Document ID: FERC-2022-0815-0001
Agency: ferc
Document Type: Proposed Rule
Title: Improvements to Generator Interconnection Procedures and Agreements
Posted Date: 2022-07-05T04:00Z

[Federal Register Volume 87, Number 127 (Tuesday, July 5, 2022)]
[Proposed Rules]
[Pages 39934-40032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13470]

[[Page 39933]]

Vol. 87

Tuesday,

No. 127

July 5, 2022

Part II

Department of Energy

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Federal Energy Regulatory Commission

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18 CFR Part 35

Improvements to Generator Interconnection Procedures and Agreements; 
Proposed Rule

  Federal Register / Vol. 87, No. 127 / Tuesday, July 5, 2022 / 
Proposed Rules  

[[Page 39934]]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM22-14-000]

Improvements to Generator Interconnection Procedures and 
Agreements

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
issuing a Notice of Proposed Rulemaking (NOPR) proposing reforms to its 
pro forma Large Generator Interconnection Procedures, pro forma Small 
Generator Interconnection Procedures, pro forma Large Generator 
Interconnection Agreement, and pro forma Small Generator 
Interconnection Agreement to address interconnection queue backlogs, 
improve certainty, and prevent undue discrimination for new 
technologies. The reforms are intended to ensure that the generator 
interconnection process is just and reasonable and not unduly 
discriminatory or preferential. The Commission invites all interested 
persons to submit comments on the proposed reforms, including proposed 
revisions to the pro forma interconnection procedures and agreements, 
and in response to specific questions.

DATES: Comments are due October 13, 2022 and Reply Comments are due 
November 14, 2022.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways. Electronic filing through https://www.ferc.gov is 
preferred.
     Electronic Filing: Documents must be filed in acceptable 
native applications and print-to-PDF, but not in scanned or picture 
format.
     For those unable to file electronically, comments may be 
filed by U.S. Postal Service mail or by hand (including courier) 
delivery.
    [cir] Mail via U.S. Postal Service only: Addressed to: Federal 
Energy Regulatory Commission, Office of the Secretary, 888 First Street 
NE, Washington, DC 20426.
    [cir] For delivery via any other carrier (including courier): 
Deliver to: Federal Energy Regulatory Commission, Office of the 
Secretary, 12225 Wilkins Avenue, Rockville, MD 20852.
    The Comment Procedures Section of this document contains more 
detailed filing procedures.

FOR FURTHER INFORMATION CONTACT: 

Tristan Kessler (Technical Information), Office of Energy Policy and 
Innovation, 888 First Street NE, Washington, DC 20426, (202) 502-6608, 
[email protected]
Franklin Jackson (Technical Information), Office of Energy Market 
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-6464, 
[email protected]
Sarah Greenberg (Legal Information), Office of the General Counsel, 888 
First Street NE, Washington, DC 20426, (202) 502-6230, 
[email protected]

SUPPLEMENTARY INFORMATION:

Table of Contents

 
                                                               Paragraph
                                                                 Nos.
 
I. Introduction.............................................           1
    A. Background...........................................           7
        1. The Commission's Pro Forma Generator                        7
         Interconnection Procedures.........................
        2. 2008 Order on RTO/ISO Interconnection Queuing              12
         Practices..........................................
        3. Order No. 845....................................          13
        4. Transmission Planning and Cost Allocation ANOPR..          14
        5. Joint Federal-State Task Force on Electric                 16
         Transmission.......................................
    B. Need for Reform......................................          18
II. Proposed Reforms........................................          37
    A. Reforms To Implement a First-Ready, First-Served               37
     Cluster Study Process..................................
        1. Interconnection Information Access...............          40
        2. Cluster Study....................................          53
        3. Allocation of Cluster Study Costs................          80
        4. Allocation of Cluster Network Upgrade Costs......          84
        5. Shared Network Upgrades..........................          90
        6. Increased Financial Commitments and Readiness             102
         Requirements.......................................
        7. Transition Process...............................         149
    B. Reforms To Increase the Speed of Interconnection              161
     Queue Processing.......................................
        1. Elimination of the Reasonable Efforts Standard...         161
        2. Affected Systems.................................         174
        3. Optional Resource Solicitation Study.............         216
    C. Reforms To Incorporate Technological Advancements             238
     Into the Interconnection Process.......................
        1. Increasing Flexibility in the Generator                   238
         Interconnection Process............................
        2. Incorporating Alternative Transmission                    289
         Technologies Into the Generator Interconnection
         Process............................................
        3. Modeling and Performance Requirements for Non-            303
         Synchronous Generating Facilities..................
III. Proposed Compliance Procedures.........................         342
IV. Information Collection Statement........................         345
V. Environmental Analysis...................................         359
VI. Regulatory Flexibility Act..............................         360
VII. Comment Procedures.....................................         364
VIII. Document Availability.................................         368
Appendix A: Interconnection Study Metrics...................
Appendix B: Compilation of proposed changes to the pro forma
 LGIP.
Appendix C: Compilation of proposed changes to the pro forma
 SGIP.
Appendix D: Compilation of proposed changes to the pro forma
 LGIA.
Appendix E: Compilation of proposed changes to the pro forma
 SGIA.
 

[[Page 39935]]

I. Introduction

    1. Pursuant to our authority under section 206 of the Federal Power 
Act (FPA),\1\ we are proposing reforms in this Notice of Proposed 
Rulemaking (NOPR) to the Commission's pro forma Large Generator 
Interconnection Procedures (LGIP), pro forma Small Generator 
Interconnection Procedures (SGIP), pro forma Large Generator 
Interconnection Agreement (LGIA), and pro forma Small Generator 
Interconnection Agreement (SGIA) to address interconnection queue 
backlogs, improve certainty, and prevent undue discrimination for new 
technologies.
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    \1\ 16 U.S.C. 824e. Section 206 of the FPA requires that 
whenever the Commission finds any rate, term, or condition for the 
transmission of electric energy in interstate commerce or the sale 
of such energy at wholesale in interstate commerce to be unjust, 
unreasonable, unduly discriminatory, or preferential, the Commission 
must establish a just and reasonable and not unduly discriminatory 
or preferential replacement rate, term, or condition.
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    2. Nineteen years ago the Commission issued Order No. 2003,\2\ in 
which the Commission required all public utilities that own, control, 
or operate facilities used for transmitting electric energy in 
interstate commerce to have on file standard procedures and a standard 
agreement for interconnecting generating facilities larger than 20 MW 
(called the pro forma LGIP, and the pro forma LGIA).\3\ The Commission 
stated its expectation that the changes would prevent undue 
discrimination, preserve reliability, increase energy supply, and lower 
wholesale prices for customers by increasing the amount and variety of 
new generation that would compete in the wholesale electricity 
market.\4\ The Commission further stated that the standard procedures 
would facilitate market entry for generation competitors by reducing 
interconnection costs and time.\5\ In Order No. 2006,\6\ the Commission 
adopted standard procedures and a standard agreement for 
interconnecting generating facilities no larger than 20 MW (called the 
pro forma SGIP, and the pro forma SGIA), citing the same purposes 
outlined in Order No. 2003.\7\
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    \2\ Standardization of Generator Interconnection Agreements & 
Proc., Order No. 2003, 68 FR 49845 (Aug. 19, 2003), 104 FERC ] 
61,103 (2003), order on reh'g, Order No. 2003-A, 69 FR 15932 (Mar. 
5, 2004), 106 FERC ] 61,220, order on reh'g, Order No. 2003-B, 70 FR 
265 (Jan. 19, 2005), 109 FERC ] 61,287 (2004), order on reh'g, Order 
No. 2003-C, 70 FR 37661 (July 18, 2005), 111 FERC ] 61,401 (2005), 
aff'd sub nom. Nat'l Ass'n of Regul. Util. Comm'rs v. FERC, 475 F.3d 
1277 (D.C. Cir. 2007) (NARUC v. FERC).
    \3\ Order No. 2003, 104 FERC ] 61,103 at P 2.
    \4\ Id. P 1.
    \5\ Id. P 12.
    \6\ Standardization of Small Generator Interconnection 
Agreements & Proc., Order No. 2006, 70 FR 34189 (June 13, 2005), 111 
FERC ] 61,220, order on reh'g, Order No. 2006-A, 70 FR 71760 (Nov. 
30, 2005), 113 FERC ] 61,195 (2005), order granting clarification, 
Order No. 2006-B, 71 FR 42587 (July 27, 2006), 116 FERC ] 61,046 
(2006).
    \7\ Order No. 2006, 111 FERC ] 61,220 at PP 15, 36.
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    3. The electricity sector has transformed significantly since the 
issuance of Order Nos. 2003 and 2006. The growth of new resources 
seeking to interconnect to the transmission system and the differing 
characteristics of those resources have created new challenges for the 
generator interconnection process. These new challenges are creating 
large interconnection queue backlogs and uncertainty regarding the cost 
and timing of interconnecting to the transmission system, potentially 
increasing costs for consumers. Backlogs in the generator 
interconnection process, in turn, can create reliability issues as 
needed new generating facilities are unable to come online in an 
efficient and timely manner. Therefore, we believe that it may be 
appropriate to reform the Commission's standard interconnection 
procedures and agreements to ensure that interconnection customers are 
able to interconnect to the transmission system in a reliable, 
efficient, transparent, and timely manner, thereby ensuring that rates, 
terms, and conditions for Commission-jurisdictional services remain 
just and reasonable and not unduly discriminatory or preferential.
    4. Accordingly, we propose in this NOPR reforms to the Commission's 
pro forma LGIP and pro forma LGIA. Specifically, as explained in detail 
in this NOPR, we propose reforms to: (1) implement a first-ready, 
first-served cluster study process; \8\ (2) increase the speed of 
interconnection queue processing; and (3) incorporate technological 
advancements into the interconnection process.
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    \8\ A first-ready, first-served cluster study process includes 
the following elements: increased access to information prior to 
entering the queue; a mechanism to study interconnection requests in 
groups; and increased financial commitments and readiness 
requirements to enter and proceed through the queue. To contrast, 
the existing first-come, first-served serial study process assigns 
interconnection requests an individual queue position based solely 
on the date of entry into the queue and does not include access to 
information prior to entering the queue.
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    5. We also propose reforms to the pro forma SGIP and pro forma 
SGIA. Specifically, as explained in detail in this NOPR, for small 
generators we propose reforms to incorporate alternative transmission 
technologies into the interconnection process and to provide modeling 
and performance requirements for non-synchronous generators. In 
addition, we seek comment on whether the other reforms proposed in this 
NOPR should be applied to the pro forma SGIP and pro forma SGIA.
    6. We recognize that transmission providers have undertaken efforts 
to address interconnection queue management issues. This NOPR is not 
intended to divert or slow the potential progress represented by those 
efforts. We will review any filings that result from those efforts 
based on the record before us in those proceedings and not based on 
whether they comply with the proposed reforms in this NOPR. We note 
that any compliance obligations arising out of any final rule in this 
docket on the issues addressed herein will be evaluated in light of the 
independent entity variation for RTO/ISO regions and the consistent 
with or superior to standard for non-RTO regions.

A. Background

1. The Commission's Pro Forma Generator Interconnection Procedures
    7. In Order No. 2003, the Commission recognized a need for a 
standard set of interconnection procedures for transmission providers 
\9\ and a single, uniformly applicable interconnection agreement for 
large generating facilities.\10\ The Commission noted that generator 
interconnection is a ``critical component of open access transmission 
service and thus is subject to the requirement that utilities offer 
comparable service under the [pro forma] OATT.'' \11\ The Commission 
found that it was appropriate to establish a standard set of generator 
interconnection procedures to

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``minimize opportunities for undue discrimination and expedite the 
development of new generation, while protecting reliability and 
ensuring that rates are just and reasonable.'' \12\ To this end, the 
Commission adopted the pro forma LGIP and pro forma LGIA and amended 
its regulations to require all transmission providers to incorporate 
these standard procedures and agreement into their OATTs.\13\
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    \9\ In this order, transmission provider ``shall mean the public 
utility (or its designated agent) that owns, controls, or operates 
transmission or distribution facilities used for the transmission of 
electric energy in interstate commerce and provides transmission 
service under the [Transmission Provider's Tariff]. The term . . . 
should be read to include the Transmission Owner when the 
Transmission Owner is separate from the Transmission Provider.'' Pro 
forma LGIP section 1; pro forma LGIA art. 1; pro forma SGIP attach. 
1; pro forma SGIA attach. 1. Therefore, unless otherwise noted, 
``transmission provider'' refers only to public utility transmission 
providers. FPA section 201(e) defines ``public utility'' to mean 
``any person who owns or operates facilities subject to the 
jurisdiction of the Commission under this subchapter.'' 16 U.S.C. 
824(e). A non-public utility that seeks voluntary compliance with 
the reciprocity condition of an Open Access Transmission Tariff 
(OATT) may satisfy that condition by filing an OATT, which includes 
the pro forma LGIP, the pro forma SGIP, the pro forma LGIA, and the 
pro forma SGIA. See Order No. 2003, 104 FERC ] 61,103 at PP 1, 616; 
Order No. 2006, 111 FERC ] 61,220 at P 1.
    \10\ Order No. 2003, 104 FERC ] 61,103 at P 11. Large generating 
facilities are defined to mean ``a Generating Facility having a 
Generating Facility Capacity of more than 20 MW.'' Pro forma LGIP 
section 1.
    \11\ Order No. 2003, 104 FERC ] 61,103 at P 9 (citing Tenn. 
Power Co., 90 FERC ] 61,238 (2000)).
    \12\ Id. P 11.
    \13\ 18 CFR 35.28(f)(1).
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    8. To initiate the generator interconnection process set forth in 
the Commission's pro forma LGIP,\14\ the interconnection customer 
submits an interconnection request for its proposed generating facility 
that includes preliminary documentation of the site of the proposed 
generating facility, certain technical information about the proposed 
generating facility, and the expected commercial operation date of the 
proposed generating facility, along with a refundable deposit of 
$10,000.\15\ After the transmission provider determines that the 
interconnection request is complete, the interconnection request enters 
the transmission provider's interconnection queue with other pending 
interconnection requests and is assigned a queue position based on the 
time and date of its receipt.\16\ The queue position determines the 
order in which the transmission provider studies the interconnection 
requests in its queue.\17\
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    \14\ While we provide a broad description of the process in the 
Commission's pro forma LGIP as background here, we recognize that 
many transmission providers have adopted (and the Commission has 
accepted) variations to many of the terms in the Commission's pro 
forma LGIP and pro forma LGIA. Consequently, some or many of the 
details of a particular transmission provider's generator 
interconnection procedures may vary considerably from the broad 
description provided here.
    \15\ Order No. 2003, 104 FERC ] 61,103 at P 35; pro forma LGIP 
sections 3.1, 3.4.
    \16\ Pro forma LGIP section 4.1.
    \17\ Id.
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    9. Transmission providers must schedule a scoping meeting with the 
interconnection customer to discuss possible points of interconnection 
for the proposed generating facility and exchange technical 
information, which is followed by a series of interconnection studies 
to evaluate the proposed interconnection in detail.\18\ Transmission 
providers study interconnection requests in three phases: (1) the 
Interconnection Feasibility Study (feasibility study); \19\ (2) the 
Interconnection System Impact Study (system impact study); \20\ and (3) 
the Interconnection Facilities Study (facilities study).\21\ These 
studies contain the power flow, short circuit, and stability analyses 
necessary to: (1) identify any adverse impacts on the transmission 
providers' transmission system or any affected systems; \22\ (2) 
determine the interconnection facilities and network upgrades \23\ 
needed to reliably interconnect the generating facility; and (3) 
estimate the interconnection customer's cost responsibility for these 
facilities.\24\ The pro forma LGIP requires that transmission providers 
use reasonable efforts to complete: (1) feasibility studies within 45 
days; (2) system impact studies within 90 days; and (3) facilities 
studies within 90 or 180 days, depending on the interconnection 
customer's requested accuracy margin.\25\
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    \18\ Order No. 2003, 104 FERC ] 61,103 at P 36; pro forma LGIP 
sections 3.4.4; 6-8.
    \19\ The pro forma LGIP defines a feasibility study as ``a 
preliminary evaluation of the system impact and cost of 
interconnecting the Generating Facility to the Transmission 
Provider's Transmission System.'' The scope of a feasibility study 
is described in section 6 of the pro forma LGIP. Pro forma LGIP 
sections 1, 6.
    \20\ The pro forma LGIP defines a system impact study as ``an 
engineering study that evaluates the impact of the proposed 
interconnection on the safety and reliability of Transmission 
Provider's Transmission System and, if applicable, an Affected 
System.'' In particular, a system impact study identifies and 
details ``the system impacts that would result if the Generating 
Facility were interconnected without project modifications or system 
modifications, focusing on the Adverse System Impacts identified in 
the [feasibility study], or to study potential impacts, including 
but not limited to those identified in the Scoping Meeting.'' Id. 
section 1.
    \21\ The pro forma LGIP defines a facilities study as ``a study 
conducted by the Transmission Provider or a third-party consultant 
for the Interconnection Customer to determine a list of facilities 
(including Transmission Provider's Interconnection Facilities and 
Network Upgrades as identified in the [system impact study]), the 
cost of those facilities, and the time required to interconnect the 
Generating Facility with the Transmission Provider's Transmission 
System.'' The scope of a facilities study is described in section 8 
of the pro forma LGIP. Id. sections 1, 8.
    \22\ An affected system is an electric system other than the 
transmission provider's transmission system that may be affected by 
the proposed interconnection. Id. section 1; pro forma LGIA art. 1.
    \23\ For purposes of this NOPR, unless otherwise noted, 
``network upgrades'' refers to interconnection-related network 
upgrades. More specifically, the pro forma LGIP and pro forma LGIA 
state that ``Network Upgrades shall mean the additions, 
modifications, and upgrades to the Transmission Provider's 
Transmission System required at or beyond the point at which the 
Interconnection Facilities connect to the Transmission Provider's 
Transmission System to accommodate the interconnection of the Large 
Generating Facility to the Transmission Provider's Transmission 
System.'' Pro forma LGIP section 1 (Definitions); pro forma LGIA 
art. 1 (Definitions).
    \24\ Order No. 2003, 104 FERC ] 61,103 at PP 35-37; pro forma 
LGIP sections 6-8. The interconnection customer is responsible for 
the actual costs of interconnection studies and any necessary re-
studies. Pro forma LGIP section 13.3.
    \25\ Id. sections 6.3, 7.4, 8.3.
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    10. At the completion of the facilities study, the pro forma LGIP 
requires the transmission provider to issue a report on the best 
estimate of the costs to effectuate the requested interconnection and 
provide a draft generator interconnection agreement to the 
interconnection customer.\26\ If the interconnection customer wishes to 
proceed, after negotiations, the interconnection customer enters into a 
generator interconnection agreement with the transmission provider or, 
in specific circumstances, requests that the transmission provider file 
the agreement with the Commission unexecuted.\27\ The transmission 
provider is responsible for the construction of all network upgrades, 
but, as further discussed below, the interconnection customer has the 
option to build these facilities in certain circumstances.\28\
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    \26\ Order No. 2003, 104 FERC ] 61,103 at P 38. Section 11.1 of 
the pro forma LGIP requires the transmission provider to tender a 
draft LGIA to the interconnection customer ``in the form of 
Transmission Provider's FERC-approved standard form LGIA.''
    \27\ If the transmission provider and interconnection customer 
execute an LGIA that conforms to the transmission provider's FERC-
approved standard form LGIA, the agreement does not need to be filed 
with the Commission (if the transmission provider has such a 
standard form LGIA on file and submits an Electronic Quarterly 
Report). Alternatively, the transmission provider must file an LGIA 
with the Commission for review and approval if: (1) the 
interconnection customer determines that negotiations with the 
transmission provider over the terms of an LGIA are at an impasse 
and requests submission of the unexecuted LGIA with the Commission; 
or (2) the LGIA does not conform to the transmission provider's 
FERC-approved standard form LGIA. See Order No. 2003-A, 106 FERC ] 
61,220 at P 201; pro forma LGIP sections 11.2-11.3.
    \28\ Order No. 2003, 104 FERC ] 61,103 at PP 351-354; pro forma 
LGIA art. 5.1.3.
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    11. Similar to Order No. 2003, in Order No. 2006, the Commission 
recognized the need for standardized interconnection procedures and 
agreements for small generating facilities with a capacity of 20 MW or 
less.\29\ In addition to establishing a pro forma interconnection study 
process for small generating facilities similar to the process for 
large generation established in Order No. 2003, the Commission 
included: (1) a ``Fast Track Process'' \30\ that uses technical screens 
to evaluate a certified small generating facility no larger than 2 MW; 
and (2) a ``10 kW Inverter Process'' \31\ that uses the same technical 
screens to evaluate a certified inverter-based small generating 
facility no larger than 10 kW.\32\ The Commission later issued Order 
No.

[[Page 39937]]

792,\33\ in which the Commission revised the pro forma SGIP and pro 
forma SGIA to provide for interconnection customers to receive point of 
interconnection information in advance of submitting an interconnection 
request, increase the threshold for participation in the Fast Track 
Process to 5 MW, and to specifically include electric storage 
devices.\34\
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    \29\ Order No. 2006, 111 FERC ] 61,220 at P 36.
    \30\ Pro forma SGIP section 2.1.
    \31\ Id. attach. 5.
    \32\ Order No. 2006, 111 FERC ] 61,220 at PP 36, 38-39.
    \33\ Small Generator Interconnection Agreements & Procs., Order 
No. 792, 78 FR 73240 (Dec. 5, 2013), 145 FERC ] 61,159 (2013), 
clarifying, Order No. 792-A, 146 FERC ] 61,214 (2014).
    \34\ See Order No. 792, 145 FERC ] 61,159 at P 1.
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2. 2008 Order on RTO/ISO Interconnection Queuing Practices
    12. In response to concerns voiced to the Commission about 
interconnection queue management, in 2007, the Commission held a 
technical conference,\35\ and later issued an order \36\ addressing 
interconnection queue issues in RTOs/ISOs. In the order, the Commission 
noted that some transmission providers were not processing their 
interconnection queues within the timelines established in the pro 
forma LGIP, and in certain cases, were greatly exceeding them.\37\ The 
Commission stated that, although it ``may need to [impose solutions] if 
the RTOs and ISOs do not act themselves,'' each RTO/ISO would have an 
opportunity to work with its stakeholders to develop its own 
solutions.\38\ As further discussed below, following the order, 
multiple RTOs/ISOs submitted queue reform proposals to the Commission, 
some of which moved away from a so-called ``first-come, first-served'' 
approach (whereby interconnection requests are processed in the order 
they are received) to a so-called ``first-ready, first-served'' 
approach (whereby interconnection requests are processed based on when 
interconnection customers meet certain project development 
milestones).\39\
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    \35\ Interconnection Queuing Practices, Docket No. AD08-2-000, 
Notice of Technical Conference (issued Nov. 2, 2007).
    \36\ Interconnection Queuing Practices, 122 FERC ] 61,252 (2008) 
(2008 Technical Conference Order).
    \37\ Id. P 3.
    \38\ Id. P 8.
    \39\ See, e.g., Sw. Power Pool, Inc., 128 FERC ] 61,114 (2009) 
(SPP); Midwest Ind. Sys. Operator, Inc., 124 FERC ] 61,183 (2008); 
Cal. Ind. Sys. Operator Corp., 124 FERC ] 61,292 (2008).
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3. Order No. 845
    13. In 2018, the Commission issued Order No. 845,\40\ in which the 
Commission made the most comprehensive revisions to the pro forma LGIP 
and pro forma LGIA since their adoption in Order No. 2003. In Order No. 
845, the Commission concluded that reforms to the pro forma LGIP and 
pro forma LGIA were needed to mitigate concerns regarding systemic 
inefficiencies, remedy discriminatory practices, and address recent 
developments, including changes in the resource mix and emergence of 
new technologies.\41\ The Commission therefore adopted reforms designed 
to improve certainty for interconnection customers, promote more 
informed interconnection decisions, and enhance the generator 
interconnection process.\42\ Among other things, the Commission: (1) 
expanded the interconnection customer's option to build certain network 
upgrades; (2) revised the definition of generating facility to include 
electric storage resources; \43\ (3) established reporting requirements 
for aggregate interconnection study performance; (4) allowed 
interconnection customers to request a level of interconnection service 
that is lower than their generating facility capacity; (5) required 
transmission providers to allow provisional interconnection service 
that provides for limited operation of a generating facility prior to 
completion of the full generator interconnection process; (6) required 
transmission providers to create a process for interconnection 
customers to use surplus interconnection service \44\ at existing 
points of interconnection; and (7) required transmission providers to 
assess and, if necessary, study, an interconnection customer's 
technology changes without affecting the interconnection customer's 
queue position.\45\
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    \40\ Reform of Generator Interconnection Procs & Agreements, 
Order No. 845, 83 FR 21342 (May 09, 2018), 163 FERC ] 61,043 (2018), 
order on reh'g, Order No. 845-A, 166 FERC ] 61,137, 84 FR 8156 (Mar. 
06, 2019), order on reh'g, Order No. 845-B, 168 FERC ] 61,092 
(2019).
    \41\ Order No. 845, 163 FERC ] 61,043 at P 7.
    \42\ Id. P 2.
    \43\ Generating Facilities ``shall mean Interconnection 
Customer's device for the production and/or storage for later 
injection of electricity identified in the Interconnection Request, 
but shall not include the Interconnection Customer's Interconnection 
Facilities.'' Pro forma LGIP section 1.
    \44\ The pro forma LGIP defines surplus interconnection service 
as ``any unneeded portion of Interconnection Service established in 
a Large Generator Interconnection Agreement, such that if Surplus 
Interconnection Service is utilized the total amount of 
Interconnection Service at the Point of Interconnection would remain 
the same.'' Pro forma LGIP section 1.
    \45\ Order No. 845, 163 FERC ] 61,043 at PP 3-5.
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4. Transmission Planning and Cost Allocation ANOPR
    14. On July 15, 2021, the Commission issued an Advance Notice of 
Proposed Rulemaking (ANOPR) in Docket No. RM21-17-000, presenting 
potential reforms to the Commission's requirements governing the 
regional transmission planning and cost allocation and generator 
interconnection processes.\46\ Specific to the generator 
interconnection process, the Commission sought comment on whether and 
which reforms may be necessary to ensure a more purposeful integration 
of the generator interconnection process with the regional transmission 
planning and cost allocation processes, establish a faster and more 
efficient interconnection queueing process, and promote a more 
efficient and cost-effective allocation of interconnection-related 
network upgrade costs.\47\ For instance, the Commission noted that the 
cost of interconnection-related network upgrades can depend largely on 
both the timing of when the interconnection customer enters the 
interconnection queue and where the interconnection customer proposes 
to interconnect its generating facility. Therefore, the Commission 
noted, interconnection customers may submit multiple interconnection 
requests in an effort to determine the most favorable point of 
interconnection \48\ that minimizes their interconnection-related 
network upgrade costs.\49\ The Commission stated that this practice, in 
turn, may lead to late-stage withdrawals of the excess interconnection 
requests, which can then impede the transmission provider's ability to 
process its interconnection queue in an efficient manner. As a result, 
the Commission stated that it may be time to consider reforms to 
generator interconnection process that would make them more efficient 
and ensure that generation facilities that are more ``ready'' than 
others are not unduly delayed in the interconnection queue.
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    \46\ Bldg. for the Future Through Elec. Reg'l Transmission Plan. 
& Cost Allocation & Generator Interconnection, 86 FR 40266 (July 15, 
2021), 176 FERC ] 61,024 (2021) (ANOPR).
    \47\ Id. P 5.
    \48\ Point of Interconnection refers to ``the point, as set 
forth in Appendix A to the Standard Large Generator Interconnection 
Agreement, where the Interconnection Facilities connect to the 
Transmission Provider's Transmission System.'' Pro forma LGIP 
section 1.
    \49\ ANOPR, 176 FERC ] 61,024 at P 41.
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    15. On April 21, 2022, the Commission issued a Notice of Proposed 
Rulemaking (Transmission Planning and Cost Allocation NOPR) proposing 
reforms to its existing regional transmission planning and cost 
allocation requirements in the same proceeding as it issued the ANOPR. 
While the Transmission Planning and Cost Allocation NOPR did not 
address many of the concerns raised by the Commission in the ANOPR with 
respect

[[Page 39938]]

to the generator interconnection queue process, the Commission noted in 
the Transmission NOPR that it would continue to review the record and 
that it expected to address possible inadequacies through subsequent 
proceedings that propose reforms, as warranted, related to that 
topic.\50\ We are now taking that next step with the reforms we propose 
in this NOPR.
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    \50\ Bldg. for the Future Through Elec. Reg'l Transmission Plan. 
& Cost Allocation & Generator Interconnection, 87 FR 26504 (May 04, 
2022), 179 FERC ] 61,028, at P 10 (2022) (Transmission Planning and 
Cost Allocation NOPR).
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5. Joint Federal-State Task Force on Electric Transmission
    16. On June 17, 2021, the Commission established a Joint Federal-
State Task Force on Electric Transmission (Task Force) to formally 
explore broad categories of transmission-related topics.\51\ The 
Commission explained that the development of new transmission 
infrastructure implicates a host of different issues, including 
generator interconnection. The Task Force is comprised of all FERC 
Commissioners as well as representatives from 10 state commissions 
nominated by the National Association of Regulatory Utility 
Commissioners (NARUC), with two originating from each NARUC region.\52\ 
The Task Force will convene for multiple formal meetings and has thus 
far met three times--on November 10, 2021, on February 16, 2022, and on 
May 6, 2022.
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    \51\ Joint Fed.-State Task Force on Elec. Transmission, 175 FERC 
] 61,224, at PP 1, 6 (2021).
    \52\ An up-to-date list of Task Force members, as well as 
additional information on the Task Force, is available on the 
Commission's website at: https://www.ferc.gov/TFSOET. Public 
materials related to the Task Force, including transcripts from 
public meetings, are available in the Commission's eLibrary in 
Docket No. AD21-15-000.
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    17. The discussion at the May meeting focused on interconnection 
issues, including generator interconnection queue processes and 
backlogs. The Task Force Members discussed: the primary challenges 
preventing more efficient processing of interconnection queues; 
specific improvements to interconnection processes (such as tighter 
applicant requirements to enter and remain in the queue, clustering, 
fast tracking, tighter deadlines on transmission providers completing 
studies, and minimizing reiterative studies); and how to balance near 
term improvements to the interconnection procedures with longer-term 
regional transmission planning and development.\53\
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    \53\ Joint Fed.-State Task Force on Elec. Transmission, Notice 
of Meeting, Docket No. AD21-15-000 (issued Apr. 22, 2022) (attaching 
agenda).
---------------------------------------------------------------------------

B. Need for Reform

    18. Under the Commission's pro forma LGIP, the interconnection 
study process for large generating facilities is a serial first-come, 
first-served study process by which transmission providers study 
interconnection requests individually in the order the transmission 
provider received them.\54\ The Commission adopted these procedures at 
a time when most interconnection requests were for large traditional 
generating facilities that would use readily available transmission 
capacity. In the 2008 Technical Conference Order, the Commission 
acknowledged that, while the generator interconnection process set 
forth in the pro forma LGIP made sense at the time that the Commission 
adopted it, it has since led to some unexpected consequences, 
particularly for transmission systems with numerous interconnection 
customers and limited excess transmission capacity.\55\ The Commission 
also explained that surges in the volume of new types of generating 
facilities, principally renewable generation, were placing stress on 
interconnection queue management because such generating facilities can 
be constructed and placed into operation more quickly than traditional 
types of generating facilities. The increase in the number of 
interconnection requests and limited transmission capacity have not 
subsided since the issuance of the 2008 Technical Conference Order. 
Although in Order No. 845, the Commission attempted to address 
interconnection queue backlogs,\56\ the interconnection queue backlog 
has persisted and worsened. Indeed, as of the end of 2021, there were 
over 8,100 active interconnection requests in interconnection queues 
throughout the United States, representing over 1,000 GW of generation 
and an estimated 420 GW of electric storage.\57\ This is more than 
triple the total volume, in gigawatts, of generation and electric 
storage in interconnection queues nationwide just five years 
earlier.\58\
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    \54\ Pro forma LGIP section 4.1.
    \55\ 2008 Technical Conference Order, 122 FERC ] 61,252 at P 15.
    \56\ Order No. 845, 163 FERC ] 61,043 at P 24.
    \57\ Joseph Rand et al., Lawrence Berkeley Nat'l Lab'y, Queued 
Up: Characteristics of Power Plants Seeking Transmission 
Interconnection as of the End of 2021, at 26 (Apr. 2022), https://emp.lbl.gov/sites/default/files/queued_up_2021_04-13-2022.pdf 
(Queued Up).
    \58\ See Ryan Wiser et al., Lawrence Berkeley Nat'l Lab'y, Wind 
Energy Techs. Office, Land-Based Wind Market Report: 2021 Edition, 
at 10 (Aug. 2021), https://www.energy.gov/eere/wind/articles/land-based-wind-market-report-2021-edition-released.
---------------------------------------------------------------------------

    19. The continued use of the Commission's pro forma LGIP in the 
face of dramatic increases in interconnection requests is leading to a 
growing backlog of interconnection requests for many transmission 
providers. Based on Commission staff's compilation of information 
posted by transmission providers for 2021, nationwide, almost 1,900 
interconnection requests were awaiting interconnection studies that had 
not been performed as of the tariff-defined deadline.\59\ These 
interconnection queue backlogs and study delays create uncertainty and 
inhibit project developers' ability to interconnect generating 
facilities to the transmission system.\60\ In addition, as 
interconnection studies fall behind, the amount of time subsequent 
interconnection requests spend in the interconnection queue rises.\61\
---------------------------------------------------------------------------

    \59\ See app. A (compiling data publicly posted by transmission 
providers in compliance with Order No. 845); see also Order No. 845, 
163 FERC ] 61,043 at P 305. This is based on informational reports 
submitted by transmission providers in compliance with Order No. 
845.
    \60\ See Joint Fed.-State Task Force on Elec. Transmission, 
Technical Conference, Docket No. AD21-15-000, Tr. 15:21-16:1 (Ted 
Thomas) (May 6, 2022) (May Joint Task Force Tr.) (``Houston, we have 
a problem. As stated in the NARUC ANOPR comments, existing methods 
for interconnecting new resources to the transmission grid are 
inadequate and inefficient because of the time necessary to 
interconnect new resources and the corresponding network upgrade 
costs.'').
    \61\ For the four RTOs/ISOs (California Independent System 
Operator Corporation (CAISO), Electric Reliability Council of Texas 
(ERCOT), New York Independent System Operator, Inc. (NYISO), and PJM 
Interconnection, L.L.C (PJM) and one utility (Arizona Public Service 
Company)) for which data was available, the average time projects 
spent in interconnection queues before being constructed increased 
from ~2.1 years for projects built between 2000 and 2010 to ~3.7 
years for those built between 2011 and 2021. Queued Up at 3. As of 
the end of 2021, only 13% of total capacity in interconnection 
queues had an executed generator interconnection agreement. Id. at 
17. See also May Joint Task Force Tr. 23:18-25 (Jason Stanek) 
(expressing frustration with the status quo and agreement that it is 
``no longer tenable'' considering the inability of generators to 
interconnect in a timely manner, e.g., there are ``2,500 projects 
under study [in the MACRUC region] and about a half of them have 
been in the queue since at least 2001'').
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    20. Numerous factors appear to contribute to these interconnection 
queue backlogs. Increasing volumes of interconnection requests are 
entering the interconnection queue due to a confluence of the rapidly 
changing

[[Page 39939]]

resource mix,\62\ market forces,\63\ and emerging technologies.\64\ At 
the same time, available transmission capacity appears to have been 
exhausted in many regions. As the Commission observed in the 
Transmission Planning and Cost Allocation NOPR, ``[t]he evidence 
suggests that long-term regional transmission planning and cost 
allocation to identify and plan for transmission needs . . . is not 
occurring in most transmission planning regions on a regular or 
consistent basis.'' \65\ Instead, the Commission added, significant 
transmission expansion appears to be happening in an incremental 
fashion, in response to individual interconnection requests.\66\ This 
reactive approach to transmission expansion adds to the challenge many 
proposed projects face to successfully complete the interconnection 
queue process and reach commercial operation. Therefore, the number of 
projects waiting in the interconnection queue is increasing. Further, 
transmission providers report that there is a nationwide shortage of 
qualified engineers to keep pace with the increasing number of 
interconnection requests in the queue and associated interconnection 
studies.\67\ Many, if not all, of these drivers are either ongoing or 
increasing. Thus, we are concerned that, without reforms to the 
generator interconnection process, existing interconnection queue 
backlogs are likely to intensify.
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    \62\ Corporations purchased over 30 GW of clean energy through 
power purchase agreements in 2021, up nearly 24% from 2020. U.S.-
based purchases represented 17 GW of the power purchase agreements 
executed in 2021. Bloomberg New Energy Finance, Corporate Clean 
Energy Buying Tops 30GW Mark in Record Year (Jan. 31, 2022), https:/
/about.bnef.com/blog/corporate-clean-energy-buying-tops-30gw-mark-
in-record-year/
#:~:text=Corporate%20Clean%20Energy%20Buying%20Tops%2030GW%20Mark%20i
n%20Record%20Year,-
January%2031%2C%202022&text=New%20York%20and%20London%2C%20January,re
search%20firm%20BloombergNEF%20 (BNEF).
    \63\ From 2009 to 2021, the levelized cost of energy from 
unsubsidized utility scale wind and solar photovoltaic facilities 
dropped 72% and 90%, respectively. Lazard, Lazard's Levelized Cost 
of Energy Analysis--Version 15.0, at 9 (Oct. 2021), https://www.lazard.com/perspective/levelized-cost-of-energy-levelized-cost-of-storage-and-levelized-cost-of-hydrogen/ (Lazard's LCOE).
    \64\ For instance, 42% (285 GW) of solar and 8% (17 GW) of wind 
projects currently in the queue include are proposed as hybrid 
resources including electric storage. Queued Up at 18.
    \65\ Transmission Planning and Cost Allocation NOPR, 179 FERC ] 
61,028 at P 36.
    \66\ Id.
    \67\ For example, CAISO stated in its recent proposal to extend 
its interconnection study deadlines to accommodate its 
interconnection queue cluster 14 that neither CAISO nor the 
participating transmission owners could increase staffing as few 
experts are available to hire. Cal. Indep. Sys. Operator Corp., 176 
FERC ] 61,207, at PP 7, 21 (2021). The Midcontinent Independent 
System Operator (MISO) has indicated that it similarly has 
experienced delays in performance of interconnection studies by 
outside consultants. See MISO, Informational Report, Transmittal, 
Docket No. ER19-1960, at 12 (filed Nov. 16, 2020).
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    21. In recent years, numerous transmission providers have responded 
to the types of trends and challenges outlined above by seeking to 
reform their interconnection queue processes.\68\ Since 2018, the 
Commission has approved proposals from five non-independent 
transmission providers to transition from the serial first-come, first-
served study process set forth in the pro forma LGIP to a first-ready, 
first-served cluster study process that imposes increasing readiness 
requirements to advance through the study phases.\69\ Meanwhile, 
several RTOs/ISOs, including MISO and Southwest Power Pool (SPP), have 
proposed refinements to the cluster study processes in their regions 
that the Commission had previously approved.\70\
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    \68\ See May Joint Task Force Tr. 88:10-12 (Ted Thomas) (``[T]he 
RTOs have been working on these interconnection issues and we don't 
have a solution yet.'').
    \69\ Dominion Energy S.C., Inc., Docket No. ER22-301-000 (Dec. 
28, 2021) (delegated order) (Dominion); Duke Energy Carolinas, LLC, 
176 FERC ] 61,075 (2021) (Duke); PacifiCorp, 171 FERC ] 61,112 
(2020); Pub. Serv. Comm'n of Colo., 169 FERC ] 61,182 (2019) (PSCo); 
Tri-State Generation & Transmission Ass'n, Inc., 173 FERC ] 61,015 
(2020) (2020 Tri-State Order).
    \70\ See, e.g., Midcontinent Indep. Sys. Operator, Inc., 178 
FERC ] 61,141 (2022); Sw. Power Pool, Inc., 178 FERC ] 61,015 
(2022).
---------------------------------------------------------------------------

    22. As the factors contributing to interconnection queue backlogs 
and study delays continue and even increase, it has become more 
apparent that the Commission's existing generator interconnection 
procedures and agreements may be insufficient to ensure that 
interconnection customers are able to interconnect to the transmission 
system in a reliable, efficient, transparent, and timely manner, 
thereby ensuring that rates, terms, and conditions for Commission-
jurisdictional services remain just and reasonable and not unduly 
discriminatory or preferential.\71\ We preliminarily find that the 
Commission's pro forma LGIP, pro forma LGIA, pro forma SGIP, and pro 
forma SGIA result in rates, terms, and conditions pursuant to which 
transmission providers provide generator interconnection service are 
unjust and unreasonable and unduly discriminatory or preferential. 
Further, because the interconnection queue backlogs and study delays 
afflicting generator interconnection service nationwide hinder the 
timely development of new generation and thereby stifle competition in 
the wholesale electric markets, we preliminarily find that the 
Commission's pro forma LGIP, pro forma LGIA, pro forma SGIP, and pro 
forma SGIA result in rates, terms, and conditions in the wholesale 
electric markets that are unjust and unreasonable and unduly 
discriminatory or preferential.
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    \71\ See May Joint Task Force Tr. 23:6-11 (Riley Allen) 
(``Ultimately, this system is not working efficiently now and those 
inefficiencies translate into costs. It's not just cost on the 
developers, but I find from my decades of experience that, if there 
are inefficiencies in the system, they ultimately have to be borne 
by the loads and ratepayer interests.'').
---------------------------------------------------------------------------

    23. Our preliminary findings are based on several features of the 
Commission's existing generator interconnection procedures and 
agreements that are of concern, specifically: (1) the information (or 
lack thereof) available to prospective interconnection customers and 
the commitments required of them to enter and progress through the 
interconnection queue; (2) the reliance on a serial first-come, first-
served study process and the standard to which transmission providers 
are held for meeting interconnection study deadlines; (3) the protocols 
for affected systems studies; (4) the provisions for studying new or 
hybrid (co-located) generation technologies and considering alternative 
transmission technologies; and (5) the performance requirements for 
inverter-based technologies, including wind, solar, and electric 
storage facilities. We describe these features of the Commission's 
existing generator interconnection procedures and agreements--as set 
forth in the Commission's pro forma LGIP, pro forma LGIA, pro forma 
SGIP, and pro forma SGIA--in this section and then turn to our proposed 
reforms to address the concerns identified with those features.\72\
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    \72\ See id. 184:6-19 (Clifford Rechtschaffen) (``I think it's 
beyond dispute that we need queue reform. I don't know if it's a 
crisis, but there's logjams, dysfunctions, inefficiencies . . . . I 
think there's a real need to keep the foot on the gas and for FERC 
to provide guidance templates, best practices, . . . minimum 
baselines, while again, providing for flexibility.'').
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    24. First, the pro forma LGIP does not contain a process by which 
an interconnection customer can obtain information at a specific 
location or point of interconnection about potential interconnection 
costs prior to submitting an interconnection request. As a result, at 
the outset of the generator interconnection process,\73\

[[Page 39940]]

interconnection customers typically have little insight into the 
interconnection capacity available at various points on the 
transmission system. Furthermore, interconnection customers face 
limited financial commitments to enter and stay in the interconnection 
queue and few requirements to prove the commercial viability of 
proposed generating facilities.\74\ Therefore, developers often submit 
multiple interconnection requests for proposed generating facilities at 
various points of interconnection, not all of which are expected to 
reach commercial operation, as an exploratory mechanism to obtain 
information to allow them to choose the most favorable site.\75\
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    \73\ As in the background of this NOPR, we describe the 
generator interconnection process set forth in the Commission's pro 
forma LGIP, which we recognize differs from many transmission 
providers' generator interconnection processes due to Commission-
approved variations.
    \74\ For example, the total cost of interconnection studies 
under the pro forma LGIP is often under $500,000. See pro Forma LGIP 
sections 3.1 ($10,000 deposit with interconnection request), 6.1 
($10,000 deposit with Feasibility Study Agreement), 7.2 ($50,000 
deposit with System Impact Study Agreement), 8.1 (minimum $100,000 
deposit with Facilities Study Agreement).
    \75\ See, e.g., Review of Generator Interconnection Agreements 
and Procedures, Technical Conference Transcript, Docket No. RM16-12-
000, at 211:10-21 (May 13, 2016) (Steve Naumann, Exelon Corp.) 
(filed Aug. 23, 2016) (``We would look at putting let's say new gas 
fired generation in PJM, it may have four queue positions. And we 
only intend to go through with one, that's not speculation, that's 
trying to get information on which is the most viable.'').
---------------------------------------------------------------------------

    25. Second, securing a higher interconnection queue position is 
valuable when interconnecting to a transmission provider that uses the 
serial first-come, first-served study process as laid out in the pro 
forma LGIP because the transmission provider will process 
interconnection requests (i.e., perform required interconnection 
studies) in the order in which the interconnection requests are 
received. By obtaining an early queue position, a generating facility 
may be able to use available transmission capacity and not need to 
incur costs for network upgrades that later-queued interconnection 
customers potentially incur. Under this framework, interconnection 
customers have an incentive to submit interconnection requests to 
secure a queue position as early as possible, even if they are not 
prepared to move forward with the proposed generating facility at the 
time the interconnection request is made, to identify locations with 
available headroom on the transmission system and establish priority 
over later-queued interconnection requests.
    26. Often, these more speculative interconnection requests do not 
prove to be commercially viable. For example, in many interconnection 
queues, the MW volumes of interconnection requests far exceed the 
transmission provider's peak network load.\76\ A lack of commercial 
viability often means that many proposed generating facilities in the 
interconnection queue will eventually withdraw after not finding a 
purchaser for their output. In the case where the interconnection 
customer submits multiple requests, the developer may select only the 
one or two most viable project candidates and withdraw the 
interconnection requests for the remaining projects. These withdrawals 
then impact the remaining interconnection customers in the 
interconnection queue. A withdrawal may necessitate re-studies and 
cause the shifting of network upgrade costs to lower-queued 
interconnection customers. New cost estimates, in turn, can alter a 
proposed generating facility's commercial viability and create further 
re-studies and withdrawals, often referred to as cascading re-studies 
and withdrawals.\77\ These re-studies exacerbate the cost uncertainty 
faced by interconnection customers \78\ and prevent the transmission 
provider from maintaining a model base case for how its transmission 
system is expected to reliably operate and serve load in the future.
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    \76\ For example, Dominion, PSCo, and Tri-State each provided 
statistics to this effect as part of their argument for 
interconnection queue reforms. See Dominion, Transmittal Letter, 
Docket No. ER22-301-000, at 8 (filed Nov. 1, 2021); PSCo, 
Transmittal Letter, Docket No. ER19-2774-000, at 27 (filed Sep. 9, 
2019); Tri-State, Transmittal Letter, Docket No. ER21-410-000, at 20 
(filed Nov. 13, 2020).
    \77\ See pro forma LGIP section 7.6; see also May Joint Task 
Force Tr. 70:20-71:6 (Matthew Nelson) (analogizing reiterative 
studies to going to the supermarket to buy ingredients for a recipe 
without knowing how much the ingredients cost, finding out at the 
register that they cost too much for your budget, and having to ``go 
home, get a new recipe, and start it all over again'').
    \78\ Id 74:9-21 (Andrew French) (stating that generator 
developers complain principally about cost certainty and cost 
sharing and that ``cost certainty is the much bigger issue'' given 
that ``an essential element of being able to sell a product is to 
know what your inputs are so you can market it'').
---------------------------------------------------------------------------

    27. These delays faced by individual interconnection customers may 
hinder the timely development of new generation, and, thereby, stifle 
competition in wholesale energy markets or delay access to potential 
low cost generation, which ultimately drive up costs for consumers.
    28. Compounding these issues, the pro forma LGIP does not require 
transmission providers to meet deadlines for conducting interconnection 
studies. Rather, transmission providers are only required to use 
``reasonable efforts'' \79\ to complete interconnection studies on 
time.\80\ Despite complaints from interconnection customers, the 
Commission has not yet found that a transmission provider failed to use 
reasonable efforts to meet interconnection study deadlines, even though 
such studies are routinely completed months or years late. While 
interconnection customers can be removed from the queue for failure to 
comply with deadlines throughout the generator interconnection 
process,\81\ transmission providers face no consequences for failure to 
comply with study deadlines.
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    \79\ Reasonable efforts are defined as ``actions that are timely 
and consistent with Good Utility Practice and are substantially 
equivalent to those a Party would use to protect its own 
interests.'' Order No. 2003, 104 FERC ] 61,103 at P 67; pro forma 
LGIP section 1.
    \80\ See pro forma LGIP sections 2.2, 6.3, 7.4, 8.3.
    \81\ Id. section 3.7 (``[I]f Interconnection Customer fails to 
adhere to all requirements of this LGIP . . . Transmission Provider 
shall deem the Interconnection Request to be withdrawn and shall 
provide written notice to Interconnection Customer . . . [.] 
Interconnection Customer shall have fifteen (15) Business Days in 
which to either respond with information or actions that cures the 
deficiency or to notify Transmission provider of its intent to 
pursue Dispute Resolution.'').
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    29. Third, similar to the lack of requirements for timely 
completion of interconnection studies, the pro forma LGIP provides 
almost no requirements regarding how or when transmission providers or 
affected systems should complete affected system studies; in 
particular, even the reasonable efforts standard does not apply to 
these studies.\82\ In practice, these studies often lag behind those 
completed by the host transmission provider and are sometimes completed 
very late in the process, causing an additional round of delays and 
cost uncertainty for interconnection customers.\83\
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    \82\ Affected systems studies are used to study the impact of 
proposed interconnection requests on neighboring transmission 
systems. Transmission providers are obligated to coordinate the 
conduct of affected system studies, but the Commission has not 
required transmission providers to follow any specific affected 
system coordination process. See pro forma LGIP section 3.6.
    \83\ EDF Renewable Energy, Inc. v. Midcontinent Indep. Sys. 
Operator, Inc., 168 FERC ] 61,173 (2019) (EDF v. MISO).
---------------------------------------------------------------------------

    30. In short, under the Commission's existing pro forma LGIP, pro 
forma LGIA, pro forma SGIP, and pro forma SGIA, it is difficult for 
transmission providers to disincentivize interconnection customers from 
entering multiple speculative interconnection requests into the 
interconnection queue or minimize the risk of late-stage withdrawals of 
interconnection requests. Conversely, transmission providers have 
little

[[Page 39941]]

incentive to perform interconnection studies in a timely fashion. The 
resulting timing and cost uncertainty creates a barrier to entry that 
hinders competitive wholesale electric markets. As the Commission has 
previously observed, delayed interconnection study results or 
unexpected cost increases can disrupt numerous aspects of generating 
facility development, including project financing and the ability to 
obtain a power purchase agreement.\84\ Developers in the 
interconnection queues have recently filed complaints with the 
Commission alleging that interconnection study delays have caused 
direct and indirect financial harm to them by threatening the viability 
of their projects.\85\ Cost uncertainty poses an especially significant 
obstacle because proposed generating facilities may simply not be able 
to absorb substantial unexpected interconnection costs allocated as the 
result of a re-study. As indicated earlier, our fundamental concern is 
the follow-on impacts of these issues on rates paid by consumers. 
Unnecessary interconnection costs, either on the part of project 
developers or transmission providers, are ultimately passed through to 
consumers through higher energy or transmission rates, respectively. 
Conversely, efficient interconnection queues and well-functioning 
wholesale markets deliver enormous benefits to consumers by driving 
down wholesale electricity costs.
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    \84\ Reform of Generator Interconnection Procedures and 
Agreements, 157 FERC ] 61,212, at P 30 (2016).
    \85\ See, e.g., SOO Green HVDC Link Project Co, LLC, Complaint, 
Docket No. EL21-85-000, at 24, 38-39 (filed June 21, 2021).
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    31. Fourth, in addition to our preliminary findings related to the 
interconnection queue backlogs described above, we preliminarily find 
that the Commission's pro forma LGIP, pro forma LGIA, pro forma SGIP, 
and pro forma SGIA are unjust and unreasonable, unduly discriminatory, 
and preferential as applied to several interconnection procedural and 
modeling issues. This set of inquiries was prompted by newer 
technologies entering interconnection queues in greater numbers. 
Interconnection queues consist now predominantly of non-synchronous 
resources such as wind, solar, and electric storage projects, all of 
which have operating characteristics that were not anticipated when the 
Commission issued Order No. 2003.\86\ In particular, interest in hybrid 
resources, which combine more than one generating facility type, often 
with electric storage, has increased dramatically.\87\ This change in 
the types of resources has brought to light several issues. For 
example, the pro forma LGIP does not specify whether interconnection 
customers of all resource types can submit a single interconnection 
request for co-located components of a generating facility, although 
research shows that this option is frequently used in regions where it 
has been made available through variations from the Commission's pro 
forma generator interconnection procedures.\88\
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    \86\ As of the end of 2019, 90% of the generating capacity that 
was waiting in interconnection queues nationwide was wind, solar, or 
energy storage projects. See Jay Caspary et al., Ams. for a Clean 
Energy Grid, Disconnected: The Need for a New Generator 
Interconnection Policy, at 4 (Jan. 2021), https://cleanenergygrid.org/disconnected-the-need-for-new-interconnection-policy/ (ACEG Report).
    \87\ 42% (285 GW) of solar and 8% (17 GW) of wind projects 
currently in the queue are proposed as hybrid resources including 
electric storage. Queued Up at 18.
    \88\ In researching hybrid interconnection requests, Lawrence 
Berkeley National Laboratory encountered many projects for which 
``the `Generator Type' field includes multiple types for a single 
queue entry.'' See Mark Bolinger, et al., Lawrence Berkeley Nat'l 
Lab'y, Hybrid Power Plants: Status of Installed and Proposed 
Projects, at 16 (Aug. 2021), https://emp.lbl.gov/sites/default/files/hybrid_plant_development_2021.pdf.
---------------------------------------------------------------------------

    32. Further, the addition of generating facilities that do not 
affect the requested interconnection service level are often deemed a 
material modification without review, which can cause unnecessary 
network upgrades. Also, the use of the surplus interconnection process, 
as adopted in Order No. 845, has proven helpful for interconnection 
customers seeking to access interconnection capacity that has already 
been approved through an LGIA, but it is currently only available when 
a resource is fully operational. Lastly, with respect to 
interconnection requests involving electric storage resources, a 
transmission provider may use operating assumptions for interconnection 
studies that employ worst-case assumptions or other inaccuracies (e.g., 
that electric storage will charge during peak load periods) \89\ that 
do not accurately reflect the planned operation of these resources, 
thus requiring network upgrades that may not be necessary.
---------------------------------------------------------------------------

    \89\ Hybrid Resource Coalition, Comments, Docket No. AD20-9-000, 
at 11-12 (filed Sept. 20, 2021); City of New York, Comments, Docket 
No. AD20-9-000, at 3 (filed Sept. 20, 2021); Clean Grid Alliance, 
Comments, Docket No. AD20-9-000, at 3 (filed Sept. 20, 2021); 
Savion, Post-Technical Conference Comments, Docket No. AD20-9-000, 
at 7 (filed Sept. 24, 2020); Enel, Post-Technical Conference 
Comments, Docket No. AD20-9-000, at 2-3 (filed Sept. 24, 2020).
---------------------------------------------------------------------------

    33. We also preliminarily find that failing to consider alternative 
transmission technologies that can be deployed both more quickly and at 
lower costs than network upgrades may render Commission-jurisdictional 
rates unjust and unreasonable. Therefore, we propose to modify the 
Commission's pro forma LGIP and SGIP to require their consideration to 
achieve their benefits in generator interconnection processes.\90\ 
Alternative transmission technologies might allow for the 
interconnection of a proposed generating facility at a lower cost and 
require less time to implement than traditional network upgrades.\91\ 
Despite these potential benefits, alternative transmission technologies 
often do not receive the same consideration during generator 
interconnection processes and have only been deployed in a small number 
of instances.\92\ The result is that interconnection customers--and 
ultimately consumers--may be paying more than is reasonable to reliably 
interconnect new generating facilities, rendering Commission-
jurisdictional rates unjust and unreasonable and unduly discriminatory 
and preferential.
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    \90\ A variety of technologies offer potential alternatives to 
standard infrastructure network upgrades (e.g., reconductoring 
transmission lines or building new ones). These technologies include 
advanced power flow control devices, transmission switching, dynamic 
line ratings, static synchronous compensators, static volt-ampere 
reactive (VAR) compensators, and electric storage in specific use 
cases.
    \91\ See, e.g., EDF Renewables, Comments, Docket No. RM21-17-
000, at 16 (filed Nov. 30, 2021); State Agencies, Comments, Docket 
No. RM21-27-000, at 30-33 (filed Nov. 30, 2021); Alliant Energy 
Corporate Services, Inc. et al., Comments, Docket No. RM20-16-000, 
at 6 (filed Mar. 22, 2021) (stating that ``utilization of [dynamic 
line ratings] can improve contingency planning and defer or 
eliminate the need for line upgrades or reconductoring'').
    \92\ See, e.g., EDF Renewables, Comments, Docket No. RM21-17-
000, at 16 (filed Nov. 30, 2021); Potomac Economics, Comments, 
Docket No. RM21-17-000, at 8-9 (filed Nov. 30, 2021); State 
Agencies, Comments, Docket No. RM21-27-000, at 31-32 (filed Nov. 30, 
2021).
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    34. Fifth, we preliminarily find that the pro forma LGIP and SGIP's 
data submission and performance requirements for non-synchronous 
generating facilities \93\ (including wind, solar, and electric storage 
facilities) require reform to avoid undue discrimination and ensure 
just and reasonable Commission-jurisdictional rates. When an 
interconnection customer submits an interconnection

[[Page 39942]]

request for a proposed synchronous generating facility, it must provide 
a variety of system information, which allows the transmission provider 
to assess and model the facility's ability to respond appropriately to 
transmission system disturbances.\94\ By contrast, non-synchronous 
generating facilities are not required to provide a comparable level of 
information that would allow the transmission provider to model and 
assess the facility's ability to respond appropriately to transmission 
system disturbances.\95\ As the penetration of wind, solar, and 
electric storage resources increases, the behavior of these types of 
non-synchronous generating facilities during transmission system 
disturbances becomes more consequential, as does the need to assess 
their potential contribution to cascading outages or other major 
electric system issues. Furthermore, we are concerned that, without 
reform to require interconnection customers developing non-synchronous 
resources to provide sufficiently accurate and validated models, 
interconnection studies may not identify the appropriate 
interconnection facilities and network upgrades needed for that 
interconnection request. If the interconnection studies are not able to 
identify the appropriate interconnection facilities and network 
upgrades, then the interconnection costs assigned to that 
interconnection customer may be skewed, resulting in unjust and 
unreasonable rates for interconnection service.
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    \93\ Non-synchronous generating facilities are ``connected to 
the bulk power system through power electronics, but do not produce 
power at system frequency (60 Hz).'' They ``do not operate in the 
same way as traditional generators and respond differently to 
network disturbances.'' Reactive Power Requirements for Non-
Synchronous Generation, Order No. 827, 81 FR 40793 (June 23, 2016), 
155 FERC ] 61,277, at P 10 n.24 (2016) (citing Interconnection for 
Wind Energy, Order No. 661, 70 FR 34993 (June 16, 2005), 111 FERC ] 
61,353, at P 3 n.4 (2005)).
    \94\ This information includes model block diagrams for 
excitation systems, power system stabilizers, and governor systems, 
to inform and verify the dynamic models used by the transmission 
provider to assess the proposed synchronous generating facility's 
response to transmission system disturbances. See pro forma LGIP 
app. 1, attach. A.
    \95\ See infra PP 310-312.
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    35. In addition, we are concerned that the pro forma LGIA and SGIA 
may impose disparate performance requirements during system 
disturbances on synchronous and non-synchronous resources. 
Specifically, the physical characteristics of synchronous generating 
facilities result in such facilities continuing to inject electric 
current during transmission system disturbances, consistent with the 
need to remain ``connected to and synchronized with the Transmission 
System'' as required by the pro forma LGIA and SGIA.\96\ As a result, 
services that support transmission system reliability are not disrupted 
during such events. However, the pro forma LGIA and SGIA do not 
currently require non-synchronous generating facilities to continue 
injecting current in a comparable manner during system disturbances. 
Specifically, non-synchronous resources many cease injecting current 
through ``momentary cessation.'' \97\ As a result, transmission 
providers cannot determine whether non-synchronous generating 
facilities, in the aggregate, will continue to inject electric current 
during transmission system disturbances.
---------------------------------------------------------------------------

    \96\ Pro forma LGIA art. 9.73; pro forma SGIA art. 1.57.
    \97\ See infra note 463.
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    36. In light of the concerns outlined above, we preliminarily find 
that it is necessary to reform the Commission's pro forma LGIP, pro 
forma LGIA, pro forma SGIP, and pro forma SGIA to ensure that 
interconnection customers are able to interconnect to the transmission 
system in a reliable, efficient, transparent, and timely manner, 
thereby ensuring that rates, terms, and conditions for Commission-
jurisdictional services remain just and reasonable and not unduly 
discriminatory or preferential.

II. Proposed Reforms

A. Reforms To Implement a First-Ready, First-Served Cluster Study 
Process

    37. In recent years, late-stage withdrawals of interconnection 
requests have caused significant delays in interconnection study 
processes. In its January 2020 interconnection queue reform filing, 
PacifiCorp noted that about 75% of all interconnection requests 
ultimately withdraw from its interconnection queue and that withdrawals 
are a significant cause of delays in the generator interconnection 
process because withdrawals trigger re-studies. PacifiCorp argued that 
the current generator interconnection process encourages speculative 
projects to enter the interconnection queue because it does not require 
any progress toward commercial viability and does not penalize 
withdrawals from the interconnection queue.\98\
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    \98\ PacifiCorp, 171 FERC ] 61,112 at P 3.
---------------------------------------------------------------------------

    38. In support of its 2019 interconnection queue reform proposal, 
PSCo stated that it has experienced a surge in interconnection requests 
that cannot be processed under its current generator interconnection 
process. PSCo explained that, because the amount of generation 
requesting interconnection is significantly greater than the region's 
needs, only a small fraction of the generating facilities in the 
interconnection queue are likely to reach commercial operation. In 
addition, PSCo stated that, due to the configuration of PSCo's 
transmission system and the fact that most requests are for network 
resource integration service (NRIS),\99\ almost all lower-queued 
interconnection requests, regardless of study phase, are affected by 
changes to higher-queued interconnection requests.\100\
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    \99\ NRIS allows the interconnection customer to integrate its 
generating facility with the transmission provider's transmission 
system in a manner comparable to that in which the transmission 
provider integrates its generating facilities to serve native load 
customers, or in an RTO/ISO with market-based congestion management, 
in the same manner as Network Resources. NRIS in and of itself does 
not convey transmission service. Pro forma LGIP section 1.
    \100\ PSCo, 169 FERC ] 61,182 at P 21.
---------------------------------------------------------------------------

    39. For the reasons explained above, we preliminarily find that the 
Commission's pro forma LGIP and LGIA are unjust, unreasonable, unduly 
discriminatory, and preferential and that reforms are needed to allow 
interconnection customers to interconnect in a reliable, efficient, 
timely manner, thereby ensuring that rates, terms, and conditions for 
Commission-jurisdictional services remain just and reasonable and not 
unduly discriminatory or preferential. In particular, with regard to 
interconnecting in an efficient and timely manner, we propose reforms 
to the pro forma LGIP that: (1) require transmission providers to offer 
an optional informational interconnection study to serve as additional 
information for prospective interconnection customers in deciding 
whether to submit an interconnection request and set minimum 
requirements for transmission providers to publicly post available 
information pertaining to generator interconnection; (2) require 
transmission providers to implement a first-ready, first-served cluster 
study process that allocates costs associated with cluster studies and 
identified network upgrades consistent with the discussion below; and 
(3) impose more stringent financial commitments and readiness 
requirements on interconnection customers, including increased study 
deposits, more stringent site control requirements, a commercial 
readiness framework, and higher withdrawal penalties. To implement 
these reforms, we also propose to require transmission providers to 
establish a transition process, consistent with the proposed 
requirements below.
1. Interconnection Information Access
a. Need for Reform
    40. We are concerned that the lack of transparency for prospective 
interconnection customers to obtain information about potential

[[Page 39943]]

interconnection costs prior to submitting an interconnection request is 
problematic. Without this information, it is difficult for 
interconnection customers to assess the viability of a specific 
proposed generating facility. Subsequently, interconnection customers 
submit multiple speculative interconnection requests in an attempt to 
obtain information through the system impact study process about the 
costs associated with various project configurations.
    41. Some transmission providers have attempted to solve these 
problems by making more information available to interconnection 
customers before they enter the interconnection queue through an 
optional informational interconnection study that provides estimates of 
costs and scheduling for various sites.\101\ These optional 
informational interconnection studies evaluate the feasibility of a 
proposed interconnection request and provide interconnection customers 
with non-binding information upon which to base preliminary siting 
decisions. Transmission providers that offer these types of studies 
require a $10,000 deposit for the studies, subject to a true-up based 
on actual costs of performing the studies.\102\ While some transmission 
providers offer such an option, it is not currently required by the pro 
forma LGIP.
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    \101\ Dominion, Docket No. ER22-301-000 (Dec. 28, 2021) 
(delegated order);  Duke, 176 FERC ] 61,075 at P 19; PacifiCorp, 171 
FERC ] 61,112 at P 54; PSCo, 169 FERC ] 61,182 at PP 9-10, 30; Tri-
State Generation & Transmission Ass'n, Inc., 174 FERC ] 61,021, at P 
6 (2021) (Tri-State).
    \102\ See, e.g., Dominion, OATT and Service Agreements, attach. 
M (4.5.0), section 3.1; PSCo, Transmission and Service Agreements 
Tariff, OATT, attach. N. (0.8.0), section 6.1 (requiring a $10,000 
deposit for an informational study request).
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b. Proposed Reforms
i. Informational Interconnection Study
    42. To address the lack of information available to interconnection 
customers prior to entering the interconnection queue, and the 
associated impacts on development of new generating facilities, 
interconnection queue backlogs, and interconnection study delays, we 
propose to revise the Commission's pro forma LGIP to require 
transmission providers to offer an informational interconnection study 
to serve as additional information for prospective interconnection 
customers in deciding whether to submit an interconnection request. The 
study would provide cost estimates for the transmission provider's 
interconnection facilities \103\ and network upgrade costs specific to 
the interconnection scenario detailed in the study agreement. 
Specifically, we propose to revise sections 6.1-6.3 and Appendix 2 to 
the pro forma LGIP to implement this reform: section 6.1 (Informational 
Interconnection Study Agreement), section 6.2 (Scope of Informational 
Interconnection Study), section 6.3 (Informational Interconnection 
Study Procedures), Appendix 2 (Informational Interconnection Study 
Request form), and Attachment A to Appendix 2 (Informational 
Interconnection Study Agreement form). We also propose to include new 
definitions for an informational interconnection study and 
informational interconnection study agreement.
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    \103\ The pro forma LGIA defines ``Transmission Provider's 
Interconnection Facilities'' as ``all facilities and equipment 
owned, controlled or operated by the Transmission Provider from the 
Point of Change of Ownership to the Point of Interconnection as 
identified in Appendix A to the Standard Large Generator 
Interconnection Agreement, including any modifications, additions or 
upgrades to such facilities and equipment. Transmission Provider's 
Interconnection Facilities are sole use facilities and shall not 
include Distribution Upgrades, Stand Alone Network Upgrades or 
Network Upgrades.'' These are distinct from ``Interconnection 
Customer's Interconnection Facilities,'' which are those facilities 
``identified in Appendix A of the Standard Large Generator 
Interconnection Agreement, that are located between the Generating 
Facility and the Point of Change of Ownership, including any 
modification, addition, or upgrades to such facilities and equipment 
necessary to physically and electrically interconnect the Generating 
Facility to the Transmission Provider's Transmission System. 
Interconnection Customer's Interconnection Facilities are sole use 
facilities.'' Pro forma LGIA section 1.
---------------------------------------------------------------------------

    43. Proposed section 6.1 of the pro forma LGIP provides that a 
prospective interconnection customer may request an informational 
interconnection study. The proposed provision would limit prospective 
interconnection customers to no more than five separate informational 
interconnection study requests pending at a time to ensure that 
transmission providers are not overburdened with these studies and that 
one prospective interconnection customer cannot prevent others from 
taking advantage of this information-gathering process.\104\ Each 
configuration of an interconnection request would require a separate 
informational interconnection study. For example, prospective 
interconnection customers seeking to evaluate different sites or 
different voltage levels at the same site would need to submit a 
separate request for each configuration. The informational 
interconnection study would be at the interconnection customer's 
expense, and each study would require a $10,000 deposit, subject to a 
true-up based on actual study costs.
---------------------------------------------------------------------------

    \104\ See, e.g., Dominion, OATT and Service Agreements, attach. 
M (4.5.0), section 3.1 (``Any one Interconnection Customer 
(including affiliates) shall have no more than five (5) requests for 
Informational Interconnection Study reports pending at one time.'').
---------------------------------------------------------------------------

    44. Under the proposal, within seven business days of the receipt 
of a prospective interconnection customer's request for an 
informational interconnection study, the transmission provider would 
have to provide the prospective interconnection customer with an 
informational interconnection study agreement in the form of Attachment 
A to Appendix 2 of the pro forma LGIP. The informational 
interconnection study agreement would specify the technical data that 
the prospective interconnection customer must provide and an estimate 
of the expected costs of the study, including, to the extent known by 
the transmission provider, an estimate of the study costs expected to 
be incurred by any relevant affected systems. The prospective 
interconnection customer would have 10 business days to execute the 
agreement and deliver it to the transmission provider, along with the 
relevant technical data and study deposit, after which the transmission 
provider would have 45 days to complete the study.
    45. Proposed section 6.2 of the pro forma LGIP explains that the 
informational interconnection study consists of a sensitivity analysis 
based on the assumptions specified in the informational interconnection 
study agreement. The informational interconnection study would identify 
potential interconnection facilities and network upgrades that may be 
required to interconnect the prospective interconnection customer's 
proposed generating facility, including an approximation of the costs 
of such interconnection facilities and network upgrades. The 
transmission provider would also coordinate with affected systems that 
may be impacted by the prospective interconnection customer's request 
to provide information on affected systems-related issues.
    46. Proposed Attachment A to Appendix 2 of the pro forma LGIP 
contains the informational interconnection study agreement form. The 
form agreement explains that the informational interconnection study is 
performed solely for informational purposes and is not binding on 
either party. It also requires the study report to provide specific 
information, including, at a minimum: (1) preliminary identification of 
any circuit breaker short circuit capability limits exceeded; (2) 
preliminary identification of any thermal overload or voltage limit 
violations; and (3) estimated network

[[Page 39944]]

upgrade costs related to the identified overloads and violations.
    47. We recognize that the benefit of the informational 
interconnection study results would depend on the information provided, 
the assumptions made, and the timing of the proposed interconnection, 
with studies looking at interconnection requests with proposed 
commercial operation dates further into the future carrying greater 
uncertainty. Nevertheless, we seek comment on whether the informational 
interconnection study, as proposed, would provide prospective 
interconnection customers with sufficient and timely information to 
inform decision-making prior to submitting an interconnection request.
    48. We seek comment on whether transmission providers should be 
required to establish a request window of a limited number of days each 
year in which potential interconnection customers can request an 
optional informational interconnection study. Lastly, we seek comment 
on the burdens on transmission providers of conducting informational 
studies and whether other options, such as the proposal below for 
public interconnection information, might strike a better balance of 
providing interconnection customers with useful information while 
making efficient use of transmission provider resources.
ii. Public Interconnection Information
    49. In addition to the optional informational interconnection study 
described above, to address the lack of information available to 
interconnection customers prior to entering the interconnection queue, 
and the associated impacts on development of new generating facilities, 
interconnection queue backlogs, and interconnection study delays, we 
also propose to set minimum requirements for transmission providers to 
publicly post available information pertaining to generator 
interconnection. We believe that providing an interactive visual 
representation \105\ of available interconnection capacity, as 
explained below, across a transmission provider's transmission system 
could provide valuable information to prospective interconnection 
customers that are considering efficient points of interconnection and 
could ameliorate the incentive to submit multiple speculative 
interconnection requests to gather information useful to assessing the 
viability of proposed generating facilities.
---------------------------------------------------------------------------

    \105\ See, e.g., Midcontinent Indep. Sys. Operator, Points of 
Interconnection, https://giqueue.misoenergy.org/PoiAnalysis/index.html (accessed March 17, 2022).
---------------------------------------------------------------------------

    50. Some transmission providers already post such generator 
interconnection information as an extra tool for prospective 
interconnection customers. For example, MISO provides an interactive 
heatmap of expected congestion to serve as a guide on potential points 
of interconnection with available interconnection capacity.\106\ The 
heatmap allows prospective interconnection customers to see estimated 
changes in variables such as the distribution factor (an approximation 
of congestion) and the percentage impact on power flow for monitored 
facilities based on a user-entered MW amount and voltage level at a 
user-selected point of interconnection. Transmission congestion is a 
key consideration for potential interconnection customers because 
elevated congestion in a particular area of the transmission system may 
signal that it is a location where network upgrades are more likely to 
be required or curtailments are more likely to occur relative to an 
area with less congestion. This heatmap is based on the assumptions in 
a given interconnection study cycle and MISO includes the caveat that 
the tool does not provide consideration for all system conditions, 
including voltage and stability constraints.
---------------------------------------------------------------------------

    \106\ Id.
---------------------------------------------------------------------------

    51. In order to make similar information available to prospective 
interconnection customers across the country--ensuring comparable 
access to information regardless of the interconnecting transmission 
provider--we propose to require transmission providers to maintain and 
make publicly available an interactive visual representation of 
available interconnection capacity as well as a table of relevant 
interconnection metrics that allow prospective interconnection 
customers to see certain estimates of a potential generating facility's 
effect on the transmission provider's transmission system. 
Specifically, we propose to revise section 6.4 of the pro forma LGIP to 
implement this reform. Section 6.4 (Publicly Posted Interconnection 
Information) would set forth minimum requirements that include a 
heatmap of estimated incremental injection capacity (in MW) available 
at each bus in the transmission provider's footprint under N-1 
conditions, as well as providing a table of results showing the 
estimated impact of the addition of a proposed project (based on the 
user-specified MW amount, voltage level, and point of interconnection) 
for each monitored facility impacted by the proposed project on: (1) 
the distribution factor; (2) the MW impact (based on the proposed 
project size and the distribution factor); (3) the percentage impact on 
the monitored facility (based on the MW values of the proposed project 
and the monitored facility rating); (4) the percentage of power flow on 
the monitored facility before the proposed project; and (5) the 
percentage power flow on the monitored facility after the injection of 
the proposed project. These metrics would be calculated based on the 
power flow model of the cluster study or re-study with the transfer 
simulated from each bus to the whole transmission providers footprint 
(to approximate NRIS), and with the incremental capacity at each bus 
decremented by the existing and queued generation in the Cluster (based 
on the existing or requested interconnection service limit of the 
generation). These metrics would be intended to facilitate a high-level 
comparison between various points of interconnection, without 
submitting an interconnection request. We propose to require 
transmission providers to make this information available on their 
public websites to facilitate transparency and the usefulness of this 
information for prospective interconnection customers. We propose to 
require transmission providers to update this information within 30 
days after the completion of each cluster study and re-study. Should 
prospective interconnection customers require more detailed analysis, 
they could submit a request for an informational interconnection study, 
as we proposed to establish above in Section A.1.b.
    52. We seek comment on whether there are any security concerns with 
this proposed requirement. We also seek comment on whether the 
assumptions specified for the analysis are the right set of 
assumptions.
2. Cluster Study
a. Need for Reform
    53. As discussed above, the inefficiency of the pro forma serial 
first-come, first-served interconnection study process in the pro forma 
LGIP is a major cause of the backlogs delaying transmission providers' 
interconnection queues. Using the pro forma serial interconnection 
study process in the face of a large interconnection queue backlog 
leads to uncertainty with regard to how long it will take to complete 
the interconnection study process, and the interconnection customer's 
cost responsibility for network upgrades.

[[Page 39945]]

    54. Even for transmission providers that have not yet experienced 
large backlogs, the serial interconnection study process may cause 
unnecessary delay and inefficiently allocate network upgrade costs. 
Under the pro forma LGIP study process, interconnection requests are 
typically studied individually where a single proposed generating 
facility may create a need for network upgrades. This current serial 
process may result in a piecemeal identification of network upgrades 
which does not account for possible efficiencies of studying multiple 
interconnection customer requests and identifying fewer network 
upgrades that are able to accommodate multiple interconnection 
requests, particularly requests that may be located in a similar 
area.\107\
---------------------------------------------------------------------------

    \107\ See May Joint Task Force Tr. 43:25-44:4 (Riley Allen) 
(``Clustering helps the regions identify what I'll call the backbone 
or trunk facilities that provide efficiencies in the system to the 
benefit ultimately of ratepayers. New England has been relying on 
clustering and I'm told that that's going very well.'').
---------------------------------------------------------------------------

    55. Moreover, advancing interconnection customers' facilities 
through the queue based solely on date of entry may result in 
inefficiencies where earlier queued customers have the potential to 
delay later-queued facilities. Specifically, the serial process 
combined with existing allocation of costs may cause unreasonable 
delays in the study process. Under existing tariffs within the RTOs/
ISOs and non-RTO/ISO regions, the transmission provider allocates the 
full cost of those network upgrades to the individual interconnection 
customer. Although the crediting policy in the pro forma LGIP requires 
that the interconnection customer is ultimately reimbursed for the cost 
of the network upgrades, the large upfront network upgrade cost 
allocation may render a proposed generating facility economically non-
viable, such that the interconnection customer is forced to withdraw 
from the interconnection queue.\108\ Unless the withdrawing 
interconnection customer's proposed generating facility is electrically 
isolated, this withdrawal will also trigger individual re-study of 
lower-queued interconnection requests. As the transmission provider 
attempts to allocate this large network upgrade cost to the next 
interconnection customer in the interconnection queue, it can cause 
several projects to withdraw and trigger further re-studies--commonly 
referred to as cascading re-studies. If the interconnection customer 
does not withdraw and pays for the network upgrade to be constructed, 
lower-queued interconnection customers that will benefit from the 
network upgrade are not required to share cost responsibility simply 
because they submitted an interconnection request at a later date.\109\ 
Therefore, the existing serial study process may now be unjust and 
unreasonable because interconnection customers are no longer able to 
consistently progress through the interconnection process in a 
timeframe consistent with Order No. 2003 and the pro forma LGIP. 
Further, the existing serial study process may now be unjust and 
unreasonable because the process frequently allocates to individual 
interconnection customers the cost network upgrades that may create 
additional interconnection capacity needed for several interconnection 
customers.
---------------------------------------------------------------------------

    \108\ See, e.g., Duke, 176 FERC ] 61,075 at P 3 (explaining 
that, in many cases, assignment of such significant network upgrade 
costs can make new generation projects infeasible, incentivizing 
those projects to delay in committing to fund the network upgrades 
or to withdraw from the interconnection queue, causing delays and 
the need for re-studies). Interconnection customers may be even more 
likely to withdraw in RTO/ISO areas where the Commission has allowed 
for participant funding of network upgrades, whereby the 
interconnection customer will not be fully reimbursed for the cost 
of the network upgrades.
    \109\ See Order No. 845-A, 166 FERC ] 61,137 at P 78 (``The 
principle of cost causation generally requires that costs `are to be 
allocated to those [that] cause the costs to be incurred and reap 
the resulting benefits.''') (citing S.C. Pub. Serv. Auth. v. FERC, 
762 F.3d 41, 87 (D.C. Cir. 2014)) (quoting NARUC v. FERC, 475 F.3d 
at 1285).
---------------------------------------------------------------------------

b. Proposed Reforms
i. Background
    56. The serial first-come, first-served study process in the pro 
forma LGIP includes three distinct studies, conducted on an individual 
basis, to identify the interconnection facilities and network upgrades 
that are needed to accommodate the interconnection request and provide 
an estimate of the cost responsibility and timing for those facilities. 
Each study incorporates the base case study model, which includes all 
generating facilities and the associated interconnection facilities and 
network upgrades needed for higher-queued interconnection requests that 
are pending, as well as an up-to-date model of the transmission 
provider's transmission system.\110\ First, the transmission provider 
conducts the feasibility study, which is a preliminary evaluation of 
the system impact and cost of interconnecting the generating facility 
to the transmission provider's transmission system, and consists of a 
power flow and short circuit analysis.\111\ The transmission provider 
must use reasonable efforts to complete the feasibility study no later 
than 45 days after it receives the executed interconnection feasibility 
study agreement.\112\
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    \110\ Pro forma LGIP section 2.3.
    \111\ Id. section 6.2. Some transmission providers--including 
CAISO, Arizona Public Service Company, El Paso Electric Company (El 
Paso Electric), Sierra Pacific Power Company and Nevada Power 
Company (jointly, NV Energy), and Public Service Company of New 
Mexico (PNM)--have eliminated the feasibility study to reduce 
interconnection request processing time.
    \112\ Id. section 6.3.
---------------------------------------------------------------------------

    57. Second, the transmission provider conducts the system impact 
study. The system impact study identifies and details the impacts to 
the transmission provider's transmission system or an affected system 
of the interconnection of the proposed generating facility.\113\ The 
system impact study consists of a short circuit analysis, a stability 
analysis, and a power flow analysis. The transmission provider must use 
reasonable efforts to complete the system impact study within 90 days 
after it receives the executed interconnection system impact study 
agreement.\114\ The pro forma LGIP provides transmission providers with 
the option to study interconnection requests on a clustered basis for 
the system impact study.\115\
---------------------------------------------------------------------------

    \113\ Id. section 7.3.
    \114\ Id. section 7.4.
    \115\ Order No. 2003, 104 FERC ] 61,103 at PP 153-156; pro forma 
LGIP section 4.2. If the transmission provider elects to study 
interconnection requests using clustering, all interconnection 
requests received within 180 days (queue cluster window) must be 
studied together without regard to the nature of the underlying 
interconnection service, whether NRIS or ERIS. However, the pro 
forma LGIP allows the transmission provider to study an 
interconnection request separately based on the electrical 
remoteness of the proposed generating facility. Pro forma LGIP 
section 4.2.
---------------------------------------------------------------------------

    58. Third, the transmission provider conducts the facilities study, 
which specifies and estimates the cost of the equipment, engineering, 
procurement, and construction work needed to implement the conclusions 
of the system impact study.\116\ Where the system impact study focuses 
mainly on impacts to the transmission system, the facilities study aims 
to provide a more accurate estimate of the electrical switching 
configuration of the connection equipment, such as transformers, 
switchgear, meters, and other station equipment and a more accurate 
estimate of the specific costs associated with required network 
upgrades rather than a per-mile estimate. The facilities study will 
also identify any potential control equipment needed to accommodate 
requests for interconnection service that are lower than the generating 
facility capacity. Interconnection customers

[[Page 39946]]

have two options for the timeframe in which the facilities study must 
be completed: 90 days, if the interconnection customer requests a +/-
20% cost estimate contained in the report; or 180 days, if the 
interconnection customer requests a +/-10% cost estimate.\117\
---------------------------------------------------------------------------

    \116\ Id. section 8.2.
    \117\ If the interconnection customer wants its cost estimate to 
be accurate within a range of +/-20%, the study must be completed 
within 90 days since there is greater room for error on the part of 
the transmission provider's estimate, whereas if the interconnection 
customer wants its cost estimate to be accurate within a range of +/
-10%, the transmission provider has up to 180 days to develop a more 
accurate cost estimate. Id. section 8.3.
---------------------------------------------------------------------------

    59. Re-study is required when (1) a higher-queued interconnection 
request withdraws from the interconnection queue, (2) a higher-queued 
interconnection request modifies its proposed generating facility 
pursuant to section 4.4 of the pro forma LGIP, or (3) the 
interconnection customer redesignates its point of 
interconnection.\118\ Transmission providers are required to conduct 
re-study of the feasibility study within 45 days of the triggering 
event and re-study of the system impact and facilities studies within 
60 days of the triggering event.
---------------------------------------------------------------------------

    \118\ Id. sections 6.4, 7.6, 8.5.
---------------------------------------------------------------------------

    60. Under the pro forma LGIP, the interconnection customer can 
request to begin negotiations to the LGIA with the transmission 
provider at any time after the interconnection customer executes the 
interconnection facilities study agreement, for not more than 60 days 
after tender of the final interconnection facilities study report.\119\ 
If the interconnection customer determines that negotiations are at an 
impasse, it may request termination of the negotiations at any time 
after tender of the draft LGIA and request submission of the unexecuted 
LGIA to the Commission, or initiate dispute resolution procedures. The 
transmission provider must provide a final LGIA to the interconnection 
customer within 15 days after the completion of the negotiation 
process. Within 15 days after receipt of the final LGIA, the 
interconnection customer must provide the transmission provider either 
(1) reasonable evidence of continued site control or (2) post 
additional non-refundable security of $250,000, which will be applied 
toward future construction costs.\120\ The interconnection customer 
also must provide reasonable evidence that it has achieved one or more 
milestones in the development of the generating facility as listed in 
section 11.3 of the pro forma LGIP. As soon as practicable, but not 
later than 10 days after receiving the tendered LGIA or the request to 
file an unexecuted LGIA, the transmission provider must file the LGIA 
with the Commission.\121\
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    \119\ Id. section 11.2.
    \120\ Id. section 11.3.
    \121\ Id.
---------------------------------------------------------------------------

    61. The Commission has stated that clustering is the preferred 
method for conducting interconnection studies, and has strongly 
encouraged clustering in interconnection queue management and 
interconnection study processes for all transmission providers.\122\ In 
the 2008 Technical Conference Order, the Commission noted that 
clustering that takes into account factors other than the 
interconnection request filing date may allow for more efficient 
prioritization of interconnection requests while still providing 
protection from undue discrimination by transmission providers.\123\ 
Subsequently, the Commission approved many variations of cluster study 
processes where the transmission provider groups interconnection 
requests received during an open window period and processes those 
requests as a cluster, with some form of shared cost responsibility for 
identified network upgrades triggered by the cluster. The Commission 
noted that performing studies in clusters helps alleviate 
interconnection queue backlogs and offers considerable benefits as the 
network upgrades required for an interconnection customer to 
interconnect to the transmission system may be large enough to 
accommodate more than one interconnection request.\124\ Generally, 
cluster study processes include the following elements: (1) an 
interconnection request window; (2) a customer engagement window; (3) 
cluster studies including (a) a power-flow and voltage study, which is 
similar to a feasibility study under the pro forma LGIP, and (b) a 
stability and short circuit study, which completes the traditional 
system impact study; (4) a facilities study; (5) re-study, if needed; 
and (6) LGIA execution or filing of an unexecuted LGIA.
---------------------------------------------------------------------------

    \122\ Order No. 2003, 104 FERC ] 61,103 at P 155, Order No. 
2006, 111 FERC ] 61,220 at P 181.
    \123\ 2008 Technical Conference Order, 122 FERC ] 61,252 at P 
18.
    \124\ Midwest Ind. Sys. Operator, Inc., 124 FERC ] 61,183 at PP 
114, 143 (accepting usage of group studies as a means to help 
alleviate interconnection queue backlog and finding that clustering 
studies offers considerable benefits); SPP, 128 FERC ] 61,114 at P 
32 (finding that performing cluster studies should enable processing 
the interconnection queue backlog more effectively); So. Cal. Edison 
Co., 135 FERC ] 61,093, at P 50 (2011) (finding that coordinating 
the cluster study processes for interconnection requests to a 
utility's transmission and distribution systems would ``achieve 
greater efficiency and effectively manage network impacts''); see 
also May Joint Task Force Tr. 42:3-9 (Gladys Brown Dutrieuille) 
(explaining that clustering has two goals: minimizing the study time 
and minimizing the first mover disadvantage by sharing costs among 
those resources that need the same upgrades).
---------------------------------------------------------------------------

    62. To join a cluster, an interconnection customer must generally 
submit a valid interconnection request before the close of the request 
window for that cluster. Some transmission providers accept 
interconnection requests during an annual \125\ window, whereas others 
have a semi-annual \126\ window. After the interconnection requests are 
received and deemed valid, and before the start of the interconnection 
study process for the cluster, a customer engagement window 
begins.\127\ During the customer engagement window, transmission 
providers work with interconnection customers to build study models, 
verify data, hold stakeholder meetings, and generally prepare for the 
interconnection study process. At the end of the customer engagement 
window, all interconnection customers with complete interconnection 
requests and a signed study agreement will be included in that cluster.
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    \125\ PacifiCorp, Tri-State, Duke, ISO New England Inc. (ISO-
NE), MISONYISO, and SPP have annual windows.
    \126\ PNM, Arizona Public Service Company, El Paso Electric, NV 
Energy, PSCo, and CAISO have semi-annual windows.
    \127\ PSCo and Tri-State have 75-day customer engagement 
windows, while Duke has a 60-day customer engagement window.
---------------------------------------------------------------------------

    63. Many transmission providers with large transmission systems 
typically group interconnection requests on the basis of geographic 
location and electrical relevance before conducting a cluster 
study.\128\ Most transmission providers that use a cluster study 
process still conduct facilities studies on an individual basis.\129\ 
In addition, some non-RTO/ISO transmission providers offer a separate 
generator interconnection process for interconnection customers 
participating in a resource solicitation process.\130\
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    \128\ MISO, CAISO, SPP, ISO-NE, NV Energy, Arizona Public 
Service Company, and PNM group projects in such a way, and 
PacifiCorp and Tri-State have added the term Cluster Area to their 
LGIPs. See PacifiCorp, Transmission OATT and Service Agreements, 
part. IV.36 (Definitions) (5.0.0); Tri-State Generation and 
Transmission Association, Inc., Open Access Transmission Tariff, 
attach. N, Standard LGIP (7.0.0), section 1.
    \129\ NV Energy, however, uses clusters for the facilities 
study. MISO performs both the system impact study and facilities 
study in a group study format.
    \130\ The resource solicitation process provision is discussed 
later in the NOPR.

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[[Page 39947]]

ii. Proposal
    64. We propose to revise the pro forma LGIP and pro forma LGIA to 
make cluster studies the required interconnection study method under 
the pro forma LGIP.\131\ We therefore propose to require transmission 
providers to eliminate the serial first-come, first-served study 
process and instead use a first-ready, first-served cluster study 
process. We preliminarily find that a first-ready, first-served cluster 
study process, coupled with increased financial commitments and 
readiness requirements that we also propose in this NOPR, will address 
the interconnection queue issues described above, thereby remedying 
potentially unjust and unreasonable Commission-jurisdictional 
rates.\132\ Even in areas that have not yet experienced large backlogs, 
we believe the first-ready, first-served cluster study process 
increases efficiency of the interconnection process and would help 
prevent delays in the future. A first-ready, first-served cluster study 
process is a more efficient way of studying a large interconnection 
queue because transmission providers can perform larger interconnection 
studies encompassing numerous proposed generating facilities, rather 
than separate studies for each individual interconnection 
customer.\133\ Additionally, conducting a single cluster study and 
cluster re-study each year would minimize delays that can arise from 
proposed generating facility interdependencies and also minimize the 
risk of cascading re-studies when a higher-queued interconnection 
customer withdraws.\134\ This limited re-study process would consume 
far less time than under a serial first-come, first-served re-study 
process, which requires re-studying all proposed generating facilities 
in isolation with a new base case. In addition, the proposed reforms 
may assist interconnection queue management because, even if clusters 
have cascading re-study issues, there will be fewer re-studies needed 
and fewer cost consequences for lower-queued generators as compared to 
serial re-studies. Thus, we believe that requiring a first-ready, 
first-served cluster study process, coupled with increased financial 
commitments and readiness requirements that we also propose in this 
NOPR, should improve the efficiency in processing generator 
interconnection requests, and result in just and reasonable Commission-
jurisdictional rates.
---------------------------------------------------------------------------

    \131\ See May Joint Task Force Tr. 46:15-19 (Clifford 
Rechtschaffen) (stating that CAISO's cluster process has been 
helpful and important for improving interconnection queue processing 
and that clustering ``is a best practice and should be promoted'').
    \132\ See 2020 Tri-State Order, 173 FERC ] 61,015 at PP 29, 45 
(finding that a first-ready, first-served cluster study process 
would address interconnection queue backlog and rejecting the filing 
on other grounds); PacifiCorp, 171 FERC ] 61,112 at P 47 (finding 
that proposed interconnection queue reform was a just and reasonable 
solution to an interconnection queue backlog); PSCo, 169 FERC ] 
61,182 at P 30 (same); Pub. Serv. Co. of N.M., 136 FERC ] 61,231, at 
P 77 (2011) (PNM) (finding that first-ready, first-served cluster 
study process would address interconnection queue backlog and allow 
projects that are further along in development to proceed on a more 
accelerated basis while allowing less developed projects to receive 
early information); Duke, 176 FERC ] 61,075 at P 51 (finding that 
proposed revisions to Duke LGIP and LGIA were consistent with or 
superior to the pro forma LGIP and LGIA); see also Tri-State, 174 
FERC ] 61,021 at P 27 (noting previous findings from the 2020 Tri-
State Order).
    \133\ See Duke, 176 FERC ] 61,075 at P 52 (finding that Duke's 
transition to a first-ready, first-served cluster study process 
could relieve ``(1) delays in completing generator interconnection 
studies; (2) inability of interconnection customers to share costs 
of network upgrades; and (3) existence of non-viable projects in the 
queues''); see also Tri-State, 174 FERC ] 61,021 at P 31 (noting 
PSCo's Comments that PSCo's preliminary experience of operating 
under the cluster study process has demonstrated that ``studying 
requests in clusters is shown to be more efficient than studying 
each request individually,'' and that ``this approach to generator 
interconnection is superior to the pro forma LGIP and LGIA'').
    \134\ PNM, 136 FERC ] 61,231 at P 79 (noting that ``PNM's 
proposal adopting the cluster approach to study related projects 
together will likely improve efficiency by limiting the need for re-
studies'') (citing Order No. 2006, 111 FERC ] 61,220, at P 181).
---------------------------------------------------------------------------

    65. In particular, we propose several revisions to the pro forma 
LGIP and pro forma LGIA to implement a first-ready, first-served 
cluster study process. We describe these revisions briefly in this 
section and include the full proposed language in appendices to this 
NOPR. We propose to add several new defined terms and revise several 
defined terms in section 1 of the pro forma LGIP and article 1 of the 
pro forma LGIA. For example, we propose to modify the definition of 
stand alone network upgrade to clarify that, for a network upgrade to 
be eligible for treatment as a stand alone network upgrade,\135\ the 
network upgrade must only be required for one interconnection customer. 
This clarification should prevent lengthy conflict and negotiations in 
instances where multiple interconnection requests trigger the need for 
a network upgrade that could be considered a stand alone network 
upgrade under the current definition mainly because it can be 
constructed without affecting day-to-day operations of the transmission 
system, and several interconnection customers have an interest in 
exercising the option to build. We also propose modifying the 
definition of material modification to account for the equal queue 
position of generating facilities in the same cluster.\136\ The new 
definition would clarify that material modifications are those with a 
material impact on the cost or timing of interconnection requests with 
a later or equal queue position.
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    \135\ Under the current pro forma, Stand Alone Network Upgrades 
are defined as ``Network Upgrades that are not part of an Affected 
System that an Interconnection Customer may construct without 
affecting day-to-day operations of the Transmission System during 
their construction. Both the Transmission Provider and the 
Interconnection Customer must agree as to what constitutes Stand 
Alone Network Upgrades and identify them in Appendix A to the 
Standard Large Generator Interconnection Agreement. If the 
Transmission Provider and Interconnection Customer disagree about 
whether a particular Network Upgrade is a Stand Alone Network 
Upgrade, the Transmission Provider must provide the Interconnection 
Customer a written technical explanation outlining why the 
Transmission Provider does not consider the Network Upgrade to be a 
Stand Alone Network Upgrade within 15 days of its determination.'' 
Pro forma LGIP section 1.
    \136\ Under the current pro forma, Material Modification is 
defined as ``those modifications that have a material impact on the 
cost or timing of any Interconnection Request with a later queue 
priority date.'' Pro forma LGIP section 1.
---------------------------------------------------------------------------

    66. We propose revisions to add new subsection 3.1.1.1 (Initial 
Study Deposit) to the pro forma LGIP, which provides that an 
interconnection customer must submit its interconnection request and 
applicable study deposit during a cluster request window (described 
below). We also propose to add new subsection 3.1.2 (Submission) to the 
pro forma LGIP, which provides that interconnection customers 
evaluating different options (such as different sizes, sites, or 
voltages) are encouraged but not required to use the new informational 
interconnection study proposed in this NOPR before entering the cluster 
study. New subsection 3.1.2 of the pro forma LGIP also provides that 
the interconnection customers must select a definitive point of 
interconnection to be studied when executing the cluster study 
agreement. Upon mutual agreement, the transmission provider may make 
reasonable changes to the requested point of interconnection to 
facilitate efficient interconnection of clustered interconnection 
requests at common points of interconnection.
    67. We also propose to add new subsection 3.4.1 (Cluster Request 
Window) to the pro forma LGIP, which provides that interconnection 
customers must submit an interconnection request during a specified 
period, the cluster request window, which is a 45-day period with the 
start date to be determined by each transmission provider (with the 
annual start date for the transmission provider's cluster

[[Page 39948]]

request window included in its LGIP). The transmission provider would 
consider all interconnection requests accepted within this period to 
have equal queue priority for purposes of the cluster study. Following 
the close of the cluster request window, the transmission provider 
would begin a 30-day customer engagement window as provided in new 
subsection 3.4.5 (Customer Engagement Window) of the pro forma LGIP.
    68. We propose to renumber and revise subsection 3.4.4 (Scoping 
Meeting) as subsection 3.4.6 of the pro forma LGIP to provide that, 
during the customer engagement window, transmission providers must hold 
a scoping meeting with all interconnection customers whose 
interconnection requests were received in that cluster request window. 
Revised subsection 3.4.6 of the pro forma LGIP would also require 
transmission providers to hold individual customer-specific scoping 
meetings, at the interconnection customer's request, which must be 
requested by no later than 15 business days after the close of the 
cluster request window. By the end of the customer engagement window, 
the transmission provider would post on OASIS the final cluster study 
plan, which lists all valid interconnection requests with an executed 
cluster study agreement that will be part of the cluster study.
    69. We propose to replace the sections of the pro forma LGIP, 
including subsection 3.5.2 (Requirement to Post Interconnection Study 
Metrics) of the pro forma LGIP, that require the posting of metrics for 
interconnection feasibility studies processing time and system impact 
study processing time with sections that require the posting of metrics 
for cluster study processing time and cluster re-study processing time. 
We also propose to add a new subsection to require the posting of the 
time from when the transmission provider received a valid 
interconnection request to the completion of the cluster study, cluster 
re-study, and facilities study.
    70. We also propose several revisions to section 4 (Queue Position) 
of the pro forma LGIP to make clear that cluster studies are the 
required interconnection study method under the pro forma LGIP and that 
transmission providers may not have a first-come, first-served 
interconnection study method under their respective LGIPs. We propose 
to rename and revise section 4.1 of the pro forma LGIP as ``Queue 
Position'' and add two new subsections: (1) subsection 4.1.1 
(Assignment of Queue Position), which makes clear that queue position 
will be based on the time and date that the transmission provider 
receives all items required under section 3.4 (Valid Interconnection 
Request) and that there is no queue priority for interconnection 
customers that opted for informational interconnection studies; \137\ 
and (2) subsection 4.1.2 (Higher Queue Position), which provides that 
all interconnection requests studied in a single cluster shall be 
considered to have equal queue priority, but clusters initiated earlier 
in time shall be considered to have a higher queue position than 
clusters initiated later. To be clear, the date of submission of an 
individual interconnection request within the same cluster would have 
no bearing on the allocation of the cost of the network upgrades 
identified in the applicable cluster study, because such costs would be 
allocated among interconnection requests using a proportional impact 
method (discussed below in section II.A.4.).
---------------------------------------------------------------------------

    \137\ See supra PP 42-45 (explaining that the informational 
interconnection study is intended to provide prospective 
interconnection customers with information prior to entering the 
queue).
---------------------------------------------------------------------------

    71. New subsection 4.1.2 of the pro forma LGIP also provides that 
moving a point of interconnection shall result in a loss of queue 
position if the transmission provider deems the change a material 
modification. To align with this, we propose corresponding changes to 
the material modification provisions in section 4.4 (Modification) of 
the pro forma LGIP to provide that moving a point of interconnection 
shall result in a loss of interconnection queue position if it is 
deemed a material modification by the transmission provider. We note 
that the interconnection customer may decide to forego the requested 
change that constitutes a material modification and retain its existing 
queue position.\138\ We also propose to revise pro forma LGIP section 
4.4.5, which currently states that an extension of less than three 
cumulative years of the generating facility's commercial operation date 
are not material and should be handled through construction sequencing. 
We propose to provide that the commercial operation date reflected in 
the initial interconnection request shall be used in calculating the 
permissible three-year extension.
---------------------------------------------------------------------------

    \138\ Pro forma LGIP section 4.4.3.
---------------------------------------------------------------------------

    72. We propose to remove from section 4.2 (Clustering) of the pro 
forma LGIP the provisions allowing interconnection requests to be 
studied serially. We also propose to remove the requirement for the 
transmission provider to provide 180 days' advance notice before 
opening a cluster window. In addition to removing these provisions, we 
propose to rename section 4.2 of the pro forma LGIP ``General Study 
Process'' and revise it to provide that interconnection studies shall 
be performed within the cluster study process.
    73. We propose to revise subsection 4.4.1 of the pro forma LGIP to 
make clear that: (1) the modifications previously permitted prior to 
return of the executed system impact study agreement are now permitted 
to be made prior to return of the executed cluster study agreement; and 
(2) for plant increases, the incremental increase will be studied with 
the next cluster study for purposes of cost allocation and study 
analysis.
    74. We propose to delete section 6 (Interconnection Feasibility 
Study) of the pro forma LGIP (and all subsections). As explained above, 
we propose to adopt the new section 6 (Interconnection Information 
Access) of the pro forma LGIP to establish a mechanism for the 
interconnection customer to evaluate the feasibility of a prospective 
generating facility. We propose to revise section 7 (Interconnection 
System Impact Study) of the pro forma LGIP to make clear that the 
system impact study will now be conducted on a clustered basis, and 
that the transmission provider must complete the cluster study within 
150 days of the closing of the customer engagement window. We further 
propose revisions to sections 3.4.2 and 8.1 of the pro forma LGIP to 
include the financial commitments and readiness requirements that must 
be met for the interconnection customer to remain in the 
interconnection queue following the completion of the cluster study. 
Those requirements are discussed in greater detail below. We propose 
additional revisions to delete section 7.5 (Meeting with Transmission 
Provider) of the pro forma LGIP and adopt the new section 7.5 (Cluster 
Study Re-Studies) of the pro forma LGIP to include provisions governing 
clustered re-studies where an interconnection customer in the cluster 
or a higher-queued cluster withdraws its interconnection request. 
Specifically, we propose to require transmission providers to conduct a 
re-study of the cluster within 150 days of informing the cluster of the 
need for re-study.
    75. We propose revisions to the facilities study provisions in 
section 8 (Interconnection Facilities Study) of the pro forma LGIP to 
make clear that re-studies can be triggered by a higher or equally 
queued interconnection project withdrawing from the interconnection 
queue or modification of a higher or equally queued interconnection 
project

[[Page 39949]]

pursuant to section 4.4 (Modifications) of the pro forma LGIP.
    76. We also propose revisions to section 11.1 (Tender) of the pro 
forma LGIP to clarify the procedures for executing the LGIA. We propose 
revisions to section 11.3 (Execution and Filing) of the pro forma LGIP 
to provide that the interconnection customer must submit to the 
transmission provider at the same time it submits the executed LGIA 
demonstration of continued site control, the requisite deposit, and 
reasonable evidence of achieving milestones in the development of the 
generating facility. An interconnection customer that requests that the 
transmission provider file an unexecuted LGIA with the Commission must 
submit the aforementioned information within 15 days of the Commission 
issuing an order on the unexecuted LGIA filing, or its interconnection 
request will be deemed withdrawn. We propose revisions to the system 
impact study agreement and facilities study agreement to be consistent 
with the new cluster study process. We propose to add several new 
definitions to section 1 of the pro forma LGIP and article 1 of the pro 
forma LGIA that relate to the new first-ready, first-served cluster 
study process and to modify a number of other definitions.
    77. We seek comment on whether the Commission should require 
transmission providers to conduct cluster studies on subgroups of 
interconnection customers based on areas of geographic and electric 
relevance, and, if so, whether the Commission should adopt provisions 
governing how cluster areas should be formed to ensure that cluster 
areas are formed in a transparent and not unduly discriminatory 
manner.\139\
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    \139\ Commenters that believe that the Commission should adopt 
provisions governing how cluster areas should be formed should also 
explain how to define such a cluster area (e.g., based on geographic 
proximity, geographic constraints such as bodies of water or 
mountain ranges, system topology, and/or major transmission system 
constraints).
---------------------------------------------------------------------------

    78. We seek comment on whether the pro forma LGIP should specify 
how cluster studies must be rerun after re-study is triggered or 
whether there are provisions the Commission could adopt to improve the 
efficacy of the re-study process, such as preventing excessive re-study 
by limiting the transmission provider to two re-studies per month 
within the 150-day cluster re-study period.
    79. We seek comment on whether the Commission should maintain an 
option in the pro forma LGIP for some interconnection requests to be 
processed outside of the annual cluster study process, and if so, in 
what circumstances and on what timeframe (for completion of the study), 
and on what priority compared to any active clusters.
3. Allocation of Cluster Study Costs
a. Background
    80. Under the pro forma LGIP, interconnection studies are conducted 
for each individual interconnection request and study costs are paid by 
the interconnection customer. Transitioning to a first-ready, first-
served cluster study process would require transmission providers to 
establish a method to allocate the shared cost of clustered 
interconnection studies among the interconnection customers in the 
cluster.
    81. The Commission has accepted a variety of approaches to 
allocating the costs of cluster studies, most of which allocate costs 
using two factors: (1) the total MW size requested in a cluster; and 
(2) the number of interconnection requests in the cluster. Approaches 
among transmission providers vary with regard to the weight assigned to 
each of these factors. For example, Duke and Dominion allocate 90% of 
the applicable study costs to interconnection customers on a pro rata 
basis based on requested MWs included in the applicable cluster, and 
10% on a per capita basis based on the number of interconnection 
requests included in the applicable cluster.\140\ SPP, PNM, PSCo, 
PacifiCorp, and Tri-State allocate 50% of the study costs based on 
requested MWs, and 50% based on the number of interconnection 
requests.\141\ CAISO, NYISO, and MISO only use one of the two factors 
in their allocation method. CAISO and NYISO allocate all study costs 
equally based on the number of interconnection requests within the 
cluster,\142\ while MISO allocates all study costs pro rata based on 
the number of MWs requested.\143\
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    \140\ See Duke, 176 FERC ] 61,075 at P 18; Dominion, Docket No. 
ER22-301-000 (Dec. 28, 2021) (delegated order).
    \141\ See SPP, OATT, attach. V (4.0.0), section 4.2.5; PNM, 136 
FERC ] 61,231 at P 24; PSCo, 169 FERC ] 61,182 at P 32; PacifiCorp, 
171 FERC ] 61,112 at P 13; Tri-State, 174 FERC ] 61,021 at P 33.
    \142\ CAISO, CAISO eTariff, OATT, app. DD, section 3 (14.0.0), 
section 3.5.1.2; NYISO, NYISO Tariffs, attach. X, section 30.13 
(5.0.0), section 30.13.3.
    \143\ MISO, FERC Electric Tariff, OATT, attach. X, (155.0.0) 
section 3.3.1.
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b. Proposal
    82. We propose to revise section 13.3 (Obligation for Study Costs) 
of the pro forma LGIP to allocate the shared costs of cluster studies 
as follows: 90% of the applicable study costs to interconnection 
customers on a pro rata basis based on requested MWs included in the 
applicable cluster, and 10% of the applicable study costs to 
interconnection customers on a per capita basis based on the number of 
interconnection requests included in the applicable cluster.\144\ We 
preliminarily find that this allocation of the costs of cluster studies 
would result in just and reasonable Commission-jurisdictional rates 
because it appropriately recognizes that the MW size of a cluster has a 
dramatic impact on the cost of studying the cluster, while also 
recognizing that the number of interconnection requests included in the 
cluster also impacts the cost of studying the cluster, but to a lesser 
degree.
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    \144\ If an interconnection customer withdraws its 
interconnection request prior to the start of the cluster study, 
that customer would be required to pay the actual costs of 
processing its interconnection request but would not be assessed a 
withdrawal penalty.
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    83. We seek comment on whether a different cost allocation approach 
may be appropriate or whether each transmission provider should be 
provided additional flexibility to propose a cost allocation approach 
on compliance with any final rule.
4. Allocation of Cluster Network Upgrade Costs
a. Background
    84. As discussed above, under the serial first-come, first-served 
study process in the pro forma LGIP, transmission providers study 
interconnection requests individually and in the order in which they 
are received. If a study identifies a need for network upgrades in 
response to an individual interconnection customer request, the 
transmission provider allocates the initial cost of those network 
upgrades to the individual interconnection customer. The pro forma LGIP 
allows transmission providers to perform clustered system impact 
studies but does not explain how transmission providers should allocate 
network upgrade costs among interconnection customers within a cluster.
    85. Several of the transmission providers that have adopted a 
cluster first-ready, first-served study process have also adopted 
methods for allocating network upgrade costs that differ from their 
previously existing cost allocation mechanisms in one of two ways: (1) 
proportional capacity (based on the proposed generating facility's MW 
capacity in proportion to the cluster's total MW capacity); or (2) 
proportional impact (determined based

[[Page 39950]]

on a distribution factor analysis). Several transmission providers also 
separate network upgrades into two categories prior to allocating costs 
based on the proportional capacity or proportional impact method: (1) 
station equipment, including all equipment located in the substation 
immediately beyond the point of interconnection to which the generating 
facility is connected (called station equipment network upgrades); and 
(2) all other network upgrades, including equipment located beyond the 
substation, such as transmission lines, transformers, voltage support, 
and distantly located breakers (called system network upgrades).\145\ 
These methods allocate station equipment network upgrade costs based on 
the number of generating facilities interconnecting at an individual 
station (i.e., allocated equally to each interconnection customer 
interconnecting to the substation).
---------------------------------------------------------------------------

    \145\ E.g., PNM, 136 FERC ] 61,231 at P 25.
---------------------------------------------------------------------------

    86. For network upgrades beyond the transmission provider's 
substation, PNM and PacifiCorp use the proportional capacity 
method.\146\ PacifiCorp explained in its interconnection queue reform 
proposal that the proportional capacity method is better for PacifiCorp 
given the size of its service territory, and that PacifiCorp uses a 
cluster area approach in which it clusters projects by electrical 
relevance, which prevents interconnection customers from bearing the 
costs of network upgrades in distant areas of PacifiCorp's transmission 
system.\147\
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    \146\ Id.; PacifiCorp, 171 FERC ] 61,112 at P 18.
    \147\ PacifiCorp, Transmittal, Docket No. ER20-924-000, at n.107 
(filed Jan. 31, 2020).
---------------------------------------------------------------------------

    87. CAISO, MISO, SPP, NYISO, PSCo, Tri-State, Duke, and Dominion 
use the proportional impact method by performing a distribution factor 
analysis.\148\ Relative to other transmission providers, Tri-State 
includes a more comprehensive explanation of its distribution factor 
analysis method in its tariff. Specifically, Tri-State's tariff 
provides that: (1) thermal network upgrade costs are allocated based on 
the impact (in MWs) from each generating facility within the cluster or 
cluster area; (2) voltage network upgrade costs are allocated based on 
the voltage impact from each generating facility within the cluster or 
cluster area on the most constrained bus under the most constraining 
contingency in the definitive interconnection study case(s); (3) 
transient stability network upgrade costs within a cluster or cluster 
area are allocated based on the pro rata share of the total MW requests 
of all generating facilities causing instability; (4) short circuit 
network upgrade costs are allocated based on the impact (in 
kiloamperes) from each generating facility within the cluster or 
cluster area, on the constrained facilities under the most constraining 
fault in the definitive interconnection study case(s); and (5) in 
instances when a network upgrade resolves multiple types of constraints 
(such as thermal and voltage or thermal and voltage and transient 
stability), the costs are allocated within a cluster or cluster area 
based on a ratio share of the total cost of the independent mitigation 
types to equitably allocate the cost to all generating facilities 
contributing to constraints.\149\
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    \148\ PSCo, 169 FERC ] 61,182 at P 34; Tri-State, 174 FERC ] 
61,021 at P 38; Duke, 176 FERC ] 61,075 at P 11; Dominion, Docket 
No. ER22-301-000 (Dec. 28, 2021) (delegated order).
    \149\ Tri-State LGIP section 4.2.4.b.
---------------------------------------------------------------------------

b. Proposal
    88. We propose to revise the pro forma LGIP to include new 
subsection 4.2.3 to require transmission providers to allocate network 
upgrade costs to interconnection customers within a cluster using a 
proportional impact method. Therefore, we propose to establish the 
definition ``Proportional Impact Method'' in the pro forma LGIP,\150\ 
and require transmission providers to revise their LGIPs to include the 
specific technical parameters and thresholds of the method for cost 
allocation. We preliminarily find that this approach will ensure just 
and reasonable Commission-jurisdictional rates because it will allow 
the transmission provider to allocate network upgrade costs among 
several interconnection customers that may benefit from (and cause the 
need for) certain network upgrades.\151\ By allocating shared network 
upgrade costs among a cluster of interconnection customers, we expect 
that this reform will reduce the frequency of an individual customer 
being allocated a large network upgrade that benefits subsequent 
interconnection customers, reduce the incentive to submit multiple 
speculative requests, and reduce the amount of cascading withdrawals 
and re-studies. We believe that a proportional impact method will 
accurately reflect the level of contribution of an interconnection 
request to the need for the network upgrade.
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    \150\ We propose to revise section 1 of the pro forma LGIP to 
provide that Proportional Impact Method shall mean a technical 
analysis conducted by the transmission provider to determine the 
degree to which each generating facility in the cluster contributes 
to the need for a specific network upgrade.
    \151\ Tri-State, 174 FERC ] 61,021 at P 38.
---------------------------------------------------------------------------

    89. We seek comment on whether there are specific types of analyses 
that the Commission should require transmission providers to use to 
determine the proportional impact attributed to an interconnection 
request, including the benefits and drawbacks of any proposed approach. 
Conversely, we seek comment on whether there are specific types of 
analyses that the Commission should prohibit because they are known to 
be inaccurate, provide undue discretion to the transmission provider, 
or could otherwise be problematic. Additionally, we seek comment on 
alternative methods to allocate the cost of network upgrades within a 
cluster such as the proportional capacity method as discussed above. 
While such a method does not assign cost based on level of contribution 
of an interconnection request to the need for a network upgrade, we 
seek comment on whether this method can be sufficiently accurate, in 
certain instances, in a manner consistent with or superior to the 
proposed method. For instance, we seek comment on whether the 
proportional capacity method may be appropriate when a transmission 
provider with a relatively small service territory clusters projects by 
electrical relevance. Conversely, we seek comment on whether there are 
some circumstances where the proportional capacity method would not be 
appropriate, such as circumstances where there may be potential for 
discriminatory treatment.
5. Shared Network Upgrades
a. Background
    90. There are no existing provisions in the pro forma LGIP that 
require transmission providers to share network upgrade costs between 
earlier-in-time and later-in-time interconnection customers (e.g., 
customers studied in separate clusters). However, in MISO and NYISO, 
the Commission has approved tariff provisions that require 
interconnection customers in later cluster studies that benefit from 
network upgrades completed prior to that later-in-time interconnection 
customer commencing commercial operation to partially reimburse the 
interconnection customers in an earlier cluster study that were 
initially responsible for the facilities' construction.\152\
---------------------------------------------------------------------------

    \152\ See NYISO, NYISO Tariffs, attach. S, section 25 (16.0.0), 
section 25.7.2; MISO, FERC Electric Tariff, MISO OATT, attach. FF 
section III (81.0.0), section III.A.2.d.2.
---------------------------------------------------------------------------

    91. MISO tests all network upgrades in service for less than five 
years to

[[Page 39951]]

determine whether they qualify for cost sharing. MISO requires 
interconnection customers in a later cluster study to share costs if 
they (1) connect to that network upgrade or (2) pass a two-part power 
flow screening.\153\ If the test reveals that more than five MW of the 
later-in-time interconnection customer's generating facility uses the 
network upgrade with a network upgrade rating exceeding one percent, 
MISO performs an additional analysis. If the results of the second 
analysis conclude that the interconnection customer generating 
facility's impact exceeds more than five percent of the network 
upgrade's facility rating, or that the transmission distribution factor 
(TDF) \154\ is greater than 20%, the interconnection customer in the 
later cluster study will reimburse interconnection customers from the 
earlier cluster study based on the share of the cost of the network 
upgrade allocated to each interconnection customer. MISO allocates the 
costs of the shared network upgrades using the pro rata share of the MW 
contribution on all constraints from each project.
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    \153\ MISO Business Practice Manual No. 15, section 6.1.1.1.11, 
version 23 (May 2021), https://cdn.misoenergy.org/BPM%20015%20-%20Generation%20Interconnection49574.zip
    \154\ TDF measures the energy the interconnection customer has 
requested to inject onto the transmission system, expressed as the 
percent of the flows across a given transmission facility.
---------------------------------------------------------------------------

    92. NYISO accounts for excess capacity created by network upgrades 
and requires that interconnection customers in a later cluster study 
reimburse the interconnection customers from an earlier cluster study 
for the use of these facilities. NYISO tracks any excess capacity, or 
headroom,\155\ created by network upgrades and determines eligibility 
for cost sharing using two methods. When technically feasible, a later-
in-time interconnection customer's use of headroom is measured in terms 
of the interconnection customer's electrical impact. Otherwise, 
headroom usage is based on the total number of interconnection 
customers using a given network upgrade. The headroom is available for 
10 years or until it is depleted.\156\
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    \155\ NYISO defines headroom as ``the functional or electrical 
capacity of the System Upgrade Facility or the electrical capacity 
of the System Deliverability Upgrade that is in excess of the 
functional or electrical capacity actually used by the Developer's 
Project.'' NYISO, NYISO Tariffs, attach. S, section 25.1 (12.0.0).
    \156\ See id. section 25.8.7.
---------------------------------------------------------------------------

b. Relevant ANOPR Comments
    93. Multiple commenters support the concept of cost sharing 
approaches. The National Association of Regulatory Utility 
Commissioners (NARUC), for example, contends that the Commission should 
encourage improvements to the participant funding model through sharing 
the costs of clusters of similarly situated interconnection 
customers.\157\
---------------------------------------------------------------------------

    \157\ NARUC, Comments, Docket No. RM21-17-000, at 23 (filed Oct. 
12, 2021).
---------------------------------------------------------------------------

    94. MISO and NYISO each highlight the advantages of their existing 
network upgrade cost sharing approaches. MISO claims that its cost 
sharing method appropriately balances the interconnection customers' 
interests.\158\ NYISO asserts that its group-based facilities study 
minimizes later-in-time interconnection customers benefiting without 
paying for the use of a network upgrade at the outset.\159\ NYISO also 
states that its headroom accounting process partly addresses the issue 
caused by later-in-time interconnection customers benefiting from 
preexisting network upgrades.
---------------------------------------------------------------------------

    \158\ MISO, Comments, Docket No. RM21-17-000, at 87-88 (filed 
Oct. 12, 2021).
    \159\ NYISO, Comments, Docket No. RM21-17-000, at 45 (filed Oct. 
12, 2021).
---------------------------------------------------------------------------

    95. The Michigan Commission asserts that MISO has not made frequent 
use of its shared network upgrade process and suggests that the 
Commission explore whether analyzing network upgrades up to 20 years 
post-construction would encourage the development of higher-cost 
network upgrades in transmission constrained areas.\160\
---------------------------------------------------------------------------

    \160\ Michigan Comm'n, Comments, Docket No. RM21-17-000, at 21-
22 (filed Oct. 12, 2021).
---------------------------------------------------------------------------

    96. Some commenters argue that a network upgrade sharing 
arrangement would be too complicated to execute and lead to stakeholder 
disagreements. EDF asserts that, while a study-based cost allocation 
might offer a more precise representation of benefits, such approaches 
are time-consuming and can be prone to stakeholder disagreement over 
the study's assumptions and results; EDF believes that any cost sharing 
percentage for generators should be commensurate with the value of the 
reimbursement generators receive.\161\ TAPS states that, while cost 
sharing arrangements make sense conceptually, developing a cost sharing 
process can be resource-intensive and highly contentious.\162\
---------------------------------------------------------------------------

    \161\ EDF Renewables, Inc., Comments, Docket No. RM21-17-000, at 
13 (filed Oct. 12, 2021).
    \162\ Transmission Access Policy Study Group (TAPS), Comments, 
Docket No. RM21-17-000, at 47-48 (filed Oct. 12, 2021).
---------------------------------------------------------------------------

c. Need for Reform
    97. We preliminarily find that the absence of network upgrade cost 
sharing provisions in the pro forma LGIP poses a barrier to entry to 
generation development. Absent cost sharing provisions among clusters, 
interconnection customers may significantly benefit from earlier-in-
time network upgrades but not share in the cost of those network 
upgrades in a manner that is roughly commensurate with benefits.\163\ 
As a result, individual interconnection customers may be responsible 
for the entire cost of network upgrades and may be reluctant to move 
forward with the development of an interconnection request if there is 
no opportunity to recover some of the costs associated with the 
construction of significant network upgrades that are likely to benefit 
interconnection customers in subsequent cluster studies.
---------------------------------------------------------------------------

    \163\ See May Joint Task Force Tr. 135:6-7 (Andrew French) (``I 
do think costs should be shared between clusters.'')
---------------------------------------------------------------------------

d. Proposal
    98. We propose to revise the pro forma LGIP and pro forma LGIA to 
require transmission providers to allocate the costs for network 
upgrade costs between interconnection customers in an earlier cluster 
study and interconnection customers in a subsequent cluster study that 
benefit from the same network upgrade in a manner that is roughly 
commensurate with the benefits received. First, we propose to require 
that, as part of the first-ready, first-served cluster study process 
that we also propose in this NOPR, the transmission provider analyze 
all network upgrades identified through the transmission provider's 
study process, and, if a generating facility of an interconnection 
customer in a later cluster study directly connects either to (1) a 
network upgrade in-service for less than five years or (2) a substation 
where the network upgrade in-service for less than five years 
terminates, then the transmission provider would be required to 
designate the network upgrade a shared network upgrade, and the 
interconnection customer in the later cluster study would be required 
to contribute a pro rata portion of the shared network upgrade's 
remaining undepreciated capital cost based on the impact the 
interconnection customer in the later cluster study has on the network 
upgrade as measured using the same method the transmission provider 
used to determine the impact of the interconnection customer(s) in the 
earlier cluster study. Second, if the new generating facility does not 
directly connect to the network upgrade, then the transmission provider 
would perform a power flow analysis with a two-step test to measure the 
later-in-time interconnection customer's use of and benefit from the 
network upgrade

[[Page 39952]]

funded by interconnection customers from an earlier cluster study. 
Under the first step, the transmission provider would determine if the 
impact of the interconnection customer in the later cluster study 
exceeds 5 MW and exceeds one percent of the network upgrade's rating, 
which we believe would reasonably identify interconnection customers 
that benefit from the network upgrade. Then, if those criteria are met, 
the transmission provider would determine if the later-in-time 
interconnection customer's impact either exceeds more than five percent 
of the network upgrade's facility rating or if the TDF is greater than 
20%.\164\ Finally, if either of these criteria were met, the 
transmission provider would be required to designate that network 
upgrade a shared network upgrade, and the interconnection customer in 
the later cluster study would be responsible for a pro rata share of 
the network upgrade's remaining undepreciated capital cost based on the 
impact the interconnection customer in the later cluster study has on 
the network upgrade as measured using the same method the transmission 
provider used to determine the impact of the interconnection 
customer(s) from the earlier cluster study.
---------------------------------------------------------------------------

    \164\ Midwest Indep. Transmission Sys. Operator, Inc., 133 FERC 
] 61,221, at P 336 (2010) (finding that the 20% TDF screen is an 
appropriate measure of benefits for shared network upgrades that 
strikes an appropriate balance between cost sharing and guarding 
against overcharging late-coming generating facilities).
---------------------------------------------------------------------------

    99. We propose to require the interconnection customer in the later 
cluster study to pay the transmission provider for the interconnection 
customer's share of the shared network upgrade costs through a one-time 
lump sum, which the transmission provider would disburse to the 
appropriate interconnection customer(s) from the earlier cluster study. 
Where applicable, the interconnection customer from the earlier cluster 
study or the relevant transmission provider would be required to assign 
transmission credits for the portion of the shared network upgrade that 
the interconnection customer in the later cluster study funded to the 
interconnection customer in the later cluster study. Additionally, we 
propose to require that the interconnection customer in the later study 
cluster not be required to pay for its share of the cost of the shared 
network upgrade until that shared network upgrade is in service. We 
propose to require transmission providers to provide the list of shared 
network upgrades to interconnection customers in subsequent cluster 
studies at the conclusion of the cluster study and to list those 
network upgrades in the LGIA.
    100. As noted above, an interconnection customer in a later cluster 
study that otherwise meets the criteria described above would only bear 
some of the network upgrade costs for a network upgrade that was in 
service before the commercial operation date of the generating facility 
of the interconnection customer in the later cluster study. Thus, there 
could be scenarios where the network upgrade may be identified as both 
a shared network upgrade and a contingent facility pursuant to section 
3.8 of the pro forma LGIP; and, therefore a designation of a network 
upgrade as a contingent facility does not preclude it from also being a 
shared network upgrade if the network upgrade meets the aforementioned 
criteria and passes the screens.\165\
---------------------------------------------------------------------------

    \165\ Contingent facilities include ``those unbuilt . . . 
Network Upgrades upon which the Interconnection Request's costs, 
timing, and study findings are dependent, and if delayed or not 
built, could cause a need for Re-Studies of the Interconnection 
Request or a reassessment of the Interconnection Facilities and/or 
Network Upgrades and/or costs and timing.'' Pro forma LGIP section 
1. Pursuant to section 3.8 of the pro forma LGIP, transmission 
providers must have a method for identifying contingent facilities 
to be provided to the interconnection customer at the conclusion of 
the system impact study and including in the LGIA. Id. section 3.8.
---------------------------------------------------------------------------

    101. We preliminarily find that requiring transmission providers to 
develop a method to share network upgrade costs among interconnection 
customers in earlier and later cluster studies will result in just and 
reasonable Commission-jurisdictional rates by allowing for allocation 
of costs of network upgrades in a manner more closely aligned to the 
distribution of benefits than the status quo.\166\ Specifically, to the 
extent that interconnection customers in later cluster studies benefit 
from pre-existing network upgrades, we preliminarily find that it is 
just and reasonable for those interconnection customers to share a 
portion of those network upgrade costs.\167\
---------------------------------------------------------------------------

    \166\ See, e.g., Midwest Indep. Transmission Sys. Operator, 
Inc., 133 FERC ] 61,221 at PP 55, 336 (accepting shared network 
upgrades as just and reasonable and agreeing that the proper test 
for cost sharing with regard to an already-constructed upgrade is 
not what effect a late-coming generating facility would have had on 
the system as it existed prior to the network upgrade, but rather 
whether that late-coming generating facility will actually benefit 
from the network upgrade).
    \167\ Id. P 336.
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6. Increased Financial Commitments and Readiness Requirements
a. Need for Reform
    102. The pro forma LGIP allows an interconnection customer to 
proceed through the generator interconnection process without having 
shown evidence to the transmission provider of meaningful progress 
toward achieving commercial viability (e.g., a power purchase agreement 
or site control). We are concerned that without requiring this type of 
evidence, interconnection customers will continue to submit multiple 
speculative interconnection requests and later withdraw those requests, 
triggering rounds of re-studies. While we believe that our proposal to 
require transmission providers to implement a first-ready, first-served 
cluster study process will substantially improve transmission 
providers' ability to manage their interconnection queues, we recognize 
that the sheer volume of interconnection requests in interconnection 
queues nationwide are overwhelming many transmission providers' 
resources.\168\ Although the optional informational interconnection 
study that we also propose in this NOPR would provide a mechanism for 
prospective interconnection customers to obtain key information on 
potential points of interconnection for proposed generating facilities, 
prospective interconnection customers may still prefer to submit an 
interconnection request to establish a queue position rather than 
investing in and waiting for the results of an optional informational 
interconnection study.
---------------------------------------------------------------------------

    \168\ See, e.g., Tri-State Generation and Transmission 
Association, Inc., Transmittal Letter, Docket No. ER20-2593-000, at 
3, 14, and 17 (filed Jul. 31, 2020); Transmittal Letter, Docket No. 
ER11-3522-000, at 3 (filed May 5, 2011); PacifiCorp, Transmittal 
Letter, Docket No. ER20-924-000, at 5 (filed Jan. 31, 2020).
---------------------------------------------------------------------------

    103. Therefore, in addition to the reforms that we propose to 
implement a first-ready, first-served cluster study process, we also 
propose a set of reforms to adopt more stringent financial commitments 
and readiness requirements for interconnection customers to remain in 
the interconnection queue to discourage speculative interconnection 
requests and allow transmission providers to focus on processing viable 
interconnection requests and to better approximate the cost of the 
interconnection study process.\169\ These

[[Page 39953]]

proposed reforms pertain to (1) increased study deposits, (2) 
demonstration of site control, (3) commercial readiness, and (4) 
withdrawal penalties.
---------------------------------------------------------------------------

    \169\ See May Joint Task Force Tr. 38:7-8 (Matthew Nelson) 
(``[W]hat we hope to do is try to make sure that being in the queue 
means something[.]''); id 47:1-4 (Clifford Rechtschaffen) 
(cautioning that clustering is important but must be accompanied by 
other reforms to interconnection queue processing to address 
existing problems).
---------------------------------------------------------------------------

b. Proposed Reforms
i. Increased Study Deposits and LGIA Deposit
(a) Background
    104. Under the serial first-come, first-served interconnection 
study process in the pro forma LGIP, an interconnection customer must 
submit the following study deposits: \170\
---------------------------------------------------------------------------

    \170\ Pro forma LGIP sections 6.1, 7.2, 8.1.
---------------------------------------------------------------------------

     $10,000 deposit with its interconnection request, which is 
used for the feasibility study,
     $50,000 deposit when executing the system impact study 
agreement, and
     $100,000 deposit when executing the facilities study 
agreement.
    105. Several transmission providers have increased the study 
deposit requirements in a tiered fashion to recognize that 
interconnection requests with higher generating facility capacities 
cost more to study. In accepting PNM's tiered approach, the Commission 
stated that increasing the study deposit in a tiered fashion is 
reasonable because it recognizes that larger proposed generating 
facilities within a cluster likely carry a greater risk (such as risk 
triggering the need for substantial network upgrades and triggering re-
studies when withdrawing from the queue).\171\ The Commission has 
accepted maximum study deposits as high as $250,000 for interconnection 
requests of 200 MW and greater and accepted proposals requiring study 
deposits at multiple points throughout the interconnection study 
process. For example, PSCo, Tri-State, Dominion, and Duke require four 
study deposits throughout their cluster study processes, and an 
additional deposit upon LGIA execution. In accepting PSCo's study 
deposit framework, the Commission reasoned that the study deposits 
represented the total approximate cost of PSCo's reformed cluster study 
process and that this framework was consistent with Order No. 2003's 
requirement that interconnection customers pay the actual costs of 
their studies.\172\
---------------------------------------------------------------------------

    \171\ PNM, 136 FERC ] 61,231 at P 80.
    \172\ PSCo, 169 FERC ] 61,182 at P 36 (citing Order No. 2003, 
104 FERC ] 61,103 at P 37).
---------------------------------------------------------------------------

 (b) Proposal
    106. We propose to adopt the following study deposit framework in 
the pro forma LGIP:

----------------------------------------------------------------------------------------------------------------
Size of proposed  generating facility  associated with
                interconnection request                                     Amount of deposit
----------------------------------------------------------------------------------------------------------------
>20 MW <80 MW.........................................                                      $35,000 + $1,000/MW.
>80 MW <200 MW........................................                                                 $150,000.
>200 MW...............................................                                                 $250,000.
----------------------------------------------------------------------------------------------------------------

    107. We propose to require transmission providers to collect this 
study deposit before each phase of the new first-ready, first-served 
cluster study process (i.e., cluster study, cluster re-study, and 
facilities study).\173\ We propose to require the interconnection 
customer to provide an initial study deposit along with its 
interconnection request which will be used to pay for the cluster 
study.\174\ We propose to require the interconnection customer to 
provide the second study deposit of the same amount within 20 days of 
receiving the cluster study report from the transmission provider.\175\ 
This second study deposit will cover the cost of any clustered re-
studies. We propose to require the interconnection customer to provide 
the third study deposit of the same amount along with its executed 
facilities study agreement.\176\ Study deposits would be refundable, 
and the transmission provider would refund any portion of the study 
deposits above the applicable study costs and withdrawal penalties once 
the interconnection customer executes the LGIA, requests the filing of 
an unexecuted LGIA and submits the corresponding payment discussed 
below, or withdraws from the queue.\177\
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    \173\ Proposed pro forma LGIP section 3.1.1.
    \174\ Id. section 3.1.1.1.
    \175\ Id. section 3.1.1.2.
    \176\ Id. section 3.1.1.2.
    \177\ Consistent with Order No. 2003, interconnection customers 
would be responsible for actual study costs, and the study deposits 
would be subject to true-up. Order No. 2003, 104 FERC ] 61,103 at P 
37; pro forma LGIP section 8.1.
---------------------------------------------------------------------------

    108. We also propose to require interconnection customers to submit 
a deposit equal to nine times the amount of its study deposit when 
executing the LGIA or requesting the filing of an unexecuted LGIA.\178\ 
This deposit would be fully refunded once the generating facility 
achieves commercial operation, but if the interconnection customer 
withdraws after executing the LGIA or after requesting the filing of an 
unexecuted LGIA, this deposit would be refunded subject to the 
withdrawal penalty discussed below.
---------------------------------------------------------------------------

    \178\ Proposed pro forma LGIP section 3.1.1.3.
---------------------------------------------------------------------------

    109. We believe that increasing the total study deposit amounts 
submitted in the interconnection study process would better approximate 
the cost of the interconnection study process and disincentivize 
interconnection customers from submitting interconnection requests for 
speculative, non-commercially viable generating facilities. As the 
Commission recognized in the 2008 Technical Conference Order, 
``relatively small deposit amounts, coupled with the incentives 
produced by a first-come, first-served approach to allocating capacity, 
provides an incentive for developers to secure a place in the queue 
even for projects that may not be commercially viable.'' \179\ 
Conversely, the Commission has specifically found that increased study 
deposits ``better identif[y] viable projects that are more ready to 
proceed with construction and commercial operation while discouraging 
speculative projects that could delay the cluster study process.'' 
\180\ The Commission has similarly explained ``that increasing the 
deposit in a tiered fashion . . . is reasonable because it recognizes 
that larger projects likely carry a greater risk.'' \181\ Accordingly, 
we propose to revise section 3 of the pro forma LGIP to implement these 
proposed increased study deposit reforms.
---------------------------------------------------------------------------

    \179\ 2008 Technical Conference Order, 122 FERC ] 61,252 at P 
15.
    \180\ PNM, 136 FERC ] 61,231 at P 80; see also PSCo, 169 FERC ] 
61,182 at PP 36, 49.
    \181\ PNM, 136 FERC ] 61,231 at P 80.
---------------------------------------------------------------------------

    110. We seek comment on whether the proposed study deposit amounts 
accurately estimate the cost of conducting cluster studies, such that 
interconnection customers are not required to submit deposits that are 
likely to far exceed actual study costs. We also seek comment on 
whether the Commission should adopt additional provisions or a 
different framework that would require larger proposed

[[Page 39954]]

generating facilities to provide a higher deposit amount--such as a per 
MW framework.
ii. Demonstration of Site Control
(a) Background
    111. The pro forma LGIP defines site control as documentation 
demonstrating: (1) ownership of, a leasehold interest in, or a right to 
develop a site for the purpose of constructing the generating facility; 
(2) an option to purchase or acquire a leasehold site for such purpose; 
or (3) an exclusivity or other business relationship between the 
interconnection customer and the entity having the right to sell, 
lease, or grant the interconnection customer the right to possess or 
occupy a site for such purpose.\182\ Interconnection customers are 
required to submit a demonstration of site control along with the 
interconnection request or submit a $10,000 deposit in lieu of such a 
demonstration.\183\ The in-lieu-of deposit allows the interconnection 
customer to proceed through the generator interconnection process 
without providing evidence of site control. At the end of the study 
process, within 15 days after receipt of the draft LGIA, the 
interconnection customer must provide evidence of continued site 
control or post $250,000 of non-refundable security that will be 
applied toward future construction costs. The pro forma LGIA allows the 
interconnection customer to suspend its LGIA for up to three years 
before providing the additional security or demonstration of site 
control.\184\
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    \182\ Pro forma LGIP section 1.
    \183\ Id. section 3.4.1.
    \184\ Pro forma LGIA art. 5.16.
---------------------------------------------------------------------------

    112. The Commission has accepted several interconnection queue 
reform proposals that have increased the initial $10,000 deposit in 
lieu of site control. For example, Nevada Power increased the initial 
deposit amount to $50,000 \185\ and Arizona Public Service Company and 
El Paso Electric increased the amount of the initial deposit in lieu of 
site control to match their increased study deposits--$160,000 for 
interconnection requests less than 75 MW, and $250,000 for 
interconnection requests for 75 MW and greater.\186\ All of these 
transmission providers maintain the pro forma LGIP provision allowing 
the interconnection customer to post $250,000 of non-refundable 
security in lieu of site control at LGIA execution.
---------------------------------------------------------------------------

    \185\ NV Energy, Inc., 142 FERC ] 61,165, at P 25 (2013).
    \186\ Ariz. Pub. Serv. Co., 137 FERC ] 61,099, at P 11 (2011); 
El Paso Elec. Serv. Co., 137 FERC ] 61,101, at P 11 (2011).
---------------------------------------------------------------------------

    113. PacifiCorp allows interconnection customers to submit a 
$10,000 deposit in lieu of site control to begin the cluster study 
process but requires that the interconnection customer demonstrate 
exclusive site control before proceeding to the facilities study.\187\ 
Duke and Dominion adopted a similar approach of requiring that the 
interconnection customer demonstrate exclusive site control before 
proceeding to the facilities study but increased the deposit amount to 
$20,000 plus $500 per MW.\188\ These transmission providers have 
removed the option to post $250,000 of non-refundable security in lieu 
of site control at LGIA execution and instead require proof of site 
control without exception.
---------------------------------------------------------------------------

    \187\ PacifiCorp, Transmission OATT and Service Agreements, 
attach. W, section 5 (3.0.0), section 5.2.
    \188\ Duke, Tariffs, Rate Schedules and Service Agreements, 
OATT, attach. J (18.0.0), section 4.4.2; Dominion, OATT and Service 
Agreements, attach. M (4.5.0), section 4.4.2.
---------------------------------------------------------------------------

    114. PNM,\189\ PSCo,\190\ and MISO have eliminated the deposit in 
lieu of site control. However, MISO allows a deposit in lieu of site 
control of $10,000 per MW where regulatory limitations prohibit the 
procurement of site control.\191\ This deposit is subject to a floor of 
$500,000 and a ceiling of $2,000,000. The cash in lieu deposit is only 
available to customers at the start of the study process: 
interconnection customers must demonstrate 100% site control prior to 
MISO conducting the facilities study.\192\ To cut down on multiple 
speculative projects leasing the same site in order to remain in the 
queue, MISO also requires that interconnection customers demonstrate an 
``exclusive right to develop the site'' of a generating facility or, 
where facilities are to be co-located, a right that is ``sufficient to 
accommodate the final design of the facility and account for any other 
projects that will utilize all or part of the same site.'' \193\
---------------------------------------------------------------------------

    \189\ PNM, 136 FERC ] 61,231 at P 81.
    \190\ PSCo, 169 FERC ] 61,182 at P 58. Site control requirements 
for PSCo are as follows: (1) before entering Phase 1, demonstration 
of 50% site control and 0% site control of interconnection 
customer's interconnection facilities is required; (2) before 
entering Phase 2, demonstration of 50% site control and 0% site 
control of interconnection customer's interconnection facilities is 
required; (3) before entering Phase 1, demonstration of 60% site 
control and 0% site control of interconnection customer's 
interconnection facilities is required; (4) before entering Phase 4, 
demonstration of 75% site control and 0% site control of 
interconnection customer's interconnection facilities is required; 
(5) before executing an LGIA, demonstration of 90% site control and 
50% site control of interconnection customer's interconnection 
facilities is required. PSCo, Transmission and Service Agreements 
Tariff, Xcel Energy Operating Cos. Joint OATT, attach. N (0.8.0), 
section 7.7.6.
    \191\ In order to demonstrate regulatory limitations to securing 
site control, MISO requires the interconnection customer to submit: 
(1) a signed affidavit from an officer of the company indicating 
that site control is unobtainable due to regulatory requirements; 
and (2) documentation sufficiently describing and explaining the 
source and effects of such regulatory restrictions, including a 
description of any conditions that must be met in order to satisfy 
the regulatory restrictions and the anticipated time by which the 
interconnection customer expects to satisfy the regulatory 
restrictions. MISO, FERC Electric Tariff, MISO OATT, attach. X 
(155.0.0), section 7.2.1.2.
    \192\ Midcontinent Indep. Sys. Operator, Inc., 169 FERC ] 
61,173, at P 27 (2019).
    \193\ Id. P 48; see also Midcontinent Indep. Sys. Operator, 
Inc., 166 FERC ] 61,187 (2019).
---------------------------------------------------------------------------

(b) Proposal
    115. We believe that more stringent site control requirements will 
help prevent interconnection customers from submitting interconnection 
requests for speculative, non-commercially viable proposed generating 
facilities.\194\ We preliminarily find that an interconnection customer 
securing the exclusive land right necessary to construct its proposed 
generating facility (or for co-located resources, demonstration of 
shared land use) is sufficient evidence of the interconnection 
customer's commitment to construct the generating facility.
---------------------------------------------------------------------------

    \194\ See, e.g., PNM, 136 FERC ] 61,231 at P 81 (accepting PNM's 
increased deposit requirement and revised site control); PSCo, 169 
FERC ] 61,182 at P 58 (stating that removing the $10,000 deposit 
option ``provides interconnection customers with the flexibility to 
demonstrate their viability while also balancing the goal of 
ensuring viable projects continue through the queue'').
---------------------------------------------------------------------------

    116. We propose to revise the pro forma LGIP to require 
interconnection customers to demonstrate 100% site control for their 
proposed generating facilities when they submit their interconnection 
request. We propose to have transmission providers include in their 
tariff specific acreage requirements for each generating facility 
technology type.
    117. To cut down on multiple interconnection customers leasing the 
same site in order to remain in the queue, we propose to revise the pro 
forma LGIP to require interconnection customers to demonstrate the 
exclusive land right (where the land rights are exclusive to the 
interconnection customer, not necessarily the individual project) to 
develop, construct, operate, and maintain its generating facility or, 
where facilities are co-located, to demonstrate a shared land use right 
to develop, construct, operate, and maintain co-located facilities.
    118. We propose to include a limited option for interconnection 
customers to submit a deposit in lieu of site control

[[Page 39955]]

when they submit their interconnection request only when regulatory 
limitations prohibit the interconnection customer from obtaining site 
control.\195\ In such instances, the interconnection customer would 
submit an initial deposit in lieu of site control of $10,000 per MW, 
subject to a floor of $500,000 and a ceiling of $2,000,000, which would 
be applied toward any interconnection studies or withdrawal penalty, if 
applicable. Such an interconnection customer must demonstrate 100% site 
control prior to the facilities study.
---------------------------------------------------------------------------

    \195\ For example, in MISO, the Commission found that 100% site 
control for the interconnection customer's interconnection 
facilities, the transmission owner's interconnection facilities, and 
network upgrades at the point of interconnection is impractical 
because those facilities often are subject to additional state 
siting and permitting requirements that do not apply to generating 
facilities. Midcontinent Indep. Sys. Operator, Inc., 169 FERC ] 
61,173 at P 40.
---------------------------------------------------------------------------

    119. In compliance with any final rule in this proceeding, we also 
propose that, after notifying the transmission provider of a change to 
the interconnection customer's site control demonstration, the 
transmission provider give the interconnection customer 10 business 
days to demonstrate satisfaction with the applicable requirement after 
notification. We propose to implement these requirements through 
revisions to sections 3.4.1 and 11.3 of the pro forma LGIP, as set 
forth in Appendix B to this NOPR.
    120. We believe that strengthening the site control requirements of 
the pro forma LGIP to include a demonstration of 100% site control 
would help prevent speculative interconnection requests. We recognize 
that requiring site control effectively bars entry into the queue until 
land is acquired, and that this may prevent early-stage projects from 
entering the queue. We nevertheless believe this proposed reform to be 
just and reasonable because it will address the concerns with 
interconnection queue backlogs and study delays explained in the Need 
for Reform by reducing the number of interconnection requests being 
submitted and ensure that interconnection customers in the queue are 
ready to proceed.
    121. We seek comment on whether there are other specific situations 
in which the Commission should accept a deposit in lieu of site 
control.
    122. We seek comment on whether the definition of ``site control,'' 
including the requirement to obtain an exclusive land right (or, for 
co-located resources, a shared land right), should be broadened or 
refined to account for circumstances that may arise in, for example, 
the siting and permitting of offshore resources in bodies of water and/
or submerged land. Further, for circumstances where interconnection 
customers are proposing to develop generating facilities on sites owned 
or physically controlled by a state governmental entity and/or federal 
governmental entity, there may be a need to craft a different site 
control requirement that acknowledges that the interconnection 
customer, that has to comply with regulatory requirements, may not be 
able to demonstrate site control as proposed in this NOPR until later. 
For this reason, we seek comment on whether and how the definition of 
``site control'' should be adjusted for interconnection customers 
(including both onshore and offshore) to account for any regulatory 
requirements they may have associated with proposed generating 
facilities developed on sites owned or physically controlled by a state 
governmental entity and/or a federal governmental entity. We also seek 
comment on the appropriate stage in developing such sites when the 
Commission should view completion of such stage as indicative of an 
interconnection customer's request being non-speculative and whether 
there are substantive differences among interconnection customers 
(including both onshore and offshore) developing sites owned or 
physically controlled by a state governmental entity and/or a federal 
governmental entity.
    123. We also seek comment on whether the Commission should allow 
transmission providers to accept demonstrations of less than 100% site 
control in the initial phases of the interconnection study process, 
outside of when regulatory limitations prohibit the interconnection 
customer from obtaining site control. Additionally, we seek comment on 
whether the Commission should instead adopt site control provisions 
that allow a deposit in lieu of site control to enter the generator 
interconnection process and be evaluated under the first-ready, first-
served cluster study process described above but require 
interconnection customers to demonstrate site control to enter the 
facilities study.
iii. Commercial Readiness
(a) Background
    124. Generally, at least in bilateral markets, an interconnection 
customer does not proceed to construct a generating facility unless it 
has executed some form of off-take agreement, such as a contract for 
the sale of electric energy or capacity from the generating facility. 
Transmission providers often use the terms ``ready'' or ``commercially 
viable'' to describe projects that have demonstrated commercial 
progress by executing such an agreement.\196\ Aside from a 
demonstration of site control or the $10,000 deposit in lieu of site 
control, the pro forma LGIP does not require interconnection customers 
to demonstrate progress towards achieving commercial readiness 
throughout the interconnection study process. Rather, section 11.3 of 
the pro forma LGIP only requires demonstrations of commercial progress 
within 15 days after receipt of the final LGIA, after the transmission 
provider has completed its studies of the interconnection request. If 
interconnection customers cannot meet this deadline, the pro forma LGIA 
allows them to suspend their LGIAs for up to three years: that 
suspension may include a decision by the interconnection customer to 
pause work on their proposed generating facilities and network 
upgrades.\197\ Under this approach, interconnection customers are able 
to submit interconnection requests and progress through the 
interconnection queue for only $160,000 in study deposits, subject to 
true-up based on actual study costs and then suspend their LGIAs for an 
additional three year time period for no cost.\198\ In Order 2003, the 
Commission allowed suspension for a three year time period to allow 
generation projects the flexibility necessary to accommodate permitting 
and other delays that are particularly likely to affect large 
projects.\199\
---------------------------------------------------------------------------

    \196\ See, e.g., PSCo, Transmission and Service Agreements 
Tariff, Xcel Energy Operating Cos. Joint OATT, attach. N, (0.8.0) 
Sec.  7.7.6; PacifiCorp, Transmission OATT and Service Agreements, 
OATT, pt. IV.38 (6.0.0), section 38.4.1.
    \197\ Pro forma LGIA art. 5.16.
    \198\ See pro forma LGIP sections 3.4.1, 6.1, 7.2, 8.1 
(providing for: $10,000 for the Interconnection Feasibility Study, 
$50,000 for the Interconnection System Impact Study, and $100,000 
for the Interconnection Facilities Study).
    \199\ Order No. 2003, 104 FERC ] 61,103 at P 410.
---------------------------------------------------------------------------

    125. PSCo, PacifiCorp, Tri-State, Dominion, and Duke have 
implemented frameworks that require interconnection customers to 
demonstrate commercial readiness early in the generator interconnection 
process to incentivize developers to submit ready or near-ready 
proposed generating facilities into the interconnection queue and to 
discourage the inclusion of speculative interconnection requests in the 
interconnection queue. These transmission providers offer several 
options to demonstrate commercial readiness. Notably, the commercial 
readiness requirements become more stringent as the interconnection 
customer proceeds to the later phases of the interconnection study 
process:

[[Page 39956]]

     Executed term sheet in early phases, or executed contract 
or power purchase agreement in later phases;
     Reasonable evidence of being selected in a resource plan 
or offered into a resource solicitation plan in early phases, or proof 
of applying for certificate of public convenience and necessity, if 
required, in later phases; or
     Provisional LGIA filed executed or unexecuted at the 
Commission in early phases or accepted at the Commission in later 
phases.\200\
---------------------------------------------------------------------------

    \200\ PSCo, Transmission and Service Agreements Tariff, Xcel 
Energy Operating Cos. Joint OATT, attach. N (0.8.0), section 7.7; 
PacifiCorp, Transmission OATT and Service Agreementts, OATT, pt. 
IV.38 (6.0.0), section 38.4.1; Tri-State, Tri-State OATT, attach. N 
(7.0.0), section 7.7; Dominion, OATT and Service Agreements, attach. 
M (4.5.0), section 10.1; Duke, Tariffs, Rate Schedules and Service 
Agreements, OATT, attach. J (18.0.0), section 10.11 .
---------------------------------------------------------------------------

    126. As an alternative, PSCo, PacifiCorp, Tri-State, Dominion, and 
Duke allow interconnection customers that cannot provide these non-
financial forms of readiness to instead provide additional deposit 
funds to proceed through the interconnection study process. Because 
PacifiCorp's cluster study process has fewer phases than PSCo, Tri-
State, Dominion, and Duke, PacifiCorp offers the option to submit a 
deposit in lieu of readiness of $3,000/MW at the interconnection 
request phase, and for the later phase, a deposit equal to the network 
upgrade costs allocated to the interconnection customer in the most 
recent cluster study.\201\ To contrast, in PSCo, Tri-State, Dominion, 
and Duke, an interconnection customer that cannot provide a readiness 
demonstration must provide additional deposits equal to:
---------------------------------------------------------------------------

    \201\ PacifiCorp, Transmission OATT and Service Agreements, 
OATT, pt. IV.38 (6.0.0), section 38.4.1(v).
---------------------------------------------------------------------------

     Two times the study deposit amount to enter the phase 1 
cluster study;
     Three times the study deposit amount after the phase 1 
report meeting to enter the phase 2 cluster study;
     Five times the study deposit amount after the phase 2 
report meeting; and
     Seven times the study deposit amount after receipt of the 
facilities study agreement.\202\
---------------------------------------------------------------------------

    \202\ PSCo, Transmission and Service Agreements Tariff, Xcel 
Energy Operating Cos. Joint OATT, attach. N (0.8.0), section 7.7.5; 
Tri-State, Tri-State OATT, attach. N (7.0.0), section 7.7.5; 
Dominion, OATT and Service Agreements, attach. M (4.5.0), section 
10.1.6; Duke, Tariffs, Rate Schedules and Service Agreements, OATT, 
attach. J (18.0.0), section 10.11.6.
---------------------------------------------------------------------------

    127. As explained earlier, we are concerned with the significant 
interconnection queue backlogs and study delays, which we believe are 
caused in part by the minimal requirements for submitting 
interconnection requests and the tendency for non-viable projects to 
linger in interconnection queues. We have learned through 
interconnection queue reform filings that interconnection customers 
typically do not actually construct generating facilities unless they 
have entered into an off-take agreement for the output of such 
facilities, at least in bilateral market areas.\203\ On the other hand, 
interconnection customers that do not enter into such agreements 
frequently withdraw from the interconnection queue, sometimes late in 
the study process or even after the conclusion of the study process, 
triggering the types of delays and re-studies for commercially viable 
projects that raise concerns for us. Thus, we believe that the existing 
pro forma LGIP requirements may be insufficient because they do not 
require customers to demonstrate commercial readiness early enough in 
the study process to deter interconnection customers from submitting 
interconnection requests for, and continuing in the interconnection 
queue, speculative proposed generating facilities.
---------------------------------------------------------------------------

    \203\ PNM, Transmittal Letter, Docket No. ER11-3522-000, at 10-
12 (filed May 5, 2011); PacifiCorp, Transmittal Letter, Docket No. 
ER20-924-000, at 51 (filed Jan. 31, 2020).
---------------------------------------------------------------------------

(b) Proposal
    128. We propose to revise the pro forma LGIP to include a 
commercial readiness framework. One major benefit of the frameworks 
adopted by PSCo, PacifiCorp, Tri-State, Dominion, and Duke is that the 
financial requirement in lieu of readiness increases throughout the 
study process, which encourages interconnection customers that are not 
ready to proceed to withdraw from the interconnection queue earlier in 
the study process while also providing them the flexibility to enter 
and remain in the interconnection queue without an off-take agreement. 
We believe that such a mechanism would reduce the number of times an 
interconnection customer executes and suspends an LGIA for a 
speculative interconnection request, only to later withdraw the 
request, which impacts the remaining interconnection customers in the 
interconnection queue by causing re-studies and shifting network 
upgrade costs to lower-queued interconnection customers. This proposed 
reform should also reduce the strain on transmission providers and 
enable viable interconnection requests to progress more quickly through 
a less congested interconnection queue, thereby remedying the unjust 
and unreasonable Commission-jurisdictional rates discussed in our need 
for reform.
    129. Therefore, we propose to establish the defined terms 
``Commercial Readiness Demonstration'' \204\ and ``Commercial Readiness 
Deposit'' \205\ in the pro forma LGIP. We also propose to add to 
sections 3.4.2, 7.5 and 8.1 of the pro forma LGIP the following options 
as acceptable commercial readiness demonstration options to enter into 
the cluster study and cluster re-study:
---------------------------------------------------------------------------

    \204\ We propose to revise section 1 of the pro forma LGIP to 
provide that Commercial Readiness Demonstration shall have the 
meaning set forth in Sections 3.4.2, 7.5, and 8.1 of this LGIP.
    \205\ We propose to revise section 1 of the pro forma LGIP to 
provide that Commercial Readiness Deposit shall mean a deposit paid 
in lieu of submitting a Commercial Readiness Demonstration, as set 
forth in Sections 3.4.2, 7.5, and 8.1 of this LGIP.
---------------------------------------------------------------------------

     Executed term sheet (or comparable evidence) related to a 
contract, binding upon the parties to the contract, for sale of (1) the 
constructed generating facility, (2) the generating facility's energy 
or capacity, or (3) the generating facility's ancillary services; where 
the term of sale is not less than five years.
     Reasonable evidence that the project has been selected in 
a resource plan or resource solicitation process by or for a load 
serving entity, is being developed by a load-serving entity (LSE), or 
is being developed for purposes of a sale to a commercial, industrial, 
or other large end-use customer.
     Provisional LGIA which has been filed at the Commission 
(executed or unexecuted), which is not suspended and includes a 
commitment to construct the generating facility.
    130. We propose to add to section 8.1 of the pro forma LGIP that 
the following may serve as commercial readiness demonstration options 
to enter the facilities study, and must be provided with the executed 
facilities study agreement:
     Executed contract (as opposed to term sheet), binding upon 
the parties to the contract, for sale of (1) the constructed generating 
facility, (2) the generating facility's energy or capacity, or (3) the 
generating facility's ancillary services; where the term of sale is not 
less than five years.
     Reasonable evidence that the project has been selected in 
a resource plan or resource solicitation process by or for a load 
serving entity, is being developed by an LSE, or is being developed for 
purposes of a sale to a commercial, industrial, or other large end-use 
customer.

[[Page 39957]]

     Provisional LGIA accepted for filing by the Commission, 
which is not suspended, with reasonable evidence that the generating 
facility and interconnection facilities have commenced design and 
engineering.
    131. We also propose to require the interconnection customer to 
inform the transmission provider of any material change to its 
commercial readiness demonstration. We propose to require the 
transmission provider to give the interconnection customer 10 business 
days to demonstrate satisfaction with the applicable requirement after 
notification of a change to the interconnection request's commercial 
readiness demonstration. The interconnection customer would have the 
option to submit a commercial readiness deposit, discussed further 
below, within the 10-day cure period if the change to the commercial 
readiness demonstration meant that the interconnection request no 
longer satisfied the criteria.
    132. The Commission has previously accepted interconnection queue 
reform proposals that allow interconnection customers to submit 
additional refundable deposits in lieu of a demonstration of commercial 
readiness. In accepting these proposals, the Commission has found that 
the demonstrations of commercial readiness and alternative deposit in 
lieu of commercial readiness framework provide interconnection 
customers with the flexibility to employ a variety of business 
models.\206\ We believe that this approach is appropriate for all 
transmission providers and therefore propose to allow interconnection 
customers the option to submit a Commercial Readiness Deposit in lieu 
of demonstrating commercial readiness through the commercial readiness 
demonstration options required to enter a cluster study, cluster re-
study, and facilities study. We note that, outside of RTOs/ISOs, 
transmission providers may be able to provide certain contractual 
arrangements to their own projects or other preferred interconnection 
customers, such as the term sheet option discussed above, which could 
lead to unduly discriminatory behavior. This deposit in lieu of 
demonstrating commercial readiness may potentially prevent any undue 
discrimination in the generator interconnection process, consistent 
with the adoption of a standard set of procedures in the first 
instance.\207\
---------------------------------------------------------------------------

    \206\ See, e.g., PSCo, 169 FERC ] 61,182 at P 50; PacifiCorp, 
171 FERC ] 61,112 at P 102.
    \207\ Order No. 2003, 104 FERC ] 61,103 at PP 1-2.
---------------------------------------------------------------------------

    133. We propose to revise the pro forma LGIP to include a framework 
to allow interconnection customers to provide a commercial readiness 
deposit in lieu of meeting commercial readiness requirements in the 
following amounts:
     Two times the study deposit amount to enter the initial 
cluster study phase;
     Five times the study deposit amount after the initial 
cluster study phase and before the system impact re-study phase; and
     Seven times the study deposit after receipt of the 
facilities study agreement.\208\
---------------------------------------------------------------------------

    \208\ See PSCo, Transmission and Service Agreements Tariff, Xcel 
Energy Operating Cos. Joint OATT, attach. N (0.8.0), section 7.7.5; 
Tri-State, Tri-State OATT, attach. N (7.0.0), section 7.7.5; 
Dominion, OATT and Service Agreements, attach. M (4.5.0), section 
10.1.6; Duke, Tariffs, Rate Schedules and Service Agreements, Duke 
OATT, attach. J (18.0.0), section 10.11.6.
---------------------------------------------------------------------------

    134. The commercial readiness deposit is separate from the study 
deposit. The commercial readiness deposit is returned if the 
interconnection customer later makes a commercial readiness 
demonstration. If the interconnection customer withdraws from the 
interconnection queue, the commercial readiness deposit is applied 
toward any incurred withdrawal penalties. As described below in section 
III.A.1.iv, we propose that withdrawal penalties will be higher for 
interconnection customers that made a deposit in lieu of a 
demonstration of commercial readiness.
    135. Additionally, we propose revisions to the list of development 
milestones in section 11.3 of the pro forma LGIP to clarify the 
following: (1) a contract for the supply or transportation of fuel and 
a contract for the supply of cooling water will not be accepted for 
wind, storage, or solar photovoltaic resources; (2) comparable evidence 
of a contract for the sale of energy or capacity will be accepted; and 
(3) any of the commercial readiness demonstration options accepted to 
enter the facilities study will be accepted along with the executed 
LGIA or within 15 days of the Commission issuing an order on the 
unexecuted LGIA filing, while a commercial readiness deposit will not 
be accepted.
    136. We propose this framework because we believe that it will 
allow interconnection customers to calculate the exact deposit that 
will be required prior to entering the interconnection queue, as it is 
based on multiples of the study deposit, and the study deposit is based 
on the size of the proposed generating facility, as chosen by the 
interconnection customer, leading to predictability in the deposit 
amount. We believe this increased transparency of the deposit amount 
early in the generator interconnection process will discourage 
speculative requests from entering the queue.
    137. We seek comment on whether the Commission should also 
establish, as another alternative demonstration of commercial 
readiness, evidence of a commitment to participate in RTO/ISO markets, 
a site specific purchase order for generating equipment specific to the 
interconnection request, or a statement signed by an officer or 
authorized agent of the interconnection customer attesting that the 
generating facility included is to be supplied with major electric 
generating components (such as wind turbines) with a manufacturer's 
blanket purchase agreement to which the interconnection customer is a 
party.
iv. Withdrawal Penalties
(a) Background
    138. The pro forma LGIP does not require transmission providers to 
assess withdrawal penalties when an interconnection customer withdraws 
from the interconnection queue. Under the pro forma LGIP, withdrawing 
interconnection customers need only pay the actual study costs that the 
transmission provider incurred. Specifically, section 3.7 of the pro 
forma LGIP states that ``[a]n Interconnection Customer that withdraws 
or is deemed to have withdrawn its Interconnection Request shall pay to 
Transmission Provider all costs that Transmission Provider prudently 
incurs with respect to that Interconnection Request prior to 
Transmission Provider's receipt of [Interconnection Customer's written 
notice of such withdrawal to Transmission Provider].''
    139. The Commission has accepted several transmission providers' 
proposals to assess withdrawal penalties on interconnection customers 
that withdraw from a cluster study process and thereby delay the timing 
or increase the interconnection costs for other proposed generating 
facilities in the same cluster, reasoning that such penalties decrease 
the number of late-stage withdrawals and mitigate potential harm to 
other interconnection customers.\209\ The Commission found that 
withdrawal penalties provide an incentive to interconnection customers 
to ensure that their interconnection-

[[Page 39958]]

related decisions consider the costs associated with an interconnection 
customer withdrawing from the queue.\210\
---------------------------------------------------------------------------

    \209\ See e.g., PacifiCorp, 171 FERC ] 61,112; PSCo, 169 FERC ] 
61,182; Tri-State, 174 FERC ] 61,021; see also May Joint Task Force 
Tr. 31:19-32:1 (Kimberly Duffley) (describing Duke's withdrawal 
penalty requirements, stating that ``North Carolina is optimistic 
that these revisions will allow for the efficient interconnection of 
generation projects.'').
    \210\ PacifiCorp, 171 FERC ] 61,112 at P 112.
---------------------------------------------------------------------------

(b) Proposal
    140. As explained below, we propose to revise the pro forma LGIP to 
require transmission providers to assess withdrawal penalties to 
interconnection customers in certain circumstances. We preliminarily 
find that withdrawal penalties are needed to account for the harms that 
can occur when interconnection customers withdraw from the 
interconnection queue, as detailed in the Need for Reform for this 
NOPR. We believe that withdrawal penalties--as we propose to require 
below--will encourage interconnection customers to make every effort to 
ensure their proposed projects are viable and all interconnection 
requirements are met in a timely fashion, thereby limiting the 
potential for situations where an interconnection customer must 
withdraw at a late stage of the generator interconnection process and 
remedying the unjust and unreasonable Commission-jurisdictional rates 
discussed in our Need for Reform.
    141. More specifically, we propose to revise the pro forma LGIP to 
require transmission providers to assess withdrawal penalties to 
interconnection customers that choose to withdraw at any point in the 
interconnection study process or do not otherwise reach commercial 
operation unless: (1) the withdrawal does not delay the timing of other 
proposed generating facilities in the same cluster; (2) the withdrawal 
does not increase the cost of network upgrades for other proposed 
generating facilities in the same cluster; (3) the interconnection 
customer withdraws after receiving the most recent cluster study report 
and the costs assigned to the interconnection customer have increased 
25% compared to the previous cluster study report; or (4) the 
interconnection customer withdraws after receiving the individual 
facilities study report and the costs assigned to the interconnection 
customer have increased by more than 100% compared to costs identified 
in the cluster study report. Thus, under this proposal, interconnection 
customers would be exempt from a withdrawal penalty if the withdrawal 
does not harm other interconnection customers or if the withdrawal 
follows a significant unanticipated increase in network upgrade cost 
estimates.
    142. The proposed withdrawal penalty will increase as the 
interconnection customer moves through the study process and will also 
increase if a commercial readiness deposit is provided in lieu of a 
demonstration of commercial readiness.\211\ For an interconnection 
customer that provides a commercial readiness deposit in lieu of a 
demonstration of commercial readiness, we propose that its withdrawal 
penalty will be higher and increase as the interconnection customer 
progresses in the interconnection study process. This will help 
dissuade interconnection customers from submitting interconnection 
requests for speculative, non-commercially viable proposed generating 
facilities or from remaining in the interconnection queue despite the 
non-viability of the proposed generating facility.
---------------------------------------------------------------------------

    \211\ See May Joint Task Force Tr. 75:23-76:1 (Kimberly Duffley) 
(``I think one of the best practices of the new system that DEP & 
DEC have implemented is the increase of withdrawal penalties as the 
interconnection moves through the process.'')
---------------------------------------------------------------------------

    143. We propose that the withdrawal penalty for an interconnection 
customer that provides a commercial readiness deposit in lieu of a 
demonstration of commercial readiness will be the greater of the study 
deposit or: (1) two times the study cost if the customer withdraws 
during the cluster study or after receipt of a cluster study report, 
capped at $1,000,000; (2) three times the study cost if the customer 
withdraws during the cluster re-study or after receipt of any 
applicable re-study reports, capped at $1,500,000; (3) five times the 
study cost if the customer withdraws during the facilities study, after 
receipt of the individual facilities study report, or after receipt of 
the draft LGIA, capped at $2,000,000; or (4) nine times the study costs 
if the customer withdraws before achieving commercial operation and 
after executing the LGIA or filing an unexecuted LGIA. We also propose 
that the withdrawal penalty revenues be used to fund studies conducted 
under the cluster study process.
    144. The table below summarizes the proposed withdrawal penalty 
structure for both interconnection requests that have demonstrated 
commercial readiness and those that have not (by instead submitting a 
deposit in lieu of commercial readiness).

----------------------------------------------------------------------------------------------------------------
                                                                    Total withdrawal
         Phase of withdrawal             Commercial readiness     penalty (if greater     Withdrawal penalty cap
                                       demonstration provided?    than study deposit)
----------------------------------------------------------------------------------------------------------------
1....................................  Yes....................  1 times study costs....  No Cap.
2....................................  Yes....................  1 times study costs....  No Cap.
3....................................  Yes....................  1 times study costs....  No Cap.
LGIA.................................  Yes....................  9 times study costs....  No Cap.
1....................................  No.....................  2 times study costs....  $1 million.
2....................................  No.....................  3 times study costs....  $1.5 million.
3....................................  No.....................  5 times study costs....  $2 million.
LGIA.................................  No.....................  9 times study costs....  No Cap.
----------------------------------------------------------------------------------------------------------------

    145. Accordingly, we propose to add the defined term ``Withdrawal 
Penalty'' and revise section 3.7 of the pro forma LGIP, as set forth in 
Appendix B to this NOPR.
    146. We seek comment on how to define the circumstances in which a 
withdrawal is deemed to have delayed the timing or increased the cost 
of network upgrades for other proposed generating facilities in the 
same cluster, including what criteria should be used to determine 
whether the withdrawal caused the delay or increased cost, and whether 
to establish a threshold for when a delay or increase in cost will 
trigger a withdrawal penalty (and if so, what that threshold should 
be).
    147. We seek comment on whether the Commission should consider 
exceptions to the proposed withdrawal penalties beyond those we propose 
in this NOPR.
    148. In addition, we seek comment on whether withdrawal penalties 
that increase with proposed generating facility size (as measured by 
MW) would more effectively deter withdrawals that cause the greatest 
harm. Specifically, we seek comment on whether a correlation exists 
between the size of a withdrawing proposed

[[Page 39959]]

generating facility and the relative level of harm (in terms of delays 
and increased cost) to other interconnection customers as a result of 
the withdrawal.
7. Transition Process
a. Need for Reform
    149. Requiring transmission providers both to utilize a first-
ready, first-served cluster study process and to adopt more stringent 
financial commitments and readiness requirements to remain in the 
interconnection queue should significantly improve interconnection 
queue management in the future. However, we are mindful that many 
providers currently face significant backlogs of existing 
interconnection customers. Absent a transition process, the need to 
study all existing interconnection requests under existing rules could 
substantially delay the transmission provider's ability to use and 
benefit from the new cluster study process and commercial readiness 
requirements, thus diminishing the effectiveness of these reforms in 
the near term. Therefore, we are proposing that transmission providers 
be required to implement a transition process whereby most existing 
interconnection customers will be subject to the new study process, 
financial commitments, and readiness requirements, while certain late-
stage customers will be allowed to finish the interconnection process 
under the existing rules.
b. Proposed Reform
i. Background
    150. The transmission providers that have proposed to adopt a 
first-ready, first-served cluster study process have proposed a 
transition process to provide an orderly move to the new approach and 
to resolve their interconnection queue backlogs.
    151. Following the 2008 Technical Conference Order, the Commission 
accepted several RTO/ISO proposals to implement a one-time transition 
process as the RTOs/ISOs moved to a first-ready, first-served cluster 
study process. To expedite interconnection queue processing, each of 
these transition plans applied a cluster study process to the majority 
of the interconnection requests in the interconnection queue. CAISO and 
SPP created a large transitional cluster study group (or a pair of 
study groups) yet continued to study later-stage interconnection 
customers under the preexisting serial first-come, first-served study 
process (i.e., grandfathered). Specifically, CAISO grandfathered all 
interconnection customers slated to receive a system impact study by 
the date of CAISO's filing with the Commission (as well as those 
meeting selected readiness requirements),\212\ while SPP grandfathered 
all interconnection customers with executed facilities study 
agreements.\213\ MISO gave existing interconnection customers 60 days 
to meet new commercial readiness requirements, although interconnection 
requests for which the facilities study had already commenced were only 
subject to new suspension procedures. All projects in MISO's 
interconnection queue at the start of the transition were slated for 
cluster study unless they were determined to be electrically remote. 
However, the size of cluster study groups was not addressed in MISO's 
filing.\214\
---------------------------------------------------------------------------

    \212\ CAISO also grandfathered interconnection customers with a 
power purchase agreement approved by the California Public Utilities 
Commission or pending with it, and interconnection customers seeking 
to interconnect to a new transmission line, with sufficient 
capacity, that had received land-use approval. See Cal. Ind. Sys. 
Operator Corp., 124 FERC ] 61,031, at PP 1, 11, 12 (2008).
    \213\ SPP also allowed interconnection customers that had 
received a system impact study but not yet executed a facilities 
study agreement to opt out of the new cluster study process. See Sw. 
Power Pool, Inc., 126 FERC ] 61,012, at P 6 (2009).
    \214\ See Midwest Ind. Sys. Operator, Inc., 124 FERC ] 61,183 at 
PP 84, 90, 112, 114.
---------------------------------------------------------------------------

    152. Recent non-RTO/ISO interconnection queue reform filings gave 
existing interconnection customers three options: transitional serial 
study, transitional cluster study, or withdrawal from the 
interconnection queue.\215\ Eligibility for the transitional studies 
was based on study status and/or commercial readiness demonstrations, 
as discussed further below. In accepting PSCo's interconnection queue 
reform filing, the Commission found that PSCo's transition process 
``consider[s] the interests of interconnection customers whose requests 
are far along in the process'' while allowing a transmission provider 
to resolve its interconnection queue backlog.\216\
---------------------------------------------------------------------------

    \215\ See, e.g., Duke, 176 FERC ] 61,075 at P 20; PSCo, 169 FERC 
] 61,182 at P 64; Tri-State, 174 FERC ] 61,021 at P 17.
    \216\ PSCo, 169 FERC ] 61,182 at P 7.
---------------------------------------------------------------------------

    153. As discussed above, in the interconnection queue reform 
filings immediately following the 2008 Technical Conference Order, the 
Commission approved transition plans that grandfathered interconnection 
customers that had executed a system impact study agreement or a 
facilities study agreement.\217\ However, in more recent 
interconnection queue reform filings, only late-stage interconnection 
customers have been consistently given a path to executing an LGIA 
under the existing interconnection procedures. Specifically, a 
grandfathering threshold based on the execution of a facilities study 
agreement has been more common. For example, transmission providers may 
require receipt of a facilities study agreement by the interconnection 
customer \218\ or receipt of a completed system impact study as well as 
execution of a facilities study agreement for an interconnection 
customer to qualify for grandfathering.\219\
---------------------------------------------------------------------------

    \217\ See, e.g., id. P 58; Midwest Indep. Sys. Operator, Inc., 
124 FERC ] 61,183 at P 90; Sw. Power Pool, Inc., 129 FERC ] 61,226 
at P 28.
    \218\ See PacifiCorp, 171 FERC ] 61,112 at P 115.
    \219\ PSCo, 169 FERC ] 61,182 at P 65; 2020 Tri-State Order, 173 
FERC ] 61,015 at P 54.
---------------------------------------------------------------------------

    154. The Commission has also allowed transmission providers to 
apply the new commercial readiness requirements in their 
interconnection queue reforms to existing interconnection customers. 
For example, to qualify for a transitional serial study, several 
transmission providers have required interconnection customers to: 
execute a transitional facilities study agreement; provide a deposit 
equivalent to 100% of the costs identified in the system impact study 
for interconnection facilities and network upgrades; demonstrate 
exclusive site control; and demonstrate commercial readiness.\220\ To 
qualify for the transitional cluster study, the Commission has approved 
transition plans that require interconnection customers to: execute a 
transitional cluster study agreement; provide a $5 million deposit; 
\221\ demonstrate exclusive site control for the generating facility; 
and demonstrate commercial readiness.\222\ The Commission has also 
approved less stringent requirements for transitional cluster study 
eligibility. For example, Duke's transition plan imposes lower cost 
security deposit requirements for ready interconnection customers and 
allows the use of cash deposits in lieu of site control (for the first 
phase of the

[[Page 39960]]

transitional cluster study) or commercial readiness.\223\
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    \220\ See, e.g., PSCo, 169 FERC ] 61,182 at P 65; 2020 Tri-State 
Order, 173 FERC ] 61,015 at PP 17-18 (describing transitional study 
requirements but rejecting the filing due to insufficient time 
period to meet them); Tri-State, 174 FERC ] 61,021 at P 45.
    \221\ In its interconnection queue reform filing, PSCo stated 
that this value is ``likely at the low end of the potential cost'' 
of interconnection, based on a review of interconnection costs from 
2003 to 2017, estimates of transmission investments in PSCo's 
Resource Planning Process, and the experience of a neighboring 
facility. PSCo, Transmittal Letter, Docket No. ER19-2774-000, at 86-
87 (filed Sept. 9, 2019).
    \222\ See, e.g., PSCo, 169 FERC ] 61,182 at P 65; 2020 Tri-State 
Order, 173 FERC ] 61,015 at P 56 (order describing $5 million 
deposit yet rejecting filing for other reasons); Tri-State, 174 FERC 
] 61,021 at P 45.
    \223\ See Duke, Transmittal Letter, Docket No. ER21-1579-000, at 
48, 52 (filed Apr. 1, 2021). In its interconnection queue reform 
proposal, Duke stated that it selected these lower thresholds d in 
response to stakeholder feedback. See Duke, 176 FERC ] 61,075 at P 
51 (approving these provisions).
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    155. The Commission has also made it clear that existing 
interconnection customers must be given sufficient time to meet new 
requirements. For example, the Commission rejected Tri-State's initial 
transition process proposal because it would have given interconnection 
customers just 10 calendar days after the filing's effective date to 
meet new requirements.\224\ Commission-approved transition processes 
commonly allow interconnection customers between 30-60 days after a 
filing's effective date (or the provision of written notice) to meet 
new commercial readiness requirements.\225\
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    \224\ Tri-State, 174 FERC ] 61,021 at P 43.
    \225\ See, e.g., Midwest Indep. Sys. Operator, Inc., 124 FERC ] 
61,183 at P 84; PSCo, 169 FERC ] 61,182 at P 65; Tri-State, 174 FERC 
] 61,021 at P 60.
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ii. Proposal
    156. We propose to revise the pro forma LGIP to require 
transmission providers to establish a transition process for moving to 
a first-ready, first-served cluster study process, as proposed in this 
NOPR.\226\ Specifically, we propose to require transmission providers 
to offer existing eligible, interconnection customers the options, for 
each project in the queue, to either enter a transitional serial 
interconnection facilities study or a transitional cluster study, with 
commercial readiness requirements, or to permit them to withdraw from 
the interconnection queue without penalty.
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    \226\ We note that this proposed reform may not be applicable to 
transmission providers that already employ a cluster study approach.
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    157. We believe that this approach would provide an efficient way 
to prioritize and process interconnection requests in the 
interconnection queue based on how far they have advanced through the 
interconnection study process on the effective date of these reforms 
and their commercial readiness to continue that process. We also 
believe that this proposal strikes an appropriate balance between 
respecting previous expectations of interconnection customers and 
ensuring that the interconnection requests that continue under the 
transition process pose an acceptably low risk of withdrawal from the 
interconnection queue, which should help reduce the likelihood of re-
studies. Accordingly, we propose to revise section 5 of the pro forma 
LGIP to specify how interconnection customers can elect to enter a 
transitional serial study or transitional cluster study or withdraw 
from the interconnection queue without penalty, as set forth in 
Appendix B to this NOPR.
    158. Our proposed transitional serial study process will allow 
late-stage interconnection customers that have executed a facilities 
study agreement by the deadline discussed below to continue under the 
existing serial study process, enter into an LGIA, and interconnect, 
provided they are ready to move forward to commercial operation. To 
proceed to the transitional serial study, eligible interconnection 
customers would be required to execute a transitional serial 
interconnection facilities study agreement to codify their choice. At 
the time of execution of such agreement, the interconnection customer 
would be required to provide a deposit equal to 100% of the 
interconnection facility and network upgrade costs allocated to the 
interconnection customer in the system impact study report. If the 
customer reaches commercial operation, this deposit would be used 
towards construction costs of the same facilities. If the customer 
withdraws, the deposit would be refunded after the final invoice for 
study costs and the withdrawal penalty are settled. The transitional 
serial study withdrawal penalty would equal nine times the study cost 
because all future interconnection requests may be harmed if the 
transitional projects do not reach commercial operation. Specifically, 
these transitional projects would be included in the base case of the 
transitional cluster study, so a transitional serial project 
withdrawing could cause the entire first cluster to be re-studied. 
Transitional serial projects would also be required to provide evidence 
of exclusive site control for the entire generating facility and 
demonstrate commercial readiness through one of the following: (1) an 
executed term sheet (or comparable evidence) related to a contract for 
the sale of the generating facility or its energy/ancillary services; 
(2) reasonable evidence that the generating facility is included in a 
resource planning entity's resource plan, has received a contract via a 
resource solicitation process, or is being developed for a large end-
use customer; or (3) a provisional LGIA that is not suspended and 
includes a commitment to build the generating facility. We propose that 
the deadline for the interconnection customer to meet all the 
provisions above will be 60 days after the effective date of a 
transmission provider's compliance filing with the final rule. Finally, 
we propose that the transitional serial studies be completed by the 
transmission provider within 90 days after the deadline for eligibility 
requirements to be satisfied.
    159. Existing interconnection customers that opt for the 
transitional cluster study would have to execute a transitional cluster 
study agreement to codify their choice. The costs of this study and the 
identified facilities would be allocated as the costs are allocated for 
future clusters as set forth in the final rule in this proceeding. The 
transitional cluster will be subject to an expedited combined system 
impact and interconnection facilities study. Transitional cluster study 
projects would be required to select Energy Resource Interconnection 
Service (ERIS) \227\ or NRIS.\228\ To ensure that interconnection 
customers are ready to move forward, interconnection customers opting 
for a transitional cluster study would be required to make a $5 million 
deposit. We draw on the evidence provided by PSCo in proposing this 
value; specifically, it is equivalent to a reasonable estimate of the 
costs that would be allocated to the customer via the transitional 
cluster study. We propose to subject this deposit to the same 
conditions as the transitional serial study deposit. Transitional 
cluster study projects also would be required to produce evidence of 
exclusive site control for the entire generating facility and 
demonstrate commercial readiness through one of the same three options 
described above for transitional serial studies. Once again, we propose 
to set the deadline for satisfying these requirements as 60 days after 
the effective date of a transmission provider's compliance filing with 
any final rule. Finally, we propose that the transitional cluster study 
be completed by the transmission provider within 300 days after the 
deadline for eligibility requirements to be satisfied.
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    \227\ ERIS allows the interconnection customer to connect its 
generating facility to the transmission provider's transmission 
system to be eligible to deliver the generating facility's electric 
output using the existing firm or nonfirm capacity of the 
transmission provider's transmission system on an as available 
basis. ERIS in and of itself does not convey transmission service. 
Pro forma LGIP section 1.
    \228\ See supra note 99.
---------------------------------------------------------------------------

    160. We seek comment on whether certain interconnection customers 
with a pending interconnection request prior to the issuance of a final 
rule in this proceeding should be allowed to

[[Page 39961]]

proceed to LGIA execution without entering the transition process, for 
example, interconnection customers with an executed facilities study 
agreement. We seek comment on whether the Commission should require 
transmission providers to accept any additional commercial readiness 
demonstrations for entry into the transition process, and whether 
existing interconnection customers should be permitted to enter the 
transitional cluster study process by posting a deposit in lieu of 
demonstrating commercial readiness. We seek comment on whether five 
million dollars is a reasonable estimate of the costs that would be 
allocated to the customer via the transitional cluster study.

B. Reforms To Increase the Speed of Interconnection Queue Processing

1. Elimination of the Reasonable Efforts Standard
a. Background
    161. The pro forma LGIP requires transmission providers to use 
reasonable efforts to process interconnection requests in a timely 
manner. Reasonable efforts are defined as ``actions that are timely and 
consistent with Good Utility Practice and are substantially equivalent 
to those a Party would use to protect its own interests.'' \229\
---------------------------------------------------------------------------

    \229\ Order No. 2003, 104 FERC ] 61,103 at P 67; pro forma LGIP 
section 1.
---------------------------------------------------------------------------

    162. Specifically, section 2.2 of the pro forma LGIP requires 
transmission providers to use reasonable efforts in processing and 
analyzing interconnection requests. Sections 6.3, 7.4, and 8.3 of the 
pro forma LGIP require transmission providers to use reasonable efforts 
to complete feasibility studies within 45 days, system impact studies 
within 90 days, and facilities studies within 90 or 180 days, depending 
on the requested accuracy of the cost estimate. The pro forma LGIP does 
not include any penalties or financial consequences if a transmission 
provider fails to meet these deadlines.
    163. In the Order No. 845 proceeding, some commenters advocated for 
the elimination of the reasonable efforts standard and imposition of 
firm study deadlines.\230\ The Commission declined to do so, explaining 
that the record in that proceeding did not support such action.\231\ 
Further, the Commission reasoned that ``reliance on improved reporting 
is a preferable approach to encourage timely processing of 
interconnection studies, rather than moving to a regime of firm study 
deadlines.'' \232\
---------------------------------------------------------------------------

    \230\ Order No. 845, 163 FERC ] 61,043 at P 315.
    \231\ Id. P 322.
    \232\ Id. P 323.
---------------------------------------------------------------------------

    164. To improve reporting, the Commission required transmission 
providers to post interconnection study metrics on a quarterly basis to 
increase the transparency of interconnection study completion 
timeframes.\233\ The Commission also adopted a filed report requirement 
pursuant to which transmission providers that exceed study deadlines 
for more than 25% of any study type for two consecutive quarters must 
file informational reports at the Commission.\234\ In adopting these 
requirements, the Commission reasoned that the increased transparency 
should provide for improved interconnection queue management.\235\ The 
Commission also explained that the informational requirements could 
highlight systemic problems in interconnection study processing and 
could be useful to the Commission in determining if additional action 
is required to address interconnection study delays in the future.\236\
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    \233\ Id. P 305.
    \234\ Id. PP 290, 305.
    \235\ Id. P 306.
    \236\ Id. PP 309, 323.
---------------------------------------------------------------------------

b. Need for Reform
    165. The transmission provider reporting requirements adopted in 
Order No. 845 indicate that the failure to timely complete 
interconnection studies is a significant problem nationwide. Appendix A 
to this NOPR compiles the interconnection study metrics that 
transmission providers publicly posted in 2021 in compliance with Order 
No. 845. The data shows that almost 1,900 interconnection studies were 
delayed as of the end of Q4 2021. Additionally, in February 2022, the 
following transmission providers submitted required informational 
reports to the Commission because they exceeded an interconnection 
study deadline for more than 25% of any study type for two consecutive 
quarters: Arizona Public Service Company, Avista, Dominion, Duke, FP&L, 
ISO-NE, LG&E/KU, MISO, Northwestern Corp, NYISO, PacifiCorp, PJM, PNM, 
Puget Sound, Tri-State, and Tucson Electric.\237\ Common explanations 
for these study delays include the high volume of interconnection 
requests,\238\ re-studies caused by withdrawal of higher-queued 
interconnection requests,\239\ and coordination among transmission 
owners, affected systems, and interconnection customers.\240\
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    \237\ Arizona Pub. Serv. Co., Filing, Docket No. ER19-1939-000 
(filed Feb. 14, 2022); Avista Corp., Filing, Docket No. ER19-1959-
000 (filed Feb. 11, 2022); Dominion, Filing, Docket No. ER19-1946-
000 (filed Feb. 14, 2022); Duke, Filing, Docket No. ER19-1507-000 
(filed Feb. 14, 2022); FP&L, Filing, ER20-1384-000 (filed Feb. 14, 
2022); ISO-NE, Filing, Docket No. ER19-1951-000 (filed Feb. 14, 
2022); LG&E/KU, Filing, Docket No. ER19-1916-000 (filed Feb. 14, 
2022); Midcontinent Indep. Sys. Operator, Inc., Filing, Docket No. 
ER19-1960-004 (filed Feb. 11, 2022); NorthWestern Corp., Filing, 
Docket No. ER19-1943-000 (filed Feb. 14, 2022); NYISO, Filing, 
Docket No. ER19-1949-000 (filed Feb. 14, 2022); PacifiCorp., Filing, 
Docket No. ER19-1948-000 (filed Feb. 9, 2022); PJM Interconnection, 
L.L.C., Filing, Docket No. ER19-1958-003 (filed Feb. 14, 2022); PNM, 
Filing, Docket No. ER19-1955-000 (filed Feb. 15, 2022); Puget Sound, 
Filing, Docket No. ER19-1947-000 (filed Feb. 15, 2022); Tri-State, 
Filing, Docket No. ER20-687-000 (filed Feb. 2, 2022); Tucson 
Electric, Filing, Docket No. ER19-1934-000 (filed Feb. 14, 2022).
    \238\ See, e.g., Dominion, Filing, Docket No. ER19-1946-000, at 
3 (filed Feb. 14, 2022); ISO-NE, Filing, Docket No. ER19-1951-000, 
at 5 (filed Feb. 14, 2022); LG&E/KU, Filing, Docket No. ER19-1916-
000, at 2 (filed Feb. 14, 2022); NYISO, Filing, Docket No. ER19-
1949-000, at 5 (filed Feb. 14, 2022); PJM Interconnection, L.L.C., 
Filing, Docket No. ER19-1958-003, at 1-2, 5-6 (filed Feb. 14, 2022).
    \239\ See, e.g., ISO-NE, Filing, Docket No. ER19-1951-000, at 5 
(filed Feb. 14, 2022); NorthWestern Corp., Filing, Docket No. ER19-
1943-000, at 2 (filed Feb. 14, 2022).
    \240\ See, e.g., ISO-NE, Filing, Docket No. ER19-1951-000, at 5 
(filed Feb. 14, 2022); Midcontinent Indep. Sys. Operator, Inc., 
Filing, Docket No. ER19-1960-004, at 9-12, 14-15 (filed Feb. 11, 
2022); NYISO, Filing, Docket No. ER19-1949-000, at 4 (filed Feb. 14, 
2022); PJM Interconnection, LLC, Filing, Docket No. ER19-1958-003, 
at 13-15 (filed Feb. 14, 2022).
---------------------------------------------------------------------------

    166. Overall, the data demonstrate that nearly all transmission 
providers across the country regularly fail to meet interconnection 
study deadlines. Importantly, the data show that many of the 
transmission providers that have implemented some of the reforms that 
we propose in this NOPR, such as a first-ready, first-served cluster 
study process, still often fail to meet interconnection study 
deadlines. We believe that this indicates the potential need for 
further reforms to better ensure that transmission providers meet 
interconnection study deadlines. In particular, we believe that the 
reasonable efforts standard in the pro forma LGIP contributes to 
interconnection study delays because transmission providers do not face 
any consequence for missing study deadlines.\241\
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    \241\ May Joint Task Force Tr. 89:6-25 (Ted LeVar) (encouraging 
FERC to examine ``appropriate consequences to the transmission 
providers when they don't comply with the tariffs,'' including by 
missing study deadlines).
---------------------------------------------------------------------------

    167. The timely provision of interconnection service is critical to 
maintaining just and reasonable rates. As such, this NOPR proposes 
reforms to remedy several well-established sources of delay, such as 
speculative

[[Page 39962]]

interconnection requests, affected systems coordination, and serial 
interconnection queues. While we expect that these reforms will yield a 
more efficient process, we also believe that it is appropriate to 
establish mechanisms to hold transmission providers accountable for the 
timely execution of their duties under the tariff. The data collected 
pursuant to Order No. 845 indicates that the reasonable efforts 
standard does not provide a meaningful incentive for the transmission 
providers to complete their studies within the deadlines established in 
their tariffs. Indeed, the fact that the Commission has never found a 
transmission provider to have violated the reasonable efforts standard 
despite wide-spread study delays further heightens this concern.\242\ 
Accordingly, we preliminary find that use of the reasonable efforts 
standard results in rates that are unjust and unreasonable.
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    \242\ See, e.g., EDF v. MISO, 163 FERC ] 61,003, at P 47, order 
on reh'g, 165 FERC ] 61,071, at PP 7-12 (2018); California Indep. 
Sys. Operator Corp., 124 FERC ] 61,292 at PP 188-189, 199.
---------------------------------------------------------------------------

c. Proposal
    168. We propose to revise the pro forma LGIP to eliminate the 
reasonable efforts standard for transmission providers completing 
interconnection studies, and instead impose firm study deadlines and 
establish penalties that would apply when transmission providers fail 
to meet these deadlines.\243\ Specifically, we propose to revise 
sections 2.2, 3.5.4(i), 7.4, 8.3, and Attachment A to Appendix 4 of the 
pro forma LGIP to remove the phrase ``reasonable efforts'' in relation 
to the completion of cluster studies and facilities studies.
---------------------------------------------------------------------------

    \243\ This proposal would not affect the application of the 
reasonable efforts standard in other contexts, such as construction 
of network upgrades or legally ordered disclosure of confidential 
information. Pro forma LGIP sections 12.2.2, 13.1.6.
---------------------------------------------------------------------------

    169. Furthermore, we propose to add a new section 3.9 to the pro 
forma LGIP to impose financial penalties on transmission providers that 
fail to meet study deadlines \244\ for cluster studies, cluster re-
studies, facilities studies, and affected system studies,\245\ except 
in situations where force majeure is determined to be applicable. By 
cluster studies,\246\ we mean those that are part of the first-ready, 
first-served cluster study process that we propose in this NOPR, and we 
exclude the proposed transitional cluster study process from this 
meaning. Specifically, we propose to require transmission providers 
that do not complete a cluster, cluster re-study, facilities, or 
affected system study by the deadline specified in the pro forma LGIP 
to pay a penalty of $500 per day that the study is late. For example, a 
transmission provider that misses a study deadline by 150 days would be 
penalized $75,000. We believe that $500 per day is an appropriate 
penalty because (1) it is in line with the penalties applied in the 
context of studies performed for transmission service requests, and (2) 
it is high enough to incent transmission providers to comply with study 
deadlines, without being unnecessarily punitive.\247\ Such penalties 
would be distributed to the delayed interconnection customers on a pro 
rata basis to offset their study costs. Consistent with other 
penalties, we propose that such penalties would not be recoverable in 
transmission rates.\248\
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    \244\ See Preventing Undue Discrimination & Preference in 
Transmission Service, Order No. 890, 72 FR 12266 (Mar. 15, 2007), 
118 FERC ] 61,119, at P 1340 (2007) (imposing penalties when 
transmission providers fail to meet study deadlines for transmission 
service request).
    \245\ Specifically, we propose to penalize transmission 
providers when they fail to meet study deadlines for studying 
interconnection requests on an affected transmission system.
    \246\ See supra PP 64-76.
    \247\ See Order No. 890, 118 FERC ] 61,119 at P 1347.
    \248\ See Order No. 890, 118 FERC ] 61,119 at P 1357 (``We will 
prohibit all jurisdictional transmission providers from recovering 
penalties for late studies from transmission customers); Order No. 
2003, 104 FERC ] 61,103 at P 884 (``[B]ecause liquidated damages 
liability will not have to be paid unless the Transmission Provider 
is at fault, we conclude that these damages will not be considered 
just and reasonable costs of service and will not be recoverable in 
transmission rates.'').
---------------------------------------------------------------------------

    170. We propose to cap penalties at 100% of the total study deposit 
received for the late study to provide a safeguard against overly large 
penalties that may be considered punitive. We further propose that no 
financial penalties on transmission providers that fail to meet study 
deadlines shall be assessed until one cluster study cycle (that is not 
a transitional study cycle) after the effective date accepted on 
compliance for implementing the reforms proposed herein. Thus, for 
example, once the reforms proposed herein become effective, a 
transmission provider would not be subject to penalties until after the 
completion of (1) the transition process, and (2) the first cluster 
study cycle applying the first-ready, first-served cluster study 
process. We also propose a 10-day grace period such that no penalties 
will be assessed for a study that is delayed by 10 business days or 
less. However, for studies that are delayed by more than 10 business 
days, the penalty would be calculated based on the first business day 
the study was late. For example, a transmission provider whose study 
was delayed by 11 business days would pay a $5,500 penalty. 
Additionally, we propose to permit the transmission provider to extend 
the deadline or a particular study by 30 days by mutual agreement of 
the transmission provider and all interconnection customers in the 
relevant study. In such a scenario, we propose that no penalties will 
be assessed for missing the original deadline. Finally, we propose to 
require transmission providers to post to its OASIS or a public website 
on a quarterly basis (1) the total amount of such penalties from the 
previous quarter, and (2) the highest amount of such penalties to a 
single interconnection request from the previous quarter.
    171. We recognize that the application of penalties for late 
interconnection studies in the context of RTOs/ISOs may raise several 
unique issues. Consistent with our findings in Order No. 890, we 
continue to believe that penalties are appropriate in certain 
circumstances to incent compliance with tariff deadlines, 
notwithstanding the RTO's/ISO's status as a not-for-profit entity. As 
the Commission explained in Order No. 890, ``we believe that all 
entities administering the tariff should operate under the same rules, 
reporting obligations, and performance metrics . . . Non-profit 
transmission providers have other sources of money to pay penalties 
beyond the revenue they collect for sales of transmission service.'' 
\249\ Similarly, in Order No. 672-A, the Commission noted ``it is not 
arbitrary and capricious to treat all operators alike, including RTOs 
and ISOs, in terms of their liability for violation of a Reliability 
Standard.'' \250\ We continue to believe it is appropriate to apply 
penalties to RTOs/ISOs in a similar manner to other transmission 
providers.
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    \249\ Id. P 1357.
    \250\ Rules Concerning Certification of the Elec. Reliability 
Org.; & Procs. for the Establishment, Approval, & Enforcement of 
Elec. Reliability Standards, Order No. 672-A, 71 FR 19814 (Apr. 18, 
2006), 114 FERC ] 61,104, at P 56 (2006).
---------------------------------------------------------------------------

    172. In the context of reliability penalties, the Commission has 
recognized that, as not-for-profit entities, RTOs/ISOs may need to seek 
to recover from other entities the costs of monetary penalties imposed 
on the RTO/ISO.\251\ As such, the Commission has approved tariff 
provisions creating mechanisms to permit RTOs/ISOs to recover monetary 
penalties imposed by NERC for violations of reliability

[[Page 39963]]

standards from entities that are responsible for, or contributed to, 
such violations, or from a broader set of entities.\252\ We recognize 
that similar tariff provisions are likely to be necessary to permit 
RTOs/ISOs to recover the costs of penalties they are obligated to pay 
for failing to meet interconnection study deadlines. Therefore, to 
ensure that RTOs/ISOs will be able to pay any such penalties, we 
propose to require RTOs/ISOs to propose tariff provisions that require 
the RTO/ISO to submit requests to recover the costs of specific 
interconnection study penalties under FPA section 205. Similar to the 
ability of RTOs/ISOs to seek to directly assign monetary penalties for 
violations of reliability standards to other responsible entities, 
RTOs/ISOs may include a provision that the RTO/ISO may make a FPA 
section 205 filing seeking to allocate such penalties to the 
appropriate transmission owner that is responsible for, or contributed 
to, the delay.\253\ However, given the complexity recognized above 
regarding assigning monetary penalties to RTOs/ISOs for late 
interconnection studies, we seek comment on whether there is a more 
appropriate method for assigning such penalties in RTOs/ISOs. More 
generally, we seek comment on whether penalties will effectively incent 
more timely completion of interconnection studies in RTOs/ISOs, and/or 
whether monetary penalties may have adverse consequences (e.g., 
incenting timeliness over accuracy or increased waiver requests).
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    \251\ Reliability Standard Compliance & Enf't in Regions with 
Reg'l Transmission Organizations or Indep. Sys. Operators, 122 FERC 
] 61,247 (2008) (Reliability Penalty Guidance Order).
    \252\ Midcontinent Indep. Sys. Operator, Inc., 147 FERC ] 61,022 
(2014); Cal. Indep. Sys. Operator Corp., 138 FERC ] 61,156 (2012); 
N.Y. Indep. Sys. Operator, Inc., 127 FERC ] 61,196 (2009).
    \253\ See Reliability Penalty Guidance Order, 122 FERC ] 61,247 
at P 23.
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    173. Additionally, we seek comment on the proposed penalty 
structure, including whether the penalty amount for a cluster study 
should be $500 per day or whether an approach that accounts for the 
number of interconnection customers affected, such as $100 per day per 
customer in the delayed study, would be more appropriate. We further 
seek comment on how and when the Commission should require transmission 
providers to communicate to interconnection customers the status of 
studies that may be delayed. Additionally, we seek comment on whether 
to include exceptions to the penalty other than force majeure, and if 
so, what those exceptions should be. Lastly, to improve transparency, 
we seek comment on whether Commission staff should issue periodic 
reports summarizing the status of transmission providers' queues and 
timeliness of interconnection studies based on information collected 
through existing reporting requirements,\254\ and whether this periodic 
report should be in addition to or a substitute for the proposed 
monetary penalties discussed above.
---------------------------------------------------------------------------

    \254\ Order No. 845, 163 FERC ] 61,043 at P 305.
---------------------------------------------------------------------------

2. Affected Systems
a. Background
    174. In Order No. 2003, the Commission found that the transmission 
system with which a generating facility directly interconnects (the 
host transmission system) must allow any affected system \255\ to 
participate in the process when conducting interconnection studies, as 
well as incorporate the legitimate safety and reliability needs of the 
affected system. However, the Commission rejected a request to require 
that an affected system operator \256\ participate in the host 
transmission provider's generator interconnection process.\257\ 
Instead, section 3.6 of the pro forma LGIP requires the host 
transmission provider to coordinate required interconnection studies 
with affected system operators and, if possible, to include those 
results within the host transmission provider's applicable results in 
the LGIP study process.
---------------------------------------------------------------------------

    \255\ An affected system is an electric system other than the 
transmission provider's transmission system that may be affected by 
the proposed interconnection. Pro forma LGIP section 1; pro forma 
LGIA art. 1.
    \256\ An affected system operator is an entity that operates an 
affected system. Pro forma LGIP section 1; pro forma LGIA art. 1.
    \257\ Order No. 2003, 104 FERC ] 61,103 at P 121.
---------------------------------------------------------------------------

    175. Specifically, the pro forma LGIP requires that host 
transmission providers: (1) coordinate the conduct of any studies 
required to determine the impact of an interconnection request on an 
affected system with the affected system operator and, if possible, 
include those study results in the transmission provider's applicable 
interconnection study; and (2) include affected system operators in all 
meetings held with the interconnection customer.\258\ The pro forma 
LGIP further requires affected system operators to ``cooperate with 
[Host] Transmission Provider . . . in all matters related to the 
conduct of studies and the determination of modifications to Affected 
Systems.'' \259\
---------------------------------------------------------------------------

    \258\ See pro forma LGIP section 3.6.
    \259\ Id.
---------------------------------------------------------------------------

    176. The affected system operator is not bound by the terms of the 
host transmission provider's pro forma LGIP, is not a party to any 
study agreement, and is not otherwise required to meet any deadlines to 
complete the affected system study. Additionally, in Order No. 2003, 
the Commission explicitly stated that a host transmission provider may 
proceed with the generator interconnection process even if an affected 
system operator does not provide information in a timely manner by not 
taking into account any information that could have been provided by 
the affected system operator, provided that the interconnection itself 
(as distinct from any future delivery service) will not endanger 
reliability.\260\ The Commission also stated that neither the pro forma 
LGIP nor the pro forma LGIA is intended to expose the host transmission 
provider to liability resulting from delays by the affected system 
operator.\261\
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    \260\ Order No. 2003, 104 FERC ] 61,103 at P 121; see also Order 
No. 2003-A, 106 FERC ] 61,220 at P 114 (clarifying on rehearing that 
delays by an affected system operator are not an acceptable reason 
to deviate from the timetables established in Order No. 2003 unless 
the interconnection will endanger reliability).
    \261\ Order No. 2003, 104 FERC ] 61,103 at P 121.
---------------------------------------------------------------------------

    177. The Commission did not specifically require in Order No. 2003 
that host transmission providers post their process for coordinating 
with affected system operators.\262\ The Commission also did not 
require that affected system operators give interconnection customers 
the affected systems study results at any specific time in the 
generator interconnection process.
---------------------------------------------------------------------------

    \262\ Transmission providers are obliged to coordinate the 
conduct of affected system studies (see pro forma LGIP section 3.6), 
but the Commission has not required transmission providers to follow 
any specific affected systems study process.
---------------------------------------------------------------------------

    178. The Commission convened a technical conference in Docket No. 
AD18-8-000 to explore affected systems coordination issues and address 
a complaint filed by EDF in Docket No. EL18-26-000 regarding affected 
systems coordination between PJM, MISO, and SPP. In the order on 
complaint and technical conference, the Commission declined to act 
generically to reform affected systems requirements but required PJM, 
MISO, and SPP to clarify certain aspects of their affected systems 
study processes in their tariffs and joint operating agreements 
(JOA).\263\
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    \263\ EDF v. MISO, 168 FERC ] 61,173.
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b. Need for Reform
    179. As further discussed below, affected systems study processes 
lack consistency between transmission providers.\264\ Interconnection 
customers

[[Page 39964]]

need a timely cost determination to make decisions to facilitate the 
interconnection of their generating facilities, and without any 
requirement for a timely cost determination, affected system operators 
may not return study results in time for interconnection customers to 
make those decisions.\265\ As explained earlier, interconnection queues 
have dramatically increased in size and are only getting larger. 
Without an efficient affected system study process that enables 
interconnection customers to receive affected system study results and 
cost estimates in a timely manner, there will continue to be late-stage 
withdrawals due to unexpected high costs for affected system network 
upgrades and resulting re-studies and delays.\266\
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    \264\ See May Joint Task Force Tr. 67:6-8 (Dan Scripps) 
(``Specifically, there may be an opportunity to create a general 
framework that would be consistent across RTO seams.''); id. 68:12-
18 (Ted Thomas) (agreeing with Chair Scripps that ``the most 
effective place that FERC can operate is in the area where you have 
two RTOs and the real issue is getting them on the same page'').
    \265\  See id. 65:2-8 (Dan Scripps) (citing affected systems 
studies as ``a growing source of delay and cost uncertainty for 
interconnection customers, both in terms of just the timelines 
involved and the difficulty in pinning those down'').
    \266\ See id. 67:14-17 (Dan Scripps) (``[W]e expect the affected 
systems study process to become increasingly critical as more 
renewable resources come online in renewable rich areas and 
transmission capacity becomes ever more scarce.'').
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    180. During the technical conference in Docket No. AD18-8-000 and 
in comments on the ANOPR,\267\ interconnection customers have 
recommended standardization of the affected systems study process. 
Specifically, they requested that the Commission standardize the timing 
of study results, the amount of study costs, and modeling criteria used 
in affected systems studies.\268\
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    \267\ See, e.g., Clean Energy Coalition, Supplemental Comments, 
Docket No. RM21-17-000, at 9-12 (filed Feb. 14, 2022).
    \268\ See also May Joint Task Force Tr. 64:18-24 (Dan Scripps) 
(stating that ``FERC may have a larger role to play in issues that 
cross RTO boundaries, particularly, around cross-RTO affected system 
studies where individual RTOs have limited control'' and certainty 
``around the timing of affected systems studies'').
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    181. Currently, detailed information about any two transmission 
providers' affected systems study processes is found in multiple 
transmission provider documents and is not necessarily cohesive, which 
creates confusion and uncertainty. For example, some information about 
the study process may be contained in a JOA between two transmission 
providers and some may be in the transmission provider's business 
practice manuals. However, much of the study process coordination 
between transmission providers is ad hoc and, therefore, unclear to 
interconnection customers. Affected systems study processes are also 
highly variable based on region and transmission provider and may not 
be uniform even across a single transmission provider's footprint.\269\
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    \269\ Compare Sw. Power Pool, Inc., Rate Schedule FERC No. 9, 
MISO-SPP Joint Operating Agreement (1.0.0), with Sw. Power Pool, 
Inc., Rate Schedule FERC No. 10, SPP-AECI Joint Operating Agreement 
(0.0.0).
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c. Affected Systems Study Process
i. Need for Reform
    182. We preliminarily find that the lack of an affected system 
study process results in Commission-jurisdictional rates that are 
unjust and unreasonable because an interconnection customer cannot 
evaluate its costs in a timely manner, which increases uncertainty and 
may result in late-stage withdrawals and subsequent re-studies, delays, 
and increased costs to the remaining interconnection customers in the 
interconnection queue. Without a transparent affected system study 
process, neither an interconnection customer nor the Commission can 
evaluate whether the affected system operator has acted in an unduly 
discriminatory manner. Reforms to improve transparency and 
coordination, therefore, may be necessary to establish a just and 
reasonable and not unduly discriminatory or preferential affected 
systems study process.
ii. Proposal
    183. We propose to revise the pro forma LGIP to include an affected 
systems study process. The proposed process includes initial 
notification, affected system scoping meeting, study process, cost 
allocation, study results and assessment, and financial penalties 
assessment. We also propose to add several definitions to section 1 of 
the pro forma LGIP, including ``Affected System Interconnection 
Customer,'' ``Affected System Network Upgrades,'' ``Affected System 
Scoping Meeting,'' and ``Affected System Study.''
    184. In subsection 3.6.1 of the pro forma LGIP, we propose to 
require that the transmission provider notify the affected system 
operator of a potential affected system impact caused by the 
interconnection request within 10 business days after the close of the 
first event giving rise to the identification of an affected system 
impact. For transmission providers utilizing a cluster study process, 
this event could be (1) the cluster request window, (2) the customer 
engagement window, (3) the cluster study, or (4) the cluster re-study 
as part of the first-ready, first-served cluster study process we also 
propose in this NOPR (described above in section II.A). At the same 
time that the transmission provider notifies the affected system, we 
propose to require the transmission provider to provide the 
interconnection customer with a list of potential affected systems, 
along with relevant contact information. The transmission provider 
would be required to provide the affected system operator data monthly, 
or more frequently as needed, about its transmission system and 
generation in its interconnection queue for the duration of the 
affected system study process.
    185. In subsection 3.6.2 and section 9 of the pro forma LGIP, we 
also propose several requirements on transmission providers acting as 
an affected system, whose transmission systems may be impacted by the 
proposed interconnection of a generating facility to a transmission 
system other than transmission provider's transmission system. We 
propose to add a new definition for the interconnection customer whose 
proposed interconnection with the host transmission system impacts the 
transmission provider acting as the affected system: the ``Affected 
System Interconnection Customer.'' \270\ We propose to require the 
transmission provider acting as an affected system, within 15 business 
days of receiving notification from the host transmission provider of 
an impact on its transmission system, to respond in writing indicating 
whether it intends to perform an affected system study. We believe that 
the proposed initial notification requirement would streamline the 
affected systems study process and minimize miscommunications that lead 
to delays and cost uncertainty for interconnection customers as well as 
potential impacts on affected systems that may be unaccounted for 
absent an effective coordination process. Firm deadlines ensure that 
the notification process advances expediently and that the obligations 
of each party are clear.
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    \270\ As we propose to define in the LGIP, the ``Affected System 
Interconnection Customer'' shall mean ``any entity that proposes 
interconnection of a device for the production and/or storage for 
later injection of electricity to a transmission system other than 
Transmission Provider's Transmission System.'' See proposed LGIP 
section 1.
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    186. In subsection 3.6.2 of the pro forma LGIP, we propose to 
require that the transmission provider acting as the affected system 
schedule an affected system scoping meeting within seven business days 
after providing written notification that it intends to conduct an

[[Page 39965]]

affected system study. We also propose to require that the affected 
system scoping meeting be held within seven business days after it is 
scheduled. The transmission provider acting as the affected system must 
include the affected system interconnection customer, using best 
efforts to include the transmission provider with whom interconnection 
has been requested. The purpose of the affected system scoping meeting 
is to discuss the potential impacts on transmission provider's 
transmission system and how they may be mitigated. Within 15 business 
days after the close of this meeting, the transmission provider would 
share with all scoping meeting attendees the schedule to complete the 
affected system study. We believe that these requirements will ensure 
that all relevant parties are timely aware of relevant impacts to 
affected systems and have the opportunity to discuss potential required 
network upgrades and mitigation measures.
    187. In subsection 3.6.3 of the pro forma LGIP, we propose to 
require that the transmission provider provide data monthly, or more 
frequently as needed, regarding the amount and location of generation 
in the transmission provider's interconnection queue as well as updated 
information about the transmission provider's transmission system.
    188. In section 9 of the pro forma LGIP, we propose to require the 
transmission provider acting as the affected system to tender an 
affected system study agreement to the affected system interconnection 
customer within five business days of sharing the schedule for the 
affected system study.\271\ The affected system interconnection 
customer must then return the executed affected system study agreement 
within 10 business days of receipt.
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    \271\ See infra PP 197-198 for an explanation of the proposed 
pro forma affected system study agreement.
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    189. In subsection 9.2 of the pro forma LGIP, we propose to require 
the transmission provider acting as the affected system to use what we 
refer to as a ``first-ready, first-served interconnection queue 
priority approach,'' which should explain how affected system network 
upgrade costs will be allocated by that transmission provider amongst 
interconnection customers in separate transmission systems.\272\ 
Specifically, in some situations, both affected system interconnection 
customers and interconnection customers on the transmission system of 
the transmission provider acting as the affected system cause the need 
for affected system network upgrades; in this case, each 
interconnection customer's relative queue priority must be determined. 
A first-ready, first-served interconnection queue priority approach 
would require the transmission provider acting as the affected system 
to assign the affected system interconnection customer an 
interconnection queue position its interconnection queue according to 
when the affected system interconnection customer executes an affected 
system study, rather than when the affected system interconnection 
customer entered its host transmission provider's queue. Such a 
position would be equivalent to that of a transmission provider's own 
interconnection customer that had just received its cluster study 
report. Under subsection 9.8 of the pro forma LGIP, the transmission 
provider acting as the affected system must allocate network upgrade 
costs in accordance with LGIP section 4.2.3, which requires using a 
proportional impact method, as discussed above in section II.A.4.
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    \272\ See, e.g., Sw. Power Pool, Inc., 179 FERC ] 61,148 (2022) 
(accepting JOA between SPP and MISO with similar queue priority 
provisions setting forth, in section 9.4 of the JOA, procedures 
under which ``[t]he relative queue position for interconnection 
requests in the MISO or SPP interconnection queues will be 
determined . . .'').
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    190. In subsection 9.6 of the pro forma LGIP, the transmission 
provider acting as the affected system must provide the affected system 
interconnection customer with affected system study results within 90 
calendar days after the receipt of the executed affected system study 
agreement. The transmission provider acting as the affected system 
would be required to include in the study results both the estimated 
costs for any network upgrades identified in the study and the timing 
for the construction of those network upgrades.
    191. In subsection 9.9 of the pro forma LGIP, we also propose to 
require, after the completion of the affected system study, that the 
transmission provider acting as the affected system provide the 
affected system interconnection customer with an affected system 
facilities construction agreement within 30 calendar days after 
providing the affected system study results.\273\ The affected system 
interconnection customer would then be required to notify the 
transmission provider within five business days of executing its 
generating interconnection agreement with its host transmission 
provider whether it would like to execute the affected system 
facilities construction agreement or request it to be filed unexecuted 
with the Commission. The transmission provider acting as the affected 
system would then be required to execute (or file unexecuted) the 
affected system facilities construction agreement within five business 
days after receiving such direction from the affected system 
interconnection customer.
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    \273\ See infra PP 200-201 for a discussion of the proposed pro 
forma affected system facilities construction agreement.
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    192. In subsection 9.6 of the pro forma LGIP, we propose to impose 
financial penalties on transmission providers acting as the affected 
systems that fail to timely complete actions required within section 9 
of the pro forma LGIP, in accordance with the proposed new section 3.9 
of the pro forma LGIP, discussed above.\274\ We reiterate that 
transmission providers conducting cluster studies are not required to 
delay those studies by waiting for the results of affected systems 
studies. A host transmission provider would not be penalized for a late 
Affected System Study, and we do not require a host transmission 
provider to wait on the results of an Affected System Study to conduct 
its Cluster Study, so any Affected System Study delay would not delay 
such a Cluster Study. The transmission provider acting as the affected 
system is the only entity that would be penalized for failure to timely 
complete an Affected System Study.
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    \274\ See supra P 169.
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    193. These proposals aim to streamline the affected systems study 
process by addressing concerns about the lack of transparency and 
certainty in the affected systems study process. A detailed affected 
systems study process within the pro forma LGIP would prevent the use 
of ad hoc approaches that may give rise to interconnection customers 
being treated in an unjust, unreasonable, unduly discriminatory, or 
preferential manner. Such an approach would provide interconnection 
customers certainty regarding expectations throughout the generator 
interconnection process, including greater cost certainty when it is 
time to finalize an LGIA. Definitive deadlines should ensure that the 
process moves along expediently, provide clarity and certainty in costs 
prior to an interconnection customer finalizing an LGIA, and provide 
increased transparency throughout the study process that should 
minimize opportunities for undue discrimination. We seek comment on the 
proposed affected systems study process.

[[Page 39966]]

d. Pro Forma Agreements
i. Need for Reform
    194. We are concerned that the lack of pro forma agreements related 
to affected system studies and the construction of network upgrades on 
affected systems is both hindering the efficiency of the generator 
interconnection process through increased litigation over such 
agreements and leaving the door open to potential unduly discriminatory 
behavior against interconnection customers whose interconnection 
requests necessitate affected system network upgrades. In Order No. 
2003, the Commission found that standard agreements applicable to large 
generating facilities would, among some other functions, minimize 
opportunities for undue discrimination and expedite the development of 
new generation, while protecting reliability and ensuring that rates 
are just and reasonable.\275\
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    \275\ See Order No. 2003, 104 FERC ] 61,103 at PP 12, 919.
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    195. We believe that there is a pressing need for (1) a 
standardized, uniformly applicable affected system study agreement that 
stipulates how to study the impact of interconnecting generating 
facilities on an affected system to identify network upgrades needed to 
accommodate the interconnection request and (2) a standardized affected 
system facilities construction agreement to set the terms and 
conditions for the construction of those network upgrades to minimize 
opportunities for undue discrimination against interconnection 
customers and expedite the development of new generation.\276\ In Order 
No. 2003, the Commission stated that, if an affected system operator 
fails to provide information in a timely manner, the transmission 
provider may proceed in the generator interconnection process without 
taking into account the information that could have been provided by 
the affected system operator. However, there is no definition for a 
``timely manner'' and affected system study delays could result in 
delays to the host transmission provider's interconnection study 
process.\277\ Additionally, the Commission found in Order No. 2003 
that, when an interconnection customer is required to pay for network 
upgrades on an affected system, the interconnection customer must enter 
into an agreement with the affected system operator unless the costs 
are incorporated in the interconnection agreement between the 
interconnection customer and the host transmission provider.\278\ 
Although the Commission incorporated this requirement into article 
11.4.1 of the pro forma LGIA, the pro forma LGIP does not contain a pro 
forma agreement that governs the terms and conditions of the affected 
system study process to identify when the interconnection request 
requires network upgrades to be built on the affected system. The 
Commission has recently seen disputes arising from an affected system 
operator attempting to negotiate terms not in accordance with the pro 
forma LGIA and Order No. 2003.\279\ With the increasing number of 
affected system-related disputes, it has become apparent that the 
current approach is an inadequate and inefficient means to address 
affected system issues.
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    \276\ Id. P 11.
    \277\ Id. P 121.
    \278\  Id. P 739.
    \279\ See Duke Energy Progress, LLC, 177 FERC ] 61,001, reh'g 
denied, 177 FERC ] 62,114 (2021), appeal pending sub nom. Duke 
Energy Progress, LLC v. FERC, No. 21-1272 (Dec. 27, 2021); see also 
Edgecombe Solar Energy LLC v. Duke Energy Progress, LLC, 177 FERC ] 
61,122 (2021).
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    196. We preliminarily find that it is unjust and unreasonable to 
leave affected systems facilities construction agreements wholly up to 
individualized negotiations because such negotiations leave open 
opportunities for undue discrimination against interconnection 
customers throughout the process. Among other things, the pro forma 
LGIA sets terms and conditions for the construction of network upgrades 
identified as necessary to interconnect the generating facility to the 
transmission owner's transmission system to which it will directly 
connect. However, the Commission does not have a similar pro forma 
agreement governing the construction of affected system network 
upgrades. Notably, MISO has both a pro forma facilities construction 
agreement and a pro forma multi-party facilities construction agreement 
in its tariff for instances when an interconnection customer is 
interconnecting to the MISO transmission system and network upgrades 
are needed to ensure reliability on a neighboring transmission owner's 
transmission system within the MISO footprint.\280\ Specifically, 
MISO's pro forma facilities construction agreement is an agreement for 
network upgrades constructed for an interconnection customer by a MISO 
transmission owner other than the MISO transmission owner with which it 
directly interconnects. MISO's pro forma multi-party facilities 
construction agreement is used when multiple interconnection requests 
cause the need for construction of common network upgrades (network 
upgrades that are constructed by a transmission owner for more than one 
interconnection customer) on the transmission owner's transmission 
system to which the interconnection customer is either directly or 
indirectly connecting to in MISO. The Commission found in its 
acceptance of these pro forma agreements that MISO accomplished the 
goal of Order No. 2003 to standardize procedures. As evidence of the 
importance of these pro forma agreements, which set consistent terms 
and conditions for the construction of network upgrades necessary for 
an interconnection customer's interconnection, more than 69 multi-party 
facilities construction agreements have been executed since 2017.\281\
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    \280\ MISO Tariff, attach. X, app. 8 (Facilities Construction 
Agreement) (45.0.0); id. app. 9 (Multi-Party Facilities Construction 
Agreement) (45.0.0).
    \281\ MISO, Transmittal, Docket No. ER21-2793-000 (filed Aug. 
31, 2021).
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ii. Proposal
(a) Pro Forma Affected System Study Agreement
    197. We propose to establish a pro forma affected system study 
agreement to further improve the efficiency and transparency of the 
interconnection customer's interaction with the affected system 
operator. We believe that a pro forma affected system study agreement 
could reduce uncertainty for the interconnection customer and save time 
by reducing the need for individualized negotiations for each 
interconnection customer with the affected system operator.
    198. We propose to model the pro forma affected system study 
agreement, incorporated as a new Appendix 15 to the pro forma LGIP, on 
the form of the existing pro forma system impact study agreement, with 
necessary minor revisions to the party names.\282\ Specifically, the 
affected system interconnection customer and transmission provider 
acting as the affected system would be parties to the agreement to 
ensure close coordination, which should reduce delays and errors in the 
affected system study process.
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    \282\ We also note that the Commission recently approved 
adoption of a pro forma affected system study agreement for CAISO, 
which CAISO proposed in anticipation of an increase in the need to 
perform affected system studies. Cal. Indep. Sys. Operator Corp., 
178 FERC ] 61,223 (2022) (delegated order).
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    199. In article 5 of the proposed affected system study agreement, 
we propose to require the affected system study to provide the 
following information: identification of any circuit breaker short 
circuit capability limits

[[Page 39967]]

exceeded as a result of the interconnection; identification of any 
thermal overload or voltage limit violations resulting from the 
interconnection; identification of any instability or inadequately 
damped response to system disturbances resulting from the 
interconnection; a non-binding, good faith estimated cost of facilities 
required to interconnect the Affected System Interconnection Customer's 
project to its host transmission provider's system; and a description 
of how such facilities will address the identified short circuit, 
instability, and power flow issues. We seek comment on whether the 
information required for the study report provides adequate information 
to the affected system interconnection customer to understand the 
results of the affected system study.
(b) Pro Forma Affected Systems Facilities Construction Agreement
    200. We propose to revise the pro forma LGIP to add a new Appendix 
16 to include a pro forma affected systems facilities construction 
agreement. A pro forma affected systems facilities construction 
agreement would improve the efficiency of the generator interconnection 
process by reducing delays through improved coordination among the 
parties and minimizing opportunities for undue discrimination.
    201. The proposed Appendix 16 includes 11 articles based on the pro 
forma facilities construction agreement included in MISO's tariff, 
including: terms of the agreement; construction of network upgrades; 
taxes; force majeure; information reporting; security, billing, and 
payments; assignment; indemnity; breach, cure, and default; 
termination; contractors; confidentiality; information access and audit 
rights; dispute resolution; and notices. Appendix A to the agreement 
details network upgrades, cost estimates and responsibility, 
construction schedule, and payment schedule. Appendix B discusses how 
to handle notification of completed construction. Appendix C includes 
the transmission provider site map, the site plan, the network upgrades 
plan and profile, and the estimated cost of the network upgrades.
    202. The affected systems facilities construction agreement would 
be entered into by the transmission provider acting as the affected 
system and the affected system interconnection customer. The 
transmission provider acting as the affected system would be 
responsible for the design, procurement, construction, and installation 
of all network upgrades identified in Appendix A using reasonable 
efforts to complete construction consistent with the schedule 
identified in Appendix A. The affected system interconnection customer 
will initially fund the cost of any assigned network upgrades and be 
reimbursed by the transmission provider acting as the affected system. 
Because affected system interconnection customers do not take 
transmission service over the affected system's transmission system, we 
do not require transmission providers acting as affected systems to 
reimburse affected system interconnection customers with transmission 
service credits. Rather, we propose to require that the transmission 
provider acting as the affected system repay the affected system 
interconnection customer the full cost of network upgrades, plus 
interest, in a term to be mutually agreed upon but not to exceed 20 
years. This term mirrors the repayment term in the pro forma LGIA but 
allows for flexibility for the parties to come to another arrangement 
if they prefer. Within six months of construction completion of the 
network upgrades, the transmission provider acting as the affected 
system would invoice the affected system interconnection customer for 
the final construction costs to include a true-up of estimated and 
actual costs. The affected system facilities construction agreement 
would terminate upon the transmission provider acting as the affected 
system's final repayment to the affected system interconnection 
customer. The affected system interconnection customer could also 
terminate the affected system facilities construction agreement with 60 
days' written notice to the transmission provider acting as the 
affected system.
    203. We seek comment on the network upgrade funding and repayment 
provisions in the proposed affected system facilities construction 
agreement. Specifically, we seek comment as to the repayment time frame 
and whether the similarity of the proposal to the repayment terms in 
the pro forma LGIA is appropriate.
    204. We also seek comment on whether any additional articles or 
provisions should be added to the pro forma affected system facilities 
construction agreement or whether the proposed provisions are 
sufficient.
e. Affected System Modeling and Study Assumptions
i. Background
    205. When an interconnection customer submits an interconnection 
request, they must choose to be studied as ERIS or NRIS, depending on 
the level of deliverability they will ultimately seek for the electric 
output of their facility. For interconnection customers seeking to 
deliver their generating facility's electric output using the existing 
firm or non-firm capacity of the transmission provider's system on an 
as-available basis, the interconnection customer will choose an ERIS 
study. A customer will choose an NRIS study when seeking to integrate 
their generating facility with the transmission provider's system (1) 
in a manner comparable to that in which the transmission provider 
integrates its generating facilities to serve native load customers or 
(2) in an RTO/ISO with market-based congestion management, in the same 
manner as network resources.\283\ An NRIS study goes beyond the 
prerequisite ERIS study and uses stricter modeling standards \284\ to 
assess an interconnection request to ensure that the interconnection 
customer's electric output is deliverable to load in aggregate on the 
host transmission provider's system.\285\ Such a deliverability 
analysis varies from region to region but can analyze anything from 
various stressed dispatch scenarios to an additional set of 
contingencies. As such, an NRIS study

[[Page 39968]]

will likely identify more network upgrades than an ERIS study.
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    \283\ ``Network Resource shall mean any designated generating 
resource owned, purchased, or leased by a Network Customer under the 
Network Integration Transmission Service Tariff. Network Resources 
do not include any resource, or any portion thereof, that is 
committed for sale to third parties or otherwise cannot be called 
upon to meet the Network Customer's Network Load on a non-
interruptible basis.'' Pro forma LGIP section 1; pro forma LGIA art. 
1.
    \284\ The term ``modeling standard'' refers to the distribution 
factor threshold on a transmission element used by transmission 
providers, such that beyond this threshold an interconnection 
request will require network upgrades. For example, for SPP, if a 
transmission element is found to be overloaded in the study, and an 
NRIS interconnection request has over a 3% distribution factor on 
that element, the requesting entity will be assigned network 
upgrades. SPP uses a 19.5% distribution factor threshold for ERIS 
requests. See EDF v. MISO, 168 FERC ] 61,173 at P 17. A lower 
threshold indicates a stricter modeling standard because a smaller 
impact triggers network upgrades. Additionally, when conducting an 
affected system analysis, although some RTOs/ISOs (PJM and SPP, for 
example) use a modeling standard associated with the same level of 
service as requested on the host transmission provider's 
transmission system, the output of proposed generating facilities is 
always sunk into the host transmission provider's transmission 
system by reducing the output of other generating facilities on that 
system. Id. P 85.
    \285\ See Order No. 2003, 104 FERC ] 61,103 at P 768; Order No. 
2003-A, 106 FERC ] 61,220 at P 500. Specifically, a transmission 
provider studying generating facility for NRIS would study the 
transmission system at peak load, under a variety of severely 
stressed conditions to determine whether, with the generating 
facility operating at full output, the aggregate of generation in 
the local area can be delivered to the aggregate of load, consistent 
with reliability criteria and procedures.
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    206. When an affected system operator is notified of a possible 
impact on its system due to an interconnection request on the host 
transmission provider's system, the host transmission provider must 
specify whether the interconnection customer requested ERIS or NRIS. 
Currently, there is no requirement for transmission providers acting as 
affected system operators to apply either ERIS or NRIS modeling 
standards to study interconnection requests made on neighboring 
systems. For example, MISO, as an affected system, studies all 
interconnection requests from host transmission systems using ERIS 
modeling standards, even if the interconnection customer requested NRIS 
on the host system. In contrast, PJM and SPP, as affected systems, 
study interconnection requests from host transmission systems using the 
modeling standards associated with the level of service requested by 
the interconnection customer on the host transmission system (i.e., 
they study ERIS requests as ERIS and NRIS requests as NRIS).\286\
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    \286\ EDF v. MISO, 168 FERC ] 61,173 at PP 75-76.
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    207. Commenters in Docket No. AD18-8-000 (the affected systems 
coordination technical conference proceeding) \287\ support the MISO 
approach of using ERIS criteria to study affected system 
interconnection requests, regardless of the level of service requested 
by the interconnection customer.\288\ Some argued that the Commission 
should require affected system transmission providers to use the ERIS 
modeling standard for affected system analysis regardless of whether 
the interconnection customer requests NRIS or ERIS in the host 
system.\289\ This is due to the fact that the interconnection customer 
would not get NRIS on the affected system, yet could be required to pay 
for more extensive network upgrades based on the stricter modeling 
assumptions.
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    \287\ Relevant comments are incorporated into the discussion 
below, and a full summary of comments is available in Midcontinent 
Indep. Sys. Operator, Inc., 169 FERC ] 61,173 at PP 79-85.
    \288\ Midcontinent Indep. Sys. Operator, Inc., 169 FERC ] 61,173 
at P 82.
    \289\ Id. P 79.
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i. Need for Reform
    208. The use of different modeling standards can significantly 
alter an interconnection customer's network upgrade costs. As explained 
above, the NRIS modeling standard studies the generating facility's 
full output such that it would be deliverable at all times. However, on 
an affected system, the interconnection customer does not seek to 
deliver power even if it is studied under the NRIS modeling standard.
    209. Further, an affected system has no obligation to continually 
ensure deliverability for a generating facility on a neighboring 
transmission system that has obtained NRIS on its host transmission 
provider's system. Specifically, under Order No. 2003, a host 
transmission provider must maintain its system to: (1) ensure that 
NRIS-interconnected resources can transmit their output to other 
electrical areas within the transmission provider's system, even while 
other generating facilities in the same electrical area are at peak 
output; and (2) allow the resource to be designated as a network 
resource for the life of the interconnection agreement.\290\ Order No. 
2003 places no similar requirements on affected system operators to 
ensure deliverability for NRIS customers interconnecting to a host 
transmission provider's system. Thus, the potential exists for an 
interconnection request to be studied by an affected system as NRIS and 
for an interconnection customer to construct significant network 
upgrades on the affected system, but not be fully deliverable on the 
host system due to curtailment or congestion on the affected system.
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    \290\ Order No. 2003 provided that NRIS interconnection entitles 
a generating facility to be treated in the same manner as the 
transmission provider's own resources in assessing whether aggregate 
supply is sufficient to meet aggregate load within the transmission 
provider's control area. Order No. 2003, 104 FERC ] 61,103 at P 768. 
On rehearing, Order No. 2003-A clarified that: ``NRIS ensures that 
the generating facility, as well as other generating facilities in 
the same electrical area, can be operated simultaneously at peak 
load and that any output produced above peak load requirements can 
be transmitted to other electrical areas within the transmission 
provider's transmission system. Thus, NRIS ensures that output of 
the generating facility will not be `bottled up' during peak load 
conditions.'' Order No. 2003-A, 106 FERC ] 61,220 at P 531. Order 
No. 2003-A further clarified that ``[t]he [NRIS] interconnection 
customer holds, through the life of the interconnection agreement, 
the right to use the network upgrade capacity that allows the 
generating facility to be designated as a network resource.'' Id. P 
560.
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    210. We preliminarily find that it is unjust and unreasonable for a 
transmission provider acting as the affected system to study 
interconnection requests on other transmission systems using NRIS 
modeling standards. As noted above, unlike the transmission provider 
with which affected system interconnection customer will directly 
interconnect, a transmission provider acting as the affected system 
does not have a continuing obligation to operate its system so that 
NRIS resources will remain deliverable on the host system. Without such 
an obligation, an affected system interconnection customer may be 
required to construct significant network upgrades on the transmission 
provider's affected system, but not be fully deliverable due to 
curtailment or congestion on the affected system. We are concerned that 
this results in unjust and unreasonable rates by increasing the costs 
for the interconnection customer without a commensurate increase in 
service.
iii. Proposal
    211. We propose in new subsection 9.6 of the pro forma LGIP to 
require the transmission provider acting as the affected system to 
study interconnection requests using ERIS modeling standards, 
regardless of the requested level of service on the host transmission 
provider's transmission system. However, if a transmission provider 
acting as an affected system believes that it is necessary to study an 
interconnection request that is requesting NRIS-level service using 
NRIS modeling standards, such a transmission provider could make a 
filing under section 205 of the FPA. The Commission will evaluate such 
case-by-case section 205 filings to determine whether they are just and 
reasonable, and not unduly discriminatory or preferential.\291\ A 
transmission provider acting as an affected system making this type of 
filing should provide evidence indicating that using NRIS modeling 
standards in such a scenario would not treat similarly situated 
customers differently or afford similar treatment to dissimilar 
customers. In addition, this section 205 filing could contain, for 
example, such supporting documentation as a reference to a NERC 
Reliability Standard violation, an operational concern such as over-
duty breakers, fault current violations, impacts on transmission 
stability, increased loop flows or other concerns that implicate any 
other critical reliability parameters. We seek comment on how to align 
the possibility for such case-by-case section 205 filings with the 
required timeline for the affected system study and other deadlines 
proposed herein for affected system studies.
---------------------------------------------------------------------------

    \291\ 16 U.S.C. section 824d.
---------------------------------------------------------------------------

    212. With respect to the proposal for a transmission provider 
acting as the affected system to study interconnection requests using 
ERIS modeling standards, regardless of the requested level of service 
on the host transmission provider's transmission system, a standard 
modeling requirement would create consistency in the modeling standards 
used across all transmission

[[Page 39969]]

provider regions.\292\ ERIS modeling standards, in addition, generally 
reduce the number and cost of network upgrades identified. By using 
these standards, we believe that interconnection customers would be 
subject to fewer late-stage cost increases, which would reduce the 
number of potential re-studies and withdrawals, thereby addressing the 
concerns we have identified that we preliminarily find are resulting in 
unjust and unreasonable and unduly discriminatory and preferential 
Commission-jurisdictional rates. It would also allow interconnection 
queues to be processed more quickly because affected system network 
upgrades would be focused on local impacts that will generally 
implicate fewer other interconnection customers, reducing the amount of 
interdependence among interconnection customers. Under this reform, 
fewer interconnection requests will be found to cause impacts to large 
numbers of projects, which will reduce the number of high-cost network 
upgrades and potential withdrawals and re-studies.
---------------------------------------------------------------------------

    \292\ We note that, while this proposal would standardize the 
use of ERIS for affected system studies, individual transmission 
providers use different specific thresholds for ERIS studies.
---------------------------------------------------------------------------

    213. We acknowledge that using a less stringent modeling standard 
may result in more frequent redispatch or curtailment by not fully 
capturing all the potential impacts of the interconnecting generating 
facility(ies) on an affected system.\293\ However, we believe that 
these risks are limited in nature and any significant impact would be 
captured by an ERIS study, which would ensure that a proposed 
generating facility can safely connect to the affected system under the 
expectation it will deliver its electric output using the existing firm 
or non-firm capacity of the affected system transmission provider's 
system on an as-available basis. As noted above, MISO has used this 
approach for many years without any adverse impacts on reliability. 
Nevertheless, we seek comment on whether the proposed reform will 
adversely affect reliability for the transmission provider acting as 
the affected system or the host transmission provider. This could 
include examples of reliability impacts caused by a transmission 
provider acting as the affected system conducting an ERIS study on an 
NRIS interconnection request from a host transmission provider or 
examples of why an NRIS study is required to ensure reliable 
interconnection on the transmission provider acting as the affected 
system's system when the interconnection customer is not seeking to 
NRIS on the affected system.
---------------------------------------------------------------------------

    \293\ EDF v. MISO, 168 FERC ] 61,173 at PP 80-81.
---------------------------------------------------------------------------

    214. Additionally, we understand that there is some concern that 
requiring only ERIS modeling standards may be inconsistent with the 
Commission's current policy of requiring interconnection customers to 
be responsible for all network upgrades needed ``but for'' their 
interconnection.\294\ This is because using only ERIS modeling 
standards would in some cases result in curtailment or redispatch on 
the affected system that is arguably caused by the interconnection 
customer's proposed generating facility but that is not paid for by the 
interconnection customer. For example, the full possibility of loop 
flow \295\ may not be accounted for under an ERIS modeling standard. 
However, we note that the Commission has previously acknowledged and 
accepted that some inadvertent or unauthorized power flows are an 
unavoidable consequence of interconnected public utilities and that 
public utilities must work closely to ensure their operations do not 
jeopardize the reliability of each other.\296\
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    \294\ See Order No. 2003, 104 FERC ] 61,103 at P 677 (``The 
Commission noted that in a region that uses locational pricing, the 
RTO or ISO usually assigns to the Interconnection Customer the cost 
of any new network facilities that would not be in its transmission 
expansion plan but for the interconnecting Generating Facility.'').
    \295\ Loop flows refer to physical flows that differ from 
scheduled flows, which can cause congestion on transmission lines. 
N.Y. Indep. Sys. Operator, Inc., 132 FERC ] 61,031 (2010).
    \296\ Am. Elec. Power Serv. Corp., 49 FERC ] 61,377, at 62,381 
(1989), order on reh'g, 50 FERC ] 61,192 (1990).
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    215. We seek comment on the potential impact of requiring 
transmission providers acting as the affected systems to use ERIS 
modeling standards when an interconnection customer seeks NRIS in the 
host transmission provider's system. We seek comment as to whether 
there are modifications to this proposal that would reduce the 
likelihood of curtailment or redispatch on the affected system 
transmission provider's system without requiring the affected system 
interconnection customer to pay network upgrade costs that are not 
commensurate with the level of service it receives.
3. Optional Resource Solicitation Study
a. Background
    216. Some transmission providers operate in states that take a 
portfolio approach to resource planning, in which resource planning 
entities procure an entire portfolio of diverse resources that all need 
to interconnect to the transmission system on approximately the same 
timetable. Entities that have these resource planning responsibilities 
may conduct resource solicitations that involve an assessment of need 
for additional resources and, if necessary, competitive acquisition 
processes to procure new resources.\297\
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    \297\ See, e.g., 4 Colo. Code Regs. section 723-3:3610 (2019) 
(Rule 3610: Assessment of Need for Additional Resources); id. 
section 723-3:3611 (Rule 3611: Utility Plan for Meeting the Resource 
Need) (establishing that ``a competitive acquisition process will 
normally be used to acquire new utility resources''); id. section 
723-3:3600 (Rule 3600: Applicability) (explaining which electric 
utilities are subject to electric resource planning requirements); 
id. section 723-3:3617 (Rule 3617: Commission Review and Approval of 
Resource Plans) (providing for review and approval of resource plans 
by the Colorado Commission).
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    217. To help meet the needs of entities that must develop a 
resource solicitation plan or conduct a resource solicitation process 
to meet state-imposed requirements,\298\ several transmission providers 
offer such resource planning entities the option to initiate an 
interconnection study that studies combinations of the resources that 
have submitted supply bids through the resource planning entity's 
resource solicitation process.\299\ For example, a resource planning 
entity, under PSCo's tariff, is defined as any entity required to 
develop a resource plan or resource solicitation process,\300\ which 
may include LSEs that must meet state-imposed resource procurement 
obligations.\301\ Though PSCo began offering this option more than a 
decade ago, several other transmission providers have followed suit--
Tri-State, the Duke Southeast Utilities (i.e., Duke

[[Page 39970]]

Energy Carolinas, Duke Energy Progress, and Duke Energy Florida), and 
Dominion offer versions of the resource solicitation study option to 
resource planning entities.\302\
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    \298\ See PSCo, 169 FERC ] 61,182 at PP 5, 14, 30; Tri-State, 
174 FERC ] 61,021 at P 65; see also Tri-State, Open Access 
Transmission Tariff, attach. N, Standard LGIP (7.0.0) section 1 
(defining ``Resource Planning Entity'' as ``any entity required to 
develop a Resource Plan or conduct a Resource Solicitation 
Process,'' ``Resource Plan'' as ``any process authorized or required 
by Applicable Laws and Regulations for, inter alia, the selection of 
Generating Facilities,'' and ``Resource Solicitation Process'' as 
``any process authorized or required by Applicable Laws and 
Regulations for the acquisition of Network Resources'').
    \299\ See PSCo, 169 FERC ] 61,182 at PP 5, 14, 30; see also Xcel 
Energy Operating Cos., 109 FERC ] 61,072 (2004) (accepting 
modifications to LGIP terms and conditions to accommodate the 
Colorado-mandated resource solicitation process, subject to certain 
conditions); PSCo, Transmission and Service Agreements Tariff, 
attach. N, Standard LGIP (0.8.0) section 4.2.2 (Initiation of a 
Resource Solicitation Cluster) (describing process).
    \300\ E.g., PSCo, Transmission and Service Agreements Tariff, 
attach. N, Standard LGIP (0.8.0) section 1 (defining ``Resource 
Planning Entity'' to mean ``any entity required to develop a 
Resource Plan or conduct a Resource Solicitation Process'').
    \301\ See Tri-State, 174 FERC ] 61,021 at PP 64-65.
    \302\  See Duke Energy Carolinas, LLC, Transmittal, Docket No. 
ER21-1579-000, at 31 (filed Apr. 1, 2021) (explaining section 10.2, 
Initiation of a Resource Solicitation Cluster); Duke, 176 FERC ] 
61,075 at PP 1, 51-52; Dominion Energy S.C., Inc., Transmittal, 
Docket No. ER22-301-000, at 19 (filed Nov. 1, 2021) (explaining 
section 10.2, Initiation of a Resource Solicitation Cluster); 
Dominion, Docket No. ER22-301-000 (Dec. 28, 2021) (delegated order).
---------------------------------------------------------------------------

    218. Under PSCo's process, interconnection requests associated with 
the resource solicitation are studied separately from clusters 
initiated through a fixed time interval window (e.g., bi-annual cluster 
windows), respecting the queue position of any ongoing interconnection 
cluster studies.\303\ Like interconnection cluster studies, the 
interconnection requests that reflect the resources being considered in 
the resource solicitation combinations are studied as their own cluster 
and proceed through the same series of interconnection studies as other 
clusters.\304\ Unlike interconnection cluster studies, however, the 
resource planning entity--i.e., the entity required to develop a 
resource solicitation plan or conduct a resource solicitation--requests 
a position in the interconnection queue as the authorized 
representative for all interconnection requests submitted to the 
resource solicitation cluster, and that entity may request study of a 
reasonable number of different combinations of such interconnection 
requests to meet the resource planning entity's identified needs and 
assumptions in the resource solicitation process.\305\ Further, PSCo 
provides the study results for the requested combinations to the 
resource planning entity for use in the resource solicitation process, 
where interconnection-related costs may be considered as a factor in 
selection. After the completion of the system impact study for the 
cluster, the resource planning entity is then expected to select one of 
the studied combinations prior to the commencement of any 
interconnection facilities study associated with the resource 
solicitation process before proceeding to that stage.\306\
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    \303\ See PSCo, 169 FERC ] 61,182 at P 14.
    \304\ PSCo, Transmission and Service Agreements Tariff, attach. 
N, (Standard LGIP) (0.8.0) section 4.2.2.
    \305\ See id. Resource planning entities must also submit all 
interconnection requests arising from the resource solicitation 
process at the same time to ensure an equal interconnection queue 
position for all generating facilities included in the resource 
solicitation study and cooperate with the transmission provider in 
conducting the studies as well. See id.
    \306\ See id. (referring to steps that follow ``[a]fter receipt 
of the Phase 2 Report''); see also PSCo, 169 FERC ] 61,182 at P 19 
(explaining, in part, that ``Phase 2 completes the traditional 
system impact study by adding stability and short circuit analysis 
to the power-flow analysis'').
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b. Need for Reform
    219. Although several transmission providers offer versions of the 
resource solicitation study concept to resource planning entities, 
transmission providers in general are not required to offer this option 
in their tariffs, and many do not. Across the country, however, 
electric resource procurement mandates have led to several state-
managed and other required resource solicitations that seek to procure 
entire portfolios of resources with significant interconnection 
needs.\307\ These resource solicitations may be managed by LSEs or by 
states. In addition, these resource solicitations may be open to all 
potential resources or targeted at specific types of resources, 
depending on the particular resource planning mandate or planning goals 
guiding the solicitation.\308\
---------------------------------------------------------------------------

    \307\ See Fredrich Kahrl, Lawrence Berkeley Nat'l Lab'y, Solar 
Energy Techs. Office, All-Source Competitive Solicitations: State 
and Electric Utility Practices, at 2-7 (Mar. 2021), https://emp.lbl.gov/publications/all-source-competitive-solicitations 
(describing different types of resource procurements).
    \308\ Id. at vi.
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    220. In the Commission's recent proceeding in Docket No. AD20-18-
000, which explored offshore wind generation and potential issues 
related to such generation in RTOs/ISOs, several commenters addressed 
the relationship between state electric resource procurement mandates 
and the generator interconnection process. Exelon and RWE Renewables 
Americas, for example, supported the idea that state agencies should be 
permitted to participate in the generator interconnection process as a 
means to help account for state resource preferences.\309\ How new 
resource procurement portfolios are studied in the generator 
interconnection process is also important; for example, [Oslash]rsted 
North America Offshore and the Clean Energy Associations stated that 
studying new groups of resources in clusters would be more beneficial 
than studying them serially, because cluster studies may better 
identify opportunities to realize economies of scale from larger 
network upgrades that can accommodate multiple projects.\310\ Other 
commenters, however, expressed concerns regarding greater state 
participation in the generator interconnection process. PJM and 
Eversource Energy, for example, expressed concern that (potentially 
sizable) interconnection requests associated with state participation, 
if withdrawn, could have adverse consequences for other resources in 
the interconnection queue.\311\
---------------------------------------------------------------------------

    \309\ See Exelon, Comments, Docket No. AD20-18-000, at 19-21 
(filed May 10, 2021); see also RWERA, Comments, Docket No. AD20-18-
000, at 2 (filed May 10, 2021).
    \310\ See [Oslash]rsted North America Offshore, Comments, Docket 
No. AD20-18-000, at 4-6 (filed May 11, 2021); American Clean Power 
Association for the Clean Energy Associations, Comments, Docket No. 
AD20-18-000, at 10-11 (filed May 10, 2021).
    \311\ See PJM, Comments, Docket No. AD20-18-000, at 6-7 (filed 
May 10, 2021); Eversource, Comments, Docket No. AD20-18-000, at 8-9 
(filed May 10, 2021).
---------------------------------------------------------------------------

    221. We preliminarily find that the failure to provide a study 
process for entities required to conduct a resource plan or resource 
solicitation process may result in rates for Commission-jurisdictional 
service that are unjust and unreasonable. Resource solicitation 
processes inspire a number of interconnection requests, but in most 
cases, state agencies and LSEs implementing state mandates do not have 
the opportunity to request dedicated studies themselves. As a result, 
interconnection customers seeking to participate in a resource 
solicitation are interspersed throughout the queue, making it more 
difficult to compare the interconnection costs of their proposals. 
Moreover, interconnection customers that submit requests associated 
with state-mandated or supervised resource solicitation and selection 
processes have a greater incentive to submit numerous interconnection 
requests to better compete in the resource solicitation. Yet, the 
volume of interconnection requests submitted in total increases 
uncertainty regarding interconnection costs generally and decreases the 
value of information obtained. These problems in turn make the 
selection decisions to be made by state agencies and LSEs implementing 
state mandates more difficult and potentially less efficient. 
Additionally, the queue delays associated with increased volumes of 
interconnection requests then may delay states acquiring the resources 
needed to meet their resource procurement mandates. Delays in meeting 
such resource procurement mandates can then raise costs to consumers 
and affect reliability.
    222. Furthermore, we believe that the trends in electric resource 
procurement mandates and in state-managed and

[[Page 39971]]

other required resource solicitations demonstrate the potential need to 
provide state agencies and LSEs with the opportunity to efficiently 
study solicitation requests in light of the reformed cluster study 
process.\312\ While resource solicitation processes are conducted 
pursuant to state mandates, not federal mandates,\313\ we believe that 
there is substantial interplay between resource solicitation processes 
and the generator interconnection process that should be 
accommodated.\314\ We thus recognize the need for our pro forma LGIP to 
better accommodate resource solicitation processes.
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    \312\ See May Joint Task Force Tr. 54:15-55:9 (Kimberly Duffley) 
(explaining that aligning the generator interconnection process and 
the state solicitation process is a challenge).
    \313\ See Xcel Energy Operating Cos., 109 FERC ] 61,072 at P 43.
    \314\ See Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 167 
(2016) (Sotomayor, J., concurring) (recognizing the 
``congressionally designed interplay between state and federal 
regulation'' envisioned by the Federal Power Act (quoting Nw. Cent. 
Pipeline Corp. v. State Corp. Comm'n of Kan., 489 U.S. 493, 518 
(1989)).
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c. Proposal
    223. We propose to revise the pro forma LGIP to require 
transmission providers to allow a resource planning entity \315\ to 
initiate an optional resource solicitation study,\316\ as further 
described in this section. These qualifying solicitations may include 
all-source procurements, or procurements focused on particular 
geographic areas, such as offshore wind lease areas or other location-
constrained resource procurements.
---------------------------------------------------------------------------

    \315\ Proposed pro forma LGIP section 1 (defining ``Resource 
Planning Entity'' as any entity required to develop a Resource Plan 
or conduct a Resource Solicitation Process, including a relevant 
state entity or load serving entity). A ``Resource Planning Entity'' 
could be an LSE, a state entity, a wholesale customer (e.g., an LSE 
not affiliated with the transmission provider), depending on the 
incidence of the state mandate(s).
    \316\ See infra notes 324-326 (defining key terms).
---------------------------------------------------------------------------

    224. We believe that this proposal will benefit interconnection 
customers and transmission providers through efficiencies in studying 
resources vying for selection in a qualifying solicitation process by 
grouping these resources together for purposes of informational 
interconnection studies. Under this proposal, a qualifying resource 
planning entity (including a state agency or LSE implementing state 
mandates) would play a facilitation role in helping group together and 
organize interconnection requests associated with the resource planning 
entity's qualifying resource solicitation process or qualifying 
resource plan.\317\ The resource planning entity would identify the 
valid interconnection requests associated with its qualifying resource 
solicitation process or qualifying resource plan and request that the 
transmission provider study several combinations of those 
interconnection requests in a resource solicitation study.\318\
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    \317\ See proposed pro forma LGIP section 4.2.2 (providing, in 
part, that a ``Resource Planning Entity must . . . act as the point 
of contact for purposes of the Optional Resource Solicitation Study 
for all Interconnection Requests submitted to the Optional Resource 
Solicitation Study'').
    \318\ See proposed pro forma LGIP section 4.2.2 (``Transmission 
Provider shall conduct the Optional Resource Solicitation Study 
separate from the Cluster Study Process.'').
---------------------------------------------------------------------------

    225. In other words, the proposed informational study option for 
these types of interconnection requests would enable the resource 
planning entity to initiate an optional resource solicitation study 
evaluating the various combinations of associated interconnection 
requests studied by the transmission provider. Because this arrangement 
affords the resource planning entity the flexibility to indicate to the 
transmission provider which interconnection requests in the optional 
resource solicitation study to study (and which to discontinue 
studying), this arrangement can help resource planning entities make 
decisions about their resource solicitations through increased access 
to information about the relative costs of different combinations of 
interconnection requests. This process can also help interconnection 
customers receive evidence of selection in a resource plan in a more 
timely manner by providing the resource planning entity with needed 
information.\319\ As the Commission has explained, it has approved 
similar modifications to the interconnection process as consistent with 
or superior to the pro forma LGIP, reasoning with respect to PSCo's 
process that this ``innovative approach to queue management'' was ``a 
reasonable approach to complying with a state-mandated resource 
solicitation process'' in ``states that have mandated resource planning 
programs.'' \320\
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    \319\ See Xcel Energy Operating Cos., 109 FERC ] 61,072 at PP 
38-39 (explaining that studies conducted under this concept may be 
``based on an assumption that not all solicitation bids will prevail 
as to that queue position,'' and may also ``avoid the need for 
extensive iterative studies'' and ``minimize the number of re-
studies that will be necessary''); see also id. P 39 (``This 
increased efficiency will benefit both generators participating in 
the solicitation and any lower queued generators that will not 
participate in the solicitation.'').
    \320\ See id. PP 22-25.
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    226. Although prior iterations of this approach may have involved a 
somewhat novel ``concept of allowing load to reserve a queue 
position,'' \321\ we clarify here that interconnection customers will 
maintain their queue position obtained through the cluster request 
window and proceed through the regular interconnection queue alongside 
all other customers. The resource planning entity under our proposal 
(which may include a state agency or LSE) will not receive a queue 
position. The resource planning entity must submit for inclusion in the 
optional resource solicitation study valid interconnection requests 
made by interconnection customers, and those interconnection customers 
remain responsible for meeting all requirements associated with 
maintaining their individual queue position(s).\322\ Thus, while the 
resource planning entity plays an important organizational and 
facilitation role regarding the initiation and progress of an optional 
resource solicitation study, resource planning entities under this 
proposal are not themselves requesting interconnection service, 
establishing a separate interconnection queue or queue position, or 
reserving interconnection capacity or transmission capacity. While this 
proposal does not lessen interconnection study requirements, this 
proposal allows the sharing of information to administratively simplify 
the process of studying a potentially large number of interconnection 
requests that are all related to the same state-authorized or mandated 
resource solicitation.
---------------------------------------------------------------------------

    \321\ See id. P 24.
    \322\ See proposed pro forma LGIP section 4.2.2 (providing, in 
part, that the optional resource solicitation study process is 
initiated by a request to perform an Optional Resource Solicitation 
Study that includes '' ``a list of Interconnection Requests, which 
have already been submitted to Transmission Provider in the current 
Cluster Request Window, that the Resource Planning Entity would like 
evaluated in the Optional Resource Solicitation Study'' and also 
that it is the ``Interconnection Customer [that] must meet all 
requirements associated with maintaining its Queue Position'').
---------------------------------------------------------------------------

    227. We believe that our proposed reforms related to qualifying 
resource solicitations will lead to greater efficiencies in the 
interconnection study process for proposed generating facilities 
participating in such solicitations, as well as for those proposed 
generating facilities in the interconnection queue that are not 
participating in those solicitations. Accordingly, we believe that our 
proposed reforms will remedy Commission-jurisdictional rates that may 
be unjust and unreasonable and deliver greater benefits for customers 
in the long run than the status quo.
    228. Additionally, we note that this proposal may help resource 
planning

[[Page 39972]]

entities procure resources more efficiently and effectively. By giving 
resource planning entities the ability to initiate an optional resource 
solicitation study, these reforms may also enable qualifying state 
agencies and LSEs to obtain better information about the 
interconnection requirements and potential network upgrade costs of 
various configurations of interconnection requests associated with bids 
submitted into their solicitations. With that information, state 
agencies and LSEs may then be able to make more informed choices in 
their qualifying solicitation processes.
    229. As mentioned above, we propose to revise the pro forma LGIP to 
require transmission providers to allow resource planning entities, 
i.e., any entity required to develop a resource plan \323\ or conduct a 
resource solicitation process,\324\ including a state entity or LSE, to 
initiate an optional resource solicitation study,\325\ as further 
described in this section. Specifically, we propose to require 
transmission providers to adopt new subsection 4.2.2 of the pro forma 
LGIP, which outlines the optional resource solicitation study and the 
roles of interconnection customers and the resource planning entity in 
that process.
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    \323\ We propose to define ``Resource Plan'' as ``any process 
for, inter alia, the selection of Generating Facilities that is 
competitive, substantively state agency-reviewed and approved, or 
state agency-managed, and authorized or required by Applicable Laws 
and Regulations.'' Proposed pro forma LGIP section 1.
    \324\ We propose to define ``Resource Solicitation Process'' as 
``any process for the acquisition of Network Resources that is 
competitive, substantively state agency-reviewed and approved, or 
state agency-managed, and authorized or required by Applicable Laws 
and Regulations.'' Id.
    \325\ We propose to define an ``Optional Resource Solicitation 
Study'' as ``the informational evaluation of one or more 
Interconnection Requests for a Resource Planning Entity as described 
in more detail in Section 4.2.2 of this LGIP.'' Id.
---------------------------------------------------------------------------

    230. To limit opportunities for undue discrimination by 
transmission providers and reduce incentives for transmission providers 
or LSEs to obtain information through the optional resource 
solicitation study that could be used to favor or advance the interests 
of affiliated generation resources, we propose to require that a 
resource plan or resource solicitation process as defined in the pro 
forma LGIP either use competitive procurement techniques, or be 
substantively reviewed and approved or directly managed by a relevant 
state agency. Regarding competitive procurement techniques, while we do 
not propose to adopt a singular definition of that term, in general, we 
believe that competitive solicitation processes tend to be those that 
are open, fair, and employ the services of an independent third party 
that applies standardized evaluation criteria to choose amongst various 
options. Regarding state agency involvement or oversight, substantive 
review and approval of a resource plan or resource solicitation process 
could only be demonstrated by showing that the resource plan or 
resource solicitation process uses a process that results in or 
involves a state commission order or state agency decision that 
approves or ratifies a procurement plan or procurement results. 
Substantive review and approval of a resource plan or resource 
solicitation process would not be demonstrated by a purely 
informational planning process that does not require state commission 
or state agency approval or ratification of a procurement plan or 
procurement results.\326\ Thus, only resource planning entities whose 
resource plan or resource solicitation process either uses competitive 
procurement techniques, or is substantively reviewed and approved or 
directly managed by a relevant state agency, could qualify to request 
that a transmission provider initiate an optional resource solicitation 
study. We believe that these safeguards will help ensure that 
interconnection studies are not unfairly used to favor the resource 
planning entity's own economic self-interests.\327\
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    \326\ We note that, while some state commissions must 
substantively review and approve the contents of utility resource 
plans, others simply provide interested stakeholders and the public 
with transparency regarding a utility's intended resource 
procurements. Compare Cal. Pub. Util. Code section 454.5(c) (2021) 
(providing that the California Commission ``shall review and accept, 
modify, or reject each electrical corporation's procurement plan and 
any amendments or updates to the plan'') with Ind. Code section 8-1-
8.5-3(e)(2) (2022) (requiring electric utilities to submit to the 
Indiana Commission an integrated resource plan); 170 Ind. Admin. 
Code 4-7-2.2(g)(3) (2022) (providing that the Indiana Commission's 
staff report on such submissions will ``not comment on . . . the 
desirability of the utility's preferred resource portfolio'' or on 
``a proposed resource action in the'' integrated resource plan); 170 
Ind. Admin. Code 4-7-2.5(b) (2022) (allowing utility resource 
actions to deviate from the utility's most recent integrated 
resource plan if ``fully explained and justified with supporting 
evidence, including an updated [integrated resource plan] 
analysis'').
    \327\ See, e.g., Carolina Solar Power, LLC, 164 FERC ] 61,058, 
at PP 14-16 (2018) (explaining that the use of ``a competitive 
procurement'' model and an ``RFP process . . . designed to be a 
rigorous, fair, and open process that is administered by an 
independent evaluator and overseen by the North Carolina 
Commission'' helped ``ensure just and reasonable rates'' and 
``safeguard against the exercise of market power''). Substantive 
review and approval--or direct management--of a resource plan or 
resource solicitation process also helps indicate the commercial 
readiness of the resources selected by such a process.
---------------------------------------------------------------------------

    231. The resource planning entity
    232. would be responsible for identifying the interconnection 
requests it is submitting for inclusion in the optional resource 
solicitation study (and for which the resource planning entity would 
serve as point of contact regarding the study). The resource planning 
entity would also be required to submit no more than five different 
combinations of such interconnection requests to meet the resource 
planning entity's identified needs and assumptions in its solicitation, 
which are considered as part of the study. The resource planning entity 
would not be responsible for the costs of this optional study; rather 
the interconnection customer would be responsible for actual study 
costs. While an additional deposit would not be required to perform 
this study, the costs would be included in the true-up based on actual 
costs of performing the studies.\328\ We also propose to amend the 
definition of Interconnection Study in the pro forma LGIP to clarify 
that the costs of an optional resource solicitation study would be the 
responsibility of participating interconnection customers.\329\
---------------------------------------------------------------------------

    \328\ Pro forma LGIP Sec.  13.3 (noting that the interconnection 
customer is responsible for the actual costs of interconnection 
studies and any necessary restudies).
    \329\ See id. (providing, in part, that ``Transmission Provider 
shall charge and Interconnection Customer shall pay the actual costs 
of the Interconnection Studies''); proposed pro forma LGIP Sec.  1 
(adding ``Optional Resource Solicitation Study'' to the definition 
of ``Interconnection Study'').
---------------------------------------------------------------------------

    233. The resource planning entity and the transmission provider 
would determine a mutually agreeable scope of study for the optional 
resource solicitation study. We propose that the transmission provider 
must evaluate each combination of interconnection requests submitted by 
the resource planning entity as a group, in the same manner it will 
perform cluster studies under the proposed pro forma LGIP. The resource 
planning entity must act as the point of contact for purposes of the 
optional resource solicitation study for all interconnection requests 
submitted to the optional resource solicitation study. To allow the 
resource planning entity sufficient time to select interconnection 
customers in the solicitation, we propose a 135-day time limit on the 
optional resource solicitation study (compared to 150-days of the 
cluster study) to avoid over-burdening the transmission provider.\330\ 
We also propose revisions to the pro forma LGIP to prohibit 
transmission providers from delaying other

[[Page 39973]]

interconnection requests not involved in the qualifying resource 
solicitation.\331\
---------------------------------------------------------------------------

    \330\ See proposed pro forma LGIP section 4.2.2.
    \331\ See id.; Xcel Energy Operating Cos., 109 FERC ] 61,072 at 
P 26 (making clear that ``XES must not disadvantage or delay other 
Interconnection Requests not involved in the solicitation'').
---------------------------------------------------------------------------

    234. After the transmission provider completes the optional 
resource solicitation study for the identified interconnection 
requests, it will provide the results to the resource planning entity 
for use in the selection process in the form of a resource solicitation 
study report. The results will also be posted on the transmission 
provider's OASIS consistent with the posting of other study results. 
Interconnection requests may proceed in the remainder of the 
transmission provider's interconnection study process regardless of 
whether they are selected by the resource planning entity for inclusion 
in the resource plan. Interconnection requests that are selected by the 
resource planning entity for inclusion in the resource plan may choose 
to submit evidence of selection as part of the new requirement to 
demonstrate commercial readiness. Interconnection requests that are not 
selected by the resource planning entity for inclusion in the resource 
plan may remain in the interconnection queue by submitting other forms 
of commercial readiness or providing a commercial readiness deposit.
    235. Regarding withdrawal penalties, we propose that inclusion in 
an optional resource solicitation study does not exempt interconnection 
customers from withdrawal penalties under section 3.7.1 of the pro 
forma LGIP. Unlike the exemptions approved in Tri-State, the withdrawal 
penalty here applies equally to those interconnection customers 
participating in the optional resource solicitation study if their 
withdrawal meets the criteria for imposing withdrawal penalties 
proposed above.\332\
---------------------------------------------------------------------------

    \332\ Tri-State, 174 FERC ] 61,021 at P 12.
---------------------------------------------------------------------------

    236. We seek comment regarding our proposal to explicitly include 
state agencies that are required to develop a resource plan or conduct 
a resource solicitation process in the definition of a resource 
planning entity.\333\ We also seek comment regarding whether other 
entities should qualify as resource planning entities and therefore be 
able to request initiation of an optional resource solicitation study, 
and, if so, what impact, if any, their inclusion would have on the 
efficiency of the generator interconnection process and whether their 
inclusion would raise concerns of undue discrimination or 
preference.\334\
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    \333\ See proposed pro forma LGIP section 1.
    \334\ Although the Commission has indicated that the 
``flexibility'' afforded by a resource solicitation cluster should 
be open to ``any entity . . . conducting a solicitation for a 
Commission-jurisdictional interconnection,'' see Xcel Energy 
Operating Cos., 109 FERC ] 61,072 at P 35, we note that we propose 
to limit the definition of Resource Planning Entity to entities 
``required to develop a Resource Plan or conduct a Resource 
Solicitation Process,'' see proposed pro forma LGIP section 1 
(emphasis added); PSCo, Transmission and Service Agreements Tariff, 
attach. N, Standard LGIP (0.8.0) section 1 (same). Our proposed 
definition would include an LSE or ``utility that develops a 
resource plan as authorized by its appropriate governing 
authority,'' or ``a local distribution cooperative that creates a 
resource plan under its governing body.'' See Tri-State, 174 FERC ] 
61,021 at P 65; see also id. P 64 (explaining that it was ``Tri-
State's intent that the Resource Solicitation Cluster process be 
open to any load serving entity (or other load) that requires its 
use to comply with its resource procurement obligations''). But as 
is the case under the PSCo and Tri-State LGIPs today, our proposed 
definition may not include every entity conducting a resource 
solicitation.
---------------------------------------------------------------------------

    We also seek comment on whether the proposed optional resource 
solicitation study raises any confidentiality concerns, including 
whether the optional resource solicitation study report could be posted 
on the transmission provider's OASIS before the qualifying solicitation 
process has concluded.
    237. We recognize that transmission providers operating across 
multiple states may need flexibility in implementing this optional 
resource solicitation study proposal. Thus, we seek comment on what, if 
any, challenges multistate transmission providers--in particular, those 
RTOs/ISOs that serve large, multi-state areas--may face regarding study 
timing, multiple concurrent studies, or other issues in offering an 
optional resource solicitation study option, and any proposals to 
mitigate such challenges.

C. Reforms To Incorporate Technological Advancements Into the 
Interconnection Process

1. Increasing Flexibility in the Generator Interconnection Process
a. Co-Located Generation Sites Behind One Point of Interconnection With 
Shared Interconnection Requests
i. Background
    238. Historically, interconnection requests have been limited to a 
single generating facility seeking to interconnect to the transmission 
system. When the Commission adopted the pro forma LGIP in Order No. 
2003, hybrid resources (which are co-located, share a point of 
interconnection, and proceed through the generator interconnection 
process with a single interconnection request) were not widely 
contemplated and therefore their needs were not considered when 
developing the requirements. However, recent studies demonstrate that 
large numbers of generating facilities currently in interconnection 
queues are seeking to co-locate on a shared site behind one point of 
interconnection and share an interconnection request.\335\ There are 
now a number of different types of generating facilities that may prove 
complementary, such as solar combined with electric storage, wind 
combined with solar, or natural gas combined with wind and electric 
storage,\336\ and that may seek to co-locate for various efficiency 
reasons.
---------------------------------------------------------------------------

    \335\ Currently, 42% (285 GW) of solar and eight percent (17 GW) 
of wind projects in the queue are proposed as hybrid resources that 
would include electric storage. Queued Up at 18.
    \336\ See, e.g., Eric Hittinger et al., Compensating for Wind 
Variability Using Co-Located Natural Gas Generation and Energy 
Storage (Carnegie Mellon Elec. Indus. Ctr, Working Paper CEIC-10-01, 
2010), https://www.cmu.edu/ceic/assets/docs/publications/working-papers/ceic-10-01.pdf.
---------------------------------------------------------------------------

ii. Need for Reform
    239. In Order No. 2003, the Commission noted that interconnection 
is a critical component of open access transmission service, and that 
case-by-case approaches to solving interconnection issues is inadequate 
and inefficient.\337\ However, the current pro forma LGIP does not 
address interconnection requests made up of multiple generating 
facilities seeking to co-locate and to share a single point of 
interconnection.\338\ The lack of procedures in the pro forma LGIP for 
generating facilities seeking to co-locate behind a single point of 
interconnection and share an interconnection request may necessitate a 
case-by-case approach that the Commission cautioned against in Order 
No. 2003 and may serve as a barrier to entry for these types of 
configurations. The benefits of such configurations may include 
efficiency in

[[Page 39974]]

managing the interconnection queue and increased reliability of the 
transmission system. For example, allowing electric storage resources 
to be combined with variable energy resources (such as wind and solar 
resources) can reduce their intermittency and prevent sudden changes in 
output. In addition, wind and solar resources can complement one 
another because they generally reach peak generation at different times 
throughout the day (wind in the early morning and late-night hours and 
solar in the afternoon).
---------------------------------------------------------------------------

    \337\ Order No. 2003, 104 FERC ] 61,103 at PP 9-10.
    \338\ All RTOs/ISOs currently allow at least two resources to 
co-locate on a shared site behind the same point of interconnection 
and share a single interconnection request. CAISO, Post-Technical 
Conference Comments, Docket No. AD20-9-000, at 5 (filed Sept. 24, 
2020); ISO-NE, Post-Technical Conference Comments, Docket No. AD20-
9-000, at 4 (filed Sept. 24, 2020); MISO, Post-Technical Conference 
Comments, Docket No. AD20-9-000, at 5 (filed Sept. 24, 2020); NYISO, 
Post-Technical Conference Comments, Docket No. AD20-9-000, at 3-4 
(filed Sept. 24, 2020); see also NYISO, Informational Report, AD20-
9-000, at 5-6 (filed July 19, 2021); PJM, Post-Technical Conference 
Comments, Docket No. AD20-9-000, at 5 (filed Oct. 1, 2020); SPP, 
Report on Hybrid Resources, Docket No. AD20-9-000, at 4-5 (filed 
July 19, 2021) (note SPP allows co-location but separately models 
the resources); AWEA, Post-Technical Conference Comments, Docket No, 
AD20-9-000, at 15-16 (filed Sept. 24, 2020).
---------------------------------------------------------------------------

    240. Therefore, we preliminarily find that that the lack of a 
process limits the interconnection of generating facilities, hindering 
competition and rendering the Commission's existing pro forma LGIP 
unjust and unreasonable or unduly discriminatory or preferential.
    241. Because the pro forma LGIP does not specify how to approach 
such proposals, requests to co-locate at a single point of 
interconnection and share an interconnection request may be subject to 
differing generator interconnection processes depending on the 
transmission provider to which the resource is seeking to interconnect 
or may not be allowed at all in certain regions.\339\ We are concerned 
that this disparate treatment may be unjust and unreasonable or unduly 
discriminatory or preferential because multiple generating facilities 
seeking to co-locate behind a single point of interconnection and share 
an interconnection request are similarly situated no matter the region 
in which they propose to interconnect.
---------------------------------------------------------------------------

    \339\ See Lawrence Berkeley Nat'l Lab'y, Generation, Storage, 
and Hybrid Capacity in Interconnection Queues, May 2021, https://emp.lbl.gov/generation-storage-and-hybrid-capacity.
---------------------------------------------------------------------------

iii. Proposal
    242. We propose to revise the pro forma LGIP and pro forma LGIA to 
require transmission providers to allow more than one resource to co-
locate on a shared site behind a single point of interconnection and 
share a single interconnection request. This proposed reform would 
create a minimum standard that would remove barriers for co-located 
resources by creating a standardized procedure for these types of 
configurations to enable them to access the transmission system.
    243. We propose to revise the pro forma LGIP to: (1) define ``Co-
Located Resources'' as more than one resource located behind the same 
point of interconnection; (2) state that co-located resources can share 
an interconnection request; and (3) modify the definition of site 
control such that it allows interconnection customers to demonstrate 
shared land-use for generating facilities that include more than one 
resource.
    244. We believe that requiring transmission providers to permit 
interconnection requests that represent more than one resource behind a 
single point of interconnection is required to ensure just and 
reasonable rates. We also believe that this requirement, by allowing a 
single interconnection request to represent a generating facility with 
more than one resource, would improve efficiency for transmission 
providers in the study process and may reduce study costs for 
developers because they would only submit a single set of deposits. 
Finally, this reform allows the assignment of more accurate queue 
positions, such that these types of generating facilities' component 
resources are tied together in the generator interconnection process 
and not studied separately, which facilitates a more accurate study of 
the planned generating facilities' actual electrical impact when 
connected to the transmission system.
    245. The pro forma LGIP requires that the transmission provider 
treat an interconnection request at one site with two different voltage 
levels as two interconnection requests. We recognize that this 
situation may occur with co-located generating facilities under this 
proposal. Therefore, we also propose revisions to the pro forma LGIP to 
require generating facilities that are co-locating to have technology 
to address differences in terminal voltage between the co-located 
generating facilities to ensure that these generating facilities have 
the same voltage levels. This requirement will ensure that co-located 
resources with voltage differences are on notice of the need to address 
attendant challenges.
b. Revisions to the Material Modification Process To Require 
Consideration of Generating Facility Additions
i. Background
    246. It has become increasingly common for generating facilities 
already in the interconnection queue to seek to change their 
interconnection requests to add electric storage or other types of 
generating facilities without changing the interconnection service 
level and/or MW total in the interconnection request. Contributing 
factors to this increasingly common occurrence include reduction of 
costs for technologies such as electric storage and the long time that 
interconnection customers remain in the queue, which may result in 
technology changes while the generating facility is still in the 
interconnection queue.
    247. Under section 4.4 of the pro forma LGIP, an interconnection 
customer can modify its interconnection request and still retain its 
queue position if the modifications are either explicitly allowed under 
the pro forma LGIP or if the transmission provider determines that the 
modifications are not material. The pro forma LGIP and pro forma LGIA, 
as modified by the cluster reform above, will define material 
modifications to be ``modifications that have a material impact on the 
cost or timing of any Interconnection Request with a later or equal 
Queue Position.''
    248. If the transmission provider determines that a proposed 
modification is material, the interconnection customer can choose 
either to (1) abandon the proposed modification or (2) proceed but 
forfeit its queue position and reenter the interconnection queue. The 
requirements of such a review vary by transmission provider and the 
modifications requested are often not included in the tariff; rather, 
many such requirements are typically in the transmission provider's 
business practice manuals.\340\ In some transmission provider tariffs 
or business practice manuals, the addition of a generating facility 
\341\ to an existing interconnection request is automatically 
considered to be a material modification, even if that addition does 
not change the requested level of interconnection service.\342\
---------------------------------------------------------------------------

    \340\ See, e.g., SPP Manual 7250 (Generator Interconnection 
Service); NYISO Manual 23 (Transmission Expansion and 
Interconnection), section 3 (Interconnection Process); CAISO BPM, 
Generator Interconnection Procedure, section 9.2 (Types of 
Modification); PJM Manual 14G (Generation Interconnection Requests), 
section 4 (Generator Interconnection Requirements, Rights and 
Obligations).
    \341\ ``Generating Facility'' shall mean ``Interconnection 
Customer's device for the production and/or storage for later 
injection of electricity identified in the Interconnection Request, 
but shall not include the Interconnection Customer's Interconnection 
Facilities'' as defined in the pro forma LGIA.
    \342\ PJM Manual 14G (Generation Interconnection Requests).
---------------------------------------------------------------------------

ii. Comments in Hybrid Resource Proceeding
    249. Commenters in the hybrid resources proceeding in Docket No. 
AD20-9-000 noted the nationwide growth of hybrid resources that are 
made up of at least one electric storage resource.\343\ Some commenters 
called

[[Page 39975]]

for uniformity in transmission providers' material modification 
determinations when evaluating an addition to an interconnection 
request of a generating facility, such as electric storage, that does 
not change the interconnection service level of the existing 
interconnection request.\344\ They noted that developers may be 
hesitant to request that the transmission provider consider the 
addition of an electric storage resource or other generating facility 
that does not change the interconnection service level in an existing 
interconnection request where such addition could cause the loss of a 
queue position if the developer is unwilling to forgo the change.\345\ 
In PJM, for example, the addition of electric storage is automatically 
deemed to be a material modification even in instances where the 
addition does not increase the requested interconnection service level, 
regardless of both (1) the use case for the proposed generating 
facility and (2) the operational controls that could be applied to the 
generating facility's output to limit fluctuation from the original 
injection limit at the point of interconnection.\346\
---------------------------------------------------------------------------

    \343\ Edison Electric Institute Comments, Docket No. AD20-9-000, 
at 2 (filed Sept. 20, 2021); Hybrid Resources Coalition Comments, 
Docket No. AD20-9-000, at 1 (filed Sept. 20, 2021); Clean Grid 
Alliance Comments, Docket No. AD20-9-000, at 2 (filed Sept. 20, 
2021).
    \344\ See Savion, Post-Technical Conference Comments, Docket No. 
AD20-9-000 (filed Sept. 24, 2020).
    \345\ SEIA, Comments, Docket No. AD20-9-000, at 6 (filed Sept. 
20, 2021).
    \346\ Pine Gate, Comments, Docket No. AD20-9-000, at 4 (filed 
Sept. 20, 2021); see PJM Manual 14G (Generation Interconnection 
Requests), section 4 (Generator Interconnection Requirements, Rights 
and Obligations).
---------------------------------------------------------------------------

    250. By contrast, in its informational report submitted as part of 
the hybrid resources proceeding, CAISO stated that it takes a more 
flexible approach to the material modification process that causes 
fewer interconnection customers to automatically lose their queue 
positions.\347\ Interconnection customers in CAISO may add an electric 
storage resource to an existing interconnection request or to a 
generating facility already in operation using the same process as all 
other modifications.\348\ Following the request, CAISO and the 
participating transmission owner study the modification to ensure there 
is no material change in electrical characteristics and that the 
proposed modification would not adversely affect the cost or timing of 
other interconnection requests. Even when an adverse impact is 
expected, however, CAISO allows the interconnection customer to 
mitigate the impact and revise the modification request. If the 
addition does not change the requested interconnection service level 
injection limit or the electrical characteristics, it is not considered 
a material modification and there is no loss in queue position. Under 
this approach, CAISO's overall process allows for fewer resource 
additions to be determined a material modification, especially if it 
does not change the requested interconnection service level.
---------------------------------------------------------------------------

    \347\ This flexible approach is possible, in part, because CAISO 
uses congestion management to mitigate the charging of an electric 
storage resource. See Hybrid Resources, Technical Conference 
Transcript, Docket No. AD20-9-000, at Tr. 66 (July 23, 2020) (Deb 
Levine, California Indep. Sys. Op.) (filed Dec. 8, 2020) (``Adding 
energy storage [to an existing interconnection request] is typically 
non-material because we use congestion management to mitigate any 
overloads caused by charging the energy storage.'').
    \348\ CAISO, Informational Report, Docket No. AD20-9-000, at 8-9 
(filed July 19, 2021).
---------------------------------------------------------------------------

    251. In the absence of a flexible approach, commenters suggested 
that transmission providers should be required to provide a specific 
list of the criteria that would cause a requested modification to a 
generating facility to be considered material. Several commenters 
additionally suggested that interconnection customers should be 
permitted to propose to add electric storage to an interconnection 
request without automatically triggering a material modification, as 
long as the addition of electric storage does not alter the requested 
interconnection service level and there are no other reliability 
concerns.\349\ Commenters suggested that interconnection customers 
should also be permitted to propose to install and use pre-approved 
controls that limit the resource's output to the requested 
interconnection service limit to prevent the addition of an electric 
storage resource being classified as a material modification by the 
transmission provider.\350\
---------------------------------------------------------------------------

    \349\ See, e.g., Hybrid Resources Coalition, Comments, Docket 
No. AD20-9-000, at 14-16 (filed Sept. 20, 2021).
    \350\ See, e.g., Pine Gate, Comments, Docket No. AD20-9-000, at 
4 (filed Sept. 20, 2021).
---------------------------------------------------------------------------

iii. Need for Reform
    252. For the reasons explained below, we are concerned that, 
because certain requested modifications are often deemed material 
without an evaluation, the material modification process may result in 
unjust and unreasonable or unduly discriminatory or preferential 
outcomes. As explained in Order No. 2003, it is inadequate and 
inefficient to solve interconnection issues on a case-by-case 
basis.\351\ In the case of material modification, without a standard 
set of procedures, transmission providers have adopted variable 
strategies for processing requests to add electric storage, or other 
generating facilities that do not change the requested interconnection 
service limit, to existing interconnection requests. This lack of 
uniformity leads to disparate outcomes across the country and leaves 
open the potential for undue discrimination.
---------------------------------------------------------------------------

    \351\ Order No. 2003, 104 FERC ] 61,103 at PP 9-10.
---------------------------------------------------------------------------

    253. As explained above, the material modification provisions in 
the pro forma LGIP do not specify whether an interconnection customer 
can modify its interconnection request to add another generating 
facility at the same point of interconnection without increasing the 
requested interconnection service level. While in some regions, such as 
SPP, electric storage can be added to an interconnection request if it 
does not change the interconnection service limit,\352\ many 
transmission providers treat such a request automatically as a material 
modification because the pro forma LGIP does not clearly state whether 
transmission providers are obligated to evaluate such modification 
requests under section 4.4 of the pro forma LGIP. As such, the 
interconnection customer that wishes to make this type of change faces 
a loss of queue position regardless of the actual effect the addition 
of a generating facility to an interconnection request may have on the 
system. Yet, the addition of electric storage or other generating 
facilities--particularly for variable energy resources--will often have 
either a neutral or a net-positive impact on the reliability of the 
transmission system without changing the total interconnection service 
level requested. For example, the addition of electric storage can 
ensure that the output of variable energy resources becomes more 
predictable or provide other reliability support services to the 
transmission system.\353\
---------------------------------------------------------------------------

    \352\ SPP Hybrid Report, Docket No. AD20-9-000, at 4 (filed July 
19, 2021); CAISO, CAISO eTariff, app. A, Definitions, Congestion 
(2.0.0), Congestion Management (0.0.0). Note that SPP and CAISO have 
similar approaches that utilize congestion management as a way to 
address concerns with any overloads caused by charging energy 
storage.
    \353\ Gorman et al., Motivations & Options for Deploying Hybrid 
Generator-Plus-Battery Projects within the Bulk Power System, 
Electricity J., at 2 (June 2020).
---------------------------------------------------------------------------

    254. Because the pro forma LGIP material modification process does 
not evaluate the addition of an electric storage resource or other 
generating facility that does not change the interconnection service 
limit before deeming it a material modification, it is a significant 
barrier to interconnection customers that wish to make this type of 
change. We preliminarily find that such a barrier hinders access to the 
transmission system and may render the existing generator 
interconnection

[[Page 39976]]

processes unjust and unreasonable and unduly discriminatory or 
preferential.
iv. Proposal
    255. We propose to revise the pro forma LGIP to require 
transmission providers to evaluate the proposed addition of a 
generating facility to an interconnection request as long as the 
interconnection customer does not request a change to the originally 
requested interconnection service level. The transmission provider 
cannot automatically consider such a request to be a material 
modification. Specifically, we propose to require that: (1) 
transmission providers evaluate the proposed addition of a generating 
facility to an interconnection request within 60 calendar days of 
receiving the request for modification if such addition does not change 
the requested interconnection service level; (2) the change cannot be 
considered an automatic material modification and an evaluation 
(including studying the configuration and necessary modeling) must 
occur prior to determining whether the proposed change constitutes a 
material modification of the interconnection request; and (3) if the 
proposed change does not have a material impact on the cost or timing 
of any interconnection request that is lower or equally queued, and 
does not cause any other reliability concerns, the addition will not be 
considered a material modification. The reliability concerns could 
include, for example, a material impact on the transmission system with 
regard to short circuit capability limits, steady-state thermal and 
voltage limits, or dynamic system stability and response.
    256. We seek comment on whether the addition of a generating 
facility that does not alter an interconnection customer's 
interconnection service limit could nonetheless require a full 
interconnection service study. We also seek comment on how transmission 
providers should perform studies required to confirm that there is no 
adverse impact because of the addition of a generating facility to an 
interconnection request, such as confirmation that the electrical 
characteristics of the interconnection customer remain the same.
    257. In addition, we seek comment on whether and how 
interconnection customers in a later cluster, or interconnection 
customers that are in the same cluster, could be adversely impacted by 
such changes. We further seek comment on whether the addition of 
electric storage when in charging mode (in terms of resistance, 
inductance, and capacitance) may change the electrical characteristics 
of an interconnection request, and whether those changes may affect the 
reliable operation of the generating facility related to that 
interconnection request. We also seek comment on whether further 
specification is needed for the assessment of the electrical 
characteristics due to the addition of a complex load.
c. Availability of Surplus Interconnection Service
i. Background
    258. In Order No. 845, the Commission implemented a reform that 
established a surplus interconnection service. The requirement mandated 
that transmission providers provide an expedited process for 
interconnection customers to utilize or transfer surplus 
interconnection service at existing generating facilities.\354\ The 
Commission defined surplus interconnection service as ``any unused 
portion of Interconnection Service established in a Large Generator 
Interconnection Agreement, such that if Surplus Interconnection Service 
is utilized the Interconnection Service limit at the Point of 
Interconnection would remain the same.'' \355\ The Commission explained 
that the ``surplus interconnection service is created because 
generating facilities may not operate at full capacity at all times. 
Consistent with the requirements of Order No. 2003, transmission 
providers assume that each interconnection customer is fully utilizing 
its interconnection service when studying other requests for new 
interconnections.'' \356\ The surplus interconnection service process 
does not require an assessment from the transmission provider, nor does 
it require the approval of the transmission provider.
---------------------------------------------------------------------------

    \354\ Order No. 845, 163 FERC ] 61,043 at P 453.
    \355\ Id. P 459.
    \356\ Id. P 468.
---------------------------------------------------------------------------

    259. The surplus interconnection service reform contemplated that 
the existing facilities would be in commercial operation at the time of 
the request to use the surplus interconnection service. However, the 
Commission has recognized that, once an interconnection customer is 
fully studied and has an executed LGIA or filed an unexecuted LGIA, it 
could be considered an existing facility for purposes of the surplus 
interconnection service process.\357\
---------------------------------------------------------------------------

    \357\ Midcontinent Indep. Sys. Operator, Inc., 177 FERC ] 
61,234, at P 13 (2021).
---------------------------------------------------------------------------

    260. MISO, in particular, has recently implemented changes that 
would allow interconnection customers to utilize the surplus 
interconnection service process prior to obtaining an executed LGIA or 
requesting the filing of an unexecuted LGIA.\358\ Previously, MISO 
allowed interconnection customers to request, and MISO to begin 
processing, interconnection requests for surplus interconnection 
service after an interconnection customer obtained an ``effective 
[GIA]'' \359\ for a generating facility. MISO now allows 
interconnection customers to request surplus interconnection service 
much earlier in the interconnection study process for a generating 
facility with a valid interconnection request from which such service 
will be obtained upon request. Specifically, such requests are now 
allowed after the completion of Decision Point II, which occurs after 
an interconnection customer receives certain study results for an 
interconnection request and which, according to MISO, is the point that 
interconnection requests remaining in the interconnection queue become 
more likely to successfully proceed to a GIA. MISO will begin 
processing and studying the surplus interconnection request, but no GIA 
will be tendered for the surplus interconnection service before the 
generating facility from which such service will come has an 
``effective GIA.''
---------------------------------------------------------------------------

    \358\ See id.
    \359\ MISO, FERC Electric Tariff, attach. X, Generator 
Interconnection Procedures (GIP) (155.0.0), section 3.3.1.1.3.a.
---------------------------------------------------------------------------

ii. Comments
    261. In the hybrid resources proceeding in Docket No. AD20-9-000, 
the Hybrid Resources Coalition argued that MISO's process should serve 
as the model for how transmission providers process requests to add an 
electric storage resource to an existing generating facility because it 
allows the surplus interconnection service process to be used earlier, 
as noted above. The Hybrid Resources Coalition further argued that 
owners of existing generating facilities should be able to add electric 
storage through the surplus interconnection service process or some 
other process.\360\
---------------------------------------------------------------------------

    \360\ Hybrid Resources Coalition, Comments, Docket No. AD20-9-
000 (filed Sept. 20, 2021).
---------------------------------------------------------------------------

iii. Need for Reform
    262. As described above, Order No. 845 established a surplus 
interconnection service process to enable a new interconnection 
customer to utilize the unused portion of an existing interconnection 
customer's approved interconnection service through the inclusion of an 
additional

[[Page 39977]]

generating facility behind a single point of interconnection. Most 
transmission providers subsequently implemented additional requirements 
limiting requests for surplus interconnection service until after a 
facility reaches commercial operation. Even though the addition of a 
generating facility could be pursued as a material modification prior 
to the commercial operation date, that process is more burdensome 
because it requires an evaluation by the transmission provider and is 
subject to transmission provider approval.
    263. While the surplus interconnection service process was created 
for existing generating facilities, Order No. 845 does not specify when 
a generating facility is considered to be ``existing'' for the purpose 
of Order No. 845. Limiting the use of surplus interconnection service 
to only those interconnection customers that have achieved commercial 
operation may unduly restrict access to potentially available surplus 
interconnection capacity. We find that this restriction may therefore 
be unjust and unreasonable and unduly discriminatory or preferential 
because it limits the applicability of surplus interconnection service.
iv. Proposal
    264. We propose to revise the pro forma LGIP to require 
transmission providers to allow interconnection customers to access the 
surplus interconnection service process once the original 
interconnection customer has an executed LGIA or requests the filing of 
an unexecuted LGIA. Allowing an interconnection customer to request 
surplus interconnection service after the original interconnection 
customer executes an LGIA or requests the filing of an unexecuted LGIA 
would enable interconnection customers with unused interconnection 
capacity to let other generating facilities use that capacity earlier 
than is currently allowed. We believe that doing so would increase the 
overall efficiency of the interconnection queue and ensure the 
efficient use of available interconnection capacity that has already 
been studied and granted to an interconnection customer. This is 
consistent with Order 845, in which we state:

    We affirm that requiring transmission providers to establish an 
expedited process, separate from the interconnection queue, for the 
use of surplus interconnection service could reduce costs for 
interconnection customers by increasing the utilization of existing 
interconnection facilities and network upgrades rather than 
requiring new ones, improve wholesale market competition by enabling 
more entities to compete through the more efficient use of surplus 
existing interconnection capacity, and remove economic barriers to 
the development of complementary technologies such as electric 
storage resources that may be able to easily tailor their use of 
interconnection service to adhere to the limitations of the surplus 
interconnection service that may exist. Further, we find that 
facilitating the use of surplus interconnection service could 
improve capabilities at existing generating facilities, prevent 
stranded costs, and improve access to the transmission system.\361\
---------------------------------------------------------------------------

    \361\ Order No. 845, 163 FERC ] 61,043 at P 467.
---------------------------------------------------------------------------

d. Operating Assumptions for Interconnection Studies
i. Background
    265. The pro forma LGIP includes only general requirements 
regarding the operating assumptions for generating facilities in 
interconnection studies.\362\ In particular, current operating 
assumptions for interconnection studies were developed prior to the 
large-scale adoption of variable energy resources, the advent of 
electric storage, and the adoption of co-located resources, including 
hybrid resources. In many instances, these operating assumptions may 
not reflect the real-world operation of electric storage 
resources,\363\ and co-located resources containing electric storage 
resources (including hybrid resources \364\), among others, because 
they assume patterns of operation similar to traditional resources and 
firm end-use customer load. For example, some transmission providers 
assume that all generating facilities in a constrained area will seek 
to generate simultaneously during light load conditions or that all 
electric storage resources will seek to charge during peak load 
conditions. Similarly, some transmission providers may assume that 
resources will operate in a manner in which they are physically 
incapable of operating, such as assuming that solar resources will 
produce electricity after the sun sets, for example, or that wind will 
produce maximum output in a less windy season. In addition, other 
examples could include natural gas facilities that need adjusted 
operating assumptions based on the inability to procure fuel at certain 
times, or a pumped hydro plant that is limited in its ability to pump 
at night given voltage constraints.
---------------------------------------------------------------------------

    \362\ See, e.g., pro forma LGIP section 3.2.1.2 (describing the 
study requirements for ERIS); id. section 3.2.2.2 (describing the 
study requirements for NRIS).
    \363\ An electric storage resource is defined as a resource 
capable of receiving electric energy from the grid and storing it 
for later injection of electric energy back to the grid. See 
Electric Storage Participation in Markets Operated by Regional 
Transmission Organizations and Independent System Operators, Order 
No. 841, 162 FERC ] 61,127 at n.1 (2018), order on reh'g, Order No. 
841-A, 167 FERC ] 61,154 (2019). Because the pro forma LGIP and pro 
forma LGIA address interconnection to the transmission system (See 
Pro Forma LGIP Section 1), we use the term electric storage resource 
in this NOPR in that context.
    \364\ Hybrid Resources, Order Directing Reports, 174 FERC ] 
61,034 (Jan. 2021). Hybrid Resources White Paper: A Staff Paper: 
Federal Energy Regulatory Commission. Docket No. AD20-9-000 (May 
2021).
---------------------------------------------------------------------------

    266. Further, for generating facilities that intend to inject 
energy onto the transmission system as well as withdraw energy from the 
transmission system, such as electric storage resources and co-located 
resources containing electric storage resources (including hybrid 
resources), transmission providers have expanded the traditional scope 
of interconnection studies to include the impact of energy withdrawals 
by the generating facility during the generator interconnection process 
to determine whether network upgrades are needed. Many transmission 
providers assume in their interconnection studies that these generating 
facilities withdraw the maximum amount of energy during peak load 
conditions, which is comparable to assuming that these generating 
facilities behave like firm end-use customer load that is unresponsive 
to transmission system conditions. However, during real-time 
operations, the controlled withdrawals of an electric storage resource 
or co-located resources containing an electric storage resource 
(including hybrid resources) for charging differ significantly from the 
behavior of largely uncontrollable end-use customer loads. Unlike most 
firm load, an electric storage resource, or co-located resource 
containing an electric storage resource (including hybrid resources), 
can choose when to withdraw energy based on real-time information from 
the transmission provider, and some electric storage resources or co-
located resources containing an electric storage resource (including 
hybrid resources) can respond to signals from the transmission provider 
to reduce or stop charging (withdrawing energy from the transmission 
system) within seconds.\365\
---------------------------------------------------------------------------

    \365\ See, e.g., Pac. Nw. Nat'l Lab'y, Energy Storage Technology 
and Cost Characterization Report, at 3.6 (July 2019), https://www.energy.gov/sites/prod/files/2019/07/f65/Storage%20Cost%20and%20Performance%20Characterization%20Report_Final.pdf; NERC, Energy Storage: Impacts of Electrochemical Utility-Scale 
Battery Energy Storage Systems on the Bulk Power System, at 15 (Feb. 
2021), https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/Master_ESAT_Report.pdf.
---------------------------------------------------------------------------

    267. By contrast, other transmission providers have used operating 
assumptions for interconnection studies

[[Page 39978]]

that more closely match the expected operation of the generating 
facility seeking to interconnect. For instance, CAISO's approach, in 
which electric storage resources are subject to CAISO's congestion 
management practices,\366\ has helped to avoid some of the issues 
above. This difference allows CAISO to curtail an electric storage 
resource's charging, if necessary, during a peak load period and remain 
confident that such curtailment will not adversely affect its system.
---------------------------------------------------------------------------

    \366\ See CAISO, Energy Storage Interconnection: Draft Final 
Proposal, at 15-17 (2014), http://www.caiso.com/Documents/DraftFinalProposal_EnergyStorageInterconnection.pdf.
---------------------------------------------------------------------------

ii. Comments
    268. Several commenters in the hybrid resources proceeding raised 
concerns with the operating assumptions for interconnection studies 
that transmission providers generally use to study co-located resources 
and hybrid resources, as well as for stand-alone electric storage 
resources. For instance, several commenters stated that multiple RTOs/
ISOs rely on worst-case operating assumptions for interconnection 
studies, for example that the electric storage resources will charge 
during peak load periods and discharge when load is light.\367\ 
Commenters argued that such operating assumptions for interconnection 
studies can lead to projects being assigned unnecessary and expensive 
network upgrade costs that make projects uneconomic.\368\
---------------------------------------------------------------------------

    \367\ Hybrid Resource Coalition, Comments, Docket No. AD20-9-
000, at 11-12 (filed Sept. 20, 2021); City of New York, Comments, 
Docket No. AD20-9-000, at 3 (filed Sept. 20, 2021); Clean Grid 
Alliance, Comments, Docket No. AD20-9-000, at 3 (filed Sept. 20, 
2021); Savion, Post-Technical Conference Comments, Docket No. AD20-
9-000, at 7 (filed Sept. 24, 2020); Enel, Post-Technical Conference 
Comments, Docket No. AD20-9-000, at 2-3 (filed Sept. 24, 2020).
    \368\ City of New York, Comments, Docket No. AD20-9-000, at 3 
(filed Sept. 20, 2021).
---------------------------------------------------------------------------

    269. In addition, commenters noted that interconnection studies 
often include inappropriate assumptions for electric storage resources 
regarding when the resource will charge to capture energy that would 
have been lost during curtailment.\369\ This can also include studying 
electric storage resources as if it were consistently using full charge 
and discharge cycles, even though that is often not how the resource 
would operate--in many cases the electric storage may be partially 
charging or discharging in response to market signals, such as 
responding to locational marginal prices in the RTO/ISO context, or 
responding to dispatch instructions more generally.
---------------------------------------------------------------------------

    \369\ Savion, Post-Technical Conference Comments, Docket No. 
AD20-9-000, at 4-5 (filed Sept. 24, 2020).
---------------------------------------------------------------------------

    270. Some commenters argued that the increased network upgrade 
costs caused by unnecessary or redundant network upgrades for 
generating facilities can be avoided if the interconnection studies 
assume that the planned resource will respond to market signals,\370\ 
or assume a particular ``use case,'' such as avoiding charging during 
peak periods, scarcity periods, or other designated periods. Pine Gates 
states that operating assumptions for interconnection studies could 
also be based on the generating facility's specific configuration and 
known operational constructs for electric storage projects.\371\ Pine 
Gates further states that this could also be applied to other 
generating facility types, such as solar, that currently may have 
erroneous assumptions made about their ability to operate at night, for 
instance.
---------------------------------------------------------------------------

    \370\ City of New York, Comments, Docket No. AD20-9-000, at 3 
(filed Sept. 20, 2021); Clean Grid Alliance, Comments, Docket No. 
AD20-9-000, at 3 (filed Sept. 20, 2021); Hybrid Resources Coalition, 
Comments, Docket No. AD20-9-000, at 11-12, 16 (filed Sept. 20, 
2021).
    \371\ Pine Gate, Comments, Docket No. AD20-9-000, at 5-6 (filed 
Sept. 20, 2021).
---------------------------------------------------------------------------

    271. Resource developers advocated for a process under which 
transmission providers would specify, per the requirements of 
identified use cases, pre-determined conditions under which an electric 
storage resource would be permitted to operate as load or as a 
generating facility: for instance, that electric storage resources 
could only charge outside of peak load conditions.\372\ One commenter 
noted that this approach would enable the transmission provider to 
realistically study the electric storage resource, as opposed to 
studying it under scenarios where the resource acts as load and as a 
generating facility simultaneously.\373\
---------------------------------------------------------------------------

    \372\ Id.
    \373\ Id.
---------------------------------------------------------------------------

    272. In addition, in response to the Commission's recent ANOPR on 
transmission and interconnection reform, the National Association of 
Regulatory Utility Commissioners (NARUC) agreed that interconnection 
studies used to evaluate Electric Storage Resources should reflect 
reasonable operating assumptions, such as charging during off-peak 
hours.\374\ The American Clean Power Association and U.S. Energy 
Storage Association (ACPA/ESA) noted that the unrealistic assumption 
that storage will charge at full capacity during peak load incentivizes 
developers to site storage far from binding transmission elements to 
avoid costly network upgrades.\375\ ACPA/ESA argued that siting this 
way is inefficient because the expected dispatch of storage near a 
binding transmission element in response to wholesale market prices 
would most likely relieve the binding transmission element rather than 
exacerbate it. The Union of Concerned Scientists agreed that assuming 
electric storage resources will charge during peak load periods and 
exacerbate transmission constraints is unrealistic because electric 
storage resources are typically deployed with a specific operating 
strategy in mind to reduce or eliminate a transmission constraint.\376\ 
ACPA/ESA further argued that current operating assumptions in 
interconnection studies disregard the ability of storage to install 
software and hardware controls to prevent dispatch in response to 
predefined line loading criteria and/or predetermined time periods.
---------------------------------------------------------------------------

    \374\ NARUC, Comments, Docket No. RM21-17-000, at 9 (filed Oct. 
12, 2021).
    \375\ ACPA/ESA, Comments, Docket No. RM21-17-000, at 41-42 
(filed Oct. 12, 2021).
    \376\ Union of Concerned Scientists, Comments, Docket No. RM21-
17-000, at 63-64 (filed Oct. 12, 2021).
---------------------------------------------------------------------------

    273. Other commenters noted that the issue concerning inaccurate 
operating assumptions applies beyond the electric storage resource and 
co-located resource or hybrid resource context and argued that the 
requirement for accurate operating assumptions should apply to all 
generating facility types. Using the framework of fuel-based dispatch 
as a reference to accurate operating assumptions, Enel explains, 
``[t]he Commission should direct all Transmission Providers to 
implement fuel-based dispatch assumptions in studies to further reduce 
interdependency between interconnection requests.'' \377\ Enel further 
states,
---------------------------------------------------------------------------

    \377\ Enel, Comments, Docket No. RM21-17-000, at 16 (filed Oct. 
12, 2021).

by studying new generators only in seasons and load profiles that 
match the likely generation profile of the fuel source, 
interconnection requests become less dependent on the results of 
interconnection studies for generators of different fuel types. For 
instance, a solar project may produce more during the summer, and a 
wind project may produce more during the winter. Studying the two 
projects as if they will achieve maximum output at the same time for 
several hours of the year could create the false impression that 
upgrades are necessary to integrate the two projects on the grid. 
This would create interdependence, such that one project dropping 
out would trigger a restudy for the other project and queue delays. 
With fuel-based dispatch [assumptions,] the two projects will not 
achieve maximum output at the same time for many hours of the year 
and

[[Page 39979]]

avoid the interdependence and need to restudy.\378\
---------------------------------------------------------------------------

    \378\ Id.

    Enel also noted that MISO and PJM already employ such an approach.
    274. Commenters in the hybrid resources proceeding also noted that 
modern control technology can limit an entire hybrid facility's impact 
at the point of interconnection.\379\ This ability would apply to 
variable energy resources and stand-alone electric storage resources, 
as well as co-located resources containing electric storage resource 
(including hybrid resources).
---------------------------------------------------------------------------

    \379\ Pine Gate, Comments, Docket No. AD20-9-000, at 4 (filed 
Sept. 20, 2021).
---------------------------------------------------------------------------

    275. Commenters also suggested that transmission providers should 
provide guidance regarding required control equipment, such that 
developers can better plan for any additional costs of this equipment, 
because this may influence how a developer configures its project.\380\ 
Commenters further recommended that the Commission require transmission 
providers to use operating assumptions for interconnection studies that 
are based on a hybrid resource's specific configuration.\381\ In one 
example, Clean Grid Alliance asserted that the MISO generator 
interconnection process does not account for all applications of 
electric storage resources because it studies storage at 100% dispatch 
in all planning scenarios.\382\ Clean Grid Alliance noted that this 
problem is particularly pronounced for hybrid resources, where each 
component is separately submitted to the MISO queue, because the 
electric storage component is assessed for impacts to the transmission 
system in operating scenarios that will never exist.
---------------------------------------------------------------------------

    \380\ Hybrid Resources Coalition, Comments, Docket No. AD20-9-
000, at 12 (filed Sept. 20, 2021).
    \381\ Id. at 10-11; Pine Gate, Comments, Docket No. AD20-9-000, 
at 6 (filed Sept. 20, 2021).
    \382\ Clean Grid Alliance, Comments, Docket No. AD20-9-000, at 3 
(filed Sept. 20, 2021).
---------------------------------------------------------------------------

    276. Providing another perspective, EEI stated that transmission 
providers may need to gain more experience with the operation of hybrid 
resources before determining whether new study approaches are 
necessary. EEI contended that this could allow transmission providers 
the time needed to gain more experience with hybrid resources in order 
to inform the need for new study approaches in the future.\383\
---------------------------------------------------------------------------

    \383\ Edison Electric Institute, Comments, Docket No. AD20-9-
000, at 6 (filed Sept. 20, 2021).
---------------------------------------------------------------------------

    277. In addition, commenters such as NYISO raised concerns that 
requiring transmission providers to change operating assumptions for 
interconnection studies could pose reliability and market 
concerns.\384\ NYISO argued that it needs to study the actual minimum 
and maximum capabilities of a proposed resource to consider potential 
market impacts of that resource. NYISO asserted that studying a 
proposed resource based on its planned operational parameters would 
limit the resources available to system operators to address system 
needs during real-time operation and could result in directing the 
operation or curtailment of other generating facilities out of economic 
merit order because the transmission system is not sufficiently 
robust.\385\
---------------------------------------------------------------------------

    \384\ NYISO, Reply Comments, Docket No. AD20-9-000, at 8 (filed 
Oct. 20, 2021).
    \385\ Id. at 8-9.
---------------------------------------------------------------------------

    278. Some participants in and commenters to the Commission's 2016 
technical conference on generator interconnection agreements identified 
CAISO's approach as a best practice for modeling electric storage 
resources in interconnection studies during the conference and in post-
technical conference comments.\386\
---------------------------------------------------------------------------

    \386\ Review of Generator Interconnection Agreements and 
Procedures, Technical Conference Transcript, Docket No. RM16-12-000, 
at Tr. 239-240 (May 13, 2016); RES Americas, Comments, Docket No. 
RM16-12-000, at 3 (filed June 30, 2016).
---------------------------------------------------------------------------

iii. Need for Reform
    279. We expect that, in many cases, the operating assumptions used 
for interconnection studies will be sufficient to accurately identify 
the network upgrades needed to reliably interconnect many generating 
facilities. However, as newer technologies with operating parameters 
that differ from traditional generation seek to interconnect, we 
preliminarily find that it is necessary for transmission providers to 
use assumptions that accurately reflect the operating parameters of 
electric storage resources and co-located resources containing electric 
storage resources (including hybrid resources), so that the unique 
operating characteristics of such resources are taken into account 
during the generator interconnection process. If the operating 
assumptions for interconnection studies do not reflect the operational 
pattern of the interconnecting generating facilities, it is possible 
that interconnection studies will overestimate the proposed generating 
facilities' impact on the transmission system, thereby assigning 
network upgrades to the interconnection customer that would be 
unnecessary under planned operations. Because the pro forma LGIP 
includes only general requirements regarding the operating assumptions 
for generating facilities in interconnection studies, we are concerned 
that electric storage resources, and co-located resources containing 
electric storage resources (including hybrid resources), may be studied 
under inappropriate operating assumptions that result in assigning 
unnecessary network upgrades and increased costs to interconnection 
customers. We therefore preliminarily find that the lack of realistic 
operating assumptions used in interconnection studies for electric 
storage resources and co-located resources containing electric storage 
resources (including hybrid resources) can result in excessive and 
unnecessary network upgrades and may hinder the timely development of 
new generation, thereby stifling competition in the wholesale markets, 
and resulting in rates, terms, and conditions that are unjust and 
unreasonable. Further, we preliminarily find that the lack of 
appropriate operating assumptions used in interconnection studies may 
present an unduly discriminatory or preferential barrier to the 
interconnection of electric storage resources and co-located resources 
containing electric storage resources (including hybrid resources).
iv. Proposal
    280. We propose to revise the pro forma LGIP to require 
transmission providers, at the request of the interconnection customer, 
to use operating assumptions for interconnection studies that reflect 
the proposed operation of an electric storage resource or co-located 
resource containing an electric storage resource (including hybrid 
resources)--i.e., whether the interconnecting resource will or will not 
charge during peak load conditions, unless good utility practice, 
including applicable reliability standards, otherwise require the use 
of different operating assumptions. Such operating assumptions shall be 
proposed by the interconnection customer as part of its initial 
interconnection request. We believe this will ensure that the 
flexibility provided by this reform does not delay the cluster study 
process as proposed earlier in this NOPR, and does not delay 
interconnection studies, or otherwise harm other interconnection 
customers in the cluster because all operating assumptions for 
interconnection studies would be clarified prior to entering a cluster 
study process. Such operating assumptions must be reasonably 
representative of the likely behavior of an electric storage resource 
or co-located resource containing an electric storage resource 
(including hybrid resources) and, in cases where available, consistent

[[Page 39980]]

with the historical performance of such resources in the relevant 
geographic area. Further, to help facilitate alignment between as-
studied and real-world conditions, we propose to allow transmission 
providers to hold interconnection customers to the intended operation 
of their electric storage resource or co-located resource containing an 
electric storage resource (including hybrid resources) by: (1) 
memorializing these operating restrictions in the interconnection 
customer's LGIA; (2) requiring control technologies (software and/or 
hardware) in cases where appropriate, such as for electric storage that 
wishes to limit its operations, with such protection devices included 
in Appendix C of the LGIA. If the interconnection customer fails to 
operate its electric storage resource or co-located resource containing 
an electric storage resource (including hybrid resources) in accordance 
with these conditions as memorialized in the LGIA, the interconnection 
customer may be considered in breach and the transmission provider may 
pursue termination pursuant to article 17 of the LGIA.
    Additionally, we propose to require that any transmission provider 
that requires electric storage resources or co-located resources 
containing an electric storage resource (including hybrid resources) to 
install control technologies to publicly post a list of acceptable 
control technologies. Furthermore, we propose revisions to the 
description of the ERIS and NRIS studies in sections 3.2.1.2. and 
3.2.2.2 of the pro forma LGIP to accommodate this proposed reform.
    281. We propose to require that interconnection customers clearly 
communicate to the transmission provider the expected operating 
patterns of the electric storage resource, or co-located resource 
containing an electric storage resource (including hybrid resources). 
In addition, for the electric storage resource or co-located resource 
containing an electric storage resource (including hybrid resources) to 
be studied, the interconnection customer must specify, as part of its 
initial interconnection request, the ancillary services that it would 
or would not provide so that the proper operating assumptions may be 
made in interconnection studies. Regardless of any changes to operating 
assumptions, all electric storage resources, or co-located resources 
containing an electric storage resource (including hybrid resources) 
must continue to meet all requirements in the pro forma LGIP and pro 
forma LGIA, as well as all applicable reliability standards.
    282. Under this proposed reform, studies based on operational use 
cases would reflect the planned operation of the electric storage 
resource, or co-located resource containing electric storage resource 
(including hybrid resources). Order No. 845 provides precedent for the 
Commission to require transmission providers to revise their 
interconnection study assumptions to ensure just and reasonable rates. 
In Order No. 845, the Commission revised the pro forma LGIP to require 
transmission providers to allow interconnection customers' requests to 
be studied and modeled below their full generating capacity.\387\ Under 
this proposed reform, each transmission provider's operating 
assumptions used in their interconnection studies would be required to 
take into consideration the services that the generating facility would 
provide and the timing of such services, as applicable.\388\ This could 
be done in a variety of ways, and the transmission provider would have 
flexibility to consider services as best fits its transmission system.
---------------------------------------------------------------------------

    \387\ Order No. 845, 163 FERC ] 61,043 at P 343.
    \388\ This could include potential ancillary services any 
generating facility, including hybrid resources, could provide, such 
as contingency reserves, ramping or other operating reserves, which 
when dispatched or called upon, causes the electric storage device 
to be recharged in the peak period to meet its obligations later in 
the day.
---------------------------------------------------------------------------

    283. We acknowledge the concern held by some entities that 
transmission providers should not be required to study electric storage 
resources, or co-located resources containing an electric storage 
resource (including hybrid resources) according to their intended 
operation because it is not possible to guarantee that those resources 
will not deviate from the intended operating assumptions.\389\ However, 
we preliminarily find that this concern can be addressed by requiring 
interconnection customers to utilize control technologies inherent to 
electric storage resources \390\ to ensure that the operation does not 
deviate from the proposed operational pattern, consistent with the 
Commission's requirements for requesting interconnection service below 
full generating capacity. We seek comment on the extent of the 
potential burden on transmission providers in tracking the usage of 
such operating limitations.
---------------------------------------------------------------------------

    \389\ NYISO, Reply Comments, Docket No. AD20-9-000, at 8 (filed 
Oct. 20, 2021).
    \390\ See, e.g., AES Companies, Comments, Docket No. RM16-12-
000, at 14-15 (filed June 21, 2016); Energy Storage Association, 
Comments, Docket No. RM16-12-000, at 2-3, 7-8 (filed June 30, 2016); 
Hybrid Resources Coalition, Comments, Docket No. AD20-9-000, at 16 
(filed Sept. 20, 2021).
---------------------------------------------------------------------------

    284. As noted previously, when studying the charging of an electric 
storage resource or co-located resources containing an electric storage 
resource (including hybrid resources), assuming for purposes of 
operating assumptions in interconnection studies that all such 
resources will behave like firm load and add to peak demand without the 
ability to respond to signals from the transmission provider to curtail 
charging, is inaccurate and can lead to expensive and unnecessary 
network upgrades.
    285. For that reason, we propose to clarify that the proposed 
reform described in this section to study electric storage resources, 
or co-located resources containing an electric storage resource 
(including hybrid resources) according to their planned operating 
assumptions at the request of the interconnection customer as part of 
its initial interconnection request is intended to mean the operating 
assumptions for withdrawals of energy (e.g., the charging of an energy 
storage resource) in interconnection studies. In line with the proposed 
reform as described above, we propose to require that the 
interconnection customer include in its initial interconnection request 
any operating assumptions for withdrawals of energy to be used by the 
transmission provider in interconnection studies.
    286. We seek comment on whether the Commission should expand this 
reform to address operating assumptions for additional generating 
facility technologies that may currently be inaccurately modeled, such 
as variable energy resources. For example, we seek comment on whether 
the Commission should expand this proposal to specify only that, at the 
interconnection customer's request, a transmission provider must not 
study generating facilities in ways that are not physically possible, 
for example studying a solar resource as producing energy at night, or 
a wind resource as producing maximum energy during low wind seasons, or 
other circumstances wherein any resource is studied in ways that are 
not physically possible, subject to the same proposed requirement that 
the generating facility be equipped with sufficient control technology, 
such as special protection systems, and/or subject to penalties for 
deviating from dispatch. We seek comment on whether other operating 
assumptions, in addition to the assumption that electric storage 
resources withdraw energy during peak load periods, should be 
considered as part of this proposed reform.
    287. We seek comment on how the Commission should define the study 
parameters (e.g., should the Commission

[[Page 39981]]

define the ``peak load period'' and/or ``net peak load'' during which 
transmission providers must not study a generating facility as 
withdrawing energy, and if so how).
    288. In addition to this proposed reform, we seek comment on 
whether, and if so how, the Commission should define firm and non-firm 
charging for electric storage resources and require transmission 
providers to define study criteria and possible ways to interconnect 
related to both firm and non-firm charging. We seek comment on whether 
providing such options would improve the effectiveness of this proposed 
reform and whether there would be other consequences of implementing 
such an approach. With respect to the definition of firm and non-firm 
charging, we seek comment on whether the Commission should, for 
example, (1) define firm charging service as interconnection service 
that allows the interconnection customer to be eligible to receive 
electric energy in a manner comparable to a transmission provider's 
load, and (2) define non-firm charging service as interconnection 
service that allows the interconnection customer to be eligible to 
receive electric energy using the existing firm or non-firm capacity of 
the transmission system on an ``as available'' basis, noting that in an 
RTO/ISO with market-based congestion management, a generating facility 
with non-firm charging service must respond to the RTO's/ISO's dispatch 
instructions, including curtailment to manage congestion.
2. Incorporating Alternative Transmission Technologies Into the 
Generator Interconnection Process
a. Background
    289. Under the pro forma LGIP and pro forma SGIP, transmission 
providers often do not consider newer technologies--such as dynamic 
line ratings or advanced power flow control devices--as they identify 
network upgrades, and instead tend toward solutions they have more 
experience with, such as reconductoring a line or upgrading a 
transformer at a transmission substation.\391\ For example, 
reconductoring a transmission line provides a certain MW capacity 
increase, while dynamic line ratings or advanced power flow control 
devices may increase capacity dependent on ambient or transmission 
system conditions.
---------------------------------------------------------------------------

    \391\ See supra note 90.
---------------------------------------------------------------------------

    290. To date, the Commission has provided few requirements 
regarding how to consider dynamic line ratings and advanced power flow 
control devices in generator interconnection processes, and only a 
small number of such technologies have been deployed to address impacts 
that result from the potential addition of a generating facility.\392\ 
In the Commission's transmission incentives proceedings, the Commission 
is considering reforms to encourage the deployment of ``transmission 
technologies that, as deployed in certain circumstances, enhance 
reliability, efficiency, and capacity, and improve the operation of new 
or existing transmission facilities,'' \393\ which includes the 
transmission technologies we discuss in this NOPR. In the ANOPR, the 
Commission sought comment on whether there is the potential for grid-
enhancing technologies (GETs) \394\--which also include the 
transmission technologies we discuss in this NOPR--not only to increase 
the capacity, efficiency, and reliability of transmission facilities, 
but in so doing, also to reduce the cost of interconnection-related 
network upgrades.\395\
---------------------------------------------------------------------------

    \392\ See, e.g., Advanced Energy Economy, Comments, Docket No. 
RM21-17-000, at 21 (filed Oct. 12, 2021); EDF Renewables, Comments, 
Docket No. RM21-17-000, at 17-18 (filed Oct. 12, 2021).
    \393\ See Elec. Transmission Incentives Pol'y Under Section 219 
of the Fed. Power Act, Notice of Proposed Rulemaking, 85 FR 18784 
(Apr. 2, 2020), 170 FERC ] 61,204, at P 9, errata notice, 171 FERC ] 
61,072 (2020).
    \394\ We do not use or define the term GETs for purposes of 
these reforms. However, for accuracy, we use the term GETs to 
summarize comments from the ANOPR because many of the technologies 
contemplated here are often considered GETs. In the ANOPR, the 
Commission referred to GETs as technologies that ``increase the 
capacity, efficiency, or reliability of transmission facilities,'' 
including ``(1) power flow control and transmission switching 
equipment; (2) storage technologies, and (3) advanced line rating 
management technologies.'' ANOPR, 176 FERC ] 61,024 at n.68. See 
also, Transmission Planning and Cost Allocation NOPR, 179 FERC ] 
61,028 at P 270 (``Advanced power flow control devices serve a 
transmission function. These devices can help the system operator 
control power flows over a given path and can include phase shifting 
transformers (also known as phase angle regulators) and devices or 
systems necessary for implementing optimal transmission switching. 
Advanced power flow control devices allow power to be pushed and 
pulled to alternate lines with spare capacity leading to maximum 
utilization of existing transmission capacity.'')
    \395\ ANOPR, 176 FERC ] 61,024 at P 158.
---------------------------------------------------------------------------

    291. In comments responding to the ANOPR, several commenters \396\ 
support the consideration of GETs during the generator interconnection 
process, with some advocating for a requirement that GETs be considered 
in all interconnection studies.\397\ Several commenters note that GETs 
can reduce the cost of network upgrades \398\ and the duration of time 
spent in interconnection queues.\399\ Commenters state that GETs are 
not currently considered in generator interconnection processes.\400\
---------------------------------------------------------------------------

    \396\ American Clean Power Association and Energy Storage 
Association (ACPA/ESA), Comments, Docket No. RM21-17-000, at 49 
(filed Nov. 30, 2021); CAISO, Comments, Docket No. RM21-17-000, at 
113-114 (filed Nov. 30, 2021); Clean Energy Coalition, Supplemental 
Comments, Docket No. RM21-17-000, at 7 (filed Nov. 30, 2021); EDF 
Renewables, Comments, Docket No. RM21-17-000, at 16-17 (filed Nov. 
30, 2021); Environmental Advocates, Comments, Docket No. RM21-17-
000, at 23-25 (filed Nov. 30, 2021); Industrial Customers, Comments, 
Docket No. RM21-17-000, at 37 (filed Nov. 30, 2021); Potomac 
Economics, Comments, Docket No. RM21-17-000, at 8-9 (filed Nov. 30, 
2021); United States Department of Energy, Comments, Docket No. 
RM21-17-000, at 48 (filed Nov. 30, 2021).
    \397\ Environmental Advocates, Comments, Docket No. RM21-17-000, 
at 23-25 (filed Nov. 30, 2021); Industrial Customers, Comments, 
Docket No. RM21-17-000, at 37 (filed Nov. 30, 2021).
    \398\ ACPA/ESA, Comments, Docket No. RM21-17-000, at 49 (filed 
Nov. 30, 2021); Environmental Advocates, Comments, Docket No. RM21-
17-000, at 23-25 (filed Nov. 30, 2021); Industrial Customers, 
Comments, Docket No. RM21-17-000, at 36-37 (filed Nov. 30, 2021); 
Potomac Economics, Comments, Docket No. RM21-17-000, at 8-9 (filed 
Nov. 30, 2021).
    \399\ ACPA/ESA, Comments, Docket No. RM21-17-000, at 64-65 
(filed Nov. 30, 2021); Environmental Advocates, Comments, Docket No. 
RM21-17-000, at 23-25 (filed Nov. 30, 2021).
    \400\ EDF Renewables, Comments, Docket No. RM21-17-000, at 16-17 
(filed Nov. 30, 2021).
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    292. Environmental Advocates state that the Commission should not 
simply allow transmission providers to independently decide on the 
viability of an alternative transmission technology; rather, the 
Commission should ensure that consideration of alternatives is open and 
transparent, and that interconnection customers should be able to 
determine if the analysis is sufficiently comprehensive.\401\ 
Similarly, EDF Renewables and ACPA/ESA argue that interconnection 
customers should have the opportunity to request GETs as an alternative 
solution to a network upgrade.\402\ ACPA/ESA state that electric 
storage could be considered a GET for interconnection purposes and 
submit that electric storage (and potentially other GETs) should 
qualify as a standalone network upgrade and be included under the 
option to build.\403\
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    \401\ Environmental Advocates, Comments, Docket No. RM21-17-000, 
at 23-25 (filed Nov. 30, 2021).
    \402\ ACPA/ESA, Comments, Docket No. RM21-17-000, at 64-65 
(filed Nov. 30, 2021); EDF Renewables, Comments, Docket No. RM21-17-
000, at 16-17 (filed Nov. 30, 2021).
    \403\ ACPA/ESA, Comments, Docket No. RM21-17-000, at 64-65 
(filed Nov. 30, 2021) (citing Order 845-A, 166 FERC ] 61,137 at P 2 
n.5 (``Stand alone network upgrades: shall mean Network Upgrades 
that an Interconnection Customer may construct without affecting 
day-to-day operations of the Transmission System during their 
construction. Both the Transmission Provider and the Interconnection 
Customer must agree as to what constitutes Stand Alone Network 
Upgrades and identify them in Appendix A to the Standard Large 
Generator Interconnection Agreement.'')).

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[[Page 39982]]

    293. On the other hand, EEI states that there are significant risks 
involved with the deployment of new technologies, such as uncertainties 
regarding long-term effectiveness, rapidly evolving technology 
rendering formerly installed technology obsolete, and concerns 
regarding cost recovery for these new investments. Thus, EEI advocates 
flexibility, but not a requirement, to evaluate them in the generator 
interconnection process.\404\
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    \404\ EEI, Comments, Docket No. RM21-17-000, at 39 (filed Nov. 
30, 2021).
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b. Need for Reform
    294. Alternative transmission technologies \405\ can provide 
substantial benefits to optimize the transmission system in specific 
scenarios. Namely, the below identified transmission technologies often 
can be deployed both more quickly and at lower costs than other network 
upgrades.\406\ As a result, selecting alternative transmission 
technologies as a network upgrade or in-lieu of a network upgrade may 
reduce interconnection costs by providing lower cost transmission 
solutions to interconnect new generating facilities. These technologies 
also have the potential to be used as temporary solutions while new 
network upgrades are constructed or used in combination with other 
network upgrades in generator interconnection processes.\407\
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    \405\ For purposes of these reforms, alternative transmission 
technologies are: advanced power flow control, transmission 
switching, dynamic line ratings, static synchronous compensators, 
and/or static VAR compensators.
    \406\ See, e.g., State Agencies, Comments, Docket No. RM21-27-
000, at 30-33 (filed Nov. 30, 2021).
    \407\ See, e.g., TAPS, Comments, Docket No. RM21-27-000, at 21-
22 (filed Nov. 30, 2021).
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    295. Specific opportunities to use alternative transmission 
technologies include resolving thermal overloads and/or redirecting 
flows following contingencies so that the transmission system will be 
operated within system operating limits. This could be achieved with 
advanced power flow control or by switching transmission system or 
generation elements. Transmission switching can reduce local congestion 
and increase transfer capacity. Dynamic line ratings, along with other 
alternative transmission technologies, can be used to enable dynamic 
injection limits at the point of interconnection and accommodate 
additional energy or ancillary services from generating facilities 
behind the point of interconnection. Devices such as static synchronous 
compensators and static VAR compensators can support or maintain 
voltages to avoid voltage collapse situations by increasing load and 
generation transfer capability.
    296. Despite these potential benefits, alternative transmission 
technologies often do not receive the same consideration during 
generator interconnection processes as other network upgrades and have 
only been deployed in a small number of instances.\408\ Furthermore, 
the current LGIP does not require transmission providers to consider 
such technologies. Therefore, reforms to require their consideration 
may be necessary to achieve their benefits in generator interconnection 
processes. We preliminarily find that failing to consider alternative 
transmission technologies that can be deployed both more quickly and at 
lower costs than network upgrades may render Commission-jurisdictional 
rates unjust and unreasonable.
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    \408\ See, e.g., Department of Energy, Advanced Transmission 
Technologies, at 28-30 (Feb. 12, 2020), https://www.energy.gov/oe/downloads/advanced-transmission-technologies-report; Environmental 
Advocates, Comments, Docket No. RM21-17-000, at 20 (filed Oct. 12, 
2021); R Street Institute, Comments, Docket No. RM21-17-000, at 3-4 
(filed Oct. 12, 2021).
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c. Proposals
i. Consideration of Alternative Transmission Technologies in 
Interconnection Studies Upon Request of the Interconnection Customer
    297. In order to ensure just and reasonable Commission-
jurisdictional rates, we propose to revise the pro forma LGIP and pro 
forma SGIP to require transmission providers, upon request of the 
interconnection customer, to evaluate the requested alternative 
transmission solution(s) during the LGIP cluster study and the SGIP 
system impact study and facilities study within the generator 
interconnection process.
    298. Here, to provide more certainty for evaluation purposes, and 
focus on technologies that serve a transmission function and thus are 
subject to Commission jurisdiction, we propose to specify the 
technologies that the interconnection customer may request to be 
evaluated. Specifically, we propose revisions to the LGIP and SGIP to 
require transmission providers to consider the following technologies 
within the cluster study of the LGIP and within the system impact study 
and facilities study of the SGIP upon request of the interconnection 
customer: advanced power flow control, transmission switching, dynamic 
line ratings, static synchronous compensators, and static VAR 
compensators. Advanced power flow control devices serve a transmission 
function. These devices can help the system operator control power 
flows over a given path and can include phase shifting transformers 
(also known as phase angle regulators) and devices or systems necessary 
for implementing optimal transmission switching. Advanced power flow 
control devices allow power to be pushed and pulled to alternate lines 
with spare capacity leading to maximum utilization of existing 
transmission capacity.\409\ Transmission switching, an application of 
transmission topology control, consists of strategically removing or 
inserting transmission elements into the transmission topology. 
Transmission switching can be used to route energy around areas with 
high congestion.\410\ A dynamic line rating is a transmission line 
rating that applies to a time period of not greater than one hour and 
reflects up-to-date forecasts of inputs such as (but not limited to) 
ambient air temperature, wind, solar heating, transmission line 
tension, or transmission line sag.\411\ Static synchronous compensators 
are voltage source converter \412\ devices that consists of a direct 
current (DC) voltage source behind a power electronic interface 
connected to the alternating current (AC) transmission system through a 
transformer. This results in a controllable voltage source and hence 
reactive power output.\413\ Static VAR compensators are flexible 
alternating current transmission system (FACTS) devices that consist of 
thyristor-controlled reactors (TCR), thyristor-switched capacitors 
(TSC), and fixed capacitors acting as a harmonic filter.

[[Page 39983]]

The TCR consists of reactors in series with thyristor valves that 
continuously control the reactive power output by varying the current 
flow through the reactor. A TSC consists of capacitors, reactors, and 
thyristor valves that simply switch the capacitor in and out of 
service. The fixed capacitor is part of the filter that absorbs the 
harmonics generated by the thyristor switching, supplying a fixed 
reactive power to the transmission system.\414\ We believe that the 
deployment of these transmission technologies may reduce 
interconnection costs by providing lower cost network upgrades to 
interconnect new generating facilities.
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    \409\ Transmission Planning and Cost Allocation NOPR, 179 FERC ] 
61,028, at P 261 (citing T. Bruce Tsuchida et al., Brattle Unlocking 
the Queue with Grid-Enhancing Technologies, at 19-20 (Feb. 1, 2021), 
https://watt-transmission.org/wp-content/uploads/2021/02/Brattle__Unlocking-the-Queue-with-Grid-Enhancing-Technologies__Final-Report_Public-Version.pdf90.pdf).
    \410\ T. Bruce Tscuchida & Rob Gramlich, Improving Transmission 
Operation with Advanced Technologies: A Review of Deployment 
Experience and Analysis of Incentives 12 (Sustainable FERC Project, 
WATT Coalition, White Paper, June 2019), https://www.brattle.com/wp-content/uploads/2021/05/16634_improving_transmission_operating_with_advanced_technologies.pdf
.
    \411\ Managing Transmission Line Ratings, Order No. 881, 87 FR 
2244 (Jan. 13, 2022), 177 FERC ] 61,179, at PP 235, 238 (2021).
    \412\ A voltage source converter is a self-commutated device 
that synthesizes a voltage waveform with variable magnitude with 
respect to the system voltage to control the reactive power 
production and consumption of the device.
    \413\ NERC, Reliability Guideline: Reactive Power Planning, at 6 
(Dec. 2016) https://www.nerc.com/comm/PC_Reliability_Guidelines_DL/Reliability%20Guideline%20-%20Reactive%20Power%20Planning.pdf.
    \414\ Id. at 7.
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    299. Under this proposal, the interconnection customer may request, 
at the relevant scoping meeting, that the transmission provider 
consider a single, multiple, or all technologies on this list. The 
transmission provider would be required to evaluate the transmission 
technologies identified above for feasibility, cost, and time savings 
within the cluster study for the LGIP and the system impact study and 
facilities study for the SGIP, upon request of the interconnection 
customer. The transmission provider, upon this request, must evaluate 
the identified transmission technology and, if feasible, determine 
whether it should be used, consistent with good utility practice and 
other applicable regulatory standards. Transmission providers continue 
to retain discretion regarding whether to use the transmission 
technology. Potential applications of these transmission technologies 
include deployments either as an alternative to a network upgrade or to 
go into service on a temporary basis to enable provisional 
interconnection service \415\ pending the completion of a network 
upgrade. The transmission provider must include evaluation of the 
requested transmissions technology or technologies in the cluster study 
report and interconnection facilities study report for the LGIP or the 
relevant feasibility study, system impact study and/or facilities study 
reports for the SGIP.
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    \415\ Provisional interconnection service is ``Interconnection 
Service provided by a Transmission Provider associated with 
interconnecting the Interconnection Customer's Generating Facility 
to Transmission Provider's Transmission System and enabling that 
Transmission System to receive electric energy and capacity from the 
Generating Facility at the Point of Interconnection, pursuant to the 
terms of the Provisional Large Generator Interconnection Agreement 
and, if applicable, the Tariff.'' Pro forma LGIP section 1, pro 
forma LGIA art. 1; see Order No. 845, 163 FERC ] 61,043 at P 438.
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    300. We seek comment on whether the list of alternative 
transmission technologies is sufficient. In particular, we seek comment 
on whether storage that performs a transmission function, synchronous 
condensers, and voltage source converters should be included in the 
list of alternative transmission technologies.
    301. We seek comment on whether there are software, operational, or 
other barriers to the use of these transmission technologies as 
proposed herein. Additionally, we seek comment on whether the use of 
alternative transmission technologies as supplements for, in the place 
of, traditional network upgrades is sufficient to guarantee a level of 
service to accommodate an interconnection customer seeking NRIS, or 
whether such a network upgrade can only relate to ERIS. We seek comment 
on whether the existing study processes and models in the generator 
interconnection process remain suitable for considering alternative 
transmission technologies, whether additional processes or models are 
needed, and if so, which entity should be responsible for developing 
them. We seek comment on how costs incurred for evaluating alternative 
transmission technology study requests would be allocated among 
interconnection customers in the cluster. We also seek comment on what 
reasonable number of transmission technology study requests from each 
interconnection customer would be workable, the burden (in terms of 
both time and resources) on transmission providers required to evaluate 
such requests, and whether interconnection study deadlines may need to 
be extended to account for time needed to evaluate the alternative 
transmission technology study requests. Lastly, we seek comment on 
whether provisional interconnection service consideration for 
transmission technologies should be mandatory.
ii. Annual Informational Report
    302. In order to add transparency to the evaluation process and 
deployment of alternative transmission technologies in generator 
interconnection processes, we propose to revise the pro forma LGIP and 
pro forma SGIP to require transmission providers to submit an annual 
informational report to the Commission that details whether, and if so 
how, advanced power flow control, transmission switching, dynamic line 
ratings, static synchronous compensators, and static VAR compensators 
were considered in interconnection requests over the last year. We 
propose to create a new docket to collect all annual informational 
report filings. Any informational reports that transmission providers 
file at the Commission would be for informational purposes and would 
neither be formally noticed nor require additional action by the 
Commission.\416\ In addition, we note that future interconnection 
customers, as well as transmission providers, may benefit from 
information as to why an alternative transmission technology that was 
considered was not deployed. Because identifying common obstacles to 
the use of these alternative transmission technologies would allow 
potential interconnection customers to submit more meaningful requests, 
we seek comment as to whether to require transmission providers to 
include such explanations in their annual reports. Additionally, we 
seek comment on the scope of the annual informational report, and 
whether additional information should be included.
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    \416\ Order No. 845, 163 FERC ] 61,043 at P 305 (citing Grid 
Assurance LLC, 154 FERC ] 61,244, at n.106, order on clarification, 
156 FERC ] 61,027 (2016)).
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3. Modeling and Performance Requirements for Non-Synchronous Generating 
Facilities
a. Background
    303. The transmission system is experiencing change driven by the 
differing characteristics of generating facilities seeking to 
interconnect and the increased penetration of non-synchronous 
generating facilities.\417\ We are concerned that the pro forma LGIP 
and pro forma SGIP may be inadequate to address certain challenges 
associated with these changes, which is rendering Commission-
jurisdictional rates unjust and unreasonable and unduly discriminatory 
or preferential through less specific or less strict modeling and 
performance requirements compared to synchronous generating facilities. 
We begin with background on: (1) prior Commission action relating to 
modeling and performance requirements for all interconnection 
customers; (2) the unique attributes of non-synchronous generating 
facilities; (3) NERC-documented non-synchronous generation disturbance 
events; (4) NERC actions to address the impact of non-synchronous 
generating facilities on the bulk-power system; and (5) initiatives by 
individual transmission providers to address the reliability challenges 
associated with non-synchronous

[[Page 39984]]

generating facilities during the generator interconnection process.
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    \417\ See, e.g., U.S. Energy Info. Admin., Monthly Energy Review 
at section 10.1 (Mar. 2022), https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf (EIA March Review).
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i. Commission Precedent
    304. To ensure that transmission providers can model an 
interconnecting generating facility's impact on the transmission 
system, Order Nos. 2003 and 2006 established that interconnection 
customers must submit technical data specified in Attachment A to 
Appendix 1 of the pro forma LGIP or Attachment 2 of the pro forma SGIP 
along with their interconnection request. Order Nos. 2003 and 2006 also 
established section 4.4 (Modification) of the pro forma LGIP and 
section 1.4 (Modification of the Interconnection Request) of the pro 
forma SGIP, which detail the process for any type of interconnection 
customer seeking to modify its interconnection request.
    305. Additionally, the Commission has imposed certain performance 
requirements on generating facilities through the generator 
interconnection process. Order No. 2003 required large generating 
facilities to ensure that they can ``ride through'' abnormal over-
frequency and under-frequency deviations.\418\ Specifically, article 
9.7.3 of the pro forma LGIP requires an interconnection customer to 
implement under-frequency and over-frequency relay set points for a 
large generating facility as required by the applicable reliability 
council \419\ to ensure ``ride through'' capability of the transmission 
system. Article 9.7.3 of the pro forma LGIP defines ``ride through'' as 
the ability of the large generating facility to stay connected to and 
synchronized with the transmission system during system disturbances 
within a range of under-frequency and over-frequency conditions. The 
pro forma LGIA does not define specific voltage ride through 
capability; rather, article 9.1 of the pro forma LGIP requires the 
interconnection customer to comply with the applicable reliability 
council requirements.
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    \418\ Order No. 2003, 104 FERC ] 61,103 at PP 562, 566.
    \419\ As discussed below, we also propose in this NOPR to update 
the term ``Applicable Reliability Council'' to ``Electric 
Reliability Organization'' to reflect current terminology.
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    306. The Commission later extended ride-through requirements in 
other contexts. In Order Nos. 661 and 661-A, the Commission established 
uniform standards in Appendix G of the pro forma LGIA that require 
large wind generating facilities to demonstrate low voltage ride 
through capability.\420\ In Order No. 828, the Commission required 
small generating facilities interconnecting pursuant to the pro forma 
SGIP to have ride through capability in a manner comparable to large 
generating facilities.\421\ In that order, the Commission added 
subsection 1.5.7 to the pro forma SGIA, which requires newly 
interconnecting small generating facilities to have and enable ride 
through capability so that they shall not disconnect during abnormal 
frequency and voltage events.\422\ The Commission did not establish 
generic ride through requirements, but required (1) each transmission 
provider to coordinate the protective equipment settings of small 
generating facilities with any automatic load shedding programs and (2) 
that the specific ride through settings be consistent with good utility 
practice and any standards and guidelines applied by the transmission 
provider to other generating facilities on a comparable basis.\423\
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    \420\ Interconnection for Wind Energy, Order No. 661, 70 FR 
34993 (June 16, 2005), 111 FERC ] 61,353, order on reh'g, Order No. 
661-A, 70 FR 75005 (Dec. 19, 2005), 113 FERC ] 61,254 (2005).
    \421\ Requirements for Frequency & Voltage Ride Through 
Capability of Small Generating Facilities, Order No. 828, 81 FR 
50290 (Aug. 1, 2016), 156 FERC ] 61,062 (2016).
    \422\ Id. P 25.
    \423\ Id. P 2.
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    307. Relatedly, in Order No. 842, the Commission required newly 
interconnecting large and small generating facilities, both synchronous 
and non-synchronous, to install, maintain, and operate equipment 
capable of providing primary frequency response as a condition of 
interconnection.\424\
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    \424\ Essential Reliability Servs. & the Evolving Bulk-Power 
Sys.--Primary Frequency Response, Order No. 842, 83 FR 9639 (Mar. 6, 
2018), 162 FERC ] 61,128, order on clarification and reh'g, 164 FERC 
] 61,135 (2018).
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ii. Non-Synchronous Generating Facilities
    308. While synchronous generating facilities convert rotating 
mechanical energy into electrical energy, non-synchronous generating 
facilities convert energy using solid-state switches.\425\ Examples of 
non-synchronous generating facilities include but are not limited to 
solar photovoltaics (PV), wind, fuel cell, and battery storage.
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    \425\ See e.g., Paul Evans, Engineering Mindset, Power Inverters 
Explained (Apr. 25, 2020), https://theengineeringmindset.com/power-inverters-explained/.
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    309. Present day non-synchronous generating facilities 
predominantly use grid-following inverters.\426\ This means that they 
rely on sensed information from the transmission system (e.g., voltage 
waveform) to achieve the desired AC active and reactive power output. 
For grid-following inverters, the transmission system state parameters 
(e.g., voltage angle) are tracked on the order of milliseconds, meaning 
that the inverters can react almost instantaneously to transmission 
system conditions. Consequently, non-synchronous generating facilities 
are sensitive to even the smallest voltage and frequency changes. If 
non-synchronous generating facilities are not properly configured or 
programmed to respond to transmission system frequency and voltage 
fluctuations, they may fail to ride through a system disturbance (e.g., 
a normally cleared transmission fault) by tripping or entering 
momentary cessation mode, as observed in several disturbances described 
below. Because non-synchronous generating facilities often employ 
similar logic with respect to their response to transmission system 
disturbances and non-synchronous generating facility operators often do 
not set and coordinate their inverters and plant controllers \427\ to 
ride through variations in system voltages during fault conditions, 
they are at greater risk of being lost en masse in response to a single 
fault on transmission or sub-transmission systems.\428\ In areas of the 
transmission system where there is a high saturation of non-synchronous 
generating facilities, the en masse response could have an impact 
greater than the most severe single contingency identified by 
transmission providers.
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    \426\ Dinesh Pattabiraman et al., Comparison of Grid Following 
and Grid Forming Control for a High Inverter Penetration Power 
System, 2018 IEEE Power & Energy Society General Meeting (PESGM), at 
1, PESGM 8586162 (citing Thomas Ackermann et al., Paving the Way: A 
Future Without Inertia Is Closer Than You Think, IEEE Power & Energy 
Mag., November/December 2017, at 61).
    \427\ The controller governs the plant's performance to achieve 
the desired aggregate real and reactive power production and 
performance characteristics. See Mills-Price, M., and Hao, K., The 
Importance of Coordinated Control Systems in Solar Generation Plants 
(May 2018), https://cms-cdn.selinc.com/assets/Literature/Publications/Technical%20Papers/6658_ImportanceCoordinated_KH_20140729_Web3.pdf?v=20190325-150209.
    \428\ See, e.g., NERC, San Fernando Disturbance, at vi (Nov. 
2020), https://www.nerc.com/pa/rrm/ea/Documents/San_Fernando_Disturbance_Report.pdf (San Fernando Disturbance 
Report) (``This event, as with past events, involved a significant 
number of solar PV reducing power output (either due to momentary 
cessation or inverter tripping) as a result of normally-cleared 
[bulk-power system] faults. The widespread nature of power reduction 
across many facilities poses risks to [bulk-power system] 
performance and reliability.'').
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iii. Documented Non-Synchronous Generation Disturbance Events
    310. As described below, disturbances both on the bulk power system 
and on distribution systems have resulted in unexpected loss of solar 
PV non-synchronous generating facilities

[[Page 39985]]

following normally cleared transmission line faults. NERC and other 
relevant entities have analyzed these disturbance events to determine 
the causes.
    311. The first documented large-scale reliability event occurred in 
August 2016 during the Blue Cut Fire Event in California. Until this 
event, the likelihood for non-synchronous generating facilities to trip 
or momentarily cease during faults on the bulk-power system was 
unclear.\429\ A NERC/Western Electricity Coordinating Council (WECC) 
joint task force examined the event and determined that a single 500 kV 
line-to-line fault, which was cleared normally by relay protection, 
caused a wide area loss of 1,200 MW of solar PV non-synchronous 
generating facilities.\430\ The task force report explained that the 
loss of solar PV generation during the event was primarily due to 
inverter settings susceptible to unexpected tripping and unanticipated 
momentary cessation of the non-synchronous generating facilities.\431\ 
The report indicated that planning studies did not predict that the 
generating facilities would not ride through the disturbance and would 
fail to provide power during the event. Once aware of the potential for 
non-synchronous generating facilities to trip or enter momentary 
cessation in response to faults, Southern California Edison Company and 
CAISO reviewed the Supervisory Control and Data Acquisition (SCADA) 
data and discovered that this was not an isolated incident.\432\
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    \429\ See, e.g., NERC, Potential Bulk System Reliability Impacts 
of Distributed Resources, at 24 (Aug. 2011), https://www.nerc.com/files/IVGTF_TF-1-8_Reliability-Impact-Distributed-Resources_Final-Draft_2011%20(2).pdf (noting NERC's awareness of the practice of 
utilities in North America to set up distributed generation to trip 
during off[hyphen]normal frequency and voltage conditions).
    \430\ NERC, 1,200 MW Fault Induced Solar Photovoltaic Resource 
Interruption Disturbance Report, at 1 (June 2017), https://www.nerc.com/pa/rrm/ea/1200_MW_Fault_Induced_Solar_Photovoltaic_Resource_/1200_MW_Fault_Induced_Solar_Photovoltaic_Resource_Interruption_Final.pdf (Blue Cut Fire Event Report).
    \431\ Id. at 15-17. Momentary cessation occurs when inverters 
stop injecting current into the transmission system during high or 
low voltage/frequency conditions that are outside the continuous 
operating range. Inverters stop producing power and stop supporting 
voltage and frequency, effectively shutting themselves down 
temporarily (typically for up to five minutes). See NERC, BPS-
Connected Inverter-Based Resource Performance, at 11-16 (Sept. 
2018), https://www.nerc.com/comm/PC_Reliability_Guidelines_DL/Inverter-Based_Resource_Performance_Guideline.pdf (NERC IBR 
Performance Guideline).
    \432\ Southern California Edison Company and CAISO identified 
seven other instances of solar inverter-based resources either 
tripping or entering momentary cessation. See Blue Cut Fire Event 
Report at 3.
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    312. Subsequently, there have been other documented instances of 
momentary cessation of non-synchronous generating facilities: the 
Canyon 2 Fire Event in 2017; \433\ the Angeles Forest and Palmdale 
Roost Events in 2018; \434\ the San Fernando Disturbance in 2020; \435\ 
and multiple events in both ERCOT and CAISO during 2021.\436\ Because 
present-day SCADA systems are not able to capture the full extent of 
all disturbance events, some smaller-scale events are likely to remain 
undetected.\437\
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    \433\ NERC, 900 MW Fault Induced Solar Photovoltaic Resource 
Interruption Disturbance Report, at 1 (Feb. 2018) (Canyon 2 Fire 
Event Report).
    \434\ NERC, April and May 2018 Fault Induced Solar Photovoltaic 
Resource Interruption Disturbances Report (Jan. 2019) (Angeles 
Forest and Palmdale Roost Events Report).
    \435\ San Fernando Disturbance Report at vi.
    \436\ See NERC, Odessa Disturbance (Sept. 2021) https://www.nerc.com/pa/rrm/ea/Documents/Odessa_Disturbance_Report.pdf 
(Odessa Disturbance Report); see also NERC and CAISO, Multiple Solar 
PV Disturbances in CAISO (Apr. 2022), https://www.nerc.com/pa/rrm/ea/Documents/NERC_2021_California_Solar_PV_Disturbances_Report.pdf 
(NERC/CAISO Joint Report).
    \437\ The present-day SCADA recording resolution is unable to 
capture events that occur at less than the scan rate of one to four 
seconds. See NERC, Reliability Guideline: Improvements to 
Interconnection Requirements for BPS-Connected Inverter-Based 
Resources, at 56 (Sept. 2019), https://www.nerc.com/comm/PC_Reliability_Guidelines_DL/Reliability_Guideline_IBR_Interconnection_Requirements_Improvements.pdf (NERC IBR Interconnection Requirements Guideline).
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iv. NERC Actions To Address Non-Synchronous Generating Facility Impacts 
on the Bulk-Power System
    313. Since the large-scale reliability issues related to non-
synchronous generating facilities during the Blue Cut Fire Event, NERC 
has: (1) published multiple disturbance reports documenting the events 
described above; \438\ (2) issued two NERC Alerts; \439\ (3) issued two 
technical reports; \440\ (4) issued two reliability guidelines 
regarding non-synchronous generating facility data collection and 
performance; \441\ and (5) published two white papers about the need to 
modify Reliability Standards to address this risk.\442\ Together, these 
documents indicate that transmission system planning and operations 
entities do not have adequate or accurate information about the actual 
behavior of non-synchronous generating facilities within their areas 
under all operating conditions, and further that these same entities 
continue to experience issues that NERC-issued alerts were intended to 
address.\443\
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    \438\ See generally Blue Cut Fire Event Report; Canyon 2 Fire 
Event Report; Angeles Forest and Palmdale Roost Events Report; San 
Fernando Disturbance Report; Odessa Disturbance Report; and NERC/
CAISO Joint Report.
    \439\ NERC, Industry Recommendation Loss of Solar Resources 
during Transmission Disturbances due to Inverter Settings (June 
2017) (June 2017 NERC Alert); NERC, Industry Recommendation Loss of 
Solar Resources During Transmission Disturbances due to Inverter 
Settings--II (May 2018) (May 2018 NERC Alert).
    \440\ NERC, Technical Report (May 2020) (IRPTF Modeling Report); 
NERC, WECC Base Case Review: Inverter-Based Resources (Aug. 2020).
    \441\ See NERC IBR Performance Guideline; NERC IBR 
Interconnection Requirements Guideline.
    \442\ NERC, IRPTF Review of NERC Reliability Standards (Mar. 
2020)https://www.nerc.com/comm/PC/InverterBased%20Resource%20Performance%20Task%20Force%20IRPT/Review_of_NERC_Reliability_Standards_White_Paper.pdf; NERC, Odessa 
Disturbance Follow-Up (Oct. 2021), https://www.nerc.com/comm/RSTC_Reliability_Guidelines/White_Paper_Odessa_Disturbance_Follow-Up.pdf.
    \443\ See, e.g., San Fernando Disturbance Report at vi (``Many 
of the issues identified in this disturbance appear systemic and are 
not being widely addressed by the solar PV fleet.''); NERC/CAISO 
Joint Report at 30 (``BPS reliability is a critical factor during 
the interconnection process and presently plants are being 
interconnected in an unreliable manner based on studies that 
inadequately identify possible reliability issues prior to 
commercial operation''); Odessa Disturbance Report at 29 (``While 
the IRPWG reliability guidelines are some of the most downloaded 
guidelines produced and most widely used across the industry, it is 
clear that industry is not adopting the recommendations contained 
within NERC reliability guidelines.'').
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    314. NERC also formed the Inverter-Based Resources Performance Task 
Force (IRPTF) \444\ in response to the findings and recommendations of 
the Blue Cut Fire Event Report, to explore the performance 
characteristics of bulk-power system connected non-synchronous 
generating facilities. Among other activities, the IRPTF has published 
a variety of whitepapers and reliability guidelines.\445\
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    \444\ The IRPTF became the IBR Performance Working Group in 
October 2020 and then the IBR Performance Subcommittee in March 
2022.
    \445\ NERC, IRPTF White Papers, Technical Reports, and 
Assessments, https://www.nerc.com/comm/PC/Pages/Inverter-Based-Resource-Performance-Task-Force.aspx (providing links to all IRPTF 
resources).
---------------------------------------------------------------------------

    315. In September 2019, NERC issued a Reliability Guideline that 
recommends improvements to interconnection requirements for non-
synchronous generating facilities connected to the bulk-power 
system.\446\ In that Guideline, NERC recommends that transmission 
owners improve their interconnection requirements for non-synchronous 
generating facilities that are connected to the bulk-power system. 
Specifically, NERC recommends that transmission owners ``require that 
newly interconnecting [non-synchronous generating facilities] 
continuously inject

[[Page 39986]]

current within the `[n]o [t]rip [z]one' of the currently effective 
version of Reliability Standard PRC-024'' to address issues with 
momentary cessation.\447\ NERC states that non-synchronous generating 
facilities should be designed and configured to only use momentary 
cessation outside the ``no trip zone'' and only to ``mitigate potential 
tripping conditions based on interconnection studies.'' \448\
---------------------------------------------------------------------------

    \446\ NERC IBR Interconnection Requirements Guideline at 1.
    \447\ Id. The currently effective version of Reliability 
Standard PRC-24 establishes the ``no trip zone'' for frequency and 
voltage ride-through curves.
    \448\ Id. at 9.
---------------------------------------------------------------------------

v. Individual Transmission Providers' Filings
    316. MISO and CAISO recently revised their pro forma generator 
interconnection agreements to account for momentary cessation of non-
synchronous generating facilities. The revisions proposed by CAISO (and 
accepted by the Commission) clarify that momentary cessation of 
inverters during transient transmission line faults violates the 
existing requirement in CAISO's pro forma generator interconnection 
agreement to remain online unless transient high voltage conditions 
rise to 1.20 per unit or more.\449\ The CAISO revisions also clarify 
that asynchronous \450\ generating facility inverters may not trip or 
cease to inject current for momentary loss of synchrony within the ``no 
trip zone'' specified in Reliability Standard PRC-024-2.\451\ Finally, 
the revisions require that when generating facilities trip or cease to 
inject current, they attempt to resynchronize promptly and 
consistently, going from no output to full output in one second or 
less.\452\
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    \449\ Cal. Indep. Sys. Operator Corp., 168 FERC ] 61,003, at P 5 
(2019).
    \450\ While inverter-based resources are often technically 
``non'' synchronous, CAISO uses the term ``asynchronous'' generally 
to apply to any resource that does not generate at 60 Hz.
    \451\ Cal. Indep. Sys. Operator Corp., 168 FERC ] 61,003 at P 6.
    \452\ Id. P 7, n.11 (citing CAISO, CAISO Tariff, app. EE, app. H 
(3.0.0), proposed section A(vi).
---------------------------------------------------------------------------

    317. On October 5, 2020, the Commission accepted MISO's proposed 
revisions to its pro forma generator interconnection agreement to adopt 
recommendations from the NERC Guideline with regard to momentary 
cessation, phase jump immunity, monitoring, and protection 
settings.\453\ As relevant here, MISO added a new subsection to 
Appendix G to its pro forma LGIA that states ``[m]omentary cessation 
(ceasing to inject current into the transmission system during a fault 
without mechanical isolation) is prohibited in [NERC] reliability 
standard PRC-024 no trip zone.'' \454\
---------------------------------------------------------------------------

    \453\ Midcontinent Indep. Sys. Operator, Inc., 173 FERC ] 61,014 
(2020).
    \454\ Id. P 4.
---------------------------------------------------------------------------

b. Need for Reform
i. Modeling Requirements
    318. We preliminarily find that the pro forma LGIP and pro forma 
SGIP may be unduly discriminatory or preferential to the extent that 
they do not require non-synchronous generating facilities to provide 
accurate and validated models to transmission providers during the 
generator interconnection process. Specifically, while Attachment A to 
Appendix 1 of the pro forma LGIP and Attachment 2 to the pro forma SGIP 
require all generating facilities to submit certain types of 
information, the information required is only sufficient to accurately 
model the behavior of synchronous generating facilities. In contrast, 
given the electrical characteristics of the inverters used by non-
synchronous generating facilities, additional information is required 
to achieve a comparable level of model fidelity.
    319. Additionally, we are concerned that, without a reform to 
require interconnection customers developing non-synchronous generating 
facilities to provide sufficiently accurate and validated models, 
interconnection studies may not identify the appropriate 
interconnection facilities and network upgrades needed for that 
interconnection request. If the interconnection studies are not able to 
identify the appropriate interconnection facilities and network 
upgrades, then the interconnection costs assigned to that 
interconnection customer may be skewed, resulting in unjust and 
unreasonable rates for interconnection service.
ii. Ride-Through Requirements
    320. We preliminarily find that the pro forma LGIA and pro forma 
SGIA ride-through provisions may result in undue discrimination and 
preferential treatment. While synchronous and non-synchronous 
generating facilities are different in many respects, both types of 
facilities are able to ``ride through'' system events and remain online 
and continue to provide real and reactive power following a 
disturbance.\455\ Moreover, given the increasing prevalence of non-
synchronous generating facilities, it is also clear that the loss of 
real and reactive power from such generating facilities following a 
system disturbance can have significant reliability impacts just like 
the loss of synchronous generating facilities.\456\ Therefore, with 
respect to the issue of ride-through, both synchronous and non-
synchronous generating facilities can be considered similarly situated.
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    \455\ See NERC/CAISO Joint Report at 9 (``Multiple solar PV 
resources that exhibited momentary cessation . . . [have inverters 
that are no longer in production] . . . [N]ew inverters are able to 
provide current injection during low voltage ride-through 
events.'').
    \456\ See supra PP 309-312.
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    321. Nevertheless, the existing pro forma LGIA and pro forma SGIA 
currently impose differing ride-through requirements because these 
provisions fail to account for a non-synchronous generating facilities' 
ability to engage in momentary cessation. As discussed above, the Blue 
Cut Fire and other disturbance events revealed that some non-
synchronous generating facilities remained physically connected to the 
transmission system but, as designed or programmed, stopped or reduced 
their injection of real or reactive power onto the transmission system 
and entered into momentary cessation. Such performance by a non-
synchronous generating facility can have the same impact on system 
reliability as would a similarly sized, synchronous generating facility 
prematurely tripping offline in response to a disturbance; however, 
this practice of momentary cessation is not expressly prohibited by the 
existing ride-through requirements because the generating facility 
still remains ``connected to and synchronized with the Transmission 
System'' as required by the pro forma LGIA and SGIA.\457\
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    \457\ Pro forma LGIA art. 9.7.3; pro forma SGIA art. 1.5.7.
---------------------------------------------------------------------------

    322. In establishing the current pro forma LGIA and pro forma SGIA, 
the Commission did not specifically consider the issue of momentary 
cessation. When Order No. 2003 was promulgated, non-synchronous 
generating facilities represented a small proportion of the nation's 
installed generating capacity.\458\ As a result, the momentary 
cessation of non-synchronous generating facilities was not a mode of 
operation that the Commission expressly addressed when it added article 
9.7.3 to the pro forma LGIA and adopted the definition of ride-through 
in Order No. 2003.\459\
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    \458\ See, e.g., EIA March Review at 176-177.
    \459\ Order No. 2003, 104 FERC ] 61,103 at PP 562, 566.
---------------------------------------------------------------------------

    323. While the Commission subsequently implemented separate low-
voltage ride-through requirements for wind generating facilities in 
Order Nos. 661 and 661-A, that requirement also did not address the 
possibility of momentary cessation. In Order No. 661, the Commission 
adopted a low voltage

[[Page 39987]]

ride-through standard for wind generating facilities but explained that 
wind generating facilities would only be required to satisfy that ride-
through requirement if the system impact study demonstrates that such 
capability is required to ensure safety or reliability.\460\ However, 
in Order No. 661-A, the Commission granted rehearing and required all 
wind generating facilities to comply with the low-voltage ride-through 
provision without the case-by-case analysis.\461\ Therefore, pursuant 
to Order No. 661-A, all wind generating facilities ``shall be able to 
remain online'' during voltage disturbances up to certain time periods 
and associated voltage levels.\462\ This requirement to ``remain 
online'' does not appear to contemplate the possibility that a facility 
could remain physically connected to the transmission system but stop 
injecting real or reactive power.
---------------------------------------------------------------------------

    \460\ Order No. 661, 111 FERC ] 61,353 at P 26.
    \461\ Order No. 661-A, 113 FERC ] 61,254 at P 31.
    \462\ Id. at app. B (``A wind generating plant shall be able to 
remain online during voltage disturbances up to the time periods and 
associated voltage levels set forth in the standard below.'').
---------------------------------------------------------------------------

    324. More recently, in Order No. 828, the Commission added article 
1.5.7 to the pro forma SGIA to require small generating facilities to 
ensure the capability to ride through system disturbances comparable to 
large generating facilities.\463\ However, the Commission again did not 
specifically consider the issue of momentary cessation. As a result, 
neither article 9.7.3 of the pro forma LGIA nor article 1.5.7 of the 
pro forma SGIA expressly address whether the momentary cessation of 
non-synchronous generating facilities is permitted during system 
disturbances.
---------------------------------------------------------------------------

    \463\ Order No. 828, 156 FERC ] 61,062 at P 11.
---------------------------------------------------------------------------

    325. Given advances in inverter technology, we are concerned that 
the lack of performance requirements regarding the use of momentary 
cessation by non-synchronous generating facilities may not be 
supportable on either a technical basis (as this is largely a control 
settings issue) or on a cost basis (as implementing the appropriate 
inverter settings may not be costly).\464\ Accordingly, we 
preliminarily find that the pro forma LGIA and pro forma SGIA ride-
through provisions may be unduly discriminatory or preferential.
---------------------------------------------------------------------------

    \464\ See, e.g., Ran Fu, et al., Nat'l Renewable Energy Lab'y, 
U.S. Solar Photovoltaic System Cost Benchmark: Q1 2018, at viii 
(Nov. 2018), https://www.nrel.gov/docs/fy19osti/72399.pdf. See also 
Cal. Indep. Sys. Operator Corp., 168 FERC ] 61,003, at P 17.
---------------------------------------------------------------------------

iii. Applicability of Ride-Through Requirements
    326. We preliminarily find that the pro forma LGIA may also result 
in undue discrimination or preferential treatment due to a gap in the 
applicability of ride-through requirements to different generating 
facilities. While article 1.5.7 of the pro forma SGIA requires newly 
interconnecting small generating facilities to ride through abnormal 
frequency and voltage events and not disconnect during such events, the 
comparable article 9.7.3 of the pro forma LGIA does not explicitly 
require newly interconnecting large generating facilities to ride 
through such disturbance events, instead referring to requirements of 
``the Applicable Reliability Council'' to ensure ride-through 
capability. By referencing the requirements of the ``Applicable 
Reliability Council'' rather than explicitly stating the ride-through 
requirements (as in article 1.5.7 of the pro forma SGIA), article 9.7.3 
of the pro forma LGIA may create a gap in applicability because it 
would only apply to those generating facilities that are subject to the 
reliability standards, i.e., entities with facilities that meet the 
definition of ``bulk electric system'' facilities and are registered 
with NERC.\465\ While most generating facilities seeking to 
interconnect to the transmission system are subject to the pro forma 
LGIP and pro forma LGIA (i.e, generating facilities above 20 MW) are 
already subject to the reliability standards, some are not. 
Specifically, generating facilities are not required to comply with 
reliability standards unless they have a gross individual nameplate 
rating greater than 20 MVA or gross plant/facility aggregate nameplate 
rating of greater than 75 MVA.\466\ As a result, we are concerned that 
there does not appear to be any provision of the pro forma LGIA that 
explicitly requires generating facilities with a capacity above 20 MW 
but with a gross plant/facility aggregate nameplate rating of 75 MVA or 
less to ride through frequency or voltage disturbances. Similarly, 
generating facilities that do not explicitly possess an automatic 
voltage regulator, such as many non-synchronous generating facilities, 
are not subject to the provisions of article 9.6.2.1 of the pro forma 
LGIA, which are applicable only to generating facilities with speed 
governors and voltage regulators.
---------------------------------------------------------------------------

    \465\ NERC's Commission-approved bulk electric system definition 
defines the scope of the Reliability Standards and the entities 
subject to NERC compliance. Revisions to Electric Reliability 
Organization Definition of Bulk Electric System and Rules of 
Procedure, Order No. 773, 78 FR 804 (Jan. 4, 2013), 141 FERC ] 
61,236 (2012). NERC's bulk electric system definition includes 
transmission elements operated at 100 kV and above but does not 
include facilities used in the local distribution of electric 
energy. The bulk electric system definition also includes dispersed 
power producing resources (i.e., non-synchronous generation) that 
aggregate to a total capacity greater than 75 MVA. NERC, Glossary of 
Terms Used in NERC Reliability Standards (Oct. 8, 2020), https://www.nerc.com/pa/Stand/Glossary%20of%20Terms/Glossary_of_Terms.pdf.
    \466\ See Order No. 773, 141 FERC ] 61,236 at PP 12, 38; see 
also NERC Registry Criteria, section I, at 4.
---------------------------------------------------------------------------

    327. There does not appear to be any clear basis for these 
distinctions, nor has the Commission previously addressed this 
potential gap. As discussed above, all generating facilities newly 
interconnecting under the pro forma LGIA are technically capable of 
riding through such disturbances.\467\ Given these facts, there does 
not appear to be any reason that generating facilities connecting under 
the pro forma LGIA that are subject to the reliability standards should 
be required to provide a higher level of performance than those that 
are not. Accordingly, we preliminarily find that the pro forma LGIA 
ride-through provisions may be unduly discriminatory or preferential.
---------------------------------------------------------------------------

    \467\ See supra note 464.
---------------------------------------------------------------------------

c. Proposal
i. Modeling Requirements
    328. We propose to revise the pro forma LGIP and pro forma SGIP to 
ensure that all interconnection customers requesting to interconnect a 
non-synchronous generating facility must provide the transmission 
provider with the models needed for accurate interconnection studies, 
as discussed below. This reform is intended to promote a consistent 
approach among all generating facilities to reliability, such that all 
interconnection customers are required to submit information sufficient 
to accurately model the behavior of their proposed generating facility. 
Pursuant to this proposal, interconnection customers requesting to 
interconnect a non-synchronous generating facility would be required to 
provide models that contain the details necessary to accurately model 
the performance of the generating facility in response to system 
disturbances in accordance with the control system settings that would 
be used by the interconnection customer during the commissioning and 
operation of the generating facility.
    329. Specifically, we propose to revise Attachment A to Appendix 1 
of the pro forma LGIP, and Attachment 2 of the

[[Page 39988]]

pro forma SGIP to require each interconnection customer requesting to 
interconnect a non-synchronous generating facility to submit to the 
transmission provider: (1) a validated user-defined root mean square 
(RMS) positive sequence dynamics model; (2) an appropriately 
parameterized, generic library RMS positive sequence dynamics model, 
including a model block diagram of the inverter control system and 
plant control system, that corresponds to a model listed in a new table 
of acceptable models or a model otherwise approved by WECC; and (3) a 
validated EMT model, if the transmission provider performs an EMT study 
as part of the interconnection study process.
    330. First, regarding the validated user-defined model, we propose 
to define a ``user-defined model'' as any set of programming code 
created by equipment manufacturers or developers that captures the 
latest features of controllers that are mainly software based and 
represents the entities' control strategies but does not necessarily 
correspond to any particular generic library model. In order for this 
model to be ``validated,'' it must be confirmed that the equipment 
behavior is consistent with the model behavior. This can involve, for 
example, an attestation from the interconnection customer that the 
model accurately represents the entire generating facility, 
attestations from each equipment manufacturer that the user defined 
model accurately represents the component of the generating facilities, 
or test data.
    331. Second, regarding the table of acceptable generic library 
models, this table is based on the current WECC list of approved 
dynamic models for renewable energy generating facilities.\468\ WECC's 
list of approved dynamic models has also been integrated into NERC 
Guidelines.\469\ These models represent the current state of the art 
with regard to dynamic modeling requirements for non-synchronous 
generating facilities.
---------------------------------------------------------------------------

    \468\ See WECC, WECC Approved Dynamic Model Library (effective 
Jan. 28, 2022), https://www.wecc.org/Reliability/Approved%20Dynamic%20Models%20January%202022.pdf.
    \469\ NERC IBR Interconnection Requirements Guideline at 27 
(``[T]he [transmission owner] should be clear in the types of models 
that are expected to be provided for the interconnection process. 
These models should, at a minimum, align with the list of acceptable 
models used for interconnection-wide modeling developed by NERC and 
the MOD-032 Designees.'') (citing WECC Approved Dynamic Model 
Library).
---------------------------------------------------------------------------

    332. We believe that these models represent the full spectrum of 
modeling data that transmission providers need to perform accurate 
interconnection studies for non-synchronous generating facilities. We 
recognize that the modeling data we propose to require from non-
synchronous generating facilities may be more voluminous than that 
required of synchronous generating facilities; however, this data 
submission requirement is intended to result in a comparable level of 
modeling accuracy among all generating facilities.
    333. An interconnection customer's failure to provide the above 
information within the deadlines established in the pro forma LGIP and 
pro forma SGIP would make the interconnection request incomplete and 
will be considered invalid in accordance with section 3.4.3 of the pro 
forma LGIP and section 1.3 of the pro forma SGIP. Pursuant to those 
provisions, if the interconnection customer does not cure the 
deficiency within the 10-day cure period, the interconnection request 
will be considered withdrawn pursuant to section 3.7 of the pro forma 
LGIP and section 1.3 of the pro forma SGIP.
    334. We also propose to modify subsection 4.4.4 of the pro forma 
LGIP and section 1.4 of the pro forma SGIP to require that any proposed 
modification of the interconnection request be accompanied by updated 
models of the proposed generating facility. This will ensure that the 
transmission provider will be able to accurately model the impact of 
the interconnection request throughout the interconnection process.
    335. We seek comment on whether these proposed reforms are 
necessary and/or sufficient to ensure that interconnection customers 
proposing non-synchronous generating facilities submit models during 
the generator interconnection process that accurately reflect the 
behavior of their proposed generating facility. Further, we seek 
comment on whether the inclusion of the table based on NERC Guidelines 
that cite WECC-approved models is appropriate. If not, we seek comment 
on how the Commission could require interconnection customers to submit 
models that are widely known in industry to be accurate without listing 
specific models.
ii. Ride-Through Requirements
    336. We propose to require newly interconnecting non-synchronous 
generating facilities to continue current injection inside the ``no 
trip zone'' of the frequency and voltage ride-through curves of 
Reliability Standard PRC-024-3 or its successor standards, in 
accordance with NERC's recommendation in the NERC IBR Guideline.\470\ 
Specifically, we propose to revise existing article 9.7.3 of the pro 
forma LGIA to require all newly interconnecting large generating 
facilities to ride through abnormal frequency and voltage conditions. 
The term ``ride-through'' is defined in article 9.7.3 of the pro forma 
LGIA as the ability of the large generating facility to stay connected 
to and synchronized with the transmission system during system 
disturbances within a range of under-frequency and over-frequency 
conditions. We propose to expand the ride-through definition to include 
the ability of the large generating facility to stay connected to and 
synchronized with the transmission system during system disturbances 
within under-voltage and over-voltage conditions as well.
---------------------------------------------------------------------------

    \470\ NERC IBR Interconnection Requirements Guideline at 9.
---------------------------------------------------------------------------

    337. In addition, we propose to revise article 9.7.3 of the pro 
forma LGIA and article 1.5.7 of the pro forma SGIA to require that any 
newly interconnecting non-synchronous generating facility must have the 
ability, during abnormal frequency conditions and voltage conditions 
within the ``no trip zone'' defined by Reliability Standard PRC-024-3 
or its successor standards, to maintain power production at pre-
disturbance levels unless providing primary frequency response or fast 
frequency response, and must have the ability to provide dynamic 
reactive power to maintain system voltage in accordance with the 
generating facility's voltage schedule. We find such a limited 
exception to be appropriate given Order No. 842, which requires all 
newly interconnecting generating facilities to provide primary 
frequency response during frequency deviations outside of the dead band 
parameter, pursuant to article 9.6.4 of the pro forma LGIA and article 
1.8.4 of the pro forma SGIA.
    338. We seek comment on whether adherence to these proposed 
requirements would be readily achievable through changes to control 
settings and whether such changes to control settings could be made at 
a relatively minor cost.

[[Page 39989]]

iii. Applicability of Ride-Through Requirements
    339. We believe that adding clarity to the expectations for all 
generating facilities to provide ride-through capability through 
modifications to the pro forma LGIA would ensure that all future 
interconnection customers are subject to clear and consistent frequency 
and voltage ride-through requirements. At present, the absence of a 
clear requirement for all generating facilities to maintain ride-
through capability may unfairly place the responsibility for 
maintaining system reliability on the subset of generating facilities 
that ride through the disturbance. Furthermore, we have identified no 
technical or economic basis to require small and large generating 
facilities to follow different voltage and frequency ride-through 
requirements.\471\
---------------------------------------------------------------------------

    \471\ Order No. 828, 156 FERC ] 61,062 at P 21.
---------------------------------------------------------------------------

    340. Accordingly, we propose to revise article 9.7.3 of the pro 
forma LGIA to require that all newly interconnecting large generating 
facilities must provide ride-through capability consistent with any 
standards and guidelines that are applied to other generating 
facilities in the balancing authority area on a comparable basis. This 
proposed reform is intended to address the existing gap in the 
applicability of ride-through requirements for large generating 
facilities with a capacity above 20 MW and with a gross plant/facility 
aggregate nameplate rating 75 MVA or less. In addition, the proposed 
reform is consistent with existing language in article 1.5.7 of the pro 
forma SGIA that requires newly interconnecting small generating 
facilities to ride through abnormal frequency and voltage events and 
not disconnect during such events.
    341. In addition to the substantive changes discussed above, we 
propose to replace the term ``Applicable Reliability Council'' with 
``Electric Reliability Organization,'' and replace the term ``control 
area'' with ``Balancing Authority Area'' throughout the pro forma LGIP 
and pro forma LGIA. These proposed replacements reflect updated 
terminology.\472\
---------------------------------------------------------------------------

    \472\ See NERC, Glossary of Terms Used in NERC Reliability 
Standards (Oct. 8, 2020), https://www.nerc.com/pa/Stand/Glossary%20of%20Terms/Glossary_of_Terms.pdf.
---------------------------------------------------------------------------

III. Proposed Compliance Procedures

    342. We propose to require each transmission provider to submit a 
compliance filing within 180 days of the effective date of the final 
rule in this proceeding revising its LGIP, LGIA, SGIP, and SGIA, as 
necessary, to demonstrate that it meets the requirements set forth in 
any final rule issued in this proceeding. The Commission also proposes 
to permit appropriate entities to seek ``regional reliability 
variation'' or ``independent entity variations'' from the proposed 
revisions to the pro forma.\473\ Some transmission providers may have 
provisions in their existing LGIPs, LGIAs, SGIPs, and SGIAs subject to 
the Commission's jurisdiction that the Commission has previously deemed 
to be consistent with or superior to the pro forma LGIP, pro forma 
LGIA, pro forma SGIP, and/or pro forma SGIA or permissible under the 
independent entity variation standard or regional reliability standard. 
Where these provisions would be modified by the final rule, 
transmission providers must either comply with the final rule or 
demonstrate that these previously-approved variations continue to be 
consistent with or superior to the pro forma as modified by the final 
rule or continue to be permissible under the independent entity 
variation standard or regional reliability standard.\474\
---------------------------------------------------------------------------

    \473\ See, e.g., Order No. 2003, 104 FERC ] 61,103 at PP 822-
827; Order No. 2006, 111 FERC ] 61,220 at PP 546-550; see also May 
Joint Task Force Tr. 41:3-7, 42:23-43:2 (Gladys Brown Dutrieuille) 
(expressing support for regional flexibility but also for FERC 
``encourag[ing] interconnection efficiencies throughout the country 
by promoting best-in-class processes, such as variations in ways to 
cluster projects'').
    \474\ See May Joint Task Force Tr. 175:13-17 (Jason Stanek) (``I 
think we heard here today that regional flexibility remains 
important, but so does having some at least minimal national 
baseline because many of these generators are not just building in 
PJM or ISO-New England, but across the country.''); id. 22:22-25 
(Riley Allen). (``[U]ltimately, there needs to be some room for 
flexibility among the regions, but I think there's some 
opportunities for more foundational aspects of reform to be common 
across regions as well.'').
---------------------------------------------------------------------------

    343. The Commission will assess whether each compliance filing 
satisfies the proposed requirements stated above and issue additional 
orders as necessary to ensure that each public utility transmission 
provider meets the requirements of the subsequent final rule.
    344. We propose that transmission providers that are not public 
utilities will have to adopt the requirements of this Proposed Rule as 
a condition of maintaining the status of their safe harbor tariff or 
otherwise satisfying the reciprocity requirement of Order No. 888.\475\
---------------------------------------------------------------------------

    \475\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission on Servs. by Pub. Utils.; Recovery of 
Stranded Costs by Pub. Utils. & Transmitting Utils., Order No. 888, 
61 FR 21540 (May 10, 1996), FERC Stats. & Regs. ] 31,036, at 31,760-
763 (1996) (cross-referenced at 75 FERC ] 61,080), order on reh'g, 
Order No. 888-A, FERC Stats. & Regs. ] 31,048 (cross-referenced at 
78 FERC ] 61,220), order on reh'g, Order No. 888-B, 81 FERC ] 61,248 
(1997), order on reh'g, Order No. 888-C, 82 FERC ] 61,046 (1998), 
aff'd in relevant part sub nom. Transmission Access Policy Study 
Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff'd sub nom. New 
York v. FERC, 535 U.S. 1 (2002).
---------------------------------------------------------------------------

IV. Information Collection Statement

    345. The information collection requirements contained in this NOPR 
are subject to review by the Office of Management and Budget (OMB) 
under section 3507(d) of the Paperwork Reduction Act of 1995.\476\ 
OMB's regulations require approval of certain information collection 
requirements imposed by agency rules.\477\ Upon approval of a 
collection of information, OMB will assign an OMB control number and an 
expiration date. Respondents subject to the filing requirements of a 
rule will not be penalized for failing to respond to these collections 
of information unless the collections of information display a valid 
OMB control number.
---------------------------------------------------------------------------

    \476\ 44 U.S.C. 3507(d).
    \477\ 5 CFR 1320.11 (2021).
---------------------------------------------------------------------------

    346. The reforms proposed in this NOPR would revise the 
Commission's standard interconnection procedures and agreement (i.e., 
the pro forma LGIP and pro forma LGIA) and the standard small generator 
interconnection procedures and agreement (i.e., the pro forma SGIP and 
pro forma SGIA) that every public utility transmission provider is 
required to include in their non-discriminatory open access 
transmission tariff under Sec.  35.28 of the Commission's 
regulations.\478\ This NOPR proposes to require each transmission 
provider to amend the standard interconnection procedures and agreement 
and the standard small generator interconnection procedures and 
agreement in its open access transmission tariff to implement the 
reforms proposed in this NOPR, which are intended to ensure that the 
generator interconnection process is just and reasonable and not unduly 
discriminatory or preferential. We will submit the proposed reporting 
requirements to OMB for its review and approval under section 3507(d) 
of the Paperwork Reduction Act.\479\ The proposed revisions included in 
this NOPR would affect the following collections of information: FERC-
516, Electric Rate Schedules and Tariff Filings, and FERC-516A, 
Standardization of Small Generator Interconnection Agreements and 
Procedures.
---------------------------------------------------------------------------

    \478\ 18 CFR 35.28(f)(1) (2021).
    \479\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    347. Interested persons may obtain information on the reporting

[[Page 39990]]

requirements by contacting Ellen Brown, Office of the Executive 
Director, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, via email ([email protected]) or telephone 
(202) 502-8663.
    348. We solicit comments on the Commission's need for this 
information; whether the information will have practical utility; the 
accuracy of the burden and cost estimates; ways to enhance the quality, 
utility, and clarity of the information to be collected or retained; 
and any suggested methods for minimizing respondents' burden, including 
the use of automated information techniques.
    349. Please send comments concerning the collections of information 
and the associated burden estimates to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, through 
www.reginfo.gov/public/do/PRAMain. Attention: Federal Energy Regulatory 
Commission Desk Officer. Please identify the OMB Control Numbers 1902-
0096 (FERC-516) and 1902-0203 (FERC-516A) in the subject line of your 
comments. Comments should be sent within 60 days of publication of this 
notice in the Federal Register.
    350. Please submit a copy of your comments on the information 
collections to the Commission via the eFiling link on the Commission's 
website at http://www.ferc.gov. Comments on the information collection 
that are sent to FERC should refer to Docket No. RM22-14-000.
    351. Title: Electric Rate Schedules and Tariff Filings (FERC-516) 
and Standardization of Small Generator Interconnection Agreements and 
Procedures (FERC-516A).
    352. Action: Proposed revisions of collections of information.
    353. OMB Control Nos.: 1902-0096 (FERC-516) and 1902-0203 (FERC-
516A).
    354. Respondents: Public utility transmission providers, including 
RTOs/ISOs.
    355. Frequency of Information Collection: One time during Year 1. 
Multiple times during subsequent years.
    356. Necessity of Information: We propose the reforms in this NOPR 
to address interconnection queue backlogs, improve certainty, prevent 
undue discrimination for new technologies, and ensure that the costs of 
network upgrades are allocated in a manner that is roughly commensurate 
with benefits. The reforms are intended to ensure that the generator 
interconnection process is just and reasonable and not unduly 
discriminatory or preferential.
    357. Internal Review: We have reviewed the proposed reforms that 
impose information collection burdens and have determined that such 
reforms are necessary. These proposed reforms conform to the 
Commission's need for efficient information collection, communication, 
and management within the energy industry. We have specific, objective 
support for the burden estimates associated with the proposed 
information collection requirements.
    358. Public Reporting Burden: Our estimates are based on the number 
of transmission providers that submitted compliance filings in response 
to Order No. 845, which is the Commission's most recent interconnection 
rulemaking that required transmission providers to revise their 
interconnection procedures and agreements. As such, we estimate that 45 
transmission providers, including the RTOs/ISOs, will be subject to 
this rulemaking. The burden \480\ and cost estimates below are based on 
(1) the initial need for transmission providers to file revised 
versions of the standard interconnection procedures and agreements in 
Year 1, and (2) ongoing information collection activities in connection 
with reporting and disclosure requirements in subsequent years. With 
regards to ongoing information collection activities, the NOPR proposes 
to add annual and quarterly information collection activities regarding 
the provision of public interconnection information, compilation and 
posting of metrics related to completion of cluster studies, 
compilation and posting of metrics related to penalties for late 
interconnection studies following the elimination of the reasonable 
efforts standard, and reporting related to the consideration of 
alternative technologies in interconnection requests. The NOPR also 
proposes an information collection requirement in which transmission 
providers will provide affected system operators with data monthly, or 
more frequently as needed, during the affected system study process. 
For other proposed reforms, we estimate no ongoing information 
collection burden because there is either no information collection 
aspect of the reform or the proposed requirements would merely supplant 
existing ones. We estimate that the reforms proposed in this NOPR would 
affect the burden and cost of FERC-516 and FERC-516A as follows.
---------------------------------------------------------------------------

    \480\ ``Burden'' is the total time, effort, or financial 
resources expended by persons to generate, maintain, retain, or 
disclose or provide information to or for a Federal agency. For 
further explanation of what is included in the information 
collection burden, refer to 5 CFR 1320.3.
    \481\ Commission staff estimates that respondents' hourly wages 
plus benefits are comparable to those of FERC employees. Therefore, 
the hourly cost used in this analysis is $87.00 ($180,703 per year).
    \482\ The ongoing burden estimated here reflects the estimated 
yearly average of the requirement to provide affected system 
operators with data monthly during the affected system study 
process.

                                                 Proposed Changes Due to NOPR in Docket No. RM22-14-000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Annual number of                             Average burden (hr.) &    Total annual burden
        Proposed requirements             Number of           responses per           Total number of      cost ($) per response   hours & total annual
                                         respondents            respondent         responses  (rounded)            \481\            cost ($)  (rounded)
                                                    (1)  (2)....................  (1) * (2) = (3).......  (4)...................  (3) * (4) = (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        FERC-516:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Informational Interconnection Study.           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
Public Interconnection Information..           45 (TPs)  Year 1: 1 Ongoing: 2...  Year 1: 45 Ongoing: 90  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 4 hr; $348.    $15,660 Ongoing: 360
                                                                                                                                   hr; $31,320.
Cluster Study.......................           45 (TPs)  Year 1: 1 Ongoing: 4...  Year 1: 45 Ongoing:     Year 1: 80 hr; $6,960   Year 1: 3600 hr;
                                                                                   180.                    Ongoing: 4 hr; $348.    $313,200 Ongoing: 720
                                                                                                                                   hr; $62,640.
Allocation of Cluster Study Costs...           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
Allocation of Cluster Network                  45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
 Upgrades.                                                                                                 Ongoing: 0.             $15,660 Ongoing: 0.

[[Page 39991]]

 
Shared Network Upgrades.............           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 80 hr; $6,960   Year 1: 3600 hr;
                                                                                                           Ongoing: 0.             $313,200 Ongoing: 0.
Increased Study Deposits and LGIA              45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
 Deposit.                                                                                                  Ongoing: 0.             $15,660 Ongoing: 0.
Demonstration of Site Control.......           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 80 hr; $6,960   Year 1: 3600 hr;
                                                                                                           Ongoing: 0.             $313,200 Ongoing: 0.
Commercial Readiness................           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
Withdrawal Penalties................           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
Transition Process..................           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 80 hr; $6,960   Year 1: 3600 hr;
                                                                                                           Ongoing: 0.             $313,200 Ongoing: 0.
Elimination of Reasonable Efforts              45 (TPs)  Year 1: 1 Ongoing: 4...  Year 1: 45 Ongoing:     Year 1: 80 hr; $6,960   Year 1: 3600 hr;
 Standard.                                                                         180.                    Ongoing: 4 hr; $348.    $313,200 Ongoing: 720
                                                                                                                                   hr; $62,640.
Affected Systems Study Process......           45 (TPs)  Year 1: 5 Ongoing: 5     Year 1: 225 Ongoing:    Year 1: 80 hr; $6,960   Year 1: 18,000 hr;
                                                          \482\.                   225.                    Ongoing: 80 hr; $6960.  $1,566,000 Ongoing:
                                                                                                                                   18,000 hr;
                                                                                                                                   $1,566,000.
Affected Systems Pro Forma                     45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
 Agreements.                                                                                               Ongoing: 0.             $15,660 Ongoing: 0.
Affected Systems Modeling and Study            45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
 Assumptions.                                                                                              Ongoing: 0.             $15,660 Ongoing: 0.
Optional Resource Solicitation Study           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
Co-Located Generation Sites Behind             45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
 One Point of Interconnection with                                                                         Ongoing: 0.             $15,660 Ongoing: 0.
 Shared Interconnection Requests.
Revisions to Material Modification             45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 80 hr; $6,960   Year 1: 3600 hr;
 to Require Consideration of                                                                               Ongoing: 0.             $313,200 Ongoing: 0.
 Generating Facility Additions.
Availability of Surplus                        45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
 Interconnection Service.                                                                                  Ongoing: 0.             $15,660 Ongoing: 0.
Operating Assumptions for                      45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 80 hr; $6,960   Year 1: 3600 hr;
 Interconnection Studies.                                                                                  Ongoing: 0.             $313,200 Ongoing: 0.
Consideration of Alternative                   45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 80 hr; $6,960   Year 1: 3600 hr;
 Transmission Technologies in                                                                              Ongoing: 0.             $313,200 Ongoing: 0.
 Interconnection Studies Upon
 Request of Interconnection Customer.
Annual Informational Report.........           45 (TPs)  Year 1: 1 Ongoing: 1...  Year 1: 45 Ongoing: 45  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 4 hr; $348.    $15,660 Ongoing: 180
                                                                                                                                   hr; $15,660.
Modeling Requirements...............           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
Ride Through........................           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
Applicability of Ride Through.......           45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
                                                                                                           Ongoing: 0.             $15,660 Ongoing: 0.
                                     -------------------------------------------------------------------------------------------------------------------
    Total for FERC-516..............  Year 1: 1305 Ongoing: 720
                                      Year 1: 49,680 hr; $4,322,160 Ongoing:
                                      19,980 hr; $1,738,260.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       FERC-516A:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consideration of Alternative                   45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 80 hr; $6,960   Year 1: 3600 hr;
 Transmission Technologies in                                                                              Ongoing: 0.             $313,200 Ongoing: 0.
 Interconnection Studies Upon
 Request of Interconnection Customer.
Modeling Requirements: Transmission            45 (TPs)  Year 1: 1 Ongoing: 0...  Year 1: 45 Ongoing: 0.  Year 1: 4 hr; $348      Year 1: 180 hr;
 Providers.                                                                                                Ongoing: 0.             $15,660 Ongoing: 0.
                                     -------------------------------------------------------------------------------------------------------------------
    Total for FERC-516A.............  Year 1: 90 Ongoing: 0
                                      Year 1: 3780 hr; $328,860 Ongoing: 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Grand Total (FERC-516 plus    Year 1: 1395 Ongoing: 0
         FERC-516A, including all
         respondents).
                                      Year 1: 53,460 hr; $4,651,020 Ongoing:
                                      19,980 hr; $1,738,260.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 39992]]

 
        Grand Total Average Per
         Entity Cost (45 TPs).
                                      Year 1: $103,356 Ongoing: $38,628.
--------------------------------------------------------------------------------------------------------------------------------------------------------

V. Environmental Analysis

    359. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\483\ We 
conclude that neither an Environmental Assessment nor an Environmental 
Impact Statement is required for this NOPR under Sec.  380.4(a)(15) of 
the Commission's regulations, which provides a categorical exemption 
for approval of actions under sections 205 and 206 of the FPA relating 
to the filing of schedules containing all rates and charges for the 
transmission or sale of electric energy subject to the Commission's 
jurisdiction, plus the classification, practices, contracts, and 
regulations that affect rates, charges, classification, and 
services.\484\
---------------------------------------------------------------------------

    \483\ Reguls. Implementing Nat'l Envt'l Pol'y Act of 1969, Order 
No. 486, 52 FR 47,897 (Dec. 17, 1987), FERC Stats. & Regs. ] 30,783 
(1987) (cross-referenced at 41 FERC ] 61,284).
    \484\ 18 CFR 380.4(a)(15) (2021).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act

    360. The Regulatory Flexibility Act of 1980 \485\ generally 
requires a description and analysis of proposed and final rules that 
will have significant economic impact on a substantial number of small 
entities. The Small Business Administration (SBA) sets the threshold 
for what constitutes a small business. Under SBA's size standards,\486\ 
the RTOs/ISOs all fall under the category of Electric Bulk Power 
Transmission and Control (NAICS code 221121), with a size threshold of 
500 employees (including the entity and its associates).\487\ The six 
RTOs/ISOs (SPP, MISO, PJM, ISO-NE, NYISO, and CAISO) each employ more 
than 500 employees and are not considered small.
---------------------------------------------------------------------------

    \485\ 5 U.S.C. 601-612.
    \486\ 13 CFR 121.201.
    \487\ The RFA definition of ``small entity'' refers to the 
definition provided in the Small Business Act, which defines a 
``small business concern'' as a business that is independently owned 
and operated and that is not dominant in its field of operation. The 
Small Business Administrations' regulations at 13 CFR 121.201 define 
the threshold for a small Electric Bulk Power Transmission and 
Control entity (NAICS code 221121) to be 500 employees. See 5 U.S.C. 
601(3) (citing to Section 3 of the Small Business Act, 15 U.S.C. 
632).
---------------------------------------------------------------------------

    361. We estimate that 39 additional transmission providers (after 
removing RTO/ISOs) are affected by the reforms proposed in this NOPR. 
We estimate that 12 of the 39 transmission providers, approximately 
31%, are small entities.
    362. We estimate that one-time costs (in Year 1) associated with 
the reforms proposed in this NOPR for one transmission provider (as 
shown in the table above) would be $103,356. Following Year 1, we 
estimate that the annual ongoing costs for one transmission provider 
would be $38,628.
    363. According to SBA guidance, the determination of significance 
of impact ``should be seen as relative to the size of the business, the 
size of the competitor's business, and the impact the regulation has on 
larger competitors.'' \488\ We do not consider the estimated cost to be 
a significant economic impact. As a result, we certify that the reforms 
proposed in this NOPR would not have a significant economic impact on a 
substantial number of small entities.
---------------------------------------------------------------------------

    \488\ U.S. Small Business Administration, A Guide for Government 
Agencies How to Comply with the Regulatory Flexibility Act, at 18 
(Aug 2017), https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf.
---------------------------------------------------------------------------

VII. Comment Procedures

    364. We invite interested persons to submit comments on the matters 
and issues proposed in this NOPR to be adopted, including any related 
matters or alternative proposals that commenters may wish to discuss. 
Comments are due October 13, 2022. Also, reply comments are due 
November 14, 2022. Comments must refer to Docket No. RM22-14-000, and 
must include the commenter's name, the organization they represent, if 
applicable, and their address.
    365. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    366. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE, 
Washington, DC 20426.
    367. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this NOPR are not 
required to serve copies of their comments on other commenters.

VIII. Document Availability

    368. In addition to publishing the full text of this document in 
the Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov). At 
this time, the Commission has suspended access to the Commission's 
Public Reference Room due to the President's March 13, 2020 
proclamation declaring a National Emergency concerning the Novel 
Coronavirus Disease (COVID-19).
    369. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.

[[Page 39993]]

    370. User assistance is available for eLibrary and the Commission's 
website during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at 
[email protected].
---------------------------------------------------------------------------

    \489\ We do not include data from SPP in the table. SPP's normal 
interconnection queue processing has been modified to address its 
large queue backlog and transition to a new interconnection study 
process, thus its data is not clearly comparable to the other 
regions.

---------------------------------------------------------------------------
By direction of the Commission.

    Commissioner Danly is concurring with a separate statement 
attached.

    Commissioner Christie is concurring with a separate statement 
attached.
    Issued: June 16, 2022.
Debbie-Anne A. Reese,
Deputy Secretary.

    Note:  The following appendices will not be published in the 
Code of Federal Regulations.

Appendix A: Interconnection Study Metrics

                                               Table 1--RTOs/ISOs Interconnection Study Metrics 2021 \489\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Studies completed   Current delayed
          Transmission provider                           Link                Completed studies    past deadline         studies          Withdrawals
--------------------------------------------------------------------------------------------------------------------------------------------------------
CAISO....................................  http://oasis.caiso.com/mrioasis/                 179                116                  0                 88
                                            logon.do.
ISO-NE...................................  https://www.oasis.oati.com/isne/.                 44                 31                 19                 25
MISO.....................................  https://cdn.misoenergy.org/                      778                754                385                204
                                            MISO%20Generator%20Interconnecti
                                            on%%20Metrics444684.pdf.
NYISO....................................  https://www.nyiso.com/                            16                 13                 48                 46
                                            interconnections.
PJM......................................  https://www.pjm.com/-/media/                   1,213                149              1,281                297
                                            planning/services-requests/
                                            interconnection-study-
                                            statistics.ashx.
--------------------------------------------------------------------------------------------------------------------------------------------------------

                         Table 2--Non-RTOs/ISOs Interconnection Study Metrics 2021 \490\
----------------------------------------------------------------------------------------------------------------
                                                                                      Current
     Transmission provider            Link           Completed    Completed past      delayed       Withdrawals
                                                      studies        deadline         studies
----------------------------------------------------------------------------------------------------------------
Alabama Power Company           https://                     157  ..............  ..............              61
 (Southern Company).             www.oasis.oati.
                                 com/SOCO/
                                 index.html.
Arizona Public Service........  https://                      22              20             198              18
                                 www.oasis.oati.
                                 com/azps/.
Avista Corp...................  https://                      20              19              35               3
                                 www.oasis.oati.
                                 com/avat/.
Black Hills Colorado..........  https://                       3  ..............               2               2
                                 www.blackhillsc
                                 orp.com/
                                 utilities-
                                 businesses/
                                 transmission/
                                 electric-
                                 transmission-
                                 services.
Black Hills Power.............  https://                       1  ..............  ..............  ..............
                                 www.blackhillsc
                                 orp.com/
                                 utilities-
                                 businesses/
                                 transmission/
                                 electric-
                                 transmission-
                                 services.
Dominion Energy South Carolina  https://                       3               3              70               4
                                 www.oasis.oati.
                                 com/SCEG/.
Duke Energy Carolinas.........  http://                        6               6              16              12
                                 www.oasis.oati.
                                 com/duk/
                                 index.html.
El Paso Electric Co...........  https://                       1  ..............  ..............               2
                                 www.oasis.oati.
                                 com/epe/
                                 index.html.
Florida Power & Light.........  https://                      71              42             140               4
                                 www.oasis.oati.
                                 com/FPL/
                                 index.html.
Gulf Power Company............  https://                      24              15              37  ..............
                                 www.oasis.oati.
                                 com/gulf/
                                 index.html.
Idaho Power...................  https://                      42               2              45               9
                                 www.oasis.oati.
                                 com/ipco/.
Louisville Gas and Electric...  https://                      21              13              39              12
                                 www.oasis.oati.
                                 com/LGEE/
                                 index.html.
Nevada Power..................  http://                       14  ..............               7               5
                                 www.oasis.oati.
                                 com/NEVP/.
Northwestern Corp (Montana)...  http://                       35              19               8              10
                                 www.oatioasis.c
                                 om/NWMT/.
PacifiCorp....................  https://                      73               4               4              19
                                 www.oasis.oati.
                                 com/PPW/.
Portland General Electric       https://                       5               3              10               4
 Company.                        www.oasis.oati.
                                 com/PGE/.
Public Service Company of       https://                      28               7               7               1
 Colorado.                       www.oasis.oati.
                                 com/psco/
                                 index.html.
Public Service Company of New   https://                      23              23              78               5
 Mexico.                         www.oasis.oati.
                                 com/PNM/.
Puget Sound Energy............  https://                      27              20              11              11
                                 www.oasis.oati.
                                 com/psei/
                                 index.html.
Tampa Electric Company........  https://                      34              28              28               5
                                 www.oasis.oati.
                                 com/TEC/.
Tri-State Generation and        https://                      12  ..............  ..............              36
 Transmission.                   www.oasis.oati.
                                 com/tsgt/
                                 index.html.
Tucson Electric Power Co......  https://                      24              18               6               2
                                 www.oasis.oati.
                                 com/tepc/.
----------------------------------------------------------------------------------------------------------------

[[Page 39994]]

Appendix B: Compilation of proposed changes to the pro forma LGIP
---------------------------------------------------------------------------

    \490\ This table excludes the following non-RTO/ISO transmission 
providers that have not reported interconnection study information 
for 2021: Basin Electric Power Coop., Cheyenne Light, Fuel, and 
Power Co., Cube Yadkin Transmission, LLC, Deseret Generation and 
Transmission Coop., Golden Spread Coop, MATL LLP, UNS Electric, 
Inc., and Versant Power.

    Note:  Proposed deletions are in brackets and proposed additions 
---------------------------------------------------------------------------
are in italics.

Section 1. Definitions

    * * *
    Affected System Facilities Construction Agreement shall mean the 
form of agreement contained in Appendix 16 of this LGIP for 
facilitating the construction of necessary Affected System Network 
Upgrades on Transmission Provider's Transmission System.
    Affected System Interconnection Customer shall mean any entity 
that proposes interconnection of a device for the production and/or 
storage for later injection of electricity to a transmission system 
other than Transmission Provider's Transmission System.
    Affected System Network Upgrades shall mean the additions, 
modifications, and upgrades to Transmission Provider's Transmission 
System required to accommodate Affected System Interconnection 
Customer's proposed interconnection to a transmission system other 
than Transmission Provider's Transmission System.
    * * *
    Affected System Scoping Meeting shall mean a meeting between 
representatives of Affected System Interconnection Customer and 
Transmission Provider for the purpose of discussing the potential 
impacts on Transmission Provider's Transmission System and how they 
may be mitigated.
    Affected System Study shall mean the evaluation of Affected 
System Interconnection Customers' proposed interconnection(s) to a 
transmission system other than Transmission Provider's Transmission 
System that have an impact on Transmission Provider's Transmission 
System, as described in more detail in Section 9 of this LGIP.
    Affected System Study Agreement shall mean the agreement 
contained in Appendix 15 to this LGIP that is made between 
Transmission Provider and Affected System Interconnection Customer 
to conduct an Affected System Study pursuant to Section 9 of this 
LGIP.
    Affected System Study Report shall mean the report issued 
following completion of an Affected System Study pursuant to Section 
9.6 of this LGIP.
    * * *
    [Applicable Reliability Council shall mean the reliability 
council applicable to the Transmission System to which the 
Generating Facility is directly interconnected.]
    Applicable Reliability Standards shall mean the requirements and 
guidelines of [NERC,]the [Applicable Reliability Council]Electric 
Reliability Organization and the [Control Area]Balancing Authority 
Area of the Transmission System to which the Generating Facility is 
directly interconnected.
    Balancing Authority shall mean an entity that integrates 
resource plans ahead of time, maintains load interchange-generation 
balance within a Balancing Authority Area, and supports 
interconnection frequency in real time.
    Balancing Authority Area shall mean the collection of 
generation, transmission, and loads within the metered boundaries of 
the Balancing Authority. The Balancing Authority maintains load-
resource balance within this area.
    * * *
    Cluster shall mean a group of one or more Interconnection 
Requests that are studied together for the purpose of conducting the 
Cluster Study or Optional Resource Solicitation Study.
    Cluster Request Window shall mean the time period set forth in 
Section 3.4.1 of this LGIP.
    Cluster Re-Study shall mean a re-study of a Cluster Study 
conducted pursuant to Section 7.5 of this LGIP.
    Cluster Re-Study Meeting shall mean the meeting held to discuss 
the results of a Cluster Re-Study pursuant to Section 7.5 of this 
LGIP.
    Cluster Re-Study Report shall mean the report issued following 
completion of a Cluster Re-Study pursuant to Section 7.5 of this 
LGIP.
    Cluster Study shall mean the evaluation of one or more 
Interconnection Requests within a Cluster as described in more 
detail in Section 7 of this LGIP.
    Cluster Study Agreement shall mean the form of agreement 
contained in Appendix 3 to this LGIP for conducting the Cluster 
Study.
    Cluster Study Process shall mean the following processes, 
conducted in sequence: the Cluster Request Window; the Customer 
Engagement Window and Scoping Meetings therein; the Cluster Study; 
any needed Cluster Re-Studies; and the Interconnection Facilities 
Study.
    Cluster Study Report shall mean the report issued following 
completion of a Cluster Study pursuant to Section 7 of this LGIP.
    Cluster Study Report Meeting shall mean the meeting held to 
discuss the results of a Cluster Study pursuant to Section 7 of this 
LGIP.
    Clustering shall mean the process whereby one or more [a group 
of]Interconnection Requests [is]are studied together, instead of 
serially, [for the purpose of conducting the Interconnection System 
Impact Study]as described in more detail in Section 7 of this LGIP.
    Co-Located Resource shall mean multiple Generating Facilities 
located on the same site.
    * * *
    Commercial Readiness Demonstration shall have the meaning set 
forth in Sections 3.4.2, 7.5, and 8.1 of this LGIP.
    Commercial Readiness Deposit shall mean a deposit paid in lieu 
of submitting a Commercial Readiness Demonstration, as set forth in 
Sections 3.4.2, 7.5, and 8.1 of this LGIP.
    * * *
    [Control Area shall mean an electrical system or systems bounded 
by interconnection metering and telemetry, capable of controlling 
generation to maintain its interchange schedule with other Control 
Areas and contributing to frequency regulation of the 
interconnection. A Control Area must be certified by an Applicable 
Reliability Council.]
    Customer Engagement Window shall mean the time period set forth 
in Section 3.4.5 of this LGIP.
    * * *
    Electric Reliability Organization shall mean NERC.
    Electric Storage Resource shall mean a resource capable of 
receiving electric energy from the grid and storing it for later 
injection of electric energy back to the grid.
    * * *
    Generating Facility shall mean Interconnection Customer's device 
for the production and/or storage for later injection of electricity 
identified in the Interconnection Request, but shall not include 
[the]Interconnection Customer's Interconnection Facilities.
    * * *
    Informational Interconnection Study shall mean a sensitivity 
analysis based on assumptions specified by the prospective 
Interconnection Customer in the Informational Interconnection Study 
Agreement and conducted pursuant to Section 6.1-6.3 of this LGIP.
    Informational Interconnection Study Agreement shall mean the 
form of agreement contained in Attachment A to Appendix 2 of this 
LGIP for conducting the Informational Interconnection Study.
    Informational Interconnection Study Request shall mean a 
prospective Interconnection Customer's request in the form of 
Appendix 2 to this LGIP.
    * * *
    Interconnection Facilities shall mean [the]Transmission 
Provider's Interconnection Facilities and [the]Interconnection 
Customer's Interconnection Facilities. Collectively, Interconnection 
Facilities include all facilities and equipment between the 
Generating Facility and the Point of Interconnection, including any 
modification, additions or upgrades that are necessary to physically 
and electrically interconnect the Generating Facility to 
[the]Transmission Provider's Transmission System. Interconnection 
Facilities are sole use facilities by Interconnection Customer and 
shall not include Distribution Upgrades, Stand Alone Network 
Upgrades or Network Upgrades. Multiple Generating Facilities located 
on the same site of Interconnection Customer may use Interconnection 
Facilities.
    Interconnection Facilities Study shall mean a study conducted by 
[the]Transmission Provider or a third party consultant for 
[the]Interconnection Customer to determine a list of facilities 
(including Transmission Provider's Interconnection Facilities and 
Network Upgrades as identified in the [Interconnection System 
Impact]Cluster Study), the cost of those

[[Page 39995]]

facilities, and the time required to interconnect the Generating 
Facility with[the] Transmission Provider's Transmission System. The 
scope of the study is defined in Section 8 of this LGIP[the Standard 
Large Generator Interconnection Procedures].
    * * *
    [Interconnection Feasibility Study shall mean a preliminary 
evaluation of the system impact and cost of interconnecting the 
Generating Facility to Transmission Provider's Transmission System, 
the scope of which is described in Section 6 of the Standard Large 
Generator Interconnection Procedures.]
    [Interconnection Feasibility Study Agreement shall mean the form 
of agreement contained in Appendix 2 of the Standard Large Generator 
Interconnection Procedures for conducting the Interconnection 
Feasibility Study.]
    * * *
    Interconnection Study shall mean any of the following studies: 
the Informational Interconnection [Feasibility]Study, the Cluster 
Study, [the Interconnection System Impact Study,] the Optional 
Resource Solicitation Study, the Surplus Interconnection Service 
System Impact Study, and the Interconnection Facilities Study, 
described in this LGIP.
    [Interconnection System Impact Study shall mean an engineering 
study that evaluates the impact of the proposed interconnection on 
the safety and reliability of Transmission Provider's Transmission 
System and, if applicable, an Affected System. The study shall 
identify and detail the system impacts that would result if the 
Generating Facility were interconnected without project 
modifications or system modifications, focusing on the Adverse 
System Impacts identified in the Interconnection Feasibility Study, 
or to study potential impacts, including but not limited to those 
identified in the Scoping Meeting as described in the Standard Large 
Generator Interconnection Procedures.]
    [Interconnection System Impact Study Agreement shall mean the 
form of agreement contained in Appendix 3 of the Standard Large 
Generator Interconnection Procedures for conducting the 
Interconnection System Impact Study.]
    * * *
    Material Modification shall mean those modifications that have a 
material impact on the cost or timing of any Interconnection Request 
with a later or equal Queue Position[queue priority date].
    * * *
    Optional Resource Solicitation Study shall mean the 
informational evaluation of one or more Interconnection Requests for 
a Resource Planning Entity as described in more detail in Section 
4.2.2 of this LGIP.
    * * *
    Proportional Impact Method shall mean a technical analysis 
conducted by the transmission provider to determine the degree to 
which each generating facility in the cluster contributes to the 
need for a specific network upgrade.
    * * *
    Queue Position shall mean the order of a valid Interconnection 
Request, relative to all other pending valid Interconnection 
Requests, that is established based upon the date and time [of 
receipt of the valid]that Interconnection[Request by the 
Transmission Provider] Customer satisfies all of the requirements of 
Section 3.4.2 of this LGIP to enter the Cluster Study. All 
Interconnection Requests within a Cluster are considered equally 
queued.
    * * *
    Resource Plan shall mean any process for, inter alia, the 
selection of Generating Facilities that is competitive, 
substantively state agency-reviewed and approved, or state agency-
managed, and authorized or required by Applicable Laws and 
Regulations.
    Resource Planning Entity shall mean any entity required to 
develop a Resource Plan or conduct a Resource Solicitation Process, 
including a state entity or load serving entity.
    Resource Solicitation Process shall mean any process for the 
acquisition of Network Resources that is competitive, substantively 
state agency-reviewed and approved, or state agency-managed, and 
authorized or required by Applicable Laws and Regulations.
    Scoping Meeting shall mean the meeting between representatives 
of [the]Interconnection Customer(s) and Transmission Provider 
conducted for the purpose of discussing the proposed interconnection 
request and any alternative interconnection options, 
[to]exchang[e]ing information including any transmission data and 
earlier study evaluations that would be reasonably expected to 
[impact]affect such interconnection options, [to]analyz[e]ing such 
information, and [to]determin[e]ing the potential feasible Points of 
Interconnection.
    Shared Network Upgrade shall mean a Network Upgrade that has 
been assigned to an Interconnection Customer(s) and is subsequently 
identified as necessary to accommodate the interconnection of the 
Large Generating Facility of an Interconnection Customer(s) in a 
later Cluster and meets the requirements pursuant to the process 
outlined in Section 3.10 of this LGIP.
    Site Control shall mean [documentation reasonably 
demonstrating]the exclusive land right to develop, construct, 
operate, and maintain the Generating Facility over the term of 
expected operation of the Generating Facility. Site Control may be 
demonstrated by documentation establishing: (1) ownership of, a 
leasehold interest in, or a right to develop a site [for the purpose 
of constructing]of sufficient size to construct and operate the 
Generating Facility or multiple Generating Facilities on a shared 
site behind one Point of Interconnection; (2) an option to purchase 
or acquire a leasehold site for such purpose; [or](3) [an 
exclusivity or other business relationship between]site of 
sufficient size to construct and operate the Generating Facility; or 
(4) any other documentation that clearly demonstrates the right of 
Interconnection Customer[and the entity having the right to sell, 
lease or grant Interconnection Customer the right to possess or]to 
exclusively occupy a site [for such purpose.]of sufficient size to 
construct and operate the Generating Facility. Site Control for any 
Co-Located Resource is demonstrated by a contract or other agreement 
demonstrating shared land use for all Co-Located Resources that meet 
the aforementioned provisions of this Site Control definition.
    * * *
    Stand Alone Network Upgrades shall mean Network Upgrades that 
are not part of an Affected System that an Interconnection Customer 
may construct without affecting day-to-day operations of the 
Transmission System during their construction and, as indicated 
under proportional impact analysis, are only required for a single 
Interconnection Request. Both [the]Transmission Provider and 
[the]Interconnection Customer must agree as to what constitutes 
Stand Alone Network Upgrades and identify them in Appendix A to the 
Standard Large Generator Interconnection Agreement. If 
[the]Transmission Provider and Interconnection Customer disagree 
about whether a particular Network Upgrade is a Stand Alone Network 
Upgrade, [the]Transmission Provider must provide 
[the]Interconnection Customer a written technical explanation 
outlining why [the]Transmission Provider does not consider the 
Network Upgrade to be a Stand Alone Network Upgrade within 15 days 
of its determination.
    * * *
    Transitional Cluster Study shall mean an Interconnection Study 
evaluating a Cluster of Interconnection Requests during the 
transition to the Cluster Study Process, as set forth in Section 
5.1.1.2 of this LGIP.
    Transitional Cluster Study Report shall mean the report issued 
following completion of a Transitional Cluster Study pursuant to 
Section 5.1.1.2 of this LGIP.
    Transitional Serial Interconnection Facilities Study shall mean 
an Interconnection Facilities Study evaluating an Interconnection 
Request on a serial basis during the transition to the Cluster Study 
Process, as set forth in Section 5.1.1.1 of this LGIP.
    * * *
    Transmission Provider's Interconnection Facilities shall mean 
all facilities and equipment owned, controlled, or operated by 
[the]Transmission Provider from the Point of Change of Ownership to 
the Point of Interconnection as identified in Appendix A to the 
Standard Large Generator Interconnection Agreement, including any 
modifications, additions or upgrades to such facilities and 
equipment. Transmission Provider's Interconnection Facilities are 
sole use facilities and shall not include Distribution Upgrades, 
Stand Alone Network Upgrades or Network Upgrades. Transmission 
Provider's Interconnection Facilities may be shared by more than one 
Generating Facility in a given Cluster Study or by Generating 
Facilities that are part of a Co-Located resource.
    * * *
    Withdrawal Penalty shall mean the penalty assessed by 
Transmission Provider to an Interconnection Customer that chooses to 
withdraw from the queue or does not otherwise reach Commercial 
Operation. The calculation of the Withdrawal Penalty is set forth in 
Section 3.7.1 of this LGIP.

[[Page 39996]]

    * * *

Section 2. Scope and Application

    * * *

2.2 Comparability

    Transmission Provider shall receive, process and analyze all 
Interconnection Requests in a timely manner as set forth in this 
LGIP. Transmission Provider [will use the same Reasonable 
Efforts]shall process[ing] and analyze[ing] Interconnection Requests 
from all Interconnection Customers comparably, regardless of whether 
the Generating Facilities are owned by Transmission Provider, its 
subsidiaries or Affiliates or others.
    * * *

Section 3. Interconnection Requests

3.1 [General.] Interconnection Requests

3.1.1 Study Deposits

3.1.1.1 Initial Study Deposit

    An Interconnection Customer shall submit to Transmission 
Provider, during a Cluster Request Window, an Interconnection 
Request in the form of Appendix 1 to this LGIP, an application fee 
of $5,000, and a refundable study deposit of[$10,000]:
    a. $35,000 plus $1,000 per MW for requests = 20 MW < 
80 MW, or;
    b. $150,000 for requests = 80 MW < 200 MW; or
    c. $250,000 for requests = 200 MW.
    Transmission Provider shall apply the initial study deposit 
toward the cost of the Cluster [an Interconnection Feasibility]Study 
Process.

3.1.1.2 Additional Study Deposits

    Interconnection Customer is required to submit a study deposit 
of the same amount required in Section 3.1.1.1 of this LGIP at the 
following points in the interconnection study process:
    a. Within 20 calendar days after the Cluster Study Report 
Meeting, which Transmission Provider will use towards Cluster Re-
Studies, if needed; and
    b. Simultaneously with the submission of an executed 
Interconnection Facilities Study Agreement, or with a request to 
Transmission Provider to file the LGIA unexecuted, which 
Transmission Provider will use towards the Interconnection 
Facilities Study.

3.1.1.3 LGIA Deposit

    As also discussed in Section 11.3 of this LGIP, when returning 
the executed, or requested to be filed unexecuted, LGIA to 
Transmission Provider, Interconnection Customer is required to 
submit a deposit equal to nine times the amount required in Section 
3.1.1.1 of this LGIP.
    An Interconnection Customer that does not provide the study 
deposit when returning the executed, or requested to be filed 
unexecuted, LGIA shall be deemed withdrawn from the interconnection 
queue pursuant to Section 3.7 of this LGIP.

3.1.2 Submission

    Interconnection Customer shall submit a separate Interconnection 
Request for each site and may submit multiple Interconnection 
Requests for a single site. Interconnection Customer must submit a 
deposit with each Interconnection Request even when more than one 
request is submitted for a single site. If there are Co-Located 
Resources on the same site, Interconnection Customer may submit 
separate Interconnection Requests or a single Interconnection 
Request. An Interconnection Request to evaluate one site at two 
different voltage levels shall be treated as two Interconnection 
Requests unless the Generating Facility, as it proposes to 
interconnect, includes technology that Transmission Provider deems 
acceptable to ensure there is no voltage difference. Interconnection 
Customers evaluating different options (such as different sizes, 
sites, or voltages) are encouraged but not required to use the 
Informational Interconnection Study (Section 6.1 of this LGIP) 
before entering the Cluster Study.
    At Interconnection Customer's option, Transmission Provider and 
Interconnection Customer will identify alternative Point(s) of 
Interconnection and configurations at [the]a Scoping Meeting within 
the Customer Engagement Window to evaluate in this process and 
attempt to eliminate alternatives in a reasonable fashion given 
resources and information available. Interconnection Customer will 
select the definitive Point[(s)] of Interconnection to be studied no 
later than the execution of the [Interconnection Feasibility Study 
Agreement.]Cluster Study Agreement. For purposes of clustering 
Interconnection Requests, Transmission Provider may make reasonable 
changes to the requested Point of Interconnection to facilitate 
efficient interconnection of Interconnection Customers at common 
Point(s) of Interconnection. Transmission Provider shall notify 
Interconnection Customers in writing of any intended changes to the 
requested Point of Interconnection and the Point of Interconnection 
shall only change upon mutual agreement.
    Transmission Provider shall have a process in place to consider 
requests for Interconnection Service below the Generating Facility 
Capacity. These requests for Interconnection Service shall be 
studied at the level of Interconnection Service requested for 
purposes of Interconnection Facilities, Network Upgrades, and 
associated costs, but may be subject to other studies at the full 
Generating Facility Capacity to ensure safety and reliability of the 
system, with the study costs borne by [the]Interconnection Customer. 
If after the additional studies are complete, Transmission Provider 
determines that additional Network Upgrades are necessary, then 
Transmission Provider must: (1) specify which additional Network 
Upgrade costs are based on which studies; and (2) provide a detailed 
explanation of why the additional Network Upgrades are necessary. 
Any Interconnection Facility and/or Network Upgrade costs required 
for safety and reliability also would be borne by 
[the]Interconnection Customer. Interconnection Customers may be 
subject to additional control technologies as well as testing and 
validation of those technologies consistent with Article 6 of the 
LGIA. The necessary control technologies and protection systems 
shall be established in Appendix C of that executed, or requested to 
be filed unexecuted, LGIA.
    Transmission Provider shall have a process in place to study 
Electric Storage Resources and Co-Located Resources containing 
Electric Storage Resources (including hybrid resources) using 
operating assumptions, including charge and discharge parameters, 
that reflect the proposed operation of the Generating Facility as 
requested by Interconnection Customer, unless Good Utility Practice, 
including applicable reliability standards, otherwise requires use 
of different operating assumptions. These requests for 
Interconnection Service shall be studied using the requested 
operating assumptions for purposes of Interconnection Facilities, 
Network Upgrades, and associated costs, but may be subject to other 
studies at the full Generating Facility Capacity to ensure safety 
and reliability of the system, with the study costs borne by 
Interconnection Customer. Interconnection Customers may be subject 
to additional control technologies as well as testing and validation 
of those technologies consistent with Article 6 of the LGIA. The 
necessary control technologies and protection systems shall be 
established in Appendix C of that executed, or requested to be filed 
unexecuted, LGIA.
    * * *

3.2.1 Energy Resource Interconnection Service

    * * *
    3.2.1.2 The Study. The study consists of short circuit/fault 
duty, steady state (thermal and voltage) and stability analyses. The 
short circuit/fault duty analysis would identify direct 
Interconnection Facilities required and the Network Upgrades 
necessary to address short circuit issues associated with the 
Interconnection Facilities. The stability and steady state studies 
would identify necessary upgrades to allow full output of the 
proposed Large Generating Facility, except for Electric Storage 
Resources and Co-Located Resources containing Electric Storage 
Resources (including hybrid resources) that request to use operating 
assumptions pursuant to section 3.1.2, and would also identify the 
maximum allowed output, at the time the study is performed, of the 
interconnecting Large Generating Facility without requiring 
additional Network Upgrades.* * *

3.2.2 Network Resource Interconnection Service

    * * *
    3.2.2.2 The Study. The Interconnection Study for Network 
Resource Interconnection Service shall assure that Interconnection 
Customer's Large Generating Facility meets the requirements for 
Network Resource Interconnection Service and as a general matter, 
that such Large Generating Facility's interconnection is also 
studied with Transmission Provider's Transmission System at peak 
load, under a variety of severely stressed conditions, to determine 
whether, with the Large Generating Facility at full output, except 
for Electric Storage Resources and Co-Located Resources

[[Page 39997]]

containing Electric Storage Resources (including hybrid resources) 
that request to use operating assumptions pursuant to section 3.1.2, 
the aggregate of generation in the local area can be delivered to 
the aggregate of load on Transmission Provider's Transmission 
System, consistent with Transmission Provider's reliability criteria 
and procedures. This approach assumes that some portion of existing 
Network Resources are displaced by the output of Interconnection 
Customer's Large Generating Facility. Network Resource 
Interconnection Service in and of itself does not convey any right 
to deliver electricity to any specific customer or Point of 
Delivery. The Transmission Provider may also study the Transmission 
System under non-peak load conditions. However, upon request by the 
Interconnection Customer, the Transmission Provider must explain in 
writing to the Interconnection Customer why the study of non-peak 
load conditions is required for reliability purposes.
    * * *

3.3 Utilization of Surplus Interconnection Service

3.3.1 Surplus Interconnection Service Request

    Surplus Interconnection Service requests may be made by the 
existing Interconnection Customer [whose Generating Facility is 
already interconnected]or one of its affiliates or may be submitted 
once Interconnection Customer has executed the LGIA or requested 
that the LGIA be filed unexecuted, even prior to Commercial 
Operation. Surplus Interconnection Service requests also may be made 
by another Interconnection Customer. Transmission Provider shall 
provide a process for evaluating Interconnection Requests for 
Surplus Interconnection Service. Studies for Surplus Interconnection 
Service shall consist of reactive power, short circuit/fault duty, 
stability analyses, and any other appropriate studies. Steady-state 
(thermal/voltage) analyses may be performed as necessary to ensure 
that all required reliability conditions are studied. If the Surplus 
Interconnection Service was not studied under off-peak conditions, 
off-peak steady state analyses shall be performed to the required 
level necessary to demonstrate reliable operation of the Surplus 
Interconnection Service. If the original System Impact Study report 
or Cluster Study Report is not available for the Surplus 
Interconnection Service, both off-peak and peak analysis may need to 
be performed for the existing Generating Facility associated with 
the request for Surplus Interconnection Service. The reactive power, 
short circuit/fault duty, stability, and steady-state analyses for 
Surplus Interconnection Service will identify any additional 
Interconnection Facilities and/or Network Upgrades necessary.

3.4 Valid Interconnection Request

3.4.1 Cluster Request Window

    Transmission Provider shall accept Interconnection Requests 
during a forty-five (45) Calendar Day period (the Cluster Request 
Window). The initial Cluster Request Window shall open for 
Interconnection Requests beginning {Transmission Provider to provide 
Month and Day (e.g., January 1){time}  following commencement of the 
transition process set out in Section 5.1 of this LGIP and 
successive Cluster Request Windows shall open annually every 
{Transmission Provider to provide Month and Day (e.g., January 
1){time}  thereafter.

3.4.[1]2 Initiating an Interconnection Request

    An Interconnection Customer seeking to join a Cluster shall 
submit its Interconnection Request to Transmission Provider within, 
and no later than the close of, the Cluster Request Window. To 
initiate an Interconnection Request, Interconnection Customer must 
submit all of the following for its proposed Generating Facility:
    (i) [a $10,000 deposit,]applicable deposit amount, pursuant to 
Section 3.1.1.1 of this LGIP,
    (ii) a completed application in the form of Appendix 1 
(including applicable technical information), [and]
    (iii) demonstration of Site Control [or a posting of an 
additional deposit of $10,000.]{Transmission Provider to insert 
acreage requirements for each Generating Facility technology 
type{time} .
    In the event that regulatory limitations prohibit 
Interconnection Customer from obtaining Site Control, 
Interconnection Customer may submit an initial deposit in lieu of 
Site Control of $10,000 per MW, subject to a floor of $500,000 and a 
ceiling of $2,000,000. Such deposits shall be applied toward any 
Interconnection Studies or Withdrawal Penalty, if applicable, 
pursuant to the Interconnection Request. If Interconnection Customer 
demonstrates Site Control within the cure period specified in 
Section [3.4.3]3.4.4 of this LGIP after submitting its 
Interconnection Request, the additional deposit shall be refundable; 
otherwise, all such deposit(s), additional and initial, become non-
refundable.
    In order to demonstrate regulatory limitations, Interconnection 
Customer must provide: (1) a signed affidavit from an officer of the 
company indicating that Site Control is unobtainable due to 
regulatory requirements; and (2) documentation sufficiently 
describing and explaining the source and effects of such regulatory 
restrictions, including a description of any conditions that must be 
met to satisfy the regulatory restrictions and the anticipated time 
by which Interconnection Customer expects to satisfy the regulatory 
restrictions.
    An Interconnection Customer that submits a deposit in lieu of 
site control due to demonstrated regulatory limitations must 
demonstrate 100% Site Control for its Generating Facility prior to 
Transmission Provider commencing the Interconnection Facilities 
Study. If Interconnection Customer does not demonstrate 100% Site 
Control for its Generating Facility prior to Transmission Provider 
commencing the Interconnection Facilities Study, its Interconnection 
Request will be deemed withdrawn, pursuant to Section 3.7 of this 
LGIP.
    (iv) Generating Facility size (MW) (and requested 
Interconnection Service amount if the requested Interconnection 
Service is less than the Generating Facility Capacity);
    (v) If applicable, (1) the requested operating assumptions, such 
as charge and discharge parameters, to be used by Transmission 
Provider that reflect the proposed operation of the Electric Storage 
Resource or Co-Located Resource containing an Electric Storage 
Resource (including a hybrid resource), and (2) a description of any 
control technologies (software and/or hardware) that will limit the 
operation of the Electric Storage Resource or Co-Located Resource 
containing an Electric Storage Resource (including a hybrid 
resource) to its intended operation.
    (vi) One of the following Commercial Readiness Demonstration 
options totaling the entire Generating Facility Capacity (or 
requested Interconnection Service amount if the requested 
Interconnection Service is less than the Generating Facility 
Capacity), or in the alternative, a Commercial Readiness Deposit 
equal to two times the study deposit described in Section 3.1.1.1 of 
this LGIP in the form of an irrevocable letter of credit or cash in 
lieu of the Commercial Readiness Demonstration. The security is 
refunded to Interconnection Customer according to Section 3.7 of 
this LGIP.
    (a) Executed term sheet (or comparable evidence) related to a 
contract for sale of (1) the constructed Generating Facility to a 
load-serving entity or to a commercial, industrial, or other large 
end-use customer, (2) the Generating Facility's energy or capacity 
where the term of sale is not less than five (5) years, or (3) the 
Generating Facility's ancillary services where the term of sale is 
not less than five (5) years;
    (b) Reasonable evidence that the Generating Facility has been 
selected in a Resource Plan or Resource Solicitation Process by or 
for a load-serving entity, is being developed by a load-serving 
entity, or is being developed for purposes of a sale to a 
commercial, industrial, or other large end-use customer;
    (c) A Provisional LGIA that has been filed at the Commission 
executed, or requested to be filed unexecuted, which is not in 
suspension pursuant to Article 5.16 of the LGIA, and includes a 
commitment to construct the Generating Facility; or
    (vii) A Point of Interconnection; and
    (viii) Whether the Interconnection Request shall be studied as a 
Network Resource Interconnection Service or an Energy Resource 
Interconnection Service, consistent with Section 3.2 of this LGIP.
    Interconnection Customer shall promptly inform Transmission 
Provider of any material change to Interconnection Customer's 
demonstration of Site Control under Section 3.4.2(iii) of this LGIP 
or its satisfaction of a Commercial Readiness Demonstration as 
selected under Section 3.4.2(vi)(a)-(c) of this LGIP. If 
Transmission Provider determines, based on Interconnection 
Customer's information, that Interconnection Customer no longer 
satisfies Site Control or a Commercial Readiness Demonstration, 
Transmission Provider shall give Interconnection Customer ten (10) 
Business Days to demonstrate the applicable requirement to 
Transmission Provider's

[[Page 39998]]

satisfaction. If the material change is related to Interconnection 
Customer's Commercial Readiness Demonstration, Interconnection 
Customer has the option to submit a Commercial Readiness Deposit 
pursuant to Section 3.4.2(vi)(d) of this LGIP before the end of the 
ten (10) Business Day cure period. Absent such, Transmission 
Provider will deem the subject Interconnection Request withdrawn 
pursuant to Section 3.7 of this LGIP.

3.4.[2]3 Acknowledgment of Interconnection Request

    * * *

3.4.[3]4 Deficiencies in Interconnection Request

    An Interconnection Request will not be considered to be a valid 
request until all items in Section [3.4.1]3.4.2 of this LGIP have 
been received by Transmission Provider. If an Interconnection 
Request fails to meet the requirements set forth in Section 
[3.4.1]3.4.2 of this LGIP, Transmission Provider shall notify 
Interconnection Customer within five (5) Business Days of receipt of 
the initial Interconnection Request of the reasons for such failure 
and that the Interconnection Request does not constitute a valid 
request. Interconnection Customer shall provide Transmission 
Provider the additional requested information needed to constitute a 
valid request within ten (10) Business Days after receipt of such 
notice but no later than the close of the Cluster Request Window. At 
any time, if Transmission Provider identifies that the technical 
data provided by Interconnection Customer is incomplete or contains 
errors, Interconnection Customer and Transmission Provider shall 
work expeditiously and in good faith to remedy such issues. Failure 
by Interconnection Customer to comply with this Section 3.4.[3]4 of 
this LGIP shall be treated in accordance with Section 3.7 of this 
LGIP.

3.4.5 Customer Engagement Window

    Upon the close of each Cluster Request Window, Transmission 
Provider will open a thirty (30) Calendar Day period (Customer 
Engagement Window). During the Customer Engagement Window, 
Transmission Provider shall hold a Scoping Meeting with all 
interested Interconnection Customers. Notwithstanding the preceding 
requirements and upon written consent of all Interconnection 
Customers within a specific Cluster, Transmission Provider may 
shorten the Customer Engagement Window and begin the Cluster Study. 
Within the first ten (10) Business Days following the close of the 
Cluster Request Window, Transmission Provider shall post on its 
OASIS site a list of Interconnection Requests for that Cluster. The 
list shall identify, for each Interconnection Request: (1) the 
requested amount of Interconnection Service; (2) the location by 
county and state; (3) the station or transmission line or lines 
where the interconnection will be made; (4) the projected In-Service 
Date; (5) the type of Interconnection Service requested; and (6) the 
type of Generating Facility or Facilities to be constructed, 
including fuel types, such as wind, natural gas, coal, or solar. 
During the Customer Engagement Window, Transmission Provider will 
provide to Interconnection Customer a non-binding updated good faith 
estimate of the cost and timeframe for completing the Cluster Study 
and a Cluster Study Agreement to be executed prior to the close of 
the Customer Engagement Window.
    At the end of the Customer Engagement Window, all 
Interconnection Requests deemed valid that have executed a Cluster 
Study Agreement in the form of Appendix 3 shall be included in that 
Cluster Study. Any Interconnection Requests not deemed valid at the 
close of the Customer Engagement Window shall not be included in 
that Cluster. Immediately following the Customer Engagement Window, 
Transmission Provider shall initiate the Cluster Study described in 
more detail in Section 7 of this LGIP.

3.4.[4]6 Cluster Study Scoping Meetings

    [Within ten (10) Business Days after receipt of a valid 
Interconnection Request]During the Customer Engagement Window, 
Transmission Provider shall [establish a date agreeable to]hold a 
Scoping Meeting with all Interconnection Customers whose valid 
Interconnection Requests were received in that Cluster Request 
Window. If requested by an Interconnection Customer[for the Scoping 
Meeting, and such date shall be no later than thirty (30) Calendar], 
Transmission Provider shall also hold individual customer-specific 
Scoping Meetings, which must be requested no later than fifteen (15) 
Business Days [from receipt of the valid Interconnection Request, 
unless otherwise mutually agreed upon by the Parties.]after the 
close of the Cluster Request Window.
    The purpose of the Scoping Meeting shall be to discuss 
alternative interconnection options, to exchange information 
including any transmission data that would reasonably be expected to 
impact such interconnection options, to discuss the Cluster Study 
materials posted to OASIS pursuant to Section 3.5 of this LGIP, if 
applicable, and to analyze such information[and to determine the 
potential feasible Points of Interconnection]. In addition, 
Interconnection Customer's request to evaluate whether advanced 
power flow control, transmission switching, dynamic line ratings, 
static synchronous compensators, static VAR compensators, and/or 
electric storage providing a transmission service could provide cost 
and/or time savings for Interconnection Customer must be submitted 
at the Cluster Study Scoping Meetings. Transmission Provider and 
Interconnection Customer will bring to the meeting such technical 
data, including, but not limited to: (i) general facility loadings, 
(ii) general instability issues, (iii) general short circuit issues, 
(iv) general voltage issues, and (v) general reliability issues as 
may be reasonably required to accomplish the purpose of the meeting. 
Transmission Provider and Interconnection Customer will also bring 
to the meeting personnel and other resources as may be reasonably 
required to accomplish the purpose of the meeting in the time 
allocated for the meeting. On the basis of the meeting, 
Interconnection Customer shall designate its Point of 
Interconnection.[, pursuant to Section 6.1,] and one or more 
available alternative Point(s) of Interconnection. The duration of 
the meeting shall be sufficient to accomplish its purpose.

3.5 OASIS Posting

3.5.1 OASIS Posting

    Transmission Provider will maintain on its OASIS a list of all 
Interconnection Requests. The list will identify, for each 
Interconnection Request: (i) the maximum summer and winter megawatt 
electrical output; (ii) the location by county and state; (iii) the 
station or transmission line or lines where the interconnection will 
be made; (iv) the projected In-Service Date; (v) the status of the 
Interconnection Request, including Queue Position; (vi) the type of 
Interconnection Service being requested; and (vii) the availability 
of any studies related to the Interconnection Request; (viii) the 
date of the Interconnection Request; (ix) the type of Generating 
Facility to be constructed[(combined cycle, base load or combustion 
turbine and fuel type)]; and (x) for Interconnection Requests that 
have not resulted in a completed interconnection, an explanation as 
to why it was not completed. Except in the case of an Affiliate, the 
list will not disclose the identity of Interconnection Customer 
until Interconnection Customer executes an LGIA or requests that 
Transmission Provider file an unexecuted LGIA with FERC. Before 
holding a Scoping Meeting with its Affiliate, Transmission Provider 
shall post on OASIS an advance notice of its intent to do so. 
Transmission Provider shall post to its OASIS site any deviations 
from the study timelines set forth herein. Interconnection Study 
reports and Optional Interconnection Study reports shall be posted 
to Transmission Provider's OASIS site subsequent to the meeting 
between Interconnection Customer and Transmission Provider to 
discuss the applicable study results. Transmission Provider shall 
also post any known deviations in the [Large]Generating Facility's 
In-Service Date.

3.5.2 Requirement to Post Interconnection Study Metrics

    Transmission Provider will maintain on its OASIS or its website 
summary statistics related to processing Interconnection Studies 
pursuant to Interconnection Requests, updated quarterly. If 
Transmission Provider posts this information on its website, a link 
to the information must be provided on Transmission Provider's OASIS 
site. For each calendar quarter, Transmission Providers must 
calculate and post the information detailed in [sections]Sections 
3.5.2.1 through 3.5.2.4 of this LGIP.

3.5.2.1 Interconnection [Feasibility Studies] Cluster Study Processing 
Time

    (A) Number of Interconnection Requests that had [Interconnection 
Feasibility]Cluster Studies completed within Transmission Provider's 
coordinated region during the reporting quarter,
    (B) Number of Interconnection Requests that had [Interconnection 
Feasibility]Cluster Studies completed within Transmission Provider's 
coordinated region during the reporting quarter that were completed 
more than [[timeline as listed in Transmission

[[Page 39999]]

Provider's LGIP]]one hundred fifty (150) Calendar Days after 
[receipt by Transmission Provider of the Interconnection Customer's 
executed Interconnection Feasibility Study Agreement]the close of 
the Customer Engagement Window,
    (C) At the end of the reporting quarter, the number of active 
valid Interconnection Requests with ongoing incomplete 
[Interconnection Feasibility] Cluster Studies where such 
Interconnection Requests had executed [Interconnection Feasibility]a 
Cluster Study Agreement[s] received by Transmission Provider more 
than [[timeline as listed in Transmission Provider's LGIP]]one 
hundred fifty (150) Calendar Days before the reporting quarter end,
    (D) Mean time (in days), [Interconnection Feasibility]Cluster 
Studies were completed within Transmission Provider's coordinated 
region during the reporting quarter, from the [date when 
Transmission Provider received the executed Interconnection 
Feasibility Study Agreement]commencement of the Cluster Study to the 
date when Transmission Provider provided the completed 
[Interconnection Feasibility]Cluster Study Report to [the] 
Interconnection Customer,
    (E) Mean time (in days), Cluster Studies were completed within 
Transmission Provider's coordinated region during the reporting 
quarter, from the close of the Cluster Request Window to the date 
when Transmission Provider provided the completed Cluster Study 
Report to Interconnection Customer.
    [(E)](F) Percentage of [Interconnection Feasibility]Cluster 
Studies exceeding [[timeline as listed in Transmission Provider's 
LGIP]]one hundred fifty (150) Calendar Days to complete this 
reporting quarter, calculated as the sum of 3.5.2.1(B) plus 
3.5.2.1(C) divided by the sum of 3.5.2.1(A) plus 3.5.2.1(C)).

3.5.2.2 [Interconnection System Impact Studies]Cluster Re-Studies 
Processing Time

    (A) Number of Interconnection Requests that had [Interconnection 
System Impact Studies]Cluster Re-Studies completed within 
Transmission Provider's coordinated region during the reporting 
quarter,
    (B) Number of Interconnection Requests that had [Interconnection 
System Impact Studies]Cluster Re-Studies completed within 
Transmission Provider's coordinated region during the reporting 
quarter that were completed more than [[timeline as listed in 
Transmission Provider's LGIP]]one hundred fifty (150) Calendar Days 
after receipt by Transmission Provider of [the]Interconnection 
Customer's executed [Interconnection System Impact Study]Cluster Re-
Study Agreement,
    (C) At the end of the reporting quarter, the number of active 
valid Interconnection Requests with ongoing incomplete [System 
Impact Studies]Cluster Re-Studies where such Interconnection 
Requests had executed [Interconnection System Impact Study]Cluster 
Re-Study Agreements received by Transmission Provider more than 
[[timeline as listed in Transmission Provider's LGIP]]one hundred 
fifty (150) Calendar Days before the reporting quarter end,
    (D) Mean time (in days), [Interconnection System Impact 
Studies]Cluster Re-Studies were completed within Transmission 
Provider's coordinated region during the reporting quarter, from the 
date when Transmission Provider received the executed 
[Interconnection System Impact Study]Cluster Re-Study Agreement to 
the date when Transmission Provider provided the completed 
[Interconnection System Impact Study]Cluster Re-Study Report to 
[the]Interconnection Customer,
    (E) Mean time (in days), Cluster Re-Studies were completed 
within Transmission Provider's coordinated region during the 
reporting quarter, from the close of the Cluster Request Window to 
the date when Transmission Provider provided the completed Cluster 
Re-Study Report to Interconnection Customer.
    [(E)](F) Percentage of [Interconnection System Impact 
Studies]Cluster Re-Studies exceeding [[timeline as listed in 
Transmission Provider's LGIP]]one hundred fifty (150) Calendar Days 
to complete this reporting quarter, calculated as the sum of 
3.5.2.2(B) plus 3.5.2.2(C) divided by the sum of 3.5.2.2(A) plus 
3.5.2.2(C)).

3.5.2.3 Interconnection Facilities Studies Processing Time

    * * *
    (E) Mean time (in days), Cluster Re-Studies were completed 
within Transmission Provider's coordinated region during the 
reporting quarter, from the close of the Cluster Request Window to 
the date when Transmission Provider provided the completed Cluster 
Re-Study Report to Interconnection Customer.
    [(E)](F) Percentage of delayed Interconnection Facilities 
Studies this reporting quarter, calculated as the sum of 3.5.2.3(B) 
plus 3.5.2.3(C) divided by the sum of 3.5.2.3(A) plus 3.5.2.3(C)).

3.5.2.4 Interconnection Service Requests Withdrawn from Interconnection 
Queue

    * * *
    (C) Number of Interconnection Requests withdrawn from 
Transmission Provider's interconnection queue during the reporting 
quarter before completion of [an Interconnection System Impact]a 
Cluster Study,
    * * *

3.5.4

    * * *
    (i) Transmission Provider must submit a report to the Commission 
describing the reason for each Cluster Study, Cluster Re-Study, or 
individual Interconnection Facilities S[s]tudy [or group of 
clustered studies]pursuant to[an] one or more Interconnection 
Request(s) that exceeded its deadline (i.e., [45,]150, 90 or 180 
days) for completion [(excluding any allowance for Reasonable 
Efforts)]. Transmission Provider must describe the reasons for each 
study delay and any steps taken to remedy these specific issues and, 
if applicable, prevent such delays in the future. The report must be 
filed at the Commission within 45 days of the end of the calendar 
quarter.
    * * *

3.6 Coordination with Affected Systems

    Transmission Provider will coordinate the conduct of any studies 
required to determine the impact of the Interconnection Request on 
Affected Systems with Affected System Operators[and, if possible, 
include those results in its applicable Interconnection Study within 
the time frame specified in this LGIP. Transmission Provider will 
include such Affected System Operators in all meetings held with 
Interconnection Customer as required by this LGIP]. Interconnection 
Customer will cooperate with Transmission Provider and Affected 
System Operator in all matters related to the conduct of studies and 
the determination of modifications to Affected Systems.
    A Transmission Provider which may be an Affected System shall 
cooperate with the [T]transmission [P]provider with whom 
interconnection has been requested in all matters related to the 
conduct of studies and the determination of modifications to 
Transmission Provider's Transmission System[Affected Systems].

3.6.1 Initial Notification

    Transmission Provider must notify Affected System Operator of a 
potential Affected System impact caused by the Interconnection 
Request within ten (10) Business Days of the first event giving rise 
to the identification of the Affected System impact. Identification 
of an Affected System impact may occur at the close of the (1) 
Cluster Request Window, (2) Customer Engagement Window, (3) Cluster 
Study, or (4) Cluster Re-Study.
    Transmission Provider will provide Interconnection Customer with 
a list of potential Affected Systems, along with relevant contact 
information.
    When Transmission Provider acting as an Affected System receives 
notification of an impact on Transmission Provider's Transmission 
System, Transmission Provider must respond in writing within fifteen 
(15) Business Days whether it intends to conduct an Affected System 
Study.

3.6.2 Affected System Scoping Meeting

    Within seven (7) Business Days of providing written notification 
that Transmission Provider acting as an Affected System intends to 
conduct an Affected System Study, Transmission Provider must 
schedule an Affected System Scoping Meeting with Affected System 
Interconnection Customer, using best efforts to include the 
transmission provider with whom interconnection has been requested.
    The purpose of the Affected System Scoping Meeting is to allow 
all attendees to discuss the potential impacts on Transmission 
Provider's Transmission System and how they may be mitigated. 
Attendees will bring to the meeting such technical data, personnel, 
and other resources as may be reasonably required to accomplish the 
purpose of the meeting. The Affected System Scoping Meeting must be 
held within seven (7) Business Days of being scheduled. Within 
fifteen (15) Business Days after the meeting, Transmission Provider 
acting as an Affected System must share with the attendees the 
schedule to complete the Affected System Study.

[[Page 40000]]

3.6.3 Affected System Study Process

    Transmission Provider must provide data monthly, or more 
frequently as needed, to any Affected System Operators regarding the 
amount and location of generation in Transmission Provider's 
interconnection queue as well as updated information about 
Transmission Provider's Transmission System.

3.7 Withdrawal

    Interconnection Customer may withdraw its Interconnection 
Request at any time by written notice of such withdrawal to 
Transmission Provider. In addition, if Interconnection Customer 
fails to adhere to all requirements of this LGIP, except as provided 
in Section 13.5 (Disputes), Transmission Provider shall deem the 
Interconnection Request to be withdrawn and shall provide written 
notice to Interconnection Customer of the deemed withdrawal and an 
explanation of the reasons for such deemed withdrawal. Upon receipt 
of such written notice, Interconnection Customer shall have fifteen 
(15) Business Days in which to either respond with information or 
actions that cures the deficiency or to notify Transmission Provider 
of its intent to pursue Dispute Resolution.
    Withdrawal shall result in the loss of Interconnection 
Customer's Queue Position. If an Interconnection Customer disputes 
the withdrawal and loss of its Queue Position, then during Dispute 
Resolution, Interconnection Customer's Interconnection Request is 
eliminated from the queue until such time that the outcome of 
Dispute Resolution would restore its Queue Position. An 
Interconnection Customer that withdraws or is deemed to have 
withdrawn its Interconnection Request shall pay to Transmission 
Provider all costs that Transmission Provider prudently incurs with 
respect to that Interconnection Request prior to Transmission 
Provider's receipt of notice described above. Interconnection 
Customer must pay all monies due to Transmission Provider before it 
is allowed to obtain any Interconnection Study data or results.
    In case of withdrawal, Transmission Provider shall (i) update 
the OASIS Queue Position posting; (ii) impose the Withdrawal Penalty 
described in Section 3.7.1 of this LGIP; and (iii) refund to 
Interconnection Customer any portion of the refundable portion of 
Interconnection Customer's study deposit or [study 
payments]Commercial Readiness Deposit that exceeds the costs that 
Transmission Provider has incurred and the cost of any penalties 
that Transmission Provider has assessed pursuant to Section 3.7.1 of 
this LGIP, including interest calculated in accordance with section 
35.19a(a)(2) of FERC's regulations. In the event of such withdrawal, 
Transmission Provider, subject to the confidentiality provisions of 
Section 13.1 of this LGIP, shall provide, at Interconnection 
Customer's request, all information that Transmission Provider 
developed for any completed study conducted up to the date of 
withdrawal of the Interconnection Request.

3.7.1 Withdrawal Penalty

    An Interconnection Customer shall be subject to a Withdrawal 
Penalty if it withdraws its Interconnection Request or the 
Generating Facility does not otherwise reach Commercial Operation 
unless: (1) the withdrawal does not delay the timing of other 
Generating Facilities within the same Cluster, as determined by 
Transmission Provider; (2) the withdrawal does not increase the cost 
of other Generating Facilities within the same Cluster, as 
determined by Transmission Provider; (3) Interconnection Customer 
withdraws after receiving the most recent Cluster Study Report and 
the costs assigned to the Interconnection Request identified in that 
report have increased by more than twenty-five percent (25%) 
compared to costs identified in the previous Cluster Study Report or 
Cluster Re-Study Report; or (4) Interconnection Customer withdraws 
after receiving the Interconnection Facilities Study report and the 
costs assigned to the Interconnection Request identified in that 
report have increased by more than one hundred percent (100%) 
compared to costs identified in the Cluster Study Report.

3.7.1.1 Calculation of the Withdrawal Penalty

    If the withdrawing Interconnection Customer has demonstrated any 
of the Commercial Readiness Demonstration options in Sections 
3.4.2(vi)(a)-(c) of this LGIP, and is withdrawing prior to 
executing, or requesting the unexecuted filing of, an LGIA and fully 
meeting the requirements of Section 11.3 of this LGIP, 
Interconnection Customer shall be charged one (1) times its actual 
allocated cost of all studies performed up until that point. If the 
withdrawing Interconnection Customer only submitted a Commercial 
Readiness Deposit, and is withdrawing at any point prior to 
executing, or requesting the unexecuted filing of, an LGIA and fully 
meeting the requirements of Section 11.3 of this LGIP, that 
Interconnection Customer's Withdrawal Penalty will be as follows in 
(a)-(c):
    (a) If Interconnection Customer withdraws or is deemed withdrawn 
during the Cluster Study or after receipt of a Cluster Study Report, 
Interconnection Customer will be charged two (2) times its actual 
allocated cost of all studies performed for Interconnection 
Customers in the Cluster up until that point, regardless of any 
previous Withdrawal Penalty revenues received. This amount will be 
capped at one (1) million dollars.
    (b) If Interconnection Customer withdraws or is deemed withdrawn 
during the Cluster Re-Study or after receipt of any applicable re-
study reports issued pursuant to Section 7.5 of this LGIP, 
Interconnection Customer will be charged three (3) times its actual 
allocated cost of all studies performed for Interconnection 
Customers in the Cluster up until that point, regardless of any 
previous Withdrawal Penalty revenues received. This amount shall be 
capped at one and one half (1.5) million dollars.
    (c) If Interconnection Customer withdraws or is deemed withdrawn 
during the Interconnection Facilities Study, after receipt of the 
Interconnection Facilities Study report issued pursuant to Section 
8.3 of this LGIP, or after receipt of the draft LGIA but before 
fully meeting requirements of Section 11.3 of this LGIP, 
Interconnection Customer shall be charged five (5) times its actual 
allocated cost of all studies performed for Interconnection 
Customers in the Cluster up until that point, regardless of any 
previous Withdrawal Penalty revenues received. This amount shall be 
capped at two (2) million dollars.
    The Withdrawal Penalty for any Interconnection Customer that, 
before achieving Commercial Operation, withdraws after executing an 
LGIA and meeting the requirements of Section 11.3 of this LGIP shall 
be nine (9) times its actual allocated cost of all studies performed 
for Interconnection Customers in the Cluster up until that point, 
regardless of any previous Withdrawal Penalty revenues received. In 
the event that Interconnection Customer suspends its LGIA, 
Interconnection Customer shall be obligated to pay for costs 
associated with any studies or re-studies required as a result of 
the suspension of the LGIA, including any re-studies associated with 
any affected Interconnection Customers with lower Queue Positions.

3.7.1.2 Distribution of the Withdrawal Penalty

    Any Withdrawal Penalty revenues shall be used to fund studies 
conducted under the Cluster Study Process. Withdrawal Penalty 
revenues shall first be applied, in the form of a bill credit, to 
not-yet-invoiced study costs for other Interconnection Customers in 
the same Cluster, and to the extent that such studies are fully 
credited, shall be applied to study costs of future Clusters in 
order of Queue Position. Withdrawn Interconnection Customers shall 
not receive a bill credit associated with Withdrawal Penalty 
revenues. Distribution of Withdrawal Penalty revenues to a specific 
Cluster Study shall not exceed the total actual Cluster Study costs. 
Allocation of Withdrawal Penalty revenues within a Cluster to a 
specific Interconnection Customer shall be (1) ninety percent (90%) 
on a pro-rata basis based on requested megawatts included in the 
applicable Cluster; and (2) ten percent (10%) on a per capita basis 
based on the number of Interconnection Requests in the applicable 
Cluster. Withdrawal Penalty revenues associated with Section 
3.7.1.1(c) of this LGIP shall not be distributed to the remaining 
Interconnection Customers in that Cluster until all Interconnection 
Customers in that Cluster have reached Commercial Operation and 
thereafter shall be distributed as described above. Transmission 
Provider shall post the balance of Withdrawal Penalty revenue held 
by transmission provider but not yet dispersed on its OASIS site and 
update this posting on a quarterly basis.

3.8 Identification of Contingent Facilities

    Transmission Provider shall post in this section a method for 
identifying the Contingent Facilities to be provided to 
Interconnection Customer at the conclusion of the [System 
Impact]Cluster Study and included in Interconnection Customer's 
Large Generator Interconnection Agreement. The method shall be 
sufficiently transparent to determine why a specific Contingent 
Facility was identified and how it relates to the Interconnection 
Request. Transmission Provider shall also provide, upon request of

[[Page 40001]]

[the]Interconnection Customer, the estimated Interconnection 
Facility and/or Network Upgrade costs and estimated in-service 
completion time of each identified Contingent Facility when this 
information is readily available and not commercially sensitive.

3.9 Penalties for Failure to Meet Study Deadlines

    (1) Transmission Provider is subject to a penalty if it fails to 
complete a Cluster Study, Cluster Re-Study, Interconnection 
Facilities Study, or Affected Systems Study by the applicable 
deadline set forth in this LGIP. Transmission Provider must pay the 
penalty on a pro rata basis per Interconnection Customer to 
Interconnection Customer(s) in the delayed study on the last 
Business Day of each calendar quarter for which a penalty applies, 
starting with the calendar quarter immediately following the quarter 
that Transmission Provider exceeded the applicable study deadline. 
The penalty will continue to be paid the last Business Day of each 
quarter until Transmission Provider completes the study.
    (2) For penalties assessed in accordance with this Section, the 
penalty amount will be equal to $500 per Business Day Transmission 
Provider takes to complete that study after the applicable deadline 
set forth in this LGIP. The total amount of a penalty assessed under 
this Section will not exceed one hundred percent (100%) of the total 
deposits paid by Interconnection Customers for the applicable study.
    (3) No penalty will be assessed under this Section where a 
Transmission Provider's failure to complete an Interconnection Study 
is caused by Force Majeure.
    (4) No penalty will be assessed under this Section where a study 
is delayed by 10 Business Days or less. The penalty amount will be 
calculated from the first day the Transmission Provider exceeds the 
appliable study deadline.
    (5) If (a) the transmission provider needs to extend the 
deadline for a particular study subject to penalties under this 
section and (b) all interconnection customers in the relevant 
cluster mutually agree to such extension, the deadline for that 
study shall be extended 30 business days from the original due date. 
In such a scenario, no penalty will be assessed for missing the 
original deadline.
    (6) No penalties shall be assessed until one Cluster Study cycle 
after Transmission Provider transitions to the Cluster Study 
Process.
    (7) Transmission Provider must maintain on its OASIS or its 
website summary statistics related to penalties assessed under this 
Section, updated quarterly. For each calendar quarter, Transmission 
Provider must calculate and post (1) the total amount of penalties 
assessed under this Section during the reporting quarter and (2) the 
highest amount of the penalties assessed under this Section paid to 
a single Interconnection Customer during the reporting quarter. 
Transmission Provider is required to post on its OASIS or its 
website these penalty amounts for each calendar quarter within 30 
calendar days of the end of the calendar quarter. Transmission 
Provider must maintain the quarterly measures posted on its OASIS or 
its website for three calendar years with the first required report 
to be one Cluster Study cycle after Transmission Provider 
transitions to the Cluster Study Process.

3.10 Identification of Shared Network Upgrades

    As part of the Cluster Study, Transmission Provider shall review 
the proposed configuration of the Generating Facility and perform a 
test, if required, to determine a Network Upgrade's eligibility for 
cost sharing. The set of possible Shared Network Upgrades included 
in the test will be all Network Upgrades identified through 
Transmission Provider's study process and In-Service for a period of 
less than five (5) years. If the Generating Facility directly-
connects to (1) a Network Upgrade(s) or (2) a substation where 
Network Upgrade(s) terminates, then the Network Upgrade(s) is a 
Shared Network Upgrade and Interconnection Customer shall share the 
cost of the Shared Network Upgrade. If the aforementioned criteria 
are not met, Transmission Provider shall perform a power flow 
analysis to calculate the impacts of the Generating Facility on 
Network Upgrade(s) under system-intact conditions and will apply the 
following two-part criteria to determine eligibility. First, 
Transmission Provider shall analyze if the impact of the Generating 
Facility on the Network Upgrade(s) is either greater than five (5) 
MW or greater than one percent (1%) of the transmission facility 
rating. If the criteria are met, Transmission Provider shall proceed 
to the second test. Transmission Provider shall analyze if the 
impact of the Generating Facility on Network Upgrade(s) is greater 
than five percent (5%) of the facility rating or the power transfer 
distribution factor is greater than twenty percent (20%). If the 
criteria listed in both (1) and (2) are met, the Network Upgrade 
shall be considered a Shared Network Upgrade(s) and Interconnection 
Customer shall share the cost of the Shared Network Upgrade(s), now 
designated as a Shared Network Upgrade(s). The Network Upgrade(s) 
shall be considered Shared Network Upgrade(s) only if they are in-
service before the Generating Facility's Commercial Operation Date.

Section 4. Interconnection Request Evaluation Process [Queue Position]

    Once an Interconnection Customer has submitted a valid 
Interconnection Request pursuant to Section 3.4 of this LGIP, such 
Interconnection Request shall be admitted into Transmission 
Provider's interconnection queue for further processing pursuant to 
the following procedures.

4.1 Queue Position [General]

4.1.1 Assignment of Queue Position

    Transmission Provider shall assign a Queue Position as follows: 
the Queue Position within the queue shall be assigned based upon the 
date and time of receipt of all items required pursuant to the 
provisions of Section 3.4 of this LGIP. All Interconnection Requests 
submitted and validated in a single Cluster Request Window shall be 
considered equally queued, but Clusters initiated earlier in time 
shall be considered to have a higher Queue Position than Clusters 
initiated later. [the valid Interconnection Request; provided that, 
if the sole reason an Interconnection Request is not valid is the 
lack of required information on the application form, and 
Interconnection Customer provides such information in accordance 
with Section 3.4.3, then Transmission Provider shall assign 
Interconnection Customer a Queue Position based on the date the 
application form was originally filed. Moving a Point of 
Interconnection shall result in a lowering of Queue Position if it 
is deemed a Material Modification under Section 4.4.3.]
    [The Queue Position of each Interconnection Request will be used 
to determine the order of performing the Interconnection Studies and 
determination of cost responsibility for the facilities necessary to 
accommodate the Interconnection Request. A higher queued]

4.1.2 Higher Queue Position

    A higher Queue Position assigned to an Interconnection Request 
is one that has been placed ``earlier'' in the queue in relation to 
another Interconnection Request that is [lower queued. Transmission 
Provider may allocate the cost of the common upgrades for clustered 
Interconnection Requests without regard to Queue Position.]assigned 
a lower Queue Position. All requests studied in a single Cluster 
shall be considered equally queued, but Clusters initiated earlier 
in time shall be considered to have a higher Queue Position than 
Clusters initiated later. Interconnection Requests within the same 
Cluster shall be equally queued, and therefore Queue Position shall 
have no bearing on the allocation of the cost of the Network 
Upgrades identified in the applicable Cluster Study (such costs will 
be allocated among Interconnection Requests in accordance with 
Section 4.2.3 of this LGIP).

[4.2 Clustering

    At Transmission Provider's option, Interconnection Requests may 
be studied serially or in clusters for the purpose of the 
Interconnection System Impact Study.
    Clustering shall be implemented on the basis of Queue Position. 
If Transmission Provider elects to study Interconnection Requests 
using Clustering, all Interconnection Requests received within a 
period not to exceed one hundred and eighty (180) Calendar Days, 
hereinafter referred to as the ``Queue Cluster Window'' shall be 
studied together without regard to the nature of the underlying 
Interconnection Service, whether Energy Resource Interconnection 
Service or Network Resource Interconnection Service. The deadline 
for completing all Interconnection System Impact Studies for which 
an Interconnection System Impact Study Agreement has been executed 
during a Queue Cluster Window shall be in accordance with Section 
7.4 of this LGIP, for all Interconnection Requests assigned to the 
same Queue Cluster Window. Transmission Provider may study an 
Interconnection Request separately to the extent warranted by Good 
Utility Practice based upon the

[[Page 40002]]

electrical remoteness of the proposed Large Generating Facility.]

4.2. General Study Process

    [Clustering Interconnection System Impact 
Studies]Interconnection Studies performed within the Cluster Study 
Process shall be conducted in such a manner to ensure the efficient 
implementation of the applicable regional transmission expansion 
plan in light of the Transmission System's capabilities at the time 
of each study.
    [The Queue Cluster Window shall have a fixed time interval based 
on fixed annual opening and closing dates. Any changes to the 
established Queue Cluster Window interval and opening or closing 
dates shall be announced with a posting on Transmission Provider's 
OASIS beginning at least one hundred and eighty (180) Calendar Days 
in advance of the change and continuing thereafter through the end 
date of the first Queue Cluster Window that is to be modified.]

4.2.2 Optional Resource Solicitation Study

    At any time during the Cluster Request Window, and upon request 
of a Resource Planning Entity, Transmission Provider may initiate an 
Optional Resource Solicitation Study. Such request shall demonstrate 
that the requesting entity meets the definition of a Resource 
Planning Entity and include all information necessary for 
Transmission Provider to verify that the requester qualifies as a 
Resource Planning Entity as defined in Section 1 of this LGIP. Such 
request shall include a list of Interconnection Requests, which have 
already been submitted to Transmission Provider in the current 
Cluster Request Window, that the Resource Planning Entity would like 
evaluated in the Optional Resource Solicitation Study. In its 
request, the Resource Planning Entity must group the Interconnection 
Requests into no more than five (5) combinations of Interconnection 
Requests for purposes of the Optional Resource Solicitation Study. 
There is no limit to how many Interconnection Requests may be 
included in each combination of Interconnection Requests.
    Resource Planning Entity may submit for inclusion in the 
Optional Resource Solicitation Study an Interconnection Request for 
a Generating Facility that already has a Queue Position pursuant to 
Section 4.1 of this LGIP, or an Interconnection Request for a 
Generating Facility that is submitted by Interconnection Customer 
during the Cluster Request Window in which the Resource Planning 
Entity submits the request for the Optional Resource Solicitation 
Study. In any case, Interconnection Customer must meet all 
requirements associated with maintaining its Queue Position.
    Transmission Provider may not delay any Interconnection Study as 
a result of an Optional Resource Solicitation Study.
    Within ten (10) Business Days of receipt of a request to perform 
an Optional Resource Solicitation Study that includes valid 
Interconnection Requests as described in Section 3.4 of this LGIP, 
Transmission Provider and Resource Planning Entity shall meet to 
determine a mutually agreeable scope for the Optional Resource 
Solicitation Study.
    Transmission Provider shall conduct the Optional Resource 
Solicitation Study separate from the Cluster Study Process. In 
conducting the Optional Resource Solicitation Study, Transmission 
Provider shall evaluate each combination of Interconnection Requests 
submitted by the Resource Planning Entity as a single group, in the 
same manner it performs Cluster Studies under Section 7.3 of this 
LGIP. Such studies in connection with a Resource Plan or Resource 
Solicitation Process shall be implemented based upon Queue Position 
(relative to Clusters with higher or lower Queue Positions) and 
shall consider Resource Planning Entity's interconnection needs 
identified in the Resource Plan or Resource Solicitation Process. 
The Resource Planning Entity must act as the point of contact for 
purposes of the Optional Resource Solicitation Study for all 
Interconnection Requests submitted to the Optional Resource 
Solicitation Study. Thereafter, the Optional Resource Solicitation 
Study shall proceed in parallel with the annual Cluster Study 
described in Section 7 of this LGIP. The Optional Resource 
Solicitation Study shall be completed within 135 days of 
commencement (15 days before the conclusion of the annual Cluster 
Study described in Section 7 of this LGIP).
    After Transmission Provider completes the Optional Resource 
Solicitation Study for the requested combinations, the results will 
be provided to the Resource Planning Entity in an Optional Resource 
Solicitation Study Report. The results will also be posted on 
Transmission Provider's OASIS consistent with the posting of other 
study results.
    The provision of the Optional Resource Solicitation Study Report 
concludes Transmission Provider's responsibilities with regard to 
the requested Optional Resource Solicitation Study. Interconnection 
Requests may proceed in the remainder of the Cluster Study Process 
either as part of the Resource Plan or as independent 
Interconnection Requests. It is the responsibility of 
Interconnection Customer to provide Transmission Provider with 
evidence of being selected in a Resource Plan or Resource 
Solicitation Process in a manner sufficient to demonstrate 
commercial readiness following Interconnection Customer's receipt of 
the Cluster Study Report (pursuant to Section 7.3 of this LGIP) and 
prior to entering the Interconnection Facilities Study (pursuant to 
Section 8.3 of this LGIP). Inclusion in an Optional Resource 
Solicitation Study in no way exempts Interconnection Customer from 
Withdrawal Penalties under Section 3.7.1 of this LGIP.

4.2.3 Cost Allocation for Transmission Provider's Interconnection 
Facilities and Network Upgrades

    (1) For Network Upgrades identified in Cluster Studies, 
Transmission Provider shall calculate each Interconnection 
Customer's share of the costs based on the proportional impact of 
each individual Generating Facility in the Cluster Study on the 
Network Upgrade or Transmission Provider's Interconnection 
Facilities. {Transmission Provider shall include in this section the 
thresholds and metrics it uses for its proportional impact 
method.{time}  An Interconnection Customer that funds Network 
Upgrades is entitled to transmission credits as provided in Article 
11.4 of the LGIA.
    (2) The costs of any required Transmission Provider's 
Interconnection Facilities will be directly assigned to 
Interconnection Customer(s) using such facilities. The cost of such 
Transmission Provider's Interconnection Facilities will be shared 
equally among all Interconnection Customers sharing use of 
Transmission Provider's Interconnection Facilities.
    * * *

4.4 Modifications

    Interconnection Customer shall submit to Transmission Provider, 
in writing, modifications to any information provided in the 
Interconnection Request. Interconnection Customer shall retain its 
Queue Position if the modifications are in accordance with Sections 
4.4.1, 4.4.2, [or]4.4.5 or 4.4.7 of this LGIP, or are determined not 
to be Material Modifications pursuant to Section 4.4.3 of this LGIP.
    Notwithstanding the above, during the course of the 
Interconnection Studies, either Interconnection Customer or 
Transmission Provider may identify changes to the planned 
interconnection that may improve the costs and benefits (including 
reliability) of the interconnection, and the ability of the proposed 
change to accommodate the Interconnection Request. To the extent the 
identified changes are acceptable to Transmission Provider, 
Interconnection Customer and any impacted Interconnection Customer 
in the same Cluster, such acceptance not to be unreasonably 
withheld, Transmission Provider shall modify the Point of 
Interconnection prior to return of the executed Cluster Study 
Agreement, provided, however, such identified changes do not result 
in a Material Modification [and/or configuration in accordance with 
such changes and proceed with any re-studies necessary to do so in 
accordance with Section 6.4, Section 7.6 and Section 8.5 as 
applicable]and Interconnection Customer shall retain its Queue 
Position.
    4.4.1 Prior to the return of the executed [Interconnection 
System Impact]Cluster Study Agreement to Transmission Provider, 
modifications permitted under this Section shall include 
specifically: (a) a decrease of up to 60 percent of electrical 
output (MW) of the proposed project, through either (1) a decrease 
in plant size or (2) a decrease in Interconnection Service level 
(consistent with the process described in Section 3.1 of this LGIP) 
accomplished by applying Transmission Provider-approved injection-
limiting equipment; (b) modifying the technical parameters 
associated with the[Large] Generating Facility technology or the 
[Large]Generating Facility step-up transformer impedance 
characteristics; and (c) modifying the interconnection 
configuration. For plant increases, the incremental increase in 
plant output will go [to]in the [end of the queue]next Cluster Study 
Window for the purposes of cost allocation and study analysis.

[[Page 40003]]

    * * *
    4.4.3 Prior to making any modification other than those 
specifically permitted by Sections 4.4.1, 4.4.2, and 4.4.5 of this 
LGIP, Interconnection Customer may first request that Transmission 
Provider evaluate whether such modification is a Material 
Modification. In response to Interconnection Customer's request, 
Transmission Provider shall evaluate the proposed modifications 
prior to making them and inform Interconnection Customer in writing 
of whether the modifications would constitute a Material 
Modification. Interconnection Customer may request, and Transmission 
Provider shall evaluate within sixty (60) calendar days, the 
addition of a Generating Facility with the same Point of 
Interconnection as indicated in the Interconnection Request to the 
Interconnection Request if the addition of the Generating Facility 
does not increase the requested Interconnection Service level. Any 
change to the Point of Interconnection, except those deemed 
acceptable under Sections 3.1.2 or 4.4 of this LGIP[.1, 6.1, 7.2] or 
so allowed elsewhere, shall constitute a Material Modification. 
Interconnection Customer may then withdraw the proposed modification 
or proceed with a new Interconnection Request for such modification.
    4.4.4 Upon receipt of Interconnection Customer's request for 
modification permitted under this Section 4.4, Transmission Provider 
shall commence and perform any necessary additional studies as soon 
as practicable, but in no event shall Transmission Provider commence 
such studies later than thirty (30) Calendar Days after receiving 
notice of Interconnection Customer's request. Any additional studies 
resulting from such modification shall be done at Interconnection 
Customer's cost. Any such modification of the Interconnection 
Request must be accompanied by any resulting updates to the models 
described in Attachment A to Appendix 1 of this LGIP.
    4.4.5 Extensions of less than three (3) cumulative years in the 
Commercial Operation Date of the [Large]Generating Facility to which 
the Interconnection Request relates are not material and should be 
handled through construction sequencing. For purposes of this 
Section, the Commercial Operation Date reflected in the initial 
Interconnection Request shall be used to calculate the permissible 
extension. Such cumulative extensions include extensions requested 
after execution of the, or the filing of an unexecuted, LGIA by 
Interconnection Customer.
    * * *
    4.4.7 Prior to determining whether the addition of a Generating 
Facility with the same Point of Interconnection as indicated in the 
Interconnection Request to an Interconnection Request constitutes a 
Material Modification, Transmission Provider shall evaluate within 
sixty (60) Calendar Days the proposed addition of such a Generating 
Facility if it does not increase the requested Interconnection 
Service level.

Section 5. Procedures for Interconnection Requests Submitted Prior to 
Effective Date of the Cluster Study Revisions [Standard Large Generator 
Interconnection Procedures]

5.1 Procedures for Transitioning to the Cluster Study Process [Queue 
Position for Pending Requests.]

5.1.1

    [Any Interconnection Customer assigned a Queue Position prior to 
the effective date of this LGIP shall retain that Queue Position.]
    Any Interconnection Customer assigned a Queue Position prior to 
the effective date of this LGIP shall retain that Queue Position 
subject to the requirements in Sections 5.1.1.1 and 5.1.1.2 of this 
LGIP. Any Interconnection Customer that fails to meet these 
requirements shall have its Interconnection Request deemed withdrawn 
without penalty. In such case, all other aspects of Section 3.7 of 
this LGIP remain applicable. Any unused deposit amounts of withdrawn 
Interconnection Requests shall be returned to Interconnection 
Customer pursuant to Section 3.7 of this LGIP. If an Interconnection 
Customer elects to continue with a Transitional Serial 
Interconnection Facilities Study or a Transitional Cluster Study, as 
described below, Transmission Provider shall retain the current 
study deposits, and Interconnection Customer shall be responsible 
for the entire cost of all studies pursuant to Sections 4.2.3 and 
13.3 of this LGIP.

5.1.1.1 Transitional Serial Study

    [If an Interconnection Study Agreement has not been executed as 
of the effective date of this LGIP, then such Interconnection Study, 
and any subsequent Interconnection Studies, shall be processed in 
accordance with this LGIP.]
    An Interconnection Customer that has (a) a final System Impact 
Study Report that identifies facilities required to feasibly 
interconnect and (b) an Interconnection Facilities Study Agreement 
that was executed before the effective date of this LGIP, may opt to 
continue with the Interconnection Facilities Study process if 
Interconnection Customer: (1) meets each of the following 
requirements that demonstrate commercial readiness; and (2) executes 
a Transitional Serial Interconnection Facilities Study Agreement in 
the form of Appendix 14 of this LGIP within sixty (60) Calendar Days 
of the effective date of this LGIP. All of the following are 
required:
    (1) A deposit equal to one hundred percent (100%) of the costs 
identified for Transmission Provider's Interconnection Facilities 
and Network Upgrades in the final System Impact Study Report. This 
deposit will be trued up to reflect actual costs after the 
associated facilities are in-service. If Interconnection Customer 
does not withdraw, the deposit shall be trued up to actual costs and 
applied to future construction costs described in Interconnection 
Customer's eventual LGIA. If Interconnection Customer withdraws or 
otherwise does not reach Commercial Operation, Transmission Provider 
shall refund the deposit after the final invoice for study costs and 
Withdrawal Penalty is settled. The deposit shall be in the form of 
an irrevocable letter of credit upon which Transmission Provider may 
draw or cash where cash deposits will be treated according to 
Section 3.7 of this LGIP.
    (2) Exclusive Site Control for the entire Generating Facility 
and any Interconnection Customer's Interconnection Facilities 
pursuant to Section 3.4.2 of this LGIP.
    (3) One of the following Commercial Readiness Demonstration 
options totaling the entire Generating Facility Capacity (or 
requested Interconnection Service amount if the requested 
Interconnection Service is less than the Generating Facility 
Capacity):
    (a) Executed term sheet (or comparable evidence as determined by 
Transmission Provider) related to a contract for sale of (1) the 
constructed Generating Facility to a load-serving entity or to a 
commercial, industrial, or other large end-use customer, (2) the 
Generating Facility's energy or capacity where the term of sale is 
not less than five (5) years, or (3) the Generating Facility's 
ancillary services where the term of sale is not less than five (5) 
years;
    (b) Reasonable evidence that the Generating Facility has been 
selected in a Resource Plan or Resource Solicitation Process by or 
for a load-serving entity, is being developed by a load-serving 
entity, or is being developed for purposes of a sale to a 
commercial, industrial, or other large end-use customer;
    (c) A Provisional LGIA that has been filed at the Commission 
executed, or requested to be filed unexecuted, and which is not in 
suspension pursuant to Article 5.16 of the LGIA, includes a 
commitment to construct the Generating Facility, and has a 
Commercial Operation Date no later than December 31, 2027.
    Transmission Provider shall conduct each Transitional 
Interconnection Facilities Study and issue the associated 
Transitional Interconnection Facilities Study Report within one 
hundred fifty (150) Calendar Days of the effective date of this 
LGIP.
    After Transmission Provider issues each Transitional 
Interconnection Facilities Study Report, the remaining process shall 
proceed according to Section 11 of this LGIP. All LGIA negotiations 
shall be completed and the LGIA executed (or filed unexecuted) 
within sixty (60) Calendar Days of the tender of the draft LGIA or 
the Interconnection Request shall be deemed withdrawn pursuant to 
Section 3.7 of this LGIP unless extended by mutual agreement of 
Transmission Provider and Interconnection Customer. During LGIA 
negotiation, Transmission Provider shall not grant a request to 
change the previously-indicated Commercial Operation Date and to 
delay the construction of Network Upgrades and/or Interconnection 
Facilities if such delay would negatively affect Interconnection 
Customers with lower or equal Queue Positions. If Interconnection 
Customer withdraws or otherwise does not reach Commercial Operation, 
a Withdrawal Penalty equal to nine (9) times Interconnection 
Customer's actual allocated cost of all studies performed for the 
Transitional Cluster Study up until that point will be imposed on 
Interconnection Customer.

[[Page 40004]]

5.1.1.2 Transitional Cluster Study

    [If an Interconnection Study Agreement has been executed prior 
to the effective date of this LGIP, such Interconnection Study shall 
be completed in accordance with the terms of such agreement. With 
respect to any remaining studies for which an Interconnection 
Customer has not signed an Interconnection Study Agreement prior to 
the effective date of the LGIP, Transmission Provider must offer 
Interconnection Customer the option of either continuing under 
Transmission Provider's existing interconnection study process or 
going forward with the completion of the necessary Interconnection 
Studies (for which it does not have a signed Interconnection Studies 
Agreement) in accordance with this LGIP.]
    An Interconnection Customer with an assigned Queue Position as 
of the effective date of this LGIP may opt to enter the combined 
system impact and interconnection facilities Transitional Cluster 
Study if Interconnection Customer: (1) meets each of the following 
requirements listed as (1)-(4) in this section that demonstrate 
commercial readiness; and (2) executes a Transitional Cluster Study 
Agreement in the form of Appendix 13 to this LGIP within sixty (60) 
Calendar Days of the effective date of this LGIP. All 
Interconnection Requests that enter the Transitional Cluster Study 
shall be considered to have an equal Queue Position. All identified 
Network Upgrade costs shall be allocated according to Section 4.2.3 
of this LGIP. Transitional Cluster Study costs shall be allocated 
according to the method described in Section 4.2.3 of this LGIP.
    Interconnection Customer may make a one-time extension to its 
requested Commercial Operation Date upon entry into the Transitional 
Cluster Study, any such extension not to exceed until the date of 
December 31, 2027.
    All of the following must be included in a request to opt into a 
Transitional Cluster Study:
    (1) A selection of either Energy Resource Interconnection 
Service or Network Resource Interconnection Service.
    (2) A deposit on Transmission Provider's Interconnection 
Facilities and Network Upgrades expected to be identified in the 
Transitional Cluster Study. The deposit shall be equal to five 
million dollars ($5,000,000) and be in the form of an irrevocable 
letter of credit upon which Transmission Provider may draw or cash 
where cash deposits will be treated according to Section 3.7 of this 
LGIP. If Interconnection Customer does not withdraw, the deposit 
shall be reconciled with and applied towards future construction 
costs described in the LGIA. Any amounts in excess of the actual 
construction costs shall be returned to Interconnection Customer 
within thirty (30) days of the date of Commercial Operation. If 
Interconnection Customer withdraws or otherwise does not reach 
Commercial Operation, Transmission Provider must refund the deposit 
once the final invoice for study costs and Withdrawal Penalty is 
settled.
    (3) Exclusive Site Control for the entire Generating Facility.
    (4) One of the following Commercial Readiness Demonstration 
options totaling the entire Generating Facility Capacity (or 
requested Interconnection Service amount if the requested 
Interconnection Service is less than the Generating Facility 
Capacity):
    (a) Executed term sheet (or comparable evidence as determined by 
Transmission Provider) related to a contract for sale of (1) the 
constructed Generating Facility to a load-serving entity or to a 
commercial, industrial, or other large end-use customer, (2) the 
Generating Facility's energy or capacity where the term of sale is 
not less than five (5) years, or (3) the Generating Facility's 
ancillary services where the term of sale is not less than five (5) 
years;
    (b) Reasonable evidence that the Generating Facility has been 
selected in a Resource Plan or Resource Solicitation Process by or 
for a load-serving entity, is being developed by a load-serving 
entity, or is being developed for purposes of a sale to a 
commercial, industrial, or other large end-use customer;
    (c) A Provisional LGIA that has been filed at the Commission 
executed, or requested to be filed unexecuted, and which is not in 
suspension pursuant to Article 5.16 of the LGIA, includes a 
commitment to construct the Generating Facility, and has a 
Commercial Operation Date no later than December 31, 2027.
    Transmission Provider shall conduct the Transitional Cluster 
Study and issue both an associated interim Transitional Serial Study 
Report and an associated final Transitional Serial Study Report. The 
interim Transitional Cluster Study report shall provide the 
following information:

--identification of any circuit breaker short circuit capability 
limits exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response 
to system disturbances resulting from the interconnection; and
--Transmission Provider's Interconnection Facilities and Network 
Upgrades that are expected to be required as a result of the 
Interconnection Request(s) and a non-binding, good faith estimate of 
cost responsibility and a non-binding, good faith estimated time to 
construct.

    In addition to the information provided in the interim 
Transitional Cluster Study report, the final Transitional Cluster 
Study Report shall: (1) provide a description of, estimated cost of, 
and schedule for required facilities to interconnect the Generating 
Facility to the Transmission System; and (2) address the short 
circuit, instability, and power flow issues identified in the 
interim Transitional Cluster Study report.
    The interim and final Transitional Cluster Study Reports shall 
be issued within three hundred (300) and three hundred sixty (360) 
Calendar Days of the effective date of this LGIP, respectively, and 
shall be posted on Transmission Provider's OASIS consistent with the 
posting of other study results. Interconnection customers included 
in the Transitional Cluster Study shall have thirty (30) days to 
comment on the interim Transitional Cluster Study, once it has been 
issued.
    After Transmission Provider issues the final Transitional 
Cluster Study Report, the remaining process shall proceed according 
to Section 11 of this LGIP. All LGIA negotiations shall be completed 
and the LGIA executed (or filed unexecuted) within sixty (60) 
Calendar Days of the tender of the draft LGIA or the Interconnection 
Request is deemed withdrawn unless extended by mutual agreement of 
Transmission Provider and Interconnection Customer. During LGIA 
negotiations, Transmission Provider shall not grant any request to 
change the previously-indicated Commercial Operation Date and to 
delay the construction of Transmission Provider's Interconnection 
Facilities or Network Upgrades if such delay would negatively affect 
Interconnection Customers with lower or equal Queue Positions.
    If Interconnection Customer withdraws or otherwise does not 
reach Commercial Operation, a Withdrawal Penalty equal to nine (9) 
times Interconnection Customer's total study cost will be imposed.
    [5.1.1.3 If an LGIA has been submitted to FERC for approval 
before the effective date of the LGIP, then the LGIA would be 
grandfathered.

5.1.2 Transition Period

    To the extent necessary, Transmission Provider and 
Interconnection Customers with an outstanding request (i.e., an 
Interconnection Request for which an LGIA has not been submitted to 
FERC for approval as of the effective date of this LGIP) shall 
transition to this LGIP within a reasonable period of time not to 
exceed sixty (60) Calendar Days. The use of the term ``outstanding 
request'' herein shall mean any Interconnection Request, on the 
effective date of this LGIP: (i) that has been submitted but not yet 
accepted by Transmission Provider; (ii) where the related 
interconnection agreement has not yet been submitted to FERC for 
approval in executed or unexecuted form, (iii) where the relevant 
Interconnection Study Agreements have not yet been executed, or (iv) 
where any of the relevant Interconnection Studies are in process but 
not yet completed. Any Interconnection Customer with an outstanding 
request as of the effective date of this LGIP may request a 
reasonable extension of any deadline, otherwise applicable, if 
necessary to avoid undue hardship or prejudice to its 
Interconnection Request. A reasonable extension shall be granted by 
Transmission Provider to the extent consistent with the intent and 
process provided for under this LGIP.]
    * * *

Section 6. Interconnection Information Access [Feasibility Study]

6.1 Informational Interconnection [Feasibility]Study Agreement

    At any time, any prospective Interconnection Customer may 
request,[Simultaneously with the acknowledgement of a valid 
Interconnection Request]and Transmission Provider shall perform, one 
or more Informational Interconnection Studies. [provide to 
Interconnection Customer an Interconnection Feasibility Study 
Agreement in the form of

[[Page 40005]]

Appendix 2.]Any prospective Interconnection Customer (including 
affiliates) shall have no more than five (5) requests for 
Informational Interconnection Studies pending at one time. The 
requesting party shall submit a separate Informational 
Interconnection Study Request for each site and may submit multiple 
Informational Interconnection Study Requests for a single site. The 
requesting party must submit a $10,000 deposit with each 
Informational Interconnection Study Request even when more than one 
request is submitted for a single site. An Informational 
Interconnection Study Request to evaluate one site at two different 
voltage levels shall be treated as two Informational Interconnection 
Study Requests. At the time the Informational Interconnection Study 
Request is submitted, the requesting party must request either 
Energy Resource Interconnection Service or Network Resource 
Interconnection Service, as described in Section 3.2 of this LGIP; 
provided, however, any prospective Interconnection Customer 
requesting an Informational Interconnection Study for Network 
Resource Interconnection Service may also request that it be 
concurrently studied for Energy Resource Interconnection Service. 
The request shall use the Informational Interconnection Study 
Request form in Appendix 2 of this LGIP and shall describe the 
assumptions to be used in the Informational Interconnection Study 
within the scope described in Section 6.2 of this LGIP.
    Within seven (7) Business Days after receipt of an Informational 
Interconnection Study Request, Transmission Provider shall provide 
to the requesting party an Informational Interconnection Study 
Agreement in the form of Attachment A to Appendix 2. The 
Informational Interconnection [Feasibility]Study Agreement shall: 
(1) specify the scope of work for the Informational Interconnection 
Study, subject to other requirements in Section 6.2 of this LGIP, 
(2) specify the technical data that the requesting party must 
provide, and (3) Transmission Provider's estimate of the cost of the 
Informational Interconnection Study. To the extent known by 
Transmission Provider, such estimate shall include any study costs 
expected to be incurred by any Affected System whose participation 
may be necessary to complete the Informational Interconnection 
Study. The requesting party shall execute the Informational 
Interconnection Study Agreement within ten (10) Business Days of 
receipt and deliver the Informational Interconnection Study 
Agreement, all required technical data, and a $10,000 deposit to 
Transmission Provider. [that Interconnection Customer is responsible 
for the actual cost of the Interconnection Feasibility Study. Within 
five (5) Business Days following the Scoping Meeting Interconnection 
Customer shall specify for inclusion in the attachment to the 
Interconnection Feasibility Study Agreement the Point(s) of 
Interconnection and any reasonable alternative Point(s) of 
Interconnection. Within five (5) Business Days following 
Transmission Provider's receipt of such designation, Transmission 
Provider shall tender to Interconnection Customer the 
Interconnection Feasibility Study Agreement signed by Transmission 
Provider, which includes a good faith estimate of the cost for 
completing the Interconnection Feasibility Study. Interconnection 
Customer shall execute and deliver to Transmission Provider the 
Interconnection Feasibility Study Agreement along with a $10,000 
deposit no later than thirty (30) Calendar Days after its receipt.]
    [On or before the return of the executed Feasibility Study 
Agreement to Transmission Provider, Interconnection Customer shall 
provide the technical data called for in Appendix 1, Attachment A.
    If the Interconnection Feasibility Study uncovers any unexpected 
result(s) not contemplated during the Scoping Meeting, a substitute 
Point of Interconnection identified by either Interconnection 
Customer or Transmission Provider, and acceptable to the other, such 
acceptance not to be unreasonably withheld, will be substituted for 
the designated Point of Interconnection specified above without loss 
of Queue Position, and Re-studies shall be completed pursuant to 
Section 6.4 as applicable. For the purpose of this Section 6.1, if 
Transmission Provider and Interconnection Customer cannot agree on 
the substituted Point of Interconnection, then Interconnection 
Customer may direct that one of the alternatives as specified in the 
Interconnection Feasibility Study Agreement, as specified pursuant 
to Section 3.4.4, shall be the substitute.
    If Interconnection Customer and Transmission Provider agree to 
forgo the Interconnection Feasibility Study, Transmission Provider 
will initiate an Interconnection System Impact Study under Section 7 
of this LGIP and apply the $10,000 deposit towards the 
Interconnection System Impact Study.]

6.2 Scope of Informational Interconnection [Feasibility]Study

    The Informational Interconnection [Feasibility]Study shall 
preliminarily evaluate the feasibility of the proposed 
interconnection to the Transmission System.
    The Informational Interconnection [Feasibility]Study will 
consist of a sensitivity analysis based on the assumptions specified 
by the requesting party in the Informational Interconnection Study 
Agreement. The Informational Interconnection Study will identify the 
prospective Transmission Provider's Interconnection Facilities and 
the Network Upgrades, and the estimated cost thereof, that may be 
required to provide transmission service or Interconnection Service 
based upon the results of the Informational Interconnection Study. 
The Informational Interconnection Study shall be performed solely 
for informational purposes. Transmission Provider shall coordinate 
the study with any Affected Systems that may be affected by the 
types of Interconnection Services that are being studied. 
Transmission Provider shall utilize existing studies to the extent 
practicable in conducting the Informational Interconnection Study. 
The Informational Interconnection Study will consider the Base Case 
as well as all generating facilities (and with respect to (iii), any 
identified Network Upgrades) that, on the date the Interconnection 
Feasibility Study is commenced: (i) are directly interconnected to 
the Transmission System; (ii) are interconnected to Affected Systems 
and may have an impact on the Interconnection Request; (iii) have a 
pending higher queued Interconnection Request to interconnect to the 
Transmission System; and (iv) have no Queue Position but have 
executed an LGIA or requested that an unexecuted LGIA be filed with 
FERC. The Informational Interconnection [Feasibility] Study will 
consist of a power flow and short circuit analysis. [The 
Interconnection Feasibility Study will provide a list of facilities 
and a non-binding good faith estimate of cost responsibility and a 
non-binding good faith estimated time to construct.]

6.3 Informational Interconnection Feasibility Study Procedures

    [Transmission Provider shall utilize existing studies to the 
extent practicable when it performs the study.] Transmission 
Provider shall [use Reasonable Efforts to]complete the Informational 
Interconnection [Feasibility]Study no later than forty-five (45) 
Calendar Days after Transmission Provider receives the fully 
executed Informational Interconnection [Feasibility]Study Agreement. 
If Transmission Provider is unable to complete the Informational 
Interconnection Study within such time period, it will notify the 
requesting party and provide an estimated completion date and an 
explanation of the reasons why additional time is required. [At the 
request of Interconnection Customer or at any time Transmission 
Provider determines that it will not meet the required time frame 
for completing the Interconnection Feasibility Study, Transmission 
Provider shall notify Interconnection Customer as to the schedule 
status of the Interconnection Feasibility Study. If Transmission 
Provider is unable to complete the Interconnection Feasibility Study 
within that time period, it shall notify Interconnection Customer 
and provide an estimated completion date with an explanation of the 
reasons why additional time is required. Upon request, Transmission 
Provider shall provide Interconnection Customer supporting 
documentation, workpapers and relevant power flow, short circuit and 
stability databases for the Interconnection Feasibility Study, 
subject to confidentiality arrangements consistent with Section 
13.1.
    Transmission Provider shall study the Interconnection Request at 
the level of service requested by the Interconnection Customer, 
unless otherwise required to study the full Generating Facility 
Capacity due to safety or reliability concerns.

6.3.1 Meeting with Transmission Provider

    Within ten (10) Business Days of providing an Interconnection 
Feasibility Study report to Interconnection Customer, Transmission 
Provider and Interconnection Customer shall meet to discuss the 
results of the Interconnection Feasibility Study.]

[[Page 40006]]

6.4 Publicly Posted Interconnection Information. [Re-Study.]

    [If Re-Study of the Interconnection Feasibility Study is 
required due to a higher queued project dropping out of the queue, 
or a modification of a higher queued project subject to Section 4.4, 
or re-designation of the Point of Interconnection pursuant to 
Section 6.1 Transmission Provider shall notify Interconnection 
Customer in writing. Such Re-Study shall take not longer than forty-
five (45) Calendar Days from the date of the notice. Any cost of Re-
Study shall be borne by [the] Interconnection Customer being re-
studied.] Transmission Provider shall maintain and make available on 
its public website: (1) an interactive visual representation of the 
estimated incremental injection capacity (in megawatts) available at 
each bus in Transmission Provider's footprint under N-1 conditions, 
and (2) a table of metrics concerning the estimated impact of a 
potential generating facility on Transmission Provider's 
Transmission System based on a user-specified addition of a 
particular number of megawatts at a particular voltage level at a 
particular point of interconnection. At a minimum, for each 
monitored facility impacted by the user-specified generation 
addition, the following information will be provided in the table: 
(1) the distribution factor; (2) the megawatt impact (based on the 
proposed project size and the distribution factor); (3) the 
percentage impact on the monitored facility (based on the megawatt 
values of the proposed project and the monitored facility rating); 
(4) the percentage of power flow on the monitored facility before 
the proposed project; (5) the percentage power flow on the monitored 
facility after the injection of the proposed project. These metrics 
must be calculated based on the power flow model of the Transmission 
System with the transfer simulated from each bus to the whole 
Transmission Provider's footprint (to approximate Network Resource 
Interconnection Service), and with the incremental capacity at each 
bus decremented by the existing and queued generation (based on the 
existing or requested interconnection service limit of the 
generation). These metrics must be updated within 30 days after the 
completion of each Cluster Study and Cluster Re-Study period. This 
information must be made available on Transmission Provider's public 
website, without a password or a fee. The website will define all 
underlying assumptions, including the name of the most recent 
Cluster Study or Re-Study used in the base case and disclaimers for 
any interconnection constraints not included or considered.

Section 7. [Interconnection System Impact]Cluster Study

7.1 [Interconnection System Impact]Cluster Study Agreement

    [Unless otherwise agreed, pursuant to the Scoping Meeting 
provided in Section 3.4.4, simultaneously with the delivery of the 
Interconnection Feasibility Study to Interconnection Customer]No 
later than five (5) Business Days after the close of a Cluster 
Request Window, Transmission Provider shall [provide ]tender to each 
Interconnection Customer [an]that submitted a valid Interconnection 
[System Impact] Request a Cluster Study Agreement in the form of 
Appendix 3 to this LGIP. The [Interconnection System Impact]Cluster 
Study Agreement shall [provide that ]require Interconnection 
Customer [shall]to compensate Transmission Provider for the actual 
cost of the [Interconnection System Impact Study.]Cluster Study 
pursuant to Section 13.3 of this LGIP. The specifications, 
assumptions, or other provisions in the appendices of the Cluster 
Study Agreement provided pursuant to Section 7.1 of this LGIP shall 
be subject to change by Transmission Provider following the 
conclusion of the Scoping Meeting. [Within three (3) Business Days 
following the Interconnection Feasibility Study results meeting, 
Transmission Provider shall provide to Interconnection Customer a 
non-binding good faith estimate of the cost and timeframe for 
completing the Interconnection System Impact Study.]

7.2 Execution of [Interconnection System Impact]Cluster Study Agreement

    Interconnection Customer shall execute the [Interconnection 
System Impact]Cluster Study Agreement and deliver the executed 
[Interconnection System Impact]Cluster Study Agreement to 
Transmission Provider no later than [thirty (30) Calendar Days after 
its receipt along with demonstration of Site Control, and a $50,000 
deposit]the close of the Customer Engagement Window.
    If Interconnection Customer does not provide all such technical 
data when it delivers the [Interconnection System Impact]Cluster 
Study Agreement, Transmission Provider shall notify Interconnection 
Customer of the deficiency within five (5) Business Days of the 
receipt of the executed [Interconnection System Impact]Cluster Study 
Agreement and Interconnection Customer shall cure the deficiency 
within ten (10) Business Days of receipt of the notice, provided, 
however, such deficiency does not include failure to deliver the 
executed [Interconnection System Impact]Cluster Study Agreement or 
deposit.
    [If the Interconnection System Impact Study uncovers any 
unexpected result(s) not contemplated during the Scoping Meeting and 
the Interconnection Feasibility Study, a substitute Point of 
Interconnection identified by either Interconnection Customer or 
Transmission Provider, and acceptable to the other, such acceptance 
not to be unreasonably withheld, will be substituted for the 
designated Point of Interconnection specified above without loss of 
Queue Position, and restudies shall be completed pursuant to Section 
7.6 as applicable. For the purpose of this Section 7.2, if 
Transmission Provider and Interconnection Customer cannot agree on 
the substituted Point of Interconnection, then Interconnection 
Customer may direct that one of the alternatives as specified in the 
Interconnection Feasibility Study Agreement, as specified pursuant 
to Section 3.4.4, shall be the substitute.]

7.3 Scope of [Interconnection System Impact]Cluster Study

    The [Interconnection System Impact]Cluster Study shall evaluate 
the impact of the proposed interconnection on the reliability of the 
Transmission System. The [Interconnection System Impact]Cluster 
Study will consider the Base Case as well as all generating 
facilities (and with respect to (iii) below, any identified Network 
Upgrades associated with such higher queued interconnection) that, 
on the date the [Interconnection System Impact]Cluster Study is 
commenced: (i) are directly interconnected to the Transmission 
System; (ii) are interconnected to Affected Systems and may have an 
impact on the Interconnection Request; (iii) have a pending higher 
queued Interconnection Request to interconnect to the Transmission 
System; and (iv) have no Queue Position but have executed an LGIA or 
requested that an unexecuted LGIA be filed with FERC.
    For purposes of determining necessary Interconnection Facilities 
and Network Upgrades, the Cluster Study shall consider the level of 
Interconnection Service requested by Interconnection Customers in 
the Cluster, unless otherwise required to study the full Generating 
Facility Capacity due to safety or reliability concerns.
    The [Interconnection System Impact]Cluster Study will consist of 
[a short circuit analysis, a]power flow, stability [analysis, and a 
power flow analysis. The Interconnection System Impact Study],and 
short circuit analyses, the results of which are documented in a 
single Cluster Study Report, or Cluster Re-Study Report, as 
applicable. At the conclusion of the Cluster Study, Transmission 
Provider will issue a Cluster Study Report. The Cluster Study Report 
will state the assumptions upon which it is based; state the results 
of the analyses; and provide the requirements or potential 
impediments to providing the requested interconnection service, 
including a preliminary indication of the cost and length of time 
that would be necessary to correct any problems identified in those 
analyses and implement the interconnection. [For purposes of 
determining necessary]The Cluster Study Report shall identify 
Transmission Provider's Interconnection Facilities and Network 
Upgrades [, the System Impact Study shall consider the level of 
Interconnection Service requested by the Interconnection Customer, 
unless otherwise required to study the full Generating Facility 
Capacity due to safety or reliability concerns.]expected to be 
required to reliably interconnect the Generating Facilities in that 
Cluster Study at the requested Interconnection Service level and 
shall provide non-binding estimates for required Network Upgrades. 
The Cluster Study Report shall identify each Interconnection 
Customer's estimated allocated costs for Transmission Provider's 
Interconnection Facilities and Network Upgrades pursuant to the 
method in Section 4.2.3 of this LGIP. Transmission Provider shall 
hold an open stakeholder meeting pursuant to Section 7.4 of this 
LGIP.
    For purposes of determining necessary Interconnection Facilities 
and Network

[[Page 40007]]

Upgrades, the Cluster Study shall use operating assumptions, 
including charge and discharge parameters, that reflect the proposed 
operation of the Electric Storage Resource or Co-Located Resource 
containing an Electric Storage Resource (including a hybrid 
resource) as requested by Interconnection Customer, unless Good 
Utility Practice, including applicable reliability standards, 
otherwise require the use of different operating assumptions. If 
Interconnection Customer makes this request, Transmission Provider 
may (1) require that Interconnection Customer specify the intended 
operation of the resource in the LGIA, (2) require that 
Interconnection Customer demonstrate that the resource has control 
technologies sufficient to limit its operation as intended and to 
respond to dispatch instructions by Transmission Provider, and/or 
(3) pursue termination of the LGIA pursuant to Article 17 of the 
LGIA if Interconnection Customer fails to operate the Electric 
Storage Resource or Co-Located Resource containing an Electric 
Storage Resource (including a hybrid resource) in accordance with 
its intended operation as specified in the LGIA.
    [The Interconnection System Impact Study]The Cluster Study 
Report will provide a list of facilities that are required as a 
result of the Interconnection [Request]Requests within the cluster 
and a non-binding good faith estimate of cost responsibility and a 
non-binding good faith estimated time to construct.
    Upon issuance of a Cluster Study Report, or Cluster Re-Study 
Report, if any, Transmission Provider shall simultaneously tender a 
draft Facilities Study Agreement to each Interconnection Customer 
within the Cluster, subject to the conditions in Section 8.1 of this 
LGIP.
    At the request of any Interconnection Customer within the 
Cluster, the Cluster Study will evaluate advanced power flow 
control, transmission switching, dynamic line ratings, static 
synchronous compensators, static VAR compensators, and/or electric 
storage resource that provides a transmission service for 
feasibility, cost, and time savings as either an alternative to the 
Network Upgrade(s) identified by the Cluster Study or to provide 
Provisional Interconnection Service. Transmission Provider shall 
include the evaluation in the Cluster Study Report.

7.4 [Interconnection System Impact]Cluster Study Procedures

    Transmission Provider shall coordinate the [Interconnection 
System Impact]Cluster Study with any Affected System that is 
affected by the Interconnection Request pursuant to Section 3.6 
[above]of this LGIP. Transmission Provider shall utilize existing 
studies to the extent practicable when it performs the 
[study]Cluster Study. Interconnection Requests for a Cluster Study 
may be submitted only within the Cluster Request Window and 
Transmission Provider shall [use Reasonable Efforts to complete the 
Interconnection System Impact Study within ninety (90) Calendar Days 
after the receipt of the Interconnection System Impact Study 
Agreement or notification to proceed, study payment, and technical 
data. If Transmission Provider uses Clustering, Transmission 
Provider shall use Reasonable Efforts to deliver a completed 
Interconnection System Impact Study within ninety (90) Calendar Days 
after the close of the Queue Cluster Window.]initiate the Cluster 
Study process pursuant to Section 7 of this LGIP.
    Unless re-studies are required pursuant to Section 7.5 of this 
LGIP, Transmission Provider shall complete the Cluster Study within 
one hundred fifty (150) Calendar Days of the close of the Customer 
Engagement Window.
    Within ten (10) Business Days of simultaneously furnishing a 
Cluster Study Report (or, as applicable, Cluster Re-Study Report) 
and a draft Interconnection Facilities Study Agreement to each 
Interconnection Customer within the Cluster and posting such report 
on OASIS, Transmission Provider shall convene an open meeting to 
discuss the study results (a Cluster Study Report Meeting or Cluster 
Re-Study Report Meeting). Transmission Provider shall, upon request, 
also make itself available to meet with individual Interconnection 
Customers after the report is provided.
    At the request of Interconnection Customer or at any time 
Transmission Provider determines that it will not meet the required 
time frame for completing the [Interconnection System Impact]Cluster 
Study, Transmission Provider shall notify Interconnection Customers 
as to the schedule status of the [Interconnection System 
Impact]Cluster Study. If Transmission Provider is unable to complete 
the [Interconnection System Impact]Cluster Study within the time 
period, it shall notify Interconnection Customers and provide an 
estimated completion date with an explanation of the reasons why 
additional time is required. Upon request, Transmission Provider 
shall provide to Interconnection Customers all supporting 
documentation, workpapers and relevant pre-Interconnection Request 
and post-Interconnection Request power flow, short circuit and 
stability databases for the [Interconnection System Impact]Cluster 
Study, subject to confidentiality arrangements consistent with 
Section 13.1 of this LGIP.

7.5 Cluster Study Re-Studies

    (1) Within twenty (20) Calendar Days after the Cluster Study 
Report Meeting, Interconnection Customer must provide the following:
    (a) Study deposit pursuant to Section 3.1.1.1 of this LGIP;
    (b) Demonstration of Site Control pursuant to Section 3.4.2(iii) 
of this LGIP; and
    (c) One of the Commercial Readiness Demonstration options in 
Section 3.4.2(vi)(a)-(c) of this LGIP totaling the entire Generating 
Facility Capacity (or requested Interconnection Service amount if 
the requested Interconnection Service is less than the Generating 
Facility Capacity), or, in the alternative, a Commercial Readiness 
Deposit equal to five (5) times the study deposit described in 
Section 3.1.1.1 of this LGIP in the form of an irrevocable letter of 
credit or cash in lieu of the Commercial Readiness Demonstration. 
Transmission Provider shall refund the security to Interconnection 
Customer upon withdrawal in accordance with Section 3.7 of this 
LGIP.
    Interconnection Customer shall promptly inform Transmission 
Provider of any material change to Interconnection Customer's 
demonstration of Site Control under Section 3.4.2(iii) of this LGIP 
or its satisfaction of a Commercial Readiness Demonstration as 
selected under Section 3.4.2(vi)(a)-(c) of this LGIP. Upon 
Transmission Provider determining separately that Interconnection 
Customer no longer satisfies Site Control or a Commercial Readiness 
Demonstration, Transmission Provider shall notify Interconnection 
Customer. Within ten (10) Business Days of such notification, 
Interconnection Customer must demonstrate satisfaction with the 
applicable requirement subject to Transmission Provider's approval, 
not to be unreasonably withheld. If the material change is related 
to Interconnection Customer's Commercial Readiness Demonstration, 
Interconnection Customer has the option to submit a Commercial 
Readiness Deposit pursuant to Section 7.5(1)(c) of this LGIP before 
the end of the ten (10) Business Day cure period. Absent such 
demonstration, Transmission Provider will deem the subject 
Interconnection Request withdrawn.
    (2) If no Interconnection Customer withdraws from the Cluster 
after completion of the Cluster Study or Cluster Re-Study or is 
deemed withdrawn pursuant to Section 3.7 of this LGIP after 
completion of the Cluster Study or Cluster Re-Study, Transmission 
Provider shall electronically notify Interconnection Customers in 
the Cluster that a Cluster Re-Study is not required.
    (3) If one or more Interconnection Customers withdraws from the 
Cluster, Transmission Provider shall determine if a Cluster Re-Study 
is necessary. If Transmission Provider determines a Cluster Re-Study 
is not necessary, Transmission Provider shall provide an updated 
Cluster Study Report within thirty (30) Calendar Days of such 
determination. When the updated Cluster Study Report is issued, 
Transmission Provider shall electronically notify Interconnection 
Customers in the Cluster that a Cluster Re-Study is not required.
    (4) If one or more Interconnection Customers withdraws from the 
Cluster and Transmission Provider determines a Cluster Re-Study is 
necessary as a result, Transmission Provider will continue with such 
re-studies until Transmission Provider determines that no further 
re-studies are required. If an Interconnection Customer withdraws 
during the Interconnection Facilities Study, or after other 
Interconnection Customers in the same Cluster have executed LGIAs, 
or requested that unexecuted LGIAs be filed with FERC, and 
Transmission Provider determines a Cluster Re-Study is necessary, 
the Cluster shall be re-studied. Transmission Provider shall 
electronically notify Interconnection Customers in the Cluster and 
post on OASIS that a Cluster Re-Study is required.
    (5) The scope of any Cluster Re-study shall be consistent with 
the scope of an initial Cluster Study pursuant to Section 7.3 of 
this

[[Page 40008]]

LGIP. Transmission Provider shall complete the Cluster Re-Study 
within one hundred fifty (150) Calendar Days of the commencement of 
the first Cluster Re-Study. The results of the Cluster Re-Study 
shall be combined into a single report (Cluster Re-Study Report). 
Transmission Provider shall hold an open stakeholder meeting 
(Cluster Re-Study Report Meeting) within ten (10) Business Days of 
publishing the Cluster Re-Study Report on OASIS.
    If additional re-studies are required, Interconnection Customer 
and Transmission Provider shall follow the procedures of this 
Section 7.5 of this LGIP until such time that Transmission Provider 
determines that no further re-studies are required. Transmission 
Provider shall electronically notify each Interconnection Customer 
within the Cluster when no further re-studies are required.
    [Meeting with Transmission Provider.
    Within ten (10) Business Days of providing an Interconnection 
System Impact Study report to Interconnection Customer, Transmission 
Provider and Interconnection Customer shall meet to discuss the 
results of the Interconnection System Impact Study.
    7.6 Re-Study.](6) If Re-Study of the [Interconnection System 
Impact Study]Cluster Study other than the Re-Study described in 
Section 7.5(1)-(5) of this LGIP is required due to a higher or equal 
priority queued project [dropping out of]withdrawing from the queue, 
or a modification of a higher or equal priority queued project 
subject to Section 4.4 of this LGIP, [or re-designation of the Point 
of Interconnection pursuant to Section 7.2]Transmission Provider 
shall notify Interconnection Customer(s) in writing. 
[Such]Transmission Provider shall complete such Re-Study 
[shall]within [sixty (60]one hundred fifty (150) Calendar Days from 
the date of notice. [Any]Except as provided in Section 3.7 of this 
LGIP in the case of withdrawing Interconnection Customers, any cost 
of Re-Study shall be borne by [the]Interconnection Customer(s) being 
re-studied.

Section 8. Interconnection Facilities Study

8.1 Interconnection Facilities Study Agreement

    Simultaneously with the delivery of the [Interconnection System 
Impact Study to Interconnection Customer]final Cluster Study Report, 
or Cluster Re-Study Report if applicable, Transmission Provider 
shall provide to Interconnection Customer an Interconnection 
Facilities Study Agreement in the form of Appendix 4 to this LGIP. 
The Interconnection Facilities Study Agreement shall provide that 
Interconnection Customer shall compensate Transmission Provider for 
the actual cost of the Interconnection Facilities Study. [Within 
three (3) Business Days following the Interconnection System Impact 
Study results meeting,]Transmission Provider shall provide to 
Interconnection Customer a non-binding good faith estimate of the 
cost and timeframe for completing the Interconnection Facilities 
Study.
    Interconnection Customer shall execute the Interconnection 
Facilities Study Agreement and deliver the executed Interconnection 
Facilities Study Agreement to Transmission Provider within thirty 
(30) Calendar Days after its receipt, together with[the]:
    (1) any required technical data[and the greater of $100,000 or 
Interconnection Customer's portion of the estimated monthly cost of 
conducting the Interconnection Facilities Study.];
    (2) Study deposit pursuant to Section 3.1.1.1 of this LGIP;
    (3) Demonstration of Site Control pursuant to Section 3.4.2(iii) 
of this LGIP; and
    (4) One of the following Commercial Readiness Demonstration 
options totaling the entire capacity of the Generating Facility (or 
requested Interconnection Service amount if the requested 
Interconnection Service is less than the Generating Facility 
Capacity), or a Commercial Readiness Deposit security equal to seven 
(7) times the study deposit described in Section 3.1.1.1 of this 
LGIP in the form of an irrevocable letter of credit or cash in lieu 
of the Commercial Readiness Demonstration. Transmission Provider 
shall refund the security to Interconnection Customer according to 
Section 3.7 of this LGIP.
    (a) Executed contract binding on the parties for sale of (1) the 
constructed Generating Facility to a load-serving entity or to a 
commercial, industrial, or other large end-use customer, (2) the 
Generating Facility's energy or capacity where the term of sale is 
not less than five (5) years, or (3) the Generating Facility's 
ancillary services where the term of sale is not less than five (5) 
years;
    (b) Reasonable evidence that the Generating Facility has been 
selected in an Resource Plan or Resource Solicitation Process by or 
for a load-serving entity, is being developed by a load-serving 
entity, or is being developed for purposes of a sale to a 
commercial, industrial, or other large end-use customer; or
    (c) A Provisional LGIA that has been filed at the Commission 
executed, or requested to be filed unexecuted, which is not in 
suspension pursuant to Article 5.16 of the LGIA, and includes a 
commitment to construct the Generating Facility.
    Interconnection Customer shall promptly inform Transmission 
Provider of any material change to Interconnection Customer's 
demonstration of Site Control under Section 3.4.2(iii) of this LGIP 
or its satisfaction of a Commercial Readiness Demonstration.
    Upon Transmission Provider determining separately that 
Interconnection Customer no longer satisfies Site Control or a 
Commercial Readiness Option, Transmission Provider shall give 
Interconnection Customer ten (10) Business Days to demonstrate 
satisfaction with the applicable requirement subject to Transmission 
Provider's approval, not to be unreasonably withheld. If the 
material change is related to Interconnection Customer's Commercial 
Readiness Demonstration, Interconnection Customer has the option to 
submit a Commercial Readiness Deposit pursuant before the end of the 
ten (10) Business Day cure period. Absent such demonstration, 
Transmission Provider will deem the subject Interconnection Request 
withdrawn.
    [8.1.1 Transmission Provider shall invoice Interconnection 
Customer on a monthly basis for the work to be conducted on the 
Interconnection Facilities Study each month. Interconnection 
Customer shall pay invoiced amounts within thirty (30) Calendar Days 
of receipt of invoice. Transmission Provider shall continue to hold 
the amounts on deposit until settlement of the final invoice.]

8.2 Scope of Interconnection Facilities Study

    The Interconnection Facilities Study shall be specific to each 
Interconnection Request and performed on an individual, i.e., non-
clustered, basis. The Interconnection Facilities Study shall specify 
and provide a non-binding estimate of the cost of the equipment, 
engineering, procurement and construction work needed to implement 
the conclusions of the [Interconnection System Impact Study]Cluster 
Study Report (and any associated re-studies) in accordance with Good 
Utility Practice to physically and electrically connect the 
Interconnection [Facility]Facilities to the Transmission System. The 
Interconnection Facilities Study shall also identify the electrical 
switching configuration of the connection equipment, including, 
without limitation: the transformer, switchgear, meters, and other 
station equipment; the nature and estimated cost of any Transmission 
Provider's Interconnection Facilities and Network Upgrades necessary 
to accomplish the interconnection; and an estimate of the time 
required to complete the construction and installation of such 
facilities. The Interconnection Facilities Study will also identify 
any potential control equipment for [requests for](1) requests for 
Interconnection Service that are lower than the Generating Facility 
Capacity[.], and/or (2) requests to model an Electric Storage 
Resource or Co-Located Resource containing an Electric Storage 
Resource (including a hybrid resource) using operating assumptions 
that reflect its proposed operation, as requested by Interconnection 
Customer, unless Good Utility Practice, including applicable 
reliability standards, otherwise require the use of different 
operating assumptions. At the request of any Interconnection 
Customer, the Interconnection Facilities Study will evaluate 
advanced power flow control, transmission switching, dynamic line 
ratings, static synchronous compensators, and/or static VAR 
compensators, for feasibility, cost, and time savings as either an 
alternative to the Network Upgrade(s) identified by the Cluster 
Study or to provide Provisional Interconnection Service. 
Transmission Provider shall include the evaluation in the 
Interconnection Facilities Study report.

8.3 Interconnection Facilities Study Procedures

    Transmission Provider shall coordinate the Interconnection 
Facilities Study with any Affected System pursuant to Section 3.6 of 
this LGIP. Transmission Provider shall utilize existing studies to 
the extent practicable in performing the Interconnection Facilities 
Study. Transmission Provider shall [use Reasonable Efforts 
to]complete the study and issue a draft Interconnection Facilities 
Study report to Interconnection Customer within

[[Page 40009]]

the following number of days after receipt of an executed 
Interconnection Facilities Study Agreement: ninety (90) Calendar 
Days after receipt of an executed Interconnection Facilities Study 
Agreement, with no more than a +/-20 percent cost estimate contained 
in the report; or one hundred eighty (180) Calendar Days, if 
Interconnection Customer requests a +/-10 percent cost estimate.
    * * *
    Interconnection Customer may, within thirty (30) Calendar Days 
after receipt of the draft Interconnection Facilities Study report, 
provide written comments to Transmission Provider, which 
Transmission Provider shall include in completing the final 
Interconnection Facilities Study report. Transmission Provider shall 
issue the final Interconnection Facilities Study report within 
fifteen (15) Business Days of receiving Interconnection Customer's 
comments or promptly upon receiving Interconnection Customer's 
statement that it will not provide comments. Transmission Provider 
may reasonably extend such fifteen[-day] (15) Business Day period 
upon notice to Interconnection Customer if Interconnection 
Customer's comments require Transmission Provider to perform 
additional analyses or make other significant modifications prior to 
the issuance of the final Interconnection Facilities Study Report. 
Upon request, Transmission Provider shall provide Interconnection 
Customer supporting documentation, workpapers, and databases or data 
developed in the preparation of the Interconnection Facilities 
Study, subject to confidentiality arrangements consistent with 
Section 13.1 of this LGIP.
    * * *

8.5 Re-Study

    If Re-Study of the Interconnection Facilities Study is required 
due to a higher or equal priority queued project dropping out of the 
queue or a modification of a higher or equal priority queued project 
pursuant to Section 4.4 of this LGIP, Transmission Provider shall so 
notify Interconnection Customer in writing. [Such]Transmission 
Provider shall ensure that such Re-Study [shall]takes no longer than 
sixty (60) Calendar Days from the date of notice. Except as provided 
in Section 3.7 of this LGIP in the case of withdrawing 
Interconnection Customers, any cost of Re-Study shall be borne by 
[the]Interconnection Customer being re-studied.

Section 9 [Engineering & Procurement (`E&P') Agreement] Affected System 
Study

9.1 Applicability

    This section 9 applies to Transmission Provider when acting as 
an Affected System.

9.2 Affected System Queue Position

    Transmission Provider must assign a Queue Position to Affected 
System Interconnection Customer(s) that require(s) an Affected 
System Study. This Queue Position shall be higher-queued than any 
Cluster that has not yet received its Cluster Study results and 
shall be lower-queued than any Cluster that has already received its 
Cluster Study results.

9.3 Affected System Study Agreement

    Unless otherwise agreed, pursuant to the Affected System Scoping 
Meeting provided in Section 3.6.2, Transmission Provider shall 
provide to Affected System Interconnection Customer an Affected 
System Study Agreement in the form of Appendix 15 to this LGIP 
within five (5) Business Days of Transmission Provider sharing the 
schedule for the Affected System Study. The Affected System Study 
Agreement shall provide that Affected System Interconnection 
Customer shall compensate Transmission Provider for the actual cost 
of the Affected System Study. Within fifteen (15) Business Days 
after the Affected System Scoping Meeting, Transmission Provider 
shall provide to Affected System Interconnection Customer a non-
binding good faith estimate of the cost and timeframe for completing 
the Affected System Study.

9.4 Execution of Affected System Study Agreement

    Affected System Interconnection Customer shall execute the 
Affected System Study Agreement and deliver the executed Affected 
System Study Agreement to Transmission Provider within ten (10) 
Business Days of receipt.
    If Affected System Interconnection Customer does not provide all 
required technical data when it delivers the Affected System Study 
Agreement, Transmission Provider shall notify Affected System 
Interconnection Customer of the deficiency within five (5) Business 
Days of the receipt of the executed Affected System Study Agreement 
and Affected System Interconnection Customer shall cure the 
deficiency within ten (10) Business Days of receipt of the notice, 
provided, however, that such deficiency does not include failure to 
deliver the executed Affected System Study Agreement or deposit.

9.5 Scope of Affected System Study

    The Affected System Study shall evaluate the impact of the 
Affected System Interconnection Customer's proposed interconnection 
on the reliability of Transmission Provider's Transmission System. 
The Affected System Study will consider the Base Case as well as all 
generating facilities (and with respect to (iii) below, any 
identified Affected System Network Upgrades associated with such 
higher-queued interconnection) that, on the date the Affected System 
Study is commenced: (i) are directly interconnected to Transmission 
Provider's Transmission System; (ii) are interconnected to Affected 
Systems and may have an impact on Affected System Interconnection 
Customer's interconnection request; (iii) have a pending higher-
queued Interconnection Request to interconnect to Transmission 
Provider's Transmission System; and (iv) have no Queue Position but 
have executed an LGIA or requested that an unexecuted LGIA be filed 
with FERC.
    The Affected System Study will consist of a short circuit 
analysis, thermal overload or voltage limit identification, a 
stability analysis, and a power flow analysis. The Affected System 
Study will state the assumptions upon which it is based; state the 
results of the analyses; and provide the requirements or potential 
impediments to providing the requested interconnection service, 
including a preliminary indication of the cost and length of time 
that would be necessary to correct any problems identified in those 
analyses and implement the interconnection. For purposes of 
determining necessary Affected System Network Upgrades, the Affected 
System Study shall consider the level of interconnection service 
requested in megawatts by Affected System Interconnection Customer, 
unless otherwise required to study the full generating facility 
capacity due to safety or reliability concerns. The Affected System 
Study will provide a list of facilities that are required as a 
result of Affected System Interconnection Customer's proposed 
interconnection and a non-binding good faith estimate of cost 
responsibility and a non-binding good faith estimated time to 
construct.

9.6 Affected System Study Procedures

    Transmission Provider shall utilize existing studies to the 
extent practicable when it performs the Affected System Study. 
Transmission Provider will use the same Energy Resource 
Interconnection Service modeling standard used for Interconnection 
Customers on its own Transmission System. Transmission Provider 
shall complete the Affected System Study and provide the Affected 
System Study Report to Affected System Interconnection Customer 
within ninety (90) Calendar Days after the receipt of the Affected 
System Study Agreement.
    At the request of Affected System Interconnection Customer, or 
at any time Transmission Provider determines that it will not meet 
the required time frame for completing the Affected System Study, 
Transmission Provider shall notify Affected System Interconnection 
Customer as to the schedule status of the Affected System Study. If 
Transmission Provider is unable to complete the Affected System 
Study within the requisite time period, it shall notify Affected 
System Interconnection Customer and provide an estimated completion 
date with an explanation of the reasons why additional time is 
required. If Transmission Provider does not meet the deadlines in 
this section, Transmission Provider will be subject to the financial 
penalties as described in Section 3.9 of this LGIP. Upon request, 
Transmission Provider shall provide Affected System Interconnection 
Customer all supporting documentation, workpapers and relevant power 
flow, short circuit and stability databases for the Affected System 
Study, subject to confidentiality arrangements consistent with 
Section 13.1 of this LGIP.
    Transmission Provider must study an Affected System 
Interconnection Customer using an Energy Resource Interconnection 
Service modeling standard, regardless of the level of service that 
Affected System Interconnection Customer is seeking from the 
transmission provider with whom interconnection has been requested. 
In the event Transmission Provider believes that it is necessary to 
study an Affected System Interconnection Customer that is requesting

[[Page 40010]]

Network Resource Interconnection Service using Network Resource 
Interconnection Service modeling standards, Transmission Provider 
may make such a request to the Commission by filing under section 
205 of the Federal Power Act.

9.7 Meeting with Transmission Provider

    Within ten (10) Business Days of providing the Affected System 
Study Report to Affected System Interconnection Customer, 
Transmission Provider and Affected System Interconnection Customer 
shall meet to discuss the results of the Affected System Study.

9.8 Affected System Cost Allocation

    Transmission Provider will allocate Affected System Network 
Upgrade costs identified during the Affected System Study to 
Affected System Interconnection Customer(s) using a proportional 
impact as described in Section 4.2.3 of this LGIP.

9.9 Tender of Affected Systems Facilities Construction Agreement

    Transmission Provider will tender to Affected System 
Interconnection Customer an Affected System Facilities Construction 
Agreement within thirty (30) Calendar Days of providing the Affected 
System Study Report. Affected System Interconnection Customer must 
notify Transmission Provider within five (5) Business Days of 
executing Affected System Interconnection Customer's LGIA whether it 
would like to execute the agreement or if it requests the agreement 
to be filed unexecuted with FERC. Transmission Provider will execute 
the agreement or file the agreement unexecuted within five (5) 
Business Days after receiving direction from Affected System 
Interconnection Customer.

9.10 Re-Study

    If Re-Study of the Affected System Study is required, 
Transmission Provider shall notify Affected System Interconnection 
Customer in writing. Such Re-Study shall take no longer than sixty 
(60) Calendar Days from the date of notice. Any cost of Re-Study 
shall be borne by the Affected System Interconnection Customer being 
re-studied.
    [Prior to executing an LGIA, an Interconnection Customer may, in 
order to advance the implementation of its interconnection, request 
and Transmission Provider shall offer the Interconnection Customer, 
an E&P Agreement that authorizes Transmission Provider to begin 
engineering and procurement of long lead-time items necessary for 
the establishment of the interconnection. However, Transmission 
Provider shall not be obligated to offer an E&P Agreement if 
Interconnection Customer is in Dispute Resolution as a result of an 
allegation that Interconnection Customer has failed to meet any 
milestones or comply with any prerequisites specified in other parts 
of the LGIP. The E&P Agreement is an optional procedure and it will 
not alter the Interconnection Customer's Queue Position or In-
Service Date. The E&P Agreement shall provide for Interconnection 
Customer to pay the cost of all activities authorized by 
Interconnection Customer and to make advance payments or provide 
other satisfactory security for such costs.
    Interconnection Customer shall pay the cost of such authorized 
activities and any cancellation costs for equipment that is already 
ordered for its interconnection, which cannot be mitigated as 
hereafter described, whether or not such items or equipment later 
become unnecessary. If Interconnection Customer withdraws its 
application for interconnection or either Party terminates the E&P 
Agreement, to the extent the equipment ordered can be canceled under 
reasonable terms, Interconnection Customer shall be obligated to pay 
the associated cancellation costs. To the extent that the equipment 
cannot be reasonably canceled, Transmission Provider may elect: (i) 
to take title to the equipment, in which event Transmission Provider 
shall refund Interconnection Customer any amounts paid by 
Interconnection Customer for such equipment and shall pay the cost 
of delivery of such equipment, or (ii) to transfer title to and 
deliver such equipment to Interconnection Customer, in which event 
Interconnection Customer shall pay any unpaid balance and cost of 
delivery of such equipment.]
    * * *

Section 11. Standard Large Generator Interconnection Agreement (LGIA)

11.1 Tender

    Interconnection Customer shall tender comments on the draft 
Interconnection Facilities Study Report within thirty (30) Calendar 
Days of receipt of the report. Within thirty (30) Calendar Days 
after the comments are submitted or after Interconnection Customer 
notifies Transmission Provider that it will not provide comments, 
Transmission Provider shall tender a draft LGIA, together with draft 
appendices. The draft LGIA shall be in the form of Transmission 
Provider's FERC-approved standard form LGIA, which is in Appendix 6. 
Interconnection Customer shall execute and return the completed 
draft appendices within thirty (30) Calendar Days, unless the (60) 
Calendar Day negotiation period under Section 11.2 of this LGIP has 
commenced.
    * * *

11.3 Execution and Filing

    Simultaneously with submitting the executed LGIA to Transmission 
Provider, [Within fifteen (15) Business Days after receipt of the 
final executed LGIA,]Interconnection Customer shall provide 
Transmission Provider with [(A) reasonable evidence that continued 
Site Control or (B) posting of $250,000, non-refundable additional 
security, which shall be applied toward future construction 
costs](1) demonstration of continued Site Control pursuant to 
Section 3.4.2(iii) of this LGIP; and (2) per Section 3.1.1.3 of this 
LGIP, a deposit equal to nine (9) times the amount required in 
Section 3.1.1.1 of this LGIP. If Interconnection Customer reaches 
Commercial Operation, this deposit will be refunded to 
Interconnection Customer, including any accumulated interest. 
Transmission Provider must not suspend the LGIA under LGIA Article 
5.16 until Interconnection Customer has provided 1 and 2 to 
Transmission Provider. If Interconnection Customer fails to provide 
1 and 2 to Transmission Provider with fifteen (15) Business Days, 
the Interconnection Request will be deemed withdrawn, subject to 
Withdrawal Penalties per Section 3.7.1 of this LGIP.
    At the same time, Interconnection Customer also shall provide 
reasonable evidence that one or more of the following milestones, 
unless such milestone is inapplicable due to the characteristics of 
the Generating Facility, in the development of the [Large]Generating 
Facility, at Interconnection Customer election, has been achieved: 
(i) the execution of a contract for the supply or transportation of 
fuel to the [Large]Generating Facility ; (ii) the execution of a 
contract for the supply of cooling water to the [Large]Generating 
Facility; (iii) execution of a contract for the engineering for, 
procurement of major equipment for, or construction of, the 
[Large]Generating Facility; (iv) execution of a contract (or 
comparable evidence) for the sale of electric energy or capacity 
from the [Large]Generating Facility; [or] (v) application for an 
air, water, or land use permit[.]; or (vi) Commercial Readiness 
Demonstration pursuant to Section 8.1 of this LGIP (Commercial 
Readiness Deposit is not allowed).
    * * *

Section 12. Construction of Transmission Provider's Interconnection 
Facilities and Network Upgrades

    * * *

12.2.4 Amended Interconnection [System Impact]Cluster Study Report

    An Interconnection [System Impact]Cluster Study Report will be 
amended to determine the facilities necessary to support the 
requested In-Service Date. This amended study report will include 
those transmission and [Large]Generating Facilities that are 
expected to be in service on or before the requested In-Service 
Date.
    * * *

Section 13. Miscellaneous

13.1 Confidentiality

    * * *
    13.1.9 Subject to the exception in Section 13.1.8 of this LGIP, 
any information that a Party claims is competitively sensitive, 
commercial or financial information (``Confidential Information``) 
shall not be disclosed by the other Party to any person not employed 
or retained by the other Party, except to the extent disclosure is 
(i) required by law; (ii) reasonably deemed by the disclosing Party 
to be required to be disclosed in connection with a dispute between 
or among the Parties, or the defense of litigation or dispute; (iii) 
otherwise permitted by consent of the other Party, such consent not 
to be unreasonably withheld; or (iv) necessary to fulfill its 
obligations under this LGIP or as a transmission service provider or 
a [Control Area]Balancing Authority Area operator including 
disclosing the Confidential Information to an RTO or ISO or to a 
subregional, regional or national reliability organization or 
planning group.

[[Page 40011]]

The Party asserting confidentiality shall notify the other Party in 
writing of the information it claims is confidential. Prior to any 
disclosures of the other Party's Confidential Information under this 
subparagraph, or if any third party or Governmental Authority makes 
any request or demand for any of the information described in this 
subparagraph, the disclosing Party agrees to promptly notify the 
other Party in writing and agrees to assert confidentiality and 
cooperate with the other Party in seeking to protect the 
Confidential Information from public disclosure by confidentiality 
agreement, protective order or other reasonable measures.
    * * *

13.3 Obligation for Study Costs

    In the event an Interconnection Customer withdraws its 
Interconnection Request prior to the commencement of the Cluster 
Study, Interconnection Customer must pay Transmission Provider the 
actual costs of processing its Interconnection Request. 
Interconnection Customer will not be assessed a Withdrawal Penalty 
in this case. Transmission Provider shall charge and Interconnection 
Customer shall pay the actual costs of the Interconnection Studies. 
The costs of Cluster Studies and Cluster Re-Studies shall be 
allocated among each Interconnection Customer within the Cluster as 
follows: (1) ninety percent (90%) of the applicable study costs on a 
pro-rata basis based on requested megawatts included in the 
applicable Cluster; and (2) ten percent (10%) of the applicable 
study costs on a per capita basis based on the number of 
Interconnection Requests included in the applicable Cluster.
    Any difference between the study deposit and the actual cost of 
the applicable Interconnection Study shall be paid by or refunded, 
except as otherwise provided herein, to Interconnection 
[Customer]Customers or offset against the cost of any future 
Interconnection Studies associated with the applicable 
[Interconnection Request]Cluster prior to beginning of any such 
future Interconnection Studies. Any invoices for Interconnection 
Studies shall include a detailed and itemized accounting of the cost 
of each Interconnection Study. Interconnection [Customer]Customers 
shall pay any such undisputed costs within thirty (30) Calendar Days 
of receipt of an invoice therefor. Any Interconnection Customer that 
fails to pay such undisputed costs within the time allotted shall be 
deemed withdrawn from the Cluster Study and will be subject to 
Withdrawal Penalties pursuant to Section 3.7.1 of this LGIP. 
[Transmission Provider shall not be obligated to perform or continue 
to perform any studies unless Interconnection Customer has paid all 
undisputed amounts in compliance herewith.]
    * * *

Section [9]13.7 Engineering & Procurement (`E&P') Agreement

    Prior to executing an LGIA, an Interconnection Customer may, in 
order to advance the implementation of its interconnection, request 
and Transmission Provider shall offer Interconnection Customer, an 
E&P Agreement that authorizes Transmission Provider to begin 
engineering and procurement of long lead-time items necessary for 
the establishment of the interconnection. However, Transmission 
Provider shall not be obligated to offer an E&P Agreement if 
Interconnection Customer is in Dispute Resolution as a result of an 
allegation that Interconnection Customer has failed to meet any 
milestones or comply with any prerequisites specified in other parts 
of the LGIP. The E&P Agreement is an optional procedure and it will 
not alter Interconnection Customer's Queue Position or In-Service 
Date. The E&P Agreement shall provide for Interconnection Customer 
to pay the cost of all activities authorized by Interconnection 
Customer and to make advance payments or provide other satisfactory 
security for such costs.
    Interconnection Customer shall pay the cost of such authorized 
activities and any cancellation costs for equipment that is already 
ordered for its interconnection, which cannot be mitigated as 
hereafter described, whether or not such items or equipment later 
become unnecessary. If Interconnection Customer withdraws its 
application for interconnection or either Party terminates the E&P 
Agreement, to the extent the equipment ordered can be canceled under 
reasonable terms, Interconnection Customer shall be obligated to pay 
the associated cancellation costs. To the extent that the equipment 
cannot be reasonably canceled, Transmission Provider may elect: (i) 
to take title to the equipment, in which event Transmission Provider 
shall refund Interconnection Customer any amounts paid by 
Interconnection Customer for such equipment and shall pay the cost 
of delivery of such equipment, or (ii) to transfer title to and 
deliver such equipment to Interconnection Customer, in which event 
Interconnection Customer shall pay any unpaid balance and cost of 
delivery of such equipment.
    * * *

13.8 Alternative Transmission Technologies Annual Report

    Each Transmission Provider shall submit an annual informational 
report to the Commission that details whether, and if so how, 
advanced power flow control, transmission switching, dynamic line 
ratings, static synchronous compensators, and/or static VAR 
compensators were considered in interconnection requests over the 
last year. The report must be submitted by the last calendar day of 
December annually.

Appendix 1 to LGIP

Interconnection Request for a Large Generating Facility

    * * *
    5. Interconnection Customer provides the following information:
    a. Address or location or the proposed new [Large]Generating 
Facility site (to the extent known) or, in the case of an existing 
Generating Facility, the name and specific location of the existing 
Generating Facility;
    b. Maximum summer at __ degrees C and winter at __ degrees C 
megawatt electrical output of the proposed new [Large]Generating 
Facility or the amount of megawatt increase in the generating 
capacity of an existing Generating Facility;
    c. General description of the equipment configuration;
    d. Commercial Operation Date (Day, Month, and Year);
    e. Name, address, telephone number, and e-mail address of 
Interconnection Customer's contact person;
    f. Approximate location of the proposed Point of Interconnection 
(optional);
    g. Interconnection Customer Data (set forth in Attachment A);
    h. Primary frequency response operating range for electric 
storage resources;
    i. Requested capacity (in MW) of Interconnection Service (if 
lower than the Generating Facility Capacity)[.];
    j. If applicable, (1) the requested operating assumptions, such 
as charge and discharge parameters, to be used by Transmission 
Provider that reflect the proposed operation of the Electric Storage 
Resource or Co-Located Resource containing an Electric Storage 
Resource (including a hybrid resource), and (2) a description of any 
control technologies (software and/or hardware) that will limit the 
operation of the Electric Storage Resource or Co-Located Resource 
containing an Electric Storage Resource (including a hybrid 
resource) to its intended operation.
    * * *

Attachment A to Appendix 1

Interconnection Request

Large Generating Facility Data

    * * *
    For a non-synchronous Generating Facility, Interconnection 
Customer must provide (1) a validated user-defined root mean squared 
(RMS) positive sequence dynamics model; (2) an appropriately 
parameterized generic library RMS positive sequence dynamics model, 
including model block diagram of the inverter control and plant 
control systems, as defined by the selection in Table 1 or a model 
otherwise approved by the Western Electricity Coordinating Council, 
that corresponds to Interconnection Customer's Generating Facility; 
and (3) an electromagnetic transient model if Transmission Provider 
performs an electromagnetic transient study as part of the 
interconnection study process. Transmission Provider to insert 
whether they perform an electromagnetic transient study. A user-
defined model is a set of programming code created by equipment 
manufacturers or developers that captures the latest features of 
controllers that are mainly software based and represents the 
entities' control strategies but does not necessarily correspond to 
any generic library model. For a model to be validated, there must 
be confirmation by Interconnection Customer that the equipment 
behavior is consistent with the model behavior (e.g., an attestation 
from Interconnection Customer that the model accurately represents 
the entire Generating Facility; attestations from each equipment 
manufacturer that the user defined model accurately represents the 
component of the Generating Facility; or test data).

[[Page 40012]]

                                                     Table 1
----------------------------------------------------------------------------------------------------------------
         GE PSLF              Siemens PSS/E *       PowerWorld simulator                Description
----------------------------------------------------------------------------------------------------------------
pvd1....................  .......................  PVD1..................  Distributed PV system model
der_a...................  DERAU1.................  DER_A.................  Distributed energy resource model
regc_a..................  REGCAU1, REGCA1........  REGC_A................  Generator/converter model
regc_b..................  REGCBU1................  REGC_B................  Generator/converter model
wt1g....................  WT1G1..................  WT1G and WT1G1........  Wind turbine model for Type-1 wind
                                                                            turbines (conventional directly
                                                                            connected induction generator)
wt2g....................  WT2G1..................  WT2G and WT2G1........  Generator model for generic Type-2
                                                                            wind turbines
wt2e....................  WT2E1..................  WT2E and WT2E1........  Rotor resistance control model for
                                                                            wound-rotor induction wind-turbine
                                                                            generator wt2g
reec_a..................  REECAU1, REECA1........  REEC--A...............  Renewable energy electrical control
                                                                            model
reec_c..................  REECCU1................  REEC_C................  Electrical control model for battery
                                                                            energy storage System
reec_d..................  REECDU1................  REEC_D................  Renewable energy electrical control
                                                                            model
wt1t....................  WT12T1.................  WT1T and WT12T1.......  Wind turbine model for Type-1 wind
                                                                            turbines (conventional directly
                                                                            connected induction generator)
wt1p_b..................  wt1p_b.................  WT12A1U_B.............  Generic wind turbine pitch controller
                                                                            for WTGs of Type 1 and 2
wt2t....................  WT12T1.................  WT2T..................  Wind turbine model for Type-2 wind
                                                                            turbines (directly connected
                                                                            induction generator wind turbines
                                                                            with an external rotor resistance)
wtgt_a..................  WTDTAU1, WTDTA1........  WTGT_A................  Wind turbine drive train model
wtga_a..................  WTARAU1, WTARA1........  WTGA_A................  Simple aerodynamic model
wtgp_a..................  WTPTAU1, WTPTA1........  WTGPT_A...............  Wind Turbine Generator Pitch
                                                                            controller
wtgq_a..................  WTTQAU1, WTTQA1........  WTGTRQ_A..............  Wind Turbine Generator Torque
                                                                            controller
wtgwgo_a................  WTGWGOAU...............  WTGWGO_A..............  Supplementary control model for Weak
                                                                            Grids
wtgibffr_a..............  WTGIBFFRA..............  WTGIBFFR_A............  Inertial-base fast frequency response
                                                                            control
wtgp_b..................  WTPTBU1................  WTGPT_B...............  Wind Turbine Generator Pitch
                                                                            controller
wtgt_b..................  WTDTBU1................  WTGT_B................  Drive train model
repc_a..................  Type 4: REPCAU1 (v33),
                           REPCA1 (v34).
                          Type 3: REPCTAU1 (v33),  REPC_A................  Power Plant Controller
                           REPCTA1 (v34).
repc_b..................  PLNTBU1................  REPC_B................  Power Plant Level Controller for
                                                                            controlling several plants/devices
                                                                           In regards to Siemens PSS/E: *
                                                                           Names of other models for interface
                                                                            with other devices:
                                                                           REA3XBU1, REAX4BU1--for interface
                                                                            with Type 3 and 4 renewable machines
                                                                           SWSAXBU1--for interface with SVC
                                                                            (modeled as switched shunt in
                                                                            powerflow)
                                                                           SYNAXBU1--for interface with
                                                                            synchronous condenser
                                                                           FCTAXBU1--for interface with FACTS
                                                                            device
repc_c..................  REPCCU.................  REPC_C................  Power plant controller
----------------------------------------------------------------------------------------------------------------

Appendix 2 to LGIP

[Interconnection Feasibility Study Agreement]

Informational Interconnection Study Request

    1. The undersigned prospective Interconnection Customer submits 
this request for an Informational Interconnection Study to evaluate 
the interconnection of its Generating Facility with Transmission 
Provider's Transmission System pursuant to Section 6.1 of this LGIP, 
to be performed in accordance with Transmission Provider's Tariff.
    2. The type of interconnection service to be evaluated (check 
one):

____ Energy Resource Interconnection Service
____ Network Resource Interconnection Service
____ Both

    3. Prospective Interconnection Customer provides the following 
information:
    a. Address or location of the proposed new Generating Facility 
site to be studied or, in the case of an existing Generating 
Facility, the name and specific location of the existing Generating 
Facility;
    b. Maximum summer at __ degrees C and winter at __ degrees C 
megawatt electrical output of the proposed new Generating Facility 
or the amount of megawatt increase in the generating capacity of an 
existing Generating Facility;
    c. General description of the equipment configuration;
    d. Commercial Operation Date to be studied (Day, Month, and 
Year);
    e. Name, address, telephone number, and e-mail address of 
prospective Interconnection Customer's contact person;
    f. Approximate location of the proposed Point of Interconnection 
and any alternate Point(s) of Interconnection;
    g. Prospective Interconnection Customer Data (set forth in 
Attachment A to Appendix 1, Generating Facility Data);
    h. Primary frequency response operating range for electric 
storage resources;
    i. Requested capacity (in MW) of Interconnection Service to be 
studied (if lower than the Generating Facility Capacity);
    j. A Scope of Work including any additional information that may 
be reasonably required;
    k. $10,000 study deposit; and
    l. If applicable, requested operating assumptions to be studied, 
such as charge and discharge parameters, that reflect the proposed 
operation of the Electric Storage Resource or Co-Located Resource 
containing an Electric Storage Resource (including a hybrid 
resource).
    6. This Informational Interconnection Study Request shall be 
submitted to the representative indicated below:
    {To be completed by Transmission Provider{time} 
    7. Representative of prospective Interconnection Customer to 
contact:
    {To be completed by prospective Interconnection Customer{time} 
    8. This Informational Interconnection Request is submitted by:

 Name of prospective Interconnection Customer:-------------------------
 By (signature):-------------------------------------------------------
 Name (type or print):-------------------------------------------------
 Title:----------------------------------------------------------------
 Date:-----------------------------------------------------------------

Attachment A to Appendix 2

Informational Interconnection Study Agreement

    This Agreement is made and entered into this __ day of ____, 20 
__ by and between ____, a ______ organized and existing under

[[Page 40013]]

the laws of the State of ______ (``Prospective Interconnection 
Customer''), and ______, a ______ existing under the laws of the 
State of ______ (``Transmission Provider''). Prospective 
Interconnection Customer and Transmission Provider each may be 
referred to as a ``Party,'' or collectively as the ``Parties.''

Recitals

    Whereas, Prospective Interconnection Customer is proposing to 
develop a [Large]Generating Facility or generating capacity addition 
to an existing Generating Facility [consistent with the 
Interconnection Request submitted by Interconnection customer dated 
______]; and
    [Whereas, Interconnection Customer desires to interconnect the 
Large Generating Facility with the Transmission System; and]
    [Whereas, Interconnection Customer has requested Transmission 
Provider to perform an Interconnection Feasibility Study to assess 
the feasibility of interconnecting the proposed Large Generating 
Facility to the Transmission System, and of any Affected Systems;]
    Whereas, Prospective Interconnection Customer is proposing to 
evaluate an interconnection with Transmission Provider's 
Transmission System; and
    Whereas, Prospective Interconnection Customer has submitted to 
Transmission Provider an Informational Interconnection Study 
Request;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated in 
[Transmission Provider's FERC-approved LGIP]this LGIP.
    2.0 Prospective Interconnection Customer elects and Transmission 
Provider shall cause to be performed an Informational 
Interconnection [Feasibility]Study consistent with Section 6.[0]1 of 
this LGIP[in accordance with the Tariff].
    3.0 The scope of the Informational Interconnection 
[Feasibility]Study shall be subject to the assumptions set forth in 
Attachment [A]B to this Agreement.
    4.0 [The Interconnection Feasibility Study shall be based on the 
technical information provided by Interconnection Customer in the 
Interconnection Request, as may be modified as the result of the 
Scoping Meeting. Transmission Provider reserves the right to request 
additional technical information from Interconnection Customer as 
may reasonably become necessary consistent with Good Utility 
Practice during the course of the Interconnection Feasibility Study 
and as designated in accordance with Section 3.4.4 of the LGIP. If, 
after the designation of the Point of Interconnection pursuant to 
Section 3.4.4 of the LGIP, Interconnection Customer modifies its 
Interconnection Request pursuant to Section 4.4, the time to 
complete the Interconnection Feasibility Study may be extended.] The 
Informational Interconnection Study shall be performed solely for 
informational purposes and is not binding on either Party.
    5.0 The Informational Interconnection Study report shall provide 
a sensitivity analysis based on the assumptions specified by 
prospective Interconnection Customer in this Agreement and the 
technical information provided by prospective Interconnection 
Customer.Transmission Provider reserves the right to request 
additional technical information from prospective Interconnection 
Customer as may reasonably become necessary consistent with Good 
Utility Practice during the course of the Informational 
Interconnection Study. If prospective Interconnection Customer 
modifies its Informational Interconnection Study Request, the time 
to complete the Informational Interconnection Study may be extended.
    The Informational Interconnection [Feasibility]Study report 
shall provide the following information:

--preliminary identification of any circuit breaker short circuit 
capability limits exceeded as a result of the interconnection;
--preliminary identification of any thermal overload or voltage 
limit violations resulting from the interconnection; and
--[preliminary description and non-bonding estimated cost of 
facilities required to interconnect the Large Generating Facility to 
the Transmission System and to address the identified short circuit 
and power flow issues.]Transmission Provider's Interconnection 
Facilities and Network Upgrades, and the estimated cost thereof, 
that may be required to provide transmission service or 
Interconnection Service based upon the assumptions specified by 
prospective Interconnection Customer in this agreement.

    6.0 Prospective Interconnection Customer shall provide a deposit 
of $10,000 for the performance of the InformationalInterconnection 
[Feasibility] Study. Transmission Provider's good faith estimate for 
the time of completion of the Informational Interconnection Study is 
{insert date{time} .
    Upon [receipt of]providing the Informational Interconnection 
[Feasibility]Study report to prospective Interconnection Customer, 
Transmission Provider shall charge and prospective Interconnection 
Customer shall pay the actual costs of the Informational 
Interconnection [Feasibility]Study.
    Any difference between the [deposit]initial payment and the 
actual cost of the study shall be paid by or refunded to prospective 
Interconnection Customer, as appropriate.
    7.0 Miscellaneous. The Informational Interconnection 
[Feasibility]Study Agreement shall include standard miscellaneous 
terms including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, 
waiver, enforceability and assignment, that reflect best practices 
in the electric industry, and that are consistent with regional 
practices, Applicable Laws and Regulations, and the organizational 
nature of each Party. All of these provisions, to the extent 
practicable, shall be consistent with the provisions of this LGIP 
and the LGIA.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
 Title:----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of prospective Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment [A]B to Appendix 2

Informational Interconnection[Feasibility] Study Agreement

Assumptions Used In Conducting The Informational Interconnection 
[Feasibility] Study

    The Informational Interconnection [Feasibility]Study will be 
based upon the information set forth in the Interconnection Request 
and agreed upon in the Scoping Meeting held on
    ____:
    Designation of Point of Interconnection and configuration to be 
studied.
    Designation of alternative Point(s) of Interconnection and 
configuration.
    {Above assumptions to be completed by Interconnection Customer 
and other assumptions to be provided by Interconnection Customer and 
Transmission Provider{time} 

Appendix 3 to LGIP

[Interconnection System Impact]Cluster Study Agreement

    This Agreement is made and entered into this day of ____, 20__ 
by and between ____, a ____organized and existing under the laws of 
the State of ____, (``Interconnection Customer,'') and ____, a ____ 
organized and existing under the laws of the State of 
____(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a 
[Large]Generating Facility or generating capacity addition to an 
existing Generating Facility consistent with the Interconnection 
Request submitted by Interconnection Customer dated ____; and
    Whereas, Interconnection Customer desires to interconnect 
the[Large] Generating Facility with the Transmission System;
    Whereas, Transmission Provider has completed an Informational 
Interconnection [Feasibility]Study (the ``[Feasibility] 
Informational Study'') and provided the results of said study to 
Interconnection Customer (This recital to be omitted if Transmission 
Provider [does not require] did not conduct the Informational 
Interconnection [Feasibility]Study.); and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform [an Interconnection System Impact]a Cluster 
Study to assess the impact of interconnecting the [Large]Generating 
Facility to the

[[Page 40014]]

Transmission System, and of any Affected Systems;
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated in this LGIP.
    2.0 Interconnection Customer elects and Transmission Provider 
shall cause to be performed [an Interconnection System Impact]a 
Cluster Study consistent with Section 7.0 of this LGIP in accordance 
with the Tariff.
    3.0 The scope of the [Interconnection System Impact]Cluster 
Study shall be subject to the assumptions set forth in Attachment A 
to this Agreement.
    4.0 The [Interconnection System Impact]Cluster Study will be 
based upon the results of the Informational Interconnection 
[Feasibility]Study and the technical information provided by 
Interconnection Customer in the Interconnection Request, subject to 
any modifications in accordance with Section 4.4 of this LGIP. 
Transmission Provider reserves the right to request additional 
technical information from Interconnection Customer as may 
reasonably become necessary consistent with Good Utility Practice 
during the course of the [Interconnection Customer System 
Impact]Cluster Study. If Interconnection Customer modifies its 
designated Point of Interconnection, Interconnection Request, or the 
technical information provided therein, the time to complete 
the[Interconnection System Impact] Cluster Study may be extended.
    5.0 The [Interconnection System Impact]Cluster Study 
[report]Report shall provide the following information:

--identification of any circuit breaker short circuit capability 
limits exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response 
to system disturbances resulting from the interconnection; and
--description and non-binding, good faith estimated cost of 
facilities required to interconnect the [Large]Generating Facility 
to the Transmission System and to address the identified short 
circuit, instability, and power flow issues.

    6.0 [Interconnection Customer shall provide a deposit of $50,000 
for the performance of the Interconnection System Impact 
Study.]Transmission Provider's good faith estimate for the time of 
completion of the [Interconnection System Impact]Cluster Study is 
{insert date{time} .
    Upon receipt of the [Interconnection System Impact]Cluster 
Study, Transmission Provider shall charge and Interconnection 
Customer shall pay its share of the actual costs of the 
[Interconnection System Impact]Cluster Study, consistent with 
Section 13.3 of this LGIP.
    Any difference between the deposit and the actual cost of the 
study shall be paid by or refunded to Interconnection Customer, as 
appropriate.
    7.0 Miscellaneous. The [Interconnection System Impact]Cluster 
Study Agreement shall include standard miscellaneous terms 
including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, 
waiver, enforceability and assignment, that reflect best practices 
in the electric industry, that are consistent with regional 
practices, Applicable Laws and Regulations and the organizational 
nature of each Party. All of these provisions, to the extent 
practicable, shall be consistent with the provisions of this LGIP 
and LGIA.
    In witness thereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.
{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment A to Appendix 3

[Interconnection System Impact]Cluster Study Agreement

Assumptions Used In Conducting The [Interconnection System 
Impact]Cluster Study

    The [Interconnection System Impact]Cluster Study will be based 
upon the results of the Informational Interconnection [Feasibility] 
Study, subject to any modifications in accordance with Section 4.4 
of this[e] LGIP, and the following assumptions:
    Designation of Point of Interconnection and configuration to be 
studied.
    Designation of alternative Point(s) of Interconnection and 
configuration.
    {Above assumptions to be completed by Interconnection Customer 
and other assumptions to be provided by Interconnection Customer and 
Transmission Provider{time} 

Appendix 4 to LGIP

Interconnection Facilities Study Agreement

    * * *
    Whereas, Transmission Provider has completed an Interconnection 
[System Impact] Cluster Study (the ``[System Impact]Cluster Study'') 
and provided the results of said study to Interconnection Customer; 
and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform an Interconnection Facilities Study to specify 
and estimate the cost of the equipment, engineering, procurement and 
construction work needed to implement the conclusions of the 
Interconnection [System Impact]Cluster Study in accordance with Good 
Utility Practice to physically and electrically connect the 
[Large]Generating Facility to the Transmission System.
    * * *
    4.0 The Interconnection Facilities Study report (i) shall 
provide a description, estimated cost of (consistent with Attachment 
A), schedule for required facilities to interconnect the [Large] 
Generating Facility to the Transmission System and (ii) shall 
address the short circuit, instability, and power flow issues 
identified in the Interconnection [System Impact]Cluster Study.
    * * *

Attachment A to Appendix 4

Interconnection Facilities Study Agreement

Interconnection Customer Schedule Election For Conducting The 
Interconnection Facilities Study

    Transmission Provider shall [use Reasonable Efforts to]complete 
the study and issue a draft Interconnection Facilities Study report 
to Interconnection Customer within the following number of days 
after [of]receipt of an executed copy of this Interconnection 
Facilities Study Agreement.
    * * *

Appendix 13 to LGIP

Transitional Cluster Study Agreement

    THIS AGREEMENT is made and entered into this __ day of ____, 
20__ by and between ____, a ____ organized and existing under the 
laws of the State of ____ (``Interconnection Customer''), and ____, 
a ____ organized and existing under the laws of the State of ____ 
(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a 
Generating Facility or generating capacity addition to an existing 
Generating Facility consistent with the Interconnection Request 
submitted by Interconnection Customer dated____;
    Whereas, Interconnection Customer desires to interconnect the 
Generating Facility with Transmission Provider's Transmission 
System; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform a ``Transitional Cluster Study,'' which is a 
combined system impact and facility Cluster Study to specify and 
estimate the cost of the equipment, engineering, procurement, and 
construction work needed to physically and electrically connect the 
Generating Facility to Transmission Provider's Transmission System; 
and
    Whereas, Interconnection Customer has a valid Queue Position as 
of the effective date of this LGIP.
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated in this LGIP.
    2.0 Interconnection Customer elects, and Transmission Provider 
shall cause to be performed, a Transitional Cluster Study.
    3.0 The Transitional Cluster Study shall be based upon the 
technical information provided by Interconnection Customer in the 
Interconnection Request. Transmission

[[Page 40015]]

Provider reserves the right to request additional technical 
information from Interconnection Customer as may reasonably become 
necessary consistent with Good Utility Practice during the course of 
the Transitional Cluster Study and Interconnection Customer shall 
provide such data as quickly as reasonable.
    4.0 Pursuant to Section 5.1.1.2 of this LGIP, the interim 
Transitional Cluster Study report shall provide the information 
below:

--identification of any circuit breaker short circuit capability 
limits exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response 
to system disturbances resulting from the interconnection; and
--Transmission Provider's Interconnection Facilities and Network 
Upgrades that are expected to be required as a result of the 
Interconnection Request(s) and a non-binding, good faith estimate of 
cost responsibility and a non-binding, good faith estimated time to 
construct.

    5.0 Pursuant to Section 5.1.1.2 of this LGIP, the final 
Transitional Cluster Study Report shall: (1) provide all the 
information included in the interim Transitional Cluster Study 
report; (2) provide a description of, estimated cost of, and 
schedule for required facilities to interconnect the Generating 
Facility to the Transmission System; and (3) address the short 
circuit, instability, and power flow issues identified in the 
interim Transitional Cluster Study report.
    6.0 Interconnection Customer has met certain requirements 
described in Section 5.1.1.2 of this LGIP.
    7.0 Interconnection Customer previously provided a deposit for 
the performance of Interconnection Studies. Upon receipt of the 
final Transitional Cluster Study Report, Transmission Provider shall 
charge and Interconnection Customer shall pay the actual costs of 
the Transitional Cluster Study. Any difference between the study 
deposit and the actual cost of the study shall be paid by or 
refunded to Interconnection Customer, in accordance with the 
provisions of Section 13.3 of this LGIP.
    8.0 Miscellaneous. The Transitional Cluster Study Agreement 
shall include standard miscellaneous terms including, but not 
limited to, indemnities, representations, disclaimers, warranties, 
governing law, amendment, execution, waiver, enforceability and 
assignment, that reflect best practices in the electric industry, 
and that are consistent with regional practices, Applicable Laws and 
Regulations, and the organizational nature of each Party. All of 
these provisions, to the extent practicable, shall be consistent 
with the provisions of this LGIP and the LGIA.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Appendix 14 to LGIP

Transitional Serial Interconnection Facilities Study Agreement

    THIS AGREEMENT is made and entered into this __ day of __, 20__, 
by and between __, a __ organized and existing under the laws of the 
State of __; (``Interconnection Customer'') and ____, a ____ 
organized and existing under the laws of the State of ____ 
(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a 
Generating Facility or generating capacity addition to an existing 
Generating Facility consistent with the Interconnection Request 
submitted by Interconnection Customer dated __; and
    Whereas, Interconnection Customer desires to interconnect the 
Generating Facility with Transmission Provider's Transmission 
System; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to continue processing its Interconnection Facilities Study 
to specify and estimate the cost of the equipment, engineering, 
procurement, and construction work needed to implement the 
conclusions of the final Interconnection System Impact Study in 
accordance with Good Utility Practice to physically and electrically 
connect the Generating Facility to the Transmission System; and
    Whereas, Interconnection Customer has executed, and Transmission 
Provider has accepted an Interconnection Facilities Study Agreement 
on or before the effective date of this LGIP.
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated in this LGIP.
    2.0 Interconnection Customer elects and Transmission Provider 
shall cause to be performed an Interconnection Facilities Study 
consistent with Section 8 of this LGIP.
    3.0 The scope of the Interconnection Facilities Study shall be 
subject to the assumptions set forth in Attachment A to this 
Agreement, which shall be the same assumptions as the previous 
Interconnection Facilities Study Agreement.
    4.0 The Interconnection Facilities Study report shall: (1) 
provide a description, estimated cost of (consistent with Attachment 
A), and schedule for required facilities to interconnect the 
Generating Facility to the Transmission System; and (2) address the 
short circuit, instability, and power flow issues identified in the 
most recently published Cluster Study Report.
    5.0 Interconnection Customer has met certain requirements 
described in Section 5.1.1.1 of this LGIP. The time for completion 
of the Interconnection Facilities Study is specified in Attachment 
A.
    6.0 Interconnection Customer previously provided a deposit of 
______dollars ($)__ for the performance of the Interconnection 
Facilities Study.
    7.0 Upon receipt of the Interconnection Facilities Study 
results, Transmission Provider shall charge and Interconnection 
Customer shall pay the actual costs of the Interconnection 
Facilities Study.
    8.0 Any difference between the study deposit and the actual cost 
of the study shall be paid by or refunded to Interconnection 
Customer, as appropriate.
    9.0 Miscellaneous. The Interconnection Facilities Study 
Agreement shall include standard miscellaneous terms including, but 
not limited to, indemnities, representations, disclaimers, 
warranties, governing law, amendment, execution, waiver, 
enforceability and assignment, that reflect best practices in the 
electric industry, and that are consistent with regional practices, 
Applicable Laws and Regulations, and the organizational nature of 
each Party. All of these provisions, to the extent practicable, 
shall be consistent with the provisions of this LGIP and this LGIA.
    In Witness Whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
{Insert name of Interconnection Customer{time} 
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment A to Appendix 14--Transitional Serial Interconnection 
Facilities Study Agreement

Assumptions Used in Conducting the Transitional Serial Interconnection 
Facilities Study

    {Assumptions to be completed by Interconnection Customer and 
Transmission Provider{time} 

Appendix 15 to LGIP--Affected System Study Agreement

    This Agreement is made and entered into this __ day of______ , 
20 __, by and among ______, a ______ organized and existing under 
the laws of the State of______ (Affected System Interconnection 
Customer) and ______,a______ organized and existing under the laws 
of the State of______ (Transmission Provider acting as Affected 
System). Affected System Interconnection Customer and Transmission 
Provider each may be referred to as a ``Party,'' or collectively as 
the ``Parties.''

Recitals

    Whereas, Affected System Interconnection Customer is proposing 
to develop a {description of generating facility or generating 
capacity addition to an existing generating facility{time}  
consistent with the interconnection request submitted by Affected 
System Interconnection Customer to {name of transmission 
provider{time} , dated

[[Page 40016]]

______, for which {name of transmission provider{time}  found 
impacts on Transmission Provider's Transmission System; and
    Whereas, Affected System Interconnection Customer desires to 
interconnect the {description of generating facility{time}  with 
{name of transmission provider{time} 's transmission system;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated in this LGIP.
    2.0 Transmission Provider shall coordinate with Affected System 
Interconnection Customer to perform an Affected System Study 
consistent with Section 9 of this LGIP.
    3.0 The scope of the Affected System Study shall be subject to 
the assumptions set forth in Attachment A to this Agreement.
    4.0 The Affected System Study will be based upon the technical 
information provided by Affected System Interconnection Customer and 
{name of transmission provider{time} . Transmission Provider 
reserves the right to request additional technical information from 
Affected System Interconnection Customer as may reasonably become 
necessary consistent with Good Utility Practice during the course of 
the Affected System Study. If Affected System Interconnection 
Customer modifies its designated point of interconnection, 
interconnection request, or the technical information provided 
therein is modified, the time to complete the Affected System Study 
may be extended by Transmission Provider.
    5.0 The Affected System Study shall provide the following 
information:
--identification of any circuit breaker short circuit capability 
limits exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response 
to system disturbances resulting from the interconnection;
--non-binding, good faith estimated cost of facilities required to 
interconnect the {description of generating facility{time}  to the 
transmission provider with whom interconnection has been requested; 
and
--description of how such facilities will address the identified 
short circuit, instability, and power flow issues.
    6.0 Upon receipt of this Agreement, Transmission Provider shall 
charge, and Affected System Interconnection Customer shall pay, an 
initial Affected System Study deposit. Any difference between the 
deposit and the actual cost of the Study shall be paid by or 
refunded to Affected System Interconnection Customer, as 
appropriate, including interest calculated in accordance with 
section 35.19a(a)(2) of FERC's regulations.
    7.0 This Agreement shall include standard miscellaneous terms 
including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, 
waiver, enforceability and assignment, which reflect best practices 
in the electric industry, that are consistent with regional 
practices, Applicable Laws and Regulations and the organizational 
nature of each Party. All of these provisions, to the extent 
practicable, shall be consistent with the provisions of this LGIP 
and this LGIA.
    In Witness Thereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.
{Insert name of Transmission Provider acting as Affected 
System{time} {time} 
By:--------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Affected System Interconnection Customer{time} 
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment A to the Affected System Study Agreement

Assumptions Used in Conducting the Affected System Study

    The Affected System Study will be based upon the following 
assumptions: {Assumptions to be completed by Affected System 
Interconnection Customer and Transmission Provider acting as 
Affected System{time} 

Appendix 16 to LGIP--Affected Systems Facilities Construction Agreement

    This Agreement is made and entered into this __ day of ______, 
20__, by and among ______, organized and existing under the laws 
20__, of the State of ______ (Affected System Interconnection 
Customer) and ______, an entity organized under the laws of the 
State of ______ (Transmission Provider acting as Affected System). 
Affected System Interconnection Customer and Transmission Provider 
each may be referred to as a ``Party'' or collectively as the 
``Parties.''

Recitals

    Whereas, Affected System Interconnection Customer is proposing 
to develop a {description of generating facility or generating 
capacity addition to an existing generating facility{time}  
consistent with the interconnection request submitted by Affected 
System Interconnection Customer to {name of transmission 
provider{time} , dated______, for which {name of transmission 
provider{time}  found impacts on Transmission Provider's 
Transmission System; and
    Whereas, Affected System Interconnection Customer desires to 
interconnect the {description of generating facility{time}  with 
{name of transmission provider{time} 's transmission system; and
    Whereas, additions, modifications, and upgrades must be made to 
certain existing facilities of Transmission Provider's Transmission 
System to accommodate such interconnection; and
    Whereas, Affected System Interconnection Customer has requested, 
and Transmission Provider has agreed, to enter into this Agreement 
for the purpose of facilitating the construction of necessary 
Affected System Network Upgrades;
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:

Article 1--Definitions

    When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in this LGIP.

Article 2--Term of Agreement

    2.1 Effective Date. This Agreement shall become effective upon 
execution by the Parties subject to acceptance by FERC (if 
applicable), or if filed unexecuted, upon the date specified by 
FERC.
    2.2 Term.
    2.2.1 General. This Agreement shall become effective as provided 
in Article 2.1 and shall continue in full force and effect until the 
earlier of (1) the final repayment, where applicable, by 
Transmission Provider of the amount funded by Affected System 
Interconnection Customer for Transmission Provider's design, 
procurement, construction and installation of the Affected System 
Network Upgrades provided in Appendix A; (2) the Parties agree to 
mutually terminate this Agreement; (3) earlier termination is 
permitted or provided for under Appendix A of this Agreement; or (4) 
Affected System Interconnection Customer terminates this Agreement 
after providing Transmission Provider with written notice at least 
sixty (60) Calendar Days prior to the proposed termination date, 
provided that Affected System Interconnection Customer has no 
outstanding contractual obligations to Transmission Provider under 
this Agreement. No termination of this Agreement shall be effective 
until the Parties have complied with all Applicable Laws and 
Regulations applicable to such termination. The term of this 
Agreement may be adjusted upon mutual agreement of the Parties if 
the commercial operation date for the {description of generating 
facility{time}  or the In-Service Date for the Affected System 
Network Upgrades is adjusted in accordance with the rules and 
procedures established by Transmission Provider.
    2.2.2 Termination Upon Default. In the event of a Default by a 
Party, the Non-Breaching Party shall have the termination rights 
described in Articles 5 and 6; provided, however, if the Default 
does not pose a threat to the reliability of Transmission Provider's 
Transmission System, Transmission Provider may not terminate this 
Agreement if Affected System Interconnection Customer is the 
Breaching Party and Affected System Interconnection Customer (1) has 
undertaken, in accordance with Article 5.2, to cure the Breach that 
led to the Default and has failed to cure the Breach for reasons 
other than Affected System Interconnection Customer's failure to 
diligently commence reasonable and appropriate steps to cure the 
Breach within the thirty (30) Calendar Days allowed by Article 5.2, 
and (2) compensates Transmission Provider within thirty (30) 
Calendar Days for the amount of damage billed to Affected System 
Interconnection Customer by Transmission Provider for any

[[Page 40017]]

damages, including costs and expenses, incurred by Transmission 
Provider as a result of such Default.
    2.2.3 Consequences of Termination. In the event of a termination 
by either Party, other than a termination by Affected System 
Interconnection Customer due to a Breach by Transmission Provider, 
Affected System Interconnection Customer must pay Transmission 
Provider all amounts still due and payable for construction and 
installation of the Affected System Network Upgrades (including, 
without limitation, any equipment ordered related to such 
construction), plus all out-of-pocket expenses incurred by 
Transmission Provider in connection with the construction and 
installation of the Affected System Network Upgrades, through the 
date of termination, plus any actual costs which Transmission 
Provider reasonably incurs in (1) winding up work and construction 
demobilization and (2) ensuring the safety of persons and property 
and the integrity and safe and reliable operation of Transmission 
Provider's Transmission System. Transmission Provider must minimize 
such costs.
    Affected System Interconnection Customer is responsible for the 
cost of additional facilities that is caused to another 
Interconnection Customer due to the termination of this Agreement, 
Affected System Interconnection Customer's LGIA, or any of Affected 
System Interconnection Customer's other Affected System Facilities 
Construction Agreement(s).
    2.2.4 Reservation of Rights. Transmission Provider shall have 
the right to make a unilateral filing with FERC to modify this 
Agreement with respect to any rates, terms and conditions, charges, 
classifications of service, rule or regulation under section 205 or 
any other applicable provision of the Federal Power Act and FERC's 
rules and regulations thereunder, and Affected System 
Interconnection Customer shall have the right to make a unilateral 
filing with FERC to modify this Agreement pursuant to section 206 or 
any other applicable provision of the Federal Power Act and FERC's 
rules and regulations thereunder; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications may be considered. Nothing in this Agreement shall 
limit the rights of the Parties or of FERC under sections 205 or 206 
of the Federal Power Act and FERC's rules and regulations 
thereunder, except to the extent that the Parties otherwise mutually 
agree as provided herein.
    2.3 Filing. Transmission Provider shall file this Agreement (and 
any amendment hereto) with the appropriate Governmental Authority, 
if required. Affected System Interconnection Customer may request 
that any information so provided be subject to the confidentiality 
provisions of Article 8. If Affected System Interconnection Customer 
has executed this Agreement, or any amendment thereto, Affected 
System Interconnection Customer shall reasonably cooperate with 
Transmission Provider with respect to such filing and to provide any 
information reasonably requested by Transmission Provider needed to 
comply with applicable regulatory requirements.
    2.4 Survival. This Agreement shall continue in effect after 
termination to the extent necessary to provide for final billings 
and payments and for costs incurred hereunder, including billings 
and payments pursuant to this Agreement; to permit the determination 
and enforcement of liability and indemnification obligations arising 
from acts or events that occurred while this Agreement was in 
effect; and to permit each Party to have access to the lands of the 
other Party pursuant to this Agreement or other applicable 
agreements, to disconnect, remove or salvage its own facilities and 
equipment.
    2.5 Termination Obligations. Upon any termination pursuant to 
this Agreement, Affected System Interconnection Customer shall be 
responsible for the payment of all costs or other contractual 
obligations incurred prior to the termination date including 
previously incurred capital costs, penalties for early termination, 
costs of removal and site restoration.

Article 3--Construction of Network Upgrades

3.1 Construction

    3.1.1 Transmission Provider Obligations. Transmission Provider 
will (or will cause such action to) design, procure, construct and 
install, and Affected System Interconnection Customer shall pay, 
consistent with Article 3.2, the cost of all Affected System Network 
Upgrades identified in Appendix A. All Affected System Network 
Upgrades designed, procured, constructed and installed by 
Transmission Provider pursuant to this Agreement shall satisfy all 
requirements of applicable safety and/or engineering codes and 
comply with Good Utility Practice, and further, shall satisfy all 
Applicable Laws and Regulations.

3.1.2 Suspension of Work

    3.1.2.1 Right to Suspend for Force Majeure Event. Provided that 
such suspension is permissible under the authorizations, permits or 
approvals granted for the construction of the Affected System 
Network Upgrades, Affected System Interconnection Customer shall not 
suspend unless a Force Majeure event occurs. Affected System 
Interconnection Customer must provide to Transmission Provider (1) 
written notice of its request for suspension and (2) a sufficient 
description, as determined by Transmission Provider, of the Force 
Majeure event. Only the Affected System Interconnection Customer 
milestones described in the Appendices of this Agreement are subject 
to suspension under this Article 3.1.2. Prior to suspension, 
Affected System Interconnection Customer must also provide security 
acceptable to Transmission Provider, equivalent to the higher of 
five million dollars ($5,000,000) or the total cost of all Affected 
System Network Upgrades listed in Appendix A of this Agreement. 
Affected System Network Upgrades will be constructed on the schedule 
described in the Appendices of this Agreement unless: (1) 
construction is prevented by the order of a Governmental Authority; 
(2) the Affected System Network Upgrades are not needed by any other 
Interconnection Customer; or (3) Transmission Provider determines 
that a Force Majeure event prevents construction. In the event of 
(1), (2), or (3), security shall be released by Transmission 
Provider upon the determination by Transmission Provider that the 
Network Upgrades will no longer be constructed. If suspension 
occurs, Affected System Interconnection Customer shall be 
responsible for the costs which Transmission Provider incurs (i) in 
accordance with this Agreement prior to the suspension, (ii) in 
suspending such work, including any costs incurred to perform such 
work as may be necessary to ensure the safety of persons and 
property and the integrity of Transmission Provider's Transmission 
System and, if applicable, any costs incurred in connection with the 
cancellation of contracts and orders for material which Transmission 
Provider cannot reasonably avoid, and (iii) reasonably incurs in 
winding up work and construction demobilization; provided, however, 
that, prior to canceling any such contracts or orders, Transmission 
Provider shall obtain Affected System Interconnection Customer's 
authorization. Affected System Interconnection Customer shall be 
responsible for all costs incurred in connection with Affected 
System Interconnection Customer's failure to authorize cancellation 
of such contracts or orders.
    Interest on amounts paid by Affected System Interconnection 
Customer to Transmission Provider for the design, procurement, 
construction, and installation of the Affected System Network 
Upgrades, shall not accrue during periods in which Affected System 
Interconnection Customer has suspended construction under this 
Article 3.1.2. Transmission Provider shall invoice Affected System 
Interconnection Customer pursuant to Article 4 and will use 
reasonable efforts to minimize its costs. In the event that Affected 
System Interconnection Customer suspends work pursuant to this 
Article, no construction duration, timelines and schedules set forth 
in Appendix A shall be suspended during the period of suspension 
unless ordered by a Governmental Authority, with such order being 
the Force Majeure event causing the suspension.
    3.1.2.2 Recommencing of Work. If Affected System Interconnection 
Customer requests that Transmission Provider recommence such work, 
Transmission Provider shall have no obligation to afford such work 
the priority it would have had but for the prior actions of Affected 
System Interconnection Customer to suspend the work. In such event, 
Affected System Interconnection Customer shall be responsible for 
any costs incurred in recommencing the work. All recommenced work 
shall be completed pursuant to an amended schedule for the 
interconnection agreed to by the Parties. Transmission Provider has 
the right to conduct a Re-Study of the Affected System Study if 
conditions have materially changed subsequent to the request to 
suspend. Affected System Interconnection Customer shall be 
responsible for the costs of any studies required.
    3.1.2.3 Right to Suspend Due to Default. Transmission Provider 
reserves the

[[Page 40018]]

right, upon written notice to Affected System Interconnection 
Customer, to suspend, at any time, work by Transmission Provider due 
to an Event of Default by Affected System Interconnection Customer. 
The incurrence of additional expenses associated with the 
construction and installation of the Affected System Network 
Upgrades upon the occurrence of either a Breach that Affected System 
Interconnection Customer is unable to cure pursuant to Article 5 or 
an Event of Default pursuant to Article 5. Any form of suspension by 
Transmission Provider shall not be barred by Articles 2.2.2, 2.2.3 
or 5.2.2, nor shall it affect Transmission Provider's right to 
terminate the work or this Agreement pursuant to Article 6. In such 
events, Affected System Interconnection Customer shall be 
responsible for costs which Transmission Provider incurs as set 
forth in Article 2.2.3.
    3.1.3 Construction Status. Transmission Provider shall keep 
Affected System Interconnection Customer advised periodically as to 
the progress of its respective design, procurement and construction 
efforts as described in Appendix A. Affected System Interconnection 
Customer may, at any time and reasonably, request a progress report 
from Transmission Provider. If, at any time, Affected System 
Interconnection Customer determines that the completion of the 
Affected System Network Upgrades will not be required until after 
the specified In-Service Date, Affected System Interconnection 
Customer will provide written notice to Transmission Provider of 
such later date upon which the completion of the Affected System 
Network Upgrades would be required. Transmission Provider may delay 
the In-Service Date of the Affected System Network Upgrades 
accordingly.
    3.1.4 Timely Completion. Transmission Provider shall use 
reasonable efforts to design, procure, construct, install, and test 
the Affected System Network Upgrades in accordance with the schedule 
set forth in Appendix A, which schedule may be revised from time to 
time by mutual agreement of the Parties. If any event occurs that 
will affect the time or ability to complete the Affected System 
Network Upgrades, Transmission Provider shall promptly notify 
Affected System Interconnection Customer. In such circumstances, 
Transmission Provider shall, within fifteen (15) Calendar Days of 
such notice, convene a meeting with Affected System Interconnection 
Customer to evaluate the alternatives available to Affected System 
Interconnection Customer. Transmission Provider shall also make 
available to Affected System Interconnection Customer all studies 
and work papers related to the event and corresponding delay, 
including all information that is in the possession of Transmission 
Provider that is reasonably needed by Affected System 
Interconnection Customer to evaluate alternatives. Transmission 
Provider shall, at Affected System Interconnection Customer's 
request and expense, use reasonable efforts to accelerate its work 
under this Agreement to meet the schedule set forth in Appendix A, 
provided that Affected System Interconnection Customer authorizes 
such actions and the costs associated therewith in advance.
    3.2 Interconnection Costs.
    3.2.1 Costs. Affected System Interconnection Customer shall pay 
to Transmission Provider costs (including taxes and financing costs) 
associated with seeking and obtaining all necessary approvals and of 
designing, engineering, constructing, and testing the Affected 
System Network Upgrades, as identified in Appendix A, in accordance 
with the cost recovery method provided herein. Unless Transmission 
Provider elects to fund the Affected System Network Upgrades, they 
shall be initially funded by Affected System Interconnection 
Customer.
    3.2.1.1 Lands of Other Property Owners. If any part of the 
Affected System Network Upgrades is to be installed on property 
owned by persons other than Affected System Interconnection Customer 
or Transmission Provider, Transmission Provider shall, at Affected 
System Interconnection Customer's expense, use efforts similar in 
nature and extent to those that it typically undertakes on its own 
behalf or on behalf of its Affiliates, including use of its eminent 
domain authority to the extent permitted and consistent with 
Applicable Laws and Regulations and, to the extent consistent with 
such Applicable Laws and Regulations, to procure from such persons 
any rights of use, licenses, rights of way and easements that are 
necessary to construct, operate, maintain, test, inspect, replace or 
remove the Affected System Network Upgrades upon such property.
    3.2.2 Repayment.
    3.2.2.1 Repayment. Affected System Interconnection Customer 
shall be entitled to a cash repayment by Transmission Provider(s) 
that owns the Affected System Network Upgrades, of the amount paid 
respectively to Transmission Provider, if any, for the Affected 
System Network Upgrades, and including any tax gross-up or other 
tax-related payments associated with the repayable portion of the 
Affected System Network Upgrades, and not refunded to Affected 
System Interconnection Customer pursuant to Article 3.3.1 or 
otherwise. The Parties may mutually agree to a repayment schedule, 
to be outlined in Appendix A, not to exceed twenty (20) years from 
the Commercial Operation Date of the Affected System Network 
Upgrades, for the complete repayment for all applicable costs 
associated with the Affected System Network Upgrades. Any repayment 
shall include interest calculated in accordance with the methodology 
set forth in FERC's regulations at 18 CFR 35.19 a(a)(2)(iii) from 
the date of any payment for Affected System Network Upgrades through 
the date on which Affected System Interconnection Customer receives 
a repayment of such payment pursuant to this subparagraph. Interest 
shall not accrue during periods in which Affected System 
Interconnection Customer has suspended construction pursuant to 
Article 3.1.2.1 or the Affected System Network Upgrades have been 
determined not to be needed pursuant to this Article 3.2.2.1. 
Affected System Interconnection Customer may assign such repayment 
rights to any person.
    3.2.2.2 Impact of Failure to Achieve Commercial Operation. If 
the {description of generating facility{time}  fails to achieve 
commercial operation, but it or another generating facility is later 
constructed and makes use of the Affected System Network Upgrades, 
Transmission Provider shall at that time reimburse Affected System 
Interconnection Customer. Before any such reimbursement can occur, 
Affected System Interconnection Customer (or the entity that 
ultimately constructs the {description of generating 
facility{time} ), if different, is responsible for identifying the 
entity to which the reimbursement must be made.
    3.3 Taxes.
    3.3.1 Indemnification for Contributions in Aid of Construction. 
With regard only to payments made by Affected System Interconnection 
Customer to Transmission Provider for the installation of the 
Affected System Network Upgrades, Transmission Provider shall not 
include a gross-up for income taxes in the amounts it charges 
Affected System Interconnection Customer for the installation of the 
Affected System Network Upgrades unless (1) Transmission Provider 
has determined, in good faith, that the payments or property 
transfers made by Affected System Interconnection Customer to 
Transmission Provider should be reported as income subject to 
taxation or (2) any Governmental Authority directs Transmission 
Provider to report payments or property as income subject to 
taxation. Affected System Interconnection Customer shall reimburse 
Transmission Provider for such costs on a fully grossed-up basis, in 
accordance with this Article, within thirty (30) Calendar Days of 
receiving written notification from Transmission Provider of the 
amount due, including detail about how the amount was calculated.
    The indemnification obligation shall terminate at the earlier of 
(1) the expiration of the ten (10)-year testing period and the 
applicable statute of limitation, as it may be extended by 
Transmission Provider upon request of the Internal Revenue Service, 
to keep these years open for audit or adjustment, or (2) the 
occurrence of a subsequent taxable event and the payment of any 
related indemnification obligations as contemplated by this Article. 
Notwithstanding the foregoing provisions of this Article 3.3.1, and 
to the extent permitted by law, to the extent that the receipt of 
such payments by Transmission Provider is determined by any 
Governmental Authority to constitute income by Transmission Provider 
subject to taxation, Affected System Interconnection Customer shall 
protect, indemnify and hold harmless Transmission Provider and its 
Affiliates, from all claims by any such Governmental Authority for 
any tax, interest and/or penalties associated with such 
determination. Upon receiving written notification of such 
determination from the Governmental Authority, Transmission Provider 
shall provide Affected System Interconnection Customer with written 
notification within thirty (30) Calendar Days of such determination 
and notification. Transmission Provider, upon the timely written 
request by Affected System

[[Page 40019]]

Interconnection Customer and at Affected System Interconnection 
Customer's expense, shall appeal, protest, seek abatement of, or 
otherwise oppose such determination. Transmission Provider reserves 
the right to make all decisions with regard to the prosecution of 
such appeal, protest, abatement or other contest, including the 
compromise or settlement of the claim; provided that Transmission 
Provider shall cooperate and consult in good faith with Affected 
System Interconnection Customer regarding the conduct of such 
contest. Affected System Interconnection Customer shall not be 
required to pay Transmission Provider for the tax, interest and/or 
penalties prior to the seventh (7th) Calendar Day before the date on 
which Transmission Provider (1) is required to pay the tax, interest 
and/or penalties or other amount in lieu thereof pursuant to a 
compromise or settlement of the appeal, protest, abatement or other 
contest; (2) is required to pay the tax, interest and/or penalties 
as the result of a final, non-appealable order by a Governmental 
Authority; or (3) is required to pay the tax, interest and/or 
penalties as a prerequisite to an appeal, protest, abatement or 
other contest. In the event such appeal, protest, abatement or other 
contest results in a determination that Transmission Provider is not 
liable for any portion of any tax, interest and/or penalties for 
which Affected System Interconnection Customer has already made 
payment to Transmission Provider, Transmission Provider shall 
promptly refund to Affected System Interconnection Customer any 
payment attributable to the amount determined to be non-taxable, 
plus any interest or other payments Transmission Provider receives 
or which Transmission Provider may be entitled with respect to such 
payment. Affected System Interconnection Customer shall provide 
Transmission Provider with credit assurances sufficient to meet 
Affected System Interconnection Customer's estimated liability for 
reimbursement of Transmission Provider for taxes, interest and/or 
penalties under this Article 3.3.1. Such estimated liability shall 
be stated in Appendix A.
    To the extent that Transmission Provider is a limited liability 
company and not a corporation, and has elected to be taxed as a 
partnership, then the following shall apply: Transmission Provider 
represents, and the Parties acknowledge, that Transmission Provider 
is a limited liability company and is treated as a partnership for 
federal income tax purposes. Any payment made by Affected System 
Interconnection Customer to Transmission Provider for Affected 
System Network Upgrades is to be treated as an upfront payment. It 
is anticipated by the Parties that any amounts paid by Affected 
System Interconnection Customer to Transmission Provider for 
Affected System Network Upgrades will be reimbursed to Affected 
System Interconnection Customer in accordance with the terms of this 
Agreement, provided Affected System Interconnection Customer 
fulfills its obligations under this Agreement.
    3.3.2 Private Letter Ruling. At Affected System Interconnection 
Customer's request and expense, Transmission Provider shall file 
with the Internal Revenue Service a request for a private letter 
ruling as to whether any property transferred or sums paid, or to be 
paid, by Affected System Interconnection Customer to Transmission 
Provider under this Agreement are subject to federal income 
taxation. Affected System Interconnection Customer will prepare the 
initial draft of the request for a private letter ruling and will 
certify under penalties of perjury that all facts represented in 
such request are true and accurate to the best of Affected System 
Interconnection Customer's knowledge. Transmission Provider and 
Affected System Interconnection Customer shall cooperate in good 
faith with respect to the submission of such request.
    3.3.3 Other Taxes. Upon the timely request by Affected System 
Interconnection Customer, and at Affected System Interconnection 
Customer's sole expense, Transmission Provider shall appeal, 
protest, seek abatement of, or otherwise contest any tax (other than 
federal or state income tax) asserted or assessed against 
Transmission Provider for which Affected System Interconnection 
Customer may be required to reimburse Transmission Provider under 
the terms of this Agreement. Affected System Interconnection 
Customer shall pay to Transmission Provider on a periodic basis, as 
invoiced by Transmission Provider, Transmission Provider's 
documented reasonable costs of prosecuting such appeal, protest, 
abatement, or other contest. Affected System Interconnection 
Customer and Transmission Provider shall cooperate in good faith 
with respect to any such contest. Unless the payment of such taxes 
is a prerequisite to an appeal or abatement or cannot be deferred, 
no amount shall be payable by Affected System Interconnection 
Customer to Transmission Provider for such taxes until they are 
assessed by a final, non-appealable order by any court or agency of 
competent jurisdiction. In the event that a tax payment is withheld 
and ultimately due and payable after appeal, Affected System 
Interconnection Customer will be responsible for all taxes, interest 
and penalties, other than penalties attributable to any delay caused 
by Transmission Provider. Each Party shall cooperate with the other 
Party to maintain each Party's tax status. Nothing in this Agreement 
is intended to adversely affect any Party's tax-exempt status with 
respect to the issuance of bonds including, but not limited to, 
local furnishing bonds, as described in section 142(f) of the 
Internal Revenue Code.

Article 4--Security, Billing and Payments

    4.1 Provision of Security. By the earlier of (1) thirty (30) 
Calendar Days prior to the due date for Affected System 
Interconnection Customer's first payment under the payment schedule 
specified in Appendix A or (2) the first date specified in Appendix 
A for the ordering of equipment by Transmission Provider for 
installing the Affected System Network Upgrades, Affected System 
Interconnection Customer shall provide Transmission Provider, at 
Affected System Interconnection Customer's option, a guarantee, a 
surety bond, letter of credit or other form of security that is 
reasonably acceptable to Transmission Provider. Such security for 
payment shall be in an amount sufficient to cover the costs for 
constructing, procuring and installing the applicable portion of 
Affected System Network Upgrades and shall be reduced on a dollar-
for-dollar basis for payments made to Transmission Provider for 
these purposes.
    The guarantee must be made by an entity that meets the 
creditworthiness requirements of Transmission Provider and contain 
terms and conditions that guarantee payment of any amount that may 
be due from Affected System Interconnection Customer, up to an 
agreed-to maximum amount. The letter of credit must be issued by a 
financial institution reasonably acceptable to Transmission Provider 
and must specify a reasonable expiration date. The surety bond must 
be issued by an insurer reasonably acceptable to Transmission 
Provider and must specify a reasonable expiration date.
    4.2 Invoice. Each Party shall submit to the other Party, on a 
monthly basis, invoices of amounts due, if any, for the preceding 
month. Each invoice shall state the month to which the invoice 
applies and fully describe the services and equipment provided. The 
Parties may discharge mutual debts and payment obligations due and 
owing to each other on the same date through netting, in which case 
all amounts a Party owes to the other Party under this Agreement, 
including interest payments, shall be netted so that only the net 
amount remaining due shall be paid by the owing Party.
    4.3 Payment. Invoices shall be rendered to the paying Party at 
the address specified by the Parties. The Party receiving the 
invoice shall pay the invoice within thirty (30) Calendar Days of 
receipt. All payments shall be made in immediately available funds 
payable to the other Party, or by wire transfer to a bank named and 
account designated by the invoicing Party. Payment of invoices by a 
Party will not constitute a waiver of any rights or claims that 
Party may have under this Agreement.
    4.4 Final Invoice. Within six (6) months after completion of the 
construction of the Affected System Network Upgrades, Transmission 
Provider shall provide an invoice of the final cost of the 
construction of the Affected System Network Upgrades and shall set 
forth such costs in sufficient detail to enable Affected System 
Interconnection Customer to compare the actual costs with the 
estimates and to ascertain deviations, if any, from the cost 
estimates. Transmission Provider shall refund, with interest 
(calculated in accordance with 18 CFR 35.19a(a)(2)(iii)), to 
Affected System Interconnection Customer any amount by which the 
actual payment by Affected System Interconnection Customer for 
estimated costs exceeds the actual costs of construction within 
thirty (30) Calendar Days of the issuance of such final construction 
invoice.
    4.5 Interest. Interest on any unpaid amounts shall be calculated 
in accordance with 18 CFR 35.19a(a)(2)(iii).
    4.6 Payment During Dispute. In the event of a billing dispute 
among the Parties, Transmission Provider shall continue to

[[Page 40020]]

construct the Affected System Network Upgrades under this Agreement 
as long as Affected System Interconnection Customer: (1) continues 
to make all payments not in dispute; and (2) pays to Transmission 
Provider or into an independent escrow account the portion of the 
invoice in dispute, pending resolution of such dispute. If Affected 
System Interconnection Customer fails to meet these two 
requirements, then Transmission Provider may provide notice to 
Affected System Interconnection Customer of a Default pursuant to 
Article 5. Within thirty (30) Calendar Days after the resolution of 
the dispute, the Party that owes money to another Party shall pay 
the amount due with interest calculated in accord with the 
methodology set forth in 18 CFR 35.19a(a)(2)(iii).

Article 5--Breach, Cure and Default

    5.1 Events of Breach. A Breach of this Agreement shall include:
    (a) The failure to pay any amount when due;
    (b) The failure to comply with any material term or condition of 
this Agreement, including but not limited to any material Breach of 
a representation, warranty or covenant made in this Agreement;
    (c) Failure of a Party to provide such access rights, or a 
Party's attempt to revoke access or terminate such access rights, as 
provided under this Agreement; or
    (d) Failure of a Party to provide information or data to another 
Party as required under this Agreement, provided the Party entitled 
to the information or data under this Agreement requires such 
information or data to satisfy its obligations under this Agreement.
    5.2 Notice of Breach, Cure and Default. Upon the occurrence of 
an event of Breach, the Party not in Breach, when it becomes aware 
of the Breach, shall give written notice of the Breach to the 
Breaching Party and to any other person representing a Party to this 
Agreement identified in writing to the other Party in advance. Such 
notice shall set forth, in reasonable detail, the nature of the 
Breach, and where known and applicable, the steps necessary to cure 
such Breach.
    5.2.1 Upon receiving written notice of the Breach hereunder, the 
Breaching Party shall have a period to cure such Breach (sometimes 
hereinafter referred as ``Cure Period'') which shall be thirty (30) 
Calendar Days unless such Breach is due to an occurrence under 
Article 5.1(a) in which case the cure period will be five (5) 
Business Days.
    5.2.2 If the Breach is such that it cannot be cured within the 
Cure Period, the Breaching Party will commence in good faith all 
steps as are reasonable and appropriate to cure the Breach within 
such Cure Period and thereafter diligently pursue such action to 
completion. In the event the Breaching Party fails to: (1) cure the 
Breach, or to commence reasonable and appropriate steps to cure the 
Breach, within the Cure Period; or (2) completely cure the Breach 
within sixty (60) Calendar Days if the Breach occurs pursuant to 
Article 5.1(b), (c), or (d), the Breaching Party will be in Default 
of this Agreement and the non-Breaching Party may terminate this 
Agreement for cause by notifying the other Party in writing or take 
whatever action at law or in equity as may appear necessary or 
desirable to enforce the performance or observance of any rights, 
remedies, obligations, agreement, or covenants under this Agreement.
    5.3 Rights in the Event of Default. Notwithstanding the 
foregoing, upon the occurrence of an event of Default, the non-
Defaulting Party shall be entitled to exercise all rights and 
remedies it may have in equity or at law.

Article 6--Termination of Agreement

    6.1 Expiration of Term. Except as otherwise specified in this 
Article 6, the Parties' obligations under this Agreement shall 
terminate at the conclusion of the term of this Agreement.
    6.2 Termination. In addition to the termination provisions set 
forth in Article 2.2, a Party may terminate this Agreement upon the 
Default of the other Party in accordance with this Agreement. 
Subject to the limitations set forth in Article 6.3, in the event of 
a Default, the non-Defaulting Party may terminate this Agreement 
only upon the later of (1) its giving of written notice of 
termination to the other Party; and (2) unless no longer required by 
FERC, the filing at FERC of a notice of termination for this 
Agreement, which filing must be accepted for filing by FERC.
    6.3 Disposition of Facilities Upon Termination of Agreement.
    6.3.1 Transmission Provider Obligations. Upon termination of 
this Agreement, unless otherwise agreed by the Parties in writing, 
Transmission Provider:
    (a) shall, prior to the construction and installation of any 
portion of the Affected System Network Upgrades and to the extent 
possible, cancel any pending orders of, or return, such equipment or 
material for such Affected System Network Upgrades;
    (b) may keep in place any portion of the Affected System Network 
Upgrades already constructed and installed; and,
    (c) shall perform such work as may be necessary to ensure the 
safety of persons and property and to preserve the integrity of 
Transmission Provider's Transmission System (e.g., construction 
demobilization to return the system to its original state, wind-up 
work).
    6.3.2 Customer Obligations. Upon billing by Transmission 
Provider, Affected System Interconnection Customer shall reimburse 
Transmission Provider for any costs incurred by Transmission 
Provider in performance of the actions required or permitted by 
Article 6.3.1 and for the cost of any Affected System Network 
Upgrades described in Appendix A. Transmission Provider shall use 
reasonable efforts to minimize costs and shall offset the amounts 
owed by any salvage value of facilities, if applicable. Affected 
System Interconnection Customer shall pay these costs pursuant to 
Article 4.3 of this Agreement.
    6.3.3 Pre-construction or Installation. Upon termination of this 
Agreement and prior to the construction and installation of any 
portion of the Affected System Network Upgrades, Transmission 
Provider may, at its option, retain any portion of such Affected 
System Network Upgrades not cancelled or returned in accordance with 
Article 6.3.1(a), in which case Transmission Provider shall be 
responsible for all costs associated with procuring such Affected 
System Network Upgrades. To the extent that Affected System 
Interconnection Customer has already paid Transmission Provider for 
any or all of such costs, Transmission Provider shall refund 
Affected System Interconnection Customer for those payments. If 
Transmission Provider elects to not retain any portion of such 
facilities, Transmission Provider shall convey and make available to 
Affected System Interconnection Customer such facilities as soon as 
practicable after Affected System Interconnection Customer's payment 
for such facilities.
    6.4 Survival of Rights. Termination or expiration of this 
Agreement shall not relieve either Party of any of its liabilities 
and obligations arising hereunder prior to the date termination 
becomes effective, and each Party may take whatever judicial or 
administrative actions as appear necessary or desirable to enforce 
its rights hereunder. The applicable provisions of this Agreement 
will continue in effect after expiration, or early termination 
hereof to the extent necessary to provide for (1) final billings, 
billing adjustments and other billing procedures set forth in this 
Agreement; (2) the determination and enforcement of liability and 
indemnification obligations arising from acts or events that 
occurred while this Agreement was in effect; and (3) the 
confidentiality provisions set forth in Article 8.

Article 7--Subcontractors

    7.1 Subcontractors. Nothing in this Agreement shall prevent a 
Party from utilizing the services of subcontractors, as it deems 
appropriate, to perform its obligations under this Agreement; 
provided, however, that each Party shall require its subcontractors 
to comply with all applicable terms and conditions of this Agreement 
in providing such services and each Party shall remain primarily 
liable to the other Party for the performance of such subcontractor.
    7.1.1 Responsibility of Principal. The creation of any 
subcontract relationship shall not relieve the hiring Party of any 
of its obligations under this Agreement. In accordance with the 
provisions of this Agreement, each Party shall be fully responsible 
to the other Party for the acts or omissions of any subcontractor it 
hires as if no subcontract had been made. Any applicable obligation 
imposed by this Agreement upon a Party shall be equally binding 
upon, and shall be construed as having application to, any 
subcontractor of such Party.
    7.1.2 No Third-Party Beneficiary. Except as may be specifically 
set forth to the contrary herein, no subcontractor or any other 
party is intended to be, nor will it be deemed to be, a third-party 
beneficiary of this Agreement.
    7.1.3 No Limitation by Insurance. The obligations under this 
Article 7 will not be limited in any way by any limitation of any 
insurance policies or coverages, including any subcontractor's 
insurance.

[[Page 40021]]

Article 8--Confidentiality

    8.1 Confidentiality. Confidential Information shall include, 
without limitation, all information relating to a Party's 
technology, research and development, business affairs, and pricing, 
and any information supplied to the other Party prior to the 
execution of this Agreement.
    Information is Confidential Information only if it is clearly 
designated or marked in writing as confidential on the face of the 
document, or, if the information is conveyed orally or by 
inspection, if the Party providing the information orally informs 
the Party receiving the information that the information is 
confidential. The Parties shall maintain as confidential any 
information that is provided and identified by a Party as Critical 
Energy Infrastructure Information (CEII), as that term is defined in 
18 CFR 388.113(c).
    Such confidentiality will be maintained in accordance with this 
Article 8. If requested by the receiving Party, the disclosing Party 
shall provide in writing, the basis for asserting that the 
information referred to in this Article warrants confidential 
treatment, and the requesting Party may disclose such writing to the 
appropriate Governmental Authority. Each Party shall be responsible 
for the costs associated with affording confidential treatment to 
its information.
    8.1.1 Term. During the term of this Agreement, and for a period 
of three (3) years after the expiration or termination of this 
Agreement, except as otherwise provided in this Article 8 or with 
regard to CEII, each Party shall hold in confidence and shall not 
disclose to any person Confidential Information. CEII shall be 
treated in accordance with FERC policies and regulations.
    8.1.2 Scope. Confidential Information shall not include 
information that the receiving Party can demonstrate: (1) is 
generally available to the public other than as a result of a 
disclosure by the receiving Party; (2) was in the lawful possession 
of the receiving Party on a non-confidential basis before receiving 
it from the disclosing Party; (3) was supplied to the receiving 
Party without restriction by a non-Party, who, to the knowledge of 
the receiving Party after due inquiry, was under no obligation to 
the disclosing Party to keep such information confidential; (4) was 
independently developed by the receiving Party without reference to 
Confidential Information of the disclosing Party; (5) is, or 
becomes, publicly known, through no wrongful act or omission of the 
receiving Party or Breach of this Agreement; or (6) is required, in 
accordance with Article 8.1.6 of this Agreement, to be disclosed by 
any Governmental Authority or is otherwise required to be disclosed 
by law or subpoena, or is necessary in any legal proceeding 
establishing rights and obligations under this Agreement. 
Information designated as Confidential Information will no longer be 
deemed confidential if the Party that designated the information as 
confidential notifies the receiving Party that it no longer is 
confidential.
    8.1.3 Release of Confidential Information. No Party shall 
release or disclose Confidential Information to any other person, 
except to its Affiliates (limited by the Standards of Conduct 
requirements), subcontractors, employees, agents, consultants, or to 
non-Parties that may be or are considering providing financing to or 
equity participation with Affected System Interconnection Customer, 
or to potential purchasers or assignees of Affected System 
Interconnection Customer, on a need-to-know basis in connection with 
this Agreement, unless such person has first been advised of the 
confidentiality provisions of this Article 8 and has agreed to 
comply with such provisions. Notwithstanding the foregoing, a Party 
providing Confidential Information to any person shall remain 
primarily responsible for any release of Confidential Information in 
contravention of this Article 8.
    8.1.4 Rights. Each Party shall retain all rights, title, and 
interest in the Confidential Information that it discloses to the 
receiving Party. The disclosure by a Party to the receiving Party of 
Confidential Information shall not be deemed a waiver by the 
disclosing Party or any other person or entity of the right to 
protect the Confidential Information from public disclosure.
    8.1.5 Standard of Care. Each Party shall use at least the same 
standard of care to protect Confidential Information it receives as 
it uses to protect its own Confidential Information from 
unauthorized disclosure, publication or dissemination. Each Party 
may use Confidential Information solely to fulfill its obligations 
to the other Party under this Agreement or its regulatory 
requirements.
    8.1.6 Order of Disclosure. If a court or a Government Authority 
or entity with the right, power, and apparent authority to do so 
requests or requires either Party, by subpoena, oral deposition, 
interrogatories, requests for production of documents, 
administrative order, or otherwise, to disclose Confidential 
Information, that Party shall provide the disclosing Party with 
prompt notice of such request(s) or requirement(s) so that the 
disclosing Party may seek an appropriate protective order or waive 
compliance with the terms of this Agreement. Notwithstanding the 
absence of a protective order or waiver, the Party may disclose such 
Confidential Information which, in the opinion of its counsel, the 
Party is legally compelled to disclose. Each Party will use 
reasonable efforts to obtain reliable assurance that confidential 
treatment will be accorded any Confidential Information so 
furnished.
    8.1.7 Termination of Agreement. Upon termination of this 
Agreement for any reason, each Party shall, within ten (10) Business 
Days of receipt of a written request from the other Party, use 
reasonable efforts to destroy, erase, or delete (with such 
destruction, erasure, and deletion certified in writing to the 
requesting Party) or return to the requesting Party any and all 
written or electronic Confidential Information received from the 
requesting Party, except that each Party may keep one copy for 
archival purposes, provided that the obligation to treat it as 
Confidential Information in accordance with this Article 8 shall 
survive such termination.
    8.1.8 Remedies. The Parties agree that monetary damages would be 
inadequate to compensate a Party for the other Party's Breach of its 
obligations under this Article 8. Each Party accordingly agrees that 
the disclosing Party shall be entitled to equitable relief, by way 
of injunction or otherwise, if the receiving Party Breaches or 
threatens to Breach its obligations under this Article 8, which 
equitable relief shall be granted without bond or proof of damages, 
and the breaching Party shall not plead in defense that there would 
be an adequate remedy at law. Such remedy shall not be deemed an 
exclusive remedy for the Breach of this Article 8, but it shall be 
in addition to all other remedies available at law or in equity. The 
Parties further acknowledge and agree that the covenants contained 
herein are necessary for the protection of legitimate business 
interests and are reasonable in scope. Neither Party, however, shall 
be liable for indirect, incidental, or consequential or punitive 
damages of any nature or kind resulting from or arising in 
connection with this Article 8.
    8.1.9 Disclosure to FERC, its Staff or a State. Notwithstanding 
anything in this Article 8 to the contrary, and pursuant to 18 CFR 
1b.20, if FERC or its staff, during the course of an investigation 
or otherwise, requests information from a Party that is otherwise 
required to be maintained in confidence pursuant to this Agreement, 
the Party shall provide the requested information to FERC or its 
staff, within the time provided for in the request for information. 
In providing the information to FERC or its staff, the Party must, 
consistent with 18 CFR 388.112, request that the information be 
treated as confidential and non-public by FERC and its staff and 
that the information be withheld from public disclosure. Parties are 
prohibited from notifying the other Party to this Agreement prior to 
the release of the Confidential Information to FERC or its staff. 
The Party shall notify the other Party to the Agreement when it is 
notified by FERC or its staff that a request to release Confidential 
Information has been received by FERC, at which time either of the 
Parties may respond before such information would be made public, 
pursuant to 18 CFR 388.112. Requests from a state regulatory body 
conducting a confidential investigation shall be treated in a 
similar manner if consistent with the applicable state rules and 
regulations.
    8.1.10 Subject to the exception in Article 8.1.9, any 
information that a disclosing Party claims is competitively 
sensitive, commercial or financial information under this Agreement 
shall not be disclosed by the receiving Party to any person not 
employed or retained by the receiving Party, except to the extent 
disclosure is (1) required by law; (2) reasonably deemed by the 
disclosing Party to be required to be disclosed in connection with a 
dispute between or among the Parties, or the defense of litigation 
or dispute; (3) otherwise permitted by consent of the disclosing 
Party, such consent not to be unreasonably withheld; or (4) 
necessary to fulfill its obligations under this Agreement or as the 
Regional Transmission Organization or a Local Balancing Authority 
operator including disclosing the Confidential

[[Page 40022]]

Information to a regional or national reliability organization. The 
Party asserting confidentiality shall notify the receiving Party in 
writing of the information that Party claims is confidential. Prior 
to any disclosures of that Party's Confidential Information under 
this subparagraph, or if any non-Party or Governmental Authority 
makes any request or demand for any of the information described in 
this subparagraph, the Party that received the Confidential 
Information from the disclosing Party agrees to promptly notify the 
disclosing Party in writing and agrees to assert confidentiality and 
cooperate with the disclosing Party in seeking to protect the 
Confidential Information from public disclosure by confidentiality 
agreement, protective order or other reasonable measures.

Article 9--Information Access and Audit Rights

    9.1 Information Access. Each Party shall make available to the 
other Party information necessary to verify the costs incurred by 
the other Party for which the requesting Party is responsible under 
this Agreement and carry out obligations and responsibilities under 
this Agreement, provided that the Parties shall not use such 
information for purposes other than those set forth in this Article 
9.1 and to enforce their rights under this Agreement.
    9.2 Audit Rights. Subject to the requirements of confidentiality 
under Article 8 of this Agreement, the accounts and records related 
to the design, engineering, procurement, and construction of the 
Affected System Network Upgrades shall be subject to audit during 
the period of this Agreement and for a period of twenty-four (24) 
months following Transmission Provider's issuance of a final invoice 
in accordance with Article 4.4. Affected System Interconnection 
Customer at its expense shall have the right, during normal business 
hours, and upon prior reasonable notice to Transmission Provider, to 
audit such accounts and records. Any audit authorized by this 
Article 9.2 shall be performed at the offices where such accounts 
and records are maintained and shall be limited to those portions of 
such accounts and records that relate to obligations under this 
Agreement.

Article 10--Notices

    10.1 General. Any notice, demand or request required or 
permitted to be given by a Party to the other Party and any 
instrument required or permitted to be tendered or delivered by a 
Party in writing to another Party may be so given, tendered or 
delivered, as the case may be, by depositing the same with the 
United States Postal Service with postage prepaid, for transmission 
by certified or registered mail, addressed to the Parties, or 
personally delivered to the Parties, at the address set out below:

To Transmission Provider:

To Affected System Interconnection Customer:

    10.2 Billings and Payments. Billings and payments shall be sent 
to the addresses shown in Article 10.1 unless otherwise agreed to by 
the Parties.
    10.3 Alternative Forms of Notice. Any notice or request required 
or permitted to be given by a Party to the other Party and not 
required by this Agreement to be given in writing may be so given by 
telephone, facsimile or email to the telephone numbers and email 
addresses set out below:

To Transmission Provider:

To Affected System Interconnection Customer:

Article 11--Miscellaneous

    11.1 This Agreement shall include standard miscellaneous terms 
including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, 
waiver, enforceability and assignment, which reflect best practices 
in the electric industry, that are consistent with regional 
practices, Applicable Laws and Regulations and the organizational 
nature of each Party. All of these provisions, to the extent 
practicable, shall be consistent with the provisions of this LGIP 
and this LGIA.
    In witness whereof, the Parties have executed this Agreement in 
multiple originals, each of which shall constitute and be an 
original Agreement among the Parties.

Transmission Provider
{Transmission Provider Acting As Affected System{time} 
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Affected System Interconnection Customer
{Affected System Interconnection Customer{time} 
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Project No.------------------------------------------------------------

Appendix A to the Affected Systems Facilities Construction Agreement

Affected System Network Upgrades, Cost Estimates And Responsibility, 
Construction Schedule and Monthly Payment Schedule

    This Appendix A is a part of the Affected Systems Facilities 
Construction Agreement between Affected System Interconnection 
Customer and Transmission Provider.
    1.1 Affected System Network Upgrades to be installed by 
Transmission Provider.
    1.2 First Equipment Order (including permitting).
    1.2.1. Permitting and Land Rights--Transmission Provider 
Affected System Network Upgrades
    1.3 Construction Schedule. Where applicable, construction of the 
Affected System Network Upgrades is scheduled as follows and will be 
periodically updated as necessary:

         Table 1--Transmission Provider Construction Activities
------------------------------------------------------------------------
                                                      Start    End  date
        Milestone number            Description        date
------------------------------------------------------------------------
 
 
 
 
 
 
                                 Initial
                                  Synchronization
                                  Date.
                                 Commercial
                                  Operation Date.
------------------------------------------------------------------------

    Note: Construction schedule assumes that Transmission Provider 
has obtained final authorizations and security from Affected System 
Interconnection Customer and all necessary permits from Governmental 
Authorities as necessary prerequisites to commence construction of 
any of the Affected System Network Upgrades.

[[Page 40023]]

    1.4 Payment Schedule.
    1.4.1 Timing of and Adjustments to Affected System 
Interconnection Customer's Payments and Security.
    1.4.2 Monthly Payment Schedule. Affected System Interconnection 
Customer's payment schedule is as follows.

  Table 2--Affected System Interconnection Customer's Payment/Security
            Obligations for Affected System Network Upgrades
------------------------------------------------------------------------
          Milestone number                  Description           Date
------------------------------------------------------------------------
                  *
 
 
 
 
 
 
                                      Initial Synchronization
                                       Date.
                                      Commercial Operation
                                       Date.
------------------------------------------------------------------------

    Note: Affected System Interconnection Customer's payment or 
provision of security as provided in this Agreement operates as a 
condition precedent to Transmission Provider's obligations to 
construct any Affected System Network Upgrades, and failure to meet 
this schedule will constitute a Breach pursuant to Article 5.1 of 
this Agreement.
    1.5 Permits, Licenses, and Authorizations.

Appendix B to the Affected Systems Facilities Construction Agreement

Notification of Completed Construction

    This Appendix B is a part of the Affected Systems Facilities 
Construction Agreement among Affected System Interconnection 
Customer and Transmission Provider. Where applicable, when 
Transmission Provider has completed construction of the Affected 
System Network Upgrades, Transmission Provider shall send notice to 
Affected System Interconnection Customer in substantially the form 
following:

{Date{time} 
{Affected System Interconnection Customer Address{time} 
Re: Completion of Affected System Network Upgrade
Dear {Name or Title{time} :

    This letter is sent pursuant to the Affected Systems Facilities 
Construction Agreement among {Transmission Provider{time}  and 
{Affected System Interconnection Customer{time} , dated ______, 
20__.
    On {Date{time} , Transmission Provider completed to its 
satisfaction all work on the Affected System Network Upgrades 
required to facilitate the safe and reliable interconnection and 
operation of Affected System Interconnection Customer's {description 
of generating facility{time} . Transmission Provider confirms that 
the Affected System Network Upgrades are in place.
    Thank you.

{Signature{time} 
{Transmission Provider acting as Affected System 
Representative{time} 

Appendix C to the Affected Systems Facilities Construction Agreement

Exhibits

    This Appendix C is a part of the Affected Systems Facilities 
Construction Agreement among Affected System Interconnection 
Customer and Transmission Provider.

Exhibit A1--Transmission Provider Site Map

Exhibit A2--Site Plan

Exhibit A3--Affected System Network Upgrades Plan & Profile

Exhibit A4--Estimated Cost of Affected System Network Upgrades

----------------------------------------------------------------------------------------------------------------
                                                                               Facilities to be
                                                                                constructed by     Estimate in
                                                                 Location        transmission        dollars
                                                                                   provider
----------------------------------------------------------------------------------------------------------------
 
                                                                                         Total:  ...............
----------------------------------------------------------------------------------------------------------------

Appendix 17 to LGIP--Shared Network Upgrades Payment Schedule

    Interconnection Customer is required to contribute to the cost 
of Shared Network Upgrades, as identified pursuant to LGIP Section 
3.10, that are funded by another Interconnection Customer pursuant 
to the LGIP. Each Interconnection Customer with one or more Shared 
Network Upgrade(s) identified in Appendix A of its Large Generator 
Interconnection Agreement shall make a one-time payment under this 
Appendix 17 to the LGIP to Transmission Provider in accordance with 
the terms in the Large Generator Interconnection Agreement. The one-
time payment will reflect the cost of the Shared Network Upgrade(s) 
assigned to Interconnection Customer as determined by Transmission 
Provider. All revenue collected by Transmission Provider through 
this Appendix shall be distributed to the appropriate 
Interconnection Customer(s). When applicable, the transmission 
credit requirement under Article 11.4 of the Large Generator 
Interconnection Agreement applies to Interconnection Customer's 
contribution to the cost of Shared Network Upgrades.

------------------------------------------------------------------------
                        Funding                         Amount of shared
 Project  number    interconnection        NERC ID       network upgrade
                        customer                          being funded
------------------------------------------------------------------------
 
------------------------------------------------------------------------

------------------------------------------------------------------------
                       Recipient                        Amount of shared
 Project  number    interconnection        NERC ID       network upgrade
                        customer                         being refunded
------------------------------------------------------------------------
 
------------------------------------------------------------------------

Appendix C: Compilation of proposed changes to the pro forma SGIP

    Note: Proposed deletions are in brackets and proposed additions 
are in italics.

Section 1. Application

* * * * *
    1.4 Modification of the Interconnection Request
    Any modification to machine data or equipment configuration or 
to the interconnection site of the Small Generating Facility not 
agreed to in writing by [the]Transmission Provider and 
[the]Interconnection Customer may be deemed a withdrawal of the 
Interconnection Request and may require submission of a new 
Interconnection Request, unless proper notification of each Party by 
the other and a reasonable time to cure the problems created by the 
changes are undertaken. Any such modification of the Interconnection 
Request must be accompanied by any resulting updates to the models 
described in Attachment 2 of this SGIP.
* * * * *

[[Page 40024]]

Section 3. Study Process

* * * * *
    3.2 Scoping Meeting
    3.2.1 A scoping meeting will be held within ten Business Days 
after the Interconnection Request is deemed complete, or as 
otherwise mutually agreed to by the Parties. [The]Transmission 
Provider and [the]Interconnection Customer will bring to the meeting 
personnel, including system engineers and other resources as may be 
reasonably required to accomplish the purpose of the meeting.
    3.2.2 The purpose of the scoping meeting is to discuss the 
Interconnection Request and review existing studies relevant to the 
Interconnection Request. The Parties shall further discuss whether 
[the]Transmission Provider should perform a feasibility study or 
proceed directly to a system impact study, or a facilities study, or 
an interconnection agreement. If the Parties agree that a 
feasibility study should be performed, [the]Transmission Provider 
shall provide [the]Interconnection Customer, as soon as possible, 
but not later than five Business Days after the scoping meeting, a 
feasibility study agreement (Attachment 6) including an outline of 
the scope of the study and a non-binding good faith estimate of the 
cost to perform the study. In addition, Interconnection Customer's 
request to evaluate whether advanced power flow control, 
transmission switching, dynamic line ratings, static synchronous 
compensators, and/or static VAR compensators are feasible 
alternatives that could provide cost and/or time savings for 
Interconnection Customer must be submitted at the scoping meeting.
    3.2.3 The scoping meeting may be omitted by mutual agreement. In 
order to remain in consideration for interconnection, an 
Interconnection Customer [who]that has requested a feasibility study 
must return the executed feasibility study agreement within 15 
Business Days. If the Parties agree not to perform a feasibility 
study, [the]Transmission Provider shall provide [the]Interconnection 
Customer, no later than five Business Days after the scoping 
meeting, a system impact study agreement (Attachment 7) including an 
outline of the scope of the study, a non-binding good faith estimate 
of the cost to perform the study, and whether Interconnection 
Customer requested an evaluation of whether advanced power flow 
control, transmission switching, dynamic line ratings, static 
synchronous compensators, and/or static VAR compensators are 
feasible alternatives that could provide cost and/or time savings 
for Interconnection Customer.
    3.3 Feasibility Study
    3.3.1 The feasibility study shall identify any potential adverse 
system impacts that would result from the interconnection of the 
Small Generating Facility.
    3.3.2 A deposit of the lesser of 50 percent of the good faith 
estimated feasibility study costs or earnest money of $1,000 may be 
required from [the]Interconnection Customer.
    3.3.3 The scope of and cost responsibilities for the feasibility 
study are described in the attached feasibility study agreement 
(Attachment 6).
    3.3.4 If the feasibility study shows no potential for adverse 
system impacts,[the] Transmission Provider shall send 
[the]Interconnection Customer a facilities study agreement, 
including an outline of the scope of the study and a non-binding 
good faith estimate of the cost to perform the study. If no 
additional facilities are required,[the] Transmission Provider shall 
send [the]Interconnection Customer an executable interconnection 
agreement within five Business Days.
    3.3.5 If the feasibility study shows the potential for adverse 
system impacts, the review process shall proceed to the appropriate 
system impact study(s).
    3.3.6 At the request of any Interconnection Customer, the 
feasibility study will evaluate advanced power flow control, 
transmission switching, dynamic line ratings, static synchronous 
compensators, and/or static VAR compensators for feasibility, cost, 
and time savings as either an alternative to the Network Upgrade(s) 
or to provide Provisional Interconnection Service. Transmission 
Provider shall include the evaluation in the feasibility study 
report.
    3.4 System Impact Study
    3.4.1 A system impact study shall identify and detail the 
electric system impacts that would result if the proposed Small 
Generating Facility were interconnected without project 
modifications or electric system modifications, focusing on the 
adverse system impacts identified in the feasibility study, or to 
study potential impacts, including but not limited to those 
identified in the scoping meeting. A system impact study shall 
evaluate the impact of the proposed interconnection on the 
reliability of the electric system.
    3.4.2 If no transmission system impact study is required, but 
potential electric power Distribution System adverse system impacts 
are identified in the scoping meeting or shown in the feasibility 
study, a distribution system impact study must be performed. 
[The]Transmission Provider shall send [the] Interconnection Customer 
a distribution system impact study agreement within 15 Business Days 
of transmittal of the feasibility study report, including an outline 
of the scope of the study and a non-binding good faith estimate of 
the cost to perform the study, or following the scoping meeting if 
no feasibility study is to be performed.
    3.4.3 In instances where the feasibility study or the 
distribution system impact study shows potential for transmission 
system adverse system impacts, within five Business Days following 
transmittal of the feasibility study report, [the]Transmission 
Provider shall send [the]Interconnection Customer a transmission 
system impact study agreement, including an outline of the scope of 
the study and a non-binding good faith estimate of the cost to 
perform the study, if such a study is required.
    3.4.4 If a transmission system impact study is not required, but 
electric power Distribution System adverse system impacts are shown 
by the feasibility study to be possible and no distribution system 
impact study has been conducted, [the]Transmission Provider shall 
send [the]Interconnection Customer a distribution system impact 
study agreement.
    3.4.5 If the feasibility study shows no potential for 
transmission system or Distribution System adverse system impacts, 
[the]Transmission Provider shall send [the]Interconnection Customer 
either a facilities study agreement (Attachment 8), including an 
outline of the scope of the study and a non-binding good faith 
estimate of the cost to perform the study, or an executable 
interconnection agreement, as applicable.
    3.4.6 In order to remain under consideration for 
interconnection,[the] Interconnection Customer must return executed 
system impact study agreements, if applicable, within 30 Business 
Days.
    3.4.7 A deposit of the good faith estimated costs for each 
system impact study may be required from [the]Interconnection 
Customer.
    3.4.8 The scope of and cost responsibilities for a system impact 
study are described in the attached system impact study agreement.
    3.4.9 Where transmission systems and Distribution Systems have 
separate owners, such as is the case with transmission-dependent 
utilities (``TDUs'')--whether investor-owned or not--
[the]Interconnection Customer may apply to the nearest Transmission 
Provider (Transmission Owner, Regional Transmission Operator, or 
Independent Transmission Provider) providing transmission service to 
the TDU to request project coordination. Affected Systems shall 
participate in the study and provide all information necessary to 
prepare the study.
    3.4.10 At the request of Interconnection Customer, the system 
impact study will evaluate advanced power flow control, transmission 
switching, dynamic line ratings, static synchronous compensators, 
and/or static VAR compensators for feasibility, cost, and time 
savings as either an alternative to the Network Upgrade(s) or to 
provide Provisional Interconnection Service. Transmission Provider 
shall include the evaluation in the system impact study report.
    3.5 Facilities Study
    3.5.1 Once the required system impact study(s) is completed, a 
system impact study report shall be prepared and transmitted to 
[the]Interconnection Customer along with a facilities study 
agreement within five Business Days, including an outline of the 
scope of the study and a non-binding good faith estimate of the cost 
to perform the facilities study. In the case where one or both 
impact studies are determined to be unnecessary, a notice of the 
fact shall be transmitted to [the]Interconnection Customer within 
the same timeframe.
    3.5.2 In order to remain under consideration for 
interconnection, or, as appropriate, in [the]Transmission Provider's 
interconnection queue,[the] Interconnection Customer must return the 
executed facilities study agreement or a request for an extension of 
time within 30 Business Days.
    3.5.3 The facilities study shall specify and estimate the cost 
of the equipment, engineering, procurement and construction work 
(including overheads) needed to implement the conclusions of the 
system impact study(s).
    3.5.4 Design for any required Interconnection Facilities and/or 
Upgrades shall be performed under the facilities study

[[Page 40025]]

agreement. [The]Transmission Provider may contract with consultants 
to perform activities required under the facilities study agreement. 
[The]Interconnection Customer and[the] Transmission Provider may 
agree to allow [the]Interconnection Customer to separately arrange 
for the design of some of the Interconnection Facilities. In such 
cases, facilities design will be reviewed and/or modified prior to 
acceptance by [the]Transmission Provider, under the provisions of 
the facilities study agreement. If the Parties agree to separately 
arrange for design and construction, and provided security and 
confidentiality requirements can be met, [the]Transmission Provider 
shall make sufficient information available to [the]Interconnection 
Customer in accordance with confidentiality and critical 
infrastructure requirements to permit[the] Interconnection Customer 
to obtain an independent design and cost estimate for any necessary 
facilities.
    3.5.5 A deposit of the good faith estimated costs for the 
facilities study may be required from [the]Interconnection Customer.
    3.5.6 The scope of and cost responsibilities for the facilities 
study are described in the attached facilities study agreement.
    3.5.7 Upon completion of the facilities study, and with the 
agreement of[the] Interconnection Customer to pay for 
Interconnection Facilities and Upgrades identified in the facilities 
study, [the]Transmission Provider shall provide [the]Interconnection 
Customer an executable interconnection agreement within five 
Business Days.
    3.5.8 At the request of Interconnection Customer, the facilities 
study will evaluate advanced power flow control, transmission 
switching, dynamic line ratings, static synchronous compensators, 
and/or static VAR compensators for feasibility, cost, and time 
savings as either an alternative to the Network Upgrade(s) or to 
provide Provisional Interconnection Service. Transmission Provider 
shall include the evaluation in the facilities study report.

Section 4. Provisions That Apply to All Interconnection Requests

    * * *
    4.11 Alternative Transmission Technologies Annual Report
    Each Transmission Provider shall submit an annual informational 
report to the Commission that details whether, and if so how, 
advanced power flow control, transmission switching, dynamic line 
ratings, static synchronous compensators, and/or static VAR 
compensators were considered in interconnection requests over the 
last year. The report must be submitted by the last calendar day of 
December annually.
    * * *

Attachment 2--Small Generator Interconnection Request

(Application Form)

    * * *

Models for Non-Synchronous Generators

    Interconnection Customer shall provide (1) a validated user-
defined root mean squared (RMS) positive sequence dynamics model; 
(2) an appropriately parameterized generic library RMS positive 
sequence dynamics model, including model block diagram of the 
inverter control and plant control systems, as defined by the 
selection in Table 1 or a model otherwise approved by the Western 
Electricity Coordinating Council, that corresponds to 
Interconnection Customer's Generating Facility; and (3) an 
electromagnetic transient model if Transmission Provider performs an 
electromagnetic transient study as part of the interconnection study 
process. {Transmission Provider to insert whether they perform an 
electromagnetic transient study.{time}  A user-defined model is a 
set of programming code created by equipment manufacturers or 
developers that captures the latest features of controllers that are 
mainly software based and represents the entities' control 
strategies but does not necessarily correspond to any generic 
library model. For a model to be validated, there must be 
confirmation that the equipment behavior is consistent with the 
model behavior (e.g., an attestation from Interconnection Customer 
that the model accurately represents the entire plant; attestations 
from each equipment manufacturer that the user defined model 
accurately represents the component of the plant; or test data).

                                                     Table 1
----------------------------------------------------------------------------------------------------------------
                                 Siemens PSS/E *       PowerWorld
            GE PSLF                                    simulator                      Description
----------------------------------------------------------------------------------------------------------------
pvd1..........................  .................  PVD1.............  Distributed PV system model.
der--a........................  DERAU1...........  DER--A...........  Distributed energy resource model.
regc--a.......................  REGCAU1, REGCA1..  REGC--A..........  Generator/converter model.
regc--b.......................  REGCBU1..........  REGC--B..........  Generator/converter model.
wt1g..........................  WT1G1............  WT1G and WT1G1...  Wind turbine model for Type-1 wind
                                                                       turbines (conventional directly connected
                                                                       induction generator).
wt2g..........................  WT2G1............  WT2G and WT2G1...  Generator model for generic Type-2 wind
                                                                       turbines.
wt2e..........................  WT2E1............  WT2E and WT2E1...  Rotor resistance control model for wound-
                                                                       rotor induction wind-turbine generator
                                                                       wt2g.
reec--a.......................  REECAU1, REECA1..  REEC--A..........  Renewable energy electrical control model.
reec--c.......................  REECCU1..........  REEC--C..........  Electrical control model for battery
                                                                       energy storage system.
reec--d.......................  REECDU1..........  REEC--D..........  Renewable energy electrical control model.
wt1t..........................  WT12T1...........  WT1T and WT12T1..  Wind turbine model for Type-1 wind
                                                                       turbines (conventional directly connected
                                                                       induction generator).
wt1p--b.......................  wt1p--b..........  WT12A1U--B.......  Generic wind turbine pitch controller for
                                                                       WTGs of Type 1 and 2.
wt2t..........................  WT12T1...........  WT2T.............  Wind turbine model for Type-2 wind
                                                                       turbines (directly connected induction
                                                                       generator wind turbines with an external
                                                                       rotor resistance).
wtgt--a.......................  WTDTAU1, WTDTA1..  WTGT--A..........  Wind turbine drive train model.
wtga--a.......................  WTARAU1, WTARA1..  WTGA--A..........  Simple aerodynamic model.
wtgp--a.......................  WTPTAU1, WTPTA1..  WTGPT--A.........  Wind Turbine Generator Pitch controller.
wtgq--a.......................  WTTQAU1, WTTQA1..  WTGTRQ--A........  Wind Turbine Generator Torque controller.
wtgwgo--a.....................  WTGWGOAU.........  WTGWGO--A........  Supplementary control model for Weak
                                                                       Grids.
wtgibffr--a...................  WTGIBFFRA........  WTGIBFFR--A......  Inertial-base fast frequency response
                                                                       control.
wtgp--b.......................  WTPTBU1..........  WTGPT--B.........  Wind Turbine Generator Pitch controller.
wtgt--b.......................  WTDTBU1..........  WTGT--B..........  Drive train model.
repc--a.......................  Type 4: REPCAU1    REPC--A..........  Power Plant Controller.
                                 (v33), REPCA1
                                 (v34).

[[Page 40026]]

 
                                Type 3: REPCTAU1
                                 (v33), REPCTA1
                                 (v34).
repc--b.......................  PLNTBU1..........  REPC--B..........  Power Plant Level Controller for
                                                                       controlling several plants/devices.
                                                                      In regards to Siemens PSS/E: *
                                                                      Names of other models for interface with
                                                                       other devices: REA3XBU1, REAX4BU1--for
                                                                       interface with Type 3 and 4 renewable
                                                                       machines.
                                                                      SWSAXBU1--for interface with SVC (modeled
                                                                       as switched shunt in powerflow).
                                                                      SYNAXBU1--for interface with synchronous
                                                                       condenser.
                                                                      FCTAXBU1-- for interface with FACTS
                                                                       device.
repc--c.......................  REPCCU...........  REPC--C..........  Power plant controller.
----------------------------------------------------------------------------------------------------------------

General Information

    Enclose copy of site electrical one-line diagram showing the 
configuration of all Small Generating Facility equipment, current 
and potential circuits, and protection and control schemes. This 
one-line diagram must be signed and stamped by a licensed 
Professional Engineer if the Small Generating Facility is larger 
than 50 kW. Is One-Line Diagram Enclosed? __Yes __No
    Enclose copy of any site documentation that indicates the 
precise physical location of the proposed Small Generating Facility 
(e.g., USGS topographic map or other diagram or documentation).
    Proposed location of protective interface equipment on property 
(include address if different from [the ]Interconnection Customer's 
Address)____________
    Enclose copy of any site documentation that describes and 
details the operation of the protection and control schemes. Is 
Available Documentation Enclosed? __Yes __No
    Enclose copies of schematic drawings for all protection and 
control circuits, relay current circuits, relay potential circuits, 
and alarm/monitoring circuits (if applicable). Are Schematic 
Drawings Enclosed? __Yes __No

Applicant Signature

    I hereby certify that, to the best of my knowledge, all the 
information provided in this Interconnection Request is true and 
correct.
For Interconnection Customer:------------------------------------------
Date:------------------------------------------------------------------

Appendix D--Compilation of proposed changes to the pro forma LGIA

    Note: Proposed deletions are in brackets and proposed additions 
are in italics.

Article 1. Definitions

    * * *
    [Applicable Reliability Council shall mean the reliability 
council applicable to the Transmission System to which the 
Generating Facility is directly interconnected.]
    Applicable Reliability Standards shall mean the requirements and 
guidelines of [NERC,]the [Applicable Reliability Council]Electric 
Reliability Organization and the [Control Area]Balancing Authority 
Area of the Transmission System to which the Generating Facility is 
directly interconnected.
    Balancing Authority shall mean an entity that integrates 
resource plans ahead of time, maintains load interchange-generation 
balance within a Balancing Authority Area, and supports 
interconnection frequency in real time.
    Balancing Authority Area shall mean the collection of 
generation, transmission, and loads within the metered boundaries of 
the Balancing Authority. The Balancing Authority maintains load-
resource balance within this area.
    * * *
    Cluster shall mean a group of one or more Interconnection 
Requests that are studied together for the purpose of conducting the 
Cluster Study.
    Cluster Study shall mean the evaluation of one or more 
Interconnection Requests within a Cluster as described in more 
detail in Section 7 of the LGIP.
    Clustering shall mean the process whereby one or more [a group 
of]Interconnection Requests [is] are studied together, instead of 
serially, [for the purpose of conducting the Interconnection System 
Impact Study]as described in more detail in Section 7 of the LGIP.
    Co-Located Resource shall mean multiple Generating Facilities 
located on the same site.
    * * *
    [Control Area shall mean an electrical system or systems bounded 
by interconnection metering and telemetry, capable of controlling 
generation to maintain its interchange schedule with other Control 
Areas and contributing to frequency regulation of the 
interconnection. A Control Area must be certified by an Applicable 
Reliability Council.]
    * * *
    Electric Reliability Organization shall mean NERC.
    * * *
    Generating Facility shall mean Interconnection Customer's device 
for the production and/or storage for later injection of electricity 
identified in the Interconnection Request, but shall not include 
[the]Interconnection Customer's Interconnection Facilities.
    * * *
    Interconnection Facilities shall mean [the]Transmission 
Provider's Interconnection Facilities and [the]Interconnection 
Customer's Interconnection Facilities. Collectively, Interconnection 
Facilities include all facilities and equipment between the 
Generating Facility and the Point of Interconnection, including any 
modification, additions or upgrades that are necessary to physically 
and electrically interconnect the Generating Facility to 
[the]Transmission Provider's Transmission System. Interconnection 
Facilities are sole use facilities by Interconnection Customer and 
shall not include Distribution Upgrades, Stand Alone Network 
Upgrades or Network Upgrades. Multiple Generating Facilities located 
on the same site of Interconnection Customer may share 
Interconnection Facilities.
    Interconnection Facilities Study shall mean a study conducted by 
[the]Transmission Provider or a third party consultant for 
[the]Interconnection Customer to determine a list of facilities 
(including Transmission Provider's Interconnection Facilities and 
Network Upgrades as identified in the [Interconnection System 
Impact]Cluster Study), the cost of those facilities, and the time 
required to interconnect the Generating Facility with [the] 
Transmission Provider's Transmission System. The scope of the study 
is defined in Section 8 of the LGIP[Standard Large Generator 
Interconnection Procedures].
    * * *
    [Interconnection Feasibility Study shall mean a preliminary 
evaluation of the system impact and cost of interconnecting the 
Generating Facility to the Transmission Provider's Transmission 
System, the scope of which is described in Section 6 of the Standard 
Large Generator Interconnection Procedures.]
    [Interconnection Feasibility Study Agreement shall mean the form 
of agreement contained in Appendix 2 of the Standard Large Generator 
Interconnection Procedures for conducting the Interconnection 
Feasibility Study.]
    * * *
    Interconnection Study shall mean any of the following studies: 
the Informational Interconnection [Feasibility]Study, the Cluster 
Study, [the Interconnection System Impact Study,]the Surplus 
Interconnection Service System Impact Study, and the Interconnection 
Facilities Study described in the Standard Large Generator 
Interconnection Procedures.

[[Page 40027]]

    [Interconnection System Impact Study shall mean an engineering 
study that evaluates the impact of the proposed interconnection on 
the safety and reliability of Transmission Provider's Transmission 
System and, if applicable, an Affected System. The study shall 
identify and detail the system impacts that would result if the 
Generating Facility were interconnected without project 
modifications or system modifications, focusing on the Adverse 
System Impacts identified in the Interconnection Feasibility Study, 
or to study potential impacts, including but not limited to those 
identified in the Scoping Meeting as described in the Standard Large 
Generator Interconnection Procedures.]
    [Interconnection System Impact Study Agreement shall mean the 
form of agreement contained in Appendix 3 of the Standard Large 
Generator Interconnection Procedures for conducting the 
Interconnection System Impact Study.]
    * * *
    Material Modification shall mean those modifications that have a 
material impact on the cost or timing of any Interconnection Request 
with a later or equal Queue Position[queue priority date].
    * * *
    Queue Position shall mean the order of a valid Interconnection 
Request, relative to all other pending valid Interconnection 
Requests, that is established based upon the date and time [of 
receipt of the valid] that Interconnection[Request by the 
Transmission Provider] Customer satisfies all of the requirements of 
Sections 3.4 of the LGIP to enter the Cluster Study. All 
Interconnection Requests within a Cluster are considered equally 
queued.
    * * *
    Scoping Meeting shall mean the meeting between representatives 
of[the] Interconnection Customer(s) and Transmission Provider 
conducted for the purpose of discussing the proposed interconnection 
request, alternative interconnection options, to exchange 
information including any transmission data and earlier study 
evaluations that would be reasonably expected to [impact] affect 
such interconnection options, to analyze such information, and to 
determine the potential feasible Points of Interconnection.
    Shared Network Upgrade shall mean a Network Upgrade that has 
been assigned to an Interconnection Customer(s) and is subsequently 
identified as necessary to accommodate the interconnection of the 
Large Generating Facility of an Interconnection Customer(s) in a 
later Cluster and meets the requirements pursuant to the process 
outlined in Section 3.10 of the LGIP.
    Site Control shall mean [documentation reasonably 
demonstrating]the exclusive land right to develop, construct, 
operate, and maintain the Generating Facility over the term of 
expected operation of the Generating Facility. Site Control may be 
demonstrated by documentation establishing: (1) ownership of, a 
leasehold interest in, or a right to develop a site [for the purpose 
of constructing]of sufficient size to construct and operate the 
Generating Facility or multiple Generating Facilities on a shared 
site behind one Point of Interconnection; (2) an option to purchase 
or acquire a leasehold[site for such purpose; or (3) an exclusivity 
or other business relationship between] site of sufficient size to 
construct and operate the Generating Facility; or (3) any other 
documentation that clearly demonstrates the right of Interconnection 
Customer[and the entity having the right to sell, lease or grant 
Interconnection Customer the right to possess or] to exclusively 
occupy a site [for such purpose.]of sufficient size to construct and 
operate the Generating Facility. Site Control for any Co-Located 
Resource is demonstrated by a contract or other agreement 
demonstrating shared land use for all Co-Located Resources that meet 
the aforementioned provisions of this Site Control definition.
    * * *
    Stand Alone Network Upgrades shall mean Network Upgrades that 
are not part of an Affected System that an Interconnection Customer 
may construct without affecting day-to-day operations of the 
Transmission System during their construction and, as indicated 
under proportional impact analysis, are only required for a single 
Interconnection Request. Both [the]Transmission Provider and 
[the]Interconnection Customer must agree as to what constitutes 
Stand Alone Network Upgrades and identify them in Appendix A to the 
Standard Large Generator Interconnection Agreement. If[the] 
Transmission Provider and Interconnection Customer disagree about 
whether a particular Network Upgrade is a Stand Alone Network 
Upgrade, [the]Transmission Provider must provide 
[the]Interconnection Customer a written technical explanation 
outlining why [the]Transmission Provider does not consider the 
Network Upgrade to be a Stand Alone Network Upgrade within 15 days 
of its determination.
    * * *
    Transmission Provider's Interconnection Facilities shall mean 
all facilities and equipment owned, controlled, or operated by 
[the]Transmission Provider from the Point of Change of Ownership to 
the Point of Interconnection as identified in Appendix A to the 
Standard Large Generator Interconnection Agreement, including any 
modifications, additions or upgrades to such facilities and 
equipment. Transmission Provider's Interconnection Facilities are 
sole use facilities and shall not include Distribution Upgrades, 
Stand Alone Network Upgrades or Network Upgrades. Transmission 
Provider's Interconnection Facilities may be shared by more than one 
Generating Facility in a given Cluster Study or by Generating 
Facilities that are part of a Co-Located resource.
    * * *

Article 5. Interconnection Facilities Engineering, Procurement, & 
Construction

    * * *
    5.4 Power System Stabilizers. [The]Interconnection Customer 
shall procure, install, maintain and operate Power System 
Stabilizers in accordance with the guidelines and procedures 
established by the [Applicable Reliability Council]Electric 
Reliability Organization. Transmission Provider reserves the right 
to reasonably establish minimum acceptable settings for any 
installed Power System Stabilizers, subject to the design and 
operating limitations of the [Large]Generating Facility. If the 
[Large]Generating Facility's Power System Stabilizers are removed 
from service or not capable of automatic operation, Interconnection 
Customer shall immediately notify Transmission Provider's system 
operator, or its designated representative. The requirements of this 
paragraph shall not apply to wind generators.
    * * *

Article 7. Metering

    7.1 General. Each Party shall comply with the[Applicable 
Reliability Council] Electric Reliability Organization requirements. 
Unless otherwise agreed by the Parties, Transmission Provider shall 
install Metering Equipment at the Point of Interconnection prior to 
any operation of the [Large]Generating Facility and shall own, 
operate, test and maintain such Metering Equipment. Power flows to 
and from the [Large]Generating Facility shall be measured at or, at 
Transmission Provider's option, compensated to, the Point of 
Interconnection. Transmission Provider shall provide metering 
quantities, in analog and/or digital form, to Interconnection 
Customer upon request. Interconnection Customer shall bear all 
reasonable documented costs associated with the purchase, 
installation, operation, testing and maintenance of the Metering 
Equipment.
    * * *

Article 9. Operations

    9.1 General. Each Party shall comply with the[Applicable 
Reliability Council] Electric Reliability Organization requirements. 
Each Party shall provide to the other Party all information that may 
reasonably be required by the other Party to comply with Applicable 
Laws and Regulations and Applicable Reliability Standards.
    9.2 [Control Area]Balancing Authority Area Notification. At 
least three months before Initial Synchronization Date, 
Interconnection Customer shall notify Transmission Provider in 
writing of the [Control Area]Balancing Authority Area in which the 
[Large]Generating Facility will be located. If Interconnection 
Customer elects to locate the [Large]Generating Facility in 
a[Control Area] Balancing Authority Area other than the [Control 
Area]Balancing Authority Area in which the [Large]Generating 
Facility is physically located, and if permitted to do so by the 
relevant transmission tariffs, all necessary arrangements, including 
but not limited to those set forth in Article 7 and Article 8 of 
this LGIA, and remote [Control Area]Balancing Authority Area 
generator interchange agreements, if applicable, and the appropriate 
measures under such agreements, shall be executed and implemented 
prior to the placement of the[Large] Generating Facility in the 
other [Control Area]Balancing Authority Area.
    * * *

[[Page 40028]]

    9.4 Interconnection Customer Obligations. Interconnection 
Customer shall at its own expense operate, maintain and control the 
[Large]Generating Facility and Interconnection Customer's 
Interconnection Facilities in a safe and reliable manner and in 
accordance with this LGIA. Interconnection Customer shall operate 
the [Large]Generating Facility and Interconnection Customer's 
Interconnection Facilities in accordance with all applicable 
requirements of the [Control Area]Balancing Authority Area of which 
it is part, as such requirements are set forth in Appendix C, 
Interconnection Details, of this LGIA. Appendix C, Interconnection 
Details, will be modified to reflect changes to the requirements as 
they may change from time to time. Either Party may request that the 
other Party provide copies of the requirements set forth in Appendix 
C, Interconnection Details, of this LGIA.
    * * *

9.6 Reactive Power and Primary Frequency Response

9.6.1 Power Factor Design Criteria

    9.6.1.1 Synchronous Generation. Interconnection Customer shall 
design the [Large]Generating Facility to maintain a composite power 
delivery at continuous rated power output at the Point of 
Interconnection at a power factor within the range of 0.95 leading 
to 0.95 lagging, unless [the]Transmission Provider has established 
different requirements that apply to all synchronous generators in 
the [Control Area]Balancing Authority Area on a comparable basis.
    9.6.1.2 Non-Synchronous Generation. Interconnection Customer 
shall design the [Large]Generating Facility to maintain a composite 
power delivery at continuous rated power output at the high-side of 
the generator substation at a power factor within the range of 0.95 
leading to 0.95 lagging, unless[the] Transmission Provider has 
established a different power factor range that applies to all non-
synchronous generators in the [Control Area]Balancing Authority Area 
on a comparable basis. This power factor range standard shall be 
dynamic and can be met using, for example, power electronics 
designed to supply this level of reactive capability (taking into 
account any limitations due to voltage level, real power output, 
etc.) or fixed and switched capacitors, or a combination of the two. 
This requirement shall only apply to newly interconnecting non-
synchronous generators that have not yet executed a Facilities Study 
Agreement as of the effective date of the Final Rule establishing 
this requirement (Order No. 827).
    9.6.2 Voltage Schedules. Once Interconnection Customer has 
synchronized the [Large]Generating Facility with the Transmission 
System, Transmission Provider shall require Interconnection Customer 
to operate the[Large] Generating Facility to produce or absorb 
reactive power within the design limitations of the 
[Large]Generating Facility set forth in Article 9.6.1 (Power Factor 
Design Criteria). Transmission Provider's voltage schedules shall 
treat all sources of reactive power in the [Control Area]Balancing 
Authority Area in an equitable and not unduly discriminatory manner. 
Transmission Provider shall exercise Reasonable Efforts to provide 
Interconnection Customer with such schedules at least one (1) day in 
advance, and may make changes to such schedules as necessary to 
maintain the reliability of the Transmission System. Interconnection 
Customer shall operate the [Large]Generating Facility to maintain 
the specified output voltage or power factor at the Point of 
Interconnection within the design limitations of the 
[Large]Generating Facility set forth in Article 9.6.1 (Power Factor 
Design Criteria). If Interconnection Customer is unable to maintain 
the specified voltage or power factor, it shall promptly notify the 
System Operator.
    9.6.2.1 Voltage Regulators. Whenever the [Large]Generating 
Facility is operated in parallel with the Transmission System and 
voltage regulators are capable of operation, Interconnection 
Customer shall operate the[Large] Generating Facility with its 
voltage regulators in automatic operation. If the [Large]Generating 
Facility's voltage regulators are not capable of such automatic 
operation, Interconnection Customer shall immediately notify 
Transmission Provider's system operator, or its designated 
representative, and ensure that such [Large]Generating Facility's 
reactive power production or absorption (measured in MVARs) are 
within the design capability of the [Large]Generating Facility's 
generating unit(s) and steady state stability limits. 
Interconnection Customer shall not cause its[Large] Generating 
Facility to disconnect automatically or instantaneously from the 
Transmission System or trip any generating unit comprising the 
[Large]Generating Facility for an under or over frequency condition 
unless the abnormal frequency condition persists for a time period 
beyond the limits set forth in ANSI/IEEE Standard C37.106, or such 
other standard as applied to other generators in the [Control 
Area]Balancing Authority Area on a comparable basis.
    * * *
    9.7.3 [Under-Frequency and Over Frequency Conditions]Ride 
Through Capability and Performance. The Transmission System is 
designed to automatically activate a load-shed program as required 
by the [Applicable Reliability Council]Electric Reliability 
Organization in the event of an underfrequency system disturbance. 
Interconnection Customer shall implement under-frequency and over-
frequency relay set points for the [Large]Generating Facility as 
required by the[Applicable Reliability Council] Electric Reliability 
Organization to ensure frequency ``ride through'' capability of the 
Transmission System. [Large]Generating Facility response to 
frequency deviations of pre-determined magnitudes, both under-
frequency and over-frequency deviations, shall be studied and 
coordinated with Transmission Provider in accordance with Good 
Utility Practice. Interconnection Customer shall also implement 
under-voltage and over-voltage relay set points, or equivalent 
electronic controls, to ensure voltage ``ride through'' capability 
of the Transmission System. The term ``ride through'' as used herein 
shall mean the ability of a Generating Facility to stay connected to 
and synchronized with the Transmission System during system 
disturbances within a range of under-frequency, [and]over-frequency, 
under-voltage, and over-voltage conditions, in accordance with Good 
Utility Practice and consistent with any standards and guidelines 
that are applied to other Generating Facilities in the Balancing 
Authority Area on a comparable basis. During abnormal frequency 
conditions and voltage conditions within the ``no trip zone'' 
defined by Reliability Standard PRC-024-2 or its successor 
standards, non-synchronous Generating Facilities must maintain real 
power production at pre-disturbance levels unless providing primary 
frequency response or fast frequency response and must provide 
dynamic reactive power to maintain system voltage in accordance with 
the Generating Facility's voltage schedule.
    * * *

Article 11. Performance Obligation

    11.3 Network Upgrades and Distribution Upgrades. Transmission 
Provider or Transmission Owner shall design, procure, construct, 
install, and own the Network Upgrades and Distribution Upgrades 
described in Appendix A, Interconnection Facilities, Network 
Upgrades and Distribution Upgrades. [The]Interconnection Customer 
shall be responsible for all costs related to Distribution Upgrades. 
Unless Transmission Provider or Transmission Owner elects to fund 
the capital for the Network Upgrades, they shall be solely funded by 
Interconnection Customer.
    11.3.1 Shared Network Upgrades. Interconnection Customer shall 
pay Transmission Provider or Transmission Owner in a one-time lump 
sum payment for Shared Network Upgrade(s) identified pursuant to 
section 3.10 of the LGIP and memorialized in Appendix A of the LGIA. 
Transmission Provider or Transmission Owner subsequently shall 
disburse the one-time lump sum payment to appropriate 
Interconnection Customer(s) from an earlier Cluster(s) with 
previously assigned costs associated with the Shared Network 
Upgrade(s) in accordance with Appendix 17 to the LGIP. Where 
applicable, Interconnection Customer(s) from an earlier Cluster with 
previously assigned costs associated with the Shared Network 
Upgrades shall assign any transmission credits associated with the 
portion of the Shared Network Upgrade that new Interconnection 
Customer reimbursed to the new Interconnection Customer, pursuant to 
Article 11.4.1 of the LGIA. If the Shared Network Upgrade is not in 
service, Interconnection Customer shall not be required to make a 
payment under Appendix 17 to the LGIP until the Shared Network 
Upgrade is in service. In the event that Interconnection Customer 
fails to meet its obligation to fund Shared Network Upgrades, 
Transmission Provider or Transmission Owner shall not be responsible 
for Interconnection Customer's funding obligation.

[[Page 40029]]

    * * *

Article 13. Emergencies

    * * *
    13.2 Obligations. Each Party shall comply with the Emergency 
Condition procedures of the applicable ISO/RTO, NERC, the 
[Applicable Reliability Council]Electric Reliability Organization, 
Applicable Laws and Regulations, and any emergency procedures agreed 
to by the Joint Operating Committee.
    * * *

Article 22. Confidentiality

    * * *
    22.1.11 Subject to the exception in Article 22.1.10, any 
information that a Party claims is competitively sensitive, 
commercial or financial information under this LGIA (``Confidential 
Information``) shall not be disclosed by the other Party to any 
person not employed or retained by the other Party, except to the 
extent disclosure is (i) required by law; (ii) reasonably deemed by 
the disclosing Party to be required to be disclosed in connection 
with a dispute between or among the Parties, or the defense of 
litigation or dispute; (iii) otherwise permitted by consent of the 
other Party, such consent not to be unreasonably withheld; or (iv) 
necessary to fulfill its obligations under this LGIA or as a 
transmission service provider or a [Control Area] Balancing 
Authority Area operator including disclosing the Confidential 
Information to an RTO or ISO or to a regional or national 
reliability organization. The Party asserting confidentiality shall 
notify the other Party in writing of the information it claims is 
confidential. Prior to any disclosures of the other Party's 
Confidential Information under this subparagraph, or if any third 
party or Governmental Authority makes any request or demand for any 
of the information described in this subparagraph, the disclosing 
Party agrees to promptly notify the other Party in writing and 
agrees to assert confidentiality and cooperate with the other Party 
in seeking to protect the Confidential Information from public 
disclosure by confidentiality agreement, protective order or other 
reasonable measures.
    * * *

Article 24. Information Requirements

    * * *
    24.3 Updated Information Submission by Interconnection Customer. 
The updated information submission by Interconnection Customer, 
including manufacturer information, shall occur no later than one 
hundred eighty (180) Calendar Days prior to the Trial Operation. 
Interconnection Customer shall submit a completed copy of the 
[Large]Generating Facility data requirements contained in Appendix 1 
to the LGIP. It shall also include any additional information 
provided to Transmission Provider for the [Feasibility]Cluster Study 
and Facilities Study. Information in this submission shall be the 
most current [Large]Generating Facility design or expected 
performance data. Information submitted for stability models shall 
be compatible with Transmission Provider standard models. If there 
is no compatible model, Interconnection Customer will work with a 
consultant mutually agreed to by the Parties to develop and supply a 
standard model and associated information.
    If Interconnection Customer's data is materially different from 
what was originally provided to Transmission Provider pursuant to 
the Interconnection Study Agreement between Transmission Provider 
and Interconnection Customer, then Transmission Provider will 
conduct appropriate studies to determine the impact on Transmission 
Provider Transmission System based on the actual data submitted 
pursuant to this Article 24.3. [The]Interconnection Customer shall 
not begin Trial Operation until such studies are completed.
    * * *

Appendix A to LGIA--Interconnection Facilities, Network Upgrades and 
Distribution Upgrades

    1. Interconnection Facilities:
    (a) {insert Interconnection Customer's Interconnection 
Facilities{time} :
    (b) {insert Transmission Provider's Interconnection 
Facilities{time} :
    2. Network Upgrades:
    (a) {insert Stand Alone Network Upgrades{time} :
    (b) {insert Other Network Upgrades{time} :
    (c) {Insert Shared Network Upgrades}:
    * * *

Appendix E--Compilation of Proposed Changes to the pro forma SGIA

    Note: Proposed deletions are in brackets and proposed additions 
are in italics.

Article 1. Scope and Limitations of Agreement

    * * *
    1.5 Responsibilities of the Parties
    * * *
    1.5.7 [The]Interconnection Customer shall ensure ``frequency 
ride through'' capability and ``voltage ride through'' capability of 
its Small Generating Facility. [The]Interconnection Customer shall 
enable these capabilities such that its Small Generating Facility 
shall not disconnect automatically or instantaneously from the 
system or equipment of [the]Transmission Provider and any Affected 
Systems for a defined under-frequency or over-frequency condition, 
or an under-voltage or over-voltage condition, as tested pursuant to 
section 2.1 of this agreement. The defined conditions shall be in 
accordance with Good Utility Practice and consistent with any 
standards and guidelines that are applied to other generating 
facilities in the Balancing Authority Area on a comparable basis. 
The Small Generating Facility's protective equipment settings shall 
comply with[the] Transmission Provider's automatic load-shed 
program. [The]Transmission Provider shall review the protective 
equipment settings to confirm compliance with the automatic load-
shed program. The term ``ride through'' as used herein shall mean 
the ability of a Small Generating Facility to stay connected to and 
synchronized with the system or equipment of [the]Transmission 
Provider and any Affected Systems during system disturbances within 
a range of conditions, in accordance with Good Utility Practice and 
consistent with any standards and guidelines that are applied to 
other generating facilities in the Balancing Authority Area on a 
comparable basis. The term ``frequency ride through'' as used herein 
shall mean the ability of a Small Generating Facility to stay 
connected to and synchronized with the system or equipment of 
[the]Transmission Provider and any Affected Systems during system 
disturbances within a range of under-frequency and over-frequency 
conditions, in accordance with Good Utility Practice and consistent 
with any standards and guidelines that are applied to other 
generating facilities in the Balancing Authority Area on a 
comparable basis. The term ``voltage ride through'' as used herein 
shall mean the ability of a Small Generating Facility to stay 
connected to and synchronized with the system or equipment of 
[the]Transmission Provider and any Affected Systems during system 
disturbances within a range of under-voltage and over-voltage 
conditions, in accordance with Good Utility Practice and consistent 
with any standards and guidelines that are applied to other 
generating facilities in the Balancing Authority Area on a 
comparable basis. During abnormal frequency conditions and voltage 
conditions within the ``no trip zone'' defined by Reliability 
Standard PRC-024-2 or its successor standards, non-synchronous Small 
Generating Facilities must maintain real power production at pre-
disturbance levels unless providing primary frequency response or 
fast frequency response and must provide dynamic reactive power to 
maintain system voltage in accordance with the Small Generating 
Facility's voltage schedule.
    1.6 Parallel Operation Obligations. Once the Small Generating 
Facility has been authorized to commence parallel operation, 
[the]Interconnection Customer shall abide by all rules and 
procedures pertaining to the parallel operation of the Small 
Generating Facility in the applicable [control area]Balancing 
Authority Area, including, but not limited to; 1) the rules and 
procedures concerning the operation of generation set forth in the 
Tariff or by the applicable system operator(s) for [the] 
Transmission Provider's Transmission System and; 2) the Operating 
Requirements set forth in Attachment 5 of this Agreement.
    * * *
    1.8 Reactive Power and Primary Frequency Response
    1.8.1 Power Factor Design Criteria
    1.8.1.1 Synchronous Generation. [The]Interconnection Customer 
shall design its Small Generating Facility to maintain a composite 
power delivery at continuous rated power output at the Point of 
Interconnection at a power factor within the range of 0.95 leading 
to 0.95 lagging, unless [the]Transmission Provider has established 
different requirements that apply to all similarly situated 
synchronous generators in the [control area]Balancing Authority Area 
on a comparable basis.
    1.8.1.2 Non-Synchronous Generation. [The]Interconnection 
Customer shall design its Small Generating Facility to maintain a 
composite power delivery at continuous rated power output at the 
high-side of the generator substation at a power factor within

[[Page 40030]]

the range of 0.95 leading to 0.95 lagging, unless [the]Transmission 
Provider has established a different power factor range that applies 
to all similarly situated non-synchronous generators in the [control 
area]Balancing Authority Area on a comparable basis. This power 
factor range standard shall be dynamic and can be met using, for 
example, power electronics designed to supply this level of reactive 
capability (taking into account any limitations due to voltage 
level, real power output, etc.) or fixed and switched capacitors, or 
a combination of the two. This requirement shall only apply to newly 
interconnecting non-synchronous generators that have not yet 
executed a Facilities Study Agreement as of the effective date of 
the Final Rule establishing this requirement (Order No. 827).
    * * *
    1.8.4.1 Governor or Equivalent Controls. Whenever the Small 
Generating Facility is operated in parallel with the Transmission 
System, Interconnection Customer shall operate the Small Generating 
Facility with its governor or equivalent controls in service and 
responsive to frequency. Interconnection Customer shall: (1) in 
coordination with Transmission Provider and/or the relevant 
[b]Balancing [a]Authority, set the deadband parameter to: (1) a 
maximum of 0.036 Hz and set the droop parameter to a 
maximum of 5 percent; or (2) implement the relevant droop and 
deadband settings from an approved NERC Reliability Standard that 
provides for equivalent or more stringent parameters. 
Interconnection Customer shall be required to provide the status and 
settings of the governor or equivalent controls to Transmission 
Provider and/or the relevant [b]Balancing [a]Authority upon request. 
If Interconnection Customer needs to operate the Small Generating 
Facility with its governor or equivalent controls not in service, 
Interconnection Customer shall immediately notify Transmission 
Provider and the relevant [b]Balancing [a]Authority, and provide 
both with the following information: (1) the operating status of the 
governor or equivalent controls (i.e., whether it is currently out 
of service or when it will be taken out of service); (2) the reasons 
for removing the governor or equivalent controls from service; and 
(3) a reasonable estimate of when the governor or equivalent 
controls will be returned to service. Interconnection Customer shall 
make Reasonable Efforts to return its governor or equivalent 
controls into service as soon as practicable. Interconnection 
Customer shall make Reasonable Efforts to keep outages of the Small 
Generating Facility's governor or equivalent controls to a minimum 
whenever the Small Generating Facility is operated in parallel with 
the Transmission System.
    * * *
    1.8.4.4 Electric Storage Resources. Interconnection Customer 
interconnecting an electric storage resource shall establish an 
operating range in Attachment 5 of its SGIA that specifies a minimum 
state of charge and a maximum state of charge between which the 
electric storage resource will be required to provide primary 
frequency response consistent with the conditions set forth in 
Sections 1.8.4, 1.8.4.1, 1.8.4.2 and 1.8.4.3 of this Agreement. 
Attachment 5 shall specify whether the operating range is static or 
dynamic, and shall consider: (1) the expected magnitude of frequency 
deviations in the interconnection; (2) the expected duration that 
system frequency will remain outside of the deadband parameter in 
the interconnection; (3) the expected incidence of frequency 
deviations outside of the deadband parameter in the interconnection; 
(4) the physical capabilities of the electric storage resource; (5) 
operational limitations of the electric storage resource due to 
manufacturer specifications; and (6) any other relevant factors 
agreed to by Transmission Provider and Interconnection Customer, and 
in consultation with the relevant transmission owner or [b]Balancing 
[a]Authority as appropriate. If the operating range is dynamic, then 
Attachment 5 must establish how frequently the operating range will 
be reevaluated and the factors that may be considered during its 
reevaluation.
    * * *

Attachment 1

Glossary of Terms

    * * *
    Balancing Authority shall mean an entity that integrates 
resource plans ahead of time, maintains load interchange-generation 
balance within a Balancing Authority Area, and supports 
interconnection frequency in real time.
    Balancing Authority Area shall mean the collection of 
generation, transmission, and loads within the metered boundaries of 
the Balancing Authority. The Balancing Authority maintains load-
resource balance within this area.
    * * *
    Operating Requirements--Any operating and technical requirements 
that may be applicable due to Regional Transmission Organization, 
Independent System Operator, [control area]Balancing Authority Area, 
or [the]Transmission Providers requirements, including those set 
forth in the Small Generator Interconnection Agreement.

United States of America--Federal Energy Regulatory Commission

Improvements to Generator Interconnection Procedures and Agreements

Docket No. RM22-14-000

(Issued June 16, 2022)

DANLY, Commissioner, concurring:

    1. I welcome improvements to existing generator interconnection 
procedures. I would prefer that Regional Transmission Organizations 
(RTOs) and other interested public utilities simply file their own 
proposals under section 205 of the Federal Power Act (FPA).\1\ They 
are fully capable of proposing rate changes and reforms on their 
own.\2\
---------------------------------------------------------------------------

    \1\ 16 U.S.C. Sec.  824d.
    \2\ See, e.g., PJM Interconnection, L.L.C., Filing, Docket No. 
ER22-2110 (filed June 14, 2022).
---------------------------------------------------------------------------

    2. If this sounds familiar, it is because I wrote the same thing 
in response to the Commission's recent Notice of Proposed Rulemaking 
(NOPR) on transmission planning.\3\ There, however, I dissented from 
the NOPR because I think it highly unlikely that the Commission can 
make the required section 206 finding that existing transmission 
planning regimes across the United States--in RTO and non-RTO 
regions alike--are so comprehensively unjust and unreasonable as to 
justify scrapping them, and I likewise strongly doubt that the 
Commission can justify the pervasive, micro-managing ``reforms'' we 
propose to make mandatory.\4\ That entire exercise appears to be 
primarily an effort to socialize the massive costs of the 
transmission network build-out required to rush the development of 
renewable generation.\5\ We await the record evidence in that 
proceeding and we shall see what the record supports.
---------------------------------------------------------------------------

    \3\ See Building for the Future Through Elec. Reg'l Transmission 
Planning & Cost Allocation & Generator Interconnection, 179 FERC ] 
61,028 (2022) (Danly, Comm'r, dissenting).
    \4\ See id. (Danly, Comm'r, dissenting).
    \5\ Id. (Danly, Comm'r, dissenting at P 3).
---------------------------------------------------------------------------

    3. In contrast to the transmission planning NOPR, I concur with 
the issuance of this NOPR \6\ because I think it is far more likely 
that the record evidence will support a section 206 \7\ step-one 
finding that at least some aspects of current interconnection rules 
are unjust and unreasonable. The hallmarks of the current regime are 
easy access and lengthy, unmanageable queues--particularly in RTOs. 
Meanwhile, the Commission regularly grants unlawful retroactive 
waivers when favored resources miss binding tariff deadlines. This 
undermines the RTOs' ability to manage their queues. Reforms (and 
greater Commission self-discipline) are desperately needed.
---------------------------------------------------------------------------

    \6\ Improvements to Generator Interconnection Procedures & 
Agreements, 179 FERC ] 61,194 (2022).
    \7\ 16 U.S.C. Sec.  824e.
---------------------------------------------------------------------------

    4. I would prefer RTOs and transmission providers come up with 
their own reforms through section 205 filings, rather than have the 
Commission issue omnibus proposals covering lists of every little 
thing commissioners would like to see done differently. Proposals 
have a propensity to turn into rules. The FPA, however, only allows 
the Commission to impose its own rates when the requisite section 
206 showings have been made: that each existing interconnection 
tariff subject to revision in this NOPR is unjust and unreasonable, 
and that each aspect of the proposed replacement rate is just and 
reasonable. I am suspicious whether the record will support such 
showings in every region of the country, including in non-RTO 
regions, particularly when it comes to imposing the extremely broad 
replacement rates contemplated by this NOPR. I welcome detailed 
evidence on these points from all parties: identify the aspects of 
the existing rates that are unjust and unreasonable, or not, with 
supporting, or opposing, legal argument and factual evidence, and 
identify the aspects of the proposed replacement rates that are 
unjust and unreasonable, or not, with supporting, or opposing, legal 
argument and factual evidence. In each case, the more specific the 
arguments and evidence submitted, the

[[Page 40031]]

better. In the transmission planning NOPR, I detailed the types of 
specific arguments and evidence that I wished to see, and I solicit 
the same here.\8\ This information is crucial to determine whether 
the Commission's exercise of its remedial rate making authority 
under section 206 is warranted.
---------------------------------------------------------------------------

    \8\ See Building for the Future Through Elec. Reg'l Transmission 
Planning & Cost Allocation & Generator Interconnection, 179 FERC ] 
61,028 (Danly, Comm'r, dissenting at PP 22-26).
---------------------------------------------------------------------------

    5. My preliminary view is that while some elements of the 
proposed replacement rates could be justified, others very likely 
might not. I suspect we might be able to require first-ready, first-
served clustering, more robust milestone deposits and showings (site 
control and commercial readiness), more binding RTO and transmission 
provider deadlines, and elimination of the Commission's routine 
practice of granting unlawful retroactive waivers to every favored 
resource that misses a deadline. If we did this, we could be well on 
our way to solving existing interconnection problems. This NOPR 
includes what I think are likely reasonable proposals in many of 
these areas, subject to the actual evidence submitted in the record.
    6. In other areas, I think the NOPR goes too far. Like the 
transmission expansion planning NOPR, many of the ideas floated in 
this NOPR seem intended to further prop up renewable resources and 
may be unduly discriminatory. I specifically seek comment on the 
following aspects of the proposal:
    7. First, does the ``shared network upgrade'' cost proposal, 
where subsequent interconnecting resources pay a share of earlier 
interconnecting resources' previously allocated network upgrade 
costs, eliminate a true ``barrier to entry'' for all types of 
resources or only for favored, small, renewable resources? \9\ Is it 
effective to reduce existing incentives to submit multiple 
speculative requests? \10\
---------------------------------------------------------------------------

    \9\ Improvements to Generator Interconnection Procedures & 
Agreements, 179 FERC ] 61,194 at PP 90, 97.
    \10\ See id. P 88.
---------------------------------------------------------------------------

    8. Second, does the proposed ``resource solicitation study'' 
process, which grants state-favored resources a ``dedicated 
studies'' process, give renewable resources undue preference in the 
development or queue process? \11\ Would it be less unduly 
discriminatory if it were resource neutral, meaning that it would 
apply if a state adopts any portfolio standard, regardless of the 
type of resource supported?
---------------------------------------------------------------------------

    \11\ Id. P 221.
---------------------------------------------------------------------------

    9. Third, the NOPR blurs the lines between generation and 
transmission facilities, proposing to require study of several 
``alternative transmission technologies,'' and ``seek[ing] comment 
on whether storage that performs a transmission function, 
synchronous condensers, and voltage source converters should be 
included in the list.'' \12\ The FPA, however, distinguishes between 
``Federal regulation of matters relating to generation'' and ``that 
part of such [utility] business which consists of the transmission 
of electric energy in interstate commerce.'' \13\ As I have 
previously explained with respect to storage that performs a 
transmission function, I disagree that the Commission can mix and 
mingle the two different types of facilities, and the different 
regulatory regimes associated with each, according to the most 
favorable treatment for a preferred resource, because the FPA does 
not contemplate such treatment and it likely is unduly 
discriminatory.\14\
---------------------------------------------------------------------------

    \12\ Id. P 300.
    \13\ 16 U.S.C. Sec.  824(a).
    \14\ See Midcontinent Indep. Sys. Operator, Inc., 172 FERC ] 
61,132 (2020) (Danly, Comm'r, dissenting) (outlining jurisdictional 
arguments against treating storage as transmission).
---------------------------------------------------------------------------

    10. Other than storage that can serve a transmission function, 
what equipment on our list also blurs the lines? \15\ Is a 
traditional ``generation'' resource unduly discriminated against 
when it is denied full cost-of-service treatment if it can also 
perform a ``transmission'' function? I seek legal argument regarding 
these statutory distinctions, and factual evidence on when a 
facility is ``generation,'' or ``transmission,'' and how to (and 
whether we must) distinguish between the two.
---------------------------------------------------------------------------

    \15\ See Improvements to Generator Interconnection Procedures & 
Agreements, 179 FERC ] 61,194 at P 298.
---------------------------------------------------------------------------

    11. Fourth, which of the interconnection and queue problems 
described in this NOPR, if any, apply to small generator 
interconnection procedures? \16\ Are any of the proposed reforms 
outlined in the NOPR for large generator interconnection procedures 
required to ensure just and reasonable rates for small generators? I 
think the answer likely is no.
---------------------------------------------------------------------------

    \16\ See id. P 5.
---------------------------------------------------------------------------

    12. I look forward to reviewing the record evidence.
    For these reasons, I respectfully concur.
-----------------------------------------------------------------------
James P. Danly,
Commissioner.

United States of America--Federal Energy Regulatory Commission

Improvements to Generator Interconnection Procedures and Agreements

Docket No. RM22-14-000

(Issued June 16, 2022)

CHRISTIE, Commissioner, concurring:

    1. Today's Notice of Proposed Rulemaking (NOPR) includes a 
number of significant revisions to the Commission's pro forma 
interconnection queue requirements that appear to be based on robust 
evidence and to address real problems ailing the interconnection 
queues. I have long favored many of these proposals, which have been 
discussed in various technical conferences and in the Joint NARUC-
FERC Task Force. These include (to name a few): (i) requiring 
transmission providers to adopt generally a ``first-ready, first 
served'' process for managing their interconnection queues; \1\ (ii) 
requiring transmission providers to provide more information to 
potential interconnecting generators earlier in the process to 
facilitate greater cost certainty; \2\ (iii) requiring generators in 
a later cluster to share the costs of previously identified network 
upgrades to the extent they directly benefit from them; \3\ (iv) 
requiring stricter showings of readiness to enter into and stay in 
the queue; \4\ (v) requiring an affected system study process and 
related pro forma study and construction agreements; \5\ and (vi) 
requiring greater flexibility for co-located resources and for the 
use of surplus interconnection service.\6\
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    \1\ NOPR at PP 64-79.
    \2\ Id. PP 42-52.
    \3\ Id. PP 98-101.
    \4\ Id. PP 115-123, 128-137, and 140-148.
    \5\ Id. PP 183-193 and 197-204.
    \6\ Id. PP 242-245 and 264.
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    2. While I concur in issuing this NOPR and I support the queue 
reform provisions noted above, I also have to note that there are a 
few additional proposals in this NOPR that are not yet ready for 
prime time, either because they are potentially good ideas that have 
simply not been fully developed, or may not be a good ideas at all. 
I am willing, however, to put this NOPR out for comment on them. I 
thus encourage all interested parties to use the comment period to 
identify areas in which these proposals either need additional 
detail or may simply not be well-conceived, particularly those that 
may raise reliability concerns or engage in unhelpful or unnecessary 
micromanagement.
    3. For example, I am wary of any Commission requirement that 
would replace the operating assumptions developed and used by 
transmission providers, whose primary job it is to ensure system 
reliability, with those requested by self-interested generators or 
resources seeking to interconnect to the grid.\7\ So, to the extent 
allowing storage (or hybrid) resources to elect whether to be 
studied as charging at peak load (and/or extending greater 
flexibility to the operating assumptions used to other variable 
resources) would come at the risk of system reliability,\8\ I want 
to hear those concerns. There are also a number of unanswered 
questions regarding the NOPR's monetary penalty proposal, such as 
how it will work (or not work) in RTO/ISO regions, and whether or 
not it will actually incentivize timelier completion of 
interconnection studies.\9\ I am conceptually in favor of imposing 
guidelines for completion of studies, but the penalty provisions do 
not answer definitively the most important question of all: Who will 
pay these penalties in an RTO or ISO which has no stockholders? 
Consumers certainly should not pay, directly or indirectly. Also, 
while I am in favor of requiring transmission providers to consider 
seriously alternative solutions to new transmission build that could 
be less costly, I could have supported a simple requirement to do so 
without proposing a mandatory list of specific

[[Page 40032]]

technologies or commercial products and, in doing so, replacing the 
judgment and expertise of grid experts with our own.\10\
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    \7\ Id. PP 280-288.
    \8\ Id. P 286 (seeking comment ``on whether the Commission 
should expand this reform to address operating assumptions for 
additional generating facility technologies that may currently be 
inaccurately modeled, such as variable energy resources'').
    \9\ Id. P 172 (seeking comment on ``whether there is a more 
appropriate method for assigning [] penalties in RTOs/ISOs'' and 
``whether monetary penalties may have adverse consequences [such as] 
incenting timeliness over accuracy'').
    \10\ Id. PP 298-301. Much of this NOPR's long descriptions of 
the various specific proposed mandatory alternative technologies 
read more like a college seminar term paper than a serious exercise 
of this Commission's legal authority. See, e.g., id. P 298. 
Engineers and planners who work in the field every day know well 
what these technologies are and which ones may be feasible or not.
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    4. Finally, with regard to the queue reforms described in P 1 
above, while I support them, I also caution strongly that we should 
avoid undermining through this NOPR what the RTOs/ISOs, working 
through their stakeholder processes, are already doing to fix their 
own queue problems. We should recognize that each RTO/ISO is 
different and faces unique local challenges and needs. The queue 
reforms proposed in today's NOPR should be seen more as guideposts 
or general standards rather than unyielding mandates that refuse to 
take local solutions into consideration. I would allow RTOs/ISOs the 
opportunity to demonstrate that if their own efforts to enact queue 
reforms achieve the same goals in a different, but equally effective 
manner, their individual reform may be acceptable in complying with 
any final rule. While this NOPR currently recognizes the potential 
for regional flexibility,\11\ I hope the need for such flexibility 
is explicitly memorialized in any final rule.
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    \11\ Id. P 6.
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    5. I look forward to reading the comments submitted in this 
proceeding and greatly appreciate the time and effort taken by all 
to provide the Commission with this important feedback.
    For these reasons, I respectfully concur.
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Mark C. Christie,
Commissioner.

[FR Doc. 2022-13470 Filed 7-1-22; 8:45 am]
BILLING CODE 6717-01-P