Comment: US FERC - does the rhetoric match the results?

Steve Barlas

No top US Federal official has been more pro-renewables, at least in his rhetoric, than Jon Wellinghoff, the chairman of the Federal Energy Regulatory Commission (FERC). But has this talk resulted in action?

The Federal Energy Regulatory Commission (FERC) has responsibility, sometimes shared with other Federal and State agencies, for approving new transmission lines to carry renewable energy to retail and wholesale (like electric utilities) customers.

In mid-October, Wellinghoff released the commission's Strategic Plan for FY2009-2014. But it was eerily quiet on the subject of renewables. The Plan's section on infrastructure does not talk about renewables, except to glancingly note that by fiscal 2014 reliability parameters will be finalised, which could affect national goals of reducing carbon and increasing the penetration of renewable energy resources on the electric transmission grid.

Really, the only place the Plan mentions increasing renewable energy is, paradoxically, in an item on natural gas. It states that by fiscal 2014, 100% of jurisdictional natural gas companies "will be examined for feasibility of installing waste heat recovery systems." That brought chortles from natural gas executives. There are 6 such systems in existence today, four in remote areas in very rural North Dakota. Compressor stations are in the middle of nowhere; there are no industrial factories or electric transmission lines (there is that lack of transmission infrastructure raising its head again) anywhere in sight. Moreover, the cost of fitting compressors for waste heat recovery would ostensibly be born by the pipeline companies, not their customers.

No regulatory relief yet for solar

While Wellinghoff has paid lip service to the development of renewable energy sources, some renewable energy providers think the Wellinghoff FERC is "drowning them" in paperwork, inhibiting their business.

That is the criticism leveled by SunEdison, a company which puts roof- top solar systems on commercial buildings, hospitals, retail offices and the like. SunEdison's operations currently comprise more than 38 MW of generating capacity, installed in more than 150 locations in nine states, with an average capacity of approximately 250 kW. The problem is that each time Sun sets up an individual solar system for a business, which uses the solar power for itself, and does not sell any of it off, Sun has to file what is called a QF self-certification with FERC.

QF status exempts a generator from the terms of the Public Utility Holding Company Act of 2005 (PUHCA ). That law in turn imposes regulatory requirements. But Sun argues that simply putting together a QF application kills the company's resources. So Sun wants FERC to simply waive the requirements of PUHCA 2005 without forcing Sun to file QFs for every small roof top system it installs.

In late November, FERC gave its answer: "No." It said its self-certification process "has been designed to be relatively quick and easy."

Those are the famous last words of all US regulators, of course. It should be noted, however, that FERC has recently proposed amendments to its regulations so that generating facilities of 1 MW or smaller claiming QF status will be exempt from the requirement that they make a filing. Should the amendments be finalised as proposed, SunEdison will get its wish, eventually.

Wind fares much better

FERC was more forthcoming with First Wind than with SunEdison. First Wind had asked the commission to give its Milford Wind Power project "firm priority rights" for the 88-mile, 345 kV transmission line it is building to connect 1000 MW of wind capacity in Delta, Utah to a 488-mile, high-voltage, direct current line over which power can be delivered to markets in southern California.

First Wind has entered into a 20-year power purchase agreement (PPA) to sell the entire output of Milford's 203.5 MW Phase I stage to Southern California Public Power Authority (SCPPA). Because of that arrangement, FERC agreed to exempt Milford from a number of FERC tariff requirements such as the open access requirement.

That request had been supported by renewable industry trade associations such as the American Wind Energy Association (AWEA) and Solar Energy Industries Association (SEIA), which both saw a positive FERC reply as setting an important precedent. But although FERC agreed to give Milford priority rights on the 88-mile line it will build, the commission declined to agree to a second Milford request: that it get a "safe harbor" period - Milford wanted 10 years - during which it could turn back any requests from third-parties seeking interconnection to Milford's 88-mile line.

Milford's request for a safe harbor, also backed by AWEA and SEIA, was based on its belief that the project will be developed in five phases over a 6- to 7-year planning horizon, and that a 10-year period would provide Milford a cushion to accommodate the ever-evolving dynamics of the project, and still have the certainty to make the project viable. FERC said: "Granting a 'safe harbor' period would be inconsistent with Commission precedent granting waiver of open access requirements unless and until the owner of the line receives a request for transmission service."



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mromansea said

07 December 2009
SunEdison actually has over 70MW of capacity across roughly 280 locations. FERC officials need to take into consideration the growth of DG in any realistic forward view.

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