Notice of Inquiry, Integration of Variable Energy Resources (Docket No: RM10-11-0000)

The FERC has issued a Notice of Inquiry in which it asks the electric industry to comment on 55 questions concerning the possible reform of its policies to make them more accommodating to variable energy resources (VERs) such as wind, solar and non-storage hydro generating plants. The comments FERC receives in response to the NOI will play an important role in what will most likely become a Notice of Proposed Rulemaking. If the FERC implements all or even a significant number of the policy changes that are implied in its questions, FERC policy will change in significant ways that could affect all electric utilities, including entities that are not public utilities under the Federal Power Act. All electric utilities should take advantage of this opportunity to let FERC know what works and what does not when it comes to renewables.

Following is a summary of the Notice of Inquiry. BGM is available to assist in writing responses to the Notice. Comments are due on March 29, 2010.

In what appears to be the beginning of policy changes to wipe clean any “non-friendly” renewable policies, FERC issued a Notice of Inquiry seeking public comment on whether to reform any of its rules or procedures as the nation’s generation portfolio expands to include more VERs. FERC stated that growing use of these types of facilities presents unique challenges to the electric power industry, such as location constraints and limited ability to dispatch, but also offers benefits such as low marginal energy costs and reduced greenhouse gas and other emissions. To meet these challenges and fully realize the benefits of VERs in a reliable and efficient manner, FERC seeks to explore whether reforms of existing policies are necessary to ensure that jurisdictional rates are just and reasonable and that the terms of jurisdictional service do not unduly discriminate against these resources.

FERC has requested that commenters take a broad look at the issues concerning the integration of variable generation resources and address any effects of variable energy resources on the following subject areas:

• Data and reporting requirements, including accurate forecasting tools;
• Scheduling flexibility and incentives for accurate scheduling of variable energy resources;
• Forward market structure and reliability commitments;
• Balancing Authority Area size and coordination;
• Suitability of reserve products;
• Capacity market reforms; and
• Redispatch and curtailment practices.

To assist commenters focus their comments, FERC has provided 55 questions for commenters to consider. FERC also has asked that commenters share their overall thoughts, including technical, commercial, and legal observations, on the challenges posed by the increasing number of VERs, operational and technical barriers faced by VERs, and the extent to which Commission policies can and/or should be revisited in light of the increasing number of VERs. Finally, FERC asks commenters to address whether any proposed changes to the Commission rules or OATT provisions should apply to all resources.

To view the FERC NOI, please click here.

To view the FERC press release, please click here.