FERC Issues Order 2023 to Resolve Interconnection Process Issues

The Federal Energy Regulatory Commission (FERC) has unanimously approved Order 2023, a “historic transmission reform rulemaking” to facilitate and improve the speed and reliability of adding new energy resources to the power system. The Order will streamline the interconnection process for transmission providers and project developers.

Key Components of the Order

The guidance in FERC’s Order 2023 is extensive and the wide-ranging reforms impact significant areas of energy policy. Utilities and project developers must now carefully consider and plan for the following changes:

1. Implement a first-ready, first-served cluster study process.
   • Transmission providers will need to conduct larger interconnection studies simultaneously encompassing numerous proposed generating facilities, rather than separate studies for each individual generating facility. This approach will increase the efficiency of the interconnection process, help minimize delays and improve cost allocation by analyzing the transmission system impacts of multiple projects at once.
   • Interconnection customers will be subject to specific requirements, including financial deposits and site control conditions, to enter and remain in the interconnection queue.
2. Speed up interconnection queue processing.
   • Firm deadlines and penalties will be imposed if transmission providers fail to complete interconnection studies on time, but transmission providers may appeal their penalties at the Commission.
   • A detailed systems study process is being established, including uniform modeling standards and pro forma system agreements.
3. Incorporate technological advancements into the interconnection process.
   • Transmission providers are required to allow more than one generating facility to co-locate on a shared site behind a single point of interconnection and share a single interconnection request. This reform creates a more efficient standardized procedure for these types of generating facility configurations.
   • Interconnection customers may add a generating facility to an existing interconnection request under certain circumstances without such a request being automatically deemed a material modification.
   • Transmission providers must use operating assumptions in interconnection studies that reflect the proposed charging behavior of electric storage resources.
   • Transmission providers are required to evaluate alternative transmission technologies in their cluster studies.

Next Steps

While FERC established an aggressive 90-day compliance filing schedule, since the issuance of the Order in July 2023, there have been a number of filings address various details and issues of concern to industry participants. As a result, FERC will likely release subsequent clarifications and adjustments regarding the implementation of the reforms.

TRC recommends utility planning and interconnection process personnel review Order 2023 and stay abreast of subsequent developments, as will TRC’s own subject matter experts. In certain areas of the US there will be significant changes (e.g., where the cluster study approach may not have been the analysis approach in the past) and clustering of projects may require supplemental planning personnel to implement. TRC can provide skilled and experienced staff augmentation in this area to facilitate delivery of the wider area system studies as called for by FERC. Additionally, FERC’s directive to allow multiple generators to be added to existing points of interconnection and to co-locate on a shared site, will also likely trigger the need for additional power system study related work from both the project developers and transmission providers.

Resources:

FERC Order 2023 – Improvements to Generator Interconnection Procedures and Agreements

TRC Insight – Modelling Power System Hosting Capacity

TRC Insight – Offshore Wind: A Critical Energy Solution on the Path to Grid Resiliency and Decarbonization

Your Trusted Regulatory Advisor

TRC closely follows the national and state regulatory trends in all regions of North America. Our approach to power system security, engineering, planning, design, construction and commissioning testing, balances solutions that incorporate industry reliability risk trends, mandatory reliability standard requirements, regulatory guidance, compliance obligations, best practices, operational goals, and budgets. With expertise in power system security, engineering, planning and operations, TRC supports public utilities and private energy providers in their efforts to stay ahead of the curve and to meet or exceed regulatory requirements as they evolve.

This regulatory update is provided as a service to TRC’s utility clients, helping to keep you informed of forward-looking issues that will impact your company’s electric system reliability risks along with related topics regarding regulatory developments to help you achieve your company’s business goals.