(November 2008)Economic uncertainties are raising doubts over utility returns. Will regulators feel the need to consider broader economic effects when engaging in ratemaking? While...
The Queue Quandary
Why developers today are often kept waiting to get projects ok’d to connect to the grid.
each single project as it rises to the top of the queue, was “seriously undermining” the CPUC’s efforts to comply with California’s aggressive timetables for renewable energy, and “seriously impeding” the ability of the California grid operator (CAISO) and its participating transmission owners to carry out their responsibilities under FERC rules.
During the final Q&A conference session in the late afternoon, CAISO’s vice president for planning and infrastructure development, Armando Perez, admitted: “We actually have taken the step of starting our own academy at the ISO … teaching power system engineering classes.”
Stephen Rourke, ISO New England’s system planning vice president, echoed that comment, saying, “We’ve also had to add to the engineering staff. We have started to reach out to universities in the area, sponsoring a grad power class right at the ISO.”
At the end of the day, however, the question goes far beyond ISO staffing concerns. After all, FERC’s LGIA rule, an element of the pro forma open-access transmission tariff (OATT), requires grid operators to notify applicants and give reasons for any delay greater than 45 days in completing the interconnection Feasibility Study, or 90 days for the System Impact Study (SIS).
The G&T cooperative, AMP-Ohio, alleges that PJM took five and ten months each for the feasibility system-impact studies for a 1,000 MW coal-fired plant under development for southern Ohio, and 12 months for an SIS for a simple 5-MW wind project. (See FERC Docket No. AD08-2, comments filed Feb. 5, 2008.)
Similarly, Dominion alleges that PJM was months late on studies for capacity upgrades on its 1,100-MW Ford Mill coal-fired plant, which Dominion says will jeopardize its ability to bid the higher plant capacity into PJM’s new capacity market, known as the RPM, or Reliability Pricing Model. (See FERC Docket No. EL08-36, complaint filed Jan. 28, 2008.)
Despite FERC’s vaunted new enforcement authority, it appears the commission so far has avoided assessing fines against grid operators for unreasonable delays in completing interconnection studies.
“I think the queue process is broken, said FERC Commissioner Jon Wellinghoff at the December conference. “It needs to be fixed.”
Phantoms and Dreams
No one can disagree that applications for grid interconnection for new generating projects have risen dramatically across the country during the last several years. This is especially true in areas possessing a high wind-energy potential, and in regions where individual states have adopted renewable portfolio standards to boost investment in alternative energy sources. However, this explosion of project applications far exceeds the level of new resources that might appear warranted by state RPS laws or favorable terrain.
Consider this data reported by the ISO/RTO Council in a white paper it filed with FERC in early January, reflecting surveys of regional interconnection queues completed in October 2007:
• Midwest ISO: 73,000 MW of active projects are in the queue, including 57,000 MW of wind projects (compared with only 12,600 MW of renewable generation that would be needed to meet current renewable mandates in MISO states).
• SouthWest Power Pool: 67 wind projects are pending out of 76 projects in the interconnection