Addressing Affected System Impacts of Generator Interconnection: Processes and Principles

Transcription

1 Addressing Affected System Impacts of Generator Interconnection: Processes and Principles August 5, 2013

2 Table of Contents 1 Executive Summary Introduction Stakeholder Process and Schedule Tariff Structure and FERC Order No Neighboring Systems as Affected Systems Process Steps Policy Principles The ISO Controlled Grid as an Affected System Policy Principles Process Steps... 8 ISO/M&ID/M&IP/KJohnson Page 1

3 Addressing Affected System Impacts of Generator Interconnection: Processes and Principles 1 Executive Summary The interconnection of generation facilities can cause reliability concerns on the electric system to which the generator will directly interconnect, as well as potentially to adjacent electric systems. The ISO tariff addresses these situations at a high level. Through this paper the ISO is starting a new stakeholder initiative to add further detail to the ISO s Business Practice Manuals ( BPMs ) regarding the processes and principles for addressing affected system impacts of generator interconnections. The ISO will issue two papers that describe its thinking on processes and principles. Following the issuance of each paper the ISO will hold a stakeholder conference call and stakeholders will have an opportunity to provide written comments. After the second round of stakeholder comments, the ISO will then include the proposed processes and principles in the ISO s BPM change management process. Stakeholders will have additional opportunities to comment on the proposed provisions during the BPM change management process. The ISO envisions that these enhancements will be in place in early Section 2 of this paper provides an overview of the issue. Section 3 describes the stakeholder process and schedule. Section 4 describes the ISO tariff structure regarding affected systems. Section 5 discusses neighboring systems as affected systems. Section 6 discusses the ISO controlled grid as an affected system. 2 Introduction As part of the generator interconnection process, the ISO must regularly coordinate with adjacent electric systems in order to facilitate studies of potential reliability concerns caused by the interconnection of generation in the ISO queue to the ISO controlled grid. Similarly, generation interconnecting to the facilities of transmission owners in adjacent electric systems may cause potential reliability concerns on the ISO controlled grid. The ISO tariff defines an affected system as an electric system other than the ISO controlled grid that may be affected by the proposed interconnection, 1 and an affected system operator as the entity operating an affected system. For the purposes of this paper, which addresses both affected system (as defined in the ISO tariff) impacts, and situations where the ISO controlled grid is, or could be, impacted by interconnections on adjacent electric systems, the 1 Note that the definition includes an electric system that may be affected, without necessarily having made a determination that it is in fact affected by the interconnection in question. In the discussion below the ISO frequently uses the phrase potentially affected system to make it explicit that the ISO is including systems for which actual impacts may not yet have been determined. ISO/M&ID/M&IP/KJohnson Page 2

4 ISO will also be referred to as an affected system. In the last few years, the ISO has worked with affected systems under a variety of interconnection circumstances and developed processes and principles to address the impacts of generator interconnections. The purpose of this stakeholder initiative is to present these principles and processes to stakeholders for consideration and eventual incorporation into the ISO s BPMs. 3 Stakeholder Process and Schedule Following the publication of this paper, the ISO will hold a stakeholder conference call to discuss the processes and principles proposed to be incorporated in the BPM language. Stakeholders can submit written comments to the ISO on this paper and on the conference call discussion. As always, comments will be most useful if parties clearly explain the business rationale for their recommendations. After the ISO has received stakeholder comments, the ISO will develop a second paper that includes draft BPM language, and will provide an opportunity for stakeholders to comment. The proposed BPM language will then be included in the ISO s BPM change management process, which provides additional opportunities for stakeholders to comment. The schedule is provided below. Aug 5 Aug 23 Sept 12 Oct 9 Oct 30 Nov 20 Dec 11 ISO posts first paper Stakeholder conference call Stakeholder written comments due ISO posts second paper that includes BPM language Stakeholder conference call Stakeholder written comments due Proposed BPM language included in ISO s change management process 4 Tariff Structure and FERC Order No The ISO tariff provides a general framework for addressing the impact of generation projects in the ISO interconnection queue on affected systems. The tariff states that, in the initial project study stages, the ISO will: Notify potential affected system operators that could be impacted by a generation interconnection; Coordinate the conduct of studies to determine possible impacts; and ISO/M&ID/M&IP/KJohnson Page 3

5 Include potential affected system operators in all customer meetings. 2 However, the ISO does not comprehensively study the impacts of generator interconnections on affected systems, for several reasons. First, the ISO does not have detailed information about affected systems on a transmission-element level, nor does the ISO know the details of the various reliability criteria applicable to the affected systems. Second, because the operation of transmission systems changes over time along with NERC reliability standards, the ISO cannot presume to know all of the impacts of these changes on affected systems. Consequently, the interconnection customer is responsible for: Cooperating with the ISO in all matters related to the affected system studies; Signing a separate study agreement with the affected system operator so that potential impacts on the affected system can be evaluated; and Paying for necessary studies and any upgrades necessary to mitigate the impacts of the interconnection on the affected system. 3 Further, the affected system operator is required to cooperate with the ISO on all matters related to the conduct of studies and modifications to the affected system. 4 The interconnection customer is obligated by the terms of the relevant generator interconnection agreement (large or small) to enter into an agreement with the affected system operator, which must specify the terms governing payments for studies and mitigation, if required, to be made by the customer to the affected system owner, and repayment by the affected system operator. 5 The ISO tariff does not specifically address the process or policies involved when a generating project interconnecting to an adjacent electric system impacts the ISO controlled grid. However, the Federal Energy Regulatory Commission ( FERC ), in its series of orders on standardized generator interconnection agreements and procedures, commencing with Order No. 2003, articulated the principle that interconnection customers on adjacent electric systems are obligated to upfront fund upgrades on the affected system for which they would be eligible for reimbursement by the affected system operator. 6 The existing ISO tariff language and guiding principles in Order Nos. 2003, et seq. provide a legal framework for the ISO to develop processes and principles addressing affected system issues. The ISO believes that no additional tariff language is needed to implement the general 2 See, e.g., ISO Tariff Appendix Y, Section 3.7; ISO Tariff Appendix DD, Section See, e.g., ISO Tariff Appendix Y, Section 3.7; ISO Tariff Appendix DD, Section See, e.g., ISO Tariff Appendix Y, Section 3.7; ISO Tariff Appendix DD, Section See, e.g., ISO Tariff Appendix BB, Article ; ISO Tariff Appendix FF, Article Standardization of Generator Interconnection Agreements and Procedures, Order No. 2003, FERC Stats. & Regs. 31,146, at P (2003) ( Order No ), order on reh g, Order No A, FERC Stats. & Regs. 31,160, at PP , order on reh g, Order No B, FERC Stats. & Regs. 31,171, at PP 35, (2004), order on reh g, Order No C, FERC Stats. & Regs. 31,190, at P 9 (2005). ISO/M&ID/M&IP/KJohnson Page 4

6 principles of: 1) coordination between parties on system studies and study results; 2) cooperation between affected system operators and interconnection customers; and 3) making arrangements for needed network upgrades, upfront funding for such upgrades, and reimbursement. Developing BPM language to capture these implementation steps will provide greater clarity for interconnection customers as they move through the ISO s process, as well as clarifying the ISO s expectations if the interconnecting customer is interconnecting to an adjoining system. 5 Neighboring Systems as Affected Systems The ISO tariff requires the ISO to notify potential affected system operators at the outset of a request for interconnection to the ISO controlled grid, and to work with these affected system operators throughout the interconnection process. To implement these provisions, the ISO has developed a process for the notification and exchange of necessary information with affected system operators and interconnection customers. These process steps are discussed in Section 5.1. In working with affected system operators, the ISO has developed policy principles that are described in Section Process Steps 1. The ISO maintains a database that lists the potentially affected systems associated with each study area. This database also contains contact information for the potentially affected system operators. The database will be used to systematically identify potentially affected system operators to be notified for all projects in the defined study area. This database will also be used as part of the ISO s queue management process to check that the interconnection customers have contacted and worked with all potentially impacted affected system operators prior to achieving commercial operation for their projects. 2. The ISO notifies potentially affected system operators at the beginning of the study process for each interconnection request that is expected, or has the potential, to impact affected systems. Affected system operators are notified when study plans and base cases are posted on the ISO secure website (using the market participant portal). 3. Affected system operators may enter into non-disclosure agreements with the ISO to access base case and study plan data (see the template for the reciprocal nondisclosure agreement on the ISO website). 4. The ISO provides interconnection customers contact information to the affected system operators. 5. The ISO informs the interconnection customers that their contact information will be provided to affected system operators. ISO/M&ID/M&IP/KJohnson Page 5

7 6. The ISO advises interconnection customers, in an , as to which systems their interconnection is potentially affecting when study reports are sent out. 7. The ISO provides affected system operators notice when individual and group study results are available, and invites them to attend the results meetings for each project that may impact their electric systems. 8. The ISO will provide each interconnection customer with a letter outlining the various tasks that need to be accomplished and a status report template that the customer must provide to the ISO on a periodic basis, including the status of their discussions and coordination with affected system operators. 9. Six months prior to its generating unit in-service date, an interconnection customer must provide documentation to the ISO confirming that the affected system operators have been contacted, that any system reliability impacts have been addressed (or that there are no system impacts), or that the interconnection customer has taken all reasonable steps to address potential reliability system impacts with the affected system operator but has been unsuccessful. 5.2 Policy Principles The ISO does not conduct comprehensive impact studies on neighboring systems as part of the ISO interconnection process, and affected system operators must conduct these studies and provide any mitigation solutions to identified reliability impacts to the interconnection customer. The ISO will, however, evaluate whether congestion management or other operational tools within the ISO controlled grid will serve to mitigate possible reliability impacts on an affected system caused by generation projects seeking to energize prior to the completion of needed system upgrades on the affected system. If the ISO deliverability studies identify constraints on neighboring systems that limit deliverability of the generator to the aggregate of ISO load, and the ISO determines that upgrades on the ISO system are the most cost effective approach to resolving the deliverability problem, then the ISO will identify those upgrades as delivery network upgrade responsibilities of the interconnection generation projects. If, however, the ISO determines that upgrades on the neighboring system may be the most cost effective approach at resolving the deliverability problem, then the ISO may work with the affected system on mitigation plan options. The ISO s general policy is that generation projects will not be energized on the ISO controlled grid until affected system issues are resolved. However, if the interconnection customer s reasonable coordination efforts with the affected system operator do not result in the affected system operator moving forward on a timely and reasonable basis, and the ISO determines that possible impacts on the affected system can be mitigated within the ISO controlled grid, the ISO will advise the affected system ISO/M&ID/M&IP/KJohnson Page 6

8 operator and the interconnection customer that the interconnection can proceed without affirmative agreement by the neighboring system. If an interconnection customer makes a unilateral decision that an affected system agreement is not necessary and does not reasonably attempt to address that issue with the potentially affected system operator, the ISO will advise the customer that the interconnection will not be allowed to move forward with synchronization and commercial operation unless the issue is resolved, including a demonstration by the interconnection customer that the customer has made reasonable efforts to obtain concurrence by the affected system operator that there is no reliability impact. If requested by the interconnection customer, the ISO will review affected system agreements, tendered to interconnection customers and available to the ISO, to determine whether they contain terms and conditions that could be problematic for the ISO. For example, the ISO would have concerns about operating instructions being given by affected system to generation resources connected to the ISO controlled grid. If requested by the interconnection customer, the ISO may review the reasonableness of the studies conducted and study results issued by the affected system operator. The ISO will review other issues on a case-by-case basis, either upon the request of the interconnection customer, or where the ISO deems it appropriate. 6 The ISO Controlled Grid as an Affected System As noted above, although the ISO tariff does not specifically address impacts on the ISO controlled grid caused by generation projects interconnecting to adjacent electric systems, Order Nos. 2003, et seq. provide a framework for affected system coordination and reimbursement. In addition to the Order No directives, adjacent electric systems and transmission providers are required by NERC planning standards to work together to minimize system impacts caused by generator interconnections. Policy principles for situations where the ISO controlled grid is an affected system are described in Section 6.1. Process steps are discussed in Section Policy Principles Based on FERC precedent involving other RTOs/ISOs, the ISO has concluded that the funding and reimbursement for reliability network upgrades on the ISO controlled grid will be in accordance with the applicable provisions of the ISO tariff regarding generator interconnection. 7 7 Under the current ISO tariff, generator interconnection is addressed in Appendices S through W, Y, Z, and BB through HH. ISO/M&ID/M&IP/KJohnson Page 7

9 The interconnection customer must notify both the ISO and the Participating Transmission owner ( PTO ) whose electric system might be impacted by the interconnection to the adjacent electric system. The ISO will use the applicable tariff reimbursement scheme for reliability upgrades to PTO systems, depending on the date on which the interconnection customer on the neighboring system contacted the ISO and the PTO whose system potentially could be impacted or entered into a study agreement with the contacted PTO, whichever was later. The ISO is developing a pro forma facilities construction agreement that will be used when the ISO is an affected system. This agreement will be a three-party agreement involving the interconnection customer, the ISO and the affected PTO. 6.2 Process Steps To date, there have been few instances of generators interconnecting to neighboring systems that have caused or potentially could cause impacts on the ISO controlled grid. Thus, the ISO has not documented formal process steps for coordinating with interconnection customers on neighboring systems and with potentially impacted PTO(s) within the ISO controlled grid. The ISO suggests that such process steps be considered in this stakeholder initiative and invites neighboring system operators and other stakeholders to make recommendations that could be incorporated into the ISO s BPMs and perhaps be provided by the neighboring system operators to their interconnection customers as part of their interconnection processes. The ISO suggests that any processes established for interconnection customers on neighboring systems include some of the steps from the ISO s affected system process steps described in section 5.1 above. For example: 1. Once an interconnection customer has entered the neighboring system operator s interconnection process, and if it appears that there could be reliability impacts on the ISO controlled grid, the ISO and affected PTO(s) should be notified by the neighboring system operator so that study data can be exchanged and studies coordinated; 2. Interconnection customers should take reasonable steps to contact the ISO and affected PTO(s) and enter into a study agreement with the PTO to identify reliability system impacts; 3. If reliability system impacts and mitigation solutions are identified, the interconnection customer must enter into the ISO s facilities construction agreement; 4. Prior to synchronization, the neighboring system operator should verify that the ISO and potentially impacted PTO(s) have been contacted and that steps have been taken to address any reliability system impacts. The ISO seeks input and additional suggestions as to how better coordinate with neighboring system operators and provide necessary information to interconnection customers to ensure ISO/M&ID/M&IP/KJohnson Page 8

10 that any affected systems impacts are identified and mitigated in a timely and cost effective manner. ISO/M&ID/M&IP/KJohnson Page 9