On March 19, 2015, FERC issued Order No. 807, which eliminated Open Access Transmission Tariff (“OATT”) requirements, Open Access Same-Time Information System requirements, and the Standards of Conduct requirements, under certain conditions, for the ownership, operation, and control of an Interconnection Customer’s Interconnection Facilities (“ICIF”). FERC stated that the waiver is designed to relieve the burden on ICIF owners while still maintaining the rights of third parties to seek access to available ICIF excess capacity.
On May 15, 2014, FERC issued the proposed waiver for ICIF because, according to FERC, “OATT requirements as applied to ICIF may impose risks and burdens on generators and create regulatory inefficiencies that are not necessary to achieve the Commission’s open access goals” (see May 16, 2014 edition of the WER). FERC explained that, under its current rule, ICIF owners were required to make excess capacity available to third parties unless the owner could demonstrate that the excess capacity is already reserved for future development. In order to make this showing, an ICIF owner files a petition for declaratory order in which the owner details the specific plans and milestones of the future development. Additionally, FERC stated that treating ICIF the same as other transmission facilities for OATT purposes, including the requirement to file an OATT following a third-party request, created undue burden for ICIF owners without a corresponding enhancement of access given the ICIF owner’s typical ability to establish priority rights. Therefore, FERC proposed the blanket waiver to reduce the burden on ICIF owners.
Under the new rule, third parties seeking to use ICIF that are subject to a blanket waiver would need to follow FERC’s rules and regulations to make a request for service pursuant to Federal Power Act (“FPA”) sections 210, 211 and 212, rather than the request triggering an ICIF owner’s OATT obligation. Determinations as to whether the ICIF owner has priority rights to the ICIF capacity will be made by FERC during the section 210, 211 or 212 proceeding. Furthermore, the new rule creates a “safe harbor” for the first five years after the commercial operation date of the ICIF. The safe harbor provision creates a rebuttable presumption that the eligible ICIF owner has definitive plans to use its capacity without having to make a demonstration through a specific plans and milestones showing. FERC stated that the safe harbor provision would reduce the risks to ICIF owners during the early years.
The final rule noted that the blanket waiver only applies in situations where FPA sections 210, 211 and 212 would provide interconnection and transmission access to a customer that seeks service over the ICIF.
Finally, the rule deviated from FERC’s original proposal by: (1) eliminating the provision that the rebuttable provision does not require the ICIF owner to expand its facilities during the “safe harbor” period; and (2) changing the start of the safe harbor from the date the ICIF is energized to the commercial operation date of the ICIF.
The rule takes effect 90 days after publication in the Federal Register. A copy of the rule is available here.