FERC Issues Final Rule in Integration of Variable Energy Resources Rulemaking Proceeding
On June 22, 2012, FERC released a final rule in the Integration of Variable Energy Resources (“VER”) rulemaking proceeding. With the stated goal of removing barriers to VER integration, the final rule provides transmission customers the option of adjusting their transmission schedules at 15-minute intervals, and it requires VER generators to provide transmission owners with certain data on meteorological and forced outages in order to support power production forecasting.
More specifically, the rule allows for:
1. Incorporation of intra-hourly transmission scheduling in Schedule 9 of the pro forma Open Access Transmission Tariff (“OATT”); and
2. Incorporation of provisions into the pro forma Large Generator Interconnection Agreement (“LGIA”) requiring interconnection customers whose generating facilities are VERs to provide meteorological and forced outage data to transmission providers.
Under Schedule 9 of the pro forma OATT, generator imbalance charges are assessed against generators, including VERs, as a penalty for deviations between the scheduled delivery of energy from the generator and the amount of energy actually generated. Prior to the June 22 final rule, generators lacked the ability to mitigate these penalty charges when generation output changed within a given hour. FERC concluded it was unjust and unreasonable or unduly discriminatory to assess these imbalance charges and not also allow intra-hourly transmission scheduling.
Additionally, FERC amended the pro forma LGIA to require new interconnection customers whose generating facilities are VERs to provide meteorological and forced outage data to transmission providers because power production forecasts can provide information on system conditions needed to manage the variability of VER generation through the unit commitment and dispatch process. The Commission also found that allowing for more accurate commitment or de-commitment of resources will help manage reserve-related charges imposed on customers. Finally, FERC clarified that the final rule applies to scheduling practices and not imbalance settlement or sub-hourly dispatch.
Commissioner LaFleur dissented in part due to the compliance requirements of the final rule. The new rule does not allow parties to show compliance through existing efforts. LaFleur noted that several regions have already begun the practice of implementing intra-hour schedules, but the new rule requires “incremental reforms” and does not explain why existing efforts are insufficient.
A copy of the final rule is available here.