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Those new merchant gen plants must wait in line to get on the grid, and they don't like it.
They say that competition reigns in electric generation . Yet, when a private power developer draws up a blueprint for a new gas-fired plant, and starts looking for lenders to supply the funding, that developer first must drop on bended knee to ask permission to connect the plant with the utility-owned transmission grid.
That's not right, says the Electric Power Supply Association, the nation's trade group for power producers. EPSA's policy director Julie Simon spelled it out in a letter she mailed in February to the Office of Markets, Tariffs and Rates at the Federal Energy Regulatory Commission:
"One EPSA member company recently waited over three months for a utility to acknowledge receipt of an interconnection request.
"Another member was told it would take 18 months for the utility's overburdened staff to get to their request. When this developer offered to pay the cost for an outside engineer of the utility's choosing to conduct the necessary studies, the utility declined, stating its preference for using its own staff.
"Meanwhile, many utilities are building their own 'merchant' facilities, often in their own service territories, seeking to compete in the wholesale market while excluding 'outside' competition via onerous interconnection procedures and requirements. Clearly, this is not what [the] FERC envisioned in Order Nos. 888 and 2000."
No, Julie, it isn't.
ENTERGY BLEW THE ISSUE WIDE OPEN WHEN, on March 1, it submitted to the FERC a proposed agreement and set of procedures to govern the interconnection of new power plants with its transmission network. That filing arrived at the FERC just one day after utility regulators in Louisiana had closed the window on Entergy and others for filing comments in their own, state-sponsored investigation of problems incurred by private power generators in gaining interconnection with the grid.
By mid-March, a good dozen protests had come in at the FERC, citing nearly as many reasons why they opposed Entergy's pro forma tariff:
- . Entergy's three-step study process could last five months, vs. only 120 days in a two-step procedure for service requests under the FERC's pro forma transmission tariff.
- . No two gen sites are alike. Interconnection agreements need flexibility.
- . Utility has no risk if deal fails, but plant owners need grid access to survive.
- . Lack of gen capacity should not trigger an "emergency," allowing utility to make demands on plant owners.
- . Tariff should not force generators to cover costs for upgrades required more for delivery service than for interconnection, such as real-time metering.
- . Tariff should not bar interconnection simply because the power producer plans to make direct retail sales to large-volume customers.
- . Tariff should not force generators to provide reactive power as condition of interconnection, regardless of capacity, synchronization with grid, mode of operation, or opportunity costs.
- . FERC Form 715 is only filed annually, and regional load flow models are also out of date, making it difficult to assess grid capacity.
- . Initial feasibility studies are conducted project-by-project, allowing