On December 11, 2013, FERC Staff convened a workshop to discuss the mechanics for filing a zero rate reactive power rate schedule – a rate schedule under which there is no compensation for providing reactive power service. The next step will be for Staff to issue a formal notice requesting written comments on this issue.
The December 11th workshop is the result of a recent FERC order that required the filing of all reactive power tariffs, regardless of whether or not any compensation is received under those tariffs (see October 18, 2013 edition of the WER). FERC Staff held the workshop to discuss what concerns and issues may arise out of FERC’s new policy on “no compensation” reactive power rate schedules.
During the workshop, panelists raised a number of unresolved questions concerning FERC’s order and suggested that FERC should delay the effectiveness of the new filing requirements until certain issues are clarified. For instance, the panelists questioned why zero rate compensation generators did not believe they had to file a tariff, and what makes this service different from other services that are not required to file with FERC. One of the panelists also encouraged FERC to try to minimize the burden and expense its policy places on public utilities. Another panelist asked FERC to take care not to eliminate the right of a public utility to make an initial filing, i.e., FERC should not make the determination that a zero compensation rate is a changed rate and, therefore, subject to suspension and refund. The panelists also agreed that it may be appropriate for FERC to initiate a rulemaking to resolve the issues.
In response to the panelists, Staff raised a number of questions about what type of a burden the “zero compensation” reactive power filings would place on the industry, and what issues different approaches to filing would encounter. Staff questioned whether there should be different requirements for different kinds of generators, or whether there should be additional language required in interconnection agreements. Staff also questioned whether FERC could interpret an interconnection agreement as having a zero rate for reactive power if no rate is specified. Additionally, Staff discussed whether FERC should consider implementing a wavier process without addressing if a zero rate existed in an interconnection agreement.
Staff noted that FERC will issue a notice requesting comments on the issues explored, with a tentative due date of January 24, 2014. FERC has not yet issued that notice. An archived video of the workshop is available here.