FERC Issues Show Cause Orders to Six Regional Grid Operators
FERC issues show cause orders to six regional grid operators, directing them to justify or reform the rules that govern how large energy users connect to the electric grid.
Large loads – mostly data centers – pose unprecedented challenges to many utilities and grid operators because they are huge, desperate to connect to the grid, and characterized by a high degree of uncertainty as to whether they will ever come to fruition. Phantom loads –– could be as much as 3 to 10x the actual number of projects built.
The show cause order gives PJM, MISO, SPP, CAISO, ISO-NE, and NYISO and relevant transmission owners 60 days to justify why their current tariffs remain just and reasonable –- without provisions tailored to large loads, or to file tariff changes addressing issues identified by FERC. FERC has initially found that existing tariffs appear to be unjust and unreasonable because they don’t adequately address challenges tied to the integration of large and co-located loads onto the transmission system.
There are five categories:
1) Developing efficient transmission service application and study processes, including consideration of alternative transmission technologies.
2) Two - Preventing cost shifting and requiring transparency into transmission costs
3) Three - Accommodating co-location agreements and behind-the-meter generation
4) Four - Providing new transmission services for flexible large loads
5) Five - Developing a process to study generating facilities that serve electrically proximate large loads and co-located loads
Also, within just 30 days, each entity must submit a report outlining how it will ensure that sufficient future generation to serve both existing and new large loads.
This timeframe is pretty short, but there are many existing best practices to choose from. It’s now time to put some rigor around this process so other ratepayers don’t get hurt.