On July 21, 2016, FERC issued a final rule (“Order No. 828”) modifying the pro forma Small Generator Interconnection Agreement (“SGIA”) to require newly interconnecting small generators to “ride-through” voltage and frequency variations rather than having those generators disconnect from the larger transmission system. With this final rule, FERC obligates new small generators—those less than 20 MW—to have comparable ride-through capabilities as those currently imposed on their large-scale counterparts through the pro forma Large Generator Interconnection Agreement (“LGIA”). 

As FERC explained in its order, large generators are required to ride-through voltage and frequency disturbances, rather than trip off-line and risk destabilizing the grid, to help ensure the reliability of the transmission system during such events. FERC considered imposing similar requirements on small generators in 2005 when it created the pro forma SGIA in Order No. 2006, but ultimately declined to do so based on the assumption that small-scale wind and solar resource integration would remain minimal and have a manageable impact on the grid. FERC again considered the question in 2013, but held-off to let the Institute of Electrical and Electronics Engineers (“IEEE”) complete the revision process for Standard 1547, its distributed resources interconnection standard.

FERC reopened the small generator ride-through question in March 2016 with a notice of proposed rulemaking. According to FERC, several changed circumstances have now brought this issue to the fore including the increasing penetration of distributed energy resources, which the North American Electric Reliability Corporation has noted, will adversely impact the electric grid if not carefully managed and coordinated. In addition, FERC emphasized that recent technological advancements and interconnection standards—like smart inverters and the now newly revised IEEE Standard 1547—indicate the current capability of small generators to ride through voltage and frequency disturbances.

In Order No. 828, FERC added section 1.5.7 to the pro forma SGIA, which requires frequency and voltage ride-through capabilities for newly interconnecting small generators taking service under an open access transmission tariff (“OATT”). FERC noted that it declined to reference specific technical standards in the new section 1.5.7, and instead, set out basic performance expectations to give transmission operators flexibility. Additionally, FERC sided with other participants arguing for regional variations for Independent System Operators and Regional Transmission Organizations that may operate under slightly different reliability requirements as a result of their resource mix. FERC rejected calls by some commenters to delay the proceeding pending further vetting of new technologies, stating that there was a “pressing need” to institute these requirements considering the increasing penetration of small generators onto the transmission system. Ultimately, FERC concluded that the time was ripe for equalizing the regulatory treatment of large and small generators and setting “a national minim ride through capability before future increases in deployment of small generation facilities.”

Going forward, public utility transmission providers that have an SGIA within their FERC-approved OATT must submit compliance filings within 65 days of the final rule’s publication in the Federal Register. However, FERC stated it would provide a short extension to allow transmission providers to submit combined filings that comply with both Order No. 828 and Order No. 827 (requiring revisions to SGIA regarding reactive power requirements). Finally, FERC stated that transmission providers with approved non-conforming SGIAs must either comply with the final rule or demonstrate that their SGIAs continue to be consistent with or superior to the new pro forma SGIA.

A copy of the Order No. 828 can be found here.