In a Notice of Proposed Rulemaking issued on November 19, 2015, the Federal Energy Regulatory Commission (the “Commission”) proposed to eliminate the exemption currently available to wind generators from the requirement to provide reactive power. The proposed rule would require that all newly interconnecting synchronous and non-synchronous generators, including wind generators, provide reactive power pursuant to the terms of their interconnection agreements. Additionally, any existing wind generators will be required to provide reactive power if they propose facility upgrades requiring a new interconnection request. Comments on the NOPR are due by the end of January 2016.
Currently, wind generators are generally exempt from the reactive power requirements in the Commission’s standard small generator interconnection agreement (“SGIA”) and large generator interconnection agreement (“LGIA”). This exemption resulted from a determination by the Commission that the costs required for a wind generator to provide reactive power were considerably higher than for synchronous generators, and could therefore create obstacles to development in wind generation. In the NOPR, the Commission explains that, due to technological advancements, wind generators can now be developed to provide reactive power more cheaply, such that the cost of doing so no longer presents a barrier to development. Thus, the Commission believes that the continued exemption from the reactive power requirement for newly interconnecting wind generators may be unjust and unreasonable and unduly discriminatory and preferential.
II. Proposed Revisions and Implementation
The Commission proposes to revise its standard SGIA and LGIA to require that all wind and other non-synchronous generators provide reactive power as a condition of interconnection. Under the Commission’s proposal, all wind generators would be required to design their generating facilities to have dynamic reactive power capability and maintain reactive power within a power factor range of .95 leading to .95 lagging. However, such generators would only be required to maintain the required reactive power range when the generator’s real power output exceeds 10% of its nameplate capacity. Additionally, all wind generators will be eligible for compensation for reactive power consistent with the existing compensation provisions of the SGIA and LGIA.
If adopted, the proposed rule would apply to all newly interconnecting wind generators and to all existing wind generators proposing facility upgrades that require new interconnection requests. The requirement would not apply to generators in development that have already executed an SGIA or LGIA, unless the generator proposes upgrades that trigger a new interconnection request.
In order to implement the proposed changes, each public utility transmission provider would, within 90 days of the effective date of the final rule, be required to submit a compliance filing revising its pro forma SGIA and LGIA as necessary.
The Commission encourages all interested parties to submit comments on the proposal set forth in the NOPR. All comments are due 60 days from the date on which the NOPR is published in the Federal Register, and must be submitted in Commission Docket No. RM16-1-000.
Footnotes: Reactive Power Requirements for Non-Synchronous Generation, Docket No. RM16-1-000 (Issued Nov. 19, 2015) (“NOPR”). A copy of the NOPR is available here.  See Payment for Reactive Power, Commission Staff Report, Docket No. AD14-7 (Apr. 22, 2014).  The Commission explains that the inverters generally used by generators are not capable of producing reactive power when operating below 10 % of nameplate capacity.