
6 p.m. for PV systems utilizing tracking systems), while all other
generation uses absolute minimum load.
2.4. 4.1.2 When this screen is being applied to a Small
Generating Facility that serves some station service load, only the
net injection into [the] Transmission Provider's electric system
will be considered as part of the aggregate generation.
2.4. 4.1.3 Transmission Provider will not consider as part of
the aggregate generation for purposes of this screen generating
facility capacity known to be already reflected in the minimum load
data.
2.4.4.2 Voltage and Power Quality Screen: In aggregate with
existing generation on the line section: (1) the voltage regulation
on the line section can be maintained in compliance with relevant
requirements under all system conditions; (2) the voltage
fluctuation is within acceptable limits as defined by Institute of
Electrical and Electronics Engineers (IEEE) Standard 1453, or
utility practice similar to IEEE Standard 1453; and (3) the harmonic
levels meet IEEE Standard 519 limits.
2.4.4.3 Safety and Reliability Screen: The location of the
proposed Small Generating Facility and the aggregate generation
capacity on the line section do not create impacts to
[[Page 27205]]
safety or reliability that cannot be adequately addressed without
application of the Study Process. [The] Transmission Provider shall
give due consideration to the following and other factors in
determining potential impacts to safety and reliability in applying
this screen.
2.4.4.3.1 Whether the line section has significant minimum
loading levels dominated by a small number of customers (e.g.,
several large commercial customers).
2.4.4.3.2 Whether the loading along the line section is uniform
or even.
2.4.4.3.3 Whether the proposed Small Generating Facility is
located in close proximity to the substation (i.e., less than 2.5
electrical circuit miles), and whether the line section from the
substation to the Point of Interconnection is a Mainline rated for
normal and emergency ampacity.
2.4.4.3.4 Whether the proposed Small Generating Facility
incorporates a time delay function to prevent reconnection of the
generator to the system until system voltage and frequency are
within normal limits for a prescribed time.
2.4.4.3.5 Whether operational flexibility is reduced by the
proposed Small Generating Facility, such that transfer of the line
section(s) of the Small Generating Facility to a neighboring
distribution circuit/substation may trigger overloads or voltage
issues.
2.4.4.3.6 Whether the proposed Small Generating Facility employs
equipment or systems certified by a recognized standards
organization to address technical issues such as, but not limited
to, islanding, reverse power flow, or voltage quality.
2.4.5 If the proposed interconnection passes the supplemental
screens in sections 2.4.4.1, 2.4.4.2, and 2.4.4.3 above, the
Interconnection Request shall be approved and [the] Transmission
Provider will provide [the] Interconnection Customer with an
executable interconnection agreement within the timeframes
established in sections 2.4.5.1 and 2.4.5.2 below. If the proposed
interconnection fails any of the supplemental review screens and
[the] Interconnection Customer does not withdraw its Interconnection
Request, it shall continue to be evaluated under the section 3 Study
Process consistent with section 2.4.5.3 below.
2.4.5.1 If the proposed interconnection passes the supplemental
screens in sections 2.4.4.1, 2.4.4.2, and 2.4.4.3 above and does not
require construction of facilities by [the] Transmission Provider on
its own system, the interconnection agreement shall be provided
within ten (10) Business Days after the notification of the
supplemental review results.
2.4.5.2 If interconnection facilities or minor modifications to
[the] Transmission Provider's system are required for the proposed
interconnection to pass the supplemental screens in sections
2.4.4.1, 2.4.4.2, and 2.4.4.3 above, and [the] Interconnection
Customer agrees to pay for the modifications to [the] Transmission
Provider's electric system, the interconnection agreement, along
with a non-binding good faith estimate for the interconnection
facilities and/or minor modifications, shall be provided to [the]
Interconnection Customer within fifteen (15) Business Days after
receiving written notification of the supplemental review results.
2.4.5.3 If the proposed interconnection would require more than
interconnection facilities or minor modifications to [the]
Transmission Provider's system to pass the supplemental screens in
sections 2.4.4.1, 2.4.4.2, and 2.4.4.3 above, [the] Transmission
Provider shall notify [the] Interconnection Customer, at the same
time it notifies [the] Interconnection Customer with the
supplemental review results, that the Interconnection Request shall
be evaluated under the section 3 Study Process unless [the]
Interconnection Customer withdraws its Small Generating Facility.
Section 3. Study Process
3.1 Applicability
The Study Process shall be used by an Interconnection Customer
proposing to interconnect its Small Generating Facility with [the]
Transmission Provider's Transmission System or Distribution System
if the Small Generating Facility (1) is larger than 2 MW but no
larger than 20 MW, (2) is not certified, or (3) is certified but did
not pass the Fast Track Process or the 10 kW Inverter Process.
3.2 Scoping Meeting
3.2.1 A scoping meeting will be held within ten (10) Business
Days after the Interconnection Request is deemed complete, or as
otherwise mutually agreed to by the Parties. [The] Transmission
Provider and [the] Interconnection Customer will bring to the
meeting personnel, including system engineers and other resources as
may be reasonably required to accomplish the purpose of the meeting.
3.2.2 The purpose of the scoping meeting is to discuss the
Interconnection Request and review existing studies relevant to the
Interconnection Request. The Parties shall further discuss whether
[the] Transmission Provider should perform a feasibility study or
proceed directly to a system impact study, or a facilities study, or
an interconnection agreement. If the Parties agree that a
feasibility study should be performed, [the] Transmission Provider
shall provide [the] Interconnection Customer, as soon as possible,
but not later than five (5) Business Days after the scoping meeting,
a feasibility study agreement (Attachment 6) including an outline of
the scope of the study and a non-binding good faith estimate of the
cost to perform the study.
3.2.3 The scoping meeting may be omitted by mutual agreement. In
order to remain in consideration for interconnection, an
Interconnection Customer who has requested a feasibility study must
return the executed feasibility study agreement within fifteen (15)
Business Days. If the Parties agree not to perform a feasibility
study, [the] Transmission Provider shall provide [the]
Interconnection Customer, no later than five (5) Business Days after
the scoping meeting, a system impact study agreement (Attachment 7)
including an outline of the scope of the study and a non-binding
good faith estimate of the cost to perform the study.
3.3 Feasibility Study
3.3.1 The feasibility study shall identify any potential adverse
system impacts that would result from the interconnection of the
Small Generating Facility.
3.3.2 A deposit of the lesser of 50 percent of the good faith
estimated feasibility study costs or earnest money of $1,000 may be
required from [the] Interconnection Customer.
3.3.3 The scope of and cost responsibilities for the feasibility
study are described in the attached feasibility study agreement
(Attachment 6).
3.3.4 If the feasibility study shows no potential for adverse
system impacts, [the] Transmission Provider shall send [the]
Interconnection Customer a facilities study agreement, including an
outline of the scope of the study and a non-binding good faith
estimate of the cost to perform the study. If no additional
facilities are required, [the] Transmission Provider shall send
[the] Interconnection Customer an executable interconnection
agreement within five (5) Business Days.
3.3.5 If the feasibility study shows the potential for adverse
system impacts, the review process shall proceed to the appropriate
system impact study(s).
3.3.6 The feasibility study shall evaluate static synchronous
compensators, static VAR compensators, advanced power flow control
devices, transmission switching, synchronous condensers, voltage
source converters, advanced conductors, and tower lifting.
Transmission Provider shall evaluate each identified alternative
transmission technology and determine whether it should be used,
consistent with Good Utility Practice, Applicable Reliability
Standards, and Applicable Laws and Regulations [other applicable
regulatory requirements]. Transmission Provider shall include an
explanation of the results of Transmission Provider's evaluation for
each technology in the feasibility study report.
3.4 System Impact Study
3.4.1 A system impact study shall identify and detail the
electric system impacts that would result if the proposed Small
Generating Facility were interconnected without project
modifications or electric system modifications, focusing on the
adverse system impacts identified in the feasibility study, or to
study potential impacts, including but not limited to those
identified in the scoping meeting. A system impact study shall
evaluate the impact of the proposed interconnection on the
reliability of the electric system.
3.4.2 If no transmission system impact study is required, but
potential electric power Distribution System adverse system impacts
are identified in the scoping meeting or shown in the feasibility
study, a distribution system impact study must be performed. [The]
Transmission Provider shall send [the] Interconnection Customer a
distribution system impact study agreement within fifteen (15)
Business Days of transmittal of the feasibility study report,
including an outline of the scope of the study and a non-binding
good faith estimate of the cost to perform the study, or following
the scoping meeting if no feasibility study is to be performed.
[[Page 27206]]
3.4.3 In instances where the feasibility study or the
distribution system impact study shows potential for transmission
system adverse system impacts, within five (5) Business Days
following transmittal of the feasibility study report, [the]
Transmission Provider shall send [the] Interconnection Customer a
transmission system impact study agreement, including an outline of
the scope of the study and a non-binding good faith estimate of the
cost to perform the study, if such a study is required.
3.4.4 If a transmission system impact study is not required, but
electric power Distribution System adverse system impacts are shown
by the feasibility study to be possible and no distribution system
impact study has been conducted, Transmission Provider shall send
Interconnection Customer a distribution system impact study
agreement.
3.4.5 If the feasibility study shows no potential for
transmission system or Distribution System adverse system impacts,
[the] Transmission Provider shall send [the] Interconnection
Customer either a facilities study agreement (Attachment 8),
including an outline of the scope of the study and a non-binding
good faith estimate of the cost to perform the study, or an
executable interconnection agreement, as applicable.
3.4.6 In order to remain under consideration for
interconnection, [the] Interconnection Customer must return executed
system impact study agreements, if applicable, within thirty (30)
Business Days.
3.4.7 A deposit of the good faith estimated costs for each
system impact study may be required from [the] Interconnection
Customer.
3.4.8 The scope of and cost responsibilities for a system impact
study are described in the attached system impact study agreement.
3.4.9 Where transmission systems and Distribution Systems have
separate owners, such as is the case with transmission-dependent
utilities (``TDUs'')--whether investor-owned or not--[the]
Interconnection Customer may apply to the nearest Transmission
Provider (Transmission Owner, Regional Transmission Operator, or
Independent Transmission Provider) providing transmission service to
the TDU to request project coordination. Affected Systems shall
participate in the study and provide all information necessary to
prepare the study.
3.4.10 The system impact study shall evaluate static synchronous
compensators, static VAR compensators, advanced power flow control
devices, transmission switching, synchronous condensers, voltage
source converters, advanced conductors, and tower lifting.
Transmission Provider shall evaluate each identified alternative
transmission technology and determine whether it should be used,
consistent with Good Utility Practice, Applicable Reliability
Standards, and Applicable Laws and Regulations [other applicable
regulatory requirements]. Transmission Provider shall include an
explanation of the results of Transmission Provider's evaluation for
each technology in the system impact study report.
3.5 Facilities Study
3.5.1 Once the required system impact study(s) is completed, a
system impact study report shall be prepared and transmitted to
[the] Interconnection Customer along with a facilities study
agreement within five (5) Business Days, including an outline of the
scope of the study and a non-binding good faith estimate of the cost
to perform the facilities study. In the case where one or both
impact studies are determined to be unnecessary, a notice of the
fact shall be transmitted to [the] Interconnection Customer within
the same timeframe.
3.5.2 In order to remain under consideration for
interconnection, or, as appropriate, in [the] Transmission
Provider's interconnection queue, [the] Interconnection Customer
must return the executed facilities study agreement or a request for
an extension of time within thirty (30) Business Days.
3.5.3 The facilities study shall specify and estimate the cost
of the equipment, engineering, procurement and construction work
(including overheads) needed to implement the conclusions of the
system impact study(s).
3.5.4 Design for any required Interconnection Facilities and/or
Upgrades shall be performed under the facilities study agreement.
[The] Transmission Provider may contract with consultants to perform
activities required under the facilities study agreement. [The]
Interconnection Customer and [the] Transmission Provider may agree
to allow [the] Interconnection Customer to separately arrange for
the design of some of the Interconnection Facilities. In such cases,
facilities design will be reviewed and/or modified prior to
acceptance by [the] Transmission Provider, under the provisions of
the facilities study agreement. If the Parties agree to separately
arrange for design and construction, and provided security and
confidentiality requirements can be met, [the] Transmission Provider
shall make sufficient information available to [the] Interconnection
Customer in accordance with confidentiality and critical
infrastructure requirements to permit [the] Interconnection Customer
to obtain an independent design and cost estimate for any necessary
facilities.
3.5.5 A deposit of the good faith estimated costs for the
facilities study may be required from [the] Interconnection
Customer.
3.5.6 The scope of and cost responsibilities for the facilities
study are described in the attached facilities study agreement.
3.5.7 Upon completion of the facilities study, and with the
agreement of [the] Interconnection Customer to pay for
Interconnection Facilities and Upgrades identified in the facilities
study, [the] Transmission Provider shall provide [the]
Interconnection Customer an executable interconnection agreement
within five (5) Business Days.
Section 4. Provisions That Apply to All Interconnection Requests
4.1 Reasonable Efforts
[The] Transmission Provider shall make reasonable efforts to
meet all time frames provided in these procedures unless [the]
Transmission Provider and [the] Interconnection Customer agree to a
different schedule. If [the] Transmission Provider cannot meet a
deadline provided herein, it shall notify [the] Interconnection
Customer, explain the reason for the failure to meet the deadline,
and provide an estimated time by which it will complete the
applicable interconnection procedure in the process.
4.2 Disputes
4.2.1 The Parties agree to attempt to resolve all disputes
arising out of the interconnection process according to the
provisions of this article.
4.2.2 In the event of a dispute, either Party shall provide the
other Party with a written Notice of Dispute. Such Notice shall
describe in detail the nature of the dispute.
4.2.3 If the dispute has not been resolved within two (2)
Business Days after receipt of the Notice, either Party may contact
FERC's Dispute Resolution Service (DRS) for assistance in resolving
the dispute.
4.2.4 The DRS will assist the Parties in either resolving their
dispute or in selecting an appropriate dispute resolution venue
(e.g., mediation, settlement judge, early neutral evaluation, or
technical expert) to assist the Parties in resolving their dispute.
DRS can be reached at 1-877-337-2237 or via the internet at https://www.ferc.gov/legal/adr.asp.
4.2.5 Each Party agrees to conduct all negotiations in good
faith and will be responsible for one-half of any costs paid to
neutral third-parties.
4.2.6 If neither Party elects to seek assistance from the DRS,
or if the attempted dispute resolution fails, then either Party may
exercise whatever rights and remedies it may have in equity or law
consistent with the terms of these procedures.
4.3 Interconnection Metering
Any metering necessitated by the use of the Small Generating
Facility shall be installed at [the] Interconnection Customer's
expense in accordance with Federal Energy Regulatory Commission,
state, or local regulatory requirements or [the] Transmission
Provider's specifications.
4.4 Commissioning
Commissioning tests of [the] Interconnection Customer's
installed equipment shall be performed pursuant to applicable codes
and standards. [The] Transmission Provider must be given at least
five (5) Business Days written notice, or as otherwise mutually
agreed to by the Parties, of the tests and may be present to witness
the commissioning tests.
4.5. Confidentiality
4.5.1 Confidential information shall mean any confidential and/
or proprietary information provided by one Party to the other Party
that is clearly marked or otherwise designated ``Confidential.'' For
purposes of these procedures all design, operating specifications,
and metering data provided by [the] Interconnection Customer shall
be deemed confidential information regardless of whether it is
clearly marked or otherwise designated as such.
4.5.2 Confidential Information does not include information
previously in the public domain, required to be publicly submitted
or divulged by Governmental Authorities (after notice to the other
Party and after exhausting any opportunity to oppose such
publication
[[Page 27207]]
or release), or necessary to be divulged in an action to enforce
these procedures. Each Party receiving Confidential Information
shall hold such information in confidence and shall not disclose it
to any third party nor to the public without the prior written
authorization from the Party providing that information, except to
fulfill obligations under these procedures, or to fulfill legal or
regulatory requirements.
4.5.2.1 Each Party shall employ at least the same standard of
care to protect Confidential Information obtained from the other
Party as it employs to protect its own Confidential Information.
4.5.2.2 Each Party is entitled to equitable relief, by
injunction or otherwise, to enforce its rights under this provision
to prevent the release of Confidential Information without bond or
proof of damages, and may seek other remedies available at law or in
equity for breach of this provision.
4.5.3 Notwithstanding anything in this article to the contrary,
and pursuant to 18 CFR 1b.20, if FERC, during the course of an
investigation or otherwise, requests information from one of the
Parties that is otherwise required to be maintained in confidence
pursuant to these procedures, the Party shall provide the requested
information to FERC, within the time provided for in the request for
information. In providing the information to FERC, the Party may,
consistent with 18 CFR 388.112, request that the information be
treated as confidential and non-public by FERC and that the
information be withheld from public disclosure. Parties are
prohibited from notifying the other Party prior to the release of
the Confidential Information to FERC. The Party shall notify the
other Party when it is notified by FERC that a request to release
Confidential Information has been received by FERC, at which time
either of the Parties may respond before such information would be
made public, pursuant to 18 CFR 388.112. Requests from a state
regulatory body conducting a confidential investigation shall be
treated in a similar manner if consistent with the applicable state
rules and regulations.
4.6 Comparability
[The] Transmission Provider shall receive, process and analyze
all Interconnection Requests in a timely manner as set forth in this
document. [The] Transmission Provider shall use the same reasonable
efforts in processing and analyzing Interconnection Requests from
all Interconnection Customers, whether the Small Generating Facility
is owned or operated by [the] Transmission Provider, its
subsidiaries or affiliates, or others.
4.7 Record Retention
[The] Transmission Provider shall maintain for three years
records, subject to audit, of all Interconnection Requests received
under these procedures, the times required to complete
Interconnection Request approvals and disapprovals, and
justification for the actions taken on the Interconnection Requests.
4.8 Interconnection Agreement
After receiving an interconnection agreement from [the]
Transmission Provider, [the] Interconnection Customer shall have
thirty (30) Business Days or another mutually agreeable timeframe to
sign and return the interconnection agreement or request that [the]
Transmission Provider file an unexecuted interconnection agreement
with the Federal Energy Regulatory Commission. If [the]
Interconnection Customer does not sign the interconnection
agreement, or ask that it be filed unexecuted by [the] Transmission
Provider within thirty (30) Business Days, the Interconnection
Request shall be deemed withdrawn. After the interconnection
agreement is signed by the Parties, the interconnection of the Small
Generating Facility shall proceed under the provisions of the
interconnection agreement.
4.9 Coordination with Affected Systems
[The] Transmission Provider shall coordinate the conduct of any
studies required to determine the impact of the Interconnection
Request on Affected Systems with Affected System operators and, if
possible, include those results (if available) in its applicable
interconnection study within the time frame specified in these
procedures. [The] Transmission Provider will include such Affected
System operators in all meetings held with [the] Interconnection
Customer as required by these procedures. [The] Interconnection
Customer will cooperate with [the] Transmission Provider in all
matters related to the conduct of studies and the determination of
modifications to Affected Systems. A Transmission Provider which may
be an Affected System shall cooperate with [the] Transmission
Provider with whom interconnection has been requested in all matters
related to the conduct of studies and the determination of
modifications to Affected Systems.
4.10 Capacity of the Small Generating Facility
4.10.1 If the Interconnection Request is for an increase in
capacity for an existing Small Generating Facility, the
Interconnection Request shall be evaluated on the basis of the new
total capacity of the Small Generating Facility.
4.10.2 If the Interconnection Request is for a Small Generating
Facility that includes multiple energy production devices at a site
for which [the] Interconnection Customer seeks a single Point of
Interconnection, the Interconnection Request shall be evaluated on
the basis of the aggregate capacity of the multiple devices.
4.10.3 The Interconnection Request shall be evaluated using the
maximum capacity that the Small Generating Facility is capable of
injecting into [the] Transmission Provider's electric system.
However, if the maximum capacity that the Small Generating Facility
is capable of injecting into [the] Transmission Provider's electric
system is limited (e.g., through use of a control system, power
relay(s), or other similar device settings or adjustments), then
[the] Interconnection Customer must obtain [the] Transmission
Provider's agreement, with such agreement not to be unreasonably
withheld, that the manner in which [the] Interconnection Customer
proposes to implement such a limit will not adversely affect the
safety and reliability of [the] Transmission Provider's system. If
[the] Transmission Provider does not so agree, then the
Interconnection Request must be withdrawn or revised to specify the
maximum capacity that the Small Generating Facility is capable of
injecting into [the] Transmission Provider's electric system without
such limitations. Furthermore, nothing in this section shall prevent
a Transmission Provider from considering an output higher than the
limited output, if appropriate, when evaluating system protection
impacts.
Attachment 1
Glossary of Terms
10 kW Inverter Process--The procedure for evaluating an
Interconnection Request for a certified inverter-based Small
Generating Facility no larger than 10 kW that uses the section 2
screens. The application process uses an all-in-one document that
includes a simplified Interconnection Request, simplified
procedures, and a brief set of terms and conditions. See SGIP
Attachment 5.
Affected System--An electric system other than [the]
Transmission Provider's Transmission System that may be affected by
the proposed interconnection.
Applicable Reliability Standards--The requirements and
guidelines of the Electric Reliability Organization and the
Balancing Authority Area of the Transmission System to which the
Generating Facility is directly interconnected.
Applicable Laws and Regulations--All duly promulgated applicable
federal, state and local laws, regulations, rules, ordinances,
codes, decrees, judgments, directives, or judicial or administrative
orders, permits and other duly authorized actions of any
Governmental Authority.
Business Day--Monday through Friday, excluding Federal Holidays.
Distribution System--[The] Transmission Provider's facilities
and equipment used to transmit electricity to ultimate usage points
such as homes and industries directly from nearby generators or from
interchanges with higher voltage transmission networks which
transport bulk power over longer distances. The voltage levels at
which Distribution Systems operate differ among areas.
Distribution Upgrades--The additions, modifications, and
upgrades to [the] Transmission Provider's Distribution System at or
beyond the Point of Interconnection to facilitate interconnection of
the Small Generating Facility and render the transmission service
necessary to effect [the] Interconnection Customer's wholesale sale
of electricity in interstate commerce. Distribution Upgrades do not
include Interconnection Facilities.
Fast Track Process--The procedure for evaluating an
Interconnection Request for a certified Small Generating Facility
that meets the eligibility requirements of section 2.1 and includes
the section 2 screens, customer options meeting, and optional
supplemental review.
Good Utility Practice--Any of the practices, methods and acts
engaged in or approved by a significant portion of the electric
industry during the relevant time period, or any of the practices,
methods and act which, in the exercise of reasonable
[[Page 27208]]
judgment in light of the facts known at the time the decision was
made, could have been expected to accomplish the desired result at a
reasonable cost consistent with good business practices,
reliability, safety and expedition. Good Utility Practice is not
intended to be limited to the optimum practice, method, or act to
the exclusion of all others, but rather to be acceptable practices,
methods, or acts generally accepted in the region.
Interconnection Customer--Any entity, including [the]
Transmission Provider, the Transmission Owner or any of the
affiliates or subsidiaries of either, that proposes to interconnect
its Small Generating Facility with [the] Transmission Provider's
Transmission System.
Interconnection Facilities--[The] Transmission Provider's
Interconnection Facilities and [the] Interconnection Customer's
Interconnection Facilities. Collectively, Interconnection Facilities
include all facilities and equipment between the Small Generating
Facility and the Point of Interconnection, including any
modification, additions or upgrades that are necessary to physically
and electrically interconnect the Small Generating Facility to [the]
Transmission Provider's Transmission System. Interconnection
Facilities are sole use facilities and shall not include
Distribution Upgrades or Network Upgrades.
Interconnection Request--[The] Interconnection Customer's
request, in accordance with the Tariff, to interconnect a new Small
Generating Facility, or to increase the capacity of, or make a
Material Modification to the operating characteristics of, an
existing Small Generating Facility that is interconnected with [the]
Transmission Provider's Transmission System.
Material Modification--A modification that has a material impact
on the cost or timing of any Interconnection Request with a later
queue priority date.
Network Resource--Any designated generating resource owned,
purchased, or leased by a Network Customer under the Network
Integration Transmission Service Tariff. Network Resources do not
include any resource, or any portion thereof, that is committed for
sale to third parties or otherwise cannot be called upon to meet the
Network Customer's Network Load on a non-interruptible basis.
Network Resource Interconnection Service--An Interconnection
Service that allows [the] Interconnection Customer to integrate its
Generating Facility with [the] Transmission Provider's System (1) in
a manner comparable to that in which [the] Transmission Provider
integrates its generating facilities to serve native load customers;
or (2) in an RTO or ISO with market based congestion management, in
the same manner as Network Resources. Network Resource
Interconnection Service in and of itself does not convey
transmission service.
Network Upgrades--Additions, modifications, and upgrades to
[the] Transmission Provider's Transmission System required at or
beyond the point at which the Small Generating Facility
interconnects with [the] Transmission Provider's Transmission System
to accommodate the interconnection with the Small Generating
Facility to [the] Transmission Provider's Transmission System.
Network Upgrades do not include Distribution Upgrades.
Party or Parties--[The] Transmission Provider, Transmission
Owner, Interconnection Customer or any combination of the above.
Point of Interconnection--The point where the Interconnection
Facilities connect with [the] Transmission Provider's Transmission
System.
Queue Position--The order of a valid Interconnection Request,
relative to all other pending valid Interconnection Requests, that
is established based upon the date and time of receipt of the valid
Interconnection Request by [the] Transmission Provider.
Small Generating Facility--[The] Interconnection Customer's
device for the production and/or storage for later injection of
electricity identified in the Interconnection Request, but shall not
include [the] Interconnection Customer's Interconnection Facilities.
Study Process--The procedure for evaluating an Interconnection
Request that includes the section 3 scoping meeting, feasibility
study, system impact study, and facilities study.
Transmission Owner--The entity that owns, leases or otherwise
possesses an interest in the portion of the Transmission System at
the Point of Interconnection and may be a Party to the Small
Generator Interconnection Agreement to the extent necessary.
Transmission Provider--The public utility (or its designated
agent) that owns, controls, or operates transmission or distribution
facilities used for the transmission of electricity in interstate
commerce and provides transmission service under the Tariff. The
term Transmission Provider should be read to include the
Transmission Owner when the Transmission Owner is separate from
[the] Transmission Provider.
Transmission System--The facilities owned, controlled or
operated by [the] Transmission Provider or the Transmission Owner
that are used to provide transmission service under the Tariff.
Upgrades--The required additions and modifications to [the]
Transmission Provider's Transmission System at or beyond the Point
of Interconnection. Upgrades may be Network Upgrades or Distribution
Upgrades. Upgrades do not include Interconnection Facilities.
BILLING CODE 6717-01-P
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BILLING CODE 6717-01-C
Excitation and Governor System Data for Synchronous Generators Only
Provide appropriate IEEE model block diagram of excitation
system, governor system and power system stabilizer (PSS) in
accordance with the regional reliability council criteria. A PSS may
be determined to be required by applicable studies. A copy of the
manufacturer's block diagram may not be substituted.
Models for Non-Synchronous Small Generating Facilities
For a non-synchronous Small Generating Facility, Interconnection
Customer shall provide (1) a validated user-defined root mean
squared (RMS) positive sequence dynamics model; (2) an appropriately
parameterized generic library RMS positive sequence dynamics model,
including model block diagram of the inverter control and plant
control systems, as defined by the selection in Table 1 or a model
otherwise approved by the Western Electricity Coordinating Council,
that corresponds to Interconnection Customer's Small Generating
Facility; and (3) if applicable, a validated electromagnetic
transient model if Transmission Provider performs an electromagnetic
transient study as part of the interconnection study process. A
user-defined model is a set of programming code created by equipment
manufacturers or developers that captures the latest features of
controllers that are mainly software based and represents the
entities' control strategies but does not necessarily correspond to
any generic library model. Interconnection Customer must also
demonstrate that the model is validated by providing evidence that
the equipment behavior is consistent with the model behavior (e.g.,
an attestation from Interconnection Customer that the model
accurately represents the entire Small Generating Facility;
attestations from each equipment manufacturer that the user defined
model accurately represents the component of the Small Generating
Facility; or test data).
Table 1--Acceptable Generic Library RMS Positive Sequence Dynamics Models
----------------------------------------------------------------------------------------------------------------
GE PSLF Siemens PSS/E* PowerWorld simulator Description
----------------------------------------------------------------------------------------------------------------
pvd1............................... ...................... PVD1.................. Distributed PV system
model.
der_a.............................. DERAU1................ DER_A................. Distributed energy resource
model.
regc_a............................. REGCAU1, REGCA1....... REGC_A................ Generator/converter model.
regc_b............................. REGCBU1............... REGC_B................ Generator/converter model.
wt1g............................... WT1G1................. WT1G and WT1G1........ Wind turbine model for Type-
1 wind turbines
(conventional directly
connected induction
generator).
wt2g............................... WT2G1................. WT2G and WT2G1........ Generator model for generic
Type-2 wind turbines.
wt2e............................... WT2E1................. WT2E and WT2E1........ Rotor resistance control
model for wound-rotor
induction wind-turbine
generator wt2g.
reec_a............................. REECAU1, REECA1....... REEC_A................ Renewable energy electrical
control model.
reec_c............................. REECCU1............... REEC_C................ Electrical control model
for battery energy storage
system.
reec_d............................. REECDU1............... REEC_D................ Renewable energy electrical
control model.
wt1t............................... WT12T1................ WT1T and WT12T1....... Wind turbine model for Type-
1 wind turbines
(conventional directly
connected induction
generator).
wt1p_b............................. wt1p_b................ WT12A1U_B............. Generic wind turbine pitch
controller for WTGs of
Types 1 and 2.
[[Page 27215]]
wt2t............................... WT12T1................ WT2T.................. Wind turbine model for Type-
2 wind turbines (directly
connected induction
generator wind turbines
with an external rotor
resistance).
wtgt_a............................. WTDTAU1, WTDTA1....... WTGT_A................ Wind turbine drive train
model.
wtga_a............................. WTARAU1, WTARA1....... WTGA_A................ Simple aerodynamic model.
wtgp_a............................. WTPTAU1, WTPTA1....... WTGPT_A............... Wind Turbine Generator
Pitch controller.
wtgq_a............................. WTTQAU1, WTTQA1....... WTGTRQ_A.............. Wind Turbine Generator
Torque controller.
wtgwgo_a........................... WTGWGOAU.............. WTGWGO_A.............. Supplementary control model
for Weak Grids.
wtgibffr_a......................... WTGIBFFRA............. WTGIBFFR_A............ Inertial-base fast
frequency response
control.
wtgp_b............................. WTPTBU1............... WTGPT_B............... Wind Turbine Generator
Pitch controller.
wtgt_b............................. WTDTBU1............... WTGT_B................ Drive train model.
repc_a............................. Type 4: REPCAU1 (v33), REPC_A................ Power Plant Controller.
REPCA1 (v34) Type 3:
REPCTAU1 (v33),
REPCTA1 (v34).
repc_b............................. PLNTBU1............... REPC_B................ Power Plant Level
Controller for controlling
several plants/devices In
regard to Siemens PSS/E*:
Names of other models for
interface with other
devices: REA3XBU1,
REAX4BU1--for interface
with Type 3 and 4
renewable machines
SWSAXBU1--for interface
with SVC (modeled as
switched shunt in
powerflow) SYNAXBU1--for
interface with synchronous
condenser FCTAXBU1--for
interface with FACTS
device.
repc_c............................. REPCCU................ REPC_C................ Power plant controller.
----------------------------------------------------------------------------------------------------------------
BILLING CODE 6717-01-P
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BILLING CODE 6717-01-C
Attachment 3
Certification Codes and Standards
IEEE1547 Standard for Interconnecting Distributed Resources with
Electric Power Systems (including use of IEEE 1547.1 testing
protocols to establish conformity)
UL 1741 Inverters, Converters, and Controllers for Use in
Independent Power Systems
IEEE Std 929-2000 IEEE Recommended Practice for Utility Interface of
Photovoltaic (PV) Systems
NFPA 70 (2002), National Electrical Code
IEEE Std C37.90.1-1989 (R1994), IEEE Standard Surge Withstand
Capability (SWC) Tests for Protective Relays and Relay Systems
IEEE Std C37.90.2 (1995), IEEE Standard Withstand Capability of
Relay Systems to Radiated Electromagnetic Interference from
Transceivers
IEEE Std C37.108-1989 (R2002), IEEE Guide for the Protection of
Network Transformers
IEEE Std C57.12.44-2000, IEEE Standard Requirements for Secondary
Network Protectors
IEEE Std C62.41.2-2002, IEEE Recommended Practice on
Characterization of Surges in Low Voltage (1000V and Less) AC Power
Circuits
IEEE Std C62.45-1992 (R2002), IEEE Recommended Practice on Surge
Testing for Equipment Connected to Low-Voltage (1000V and Less) AC
Power Circuits
ANSI C84.1-1995 Electric Power Systems and Equipment--Voltage
Ratings (60 Hertz)
IEEE Std 100-2000, IEEE Standard Dictionary of Electrical and
Electronic Terms
NEMA MG 1-1998, Motors and Small Resources, Revision 3
IEEE Std 519-1992, IEEE Recommended Practices and Requirements for
Harmonic Control in Electrical Power Systems
NEMA MG 1-2003 (Rev 2004), Motors and Generators, Revision 1
Attachment 4
Certification of Small Generator Equipment Packages
1.0 Small Generating Facility equipment proposed for use
separately or packaged with other equipment in an interconnection
system shall be considered certified for interconnected operation if
(1) it has been tested in accordance with industry standards for
continuous utility interactive operation in compliance with the
appropriate codes and standards referenced below by any Nationally
Recognized Testing Laboratory (NRTL) recognized by the United States
Occupational Safety and Health Administration to test and certify
interconnection equipment pursuant to the relevant codes and
standards listed in SGIP Attachment 3, (2) it has been labeled and
is publicly listed by such NRTL at the time of the interconnection
application, and (3) such NRTL makes readily available for
verification all test standards and procedures it utilized in
performing such equipment certification, and, with consumer
approval, the test data itself. The NRTL may make such information
available on its website and by encouraging such information to be
included in the manufacturer's literature accompanying the
equipment.
2.0 [The] Interconnection Customer must verify that the intended
use of the equipment falls within the use or uses for which the
equipment was tested, labeled, and listed by the NRTL.
3.0 Certified equipment shall not require further type-test
review, testing, or additional equipment to meet the requirements of
this interconnection procedure; however, nothing herein shall
preclude the need for an on-site commissioning test by the parties
to the interconnection nor follow-up production testing by the NRTL.
4.0 If the certified equipment package includes only interface
components (switchgear, inverters, or other interface devices), then
an Interconnection Customer must show that the generator or other
electric source being utilized with the equipment package is
compatible with the equipment package and is consistent with the
testing and listing specified for this type of interconnection
equipment.
5.0 Provided the generator or electric source, when combined
with the equipment package, is within the range of capabilities for
which it was tested by the NRTL, and does not violate the interface
components' labeling and listing performed by the NRTL, no further
design review, testing or additional equipment on the customer side
of the point of common coupling shall be required to meet the
requirements of this interconnection procedure.
6.0 An equipment package does not include equipment provided by
the utility.
7.0 Any equipment package approved and listed in a state by that
state's regulatory body for interconnected operation in that state
prior to the effective date of these small generator interconnection
procedures shall be considered certified under these procedures for
use in that state.
Attachment 5
Application, Procedures, and Terms and Conditions for Interconnecting a
Certified Inverter-Based Small Generating Facility No Larger Than 10 kW
(``10 kW Inverter Process'')
1.0 [The] Interconnection Customer (``Customer'') completes the
Interconnection Request (``Application'') and submits it to [the]
Transmission Provider (``Company'').
[[Page 27220]]
2.0 The Company acknowledges to the Customer receipt of the
Application within three (3) Business Days of receipt.
3.0 The Company evaluates the Application for completeness and
notifies the Customer within ten (10) Business Days of receipt that
the Application is or is not complete and, if not, advises what
material is missing.
4.0 The Company verifies that the Small Generating Facility can
be interconnected safely and reliably using the screens contained in
the Fast Track Process in the Small Generator Interconnection
Procedures (SGIP). The Company has fifteen (15) Business Days to
complete this process. Unless the Company determines and
demonstrates that the Small Generating Facility cannot be
interconnected safely and reliably, the Company approves the
Application and returns it to the Customer. Note to Customer: Please
check with the Company before submitting the Application if
disconnection equipment is required.
5.0 After installation, the Customer returns the Certificate of
Completion to the Company. Prior to parallel operation, the Company
may inspect the Small Generating Facility for compliance with
standards which may include a witness test, and may schedule
appropriate metering replacement, if necessary.
6.0 The Company notifies the Customer in writing that
interconnection of the Small Generating Facility is authorized. If
the witness test is not satisfactory, the Company has the right to
disconnect the Small Generating Facility. The Customer has no right
to operate in parallel until a witness test has been performed, or
previously waived on the Application. The Company is obligated to
complete this witness test within ten (10) Business Days of the
receipt of the Certificate of Completion. If the Company does not
inspect within ten (10) Business Days or by mutual agreement of the
Parties, the witness test is deemed waived.
7.0 Contact Information--The Customer must provide the contact
information for the legal applicant (i.e., [the] Interconnection
Customer). If another entity is responsible for interfacing with the
Company, that contact information must be provided on the
Application.
8.0 Ownership Information--Enter the legal names of the owner(s)
of the Small Generating Facility. Include the percentage ownership
(if any) by any utility or public utility holding company, or by any
entity owned by either.
9.0 UL1741 Listed--This standard (``Inverters, Converters, and
Controllers for Use in Independent Power Systems'') addresses the
electrical interconnection design of various forms of generating
equipment. Many manufacturers submit their equipment to a Nationally
Recognized Testing Laboratory (NRTL) that verifies compliance with
UL1741. This ``listing'' is then marked on the equipment and
supporting documentation.
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BILLING CODE 6717-01-C
Terms and Conditions for Interconnecting an Inverter-Based Small
Generating Facility No Larger Than 10kW
1.0 Construction of the Facility
[The] Interconnection Customer (the ``Customer'') may proceed to
construct (including operational testing not to exceed two hours)
the Small Generating Facility when [the] Transmission Provider (the
``Company'') approves the Interconnection Request (the
``Application'') and returns it to the Customer.
2.0 Interconnection and Operation
The Customer may operate Small Generating Facility and
interconnect with the Company's electric system once all of the
following have occurred:
2.1 Upon completing construction, the Customer will cause the
Small Generating Facility to be inspected or otherwise certified by
the appropriate local electrical wiring inspector with jurisdiction,
and
2.2 The Customer returns the Certificate of Completion to the
Company, and
2.3 The Company has either:
2.3.1 Completed its inspection of the Small Generating Facility
to ensure that all equipment has been appropriately installed and
that all electrical connections have been made in accordance with
applicable codes. All inspections must be conducted by the Company,
at its own expense, within ten (10) Business Days after receipt of
the Certificate of Completion and shall take place at a time
agreeable to the Parties. The Company shall provide a written
statement that the Small Generating Facility has passed inspection
or shall notify the Customer of what steps it must take to pass
inspection as soon as practicable after the inspection takes place;
or
2.3.2 If the Company does not schedule an inspection of the
Small Generating Facility within ten (10) [b]Business [d]Days after
receiving the Certificate of Completion, the witness test is deemed
waived (unless the Parties agree otherwise); or
2.3.3 The Company waives the right to inspect the Small
Generating Facility.
2.4 The Company has the right to disconnect the Small Generating
Facility in the event of improper installation or failure to return
the Certificate of Completion.
2.5 Revenue quality metering equipment must be installed and
tested in accordance with applicable ANSI standards.
3.0 Safe Operations and Maintenance
The Customer shall be fully responsible to operate, maintain,
and repair the Small Generating Facility as required to ensure that
it complies at all times with the interconnection standards to which
it has been certified.
4.0 Access
The Company shall have access to the disconnect switch (if the
disconnect switch is required) and metering equipment of the Small
Generating Facility at all times. The Company shall provide
reasonable notice to the Customer when possible prior to using its
right of access.
5.0 Disconnection
The Company may temporarily disconnect the Small Generating
Facility upon the following conditions:
5.1 For scheduled outages upon reasonable notice.
5.2 For unscheduled outages or emergency conditions.
5.3 If the Small Generating Facility does not operate in the
manner consistent with these Terms and Conditions.
5.4 The Company shall inform the Customer in advance of any
scheduled disconnection, or as is reasonable after an unscheduled
disconnection.
6.0 Indemnification
The Parties shall at all times indemnify, defend, and save the
other Party harmless from, any and all damages, losses, claims,
including claims and actions relating to injury to or death of any
person or damage to property, demand, suits, recoveries, costs and
expenses, court costs, attorney fees, and all other obligations by
or to third parties, arising out of or resulting from the other
Party's action or inactions of its obligations under this agreement
on behalf of the indemnifying Party, except in cases of gross
negligence or intentional wrongdoing by the indemnified Party.
7.0 Insurance
The Parties agree to follow all applicable insurance
requirements imposed by the state in which the Point of
Interconnection is located. All insurance policies must be
maintained with insurers authorized to do business in that state.
8.0 Limitation of Liability
Each party's liability to the other party for any loss, cost,
claim, injury, liability, or expense, including reasonable
attorney's fees, relating to or arising from any act or omission in
its performance of this Agreement, shall be limited to the amount of
direct damage actually incurred. In no event shall either party be
liable to the other party for any indirect, incidental, special,
consequential, or punitive damages of any kind whatsoever, except as
allowed under paragraph 6.0.
9.0 Termination
The agreement to operate in parallel may be terminated under the
following conditions:
9.1 By the Customer
By providing written notice to the Company.
9.2 By the Company
If the Small Generating Facility fails to operate for any
consecutive 12 month period or the Customer fails to remedy a
violation of these Terms and Conditions.
9.3 Permanent Disconnection
In the event this Agreement is terminated, the Company shall
have the right to disconnect its facilities or direct the Customer
to disconnect its Small Generating Facility.
9.4 Survival Rights
This Agreement shall continue in effect after termination to the
extent necessary to allow or require either Party to fulfill rights
or obligations that arose under the Agreement.
10.0 Assignment/Transfer of Ownership of the Facility
This Agreement shall survive the transfer of ownership of the
Small Generating Facility to a new owner when the new owner agrees
in writing to comply with the terms of this Agreement and so
notifies the Company.
Attachment 6
Feasibility Study Agreement
This Agreement is made and entered into this__ day of ____ 20__
by and between ____, a ____ organized and existing under the laws of
the State of ____, (``Interconnection Customer,'') and ____, a ____
organized and existing under the laws of the State of ____,
(``Transmission Provider''). Interconnection Customer and
Transmission Provider each may be referred to as a ``Party,'' or
collectively as the ``Parties.''
Recitals
Whereas, Interconnection Customer is proposing to develop a
Small Generating Facility or generating capacity addition to an
existing Small Generating Facility consistent with the
Interconnection Request completed by Interconnection Customer on
____; and
Whereas, Interconnection Customer desires to interconnect the
Small Generating Facility with [the] Transmission Provider's
Transmission System; and
Whereas, Interconnection Customer has requested [the]
Transmission Provider to perform a feasibility study to assess the
feasibility of interconnecting the proposed Small Generating
Facility with [the] Transmission Provider's Transmission System, and
of any Affected Systems;
Now, therefore, in consideration of and subject to the mutual
covenants contained herein the Parties agreed as follows:
1.0 When used in this Agreement, with initial capitalization,
the terms specified shall have the meanings indicated or the
meanings specified in the standard Small Generator Interconnection
Procedures.
2.0 [The] Interconnection Customer elects and [the] Transmission
Provider shall cause to be performed an interconnection feasibility
study consistent the standard Small Generator Interconnection
Procedures in accordance with the Open Access Transmission Tariff.
3.0 The scope of the feasibility study shall be subject to the
assumptions set forth in Attachment A to this Agreement.
4.0 The feasibility study shall be based on the technical
information provided by [the] Interconnection Customer in the
Interconnection Request, as may be modified as the result of the
scoping meeting. [The] Transmission Provider reserves the right to
request additional technical information from [the] Interconnection
Customer as may reasonably become necessary consistent with Good
Utility Practice during the course of the feasibility study and as
designated in accordance with the standard Small Generator
Interconnection Procedures. If [the] Interconnection Customer
modifies its Interconnection Request, the time to complete the
feasibility study may be extended by agreement of the Parties.
5.0 In performing the study, [the] Transmission Provider shall
rely, to the extent reasonably practicable, on existing studies of
recent vintage. [The] Interconnection Customer shall not be charged
for such existing studies; however, [the] Interconnection Customer
shall be
[[Page 27227]]
responsible for charges associated with any new study or
modifications to existing studies that are reasonably necessary to
perform the feasibility study.
6.0 The feasibility study report shall provide the following
analyses for the purpose of identifying any potential adverse system
impacts that would result from the interconnection of the Small
Generating Facility as proposed:
6.1 Initial identification of any circuit breaker short circuit
capability limits exceeded as a result of the interconnection;
6.2 Initial identification of any thermal overload or voltage
limit violations resulting from the interconnection;
6.3 Initial review of grounding requirements and electric system
protection; and
6.4 Description and non-binding estimated cost of facilities
required to interconnect the proposed Small Generating Facility and
to address the identified short circuit and power flow issues.
7.0 The feasibility study shall model the impact of the Small
Generating Facility regardless of purpose in order to avoid the
further expense and interruption of operation for reexamination of
feasibility and impacts if [the] Interconnection Customer later
changes the purpose for which the Small Generating Facility is being
installed.
8.0 The study shall include the feasibility of any
interconnection at a proposed project site where there could be
multiple potential Points of Interconnection, as requested by [the]
Interconnection Customer and at [the] Interconnection Customer's
cost.
9.0 A deposit of the lesser of 50 percent of good faith
estimated feasibility study costs or earnest money of $1,000 may be
required from [the] Interconnection Customer.
10.0 Once the feasibility study is completed, a feasibility
study report shall be prepared and transmitted to [the]
Interconnection Customer. Barring unusual circumstances, the
feasibility study must be completed and the feasibility study report
transmitted within thirty (30) Business Days of [the]
Interconnection Customer's agreement to conduct a feasibility study.
11.0 Any study fees shall be based on [the] Transmission
Provider's actual costs and will be invoiced to [the]
Interconnection Customer after the study is completed and delivered
and will include a summary of professional time.
12.0 [The] Interconnection Customer must pay any study costs
that exceed the deposit without interest within thirty (30)
[c]Calendar [d]Days on receipt of the invoice or resolution of any
dispute. If the deposit exceeds the invoiced fees, [the]
Transmission Provider shall refund such excess within thirty (30)
[c]Calendar [d]Days of the invoice without interest.
13.0 Governing Law, Regulatory Authority, and Rules
The validity, interpretation and enforcement of this Agreement
and each of its provisions shall be governed by the laws of the
state of ____(where the Point of Interconnection is located),
without regard to its conflicts of law principles. This Agreement is
subject to all Applicable Laws and Regulations. Each Party expressly
reserves the right to seek changes in, appeal, or otherwise contest
any laws, orders, or regulations of a Governmental Authority.
14.0 Amendment
The Parties may amend this Agreement by a written instrument
duly executed by both Parties.
15.0 No Third-Party Beneficiaries
This Agreement is not intended to and does not create rights,
remedies, or benefits of any character whatsoever in favor of any
persons, corporations, associations, or entities other than the
Parties, and the obligations herein assumed are solely for the use
and benefit of the Parties, their successors in interest and where
permitted, their assigns.
16.0 Waiver
16.1 The failure of a Party to this Agreement to insist, on any
occasion, upon strict performance of any provision of this Agreement
will not be considered a waiver of any obligation, right, or duty
of, or imposed upon, such Party.
16.2 Any waiver at any time by either Party of its rights with
respect to this Agreement shall not be deemed a continuing waiver or
a waiver with respect to any other failure to comply with any other
obligation, right, duty of this Agreement. Termination or default of
this Agreement for any reason by Interconnection Customer shall not
constitute a waiver of [the] Interconnection Customer's legal rights
to obtain an interconnection from [the] Transmission Provider. Any
waiver of this Agreement shall, if requested, be provided in
writing.
17.0 Multiple Counterparts
This Agreement may be executed in two or more counterparts, each
of which is deemed an original but all constitute one and the same
instrument.
18.0 No Partnership
This Agreement shall not be interpreted or construed to create
an association, joint venture, agency relationship, or partnership
between the Parties or to impose any partnership obligation or
partnership liability upon either Party. Neither Party shall have
any right, power or authority to enter into any agreement or
undertaking for, or act on behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the other Party.
19.0 Severability
If any provision or portion of this Agreement shall for any
reason be held or adjudged to be invalid or illegal or unenforceable
by any court of competent jurisdiction or other Governmental
Authority, (1) such portion or provision shall be deemed separate
and independent, (2) the Parties shall negotiate in good faith to
restore insofar as practicable the benefits to each Party that were
affected by such ruling, and (3) the remainder of this Agreement
shall remain in full force and effect.
20.0 Subcontractors
Nothing in this Agreement shall prevent a Party from utilizing
the services of any subcontractor as it deems appropriate to perform
its obligations under this Agreement; provided, however, that each
Party shall require its subcontractors to comply with all applicable
terms and conditions of this Agreement in providing such services
and each Party shall remain primarily liable to the other Party for
the performance of such subcontractor.
20.1 The creation of any subcontract relationship shall not
relieve the hiring Party of any of its obligations under this
Agreement. The hiring Party shall be fully responsible to the other
Party for the acts or omissions of any subcontractor the hiring
Party hires as if no subcontract had been made; provided, however,
that in no event shall [the] Transmission Provider be liable for the
actions or inactions of [the] Interconnection Customer or its
subcontractors with respect to obligations of [the] Interconnection
Customer under this Agreement. Any applicable obligation imposed by
this Agreement upon the hiring Party shall be equally binding upon,
and shall be construed as having application to, any subcontractor
of such Party.
20.2 The obligations under this article will not be limited in
any way by any limitation of subcontractor's insurance.
21.0 Reservation of Rights
[The] Transmission Provider shall have the right to make a
unilateral filing with FERC to modify this Agreement with respect to
any rates, terms and conditions, charges, classifications of
service, rule or regulation under section 205 or any other
applicable provision of the Federal Power Act and FERC's rules and
regulations thereunder, and [the] Interconnection Customer shall
have the right to make a unilateral filing with FERC to modify this
Agreement under any applicable provision of the Federal Power Act
and FERC's rules and regulations; provided that each Party shall
have the right to protest any such filing by the other Party and to
participate fully in any proceeding before FERC in which such
modifications may be considered. Nothing in this Agreement shall
limit the rights of the Parties or of FERC under sections 205 or 206
of the Federal Power Act and FERC's rules and regulations, except to
the extent that the Parties otherwise agree as provided herein.
In witness whereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider{time}
-----------------------------------------------------------------------
Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
-----------------------------------------------------------------------
Title:-----------------------------------------------------------------
{Insert name of Interconnection Customer{time}
-----------------------------------------------------------------------
Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
-----------------------------------------------------------------------
Title:-----------------------------------------------------------------
Attachment A to
Feasibility Study Agreement
Assumptions Used in Conducting the Feasibility Study
The feasibility study will be based upon the information set
forth in the Interconnection Request and agreed upon in the scoping
meeting held on ____:
(1) Designation of Point of Interconnection and configuration to
be studied.
[[Page 27228]]
(2) Designation of alternative Points of Interconnection and
configuration.
(1) and (2) are to be completed by the Interconnection Customer.
Other assumptions (listed below) are to be provided by [the]
Interconnection Customer and [the] Transmission Provider.
Attachment 7
System Impact Study Agreement
This agreement is made and entered into this __ day of____ 20__
by and between______, a____ organized and existing under the laws of
the State of ____, (``Interconnection Customer,'') and ____, a ____
organized and existing under the laws of the State of ____,
(``Transmission Provider''). Interconnection Customer and
Transmission Provider each may be referred to as a ``Party,'' or
collectively as the ``Parties.''
Recitals
Whereas, [the] Interconnection Customer is proposing to develop
a Small Generating Facility or generating capacity addition to an
existing Small Generating Facility consistent with the
Interconnection Request completed by [the] Interconnection Customer
on ____; and
Whereas, [the] Interconnection Customer desires to interconnect
the Small Generating Facility with [the] Transmission Provider's
Transmission System;
Whereas, [the] Transmission Provider has completed a feasibility
study and provided the results of said study to [the]
Interconnection Customer (This recital to be omitted if the Parties
have agreed to forego the feasibility study.); and
Whereas, [the] Interconnection Customer has requested [the]
Transmission Provider to perform a system impact study(s) to assess
the impact of interconnecting the Small Generating Facility with
[the] Transmission Provider's Transmission System, and of any
Affected Systems;
Now, therefore, in consideration of and subject to the mutual
covenants contained herein the Parties agreed as follows:
1.0 When used in this Agreement, with initial capitalization,
the terms specified shall have the meanings indicated or the
meanings specified in the standard Small Generator Interconnection
Procedures.
2.0 [The] Interconnection Customer elects and [the] Transmission
Provider shall cause to be performed a system impact study(s)
consistent with the standard Small Generator Interconnection
Procedures in accordance with the Open Access Transmission Tariff.
3.0 The scope of a system impact study shall be subject to the
assumptions set forth in Attachment A to this Agreement.
4.0 A system impact study will be based upon the results of the
feasibility study and the technical information provided by
Interconnection Customer in the Interconnection Request. [The]
Transmission Provider reserves the right to request additional
technical information from [the] Interconnection Customer as may
reasonably become necessary consistent with Good Utility Practice
during the course of the system impact study. If [the]
Interconnection Customer modifies its designated Point of
Interconnection, Interconnection Request, or the technical
information provided therein is modified, the time to complete the
system impact study may be extended.
5.0 A system impact study shall consist of a short circuit
analysis, a stability analysis, a power flow analysis, voltage drop
and flicker studies, protection and set point coordination studies,
and grounding reviews, as necessary. A system impact study shall
state the assumptions upon which it is based, state the results of
the analyses, and provide the requirement or potential impediments
to providing the requested interconnection service, including a
preliminary indication of the cost and length of time that would be
necessary to correct any problems identified in those analyses and
implement the interconnection. A system impact study shall provide a
list of facilities that are required as a result of the
Interconnection Request and non-binding good faith estimates of cost
responsibility and time to construct.
6.0 A distribution system impact study shall incorporate a
distribution load flow study, an analysis of equipment interrupting
ratings, protection coordination study, voltage drop and flicker
studies, protection and set point coordination studies, grounding
reviews, and the impact on electric system operation, as necessary.
7.0 Affected Systems may participate in the preparation of a
system impact study, with a division of costs among such entities as
they may agree. All Affected Systems shall be afforded an
opportunity to review and comment upon a system impact study that
covers potential adverse system impacts on their electric systems,
and [the] Transmission Provider has twenty (20) additional Business
Days to complete a system impact study requiring review by Affected
Systems.
8.0 If [the] Transmission Provider uses a queuing procedure for
sorting or prioritizing projects and their associated cost
responsibilities for any required Network Upgrades, the system
impact study shall consider all generating facilities (and with
respect to paragraph 8.3 below, any identified Upgrades associated
with such higher queued interconnection) that, on the date the
system impact study is commenced--
8.1 Are directly interconnected with [the] Transmission
Provider's electric system; or
8.2 Are interconnected with Affected Systems and may have an
impact on the proposed interconnection; and
8.3 Have a pending higher queued Interconnection Request to
interconnect with [the] Transmission Provider's electric system.
9.0 A distribution system impact study, if required, shall be
completed and the results transmitted to [the] Interconnection
Customer within thirty (30) Business Days after this Agreement is
signed by the Parties. A transmission system impact study, if
required, shall be completed and the results transmitted to [the]
Interconnection Customer within forty-five (45) Business Days after
this Agreement is signed by the Parties, or in accordance with [the]
Transmission Provider's queuing procedures.
10.0 A deposit of the equivalent of the good faith estimated
cost of a distribution system impact study and the one half the good
faith estimated cost of a transmission system impact study may be
required from [the] Interconnection Customer.
11.0 Any study fees shall be based on [the] Transmission
Provider's actual costs and will be invoiced to [the]
Interconnection Customer after the study is completed and delivered
and will include a summary of professional time.
12.0 [The] Interconnection Customer must pay any study costs
that exceed the deposit without interest within thirty (30)
[c]Calendar [d]Days on receipt of the invoice or resolution of any
dispute. If the deposit exceeds the invoiced fees, [the]
Transmission Provider shall refund such excess within thirty (30)
[c]Calendar [d]Days of the invoice without interest.
13.0 Governing Law, Regulatory Authority, and Rules
The validity, interpretation and enforcement of this Agreement
and each of its provisions shall be governed by the laws of the
state of ____ (where the Point of Interconnection is located),
without regard to its conflicts of law principles. This Agreement is
subject to all Applicable Laws and Regulations. Each Party expressly
reserves the right to seek changes in, appeal, or otherwise contest
any laws, orders, or regulations of a Governmental Authority.
14.0 Amendment
The Parties may amend this Agreement by a written instrument
duly executed by both Parties.
15.0 No Third-Party Beneficiaries
This Agreement is not intended to and does not create rights,
remedies, or benefits of any character whatsoever in favor of any
persons, corporations, associations, or entities other than the
Parties, and the obligations herein assumed are solely for the use
and benefit of the Parties, their successors in interest and where
permitted, their assigns.
16.0 Waiver
16.1 The failure of a Party to this Agreement to insist, on any
occasion, upon strict performance of any provision of this Agreement
will not be considered a waiver of any obligation, right, or duty
of, or imposed upon, such Party.
16.2 Any waiver at any time by either Party of its rights with
respect to this Agreement shall not be deemed a continuing waiver or
a waiver with respect to any other failure to comply with any other
obligation, right, duty of this Agreement. Termination or default of
this Agreement for any reason by Interconnection Customer shall not
constitute a waiver of [the] Interconnection Customer's legal rights
to obtain an interconnection from [the] Transmission Provider. Any
waiver of this Agreement shall, if requested, be provided in
writing.
17.0 Multiple Counterparts
This Agreement may be executed in two or more counterparts, each
of which is deemed an original but all constitute one and the same
instrument.
18.0 No Partnership
This Agreement shall not be interpreted or construed to create
an association, joint venture, agency relationship, or partnership
between the Parties or to impose any partnership obligation or
partnership liability
[[Page 27229]]
upon either Party. Neither Party shall have any right, power or
authority to enter into any agreement or undertaking for, or act on
behalf of, or to act as or be an agent or representative of, or to
otherwise bind, the other Party.
19.0 Severability
If any provision or portion of this Agreement shall for any
reason be held or adjudged to be invalid or illegal or unenforceable
by any court of competent jurisdiction or other Governmental
Authority, (1) such portion or provision shall be deemed separate
and independent, (2) the Parties shall negotiate in good faith to
restore insofar as practicable the benefits to each Party that were
affected by such ruling, and (3) the remainder of this Agreement
shall remain in full force and effect.
20.0 Subcontractors
Nothing in this Agreement shall prevent a Party from utilizing
the services of any subcontractor as it deems appropriate to perform
its obligations under this Agreement; provided, however, that each
Party shall require its subcontractors to comply with all applicable
terms and conditions of this Agreement in providing such services
and each Party shall remain primarily liable to the other Party for
the performance of such subcontractor.
20.1 The creation of any subcontract relationship shall not
relieve the hiring Party of any of its obligations under this
Agreement. The hiring Party shall be fully responsible to the other
Party for the acts or omissions of any subcontractor the hiring
Party hires as if no subcontract had been made; provided, however,
that in no event shall [the] Transmission Provider be liable for the
actions or inactions of [the] Interconnection Customer or its
subcontractors with respect to obligations of [the] Interconnection
Customer under this Agreement. Any applicable obligation imposed by
this Agreement upon the hiring Party shall be equally binding upon,
and shall be construed as having application to, any subcontractor
of such Party.
20.2 The obligations under this article will not be limited in
any way by any limitation of subcontractor's insurance.
21.0 Reservation of Rights
[The] Transmission Provider shall have the right to make a
unilateral filing with FERC to modify this Agreement with respect to
any rates, terms and conditions, charges, classifications of
service, rule or regulation under section 205 or any other
applicable provision of the Federal Power Act and FERC's rules and
regulations thereunder, and [the] Interconnection Customer shall
have the right to make a unilateral filing with FERC to modify this
Agreement under any applicable provision of the Federal Power Act
and FERC's rules and regulations; provided that each Party shall
have the right to protest any such filing by the other Party and to
participate fully in any proceeding before FERC in which such
modifications may be considered. Nothing in this Agreement shall
limit the rights of the Parties or of FERC under sections 205 or 206
of the Federal Power Act and FERC's rules and regulations, except to
the extent that the Parties otherwise agree as provided herein.
In witness thereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider{time}
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Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
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Title:-----------------------------------------------------------------
{Insert name of Interconnection Customer{time}
-----------------------------------------------------------------------
Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
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Title:-----------------------------------------------------------------
Attachment A to System
Impact Study Agreement Assumptions Used in Conducting the System Impact
Study
The system impact study shall be based upon the results of the
feasibility study, subject to any modifications in accordance with
the standard Small Generator Interconnection Procedures, and the
following assumptions:
(1) Designation of Point of Interconnection and configuration to
be studied.
(2) Designation of alternative Points of Interconnection and
configuration.
(1) and (2) are to be completed by [the] Interconnection
Customer. Other assumptions (listed below) are to be provided by
[the] Interconnection Customer and [the] Transmission Provider.
Attachment 8
Facilities Study Agreement
This agreement is made and entered into this __ day of ____ 20__
by and between ____, a ____ organized and existing under the laws of
the State of ____, (``Interconnection Customer,'') and ____, a ____
organized and existing under the laws of the State of ____,
(``Transmission Provider''). Interconnection Customer and
Transmission Provider each may be referred to as a ``Party,'' or
collectively as the ``Parties.''
Recitals
Whereas, [the] Interconnection Customer is proposing to develop
a Small Generating Facility or generating capacity addition to an
existing Small Generating Facility consistent with the
Interconnection Request completed by [the] Interconnection Customer
on ____; and
Whereas, [the] Interconnection Customer desires to interconnect
the Small Generating Facility with [the] Transmission Provider's
Transmission System;
Whereas, [the] Transmission Provider has completed a system
impact study and provided the results of said study to [the]
Interconnection Customer; and
Whereas, [the] Interconnection Customer has requested [the]
Transmission Provider to perform a facilities study to specify and
estimate the cost of the equipment, engineering, procurement and
construction work needed to implement the conclusions of the system
impact study in accordance with Good Utility Practice to physically
and electrically connect the Small Generating Facility with [the]
Transmission Provider's Transmission System.
Now, therefore, in consideration of and subject to the mutual
covenants contained herein the Parties agreed as follows:
1.0 When used in this Agreement, with initial capitalization,
the terms specified shall have the meanings indicated or the
meanings specified in the standard Small Generator Interconnection
Procedures.
2.0 [The] Interconnection Customer elects and [the] Transmission
Provider shall cause a facilities study consistent with the standard
Small Generator Interconnection Procedures to be performed in
accordance with the Open Access Transmission Tariff.
3.0 The scope of the facilities study shall be subject to data
provided in Attachment A to this Agreement.
4.0 The facilities study shall specify and estimate the cost of
the equipment, engineering, procurement and construction work
(including overheads) needed to implement the conclusions of the
system impact study(s). The facilities study shall also identify (1)
the electrical switching configuration of the equipment, including,
without limitation, transformer, switchgear, meters, and other
station equipment, (2) the nature and estimated cost of [the]
Transmission Provider's Interconnection Facilities and Upgrades
necessary to accomplish the interconnection, and (3) an estimate of
the time required to complete the construction and installation of
such facilities.
5.0 [The] Transmission Provider may propose to group facilities
required for more than one Interconnection Customer in order to
minimize facilities costs through economies of scale, but any
Interconnection Customer may require the installation of facilities
required for its own Small Generating Facility if it is willing to
pay the costs of those facilities.
6.0 A deposit of the good faith estimated facilities study costs
may be required from [the] Interconnection Customer.
7.0 In cases where Upgrades are required, the facilities study
must be completed within forty-five (45) Business Days of the
receipt of this Agreement. In cases where no Upgrades are necessary,
and the required facilities are limited to Interconnection
Facilities, the facilities study must be completed within thirty
(30) Business Days.
8.0 Once the facilities study is completed, a ``draft''
facilities study report shall be prepared and transmitted to [the]
Interconnection Customer. Barring unusual circumstances, the
facilities study must be completed and the ``draft'' facilities
study report transmitted within thirty (30) Business Days of [the]
Interconnection Customer's agreement to conduct a facilities study.
9.0 Interconnection Customer may, within thirty (30) Calendar
Days after receipt of the draft report, provide written comments to
Transmission Provider, which Transmission Provider shall include in
the final report. Transmission Provider shall issue the final
Interconnection Facilities Study report within fifteen (15) Business
Days of receiving Interconnection Customer's comments or promptly
upon receiving Interconnection Customer's statement that it
[[Page 27230]]
will not provide comments. Transmission Provider may reasonably
extend such fifteen-day period upon notice to Interconnection
Customer if Interconnection Customer's comments require Transmission
Provider to perform additional analyses or make other significant
modifications prior to the issuance of the final Interconnection
Facilities Report. Upon request, Transmission Provider shall provide
Interconnection Customer supporting documentation, workpapers, and
databases or data developed in the preparation of the
Interconnection Facilities Study, subject to confidentiality
arrangements consistent with Section 4.5 of the standard Small
Generator Interconnection Procedures.
10.0 Within ten (10) Business Days of providing a draft
Interconnection Facilities Study report to Interconnection Customer,
Transmission Provider and Interconnection Customer shall meet to
discuss the results of the Interconnection Facilities Study.
11.0 Any study fees shall be based on [the] Transmission
Provider's actual costs and will be invoiced to [the]
Interconnection Customer after the study is completed and delivered
and will include a summary of professional time.
12.0 [The] Interconnection Customer must pay any study costs
that exceed the deposit without interest within thirty (30)
[c]Calendar [d]Days on receipt of the invoice or resolution of any
dispute. If the deposit exceeds the invoiced fees, [the]
Transmission Provider shall refund such excess within thirty (30)
[c]Calendar [d]Days of the invoice without interest.
13.0 Governing Law, Regulatory Authority, and Rules
The validity, interpretation and enforcement of this Agreement
and each of its provisions shall be governed by the laws of the
state of ____ (where the Point of Interconnection is located),
without regard to its conflicts of law principles. This Agreement is
subject to all Applicable Laws and Regulations. Each Party expressly
reserves the right to seek changes in, appeal, or otherwise contest
any laws, orders, or regulations of a Governmental Authority.
14.0 Amendment
The Parties may amend this Agreement by a written instrument
duly executed by both Parties.
15.0 No Third-Party Beneficiaries
This Agreement is not intended to and does not create rights,
remedies, or benefits of any character whatsoever in favor of any
persons, corporations, associations, or entities other than the
Parties, and the obligations herein assumed are solely for the use
and benefit of the Parties, their successors in interest and where
permitted, their assigns.
16.0 Waiver
16.1 The failure of a Party to this Agreement to insist, on any
occasion, upon strict performance of any provision of this Agreement
will not be considered a waiver of any obligation, right, or duty
of, or imposed upon, such Party.
16.2 Any waiver at any time by either Party of its rights with
respect to this Agreement shall not be deemed a continuing waiver or
a waiver with respect to any other failure to comply with any other
obligation, right, duty of this Agreement. Termination or default of
this Agreement for any reason by Interconnection Customer shall not
constitute a waiver of [the] Interconnection Customer's legal rights
to obtain an interconnection from [the] Transmission Provider. Any
waiver of this Agreement shall, if requested, be provided in
writing.
17.0 Multiple Counterparts
This Agreement may be executed in two or more counterparts, each
of which is deemed an original but all constitute one and the same
instrument.
18.0 No Partnership
This Agreement shall not be interpreted or construed to create
an association, joint venture, agency relationship, or partnership
between the Parties or to impose any partnership obligation or
partnership liability upon either Party. Neither Party shall have
any right, power or authority to enter into any agreement or
undertaking for, or act on behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the other Party.
19.0 Severability
If any provision or portion of this Agreement shall for any
reason be held or adjudged to be invalid or illegal or unenforceable
by any court of competent jurisdiction or other Governmental
Authority, (1) such portion or provision shall be deemed separate
and independent, (2) the Parties shall negotiate in good faith to
restore insofar as practicable the benefits to each Party that were
affected by such ruling, and (3) the remainder of this Agreement
shall remain in full force and effect.
20.0 Subcontractors
Nothing in this Agreement shall prevent a Party from utilizing
the services of any subcontractor as it deems appropriate to perform
its obligations under this Agreement; provided, however, that each
Party shall require its subcontractors to comply with all applicable
terms and conditions of this Agreement in providing such services
and each Party shall remain primarily liable to the other Party for
the performance of such subcontractor.
20.1 The creation of any subcontract relationship shall not
relieve the hiring Party of any of its obligations under this
Agreement. The hiring Party shall be fully responsible to the other
Party for the acts or omissions of any subcontractor the hiring
Party hires as if no subcontract had been made; provided, however,
that in no event shall [the] Transmission Provider be liable for the
actions or inactions of [the] Interconnection Customer or its
subcontractors with respect to obligations of [the] Interconnection
Customer under this Agreement. Any applicable obligation imposed by
this Agreement upon the hiring Party shall be equally binding upon,
and shall be construed as having application to, any subcontractor
of such Party.
20.2 The obligations under this article will not be limited in
any way by any limitation of subcontractor's insurance.
21.0 Reservation of Rights
[The] Transmission Provider shall have the right to make a
unilateral filing with FERC to modify this Agreement with respect to
any rates, terms and conditions, charges, classifications of
service, rule or regulation under section 205 or any other
applicable provision of the Federal Power Act and FERC's rules and
regulations thereunder, and [the] Interconnection Customer shall
have the right to make a unilateral filing with FERC to modify this
Agreement under any applicable provision of the Federal Power Act
and FERC's rules and regulations; provided that each Party shall
have the right to protest any such filing by the other Party and to
participate fully in any proceeding before FERC in which such
modifications may be considered. Nothing in this Agreement shall
limit the rights of the Parties or of FERC under sections 205 or 206
of the Federal Power Act and FERC's rules and regulations, except to
the extent that the Parties otherwise agree as provided herein.
In witness whereof, the Parties have caused this Agreement to be
duly executed by their duly authorized officers or agents on the day
and year first above written.
{Insert name of Transmission Provider{time}
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Signed-----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
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Title------------------------------------------------------------------
{Insert name of Interconnection Customer{time}
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Signed-----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
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Title------------------------------------------------------------------
BILLING CODE 6717-01-P
[[Page 27231]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.024
[[Page 27232]]
[GRAPHIC] [TIFF OMITTED] TR16AP24.025
[[Page 27233]]
BILLING CODE 6717-01-C
Appendix F: Changes to Pro Forma SGIA
Small Generator Interconnection Agreement (SGIA)
(For Generating Facilities No Larger Than 20 MW)
Table of Contents
Article 1. Scope and Limitations of Agreement
1.5 Responsibilities of the Parties
1.6 Parallel Operation Obligations
1.7 Metering
1.8 Reactive Power and Primary Frequency Response
1.8.1 Power Factor Design Criteria
1.8.4 Primary Frequency Response
Article 2. Inspection, Testing, Authorization, and Right of Access
2.1 Equipment Testing and Inspection
2.2 Authorization Required Prior to Parallel Operation
2.3 Right of Access
Article 3. Effective Date, Term, Termination, and Disconnection
3.1 Effective Date
3.2 Term of Agreement
3.3 Termination
3.4 Temporary Disconnection
3.4.1 Emergency Conditions
3.4.2 Routine Maintenance, Construction, and Repair
3.4.3 Forced Outages
3.4.4 Adverse Operating Effects
3.4.5 Modification of the Small Generating Facility
3.4.6 Reconnection
Article 4. Cost Responsibility for Interconnection Facilities and
Distribution Upgrades
4.1 Interconnection Facilities
4.2 Distribution Upgrades
Article 5. Cost Responsibility for Network Upgrades
5.1 Applicability
5.2 Network Upgrades
5.2.1 Repayment of Amounts Advanced for Network Upgrades
5.3 Special Provisions for Affected Systems
5.4 Rights Under Other Agreements
Article 6. Billing, Payment, Milestones, and Financial Security
6.1 Billing and Payment Procedures and Final Accounting
6.2 Milestones
6.3 Financial Security Arrangements
Article 7. Assignment, Liability, Indemnity, Force Majeure,
Consequential Damages, and Default
7.1 Assignment
7.2 Limitation of Liability
7.3 Indemnity
7.4 Consequential Damages
7.5 Force Majeure
7.6 Default
Article 8. Insurance
Article 9. Confidentiality
Article 10. Disputes
Article 11. Taxes
Article 12. Miscellaneous
12.1 Governing Law, Regulatory Authority, and Rules
12.2 Amendment
12.3 No Third-Party Beneficiaries
12.4 Waiver
12.5 Entire Agreement
12.6 Multiple Counterparts
12.7 No Partnership
12.8 Severability
12.9 Security Arrangements
12.10 Environmental Releases
12.11 Subcontractors
12.12 Reservation of Rights
Article 13. Notices
13.1 General
13.2 Billing and Payment
13.3 Alternative Forms of Notice
13.4 Designated Operating Representative
13.5 Changes to the Notice Information
Article 14. Signatures
Attachment 1--Glossary of Terms
Attachment 2--Description and Costs of the Small Generating
Facility, Interconnection Facilities, and Metering Equipment
Attachment 3--One-line Diagram Depicting the Small Generating
Facility, Interconnection Facilities, Metering Equipment, and
Upgrades
Attachment 4--Milestones
Attachment 5--Additional Operating Requirements for [the]
Transmission Provider's Transmission System and Affected Systems
Needed to Support [the] Interconnection Customer's Needs
Attachment 6--Transmission Provider's Description of its Upgrades
and Best Estimate of Upgrade Costs
This Interconnection Agreement (``Agreement'') is made and
entered into this __ day of ____, 20__, by ____ (``Transmission
Provider''), and ____
(``Interconnection Customer'') each hereinafter sometimes
referred to individually as ``Party'' or both referred to
collectively as the ``Parties.''
Transmission Provider Information
Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
Interconnection Customer Information
Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
Interconnection Customer Application No: ____
In consideration of the mutual covenants set forth herein, the
Parties agree as follows:
Article 1. Scope and Limitations of Agreement
1.1 Applicability
This Agreement shall be used for all Interconnection Requests
submitted under the Small Generator Interconnection Procedures
(SGIP) except for those submitted under the 10 kW Inverter Process
contained in SGIP Attachment 5.
1.2 Purpose
This Agreement governs the terms and conditions under which
[the] Interconnection Customer's Small Generating Facility will
interconnect with, and operate in parallel with, [the] Transmission
Provider's Transmission System.
1.3 No Agreement to Purchase or Deliver Power
This Agreement does not constitute an agreement to purchase or
deliver [the] Interconnection Customer's power. The purchase or
delivery of power and other services that [the] Interconnection
Customer may require will be covered under separate agreements, if
any. [The] Interconnection Customer will be responsible for
separately making all necessary arrangements (including scheduling)
for delivery of electricity with the applicable Transmission
Provider.
1.4 Limitations
Nothing in this Agreement is intended to affect any other
agreement between [the] Transmission Provider and [the]
Interconnection Customer.
1.5 Responsibilities of the Parties
1.5.1 The Parties shall perform all obligations of this
Agreement in accordance with all Applicable Laws and Regulations,
Operating Requirements, and Good Utility Practice.
1.5.2 [The] Interconnection Customer shall construct,
interconnect, operate and maintain its Small Generating Facility and
construct, operate, and maintain its Interconnection Facilities in
accordance with the applicable manufacturer's recommended
maintenance schedule, and in accordance with this Agreement, and
with Good Utility Practice.
1.5.3 [The] Transmission Provider shall construct, operate, and
maintain its Transmission System and Interconnection Facilities in
accordance with this Agreement, and with Good Utility Practice.
1.5.4 [The] Interconnection Customer agrees to construct its
facilities or systems in accordance with applicable specifications
that meet or exceed those provided by the National Electrical Safety
Code, the American National Standards Institute, IEEE, Underwriter's
Laboratory, and Operating Requirements in effect at the time of
construction and other applicable national and state codes and
standards. [The] Interconnection Customer agrees to design, install,
maintain, and operate its Small Generating Facility so as to
reasonably minimize the likelihood of a disturbance adversely
affecting or impairing the system or equipment of [the] Transmission
Provider and any Affected Systems.
1.5.5 Each Party shall operate, maintain, repair, and inspect,
and shall be fully responsible for the facilities that it now or
subsequently may own unless otherwise specified in the Attachments
to this Agreement. Each Party shall be responsible for the safe
installation, maintenance, repair and condition of their respective
lines and appurtenances on their respective sides of the point of
change of ownership. [The] Transmission Provider and [the]
Interconnection Customer, as appropriate, shall provide
Interconnection Facilities that
[[Page 27234]]
adequately protect [the] Transmission Provider's Transmission
System, personnel, and other persons from damage and injury. The
allocation of responsibility for the design, installation,
operation, maintenance and ownership of Interconnection Facilities
shall be delineated in the Attachments to this Agreement.
1.5.6 [The] Transmission Provider shall coordinate with all
Affected Systems to support the interconnection.
1.5.7 [The] Interconnection Customer shall ensure ``frequency
ride through'' capability and ``voltage ride through'' capability of
its Small Generating Facility. [The] Interconnection Customer shall
enable these capabilities such that its Small Generating Facility
shall not disconnect automatically or instantaneously from the
system or equipment of [the] Transmission Provider and any Affected
Systems for a defined under-frequency or over-frequency condition,
or an under-voltage or over-voltage condition, as tested pursuant to
Section 2.1 of this agreement. The defined conditions shall be in
accordance with Good Utility Practice and consistent with any
standards and guidelines that are applied to other generating
facilities in the Balancing Authority Area on a comparable basis.
The Small Generating Facility's protective equipment settings shall
comply with [the] Transmission Provider's automatic load-shed
program. [The] Transmission Provider shall review the protective
equipment settings to confirm compliance with the automatic load-
shed program. The term ``ride through'' as used herein shall mean
the ability of a Small Generating Facility to stay connected to and
synchronized with the system or equipment of [the] Transmission
Provider and any Affected Systems during system disturbances within
a range of conditions, in accordance with Good Utility Practice and
consistent with any standards and guidelines that are applied to
other generating facilities in the Balancing Authority Area on a
comparable basis. The term ``frequency ride through'' as used herein
shall mean the ability of a Small Generating Facility to stay
connected to and synchronized with the system or equipment of [the]
Transmission Provider and any Affected Systems during system
disturbances within a range of under-frequency and over-frequency
conditions, in accordance with Good Utility Practice and consistent
with any standards and guidelines that are applied to other
generating facilities in the Balancing Authority Area on a
comparable basis. The term ``voltage ride through'' as used herein
shall mean the ability of a Small Generating Facility to stay
connected to and synchronized with the system or equipment of [the]
Transmission Provider and any Affected Systems during system
disturbances within a range of under-voltage and over-voltage
conditions, in accordance with Good Utility Practice and consistent
with any standards and guidelines that are applied to other
generating facilities in the Balancing Authority Area on a
comparable basis. For abnormal frequency conditions and voltage
conditions within the ``no trip zone'' defined by Reliability
Standard PRC-024-3 or successor mandatory ride through Applicable
Reliability Standards, the non-synchronous Small Generating Facility
must ensure that, within any physical limitations of the Small
Generating Facility, its control and protection settings are
configured or set to (1) continue active power production during
disturbance and post disturbance periods at pre-disturbance levels
unless reactive power priority mode is enabled or unless providing
primary frequency response or fast frequency response; (2) minimize
reductions in active power and remain within dynamic voltage and
current limits, if reactive power priority mode is enabled, unless
providing primary frequency response or fast frequency response; (3)
not artificially limit dynamic reactive power capability during
disturbances; and (4) return to pre-disturbance active power levels
without artificial ramp rate limits if active power is reduced,
unless providing primary frequency response or fast frequency
response.
1.6 Parallel Operation Obligations
Once the Small Generating Facility has been authorized to
commence parallel operation, [the] Interconnection Customer shall
abide by all rules and procedures pertaining to the parallel
operation of the Small Generating Facility in the applicable
Balancing Authority Area, including, but not limited to; (1) the
rules and procedures concerning the operation of generation set
forth in the Tariff or by the applicable system operator(s) for
[the] Transmission Provider's Transmission System and; (2) the
Operating Requirements set forth in Attachment 5 of this Agreement.
1.7 Metering
[The] Interconnection Customer shall be responsible for [the]
Transmission Provider's reasonable and necessary cost for the
purchase, installation, operation, maintenance, testing, repair, and
replacement of metering and data acquisition equipment specified in
Attachments 2 and 3 of this Agreement. [The] Interconnection
Customer's metering (and data acquisition, as required) equipment
shall conform to applicable industry rules and Operating
Requirements.
1.8 Reactive Power and Primary Frequency Response
1.8.1 Power Factor Design Criteria
1.8.1.1 Synchronous Generation. [The] Interconnection Customer
shall design its Small Generating Facility to maintain a composite
power delivery at continuous rated power output at the Point of
Interconnection at a power factor within the range of 0.95 leading
to 0.95 lagging, unless [the] Transmission Provider has established
different requirements that apply to all similarly situated
synchronous generators in the Balancing Authority Area on a
comparable basis.
1.8.1.2 Non-Synchronous Generation. [The] Interconnection
Customer shall design its Small Generating Facility to maintain a
composite power delivery at continuous rated power output at the
high-side of the generator substation at a power factor within the
range of 0.95 leading to 0.95 lagging, unless [the] Transmission
Provider has established a different power factor range that applies
to all similarly situated non-synchronous generators in the
Balancing Authority Area on a comparable basis. This power factor
range standard shall be dynamic and can be met using, for example,
power electronics designed to supply this level of reactive
capability (taking into account any limitations due to voltage
level, real power output, etc.) or fixed and switched capacitors, or
a combination of the two. This requirement shall only apply to newly
interconnecting non-synchronous generators that have not yet
executed a Facilities Study Agreement as of the effective date of
the Final Rule establishing this requirement (Order No. 827).
1.8.2 [The] Transmission Provider is required to pay [the]
Interconnection Customer for reactive power that [the]
Interconnection Customer provides or absorbs from the Small
Generating Facility when [the] Transmission Provider requests [the]
Interconnection Customer to operate its Small Generating Facility
outside the range specified in Article 1.8.1. In addition, if [the]
Transmission Provider pays its own or affiliated generators for
reactive power service within the specified range, it must also pay
[the] Interconnection Customer.
1.8.3 Payments shall be in accordance with [the] Interconnection
Customer's applicable rate schedule then in effect unless the
provision of such service(s) is subject to a regional transmission
organization or independent system operator FERC-approved rate
schedule. To the extent that no rate schedule is in effect at the
time [the] Interconnection Customer is required to provide or absorb
reactive power under this Agreement, the Parties agree to
expeditiously file such rate schedule and agree to support any
request for waiver of the Commission's prior notice requirement in
order to compensate [the] Interconnection Customer from the time
service commenced.
1.8.4 Primary Frequency Response. Interconnection Customer shall
ensure the primary frequency response capability of its Small
Generating Facility by installing, maintaining, and operating a
functioning governor or equivalent controls. The term ``functioning
governor or equivalent controls'' as used herein shall mean the
required hardware and/or software that provides frequency responsive
real power control with the ability to sense changes in system
frequency and autonomously adjust the Small Generating Facility's
real power output in accordance with the droop and deadband
parameters and in the direction needed to correct frequency
deviations. Interconnection Customer is required to install a
governor or equivalent controls with the capability of operating:
(1) with a maximum 5 percent droop and 0.036 Hz
deadband; or (2) in accordance with the relevant droop, deadband,
and timely and sustained response settings from an approved Electric
Reliability Organization reliability standard providing for
equivalent or more stringent parameters. The droop characteristic
shall be: (1) based on the nameplate capacity of the Small
Generating Facility, and shall be linear in the range of frequencies
between 59 to 61 Hz that are outside of the deadband parameter; or
(2) based on an approved Electric Reliability Organization
reliability standard providing for an equivalent or more stringent
parameter. The deadband parameter shall be:
[[Page 27235]]
the range of frequencies above and below nominal (60 Hz) in which
the governor or equivalent controls is not expected to adjust the
Small Generating Facility's real power output in response to
frequency deviations. The deadband shall be implemented: (1) without
a step to the droop curve, that is, once the frequency deviation
exceeds the deadband parameter, the expected change in the Small
Generating Facility's real power output in response to frequency
deviations shall start from zero and then increase (for under-
frequency deviations) or decrease (for over-frequency deviations)
linearly in proportion to the magnitude of the frequency deviation;
or (2) in accordance with an approved Electric Reliability
Organization reliability standard providing for an equivalent or
more stringent parameter. Interconnection Customer shall notify
Transmission Provider that the primary frequency response capability
of the Small Generating Facility has been tested and confirmed
during commissioning. Once Interconnection Customer has synchronized
the Small Generating Facility with the Transmission System,
Interconnection Customer shall operate the Small Generating Facility
consistent with the provisions specified in Sections 1.8.4.1 and
1.8.4.2 of this Agreement. The primary frequency response
requirements contained herein shall apply to both synchronous and
non-synchronous Small Generating Facilities.
1.8.4.1 Governor or Equivalent Controls. Whenever the Small
Generating Facility is operated in parallel with the Transmission
System, Interconnection Customer shall operate the Small Generating
Facility with its governor or equivalent controls in service and
responsive to frequency. Interconnection Customer shall: (1) in
coordination with Transmission Provider and/or the relevant
Balancing Authority, set the deadband parameter to: (1) a maximum of
0.036 Hz and set the droop parameter to a maximum of 5
percent; or (2) implement the relevant droop and deadband settings
from an approved Electric Reliability Organization reliability
standard that provides for equivalent or more stringent parameters.
Interconnection Customer shall be required to provide the status and
settings of the governor or equivalent controls to Transmission
Provider and/or the relevant Balancing Authority upon request. If
Interconnection Customer needs to operate the Small Generating
Facility with its governor or equivalent controls not in service,
Interconnection Customer shall immediately notify Transmission
Provider and the relevant Balancing Authority, and provide both with
the following information: (1) the operating status of the governor
or equivalent controls (i.e., whether it is currently out of service
or when it will be taken out of service); (2) the reasons for
removing the governor or equivalent controls from service; and (3) a
reasonable estimate of when the governor or equivalent controls will
be returned to service. Interconnection Customer shall make
Reasonable Efforts to return its governor or equivalent controls
into service as soon as practicable. Interconnection Customer shall
make Reasonable Efforts to keep outages of the Small Generating
Facility's governor or equivalent controls to a minimum whenever the
Small Generating Facility is operated in parallel with the
Transmission System.
1.8.4.2 Timely and Sustained Response. Interconnection Customer
shall ensure that the Small Generating Facility's real power
response to sustained frequency deviations outside of the deadband
setting is automatically provided and shall begin immediately after
frequency deviates outside of the deadband, and to the extent the
Small Generating Facility has operating capability in the direction
needed to correct the frequency deviation. Interconnection Customer
shall not block or otherwise inhibit the ability of the governor or
equivalent controls to respond and shall ensure that the response is
not inhibited, except under certain operational constraints
including, but not limited to, ambient temperature limitations,
physical energy limitations, outages of mechanical equipment, or
regulatory requirements. The Small Generating Facility shall sustain
the real power response at least until system frequency returns to a
value within the deadband setting of the governor or equivalent
controls. A Commission-approved Reliability Standard with equivalent
or more stringent requirements shall supersede the above
requirements.
1.8.4.3 Exemptions. Small Generating Facilities that are
regulated by the United States Nuclear Regulatory Commission shall
be exempt from Sections 1.8.4, 1.8.4.1, and 1.8.4.2 of this
Agreement. Small Generating Facilities that are behind the meter
generation that is sized-to-load (i.e., the thermal load and the
generation are near-balanced in real-time operation and the
generation is primarily controlled to maintain the unique thermal,
chemical, or mechanical output necessary for the operating
requirements of its host facility) shall be required to install
primary frequency response capability in accordance with the droop
and deadband capability requirements specified in Section 1.8.4, but
shall be otherwise exempt from the operating requirements in
Sections 1.8.4, 1.8.4.1, 1.8.4.2, and 1.8.4.4 of this Agreement.
1.8.4.4 Electric Storage Resources. Interconnection Customer
interconnecting an electric storage resource shall establish an
operating range in Attachment 5 of its SGIA that specifies a minimum
state of charge and a maximum state of charge between which the
electric storage resource will be required to provide primary
frequency response consistent with the conditions set forth in
Sections 1.8.4, 1.8.4.1, 1.8.4.2 and 1.8.4.3 of this Agreement.
Attachment 5 shall specify whether the operating range is static or
dynamic, and shall consider: (1) the expected magnitude of frequency
deviations in the interconnection; (2) the expected duration that
system frequency will remain outside of the deadband parameter in
the interconnection; (3) the expected incidence of frequency
deviations outside of the deadband parameter in the interconnection;
(4) the physical capabilities of the electric storage resource; (5)
operational limitations of the electric storage resource due to
manufacturer specifications; and (6) any other relevant factors
agreed to by Transmission Provider and Interconnection Customer, and
in consultation with the relevant transmission owner or Balancing
Authority as appropriate. If the operating range is dynamic, then
Attachment 5 must establish how frequently the operating range will
be reevaluated and the factors that may be considered during its
reevaluation.
Interconnection Customer's electric storage resource is required
to provide timely and sustained primary frequency response
consistent with Section 1.8.4.2 of this Agreement when it is online
and dispatched to inject electricity to the Transmission System and/
or receive electricity from the Transmission System. This excludes
circumstances when the electric storage resource is not dispatched
to inject electricity to the Transmission System and/or dispatched
to receive electricity from the Transmission System. If
Interconnection Customer's electric storage resource is charging at
the time of a frequency deviation outside of its deadband parameter,
it is to increase (for over-frequency deviations) or decrease (for
under-frequency deviations) the rate at which it is charging in
accordance with its droop parameter. Interconnection Customer's
electric storage resource is not required to change from charging to
discharging, or vice versa, unless the response necessitated by the
droop and deadband settings requires it to do so and it is
technically capable of making such a transition.
1.9 Capitalized terms used herein shall have the meanings
specified in the Glossary of Terms in Attachment 1 or the body of
this Agreement.
Article 2. Inspection, Testing, Authorization, and Right of Access
2.1 Equipment Testing and Inspection
2.1.1 [The] Interconnection Customer shall test and inspect its
Small Generating Facility and Interconnection Facilities prior to
interconnection. [The] Interconnection Customer shall notify [the]
Transmission Provider of such activities no fewer than five (5)
Business Days (or as may be agreed to by the Parties) prior to such
testing and inspection. Testing and inspection shall occur on a
Business Day. [The] Transmission Provider may, at its own expense,
send qualified personnel to the Small Generating Facility site to
inspect the interconnection and observe the testing. [The]
Interconnection Customer shall provide [the] Transmission Provider a
written test report when such testing and inspection is completed.
2.1.2 [The] Transmission Provider shall provide [the]
Interconnection Customer written acknowledgment that it has received
[the] Interconnection Customer's written test report. Such written
acknowledgment shall not be deemed to be or construed as any
representation, assurance, guarantee, or warranty by [the]
Transmission Provider of the safety, durability, suitability, or
reliability of the Small Generating Facility or any associated
control, protective, and safety devices owned or controlled by [the]
Interconnection Customer or the quality of power produced by the
Small Generating Facility.
[[Page 27236]]
2.2 Authorization Required Prior to Parallel Operation
2.2.1 [The] Transmission Provider shall use Reasonable Efforts
to list applicable parallel operation requirements in Attachment 5
of this Agreement. Additionally, [the] Transmission Provider shall
notify [the] Interconnection Customer of any changes to these
requirements as soon as they are known. [The] Transmission Provider
shall make Reasonable Efforts to cooperate with [the]
Interconnection Customer in meeting requirements necessary for [the]
Interconnection Customer to commence parallel operations by the in-
service date.
2.2.2 [The] Interconnection Customer shall not operate its Small
Generating Facility in parallel with [the] Transmission Provider's
Transmission System without prior written authorization of [the]
Transmission Provider. [The] Transmission Provider will provide such
authorization once [the] Transmission Provider receives notification
that [the] Interconnection Customer has complied with all applicable
parallel operation requirements. Such authorization shall not be
unreasonably withheld, conditioned, or delayed.
2.3 Right of Access
2.3.1 Upon reasonable notice, [the] Transmission Provider may
send a qualified person to the premises of [the] Interconnection
Customer at or immediately before the time the Small Generating
Facility first produces energy to inspect the interconnection, and
observe the commissioning of the Small Generating Facility
(including any required testing), startup, and operation for a
period of up to three (3) Business Days after initial start-up of
the unit. In addition, [the] Interconnection Customer shall notify
[the] Transmission Provider at least five (5) Business Days prior to
conducting any on-site verification testing of the Small Generating
Facility.
2.3.2 Following the initial inspection process described above,
at reasonable hours, and upon reasonable notice, or at any time
without notice in the event of an emergency or hazardous condition,
[the] Transmission Provider shall have access to [the]
Interconnection Customer's premises for any reasonable purpose in
connection with the performance of the obligations imposed on it by
this Agreement or if necessary to meet its legal obligation to
provide service to its customers.
2.3.3 Each Party shall be responsible for its own costs
associated with following this article.
Article 3. Effective Date, Term, Termination, and Disconnection
3.1 Effective Date
This Agreement shall become effective upon execution by the
Parties subject to acceptance by FERC (if applicable), or if filed
unexecuted, upon the date specified by the FERC. [The] Transmission
Provider shall promptly file this Agreement with the FERC upon
execution, if required.
3.2 Term of Agreement
This Agreement shall become effective on the Effective Date and
shall remain in effect for a period of ten years from the Effective
Date or such other longer period as [the] Interconnection Customer
may request and shall be automatically renewed for each successive
one-year period thereafter, unless terminated earlier in accordance
with article 3.3 of this Agreement.
3.3 Termination
No termination shall become effective until the Parties have
complied with all Applicable Laws and Regulations applicable to such
termination, including the filing with FERC of a notice of
termination of this Agreement (if required), which notice has been
accepted for filing by FERC.
3.3.1 [The] Interconnection Customer may terminate this
Agreement at any time by giving [the] Transmission Provider twenty
(20) Business Days written notice.
3.3.2 Either Party may terminate this Agreement after Default
pursuant to article 7.6.
3.3.3 Upon termination of this Agreement, the Small Generating
Facility will be disconnected from [the] Transmission Provider's
Transmission System. All costs required to effectuate such
disconnection shall be borne by the terminating Party, unless such
termination resulted from the non-terminating Party's Default of
this SGIA or such non-terminating Party otherwise is responsible for
these costs under this SGIA.
3.3.4 The termination of this Agreement shall not relieve either
Party of its liabilities and obligations, owed or continuing at the
time of the termination.
3.3.5 The provisions of this article shall survive termination
or expiration of this Agreement.
3.4 Temporary Disconnection
Temporary disconnection shall continue only for so long as
reasonably necessary under Good Utility Practice.
3.4.1 Emergency Conditions--``Emergency Condition'' shall mean a
condition or situation: (1) that in the judgment of the Party making
the claim is imminently likely to endanger life or property; or (2)
that, in the case of [the] Transmission Provider, is imminently
likely (as determined in a non-discriminatory manner) to cause a
material adverse effect on the security of, or damage to the
Transmission System, [the] Transmission Provider's Interconnection
Facilities or the Transmission Systems of others to which the
Transmission System is directly connected; or (3) that, in the case
of [the] Interconnection Customer, is imminently likely (as
determined in a non-discriminatory manner) to cause a material
adverse effect on the security of, or damage to, the Small
Generating Facility or [the] Interconnection Customer's
Interconnection Facilities. Under Emergency Conditions, [the]
Transmission Provider may immediately suspend interconnection
service and temporarily disconnect the Small Generating Facility.
[The] Transmission Provider shall notify [the] Interconnection
Customer promptly when it becomes aware of an Emergency Condition
that may reasonably be expected to affect [the] Interconnection
Customer's operation of the Small Generating Facility. [The]
Interconnection Customer shall notify [the] Transmission Provider
promptly when it becomes aware of an Emergency Condition that may
reasonably be expected to affect [the] Transmission Provider's
Transmission System or any Affected Systems. To the extent
information is known, the notification shall describe the Emergency
Condition, the extent of the damage or deficiency, the expected
effect on the operation of both Parties' facilities and operations,
its anticipated duration, and the necessary corrective action.
3.4.2 Routine Maintenance, Construction, and Repair
[The] Transmission Provider may interrupt interconnection
service or curtail the output of the Small Generating Facility and
temporarily disconnect the Small Generating Facility from [the]
Transmission Provider's Transmission System when necessary for
routine maintenance, construction, and repairs on [the] Transmission
Provider's Transmission System. [The] Transmission Provider shall
provide [the] Interconnection Customer with five (5) Business Days
notice prior to such interruption. [The] Transmission Provider shall
use Reasonable Efforts to coordinate such reduction or temporary
disconnection with [the] Interconnection Customer.
3.4.3 Forced Outages
During any forced outage, [the] Transmission Provider may
suspend interconnection service to effect immediate repairs on [the]
Transmission Provider's Transmission System. [The] Transmission
Provider shall use Reasonable Efforts to provide [the]
Interconnection Customer with prior notice. If prior notice is not
given, [the] Transmission Provider shall, upon request, provide
[the] Interconnection Customer written documentation after the fact
explaining the circumstances of the disconnection.
3.4.4 Adverse Operating Effects
[The] Transmission Provider shall notify [the] Interconnection
Customer as soon as practicable if, based on Good Utility Practice,
operation of the Small Generating Facility may cause disruption or
deterioration of service to other customers served from the same
electric system, or if operating the Small Generating Facility could
cause damage to [the] Transmission Provider's Transmission System or
Affected Systems. Supporting documentation used to reach the
decision to disconnect shall be provided to [the] Interconnection
Customer upon request. If, after notice, [the] Interconnection
Customer fails to remedy the adverse operating effect within a
reasonable time, [the] Transmission Provider may disconnect the
Small Generating Facility. [The] Transmission Provider shall provide
[the] Interconnection Customer with five Business Day notice of such
disconnection, unless the provisions of article 3.4.1 apply.
3.4.5 Modification of the Small Generating Facility
[The] Interconnection Customer must receive written
authorization from [the] Transmission Provider before making any
change to the Small Generating Facility that may have a material
impact on the safety or reliability of the Transmission System. Such
authorization shall not be unreasonably withheld. Modifications
shall be done in accordance with Good Utility Practice. If [the]
Interconnection Customer makes such
[[Page 27237]]
modification without [the] Transmission Provider's prior written
authorization, the latter shall have the right to temporarily
disconnect the Small Generating Facility.
3.4.6 Reconnection
The Parties shall cooperate with each other to restore the Small
Generating Facility, Interconnection Facilities, and [the]
Transmission Provider's Transmission System to their normal
operating state as soon as reasonably practicable following a
temporary disconnection.
Article 4. Cost Responsibility for Interconnection Facilities and
Distribution Upgrades
4.1 Interconnection Facilities
4.1.1 [The] Interconnection Customer shall pay for the cost of
the Interconnection Facilities itemized in Attachment 2 of this
Agreement. [The] Transmission Provider shall provide a best estimate
cost, including overheads, for the purchase and construction of its
Interconnection Facilities and provide a detailed itemization of
such costs. Costs associated with Interconnection Facilities may be
shared with other entities that may benefit from such facilities by
agreement of [the] Interconnection Customer, such other entities,
and [the] Transmission Provider.
4.1.2 [The] Interconnection Customer shall be responsible for
its share of all reasonable expenses, including overheads,
associated with (1) owning, operating, maintaining, repairing, and
replacing its own Interconnection Facilities, and (2) operating,
maintaining, repairing, and replacing [the] Transmission Provider's
Interconnection Facilities.
4.2 Distribution Upgrades
[The] Transmission Provider shall design, procure, construct,
install, and own the Distribution Upgrades described in Attachment 6
of this Agreement. If [the] Transmission Provider and [the]
Interconnection Customer agree, [the] Interconnection Customer may
construct Distribution Upgrades that are located on land owned by
[the] Interconnection Customer. The actual cost of the Distribution
Upgrades, including overheads, shall be directly assigned to [the]
Interconnection Customer.
Article 5. Cost Responsibility for Network Upgrades
5.1 Applicability
No portion of this article 5 shall apply unless the
interconnection of the Small Generating Facility requires Network
Upgrades.
5.2 Network Upgrades
[The] Transmission Provider or the Transmission Owner shall
design, procure, construct, install, and own the Network Upgrades
described in Attachment 6 of this Agreement. If [the] Transmission
Provider and [the] Interconnection Customer agree, [the]
Interconnection Customer may construct Network Upgrades that are
located on land owned by [the] Interconnection Customer. Unless
[the] Transmission Provider elects to pay for Network Upgrades, the
actual cost of the Network Upgrades, including overheads, shall be
borne initially by [the] Interconnection Customer.
5.2.1 Repayment of Amounts Advanced for Network Upgrades
[The] Interconnection Customer shall be entitled to a cash
repayment, equal to the total amount paid to [the] Transmission
Provider and Affected System operator, if any, for Network Upgrades,
including any tax gross-up or other tax-related payments associated
with the Network Upgrades, and not otherwise refunded to [the]
Interconnection Customer, to be paid to [the] Interconnection
Customer on a dollar-for-dollar basis for the non-usage sensitive
portion of transmission charges, as payments are made under [the]
Transmission Provider's Tariff and Affected System's Tariff for
transmission services with respect to the Small Generating Facility.
Any repayment shall include interest calculated in accordance with
the methodology set forth in FERC's regulations at 18 CFR
35.19a(a)(2)(iii) from the date of any payment for Network Upgrades
through the date on which [the] Interconnection Customer receives a
repayment of such payment pursuant to this subparagraph. [The]
Interconnection Customer may assign such repayment rights to any
person.
5.2.1.1 Notwithstanding the foregoing, [the] Interconnection
Customer, [the] Transmission Provider, and any applicable Affected
System operators may adopt any alternative payment schedule that is
mutually agreeable so long as [the] Transmission Provider and said
Affected System operators take one of the following actions no later
than five years from the Commercial Operation Date: (1) return to
[the] Interconnection Customer any amounts advanced for Network
Upgrades not previously repaid, or (2) declare in writing that [the]
Transmission Provider or any applicable Affected System operators
will continue to provide payments to [the] Interconnection Customer
on a dollar-for-dollar basis for the non-usage sensitive portion of
transmission charges, or develop an alternative schedule that is
mutually agreeable and provides for the return of all amounts
advanced for Network Upgrades not previously repaid; however, full
reimbursement shall not extend beyond twenty (20) years from the
commercial operation date.
5.2.1.2 If the Small Generating Facility fails to achieve
commercial operation, but it or another generating facility is later
constructed and requires use of the Network Upgrades, [the]
Transmission Provider and Affected System operator shall at that
time reimburse [the] Interconnection Customer for the amounts
advanced for the Network Upgrades. Before any such reimbursement can
occur, [the] Interconnection Customer, or the entity that ultimately
constructs the generating facility, if different, is responsible for
identifying the entity to which reimbursement must be made.
5.3 Special Provisions for Affected Systems
Unless [the] Transmission Provider provides, under this
Agreement, for the repayment of amounts advanced to any applicable
Affected System operators for Network Upgrades, [the]
Interconnection Customer and Affected System operator shall enter
into an agreement that provides for such repayment. The agreement
shall specify the terms governing payments to be made by [the]
Interconnection Customer to Affected System operator as well as the
repayment by Affected System operator.
5.4 Rights Under Other Agreements
Notwithstanding any other provision of this Agreement, nothing
herein shall be construed as relinquishing or foreclosing any
rights, including but not limited to firm transmission rights,
capacity rights, transmission congestion rights, or transmission
credits, that [the] Interconnection Customer shall be entitled to,
now or in the future, under any other agreement or tariff as a
result of, or otherwise associated with, the transmission capacity,
if any, created by the Network Upgrades, including the right to
obtain cash reimbursements or transmission credits for transmission
service that is not associated with the Small Generating Facility.
Article 6. Billing, Payment, Milestones, and Financial Security
6.1 Billing and Payment Procedures and Final Accounting
6.1.1 [The] Transmission Provider shall bill [the]
Interconnection Customer for the design, engineering, construction,
and procurement costs of Interconnection Facilities and Upgrades
contemplated by this Agreement on a monthly basis, or as otherwise
agreed by the Parties. [The] Interconnection Customer shall pay each
bill within thirty (30) [c]Calendar [d]Days of receipt, or as
otherwise agreed to by the Parties.
6.1.2 Within three months of completing the construction and
installation of [the] Transmission Provider's Interconnection
Facilities and/or Upgrades described in the Attachments to this
Agreement, [the] Transmission Provider shall provide [the]
Interconnection Customer with a final accounting report of any
difference between (1) [the] Interconnection Customer's cost
responsibility for the actual cost of such facilities or Upgrades,
and (2) [the] Interconnection Customer's previous aggregate payments
to [the] Transmission Provider for such facilities or Upgrades. If
[the] Interconnection Customer's cost responsibility exceeds its
previous aggregate payments, [the] Transmission Provider shall
invoice [the] Interconnection Customer for the amount due and [the]
Interconnection Customer shall make payment to [the] Transmission
Provider within thirty (30) [c]Calendar [d]Days. If [the]
Interconnection Customer's previous aggregate payments exceed its
cost responsibility under this Agreement, [the] Transmission
Provider shall refund to [the] Interconnection Customer an amount
equal to the difference within thirty (30) [c]Calendar [d]Days of
the final accounting report.
6.2 Milestones
The Parties shall agree on milestones for which each Party is
responsible and list them in Attachment 4 of this Agreement. A
Party's obligations under this provision may be extended by
agreement. If a Party anticipates that it will be unable to meet a
milestone for any reason other than a Force Majeure Event,
[[Page 27238]]
it shall immediately notify the other Party of the reason(s) for not
meeting the milestone and (1) propose the earliest reasonable
alternate date by which it can attain this and future milestones,
and (2) requesting appropriate amendments to Attachment 4. The Party
affected by the failure to meet a milestone shall not unreasonably
withhold agreement to such an amendment unless it will suffer
significant uncompensated economic or operational harm from the
delay, (2) attainment of the same milestone has previously been
delayed, or (3) it has reason to believe that the delay in meeting
the milestone is intentional or unwarranted notwithstanding the
circumstances explained by the Party proposing the amendment.
6.3 Financial Security Arrangements
At least twenty (20) Business Days prior to the commencement of
the design, procurement, installation, or construction of a discrete
portion of [the] Transmission Provider's Interconnection Facilities
and Upgrades, [the] Interconnection Customer shall provide [the]
Transmission Provider, at [the] Interconnection Customer's option, a
guarantee, a surety bond, letter of credit or other form of security
that is reasonably acceptable to [the] Transmission Provider and is
consistent with the Uniform Commercial Code of the jurisdiction
where the Point of Interconnection is located. Such security for
payment shall be in an amount sufficient to cover the costs for
constructing, designing, procuring, and installing the applicable
portion of [the] Transmission Provider's Interconnection Facilities
and Upgrades and shall be reduced on a dollar-for-dollar basis for
payments made to [the] Transmission Provider under this Agreement
during its term. In addition:
6.3.1 The guarantee must be made by an entity that meets the
creditworthiness requirements of [the] Transmission Provider, and
contain terms and conditions that guarantee payment of any amount
that may be due from [the] Interconnection Customer, up to an
agreed-to maximum amount.
6.3.2 The letter of credit or surety bond must be issued by a
financial institution or insurer reasonably acceptable to [the]
Transmission Provider and must specify a reasonable expiration date.
Article 7. Assignment, Liability, Indemnity, Force Majeure,
Consequential Damages, and Default
7.1 Assignment
This Agreement may be assigned by either Party upon fifteen (15)
Business Days prior written notice and opportunity to object by the
other Party; provided that:
7.1.1 Either Party may assign this Agreement without the consent
of the other Party to any affiliate of the assigning Party with an
equal or greater credit rating and with the legal authority and
operational ability to satisfy the obligations of the assigning
Party under this Agreement, provided that [the] Interconnection
Customer promptly notifies [the] Transmission Provider of any such
assignment;
7.1.2 [The] Interconnection Customer shall have the right to
assign this Agreement, without the consent of [the] Transmission
Provider, for collateral security purposes to aid in providing
financing for the Small Generating Facility, provided that [the]
Interconnection Customer will promptly notify [the] Transmission
Provider of any such assignment.
7.1.3 Any attempted assignment that violates this article is
void and ineffective. Assignment shall not relieve a Party of its
obligations, nor shall a Party's obligations be enlarged, in whole
or in part, by reason thereof. An assignee is responsible for
meeting the same financial, credit, and insurance obligations as
[the] Interconnection Customer. Where required, consent to
assignment will not be unreasonably withheld, conditioned or
delayed.
7.2 Limitation of Liability
Each Party's liability to the other Party for any loss, cost,
claim, injury, liability, or expense, including reasonable
attorney's fees, relating to or arising from any act or omission in
its performance of this Agreement, shall be limited to the amount of
direct damage actually incurred. In no event shall either Party be
liable to the other Party for any indirect, special, consequential,
or punitive damages, except as authorized by this Agreement.
7.3 Indemnity
7.3.1 This provision protects each Party from liability incurred
to third parties as a result of carrying out the provisions of this
Agreement. Liability under this provision is exempt from the general
limitations on liability found in article 7.2.
7.3.2 The Parties shall at all times indemnify, defend, and hold
the other Party harmless from, any and all damages, losses, claims,
including claims and actions relating to injury to or death of any
person or damage to property, demand, suits, recoveries, costs and
expenses, court costs, attorney fees, and all other obligations by
or to third parties, arising out of or resulting from the other
Party's action or failure to meet its obligations under this
Agreement on behalf of the indemnifying Party, except in cases of
gross negligence or intentional wrongdoing by the indemnified Party.
7.3.3 If an indemnified person is entitled to indemnification
under this article as a result of a claim by a third party, and the
indemnifying Party fails, after notice and reasonable opportunity to
proceed under this article, to assume the defense of such claim,
such indemnified person may at the expense of the indemnifying Party
contest, settle or consent to the entry of any judgment with respect
to, or pay in full, such claim.
7.3.4 If an indemnifying party is obligated to indemnify and
hold any indemnified person harmless under this article, the amount
owing to the indemnified person shall be the amount of such
indemnified person's actual loss, net of any insurance or other
recovery.
7.3.5 Promptly after receipt by an indemnified person of any
claim or notice of the commencement of any action or administrative
or legal proceeding or investigation as to which the indemnity
provided for in this article may apply, the indemnified person shall
notify the indemnifying party of such fact. Any failure of or delay
in such notification shall not affect a Party's indemnification
obligation unless such failure or delay is materially prejudicial to
the indemnifying party.
7.4 Consequential Damages
Other than as expressly provided for in this Agreement, neither
Party shall be liable under any provision of this Agreement for any
losses, damages, costs or expenses for any special, indirect,
incidental, consequential, or punitive damages, including but not
limited to loss of profit or revenue, loss of the use of equipment,
cost of capital, cost of temporary equipment or services, whether
based in whole or in part in contract, in tort, including
negligence, strict liability, or any other theory of liability;
provided, however, that damages for which a Party may be liable to
the other Party under another agreement will not be considered to be
special, indirect, incidental, or consequential damages hereunder.
7.5 Force Majeure
7.5.1 As used in this article, a Force Majeure Event shall mean
``any act of God, labor disturbance, act of the public enemy, war,
insurrection, riot, fire, storm or flood, explosion, breakage or
accident to machinery or equipment, any order, regulation or
restriction imposed by governmental, military or lawfully
established civilian authorities, or any other cause beyond a
Party's control. A Force Majeure Event does not include an act of
negligence or intentional wrongdoing.''
7.5.2 If a Force Majeure Event prevents a Party from fulfilling
any obligations under this Agreement, the Party affected by the
Force Majeure Event (Affected Party) shall promptly notify the other
Party, either in writing or via the telephone, of the existence of
the Force Majeure Event. The notification must specify in reasonable
detail the circumstances of the Force Majeure Event, its expected
duration, and the steps that the Affected Party is taking to
mitigate the effects of the event on its performance. The Affected
Party shall keep the other Party informed on a continuing basis of
developments relating to the Force Majeure Event until the event
ends. The Affected Party will be entitled to suspend or modify its
performance of obligations under this Agreement (other than the
obligation to make payments) only to the extent that the effect of
the Force Majeure Event cannot be mitigated by the use of Reasonable
Efforts. The Affected Party will use Reasonable Efforts to resume
its performance as soon as possible.
7.6 Default
7.6.1 No Default shall exist where such failure to discharge an
obligation (other than the payment of money) is the result of a
Force Majeure Event as defined in this Agreement or the result of an
act or omission of the other Party. Upon a Default, the non-
defaulting Party shall give written notice of such Default to the
defaulting Party. Except as provided in article 7.6.2, the
defaulting Party shall have sixty (60) [c]Calendar [d]Days from
receipt of the Default notice within which to cure such Default;
provided however, if such Default is not capable of cure within
sixty (60) [c]Calendar [d]Days, the defaulting Party shall commence
such cure within twenty (20) [c]Calendar [d]Days after notice and
continuously and diligently complete such cure within six months
from
[[Page 27239]]
receipt of the Default notice; and, if cured within such time, the
Default specified in such notice shall cease to exist.
7.6.2 If a Default is not cured as provided in this article, or
if a Default is not capable of being cured within the period
provided for herein, the non-defaulting Party shall have the right
to terminate this Agreement by written notice at any time until cure
occurs, and be relieved of any further obligation hereunder and,
whether or not that Party terminates this Agreement, to recover from
the defaulting Party all amounts due hereunder, plus all other
damages and remedies to which it is entitled at law or in equity.
The provisions of this article will survive termination of this
Agreement.
Article 8. Insurance
8.1 [The] Interconnection Customer shall, at its own expense,
maintain in force general liability insurance without any exclusion
for liabilities related to the interconnection undertaken pursuant
to this Agreement. The amount of such insurance shall be sufficient
to insure against all reasonably foreseeable direct liabilities
given the size and nature of the generating equipment being
interconnected, the interconnection itself, and the characteristics
of the system to which the interconnection is made. [The]
Interconnection Customer shall obtain additional insurance only if
necessary as a function of owning and operating a generating
facility. Such insurance shall be obtained from an insurance
provider authorized to do business in the State where the
interconnection is located. Certification that such insurance is in
effect shall be provided upon request of [the] Transmission
Provider, except that [the] Interconnection Customer shall show
proof of insurance to [the] Transmission Provider no later than ten
(10) Business Days prior to the anticipated commercial operation
date. An Interconnection Customer of sufficient credit-worthiness
may propose to self-insure for such liabilities, and such a proposal
shall not be unreasonably rejected.
8.2 [The] Transmission Provider agrees to maintain general
liability insurance or self-insurance consistent with [the]
Transmission Provider's commercial practice. Such insurance or self-
insurance shall not exclude coverage for [the] Transmission
Provider's liabilities undertaken pursuant to this Agreement.
8.3 The Parties further agree to notify each other whenever an
accident or incident occurs resulting in any injuries or damages
that are included within the scope of coverage of such insurance,
whether or not such coverage is sought.
Article 9. Confidentiality
9.1 Confidential Information shall mean any confidential and/or
proprietary information provided by one Party to the other Party
that is clearly marked or otherwise designated ``Confidential.'' For
purposes of this Agreement all design, operating specifications, and
metering data provided by [the] Interconnection Customer shall be
deemed Confidential Information regardless of whether it is clearly
marked or otherwise designated as such.
9.2 Confidential Information does not include information
previously in the public domain, required to be publicly submitted
or divulged by Governmental Authorities (after notice to the other
Party and after exhausting any opportunity to oppose such
publication or release), or necessary to be divulged in an action to
enforce this Agreement. Each Party receiving Confidential
Information shall hold such information in confidence and shall not
disclose it to any third party nor to the public without the prior
written authorization from the Party providing that information,
except to fulfill obligations under this Agreement, or to fulfill
legal or regulatory requirements.
9.2.1 Each Party shall employ at least the same standard of care
to protect Confidential Information obtained from the other Party as
it employs to protect its own Confidential Information.
9.2.2 Each Party is entitled to equitable relief, by injunction
or otherwise, to enforce its rights under this provision to prevent
the release of Confidential Information without bond or proof of
damages, and may seek other remedies available at law or in equity
for breach of this provision.
9.3 Notwithstanding anything in this article to the contrary,
and pursuant to 18 CFR 1b.20, if FERC, during the course of an
investigation or otherwise, requests information from one of the
Parties that is otherwise required to be maintained in confidence
pursuant to this Agreement, the Party shall provide the requested
information to FERC, within the time provided for in the request for
information. In providing the information to FERC, the Party may,
consistent with 18 CFR 388.112, request that the information be
treated as confidential and non-public by FERC and that the
information be withheld from public disclosure. Parties are
prohibited from notifying the other Party to this Agreement prior to
the release of the Confidential Information to FERC. The Party shall
notify the other Party to this Agreement when it is notified by FERC
that a request to release Confidential Information has been received
by FERC, at which time either of the Parties may respond before such
information would be made public, pursuant to 18 CFR 388.112.
Requests from a state regulatory body conducting a confidential
investigation shall be treated in a similar manner if consistent
with the applicable state rules and regulations.
Article 10. Disputes
10.1 The Parties agree to attempt to resolve all disputes
arising out of the interconnection process according to the
provisions of this article.
10.2 In the event of a dispute, either Party shall provide the
other Party with a written Notice of Dispute. Such Notice shall
describe in detail the nature of the dispute.
10.3 If the dispute has not been resolved within two (2)
Business Days after receipt of the Notice, either Party may contact
FERC's Dispute Resolution Service (DRS) for assistance in resolving
the dispute.
10.4 The DRS will assist the Parties in either resolving their
dispute or in selecting an appropriate dispute resolution venue
(e.g., mediation, settlement judge, early neutral evaluation, or
technical expert) to assist the Parties in resolving their dispute.
DRS can be reached at 1-877-337-2237 or via the internet at https://www.ferc.gov/legal/adr.asp.
10.5 Each Party agrees to conduct all negotiations in good faith
and will be responsible for one-half of any costs paid to neutral
third-parties.
10.6 If neither Party elects to seek assistance from the DRS, or
if the attempted dispute resolution fails, then either Party may
exercise whatever rights and remedies it may have in equity or law
consistent with the terms of this Agreement.
Article 11. Taxes
11.1 The Parties agree to follow all applicable tax laws and
regulations, consistent with FERC policy and Internal Revenue
Service requirements.
11.2 Each Party shall cooperate with the other to maintain the
other Party's tax status. Nothing in this Agreement is intended to
adversely affect [the] Transmission Provider's tax exempt status
with respect to the issuance of bonds including, but not limited to,
local furnishing bonds.
Article 12. Miscellaneous
12.1 Governing Law, Regulatory Authority, and Rules
The validity, interpretation and enforcement of this Agreement
and each of its provisions shall be governed by the laws of the
state of ____ (where the Point of Interconnection is located),
without regard to its conflicts of law principles. This Agreement is
subject to all Applicable Laws and Regulations. Each Party expressly
reserves the right to seek changes in, appeal, or otherwise contest
any laws, orders, or regulations of a Governmental Authority.
12.2 Amendment
The Parties may amend this Agreement by a written instrument
duly executed by both Parties, or under article 12.12 of this
Agreement.
12.3 No Third-Party Beneficiaries
This Agreement is not intended to and does not create rights,
remedies, or benefits of any character whatsoever in favor of any
persons, corporations, associations, or entities other than the
Parties, and the obligations herein assumed are solely for the use
and benefit of the Parties, their successors in interest and where
permitted, their assigns.
12.4 Waiver
12.4.1 The failure of a Party to this Agreement to insist, on
any occasion, upon strict performance of any provision of this
Agreement will not be considered a waiver of any obligation, right,
or duty of, or imposed upon, such Party.
12.4.2 Any waiver at any time by either Party of its rights with
respect to this Agreement shall not be deemed a continuing waiver or
a waiver with respect to any other failure to comply with any other
obligation, right, duty of this Agreement. Termination or default of
this Agreement for any reason by Interconnection Customer shall not
constitute a waiver of [the] Interconnection Customer's legal rights
to obtain an interconnection from [the] Transmission Provider. Any
waiver of this Agreement shall, if requested, be provided in
writing.
[[Page 27240]]
12.5 Entire Agreement
This Agreement, including all Attachments, constitutes the
entire agreement between the Parties with reference to the subject
matter hereof, and supersedes all prior and contemporaneous
understandings or agreements, oral or written, between the Parties
with respect to the subject matter of this Agreement. There are no
other agreements, representations, warranties, or covenants which
constitute any part of the consideration for, or any condition to,
either Party's compliance with its obligations under this Agreement.
12.6 Multiple Counterparts
This Agreement may be executed in two or more counterparts, each
of which is deemed an original but all constitute one and the same
instrument.
12.7 No Partnership
This Agreement shall not be interpreted or construed to create
an association, joint venture, agency relationship, or partnership
between the Parties or to impose any partnership obligation or
partnership liability upon either Party. Neither Party shall have
any right, power or authority to enter into any agreement or
undertaking for, or act on behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the other Party.
12.8 Severability
If any provision or portion of this Agreement shall for any
reason be held or adjudged to be invalid or illegal or unenforceable
by any court of competent jurisdiction or other Governmental
Authority, (1) such portion or provision shall be deemed separate
and independent, (2) the Parties shall negotiate in good faith to
restore insofar as practicable the benefits to each Party that were
affected by such ruling, and (3) the remainder of this Agreement
shall remain in full force and effect.
12.9 Security Arrangements
Infrastructure security of electric system equipment and
operations and control hardware and software is essential to ensure
day-to-day reliability and operational security. FERC expects all
Transmission Providers, market participants, and Interconnection
Customers interconnected to electric systems to comply with the
recommendations offered by the President's Critical Infrastructure
Protection Board and, eventually, best practice recommendations from
the electric reliability authority. All public utilities are
expected to meet basic standards for system infrastructure and
operational security, including physical, operational, and cyber-
security practices.
12.10 Environmental Releases
Each Party shall notify the other Party, first orally and then
in writing, of the release of any hazardous substances, any asbestos
or lead abatement activities, or any type of remediation activities
related to the Small Generating Facility or the Interconnection
Facilities, each of which may reasonably be expected to affect the
other Party. The notifying Party shall (1) provide the notice as
soon as practicable, provided such Party makes a good faith effort
to provide the notice no later than 24 hours after such Party
becomes aware of the occurrence, and (2) promptly furnish to the
other Party copies of any publicly available reports filed with any
governmental authorities addressing such events.
12.11 Subcontractors
Nothing in this Agreement shall prevent a Party from utilizing
the services of any subcontractor as it deems appropriate to perform
its obligations under this Agreement; provided, however, that each
Party shall require its subcontractors to comply with all applicable
terms and conditions of this Agreement in providing such services
and each Party shall remain primarily liable to the other Party for
the performance of such subcontractor.
12.11.1 The creation of any subcontract relationship shall not
relieve the hiring Party of any of its obligations under this
Agreement. The hiring Party shall be fully responsible to the other
Party for the acts or omissions of any subcontractor the hiring
Party hires as if no subcontract had been made; provided, however,
that in no event shall [the] Transmission Provider be liable for the
actions or inactions of [the] Interconnection Customer or its
subcontractors with respect to obligations of [the] Interconnection
Customer under this Agreement. Any applicable obligation imposed by
this Agreement upon the hiring Party shall be equally binding upon,
and shall be construed as having application to, any subcontractor
of such Party.
12.11.2 The obligations under this article will not be limited
in any way by any limitation of subcontractor's insurance.
12.12 Reservation of Rights
[The] Transmission Provider shall have the right to make a
unilateral filing with FERC to modify this Agreement with respect to
any rates, terms and conditions, charges, classifications of
service, rule or regulation under section 205 or any other
applicable provision of the Federal Power Act and FERC's rules and
regulations thereunder, and [the] Interconnection Customer shall
have the right to make a unilateral filing with FERC to modify this
Agreement under any applicable provision of the Federal Power Act
and FERC's rules and regulations; provided that each Party shall
have the right to protest any such filing by the other Party and to
participate fully in any proceeding before FERC in which such
modifications may be considered. Nothing in this Agreement shall
limit the rights of the Parties or of FERC under sections 205 or 206
of the Federal Power Act and FERC's rules and regulations, except to
the extent that the Parties otherwise agree as provided herein.
Article 13. Notices
13.1 General
Unless otherwise provided in this Agreement, any written notice,
demand, or request required or authorized in connection with this
Agreement (``Notice'') shall be deemed properly given if delivered
in person, delivered by recognized national currier service, or sent
by first class mail, postage prepaid, to the person specified below:
If to [the] Interconnection Customer:
Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
If to [the] Transmission Provider:
Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
13.2 Billing and Payment
Billings and payments shall be sent to the addresses set out
below:
Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
13.3 Alternative Forms of Notice
Any notice or request required or permitted to be given by
either Party to the other and not required by this Agreement to be
given in writing may be so given by telephone, facsimile or email to
the telephone numbers and email addresses set out below:
If to [the] Interconnection Customer:
Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
If to [the] Transmission Provider:
Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
13.4 Designated Operating Representative
The Parties may also designate operating representatives to
conduct the communications which may be necessary or convenient for
the administration of this Agreement. This person will also serve as
the point of contact with respect to operations and maintenance of
the Party's facilities.
Interconnection Customer's Operating Representative:
Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
[[Page 27241]]
-----------------------------------------------------------------------
Transmission Provider's Operating Representative:
Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
13.5 Changes to the Notice Information
Either Party may change this information by giving five (5)
Business Days written notice prior to the effective date of the
change.
Article 14. Signatures
In witness whereof, the Parties have caused this Agreement to be
executed by their respective duly authorized representatives.
For [the] Transmission Provider
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
For [the] Interconnection Customer
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Attachment 1
Glossary of Terms
Affected System--An electric system other than [the]
Transmission Provider's Transmission System that may be affected by
the proposed interconnection.
Applicable Laws and Regulations--All duly promulgated applicable
federal, state and local laws, regulations, rules, ordinances,
codes, decrees, judgments, directives, or judicial or administrative
orders, permits and other duly authorized actions of any
Governmental Authority.
Applicable Reliability Standards--The requirements and
guidelines of the Electric Reliability Organization and the
Balancing Authority Area of the Transmission System to which the
Generating Facility is directly interconnected.
Balancing Authority [shall mean]--[a]An entity that integrates
resource plans ahead of time, maintains demand and resource balance
within a Balancing Authority Area, and supports interconnection
frequency in real time.
Balancing Authority Area [shall mean]--[t]The collection of
generation, transmission, and loads within the metered boundaries of
the Balancing Authority. The Balancing Authority maintains load-
resource balance within this area.
Business Day--Monday through Friday, excluding Federal Holidays.
Default--The failure of a breaching Party to cure its breach
under the Small Generator Interconnection Agreement.
Distribution System--[The] Transmission Provider's facilities
and equipment used to transmit electricity to ultimate usage points
such as homes and industries directly from nearby generators or from
interchanges with higher voltage transmission networks which
transport bulk power over longer distances. The voltage levels at
which Distribution Systems operate differ among areas.
Distribution Upgrades--The additions, modifications, and
upgrades to [the] Transmission Provider's Distribution System at or
beyond the Point of Interconnection to facilitate interconnection of
the Small Generating Facility and render the transmission service
necessary to effect [the] Interconnection Customer's wholesale sale
of electricity in interstate commerce. Distribution Upgrades do not
include Interconnection Facilities.
Good Utility Practice--Any of the practices, methods and acts
engaged in or approved by a significant portion of the electric
industry during the relevant time period, or any of the practices,
methods and acts which, in the exercise of reasonable judgment in
light of the facts known at the time the decision was made, could
have been expected to accomplish the desired result at a reasonable
cost consistent with good business practices, reliability, safety
and expedition. Good Utility Practice is not intended to be limited
to the optimum practice, method, or act to the exclusion of all
others, but rather to be acceptable practices, methods, or acts
generally accepted in the region.
Governmental Authority--Any federal, state, local or other
governmental regulatory or administrative agency, court, commission,
department, board, or other governmental subdivision, legislature,
rulemaking board, tribunal, or other governmental authority having
jurisdiction over the Parties, their respective facilities, or the
respective services they provide, and exercising or entitled to
exercise any administrative, executive, police, or taxing authority
or power; provided, however, that such term does not include [the]
Interconnection Customer, the Interconnection Provider, or any
Affiliate thereof.
Interconnection Customer--Any entity, including [the]
Transmission Provider, the Transmission Owner or any of the
affiliates or subsidiaries of either, that proposes to interconnect
its Small Generating Facility with [the] Transmission Provider's
Transmission System.
Interconnection Facilities--[The] Transmission Provider's
Interconnection Facilities and [the] Interconnection Customer's
Interconnection Facilities. Collectively, Interconnection Facilities
include all facilities and equipment between the Small Generating
Facility and the Point of Interconnection, including any
modification, additions or upgrades that are necessary to physically
and electrically interconnect the Small Generating Facility to [the]
Transmission Provider's Transmission System. Interconnection
Facilities are sole use facilities and shall not include
Distribution Upgrades or Network Upgrades.
Interconnection Request--[The] Interconnection Customer's
request, in accordance with the Tariff, to interconnect a new Small
Generating Facility, or to increase the capacity of, or make a
Material Modification to the operating characteristics of, an
existing Small Generating Facility that is interconnected with [the]
Transmission Provider's Transmission System.
Material Modification--A modification that has a material impact
on the cost or timing of any Interconnection Request with a later
queue priority date.
Network Upgrades--Additions, modifications, and upgrades to
[the] Transmission Provider's Transmission System required at or
beyond the point at which the Small Generating Facility
interconnects with [the] Transmission Provider's Transmission System
to accommodate the interconnection of the Small Generating Facility
with [the] Transmission Provider's Transmission System. Network
Upgrades do not include Distribution Upgrades.
Operating Requirements--Any operating and technical requirements
that may be applicable due to Regional Transmission Organization,
Independent System Operator, Balancing Authority Area, or
Transmission Provider's requirements, including those set forth in
the Small Generator Interconnection Agreement.
Party or Parties--[The] Transmission Provider, Transmission
Owner, Interconnection Customer or any combination of the above.
Point of Interconnection--The point where the Interconnection
Facilities connect with [the] Transmission Provider's Transmission
System.
Reasonable Efforts--With respect to an action required to be
attempted or taken by a Party under the Small Generator
Interconnection Agreement, efforts that are timely and consistent
with Good Utility Practice and are otherwise substantially
equivalent to those a Party would use to protect its own interests.
Small Generating Facility--[The] Interconnection Customer's
device for the production and/or storage for later injection of
electricity identified in the Interconnection Request, but shall not
include [the] Interconnection Customer's Interconnection Facilities.
Tariff--[The] Transmission Provider or Affected System's Tariff
through which open access transmission service and Interconnection
Service are offered, as filed with the FERC, and as amended or
supplemented from time to time, or any successor tariff.
Transmission Owner--The entity that owns, leases or otherwise
possesses an interest in the portion of the Transmission System at
the Point of Interconnection and may be a Party to the Small
Generator Interconnection Agreement to the extent necessary.
Transmission Provider--The public utility (or its designated
agent) that owns, controls, or operates transmission or distribution
facilities used for the transmission of electricity in interstate
commerce and provides transmission service under the Tariff. The
term Transmission Provider should be read to include the
Transmission Owner when the Transmission Owner is separate from
[the] Transmission Provider.
Transmission System--The facilities owned, controlled or
operated by [the] Transmission Provider or the Transmission Owner
that are used to provide transmission service under the Tariff.
Upgrades--The required additions and modifications to [the]
Transmission Provider's Transmission System at or beyond the Point
of Interconnection. Upgrades may
[[Page 27242]]
be Network Upgrades or Distribution Upgrades. Upgrades do not
include Interconnection Facilities.
Attachment 2
Description and Costs of the Small Generating Facility, Interconnection
Facilities, and Metering Equipment
Equipment, including the Small Generating Facility,
Interconnection Facilities, and metering equipment shall be itemized
and identified as being owned by [the] Interconnection Customer,
[the] Transmission Provider, or the Transmission Owner. [The]
Transmission Provider will provide a best estimate itemized cost,
including overheads, of its Interconnection Facilities and metering
equipment, and a best estimate itemized cost of the annual operation
and maintenance expenses associated with its Interconnection
Facilities and metering equipment.
Attachment 3
One-Line Diagram Depicting the Small Generating Facility,
Interconnection Facilities, Metering Equipment, and Upgrades
Attachment 4
Milestones
In-Service Date:-------------------------------------------------------
Critical milestones and responsibility as agreed to by the
Parties:
------------------------------------------------------------------------
Milestone/date Responsible party
------------------------------------------------------------------------
(1) ____________________ ____________________
(2) ____________________ ____________________
(3) ____________________ ____________________
(4) ____________________ ____________________
(5) ____________________ ____________________
(6) __ __
(7) ____________________ ____________________
(8) ____________________ ____________________
(9) ____________________ ____________________
(10) ____________________ ____________________
------------------------------------------------------------------------
Agreed to by:
For [the] Transmission Provider----------------------------------------
Date-------------------------------------------------------------------
For [the] Transmission Owner (If Applicable)---------------------------
Date-------------------------------------------------------------------
For [the] Interconnection Customer-------------------------------------
Date-------------------------------------------------------------------
Attachment 5
Additional Operating Requirements for [the] Transmission Provider's
Transmission System and Affected Systems Needed To Support [the]
Interconnection Customer's Needs
[The] Transmission Provider shall also provide requirements that
must be met by [the] Interconnection Customer prior to initiating
parallel operation with [the] Transmission Provider's Transmission
System.
Attachment 6
Transmission Provider's Description of Its Upgrades and Best Estimate
of Upgrade Costs
[The] Transmission Provider shall describe Upgrades and provide
an itemized best estimate of the cost, including overheads, of the
Upgrades and annual operation and maintenance expenses associated
with such Upgrades. [The] Transmission Provider shall functionalize
Upgrade costs and annual expenses as either transmission or
distribution related.
UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION
Improvements to Generator Interconnection Procedures and Agreements
Docket No. RM22-14-001
(Issued March 21, 2024)
CHRISTIE, Commissioner, concurring:
1. I concur with Order No. 2023-A,\1\ which largely sustains the
findings and determinations of its predecessor, Order No. 2023. I
write separately to highlight two issues in the order, which I
previously discussed in my concurrence to Order No. 2023.\2\
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\1\ Improvements to Generator Interconnection Procedures and
Agreements, Order No. 2023-A, 186 FERC ] 61,199 (2024).
\2\ Improvements to Generator Interconnection Procedures and
Agreements, Order No. 2023, 88 FR 61014 (Sept. 6, 2023), 184 FERC ]
61,054 (2023) (Christie, Comm'r, concurring at P 1) (Order No. 2023
Concurrence), https://www.ferc.gov/news-events/news/e-1-commissioner-christie-concurrence-order-no-2023-interconnection-final-rule.
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I. Enumerated Alternative Transmission Technologies (Section
II.E.2.a.iii)
2. Order No. 2023-A sustains the determination in Order No. 2023
that transmission providers have the sole discretion in determining
whether to use an alternative transmission technology, or grid-
enhancing technology (GET), in the interconnection process. As I
explained in my concurrence to Order No. 2023:
A GET may hold the potential of squeezing more juice--
literally--out of the existing transmission grid. By increasing the
capacity of the existing grid, a GET could reduce or even eliminate
the need for the future construction of new transmission assets. So
the potential for cost-savings from the use of GETs is too important
to ignore.\3\
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\3\ Id. P 2.
I emphasized, however, that GETs are operational applications,
which should be deployed when and where their efficacy can be
proven, and should not be mandated as planning assumptions or as
potential substitutes for network upgrades caused by interconnection
requests.\4\ I also noted the different financial incentives at
play: transmission owners will typically favor the construction of
costly new transmission assets over deploying GETs, whereas
companies who sell GETs and generation developers--particularly
those in RTOs/ISOs that use participant funding to pay for the costs
of network upgrades caused by the interconnecting customers--want
GETs to be mandated.\5\ Therefore, it was crucial to strike the
right balance in the order.\6\
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\4\ Id. P 5 (footnote omitted).
\5\ Id. PP 6-7.
\6\ Id. P 8.
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3. And Order No. 2023 did just that. Order No. 2023 required the
evaluation of certain listed GETs in the interconnection studies
process but did not require that a GET must be deployed as an
alternative to a necessary network upgrade.\7\ Further, and most
importantly, Order No. 2023 made clear that the determination in
each case was to be made at the sole discretion of the transmission
provider (i.e., RTO/ISOs or non-RTO transmission providers).\8\ This
is crucial because transmission providers are responsible for
resolving the reliability issues caused by a particular
interconnection, and there is a risk that a GET could fail,
prompting a later, potentially more costly, network upgrade.\9\ And,
of course, for that subsequent reliability upgrade, consumers would
likely get stuck with the bill, not the generation developer.
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\7\ Id. P 9.
\8\ Id. P 10.
\9\ Id. P 11.
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4. Order No. 2023-A rightly sustains the discretion that Order
No. 2023 affords transmission providers in determining whether to
use a GET. This level of discretion continues to be justified
because:
(1) the transmission provider is responsible for determining
whether using any of the enumerated alternative transmission
technologies is an appropriate and reliable network upgrade that
allows the interconnection customer to flow the output of its
generating facility onto the transmission provider's transmission
system
[[Page 27243]]
in a safe and reliable manner; (2) the requirement to make such a
determination before allowing for the use of the enumerated
alternative transmission technologies addresses concerns that their
use may impinge on reliability, delay network upgrades instead of
reducing the need for them or obviating the need for them
altogether, or fail to address all transmission system issues that a
traditional network upgrade would address; and (3) there is a need
to avoid time-consuming delays and costly disputes or litigation
over interconnection costs that could arise as a result of this
reform.\10\
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\10\ Order No. 2023-A, 186 FERC ] 61,199 at P 618 (citations
omitted).
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Order No. 2023-A also clarifies that transmission providers must
explain their evaluation of GETs for feasibility, cost, and time
savings as an alternative to a traditional network upgrade in their
applicable study report(s), and their use determinations must be
consistent with good utility practice, applicable reliability
standards, and applicable laws and regulations.\11\ Thus, as I
observed, Order No. 2023 ``strikes the appropriate balance between
requiring the evaluation of GETs, but not mandating the use of a GET
in specific cases unless the transmission provider--and only the
transmission provider--determines it would work from a real-world
applicability standpoint.'' \12\ And Order No. 2023-A preserves that
balance.
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\11\ Id. P 619 (citation omitted); see also id. PP 626-627.
\12\ Order No. 2023 Concurrence at P 12 (emphasis added).
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II. Inappropriate Allocation of Certain Costs to Consumers
5. I remain concerned that study delay penalties on RTOs/ISOs
and the costs of transmission provider heatmaps used as a tool for
interconnection customers will be inappropriately allocated to
consumers even though they both appear to provide much more of a
benefit to generation developers than consumers.\13\ I address each
in turn.
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\13\ Id. P 17.
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A. Study Delay Penalties on RTO/ISOs (Section II.D.1.c.iii)
6. Order No. 2023-A sustains the imposition of penalties on
transmission providers who miss study deadlines. As I expressed in
my Order No. 2023 Concurrence, I have concerns about assessing study
penalties on RTOs/ISOs, which are not-for-profit entities with no
stockholders.\14\
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\14\ Id. P 18.
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7. Order No. 2023 left open the question of how RTOs/ISOs will
recover those study delay penalties that are not automatically
imposed on a transmission-owning member by explaining that RTOs/ISOs
may submit an FPA section 205 filing to propose a cost recovery
scheme for these penalties.\15\ Unfortunately, Order No. 2023-A
continues to punt this question, stating that it will address any
future RTO/ISO section 205 proposal to recover the costs of study
delay penalties on case-by-case basis.\16\ I urge that any such RTO/
ISO filing make protections to consumers paramount. In any scenario,
the costs of penalties should not be imposed on retail customers,
for the obvious reason they are not the cause of the penalties. I
would add that the fact that Order No. 2023-A still fails to answer
the fundamental question of ``who pays?'' illustrates the legal and
policy flaws in the penalty scheme as applied to RTOs/ISOs. No doubt
we will continue to hear more about this issue.
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\15\ Id. P 20.
\16\ Order No. 2023-A, 186 FERC ] 61,199 at P 465 (citation
omitted).
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B. Cost of Heatmap (Section II.C.1.c)
8. In addition, although I support the heatmap requirement, I
remain concerned over its potential funding through transmission
rates.\17\ Order No. 2023-A sustains the determination that
transmission providers must bear the costs associated with their
heatmaps or recover them through transmission rates to the extent
they are recoverable consistent with Commission accounting and
ratemaking policy, finding that interconnection customers are not
the sole or primary beneficiaries of the heatmap requirement.\18\
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\17\ Order No. 2023 Concurrence at PP 21-22.
\18\ Order No. 2023-A, 186 FERC ] 61,199 at P 106.
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9. I agree with this rationale only with respect to those
regions in which transmission providers which do not use participant
funding--i.e., in those regions where the transmission provider's
load ultimately reimburses (or more accurately, subsidizes)
interconnection customers for their interconnection costs. As
heatmaps serve to identify viable points of interconnection and
improve queue efficiency, they help to reduce interconnection costs.
Thus, ceteris paribus, heatmaps will indirectly reduce the magnitude
of the reimbursements of interconnection costs paid by load to
interconnection customers.
10. On the other hand, in regions in which the transmission
provider uses participant funding--such as in PJM and MISO--I fail
to see how interconnection customers are not the sole or primary
beneficiaries of the heatmap requirement. In those regions, as
interconnection customers are ultimately responsible for
interconnection costs--with the exception of MISO's (questionable,
in my opinion) assignment to load of 10% of the cost of network
upgrades 345 kV and above--the savings that heatmaps provide would
inure to generation developers. I question, therefore, whether the
recovery of the cost of heatmaps from load in those regions would be
just and reasonable. As I stated in my Order No. 2023 Concurrence:
Commission policy may dictate that interconnection queue
efficiency benefits transmission customers; however, that should not
result in the costs of a requirement that best benefits
interconnection customers, and really prospective interconnection
customers that may ultimately not seek to interconnect, being
recovered from consumers through transmission rates carte
blanche.\19\
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\19\ Order No. 2023 Concurrence at P 22 (emphasis in original).
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For these reasons, I concur.
Mark C. Christie
Commissioner.
[FR Doc. 2024-06563 Filed 4-15-24; 8:45 am]
BILLING CODE 6717-01-P
