On March 17, 2016, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) that would modify the pro forma Small Generator Interconnection Agreement (“SGIA”) originally set forth in Order No. 2006. Specifically, FERC’s proposed modifications would require small generating facilities interconnecting through the SGIA to ride through abnormal frequency and voltage events rather than disconnecting. Because FERC already imposes such requirements on large generators under the Large Generator Interconnection Agreement, FERC stated that the proposed revisions address its concerns that it is unduly discriminatory to only impose such requirements on large generating facilities and not small generating facilities.

In general, the pro forma SGIA establishes the terms and conditions under which public utilities must provide interconnection service to small generating facilities of no larger than 20 megawatts. Currently, the pro forma SGIA does not mandate that small generating facilities must ride through voltage or frequency disturbances. In promulgating Order No. 2006, the Commission explored whether voltage ride through requirements proposed for large generating facilities should apply to small generating facilities. At that time, the Commission concluded that because the generating facilities interconnecting under Order No. 2006 would be small and would have minimal impact on the transmission provider’s electric system, the ride through requirements were unnecessary.

In the new NOPR, FERC cites to changing conditions since its issuance of Order No. 2006 to support its proposed revisions to the pro forma SGIA. First, FERC highlights that the Institute of Electrical and Electronics Engineers, a recognized power industry standards-setting body, revised its Standard 1547a to provide wider trip settings that give small generating facilities greater ability to ride through disturbances. Further, FERC notes that the proliferation of distributed energy resources has increased the risk that an initial voltage or frequency disturbance may cause a significant number of small generating facilities to trip across a particular area or Interconnection. Finally, FERC states in the NOPR that the North American Electric Reliability Corporation has found that disconnection of distributed resources during frequency excursions or voltage deviations may exacerbate a disturbance on the Bulk-Power System.

FERC believes that the NOPR addresses these changed conditions and concerns by proposing a new section 1.5.7 to the pro forma SGIA that would require interconnection customers to ensure the frequency ride through capability and the voltage ride through capability of small generating facilities. FERC’s proposed change would also prohibit such facilities from disconnecting automatically or instantaneously from the system or equipment of the transmission provider and any affected systems for an under-frequency or over-frequency condition, or an under-voltage or over-voltage condition. Under the NOPR, FERC also proposes to allow for the development of appropriate system-specific standards by standards-setting bodies.

FERC’s proposed compliance procedures would require each public utility transmission provider that has an SGIA within its Open Access Transmission Tariff (“OATT”) to submit a compliance filing within 90 days of the effective date of the final rule revising the SGIA within its OATT to include the new section 1.5.7. FERC has set a 60-day comment period for the NOPR.

The NOPR is available here.