FERC Clarifies the Rights of Transmission Providers That Receive Generator Interconnection Requests

I.        Summary

Generators can’t use interconnection requests to expand the transmission system. The Federal Energy Regulatory Commission, on August 16, 2010, issued an order addressing a joint petition for declaratory order filed by Cash Creek Generation LLC (“Cash Creek”), the Southwest Power Pool, Inc. (“SPP”), and E.ON US LLC (“E.ON”) concerning certain generator interconnection issues.  132 FERC ¶ 61,137.  In its order, FERC held that a valid generator interconnection request under Order No. 2003 pro forma large generating procedures (“LGIP”) is one in which the generating facility will be interconnected with the transmission system of the transmission provider.  In making this finding, FERC rejected Cash Creek’s contention that a generator could require a transmission provider to provide a looped interconnection between two separate transmission systems.

Generators cannot avoid costs by designating the bus bar as the point of interconnection. The Commission also held that a valid point of interconnection under the LGIP is one where the interconnection facility interconnects with the transmission provider’s transmission system.  FERC rejected the suggestion that an interconnection customer could elect to have the point of interconnection be at the generator’s bus bar.

II.       Analysis of the Order

SPP serves as the Independent Transmission Organization for E.ON, which is made up of Louisville Gas & Electric Company (“LG&E”) and Kentucky Utilities Company (“KU”).  Cash Creek submitted an interconnection request for a study of three alternative interconnection options: to a substation on the LG&E system, to a substation on the neighboring Big Rivers Electric Corporation system (“Big Rivers”), and to a non-existent looped configuration connecting to the LG&E and Big River substations.  E.ON challenged Cash Creek’s right to request an interconnection to a non-existent transmission line.

In the joint petition, the parties described the three alternative interconnection scenarios and asked for resolution of three issues:

1. Which of the interconnection configurations was valid under the pro forma LGIP?
2. If the looped configuration was valid, what were each transmission owner’s (i.e., LG&E and Big Rivers) construction obligations?
3. In order to determine what new facilities should be network upgrades, was the point of interconnection at the high side of the generator’s bus bar as proposed by Crane Creek or where the interconnection facilities meet the transmission provider’s transmission system?

With respect to the first issue, the Commission held that to be valid, an interconnection request must be for the interconnection to facilities solely owned by the transmission provider at the time of the request.  Thus Cash Creek’s interconnection request to Big Rivers was not a valid request under the E.ON OATT.  The Commission also held that Cash Creek’s looped interconnection request was invalid, stating that nothing in the pro forma LGIP allowed a generator to use an interconnection request as a means of connecting two separate transmission systems.

The Commission determined that the construction issue was mooted by its finding that the looped configuration was invalid.

The Commission found that the point of interconnection is to be the point where the interconnection facility meets the existing transmission system.  The Commission agreed with Cash Creek that under Order No. 2003, the generator had flexibility to select the point of interconnection but it noted that the selected point had to be valid under the LGIP.  This is important because the location of the point of interconnection determines who ultimately pays for the facilities connecting the generator to the transmission grid.  Allowing a generator to designate the generator bus bar as the point of interconnection would result in the facilities connecting the bus bar with the transmission system being classified as network upgrades in accordance with the Commission’s policy that all facilities “at or beyond” the point of interconnection are classified as network facilities.  In turn, the generator would be entitled to transmission credits equal to its payment for the network upgrades.  If the point of interconnection is at the existing transmission system, the facilities connecting the generator to the transmission grid are designated as interconnection facilities, and the generator is responsible for 100% of the cost of those facilities.

To access the order, please click here.

For more information, please contact Peter Matt at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 202-296-1500.