FERC Conditionally Accepts Revisions to CAISO Generator Interconnection Process

On January 30, 2012, the Federal Energy Regulatory Commission (FERC) conditionally approved a series of changes to the California Independent System Operator Corporation’s (CAISO) generator interconnection procedures. Some of the changes of potential interest to prospective interconnection customers, including renewable energy companies, include the following—

  • The time for interconnection agreement negotiations was increased from 90 calendar days to 120 calendar days.
  • An interconnection customer may elect to be studied assuming the delivery of only a portion of its capacity, thereby reducing some of the network upgrade costs that would be required for full capacity deliverability.
  • An interconnection customer may reduce the megawatts of its generating facility by up to 5 percent, for any reason, between the effective date of its large generator interconnection agreement (LGIA) and the commercial operation date.  The interconnection customer also may request a size reduction of greater than 5 percent if the reduction is due to circumstances beyond the interconnection customer’s control.  Such capacity reductions do not operate to reduce the cost responsibility of the interconnection customer for network upgrades. 
  • Issuance of a revised Phase I interconnection study report to address a “substantial error” will extend the deadlines for an interconnection customer to post financial security.  A “substantial error” is one that overstates or understates the interconnection customer’s cost responsibility for either network upgrades or participating transmission owner interconnection facilities by more than 5 percent or $1 million, whichever is greater.
  • For transmission owner interconnection facilities, the financial security required will be based on the lower of three screens, with a hard cap on the total amount required.
  • The third posting of interconnection financial security may be parsed into separate and discrete components corresponding to discrete phases of construction.
  • The achievement of commercial operation is not the sole criterion for determining an interconnection customer’s eligibility for repayment of network upgrade costs.  Repayment may be withheld until all network upgrades necessary for the completed phase of a generation project to meet its desired level of deliverability are in service. 

For a complete copy of FERC’s order, click here.

Contact Information

If you have any questions regarding this alert, please contact—

G. Philip Nowak
pnowak@akingump.com
202.887.4533
Washington, D.C.

Julia E. Sullivan
jsullivan@akingump.com
202.887.4537
Washington, D.C.
Adam Umanoff
aumanoff@akingump.com
213.254.1300
Los Angeles - Downtown
Edward W. Zaelke
ezaelke@akingump.com
213.254.1234
Los Angeles - Downtown