On March 19, 2015, the Federal Energy Regulatory Commission ("FERC") issued Order No. 807, which amends certain of FERC's rules with respect to the ownership, control, and operation of Interconnection Customer's Interconnection Facilities ("ICIF"). In particular, Order No. 807 addresses the circumstances under which ICIF owners and operators are required to have an Open Access Transmission Tariff ("OATT") on file with FERC, to implement an Open Access Same-Time Information System ("OASIS"), and to comply with FERC's Standards of Conduct.
In the past, FERC has waived the OATT, OASIS, and Standards of Conduct requirements on a case-by-case basis in situations where ICIF owners have been able to demonstrate that their ICIF are limited and discrete and where no requests have been made by third parties to access the ICIF. In circumstances where a third party submits a request for service, FERC has determined that an ICIF owner and its affiliates have priority to existing excess capacity on the ICIF if the owner can demonstrate that there are pre-existing generator expansion plans and that material progress has been made towards meeting construction milestones for the expansion. However, even in situations where the ICIF owner has been able to demonstrate that it should have priority rights to the excess capacity, FERC has required the owner to file an OATT within 60 days of receiving a request for service from a third party.
Recognizing that this existing policy imposes regulatory burdens and unnecessary risks on generation developers, FERC's Order No. 807 grants a blanket waiver of the OATT, OASIS, and Standards of Conduct requirements to public utilities that are subject to those requirements solely as the result of owning, controlling, or operating ICIF. To be eligible for the blanket waiver, the ICIF owner or operator must either sell electricity, or file a statement with FERC that it commits to comply with, and be bound by, the obligations and procedures applicable to electric utilities under Section 210 of the Federal Power Act (the "FPA").
Under the new rules promulgated in Order No. 807, the blanket waiver is not automatically revoked if a third party submits a request for service, but may be revoked upon a third party's application for service under Sections 210 and 211 of the FPA to the extent that the Commission determines that revocation is in the public interest. The rules state that, in any such proceedings, FERC will consider it to be in the public interest to grant priority rights to the owner/operator of the ICIF where it is demonstrated that the owner/operator has specific plans with milestones to use such capacity to interconnect its or its affiliates future generation projects. Moreover, FERC adopted a rebuttable presumption that, for the first five years after the commercial operation date of the ICIF, the owner/operator has definitive plans to use the capacity and that it is in the public interest to grant priority rights to such owner/operator. Order No. 807 also expressly clarifies that ICIF owners may enter into voluntary agreements that allow other entities to obtain service on the ICIF.