On January 8, 2018, the Federal Energy Regulatory Commission (the “Commission”) issued an order rejecting the Department of Energy’s (“DOE”) notice of proposed rule making (“NOPR”) that would have allowed fuel secure generation that would include coal and nuclear generation facilities with a 90-day fuel supply to “fully recover costs” to maintain the resiliency of the electric grid. The Commission found that the NOPR did not comply with Section 206 of the Federal Power Act (“FPA”). Instead, the Commission initiated a new proceeding to “examine holistically the resilience of the bulk power system” and directed regional transmission organizations (“RTOs”) and independent system operators (“ISOs”) to respond to questions outlined in the order addressing grid resilience issues by March 9, 2018. All other interested entities may submit reply comments by April 9, 2018. Commissioners LaFleur, Chatterjee, and Glick each issued separate concurring opinions.
In one of its first orders since regaining a quorum, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Request for Supplemental Comments (“Notice”) on August 18, 2017, seeking comments related to circumstances where electric storage resources should be required to provide primary frequency response and the costs associated with primary frequency response capabilities for small generating facilities.
The Notice builds off of comments received in response to FERC’s November 17, 2016 Notice of Proposed Rulemaking (“NOPR”). Along with a number of other proposals, the NOPR proposed to modify the pro forma Large Generator Interconnection Agreement and the pro forma Small Generator Interconnection Agreement to require all new large and small generating facilities, both synchronous and non-synchronous, to install, maintain, and operate equipment capable of providing primary frequency response as a condition of interconnection. The NOPR also proposed including minimum operating requirements for droop and deadband parameters and requirements to ensure timely and sustained responses to frequency deviations.
The NOPR did not include provisions specific to electric storage resources, and several commenters noted that by failing to address electric storage resources’ unique technical attributes, the NOPR requirements could pose an unduly discriminatory burden on such resources. In response to these concerns, FERC seeks additional information to better understand (1) the performance characteristics and limitations of electric storage resources; (2) potential ramifications to electric storage resources from the proposed primary frequency response requirements; and (3) what changes are needed to address the issues raised by stakeholders. While the Notice sets forth a number of specific questions for commenters to address, in general, the Notice seeks comments on operational limitations or challenges and potential adverse effects if electric storage resources are required to provide primary frequency response. The Notice also seeks comments on whether there are reasonable parameters or requirements that could apply to electric storage resources’ provision of primary frequency response.
In response to the NOPR, commenters also suggested a need to further investigate the costs for small generating facilities to install frequency response capability and argued that the proposed requirement would impose disproportionate costs on small generating facilities. Accordingly, to further assess small generating facilities’ ability and cost to comply with the proposed primary frequency response requirement, the Notice seeks comment on:
- The differences in costs to install, maintain and operate governor or equivalent controls for small generating facilities versus large generating facilities;
- Whether recent technological advances in primary frequency response capability minimize or eliminate barriers to entry for small generating facilities; and
- Whether an exemption is appropriate for all or a subset of small generating facilities based on disproportionate cost impacts.
Developers, owners, and operators of electric storage resources and small generating facilities should consider whether the proposed primary frequency response requirements materially affect the cost, operation, and/or feasibility of projects to be developed. The Notice offers interested stakeholders an additional opportunity to shape FERC’s interconnection policy to avoid barriers to the integration of electric storage resources and small generating facilities and ensure any unique features of these technologies are addressed in future rules. The invitation for additional comments suggests that FERC may be interested in building a record to support different treatment or rules for energy storage resources and smaller distributed energy resources compared to traditional generation. Comments are due 21 days after publication of the Notice in the Federal Register.
On June 16, 2016, the Federal Energy Regulatory Commission (the “Commission”) issued Order No. 827, which establishes reactive power requirements for all new non-synchronous generation (the “Rule”). Specifically, the Rule revises the Commission’s pro forma Large Generator Interconnection Agreement (“LGIA”) and pro forma Small Generator Interconnection Agreement (“SGIA”) to require that newly interconnecting non-synchronous generators, including wind generators, provide dynamic reactive power pursuant to the terms of their interconnection agreements. The Rule is the result of a Notice of Proposed Rulemaking addressing reactive power requirements that was issued by the Commission last November.