pro forma LGIA contains no similar requirement that upon termination of
an LGIA that the interconnection customer is responsible for any
additional costs assigned to another interconnection customer as a
result of the LGIA's termination and based on the comments received,
the record does not support including the provision.
---------------------------------------------------------------------------

    \2342\ Invenergy Initial Comments at 45; Tri-State Initial
Comments at 20.
---------------------------------------------------------------------------

    1239. MISO requests a cross-default provision between the pro forma
affected system facilities construction agreement and the pro forma
LGIA because MISO asserts that, if an affected system interconnection
customer does not meet its obligations under its affected system
facilities construction agreement, it is unclear how that would affect
that interconnection customer's LGIA on its host transmission
system.\2343\ In response, we clarify that a breach under the pro forma
affected system facilities construction agreement does not constitute a
breach under the pro forma LGIA. We are unpersuaded that cross-default
provisions between the pro forma affected system facilities
construction agreement and the pro forma LGIA are necessary because
both the pro forma affected system facilities construction agreement
and the pro forma LGIA individually already contain default provisions.
---------------------------------------------------------------------------

    \2343\ MISO Initial Comments at 97.
---------------------------------------------------------------------------

    1240. In addition, we are concerned that a cross-default provision,
which could result in the termination of an interconnection customer's
interconnection service based on actions under a separate agreement,
could raise contractual complications because the host transmission
provider will not be a party to the affected system facilities
construction agreement. We note, however, that any affected system
interconnection customer that defaults on its obligations under the pro
forma affected system facilities construction agreement may face
consequences, including, for example, curtailment. Additionally, we
find that article 4.1 of the pro forma affected system facilities
construction agreement already contains sufficient security provisions
to protect a transmission provider in the situation that the affected
system interconnection customer defaults on the agreement and which
discourages non-payment by the interconnection customer.
    1241. We modify proposed article <IP_ADDRESS> (Right to Suspend for
Force Majeure Event) of the pro forma affected system facilities
construction agreement in response to comments that the proposed
suspension provision is too restrictive and inconsistent with the
suspension provision in the pro forma LGIA.\2344\ Specifically, we
revise article <IP_ADDRESS> to remove the limitation on the right to suspend
to force majeure events and modify the suspension provision to allow an
affected system interconnection customer to suspend work required under
the affected system facilities construction agreement for up to three
years.\2345\ We also modify article <IP_ADDRESS> to remove the requirement
for the affected system interconnection customer, prior to suspension,
to provide security to the affected system transmission provider of the
higher of $5 million or the total cost of all affected system network
upgrades listed in Appendix A of the agreement. We find the requirement
unnecessary because, under article 4.1 (Provision of Security) of the
pro forma affected system facilities construction agreement, the
affected system interconnection customer would have already been
required to provide security for the applicable portion of the affected
system network upgrades. With these changes to article <IP_ADDRESS>, the
suspension provision in the pro forma affected

system facilities construction agreement will mirror the suspension
provision in the pro forma LGIA.\2346\
---------------------------------------------------------------------------

    \2344\ Pro forma LGIA art. 5.16.
    \2345\ We also make various conforming revisions throughout
proposed article <IP_ADDRESS> of the pro forma affected system facilities
construction agreement, consistent with this modification to the
suspension provision.
    \2346\ Pro forma LGIA art. 5.16.
---------------------------------------------------------------------------

    1242. Additionally, we revise proposed article <IP_ADDRESS> (Right to
Suspend Due to Default) of the pro forma affected system facilities
construction agreement, which provides for the right to suspend due to
default. The revisions we adopt to this provision clarify that if an
affected system interconnection customer defaults, the affected system
interconnection customer will be responsible for any additional
expenses incurred by the affected system transmission provider
associated with the construction and installation of the affected
system network upgrades, as set forth in article 2.2.3 (Consequences of
Termination). We find that the revisions will align the language in the
pro forma affected system facilities construction agreement with
similar language in the pro forma LGIP, as suggested by
PacifiCorp.\2347\ However, we reject the proposed revisions suggested
by Tri-State to article <IP_ADDRESS> because they would alter the right to
suspend to allow an affected system transmission provider the right to
suspend in the event of a breach, rather than in the event of a
default. Tri-State's suggested changes to article <IP_ADDRESS> would
contradict other provisions in the pro forma LGIA and the pro forma
affected system facilities construction agreement, which allow for the
breaching party to cure a breach as is appropriate.
---------------------------------------------------------------------------

    \2347\ PacifiCorp Initial Comments, attach. A, at 54.
---------------------------------------------------------------------------

    1243. We adopt article <IP_ADDRESS> (Repayment) of the pro forma
affected system facilities construction agreement as proposed, which is
consistent with existing Commission precedent.\2348\
---------------------------------------------------------------------------

    \2348\ Order No. 2003, 104 FERC ] 61,103 at PP 693-696, 720-739;
Order No. 2003-A, 106 FERC ] 61,220 at PP 584-586 (stating that the
transmission system is a cohesive, integrated network that operates
as a single piece of equipment, and that network facilities benefit
all transmission customers; further, even if a customer can be said
to have caused the addition of a grid facility, such addition
represents a system expansion used by and benefiting all users due
to the integrated nature of the grid); Order No. 2003-C, 111 FERC ]
61,401 at P 13; NARUC v. FERC, 475 F.3d 1277, 1285 (D.C. Cir. 2007)
(affirming the Commission's conclusions); W. Mass. Elec. Co. v.
FERC, 165 F.3d 922, 927 (D.C. Cir. 1999).
---------------------------------------------------------------------------

    1244. Some commenters are concerned that affected systems repayment
could force affected system transmission providers to subsidize
interconnection to neighboring systems, stifle renewable generating
facility development, or facilitate inefficient siting.\2349\ However,
in the NOPR, the Commission did not propose to change the Commission's
affected system repayment policy; instead, the Commission simply
proposed to memorialize the Commission's existing policy in a pro forma
agreement for affected systems.\2350\ As a result, we decline to
address arguments on the merits of the Commission's affected systems
repayment policy in this final rule.
---------------------------------------------------------------------------

    \2349\ AECI Initial Comments at 9; Duke Southeast Utilities
Initial Comments at 21-22, 26; EEI Initial Comments at 18-19; North
Carolina Commission and Staff Initial Comments at 6; PPL Initial
Comments at 21; Tri-State Initial Comments at 21-22; U.S. Chamber of
Commerce Initial Comments at 11-12; Xcel Initial Comments at 40.
    \2350\ See Order No. 2003, 104 FERC ] 61,103 at PP 738-739; see
also pro forma LGIA art. 11.4.
---------------------------------------------------------------------------

    1245. With respect to the concerns raised by WAPA that it is unable
to repay affected system interconnection customers due to limitations
based on its Federal status, we decline to rule on the specifics of
individual transmission provider circumstances and instead find that
such concerns are better raised in a compliance proceeding, including
such a proceeding with a reciprocity tariff filing, if WAPA chooses to
file one.
    1246. In response to requests for clarification from Southern, we
clarify that, consistent with the Commission's findings in Order No.
2003, we are not changing our policy requiring the interconnection
customer, at its expense, to install, operate, and maintain system
protection facilities as a part of its generating facility or its
interconnection facilities.\2351\ Also in response to Southern and
consistent with the Commission's findings in Order No. 2003,
transmission providers may make a filing to the Commission proposing an
incremental rate to the affected system interconnection customer, as
more fully described in Order Nos. 2003-A and 2003-B,\2352\ if native
load and existing transmission customers are not being held harmless,
though we reiterate that the transmission provider bears the full
burden of showing that any such proposal is just, reasonable, and not
unduly discriminatory or preferential and is appropriate under the
circumstances.\2353\
---------------------------------------------------------------------------

    \2351\ Pro forma LGIA art. <IP_ADDRESS>; see also Order No. 845, 163
FERC ] 61,043 at P 371.
    \2352\ Order No. 2003-A, 106 FERC ] 61,220 at P 586; Order No.
2003-B, 109 FERC ] 61,287 at P 56.
    \2353\ Order No. 2003-B, 109 FERC ] 61,287 at P 56.
---------------------------------------------------------------------------

    1247. We adopt Tri-State's suggested revisions to proposed article
<IP_ADDRESS> of the pro forma affected system facilities construction
agreement regarding the terms for repayment of affected system network
upgrades. Consistent with existing pro forma LGIA provisions,\2354\ the
parties may mutually agree to a repayment schedule for all applicable
costs associated with affected system network upgrades, with complete
repayment not to exceed 20 years from the commercial operation date of
the affected system interconnection customer's generating facility.
---------------------------------------------------------------------------

    \2354\ Pro forma LGIA art. 11.4.1.
---------------------------------------------------------------------------

    1248. We decline to adopt additions to proposed article 4.1
(Provision of Security) of the pro forma affected system facilities
construction agreement suggested by PacifiCorp that would add
additional security posting requirements, to the extent that costs to
construct affected system network upgrades increase.\2355\ Proposed
article 4.1 is consistent with security provisions outlined in pro
forma LGIA article 11.5 (Provision of Security), and we find that such
provisions should be consistent across both the pro forma affected
system facilities construction agreement and the pro forma LGIA. We
also find that the security provision requirements are already
sufficiently clear in article 4.1 of the pro forma affected system
facilities construction agreement. Specifically, article 4.1 of the pro
forma affected system facilities construction agreement provides that
``security for payment shall be in an amount sufficient to cover the
costs for constructing, procuring and installing the applicable portion
of Affected System Network Upgrades.''
---------------------------------------------------------------------------

    \2355\ PacifiCorp Initial Comments at 37.
---------------------------------------------------------------------------

    1249. In response to comments from PPL asserting that affected
system interconnection customers should be responsible for meeting the
affected system transmission provider's creditworthiness
requirements,\2356\ because the pro forma affected system facilities
construction agreement is an agreement between the affected system
transmission provider and the affected system interconnection customer,
we clarify that affected system interconnection customers are obligated
to meet the affected system transmission provider's creditworthiness
and security requirements. We note that this is consistent with the
parallel requirement for interconnection customers to meet the
creditworthiness and security requirements of the host transmission
provider outlined in pro forma LGIA article 11.5.1.
---------------------------------------------------------------------------

    \2356\ PPL Initial Comments at 20.
---------------------------------------------------------------------------

    1250. We revise proposed article 5.1(b) of the pro forma affected
system facilities construction agreement, consistent with PacifiCorp's
suggestion, to remove the requirement that a party will be in breach
for failure to comply with a material term or condition of the
agreement due to an inaccuracy in a representation, warranty, or
covenant

made in the agreement resulting in a breach under the agreement. We
find that there is no reason why an inaccuracy should lead to a
potential breach, or even a default, under the agreement. We note that
the pro forma LGIA contains no similar provision.
    1251. We revise proposed article 5.2.1, now article 5.3.1, of the
pro forma affected system facilities construction agreement to extend
the cure period for a breach from 30 calendar days to 60 calendar days
and proposed article 5.2.2, now article 5.3.2, of the pro forma
affected system facilities construction agreement to remove the
additional cure period if the breach remains despite the occurrence of
good faith steps. We find that the revision will simplify the cure
requirements while providing breaching party with an extra 30 calendar
days at the onset to cure its breach. We also revise article 5.3.2 to
include a reference that if the breaching party defaults, then the non-
defaulting party may terminate the agreement in accordance with article
6.2 (Termination) of the agreement. We further clarify article 5 of
both the pro forma affected system facilities construction agreement
and the pro forma multiparty affected system facilities construction
agreement that a failure to cure a breach of either agreement will also
constitute a default.
    1252. We decline to delete proposed article 6.4 (Survival of
Rights) of the pro forma affected system facilities construction
agreement, as suggested by Tri-State. Although Tri-State asserts that
proposed article 6.4 should be deleted because it is duplicative of
proposed article 2.4 (Survival),\2357\ we find that the contents are
sufficiently different to merit their separate inclusion. Specifically,
article 2.4 provides for the survival of the pro forma affected system
facilities construction agreement until all liabilities incurred prior
to termination are fulfilled, whereas article 6.4 clarifies the scope
of the rights of parties following termination to provide for final
billing, enforcement of liabilities and confidentiality obligations,
and for potential judicial or administrative action.
---------------------------------------------------------------------------

    \2357\ Tri-State Initial Comments at 34.
---------------------------------------------------------------------------

    1253. In response to comments from Southern regarding updates to
the confidentiality provisions contained in proposed article 8
(Confidentiality) of the pro forma affected system facilities
construction agreement,\2358\ we find that, because we are not
proposing to revise the confidentiality provision set forth in the pro
forma LGIA--instead, we are merely adopting it into the pro forma
affected system facilities construction agreement--article 8, as
adopted, is just and reasonable. Contrary to Southern's comments, the
confidentiality provisions in article 8.1.7 of the pro forma affected
system facilities construction agreement allow for confidential
information to be destroyed, erased, deleted or, as applicable,
returned, not for such information to exclusively be ``destroyed or
returned.'' \2359\ Thus, such language reflects the fact that most
electronic information is stored in backup servers. Moreover, in
response to Southern's concern that deleting information stored on
backup servers is administratively difficult, we find that Southern has
not provided any evidence or explained why this might be so.
---------------------------------------------------------------------------

    \2358\ Southern Initial Comments at 19.
    \2359\ Id.
---------------------------------------------------------------------------

    1254. In response to MISO's contention that there is no need to
list a commercial operation date for affected system network upgrades
in Appendix A of the pro forma affected system facilities construction
agreement,\2360\ we agree and modify Appendix A, now Attachment A, to
remove the commercial operation date from tables 1 and 3. However, we
note that parties may find it useful to memorialize the commercial
operation date for the affected system interconnection customer's
generating facility because, under article 2.2.1 of the pro forma
affected system facilities construction agreement, the parties to the
agreement may alter the affected system facilities construction
agreement by mutual consent if the in-service state date for the
affected system network upgrades or the commercial operation date for
the generating facility changes. To the extent MISO is concerned that
there could be different commercial operation dates listed for affected
system network upgrades in the LGIA and the affected system facilities
construction agreement, the host transmission provider must update the
commercial operation date for affected system network upgrades in the
affected system interconnection customer's LGIA with the host system,
to avoid discrepancies between the affected system facilities
construction agreement and the LGIA.
---------------------------------------------------------------------------

    \2360\ MISO Initial Comments at 97.
---------------------------------------------------------------------------

    1255. Finally, in response to comments from Eversource and ISO-
NE,\2361\ we clarify that these pro forma affected system agreements
are distinct from intra-RTO/ISO agreements, like ISO-NE's RFA, which
RTOs/ISOs may use to coordinate the construction of necessary network
upgrades within multiple transmission owner service territories within
the same RTO/ISO.\2362\
---------------------------------------------------------------------------

    \2361\ Eversource Initial Comments at 32; ISO-NE Initial
Comments at 38.
    \2362\ Eversource Initial Comments at 31-32.
---------------------------------------------------------------------------

d. Affected System Modeling and Study Assumptions
i. NOPR Proposal
    1256. As the Commission explained in the NOPR, 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 seek for the output of their generating 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. An interconnection
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.\2363\ An NRIS study goes beyond the prerequisite
ERIS study and uses stricter modeling standards \2364\ 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.\2365\ Such a deliverability analysis
varies regionally 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 to accommodate
the interconnection of a generating facility than an ERIS study because
NRIS provides a higher level of interconnection service than ERIS.
---------------------------------------------------------------------------

    \2363\ ``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.
    \2364\ NOPR, 179 FERC ] 61,194 at P 210. 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, in SPP, if a transmission element is
found to be overloaded in an interconnection study, and an NRIS
interconnection request has over a 3% distribution factor on that
element (3% being SPP's distribution factor threshold for NRIS
requests), the requesting entity will be assigned network upgrades.
SPP uses a 19.5% distribution factor threshold for ERIS requests.
See EDF Renewable Energy, Inc. v. Midcontinent Indep. Sys. Operator,
Inc., 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.
    \2365\ 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.
---------------------------------------------------------------------------

    1257. As the Commission also explained in the NOPR, when a host
transmission provider notifies an affected system operator of a
possible impact on its system from an interconnection request in the
host's queue, it must specify whether the interconnection customer
requested ERIS or NRIS. Currently, there is no requirement for affected
system transmission providers to apply either ERIS or NRIS modeling
standards to study interconnection requests made on neighboring
systems. For example, MISO uses ERIS studies for all affected system
interconnection requests, while PJM and SPP use the modeling standard
associated with the level of service requested on the host system.
(They study ERIS requests as ERIS and NRIS requests as NRIS.) \2366\
---------------------------------------------------------------------------

    \2366\ EDF Renewable Energy, Inc. v. Midcontinent Indep. Sys.
Operator, Inc., 168 FERC ] 61,173 at PP 75-76.
---------------------------------------------------------------------------

    1258. In the NOPR, the Commission preliminarily found that it was
unjust and unreasonable for an affected system transmission provider to
study interconnection requests on other transmission systems using NRIS
modeling standards, regardless of the level of service requested on the
host transmission system. The Commission noted that, unlike the host
transmission provider with which the affected system interconnection
customer will directly interconnect, an affected system transmission
provider 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, the Commission stated that 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. The Commission was concerned that this could result in
unjust and unreasonable rates by increasing the costs for the
interconnection customer without a commensurate increase in service.
    1259. The Commission proposed to require, under new pro forma LGIP
section 9.6,\2367\ the affected system transmission provider to study
interconnection requests using ERIS modeling standards, regardless of
the requested level of service on the host transmission provider's
transmission system.\2368\
---------------------------------------------------------------------------

    \2367\ We note that under the NOPR proposal, this reform was in
pro forma LGIP section 9.6; however, under the final rule, the
reform is in pro forma LGIP section 9.7.
    \2368\ NOPR, 179 FERC ] 61,194 at P 211.
---------------------------------------------------------------------------

    1260. The Commission also explained that if an affected system
transmission provider believed that it was 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 FPA section 205. The Commission explained that it would
evaluate such case-by-case FPA section 205 filings to determine whether
they were just, reasonable, and not unduly discriminatory or
preferential.\2369\ The Commission noted that an affected system
transmission provider 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 FPA
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.
---------------------------------------------------------------------------

    \2369\ 16 U.S.C. 824d.
---------------------------------------------------------------------------

    1261. The Commission stated that a modeling standard would create
consistency in the modeling standards used across all transmission
regions.\2370\ The Commission also stated that ERIS modeling standards
generally reduce the number and cost of network upgrades identified
and, by using ERIS modeling standards, interconnection customers would
be subject to fewer late-stage cost increases, which would reduce the
number of potential restudies and withdrawals thereby addressing the
concerns that the Commission has preliminarily found to result in
unjust, unreasonable, and unduly discriminatory or preferential
Commission-jurisdictional rates. The Commission acknowledged 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 interconnection generating facility(ies) on an affected
system.\2371\ Nevertheless, the Commission stated that it believed that
these risks were 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 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.
---------------------------------------------------------------------------

    \2370\ The Commission noted that, while this proposal would
standardize the use of ERIS for affected system studies, individual
transmission providers use different specific thresholds for ERIS
studies. NOPR, 179 FERC ] 61,194 at P 212 n.292.
    \2371\ Id. P 213.
---------------------------------------------------------------------------

    1262. The Commission sought comment on: (1) how to align the
possibility for such case-by-case FPA section 205 filings with the
required timeline for the affected system study and other deadlines
proposed in the NOPR; (2) whether the proposed reform will adversely
affect reliability for the affected system transmission provider or the
host transmission provider; (3) the potential impact of requiring
affected system transmission providers to use ERIS modeling standards
when an interconnection customer seeks NRIS on the host transmission
provider's system; and (4) 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.\2372\
---------------------------------------------------------------------------

    \2372\ Id. PP 211, 213, 215.
---------------------------------------------------------------------------

ii. Comments
(a) Comments in Support
    1263. Numerous commenters support the NOPR proposal.\2373\ ELCON
suggests that standardization of affected system modeling and
assumptions furthers certainty and accountability, resulting

in a more transparent, efficient, and cost-effective interconnection
process.\2374\ Some commenters argue that the NOPR proposal will reduce
the identification and assignment of unnecessary affected system
network upgrades under NRIS studies.\2375\ MISO and Shell contend that
ERIS modeling will adequately cover reliability for affected systems
and that they have no significant concerns regarding unnecessary
curtailment or redispatch on affected systems associated with ERIS
modeling.\2376\ Additionally, commenters contend that there is no need
to use NRIS modeling standards when the affected system interconnection
customer requests NRIS-level service on the host system because the
generating facility's output will not be delivered to the affected
system, and the NRIS standard serves the exclusive purpose of allowing
interconnection customers to be designated as a network resource on the
host system.\2377\ Some commenters claim that the NOPR proposal will
reduce the time required to conduct affected system study and
construction processes, as well as the likelihood of withdrawals once
the affected system necessary upgrades are identified.\2378\
---------------------------------------------------------------------------

    \2373\ ACE-NY Initial Comments at 9; AES Initial Comments at 21;
Alliant Energy Initial Comments at 7; Clean Energy Associations
Initial Comments at 48; Clean Energy Associations Reply Comments at
12; ELCON Initial Comments at 8; Enel Initial Comments at 67-68;
Fervo Energy Initial Comments at 6; Invenergy Initial Comments at
44; MISO Initial Comments at 98; NextEra Initial Comments at 34; OMS
Initial Comments at 17; Pattern Energy Initial Comments at 26; Pine
Gate Initial Comments at 42; Shell Initial Comments at 31-32; UMPA
Initial Comments at 6.
    \2374\ ELCON Initial Comments at 8.
    \2375\ Fervo Energy Initial Comments at 6; UMPA Initial Comments
at 6.
    \2376\ MISO Initial Comments at 98; Shell Initial Comments at
33.
    \2377\ Fervo Energy Initial Comments at 6; Interwest Reply
Comments at 18; Invenergy Initial Comments at 44; NextEra Initial
Comments at 34; NextEra Reply Comments at 6; OMS Initial Comments at
17.
    \2378\ OMS Initial Comments at 17; Pine Gate Initial Comments at
42; Public Interest Organizations Initial Comments at 51.
---------------------------------------------------------------------------

(b) Comments in Opposition
    1264. Some commenters oppose the NOPR proposal.\2379\ AECI claims
that, without increasing the granularity of the redispatch and
curtailment process in real time to better understand the actual impact
an affected system interconnection customer has on the affected system
from a distribution factor standpoint, the NOPR proposal would produce
disproportionate burdens by reducing otherwise economical and reliable
generating facilities to accommodate resources that are outside an
affected system transmission provider's control.\2380\ Idaho Power
asserts that the NOPR proposal may not sufficiently capture network
upgrades that are jointly owned by multiple entities.\2381\
Specifically, Idaho Power states that the host transmission provider
``may not be the entity responsible for designing and constructing
network upgrades and interconnection facilities; therefore, the
affected party ERIS study may not provide sufficient details to be
meaningful.'' \2382\
---------------------------------------------------------------------------

    \2379\ AECI Initial Comments at 7; AEP Initial Comments at 34;
Ameren Initial Comments at 23-24; Duke Southeast Utilities Initial
Comments at 28; EEI Initial Comments at 19; Illinois Commission
Initial Comments at 9; LADWP Initial Comments at 5; NRECA Initial
Comments at 39; Southern Initial Comments at 4, 16; SPP Initial
Comments at 20.
    \2380\ AECI Initial Comments at 7.
    \2381\ Idaho Power Initial Comments at 12.
    \2382\ Id.
---------------------------------------------------------------------------

    1265. Several commenters claim that the ERIS modeling requirement
for affected systems will negatively impact reliability.\2383\ AECI
argues that incentivizing ERIS-only studies would fundamentally affect
reliability by failing to address systemic de minimis issues that
become material in the aggregate.\2384\ Some commenters contend that,
under the NOPR proposal, reliability issues will not arise until the
operational time horizon, which could, as an example, result in an
increase in transmission loading relief events and redispatch of
network resources and native load.\2385\ LADWP asserts that the
dispatching assumptions of an interconnection request can make a
significant difference to flow patterns in the host system, and
parallel paths will inherently absorb the unscheduled flow intended for
the host system.\2386\ LADWP contends that, as the number of
interconnection requests continues to grow, these unscheduled flows
will continue to increase and begin to affect systems downstream of the
affected system, rather than just the local transmission system that
the ERIS modeling standard is designed to evaluate. LADWP claims that
the NOPR proposal would result in approval of generating facilities
without identification of sufficient network upgrades to accommodate
requested interconnection service, and affected system transmission
providers would be responsible for maintaining reliability by
developing operating procedures, capital projects, or performing
curtailments from the additional stress of energy that is not being
delivered to the affected system.
---------------------------------------------------------------------------

    \2383\ AECI Initial Comments at 7; Illinois Commission Initial
Comments at 9; Southern Initial Comments at 16-17.
    \2384\ AECI Initial Comments at 7.
    \2385\ Ameren Initial Comments at 24; LADWP Initial Comments at
5; PJM Reply Comments at 10; Southern Initial Comments at 16-17.
    \2386\ LADWP Initial Comments at 5.
---------------------------------------------------------------------------

    1266. AEP, SPP, and Xcel express concern that the proposed ERIS
modeling standard may harm firm transmission service on the affected
system.\2387\ AEP, NRECA, and Xcel argue that affected system
transmission providers should be able to use NRIS in affected system
studies if the affected system interconnection customer is requesting
NRIS-level service on the host transmission system to ensure the
required level of deliverability.\2388\ AEP states that, in the case
that the interconnection customer is requesting to interconnect to a
different RTO/ISO or is in a non-RTO/ISO, then an ERIS-only modeling
standard could result in the failure to construct affected system
network upgrades to mitigate congestion and/or loop flow once the new
generating facility commences operation, impacting loads that secured
and paid for firm transmission service and/or NRIS.\2389\
---------------------------------------------------------------------------

    \2387\ AEP Initial Comments at 34; SPP Initial Comments at 20;
Xcel Initial Comments at 43.
    \2388\ AEP Initial Comments at 34; NRECA Initial Comments at 39;
SPP Initial Comments at 20-21; Xcel Initial Comments at 43.
    \2389\ AEP Initial Comments at 34.
---------------------------------------------------------------------------

    1267. SPP is concerned that, if an affected system interconnection
customer requests NRIS-level service on the host transmission system
that grants deliverability rights without additional study procedures,
an affected system may be exposed to impacts that it has not had an
opportunity to evaluate under an ERIS modeling standard.\2390\ As an
example, SPP explains that SPP and MISO treat what constitutes firm
transmission service differently, but SPP's current ability to conduct
affected system studies under NRIS when the interconnection customer
has requested NRIS on the host system allows for that difference. In
response to SPP's concerns, NextEra argues that this issue appears to
be a problem of SPP's own making based on how SPP implemented ERIS and
NRIS on its own system and ignores that affected system interconnection
customers are not seeking deliverability or to be deemed firm on SPP's
transmission system through any sort of transmission service from
SPP.\2391\
---------------------------------------------------------------------------

    \2390\ SPP Initial Comments at 20-21.
    \2391\ NextEra Reply Comments at 6-7.
---------------------------------------------------------------------------

    1268. Some commenters note that the proposal may not work in all
scenarios.\2392\ For instance, Clean Energy Associations state that
this proposal may not be appropriate for non-RTO/ISO regions, if these
impacts are not addressed through a coordinated transmission service
study.\2393\ Xcel believes that the use of ERIS modeling standards for
affected system studies

may be appropriate under a joint operating agreement or in areas where
the impact may be evaluated and mitigated in the transmission service
study process, but in other areas, if the impact will not be evaluated
in the transmission service study process, it is appropriate for an
affected system transmission provider to model the neighbor's NRIS
requests based on the expected delivery point.\2394\
---------------------------------------------------------------------------

    \2392\ AEP Initial Comments at 34; Clean Energy Associations
Initial Comments at 48; SPP Initial Comments at 21-22; Xcel Initial
Comments at 43.
    \2393\ Clean Energy Associations Initial Comments at 48.
    \2394\ Xcel Initial Comments at 43-44.
---------------------------------------------------------------------------

(c) Comments on Specific Proposal
    1269. Some commenters ask the Commission to make changes to the
NOPR proposal to mitigate the negative impacts they discuss in their
comments. For example, some commenters recommend that, in addition to
the ERIS modeling standard, the Commission should establish (or allow
affected system transmission providers to establish) a distribution
factor or impact threshold for affected system studies to ensure that
affected system interconnection customers are not assigned unnecessary
affected system network upgrades.\2395\ NextEra recommends that the use
of ERIS be included in the pro forma affected system study agreement to
require any affected system transmission provider proposing to use NRIS
rather than ERIS to file such agreement with the Commission on a non-
conforming basis.\2396\
---------------------------------------------------------------------------

    \2395\ AES Initial Comments at 8, 21; Clean Energy Associations
Initial Comments at 48; Enel Initial Comments at 68; Pine Gate
Initial Comments at 42; SEIA Initial Comments at 35.
    \2396\ NextEra Initial Comments at 34.
---------------------------------------------------------------------------

    1270. Enel states that a critical interconnection issue not
addressed in the NOPR is the lack of clarification of ERIS and NRIS-
level service and how the different assumptions used by transmission
providers significantly alter results.\2397\ Enel explains that the
wide variety of views on what rights interconnection service grants to
an interconnection customer leads to confusion in the development of
study practices and requirements, as well as the services and products
a generating facility can provide. Enel requests that, in a final rule
or a supplemental notice, the Commission should provide concrete
direction regarding how these service types should be studied and what
outcome an interconnection customer should receive for making the
necessary transmission system improvements to obtain that
interconnection service. NV Energy requests that affected system
transmission providers and host transmission providers coordinate
assumptions for affected system studies and update those assumptions
quarterly after the affected system study has been issued to provide
meaningful changes.\2398\
---------------------------------------------------------------------------

    \2397\ Enel Initial Comments at 26-27.
    \2398\ NV Energy Initial Comments at 12.
---------------------------------------------------------------------------

    1271. Some commenters note that a final rule should provide host
transmission providers with flexibility to work with their neighboring
regions to address modeling consistencies in transmission system
representations across regions.\2399\
---------------------------------------------------------------------------

    \2399\ Duke Southeast Utilities Initial Comments at 27-28; NYISO
Initial Comments at 46.
---------------------------------------------------------------------------

    1272. Some commenters specifically support allowing transmission
providers to use NRIS modeling standards for affected system studies
pursuant to separate FPA section 205 filings, as proposed in the
NOPR.\2400\ Duke Southeast Utilities assert that the Commission should
remove any negative repercussions, including any financial penalties or
liability for breaching deadlines of the study process, for affected
system transmission providers that seek to make such FPA section 205
filings.\2401\
---------------------------------------------------------------------------

    \2400\ AES Initial Comments at 21; Clean Energy Associations
Initial Comments at 48; Fervo Energy Initial Comments at 6.
    \2401\ Duke Southeast Utilities Initial Comments at 27-28.
---------------------------------------------------------------------------

    1273. Several commenters argue that affected system transmission
providers should be able to use NRIS when conducting affected system
studies without requiring the NOPR's proposed FPA section 205
filing.\2402\ A few commenters argue that the requirement to make an
FPA section 205 filing to use NRIS modeling standards will create
delays and is overly burdensome on affected system transmission
providers.\2403\ SPP claims that, as proposed in the NOPR, an FPA
section 205 filing to use NRIS modeling assumptions would require
supporting documentation amounting to evidence that the affected system
transmission provider could only obtain if it conducted a study using
the standards of the heightened level of service, which it could not do
absent the Commission's grant of a waiver to require such a
study.\2404\ Invenergy argues that the option for an FPA section 205
request to conduct an affected system study using NRIS criteria invites
case-by-case disputes over modeling criteria, potentially delaying the
affected system study process. Therefore, Invenergy argues that the
Commission should clarify that any such filing must be limited to only
the facts of an individual interconnection request.\2405\
---------------------------------------------------------------------------

    \2402\ Id. at 28; AECI Initial Comments at 7; AEP Initial
Comments at 34; Ameren Initial Comments at 23-24; EEI Initial
Comments at 19; Illinois Commission Initial Comments at 9; LADWP
Initial Comments at 5; NRECA Initial Comments at 39; Southern
Initial Comments at 4, 16; SPP Initial Comments at 20.
    \2403\ AECI Initial Comments at 7; AEP Initial Comments at 34;
Duke Southeast Utilities Initial Comments at 27; EEI Initial
Comments at 19; LADWP Initial Comments at 5; MISO Initial Comments
at 98; Southern Initial Comments at 16; SPP Initial Comments at 20.
    \2404\ SPP Initial Comments at 20.
    \2405\ Invenergy Initial Comments at 44-45.
---------------------------------------------------------------------------

    1274. Xcel states that the Commission should: (1) remove the ERIS
option in RTO/ISO markets and require all generating facilities in such
markets to be deliverable; (2) curtail generating facilities that did
not pay for long-term firm transmission service; or (3) convene a
technical conference on this topic in this docket.\2406\ Xcel explains
that ERIS-only generating facilities in RTO/ISO markets may place a bid
to sell into the market, and the ERIS-only generating facilities will
be dispatched to the extent a bid clears, while in other areas, the
ERIS-only generating facilities must acquire transmission service to be
delivered.\2407\ Xcel concludes that ERIS service in RTO/ISO markets
results in unjust and unreasonable rates and discriminatory treatment
because ERIS-level generating facilities do not bear the costs
necessary to ensure that they are deliverable to load. Xcel claims
that: (1) the affected system transmission provider should not have to
assume it will redispatch its own network resources to accommodate an
affected system interconnection customer taking NRIS-level service; (2)
the affected system's network resources paid for and expect to receive
firm transmission service; and (3) there is no process for a host
transmission provider to require an affected system transmission
provider to redispatch its transmission system to accommodate a
generating facility on the host system under the pro forma
tariff.\2408\
---------------------------------------------------------------------------

    \2406\ Xcel Initial Comments at 16, 41-42.
    \2407\ Id. at 15.
    \2408\ Id. at 43.
---------------------------------------------------------------------------

    1275. NRECA asserts that the final rule should allow a
``transmission customer'' to propose a different standard through an
FPA section 206 complaint.\2409\ NextEra and MISO suggest that, to
avoid delays in the interconnection process, any affected system
transmission provider submitting an FPA section 205 filing to use NRIS
modeling in an affected system study should proceed with the affected
system study, using both the ERIS and NRIS standards, and then the
appropriate results could be used based on the outcome of the FPA
section 205

proceeding.\2410\ MISO also encourages the Commission to recognize that
this FPA section 205 filing process will add length and delay to the
affected system study process, which further compounds and demonstrates
the problems with the Commission's automatic penalty proposal.\2411\
---------------------------------------------------------------------------

    \2409\ NRECA Initial Comments at 40.
    \2410\ MISO Initial Comments at 98; NextEra Initial Comments at
34.
    \2411\ MISO Initial Comments at 98.
---------------------------------------------------------------------------

iii. Commission Determination
    1276. We adopt the NOPR proposal, with modification, to add section
9.7 to the pro forma LGIP to require affected system transmission
providers to study all affected system interconnection requests using
ERIS modeling standards.\2412\ We decline to adopt the NOPR proposal to
expressly acknowledge in pro forma LGIP section 9.7 that an affected
system transmission provider may submit an FPA section 205 filing to
request to study an affected system interconnection customer using NRIS
on a case-by-case basis.
---------------------------------------------------------------------------

    \2412\ In relevant part, pro forma LGIP section 9.7 states:
``Transmission Provider must study an Affected System
Interconnection Customer using the Energy Resource Interconnection
Service modeling standard used for Interconnection Requests on its
own Transmission System, regardless of the level of interconnection
service that Affected System Interconnection Customer is seeking
from the host transmission provider with whom it seeks to
interconnect.''
---------------------------------------------------------------------------

    1277. We find that the use of ERIS in affected system studies is
just and reasonable, given that the affected system transmission
provider has no obligation to continually ensure deliverability for an
affected system interconnection customer that has obtained NRIS on its
host system. An NRIS study goes beyond the prerequisite ERIS study and
uses stricter modeling standards 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
transmission system.\2413\ We find that the use of ERIS for affected
system studies is consistent with Order No. 2003 because
interconnection is separate from the deliverability component of
transmission service.\2414\
---------------------------------------------------------------------------

    \2413\ 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 a 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.
    \2414\ Order No. 2003, 104 FERC ] 61,103 at P 118; Order No.
2003-A, 106 FERC ] 61,220 at P 113.
---------------------------------------------------------------------------

    1278. We also find that this requirement is likely to prevent an
affected system interconnection customer from being required to
construct significant network upgrades on the transmission provider's
affected system, but not being deliverable due to curtailment or
congestion on the affected system. Without this reform, rates would
continue to be unjust and unreasonable because an affected system
interconnection customer would face increased costs without a
commensurate increase in service, as explained in the NOPR. This
mismatch between costs and services received would occur because the
affected system transmission provider has no obligation to ensure that
the output from the affected system interconnection customer's
generating facility is deliverable on the affected system and could
lead to curtailment of the generating facility, or there could be
congestion on the affected system preventing deliverability of the
generating facility's output.
    1279. We also find that, if the affected system transmission
provider were able to study affected system interconnection customers
under an NRIS standard, it could require affected system
interconnection customers to pay significant upfront costs in order to
construct the required affected system network upgrades, which could
lead to late-stage interconnection request withdrawals as
interconnection customers will not receive affected system study
results until late in the interconnection process. An ERIS standard
ensures that the assigned affected system network upgrade costs will
likely be lower and that affected system interconnection customers
assigned affected system network upgrades will be less likely to
withdraw at a late stage. This standard will help prevent the cascading
restudies that commenters have observed \2415\ and will ensure that the
interconnection process operates more efficiently.
---------------------------------------------------------------------------

    \2415\ OMS Initial Comments at 17; Pine Gate Initial Comments at
42.
---------------------------------------------------------------------------

    1280. We also find that the use of ERIS in affected system study
processes across all transmission provider regions will create
consistency and provide transparency for affected system
interconnection customers. Currently, similarly situated
interconnection customers requesting NRIS on their host transmission
systems could have disparate impacts on affected systems that use
different modeling standards, and these interconnection customers could
be assigned dramatically different affected system network upgrade
costs due to those varying modeling standards, without any factual or
service differences to justify the discriminatory treatment. Thus, the
consistent application of ERIS in affected system studies across all
transmission providers' study processes will ensure that all affected
system interconnection customers are studied similarly.\2416\ As such,
we agree with commenters that the use of ERIS on all affected system
interconnection requests will increase certainty and
transparency.\2417\
---------------------------------------------------------------------------

    \2416\ Order No. 2003, 104 FERC ] 61,103 at P 11 (stating that a
standard set of interconnection procedures will, among other things,
expedite the development of new generation, while protecting
reliability and ensuring that rates are just and reasonable).
    \2417\ ELCON Initial Comments at 8; Fervo Energy Initial
Comments at 6; UMPA Initial Comments at 6.
---------------------------------------------------------------------------

    1281. We find outside the scope of this final rule Xcel's request
that the Commission require all generating facilities in RTO/ISO
markets to be deliverable and its claim that ERIS-level generating
facilities do not bear the costs necessary to ensure that they are
deliverable to load.\2418\ We are not proposing in this final rule to
alter how an interconnection customer in an RTO/ISO requests its type
of interconnection service on the host system (i.e., ERIS or NRIS);
rather, we are standardizing how an affected system transmission
provider studies an affected system interconnection request.
---------------------------------------------------------------------------

    \2418\ Xcel Initial Comments at 15-16, 41-42.
---------------------------------------------------------------------------

    1282. Regarding AECI's claim that the NOPR proposal would produce
disproportionate burdens by necessitating curtailment from economical
and reliable generating facilities to accommodate generating facilities
on a different transmission system unless overall granularity of the
redispatch and curtailment process is increased in real time, we find
no evidence of this concern, from AECI or otherwise.\2419\ Rather, AECI
appears concerned that generating facilities on its transmission system
may be redispatched and curtailed, which we have acknowledged may
occur.\2420\ Additionally, we note the transmission loading relief
procedures set the priority for curtailing generating facilities as
necessary, and this final rule is not revising those procedures.
Finally, to the extent that the costs associated with increasing the
overall granularity of real-time models is less than any hypothetical
increase in curtailment and redispatch costs, a transmission provider
may increase the real-time granularity of its model.
---------------------------------------------------------------------------

    \2419\ AECI Initial Comments at 7.
    \2420\ NOPR, 179 FERC ] 61,194 at P 213.
---------------------------------------------------------------------------

    1283. Further, we find that Idaho Power has not adequately
explained how this reform will result in

insufficiently identifying network upgrades that are jointly owned by
multiple entities.\2421\ Moreover, even if this were a valid concern,
we find that this concern would be equally present regardless of the
modeling standard (i.e., ERIS or NRIS) used to conduct the affected
system study.
---------------------------------------------------------------------------

    \2421\ Idaho Power Initial Comments at 12.
---------------------------------------------------------------------------

    1284. As discussed in the NOPR proposal, using a less stringent
modeling standard may result in more frequent redispatch or curtailment
by not fully capturing all the potential impacts of the affected system
interconnection customer's generating facility(ies) on an affected
system. Based on the record, we continue to find that these risks are
limited in nature, particularly in non-RTO/ISO regions where
interconnection service does not, by itself, allow a generating
facility's power to flow. In non-RTO/ISO regions, power can only flow
from a generating facility once transmission service has been requested
and granted. For example, once point-to-point transmission service has
been requested to enable a particular generating facility's power to
flow, either by the generating facility itself or its power sale
customer, pro forma open access transmission tariff section 21
(Provisions Relating to Transmission Construction and Services on the
Systems of Other Utilities) provides a process similar to the affected
system process in the pro forma LGIP. In summary, pro forma open access
transmission tariff section 21 makes the transmission customer
responsible for obtaining any necessary engineering, permitting, and
construction of transmission or distribution facilities on the
system(s) of utilities other than the directly connected transmission
provider, but requires that transmission provider to undertake
reasonable efforts to assist in that effort. This means that affected
systems will have another opportunity to study the impact of the
interconnection customer's generating facility in the context of this
transmission service request, whether a new point-to-point transmission
service request or designation as a new network resource under an
existing transmission customer's network integration transmission
service, before any power can flow from the generating facility.
    1285. Moreover, we find that any significant impact would generally
be captured by an ERIS study, which would ensure that any reliability
impacts on the affected system are mitigated to accommodate the
interconnection of the affected system interconnection customer's
proposed generating facility to the host system. That ERIS adequately
studies an affected system interconnection customer's interconnection
request for its reliability impacts on the affected system is evidenced
by MISO's use of only ERIS in affected system studies without adverse
reliability impacts.\2422\
---------------------------------------------------------------------------

    \2422\ MISO Initial Comments at 98.
---------------------------------------------------------------------------

    1286. Regarding AECI's claim that using only ERIS in affected
system studies may result in increased de minimis impacts,\2423\ we are
not setting the implementation of the ERIS standard. Rather, each
transmission provider determines its own implementation of that
standard, which could include a de minimis threshold that is best for
its region. The Commission has found that, if consistently applied, it
is reasonable for interconnection customers to not bear cost
responsibility for de minimis impacts on transmission facilities based
on a threshold.\2424\ Additionally, we expect that any overloads in the
models due to the accumulation of de minimis impacts will ultimately be
assigned, pursuant to the transmission provider's tariff, when an
interconnection customer triggers the need for a network upgrade or
when the transmission provider's reliability transmission planning
process identifies the need for mitigation.
---------------------------------------------------------------------------

    \2423\ AECI Initial Comments at 7.
    \2424\ Tenaska Clear Creek Wind, LLC v. Sw. Power Pool, Inc.,
180 FERC ] 61,160, at P 99 (2022).
---------------------------------------------------------------------------

    1287. We disagree with LADWP that the use of ERIS by an affected
system transmission provider will result in approval of generating
facilities with insufficient network upgrades identified.\2425\ As
discussed above, we find that, in general, the use of ERIS is
sufficient for affected system studies to prevent reliability issues
from occurring on the affected system. Moreover, as noted earlier, in
non-RTO/ISO regions, power can only flow from a generating facility
once transmission service has been requested and granted, meaning that
affected systems will have another opportunity to study the impact of
the interconnection customer's generating facility in the context of
the associated transmission service request before any power can flow
from that generating facility as explained above.
---------------------------------------------------------------------------

    \2425\ LADWP Initial Comments at 5.
---------------------------------------------------------------------------

    1288. Similarly, we find that commenters' concerns about harm to
firm transmission service and cost shifting when using ERIS in affected
system studies are misplaced because those concerns do not arise until
the interconnection customer seeks to deliver power from its generating
facility to a customer, which outside of RTO/ISO regions can only
happen once transmission service is separately secured.\2426\ In Order
No. 2003, the Commission found that interconnection service is separate
from the delivery component of transmission service, and, in the
majority of circumstances, interconnection alone is unlikely to affect
the reliability of an affected system transmission provider's
transmission system.\2427\ Additionally, the Commission found that
holding new interconnection customers responsible for network upgrades
to all interconnected systems, including not only the transmission
system to which the generating facility interconnects, but other, more
distant transmission systems as well would create an unreasonable
obstacle to the construction of new generation.\2428\ As such, if an
affected system interconnection customer subsequently seeks
deliverability on either the host system or an affected system and
submits a transmission service request to either the host transmission
provider or the affected system transmission provider, the affected
system transmission provider will have the opportunity to study the
request and potentially require the construction of additional network
upgrades on the affected system to accommodate deliverability.
Therefore, we find that being assigned significant affected system
network upgrades under an NRIS study without the obligation for the
affected system transmission provider to ensure that the output from an
affected system interconnection customer's generating facility is
integrated on the affected system similar to generating facilities that
serve the affected system transmission provider's native load customers
or network resources results in unjust and unreasonable rates by
increasing the cost for affected system interconnection customers
without a commensurate increase in service.\2429\
---------------------------------------------------------------------------

    \2426\ AEP Initial Comments at 34; NRECA Initial Comments at 39;
SPP Initial Comments at 20-21; Xcel Initial Comments at 43.
    \2427\ Order No. 2003, 104 FERC ] 61,103 at P 118; Order No.
2003-A, 106 FERC ] 61,220 at P 113.
    \2428\ Order No. 2003, 104 FERC ] 61,103 at P 120.
    \2429\ As stated in section III.A.1, the pro forma LGIP defines
NRIS service as ``an Interconnection Service that allows the
Interconnection Customer to integrate its Large Generating Facility
with the Transmission Provider's Transmission 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 or ISO with market based congestion management, in the same
manner as Network Resources. Network Resource Interconnection
Service in and of itself does not convey transmission service.'' Pro
forma LGIP section 1.

---------------------------------------------------------------------------

    1289. Regarding claims that affected system transmission providers
would need to develop operating procedures or capital projects or
perform curtailments due to the additional stress on affected systems
caused by affected system interconnection requests being studied under
the ERIS modeling standard,\2430\ we find these claims to be
speculative and that affected system studies are designed to ensure
that an affected system interconnection customer's proposed generating
facility can reliably connect to the host system without adversely
impacting an affected system and are not meant to ensure deliverability
on either the host or affected system. As mentioned above, an affected
system transmission provider has no obligation to ensure that an
affected system interconnection request is fully deliverable.
---------------------------------------------------------------------------

    \2430\ LADWP Initial Comments at 5.
---------------------------------------------------------------------------

    1290. We are unpersuaded by arguments that the NOPR proposal may
not work in all scenarios \2431\ and note that commenters did not
provide specific examples of how the proposal would not work under the
Commission's pro forma LGIP process. Several commenters raise concerns
that, although the use of ERIS may work in regions with joint operating
agreements or coordinated transmission service studies, the use of ERIS
for all affected system studies may not be appropriate if an affected
system transmission provider's transmission service studies do not
identify all impacts. Once again, in adopting the ERIS requirement for
affected system transmission providers, we find that ERIS is sufficient
to capture reliability impacts of affected system interconnection
requests on the affected system. We do not address whether individual
transmission providers have adequate transmission service studies. If a
transmission provider believes that changes are needed to better
consider the deliverability of transmission service on its transmission
system or with its neighboring transmission systems, nothing in this
final rule prevents transmission providers from addressing those
concerns.
---------------------------------------------------------------------------

    \2431\ AEP Initial Comments at 34; Clean Energy Associations
Initial Comments at 48; SPP Initial Comments at 20-21; Xcel Initial
Comments at 43.
---------------------------------------------------------------------------

    1291. We decline requests for the Commission to set modeling
standards, to require transmission providers to include their modeling
standards in their tariffs, or to provide direction on how ERIS and
NRIS should be studied and what service the interconnection customer
should receive, and to require neighboring transmission providers to
coordinate assumptions and update those assumptions quarterly.\2432\ We
find these requests to be outside the scope of the final rule.
---------------------------------------------------------------------------

    \2432\ AES Initial Comments at 8, 21; Clean Energy Associations
Initial Comments at 48; Enel Initial Comments at 27, 68; NV Energy
Initial Comments at 12; Pine Gate Initial Comments at 42; SEIA
Initial Comments at 35.
---------------------------------------------------------------------------

    1292. Although some commenters request flexibility on whether to
use ERIS or NRIS in conducting an affected system study,\2433\ we find
such a request is essentially a request to maintain the status quo,
which, as discussed above, results in Commission-jurisdictional rates
that are unjust, unreasonable, and unduly discriminatory or
preferential and prevents interconnection customers from
interconnecting in a reliable, efficient, transparent, and timely
manner.
---------------------------------------------------------------------------

    \2433\ Duke Southeast Utilities Initial Comments at 27-28; NYISO
Initial Comments at 46.
---------------------------------------------------------------------------

    1293. We decline to adopt the proposal stating that an affected
system transmission provider may make an FPA section 205 filing to
request use of an NRIS modeling standard in affected system studies. We
find that there is no need to expressly provide for the availability of
an FPA section 205 filing in pro forma LGIP section 9.7 because
transmission providers always have the right to submit an FPA section
205 filing.
3. Optional Resource Solicitation Study
a. NOPR Proposal
    1294. In the NOPR, the Commission explained that 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.\2434\
---------------------------------------------------------------------------

    \2434\ NOPR, 179 FERC ] 61,194 at P 211.
---------------------------------------------------------------------------

    1295. The Commission proposed 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 or conduct a
resource solicitation process, including a state entity or LSE, to
initiate an optional resource solicitation study.\2435\
---------------------------------------------------------------------------

    \2435\ Id. P 223.
---------------------------------------------------------------------------

    1296. Under the NOPR proposal, 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.\2436\
---------------------------------------------------------------------------

    \2436\ Id. P 224.
---------------------------------------------------------------------------

    1297. The Commission clarified that under this proposal, the
resource planning entity would not receive a queue position:
interconnection customers would maintain their queue position obtained
through the cluster request window and proceed through the regular
interconnection queue alongside all other customers.\2437\
---------------------------------------------------------------------------

    \2437\ Id. P 226.
---------------------------------------------------------------------------

    1298. The Commission proposed 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.\2438\ The Commission
proposed a 135-calendar day time limit on the optional resource
solicitation study (compared to 150 calendar days for the cluster
study).
---------------------------------------------------------------------------

    \2438\ Id. P 233.
---------------------------------------------------------------------------

    1299. The Commission sought comment on: (1) the NOPR 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; (2) 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 interconnection process and whether their inclusion would raise
concerns of undue discrimination or preference; (3) 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; and (4) 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.\2439\
---------------------------------------------------------------------------

    \2439\ Id. PP 236-237.
---------------------------------------------------------------------------

b. Comments
i. Comments in Support
    1300. Many commenters support the NOPR proposal and note that the
ability to gather holistic information on a range of resource mix
scenarios from transmission providers would support efforts by states
and other resource planning entities to meet policy

objectives.\2440\ The North Dakota Commission notes that resource
solicitation studies could help improve coordination and make state-
level, bottom-up resource planning processes more efficient and cost-
effective.\2441\ Similarly, [Oslash]rsted argues that resource
solicitation studies have the potential to reduce the uncertainty
involving the interconnection cost portion of future state-sponsored
resource solicitations.\2442\
---------------------------------------------------------------------------

    \2440\ Clean Energy States Initial Comments at 9; Colorado
Commission Reply Comments at 2; Consumers Energy Initial Comments at
8; EEI Initial Comments at 5-6; Illinois Commission Initial Comments
at 11; Iowa Commission Initial Comments at 6; NARUC Initial Comments
at 25; NESCOE Initial Comments at 17; New Jersey Commission Initial
Comments at 16-17; North Carolina Commission Initial Comments at 26;
Northwest and Intermountain Initial Comments at 15; [Oslash]rsted
Initial Comments at 15; OPSI Initial Comments at 7; Public Interest
Organizations Initial Comments at 37-38.
    \2441\ North Dakota Commission Initial Comments at 7.
    \2442\ [Oslash]rsted Initial Comments at 15.
---------------------------------------------------------------------------

ii. Comments in Opposition
    1301. AES states that it does not believe reforms on this issue
should be part of the final rule but does not oppose transmission
providers submitting optional resource solicitation study proposals to
the Commission pursuant to separate FPA section 205 filings after
consultation with stakeholders.\2443\
---------------------------------------------------------------------------

    \2443\ AES Initial Comments at 22.
---------------------------------------------------------------------------

    1302. AEP disagrees with the Commission's conclusion that failure
to provide for a resource solicitation process leads to unjust and
unreasonable rates.\2444\ AEP argues that this reasoning only applies
to ``entities required to conduct a resource plan or resource
solicitation process'' and that, accordingly, there is no legal basis
to ``solve'' the problem through a nationwide mandate, as transmission
providers with no LSEs that are required to ``conduct a resource plan
or resource solicitation process'' do not need to amend their tariffs
to include the optional resource solicitation study proposal. AEP
asserts that there is no evidence that LSEs in RTOs/ISOs need the
optional resource solicitation study process to perform IRPs
efficiently and reach appropriate procurement decisions. AECI argues
that resource planning entities should maintain discretion over their
portfolios, and that the Commission lacks jurisdiction to mandate
deployment of any particular resource or to require transmission
providers to provide preferential treatment towards any specific
technology.\2445\
---------------------------------------------------------------------------

    \2444\ AEP Initial Comments at 39-40.
    \2445\ AECI Initial Comments at 8.
---------------------------------------------------------------------------

    1303. Several commenters argue that the proposed optional resource
solicitation study is unnecessary, particularly in regions such as PJM
and MISO, which have existing or proposed processes for considering
state objectives.\2446\
---------------------------------------------------------------------------

    \2446\ Dominion Initial Comments at 39; Dominion Reply Comments
at 24; Indicated PJM TOs Initial Comments at 51; MISO Initial
Comments at 9, 98-102; MISO Reply Comments at 11; National Grid
Initial Comments at 39; OMS Initial Comments at 18.
---------------------------------------------------------------------------

    1304. CAISO and SPP argue that the proposed optional resource
solicitation study may create uncertainty regarding the cost and timing
of interconnecting to the transmission system.\2447\ CAISO asserts that
it is impossible to provide meaningful cost data to interconnection
customers until the transmission provider knows precisely the entire
make-up of the study cluster.\2448\
---------------------------------------------------------------------------

    \2447\ CAISO Initial Comments at 30; SPP Initial Comments at 22.
    \2448\ CAISO Initial Comments at 31.
---------------------------------------------------------------------------

    1305. Several commenters question the efficacy of the resource
solicitation study proposal.\2449\ PJM argues that, because the study
would include only a subset of the clustered interconnection requests,
the results would not be indicative of the outcome when considering the
entire cluster, and would not provide information upon which resource
planning entities could act or base decisions.\2450\ Enel and Indicated
PJM TOs argue that the studies would not be expected to yield a
reliable estimate of the total costs of the portfolio of resources
being contemplated by the resource planner.\2451\ Similarly, Indicated
PJM TOs argue that optional studies will divert scarce resources away
from curing the fundamental problem, arguing that such studies may not
be valuable to resource planners because they would be conducted in a
vacuum, would not account for other interconnection requests, and would
not necessarily lead to the most efficient combination of
resources.\2452\
---------------------------------------------------------------------------

    \2449\ AEE Initial Comments at 35; Enel Initial Comments at 71;
Indicated PJM TOs Initial Comments at 50.
    \2450\ PJM Initial Comments at 50.
    \2451\ Enel Initial Comments at 71; Indicated PJM TOs Initial
Comments at 50.
    \2452\ Indicated PJM TOs Initial Comments at 50.
---------------------------------------------------------------------------

    1306. Some commenters assert that prospective interconnection
customers will have an incentive to lodge speculative interconnection
requests antithetical to the desired streamlining of the pro forma LGIA
and pro forma LGIP process contemplated by the NOPR.\2453\ APPA-LPPC
comment that, to the extent that the generating facilities associated
with interconnection requests are competing in a resource solicitation
in which they may not be selected, such interconnection requests could
constitute the kind of speculative interconnection request that the
NOPR otherwise discourages.\2454\
---------------------------------------------------------------------------

    \2453\ AECI Initial Comments at 8; Enel Initial Comments at 69.
    \2454\ APPA-LPPC Initial Comments at 27.
---------------------------------------------------------------------------

    1307. Several commenters argue that the optional resource
solicitation study will result in inefficiencies and delays that
degrade the quality of the main cluster study.\2455\ Several commenters
express concern that adding optional resource solicitation studies as a
pro forma LGIP requirement would hinder the Commission's goal of
increasing the speed of processing interconnection requests, arguing
that the additional study requirements are time consuming and would
require significant resources to complete.\2456\ Enel states that,
because a transmission provider would be required to evaluate six full
cluster studies (i.e., one standard plus five sensitivities) with
different combinations of generating facilities, the optional resource
solicitation study would inevitably lead to delays, restudies, late-
stage withdrawals, errors, and increased potential for inadequate
consideration of lower cost and alternative mitigations.\2457\ The
Colorado Commission argues that the NOPR proposal could materially
delay the clean energy transition in Colorado given interconnection
scarcity concerns if it required the elimination of resource
solicitation clusters as currently implemented by the Colorado
utilities.\2458\
---------------------------------------------------------------------------

    \2455\ Id.; AECI Initial Comments at 8; Bonneville Initial
Comments at 22; CAISO Initial Comments 30-31; CREA and NewSun Reply
Comments at 55; Dominion Initial Comments at 39; Enel Initial
Comments at 69; Illinois Commission Initial Comments at 11; NARUC
Initial Comments at 31; NextEra Initial Comments at 35; NYISO
Initial Comments at 46; PJM Initial Comments at 5-6.
    \2456\ Bonneville Initial Comments at 22; CAISO Initial Comments
30-31; CREA and NewSun Reply Comments at 55; Enel Initial Comments
at 69; Illinois Commission Initial Comments at 11; NARUC Initial
Comments at 31; NextEra Initial Comments at 35; NYISO Initial
Comments at 46; PJM Initial Comments at 6; SEIA Reply Comments at
18, 21; SPP Initial Comments at 22.
    \2457\ Enel Initial Comments at 69-71.
    \2458\ Colorado Commission Reply Comments at 3.
---------------------------------------------------------------------------

    1308. Some commenters question whether transmission providers can
realistically manage interconnection cluster studies and perhaps
multiple optional resource solicitation studies at the same time.\2459\
Indicated PJM TOs

state that the ability for any resource planning entity to initiate the
resource solicitation study without warning at any time would be
especially burdensome.\2460\ MISO warns that multiple resource planning
entities could request an optional study with different combinations,
requiring MISO to perform numerous iterations of its system impact
studies.\2461\ Several commenters argue that instituting an additional
study will put further strain on transmission providers' limited staff
resources.\2462\ Bonneville, WAPA, and NRECA assert that most small
transmission providers are not staffed or organized to accomplish the
work discussed by the Commission.\2463\
---------------------------------------------------------------------------

    \2459\ Indicated PJM TOs Initial Comments at 50; MISO Initial
Comments at 101-102; Northwest and Intermountain Initial Comments at
16-17; NRECA Initial Comments at 41-42; PJM Initial Comments at 6.
    \2460\ Indicated PJM TOs Initial Comments at 50; Indicated PJM
TOs Reply Comments at 18.
    \2461\ MISO Initial Comments at 102.
    \2462\ Dominion Initial Comments at 39; Indicated PJM TOs
Initial Comments at 50; National Grid Initial Comments at 38-39;
NYISO Initial Comments at 46; PJM Initial Comments at 6; SEIA
Initial Comments at 36.
    \2463\ Bonneville Initial Comments at 22; WAPA Initial Comments
at 14; NRECA Initial Comments at 41-42.
---------------------------------------------------------------------------

    1309. Several commenters caution the Commission that the optional
resource solicitation studies could be costly.\2464\ MISO contends that
mandating a new study activity without a corresponding study deposit
may result in a situation where study deposit funds run out, halting
interconnection studies until more funds are provided and leading to
interconnection queue delays.\2465\ NRECA also argues that requiring
both the optional informational interconnection studies and the
optional resource solicitation studies increase costs for transmission
customers.\2466\ SEIA argues that imposing an optional resource
solicitation process in the early stages of the interconnection
process, before interconnection customers receive the cost estimates of
their network upgrades, means that the results from the study may not
accurately reflect the costs of the network upgrades for the resources
in the study.\2467\ Enel argues that, because the resource planning
entity selects generating facilities for scenarios without any
knowledge of interconnection results, it is possible that the selected
generating facilities will end up being built despite large upgrade
costs.\2468\
---------------------------------------------------------------------------

    \2464\ Clean Energy Associations Initial Comments at 51;
Illinois Commission Initial Comments at 11; MISO Initial Comments at
103.
    \2465\ MISO Initial Comments at 103.
    \2466\ NRECA Initial Comments at 41-42.
    \2467\ SEIA Reply Comments at 18-19.
    \2468\ Enel Initial Comments at 72.
---------------------------------------------------------------------------

    1310. Several commenters contend that the proposal is unjust,
unreasonable, and unduly discriminatory or preferential because it
gives special treatment to generating facilities selected to fulfill a
resource plan without full consideration of interconnection
upgrades.\2469\ Several commenters are concerned that this proposal
could allow vertically integrated transmission providers or LSEs to use
the process in a way that would inappropriately favor the
interconnection of company-owned resources.\2470\ NARUC and SEIA
explain that an LSE could have a transmission provider identify cost-
saving interconnection options through the optional resource
solicitation study for company-owned resources but exclude non-company-
owned resources from the analysis, thus tipping the cost evaluation in
favor of the company's resources.\2471\ Likewise, Interwest and EPSA
are concerned that priority in interconnection queue processing for
interconnection requests selected in a resource plan and under contract
with a utility may provide competitive advantages for vertically
integrated utilities because of their control over the selection of
projects and the identification and timing of the installation of
network upgrades.\2472\
---------------------------------------------------------------------------

    \2469\ Id. at 68, 72; AEE Initial Comments at 35-36; EPSA
Initial Comments at 12; Interwest Initial Comments at 9; Interwest
Reply Comments at 8; MISO Initial Comments at 98; OMS Initial
Comments at 18; PJM Initial Comments at 50-51; SEIA Reply Comments
at 19-20.
    \2470\ AEE Initial Comments at 36; CREA and NewSun Initial
Comments at 89; EPSA Initial Comments at 11-12; Interwest Initial
Comments at 9-10; NARUC Initial Comments at 26-27; Northwest and
Intermountain Initial Comments at 15-16; Public Interest
Organizations Initial Comments at 41; SEIA Initial Comments at 36.
    \2471\ NARUC Initial Comments at 26-27; SEIA Initial Comments at
36; SEIA Reply Comments at 20.
    \2472\ EPSA Initial Comments at 12; Interwest Initial Comments
at 9-10.
---------------------------------------------------------------------------

    1311. SEIA also argues that an optional resource solicitation study
in situations where there is a commercial readiness requirement
presents numerous opportunities for a utility to discriminate against
independent power producers in favor of that utility's own
generation.\2473\ AEP argues that, in multi-state RTOs/ISOs, the
proposal facially discriminates against LSEs that are not eligible
resource planning entities or are located in states that are not
eligible resource planning entities themselves, and shifts key RTO/ISO
resources away from such entities.\2474\ In RTOs/ISOs that allow
bilateral capacity procurement, AEP argues that the proposal likewise
discriminates between LSEs with qualifying resource planning entities
(which may well be themselves) and those without.
---------------------------------------------------------------------------

    \2473\ SEIA Initial Comments at 36.
    \2474\ AEP Initial Comments at 37-38.
---------------------------------------------------------------------------

    1312. Multiple commenters argue that the proposed requirement to
perform an optional resource solicitation study in multiple states
imposes a considerable burden on RTOs/ISOs without providing meaningful
benefits.\2475\ PJM argues that requiring it ``to serve as a de facto
consultant'' to resource planning entities in addition to its efforts
to expedite and process the country's largest interconnection queue
would require PJM to take on a role beyond its authority as a
transmission provider.\2476\ Similarly, Indicated PJM TOs argue that
there is no justification for requiring transmission providers to
provide resource solicitation studies when consultants could do
so.\2477\
---------------------------------------------------------------------------

    \2475\ Id. at 36-37; AES Initial Comments at 22; CAISO Initial
Comments at 31; ClearPath Initial Comments at 9; Dominion Initial
Comments at 39; MISO Initial Comments at 105; NextEra Initial
Comments at 35; PJM Initial Comments at 51; SEIA Reply Comments at
21; WAPA Initial Comments at 15.
    \2476\ PJM Initial Comments at 51.
    \2477\ Indicated PJM TOs Reply Comments at 19.
---------------------------------------------------------------------------

    1313. The North Dakota Commission suggests that the Commission
should consider whether the proposal potentially allows cost-shifting
from states or localities with significant resource build out mandates
to other states within the RTO/ISO and how to mitigate such unjust
cost-shifting.\2478\ Similarly, Interwest cautions that, in bilateral
and RTO/ISO markets, requiring a ranking in priority between
interconnection requests may result in setting up competition between
the utilities, with each vying for space on the constrained
system.\2479\
---------------------------------------------------------------------------

    \2478\ North Dakota Commission Initial Comments at 7.
    \2479\ Interwest Initial Comments at 10.
---------------------------------------------------------------------------

    1314. Tri-State adds that there are ``timing issues'' regarding the
optional resource solicitation study, as it does not align with the
electric resource planning process within Colorado, and potentially
other states.\2480\ The Colorado Commission is also concerned that, to
the extent interconnection requests are permitted to be made into non-
resource solicitation cluster studies without strong requirements to
demonstrate that those requests are for viable generating facilities,
the cluster study results may render later resource solicitation study
results inaccurate.\2481\
---------------------------------------------------------------------------

    \2480\ Tri-State Initial Comments at 29.
    \2481\ Colorado Commission Reply Comments at 5 n.10.

---------------------------------------------------------------------------

iii. Requests for Alternatives and Regional Flexibility
    1315. Public Interest Organizations argue that the Commission
should grant extra flexibility on the 135-calendar day study
timeline.\2482\ Several commenters support the implementation of
boundaries or guardrails to ensure that optional resource solicitation
studies do not delay the study of other interconnection requests by
diverting needed resources away from the general interconnection
queue.\2483\ Several commenters support the proposal so long as
protections are included to prevent undue discrimination and maintain a
competitive generation solicitation.\2484\
---------------------------------------------------------------------------

    \2482\ Public Interest Organizations Initial Comments at 38.
    \2483\ Illinois Commission Initial Comments at 11; NESCOE
Initial Comments at 18; OPSI Initial Comments at 7-8.
    \2484\ CREA and NewSun Initial Comments at 89-90; CREA and
NewSun Reply Comments at 55; Interwest Initial Comments at 11;
Northwest and Intermountain Initial Comments at 16; Pine Gate
Initial Comments at 43; Public Interest Organizations Initial
Comments at 41; R Street Initial Comments at 15-16.
---------------------------------------------------------------------------

    1316. NARUC asks the Commission to consider going farther than
requiring the optional resource solicitation study only for purposes of
transparency and cost estimation; it recommends making the results of
the studies available for interconnection customers to pursue and a
basis upon which interconnection customers could seek interconnection
on an expedited basis.\2485\
---------------------------------------------------------------------------

    \2485\ NARUC Initial Comments at 31.
---------------------------------------------------------------------------

    1317. Xcel, the Colorado Commission, and EEI argue that the
resource solicitation cluster should have its own queue position.\2486\
Enel recommends that the optional resource solicitation study be a
separate queue cycle with an intermediate queue priority between the
transmission provider's annual study clusters.\2487\ Several commenters
argue that resources selected as part of the resource solicitation
process should be given priority in the interconnection queue.\2488\
The Colorado Commission suggests that the Commission modify its
proposal to prioritize interconnection requests selected to serve
native and network load within the RTO/ISO.
---------------------------------------------------------------------------

    \2486\ Colorado Commission Initial Comments at 29; Colorado
Commission Reply Comments at 6; EEI Initial Comments at 5-6; Xcel
Initial Comments at 11, 14.
    \2487\ Enel Initial Comments at 72.
    \2488\ Arizona Commission Initial Comments at 2; Colorado
Commission Reply Comments at 2; Public Interest Organizations
Initial Comments at 43; Xcel Initial Comments at 46.
---------------------------------------------------------------------------

    1318. The Colorado Commission and Xcel encourage the Commission to
determine that any current resource solicitation cluster processes
already in place remain just and reasonable or are consistent with/
superior to the final rule.\2489\ SEIA disagrees, noting that PSCo's
existing resource solicitation study procedures were approved by the
Commission in 2004 only so long as PSCo did not ``disadvantage or delay
other Interconnection Requests not involved in the solicitation.''
\2490\ SEIA argues that the Colorado Commission's current proposal to
prioritize interconnection requests selected in the state process
conflicts with this 2004 order and the Commission's ``longstanding
prohibition against queue jumping.'' \2491\
---------------------------------------------------------------------------

    \2489\ Colorado Commission Reply Comments at 1; Xcel Initial
Comments at 11.
    \2490\ SEIA Reply Comments at 20 (citing NOPR, 179 FERC ] 61,194
at P 298; Xcel Energy Operating Cos., 109 FERC ] 61,072, at P 26
(2004)).
    \2491\ Id. at 20-21 (citing Xcel Energy Operating Cos., 106 FERC
] 61,260, at P 22, order on reh'g, 109 FERC ] 61,072).
---------------------------------------------------------------------------

    1319. Multiple commenters request clarification and changes to the
NOPR's proposal on resource solicitation in multistate transmission
areas,\2492\ but NARUC and Xcel suggest that facilitated coordination
of resource planning and interconnection as well as discussion across
states and LSEs may be the most helpful practice to reduce the burden
of differing state portfolio requirements on transmission providers in
multi-state areas.\2493\
---------------------------------------------------------------------------

    \2492\ AEP Initial Comments at 36; CAISO Initial Comments at 31;
PacifiCorp Initial Comments at 39; PJM Initial Comments at 51; WAPA
Initial Comments at 15; Xcel Initial Comments at 45-46.
    \2493\ NARUC Initial Comments at 30-31; Xcel Initial Comments at
45.
---------------------------------------------------------------------------

    1320. Several commenters suggest that the proposed optional
resource solicitation study should occur outside the tariff
process.\2494\ NextEra argues that the absence of such a feature from
the pro forma LGIP is in no way unjust and unreasonable and that, if a
transmission provider feels the need to customize its LGIP in this way,
the transmission provider can do so on its own.\2495\ NRECA suggests
that the Commission require that base cases and support files are
available for LSEs so the LSE can run these studies outside of the
tariff process.\2496\ WAPA and Bonneville argue that resource
solicitation studies should occur at the reliability coordinator level
and not the transmission provider level.\2497\
---------------------------------------------------------------------------

    \2494\ NextEra Initial Comments at 35; NRECA Initial Comments at
42.
    \2495\ NextEra Initial Comments at 35.
    \2496\ NRECA Initial Comments at 42.
    \2497\ Bonneville Initial Comments at 22; WAPA Initial Comments
at 14.
---------------------------------------------------------------------------

    1321. Several commenters argue that the Commission should allow
transmission providers flexibility in implementing resource
solicitations.\2498\ NYISO asserts that it has addressed the NOPR's
aims by permitting state agencies to act as a developer for purposes of
obtaining a generic interconnection request that they can put out for
solicitation.\2499\
---------------------------------------------------------------------------

    \2498\ AECI Initial Comments at 8; Dominion Initial Comments at
39; Interwest Initial Comments at 12; ISO-NE Initial Comments at 38;
NESCOE Reply Comments at 15; NRECA Initial Comments at 10; NYISO
Initial Comments at 46; PacifiCorp Initial Comments at 39; PJM
Initial Comments at 51; Xcel Initial Comments at 14, 45; Xcel Reply
Comments at 3.
    \2499\ NYISO Initial Comments at 47.
---------------------------------------------------------------------------

c. Commission Determination
    1322. We decline to adopt the NOPR proposal to modify the pro forma
LGIP to require transmission providers to allow resource planning
entities to initiate an optional resource solicitation study.\2500\ We
find that there is insufficient evidence in the record to justify
establishing the optional resource solicitation study process proposed
in the NOPR as a generic solution across all regions for coordinating
state-level resource planning with the interconnection process. As
commenters explain, many transmission providers do not have LSEs that
conduct a resource solicitation process. We are also concerned that the
particular ``one size fits all'' approach proposed in the NOPR would
create uncertainty regarding the cost and timing of interconnecting to
the transmission system, because the proposed study would not result in
useful network upgrade cost estimates. Finally, we agree with
commenters that the proposal as set forth in the NOPR would divert
transmission provider resources and potentially lead to delays in the
processing of the interconnection queue.
---------------------------------------------------------------------------

    \2500\ Because we are not adopting this proposal, we do not
address comments on specific aspects of the proposal.
---------------------------------------------------------------------------

    1323. Notwithstanding our decision not to adopt the NOPR's resource
solicitation proposal, we agree with commenters who note that, in
certain regions, resource solicitation studies have the potential to
reduce uncertainty, improve coordination, and make resource planning
more efficient and cost effective. We acknowledge comments arguing that
a resource solicitation study may be most effective if paired with a
structure where the resources within the resource solicitation
structure are granted their own queue position, as this provides the
relevant resources and soliciting entity with actionable information
and avoids the uncertainty and delay that may occur if a study is
conducted only for informational purposes and the

associated resources do not have a queue position that corresponds to
the study assumptions.\2501\ We note that our decision not to adopt the
NOPR's proposal in this final rule in no way prejudges any future
resource solicitation study proposals that transmission providers may
choose to file pursuant to FPA section 205.
---------------------------------------------------------------------------

    \2501\ See Colorado Commission Initial Comments at 29; Colorado
Commission Reply Comments at 6; EEI Initial Comments at 5-6; Xcel
Initial Comments at 11, 14.
---------------------------------------------------------------------------

C. Reforms To Incorporate Technological Advancements Into the
Interconnection Process

1. Increasing Flexibility in the Generator Interconnection Process
a. Co-Located Generating Facilities Behind One Point of Interconnection
With Shared Interconnection Requests
i. Need for Reform and NOPR Proposal
    1324. In the NOPR, the Commission noted that 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.\2502\ The Commission preliminarily found that the
lack of such a process limits the interconnection of generating
facilities, hindering competition and rendering the Commission's
existing pro forma LGIP unjust, unreasonable, and unduly discriminatory
or preferential.\2503\
---------------------------------------------------------------------------

    \2502\ NOPR, 179 FERC ] 61,194 at P 239.
    \2503\ Id. P 240.
---------------------------------------------------------------------------

    1325. The Commission therefore proposed to revise the pro forma
LGIP and pro forma LGIA to ``require transmission providers to allow
more than one generating facility to co-locate on a shared site behind
a single point of interconnection and share a single interconnection
request.'' \2504\ The Commission explained that 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.''
\2505\
---------------------------------------------------------------------------

    \2504\ Id. P 242.
    \2505\ Id.
---------------------------------------------------------------------------

    1326. The Commission proposed 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; (3) modify the
definition of site control such that it allows interconnection
customers to demonstrate shared land-use for co-located resources.''
\2506\ The Commission also proposed to modify the definition of
interconnection facilities to clarify that multiple generating
facilities located on the same site may share interconnection
facilities.\2507\
---------------------------------------------------------------------------

    \2506\ Id. P 243.
    \2507\ Id.; proposed pro forma LGIP section 1.
---------------------------------------------------------------------------

    1327. The Commission also proposed 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.'' \2508\ The Commission noted
that many co-located generating facilities are co-located with electric
storage resources,\2509\ and proposed to define ``electric storage
resources'' in the pro forma LGIP as a resource capable of receiving
electric energy from the grid and storing it for later injection of
electric energy back to the grid.\2510\
---------------------------------------------------------------------------

    \2508\ NOPR, 179 FERC ] 61,194 at P 245.
    \2509\ Id. P 240.
    \2510\ Id.; proposed pro forma LGIP section 1.
---------------------------------------------------------------------------

ii. Comments
(a) Comments in Support
    1328. Commenters overwhelmingly support the Commission's
proposal.\2511\ Eversource conditionally supports the proposal as a
solid step that will improve the interconnection process.\2512\
Avangrid is not opposed to the proposal but does not foresee the reform
as providing incremental efficiency to transmission providers.\2513\
---------------------------------------------------------------------------

    \2511\ AEE Initial Comments at 38; AES Initial Comments at 23;
Ameren Initial Comments at 26; APPA-LPPC Initial Comments at 28;
CAISO Initial Comments at 32; Clean Energy Associations Initial
Comments at 59; Clean Energy Buyers Initial Comments at 4-5;
Consumers Energy Company Initial Comments at 8; CREA and NewSun
Initial Comments at 90; Environmental Defense Fund Initial Comments
at 5; Environmental Defense Fund Reply Comments at 8; ELCON Initial
Comments at 10; Enel Initial Comments at 78; Evergreen Action
Initial Comments at 3; ISO-NE Initial Comments at 39; MISO Initial
Comments at 107; NARUC Initial Comments at 33; National Grid Initial
Comments at 39; NextEra Initial Comments at 6; NRECA Initial
Comments at 44; NY Commission and NYSERDA Initial Comments at 9;
NYISO Initial Comments at 47; NYTOs Initial Comments at 31-32; OSPA
Reply Comments at 15; Ohio Commission Initial Comments at 14; Omaha
Public Power Initial Comments at 13; [Oslash]rsted Initial Comments
at 18; Pine Gate Initial Comments at 44-45; Public Interest
Organizations Initial Comments at 43; SEIA Initial Comments at 37;
SoCal Edison Initial Comments at 19; SPP Initial Comments at 23;
State Agencies Initial Comments at 14.
    \2512\ Eversource Initial Comments at 32-33.
    \2513\ Avangrid Initial Comments at 34.
---------------------------------------------------------------------------

    1329. Evergreen Action avers that co-location is vital to
connecting more generation in the short term as transmission providers
begin to work through large interconnection queue backlogs,\2514\ and
Evergreen Action and NRECA state that co-locating two or more resources
will take advantage of technologies like battery storage to more
efficiently use the transmission system.\2515\ AEE and State Agencies
argue that, because existing interconnection procedures were designed
before battery storage and hybrid resource types came into common
usage, these types of technologies are often underserved under existing
interconnection procedures despite being well represented in current
interconnection queues, making this reform timely.\2516\ OSPA urges the
Commission to implement this proposal as soon as possible.\2517\
---------------------------------------------------------------------------

    \2514\ Evergreen Action Initial Comments at 3.
    \2515\ Id.; NRECA Initial Comments at 44.
    \2516\ AEE Initial Comments at 38; State Agencies Initial
Comments at 14.
    \2517\ OSPA Reply Comments at 15.
---------------------------------------------------------------------------

    1330. Several commenters argue that the NOPR proposal will likely
improve the overall efficiency of interconnection processes, result in
more accurate interconnection queue positions, and help to ensure just
and reasonable rates.\2518\ Environmental Defense Fund argues that
combinations of generation and storage on a single site will create
several benefits, including reducing intermittency, shifting supply to
better meet demand, responding to grid events, and enabling provision
of ancillary services.\2519\
---------------------------------------------------------------------------

    \2518\ AEE Initial Comments at 39; AES Initial Comments at 23;
NARUC Initial Comments at 33; Ohio Commission Initial Comments at
14.
    \2519\ Environmental Defense Fund Initial Comments at 5.
---------------------------------------------------------------------------

    1331. AEE argues that the greatest value of storage systems is
their ability to respond rapidly with a high degree of controllability,
and contends that hybrid resources smooth the output of variable
resources, allowing for increased land use efficiencies.\2520\ Several
commenters argue that the proposal will yield interconnection queue
efficiency because the shared nature of the co-located resources can be
fully accounted for in a single interconnection request: they contend
that requiring co-located resources to submit multiple interconnection
requests increases cost, timing, and complexity, while forgoing
reliability benefits.\2521\
---------------------------------------------------------------------------

    \2520\ AEE Initial Comments at 39.
    \2521\ Id.; AES Initial Comments at 39; Consumers Energy Company
Initial Comments at 8; Environmental Defense Fund Initial Comments
at 5-6; NARUC Initial Comments at 33; Ohio Commission Initial
Comments at 14; [Oslash]rsted Initial Comments at 19; Public
Interest Organizations Initial Comments at 44; SEIA Initial Comments
at 37-38; SoCal Edison Initial Comments at 19.

---------------------------------------------------------------------------

    1332. In support of the proposal, AEE argues that several
transmission providers already allow co-located generating facilities
at the same point of interconnection to submit a single request (e.g.,
CAISO, ISO-NE, and MISO).\2522\ AES contends that the Commission's
proposed reforms are necessary to ensure parity across all RTOs/ISOs on
this issue, as some RTOs'/ISOs' practices erect unnecessary and
unreasonable barriers for generating facilities located behind a single
point of interconnection to interconnect.\2523\
---------------------------------------------------------------------------

    \2522\ AEE Initial Comments at 39-40.
    \2523\ AES Initial Comments at 23.
---------------------------------------------------------------------------

    1333. Omaha Public Power supports the Commission's proposals to
facilitate new technologies, specifically the reforms related to co-
located resources, revisions to the modification process, and surplus
interconnection capacity.\2524\ Omaha Public Power observes, however,
that many transmission providers have already made progress in this
area and therefore recommends that the Commission allow existing
transmission provider processes that are facilitating new technologies
to continue.
---------------------------------------------------------------------------

    \2524\ Omaha Public Power Initial Comments at 13.
---------------------------------------------------------------------------

(b) Comments on Specific Proposal
    1334. Avangrid asserts that the Commission's proposal should not
change or supersede any regional metering requirements for market
participation and contends that co-located resources must have separate
meters even if they share a point of interconnection.\2525\
---------------------------------------------------------------------------

    \2525\ Avangrid Initial Comments at 34.
---------------------------------------------------------------------------

    1335. NARUC and MISO support the Commission's proposal that co-
located generating facilities must have technology to address
differences in terminal voltage between the co-located generating
facilities.\2526\ MISO states that having to study a single co-located
generating facility with two points of interconnection at different
voltages would be infeasible, and that co-located generating facilities
should be required to inject at a single point of interconnection, at a
single voltage.\2527\ SPP states that it is unclear what the Commission
intended in the NOPR by proposing to require that generating facilities
``address differences in terminal voltage between the co-located
generating facilities to ensure that these generating facilities have
the same voltage levels.'' \2528\ SPP contends that it would be simpler
to require that such generating facilities connect at the same point of
interconnection and leave the details as to how to do that to the
interconnection customer. Ameren argues that, so long as modeling is
available to the transmission provider for the types of resources that
are behind the point of interconnection, co-located resources with
differences in terminal voltage should not be an issue when performing
the interconnection studies.\2529\
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    \2526\ MISO Initial Comments at 107-108; NARUC Initial Comments
at 33.
    \2527\ MISO Initial Comments at 107-108.
    \2528\ SPP Initial Comments at 23 (citing NOPR, 179 FERC ]
61,194 at P 245).
    \2529\ Ameren Initial Comments at 26.
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    1336. [Oslash]rsted supports the Commission's proposed changes to
the definition of ``interconnection facilities.'' \2530\ Enel states
that the proposed insertion of the phrase ``by interconnection
customer'' in the third sentence of the pro forma LGIA/LGIP definition
of ``interconnection facilities'' should be changed to the phrase ``by
interconnection customer(s).'' \2531\ Enel further states that the
proposed new fourth sentence to the definition of ``interconnection
facilities'' explains that multiple interconnection customers may use a
single set of interconnection facilities, and thus ``sole use
facilities'' may have multiple interconnection customer beneficiaries.
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    \2530\ [Oslash]rsted Initial Comments at 18.
    \2531\ Enel Initial Comments at 81-82.
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    1337. Southern states that, under the NOPR proposal, co-located
resources can include different owners of different generating
facilities.\2532\ Pine Gate and Southern note that the proposal to
allow interconnection customers to demonstrate shared land-use may
require interconnection customers to provide transmission providers
more detailed site maps to demonstrate valid site control for each
generating facility.\2533\ Southern states that this is appropriate
because the transmission provider should not be responsible for
monitoring the legal relationship between the co-owners.\2534\ Southern
states that co-located resources must either be owned by the same
owner, or the different owners of the generating facilities must enter
into an agreement that addresses off-take rights and ownership, and
they must submit one interconnection request for the entire generating
facility. Tri-State suggests clarifying that a separate agreement is
not necessary when both co-located resources belong to the same
interconnection customer.\2535\
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    \2532\ Southern Initial Comments at 35.
    \2533\ Id. at 36; Pine Gate Initial Comments at 46.
    \2534\ Southern Initial Comments at 36.
    \2535\ Tri-State Initial Comments at 25.
---------------------------------------------------------------------------

    1338. Clean Energy Associations support allowing multiple
generating facilities that share a single point of interconnection to
submit a joint interconnection request as a hybrid or co-located
resource. Clean Energy Associations argue that interconnection
customers with proposed generating facilities where the electric
storage resource and generating facility are co-located, and have two
``resource IDs,'' should be allowed to choose to have each component
studied separately.\2536\ Clean Energy Associations also submit that
the generating equipment for the generating facilities should not be
required to be located on a shared site. Clean Energy Associations
further assert that such flexibility would allow, for example, a solar
facility to obtain a faster ERIS study while the co-located storage
could get a more detailed study for NRIS.
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    \2536\ Clean Energy Associations Initial Comments at 59-61.
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    1339. Southern contends that co-located resources that intend to be
qualifying facilities should be required to comply with PURPA
requirements.\2537\
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    \2537\ Southern Initial Comments at 36.
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(c) Requests for Clarification and Flexibility
    1340. Pine Gate agrees that co-located generating facilities must
have technology to address differences in terminal voltage between the
co-located generating facilities, arguing that such technology is
likely necessary in instances where a co-located resource is being
studied under a single interconnection request for a net injection at
the point of interconnection.\2538\ However, Pine Gate requests that
the Commission clarify that such technology is not necessary in
instances in which the interconnection customer elects to submit a co-
located resource using two separate interconnection requests.
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    \2538\ Pine Gate Initial Comments at 46.
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    1341. SPP notes that in the NOPR, the Commission proposed to define
``co-located resources'' as ``more than one resource located behind the
same point of interconnection,'' whereas the proposed definition in the
pro forma LGIP reads, ``Co-Located Resource shall mean multiple
Generating Facilities located on the same site.'' \2539\ SPP states
that two generating facilities can be located on the same site without
connecting behind the same point of interconnection. SPP asks the
Commission to clarify in the final rule which definition of co-located
resource is required. SPP states that it supports a definition that
explicitly states that the

generating facilities must connect at the same point of
interconnection.
---------------------------------------------------------------------------

    \2539\ SPP Initial Comments at 23.
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    1342. MISO and Southern request that the Commission clarify that
co-located resources must be required to share an interconnection
request.\2540\ According to MISO, its tariff and Order No. 807 \2541\
allow for different interconnection requests to share a generator tie
line and thus share the same point of interconnection. MISO argues that
failing to amend the definition of co-located resource would conflate
the two scenarios under the same definition, such that two separate
noncontiguous generating facilities that share a generator tie line
would share the same point of interconnection, thus also falling under
the definition of co-located resources without the intent to do
so.\2542\ Southern argues that the Commission should clarify that the
interconnection tie line connecting the co-located resource to the
transmission system is a radial facility, not a network facility.\2543\
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    \2540\ MISO Initial Comments at 107; Southern Initial Comments
at 36.
    \2541\ Open Access & Priority Rights on Interconnection
Customer's Interconnection Facilities, Order No. 807, 80 FR 17654
(Apr. 1, 2015), 150 FERC ] 61,211, order on reh'g, Order No. 807-A,
153 FERC ] 61,047 (2015).
    \2542\ MISO Initial Comments at 107.
    \2543\ Southern Initial Comments at 37.
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    1343. National Grid asks that the Commission clarify what is
included in the definition of ``co-located resources.'' \2544\ National
Grid understands that the term can apply to hybrid technologies owned
by a single interconnection customer interconnecting to a single point
of interconnection, such as a solar generating facility coupled with a
storage facility. National Grid suggests that, to the extent the term
also is intended to apply to multiple interconnection customers with
separate generating facilities interconnecting to a single point of
interconnection, that the proposal might create complexities not
discussed in the NOPR but may merit consideration.
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    \2544\ National Grid Initial Comments at 39-40.
---------------------------------------------------------------------------

    1344. SEIA requests clarification on the terminology used in the
proposal.\2545\ SEIA states that in January 2021, in its order
directing reports on information related to hybrid resources, the
Commission used two distinct terms to identify hybrid resource market
participation.\2546\ SEIA states that ``co-located hybrid resources''
are defined as two separate resources sharing a single point of
interconnection that are modeled and dispatched separately. SEIA states
that ``integrated hybrid resources'' are defined as sets of resources
that share a single point of interconnection and are modeled and
dispatched as a single resource. Tri-State similarly states that the
``electric storage resource'' definition does not account for resources
designed to be charged apart from the transmission system, such as
solar or wind generating facilities that may charge an electric storage
resource.\2547\ SEIA requests that the Commission adopt the terms co-
located and integrated hybrid resources in the final rule and clarify
that interconnection customers retain the choice of how to structure
their interconnection requests to best suit their needs and the needs
of their customers.\2548\
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    \2545\ SEIA Initial Comments at 38.
    \2546\ Id. (citing Hybrid Res., 174 FERC ] 61,034, at P 4
(2021)).
    \2547\ Tri-State Initial Comments at 25.
    \2548\ SEIA Initial Comments at 38.
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    1345. Some commenters ask that the Commission provide regional
flexibility as to the types of co-located resources permitted in each
RTO/ISO and existing processes that may already accomplish the goals of
the proposed reforms.\2549\ ISO-NE, NYISO, and MISO state that they are
already in compliance with the proposed reform.\2550\
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    \2549\ ISO-NE Initial Comments at 39; NY Commission and NYSERDA
Initial Comments at 9; NYTOs Initial Comments at 31-32.
    \2550\ ISO-NE Initial Comments at 39; MISO Initial Comments at
107; NYISO Initial Comments at 47.
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iii. Commission Determination
    1346. We adopt, with modification, the NOPR proposal to revise pro
forma LGIP section 3.1.2 to require transmission providers to allow
more than one generating facility to co-locate on a shared site behind
a single point of interconnection and share a single interconnection
request. We decline to adopt the proposed definitions of ``co-located
resource'' and ``electric storage resource,'' and we decline to adopt
the proposed modifications to the definitions of interconnection
facilities, and transmission provider's interconnection facilities in
pro forma LGIP section 1 and pro forma LGIA article 1.\2551\ We find
that including the definition of co-located resource in the pro forma
LGIP and pro forma LGIA is not necessary to effectuate the process
reforms detailed in the NOPR, and thus decline to adopt it here.\2552\
Given that Order No. 845 revised the definition of generating facility