On March 7, 2016, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) conditionally approved amendments to the California Independent System Operator Corporation’s (“CAISO”) Open Access Transmission Tariff (“OATT”) that are designed to enhance CAISO’s generator interconnection process. The proposed amendments represent the second and final set of OATT revisions resulting from CAISO’s 2015 interconnection enhancement stakeholder initiative.

In its January 7, 2016 filing, CAISO proposed tariff amendments to its generator interconnection process whereby:

1) CAISO, rather than the interconnection customer, will notify affected third-party systems of proposed generator interconnection requests, and the affected system will have 60 days to verify whether they are actually affected and want to be involved in the interconnection study process;

2) commercial viability criteria will be applied to requests by interconnection customers to extend their commercial operation dates beyond the limits currently set forth in the tariff, if the customer wishes to maintain its capacity deliverability status;

3) the timing for when CAISO will tender a generator interconnection agreement (“GIA”) for negotiation and execution will be tied to the longest lead-time to construct any network upgrades rather than completion of the initial studies;

4) the interconnection deposit will change from $50,000 plus $1,000/MW to a flat $150,000 for both small and large interconnection customers;

5) interconnection customers undertaking self-build of network upgrades will be required to post financial security until the date the GIA is executed;

6) additional flexibility for project changes between the Phase I and Phase II interconnection studies will be granted without loss of queue position;

7) CAISO clarified that CAISO can update the Phase II study results for changes due to requests for modification from either the interconnection customer or transmission owner;

8) the GIA insurance provisions will be updated to be consistent with current industry standards;

9) CAISO clarified various financial security requirements; and

10) CAISO clarified that interconnection customers electing transmission plan deliverability Option B (i.e., must-have capacity deliverability) may proceed as energy-only deliverability or withdraw from the queue, if it does not receive the requisite capacity allocation.

In its March 7, 2016 order, the Commission accepted CAISO’s filing, subject to condition. Specifically, the Commission found proposed revisions 2-10, described above, to be just and reasonable and not unduly discriminatory or preferential. However, the Commission found that the following sentence should be removed from the tariff language associated with proposed revision 1: “[a]ny mitigation the electric system operator that failed to timely identify as an Identified Affected System determines is necessary will be the responsibility of the electric system operator and not of the CAISO, the Participating Transmission Owner(s), or the Interconnection Customer.” According to the Commission, this sentence “inappropriately imposes sole responsibility for mitigating the impacts of a customer’s interconnection on an entity that is not governed by CAISO’s tariff” and “conflicts with the proposed tariff provision that states that affected systems’ mitigation remedies available outside the CAISO tariff are unaffected.” Accordingly, the Commission directed CAISO to submit a compliance filing removing the sentence within 30 days.

A copy of the Commission’s order may be found here.