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RM10-11-000 Integration of Variable Energy Resources

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RM10-11-000 Integration of Variable Energy Resources 139 FERC ¶ 61,246 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION 18 CFR Part 35 [Docket No. RM10-11-000; Order No. 764] Integration of Variable Energy Resources (Issued June 22, 2012) AGENCY: Federal Energy Regulatory Commission. ACTION: Final Rule. SUMMARY: The Federal Energy Regulatory Commission is amending the pro forma Open Access Transmission Tariff to remove unduly discriminatory practices and to ensure just and reasonable rates for Commission-jurisdictional services. Specifically, this Final Rule removes barriers to the integration of variable energy resources by requiring each public utility transmission provider to: (1) offer intra-hourly transmission scheduling; and, (2) incorporate provisions into the pro forma Large Generator Interconnection Agreement requiring interconnection customers whose generating facilities are variable energy resources to provide meteorological and forced outage data to the public utility transmission provider for the purpose of power production forecasting. EFFECTIVE DATE: This rule will become effective [insert date 60 days after publication in the FEDERAL REGISTER]. Docket No. RM10-11-000 - 2 - FOR FURTHER INFORMATION CONTACT: Jessica L. Cockrell (Technical Information) Office of Energy Policy and Innovation Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 (202) 502-8190 Andrea Hilliard (Legal Information) Office of General Counsel – Energy Markets Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 (202) 502-8288 SUPPLEMENTARY INFORMATION: 139 FERC ¶ 61,246 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Jon Wellinghoff, Chairman; Philip D. Moeller, John R. Norris, Cheryl A. LaFleur, and Tony T. Clark. Integration of Variable Energy Resources Docket No. RM10-11-000 ORDER NO. 764 FINAL RULE (Issued June 22, 2012) TABLE OF CONTENTS I. Introduction ............................................................................................................................ 1. Background ............................................................................................................................ 6. II. The Need for Reform ........................................................................................................... 11. A. Commission Proposal ....................................................................................................... 11. B. Comments ......................................................................................................................... 12. C. Commission Determination ............................................................................................. 16. III. Legal Authority to Implement Proposed Reforms ............................................................. 25. A. Commission Proposal ....................................................................................................... 25. B. Comments ........................................................................................................................ 26. C. Commission Determination .............................................................................................. 36. IV. Proposed Reforms ............................................................................................................... 51. A. Intra-hour Scheduling ...................................................................................................... 51. 1. Intra-Hour Scheduling Requirement ............................................................................ 52. 2. Implementation of Intra-Hour Scheduling ................................................................... 114. 3. Other Issues .................................................................................................................. 148. B. Data Reporting to Support Power Production Forecasting .............................................. 154. 1. Data Requirements........................................................................................................ 155. 2. Definition of VER......................................................................................................... 200. 3. Data Sharing ................................................................................................................. 217. 4. Cost Recovery ............................................................................................................... 222. C. Generator Regulation Service-Capacity ........................................................................... 233. Docket No. RM10-11-000 - 2 - 1. Schedule 10-Generator Regulation and Frequency Response Service......................... 234. 2. Mechanics of a Generator Regulation Charge .............................................................. 276. 3. Use of Contingency Reserves ....................................................................................... 336. V. Other Issues .......................................................................................................................... 343. 1. Regulatory Text ............................................................................................................ 343. 2. Market Mechanisms...................................................................................................... 346. 3. Power Factor Design..................................................................................................... 363. VI. Compliance .......................................................................................................................... 365. VII. Information Collection Statement ..................................................................................... 378. VIII. Environmental Analysis .................................................................................................. 383. IX. Regulatory Flexibility Act Analysis ................................................................................... 384. X. Document Availability ........................................................................................................ 385. XI. Effective Date and Congressional Notification .................................................................. 388. Docket No. RM10-11-000 - 3 - I. Introduction 1. In this Final Rule, the Commission acts under section 206 of the Federal Power Act (FPA) to adopt reforms that will remove barriers to the integration of variable energy resources (VER)1 and ensure that the rates, terms, and conditions for Commission- jurisdictional services provided by public utility transmission providers are just and reasonable and not unduly discriminatory or preferential.2 As the Commission noted in the Proposed Rule, VERs are making up an increasing percentage of new generating capacity being brought on-line.3 This evolution in the Nation’s generation fleet has caused the industry to reevaluate practices developed at a time when virtually all generation on the system could be scheduled with relative precision and when only load exhibited significant degrees of within-hour variation. As part of this evaluation, the Commission initiated this rulemaking proceeding to consider its own rules and, based on the comments received, concludes that reforms are needed in order to ensure that transmission customers are not exposed to excessive or unduly discriminatory charges 1 As defined in the Notice of Proposed Rulemaking, a Variable Energy Resource is a device for the production of electricity that is characterized by an energy source that: (1) is renewable; (2) cannot be stored by the facility owner or operator; and (3) has variability that is beyond the control of the facility owner or operator. This includes, for example, wind, solar thermal and photovoltaic, and hydrokinetic generating facilities. See Integration of Variable Energy Resources Notice of Proposed Rulemaking, FERC Stats. & Regs. ¶ 32,664, at P 64 (2010) (Proposed Rule). 2 16 U.S.C. 824e (2006). 3 Proposed Rule, FERC Stats. & Regs. ¶ 32,664 at P 13. Docket No. RM10-11-000 - 4 - and that public utility transmission providers have the information needed to efficiently manage reserve-related costs. 2. Specifically, the Commission amends the pro forma Open Access Transmission Tariff (OATT) to provide all transmission customers the option of using more frequent transmission scheduling intervals within each operating hour, at 15-minute intervals. There is currently no requirement to provide transmission customers the opportunity to adjust their transmission schedules within the hour to reflect changes in generation output. As a result, transmission customers have no ability under the pro forma OATT to mitigate Schedule 9 generator imbalance charges in situations when the transmission customer knows or believes that generation output will change within the hour. This lack of ability to update transmission schedules within the hour can cause charges for Schedule 9 generator imbalance service to be unjust and unreasonable or unduly discriminatory. Accordingly, the Commission amends the pro forma OATT to correct this deficiency. 3. The Commission also amends the pro forma Large Generator Interconnection Agreement (LGIA) to require new interconnection customers whose generating facilities are VERs to provide meteorological and forced outage data to the public utility transmission provider with which the customer is interconnected, where necessary for that public utility transmission provider to develop
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