with affected system operators.\262\ The Commission also did not
require that affected system operators give interconnection customers
the affected systems study results at any specific time in the
generator interconnection process.
---------------------------------------------------------------------------

    \262\ Transmission providers are obliged to coordinate the
conduct of affected system studies (see pro forma LGIP section 3.6),
but the Commission has not required transmission providers to follow
any specific affected systems study process.
---------------------------------------------------------------------------

    178. The Commission convened a technical conference in Docket No.
AD18-8-000 to explore affected systems coordination issues and address
a complaint filed by EDF in Docket No. EL18-26-000 regarding affected
systems coordination between PJM, MISO, and SPP. In the order on
complaint and technical conference, the Commission declined to act
generically to reform affected systems requirements but required PJM,
MISO, and SPP to clarify certain aspects of their affected systems
study processes in their tariffs and joint operating agreements
(JOA).\263\
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    \263\ EDF v. MISO, 168 FERC ] 61,173.
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b. Need for Reform
    179. As further discussed below, affected systems study processes
lack consistency between transmission providers.\264\ Interconnection
customers

need a timely cost determination to make decisions to facilitate the
interconnection of their generating facilities, and without any
requirement for a timely cost determination, affected system operators
may not return study results in time for interconnection customers to
make those decisions.\265\ As explained earlier, interconnection queues
have dramatically increased in size and are only getting larger.
Without an efficient affected system study process that enables
interconnection customers to receive affected system study results and
cost estimates in a timely manner, there will continue to be late-stage
withdrawals due to unexpected high costs for affected system network
upgrades and resulting re-studies and delays.\266\
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    \264\ See May Joint Task Force Tr. 67:6-8 (Dan Scripps)
(``Specifically, there may be an opportunity to create a general
framework that would be consistent across RTO seams.''); id. 68:12-
18 (Ted Thomas) (agreeing with Chair Scripps that ``the most
effective place that FERC can operate is in the area where you have
two RTOs and the real issue is getting them on the same page'').
    \265\  See id. 65:2-8 (Dan Scripps) (citing affected systems
studies as ``a growing source of delay and cost uncertainty for
interconnection customers, both in terms of just the timelines
involved and the difficulty in pinning those down'').
    \266\ See id. 67:14-17 (Dan Scripps) (``[W]e expect the affected
systems study process to become increasingly critical as more
renewable resources come online in renewable rich areas and
transmission capacity becomes ever more scarce.'').
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    180. During the technical conference in Docket No. AD18-8-000 and
in comments on the ANOPR,\267\ interconnection customers have
recommended standardization of the affected systems study process.
Specifically, they requested that the Commission standardize the timing
of study results, the amount of study costs, and modeling criteria used
in affected systems studies.\268\
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    \267\ See, e.g., Clean Energy Coalition, Supplemental Comments,
Docket No. RM21-17-000, at 9-12 (filed Feb. 14, 2022).
    \268\ See also May Joint Task Force Tr. 64:18-24 (Dan Scripps)
(stating that ``FERC may have a larger role to play in issues that
cross RTO boundaries, particularly, around cross-RTO affected system
studies where individual RTOs have limited control'' and certainty
``around the timing of affected systems studies'').
---------------------------------------------------------------------------

    181. Currently, detailed information about any two transmission
providers' affected systems study processes is found in multiple
transmission provider documents and is not necessarily cohesive, which
creates confusion and uncertainty. For example, some information about
the study process may be contained in a JOA between two transmission
providers and some may be in the transmission provider's business
practice manuals. However, much of the study process coordination
between transmission providers is ad hoc and, therefore, unclear to
interconnection customers. Affected systems study processes are also
highly variable based on region and transmission provider and may not
be uniform even across a single transmission provider's footprint.\269\
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    \269\ Compare Sw. Power Pool, Inc., Rate Schedule FERC No. 9,
MISO-SPP Joint Operating Agreement (1.0.0), with Sw. Power Pool,
Inc., Rate Schedule FERC No. 10, SPP-AECI Joint Operating Agreement
(0.0.0).
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c. Affected Systems Study Process
i. Need for Reform
    182. We preliminarily find that the lack of an affected system
study process results in Commission-jurisdictional rates that are
unjust and unreasonable because an interconnection customer cannot
evaluate its costs in a timely manner, which increases uncertainty and
may result in late-stage withdrawals and subsequent re-studies, delays,
and increased costs to the remaining interconnection customers in the
interconnection queue. Without a transparent affected system study
process, neither an interconnection customer nor the Commission can
evaluate whether the affected system operator has acted in an unduly
discriminatory manner. Reforms to improve transparency and
coordination, therefore, may be necessary to establish a just and
reasonable and not unduly discriminatory or preferential affected
systems study process.
ii. Proposal
    183. We propose to revise the pro forma LGIP to include an affected
systems study process. The proposed process includes initial
notification, affected system scoping meeting, study process, cost
allocation, study results and assessment, and financial penalties
assessment. We also propose to add several definitions to section 1 of
the pro forma LGIP, including ``Affected System Interconnection
Customer,'' ``Affected System Network Upgrades,'' ``Affected System
Scoping Meeting,'' and ``Affected System Study.''
    184. In subsection 3.6.1 of the pro forma LGIP, we propose to
require that the transmission provider notify the affected system
operator of a potential affected system impact caused by the
interconnection request within 10 business days after the close of the
first event giving rise to the identification of an affected system
impact. For transmission providers utilizing a cluster study process,
this event could be (1) the cluster request window, (2) the customer
engagement window, (3) the cluster study, or (4) the cluster re-study
as part of the first-ready, first-served cluster study process we also
propose in this NOPR (described above in section II.A). At the same
time that the transmission provider notifies the affected system, we
propose to require the transmission provider to provide the
interconnection customer with a list of potential affected systems,
along with relevant contact information. The transmission provider
would be required to provide the affected system operator data monthly,
or more frequently as needed, about its transmission system and
generation in its interconnection queue for the duration of the
affected system study process.
    185. In subsection 3.6.2 and section 9 of the pro forma LGIP, we
also propose several requirements on transmission providers acting as
an affected system, whose transmission systems may be impacted by the
proposed interconnection of a generating facility to a transmission
system other than transmission provider's transmission system. We
propose to add a new definition for the interconnection customer whose
proposed interconnection with the host transmission system impacts the
transmission provider acting as the affected system: the ``Affected
System Interconnection Customer.'' \270\ We propose to require the
transmission provider acting as an affected system, within 15 business
days of receiving notification from the host transmission provider of
an impact on its transmission system, to respond in writing indicating
whether it intends to perform an affected system study. We believe that
the proposed initial notification requirement would streamline the
affected systems study process and minimize miscommunications that lead
to delays and cost uncertainty for interconnection customers as well as
potential impacts on affected systems that may be unaccounted for
absent an effective coordination process. Firm deadlines ensure that
the notification process advances expediently and that the obligations
of each party are clear.
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    \270\ As we propose to define in the LGIP, the ``Affected System
Interconnection Customer'' shall mean ``any entity that proposes
interconnection of a device for the production and/or storage for
later injection of electricity to a transmission system other than
Transmission Provider's Transmission System.'' See proposed LGIP
section 1.
---------------------------------------------------------------------------

    186. In subsection 3.6.2 of the pro forma LGIP, we propose to
require that the transmission provider acting as the affected system
schedule an affected system scoping meeting within seven business days
after providing written notification that it intends to conduct an

affected system study. We also propose to require that the affected
system scoping meeting be held within seven business days after it is
scheduled. The transmission provider acting as the affected system must
include the affected system interconnection customer, using best
efforts to include the transmission provider with whom interconnection
has been requested. The purpose of the affected system scoping meeting
is to discuss the potential impacts on transmission provider's
transmission system and how they may be mitigated. Within 15 business
days after the close of this meeting, the transmission provider would
share with all scoping meeting attendees the schedule to complete the
affected system study. We believe that these requirements will ensure
that all relevant parties are timely aware of relevant impacts to
affected systems and have the opportunity to discuss potential required
network upgrades and mitigation measures.
    187. In subsection 3.6.3 of the pro forma LGIP, we propose to
require that the transmission provider provide data monthly, or more
frequently as needed, regarding the amount and location of generation
in the transmission provider's interconnection queue as well as updated
information about the transmission provider's transmission system.
    188. In section 9 of the pro forma LGIP, we propose to require the
transmission provider acting as the affected system to tender an
affected system study agreement to the affected system interconnection
customer within five business days of sharing the schedule for the
affected system study.\271\ The affected system interconnection
customer must then return the executed affected system study agreement
within 10 business days of receipt.
---------------------------------------------------------------------------

    \271\ See infra PP 197-198 for an explanation of the proposed
pro forma affected system study agreement.
---------------------------------------------------------------------------

    189. In subsection 9.2 of the pro forma LGIP, we propose to require
the transmission provider acting as the affected system to use what we
refer to as a ``first-ready, first-served interconnection queue
priority approach,'' which should explain how affected system network
upgrade costs will be allocated by that transmission provider amongst
interconnection customers in separate transmission systems.\272\
Specifically, in some situations, both affected system interconnection
customers and interconnection customers on the transmission system of
the transmission provider acting as the affected system cause the need
for affected system network upgrades; in this case, each
interconnection customer's relative queue priority must be determined.
A first-ready, first-served interconnection queue priority approach
would require the transmission provider acting as the affected system
to assign the affected system interconnection customer an
interconnection queue position its interconnection queue according to
when the affected system interconnection customer executes an affected
system study, rather than when the affected system interconnection
customer entered its host transmission provider's queue. Such a
position would be equivalent to that of a transmission provider's own
interconnection customer that had just received its cluster study
report. Under subsection 9.8 of the pro forma LGIP, the transmission
provider acting as the affected system must allocate network upgrade
costs in accordance with LGIP section 4.2.3, which requires using a
proportional impact method, as discussed above in section II.A.4.
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    \272\ See, e.g., Sw. Power Pool, Inc., 179 FERC ] 61,148 (2022)
(accepting JOA between SPP and MISO with similar queue priority
provisions setting forth, in section 9.4 of the JOA, procedures
under which ``[t]he relative queue position for interconnection
requests in the MISO or SPP interconnection queues will be
determined . . .'').
---------------------------------------------------------------------------

    190. In subsection 9.6 of the pro forma LGIP, the transmission
provider acting as the affected system must provide the affected system
interconnection customer with affected system study results within 90
calendar days after the receipt of the executed affected system study
agreement. The transmission provider acting as the affected system
would be required to include in the study results both the estimated
costs for any network upgrades identified in the study and the timing
for the construction of those network upgrades.
    191. In subsection 9.9 of the pro forma LGIP, we also propose to
require, after the completion of the affected system study, that the
transmission provider acting as the affected system provide the
affected system interconnection customer with an affected system
facilities construction agreement within 30 calendar days after
providing the affected system study results.\273\ The affected system
interconnection customer would then be required to notify the
transmission provider within five business days of executing its
generating interconnection agreement with its host transmission
provider whether it would like to execute the affected system
facilities construction agreement or request it to be filed unexecuted
with the Commission. The transmission provider acting as the affected
system would then be required to execute (or file unexecuted) the
affected system facilities construction agreement within five business
days after receiving such direction from the affected system
interconnection customer.
---------------------------------------------------------------------------

    \273\ See infra PP 200-201 for a discussion of the proposed pro
forma affected system facilities construction agreement.
---------------------------------------------------------------------------

    192. In subsection 9.6 of the pro forma LGIP, we propose to impose
financial penalties on transmission providers acting as the affected
systems that fail to timely complete actions required within section 9
of the pro forma LGIP, in accordance with the proposed new section 3.9
of the pro forma LGIP, discussed above.\274\ We reiterate that
transmission providers conducting cluster studies are not required to
delay those studies by waiting for the results of affected systems
studies. A host transmission provider would not be penalized for a late
Affected System Study, and we do not require a host transmission
provider to wait on the results of an Affected System Study to conduct
its Cluster Study, so any Affected System Study delay would not delay
such a Cluster Study. The transmission provider acting as the affected
system is the only entity that would be penalized for failure to timely
complete an Affected System Study.
---------------------------------------------------------------------------

    \274\ See supra P 169.
---------------------------------------------------------------------------

    193. These proposals aim to streamline the affected systems study
process by addressing concerns about the lack of transparency and
certainty in the affected systems study process. A detailed affected
systems study process within the pro forma LGIP would prevent the use
of ad hoc approaches that may give rise to interconnection customers
being treated in an unjust, unreasonable, unduly discriminatory, or
preferential manner. Such an approach would provide interconnection
customers certainty regarding expectations throughout the generator
interconnection process, including greater cost certainty when it is
time to finalize an LGIA. Definitive deadlines should ensure that the
process moves along expediently, provide clarity and certainty in costs
prior to an interconnection customer finalizing an LGIA, and provide
increased transparency throughout the study process that should
minimize opportunities for undue discrimination. We seek comment on the
proposed affected systems study process.

d. Pro Forma Agreements
i. Need for Reform
    194. We are concerned that the lack of pro forma agreements related
to affected system studies and the construction of network upgrades on
affected systems is both hindering the efficiency of the generator
interconnection process through increased litigation over such
agreements and leaving the door open to potential unduly discriminatory
behavior against interconnection customers whose interconnection
requests necessitate affected system network upgrades. In Order No.
2003, the Commission found that standard agreements applicable to large
generating facilities would, among some other functions, minimize
opportunities for undue discrimination and expedite the development of
new generation, while protecting reliability and ensuring that rates
are just and reasonable.\275\
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    \275\ See Order No. 2003, 104 FERC ] 61,103 at PP 12, 919.
---------------------------------------------------------------------------

    195. We believe that there is a pressing need for (1) a
standardized, uniformly applicable affected system study agreement that
stipulates how to study the impact of interconnecting generating
facilities on an affected system to identify network upgrades needed to
accommodate the interconnection request and (2) a standardized affected
system facilities construction agreement to set the terms and
conditions for the construction of those network upgrades to minimize
opportunities for undue discrimination against interconnection
customers and expedite the development of new generation.\276\ In Order
No. 2003, the Commission stated that, if an affected system operator
fails to provide information in a timely manner, the transmission
provider may proceed in the generator interconnection process without
taking into account the information that could have been provided by
the affected system operator. However, there is no definition for a
``timely manner'' and affected system study delays could result in
delays to the host transmission provider's interconnection study
process.\277\ Additionally, the Commission found in Order No. 2003
that, when an interconnection customer is required to pay for network
upgrades on an affected system, the interconnection customer must enter
into an agreement with the affected system operator unless the costs
are incorporated in the interconnection agreement between the
interconnection customer and the host transmission provider.\278\
Although the Commission incorporated this requirement into article
11.4.1 of the pro forma LGIA, the pro forma LGIP does not contain a pro
forma agreement that governs the terms and conditions of the affected
system study process to identify when the interconnection request
requires network upgrades to be built on the affected system. The
Commission has recently seen disputes arising from an affected system
operator attempting to negotiate terms not in accordance with the pro
forma LGIA and Order No. 2003.\279\ With the increasing number of
affected system-related disputes, it has become apparent that the
current approach is an inadequate and inefficient means to address
affected system issues.
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    \276\ Id. P 11.
    \277\ Id. P 121.
    \278\  Id. P 739.
    \279\ See Duke Energy Progress, LLC, 177 FERC ] 61,001, reh'g
denied, 177 FERC ] 62,114 (2021), appeal pending sub nom. Duke
Energy Progress, LLC v. FERC, No. 21-1272 (Dec. 27, 2021); see also
Edgecombe Solar Energy LLC v. Duke Energy Progress, LLC, 177 FERC ]
61,122 (2021).
---------------------------------------------------------------------------

    196. We preliminarily find that it is unjust and unreasonable to
leave affected systems facilities construction agreements wholly up to
individualized negotiations because such negotiations leave open
opportunities for undue discrimination against interconnection
customers throughout the process. Among other things, the pro forma
LGIA sets terms and conditions for the construction of network upgrades
identified as necessary to interconnect the generating facility to the
transmission owner's transmission system to which it will directly
connect. However, the Commission does not have a similar pro forma
agreement governing the construction of affected system network
upgrades. Notably, MISO has both a pro forma facilities construction
agreement and a pro forma multi-party facilities construction agreement
in its tariff for instances when an interconnection customer is
interconnecting to the MISO transmission system and network upgrades
are needed to ensure reliability on a neighboring transmission owner's
transmission system within the MISO footprint.\280\ Specifically,
MISO's pro forma facilities construction agreement is an agreement for
network upgrades constructed for an interconnection customer by a MISO
transmission owner other than the MISO transmission owner with which it
directly interconnects. MISO's pro forma multi-party facilities
construction agreement is used when multiple interconnection requests
cause the need for construction of common network upgrades (network
upgrades that are constructed by a transmission owner for more than one
interconnection customer) on the transmission owner's transmission
system to which the interconnection customer is either directly or
indirectly connecting to in MISO. The Commission found in its
acceptance of these pro forma agreements that MISO accomplished the
goal of Order No. 2003 to standardize procedures. As evidence of the
importance of these pro forma agreements, which set consistent terms
and conditions for the construction of network upgrades necessary for
an interconnection customer's interconnection, more than 69 multi-party
facilities construction agreements have been executed since 2017.\281\
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    \280\ MISO Tariff, attach. X, app. 8 (Facilities Construction
Agreement) (45.0.0); id. app. 9 (Multi-Party Facilities Construction
Agreement) (45.0.0).
    \281\ MISO, Transmittal, Docket No. ER21-2793-000 (filed Aug.
31, 2021).
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ii. Proposal
(a) Pro Forma Affected System Study Agreement
    197. We propose to establish a pro forma affected system study
agreement to further improve the efficiency and transparency of the
interconnection customer's interaction with the affected system
operator. We believe that a pro forma affected system study agreement
could reduce uncertainty for the interconnection customer and save time
by reducing the need for individualized negotiations for each
interconnection customer with the affected system operator.
    198. We propose to model the pro forma affected system study
agreement, incorporated as a new Appendix 15 to the pro forma LGIP, on
the form of the existing pro forma system impact study agreement, with
necessary minor revisions to the party names.\282\ Specifically, the
affected system interconnection customer and transmission provider
acting as the affected system would be parties to the agreement to
ensure close coordination, which should reduce delays and errors in the
affected system study process.
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    \282\ We also note that the Commission recently approved
adoption of a pro forma affected system study agreement for CAISO,
which CAISO proposed in anticipation of an increase in the need to
perform affected system studies. Cal. Indep. Sys. Operator Corp.,
178 FERC ] 61,223 (2022) (delegated order).
---------------------------------------------------------------------------

    199. In article 5 of the proposed affected system study agreement,
we propose to require the affected system study to provide the
following information: identification of any circuit breaker short
circuit capability limits

exceeded as a result of the interconnection; identification of any
thermal overload or voltage limit violations resulting from the
interconnection; identification of any instability or inadequately
damped response to system disturbances resulting from the
interconnection; a non-binding, good faith estimated cost of facilities
required to interconnect the Affected System Interconnection Customer's
project to its host transmission provider's system; and a description
of how such facilities will address the identified short circuit,
instability, and power flow issues. We seek comment on whether the
information required for the study report provides adequate information
to the affected system interconnection customer to understand the
results of the affected system study.
(b) Pro Forma Affected Systems Facilities Construction Agreement
    200. We propose to revise the pro forma LGIP to add a new Appendix
16 to include a pro forma affected systems facilities construction
agreement. A pro forma affected systems facilities construction
agreement would improve the efficiency of the generator interconnection
process by reducing delays through improved coordination among the
parties and minimizing opportunities for undue discrimination.
    201. The proposed Appendix 16 includes 11 articles based on the pro
forma facilities construction agreement included in MISO's tariff,
including: terms of the agreement; construction of network upgrades;
taxes; force majeure; information reporting; security, billing, and
payments; assignment; indemnity; breach, cure, and default;
termination; contractors; confidentiality; information access and audit
rights; dispute resolution; and notices. Appendix A to the agreement
details network upgrades, cost estimates and responsibility,
construction schedule, and payment schedule. Appendix B discusses how
to handle notification of completed construction. Appendix C includes
the transmission provider site map, the site plan, the network upgrades
plan and profile, and the estimated cost of the network upgrades.
    202. The affected systems facilities construction agreement would
be entered into by the transmission provider acting as the affected
system and the affected system interconnection customer. The
transmission provider acting as the affected system would be
responsible for the design, procurement, construction, and installation
of all network upgrades identified in Appendix A using reasonable
efforts to complete construction consistent with the schedule
identified in Appendix A. The affected system interconnection customer
will initially fund the cost of any assigned network upgrades and be
reimbursed by the transmission provider acting as the affected system.
Because affected system interconnection customers do not take
transmission service over the affected system's transmission system, we
do not require transmission providers acting as affected systems to
reimburse affected system interconnection customers with transmission
service credits. Rather, we propose to require that the transmission
provider acting as the affected system repay the affected system
interconnection customer the full cost of network upgrades, plus
interest, in a term to be mutually agreed upon but not to exceed 20
years. This term mirrors the repayment term in the pro forma LGIA but
allows for flexibility for the parties to come to another arrangement
if they prefer. Within six months of construction completion of the
network upgrades, the transmission provider acting as the affected
system would invoice the affected system interconnection customer for
the final construction costs to include a true-up of estimated and
actual costs. The affected system facilities construction agreement
would terminate upon the transmission provider acting as the affected
system's final repayment to the affected system interconnection
customer. The affected system interconnection customer could also
terminate the affected system facilities construction agreement with 60
days' written notice to the transmission provider acting as the
affected system.
    203. We seek comment on the network upgrade funding and repayment
provisions in the proposed affected system facilities construction
agreement. Specifically, we seek comment as to the repayment time frame
and whether the similarity of the proposal to the repayment terms in
the pro forma LGIA is appropriate.
    204. We also seek comment on whether any additional articles or
provisions should be added to the pro forma affected system facilities
construction agreement or whether the proposed provisions are
sufficient.
e. Affected System Modeling and Study Assumptions
i. Background
    205. When an interconnection customer submits an interconnection
request, they must choose to be studied as ERIS or NRIS, depending on
the level of deliverability they will ultimately seek for the electric
output of their facility. For interconnection customers seeking to
deliver their generating facility's electric output using the existing
firm or non-firm capacity of the transmission provider's system on an
as-available basis, the interconnection customer will choose an ERIS
study. A customer will choose an NRIS study when seeking to integrate
their generating facility with the transmission provider's system (1)
in a manner comparable to that in which the transmission provider
integrates its generating facilities to serve native load customers or
(2) in an RTO/ISO with market-based congestion management, in the same
manner as network resources.\283\ An NRIS study goes beyond the
prerequisite ERIS study and uses stricter modeling standards \284\ to
assess an interconnection request to ensure that the interconnection
customer's electric output is deliverable to load in aggregate on the
host transmission provider's system.\285\ Such a deliverability
analysis varies from region to region but can analyze anything from
various stressed dispatch scenarios to an additional set of
contingencies. As such, an NRIS study

will likely identify more network upgrades than an ERIS study.
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    \283\ ``Network Resource shall mean any designated generating
resource owned, purchased, or leased by a Network Customer under the
Network Integration Transmission Service Tariff. Network Resources
do not include any resource, or any portion thereof, that is
committed for sale to third parties or otherwise cannot be called
upon to meet the Network Customer's Network Load on a non-
interruptible basis.'' Pro forma LGIP section 1; pro forma LGIA art.
1.
    \284\ The term ``modeling standard'' refers to the distribution
factor threshold on a transmission element used by transmission
providers, such that beyond this threshold an interconnection
request will require network upgrades. For example, for SPP, if a
transmission element is found to be overloaded in the study, and an
NRIS interconnection request has over a 3% distribution factor on
that element, the requesting entity will be assigned network
upgrades. SPP uses a 19.5% distribution factor threshold for ERIS
requests. See EDF v. MISO, 168 FERC ] 61,173 at P 17. A lower
threshold indicates a stricter modeling standard because a smaller
impact triggers network upgrades. Additionally, when conducting an
affected system analysis, although some RTOs/ISOs (PJM and SPP, for
example) use a modeling standard associated with the same level of
service as requested on the host transmission provider's
transmission system, the output of proposed generating facilities is
always sunk into the host transmission provider's transmission
system by reducing the output of other generating facilities on that
system. Id. P 85.
    \285\ See Order No. 2003, 104 FERC ] 61,103 at P 768; Order No.
2003-A, 106 FERC ] 61,220 at P 500. Specifically, a transmission
provider studying generating facility for NRIS would study the
transmission system at peak load, under a variety of severely
stressed conditions to determine whether, with the generating
facility operating at full output, the aggregate of generation in
the local area can be delivered to the aggregate of load, consistent
with reliability criteria and procedures.
---------------------------------------------------------------------------

    206. When an affected system operator is notified of a possible
impact on its system due to an interconnection request on the host
transmission provider's system, the host transmission provider must
specify whether the interconnection customer requested ERIS or NRIS.
Currently, there is no requirement for transmission providers acting as
affected system operators to apply either ERIS or NRIS modeling
standards to study interconnection requests made on neighboring
systems. For example, MISO, as an affected system, studies all
interconnection requests from host transmission systems using ERIS
modeling standards, even if the interconnection customer requested NRIS
on the host system. In contrast, PJM and SPP, as affected systems,
study interconnection requests from host transmission systems using the
modeling standards associated with the level of service requested by
the interconnection customer on the host transmission system (i.e.,
they study ERIS requests as ERIS and NRIS requests as NRIS).\286\
---------------------------------------------------------------------------

    \286\ EDF v. MISO, 168 FERC ] 61,173 at PP 75-76.
---------------------------------------------------------------------------

    207. Commenters in Docket No. AD18-8-000 (the affected systems
coordination technical conference proceeding) \287\ support the MISO
approach of using ERIS criteria to study affected system
interconnection requests, regardless of the level of service requested
by the interconnection customer.\288\ Some argued that the Commission
should require affected system transmission providers to use the ERIS
modeling standard for affected system analysis regardless of whether
the interconnection customer requests NRIS or ERIS in the host
system.\289\ This is due to the fact that the interconnection customer
would not get NRIS on the affected system, yet could be required to pay
for more extensive network upgrades based on the stricter modeling
assumptions.
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    \287\ Relevant comments are incorporated into the discussion
below, and a full summary of comments is available in Midcontinent
Indep. Sys. Operator, Inc., 169 FERC ] 61,173 at PP 79-85.
    \288\ Midcontinent Indep. Sys. Operator, Inc., 169 FERC ] 61,173
at P 82.
    \289\ Id. P 79.
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i. Need for Reform
    208. The use of different modeling standards can significantly
alter an interconnection customer's network upgrade costs. As explained
above, the NRIS modeling standard studies the generating facility's
full output such that it would be deliverable at all times. However, on
an affected system, the interconnection customer does not seek to
deliver power even if it is studied under the NRIS modeling standard.
    209. Further, an affected system has no obligation to continually
ensure deliverability for a generating facility on a neighboring
transmission system that has obtained NRIS on its host transmission
provider's system. Specifically, under Order No. 2003, a host
transmission provider must maintain its system to: (1) ensure that
NRIS-interconnected resources can transmit their output to other
electrical areas within the transmission provider's system, even while
other generating facilities in the same electrical area are at peak
output; and (2) allow the resource to be designated as a network
resource for the life of the interconnection agreement.\290\ Order No.
2003 places no similar requirements on affected system operators to
ensure deliverability for NRIS customers interconnecting to a host
transmission provider's system. Thus, the potential exists for an
interconnection request to be studied by an affected system as NRIS and
for an interconnection customer to construct significant network
upgrades on the affected system, but not be fully deliverable on the
host system due to curtailment or congestion on the affected system.
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    \290\ Order No. 2003 provided that NRIS interconnection entitles
a generating facility to be treated in the same manner as the
transmission provider's own resources in assessing whether aggregate
supply is sufficient to meet aggregate load within the transmission
provider's control area. Order No. 2003, 104 FERC ] 61,103 at P 768.
On rehearing, Order No. 2003-A clarified that: ``NRIS ensures that
the generating facility, as well as other generating facilities in
the same electrical area, can be operated simultaneously at peak
load and that any output produced above peak load requirements can
be transmitted to other electrical areas within the transmission
provider's transmission system. Thus, NRIS ensures that output of
the generating facility will not be `bottled up' during peak load
conditions.'' Order No. 2003-A, 106 FERC ] 61,220 at P 531. Order
No. 2003-A further clarified that ``[t]he [NRIS] interconnection
customer holds, through the life of the interconnection agreement,
the right to use the network upgrade capacity that allows the
generating facility to be designated as a network resource.'' Id. P
560.
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    210. We preliminarily find that it is unjust and unreasonable for a
transmission provider acting as the affected system to study
interconnection requests on other transmission systems using NRIS
modeling standards. As noted above, unlike the transmission provider
with which affected system interconnection customer will directly
interconnect, a transmission provider acting as the affected system
does not have a continuing obligation to operate its system so that
NRIS resources will remain deliverable on the host system. Without such
an obligation, an affected system interconnection customer may be
required to construct significant network upgrades on the transmission
provider's affected system, but not be fully deliverable due to
curtailment or congestion on the affected system. We are concerned that
this results in unjust and unreasonable rates by increasing the costs
for the interconnection customer without a commensurate increase in
service.
iii. Proposal
    211. We propose in new subsection 9.6 of the pro forma LGIP to
require the transmission provider acting as the affected system to
study interconnection requests using ERIS modeling standards,
regardless of the requested level of service on the host transmission
provider's transmission system. However, if a transmission provider
acting as an affected system believes that it is necessary to study an
interconnection request that is requesting NRIS-level service using
NRIS modeling standards, such a transmission provider could make a
filing under section 205 of the FPA. The Commission will evaluate such
case-by-case section 205 filings to determine whether they are just and
reasonable, and not unduly discriminatory or preferential.\291\ A
transmission provider acting as an affected system making this type of
filing should provide evidence indicating that using NRIS modeling
standards in such a scenario would not treat similarly situated
customers differently or afford similar treatment to dissimilar
customers. In addition, this section 205 filing could contain, for
example, such supporting documentation as a reference to a NERC
Reliability Standard violation, an operational concern such as over-
duty breakers, fault current violations, impacts on transmission
stability, increased loop flows or other concerns that implicate any
other critical reliability parameters. We seek comment on how to align
the possibility for such case-by-case section 205 filings with the
required timeline for the affected system study and other deadlines
proposed herein for affected system studies.
---------------------------------------------------------------------------

    \291\ 16 U.S.C. section 824d.
---------------------------------------------------------------------------

    212. With respect to the proposal for a transmission provider
acting as the affected system to study interconnection requests using
ERIS modeling standards, regardless of the requested level of service
on the host transmission provider's transmission system, a standard
modeling requirement would create consistency in the modeling standards
used across all transmission

provider regions.\292\ ERIS modeling standards, in addition, generally
reduce the number and cost of network upgrades identified. By using
these standards, we believe that interconnection customers would be
subject to fewer late-stage cost increases, which would reduce the
number of potential re-studies and withdrawals, thereby addressing the
concerns we have identified that we preliminarily find are resulting in
unjust and unreasonable and unduly discriminatory and preferential
Commission-jurisdictional rates. It would also allow interconnection
queues to be processed more quickly because affected system network
upgrades would be focused on local impacts that will generally
implicate fewer other interconnection customers, reducing the amount of
interdependence among interconnection customers. Under this reform,
fewer interconnection requests will be found to cause impacts to large
numbers of projects, which will reduce the number of high-cost network
upgrades and potential withdrawals and re-studies.
---------------------------------------------------------------------------

    \292\ We note that, while this proposal would standardize the
use of ERIS for affected system studies, individual transmission
providers use different specific thresholds for ERIS studies.
---------------------------------------------------------------------------

    213. We acknowledge that using a less stringent modeling standard
may result in more frequent redispatch or curtailment by not fully
capturing all the potential impacts of the interconnecting generating
facility(ies) on an affected system.\293\ However, we believe that
these risks are limited in nature and any significant impact would be
captured by an ERIS study, which would ensure that a proposed
generating facility can safely connect to the affected system under the
expectation it will deliver its electric output using the existing firm
or non-firm capacity of the affected system transmission provider's
system on an as-available basis. As noted above, MISO has used this
approach for many years without any adverse impacts on reliability.
Nevertheless, we seek comment on whether the proposed reform will
adversely affect reliability for the transmission provider acting as
the affected system or the host transmission provider. This could
include examples of reliability impacts caused by a transmission
provider acting as the affected system conducting an ERIS study on an
NRIS interconnection request from a host transmission provider or
examples of why an NRIS study is required to ensure reliable
interconnection on the transmission provider acting as the affected
system's system when the interconnection customer is not seeking to
NRIS on the affected system.
---------------------------------------------------------------------------

    \293\ EDF v. MISO, 168 FERC ] 61,173 at PP 80-81.
---------------------------------------------------------------------------

    214. Additionally, we understand that there is some concern that
requiring only ERIS modeling standards may be inconsistent with the
Commission's current policy of requiring interconnection customers to
be responsible for all network upgrades needed ``but for'' their
interconnection.\294\ This is because using only ERIS modeling
standards would in some cases result in curtailment or redispatch on
the affected system that is arguably caused by the interconnection
customer's proposed generating facility but that is not paid for by the
interconnection customer. For example, the full possibility of loop
flow \295\ may not be accounted for under an ERIS modeling standard.
However, we note that the Commission has previously acknowledged and
accepted that some inadvertent or unauthorized power flows are an
unavoidable consequence of interconnected public utilities and that
public utilities must work closely to ensure their operations do not
jeopardize the reliability of each other.\296\
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    \294\ See Order No. 2003, 104 FERC ] 61,103 at P 677 (``The
Commission noted that in a region that uses locational pricing, the
RTO or ISO usually assigns to the Interconnection Customer the cost
of any new network facilities that would not be in its transmission
expansion plan but for the interconnecting Generating Facility.'').
    \295\ Loop flows refer to physical flows that differ from
scheduled flows, which can cause congestion on transmission lines.
N.Y. Indep. Sys. Operator, Inc., 132 FERC ] 61,031 (2010).
    \296\ Am. Elec. Power Serv. Corp., 49 FERC ] 61,377, at 62,381
(1989), order on reh'g, 50 FERC ] 61,192 (1990).
---------------------------------------------------------------------------

    215. We seek comment on the potential impact of requiring
transmission providers acting as the affected systems to use ERIS
modeling standards when an interconnection customer seeks NRIS in the
host transmission provider's system. We seek comment as to whether
there are modifications to this proposal that would reduce the
likelihood of curtailment or redispatch on the affected system
transmission provider's system without requiring the affected system
interconnection customer to pay network upgrade costs that are not
commensurate with the level of service it receives.
3. Optional Resource Solicitation Study
a. Background
    216. Some transmission providers operate in states that take a
portfolio approach to resource planning, in which resource planning
entities procure an entire portfolio of diverse resources that all need
to interconnect to the transmission system on approximately the same
timetable. Entities that have these resource planning responsibilities
may conduct resource solicitations that involve an assessment of need
for additional resources and, if necessary, competitive acquisition
processes to procure new resources.\297\
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    \297\ See, e.g., 4 Colo. Code Regs. section 723-3:3610 (2019)
(Rule 3610: Assessment of Need for Additional Resources); id.
section 723-3:3611 (Rule 3611: Utility Plan for Meeting the Resource
Need) (establishing that ``a competitive acquisition process will
normally be used to acquire new utility resources''); id. section
723-3:3600 (Rule 3600: Applicability) (explaining which electric
utilities are subject to electric resource planning requirements);
id. section 723-3:3617 (Rule 3617: Commission Review and Approval of
Resource Plans) (providing for review and approval of resource plans
by the Colorado Commission).
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    217. To help meet the needs of entities that must develop a
resource solicitation plan or conduct a resource solicitation process
to meet state-imposed requirements,\298\ several transmission providers
offer such resource planning entities the option to initiate an
interconnection study that studies combinations of the resources that
have submitted supply bids through the resource planning entity's
resource solicitation process.\299\ For example, a resource planning
entity, under PSCo's tariff, is defined as any entity required to
develop a resource plan or resource solicitation process,\300\ which
may include LSEs that must meet state-imposed resource procurement
obligations.\301\ Though PSCo began offering this option more than a
decade ago, several other transmission providers have followed suit--
Tri-State, the Duke Southeast Utilities (i.e., Duke

Energy Carolinas, Duke Energy Progress, and Duke Energy Florida), and
Dominion offer versions of the resource solicitation study option to
resource planning entities.\302\
---------------------------------------------------------------------------

    \298\ See PSCo, 169 FERC ] 61,182 at PP 5, 14, 30; Tri-State,
174 FERC ] 61,021 at P 65; see also Tri-State, Open Access
Transmission Tariff, attach. N, Standard LGIP (7.0.0) section 1
(defining ``Resource Planning Entity'' as ``any entity required to
develop a Resource Plan or conduct a Resource Solicitation
Process,'' ``Resource Plan'' as ``any process authorized or required
by Applicable Laws and Regulations for, inter alia, the selection of
Generating Facilities,'' and ``Resource Solicitation Process'' as
``any process authorized or required by Applicable Laws and
Regulations for the acquisition of Network Resources'').
    \299\ See PSCo, 169 FERC ] 61,182 at PP 5, 14, 30; see also Xcel
Energy Operating Cos., 109 FERC ] 61,072 (2004) (accepting
modifications to LGIP terms and conditions to accommodate the
Colorado-mandated resource solicitation process, subject to certain
conditions); PSCo, Transmission and Service Agreements Tariff,
attach. N, Standard LGIP (0.8.0) section 4.2.2 (Initiation of a
Resource Solicitation Cluster) (describing process).
    \300\ E.g., PSCo, Transmission and Service Agreements Tariff,
attach. N, Standard LGIP (0.8.0) section 1 (defining ``Resource
Planning Entity'' to mean ``any entity required to develop a
Resource Plan or conduct a Resource Solicitation Process'').
    \301\ See Tri-State, 174 FERC ] 61,021 at PP 64-65.
    \302\  See Duke Energy Carolinas, LLC, Transmittal, Docket No.
ER21-1579-000, at 31 (filed Apr. 1, 2021) (explaining section 10.2,
Initiation of a Resource Solicitation Cluster); Duke, 176 FERC ]
61,075 at PP 1, 51-52; Dominion Energy S.C., Inc., Transmittal,
Docket No. ER22-301-000, at 19 (filed Nov. 1, 2021) (explaining
section 10.2, Initiation of a Resource Solicitation Cluster);
Dominion, Docket No. ER22-301-000 (Dec. 28, 2021) (delegated order).
---------------------------------------------------------------------------

    218. Under PSCo's process, interconnection requests associated with
the resource solicitation are studied separately from clusters
initiated through a fixed time interval window (e.g., bi-annual cluster
windows), respecting the queue position of any ongoing interconnection
cluster studies.\303\ Like interconnection cluster studies, the
interconnection requests that reflect the resources being considered in
the resource solicitation combinations are studied as their own cluster
and proceed through the same series of interconnection studies as other
clusters.\304\ Unlike interconnection cluster studies, however, the
resource planning entity--i.e., the entity required to develop a
resource solicitation plan or conduct a resource solicitation--requests
a position in the interconnection queue as the authorized
representative for all interconnection requests submitted to the
resource solicitation cluster, and that entity may request study of a
reasonable number of different combinations of such interconnection
requests to meet the resource planning entity's identified needs and
assumptions in the resource solicitation process.\305\ Further, PSCo
provides the study results for the requested combinations to the
resource planning entity for use in the resource solicitation process,
where interconnection-related costs may be considered as a factor in
selection. After the completion of the system impact study for the
cluster, the resource planning entity is then expected to select one of
the studied combinations prior to the commencement of any
interconnection facilities study associated with the resource
solicitation process before proceeding to that stage.\306\
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    \303\ See PSCo, 169 FERC ] 61,182 at P 14.
    \304\ PSCo, Transmission and Service Agreements Tariff, attach.
N, (Standard LGIP) (0.8.0) section 4.2.2.
    \305\ See id. Resource planning entities must also submit all
interconnection requests arising from the resource solicitation
process at the same time to ensure an equal interconnection queue
position for all generating facilities included in the resource
solicitation study and cooperate with the transmission provider in
conducting the studies as well. See id.
    \306\ See id. (referring to steps that follow ``[a]fter receipt
of the Phase 2 Report''); see also PSCo, 169 FERC ] 61,182 at P 19
(explaining, in part, that ``Phase 2 completes the traditional
system impact study by adding stability and short circuit analysis
to the power-flow analysis'').
---------------------------------------------------------------------------

b. Need for Reform
    219. Although several transmission providers offer versions of the
resource solicitation study concept to resource planning entities,
transmission providers in general are not required to offer this option
in their tariffs, and many do not. Across the country, however,
electric resource procurement mandates have led to several state-
managed and other required resource solicitations that seek to procure
entire portfolios of resources with significant interconnection
needs.\307\ These resource solicitations may be managed by LSEs or by
states. In addition, these resource solicitations may be open to all
potential resources or targeted at specific types of resources,
depending on the particular resource planning mandate or planning goals
guiding the solicitation.\308\
---------------------------------------------------------------------------

    \307\ See Fredrich Kahrl, Lawrence Berkeley Nat'l Lab'y, Solar
Energy Techs. Office, All-Source Competitive Solicitations: State
and Electric Utility Practices, at 2-7 (Mar. 2021), https://emp.lbl.gov/publications/all-source-competitive-solicitations
(describing different types of resource procurements).
    \308\ Id. at vi.
---------------------------------------------------------------------------

    220. In the Commission's recent proceeding in Docket No. AD20-18-
000, which explored offshore wind generation and potential issues
related to such generation in RTOs/ISOs, several commenters addressed
the relationship between state electric resource procurement mandates
and the generator interconnection process. Exelon and RWE Renewables
Americas, for example, supported the idea that state agencies should be
permitted to participate in the generator interconnection process as a
means to help account for state resource preferences.\309\ How new
resource procurement portfolios are studied in the generator
interconnection process is also important; for example, [Oslash]rsted
North America Offshore and the Clean Energy Associations stated that
studying new groups of resources in clusters would be more beneficial
than studying them serially, because cluster studies may better
identify opportunities to realize economies of scale from larger
network upgrades that can accommodate multiple projects.\310\ Other
commenters, however, expressed concerns regarding greater state
participation in the generator interconnection process. PJM and
Eversource Energy, for example, expressed concern that (potentially
sizable) interconnection requests associated with state participation,
if withdrawn, could have adverse consequences for other resources in
the interconnection queue.\311\
---------------------------------------------------------------------------

    \309\ See Exelon, Comments, Docket No. AD20-18-000, at 19-21
(filed May 10, 2021); see also RWERA, Comments, Docket No. AD20-18-
000, at 2 (filed May 10, 2021).
    \310\ See [Oslash]rsted North America Offshore, Comments, Docket
No. AD20-18-000, at 4-6 (filed May 11, 2021); American Clean Power
Association for the Clean Energy Associations, Comments, Docket No.
AD20-18-000, at 10-11 (filed May 10, 2021).
    \311\ See PJM, Comments, Docket No. AD20-18-000, at 6-7 (filed
May 10, 2021); Eversource, Comments, Docket No. AD20-18-000, at 8-9
(filed May 10, 2021).
---------------------------------------------------------------------------

    221. We preliminarily find that the failure to provide a study
process for entities required to conduct a resource plan or resource
solicitation process may result in rates for Commission-jurisdictional
service that are unjust and unreasonable. Resource solicitation
processes inspire a number of interconnection requests, but in most
cases, state agencies and LSEs implementing state mandates do not have
the opportunity to request dedicated studies themselves. As a result,
interconnection customers seeking to participate in a resource
solicitation are interspersed throughout the queue, making it more
difficult to compare the interconnection costs of their proposals.
Moreover, interconnection customers that submit requests associated
with state-mandated or supervised resource solicitation and selection
processes have a greater incentive to submit numerous interconnection
requests to better compete in the resource solicitation. Yet, the
volume of interconnection requests submitted in total increases
uncertainty regarding interconnection costs generally and decreases the
value of information obtained. These problems in turn make the
selection decisions to be made by state agencies and LSEs implementing
state mandates more difficult and potentially less efficient.
Additionally, the queue delays associated with increased volumes of
interconnection requests then may delay states acquiring the resources
needed to meet their resource procurement mandates. Delays in meeting
such resource procurement mandates can then raise costs to consumers
and affect reliability.
    222. Furthermore, we believe that the trends in electric resource
procurement mandates and in state-managed and

other required resource solicitations demonstrate the potential need to
provide state agencies and LSEs with the opportunity to efficiently
study solicitation requests in light of the reformed cluster study
process.\312\ While resource solicitation processes are conducted
pursuant to state mandates, not federal mandates,\313\ we believe that
there is substantial interplay between resource solicitation processes
and the generator interconnection process that should be
accommodated.\314\ We thus recognize the need for our pro forma LGIP to
better accommodate resource solicitation processes.
---------------------------------------------------------------------------

    \312\ See May Joint Task Force Tr. 54:15-55:9 (Kimberly Duffley)
(explaining that aligning the generator interconnection process and
the state solicitation process is a challenge).
    \313\ See Xcel Energy Operating Cos., 109 FERC ] 61,072 at P 43.
    \314\ See Hughes v. Talen Energy Mktg., LLC, 578 U.S. 150, 167
(2016) (Sotomayor, J., concurring) (recognizing the
``congressionally designed interplay between state and federal
regulation'' envisioned by the Federal Power Act (quoting Nw. Cent.
Pipeline Corp. v. State Corp. Comm'n of Kan., 489 U.S. 493, 518
(1989)).
---------------------------------------------------------------------------

c. Proposal
    223. We propose to revise the pro forma LGIP to require
transmission providers to allow a resource planning entity \315\ to
initiate an optional resource solicitation study,\316\ as further
described in this section. These qualifying solicitations may include
all-source procurements, or procurements focused on particular
geographic areas, such as offshore wind lease areas or other location-
constrained resource procurements.
---------------------------------------------------------------------------

    \315\ Proposed pro forma LGIP section 1 (defining ``Resource
Planning Entity'' as any entity required to develop a Resource Plan
or conduct a Resource Solicitation Process, including a relevant
state entity or load serving entity). A ``Resource Planning Entity''
could be an LSE, a state entity, a wholesale customer (e.g., an LSE
not affiliated with the transmission provider), depending on the
incidence of the state mandate(s).
    \316\ See infra notes 324-326 (defining key terms).
---------------------------------------------------------------------------

    224. We believe that this proposal will benefit interconnection
customers and transmission providers through efficiencies in studying
resources vying for selection in a qualifying solicitation process by
grouping these resources together for purposes of informational
interconnection studies. Under this proposal, a qualifying resource
planning entity (including a state agency or LSE implementing state
mandates) would play a facilitation role in helping group together and
organize interconnection requests associated with the resource planning
entity's qualifying resource solicitation process or qualifying
resource plan.\317\ The resource planning entity would identify the
valid interconnection requests associated with its qualifying resource
solicitation process or qualifying resource plan and request that the
transmission provider study several combinations of those
interconnection requests in a resource solicitation study.\318\
---------------------------------------------------------------------------

    \317\ See proposed pro forma LGIP section 4.2.2 (providing, in
part, that a ``Resource Planning Entity must . . . act as the point
of contact for purposes of the Optional Resource Solicitation Study
for all Interconnection Requests submitted to the Optional Resource
Solicitation Study'').
    \318\ See proposed pro forma LGIP section 4.2.2 (``Transmission
Provider shall conduct the Optional Resource Solicitation Study
separate from the Cluster Study Process.'').
---------------------------------------------------------------------------

    225. In other words, the proposed informational study option for
these types of interconnection requests would enable the resource
planning entity to initiate an optional resource solicitation study
evaluating the various combinations of associated interconnection
requests studied by the transmission provider. Because this arrangement
affords the resource planning entity the flexibility to indicate to the
transmission provider which interconnection requests in the optional
resource solicitation study to study (and which to discontinue
studying), this arrangement can help resource planning entities make
decisions about their resource solicitations through increased access
to information about the relative costs of different combinations of
interconnection requests. This process can also help interconnection
customers receive evidence of selection in a resource plan in a more
timely manner by providing the resource planning entity with needed
information.\319\ As the Commission has explained, it has approved
similar modifications to the interconnection process as consistent with
or superior to the pro forma LGIP, reasoning with respect to PSCo's
process that this ``innovative approach to queue management'' was ``a
reasonable approach to complying with a state-mandated resource
solicitation process'' in ``states that have mandated resource planning
programs.'' \320\
---------------------------------------------------------------------------

    \319\ See Xcel Energy Operating Cos., 109 FERC ] 61,072 at PP
38-39 (explaining that studies conducted under this concept may be
``based on an assumption that not all solicitation bids will prevail
as to that queue position,'' and may also ``avoid the need for
extensive iterative studies'' and ``minimize the number of re-
studies that will be necessary''); see also id. P 39 (``This
increased efficiency will benefit both generators participating in
the solicitation and any lower queued generators that will not
participate in the solicitation.'').
    \320\ See id. PP 22-25.
---------------------------------------------------------------------------

    226. Although prior iterations of this approach may have involved a
somewhat novel ``concept of allowing load to reserve a queue
position,'' \321\ we clarify here that interconnection customers will
maintain their queue position obtained through the cluster request
window and proceed through the regular interconnection queue alongside
all other customers. The resource planning entity under our proposal
(which may include a state agency or LSE) will not receive a queue
position. The resource planning entity must submit for inclusion in the
optional resource solicitation study valid interconnection requests
made by interconnection customers, and those interconnection customers
remain responsible for meeting all requirements associated with
maintaining their individual queue position(s).\322\ Thus, while the
resource planning entity plays an important organizational and
facilitation role regarding the initiation and progress of an optional
resource solicitation study, resource planning entities under this
proposal are not themselves requesting interconnection service,
establishing a separate interconnection queue or queue position, or
reserving interconnection capacity or transmission capacity. While this
proposal does not lessen interconnection study requirements, this
proposal allows the sharing of information to administratively simplify
the process of studying a potentially large number of interconnection
requests that are all related to the same state-authorized or mandated
resource solicitation.
---------------------------------------------------------------------------

    \321\ See id. P 24.
    \322\ See proposed pro forma LGIP section 4.2.2 (providing, in
part, that the optional resource solicitation study process is
initiated by a request to perform an Optional Resource Solicitation
Study that includes '' ``a list of Interconnection Requests, which
have already been submitted to Transmission Provider in the current
Cluster Request Window, that the Resource Planning Entity would like
evaluated in the Optional Resource Solicitation Study'' and also
that it is the ``Interconnection Customer [that] must meet all
requirements associated with maintaining its Queue Position'').
---------------------------------------------------------------------------

    227. We believe that our proposed reforms related to qualifying
resource solicitations will lead to greater efficiencies in the
interconnection study process for proposed generating facilities
participating in such solicitations, as well as for those proposed
generating facilities in the interconnection queue that are not
participating in those solicitations. Accordingly, we believe that our
proposed reforms will remedy Commission-jurisdictional rates that may
be unjust and unreasonable and deliver greater benefits for customers
in the long run than the status quo.
    228. Additionally, we note that this proposal may help resource
planning

entities procure resources more efficiently and effectively. By giving
resource planning entities the ability to initiate an optional resource
solicitation study, these reforms may also enable qualifying state
agencies and LSEs to obtain better information about the
interconnection requirements and potential network upgrade costs of
various configurations of interconnection requests associated with bids
submitted into their solicitations. With that information, state
agencies and LSEs may then be able to make more informed choices in
their qualifying solicitation processes.
    229. As mentioned above, we propose to revise the pro forma LGIP to
require transmission providers to allow resource planning entities,
i.e., any entity required to develop a resource plan \323\ or conduct a
resource solicitation process,\324\ including a state entity or LSE, to
initiate an optional resource solicitation study,\325\ as further
described in this section. Specifically, we propose to require
transmission providers to adopt new subsection 4.2.2 of the pro forma
LGIP, which outlines the optional resource solicitation study and the
roles of interconnection customers and the resource planning entity in
that process.
---------------------------------------------------------------------------

    \323\ We propose to define ``Resource Plan'' as ``any process
for, inter alia, the selection of Generating Facilities that is
competitive, substantively state agency-reviewed and approved, or
state agency-managed, and authorized or required by Applicable Laws
and Regulations.'' Proposed pro forma LGIP section 1.
    \324\ We propose to define ``Resource Solicitation Process'' as
``any process for the acquisition of Network Resources that is
competitive, substantively state agency-reviewed and approved, or
state agency-managed, and authorized or required by Applicable Laws
and Regulations.'' Id.
    \325\ We propose to define an ``Optional Resource Solicitation
Study'' as ``the informational evaluation of one or more
Interconnection Requests for a Resource Planning Entity as described
in more detail in Section 4.2.2 of this LGIP.'' Id.
---------------------------------------------------------------------------

    230. To limit opportunities for undue discrimination by
transmission providers and reduce incentives for transmission providers
or LSEs to obtain information through the optional resource
solicitation study that could be used to favor or advance the interests
of affiliated generation resources, we propose to require that a
resource plan or resource solicitation process as defined in the pro
forma LGIP either use competitive procurement techniques, or be
substantively reviewed and approved or directly managed by a relevant
state agency. Regarding competitive procurement techniques, while we do
not propose to adopt a singular definition of that term, in general, we
believe that competitive solicitation processes tend to be those that
are open, fair, and employ the services of an independent third party
that applies standardized evaluation criteria to choose amongst various
options. Regarding state agency involvement or oversight, substantive
review and approval of a resource plan or resource solicitation process
could only be demonstrated by showing that the resource plan or
resource solicitation process uses a process that results in or
involves a state commission order or state agency decision that
approves or ratifies a procurement plan or procurement results.
Substantive review and approval of a resource plan or resource
solicitation process would not be demonstrated by a purely
informational planning process that does not require state commission
or state agency approval or ratification of a procurement plan or
procurement results.\326\ Thus, only resource planning entities whose
resource plan or resource solicitation process either uses competitive
procurement techniques, or is substantively reviewed and approved or
directly managed by a relevant state agency, could qualify to request
that a transmission provider initiate an optional resource solicitation
study. We believe that these safeguards will help ensure that
interconnection studies are not unfairly used to favor the resource
planning entity's own economic self-interests.\327\
---------------------------------------------------------------------------

    \326\ We note that, while some state commissions must
substantively review and approve the contents of utility resource
plans, others simply provide interested stakeholders and the public
with transparency regarding a utility's intended resource
procurements. Compare Cal. Pub. Util. Code section 454.5(c) (2021)
(providing that the California Commission ``shall review and accept,
modify, or reject each electrical corporation's procurement plan and
any amendments or updates to the plan'') with Ind. Code section 8-1-
8.5-3(e)(2) (2022) (requiring electric utilities to submit to the
Indiana Commission an integrated resource plan); 170 Ind. Admin.
Code 4-7-2.2(g)(3) (2022) (providing that the Indiana Commission's
staff report on such submissions will ``not comment on . . . the
desirability of the utility's preferred resource portfolio'' or on
``a proposed resource action in the'' integrated resource plan); 170
Ind. Admin. Code 4-7-2.5(b) (2022) (allowing utility resource
actions to deviate from the utility's most recent integrated
resource plan if ``fully explained and justified with supporting
evidence, including an updated [integrated resource plan]
analysis'').
    \327\ See, e.g., Carolina Solar Power, LLC, 164 FERC ] 61,058,
at PP 14-16 (2018) (explaining that the use of ``a competitive
procurement'' model and an ``RFP process . . . designed to be a
rigorous, fair, and open process that is administered by an
independent evaluator and overseen by the North Carolina
Commission'' helped ``ensure just and reasonable rates'' and
``safeguard against the exercise of market power''). Substantive
review and approval--or direct management--of a resource plan or
resource solicitation process also helps indicate the commercial
readiness of the resources selected by such a process.
---------------------------------------------------------------------------

    231. The resource planning entity
    232. would be responsible for identifying the interconnection
requests it is submitting for inclusion in the optional resource
solicitation study (and for which the resource planning entity would
serve as point of contact regarding the study). The resource planning
entity would also be required to submit no more than five different
combinations of such interconnection requests to meet the resource
planning entity's identified needs and assumptions in its solicitation,
which are considered as part of the study. The resource planning entity
would not be responsible for the costs of this optional study; rather
the interconnection customer would be responsible for actual study
costs. While an additional deposit would not be required to perform
this study, the costs would be included in the true-up based on actual
costs of performing the studies.\328\ We also propose to amend the
definition of Interconnection Study in the pro forma LGIP to clarify
that the costs of an optional resource solicitation study would be the
responsibility of participating interconnection customers.\329\
---------------------------------------------------------------------------

    \328\ Pro forma LGIP Sec.  13.3 (noting that the interconnection
customer is responsible for the actual costs of interconnection
studies and any necessary restudies).
    \329\ See id. (providing, in part, that ``Transmission Provider
shall charge and Interconnection Customer shall pay the actual costs
of the Interconnection Studies''); proposed pro forma LGIP Sec.  1
(adding ``Optional Resource Solicitation Study'' to the definition
of ``Interconnection Study'').
---------------------------------------------------------------------------

    233. The resource planning entity and the transmission provider
would determine a mutually agreeable scope of study for the optional
resource solicitation study. We propose that the transmission provider
must evaluate each combination of interconnection requests submitted by
the resource planning entity as a group, in the same manner it will
perform cluster studies under the proposed pro forma LGIP. The resource
planning entity must act as the point of contact for purposes of the
optional resource solicitation study for all interconnection requests
submitted to the optional resource solicitation study. To allow the
resource planning entity sufficient time to select interconnection
customers in the solicitation, we propose a 135-day time limit on the
optional resource solicitation study (compared to 150-days of the
cluster study) to avoid over-burdening the transmission provider.\330\
We also propose revisions to the pro forma LGIP to prohibit
transmission providers from delaying other

interconnection requests not involved in the qualifying resource
solicitation.\331\
---------------------------------------------------------------------------

    \330\ See proposed pro forma LGIP section 4.2.2.
    \331\ See id.; Xcel Energy Operating Cos., 109 FERC ] 61,072 at
P 26 (making clear that ``XES must not disadvantage or delay other
Interconnection Requests not involved in the solicitation'').
---------------------------------------------------------------------------

    234. After the transmission provider completes the optional
resource solicitation study for the identified interconnection
requests, it will provide the results to the resource planning entity
for use in the selection process in the form of a resource solicitation
study report. The results will also be posted on the transmission
provider's OASIS consistent with the posting of other study results.
Interconnection requests may proceed in the remainder of the
transmission provider's interconnection study process regardless of
whether they are selected by the resource planning entity for inclusion
in the resource plan. Interconnection requests that are selected by the
resource planning entity for inclusion in the resource plan may choose
to submit evidence of selection as part of the new requirement to
demonstrate commercial readiness. Interconnection requests that are not
selected by the resource planning entity for inclusion in the resource
plan may remain in the interconnection queue by submitting other forms
of commercial readiness or providing a commercial readiness deposit.
    235. Regarding withdrawal penalties, we propose that inclusion in
an optional resource solicitation study does not exempt interconnection
customers from withdrawal penalties under section 3.7.1 of the pro
forma LGIP. Unlike the exemptions approved in Tri-State, the withdrawal
penalty here applies equally to those interconnection customers
participating in the optional resource solicitation study if their
withdrawal meets the criteria for imposing withdrawal penalties
proposed above.\332\
---------------------------------------------------------------------------

    \332\ Tri-State, 174 FERC ] 61,021 at P 12.
---------------------------------------------------------------------------

    236. We seek comment regarding our proposal to explicitly include
state agencies that are required to develop a resource plan or conduct
a resource solicitation process in the definition of a resource
planning entity.\333\ We also seek comment regarding whether other
entities should qualify as resource planning entities and therefore be
able to request initiation of an optional resource solicitation study,
and, if so, what impact, if any, their inclusion would have on the
efficiency of the generator interconnection process and whether their
inclusion would raise concerns of undue discrimination or
preference.\334\
---------------------------------------------------------------------------

    \333\ See proposed pro forma LGIP section 1.
    \334\ Although the Commission has indicated that the
``flexibility'' afforded by a resource solicitation cluster should
be open to ``any entity . . . conducting a solicitation for a
Commission-jurisdictional interconnection,'' see Xcel Energy
Operating Cos., 109 FERC ] 61,072 at P 35, we note that we propose
to limit the definition of Resource Planning Entity to entities
``required to develop a Resource Plan or conduct a Resource
Solicitation Process,'' see proposed pro forma LGIP section 1
(emphasis added); PSCo, Transmission and Service Agreements Tariff,
attach. N, Standard LGIP (0.8.0) section 1 (same). Our proposed
definition would include an LSE or ``utility that develops a
resource plan as authorized by its appropriate governing
authority,'' or ``a local distribution cooperative that creates a
resource plan under its governing body.'' See Tri-State, 174 FERC ]
61,021 at P 65; see also id. P 64 (explaining that it was ``Tri-
State's intent that the Resource Solicitation Cluster process be
open to any load serving entity (or other load) that requires its
use to comply with its resource procurement obligations''). But as
is the case under the PSCo and Tri-State LGIPs today, our proposed
definition may not include every entity conducting a resource
solicitation.
---------------------------------------------------------------------------

    We also seek comment on whether the proposed optional resource
solicitation study raises any confidentiality concerns, including
whether the optional resource solicitation study report could be posted
on the transmission provider's OASIS before the qualifying solicitation
process has concluded.
    237. We recognize that transmission providers operating across
multiple states may need flexibility in implementing this optional
resource solicitation study proposal. Thus, we seek comment on what, if
any, challenges multistate transmission providers--in particular, those
RTOs/ISOs that serve large, multi-state areas--may face regarding study
timing, multiple concurrent studies, or other issues in offering an
optional resource solicitation study option, and any proposals to
mitigate such challenges.

C. Reforms To Incorporate Technological Advancements Into the
Interconnection Process

1. Increasing Flexibility in the Generator Interconnection Process
a. Co-Located Generation Sites Behind One Point of Interconnection With
Shared Interconnection Requests
i. Background
    238. Historically, interconnection requests have been limited to a
single generating facility seeking to interconnect to the transmission
system. When the Commission adopted the pro forma LGIP in Order No.
2003, hybrid resources (which are co-located, share a point of
interconnection, and proceed through the generator interconnection
process with a single interconnection request) were not widely
contemplated and therefore their needs were not considered when
developing the requirements. However, recent studies demonstrate that
large numbers of generating facilities currently in interconnection
queues are seeking to co-locate on a shared site behind one point of
interconnection and share an interconnection request.\335\ There are
now a number of different types of generating facilities that may prove
complementary, such as solar combined with electric storage, wind
combined with solar, or natural gas combined with wind and electric
storage,\336\ and that may seek to co-locate for various efficiency
reasons.
---------------------------------------------------------------------------

    \335\ Currently, 42% (285 GW) of solar and eight percent (17 GW)
of wind projects in the queue are proposed as hybrid resources that
would include electric storage. Queued Up at 18.
    \336\ See, e.g., Eric Hittinger et al., Compensating for Wind
Variability Using Co-Located Natural Gas Generation and Energy
Storage (Carnegie Mellon Elec. Indus. Ctr, Working Paper CEIC-10-01,
2010), https://www.cmu.edu/ceic/assets/docs/publications/working-papers/ceic-10-01.pdf.
---------------------------------------------------------------------------

ii. Need for Reform
    239. In Order No. 2003, the Commission noted that interconnection
is a critical component of open access transmission service, and that
case-by-case approaches to solving interconnection issues is inadequate
and inefficient.\337\ However, the current pro forma LGIP does not
address interconnection requests made up of multiple generating
facilities seeking to co-locate and to share a single point of
interconnection.\338\ The lack of procedures in the pro forma LGIP for
generating facilities seeking to co-locate behind a single point of
interconnection and share an interconnection request may necessitate a
case-by-case approach that the Commission cautioned against in Order
No. 2003 and may serve as a barrier to entry for these types of
configurations. The benefits of such configurations may include
efficiency in

managing the interconnection queue and increased reliability of the
transmission system. For example, allowing electric storage resources
to be combined with variable energy resources (such as wind and solar
resources) can reduce their intermittency and prevent sudden changes in
output. In addition, wind and solar resources can complement one
another because they generally reach peak generation at different times
throughout the day (wind in the early morning and late-night hours and
solar in the afternoon).
---------------------------------------------------------------------------

    \337\ Order No. 2003, 104 FERC ] 61,103 at PP 9-10.
    \338\ All RTOs/ISOs currently allow at least two resources to
co-locate on a shared site behind the same point of interconnection
and share a single interconnection request. CAISO, Post-Technical
Conference Comments, Docket No. AD20-9-000, at 5 (filed Sept. 24,
2020); ISO-NE, Post-Technical Conference Comments, Docket No. AD20-
9-000, at 4 (filed Sept. 24, 2020); MISO, Post-Technical Conference
Comments, Docket No. AD20-9-000, at 5 (filed Sept. 24, 2020); NYISO,
Post-Technical Conference Comments, Docket No. AD20-9-000, at 3-4
(filed Sept. 24, 2020); see also NYISO, Informational Report, AD20-
9-000, at 5-6 (filed July 19, 2021); PJM, Post-Technical Conference
Comments, Docket No. AD20-9-000, at 5 (filed Oct. 1, 2020); SPP,
Report on Hybrid Resources, Docket No. AD20-9-000, at 4-5 (filed
July 19, 2021) (note SPP allows co-location but separately models
the resources); AWEA, Post-Technical Conference Comments, Docket No,
AD20-9-000, at 15-16 (filed Sept. 24, 2020).
---------------------------------------------------------------------------

    240. Therefore, we preliminarily find that that the lack of a
process limits the interconnection of generating facilities, hindering
competition and rendering the Commission's existing pro forma LGIP
unjust and unreasonable or unduly discriminatory or preferential.
    241. Because the pro forma LGIP does not specify how to approach
such proposals, requests to co-locate at a single point of
interconnection and share an interconnection request may be subject to
differing generator interconnection processes depending on the
transmission provider to which the resource is seeking to interconnect
or may not be allowed at all in certain regions.\339\ We are concerned
that this disparate treatment may be unjust and unreasonable or unduly
discriminatory or preferential because multiple generating facilities
seeking to co-locate behind a single point of interconnection and share
an interconnection request are similarly situated no matter the region
in which they propose to interconnect.
---------------------------------------------------------------------------

    \339\ See Lawrence Berkeley Nat'l Lab'y, Generation, Storage,
and Hybrid Capacity in Interconnection Queues, May 2021, https://emp.lbl.gov/generation-storage-and-hybrid-capacity.
---------------------------------------------------------------------------

iii. Proposal
    242. We propose to revise the pro forma LGIP and pro forma LGIA to
require transmission providers to allow more than one resource to co-
locate on a shared site behind a single point of interconnection and
share a single interconnection request. This proposed reform would
create a minimum standard that would remove barriers for co-located
resources by creating a standardized procedure for these types of
configurations to enable them to access the transmission system.
    243. We propose to revise the pro forma LGIP to: (1) define ``Co-
Located Resources'' as more than one resource located behind the same
point of interconnection; (2) state that co-located resources can share
an interconnection request; and (3) modify the definition of site
control such that it allows interconnection customers to demonstrate
shared land-use for generating facilities that include more than one
resource.
    244. We believe that requiring transmission providers to permit
interconnection requests that represent more than one resource behind a
single point of interconnection is required to ensure just and
reasonable rates. We also believe that this requirement, by allowing a
single interconnection request to represent a generating facility with
more than one resource, would improve efficiency for transmission
providers in the study process and may reduce study costs for
developers because they would only submit a single set of deposits.
Finally, this reform allows the assignment of more accurate queue
positions, such that these types of generating facilities' component
resources are tied together in the generator interconnection process
and not studied separately, which facilitates a more accurate study of
the planned generating facilities' actual electrical impact when
connected to the transmission system.
    245. The pro forma LGIP requires that the transmission provider
treat an interconnection request at one site with two different voltage
levels as two interconnection requests. We recognize that this
situation may occur with co-located generating facilities under this
proposal. Therefore, we also propose revisions to the pro forma LGIP to
require generating facilities that are co-locating to have technology
to address differences in terminal voltage between the co-located
generating facilities to ensure that these generating facilities have
the same voltage levels. This requirement will ensure that co-located
resources with voltage differences are on notice of the need to address
attendant challenges.
b. Revisions to the Material Modification Process To Require
Consideration of Generating Facility Additions
i. Background
    246. It has become increasingly common for generating facilities
already in the interconnection queue to seek to change their
interconnection requests to add electric storage or other types of
generating facilities without changing the interconnection service
level and/or MW total in the interconnection request. Contributing
factors to this increasingly common occurrence include reduction of
costs for technologies such as electric storage and the long time that
interconnection customers remain in the queue, which may result in
technology changes while the generating facility is still in the
interconnection queue.
    247. Under section 4.4 of the pro forma LGIP, an interconnection
customer can modify its interconnection request and still retain its
queue position if the modifications are either explicitly allowed under
the pro forma LGIP or if the transmission provider determines that the
modifications are not material. The pro forma LGIP and pro forma LGIA,
as modified by the cluster reform above, will define material
modifications to be ``modifications that have a material impact on the
cost or timing of any Interconnection Request with a later or equal
Queue Position.''
    248. If the transmission provider determines that a proposed
modification is material, the interconnection customer can choose
either to (1) abandon the proposed modification or (2) proceed but
forfeit its queue position and reenter the interconnection queue. The
requirements of such a review vary by transmission provider and the
modifications requested are often not included in the tariff; rather,
many such requirements are typically in the transmission provider's
business practice manuals.\340\ In some transmission provider tariffs
or business practice manuals, the addition of a generating facility
\341\ to an existing interconnection request is automatically
considered to be a material modification, even if that addition does
not change the requested level of interconnection service.\342\
---------------------------------------------------------------------------

    \340\ See, e.g., SPP Manual 7250 (Generator Interconnection
Service); NYISO Manual 23 (Transmission Expansion and
Interconnection), section 3 (Interconnection Process); CAISO BPM,
Generator Interconnection Procedure, section 9.2 (Types of
Modification); PJM Manual 14G (Generation Interconnection Requests),
section 4 (Generator Interconnection Requirements, Rights and
Obligations).
    \341\ ``Generating Facility'' shall mean ``Interconnection
Customer's device for the production and/or storage for later
injection of electricity identified in the Interconnection Request,
but shall not include the Interconnection Customer's Interconnection
Facilities'' as defined in the pro forma LGIA.
    \342\ PJM Manual 14G (Generation Interconnection Requests).
---------------------------------------------------------------------------

ii. Comments in Hybrid Resource Proceeding
    249. Commenters in the hybrid resources proceeding in Docket No.
AD20-9-000 noted the nationwide growth of hybrid resources that are
made up of at least one electric storage resource.\343\ Some commenters
called

for uniformity in transmission providers' material modification
determinations when evaluating an addition to an interconnection
request of a generating facility, such as electric storage, that does
not change the interconnection service level of the existing
interconnection request.\344\ They noted that developers may be
hesitant to request that the transmission provider consider the
addition of an electric storage resource or other generating facility
that does not change the interconnection service level in an existing
interconnection request where such addition could cause the loss of a
queue position if the developer is unwilling to forgo the change.\345\
In PJM, for example, the addition of electric storage is automatically
deemed to be a material modification even in instances where the
addition does not increase the requested interconnection service level,
regardless of both (1) the use case for the proposed generating
facility and (2) the operational controls that could be applied to the
generating facility's output to limit fluctuation from the original
injection limit at the point of interconnection.\346\
---------------------------------------------------------------------------

    \343\ Edison Electric Institute Comments, Docket No. AD20-9-000,
at 2 (filed Sept. 20, 2021); Hybrid Resources Coalition Comments,
Docket No. AD20-9-000, at 1 (filed Sept. 20, 2021); Clean Grid
Alliance Comments, Docket No. AD20-9-000, at 2 (filed Sept. 20,
2021).
    \344\ See Savion, Post-Technical Conference Comments, Docket No.
AD20-9-000 (filed Sept. 24, 2020).
    \345\ SEIA, Comments, Docket No. AD20-9-000, at 6 (filed Sept.
20, 2021).
    \346\ Pine Gate, Comments, Docket No. AD20-9-000, at 4 (filed
Sept. 20, 2021); see PJM Manual 14G (Generation Interconnection
Requests), section 4 (Generator Interconnection Requirements, Rights
and Obligations).
---------------------------------------------------------------------------

    250. By contrast, in its informational report submitted as part of
the hybrid resources proceeding, CAISO stated that it takes a more
flexible approach to the material modification process that causes
fewer interconnection customers to automatically lose their queue
positions.\347\ Interconnection customers in CAISO may add an electric
storage resource to an existing interconnection request or to a
generating facility already in operation using the same process as all
other modifications.\348\ Following the request, CAISO and the
participating transmission owner study the modification to ensure there
is no material change in electrical characteristics and that the
proposed modification would not adversely affect the cost or timing of
other interconnection requests. Even when an adverse impact is
expected, however, CAISO allows the interconnection customer to
mitigate the impact and revise the modification request. If the
addition does not change the requested interconnection service level
injection limit or the electrical characteristics, it is not considered
a material modification and there is no loss in queue position. Under
this approach, CAISO's overall process allows for fewer resource
additions to be determined a material modification, especially if it
does not change the requested interconnection service level.
---------------------------------------------------------------------------

    \347\ This flexible approach is possible, in part, because CAISO
uses congestion management to mitigate the charging of an electric
storage resource. See Hybrid Resources, Technical Conference
Transcript, Docket No. AD20-9-000, at Tr. 66 (July 23, 2020) (Deb
Levine, California Indep. Sys. Op.) (filed Dec. 8, 2020) (``Adding
energy storage [to an existing interconnection request] is typically
non-material because we use congestion management to mitigate any
overloads caused by charging the energy storage.'').
    \348\ CAISO, Informational Report, Docket No. AD20-9-000, at 8-9
(filed July 19, 2021).
---------------------------------------------------------------------------

    251. In the absence of a flexible approach, commenters suggested
that transmission providers should be required to provide a specific
list of the criteria that would cause a requested modification to a
generating facility to be considered material. Several commenters
additionally suggested that interconnection customers should be
permitted to propose to add electric storage to an interconnection
request without automatically triggering a material modification, as
long as the addition of electric storage does not alter the requested
interconnection service level and there are no other reliability
concerns.\349\ Commenters suggested that interconnection customers
should also be permitted to propose to install and use pre-approved
controls that limit the resource's output to the requested
interconnection service limit to prevent the addition of an electric
storage resource being classified as a material modification by the
transmission provider.\350\
---------------------------------------------------------------------------

    \349\ See, e.g., Hybrid Resources Coalition, Comments, Docket
No. AD20-9-000, at 14-16 (filed Sept. 20, 2021).
    \350\ See, e.g., Pine Gate, Comments, Docket No. AD20-9-000, at
4 (filed Sept. 20, 2021).
---------------------------------------------------------------------------

iii. Need for Reform
    252. For the reasons explained below, we are concerned that,
because certain requested modifications are often deemed material
without an evaluation, the material modification process may result in
unjust and unreasonable or unduly discriminatory or preferential
outcomes. As explained in Order No. 2003, it is inadequate and
inefficient to solve interconnection issues on a case-by-case
basis.\351\ In the case of material modification, without a standard
set of procedures, transmission providers have adopted variable
strategies for processing requests to add electric storage, or other
generating facilities that do not change the requested interconnection
service limit, to existing interconnection requests. This lack of
uniformity leads to disparate outcomes across the country and leaves
open the potential for undue discrimination.
---------------------------------------------------------------------------

    \351\ Order No. 2003, 104 FERC ] 61,103 at PP 9-10.
---------------------------------------------------------------------------

    253. As explained above, the material modification provisions in
the pro forma LGIP do not specify whether an interconnection customer
can modify its interconnection request to add another generating
facility at the same point of interconnection without increasing the
requested interconnection service level. While in some regions, such as
SPP, electric storage can be added to an interconnection request if it
does not change the interconnection service limit,\352\ many
transmission providers treat such a request automatically as a material
modification because the pro forma LGIP does not clearly state whether
transmission providers are obligated to evaluate such modification
requests under section 4.4 of the pro forma LGIP. As such, the
interconnection customer that wishes to make this type of change faces
a loss of queue position regardless of the actual effect the addition
of a generating facility to an interconnection request may have on the
system. Yet, the addition of electric storage or other generating
facilities--particularly for variable energy resources--will often have
either a neutral or a net-positive impact on the reliability of the
transmission system without changing the total interconnection service
level requested. For example, the addition of electric storage can
ensure that the output of variable energy resources becomes more
predictable or provide other reliability support services to the
transmission system.\353\
---------------------------------------------------------------------------

    \352\ SPP Hybrid Report, Docket No. AD20-9-000, at 4 (filed July
19, 2021); CAISO, CAISO eTariff, app. A, Definitions, Congestion
(2.0.0), Congestion Management (0.0.0). Note that SPP and CAISO have
similar approaches that utilize congestion management as a way to
address concerns with any overloads caused by charging energy
storage.
    \353\ Gorman et al., Motivations & Options for Deploying Hybrid
Generator-Plus-Battery Projects within the Bulk Power System,
Electricity J., at 2 (June 2020).
---------------------------------------------------------------------------

    254. Because the pro forma LGIP material modification process does
not evaluate the addition of an electric storage resource or other
generating facility that does not change the interconnection service
limit before deeming it a material modification, it is a significant
barrier to interconnection customers that wish to make this type of
change. We preliminarily find that such a barrier hinders access to the
transmission system and may render the existing generator
interconnection

processes unjust and unreasonable and unduly discriminatory or
preferential.
iv. Proposal
    255. We propose to revise the pro forma LGIP to require
transmission providers to evaluate the proposed addition of a
generating facility to an interconnection request as long as the
interconnection customer does not request a change to the originally
requested interconnection service level. The transmission provider
cannot automatically consider such a request to be a material
modification. Specifically, we propose to require that: (1)
transmission providers evaluate the proposed addition of a generating
facility to an interconnection request within 60 calendar days of
receiving the request for modification if such addition does not change
the requested interconnection service level; (2) the change cannot be
considered an automatic material modification and an evaluation
(including studying the configuration and necessary modeling) must
occur prior to determining whether the proposed change constitutes a
material modification of the interconnection request; and (3) if the
proposed change does not have a material impact on the cost or timing
of any interconnection request that is lower or equally queued, and
does not cause any other reliability concerns, the addition will not be
considered a material modification. The reliability concerns could
include, for example, a material impact on the transmission system with
regard to short circuit capability limits, steady-state thermal and
voltage limits, or dynamic system stability and response.
    256. We seek comment on whether the addition of a generating
facility that does not alter an interconnection customer's
interconnection service limit could nonetheless require a full
interconnection service study. We also seek comment on how transmission
providers should perform studies required to confirm that there is no
adverse impact because of the addition of a generating facility to an
interconnection request, such as confirmation that the electrical
characteristics of the interconnection customer remain the same.
    257. In addition, we seek comment on whether and how
interconnection customers in a later cluster, or interconnection
customers that are in the same cluster, could be adversely impacted by
such changes. We further seek comment on whether the addition of
electric storage when in charging mode (in terms of resistance,
inductance, and capacitance) may change the electrical characteristics
of an interconnection request, and whether those changes may affect the
reliable operation of the generating facility related to that
interconnection request. We also seek comment on whether further
specification is needed for the assessment of the electrical
characteristics due to the addition of a complex load.
c. Availability of Surplus Interconnection Service
i. Background
    258. In Order No. 845, the Commission implemented a reform that
established a surplus interconnection service. The requirement mandated
that transmission providers provide an expedited process for
interconnection customers to utilize or transfer surplus
interconnection service at existing generating facilities.\354\ The
Commission defined surplus interconnection service as ``any unused
portion of Interconnection Service established in a Large Generator
Interconnection Agreement, such that if Surplus Interconnection Service
is utilized the Interconnection Service limit at the Point of
Interconnection would remain the same.'' \355\ The Commission explained
that the ``surplus interconnection service is created because
generating facilities may not operate at full capacity at all times.
Consistent with the requirements of Order No. 2003, transmission
providers assume that each interconnection customer is fully utilizing
its interconnection service when studying other requests for new
interconnections.'' \356\ The surplus interconnection service process
does not require an assessment from the transmission provider, nor does
it require the approval of the transmission provider.
---------------------------------------------------------------------------

    \354\ Order No. 845, 163 FERC ] 61,043 at P 453.
    \355\ Id. P 459.
    \356\ Id. P 468.
---------------------------------------------------------------------------

    259. The surplus interconnection service reform contemplated that
the existing facilities would be in commercial operation at the time of
the request to use the surplus interconnection service. However, the
Commission has recognized that, once an interconnection customer is
fully studied and has an executed LGIA or filed an unexecuted LGIA, it
could be considered an existing facility for purposes of the surplus
interconnection service process.\357\
---------------------------------------------------------------------------

    \357\ Midcontinent Indep. Sys. Operator, Inc., 177 FERC ]
61,234, at P 13 (2021).
---------------------------------------------------------------------------

    260. MISO, in particular, has recently implemented changes that
would allow interconnection customers to utilize the surplus
interconnection service process prior to obtaining an executed LGIA or
requesting the filing of an unexecuted LGIA.\358\ Previously, MISO
allowed interconnection customers to request, and MISO to begin
processing, interconnection requests for surplus interconnection
service after an interconnection customer obtained an ``effective
[GIA]'' \359\ for a generating facility. MISO now allows
interconnection customers to request surplus interconnection service
much earlier in the interconnection study process for a generating
facility with a valid interconnection request from which such service
will be obtained upon request. Specifically, such requests are now
allowed after the completion of Decision Point II, which occurs after
an interconnection customer receives certain study results for an
interconnection request and which, according to MISO, is the point that
interconnection requests remaining in the interconnection queue become
more likely to successfully proceed to a GIA. MISO will begin
processing and studying the surplus interconnection request, but no GIA
will be tendered for the surplus interconnection service before the
generating facility from which such service will come has an
``effective GIA.''
---------------------------------------------------------------------------

    \358\ See id.
    \359\ MISO, FERC Electric Tariff, attach. X, Generator
Interconnection Procedures (GIP) (155.0.0), section <IP_ADDRESS>.3.a.
---------------------------------------------------------------------------

ii. Comments
    261. In the hybrid resources proceeding in Docket No. AD20-9-000,
the Hybrid Resources Coalition argued that MISO's process should serve
as the model for how transmission providers process requests to add an
electric storage resource to an existing generating facility because it
allows the surplus interconnection service process to be used earlier,
as noted above. The Hybrid Resources Coalition further argued that
owners of existing generating facilities should be able to add electric
storage through the surplus interconnection service process or some
other process.\360\
---------------------------------------------------------------------------

    \360\ Hybrid Resources Coalition, Comments, Docket No. AD20-9-
000 (filed Sept. 20, 2021).
---------------------------------------------------------------------------

iii. Need for Reform
    262. As described above, Order No. 845 established a surplus
interconnection service process to enable a new interconnection
customer to utilize the unused portion of an existing interconnection
customer's approved interconnection service through the inclusion of an
additional

generating facility behind a single point of interconnection. Most
transmission providers subsequently implemented additional requirements
limiting requests for surplus interconnection service until after a
facility reaches commercial operation. Even though the addition of a
generating facility could be pursued as a material modification prior
to the commercial operation date, that process is more burdensome
because it requires an evaluation by the transmission provider and is
subject to transmission provider approval.
    263. While the surplus interconnection service process was created
for existing generating facilities, Order No. 845 does not specify when
a generating facility is considered to be ``existing'' for the purpose
of Order No. 845. Limiting the use of surplus interconnection service
to only those interconnection customers that have achieved commercial
operation may unduly restrict access to potentially available surplus
interconnection capacity. We find that this restriction may therefore
be unjust and unreasonable and unduly discriminatory or preferential
because it limits the applicability of surplus interconnection service.
iv. Proposal
    264. We propose to revise the pro forma LGIP to require
transmission providers to allow interconnection customers to access the
surplus interconnection service process once the original
interconnection customer has an executed LGIA or requests the filing of
an unexecuted LGIA. Allowing an interconnection customer to request
surplus interconnection service after the original interconnection
customer executes an LGIA or requests the filing of an unexecuted LGIA
would enable interconnection customers with unused interconnection
capacity to let other generating facilities use that capacity earlier
than is currently allowed. We believe that doing so would increase the
overall efficiency of the interconnection queue and ensure the
efficient use of available interconnection capacity that has already
been studied and granted to an interconnection customer. This is
consistent with Order 845, in which we state:

    We affirm that requiring transmission providers to establish an
expedited process, separate from the interconnection queue, for the
use of surplus interconnection service could reduce costs for
interconnection customers by increasing the utilization of existing
interconnection facilities and network upgrades rather than
requiring new ones, improve wholesale market competition by enabling
more entities to compete through the more efficient use of surplus
existing interconnection capacity, and remove economic barriers to
the development of complementary technologies such as electric
storage resources that may be able to easily tailor their use of
interconnection service to adhere to the limitations of the surplus
interconnection service that may exist. Further, we find that
facilitating the use of surplus interconnection service could
improve capabilities at existing generating facilities, prevent
stranded costs, and improve access to the transmission system.\361\
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    \361\ Order No. 845, 163 FERC ] 61,043 at P 467.
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d. Operating Assumptions for Interconnection Studies
i. Background
    265. The pro forma LGIP includes only general requirements
regarding the operating assumptions for generating facilities in
interconnection studies.\362\ In particular, current operating
assumptions for interconnection studies were developed prior to the
large-scale adoption of variable energy resources, the advent of
electric storage, and the adoption of co-located resources, including
hybrid resources. In many instances, these operating assumptions may
not reflect the real-world operation of electric storage
resources,\363\ and co-located resources containing electric storage
resources (including hybrid resources \364\), among others, because
they assume patterns of operation similar to traditional resources and
firm end-use customer load. For example, some transmission providers
assume that all generating facilities in a constrained area will seek
to generate simultaneously during light load conditions or that all
electric storage resources will seek to charge during peak load
conditions. Similarly, some transmission providers may assume that
resources will operate in a manner in which they are physically
incapable of operating, such as assuming that solar resources will
produce electricity after the sun sets, for example, or that wind will
produce maximum output in a less windy season. In addition, other
examples could include natural gas facilities that need adjusted
operating assumptions based on the inability to procure fuel at certain
times, or a pumped hydro plant that is limited in its ability to pump
at night given voltage constraints.
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    \362\ See, e.g., pro forma LGIP section <IP_ADDRESS> (describing the
study requirements for ERIS); id. section <IP_ADDRESS> (describing the
study requirements for NRIS).
    \363\ An electric storage resource is defined as a resource
capable of receiving electric energy from the grid and storing it
for later injection of electric energy back to the grid. See
Electric Storage Participation in Markets Operated by Regional
Transmission Organizations and Independent System Operators, Order
No. 841, 162 FERC ] 61,127 at n.1 (2018), order on reh'g, Order No.
841-A, 167 FERC ] 61,154 (2019). Because the pro forma LGIP and pro
forma LGIA address interconnection to the transmission system (See
Pro Forma LGIP Section 1), we use the term electric storage resource
in this NOPR in that context.
    \364\ Hybrid Resources, Order Directing Reports, 174 FERC ]
61,034 (Jan. 2021). Hybrid Resources White Paper: A Staff Paper:
Federal Energy Regulatory Commission. Docket No. AD20-9-000 (May
2021).
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    266. Further, for generating facilities that intend to inject
energy onto the transmission system as well as withdraw energy from the
transmission system, such as electric storage resources and co-located
resources containing electric storage resources (including hybrid
resources), transmission providers have expanded the traditional scope
of interconnection studies to include the impact of energy withdrawals
by the generating facility during the generator interconnection process
to determine whether network upgrades are needed. Many transmission
providers assume in their interconnection studies that these generating
facilities withdraw the maximum amount of energy during peak load
conditions, which is comparable to assuming that these generating
facilities behave like firm end-use customer load that is unresponsive
to transmission system conditions. However, during real-time
operations, the controlled withdrawals of an electric storage resource
or co-located resources containing an electric storage resource
(including hybrid resources) for charging differ significantly from the
behavior of largely uncontrollable end-use customer loads. Unlike most
firm load, an electric storage resource, or co-located resource
containing an electric storage resource (including hybrid resources),
can choose when to withdraw energy based on real-time information from
the transmission provider, and some electric storage resources or co-
located resources containing an electric storage resource (including
hybrid resources) can respond to signals from the transmission provider
to reduce or stop charging (withdrawing energy from the transmission
system) within seconds.\365\
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    \365\ See, e.g., Pac. Nw. Nat'l Lab'y, Energy Storage Technology
and Cost Characterization Report, at 3.6 (July 2019), https://www.energy.gov/sites/prod/files/2019/07/f65/Storage%20Cost%20and%20Performance%20Characterization%20Report_Final.pdf; NERC, Energy Storage: Impacts of Electrochemical Utility-Scale
Battery Energy Storage Systems on the Bulk Power System, at 15 (Feb.
2021), https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/Master_ESAT_Report.pdf.
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    267. By contrast, other transmission providers have used operating
assumptions for interconnection studies

that more closely match the expected operation of the generating
facility seeking to interconnect. For instance, CAISO's approach, in
which electric storage resources are subject to CAISO's congestion
management practices,\366\ has helped to avoid some of the issues
above. This difference allows CAISO to curtail an electric storage
resource's charging, if necessary, during a peak load period and remain
confident that such curtailment will not adversely affect its system.
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    \366\ See CAISO, Energy Storage Interconnection: Draft Final
Proposal, at 15-17 (2014), http://www.caiso.com/Documents/DraftFinalProposal_EnergyStorageInterconnection.pdf.
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ii. Comments
    268. Several commenters in the hybrid resources proceeding raised
concerns with the operating assumptions for interconnection studies
that transmission providers generally use to study co-located resources
and hybrid resources, as well as for stand-alone electric storage
resources. For instance, several commenters stated that multiple RTOs/
ISOs rely on worst-case operating assumptions for interconnection
studies, for example that the electric storage resources will charge
during peak load periods and discharge when load is light.\367\
Commenters argued that such operating assumptions for interconnection
studies can lead to projects being assigned unnecessary and expensive
network upgrade costs that make projects uneconomic.\368\
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    \367\ Hybrid Resource Coalition, Comments, Docket No. AD20-9-
000, at 11-12 (filed Sept. 20, 2021); City of New York, Comments,
Docket No. AD20-9-000, at 3 (filed Sept. 20, 2021); Clean Grid
Alliance, Comments, Docket No. AD20-9-000, at 3 (filed Sept. 20,
2021); Savion, Post-Technical Conference Comments, Docket No. AD20-
9-000, at 7 (filed Sept. 24, 2020); Enel, Post-Technical Conference
Comments, Docket No. AD20-9-000, at 2-3 (filed Sept. 24, 2020).
    \368\ City of New York, Comments, Docket No. AD20-9-000, at 3
(filed Sept. 20, 2021).
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    269. In addition, commenters noted that interconnection studies
often include inappropriate assumptions for electric storage resources
regarding when the resource will charge to capture energy that would
have been lost during curtailment.\369\ This can also include studying
electric storage resources as if it were consistently using full charge
and discharge cycles, even though that is often not how the resource
would operate--in many cases the electric storage may be partially
charging or discharging in response to market signals, such as
responding to locational marginal prices in the RTO/ISO context, or
responding to dispatch instructions more generally.
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    \369\ Savion, Post-Technical Conference Comments, Docket No.
AD20-9-000, at 4-5 (filed Sept. 24, 2020).
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    270. Some commenters argued that the increased network upgrade
costs caused by unnecessary or redundant network upgrades for
generating facilities can be avoided if the interconnection studies
assume that the planned resource will respond to market signals,\370\
or assume a particular ``use case,'' such as avoiding charging during
peak periods, scarcity periods, or other designated periods. Pine Gates
states that operating assumptions for interconnection studies could
also be based on the generating facility's specific configuration and
known operational constructs for electric storage projects.\371\ Pine
Gates further states that this could also be applied to other
generating facility types, such as solar, that currently may have
erroneous assumptions made about their ability to operate at night, for
instance.
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    \370\ City of New York, Comments, Docket No. AD20-9-000, at 3
(filed Sept. 20, 2021); Clean Grid Alliance, Comments, Docket No.
AD20-9-000, at 3 (filed Sept. 20, 2021); Hybrid Resources Coalition,
Comments, Docket No. AD20-9-000, at 11-12, 16 (filed Sept. 20,
2021).
    \371\ Pine Gate, Comments, Docket No. AD20-9-000, at 5-6 (filed
Sept. 20, 2021).
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    271. Resource developers advocated for a process under which
transmission providers would specify, per the requirements of
identified use cases, pre-determined conditions under which an electric
storage resource would be permitted to operate as load or as a
generating facility: for instance, that electric storage resources
could only charge outside of peak load conditions.\372\ One commenter
noted that this approach would enable the transmission provider to
realistically study the electric storage resource, as opposed to
studying it under scenarios where the resource acts as load and as a
generating facility simultaneously.\373\
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    \372\ Id.
    \373\ Id.
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    272. In addition, in response to the Commission's recent ANOPR on
transmission and interconnection reform, the National Association of
Regulatory Utility Commissioners (NARUC) agreed that interconnection