On November 4, 2016, FERC issued an order denying a complaint filed by HORUS Central Valley Solar 1, LLC and HORUS Central Valley Solar 2, LLC (jointly, “HORUS”) against the California Independent System Operator Corporation (“CAISO”). In the complaint, HORUS requested that the Commission prevent CAISO from imposing interconnection procedures and study requirements in addition to those already imposed on HORUS by the Western Area Power Administration (“WAPA”). In denying the complaint, FERC reaffirmed its existing policy that generators must obtain transmission service at or beyond the point where facility ownership changes, as well as beyond the interconnection point with the wider integrated grid. Because HORUS sought to connect to WAPA-owned interconnection facilities, and those facilities in turn interconnected with CAISO, HORUS was required to comply with both WAPA’s and CAISO’s interconnection procedures.

As reflected in a four-party generator interconnection agreement (“GIA”) between HORUS, Pacific Gas and Electric (“PG&E”), WAPA, and the U.S. Bureau of Reclamation (“Bureau”), HORUS’s 26.5 MW generation project will utilize PG&E’s transmission lines to provide load and generator interconnection services to a Bureau-owned pumping-generating plant by way of a direct interconnection with a WAPA-owned substation. As a result of the substation interconnection, HORUS sought to comply with WAPA’s interconnection procedures and impact study requirements. The present controversy arose after CAISO informed HORUS in April 2016 that HORUS would also have to participate in CAISO’s large generator interconnection procedures.

In its FERC complaint, HORUS essentially argued that neither CAISO’s Tariff nor the GIA required HORUS to follow CAISO’s interconnection procedures in addition to WAPA’s. In particular, according to HORUS, GIA section 7.9.1—requiring “Applicants” to follow all applicable CAISO tariff provisions for new interconnections or existing interconnection capacity increases—did not apply to third-parties neither directly connected to CAISO nor transmitting over existing interconnections without capacity increases. CAISO countered that the HORUS generating facilities fall under the Commission’s broad definition of “interconnection facilities” for purposes of CAISO tariff compliance. Furthermore, CAISO retorted that HORUS’s interpretation of GIA section 7.9.1 would allow parties to skirt important interconnection procedures and study requirements simply by utilizing existing connections. PG&E intervened to comment in CAISO’s favor and urged the Commission to reject HORUS’s complaint.

In its order, FERC found that HORUS was essentially attempting to achieve an interconnection with the CAISO-controlled grid. As a result, GIA Section 7.9.1 applied to require HORUS’s compliance with relevant CAISO tariff provisions—including any interconnection and study requirements. According to the Commission, regardless of whether HORUS claimed to seek an interconnection with WAPA rather than CAISO, it ultimately wanted to deliver energy to CAISO. CAISO appropriately treated HORUS as an interconnection-seeking customer because the project needed to utilize PG&E’s CAISO-interconnected system beyond the point of WAPA’s own interconnection point. Thus, HORUS was required to comply with both WAPA and CAISO interconnection procedures.

A copy of FERC’s order can be found here.