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Power & Pipes

FERC, CFTC, and State Energy Law Developments

New proposals aim to reduce regulatory burden on generation developers.

On May 15, the Federal Energy Regulatory Commission (FERC or the Commission) issued a Notice of Proposed Rulemaking (NOPR)[1] that proposes to relieve some of the existing regulatory burdens on generator-owned interconnection facilities. The relief FERC proposes includes the following:

  • Allowing a generation developer to conditionally keep control of certain interconnection-overbuild or excess capacity for a discrete period of time
  • Limiting the existing presumptive right of third parties to commandeer access to interconnection facilities
  • Eliminating certain related advance filing and approval requirements

The Commission now subjects Interconnection Customer’s Interconnection Facilities (ICIF), also known as generator tie lines, to extensive FERC transmission regulation, including compliance with Open Access Transmission Tariff (OATT), Open Access Same Time Information System (OASIS), and Standards of Conduct (SoC) requirements.[2] Most significantly, FERC presumes in most cases that a third party that desires transmission access may obtain rights to use another entity’s ICIF, as ICIF owners must make excess capacity available to third parties upon request unless they can compellingly demonstrate that they must reserve for themselves the currently available excess capacity for future generation development. Although many ICIF owners have been able to seek waiver of open access requirements by demonstrating a need for the full capacity of their ICIF, a formal waiver filing is typically required, and the results before FERC are far from assured. Typically, the ICIF may be the only transmission assets owned by the generator, and third-party requests to use ICIF capacity are rare. The Commission’s proposed rule would presume owner-only access for an initial five-year period.