U.S. Energy Secretary Chris Wright has directed the Federal Energy Regulatory Commission (FERC) to begin the rulemaking process with a proposed rule aimed at “rapidly accelerating” the interconnection of large loads, including data centers.
The proposed rule would allow consumers to submit joint, shared load and generation interconnection applications. Secretary Wright argues that it would also reduce study times and grid upgrade costs, while reducing additional generation and the time needed for electricity to come online.
Secretary Wright has noted that U.S. electricity demand is expected to grow at an “extraordinary” pace, largely due to the rapid growth of large loads — and NERC has said that demand growth is now greater than at any point in the past two decades.
To address this increase in demand, the proposed rule states that “it has become necessary to standardize interconnection procedures and agreements for large loads, including those seeking to share a point of interconnection with new or existing generation facilities (hybrid facilities).
What will change?
Under the proposed rules, FERC’s jurisdiction would be limited to direct interconnection to transmission facilities. The DOE says this is to be avoided Even the argument Affecting the jurisdiction of states for the transmission of electric energy over generation facilities, facilities used in local distribution or solely in interstate commerce, or transmission used by transmitters.
Additionally, the new rules will likely only apply to new loads above 20 MW, but DOE noted that it is seeking comments on alternative thresholds, or thresholds required.
The proposed rules also state that, “to the extent practicable,” local and hybrid facilities should be studied in conjunction with facilities being studied. Du argued that this would allow for more efficient siting of loads and generating facilities, which could reduce the need for costly network upgrades. Additionally, like generating facilities, local and hybrid facilities may have standard study reserves, preparation requirements, and evacuation penalties.
DOE states that hybrid facilities should also be studied based on the amount of injection and/or withdrawal rights. Under this rule, a hybrid facility consisting of 500 MW load and 600 MW generating facility cannot acquire withdrawal rights and 100 MW injection rights. Any hybrid interconnection shall also be required to install the necessary system protection facilities to prevent unauthorized injection or withdrawal in excess of the respective rights.
DOE is also arguing that large-load interconnection studies that agree on operable and hybrid facilities that agree on operability and dispatchability should be expedited. Also, existing generating facilities that attempt to enter partial suspension to serve new loads at the same location should go through a System Support Resource (SSR)/Reliability (RMR) type study.
Utilities serving large loads, including those involved in hybrid facilities, shall be responsible for transmission service based on evacuation rights. Additionally, those utilities will be responsible for ancillary services based on peak demand, without regard to mutual generation. The DOE added that any co-generation facilities would be “fully compensated” for providing ancillary services. Utilities serving large loads must also meet all applicable NERC reliability standards and OATT provisions.
