Power Engineering

FERC Issues Standard Rule For Small Generator Interconnection

The Federal Energy Regulatory Commission (FERC) has issued standard procedures for the interconnection of generators no larger than 20 MW, removing barriers to the development of additional electric power infrastructure by reducing interconnection uncertainty, time and costs. The new rule - Order 2006 - complements Order 2003, the commission’s rule for facilities larger than 20 MW.

According to FERC, Order 2006 will help preserve grid reliability, increase energy supply, and lower wholesale electric costs for customers by increasing the number and types of new generators available in the electric market, including development of non-polluting alternative energy resources. It directs public utilities to amend Order 888 open access transmission tariffs to offer non-discriminatory, standardized interconnection service for small generators.

Amendments should include small generator interconnection procedures that contain technical procedures the small generator and utility must follow in the course of connecting the generator with the utility’s lines, and a small generator interconnection agreement that details provisions for the interconnection and defines who pays for improvements to the utility’s electric system if needed to complete the interconnection.

The rule applies only to interconnections with facilities already subject to FERC jurisdiction and not to local distribution facilities.

Order 2006 reflects input from utilities, small generators, state commission representatives, and the National Association of Regulatory Utility Commissioners (NARUC) who recommend a unified approach to small generator interconnection. The rule harmonizes state and federal practices by adopting many of the best interconnection practices recommended by NARUC, and should help promote consistent, nationwide interconnection rules for small generators.

“This rule takes us a step closer to truly non-discriminatory, competitive bulk power markets,” said FERC Chairman Pat Wood, III. “Advances in technology have led to a growing industry of small power plants that offer economic and environmental benefits. Standardization of interconnection practices across the nation will lower costs for small generators, help ensure reliability, and help ensure reasonably-priced electric service for the nation’s wholesale power customers,” said Wood. p

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To the Editor:

Great article by Hans Kern, P.E. (“Are Estimating Methods Hurting U.S. Energy Projects?,” July 2010). Another impediment is the lack of risk sharing among the key contributors to a project undertaking. The preferred EPC contract delivery method first evolved in the mid 1980’s when private funding bankrolled projects as limited liability project finance undertakings. This form of contract ensured that the EPC contractor bears all the risks for performance, schedule and lump-sum cost of the project. Unfortunately, it also imposed an additional markup in total project cost, probably around 10 to 15 percent, to protect the contractor from nasty surprises when things did not go according to plan.

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