FERC's recent Sky River decision highlights issues for owners of generator lead lines regarding the use of such lines by unaffiliated third parties.

Sky River, LLC owns a wind project and an interest in an associated lead line to connect to the transmission grid. Other qualifying facilities also use the nine-mile, 320-kV generator lead line. Sky River negotiated a common facilities agreement to allow a third party, WindStar Energy, LLC, to use the line to transmit power from WindStar's proposed wind project to its point of interconnection on the transmission grid.

With Sky River as owner and WindStar as licensee, the parties filed the common facilities agreement for FERC approval under Section 205 of the Federal Power Act. The parties requested waiver of Sky River's requirement to post an open access transmission tariff (OATT), which, pursuant to Order No. 888, is required for the provision of jurisdictional transmission service. FERC has often granted waivers to entities that only own discrete and limited interconnection facilities, such as a generator lead line.

In this instance, however, FERC rejected the common facilities agreement. FERC stated that Sky River cannot provide transmission service to an unaffiliated third party outside the context of an OATT. In the circumstances involving WindStar, an unaffiliated third party, FERC determined that Sky River was required to publish an OATT and process a transmission service request pursuant to that OATT, as outlined in Order No. 888.

Sky River affects numerous generators with lead lines. It would require them to publish an OATT when an unaffiliated third party requests service on the line. The Sky River decision rejects common facilities agreements with unaffiliated third parties that involve generator lead lines because they have been determined to result in the provision of jurisdictional services outside of FERC's open access requirements.

Rehearing requests are due March 2, 2010.