The DOE proposes a standardized FERC interconnection process for data centers and other large industrial load

In addition to large end-users directly interconnecting to the transmission grid, the proposal also addresses large end-users seeking to share a point of interconnection with a new or existing generating facility (which are referred to in the Secretary’s proposal as “hybrid” facilities).

The proposal contains the following set of principles that should inform FERC’s process:

1. FERC only has jurisdiction over facilities that interconnect to the transmission system in interstate commerce, not to facilities that interconnect to the distribution system or to transmission in intrastate commerce.
2. The rules should only apply to new loads greater than 20 MW.
3. Loads and hybrid facilities should be studied together in the interconnection process with generating facilities. The proposal explains that “[s]uch an approach will allow for efficient siting of loads and generating facilities and thereby minimize the need for costly network upgrades.”
4. Similar to the generator interconnection process, load and hybrid facilities should be subject to standardized study deposits, readiness requirements, and withdrawal penalties, to deter speculative projects.
5. Hybrid facilities should be studied based on the amount of injection and/or withdrawal rights requested. “For example, a hybrid facility consisting of a 500 MW load and a 600 MW generating facility may seek no withdrawal rights and 100 MW of injection rights.”
6. Any hybrid interconnection should be required to install system protections necessary to prevent unauthorized injections or withdrawals.
7. The interconnection of large loads and hybrid facilities that agree to be curtailable and dispatchable should be expedited.
8. Large loads and hybrid facilities must be responsible for 100% of the network upgrades they are assigned through the interconnection process. The DOE states that it is seeking comments on whether those costs should be offset through a crediting mechanism (similar to that available in the generator interconnection process).
9. The load should have the same “option to build” as a generator does under the generator interconnection process.

The Secretary issued its directive to FERC pursuant to Section 403 of the Department of Energy Organization Act. That section allows the Energy Secretary to propose rules, regulations and statements of policy on issues that are within FERC’s jurisdiction; however, it is FERC’s decision as to whether to adopt a proposal from the Secretary. It was pursuant to Section 403 that the Energy Secretary in 2017, under the first Trump Administration, proposed that FERC implement a resiliency pricing mechanism to address the premature retirement of primarily coal and nuclear resources. FERC, then under a Republican chair and with a Republican majority, declined to adopt the Administration’s proposal, thereby illustrating FERC’s status as an “independent” agency.

Authored by Chip Cannon.