Late last week, FERC put out a call for comments via an April 19th Notice of Inquiry relating to open access and priority rights on interconnection facilities. Just a few days later law firms Van Ness Feldman and Alston + Bird stepped up to the plate with their analysis (here and here, respectively) on FERC’s proposed changes.
Specifically, FERC asks “whether, and, if so, how the Commission should revise its current policy concerning priority rights and open access with regard to certain interconnection facilities.” According to their news release, at a 2011 FERC technical conference, commenters asserted “asserted that open-access policies may be ill-suited for generator lead lines, which the NOI refers to as interconnection facilities,” and that “the policies may have detrimental impacts on the development and financing of such lines.”
Therefore FERC asks:
- Has industry largely adapted to current policy in the time since the technical conference?
- Must interconnection facilities provide third-party access under an open-access transmission tariff (OATT) to ensure non-discriminatory access and just and reasonable rates?
- Does current policy blur the line between interconnection and transmission service with respect to third-party access, creating unintended consequences?
So, what does it all mean?
Alston + Bird concludes that “the NOI could mark an early step in a major shift in the Commission’s policy towards generator interconnection,” and that “[t]he impact could be particularly pronounced in the renewable power industry, where generators are often located in remote locations at long distances from transmission systems, and are increasingly being planned and constructed on a modular, phased basis.” VNF, in turn, wraps it up like so:
“FERC will need to consider how best to balance the need to promote generation development from areas remote from the transmission grid, how to allocate costs in a way that does not promote free rider interconnections to generator lead lines, and how to reduce the regulatory burden on generation developers, among other issues.”
Comments are due June 11, 2012. View the Federal Register notice here.