[Federal Register Volume 80, Number 227 (Wednesday, November 25, 2015)]
[Proposed Rules]
[Pages 73683-73689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29972]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM16-1-000]


Reactive Power Requirements for Non-Synchronous Generation

AGENCY: Federal Energy Regulatory Commission.

ACTION: Proposed rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
proposing to eliminate the exemptions for wind generators from the 
requirement to provide reactive power. As a result, all newly 
interconnecting generators, including both synchronous and non-
synchronous generators, would be required to provide reactive power. To 
implement this requirement, the Commission proposes to revise the pro 
forma Large Generator Interconnection Agreement (LGIA), Appendix G to 
the pro forma LGIA, and the pro forma Small Generator Interconnection 
Agreement (SGIA) in accordance with the Commission's regulations, which 
require every public utility with a non-discriminatory open access 
transmission tariff on file to also have on file the pro forma LGIA and 
pro forma SGIA ``required by Commission rulemaking proceedings 
promulgating and amending such interconnection procedures and 
agreements.'' In this Proposal to Revise Standard Generator 
Interconnection Agreements (Proposal), the Commission proposes to 
modify both agreements to eliminate the exemptions for wind generators 
from the requirement to provide reactive power. As a result, all newly 
interconnecting generators (i.e., new generators seeking to 
interconnect to the transmission system and all existing non-
synchronous generators making upgrades to their generation facilities 
that require new interconnection requests), both synchronous and non-
synchronous, would be required to provide reactive power as a condition 
of interconnection as of the effective date of the final revision.

DATES: Comments are due January 25, 2016.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.

[[Page 73684]]

     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on this process, see the Comment Procedures 
Section of this document.

FOR FURTHER INFORMATION CONTACT:
Brian Bak (Technical Information), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-6574, [email protected]
Gretchen Kershaw (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, (202) 502-8213, [email protected]

SUPPLEMENTARY INFORMATION

Proposal To Revise Standard Generator Interconnection Agreements Issued 
November 19, 2015

    1. In this Proposal to Revise Standard Generator Interconnection 
Agreements (Proposal), the Federal Energy Regulatory Commission 
(Commission) is proposing to eliminate the exemptions for wind 
generators from the requirement to provide reactive power. As a result, 
all newly interconnecting generators, including both synchronous and 
non-synchronous, would be required to provide reactive power. 
Specifically, the Commission proposes to modify the two pro forma 
interconnection agreements, the Large Generator Interconnection 
Agreement (LGIA) and the Small Generator Interconnection Agreement 
(SGIA), to eliminate the current exemption for wind generators from the 
requirement to provide reactive power, thereby requiring all newly 
interconnecting generators (i.e., new generators seeking to 
interconnect to the transmission system and all existing non-
synchronous generators making upgrades to their generation facilities 
that require new interconnection requests), both synchronous and non-
synchronous, to provide reactive power. This Proposal would create 
comparable reactive power requirements for non-synchronous and 
synchronous generators, except that the Proposal requires that non-
synchronous generators maintain the required power factor range only 
when the generator's real power output exceeds 10 percent of its 
nameplate capacity. Additionally, all existing non-synchronous 
generators making upgrades to their generation facilities that require 
new interconnection requests would be required to provide reactive 
power.
    2. The existing pro forma LGIA and pro forma SGIA both require, as 
a condition of interconnection, an interconnecting generator ``to 
design its generating facility to maintain a composite power delivery 
at continuous rated power output at the Point of Interconnection at a 
power factor \1\ of 0.95 leading to 0.95 lagging, or a different range 
if adopted by the Transmission Provider'' \2\ (i.e., the reactive power 
requirement). This reactive power requirement requires dynamic reactive 
power \3\ from generators. As discussed below, however, wind generators 
have been exempted from the reactive power requirement absent a study 
finding the provision of reactive power necessary, because 
historically, costs for an interconnection customer to design and build 
a wind generator that could provide reactive power were high and could 
have created an obstacle to the development of wind generation.\4\ 
However, due to technological advancements, wind generators can now 
provide reactive power more cheaply and the cost of providing reactive 
power no longer presents an obstacle to the development of wind 
generation.\5\ The subsequent decline in the cost to wind generators of 
providing reactive power may make it unduly discriminatory and 
preferential to exempt wind generators from the reactive power 
requirement when other types of generators are not exempt. Further, the 
growing penetration of wind generators on some systems increases the 
potential for a deficiency in reactive power.\6\ Given this potential, 
the Commission's current requirement that the transmission provider 
conduct a study to determine whether each new wind generator needs to 
provide reactive power may unduly place the burden of supplying 
reactive power on synchronous generators without a reasonable 
technological or cost-based basis.
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    \1\ The power factor of an alternating current transmission 
system is the ratio of real power to apparent power. Reliable 
operation of a transmission system requires system operators to 
maintain a tight control of voltages (at all points) on the 
transmission system. The ability to vary the ratio of real power to 
apparent power (i.e., adjust the power factor) allows system 
operators to maintain scheduled voltages within allowed for 
tolerances on the transmission system and maintain the reliability 
of the transmission system. The Commission established a required 
power factor range in Order No. 2003 of 0.95 leading to 0.95 
lagging. See Standardization of Generator Interconnection Agreements 
and Procedures, Order No. 2003, FERC Stats. & Regs. ] 31,146, at P 
542 (2003), order on reh'g, Order No. 2003-A, FERC Stats. & Regs. ] 
31,160, order on reh'g, Order No. 2003-B, FERC Stats. & Regs. ] 
31,171 (2004), order on reh'g, Order No. 2003-C, FERC Stats. & Regs. 
] 31,190 (2005), aff'd sub nom. Nat'l Ass'n of Regulatory Util. 
Comm'rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007), cert. denied, 552 
U.S. 1230 (2008).
    \2\ Section 9.6.1 of the pro forma LGIA and section 1.8.1 of the 
pro forma SGIA.
    \3\ Reactive power sources are generally categorized as static 
or dynamic based on the speed and continuity at which they can 
produce or absorb reactive power in response to changes in system 
conditions. In general, dynamic reactive power devices are 
characterized by faster acting and continuously variable voltage 
control capability.
    \4\ Interconnection for Wind Energy, Order No. 661, FERC Stats. 
& Regs. ] 31,186, at P 51, order on reh'g, Order No. 661-A, FERC 
Stats. & Regs. ] 31,198 (2005).
    \5\ Payment for Reactive Power, Commission Staff Report, Docket 
No. AD14-7, app. 2, at 1-3 (Apr. 22, 2014).
    \6\ See PJM Interconnection, L.L.C., 151 FERC ] 61,097, at P 7 
(2015).
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    3. Therefore, the Commission proposes to eliminate the existing 
exemptions for wind generators, and thereby require that all newly 
interconnecting non-synchronous generators provide dynamic reactive 
power as a condition of interconnection. This requirement would also 
apply to all existing non-synchronous generators making upgrades to 
their generation facilities that require new interconnection requests. 
The proposals set forth in this Proposal are intended to ensure that 
all generators, synchronous and non-synchronous, are treated in a not 
unduly discriminatory or preferential manner, as required by sections 
205 and 206 of the Federal Power Act (FPA),\7\ and to ensure sufficient 
reactive power is available on the electric grid as more non-
synchronous generators seek to interconnect.
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    \7\ 16 U.S.C. 824a, 824b (2012).
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    4. The Commission seeks comment on these proposed reforms sixty 
(60) days after publication of this Proposal in the Federal Register.

Background

    5. Transmission providers require reactive power to control system 
voltage for efficient and reliable operation of an alternating current 
transmission system. At times, transmission providers need generators 
to either supply or consume reactive power. Starting with Order No. 
888,\8\ which included provisions regarding reactive power from

[[Page 73685]]

generators as an ancillary service in Schedule 2 of the pro forma Open 
Access Transmission Tariff (OATT), the Commission issued a series of 
orders intended to ensure that sufficient reactive power is available 
to maintain the reliability of the electric grid.
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    \8\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, FERC Stats. & Regs. ] 31,036 (1996), order on reh'g, 
Order No. 888-A, FERC Stats. & Regs. ] 31,048, order on reh'g, Order 
No. 888-B, 81 FERC ] 61,248 (1997), order on reh'g, Order No. 888-C, 
82 FERC ] 61,046 (1998), aff'd in relevant part sub nom. 
Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. 
Cir. 2000), aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
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    6. Starting with Order No. 2003, the Commission adopted standard 
procedures and a standard agreement for the interconnection of large 
generation facilities (the pro forma LGIA), which included the reactive 
power requirement.\9\ The Commission recognized in Order No. 2003-A 
that the pro forma LGIA was ``designed around the needs of large 
synchronous generators and that generators relying on newer 
technologies may find that either a specific requirement is 
inapplicable or that it calls for a slightly different approach'' 
because such generators ``may have unique electrical characteristics.'' 
\10\ Therefore, the Commission exempted wind generators from the 
reactive power requirement and added a blank Appendix G to the pro 
forma LGIA as a placeholder for future interconnection requirements for 
newer technologies.\11\
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    \9\ Order No. 2003, FERC Stats. & Regs. ] 31,146 at PP 1, 542.
    \10\ Order No. 2003-A, FERC Stats. & Regs. ] 31,160 at P 407 & 
n.85.
    \11\ Id. Article 9.6.1 of the pro forma LGIA provides: 
``Interconnection Customer shall design the Large Generating 
Facility to maintain a composite power delivery at continuous rated 
power output at the Point of Interconnection at a power factor 
within the range of 0.95 leading to 0.95 lagging, unless 
Transmission Provider has established different requirements that 
apply to all generators in the Control Area on a comparable basis. 
The requirements of this paragraph shall not apply to wind 
generators.''
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    7. In June 2005, the Commission issued Order No. 661,\12\ 
establishing interconnection requirements in Appendix G to the pro 
forma LGIA for large wind generators.\13\ Recognizing that, unlike 
traditional synchronous generators, wind generators had to ``install 
costly equipment'' in order to maintain reactive power capability, the 
Commission in Order No. 661 preserved the exemption for large wind 
generators from the reactive power requirement unless the transmission 
provider shows, through a System Impact Study, that reactive power 
capability is required to ensure safety or reliability.\14\ The 
Commission explained that this qualified exemption from the reactive 
power requirement for large wind generators would provide certainty to 
the industry and ``remove unnecessary obstacles to the increased growth 
of wind generation.'' \15\
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    \12\ Interconnection for Wind Energy, Order No. 661, FERC Stats. 
& Regs. ] 31,186, Appendix B (Appendix G--Interconnection 
Requirements for a Wind Generating Plant), order on reh'g, Order No. 
661-A, FERC Stats. & Regs. ] 31,198 (2005).
    \13\ Id. P 1.
    \14\ Id. PP 50-51. Appendix G states: ``A wind generating plant 
shall maintain a power factor within the range of 0.95 leading to 
0.95 lagging, measured at the Point of Interconnection as defined in 
this LGIA, if the Transmission Provider's System Impact Study shows 
that such a requirement is necessary to ensure safety and 
reliability.''
    \15\ Id. P 50.
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    8. In May 2005, the Commission issued Order No. 2006,\16\ in which 
it adopted standard procedures and a standard agreement for the 
interconnection of small generation facilities (pro forma SGIA).\17\ In 
Order No. 2006, the Commission completely exempted small wind 
generators from the reactive power requirement.\18\ The Commission 
reasoned that, similar to large wind generators, small wind generators 
would face increased costs to provide reactive power that could create 
an obstacle to the development of small wind generators. Additionally, 
the Commission reasoned that small wind generators would ``have minimal 
impact on the Transmission Provider's electric system'' and therefore 
the reliability requirements for large wind generators that were 
eventually imposed in Order No. 661 were not needed for small wind 
generators.\19\
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    \16\ Standardization of Small Generator Interconnection 
Agreements and Procedures, Order No. 2006, FERC Stats. & Regs. ] 
31,180, Attachment F (Small Generator Interconnection Agreement), 
order on reh'g, Order No. 2006-A, FERC Stats. & Regs. ] 31,196 
(2005), order granting clarification, Order No. 2006-B, FERC Stats. 
& Regs. ] 31,221 (2006).
    \17\ Id. P 1.
    \18\ Id. P 387. Section 1.8.1 of the pro forma SGIA states: 
``The Interconnection Customer shall design its Small Generating 
Facility to maintain a composite power delivery at continuous rated 
power output at the Point of Interconnection at a power factor 
within the range of 0.95 leading to 0.95 lagging, unless the 
Transmission Provider has established different requirements that 
apply to all similarly situated generators in the control area on a 
comparable basis. The requirements of this paragraph shall not apply 
to wind generators.''
    \19\ Id. P 24.
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    9. Since the Commission provided these exemptions from the reactive 
power requirement for wind generators, the equipment needed for a wind 
generator to provide reactive power appears to have become more 
commercially available and less costly, such that the cost of 
installing equipment that is capable of providing reactive power is 
comparable to the costs of a traditional generator.\20\ Recognizing 
these factors, the Commission recently accepted a proposal by PJM 
Interconnection, L.L.C. (PJM) to effectively remove the wind generator 
exemption from the PJM tariff.\21\ Specifically, the Commission granted 
PJM an ``independent entity variation'' from Order No. 661 in accepting 
PJM's proposal to require interconnection customers seeking to 
interconnect non-synchronous generators,\22\ including wind generators, 
to use ``enhanced inverters'' with the capability to provide reactive 
power.\23\ The Commission observed that, ``[a]lthough there are still 
technical differences between non-synchronous generators [such as wind 
generators] and traditional generators, with regard to the provision of 
reactive power, those differences have significantly diminished since 
the Commission issued Order No. 661.'' \24\ The Commission agreed with 
PJM ``that the technology has changed both in availability and in cost 
since the Commission rejected [the California Independent System 
Operator's] proposal in 2010,'' such that ``PJM's proposal will not 
present a barrier to non-synchronous resources.'' \25\
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    \20\ Payment for Reactive Power, Commission Staff Report, Docket 
No. AD14-7, app. 1, at 6, app. 2, at 4-5 (Apr. 22, 2014).
    \21\ PJM Interconnection, L.L.C., 151 FERC ] 61,097, at P 28 
(2015).
    \22\ Non-synchronous generators are ``connected to the bulk 
power system through power electronics, but do not produce power at 
system frequency (60 Hz).'' They ``do not operate in the same way as 
traditional generators and respond differently to network 
disturbances.'' Id. P 1 n.3 (citing Order No. 661, FERC Stats. & 
Regs. ] 31,198 at P 3 n.4). Wind and solar photovoltaic generators 
are two examples of non-synchronous generators.
    \23\ Id. PP 1, 6.
    \24\ Id. P 28.
    \25\ Id.
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Discussion

    10. The continued exemption from the reactive power requirement in 
the pro forma LGIA and the pro forma SGIA for newly interconnecting 
wind generators appears to be unjust, unreasonable, and unduly 
discriminatory or preferential. Older wind turbine generators consumed 
reactive power; however, they lacked the capability to produce and 
control reactive power without the use of costly equipment because they 
did not use inverters like other non-synchronous generators.\26\ 
Technological advances have been made in the inverters used by wind 
generators.\27\ Based on these improvements, requiring newly 
interconnecting wind generators to provide reactive power does not 
appear to be the obstacle to the development of

[[Page 73686]]

wind generation that it was when the Commission issued Order Nos. 2003, 
661, and 2006.\28\ In particular, the wind turbines being installed 
today are generally Type III and Type IV inverter-based turbines,\29\ 
which are capable of producing and controlling dynamic reactive power, 
which was not the case in 2005 when the Commission exempted wind 
generators from the reactive power requirement in Order No. 661.\30\ 
The Commission preliminarily concludes that improvements in technology 
and the corresponding declining costs to newly interconnecting wind 
generators in providing reactive power make it unduly discriminatory 
and preferential to exempt such non-synchronous generators from the 
reactive power requirement when other types of generators are not 
exempt. Given the reduced costs to newly interconnecting wind 
generators to provide reactive power, requiring them to operate within 
the required power factor range would ensure they satisfy the same 
requirements as other generators and satisfy a basic requirement of 
interconnection.\31\
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    \26\ Order No. 661, FERC Stats. & Regs. ] 31,186 at PP 50-51.
    \27\ Non-synchronous generators produce electricity that is not 
synchronized to the electric grid (i.e., direct current (DC) power 
or alternating current (AC) power at a frequency other than 60 
hertz). Inverters convert non-synchronized AC or DC power into 
synchronized AC power that can be transmitted on the transmission 
system.
    \28\ As discussed above, in exempting wind generators from the 
reactive power requirement, the Commission sought to avoid creating 
an obstacle to the development of wind generation. For example, in 
Order No. 661, the Commission was concerned with ``remov[ing] 
unnecessary obstacles to the increased growth of wind generation.'' 
Id. P 50.
    \29\ A Type III wind turbine is a non-synchronous wound-rotor 
generator that has a three phase AC field applied to the rotor from 
a partially-rated power-electronics converter. A Type IV wind 
turbine is an AC generator in which the stator windings are 
connected to the power system through a fully-rated power-
electronics converter. Both Type III and Type IV wind turbines have 
inherent reactive power capabilities.
    \30\ Id. PP 50-51.
    \31\ See, e.g., Sw. Power Pool, Inc., 119 FERC ] 61,199, at P 29 
(``Providing reactive power within the [standard power factor range] 
is an obligation of a generator, and is as much an obligation of a 
generator as, for example, operating in accordance with Good Utility 
Practice.''), order on reh'g, 121 FERC ] 61,196 (2007).
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    11. Further, the Commission is concerned that, as the penetration 
of wind generation continues to grow, exempting a class of generators 
from providing reactive power could create reliability issues if those 
generators represent a substantial amount of total generation, or if 
many of the resources that currently provide reactive power are retired 
from operation. Local reliability issues, due to the short distances 
that reactive power can be transmitted, that are not readily apparent 
given the current generation mix could result if a region were to lose 
synchronous resources that supply reactive power and the resulting 
generation mix consisted of a significant quantity of resources that 
were exempt from providing reactive power. Further, the Commission 
believes that maintaining this exemption may unduly place the burden of 
supplying reactive power on synchronous generators without a reasonable 
technological or cost-based distinction between synchronous and non-
synchronous generators.\32\
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    \32\ See PJM Interconnection, L.L.C., 151 FERC ] 61,097, at P 7 
(2015); Payment for Reactive Power, Commission Staff Report, Docket 
No. AD14-7, app. 1 (Apr. 22, 2014).
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    12. Therefore, the Commission preliminarily concludes that the 
continued exemption from the reactive power requirement for newly 
interconnecting wind generators is unjust and unreasonable and unduly 
discriminatory and preferential. The Commission, therefore, proposes to 
revise the pro forma LGIA, Appendix G of the pro forma LGIA, and the 
pro forma SGIA to eliminate the exemptions for wind generators from the 
reactive power requirement.\33\ Under this Proposal, newly 
interconnecting non-synchronous generators would be eligible for the 
same payments for reactive power as other generators.\34\ Any 
compensation would be based on the cost of providing reactive power. We 
note that the cost to a wind generator of providing reactive power may 
not be easily estimated using existing methods that are applied to 
synchronous generators.\35\ The Commission also proposes that 
transmission providers that are not public utilities will have to adopt 
the requirements of this Proposal as a condition of maintaining the 
status of their safe harbor tariff or otherwise satisfying the 
reciprocity requirement of Order No. 888.\36\
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    \33\ The Commission does not propose to revise any regulatory 
text. The Commission proposes to revise the pro forma LGIA and pro 
forma SGIA in accordance with section 35.28(f)(1) of the 
Commission's regulations, which provides: ``Every public utility 
that is required to have on file a non-discriminatory open access 
transmission tariff under this section must amend such tariff by 
adding the standard interconnection procedures and agreement and the 
standard small generator interconnection procedures and agreement 
required by Commission rulemaking proceedings promulgating and 
amending such interconnection procedures and agreements, or such 
other interconnection procedures and agreements as may be required 
by Commission rulemaking proceedings promulgating and amending the 
standard interconnection procedures and agreement and the standard 
small generator interconnection procedures and agreement.'' 18 CFR 
35.28(f)(1) (2015). See Integration of Variable Energy Resources, 
Order No. 764, FERC Stats. & Regs. ] 31,331, at PP 343-345 (adopting 
this regulatory text effective September 11, 2012), order on reh'g 
and clarification, Order No. 764-A, 141 FERC ] 61,232 (2012), order 
on clarification and reh'g, Order No. 764-B, 144 FERC ] 61,222 
(2013). While not revising regulatory text, the Commission is using 
the process provided for rulemaking proceedings, as defined in 5 
U.S.C. 551(4)-(5) (2012).
    \34\ Order No. 2003-A, FERC Stats. & Regs. ] 31,160 at P 416.
    \35\ See Payment for Reactive Power, Commission Staff Report, 
Docket No. AD14-7, app. 2 (Apr. 22, 2014).
    \36\ Order No. 888, FERC Stats. & Regs. ] 31,036 at 31,760-63.
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    13. Removing the exemptions for wind generators from the reactive 
power requirement would specifically require all newly interconnecting 
non-synchronous generators, and all existing non-synchronous generators 
proposing upgrades to their generation facilities that require new 
interconnection requests, to design their generating facilities to 
maintain reactive power within a power factor range of 0.95 leading to 
0.95 lagging, or the standard range established by the transmission 
provider and approved by the Commission, to be measured at the Point of 
Interconnection.\37\
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    \37\ The pro forma LGIA defines ``Point of Interconnection'' as 
``the point, as set forth in Appendix A to the Standard Large 
Generator Interconnection Agreement, where the Interconnection 
Facilities connect to the Transmission Provider's Transmission 
System.'' Similarly, the pro forma SGIA defines ``Point of 
Interconnection'' as ``[t]he point where the Interconnection 
Facilities connect with the Transmission Provider's Transmission 
System.''
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    14. The Commission also proposes to require that the reactive power 
capability installed by non-synchronous generators be dynamic. In Order 
No. 661, the Commission declined to require dynamic reactive power 
capability from wind generators, unless the System Impact Study showed 
that dynamic reactive power capability was needed for system 
reliability, reasoning that dynamic reactive power capability may not 
be needed in every case.\38\ Based on technological advancements, the 
Commission no longer believes it is just and reasonable and not unduly 
discriminatory or preferential to exempt wind generators from the 
requirement to provide dynamic reactive power.\39\
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    \38\ See Order No. 661, FERC Stats. & Regs. ] 31,186 at P 66.
    \39\ Payment for Reactive Power, Commission Staff Report, Docket 
No. AD14-7, at 7 (Apr. 22, 2014).
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    15. Further, the Commission proposes to require that newly 
interconnecting non-synchronous generators be required to design the 
generating facility to maintain the required power factor range only 
when the generator's real power output exceeds 10 percent of its 
nameplate capacity.\40\ In requiring a generator to provide reactive 
power, the interconnection agreements would state: ``Non-synchronous 
generators shall only be required to maintain the above power factor 
when their output is above 10

[[Page 73687]]

percent of the Generating Facility Capacity.'' The Commission's 
understanding is that the inverters used by non-synchronous generators 
are not capable of producing reactive power when operating below 10 
percent of nameplate capacity.\41\
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    \40\ See Order No. 661, FERC Stats. & Regs. ] 31,186 at P 46.
    \41\ Id.
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    16. Specifically, with deleted text in brackets and added text in 
italics, the Commission proposes to revise section 9.6.1 of the pro 
forma LGIA to read:

    Interconnection Customer shall design the Large Generating 
Facility to maintain a composite power delivery at continuous rated 
power output at the Point of Interconnection at a power factor 
within the range of 0.95 leading to 0.95 lagging, unless 
Transmission Provider has established different requirements that 
apply to all generators in the Control Area on a comparable basis. 
[The requirements of this paragraph shall not apply to wind 
generators.] Non-synchronous generators shall only be required to 
maintain the above power factor when their output is above 10 
percent of the Generating Facility Capacity.\42\
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    \42\ Section 9.6.1 of the pro forma LGIA.

    The Commission similarly proposes to revise section 1.8.1 of the 
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pro forma SGIA to read:

    The Interconnection Customer shall design its Small Generating 
Facility to maintain a composite power delivery at continuous rated 
power output at the Point of Interconnection at a power factor 
within the range of 0.95 leading to 0.95 lagging, unless the 
Transmission Provider has established different requirements that 
apply to all similarly situated generators in the control area on a 
comparable basis. [The requirements of this paragraph shall not 
apply to wind generators.] Non-synchronous generators shall only be 
required to maintain the above power factor when their output is 
above 10 percent of the generator nameplate capacity.\43\
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    \43\ Section 1.8.1 of the pro forma SGIA.

    In addition, the Commission would strike paragraph A.ii of Appendix 
G to the pro forma LGIA, ``Technical Standards Applicable to a Wind 
Generation Plant.'' \44\
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    \44\ The full text of the pro forma LGIA will be posted on the 
Commission's internet page at: http://www.ferc.gov/industries/electric/indus-act/gi/stnd-gen.asp. The full text of the pro forma 
SGIA will be posted on the Commission's internet page at: http://www.ferc.gov/industries/electric/indus-act/gi/small-gen.asp.

    A wind generating plant shall maintain a power factor within the 
range of 0.95 leading to 0.95 lagging, measured at the Point of 
Interconnection as defined in this LGIA, if the Transmission 
Provider's System Impact Study shows that such a requirement is 
necessary to ensure safety or reliability. The power factor range 
standard can be met by using, for example, power electronics 
designed to supply this level of reactive capability 606 (taking 
into account any limitations due to voltage level, real power 
output, etc.) or fixed and switched capacitors if agreed to by the 
Transmission Provider, or a combination of the two. The 
Interconnection Customer shall not disable power factor equipment 
while the wind plant is in operation. Wind plants shall also be able 
to provide sufficient dynamic voltage support in lieu of the power 
system stabilizer and automatic voltage regulation at the generator 
excitation system if the System Impact Study shows this to be 
required for system safety or reliability.\45\
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    \45\ Section A.ii of Appendix G to the pro forma LGIA.

    17. The Commission proposes to apply the reactive power requirement 
to all newly interconnecting non-synchronous generators, as well as all 
existing non-synchronous generators making upgrades to their generation 
facilities that require new interconnection requests, as of the 
effective date of the final revision. The Commission also proposes to 
apply the reactive power requirement to all newly interconnecting non-
synchronous generators that have requested that an LGIA or SGIA be 
filed unexecuted with the Commission that is still pending before the 
Commission as of the effective date of the final revision. Thus, the 
requirement would not apply to non-synchronous generators that have 
executed an LGIA or SGIA, as relevant, prior to the effective date of 
the final revision, unless they propose upgrades to their generation 
facilities that require new interconnection requests. Given that not 
all existing wind generators are capable of providing reactive power 
without incurring substantial costs to install new equipment, we do not 
believe it is reasonable or necessary to require those generators to 
provide reactive power. However, existing wind generators that make 
upgrades to their generation facility that require a new 
interconnection request will be required to conform to this new 
requirement.
    18. The Commission seeks comments on the Proposal to remove the 
exemptions for wind generators from the reactive power requirement. 
Further, the Commission seeks comments on whether the current power 
factor range of 0.95 leading to 0.95 lagging, as set forth in the 
existing pro forma interconnection agreements,\46\ is reasonable given 
the technology used by non-synchronous generators. The Commission also 
seeks comments on the proposed requirement that newly interconnecting 
non-synchronous generators only be required to produce reactive power 
when the generator's real power output is greater than 10 percent of 
nameplate capacity. And finally, we note that a non-synchronous 
generator will be eligible for compensation for reactive power, 
consistent with the compensation provisions of the pro forma LGIA and 
pro forma SGIA.\47\ The Commission seeks comment on whether the 
existing methods used to determine reactive power compensation are 
appropriate for wind generators and, if not, what alternatives would be 
appropriate.\48\
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    \46\ Section 9.6.1 of the pro forma LGIA and section 1.8.1 of 
the pro forma SGIA.
    \47\ Section 9.6.3 of the pro forma LGIA and section 1.8.2 of 
the pro forma SGIA.
    \48\ See Payment for Reactive Power, Commission Staff Report, 
Docket No. AD14-7, app. 1 (Apr. 22, 2014).
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Proposed Compliance Procedures

    19. To comply with the requirements of this Proposal, the 
Commission proposes to require each public utility \49\ transmission 
provider to submit a compliance filing within 90 days of the effective 
date of the final revision in this proceeding revising its pro forma 
LGIA and pro forma SGIA subject to the Commission's jurisdiction as 
necessary to demonstrate that it meets the requirements set forth in 
this Proposal.
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    \49\ For purposes of this Proposal, a public utility is a 
utility that owns, controls, or operates facilities used for 
transmitting electric energy in interstate commerce, as defined by 
the FPA. See 16 U.S.C. 824(e) (2012). A non-public utility that 
seeks voluntary compliance with the reciprocity condition of an OATT 
may satisfy that condition by filing an OATT, which includes the pro 
forma LGIA and SGIA.
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    20. In some cases, public utility transmission providers may have 
provisions in their currently effective pro forma LGIAs and pro forma 
SGIAs related to the provision of reactive power by non-synchronous 
generators that the Commission has deemed to be consistent with or 
superior to the pro forma LGIA and pro forma SGIA. Where these pro 
forma LGIA and pro forma SGIA provisions will be modified by the final 
revision, public utility transmission providers must either comply with 
the final revision or demonstrate that these previously-approved pro 
forma LGIA and pro forma SGIA variations continue to be consistent with 
or superior to the pro forma LGIA and pro forma SGIA as modified by the 
final revision.
    21. The Commission will assess whether each compliance filing 
satisfies the proposed requirements and principles stated above and 
issue additional orders as necessary to ensure that each public utility 
transmission provider meets the requirements of this Proposal and the 
subsequent final revision.
    22. The Commission proposes that transmission providers that are 
not

[[Page 73688]]

public utilities will have to adopt the requirements of this Proposal 
and subsequent final revision as a condition of maintaining the status 
of their safe harbor tariff or otherwise satisfying the reciprocity 
requirement of Order No. 888.\50\
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    \50\ Order No. 888, FERC Stats. & Regs. ] 31,036 at 31,760-63.
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Information Collection Statement

    23. The collection of information contained in this Proposal to 
Revise Standard Generator Interconnection Agreements is subject to 
review by the Office of Management and Budget (OMB) regulations under 
section 3507(d) of the Paperwork Reduction Act of 1995 (PRA).\51\ OMB's 
regulations require approval of certain informational collection 
requirements imposed by an agency.\52\ Upon approval of a collection(s) 
of information, OMB will assign an OMB control number and an expiration 
date. Respondents subject to the filing requirements will not be 
penalized for failing to respond to these collections of information 
unless the collections of information display a valid OMB control 
number.
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    \51\ 44 U.S.C. 3507(d) (2012).
    \52\ 5 CFR 1320.11 (2015).
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    24. The reforms proposed in this Proposal would amend the 
Commission's standard generator interconnection agreements in 
accordance with section 35.28(f)(1) of the Commission's regulations 
\53\ to require that each public utility transmission provider amend 
its pro forma LGIA and pro forma SGIA to: (1) Eliminate the exemptions 
for wind generators from the requirement to provide reactive power; and 
(2) require that all newly interconnecting non-synchronous generators, 
as well as all existing non-synchronous generators making upgrades to 
their generation facilities that require new interconnection requests, 
provide reactive power as a condition of interconnection, as of the 
effective date of the final revision. The reforms proposed in this 
Proposal would require filings of pro forma LGIAs and pro forma SGIAs 
with the Commission. The Commission anticipates the reforms proposed in 
this Proposal, once implemented, would not significantly change 
currently existing burdens on an ongoing basis. With regard to those 
public utility transmission providers that believe that they already 
comply with the reforms proposed in this Proposal, they could 
demonstrate their compliance in the filing required 90 days after the 
effective date of the final revision in this proceeding. The Commission 
will submit the proposed reporting requirements to OMB for its review 
and approval under section 3507(d) of the Paperwork Reduction Act.\54\
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    \53\ 18 CFR 35.28(f)(1) (2015).
    \54\ 44 U.S.C. 3507(d) (2012).
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    25. While the Commission expects the adoption of the reforms 
proposed in this Proposal to provide significant benefits, the 
Commission understands that implementation can be a complex and costly 
endeavor. The Commission solicits comments on the accuracy of provided 
burden and cost estimates and any suggested methods for minimizing the 
respondents' burdens.
    Burden Estimate and Information Collection Costs: The Commission 
believes that the burden estimates below are representative of the 
average burden on respondents. The estimated burden and cost \55\ for 
the requirements contained in this Proposal follow.
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    \55\ The estimates for cost per response are derived using the 
following formula: Average Burden Hours per Response * $72 per Hour 
= Average Cost per Response. The hourly cost figure comes from the 
FERC average salary of $149,489. Subject matter experts found that 
industry employment costs closely resemble FERC's regarding the 
FERC-516 information collection.

                                                                Data Collection--FERC 516
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Number of    Annual  number
                                            applicable     of  responses   Total number    Average  burden (hours)  and   Total annual burden hours  and
                                            registered          per        of responses       cost per response \56\            total  annual cost
                                             entities       respondent
                                                     (1)             (2)     (1)*(2)=(3)  (4)...........................  (3)*(4)=(5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Conforming LGIA changes to incorporate               132               1             132  7.5...........................  990 hours.
 proposed revisions.                                                                      $540.00.......................  $71,280.00.
Conforming SGIA changes to incorporate               132               1             132  7.5...........................  990 hours.
 proposed revisions.                                                                      $540.00.......................  $71,280.00.
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................  ..............  ..............             264  15 hours......................  1,980 hours.
                                                                                          $1,080........................  $142,560.00.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Cost to Comply: The Commission has projected the total cost of 
compliance as follows: \57\
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    \56\ $149,489/$2,080 = $71.8697 and is rounded to $72.00 per 
hour.
    \57\ The costs for Year 1 would consist of filing proposed 
changes to the pro forma LGIA and pro forma SGIA with the Commission 
within 90 days of the effective date of the final revision plus 
initial implementation. The Commission does not expect any ongoing 
costs beyond the initial compliance in Year 1.
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     Year 1: $142,560 ($1,080/utility)
     Year 2: $0
    After Year 1, the reforms proposed in this Proposal, once 
implemented, would not significantly change existing burdens on an 
ongoing basis.
    Title: FERC-516, Electric Rate Schedules and Tariff Filings.
    Action: Proposed revisions to an information collection.
    OMB Control No.: 1902-0096.
    Respondents for This Proposal: Businesses or other for profit and/
or not-for-profit institutions.
    Frequency of Information: One-time during year one.
    Necessity of Information: The Federal Energy Regulatory Commission 
makes this Proposal to improve the reliability of the electric grid by 
requiring all newly interconnecting non-synchronous generators to 
provide reactive power and to ensure that all generators are being 
treated in a not unduly discriminatory or preferential manner.
    Internal Review: The Commission has reviewed the proposed changes 
and has determined that such changes are necessary. These requirements 
conform to the Commission's need for efficient information collection, 
communication, and management within the energy industry. The 
Commission has specific, objective support for the burden estimates 
associated with the information collection requirements.
    26. Interested persons may obtain information on the reporting 
requirements by contacting the

[[Page 73689]]

following: Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive 
Director], email: [email protected], phone: (202) 502-8663, fax: 
(202) 273-0873. Comments concerning the collection of information and 
the associated burden estimate(s), may also be sent to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
725 17th Street NW., Washington, DC 20503 [Attention: Desk Officer for 
the Federal Energy Regulatory Commission, phone: (202) 395-0710, fax: 
(202) 395-7285]. Due to security concerns, comments should be sent 
electronically to the following email address: 
[email protected]. Comments submitted to OMB should include 
FERC-516 and OMB Control No. 1902-0096.

Regulatory Flexibility Act Certification

    27. The Regulatory Flexibility Act of 1980 (RFA) \58\ generally 
requires a description and analysis of rules that will have significant 
economic impact on a substantial number of small entities. The RFA does 
not mandate any particular outcome in a rulemaking. It only requires 
consideration of alternatives that are less burdensome to small 
entities and an agency explanation of why alternatives were rejected.
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    \58\ 5 U.S.C. 601-12 (2012).
---------------------------------------------------------------------------

    28. To the extent the RFA applies to this proceeding, the 
Commission estimates that the total number of public utility 
transmission providers that would have to modify their currently 
effective pro forma LGIA and pro forma SGIA is 132. Of these, the 
Commission estimates the total number that are small entities is 11. 
The Commission estimates the average total cost of these entities will 
be minimal, requiring on average 15 hours, or $1,080 in expenses. The 
Commission does not consider this to be a significant economic impact. 
As a result, the Commission certifies that the reforms proposed in this 
Proposal would not have a significant economic impact on a substantial 
number of small entities.

Environmental Analysis

    29. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\59\ The 
Commission concludes that neither an Environmental Assessment nor an 
Environmental Impact Statement is required for this Proposal under 
section 380.4(a)(15) of the Commission's regulations, which provides a 
categorical exemption for approval of actions under sections 205 and 
206 of the FPA relating to the filing of schedules containing all rates 
and charges for the transmission or sale of electric energy subject to 
the Commission's jurisdiction, plus the classification, practices, 
contracts and regulations that affect rates, charges, classifications, 
and services.\60\ The revisions proposed in this Proposal would update 
and clarify the application of the Commission's standard 
interconnection requirements to wind generators. Therefore, this 
Proposal falls within the categorical exemptions provided in the 
Commission's regulations, and as a result neither an environmental 
impact statement nor an environmental assessment is required.
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    \59\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. 
& Regs., Regulations Preambles 1986-1990 ] 30,783 (1987).
    \60\ 18 CFR 380.4(a)(15) (2015).
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Comment Procedures

    30. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this Proposal to be adopted, 
including any related matters or alternative proposals that commenters 
may wish to discuss. Comments are due January 25, 2016. Comments must 
refer to Docket No. RM16-1-000, and must include the commenter's name, 
the organization they represent, if applicable, and their address.
    31. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    32. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    33. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this Proposal are 
not required to serve copies of their comments on other commenters.

Document Availability

    34. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    35. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number of this document, excluding the last three digits, in 
the docket number field.
    36. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

List of Subjects in 18 CFR Part 35

    Electric power rates, Electric utilities, Non-discriminatory open 
access transmission tariffs.

    By direction of the Commission.

    Issued: November 19, 2015
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2015-29972 Filed 11-24-15; 8:45 am]
 BILLING CODE 6717-01-P