FERC on Monday approved PacifiCorp’s changes to its generator interconnection procedures that will allow it to use retiring generators’ interconnection capacity for new power plants in a process overseen by an independent coordinator (ER23-407).
The commission has already approved similar rules for Dominion Energy South Carolina, Public Service Company of Colorado and Duke Energy’s utilities in the South.
PacifiCorp argued that its new rules are superior to FERC’s pro forma interconnection rules because they create efficiencies by using existing interconnection capacity of retiring facilities, cutting interconnection timelines and uncertainty for new plants that use the process. Using existing interconnection capacity means that no new lines will have to be built to reliably connect power plants.
The Western Power Trading Forum told FERC that the independent coordinator was needed to minimize possible anticompetitive impacts from PacifiCorp reusing its old plants’ interconnection capacity, especially when the new generators use a different fuel.
TerraPower supported the rules, which it plans to use in the development of its Natrium nuclear reactor demonstration project at the site of PacifiCorp’s coal-fired Naughton Power Plant, where the remaining two units are set to retire in 2025.
FERC conditionally accepted the rules, subject to PacifiCorp fixing a typographical error on one of its tariff sheets.
“We find that PacifiCorp’s proposed generator replacement process provides substantial benefits and, in combination with the safeguards against unduly discriminatory implementation provided by the proposed independent coordinator, satisfies the consistent with or superior to standard with respect to the pro forma” large generator interconnection procedures, FERC said.
The generator replacement rules are similar to ones FERC has approved for other utilities in the past, and they should produce the same benefits, the commission said. They will create efficiencies by using existing interconnection facilities at retiring facilities; reduce interconnection timelines; save money for customers by decreasing new construction; and cut interconnection-related uncertainty in generation resource planning.
While PacifiCorp owns “a significant share” of the existing generation on its system, FERC said the replacement model would provide benefits, as it comes with the independent consultant’s review.
The order drew a dissent from Commissioner Allison Clements, who said PacifiCorp failed to show that the proposal is consistent with or superior to FERC’s pro forma interconnection rules.
“In particular, protesters make compelling arguments, not present in those previous generator replacement rights proceedings, highlighting the potential for anticompetitive outcomes under PacifiCorp’s proposal,” Clements said. “Based on the record before us, I cannot conclude that the benefits of this proposal outweigh the potential significant negative impacts on open access and competition in the PacifiCorp region.”
The main question is whether PacifiCorp will be able to retain up to 5,000 MW of interconnection rights in perpetuity without any opportunity for new generation to gain access to it. Clements said that the D.C. Circuit Court of Appeals rejected similar rules for Xcel Energy because of concerns of their anticompetitive effects and potential for undue discrimination.
