Reply comments to the Department of Energy’s Advance Notice of Proposed Rulemaking to FERC on large loads were in general agreement that the interconnection process needs to be improved while preserving reliability and affordability (RM26-4). (See Parties Warn that Jurisdictional Fight Could Slow Data Center Connection Effort.)
The National Association of Regulatory Utility Commissioners noted that states have come out against FERC taking jurisdiction over large loads, and that position was shared by others, including the Edison Electric Institute, Meta, the Data Center Coalition and Talen Energy. But the association also argued that FERC should convene a technical conference in January to discuss the areas on which the commission can act without sparking any jurisdictional fights.
“A technical conference will provide relevant entities with the opportunity to provide insights to the commission as well as the opportunity to exchange ideas with each other and coalesce regarding solutions,” NARUC said.
State regulators and ISOs/RTOs are already dealing with the issues, and NARUC urged FERC against any action that would derail those ongoing efforts.
The National Association of State Utility Consumer Advocates reminded FERC that while it is important to weigh the views of industry participants, it also must consider end-use consumers. Their interests might be contrary to what industry wants, and consumers’ interests in reliability and affordability need to be the lodestars that guide FERC’s actions, it argued.
“FERC should avoid taking any action in this proceeding that undermines the important progress that states and FERC have been able to make by coordinating their efforts and maximizing their respective abilities to effectively regulate within their jurisdictional bounds,” NASUCA said. “Following directly from principles of cooperative federalism, the ANOPR’s proposed reform should confirm the emerging policy development embodied in state-level large load retail electric tariffs and rules.”
The tariffs contribute to better management and pacing of large load interconnections, including weeding out speculative large load interconnections and mitigating cost shifts to other customers, it added.
The Pennsylvania Office of Consumer Advocate, Delaware Division of Public Advocate and Illinois Attorney General’s Office agreed on the cooperative federalist approach. They also argued that because residential consumers have paid for capacity for years and are not stressing the system, if rolling outages caused by a lack of resource adequacy are ever required, then grid operators should focus them on the new large loads stressing the system.
“Given the unique issues that large loads create for grid reliability, treating new large loads differently from other load is reasonable and necessary to ensure reliable service and just and reasonable rates for existing consumers, especially residential consumers,” they said. “FERC can and must appropriately treat new large loads attributable to data centers differently from other kinds of load because: (1) data centers are creating unique difficulties for the grid and impacting a uniquely vulnerable market at a uniquely expensive level; and (2) investments in data centers can be speculative and uncertain in nature, increasing the risk of a severe market correction that would create stranded costs.”
PJM’s Independent Market Monitor said that the ANOPR recognizes the need for a new large load queue at the RTO, which does not need to impinge on state jurisdiction.
“The criteria for the PJM queue could be focused on the very specific question of whether the load when interconnected can be served reliably,” the Monitor said. “Reliable service means that there is adequate capacity to meet the load, including a reserve margin. The current failure to impose a reliability requirement has led to large increases in capacity market prices but also in energy market prices and in transmission costs.”
The IMM also brought up a recent complaint that it filed seeking greater flexibility for PJM to deal with large load issues, by finding it can require that they are able to be served reliably before agreeing to connect them. It was one of many comments that focused on issues in PJM. (See Market Monitor Files Complaint Over PJM Large Load Interconnections.)
Constellation Energy Generation urged FERC to act on the pending show-cause proceeding on co-located load in PJM.
“On jurisdiction, the only immediate call the commission must make in PJM is whether to exercise jurisdiction over hybrid facilities’ shared point of interconnection to the grid,” Constellation said. “This is an easy call since the commission already exercises jurisdiction over the generator’s interconnection, and jurisdiction over the same shared facilities does not bifurcate between state and federal authority depending on the services of the moment.”
Constellation reported that the issues in PJM have gotten worse, with some transmission owners blocking hybrid facilities, in which a large load is built near a new generator, by making net billing impossible.
The Electric Power Supply Association likewise urged FERC to act on the long-pending issues in PJM and to avoid taking actions that threaten competitive markets.
“Regrettably, this proceeding is being utilized as an opportunity to press unwarranted attacks on our nation’s competitive power markets in an attempt to hijack this critical emergent concern to dismantle competitive mechanisms and allow monopolistic behavior to flourish further,” EPSA said. “Ignoring years of market price signals that justified generation retirements, transmission owners — particularly in PJM — now argue this crisis can be resolved by state-led processes that would allow these transmission owners to build and rate base new generation.”
Ultimately the issues the ANOPR raises will only be dealt with by adding more generation, along with the transmission required to bring that to market, American Electric Power said.
“AEP’s proposal in its initial comments achieves this goal by focusing on long-term, proactive solutions to generator interconnection, transmission planning and cost allocation,” the utility said. “AEP’s proposal supports the expedited connection of data centers and large industrial loads to the electric grid by effectively combining short-term speed-to-power solutions, with longer-term generator interconnection reforms and proactive transmission planning, which address the root causes of the current slow pace of large load interconnection.”
Google also argued that the root of the issue is more infrastructure, though its comments focused on transmission, which is squarely in FERC’s jurisdiction.
“The combination of aging infrastructure, decades of underinvestment and fragmented, highly localized planning practices have resulted in a transmission grid that is struggling to keep up with the demands of this new growth, including from data centers,” Google said. “As a result, it takes too long to interconnect new large loads and new generation, and the cost of doing so is too high. Lengthy interconnection delays are directly driving up energy prices. When new supply remains locked in a queue, it cannot meet rising demand in time, which puts upward pressure on all prices, including for energy, capacity and ancillary services. Resolving those bottlenecks by building the necessary transmission infrastructure is one of the principal steps our nation can take to solve all of those challenges.”
Talen said the only path forward was to develop new generation through transparent, market-based mechanisms that provide clear investment signals and maintain regulatory certainty.
“The fundamental underlying issue of resource adequacy will not be solved solely through a rulemaking process addressing large load interconnection,” Talen said. “Supporting market-based mechanisms designed to ensure sufficient generation resources are available to serve load demand is more pressing (and within the commission’s jurisdiction) than the issues raised by the ANOPR.”
