[Federal Register Volume 89, Number 74 (Tuesday, April 16, 2024)]
[Rules and Regulations]
[Pages 27006-27243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06563]



[[Page 27005]]

Vol. 89

Tuesday,

No. 74

April 16, 2024

Part II





Department of Energy





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Federal Energy Regulatory Commission





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18 CFR Part 35





Improvements to Generator Interconnection Procedures and Agreements; 
Rule

  Federal Register / Vol. 89 , No. 74 / Tuesday, April 16, 2024 / Rules 
and Regulations  

[[Page 27006]]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM22-14-001; Order No. 2023-A]


Improvements to Generator Interconnection Procedures and 
Agreements

AGENCY: Federal Energy Regulatory Commission.

ACTION: Order on rehearing and clarification.

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SUMMARY: In this order, the Federal Energy Regulatory Commission 
addresses arguments raised on rehearing, sets aside, in part, and 
clarifies Order No. 2023, which amended the Commission's regulations 
and its pro forma Large Generator Interconnection Procedures, pro forma 
Large Generator Interconnection Agreement, pro forma Small Generator 
Interconnection Procedures, and pro forma Small Generator 
Interconnection Agreement to address interconnection queue backlogs, 
improve certainty, and prevent undue discrimination for new 
technologies.

DATES: This rule is effective May 16, 2024.

FOR FURTHER INFORMATION CONTACT: 
Anne Marie Hirschberger (Legal Information), Office of the General 
Counsel, 888 First Street NE, Washington, DC 20426, (202) 502-8387, 
[email protected].

Sarah Greenberg (Legal Information), Office of the General Counsel, 888 
First St. NE, Washington, DC 20426, (202) 502-6230, 
[email protected].

Franklin Jackson (Technical Information), Office of Energy Market 
Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-6464, 
[email protected].
Michael G. Henry, Office of Energy Policy and Innovation, 888 First 
Street NE, Washington, DC 20426, (202) 502-8583, 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Discussion
    A. Need for Reform
    1. Order No. 2023
    2. Requests for Rehearing and Clarification
    3. Determination
    B. Arguments Regarding Conflicts With Ongoing Queue Reform 
Efforts and Evaluation of Variations on Compliance
    1. Order No. 2023 Requirements
    2. Requests for Rehearing and Clarification
    3. Determination
    C. Reforms To Implement a First-Ready, First-Served Cluster 
Study Process
    1. Public Interconnection Information
    2. Cluster Study Process
    3. Allocation of Cluster Network Upgrade Costs
    4. Shared Network Upgrades
    5. Increased Financial Commitments and Readiness Requirements
    6. Transition Process
    D. Reforms To Increase the Speed of Interconnection Queue 
Processing
    1. Elimination of Reasonable Efforts Standard and Implementation 
of a Replacement Rate
    2. Affected Systems
    E. Reforms To Incorporate Technological Advancements Into the 
Interconnection Process
    1. Increasing Flexibility in the Generation Interconnection 
Process
    2. Incorporating the Enumerated Alternative Transmission 
Technologies Into the Generator Interconnection Process
    3. Modeling and Ride Through Requirements for Non-Synchronous 
Generating Facilities
    F. Compliance Procedures
    1. Order No. 2023 Requirements
    2. Requests for Rehearing and Clarification
    3. Determination
III. Information Collection Statement
IV. Environmental Analysis
V. Regulatory Flexibility Act
VI. Document Availability
VII. Effective Date

I. Background

    1. On July 28, 2023, the Federal Energy Regulatory Commission 
(Commission) issued Order No. 2023.\1\ Order No. 2023 required all 
public utility transmission providers to adopt revised pro forma Large 
Generator Interconnection Procedures (LGIP), pro forma Large Generator 
Interconnection Agreements (LGIA), pro forma Small Generator 
Interconnection Procedures (SGIP), and pro forma Small Generator 
Interconnection Agreements (SGIA).\2\ These revisions ensure that 
interconnection customers are able to interconnect to the transmission 
system in a reliable, efficient, transparent, and timely manner, and 
will prevent undue discrimination.\3\ In Order No. 2023, the Commission 
adopted a comprehensive package of reforms in three general categories: 
(1) reforms to implement a first-ready, first-served cluster study 
process, (2) reforms to increase the speed of interconnection queue 
processing, and (3) reforms to incorporate technological advancements 
into the interconnection process.
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    \1\ Improvements to Generator Interconnection Procs. & 
Agreements, Order No. 2023, 88 FR 61014 (Sept. 6, 2023), 184 FERC ] 
61,054 (2023).
    \2\ Id. P 1 n.1 (``Section 201(e) of the Federal Power Act (FPA) 
defines ``public utility'' to mean ``any person who owns or operates 
facilities subject to the jurisdiction of the Commission under this 
subchapter.'' 16 U.S.C. 824(e). A non-public utility that seeks 
voluntary compliance with the reciprocity condition of a tariff may 
satisfy that condition by filing a tariff, which includes the pro 
forma LGIP, the pro forma SGIP, the pro forma LGIA, and the pro 
forma SGIA. See Standardization of Generator Interconnection 
Agreements & Procs., Order No. 2003, 68 FR 49846 (Aug. 19, 2003), 
104 FERC ] 61,103, at PP 1, 616 (2003), order on reh'g, Order No. 
2003-A, 69 FR 15932 (Mar. 26, 2004), 106 FERC ] 61,220, order on 
reh'g, Order No. 2003-B, 70 FR 265 (Jan. 4, 2005), 109 FERC ] 61,287 
(2004), order on reh'g, Order No. 2003-C, 70 FR 37661 (June 30, 
2005), 111 FERC ] 61,401 (2005), aff'd sub nom. Nat'l Ass'n of 
Regul. Util. Comm'rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007) (NARUC 
v. FERC). As stated in the pro forma LGIP, pro forma LGIA, pro forma 
SGIP, and pro forma SGIA, transmission provider ``shall mean the 
public utility (or its designated agent) that owns, controls, or 
operates transmission or distribution facilities used for the 
transmission of electric energy in interstate commerce and provides 
transmission service under the [Transmission Provider's Tariff]. The 
term . . . should be read to include the Transmission Owner when the 
Transmission Owner is separate from the Transmission Provider.'' Pro 
forma LGIP section 1; pro forma LGIA art. 1; pro forma SGIP attach. 
1; pro forma SGIA attach. 1.'').
    \3\ Order No. 2023, 184 FERC ] 61,054 at P 1.
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    2. To implement a first-ready, first served cluster study process, 
Order No. 2023: (1) required transmission providers to post public 
interconnection information in an interactive heatmap to provide 
interconnection customers information before they enter the queue; (2) 
eliminated individual serial feasibility and system impact studies and 
created a cluster study; (3) created a range of allowable allocations 
of cluster study costs; (4) required transmission providers to use a 
proportional impact method to assign network upgrade costs within a 
cluster; (5) required increased financial commitments and readiness 
requirements from interconnection customers, including increased study 
deposits, site control, commercial readiness deposits, an LGIA deposit, 
and required transmission providers to institute penalties for 
withdrawn interconnection requests; and (6) created a transition 
mechanism for moving to the cluster study process adopted in Order No. 
2023 from the existing serial study process.\4\
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    \4\ Id. P 5.
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    3. To increase the speed of interconnection queue processing, Order 
No. 2023: (1) eliminated the reasonable efforts standard for completing 
interconnection studies and adopted study delay penalties applicable 
when transmission providers fail to complete interconnection studies

[[Page 27007]]

by the deadlines in their tariff; and (2) established a more detailed 
affected system study process in the pro forma LGIP, including pro 
forma affected system agreements and uniform modeling standards.\5\
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    \5\ Id. P 6.
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    4. To incorporate technological advancements into the 
interconnection process, Order No. 2023: (1) required 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; (2) required transmission providers to 
evaluate the proposed addition of a generating facility to an existing 
interconnection request prior to deeming such an addition a material 
modification; (3) required transmission providers to allow 
interconnection customers to access the surplus interconnection service 
process once the original interconnection customer has an executed LGIA 
or requests the filing of an unexecuted LGIA; (4) required transmission 
providers, at the request of the interconnection customer, to use 
operating assumptions in interconnection studies that reflect the 
proposed charging behavior of electric storage resources; (5) required 
transmission providers to evaluate an enumerated list of alternative 
transmission technologies during the study process; (6) required each 
interconnection customer requesting to interconnect a non-synchronous 
generating facility to submit to the transmission provider certain 
specific models of the generating facility; (7) established ride 
through requirements during abnormal frequency conditions and voltage 
conditions within the ``no trip zone'' defined by NERC Reliability 
Standard PRC-024-3 or successor mandatory ride through reliability 
standards; and (8) required that all newly interconnecting large 
generating facilities provide frequency and voltage ride through 
capability consistent with any standards and guidelines that are 
applied to other generating facilities in the balancing authority area 
on a comparable basis.\6\
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    \6\ Id. P 6.
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    5. The Commission received 32 timely filed requests for rehearing 
and/or clarification, and two additional requests for clarification.\7\ 
The rehearing requests raise issues related to nearly all reforms 
adopted in Order No. 2023.
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    \7\ Appendix A provides the short names of the entities that 
filed requests for rehearing or clarification. Shell filed an 
answer. Rule 713(d)(1) of the Commission's Rules of Practice and 
Procedure (18 CFR 385.713(d)) prohibits an answer to a request for 
rehearing. Accordingly, we deny Shell's motion to answer and reject 
its answer.
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    6. Pursuant to Allegheny Defense Project v. FERC,\8\ the rehearing 
requests filed in this proceeding may be deemed denied by operation of 
law. However, as permitted by section 313(a) of the Federal Power Act 
(FPA),\9\ we are modifying the discussion in Order No. 2023, setting 
aside the order, in part, and clarifying the order, as discussed 
below.\10\
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    \8\ 964 F.3d 1 (D.C. Cir. 2020) (en banc).
    \9\ 16 U.S.C. 825l(a) (``Until the record in a proceeding shall 
have been filed in a court of appeals, as provided in subsection 
(b), the Commission may at any time, upon reasonable notice and in 
such manner as it shall deem proper, modify or set aside, in whole 
or in part, any finding or order made or issued by it under the 
provisions of this chapter.'').
    \10\ Allegheny Def. Project, 964 F.3d at 16-17. In Appendices C, 
D, E, and F, we provide the revisions to the provisions of the pro 
forma LGIP, pro forma LGIA, pro forma SGIP, and pro forma SGIA made 
in this order on rehearing and clarification. Additionally, these 
Appendices reflect several non-substantive corrections in these 
appendices to address stylistic inconsistencies or clerical errors 
in some of the new and revised pro forma provisions.
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    7. Specifically, we set aside the order, in part, to specify that: 
(1) where an interconnection customer is in the interconnection queue 
of a transmission provider that currently uses, or is transitioning to, 
a cluster study process and the transmission provider proposes on 
compliance to adopt new readiness requirements for its annual cluster 
study, the interconnection customer must comply with the transmission 
provider's new readiness requirements within 60 days of the Commission-
approved effective date of the transmission provider's compliance 
filing, where such readiness requirements are applicable given the 
status of the individual interconnection customer in the queue; (2) a 
network upgrade that is required for multiple interconnection customers 
in a cluster may be considered a stand alone network upgrade if all 
such interconnection customers mutually agree to exercise the option to 
build; (3) transmission providers must complete their determination 
that an interconnection request is valid by the close of the cluster 
request window such that only interconnection customers with valid 
interconnection requests proceed to the customer engagement window; and 
(4) acceptable forms of security for the Commercial Readiness Deposit 
and deposits prior to the Transitional Serial Study, Transitional 
Cluster Study, Cluster Restudy and the Interconnection Facilities Study 
should include not only cash or an irrevocable letter of credit, but 
also surety bonds or other forms of financial security that are 
reasonably acceptable to the transmission provider.
    8. Additionally, we grant several clarifications on the following 
topics, as further discussed below: (1) conflicts with ongoing queue 
reform efforts; (2) public interconnection information; (3) cluster 
study process; (4) allocation of cluster network upgrade costs; (5) 
shared network upgrades; (6) withdrawal penalties; (7) study delay 
penalty and appeal structure; (8) affected systems; (9) revisions to 
the material modification process to require consideration of 
generating facility additions; (10) availability of surplus 
interconnection service; (11) operating assumptions for interconnection 
studies; (12) consideration of the enumerated alternative transmission 
technologies in interconnection studies; and (13) ride-through 
requirements.
    9. Finally, in light of the revisions made to the pro forma LGIP, 
pro forma LGIA, pro forma SGIP, and pro forma SGIA herein, we extend 
the deadline for transmission providers to submit compliance filings 
until the effective date of this order (i.e., the new deadline for 
compliance with Order No. 2023 will be 30 days after the publication of 
this order in the Federal Register, and must include the further 
revisions reflected in this order).

II. Discussion

A. Need for Reform

1. Order No. 2023
    10. The Commission stated that it found substantial evidence in the 
record to support the conclusion that the existing pro forma generator 
interconnection procedures and agreements were unjust, unreasonable, 
and unduly discriminatory or preferential.\11\ Therefore, pursuant to 
FPA section 206, the Commission concluded that certain revisions to the 
pro forma open access transmission tariff and the Commission's 
regulations were necessary to ensure rates that are just, reasonable, 
and not unduly discriminatory or preferential. Specifically, the 
Commission found that the existing pro forma generator interconnection 
procedures and agreements were insufficient to ensure that 
interconnection customers are able to interconnect to the transmission 
system in a reliable, efficient, transparent, and timely manner, 
thereby ensuring that rates, terms, and conditions for Commission-
jurisdictional services are just, reasonable, and not unduly 
discriminatory or preferential. The

[[Page 27008]]

Commission stated that, absent reform, the interconnection process will 
continue to cause interconnection queue backlogs, longer development 
timelines, and increased uncertainty regarding the cost and timing of 
interconnecting to the transmission system. The Commission explained 
that these backlogs and delays, and the resulting timing and cost 
uncertainty, hinder the timely development of new generation and 
thereby stifle competition in the wholesale electric markets resulting 
in rates, terms, and conditions that are unjust, unreasonable, and 
unduly discriminatory or preferential.
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    \11\ Order No. 2023, 184 FERC ] 61,054 at P 37.
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    11. The Commission cited recent data to support its findings that 
the dramatic increase in the number of interconnection requests and 
limited transmission capacity are increasing interconnection queue 
backlogs across all regions of the country.\12\ This data indicated 
that, as of the end of 2022, there were over 10,000 active 
interconnection requests in interconnection queues throughout the 
United States, representing over 2,000 gigawatts (GW) of potential 
generation and storage capacity.\13\ These interconnection requests and 
the generating facilities they represent amount to the largest 
interconnection queue size on record, more than four times the total 
volume (in GW) of the interconnection queues in 2010, and a 40% 
increase over the interconnection queue size from just the year prior. 
The Commission explained that these trends are not exclusive to any 
specific region of the country; rather, every region, including 
regional transmission organizations (RTO), independent system operators 
(ISO), and non-RTOs/ISOs, has faced an increase in both interconnection 
queue size and the length of time interconnection customers are 
spending in the interconnection queue prior to commercial operation in 
recent years. The Commission noted that the uncertainty and delays in 
the interconnection queues have resulted in fewer than 25% of 
interconnection requests, by capacity, reaching commercial operation 
between 2000 and 2017 in any region of the country--with some regions 
as low as 8%.
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    \12\ Id. P 38 (citing Energy Markets & Policy- Berkeley Lab, 
Queued Up: Characteristics of Power Plants Seeking Transmission 
Interconnection, 7-8 (Apr. 2023) (Queued Up 2023), https://emp.lbl.gov/sites/default/files/queued_up_2022_04-06-2023.pdf; 
Appendix B to Order No. 2023, which provided an overview of recent 
data based on reporting by transmission providers in compliance with 
Order No. 845).
    \13\ Id. (citing Queued Up 2023).
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    12. The Commission also cited recent data that interconnection 
customers are waiting longer in the interconnection queue before 
withdrawing their interconnection requests, even as overall 
interconnection study timelines are increasing in many regions.\14\ 
Despite efforts to address these challenges, the Commission observed 
that interconnection queue backlogs and delays have persisted and 
worsened. For generating facilities built in 2022, wait times in the 
interconnection queue saw a marked increase from 2.1 years for 
generating facilities built in 2000-2010 to roughly five years for 
generating facilities built in 2022.
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    \14\ Id. P 39.
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    13. The Commission explained that delays in the interconnection 
study process are an important contributor to interconnection queue 
backlogs nationwide.\15\ The Commission cited recent interconnection 
study metrics transmission providers filed with the Commission, as 
required by Order No. 845, which showed that of the 2,179 
interconnection studies completed in 2022, 68% were issued late. At the 
end of 2022, an additional 2,544 studies were delayed (i.e., ongoing 
and past their deadline). All of the RTOs/ISOs except CAISO and most 
non-RTO/ISO transmission providers (14 of 38) reported pending delayed 
studies at the end of 2022.
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    \15\ Id. P 40.
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    14. The Commission found that numerous factors have contributed to 
the increasing volume of interconnection requests, including a rapidly 
changing resource mix, market forces, and emerging technologies.\16\ 
The Commission also found that available transmission capacity has been 
largely or fully used in many regions, creating situations where 
interconnection customers face significant network upgrade cost 
assignments to interconnect their proposed generating facilities. As an 
example, the Commission cited a U.S. DOE report that found that 
interconnection costs in MISO doubled for generating facilities for 
which the interconnection studies were completed between 2019 and 2021 
as compared to those completed prior to 2019, and cost estimates 
tripled for proposed generating facilities still active in the 
interconnection queue between the same time periods.\17\ The Commission 
also noted that other reports show similar cost increases in NYISO and 
PJM.\18\ The Commission found that this combination of increased volume 
of interconnection requests and insufficient transmission capacity and 
therefore higher costs to interconnect, which can result in 
interconnection request withdrawals, has resulted in longer 
interconnection queue processing times and larger, more delayed 
interconnection queues.
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    \16\ Id. P 41.
    \17\ Id. (citing Joachim Seel et al., Generator Interconnection 
Cost Analysis in the Midcontinent Independent System Operator (MISO) 
Territory, 1, 4-5 (Oct. 2022), https://emp.lbl.gov/interconnection_costs.).
    \18\ Id. (citing Julia Mulvaney Kemp et al., Interconnection 
Cost Analysis in the NYISO Territory (Mar. 2023), https://emp.lbl.gov/publications/interconnection-cost-analysis-nyiso 
(showing that costs have doubled for generating facilities studied 
since 2017, relative to costs for generating facilities studied from 
2006 to 2016); Joachim Seel et al., Interconnection Cost Analysis in 
the PJM Territory (Jan. 2023), https://emp.lbl.gov/publications/interconnection-cost-analysis-pjm (showing that costs for recent 
``complete'' generating facilities have doubled on average relative 
to costs from 2000-2019)).
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    15. The Commission explained that interconnection queue backlogs 
and delays have created uncertainty for interconnection customers 
regarding the timing and cost of ultimately interconnecting to the 
transmission system, which may lead to an increase in costs to 
consumers.\19\ The Commission stated that delayed interconnection study 
results or unexpected cost increases can disrupt numerous aspects of 
generating facility development and such uncertainty, either on the 
part of transmission providers or interconnection customers, is 
ultimately passed through to consumers through higher transmission or 
energy rates. The Commission explained that increases in energy rates 
may result from wholesale customers having limited access to new and 
more competitive supplies of generation and that, conversely, efficient 
interconnection queues and well-functioning wholesale markets deliver 
benefits to consumers by driving down wholesale electricity costs.
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    \19\ Id. P 43.
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    16. Overall, due to continuing and increasing interconnection queue 
backlogs and study delays, the Commission found that the Commission's 
existing rules contained in the pro forma LGIP, pro forma LGIA, pro 
forma SGIP, and pro forma SGIA resulted in rates, terms, and conditions 
for Commission-jurisdictional services that are unjust, unreasonable, 
and unduly discriminatory or preferential.\20\ The Commission found 
that the problems described above lead to an inability of 
interconnection customers to interconnect to the transmission system in 
a reliable, efficient, transparent, and timely manner, and

[[Page 27009]]

hindered the timely development of new generation, thereby stifling 
competition in the wholesale electric markets. Therefore, the 
Commission found that reform to the Commission's existing pro forma 
generator interconnection procedures and agreements was necessary.
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    \20\ Id. P 44.
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    17. The Commission based its findings that the pro forma LGIP, pro 
forma LGIA, pro forma SGIP, and pro forma SGIA must be reformed on the 
following features: (1) the information (or lack thereof) available to 
prospective interconnection customers and the commitments required of 
them to enter and progress through the interconnection queue; (2) the 
reliance on a serial first-come, first-served study process and the 
reasonable efforts standard that transmission providers are held to for 
meeting interconnection study deadlines; (3) the protocols (or lack 
thereof) for affected system studies; (4) the provisions for studying 
new generating facility technologies and evaluating the list of 
alternative transmission technologies enumerated in Order No. 2023; and 
(5) the modeling or performance requirements (or lack thereof) for non-
synchronous generating facilities, including wind, solar, and electric 
storage facilities.\21\ The Commission further explained each of these 
five features.
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    \21\ Id. P 45.
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    18. First, the Commission explained that, without a process by 
which an interconnection customer can obtain information about 
potential interconnection costs at a specific location or point of 
interconnection prior to submitting an interconnection request, it is 
difficult for interconnection customers to assess the commercial 
viability of a specific proposed generating facility prior to entering 
the interconnection queue.\22\ The Commission also found that the pro 
forma interconnection procedures and agreements failed to include 
meaningful financial commitments and readiness requirements to enter 
and stay in the interconnection queue and lacked stringent requirements 
to establish the commercial viability of proposed generating 
facilities. As a result, the Commission explained, interconnection 
customers often submit multiple interconnection requests for proposed 
generating facilities at various points of interconnection, knowing 
that not all of them will reach commercial operation, as an exploratory 
mechanism to obtain information to allow the interconnection customer 
to choose to proceed with the interconnection request representing the 
most favorable site in terms of potential interconnection-related 
costs.
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    \22\ Id. P 46.
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    19. Second, the Commission explained that the existing serial 
first-come, first-served study process created incentives for 
interconnection customers to submit exploratory or speculative 
interconnection requests pursuant to which interconnection customers 
seek to secure valuable queue positions as early as possible, even if 
they are not prepared to move forward with the proposed generating 
facility.\23\ Such generating facilities are often not commercially 
viable: thus, the interconnection customers ultimately withdraw their 
interconnection requests from the interconnection queue, which triggers 
reassessments and possible restudies by the transmission provider that 
can delay the timing and increase the cost to interconnect for lower-
queued interconnection requests. The Commission found that the lack of 
access to information about a specific location or point of 
interconnection prior to submitting an interconnection request, the 
lack of any meaningful financial commitments in the pro forma 
interconnection procedures and agreements for interconnection customers 
to enter and stay in the interconnection queue, as well as the existing 
serial first-come, first-served study process, together incentivized 
interconnection customers to submit speculative interconnection 
requests that contribute to interconnection study backlogs, delays, and 
uncertainty, and, in turn, unjust and unreasonable Commission-
jurisdictional rates.\24\
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    \23\ Id. P 47.
    \24\ Id. P 48.
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    20. The Commission also found that interconnection queue backlogs 
and delays, and the accompanying uncertainty, have been further 
compounded because transmission providers have limited incentive to 
perform interconnection studies in a timely manner.\25\ The Commission 
stated that, despite pervasive delays in completing interconnection 
studies by transmission providers, transmission providers have faced 
few, if any, consequences for failing to meet their tariff-imposed 
study deadlines under the reasonable efforts standard. The Commission 
therefore found that the existing pro forma LGIP requirement for 
transmission providers to make a reasonable effort to meet 
interconnection study deadlines contributes to the interconnection 
study backlogs, delays, and uncertainty that erects barriers to new 
generation, resulting in Commission-jurisdictional rates that are 
unjust and unreasonable.
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    \25\ Id. P 50.
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    21. Third, the Commission found that, without requirements for how 
and when transmission providers should complete affected system 
studies, those studies often lag behind those completed by the 
transmission provider to whose transmission system the interconnection 
customer proposes to interconnect (the host transmission provider) and 
are sometimes completed very late in the interconnection process, 
causing an additional round of delays and cost uncertainty for 
interconnection customers.\26\ Additionally, for transmission providers 
that have procedures for how to complete affected system studies in 
their tariffs or other documents (e.g., business practice manuals or 
joint operating agreements), the Commission found that those procedures 
are not consistent, may be hard for interconnection customers to 
locate, and may not represent the actual practices in use by the 
transmission provider, thus still creating uncertainty for 
interconnection customers. As a result, the Commission found that the 
lack of consistent requirements for affected system modeling and 
procedures results in Commission-jurisdictional rates that are unjust, 
unreasonable, and unduly discriminatory or preferential.
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    \26\ Id. P 51.
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    22. Fourth, the Commission found that the Commission's pro forma 
LGIP failed to accommodate the operating characteristics and technical 
capabilities of electric storage resources when it comes to specific 
interconnection procedures and modeling.\27\ The Commission noted that 
interconnection queues predominantly consist of new technologies which 
have operating characteristics that differ from synchronous resources 
and were not anticipated when the Commission established the pro forma 
generator interconnection procedures and agreements in Order Nos. 2003 
and 2006. The Commission noted that the existing pro forma generator 
interconnection procedures and agreements did not contemplate the 
operating characteristics or technical capabilities of electric storage 
resources, leading to electric storage resources being studied under 
inappropriate operating assumptions (e.g., charging at full capacity 
during peak load conditions) that result in the assignment of 
unnecessary network upgrades which increase costs to interconnection 
customers. Therefore, the Commission found that the inability to modify

[[Page 27010]]

operating assumptions for electric storage resources pursuant to the 
pro forma LGIP resulted in Commission-jurisdictional rates that are 
unjust, unreasonable, and unduly discriminatory or preferential.
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    \27\ Id. P 52.
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    23. The Commission also found that the existing pro forma 
interconnection procedures regarding material modifications did not 
provide for consistent evaluation of technology additions to an 
existing interconnection request, and that automatically deeming a 
request to add a generating facility to an existing interconnection 
request to be a material modification creates a significant barrier to 
access to the transmission system.\28\
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    \28\ Id. P 53.
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    24. Finally, the Commission found that the pro forma LGIP and pro 
forma SGIP failed to require the consideration of alternative 
transmission technologies that can be used as network upgrades and can 
be deployed more quickly and at a lower cost than, traditional network 
upgrades.\29\ The Commission found that failing to require transmission 
providers to evaluate the enumerated list of alternative transmission 
technologies resulted in interconnection customers paying more than is 
just and reasonable to reliably interconnect new generating facilities, 
ultimately creating Commission-jurisdictional rates that are unjust, 
unreasonable, and unduly discriminatory or preferential.
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    \29\ Id. P 54.
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    25. Fifth, the Commission found that the Commission's existing pro 
forma LGIP and pro forma SGIP did not include a modeling requirement 
for non-synchronous generating facilities, which is necessary to enable 
the transmission provider to assess and model the facility's ability to 
respond appropriately to transmission system disturbances.\30\ The 
Commission explained that interconnection customers must submit 
accurate and validated models, which will prevent study delays and 
ensure that transmission providers identify the necessary 
interconnection facilities and network upgrades to accommodate the 
interconnection request and thus allow the appropriate assignment of 
interconnection costs to the interconnection request. Therefore, the 
Commission found that the lack of a modeling requirement for non-
synchronous generating facilities in the pro forma LGIP and pro forma 
SGIP results in rates that are unjust, unreasonable, and unduly 
discriminatory or preferential. Additionally, the Commission explained 
that the physical characteristics of synchronous generating facilities 
allow them to continue to inject electric current during transmission 
system disturbances, as required by the pro forma LGIA and pro forma 
SGIA.\31\ However, non-synchronous generating facilities did not face a 
comparable requirement and many cease injecting current during system 
disturbances through ``momentary cessation,'' which creates reliability 
issues on the transmission system. The Commission stated that, without 
requirements for non-synchronous generating facilities to remain 
connected to and synchronized with the transmission system during 
system disturbances, interconnection studies may not accurately model 
expected behavior and identify the appropriate interconnection 
facilities and network upgrades to accommodate the interconnection 
request, skewing the assignment of interconnection costs. As a result, 
the Commission found that the lack of comparable requirements for non-
synchronous generating facilities to remain ``connected to and 
synchronized with the [t]ransmission [s]ystem'' in the pro forma LGIA 
and pro forma SGIA results in rates that are unjust, unreasonable, and 
unduly discriminatory or preferential.
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    \30\ Id. P 55.
    \31\ Id. P 56.
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    26. The Commission further found that the reforms adopted in Order 
No. 2023 will improve the efficiency of study processes, reduce 
interconnection queue backlogs, and thereby ensure just, reasonable, 
and not unduly discriminatory or preferential rates.\32\ The Commission 
explained that the majority of the individual reforms that the 
Commission adopted have already been implemented in one or more regions 
in order to improve the interconnection process, demonstrating 
incremental improvements. The Commission compiled a package of such 
reforms that, in their entirety, have not yet been adopted by any 
region, and will ensure that interconnection customers are able to 
interconnect to the transmission system in a reliable, efficient, 
transparent, and timely manner.
---------------------------------------------------------------------------

    \32\ Id. P 59.
---------------------------------------------------------------------------

2. Requests for Rehearing and Clarification
    27. Dominion seeks rehearing, asserting that the Commission 
exceeded its FPA section 206 authority by declaring all existing 
interconnection tariffs, including recently accepted reforms by PJM and 
Dominion Energy South Carolina (DESC), as unjust, unreasonable, and 
unduly discriminatory or preferential without substantial evidence.\33\ 
Dominion asserts that the Commission did not establish a sufficient 
legal foundation to generically find that all tariffs are unjust and 
unreasonable.\34\ Similarly, Indicated PJM TOs argue that the 
Commission arbitrarily and capriciously relied on inapposite and stale 
evidence to impose a generic replacement rate on early adopters of the 
cluster study approach.\35\ PJM also argues that the generic findings 
underlying Order No. 2023 cannot apply to its Interconnection Process 
Reform Task Force (IPRTF) Tariff, which was filed and approved during 
the time period between issuance of the NOPR and Order No. 2023.\36\ 
Therefore, PJM contends, the data underlying Order No. 2023 is stale as 
to PJM and its use does not constitute reasoned decision-making based 
on substantial evidence.
---------------------------------------------------------------------------

    \33\ Dominion Rehearing Request at 2.
    \34\ Id. at 14 (citing S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 
71, 65 (D.C. Cir. 2014) (S.C. Pub. Serv. Auth.) (``To regulate a 
practice affecting rates pursuant to Section 206, the Commission 
must find that the existing practice is `unjust, unreasonable, 
unduly discriminatory or preferential,' and that the remedial 
practice it imposes is `just and reasonable.' These findings must be 
supported by `substantial evidence[.]'''); Emera Me. v. FERC, 854 
F.3d 9, 25 (D.C. Cir. 2017) (Emera Me.) (``[A] finding that an 
existing rate is unjust and unreasonable is the `condition 
precedent' to FERC's exercise of its section 206 authority to change 
that rate. Section 206, therefore, imposes a `dual burden' on FERC. 
Without a showing that the existing rate is unlawful, FERC has no 
authority to impose a new rate.'')).
    \35\ Indicated PJM TOs Rehearing Request at 7, 17.
    \36\ PJM Rehearing Request at 25-26.
---------------------------------------------------------------------------

    28. Dominion acknowledges that the Commission is able to rely on 
generic rulemakings to support an industry wide solution, but that 
Order No. 2023 goes beyond the limits of this authority.\37\ Dominion 
argues that Order No. 2023's mandate is unlike the generic rulemaking 
upheld by the D.C. Circuit in Transmission Access Policy Study Group v. 
FERC because the rule at issue in that case, Order No. 888, represented 
a paradigm shift for which a generic rulemaking is appropriate.\38\ 
Dominion asserts that the other generic rulemakings upheld by the 
courts similarly involve more wholesale reform than Order No. 2023, 
such as the expansion and creation of new Order No. 1000 planning 
obligations upheld in S.C. Pub. Serv. Auth., or the Order No. 637 
requirement for gas pipelines to permit segmentation where

[[Page 27011]]

operationally feasible, upheld in Interstate Natural Gas Association of 
America v. FERC.\39\ Dominion contends that the Commission's generic 
findings in Order No. 2023 are disproportionate to the evidence the 
Commission relies on. Similarly, Indicated PJM TOs assert that the 
Commission's generic finding is overbroad because many RTOs/ISOs have 
already adopted the core reforms in Order No. 2023.\40\
---------------------------------------------------------------------------

    \37\ Dominion Rehearing Request at 12.
    \38\ Id. (citing Transmission Access Pol'y Study Grp. v. FERC, 
225 F.3d 667 (D.C. Cir. 2000) (TAPS), aff'd sub nom. N. Y. v. FERC, 
535 U.S. 1 (2002)); see also Indicated PJM TOs Rehearing Request at 
14.
    \39\ Dominion Rehearing Request at 12-13 (citing S.C. Pub. Serv. 
Auth., 762 F.3d at 67; Interstate Nat. Gas Ass'n of Am. v. FERC, 285 
F.3d 18 (D.C. Cir. 2002) (INGAA)).
    \40\ Indicated PJM TOs Rehearing Request at 7, 17-18 (citing PJM 
Interconnection, L.L.C., 181 FERC ] 61,162 (2022)).
---------------------------------------------------------------------------

    29. Dominion further argues that, while the courts have held that 
the Commission can address case-by-case discrepancies between the 
generic determination and specific tariffs during compliance filings, 
this cannot be considered an unlimited way for the Commission to avoid 
its obligation under the Administrative Procedure Act (APA) to rely on 
substantial evidence when making FPA section 206 decisions.\41\ 
Dominion asserts that, because the Commission recently accepted 
revisions to PJM's and DESC's tariffs to address the same issue that 
Order No. 2023 attempts to address, the Commission must consider those 
tariffs individually and may not sweep them up in a generic 
determination based on evidence of queue backlogs made under previous 
tariffs and regions.
---------------------------------------------------------------------------

    \41\ Dominion Rehearing Request at 14 (citing INGAA, 285 F.3d at 
37).
---------------------------------------------------------------------------

    30. Dominion argues that Order No. 2023 was arbitrary and 
capricious because it relied on out-of-date data and ignored contrary 
data.\42\ Dominion asserts that, although the Commission is not 
required to rely on ``empirical evidence,'' the Commission must support 
its findings with substantial, up-to-date, evidence and cannot ignore 
new circumstances.\43\ Dominion asserts that Order No. 2023 does not 
reflect reasoned decision-making as it relates to PJM and DESC because 
it relies on queue delays and backlogs that predate PJM's and DESC's 
revised interconnection reforms and it does not consider those 
currently effective interconnection reforms. Indicated PJM TOs point 
out that the Order No. 845 data the Commission relied on is stale 
because it concerns PJM's previous serial study process, and the 
Commission's reliance on that data is inconsistent with its decision to 
omit SPP's data from its consideration.\44\
---------------------------------------------------------------------------

    \42\ Id. at 2.
    \43\ Id. at 10 (citing S.C. Pub. Serv. Auth., 762 F.3d at 64-
65).
    \44\ Indicated PJM TOs Rehearing Request at 18 n.45. Indicated 
PJM TOs specifically point to Order No. 2023's citation to Order No. 
845 data showing the number of delayed studies as of the end of 
2022, ``with the vast majority of these studies (2,211)'' coming 
from PJM, as stale data the Commission used to support the new 
obligations Order No. 2023 will impose. Id. at 17.
---------------------------------------------------------------------------

    31. Dominion argues that the Commission ignored evidence that PJM 
and DESC had recently adopted interconnection reforms to address the 
same problem addressed by Order No. 2023.\45\ Indicated PJM TOs state 
that the Commission points repeatedly to problems associated with a 
serial study approach, which are irrelevant to regions that already 
implemented cluster studies.\46\ Dominion and Indicated PJM TOs argue 
that the Commission should have considered whether PJM's, DESC's, and 
other similarly situated transmission providers' reforms are working or 
even had a chance to be fully implemented.\47\ Dominion argues that the 
Commission cited no evidence to demonstrate that PJM's tariff is unjust 
and unreasonable, and that it would be difficult to do so because PJM's 
transitional process began on July 10, 2023, so there is no data 
available to determine whether it is successful.\48\ Similarly, 
Dominion notes that DESC's transition process began on June 13, 2022, 
was based on 12 months of stakeholder engagement, and includes many 
components of Order No. 2023. Dominion contends that reasoned decision-
making should at least require the Commission to consider all relevant 
information, including information about the efficacy of reforms in 
existing tariffs that are attempting to address the same problem the 
Commission is relying upon to make its FPA section 206 
determination.\49\
---------------------------------------------------------------------------

    \45\ Dominion Rehearing Request at 12.
    \46\ Indicated PJM TOs Rehearing Request at 18.
    \47\ Id.; Dominion Rehearing Request at 13.
    \48\ Dominion Rehearing Request at 8-9.
    \49\ Id. at 13 (citing Greater Bos. Television Corp. v. Fed. 
Communications Comm'n, 444 F.2d 841, 851 (D.C. Cir. 1970) (an agency 
must give ``reasoned consideration to all the material facts and 
issues'' and ``engage[] in reasoned decision making''); Tarpon 
Transmission Co. v. FERC, 860 F.2d 439, 442 (D.C. Cir. 1988) (``We 
cannot accept an agency determination unless it is the result of 
reasoned and principled decisionmaking that can be ascertained from 
the record.''); ANR Pipeline Co., 71 F.3d 897, 901 (D.C. Cir. 1995) 
(``[W]here an agency departs from established precedent without a 
reasoned explanation, its decision will be vacated as arbitrary and 
capricious.''); Tenneco Gas v. FERC, 969 F.2d 1187, 1214 (D.C. Cir. 
1992) (``Subsumed in the substantial evidence requirement is the 
expectation that agencies will treat fully each of the pertinent 
factors and issues before them.'' (internal citations omitted))).
---------------------------------------------------------------------------

    32. Dominion also states that Order No. 2023 directly acknowledges 
that CAISO and some non-RTO/ISO transmission providers had no delayed 
studies at the end of 2022.\50\ Dominion argues that, instead of 
supporting the Commission's finding that all interconnection processes 
are unjust and unreasonable, Order No. 2023 acknowledges that the 
problem is not as widespread as suggested and that intervening reforms 
similar to what Order No. 2023 requires may already be addressing the 
problem used to justify the FPA section 206 finding.
---------------------------------------------------------------------------

    \50\ Id. at 15-16 (citing Order No. 2023, 184 FERC ] 61,054 at P 
40).
---------------------------------------------------------------------------

    33. Dominion states that, where an industry-wide solution is 
imposed for a problem that only exists in isolated pockets, ``the 
disproportion of remedy to ailment would, at least at some point, 
become arbitrary and capricious.'' \51\ Dominion states that the Order 
No. 2023 compliance obligation essentially requires all existing 
processes to re-prove the justness and reasonableness of their 
processes, creating a remedy that is ``disproportionate'' to the 
identified problem.\52\
---------------------------------------------------------------------------

    \51\ Id. at 13 (citing Assoc. Gas Distribs. v. FERC, 824 F.2d 
981, 1019 (D.C. Cir. 1987) (Assoc. Gas)).
    \52\ Id. at 7-8 (citing Order No. 2023, 184 FERC ] 61,054 at PP 
1762-1764).
---------------------------------------------------------------------------

    34. Dominion asks the Commission to confirm that, if compliance 
filings are required of early adopters like PJM and DESC, the 
Commission has the burden under FPA section 206 to find that existing 
processes recently adopted are unjust and unreasonable.\53\ Dominion 
asserts that the Commission must hew to the constraints created by FPA 
section 206 and cannot shift the burden to individual early adopters to 
defend their current rates.
---------------------------------------------------------------------------

    \53\ Id. at 16 (citing INGAA, 285 F.3d at 37-39).
---------------------------------------------------------------------------

3. Determination
    35. We sustain our finding in Order No. 2023 \54\ that the existing 
pro forma generator interconnection procedures and agreements are 
unjust, unreasonable, and unduly discriminatory or preferential.\55\ We 
also continue to find that Order No. 2023's revisions to the pro forma 
open access transmission tariff and the Commission's regulations are 
necessary to ensure rates that are just, reasonable, and not unduly 
discriminatory or preferential.
---------------------------------------------------------------------------

    \54\ Order No. 2023, 184 FERC ] 61,054 at P 37.
    \55\ 16 U.S.C. 824e(a); 18 CFR 385.206.
---------------------------------------------------------------------------

    36. We note that Dominion's rehearing request misstates the 
Commission's generic finding as ``declaring all existing 
interconnection tariffs, including recently accepted reforms by PJM and 
DESC, as unjust, unreasonable, and unduly

[[Page 27012]]

discriminatory or preferential.'' \56\ The findings in Order No. 2023 
relate to the Commission's existing pro forma generator interconnection 
procedures and agreements, which, among other things, relied on a 
serial first-come, first-served study process.\57\ The Commission did 
not make any findings regarding specific transmission provider's 
tariffs, and it was not required to do so under FPA section 206.\58\ 
Issues regarding the individual tariffs of specific transmission 
providers that currently deviate from the existing pro forma generator 
interconnection procedures and agreements will be addressed on an 
individual basis on compliance.\59\
---------------------------------------------------------------------------

    \56\ Dominion Rehearing Request at 2.
    \57\ Order No. 2023, 184 FERC ] 61,054 at P 37.
    \58\ See, e.g., TAPS, 225 F.3d at 687-88 (upholding Commission 
action under FPA section 206 premised on general systemic conditions 
rather than evidence regarding individual utilities); S.C. Pub. 
Serv. Auth., 762 F.3d at 67 (``[T]he Commission may rely on 
`generic' or `general' findings of a systemic problem to support 
imposition of an industry-wide solution.'') (citing INGAA, 285 F.3d 
at 37); Assoc. Gas, 824 F.2d at 1008 (``The Commission is not 
required to make individual findings, however, if it exercises its 
Natural Gas Act Sec.  5 authority by means of a generic rule.'').
    \59\ Order No. 2023, 184 FERC ] 61,054 at P 1765.
---------------------------------------------------------------------------

    37. We disagree with Dominion's argument that Order No. 2023 goes 
beyond the limits of our authority to rely on a generic rulemaking to 
support an industry-wide solution. As noted above, Order No. 2023 
adopts reforms to the existing pro forma interconnection procedures and 
agreements, which themselves were adopted as an industry-wide reform to 
identified, industry-wide problems.\60\ All three of the cases Dominion 
relies on support the Commission's authority to issue Order No. 2023.
---------------------------------------------------------------------------

    \60\ See id. PP 8-12 (explaining the need for and adopting pro 
forma interconnection agreements and procedures); see also NARUC v. 
FERC, 475 F.3d at 1279 (explaining, at the outset, the structural 
connection between the nationwide reforms in Order No. 888 and those 
in Order No. 2003).
---------------------------------------------------------------------------

    38. When the D.C. Circuit upheld Order No. 888 in TAPS, the court 
specifically explained that the Commission can rely on general findings 
of systemic conditions to impose an industry-wide remedy under FPA 
section 206.\61\ The court agreed with the Commission that specific 
evidence regarding individual utilities' behavior is not required under 
FPA section 206. Similarly, when upholding Order No. 637 in INGAA, the 
D.C. Circuit stated that ``our cases have long held that the Commission 
may rely on `generic' or `general' findings of a systemic problem to 
support imposition of an industry-wide solution.'' \62\ The D.C. 
Circuit explicitly rejected an argument that the Commission 
impermissibly shifted the burden of proof merely by requiring pro forma 
filings.\63\ Several years later, when upholding Order No. 1000 in S.C. 
Pub. Serv. Auth., the D.C. Circuit once again affirmed the Commission's 
ability to promulgate nationwide rules, in lieu of case-by-case 
adjudication, to solve a nationwide problem.\64\ The court explained 
that, even though some regions had already satisfied some requirements 
of the rule, the deficiencies identified by the Commission did not only 
exist in ``isolated pockets,'' and ``[a]bsent such an extreme 
`disproportion of remedy to ailment,' the Commission could reasonably 
proceed to address a systemic problem with an industry-wide solution.'' 
\65\ Nothing in this precedent indicates that the Commission's 
authority to promulgate generic rulemakings under FPA section 206 
depends upon the rule representing a paradigm shift. Rather, the 
precedent is clear that, where the Commission finds a systemic, 
nationwide problem that renders the rates, terms, and conditions for 
Commission-jurisdictional services unjust, unreasonable, unduly 
discriminatory, or preferential, the Commission has authority to 
implement a nationwide solution.\66\
---------------------------------------------------------------------------

    \61\ TAPS, 225 F.3d at 687-88.
    \62\ INGAA, 285 F.3d at 37.
    \63\ Id. at 38.
    \64\ S.C. Pub. Serv. Auth., 762 F.3d at 67.
    \65\ Id.
    \66\ S.C. Pub. Serv. Auth., 762 F.3d at 67; TAPS, 225 F.3d at 
687-88; INGAA, 285 F.3d at 37.
---------------------------------------------------------------------------

    39. Here, substantial evidence indicates that interconnection queue 
delays and backlogs are a nationwide problem, not a problem that only 
exists in isolated pockets. As explained in Order No. 2023, 
interconnection queue backlogs are increasing across all regions of the 
country, and ``every single region has faced an increase in both 
interconnection queue size and the length of time interconnection 
customers are spending in the interconnection queue prior to commercial 
operation in recent years. This is true for RTO/ISO and non-RTO/ISO 
regions alike.'' \67\ ``[T]he uncertainty and delays in the 
interconnection queues have resulted in fewer than 25% of 
interconnection requests, by capacity, reaching commercial operation 
between 2000 and 2017 in any region of the country--with some regions 
as low as 8%.'' \68\ Appendix B to Order No. 2023 shows that most 
transmission providers in the country were late in completing 
interconnection studies in 2022.\69\ We acknowledge that the data 
collected in compliance with Order No. 845 regarding PJM's queue 
reflected PJM's previous study process, which was recently reformed. 
However, excluding PJM's data would not change our overall conclusion 
that interconnection queue backlogs and late interconnection studies 
are a significant problem in most regions of the country. To the 
contrary, we continue to find that ``the challenges being faced across 
the country will be further compounded in the future,'' \70\ and that 
the multiple factors contributing to interconnection queue backlogs, 
longer development timelines, and increased uncertainty regarding the 
cost and timing of interconnecting to the transmission system, 
including increasing volume of interconnection requests, increased 
complexity in interconnection studies, and insufficient transmission 
capacity, are industry-wide challenges likely to persist and 
potentially worsen in the future.\71\
---------------------------------------------------------------------------

    \67\ Order No. 2023, 184 FERC ] 61,054 at P 38 (citing Queued Up 
2023 at 7-9, 32).
    \68\ Id. (citing Queued Up 2023 at 3, 21).
    \69\ Id. at app. B.
    \70\ Id. P 58.
    \71\ Id. P 41.
---------------------------------------------------------------------------

    40. Moreover, due to the early stages of PJM's reforms, the instant 
record does not contain any information regarding the effects of such 
reforms, including whether PJM is meeting all study deadlines on time, 
the overall length of time to reach interconnection, or the portion of 
interconnection customers reaching commercial operation. Nor does the 
record support that any region, including PJM, is unaffected by the 
underlying factors that are persistent and increasing drivers of 
widespread interconnection queue delays and backlogs. Therefore, we 
continue to find that the systemic problems identified in Order No. 
2023 warrant a nationwide solution.
    41. In response to Dominion's contention that the Commission 
ignored evidence regarding recent queue reform efforts, we note that 
Order No. 2023 specifically referenced these ongoing queue reform 
efforts. The Commission stated:

    We recognize that many transmission providers have adopted or 
are in the process of adopting similar reforms to those adopted in 
this final rule. We do not intend to disrupt these ongoing 
transition processes or stifle further innovation. On compliance, 
transmission providers can propose deviations from the requirements 
adopted in this final rule--including deviations seeking to minimize 
interference with ongoing transition plans--and demonstrate how 
those deviations satisfy the standards \72\ discussed

[[Page 27013]]

above, which the Commission will consider on a case-by-case 
basis.\73\
---------------------------------------------------------------------------

    \72\ Specifically, where transmission providers propose 
variations to the Order No. 2023 transition process, the Commission 
will evaluate such proposals under the consistent with or superior 
to standard for non-RTO transmission providers and the independent 
entity variation standard for RTOs/ISOs.
    \73\ Order No. 2023, 184 FERC ] 61,054 at P 1765.

    In fact, in the NOPR underlying Order No. 2023, the Commission made 
clear that it reviewed these recent queue reform efforts, learned from 
them, and considered them in formulating a number of its proposals.\74\
---------------------------------------------------------------------------

    \74\ Improvements to Generator Interconnection Procs. & 
Agreements, 87 FR 39934 (July 5, 2022), 179 FERC ] 61,194, at PP 86-
87, 112, 127, 132, 152-54 (2022) (NOPR).
---------------------------------------------------------------------------

    42. However, as explained above, the Commission was not required to 
make FPA section 206 findings specific to PJM or DESC's queue reforms. 
The details of a specific transmission provider's tariff, and whether 
its recent queue reform complies with the new requirements of Order No. 
2023, are appropriately handled on an individual basis on compliance.
    43. We disagree with Dominion's argument that Order No. 2023's 
acknowledgement that some transmission providers had no delayed studies 
in 2022 indicates that the problem is not as widespread as suggested. 
The fact that a few transmission providers complete studies on time 
does not mean that the problem exists only in isolated pockets. As the 
D.C. Circuit explained in S.C. Pub. Serv. Auth., the fact that a 
problem may not exist in every single region of the country ``is as 
unastonishing as it is irrelevant, because petitioners have not shown 
that the deficiencies identified by the Commission exist[] only in 
isolated pockets.'' \75\
---------------------------------------------------------------------------

    \75\ See S.C. Pub. Serv. Auth., 762 F.3d at 67 (citing Wis. Gas. 
Co. v. FERC, 770 F.2d 1144, 1157 (D.C. Cir. 1985) (Wis. Gas.); 
Assoc. Gas, 824 F.2d at 1019).
---------------------------------------------------------------------------

    44. Moreover, substantial evidence indicates that these nationwide 
interconnection queue delays and backlogs result in rates, terms, and 
conditions in the wholesale electric markets that are unjust, 
unreasonable, and unduly discriminatory or preferential.\76\ 
Interconnection queue delays and backlogs result in longer development 
timelines, uncertainty regarding the cost and timing of interconnecting 
to the transmission system, and ultimately higher rates, as ``wholesale 
customers hav[e] limited access to new and more competitive supplies of 
generation.'' \77\
---------------------------------------------------------------------------

    \76\ Order No. 2023, 184 FERC ] 61,054 at PP 37, 44.
    \77\ Id. PP 37, 43 (citing May Joint Task Force Tr. 74:9-21 
(Andrew French) (stating that generator developers complain about 
cost certainty); May Joint Task Force Tr. 23:18-25 (Jason Stanek) 
(expressing frustration with the status quo and agreement that it is 
``no longer tenable'' considering the inability of generators to 
interconnect in a timely manner); Ameren Initial Comments at 2; 
ELCON Initial Comments at 2; ELCON Initial Comments at 2; Xcel 
Initial Comments at 8).
---------------------------------------------------------------------------

    45. Further, we believe that the remedies adopted in Order No. 2023 
are proportional to the issues identified. As explained in detail in 
Order No. 2023, each of the reforms the Commission adopted are directly 
related to the need to reform the pro forma generator interconnection 
procedures and agreements to ensure that interconnection customers are 
able to interconnect to the transmission system in a reliable, 
efficient, transparent, and timely manner, and will prevent undue 
discrimination.\78\
---------------------------------------------------------------------------

    \78\ Id. PP 45-56.
---------------------------------------------------------------------------

    46. Further, we also believe that a generic, nationwide rulemaking 
is justified by the need for consistent interconnection policies that 
apply to all public utility transmission providers.\79\ We continue to 
find that it is necessary to apply the reforms in Order No. 2023 on a 
nationwide basis to ensure that interconnection customers are able to 
interconnect to the transmission system in a reliable, efficient, 
transparent, and timely manner, and to prevent undue discrimination. We 
further note that some of the critical reforms of Order No. 2023 could 
only have been achieved through a nationwide rulemaking; for instance, 
standardization of the affected systems study process requires rules 
that apply to all jurisdictional transmission providers.
---------------------------------------------------------------------------

    \79\ See Order No. 2003, 104 FERC ] 61,103 at P 11 (``[T]here is 
a pressing need for a single set of [interconnection] procedures . . 
. [which] will minimize opportunities for undue discrimination and 
expedite the development of new generation, while protecting 
reliability and ensuring that rates are just and reasonable.'').
---------------------------------------------------------------------------

    47. For the reasons stated above, we disagree with Dominion's 
argument that the Commission bears the burden on compliance to find 
that recently adopted existing processes that deviate from the pro 
forma generator interconnection procedures and agreements are unjust 
and unreasonable.\80\ We reiterate that the findings in Order No. 2023 
relate to the Commission's existing pro forma generator interconnection 
procedures and agreements.\81\ We note that, on compliance, the 
Commission will apply the consistent with or superior to standard for 
non-RTO transmission providers and the independent entity variation 
standard for RTOs/ISOs when analyzing deviations from the Commission's 
pro forma LGIP, pro forma LGIA, pro forma SGIP and/or pro forma 
SGIA.\82\
---------------------------------------------------------------------------

    \80\ Elsewhere in this order, the Commission clarifies that 
transmission providers need only re-file and seek approval for 
previously approved variations where those provisions are modified 
by Order No. 2023. See infra P 77.
    \81\ Order No. 2023, 184 FERC ] 61,054 at P 37.
    \82\ See Xcel Energy Servs. Inc. v. FERC, 41 F.4th 548, 557 
(D.C. Cir. 2022) (``The Commission has used its discretion and 
expertise to craft the ``consistent with or superior to'' test for 
deviations from its pro forma rules.'') (citing Order No. 2003, 104 
FERC ] 61,103 at P 826); see also Sacramento Mun. Util. Dist. v. 
FERC, 428 F.3d 294, 296 (D.C. Cir. 2005) (explaining that utilities 
can deviate from the terms of the pro forma tariff if such 
deviations are consistent with or superior to the terms of the pro 
forma tariff).
---------------------------------------------------------------------------

    48. In response to Indicated PJM TOs' contention that the 
Commission failed to grapple with the fact that many RTOs/ISOs already 
adopted the Commission's core substantive reforms before Order No. 2023 
was issued, we acknowledge that many transmission providers have 
adopted many of the reforms in Order No. 2023. As explained above, that 
is not an accident. The Commission carefully examined recent queue 
reform proposals to identify best practices to implement nationwide. 
However, no transmission provider has yet adopted all of the reforms in 
Order No. 2023. For example, no transmission provider has eliminated 
the reasonable efforts standard for completing interconnection studies 
on time. We continue to believe that this broad suite of reforms, as a 
whole, is necessary to ensure that interconnection customers are able 
to interconnect to the transmission system in a reliable, efficient, 
transparent, and timely manner, thereby ensuring that rates, terms, and 
conditions for Commission-jurisdictional services are just, reasonable, 
and not unduly discriminatory or preferential.\83\
---------------------------------------------------------------------------

    \83\ Order No. 2023, 184 FERC ] 61,054 at P 59.
---------------------------------------------------------------------------

    49. Regarding Indicated PJM TOs' argument that the Commission 
should have waited for recent queue reforms to be fully implemented 
before determining whether additional reforms are required, we 
disagree. Transmission providers across the country have been working 
on regional queue reform for well over a decade.\84\ These proposals 
are filed at varying intervals, and at any given time, multiple 
transmission providers may be in the process of proposing or 
implementing new queue processes. By the time one or two particular 
transmission providers implement one set of queue reforms, it is likely 
that other transmission providers would be in the process of proposing 
or implementing their next queue reform. The Commission would

[[Page 27014]]

be waiting a very long time indeed if it could not issue a generic 
rulemaking while any individual transmission provider pursues its own 
regional queue reform.\85\
---------------------------------------------------------------------------

    \84\ Id. P 16, n.39.
    \85\ Transmission Plan. & Cost Allocation by Transmission Owning 
& Operating Pub. Utils., Order No. 1000, 76 FR 49842 (Aug. 11, 
2011), 136 FERC ] 61,051, at P 50 (2011) (finding that the need to 
generically establish rules addressing transmission planning, as 
well as the long lead times and complex problems associated with 
developing transmission facilities, made Commission action 
appropriate and prudent rather than allowing the noted transmission 
planning problems to persist).
---------------------------------------------------------------------------

    50. Furthermore, we note that the Commission has historically taken 
a gradual approach to addressing problems with respect to 
interconnection queue backlogs. In Order No. 845, for instance, the 
Commission implemented a number of specific reforms, but held off on 
other reforms in favor of collecting further information from 
transmission providers.\86\ In doing so, the Commission noted that 
``[t]his information could also be useful to the Commission in 
determining if additional action is required to address interconnection 
study delays.'' \87\ In Order No. 2023, the Commission determined that 
additional action was required to address interconnection study 
delays.\88\ The reforms in Order No. 845 have not eliminated the 
problems of interconnection queue backlogs and delayed interconnection 
studies; rather, these problems have only grown, notwithstanding the 
Commission's previous reforms. We maintain that the reforms in Order 
No. 2023 are necessary to ensure that interconnection customers are 
able to interconnect to the transmission system in a reliable, 
efficient, transparent, and timely manner, thereby ensuring that rates, 
terms, and conditions for Commission-jurisdictional services are just, 
reasonable, and not unduly discriminatory or preferential.
---------------------------------------------------------------------------

    \86\ Reform of Generator Interconnection Procs. & Agreements, 
Order No. 845, 83 FR 21342 (May 9, 2018), 163 FERC ] 61,043, at P 24 
(2018), order on reh'g, Order No. 845-A, 84 FR 8156 (Mar. 6, 2019), 
166 FERC ] 61,137 (2019), order on reh'g, Order No. 845-B, 168 FERC 
] 61,092 (2019).
    \87\ Order No. 845, 163 FERC ] 61,043 at P 309.
    \88\ Order No. 2023, 184 FERC ] 61,054 at P 3.
---------------------------------------------------------------------------

B. Arguments Regarding Conflicts With Ongoing Queue Reform Efforts and 
Evaluation of Variations on Compliance

1. Order No. 2023 Requirements
    51. The Commission addressed commenters' concerns regarding Order 
No. 2023's impact on early adopters of similar queue reforms or those 
queues currently in transition to a cluster study process. The 
Commission recognized that many of the individual reforms that the 
Commission adopted in Order No. 2023 are incremental improvements that 
one or more regions had already implemented.\89\ The Commission 
explained that Order No. 2023 uses some of these individual and 
incremental improvements as a basis for a broad suite of reforms that, 
in their entirety, have not yet been adopted by any region.
---------------------------------------------------------------------------

    \89\ Id. P 59.
---------------------------------------------------------------------------

    52. Additionally, the Commission rejected requests to presume that 
any transmission provider's tariff meets the requirements of Order No. 
2023.\90\ The Commission recognized that many transmission providers 
have adopted or are in the process of adopting similar reforms to those 
adopted in Order No. 2023 and clarified that the Commission did not 
intend to disrupt these ongoing transition processes or stifle further 
innovation.\91\ The Commission emphasized that the provisions of Order 
No. 2023 are not intended to interfere with the timely completion of 
those in-progress cluster studies and transition processes.\92\ The 
Commission explained that, on compliance, transmission providers can 
propose deviations from the requirements adopted in Order No. 2023, 
including deviations seeking to minimize interference with ongoing 
transition plans,\93\ provided that the reason for the variation is 
sufficiently justified, and may continue to propose solutions to 
interconnection issues under FPA section 205.\94\
---------------------------------------------------------------------------

    \90\ Id. P 1765.
    \91\ Id. PP 861, 1765.
    \92\ Id. P 861.
    \93\ Id. P 1765 (clarifying that transmission providers that 
have already adopted a cluster study process or are currently 
undergoing a transition to a cluster study process will not be 
required to implement a new transition process).
    \94\ Id. P 1767.
---------------------------------------------------------------------------

    53. Therefore, consistent with Order Nos. 888, 890, 2003, 2006, and 
845, the Commission adopted the NOPR proposal to continue to apply the 
consistent with or superior to standard when considering proposals from 
non-RTO/ISO transmission providers to deviate from the requirements of 
Order No. 2023.\95\ Consistent with Order Nos. 2003, 2006, and 845, the 
Commission adopted the NOPR proposal to continue to use the 
``independent entity variation'' standard when considering such 
proposals from RTOs/ISOs.\96\ Consistent with Order Nos. 888, 890, 
2003, 2006, and 845, the Commission adopted the NOPR proposal to 
continue to allow non-RTO/ISO transmission providers to use the 
regional differences rationale to seek variations made in response to 
established (i.e., approved by the Applicable Reliability Council) 
reliability requirements.\97\ The Commission explained that Order No. 
2023 makes no changes to the standards used to judge requested 
variations, as described in Order Nos. 888, 890, 2003, 2006, and 845.
---------------------------------------------------------------------------

    \95\ Id. P 1764 (citing Promoting Wholesale Competition Through 
Open Access Non-Discriminatory Transmission Servs. By Pub. Utils,; 
Recovery of Stranded Costs by Pub. Utils. & Transmitting Utils., 
Order No. 888, FERC Stats. & Regs. ] 31,036, at 31,769-770 (cross-
referenced at 75 FERC ] 61,080); Preventing Undue Discrimination & 
Preference in Transmission Serv., Order No. 890, 72 FR 12226 (Mar. 
15, 2007), 118 FERC ] 61,119 at P 109 (2007) (``[W]e reiterate that 
any departures from the pro forma [open access transmission tariff] 
proposed by an ISO or an RTO must be `consistent with or superior 
to' the pro forma [open access transmission tariff] in this Final 
Rule.''); Order No. 2003, 104 FERC ] 61,103 at P 825; Order No. 
2006, 111 FERC ] 61,220 at PP 546-547; Order No. 845, 163 FERC ] 
61,043 at P 43 (explaining that a transmission provider that is not 
an RTO/ISO that seeks a variation from the requirements of the final 
rule must present its justification for the variation as consistent 
with or superior to the pro forma LGIA or pro forma LGIP)).
    \96\ Id. (citing Order No. 2003, 104 FERC ] 61,103 at P 826 
(``[w]ith respect to an RTO or ISO . . . we will allow it to seek 
`independent entity variations' from the Final Rule . . . This is a 
balanced approach that recognizes that an RTO or ISO has different 
operating characteristics depending on its size and location and is 
less likely to act in an unduly discriminatory manner than a 
Transmission Provider that is a market participant.''); Order No. 
2006, 111 FERC ] 61,220 at PP 447, 549; Order No. 845, 163 FERC ] 
61,043 at P 556).
    \97\ Id. (citing Order No. 888, FERC Stats. & Regs. ] 31,036, at 
31,770; Order No. 890, 118 FERC ] 61,119 at P 109; Order No. 2003, 
104 FERC ] 61,103 at P 826 (``if on compliance a non-RTO or ISO 
Transmission Provider offers a variation from the Final Rule LGIP 
and Final Rule LGIA, and the variation is in response to established 
(i.e., approved by the Applicable Reliability Council) reliability 
requirements, then it may seek to justify its variation using the 
regional difference rationale.''); Order No. 2006, 111 FERC ] 61,220 
at PP 546-547; Order No. 845, 163 FERC ] 61,043 at P 43).
---------------------------------------------------------------------------

2. Requests for Rehearing and Clarification
    54. Several entities request clarification regarding the scope of 
the application of Order No. 2023 to transmission providers that have 
already transitioned to, or that are in the process of transitioning 
to, a cluster study process.\98\
---------------------------------------------------------------------------

    \98\ Clean Energy Associations Rehearing Request at 51-52; 
Dominion Rehearing Request at 17-18; IPP Coalition Rehearing Request 
at 10-13; PacifiCorp Rehearing Request at 15-20; PJM Rehearing 
Request at 1-3; Revised Early Adopters Coalition Rehearing Request 
at 2-7; WIRES Rehearing Request at 12.
---------------------------------------------------------------------------

    55. Clean Energy Associations and IPP Coalition ask the Commission 
to clarify that all existing cluster study processes must comport with 
the requirements of Order No. 2023, whether the transmission provider 
currently operates a cluster study process or is currently undergoing a 
transition to a

[[Page 27015]]

cluster study process.\99\ Clean Energy Associations and IPP Coalition 
argue that interconnection customers that are currently in a cluster 
study process should be required to satisfy the requirements of Order 
No. 2023, including site control requirements, within an identified 
time horizon (e.g., 60-90 days of the compliance filing) or withdraw 
from the interconnection queue without penalty.\100\ Clean Energy 
Associations and IPP Coalition argue that, if some transmission 
providers are not required to transition to a process that is compliant 
with Order No. 2023, projects currently in the queue that are not ready 
to proceed will not face the increased readiness requirements and delay 
reforms to new queue requests, undermining the central purpose of Order 
No. 2023.\101\
---------------------------------------------------------------------------

    \99\ Clean Energy Associations Rehearing Request at 51; IPP 
Coalition Rehearing Request at 10-11.
    \100\ Clean Energy Associations Rehearing Request at 51; IPP 
Coalition Rehearing Request at 11-12.
    \101\ Clean Energy Associations Rehearing Request at 53; IPP 
Coalition Rehearing Request at 13.
---------------------------------------------------------------------------

    56. Clean Energy Associations and IPP Coalition argue that, absent 
clarification, the Commission risks leaving in place a potentially 
problematic oversight.\102\ Specifically, Clean Energy Associations and 
IPP Coalition assert that the notion that transmission providers that 
have adopted or are currently transitioning to a cluster study process 
will not be required to implement a new transition process runs counter 
to the requirement that transmission providers may seek approval, on a 
case-by-case basis, to maintain variations from the pro forma LGIP and 
pro forma LGIA.\103\ According to Clean Energy Associations and IPP 
Coalition, the fact that a transmission provider has an existing 
cluster study does not exempt that provider from its compliance 
obligation or the need to update its process to reflect the material 
elements of Order No. 2023.
---------------------------------------------------------------------------

    \102\ Clean Energy Associations Rehearing Request at 51; IPP 
Coalition Rehearing Request at 11.
    \103\ Clean Energy Associations Rehearing Request at 51-52; IPP 
Coalition Rehearing Request at 11 (both citing Order No. 2023, 184 
FERC ] 61,054 at P 1530).
---------------------------------------------------------------------------

    57. NV Energy requests that the Commission clarify whether the new 
tariff changes are applicable to all interconnection customers, 
including those that currently participate in a cluster study process 
or have executed LGIAs.\104\ Specifically, NV Energy requests that the 
Commission clarify if interconnection customers will be required to 
update their respective study deposits, provide commercial readiness 
deposits correlating to the amounts required at the various stages of 
the process, and update their site control documentation in order to 
remain in the queue.\105\ NV Energy requests a one-time ability for 
existing interconnection customers of transmission providers who 
currently conduct cluster studies to withdraw penalty-free from the 
queue if they are unable to provide the updated study deposits, site 
control, commercial readiness deposits, etc.
---------------------------------------------------------------------------

    \104\ NV Energy Rehearing Request at 2 (citing Order 2023, 184 
FERC ] 61,054 at P 861). NV Energy states that Order No. 2023 did 
not mention grandfathering any of the existing interconnection 
agreements. Id.
    \105\ Id. at 3.
---------------------------------------------------------------------------

    58. NV Energy additionally requests clarification on whether a 
queued interconnection customer, whether in a current cluster study, 
with an executed facilities study agreement, or with an executed LGIA, 
must provide the heightened proof of site control by the effective date 
of the new tariff changes.\106\ NV Energy seeks clarity on whether: (1) 
existing queued interconnection customers are required to provide 90% 
of site control if not impacted by a regulatory limitation and are 
currently within the cluster study phase of the process; (2) existing 
queued interconnection customers with executed facilities studies 
agreements are required to provide 100% of site control if the site is 
not impacted by a regulatory limitation; (3) existing queued 
interconnection customers who are impacted by a regulatory limitation 
are required to update their deposit in lieu of site control to the new 
deposit amounts; and (4) existing queued interconnection customers with 
executed LGIAs who are impacted by a regulatory limitation are required 
to provide site control within 180 days of executing their respective 
LGIAs.
---------------------------------------------------------------------------

    \106\ Id.
---------------------------------------------------------------------------

    59. EEI asks the Commission to clarify that Order No. 2023 does not 
require transmission providers to re-file and seek approval for 
portions of their existing LGIA and LGIP that have previously been 
approved by the Commission and are not directly impacted by Order No. 
2023.\107\ EEI argues that it would be inappropriate for the Commission 
to require transmission providers to re-file and seek approval for such 
portions of their existing LGIAs and LGIPs because the Commission 
provided no notice that it was going to review or reconsider every 
change it has previously approved for LGIAs and LGIPs, and thus 
transmission providers were not given an opportunity to defend 
previously approved changes.\108\ EEI argues that it would be a 
significant administrative burden for transmission providers to re-
justify every change that the Commission has already approved.\109\
---------------------------------------------------------------------------

    \107\ EEI Rehearing Request at 2-3, 16.
    \108\ Id. at 16.
    \109\ EEI states that this would include changes that were 
approved by the Commission in response to other rulemakings, such as 
Order No. 845. Id. at 16-17.
---------------------------------------------------------------------------

    60. PJM asks the Commission to provide a clearer signal as to how 
it will take into account recently approved reforms such as PJM's 
IPRTF.\110\ PJM states that its recent queue reform meets the 
Commission's intent in promulgating Order No. 2023, substantially 
satisfies its requirements, and is superior for the PJM region.\111\ 
PJM explains that there are differences between the implementation 
mechanisms in its IPRTF Tariff and Order No. 2023, but that these 
mechanisms serve the same goals and offer the same protections and 
benefits.\112\
---------------------------------------------------------------------------

    \110\ PJM Rehearing Request at 1-2.
    \111\ Id. at 1, 19-20.
    \112\ Id. at 19-23.
---------------------------------------------------------------------------

    61. PJM states that it has begun its transition period, and unless 
the Commission provides more clarity as to how it will review recently 
approved queue reform processes in the Order No. 2023 compliance 
process, it will create substantial uncertainty that will distract from 
the effort to process the queue backlog.\113\ PJM seeks clarification 
that it will not be required to implement Order No. 2023 in a manner 
that would modify or undermine the procedures recently accepted by the 
Commission, and that the Commission will review PJM's request for an 
independent entity variation holistically, by examining whether the 
package as a whole is consistent with or superior to the goals and 
requirements of Order No. 2023 rather than forcing PJM to engage in an 
item-by-item justification of every variation from the minutiae of 
Order No. 2023's requirements.\114\ PJM explains that requiring it to 
overhaul its tariff or justify each difference from the new pro forma 
will risk that some elements will be retained while other balancing 
elements will be changed, upsetting the balance that led to stakeholder 
approval.\115\ PJM states that proceeding element by element through 
compliance will also provide intervenors an opportunity to re-litigate 
issues on which they did not prevail, which is contrary to judicial 
principles and would be a poor use of time.\116\ PJM also explains that 
the elements of its tariff are interdependent, such that a

[[Page 27016]]

piecemeal approach could undermine the entire tariff.
---------------------------------------------------------------------------

    \113\ Id. at 2, 10.
    \114\ Id. at 3, 15.
    \115\ Id. at 15.
    \116\ Id. at 16.
---------------------------------------------------------------------------

    62. If the Commission does not provide the requested 
clarifications, PJM seeks rehearing because the Commission should have 
established a presumption that ongoing, recently approved 
interconnection queue reform packages comply with Order No. 2023.\117\ 
PJM explains that Order No. 2023 is internally inconsistent because it 
seeks to expedite the interconnection queue, and recognizes the efforts 
of on-going queue reform, but refuses to grant a presumption, which 
will cause delay and inefficiency.\118\ PJM argues that it would be 
arbitrary and capricious and inconsistent with reasoned decision-making 
to require modification of PJM's tariff based on a generic 
rulemaking.\119\ PJM also argues that failure to grant this rehearing 
will undermine confidence in the use of stakeholder processes.\120\
---------------------------------------------------------------------------

    \117\ Id. at 3, 25-26.
    \118\ Id. at 26.
    \119\ Id. at 3-4.
    \120\ Id. at 27.
---------------------------------------------------------------------------

    63. To the extent that the Commission does not grant PJM's request 
to provide a clear signal on rehearing that it will consider whether 
the entire package of IPRTF reforms as a whole meets the goals of Order 
No. 2023 rather than forcing PJM to engage in an extensive 
justification of every variation from every detail in Order No. 2023, 
PJM requests rehearing.\121\
---------------------------------------------------------------------------

    \121\ Id. at 24.
---------------------------------------------------------------------------

    64. Dominion argues that the Commission should cure the 
deficiencies in Order No. 2023's approach to compliance for early 
adopters like DESC and PJM.\122\ Dominion suggests that the Commission 
could simply not require entities that have already transitioned or are 
in the process of transitioning to a first-ready, first-served cluster 
study construct to file compliance filings. Dominion alternatively 
argues that the Commission could defer those entities' obligations to 
modify their tariffs, pending an appropriate period of time to gather 
evidence about whether their particular, Commission-approved reforms 
need to be further modified. Dominion asserts that this approach would 
be within the Commission's statutory bounds, is administratively 
efficient, and maintains the settled expectations of the stakeholders 
that worked diligently and collaboratively to develop transmission 
provider-specific reforms. Dominion asserts that the Commission has on 
several occasions directed entities to provide reports so that it can 
monitor situations before deciding it is necessary to take action.\123\ 
Dominion argues that the Commission could then require such early 
adopters to provide an additional report after a period of time 
determined by the Commission, such as two full cluster cycles following 
the transition, that would update the Commission on processing time 
under the proposed rule.
---------------------------------------------------------------------------

    \122\ Dominion Rehearing Request at 17.
    \123\ Id. at 17-18 (citing, for example, One-Time Informational 
Reports on Extreme Weather Vulnerability Assessments Climate Change, 
Extreme Weather, & Elec. Sys. Reliability, Order No. 897, 88 FR 
41477 (June 27, 2023), 183 FERC ] 61,192, at P 25 (2023) (requiring 
one-time informational reports related to planning for the impacts 
of extreme weather on system reliability); Hybrid Res., 174 FERC ] 
61,034, at P 1 (2021) (requiring RTOs and ISOs to submit information 
related to hybrid resources)).
---------------------------------------------------------------------------

    65. Dominion argues that, if the reports demonstrate that early 
adopters' processes are not meeting the goals of Order No. 2023, the 
Commission would then have a sufficient record, through the reports, to 
determine whether to direct further changes to conform with Order No. 
2023.\124\ Dominion contends that this compliance path for early 
adopters is superior to Order No. 2023's proposal and would allow 
transmission providers to demonstrate that the desired aim of Order No. 
2023--facilitating quicker, more efficient interconnection processes--
is being achieved.
---------------------------------------------------------------------------

    \124\ Id. at 18.
---------------------------------------------------------------------------

    66. Revised Early Adopter Coalition and PacifiCorp state that, to 
the extent a transmission provider does not seek or is not granted a 
variance for its existing interconnection reforms, such transmission 
provider appears to be required to immediately adopt the reforms in 
Order No. 2023 without any ability to start from a clean slate like 
other transmission providers utilizing a transition study process or to 
conclude any ongoing studies.\125\ Revised Early Adopters Coalition and 
PacifiCorp argue that Order No. 2023 does not appear to allow early 
adopters of interconnection reforms an option to open the initial 
cluster request window under Order No. 2023 after the conclusion of the 
study of existing interconnection requests.\126\ Revised Early Adopters 
Coalition and PacifiCorp assert that, because many early adopters are 
currently in the process of one or more cluster studies, not allowing 
such early adopters to use a transition cluster study process is both 
unworkable for such transmission providers and also contrary to Order 
No. 2023's assurance that ``the provisions of this final rule are not 
intended to interfere with the timely completion of those in-progress 
cluster studies and transition processes.'' \127\
---------------------------------------------------------------------------

    \125\ Revised Early Adopters Coalition Rehearing Request at 3; 
PacifiCorp Rehearing Request at 16.
    \126\ Revised Early Adopters Coalition Rehearing Request at 4; 
PacifiCorp Rehearing Request at 16. Revised Early Adopters Coalition 
note that the initial cluster request window under Order No. 2023 
would open ``after the conclusion of the transition process set out 
in Section 5.1 of this LGIP.'' Revised Early Adopters Coalition 
Rehearing Request at 3-4 (citing Order No. 2023, 184 FERC ] 61,054 
at app. C, pro forma LGIP section 3.4.1).
    \127\ Revised Early Adopters Coalition Rehearing Request at 4, 
7; PacifiCorp Rehearing Request at 16 (both citing Order No. 2023, 
184 FERC ] 61,054 at P 861).
---------------------------------------------------------------------------

    67. Revised Early Adopters Coalition and PacifiCorp state that 
Order No. 2023 also appears to require early adopters to undertake an 
initial cluster request window prior to completion of cluster studies 
and/or restudies currently underway.\128\ Revised Early Adopters 
Coalition and PacifiCorp argue that this would be an unexplained 
departure from prior precedent and the Commission's own statements in 
Order No. 2023.\129\ Revised Early Adopters Coalition and PacifiCorp 
assert that this will also interfere with the timely completion of 
current cluster studies because it will divert already strained 
resources to preparing for and implementing Order No. 2023's new 
provisions. Revised Early Adopters Coalition and PacifiCorp further 
argue that this will put early adopters in the difficult, if not 
impossible, situation of having to undertake new cluster studies under 
Order No. 2023 that are reliant on outcomes of existing, not-yet-
completed, cluster studies.
---------------------------------------------------------------------------

    \128\ Revised Early Adopters Coalition Rehearing Request at 6; 
PacifiCorp Rehearing Request at 18.
    \129\ Revised Early Adopters Coalition Rehearing Request at 2, 
6; PacifiCorp Rehearing Request at 18 (both citing, for example, 
Panhandle E. Pipe Line Co. v. FERC, 196 F.3d 1273, 1275 (D.C. Cir. 
1999) (Panhandle) (``if [FERC] wishes to depart from its prior 
policies, it must explain the reasons for its departure.'')).
---------------------------------------------------------------------------

    68. Revised Early Adopters Coalition and PacifiCorp ask the 
Commission to clarify that early adopters of similar interconnection 
reforms, to the extent they do not seek or are not granted variances 
for their existing interconnection reforms, may conclude their pending/
existing studies before transition to the new Order No. 2023 
process.\130\ Revised Early Adopters Coalition and PacifiCorp 
alternatively request that the Commission grant rehearing to permit 
such study flexibility for those transmission providers who have 
already adopted similar reforms to Order No. 2023. PacifiCorp argues 
that, without this flexibility, new cluster studies pursuant to Order 
No. 2023 may not be reliable as they will need to rely upon

[[Page 27017]]

assumptions, including ``higher priority requests'' that were studied 
in prior interconnection studies and assumed to be in service.\131\ 
PacifiCorp emphasizes that this flexibility is imperative, given the 
size of its queue--326 active interconnection requests, accounting for 
over 59 gigawatts of requests.
---------------------------------------------------------------------------

    \130\ Revised Early Adopters Coalition Rehearing Request at 2; 
PacifiCorp Rehearing Request at 15.
    \131\ PacifiCorp Rehearing Request at 19.
---------------------------------------------------------------------------

    69. Revised Early Adopters Coalition and PacifiCorp further assert 
that Order No. 2023 puts early adopters of interconnection reforms in a 
uniquely disadvantaged position of having to simultaneously administer 
two types of interconnection processes and, as a result, potentially 
expose them to greater likelihood of penalties than other transmission 
providers.\132\ Revised Early Adopters Coalition asserts that exposing 
early adopters to such outsized risks would be arbitrary and capricious 
as well as discriminatory.\133\
---------------------------------------------------------------------------

    \132\ Id.; Revised Early Adopters Coalition Rehearing Request at 
2-3, 6 (citing 5 U.S.C. 706(2)(A); Motor Vehicle Mfrs. Ass'n of the 
U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) 
(Motor Vehicle Manufacturers) (explaining that to survive review 
under the arbitrary and capricious standard, an agency must examine 
the relevant data and articulate a satisfactory explanation for its 
action including a rational connection between the facts found and 
the choice made.') (internal citations omitted)).
    \133\ Revised Early Adopters Coalition Rehearing Request at 6.
---------------------------------------------------------------------------

    70. Revised Early Adopters Coalition and PacifiCorp explain that, 
if permitted the flexibility above, any transmission provider that 
currently has one or more ongoing cluster studies pursuant to its 
Commission-accepted cluster study processes, and who has not sought and 
received a variance, would commence new cluster studies only after all 
pending interconnection request cluster studies (or restudies) have 
concluded and only under updated tariff provisions that are consistent 
with or superior to Order No. 2023.\134\ Revised Early Adopters 
Coalition and PacifiCorp state that allowing such providers to conclude 
their existing cluster studies before transition to the new pro forma 
study approach will preserve the interests of current interconnection 
customers that have been participating in the existing cluster study 
process as well as ease the administrative burden for such transmission 
providers.
---------------------------------------------------------------------------

    \134\ Id. at 6-7; PacifiCorp Rehearing Request at 19-20.
---------------------------------------------------------------------------

    71. Revised Early Adopters Coalition and PacifiCorp also request, 
in the alternative, that the Commission allow early adopters to use a 
transition process similar to other transmission providers, if such a 
process better suits their needs and facilitates expedient queue 
processing.\135\ Revised Early Adopters Coalition and PacifiCorp 
request that, either through clarification or rehearing, the Commission 
ensure that early adopters have the flexibility to choose either Order 
No. 2023's transition process or the ability to implement Order No 
2023's reforms after completing any existing cluster studies and 
restudies.
---------------------------------------------------------------------------

    \135\ Revised Early Adopters Coalition Rehearing Request at 7; 
PacifiCorp Rehearing Request at 20.
---------------------------------------------------------------------------

    72. WIRES argues that Order No. 2023 also includes new requirements 
that need clarification or further consideration by the 
Commission.\136\ WIRES states that it generally agrees that the shift 
from a serial study process to a cluster study process is likely to 
result in greater efficiency and provide more certainty but argues that 
the Commission has not explained how this new requirement will sync up 
with ongoing efforts that are already under way. WIRES requests that 
the Commission clarify how it plans to accommodate those ongoing 
efforts.
---------------------------------------------------------------------------

    \136\ WIRES Rehearing Request at 12.
---------------------------------------------------------------------------

3. Determination
    73. We clarify that all transmission providers, including those 
with existing cluster study processes, have a compliance obligation to 
review and modify their current pro forma interconnection procedures 
and pro forma interconnection agreements to comply with Order No. 2023. 
However, we continue to find that transmission providers that have 
already adopted a cluster study process or are currently undergoing a 
transition to a cluster study process will not be required to implement 
the transition process laid out in Order No. 2023,\137\ and thus 
further clarify that such transmission providers are not required to 
file pro forma LGIP section 5 (Procedures for Interconnection Requests 
Submitted Prior to Effective Date of the Cluster Study) and the related 
appendices in their compliance filings.
---------------------------------------------------------------------------

    \137\ Order No. 2023, 184 FERC ] 61,054 at P 861.
---------------------------------------------------------------------------

    74. However, in response to the arguments raised by Revised Early 
Adopters Coalition and PacifiCorp, we note that Order No. 2023 does not 
prohibit such transmission providers from adopting the transition 
process established in Order No. 2023. Therefore, a transmission 
provider that does not seek or is not granted a variance for its 
existing cluster study process and adopts the reforms in Order No. 2023 
would be able to use the Order No. 2023 transition process. Where 
transmission providers propose variations to the Order No. 2023 
transition process, the Commission will evaluate such proposals under 
the consistent with or superior to standard for non-RTO transmission 
providers and the independent entity variation standard for RTOs/ISOs. 
A transmission provider currently conducting a cluster study process 
that does not propose to conduct an Order No. 2023 transition process 
must comply with the remaining requirements of Order No. 2023 other 
than the transition process.
    75. We further grant clarification in response to requests seeking 
to clarify the applicability of the Order No. 2023 readiness 
requirements to a transmission provider currently conducting a cluster 
study process. On compliance, unless it proposes a variation, such a 
transmission provider must adopt the Order No. 2023 readiness 
requirements; \138\ those new readiness requirements are then to be 
applied based on the interconnection customer's progress in the queue 
as of 60 calendar days after the Commission-approved effective date of 
the transmission provider's compliance filing. Within 60 calendar days 
of the Commission-approved effective date of the transmission 
provider's Order No. 2023 compliance filing, interconnection customers 
that have not executed an LGIA or requested an LGIA to be filed 
unexecuted with the Commission must meet the transmission provider's 
new readiness requirements for the relevant study phase, such as 
updating their respective study deposits, providing commercial 
readiness deposits correlating to the amounts required at the various 
stages of the process, and demonstrating site control. Interconnection 
customers that must meet the transmission provider's new readiness 
requirements may withdraw within the 60 days after the Commission-
approved effective date of the transmission provider's Order No. 2023 
compliance filing without being subject to Order No. 2023 withdrawal 
penalties. If the interconnection customer chooses to withdraw outside 
this 60-day timeline, the interconnection customer will be subject to 
the new withdrawal penalties. To reflect these clarifications, we set 
aside Order No. 2023, in part, and add new section 5.1.2 to the pro 
forma LGIP.\139\
---------------------------------------------------------------------------

    \138\ Id. PP 490-813.
    \139\ New pro forma LGIP section 5.1.2 (Transmission Providers 
with Existing Cluster Study Processes or Currently in Transition) 
states that if Transmission Provider is not conducting a transition 
process under Section 5.1.1, it will continue processing 
interconnection requests under its current Cluster Study Process. 
Within 60 calendar days of the Commission-approved effective date of 
Transmission Provider's Order No. 2023 compliance filing, 
Interconnection Customers that have not executed an LGIA or 
requested an LGIA to be filed unexecuted must meet the requirements 
of Sections 3.4.2, 7.5, or 8.1 of this LGIP, based on 
Interconnection Customer's Queue Position. Any Interconnection 
Customer that fails to meet these requirements within 60 calendar 
days of the Commission-approved effective date of this LGIP shall 
have its Interconnection Request deemed withdrawn by Transmission 
Provider pursuant to Section 3.7 of this LGIP. In such case, 
Transmission Provider shall not assess the Interconnection Customer 
any Withdrawal Penalty.

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

[[Page 27018]]

    76. In response to NV Energy, we clarify that the requirement to 
meet the new site control requirements also requires that a queued 
interconnection customer, whether in a current cluster study or with an 
executed facilities study agreement (but not an interconnection 
customer with an executed LGIA or that has requested an LGIA to be 
filed unexecuted with the Commission), that is facing regulatory 
limitations must also submit the applicable deposit and information 
regarding the specific limitation within 60 days after the Commission-
approved effective date of the transmission provider's compliance 
filing. An interconnection customer that withdraws within the 60-day 
period instead of submitting the applicable deposit and information 
will not be subject to Order No. 2023 withdrawal penalties.
    77. We agree with EEI that transmission providers need only re-file 
and seek approval for previously approved variations where those 
provisions are modified by Order No. 2023. As the Commission explained 
in Order No. 2023, the Commission adopted requirements that are part of 
the pro forma LGIP, pro forma LGIA, pro forma SGIP, and pro forma SGIA 
and the Commission therefore only addressed the interaction of the 
requirements adopted with existing requirements that are part of the 
pro forma process and not variations thereto.\140\ Transmission 
providers may seek variations from Order No. 2023's requirements on 
compliance provided the reason for the variation is sufficiently 
justified.\141\ Transmission providers may also continue to propose 
interconnection process enhancements beyond Order No. 2023 through a 
separate filing under FPA section 205.
---------------------------------------------------------------------------

    \140\ Order No. 2023, 184 FERC ] 61,054 at P 1530.
    \141\ Id. P 1767.
---------------------------------------------------------------------------

    78. We reject requests to presume that any transmission provider's 
tariff meets the requirements of Order No. 2023.\142\ As explained 
above, while the majority of reforms adopted herein are based on 
individual and incremental improvements that one or more regions have 
already implemented, no transmission provider has yet to adopt the 
entirety of Order No. 2023's broad suite of reforms.\143\ Thus, we are 
unpersuaded by PJM's arguments on rehearing that ongoing, recently 
approved interconnection queue reform packages presumably already 
comply with Order No. 2023. Applying a presumption to transmission 
providers who recently adopted some similar reforms, but not all the 
reforms contained herein, will only result in incomplete change that 
fails to fulfill or further delays the comprehensive reform required by 
Order No. 2023. Additionally, because the Commission continues to find 
that the record supports a generic rulemaking,\144\ the Commission 
reiterates that it did not need to make a finding specific to each 
transmission provider's tariff to require compliance with Order No. 
2023.\145\ Therefore, we also remain unpersuaded by Dominion's 
arguments on rehearing to defer the tariff modifications of, or to not 
require compliance filings from, transmission providers that have 
already transitioned or are in the process of transitioning to a 
cluster study process or to defer those entities' obligations to modify 
their tariffs.
---------------------------------------------------------------------------

    \142\ Id. P 1765.
    \143\ Id. P 59.
    \144\ Order No. 2023, 184 FERC ] 61,054 at P 1766; supra section 
II.A.3.
    \145\ See Order No. 2023, 184 FERC ] 61,054 at P 1766 (citing 
TAPS, 225 F.3d at 687-88).
---------------------------------------------------------------------------

    79. In response to requests for clarification regarding how the 
Commission will review the compliance filings of entities that already 
adopted reforms, we continue to find, consistent with the Commission's 
statements in Order No. 2023, that transmission providers may explain 
specific circumstances on compliance and justify why any deviations 
from the pro forma LGIP, pro forma LGIA, pro forma SGIP, and pro forma 
SGIA are either consistent with or superior to the reforms adopted in 
Order No. 2023 for non-RTO transmission providers or merit an 
independent entity variation for RTOs/ISOs.\146\ An item-by-item 
justification must be offered for each variation from the pro forma 
provisions modified in Order No. 2023; general statements alone are 
insufficient under the consistent with or superior to or the 
independent entity variation standard. Region-specific concerns like 
those raised by PJM and Dominion are appropriately addressed on 
compliance where the Commission will review the compliance filings on a 
case-by-case basis.
---------------------------------------------------------------------------

    \146\ Id. PP 1764-1765.
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C. Reforms To Implement a First-Ready, First-Served Cluster Study 
Process

1. Public Interconnection Information
a. Order No. 2023 Requirements
    80. In Order No. 2023, the Commission adopted section 6.1 (Publicly 
Posted Interconnection Information) of the pro forma LGIP to require 
transmission providers to maintain and make publicly available an 
interactive visual representation of available interconnection capacity 
(commonly known as a ``heatmap'') as well as a table of relevant 
interconnection metrics that is produced in response to user-specified 
input about their prospective generating facility.\147\ The table will 
allow prospective interconnection customers to see certain estimates of 
a potential generating facility's effect on the transmission provider's 
transmission system. Specifically, the Commission required transmission 
providers to post on their public website a heatmap of estimated 
incremental injection capacity (in MW) available at each point of 
interconnection to the whole transmission provider's footprint under N-
1 conditions, as well as provide a table of results in response to a 
specific user's input showing the estimated impact of the addition of 
the proposed project (based on the user-specified MW amount, voltage 
level, and point of interconnection) for each monitored facility 
impacted by the proposed project on: (1) the distribution factor; (2) 
the MW impact (based on the proposed project size and the distribution 
factor); (3) the percentage impact on the monitored facility (based on 
the MW values of the proposed project and the monitored facility 
rating); (4) the percentage of power flow on the monitored facility 
before the proposed project; and (5) the percentage power flow on the 
monitored facility after the injection of the proposed project. The 
Commission required that heatmaps be calculated under N-1 conditions 
and studied based on the power flow model of the transmission system 
used in the most recent cluster study or restudy, and with the transfer 
simulated from each point of interconnection to the whole transmission 
provider's footprint (to approximate NRIS), and with the incremental 
capacity at each point of interconnection decremented by the existing 
and queued generation at that location (based on the existing or 
requested interconnection service limit of such generation). The 
Commission required transmission providers to

[[Page 27019]]

update their heatmaps within 30 calendars days after the completion of 
each cluster study and cluster restudy. Further, the Commission 
clarified that transmission providers are not required to make their 
heatmaps available until after their transition period.\148\
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    \147\ Id. P 135.
    \148\ Id. P 141.
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b. Requests for Rehearing and Clarification
    81. Clean Energy Associations ask the Commission to clarify that 
transmission providers may use ERIS or NRIS assumptions for their 
heatmaps, as appropriate for their particular region.\149\ Clean Energy 
Associations argue that the requirement to use only NRIS assumptions 
fails to account for regional differences and could reduce the value of 
providing a heatmap. For example, Clean Energy Associations assert that 
in SPP and MISO, ERIS is the primary driver of determining network 
upgrades for new generation. If the Commission declines to grant 
clarification, Clean Energy Associations seek rehearing of the 
requirement to use NRIS assumptions for heatmaps.
---------------------------------------------------------------------------

    \149\ Clean Energy Associations Rehearing Request at 48-49.
---------------------------------------------------------------------------

    82. Non-RTO Providers request rehearing and modification of Order 
No. 2023's requirement that non-RTO/ISO transmission providers develop 
interactive heatmap websites.\150\ Non-RTO Providers assert that the 
mandate is arbitrary and capricious and contrary to reasoned decision-
making. Non-RTO Providers state that the Commission did not perform an 
adequate cost-benefit analysis to weigh the high cost and 
administrative burden on non-RTO transmission providers against the 
``limited and speculative benefits'' of the heatmaps for non-RTO/ISO 
interconnection customers.\151\ Non-RTO Providers assert that the 
mandate will require the 37 non-RTO/ISO regions \152\ to each develop 
separate heatmap websites. Non-RTO Providers estimate that the 
cumulative upfront cost for these 37 heatmap websites is $7.4 million, 
and that the cumulative annual maintenance cost for the 37 heatmap 
websites is $666,000. Non-RTO Providers assert that the heatmaps will 
require regular attention from interconnection engineers who will 
otherwise be focused on transitioning to cluster studies. Non-RTO 
Providers contend that the heatmap requirement amounts to a penalty on 
non-RTO/ISO transmission providers, who cannot socialize the costs as 
broadly as RTOs/ISOs can.\153\ Non-RTO Providers request that the 
Commission reverse the mandate on rehearing and (1) issue a modified 
version of section 6.1 of the pro forma LGIP for non-RTO regions that 
allows static public information postings of interconnection capacity 
based on cluster study results and (2) adopt a voluntary approach for 
the potential development and maintenance of interactive heatmaps in 
non-RTO regions.
---------------------------------------------------------------------------

    \150\ Non-RTO Providers Rehearing Request at 1-2.
    \151\ Id. at 3.
    \152\ Non-RTO Providers arrive at this number by subtracting the 
RTOs/ISOs from the 44 transmission providers estimated to be 
required to comply with Order No. 2023. Id. n.6.
    \153\ Id. at 4.
---------------------------------------------------------------------------

    83. Non-RTO Providers note that the heatmap concept is a novel 
concept and that transmission providers have no special expertise in 
website development.\154\ Non-RTO Providers contend that the legal 
question on rehearing is whether the benefits of a proposed reform can 
reasonably be said to outweigh the costs and assert that the Commission 
did not provide sufficient legal foundation under FPA section 206 to 
justify the mandate. Non-RTO Providers aver that the Commission did not 
acknowledge that interactive websites make financial sense only when 
done at scale. Therefore, Non-RTO Providers agree that the costs of the 
requirement are justified for RTO/ISO regions, which would require 
seven websites to serve approximately two-thirds of the nation's 
transmission system, but not for non-RTO/ISO regions, which would have 
to develop 37 websites to serve the remaining one-third of the 
transmission system. Non-RTO Providers explain that the Commission 
appears to prohibit non-RTO/ISO regions from developing joint, regional 
heatmaps to reduce the number of websites needed, which they claim 
demonstrates that the cost burden and administrative burden on 
engineering staff to non-RTO/ISO regions was not adequately 
considered.\155\
---------------------------------------------------------------------------

    \154\ Id. at 4-5.
    \155\ Id. at 5-6.
---------------------------------------------------------------------------

    84. Non-RTO Providers contend that the Commission wrongly relies on 
Clean Energy Associations' proposition that the heatmaps will be 
automated to conclude that engineering resources will not be strained 
by the heatmap requirement.\156\ Non-RTO Providers state that such 
updates will require one or two full-time employees to prepare data for 
the first three weeks of a given 30-day update period and send the 
updated data to the vendor during the last week. Non-RTO Providers 
contend that the N-1 conditions reflected by the heatmap will offer no 
practical value to prospective interconnection customers but will 
result in five times as many engineering staff in non-RTOs/ISOs making 
heatmap updates compared to those in RTOs/ISOs.\157\ Non-RTO Providers 
contend that the Commission did not adequately address these 
discrepancies in arguing that non-RTOs/ISOs have the technical capacity 
to create heatmaps.
---------------------------------------------------------------------------

    \156\ Id. at 6 (citing Order No. 2023, 184 FERC ] 61,054 at P 
89).
    \157\ Id. at 6-7.
---------------------------------------------------------------------------

    85. Further, Non-RTO Providers argue that the record does not 
demonstrate that the incremental rate increase to non-RTO/ISO regions 
from the heatmaps will be justified by meaningful overall queue 
efficiency improvements for non-RTO/ISO customers in the long run.\158\ 
For example, Non-RTO Providers contend that the Commission failed to 
consider that heatmaps could increase speculative interconnection 
requests if many interconnection customers seek to interconnect at the 
same uncongested points reflected by the heatmap. For the above 
reasons, Non-RTO Providers argue that the connection between improving 
queue efficiency and benefits to transmission customers is too tenuous 
to support a FPA section 206 finding that the heatmap mandate is just 
and reasonable for non-RTO transmission providers.\159\
---------------------------------------------------------------------------

    \158\ Id. at 8.
    \159\ Id. at 9.
---------------------------------------------------------------------------

    86. Non-RTO Providers claim that the Commission erred by failing to 
consider a non-interactive website alternative for the public 
information posting mandate in non-RTO regions.\160\ Non-RTO Providers 
state that the Commission never explains why such information needs to 
be provided in an interactive heatmap format, rather than in static 
public information postings regarding system conditions after each 
cluster study or restudy.
---------------------------------------------------------------------------

    \160\ Id.
---------------------------------------------------------------------------

    87. In the alternative to granting rehearing, Non-RTO Providers 
propose that the Commission revise section 6.1 of the pro forma LGIP to 
allow static data postings and adopt a voluntary funding approach for 
heatmap development in non-RTO Regions.\161\ In particular, Non-RTO 
Providers state that they are not opposed to providing increased public 
access to base case data after cluster studies have been performed that 
shows the estimated incremental injection capacity (in megawatts) 
available at each bus in the transmission provider's footprint under N-
1 conditions in table format. Non-RTO Providers explain that data in 
this format could still be uniform and

[[Page 27020]]

standardized to the Commission's specifications.\162\ Non-RTO Providers 
state that with the voluntary funding approach, website developers 
aligned with any of the relevant stakeholders, including transmission 
providers and prospective interconnection customers and even the 
Commission itself, would be free to develop their own voluntary 
interactive heatmaps based on this publicly available data.
---------------------------------------------------------------------------

    \161\ Id. at 10.
    \162\ Id. at 11.
---------------------------------------------------------------------------

    88. NV Energy requests clarification on (1) whether the heatmap 
must include proposed network upgrades with capacity amounts to reflect 
the available transfer capacity or only the existing facilities and (2) 
when a heatmap must be made available and posted to OASIS by 
transmission providers that do not conduct a new transition 
period.\163\ NV Energy asserts that, presently, the heatmap will 
provide limited value and will be consistently red \164\ because 
interconnection requests greatly exceed the available capacity or 
load.\165\ NV Energy asks if the heatmap requirement for transmission 
providers already conducting cluster studies could be implemented at 
the same time as study penalties (after the third cluster study cycle/
three years), which would allow transmission providers to issue 
requests for proposals for the necessary heatmap software for 
implementation and would allow suspended projects to withdraw as well 
as remove from the queue those that fail to (1) submit complete 
applications, (2) meet various deadlines, and (3) reach commercial 
readiness.
---------------------------------------------------------------------------

    \163\ NV Energy Rehearing Request at 4.
    \164\ An ``all red'' heatmap would indicate no available 
interconnection capacity. See Order No. 2023, 184 FERC ] 61,054 at P 
157.
    \165\ NV Energy Rehearing Request at 4.
---------------------------------------------------------------------------

    89. PacifiCorp likewise seeks clarification on when transmission 
providers will be required to submit heatmaps for those transmission 
providers that do not conduct a transition cluster study process 
because the Commission is not requiring transmission providers to 
submit heatmaps until after the transition period ends.\166\
---------------------------------------------------------------------------

    \166\ PacifiCorp Rehearing Request at 22-23 (citing Order No. 
2023, 184 FERC ] 61,054 at P 141).
---------------------------------------------------------------------------

    90. Public Interest Organizations assert that the Commission erred 
by not providing an adequate method for prospective interconnection 
customers to obtain information about potential interconnection costs 
at a specific location prior to submitting an interconnection request, 
and that the limited information publicly available to interconnection 
customers will lead to unjust, unreasonable, unduly discriminatory, and 
preferential rates.\167\ Public Interest Organizations also note that 
the level of cost uncertainty for different interconnection customers 
is not balanced because transmission owner affiliates, particularly in 
non-RTO/ISO regions, have greater access to interconnection cost 
information relative to independent power producers. Public Interest 
Organizations contend that the Commission's decision to not adopt the 
proposed informational studies and optional solicitation studies make 
Order No. 2023's adopted reforms insufficient to remedy its finding 
that the pro forma interconnection procedures ``fail[ ] to contain a 
process by which an interconnection customer can obtain information 
about potential interconnection costs at a specific location or point 
of interconnection prior to submitting an interconnection request.'' 
\168\ Public Interest Organizations explain that both the informational 
studies and optional solicitation studies were specifically intended to 
provide additional cost information to prospective interconnection 
customers, while the public access information requirement was intended 
to provide high-level information to assist interconnection customers 
with comparing multiple points of interconnection and estimate 
congestion.\169\
---------------------------------------------------------------------------

    \167\ Public Interest Organizations Rehearing Request at 7.
    \168\ Id. at 8 (citing Order No. 2023, 184 FERC ] 61,054 at PP 
46, 152).
    \169\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 68).
---------------------------------------------------------------------------

    91. Public Interest Organizations state that many parties suggested 
that the Commission add more data to the heatmap to provide information 
for interconnection customers to readily identify network upgrades, 
which would help them estimate the costs to interconnect their project 
before they join the interconnection queue.\170\ Public Interest 
Organizations note, for example, that NextEra suggested including 
information on the circuit and ratings of equipment, and Public 
Interest Organizations argued that the heatmaps should include 
information on the number of megawatts that could be interconnected 
without substantial costs, among other suggestions. Public Interest 
Organizations argue that, without such additional data, interconnection 
customers continue to bear the burden of determining potential costs, 
and that not all interconnection customers possess the resources to use 
software or hire consultants to extract meaningful data from the 
heatmaps. Public Interest Organizations contend that the heatmap 
requirement ultimately falls short of providing a reasonable method for 
interconnection customers to predict potential network upgrade costs 
prior to entering the queue, leading interconnection customers to make 
the ``rational'' decision to submit multiple interconnection requests 
to obtain information, which contributes to study delays and 
withdrawals. For these reasons, Public Interest Organizations request 
the Commission revisit the record to evaluate and adopt requirements 
that transmission providers must also make available the additional 
data that will allow all customers to estimate the potential network 
upgrade costs using reasonable efforts.
---------------------------------------------------------------------------

    \170\ Id. at 9-10.
---------------------------------------------------------------------------

    92. Public Interest Organizations further assert that the 
Commission's decision not to require more information be made publicly 
available to potential interconnection customers is arbitrary and 
capricious, contrary to the weight of the comments and record, and not 
based on substantial evidence.\171\ Public Interest Organizations argue 
that the Commission's finding that adding any additional data 
requirements to assist interconnection customers is outweighed by the 
potential burden to transmission providers failed to consider 
countervailing evidence of the benefits of additional data. Public 
Interest Organizations assert that the benefits of providing cost 
information prior to interconnection customers submitting an 
interconnection request is clear: fewer speculative interconnection 
requests and therefore less backlogged queues. However, Public Interest 
Organizations contend that MISO's heatmap demonstrates that a heatmap 
alone is not enough. Public Interest Organizations also argue that the 
marginal burden on transmission providers to provide additional heatmap 
data is minimal as they can take advantage of automation.
---------------------------------------------------------------------------

    \171\ Id. at 10-12.
---------------------------------------------------------------------------

    93. PJM seeks rehearing of Order No. 2023's blanket requirement to 
update the heatmap 30 calendar days after completion of each cluster 
study because PJM states that it is unreasonable for such a large, 
multi-state RTO like PJM with hundreds of expected interconnection 
requests in each cluster.\172\ PJM states that publishing study results 
to its interconnection screening tool, queue scope, requires detailed, 
precise analysis using the latest inputs available at the time and 
would hold PJM to an unrealistically strict and expedited

[[Page 27021]]

schedule of updating data, tools, simulations, and results, and the 
fact that such publishing would be necessary several times a year is 
burdensome and adds to the scope of study work required, taking 
resources away from other processing efforts. PJM instead anticipates 
annually published studies. PJM also states that ``the models'' are 
already made available to interconnection customers via a Critical 
Energy Infrastructure Information (CEII) request and can provide 
information about points of interconnection.
---------------------------------------------------------------------------

    \172\ PJM Rehearing Request at 23-24.
---------------------------------------------------------------------------

    94. PJM requests rehearing of Order No. 2023's clarification in P 
162, which it interprets as stating that transmission providers must 
absorb heatmap costs but are not barred from seeking recovery of them 
through their transmission rates (and paid by interconnection 
customers).\173\ PJM states that interconnection customers, rather than 
transmission providers or transmission customers, benefit from heatmap 
posting, so there is no good reason that transmission providers must 
always charge the costs of maintaining and posting heatmaps to 
transmission service customers rather than considering other structures 
such as fees for prospective developers not yet in the queue. PJM 
states that this rule departs from the Commission's and judicial cost-
causation principles, requiring that costs should be paid by those who 
benefit from their incurrence,\174\ and it does so (by assigning 
heatmap costs to transmission providers or transmission customers) 
without explanation, presents free-ridership issues, and would be 
arbitrary and capricious.\175\ PJM asserts that not granting rehearing 
of this item would set a precedent that transmission providers must 
absorb or pass on to transmission customers costs that are caused by or 
that benefit interconnection customers only.
---------------------------------------------------------------------------

    \173\ Id. at 42-43.
    \174\ Id. at 43 (citing Transmission Plan. & Cost Allocation by 
Transmission Owning & Operating Pub. Utils., Order No. 1000-A, 77 FR 
32184 (May 31, 2012), 139 FERC ] 61,132 at P 578). PJM includes an 
excerpt from Commissioner Christie's concurrence to Order No. 2023, 
which states, ``Commission policy may dictate that interconnection 
queue efficiency benefits transmission customers; however, that 
should not result in the costs of a requirement that best benefits 
interconnection customers, and really prospective interconnection 
customers that may ultimately not seek to interconnect, being 
recovered from consumers through transmission rates carte blanche. 
The Commission simply cannot ask retail consumers to foot the bill 
for every single ``efficiency,'' especially where many of these 
``efficiencies'' largely benefit generation developers and then get 
folded into transmission rates and receive an ROE.'' Order No. 2023, 
concur op. (Comm'r Christie) at P 22.
    \175\ PJM Rehearing Request at 43-44 (citing Motor Vehicle 
Manufacturers, 463 U.S. at 57; Sw. Airlines Co. v. FERC, 926 F.3d 
851, 858 (D.C. Cir. 2019); Panhandle, 196 F.3d at 1275).
---------------------------------------------------------------------------

c. Determination
    95. We deny Clean Energy Associations' request for the Commission 
to clarify that transmission providers may use ERIS or NRIS assumptions 
for their public heatmaps. As the Commission explained in Order No. 
2023, generating facilities seeking NRIS are generally subject to more 
stringent study requirements.\176\ Therefore, requiring transmission 
providers to produce heatmap results that approximate NRIS assumptions 
will provide actionable information on the viability of a given 
proposed generating facility to both ERIS and NRIS customers. On the 
other hand, requiring heatmaps to approximate ERIS assumptions would 
not be helpful to NRIS customers. Even in regions where ERIS may be 
more commonly selected or lead to a greater number of network upgrades, 
we find that the use of stricter NRIS assumptions would more 
consistently alert prospective interconnection customers to the 
possibility of required network upgrades compared to ERIS assumptions. 
We therefore find that using NRIS assumptions as a baseline would 
prevent false negatives, in which the heatmap incorrectly indicates to 
prospective interconnection customers that their projects would not 
trigger network upgrades. This finding reasonably balances the 
resources required of transmission providers in making heatmaps 
available with the value of providing non-binding system impact 
information to all prospective interconnection customers ahead of 
entering the interconnection queue. We note, however, that Order No. 
2023 states that ``if transmission providers find value in providing 
additional or different information [than required by Order No. 2023], 
they may propose such variations on compliance.'' \177\ Therefore, if a 
transmission provider believes that it would be informative to 
interconnection customers, it may propose on compliance an option for 
heatmap users to view results using ERIS assumptions in addition to 
NRIS assumptions. As such, we reiterate that ``heatmaps must be 
calculated under N-1 conditions and studied based on the power flow 
model of the transmission system with the transfer simulated from each 
point of interconnection to the whole transmission provider's footprint 
(to approximate NRIS), and with the incremental capacity at each point 
of interconnection decremented by the existing and queued generation at 
that location (based on the existing or requested interconnection 
service limit of such generation).'' \178\ For the same reasons noted 
above, we are unpersuaded by the arguments raised in Clean Energy 
Associations' alternative request for rehearing.
---------------------------------------------------------------------------

    \176\ Order No. 2023, 184 FERC ] 61,054 at P 148.
    \177\ Id. P 156.
    \178\ Id. P 135.
---------------------------------------------------------------------------

    96. We are also unpersuaded by Non-RTO Providers' argument that the 
Commission failed to properly evaluate the costs and benefits of the 
heatmap requirement for non-RTO/ISO regions and that they cannot 
socialize the costs as broadly as RTOs/ISOs. First, without a 
comparison to estimated heatmap costs for RTO/ISO regions, Non-RTO 
Providers' cost estimates do not support its assertion that the cost of 
developing interactive heatmaps is more burdensome for non-RTO/ISO 
regions.\179\ While RTO/ISO regions do have larger customer bases from 
which to recover costs, their heatmaps will also reflect larger and 
potentially more complex power systems and need to accommodate a larger 
pool of users and, therefore, may cost more.
---------------------------------------------------------------------------

    \179\ See, e.g., Ill. Commerce Comm'n v. FERC, 721 F.3d 764, 775 
(7th Cir. 2013) (stating that not all benefits can be calculated in 
advance, and if FERC cannot quantify the benefits to a particular 
utility or utilities but ``has an articulable and plausible reason 
to believe that the benefits are at least roughly commensurate with 
those utilities' total electricity sales in [the] region,'' then the 
Commission can approve the pricing scheme on that basis) (internal 
citations omitted).
---------------------------------------------------------------------------

    97. We further disagree that the labor requirements Non-RTO 
Providers refer to will be overly burdensome relative to RTO/ISO 
regions. First, as the Commission clarified in Order No. 2023, 
transmission providers are not required to update their heatmaps on a 
rolling 30-day basis, but rather within 30 days of the completion of a 
cluster study or restudy.\180\ Thus, transmission providers will likely 
update their heatmaps at most two times per year, accounting for one 
cluster study and one cluster restudy.
---------------------------------------------------------------------------

    \180\ Order No. 2023, 184 FERC ] 61,054 at P 141.
---------------------------------------------------------------------------

    98. Second, to Non-RTO Providers' argument that annual heatmap 
maintenance would divert attention from interconnection engineers who 
would otherwise be focused on transitioning to cluster studies, we 
reiterate that transmission providers are not required to make heatmaps 
available until after their transition period, which will help ensure 
that transmission providers' implementation of this final rule, 
beginning with the transition period, has begun to reduce backlogged 
interconnection queues.

[[Page 27022]]

    99. Third, Non-RTO Providers' cost estimates are based on an 
extrapolation of one transmission provider's initial estimate, and Non-
RTO Providers do not describe any assumptions of this estimate beyond 
the assertion that, after each cluster study or restudy, it would take 
two full-time engineers several weeks to ``prepare the data'' before 
having a vendor update the heatmap.\181\ We are unpersuaded by this 
assertion because, as Order No. 2023 states, transmission providers 
must use the results of their most recent cluster study or restudy to 
update the heatmap.\182\ Therefore, to update their heatmaps, little 
additional analysis should be required beyond what transmission 
providers have already completed for their cluster studies and 
restudies. We recognize that engineering labor will likely be required 
during heatmap website development, either directly, in developing the 
software and processes, or in consultation with the firm developing the 
heatmap. However, we believe that it is feasible for transmission 
providers, or their heatmap developers, to develop their heatmap 
websites to accept their base case files as inputs for each update such 
that little to no modification of the base case files and data is 
necessary. To that point, and Non-RTO Providers' concern that 
transmission providers have no special expertise in website 
development, we note that Order No. 2023 does not require transmission 
providers themselves to develop the requisite software and processes, 
and they may contract with firms whose expertise includes website 
development and data management. Further, Order No. 2023 does not 
preclude transmission providers from proposing on compliance to develop 
joint, regional heatmaps.
---------------------------------------------------------------------------

    \181\ Non-RTO Providers Rehearing Request at 6.
    \182\ Order No. 2023, 184 FERC ] 61,054 at PP 139-140.
---------------------------------------------------------------------------

    100. Finally, we disagree that Non-RTO Providers' proposal to 
require that transmission providers post only static data and allow 
other entities to voluntarily develop heatmaps accomplishes the goals 
outlined in Order No. 2023. The purpose of the heatmap requirement is, 
in part, to provide comparable information to all interconnection 
customers, prior to entering the queue, regardless of the transmission 
provider. Non-RTO Providers' proposal would not ensure such 
comparability, but rather would favor interconnection customers that 
have more resources to devote towards modeling and favor some 
transmission providers' own proposed generation. Thus, interconnection 
customers that cannot afford to process the static data Non-RTO 
Providers propose to post would still need to submit speculative 
interconnection requests to obtain information. Further, the voluntary 
funding approach Non-RTO Providers propose would not ensure that non-
RTO/ISO regions have public interconnection information available and 
therefore would discriminate against interconnection customers seeking 
to interconnect outside of RTO/ISO regions.
    101. In response to NV Energy's request for clarification on 
whether heatmaps must include proposed network upgrades or only 
existing facilities, we reiterate that heatmaps must be based on the 
power flow model and base case assumptions used in the most recent 
cluster study or restudy. Therefore, heatmaps will incorporate in-
service network upgrades and network upgrades proposed for clusters 
higher queued than the most recent cluster study or restudy, as the 
base case and power flow models for any cluster will include proposed 
network upgrades for higher queued clusters.
    102. We agree with NV Energy and PacifiCorp on the need for 
clarification regarding when heatmaps must be made available by 
transmission providers that do not conduct transition processes. We 
therefore clarify that transmission providers that do not conduct 
transition periods do not need to make their heatmap available until 
360 calendar days after the Commission-approved effective date of the 
transmission provider's Order No. 2023 compliance filing. This timeline 
will give transmission providers that do not conduct transition periods 
the same amount of time as transitioning transmission providers (i.e., 
completion of the transitional cluster study within 360 days after the 
Commission-approved effective date of the compliance filing) to develop 
their heatmaps. Further, while we agree that heatmaps for some 
transmission providers may initially appear as all red, which indicates 
no available interconnection capacity, we reiterate our finding that an 
all red heatmap still ``sends a valuable signal to interconnection 
customers regarding where proposed generating facilities may be more or 
less economic to interconnect prior to entering the interconnection 
queue.'' \183\ We are therefore unpersuaded that such a result 
necessitates delaying the posting of the interactive heatmap.
---------------------------------------------------------------------------

    \183\ Id. P 157.
---------------------------------------------------------------------------

    103. We are also unpersuaded by NV Energy's request for 
clarification that transmission providers that do not conduct 
transition processes because they already use cluster studies should be 
required to post publicly available heatmaps only after three cluster 
cycles, similar to the transition to study delay penalties. This would 
delay transmission providers already using cluster studies, and their 
potential interconnection customers, from realizing the benefits of a 
heatmap (e.g., a reduced volume of speculative interconnection 
requests) for more than twice as long as those transmission providers 
who do conduct a transition process and their potential interconnection 
customers.
    104. We are unpersuaded by Public Interest Organizations' assertion 
that the Commission erred in not requiring transmission providers to 
include additional data in their heatmaps that would assist 
interconnection customers in estimating interconnection costs at 
potential points of interconnection. We further disagree with Public 
Interest Organizations' contention that the Commission did not fully 
consider the record on this matter in coming to its decision. On the 
contrary, as numerous commenters explain--and as the Commission stated 
in Order No. 2023--cost estimates produced prior to an interconnection 
customer entering the queue would be highly uncertain and subject to a 
high degree of change depending on the actions of other interconnection 
customers in the queue and study results, and therefore would provide 
little to no value to interconnection customers in terms of improving 
cost certainty.\184\ We believe this to be true regardless of whether 
the transmission provider or the interconnection customer produces 
those cost estimates. Further, Public Interest Organizations do not 
argue that cost estimates should be directly incorporated into 
transmission providers' heatmaps, but rather that transmission 
providers should include additional information in their heatmaps that 
would allow interconnection customers to ascertain information about 
potential costs at points of interconnection. At the same time, 
however, Public Interest Organizations argue that many interconnection 
customers lack the resources to develop cost estimates based on 
transmission providers' heatmaps. Thus, Public Interest Organizations' 
proposal would not only increase the burden on transmission providers 
but require interconnection

[[Page 27023]]

customers themselves to dedicate more resources towards developing cost 
estimates that are likely to change once they enter the queue. We 
therefore continue to find that the heatmap requirements set forth in 
Order No. 2023 strike a reasonable balance between the burden on 
transmission providers to develop and maintain heatmaps and the benefit 
of providing interconnection customers with sufficient information to 
identify viable points of interconnection, given that cost estimates 
produced prior to entering the queue would be unreliable. We note, 
however, that, consistent with the Commission's statements in Order No. 
2023, transmission providers may explain specific circumstances on 
compliance and justify why any deviations are either consistent with or 
superior to the pro forma LGIP or merit an independent entity variation 
in the context of RTOs/ISOs.\185\
---------------------------------------------------------------------------

    \184\ See id. P 138.
    \185\ Id. P 1764.
---------------------------------------------------------------------------

    105. We are unpersuaded by PJM's request to modify the requirement 
for transmission providers to update their heatmaps within 30 calendar 
days of completing a cluster study or restudy. We find PJM's argument 
regarding its queue scope tool to be inapposite. As the Commission 
explained in Order No. 2023, because the heatmap should use the results 
of the most recent cluster study or restudy, the heatmap requirement 
should require minimal additional analysis beyond the cluster study or 
restudy and should not necessitate detailed analysis.\186\ Transmission 
providers must simply make the data and assumptions used in the 
analyses they already completed available in a public, interactive 
form. Updating heatmaps within 30 calendar days of completion of a 
cluster study or restudy will also ensure that interconnection 
customers can use the heatmap during the customer engagement window to 
determine whether to proceed in the queue or withdraw. Finally, we 
disagree that interconnection customers' ability to request CEII 
achieves the same goal as the heatmap requirement. The heatmaps are 
intended to improve transparency and ease the burden of producing 
interconnection-related information for prospective interconnection 
customers. On the other hand, requests for CEII typically require an 
entity to submit certain identifying information and/or legal documents 
like non-disclosure agreements and require the transmission provider to 
review and verify such information, and weigh the need for the 
information against the potential harm of its release, before 
potentially granting access to a protected part of its website or OASIS 
portal.\187\ Reliance on such a process would impose an unnecessary 
burden on the prospective interconnection customer, the transmission 
provider, and other interested stakeholders because, as commenters 
explain, the information to be published in transmission providers' 
heatmaps does not raise CEII concerns.\188\
---------------------------------------------------------------------------

    \186\ Id. PP 139-140.
    \187\ PJM's CEII request process, for example, includes all 
these process components. See https://www.pjm.com/library/request-access.
    \188\ Order No. 2023, 184 FERC ] 61,054 at P 144.
---------------------------------------------------------------------------

    106. Further, we are unpersuaded by PJM's request to modify the 
finding in Order No. 2023 that transmission providers must bear the 
costs associated with their heatmaps or recover them through 
transmission rates to the extent they are recoverable consistent with 
Commission accounting and ratemaking policy. First, transmission 
providers already maintain interconnection information and other 
related information online for the purposes of transparency and 
facilitating participation amongst various stakeholders. Thus, we 
disagree with PJM's requested modification because transmission 
providers may recover the costs associated with heatmaps through 
transmission rates to the extent they are recoverable consistent with 
Commission accounting and ratemaking policy. Second, we disagree that 
interconnection customers are the sole or primary beneficiaries of the 
heatmap requirement, and that transmission providers themselves do not 
benefit from it. The heatmap requirement will reduce the number of 
speculative interconnection requests submitted to transmission 
providers by providing prospective interconnection customers with 
information to evaluate the viability of their potential 
interconnection requests, thus improving overall queue efficiency for 
the benefit of both transmission providers and prospective 
interconnection customers.
2. Cluster Study Process
a. Order No. 2023 Requirements
    107. In Order No. 2023, the Commission revised the pro forma LGIP 
and pro forma LGIA to require transmission providers to study 
interconnection requests in clusters.\189\ The Commission adopted 
numerous revisions to the pro forma LGIP and pro forma LGIA to 
effectuate this change. Specifically, and as relevant here, the 
Commission revised the definitions of material modification and stand 
alone network upgrades, and defined interconnection facilities study 
report.\190\ The Commission adopted section 3.1.2 (Submission) of the 
pro forma LGIP to require an interconnection customer to select a 
definitive point of interconnection when executing the cluster study 
agreement.\191\ The Commission adopted section 3.4.1 (Cluster Request 
Window), section 3.4.4 (Deficiencies in Interconnection Request), and 
section 3.4.5 (Customer Engagement Window) of the pro forma LGIP to 
provide a process for interconnection customers to submit a cluster 
study interconnection request.\192\ The Commission adopted section 
3.4.6 (Cluster Study Scoping Meetings) of the pro forma LGIP to require 
transmission providers to hold a scoping meeting with interconnection 
customers in the cluster.\193\ The Commission revised section 3.5.2 
(Requirement to Post Interconnection Study Metrics) of the pro forma 
LGIP to require transmission providers to post metrics for cluster 
study and restudy processing time.\194\
---------------------------------------------------------------------------

    \189\ Id. P 177.
    \190\ Id. P 192.
    \191\ Id. P 200.
    \192\ Id. P 223.
    \193\ Id. P 245.
    \194\ Id. P 259.
---------------------------------------------------------------------------

    108. The Commission adopted several revisions to the pro forma LGIP 
related to the process by which interconnection customers can make an 
interconnection request. The Commission revised section 4.1 (Queue 
Position) of the pro forma LGIP to provide that all interconnection 
requests within a cluster be considered equally queued and accordingly 
modified the definition of queue position.\195\ The Commission renamed 
and revised section 4.2 (General Study Process) of the pro forma LGIP 
to require transmission providers to perform interconnection studies 
within the cluster study process.\196\ The Commission revised section 
4.4 (Modifications) of the pro forma LGIP to provide that moving a 
point of interconnection shall result in the loss of a queue position 
if it is deemed a material modification by the transmission 
provider.\197\ The Commission also revised section 4.4.1 of the pro 
forma LGIP to incorporate the material modification process as part of 
the cluster study process.\198\ The Commission revised section 4.4.5 of 
the pro forma LGIP to require that interconnection customers receive an

[[Page 27024]]

extension of fewer than three cumulative years of the generating 
facility's commercial operation date without requiring them to request 
such an extension from the transmission provider.\199\
---------------------------------------------------------------------------

    \195\ Id. PP 277, 283.
    \196\ Id. P 278.
    \197\ Id. P 283.
    \198\ Id. P 285.
    \199\ Id. P 293.
---------------------------------------------------------------------------

    109. The Commission adopted revisions to the pro forma LGIP to 
implement several cluster study provisions. The Commission replaced 
section 6 (Interconnection Feasibility Study) of the pro forma LGIP 
with the new public interconnection information requirements as 
discussed in section II.C.1 of Order No. 2023.\200\ The Commission 
revised section 7 (Cluster Study) of the pro forma LGIP to set out the 
requirements and scope of the cluster study agreement, as well as the 
cluster study and restudy procedures.\201\ The Commission revised 
section 7.4 (Cluster Study Procedures) of the pro forma LGIP to permit 
transmission providers to use subgroups in their cluster study process 
if they so choose.\202\ The Commission revised section 8.5 (Restudy) of 
the pro forma LGIP to make clear that restudies can be triggered by the 
withdrawal or modification by a higher- or equally-queued 
interconnection requests.\203\ The Commission revised sections 11.1 
(Tender) and 11.3 (Execution and Filing) of the pro forma LGIP 
regarding the tendering, execution, and filing of the LGIA to 
incorporate the site control demonstrations and LGIA deposit 
requirements of Order No. 2023.\204\
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    \200\ Id. P 316.
    \201\ Id. P 317.
    \202\ Id. P 363.
    \203\ Id. P 335.
    \204\ Id. P 344.
---------------------------------------------------------------------------

b. Requests for Rehearing and Clarification
    110. Clean Energy Associations contend that the Commission acted 
arbitrarily and capriciously and failed to engage in reasoned decision-
making by changing the definition of stand alone network upgrades such 
that only ``single customers'' are eligible to build them.\205\ Clean 
Energy Associations claim that, when considered with the shift to a 
cluster study process and other stated goals for the sharing of network 
upgrade costs amongst interconnection customers, the revised definition 
effectively forecloses the opportunity for any future interconnection 
customer to exercise their discretion to build stand alone network 
upgrades or identified transmission provider interconnection 
facilities. Additionally, Clean Energy Associations aver that the 
revisions ignore the relationship of the option to build to the project 
sponsor, nearly eliminating the benefits of the option to build, such 
as controlling project schedules.\206\ Finally, Clean Energy 
Associations assert that the Commission's reasoning is based on a 
hypothetical situation which has not occurred since Order No. 845, or 
possibly ever.
---------------------------------------------------------------------------

    \205\ Clean Energy Associations Rehearing Request at 8-9.
    \206\ Id. at 9-10.
---------------------------------------------------------------------------

    111. Clean Energy Associations argue that the Commission's 
assertion that ``confusion and potentially lengthy negotiations and/or 
disputes'' would result without revisions to the definition of stand 
alone network upgrades is unsupported by the record of this 
proceeding.\207\ Clean Energy Associations note that transmission 
providers already using cluster studies have operated for years under 
the Order No. 845 definition, demonstrating that the revisions were not 
necessary. Clean Energy Associations explain that Order No. 2023 
neither cites previous instances of confusion or lengthy disputes 
regarding the construction of stand alone network upgrades, nor any 
other facts or evidence that would support a finding that the current 
definition is insufficient or inadequate. Clean Energy Associations 
also note that one transmission provider using cluster studies 
supported the concept of allowing stand alone network upgrades to be 
shared among interconnection customers.\208\
---------------------------------------------------------------------------

    \207\ Id. at 10 (citing Order No. 2023, 184 FERC ] 61,054 at P 
193).
    \208\ Id. at 11-12 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 185).
---------------------------------------------------------------------------

    112. Clean Energy Associations contend that this aspect of Order 
No. 2023 is arbitrary and capricious because the Commission fails to 
acknowledge or adequately explain departures from its precedent.\209\ 
Clean Energy Associations note that Order No. 845 explains that the 
option to build benefits the interconnection process by giving 
interconnection customers more control and certainty, and that 
interconnection customers are in the best position to determine if the 
option to build in their interest. However, Clean Energy Associations 
assert that the revised definition removes interconnection customers' 
ability to exercise their discretion regarding the option to build for 
the majority of network upgrades identified in a cluster study, and 
modifies the status quo by reducing the number of network upgrades that 
would qualify as stand alone network upgrades because the proportional 
impact method of cost allocation will reduce the likelihood of finding 
a single customer 100% responsible for a network upgrade.\210\ Clean 
Energy Associations contend that this renders the Order No. 845 policy 
moot and is inconsistent with the Commission's intent in Order No. 2023 
to maintain the status quo.
---------------------------------------------------------------------------

    \209\ Id. at 12-13.
    \210\ Id. at 13-14.
---------------------------------------------------------------------------

    113. Clean Energy Associations state that the Commission can 
redress this error on rehearing by (1) reversing its decision to revise 
the definition of stand alone network upgrade, and (2) requiring 
transmission providers to address, in their compliance filings and 
OATTs, the process through which interconnection customers with shared 
network upgrades that qualify as stand alone network upgrades can 
exercise their option to build.\211\ Alternatively, Clean Energy 
Associations suggest that the Commission require transmission providers 
to allow the interconnection customers amongst whom a stand alone 
network upgrade was shared to unanimously exercise the option to build 
and, then, to either select a third party to construct the upgrade or 
to determine responsibility for doing so amongst themselves. Clean 
Energy Associations assert that this would prevent the concern of 
disputes among interconnection customers within a cluster. Clean Energy 
Associations state that both of these options would be consistent with, 
and would preserve, the policy set forth in Order No. 845, while also 
addressing the Commission's concerns that disputes or confusion may 
arise and further delay the interconnection process, while striking an 
appropriate balance between the Commission's policy and efforts in 
Order No. 845 and Order No. 2023, honoring both efforts and further 
enhancing and benefiting the interconnection process.
---------------------------------------------------------------------------

    \211\ Id. at 14-15.
---------------------------------------------------------------------------

    114. Clean Energy Associations state that the Commission erred in 
finding that modifications to project size can only be made during the 
customer engagement window and that interconnection customers must 
select a single, definitive point of interconnection at that time.\212\ 
Clean Energy Associations assert that the record does not support the 
conclusion that the customer engagement window is sufficient for the 
interconnection customer to enter the cluster study with confidence in 
its project size and definitive point of interconnection and, thus, 
this timeline does not reflect an appropriate balance that will reduce 
the need for restudies and delays. Clean Energy Associations assert the

[[Page 27025]]

opposite--that the record indicates that failure to provide flexibility 
to interconnection customers to modify project size and point of 
interconnection after receipt of initial cluster study results will 
increase the likelihood of withdrawals and cascading restudies by not 
allowing interconnection customers to make beneficial adjustments 
earlier in the interconnection process that could be determinative in a 
project's decision to stay in the cluster or withdraw. Clean Energy 
Associations disagree with the Commission's conclusion that the 
extended 60 calendar day customer engagement window is sufficient to 
provide interconnection customers with ``time to consider information 
collected during this period of engagement with the transmission 
provider,'' \213\ which will allow customers to determine when to 
withdraw their interconnection requests and avoid penalties while 
improving queue efficiency due to fewer late-stage cluster study 
withdrawals. Clean Energy Associations assert that, prior to the 
cluster study, it is difficult for an interconnection customer to make 
any informed conclusion about expected costs of potential network 
upgrades and such costs' impact on project viability, which the 
interconnection customer must learn from the cluster study.
---------------------------------------------------------------------------

    \212\ Id. at 15-16.
    \213\ Id. at 17-18 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 233).
---------------------------------------------------------------------------

    115. The 60-day customer engagement window, Clean Energy 
Associations assert, only provides interconnection customers 46 
calendar days to evaluate publicly posted information and make any 
potential project modifications prior to entering the cluster study, 
and any such early-acquired information will be incomplete, lacking 
modeling data, new model sets, and other study assumptions such as 
confidential merit order dispatch lists used by transmission providers 
to set up power transfers from new generators, despite publicly posted 
information by transmission providers.\214\ Clean Energy Associations 
state that substantial information gained through the study process may 
necessitate a change in point of interconnection, making choosing a 
single point of interconnection implausible. They claim that not 
requiring transmission owners to attend scoping meetings further limits 
an interconnection customer's access to information. Clean Energy 
Associations assert that an interconnection customer will not have 
sufficient time and information to evaluate project viability during 
the customer engagement window or modify project size and location in 
response to pre-study information obtained during that window.
---------------------------------------------------------------------------

    \214\ Id. at 18-19.
---------------------------------------------------------------------------

    116. Clean Energy Associations assert that limiting post-initial 
cluster study entry modifications to the interconnection request to 
those the transmission provider deems not to be material ignores record 
evidence that this practice will not result in a more reliable, 
efficient, transparent, and timely interconnection process.\215\ Clean 
Energy Associations assert that allowing flexibility in project size 
reductions through the initial cluster study will allow for 
optimization of projects based on official study results, resulting in 
fewer withdrawals due to increased project viability and contribution 
to reliability through reduced impacts to the transmission provider's 
system, which it asserts will be less disruptive to the interconnection 
process than a full withdrawal. Clean Energy Associations state that, 
likewise, inability to change the point of interconnection or to submit 
an alternate point of interconnection could cause delays and can 
trigger the restudy of an entire cluster. Clean Energy Associations 
assert that the record demonstrates that interconnection customers lack 
sufficient time or information to optimize project characteristics 
prior to entering the initial cluster study, and that flexibility to 
make beneficial modifications after receipt of initial study results 
would reduce rather than increase uncertainty, restudy, and 
administrative burden.
---------------------------------------------------------------------------

    \215\ Id. at 19-20.
---------------------------------------------------------------------------

    117. Clean Energy Associations further state that the option to 
instead pursue a material modification exemption does not provide 
sufficient flexibility because: (1) it leaves this determination to the 
discretion of the transmission provider; and (2) it ignores that minor 
project modifications that could have slight impacts on other 
interconnection customers in the same cluster might nonetheless be far 
less disruptive than project withdrawal.\216\ Clean Energy Associations 
argue that the material modification review is often based on ``opaque 
assumptions'' available only to the transmission provider and may 
divert resources at a relatively more intense part of the study 
process.
---------------------------------------------------------------------------

    \216\ Id. at 21-22.
---------------------------------------------------------------------------

    118. Clean Energy Associations note that SPP, PJM, and MISO have 
adopted provisions allowing 50%-100% reduction allowance and minor 
point of interconnection changes, and also permit smaller size 
adjustments similar to that found in pro forma LGIP section 4.4.2 
through the initial cluster restudy, which Clean Energy Associations 
state belie the Commission's assertion that the timing for 
modifications in Order No. 2023 reflects a natural translation of the 
timing for modification in the existing serial study process to a 
cluster study process.\217\ Clean Energy Associations therefore request 
that the Commission grant rehearing and modify the language in revised 
pro forma LGIP section 4.4.1 to allow modifications to project size 
(specifically, up to a 60% size reduction) prior to entering the 
cluster restudy, and to allow minor modifications to project size 
(specifically, up to a 15% size reduction) after the receipt of a 
cluster restudy but prior to the start of the facilities study. Clean 
Energy Associations further request that the Commission grant rehearing 
and allow interconnection customers the option to present a primary and 
alternative definitive point of interconnection in an electrically 
proximate area, provided that the transmission provider and 
transmission owner verify the alternative as acceptable during the 
customer engagement window and prior to the scoping meeting.
---------------------------------------------------------------------------

    \217\ Id. at 22.
---------------------------------------------------------------------------

    119. IPP Coalition also asks the Commission to reconsider its 
requirement that customers identify a single point of interconnection 
and, instead, allow for an electrically proximate alternative point of 
interconnection that is verified as acceptable by the transmission 
provider during the cluster study customer engagement window and listed 
in the cluster study agreement.\218\ IPP Coalition asserts that 
electrically proximate point of interconnection locations can be 
effectively implemented within a study process without materially 
impacting a study process, and that this general standard should be 
applied consistently to a potential change, whether it is sought by an 
interconnection customer as part of the interconnection request or 
ultimately required on the basis of a public policy decision.
---------------------------------------------------------------------------

    \218\ IPP Coalition Rehearing Request at 7-8.
---------------------------------------------------------------------------

    120. [Oslash]rsted requests that the Commission clarify that, in 
circumstances where state or federal agency policy or regulation 
requires a change to the point of interconnection, projects should be 
restudied based upon the new regulatory or statutory requirements.\219\ 
Alternatively, [Oslash]rsted requests that the Commission clarify that, 
in such circumstances, the transmission provider, the state, or the

[[Page 27026]]

interconnection customer may request a waiver of applicable tariff and 
LGIA/LGIP provisions that might be affected in order to comply with the 
federal or state regulatory requirement.
---------------------------------------------------------------------------

    \219\ [Oslash]rsted Rehearing Request at 11.
---------------------------------------------------------------------------

    121. Clean Energy Associations state that the Commission should 
grant rehearing and amend Order No. 2023 to stipulate that, if an 
interconnection customer submits an interconnection request at least 15 
business days prior to the close of the cluster request window, and if 
failure by the transmission provider to issue a deficiency notice 
within five business days of receipt results in the interconnection 
customer having fewer than 10 business days to respond to the 
deficiency notice prior to the close of the customer request window, 
the interconnection customer shall still be granted a full 10 business 
days to respond prior to facing the consequences outlined in revised 
pro forma LGIP section 3.4.4.\220\ Clean Energy Associations state 
that, to ensure a full 10 business days to respond, an interconnection 
customer would have to submit its interconnection request more than 15 
business days before the close of the cluster request window to account 
for the five business day window for the transmission provider to issue 
a deficiency notice, and that even if an interconnection customer 
submitted its interconnection request more than 15 business days before 
the close of the cluster window, the interconnection customer may be 
left with fewer than 10 business days to provide a response in the 
event that the transmission provider failed to meet the five business 
day notification requirement. Clean Energy Associations state that, 
because of this oversight, an interconnection customer may, through no 
fault of its own, have as little as one day to respond to a deficiency 
notice. Clean Energy Associations argue that revised pro forma LGIP 
section 3.4.4 includes significant consequences for interconnection 
customers that fail to meet the 10 business-day deadline, but no 
consequences for transmission providers that fail to meet the five-
business day deficiency notice deadline. Clean Energy Associations 
argue that the Commission acted arbitrarily and capriciously and failed 
to engage in reasoned decision-making by failing to account for 
potential delay on the part of the transmission provider.
---------------------------------------------------------------------------

    \220\ Clean Energy Associations Rehearing Request at 25-26.
---------------------------------------------------------------------------

    122. Clean Energy Associations and [Oslash]rsted argue that the 
Commission acted arbitrarily and capriciously and failed to engage in 
reasoned decision-making when it declined to require transmission 
owners to attend scoping meetings.\221\ Clean Energy Associations and 
[Oslash]rsted state that requiring transmission owners to attend may 
help RTOs/ISOs address potential challenges sooner, avoiding penalties 
caused by transmission owner delays. Clean Energy Associations and 
[Oslash]rsted assert that the purpose of the customer engagement window 
is to provide interconnection customers with information to help them 
determine the viability of their proposed generating facilities earlier 
in the process, and without transmission owners in these meetings, 
interconnection customers are deprived of critical information 
necessary to determine the costs and commercial viability of their 
projects.\222\ [Oslash]rsted additionally states that transmission 
owners are fully responsible for design of network upgrades, including 
both substation and system network upgrades, as well as play an 
important role in informing point of interconnection decisions by 
providing information about the existing grid conditions and 
capabilities as well as information related to interconnection 
requirements.\223\ [Oslash]rsted therefore argues that the transmission 
owner is in the best position to give interconnection customers a sense 
of the work required to expand the transmission facilities to 
accommodate new interconnection customers, and that a failure to 
include transmission owners in these meetings deprives interconnection 
customers of critical information necessary to determine the costs and 
commercial viability of their projects. [Oslash]rsted asserts that not 
requiring transmission owners to attend the scoping meeting creates an 
additional burden on both the interconnection customer and the 
transmission owner because customer will need to schedule separate 
meetings with the transmission owners to get additional information.
---------------------------------------------------------------------------

    \221\ Id. at 26; [Oslash]rsted Rehearing Request at 3.
    \222\ Clean Energy Associations Rehearing Request at 27-28; 
[Oslash]rsted Rehearing Request at 3-4.
    \223\ [Oslash]rsted Rehearing Request at 4-5.
---------------------------------------------------------------------------

    123. EEI, NYISO, and NYTOs seek rehearing of Order No. 2023's 
elimination of the feasibility study.\224\ EEI argues that carrying out 
physical feasibility studies, which determine whether the project is 
``physically constructable'' to the point of interconnection, early in 
the interconnection process will allow for the early disqualification 
of infeasible interconnection requests, which will save resources.\225\ 
NYTOs contend that analyzing feasibility is especially needed in highly 
congested areas like New York City and Long Island, where geographic 
and environmental limitations often restrict the ability to 
interconnect new generation at certain locations, which cannot be 
reflected in a heatmap.\226\ NYISO and NYTOs note that, because 
physical feasibility issues are particularly important in New York, 
NYISO needs to address early in the interconnection study process which 
proposed projects will be eligible to make use of those limited points 
of interconnection.\227\ NYISO and NYTOs assert that the Commission's 
determination to eliminate the feasibility study and replace it with a 
heatmap to provide project developers with a rough indication of 
interconnection capacity before they submit their interconnection 
requests will not address critical physical feasibility issues.
---------------------------------------------------------------------------

    \224\ EEI Rehearing Request at 13-14; NYISO Rehearing Request at 
11; NYTOs Rehearing Request at 6; see also WIRES Rehearing Request 
at 12 (asking the Commission to clarify that feasibility studies can 
continue to be performed under the ``Independent Entity Regional 
Variation Standard'').
    \225\ EEI Rehearing Request at 13-14.
    \226\ NYTOs Rehearing Request at 8.
    \227\ Id. at 7; NYISO Rehearing Request at 11.
---------------------------------------------------------------------------

    124. EEI asks the Commission to clarify that provisional 
interconnection service requests will continue to be processed as 
received and outside the cluster study process.\228\ EEI states that 
the Commission may have inadvertently failed to include provisional 
service in its response to PacifiCorp's comments regarding processing 
interconnection requests (including provisional service requests) in 
Order No. 2023.
---------------------------------------------------------------------------

    \228\ EEI Rehearing Request at 14-15.
---------------------------------------------------------------------------

    125. EEI requests that the Commission clarify how the 150-day study 
deadline applies to cascading restudies.\229\ EEI states that a 
withdrawal has the potential to trigger the restudy of every subsequent 
cluster, which will have to be conducted in turn. EEI specifically asks 
the Commission to clarify that transmission providers have 150 days to 
complete the restudy from the initiation of the restudy, rather than 
from when the interconnection customers are informed that the restudy 
is needed. EEI argues that this clarification is necessary so that 
transmission providers have the full 150-day period for each restudy.
---------------------------------------------------------------------------

    \229\ Id. at 15-16.
---------------------------------------------------------------------------

    126. MISO asks the Commission to clarify that Order No. 2023's 
statements that decline to allow transmission providers the flexibility 
to set their own study deadlines were intended to respond to requests 
to allow transmission providers to establish deadlines for specific 
study clusters other than through deadlines fixed in

[[Page 27027]]

their tariffs, and were not intended to preempt transmission providers 
from proposing to maintain existing tariff-defined study deadlines that 
may differ from the pro forma LGIP's 150 day schedule.\230\ MISO 
explains that it uses a three-phase process that has a different length 
than the one phase process in the pro forma, and MISO's tariff includes 
fixed study deadlines for each phase that are not subject to 
discretionary adjustment.
---------------------------------------------------------------------------

    \230\ MISO Rehearing Request at 26.
---------------------------------------------------------------------------

    127. NYISO asserts that the one-size-fits-all, 150-calendar day 
cluster study timeframe is arbitrary and capricious, does not reflect 
reasoned decision-making, and is not based on substantial 
evidence.\231\ NYISO states that the timeframes for the cluster restudy 
and facilities studies are also arbitrary and capricious and deficient. 
NYISO asserts that the Commission did not establish a basis for the 
150-day timeframe, but rather stated that the timeframe for performing 
the stability analyses, power flow analyses, and short circuit analyses 
was based on the record without providing detail as to what in the 
record supports that conclusion. NYISO also claims the Commission cites 
to a limited number of parties, none of which it claims performs such 
studies, in support of the 150-day timeframe.
---------------------------------------------------------------------------

    \231\ NYISO Rehearing Request at 4-5.
---------------------------------------------------------------------------

    128. NYISO contends that the Commission has not considered the 
impact to the study timeline of any evaluations required to address 
applicable reliability requirements.\232\ NYISO explains that in New 
York, for example, the system impact study encompasses numerous steps 
critical to evaluating reliability impacts of proposed generating 
facilities, which must be performed to fully evaluate a proposed 
interconnection under all Applicable Reliability Requirements. NYISO 
notes that in New York, Applicable Reliability Requirements include 
Northeast Power Coordinating Council rules and New York State 
Reliability Council rules, which are often more stringent than NERC 
rules because of New York's unique transmission system complexities, 
including congestion around New York City and Long Island, and an 
influx of offshore wind generation.
---------------------------------------------------------------------------

    \232\ Id. at 6-7.
---------------------------------------------------------------------------

    129. NYISO contends that the Commission has also failed to consider 
how the size or complexity of the cluster could affect the study 
timeframe.\233\ NYISO explains that the system impact study timeframe 
is driven by the study scope (e.g., whether the study addresses 
physical feasibility), the number of impacted parties, the complexity 
of the project, and unique challenges at the project's point of 
interconnection. NYISO further explains that, for a system impact study 
to effectively evaluate a proposed interconnection, the transmission 
provider requires accurate modeling data from an interconnection 
customer, study cases built for the proposed project, and precise 
thermal, voltage, steady state, and short circuit analyses. NYISO 
explains that accomplishing this requires a potential several-month 
collaboration with transmission owners to: (1) build applicable study 
base cases and the associated auxiliary study files; (2) complete any 
short circuit base cases necessary to determine point of 
interconnection requirements; (3) build pre-and post-project steady-
state base cases that represent various system conditions (e.g., summer 
peak load, winter peak load, and spring light load conditions).\234\ 
NYISO further explains that it: (1) collaborates with applicable 
transmission owners and/or interconnection customers to determine 
upgrade solutions that constitute the least cost solution to mitigate 
reliability violations consistent with good utility practice and all 
applicable reliability requirements; (2) must sometimes iteratively 
redo the reliability analyses to ensure network upgrades can be 
reliably interconnected; and (3) must conduct stability analysis, 
transfer analysis, deliverability analysis, short circuit analysis, 
NPCC/NYSRC bulk power system transmission facility testing analysis, 
sub-synchronous torsional interaction screening analysis, and 
additional analyses. NYISO states that the study results must be 
summarized and shared with impacted parties and stakeholders and 
reviewed by the appropriate NYISO committees and subcommittees. NYISO 
avers that, if it had to comply with the 150-day timeline, it may 
likely be forced to eliminate this review and approval process.\235\
---------------------------------------------------------------------------

    \233\ Id. at 8.
    \234\ Id. at 9-10.
    \235\ Id. at 11.
---------------------------------------------------------------------------

    130. Additionally, NYISO asserts that cluster studies are unlikely 
to create the time savings expected by the Commission.\236\ NYISO 
disagrees with the Commission's statement that the transmission 
provider ``will be conducting only one interconnection study, or at 
most a small number of interconnection studies, at a time, allowing 
them to devote more resources to completing the studies in a timely 
manner'' because, NYISO argues, this statement does not accurately 
reflect the type and amount of work required for the cluster study that 
it proposes and the resources that will need to be committed to such 
study.\237\ NYISO explains that a large portion of cluster study work 
is spent identifying network upgrades at or near points of 
interconnection for individual projects or subsets of projects within 
the cluster which, as NYISO asserts, effectively requires transmission 
providers to perform individual studies within the broader cluster 
study and requiring resources similar to that of a serial study.\238\ 
NYISO contends that only a small portion of cluster study work involves 
assessing the impacts on the system of the cluster as a whole. NYISO 
adds that each additional project in the cluster adds to the total 
amount of work required because each project must be modeled.
---------------------------------------------------------------------------

    \236\ Id. at 12.
    \237\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 326).
    \238\ Id. at 13.
---------------------------------------------------------------------------

    131. Further, NYISO argues that efficiencies gained by 
transitioning to a cluster study may be offset by increased 
participation and resultant large clusters.\239\ NYISO contends that 
the more stringent study deposit, commercial readiness, and site 
control rules adopted in Order No. 2023 will not materially reduce the 
number of projects entering interconnection queues. NYISO notes that it 
and other RTOs/ISOs haves adopted similar rules without seeing a 
corresponding decrease in projects entering and progressing through 
their queues.\240\ NYISO states that, if the Commission does establish 
a firm deadline for cluster study completion, it should define a 
maximum number of projects in a cluster or allow for extending the 150-
day timeframe according to cluster size.
---------------------------------------------------------------------------

    \239\ Id. at 14.
    \240\ Id. (citing, for example, Midcontinent Independent System 
Operator Presentation, Generator Interconnection Queue Improvements, 
Planning Advisory Committee (July 19, 2023) (proposing increasing 
initial milestone payment from $4000/MW to $10,000/MW), at: https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20GI%20Queue%20Improvements%20Proposal629634.pdf).
---------------------------------------------------------------------------

    132. NYISO requests that the Commission allow RTOs/ISOs to propose 
alternative study deadlines as independent entity variations.\241\ 
NYISO argues that requiring a single, firm study timeframe for all 
transmission providers does not recognize that interconnection study 
process requirements, challenges, reliability criteria, and queue size 
will be different in each region. In the alternative, NYISO requests 
that the Commission grant clarification that

[[Page 27028]]

Order No. 2023 was not intended to prevent RTOs/ISOs from proposing 
region-specific study deadlines for some or all future studies in their 
individual Order No. 2023 compliance filings.
---------------------------------------------------------------------------

    \241\ Id. at 15-16.
---------------------------------------------------------------------------

    133. NYISO also asks the Commission to confirm that, during the 45-
day cluster request window, the interconnection customer is limited to 
one 10-business day opportunity (or shorter at the end of the request 
window) to cure a deficiency in its application.\242\ Further, NYISO 
asks the Commission to confirm that it did not intend to require the 
transmission provider to issue a second deficiency notice even if time 
allowed for such notice in the cluster request window and that, if the 
interconnection customer fails to fully cure its application within its 
single cure period, its application will be withdrawn. NYISO notes that 
section 3.4.4 of the pro forma LGIP provides that: ``At any time, if 
Transmission Provider finds that the technical data provided by 
Interconnection Customer is incomplete or contains errors, 
Interconnection Customer and Transmission Provider shall work 
expeditiously and in good faith to remedy such issues.'' NYISO argues 
that the Commission should clarify that this language is not intended 
to extend the time period by which an interconnection customer must 
address deficiencies for the transmission provider's acceptance of a 
valid, complete interconnection request, but instead is simply intended 
to permit the transmission provider and interconnection customer to 
address any minor issues that may be discovered later in the 
interconnection process, subject to applicable deadlines. NYISO 
proposes revisions to section 3.4.4 of the pro forma LGIP which it 
states would accomplish this clarification.
---------------------------------------------------------------------------

    \242\ Id. at 44-45.
---------------------------------------------------------------------------

    134. NYISO asks the Commission to confirm that the transmission 
provider may complete its determination that an interconnection request 
is valid into the customer engagement window, including assessing any 
updated information provided by the interconnection customer, within 
its permitted deficiency cure period in the cluster request 
window.\243\ NYISO also requests confirmation that the transmission 
provider is not required to permit interconnection customers to address 
any further deficiencies identified in the customer engagement window. 
Further, NYISO states the Commission should confirm that, if the 
transmission provider determines in the customer engagement window that 
an interconnection customer's updated interconnection request remains 
deficient and is not valid, the transmission provider may withdraw the 
project upon such determination. In particular, NYISO notes that 
Paragraph 234 of Order No. 2023 appears to reject withdrawals for 
interconnection requests that are not deemed valid until the close of 
the customer engagement window. NYISO argues that this statement is 
inconsistent with the Commission's requirements to not permit 
interconnection customers to cure deficiencies during the customer 
engagement window and to limit participation in the Scoping Meeting 
during that window to only customers ``whose valid Interconnection 
Requests were received in the Cluster Request Window.'' \244\
---------------------------------------------------------------------------

    \243\ Id. at 45.
    \244\ Id. (citing pro forma LGIP section 3.4.5).
---------------------------------------------------------------------------

    135. NYISO requests rehearing of the requirement that transmission 
providers post an anonymized list of the projects eligible to 
participate in the cluster study during the customer engagement 
window.\245\ NYISO argues that the requirement creates another 
administrative burden on the transmission provider for which the 
Commission has not provided a reasonable basis and could result in the 
unequal public disclosure of certain information to only a subset of 
developers. NYISO asserts that the Commission has not provided support 
for this anonymity requirement, aside from a general assertion that 
such requirement is appropriate ``to reduce opportunities for 
developers to gain competitive advantage over others before 
interconnection requests have been finalized and accepted by the 
transmission provider.'' \246\ NYISO further states that the Commission 
has not provided a description of any means by which publicly 
identifying the developers of projects with valid interconnection 
requests would provide the developer or other parties with a 
competitive advantage. NYISO also explains that its OATT requires 
transmission providers to publicly post queue information that includes 
certain identifying information about valid interconnection requests. 
NYISO argues that the proposed requirement would therefore require a 
further administrative step for NYISO to have to conceal certain 
information in its publicly posted queue, including the developer's 
name and/or the status of the project, as well as take additional steps 
to maintain the projects' anonymity, such as masking information in any 
other public communications.\247\ Further, NYISO notes that the group 
scoping meeting required during the customer engagement window will 
reveal many of the cluster participants, and that even if developer 
names are not provided during the meeting, many developers in a region 
are aware of the employees of other developers in that region. 
Therefore, NYISO argues that anonymity of developer names will not mask 
the identity of the underlying developers from other cluster 
participants but would simply give them an information advantage over 
other developers. Finally, NYISO explains that in many cases, such 
information would be public anyway, such as through a developer posting 
its projects on its website or participating in public request for 
proposals, permitting processes, Commission submissions, or other 
federal, state, or local proceedings.
---------------------------------------------------------------------------

    \245\ Id.
    \246\ Id. at 46 (citing Order No. 2023, 184 FERC ] 61,054 at P 
237).
    \247\ Id. at 46-47.
---------------------------------------------------------------------------

    136. NewSun argues that the 30-day timeline permitted following 
receipt of the cluster study report for interconnection customers to 
execute the facilities study agreement and provide deposits is 
arbitrary and capricious because it is commercially unreasonable, 
counterproductive to the Commission's goals of reducing withdrawals and 
restudies, fails to address record evidence, and inconsistent with the 
rationale provided in Order No. 2023.\248\ NewSun argues that the 30-
day timeline does not leave time for the proper review and discussion 
of the study information, especially where third party information is 
involved, or where the interconnection customer's understanding of the 
information (even assuming the study was without errors) is contingent 
upon study results meetings. NewSun explains that it takes time to, for 
example, read the report, formulate questions, set up meetings with 
consultants, run financial models, and engage with outside bankers and 
financiers.\249\ NewSun asserts that companies with ``near infinite 
resources can just play chicken with their balance sheets, many of whom 
can merely post a letter of credit (by paying points) to proceed, and/
or make the strategic decision to hold their noses and stay in, hope it 
works out, and just treat withdrawal penalties as a cost of doing 
business,'' while companies like NewSun have to arrange cash-backed

[[Page 27029]]

letter of credit facilities which takes longer than 30 days to 
arrange.\250\ NewSun states that forcing all interconnection customers, 
big and small, to make such huge decisions in short windows creates 
biases towards ``nose-holding behavior, fearful exits, and inability to 
thoughtfully consider outcomes--or changes--much less to collaborate 
and/or adapt to avoid delay-causing or costly upgrades.\251\
---------------------------------------------------------------------------

    \248\ NewSun Rehearing Request at 7-8.
    \249\ Id. at 8-9.
    \250\ Id. at 9.
    \251\ Id. at 10.
---------------------------------------------------------------------------

    137. NewSun requests rehearing of the requirement that, if any 
interconnection customer withdraws from the cluster after receiving the 
cluster study report and the transmission provider concludes that such 
withdrawal triggers a restudy, the transmission provider has 30 days 
from the cluster study report meeting (or cluster restudy report 
meeting, if applicable) to notify affected interconnection 
customers.\252\ NewSun states that notice of restudy will occur up to 
10 days after the interconnection customer is required to sign a 
facilities study agreement and make the associated deposit 10% of the 
estimated network upgrade costs. NewSun states that, because the time 
frames for notice of restudy and for execution of the facilities study 
agreement overlap, the interconnection customer almost certainly will 
not know if a restudy--which entails potentially significant additional 
delays and increases in interconnection costs--is required before it is 
required to commit to a facilities study and making deposits that in 
many cases will requiring financing of millions or even tens of 
millions of dollars in financial security. NewSun asserts that, even if 
the transmission provider somehow manages to give the interconnection 
customers notice of intent to conduct a cluster restudy and tolls the 
due date for the facilities study agreement and 10% network upgrade 
deposit within 30 days of furnishing the cluster study report, the 
interconnection customer will have only 20 days to increase the amount 
on deposit to 5% of its estimated network upgrade costs. NewSun notes 
that this decision point could require financing of millions of dollars 
and, even in cases where monies may have already been financed, if 
refunds are not received, they cannot be recycled or reused. NewSun 
seeks rehearing of these timing issues and requests that the Commission 
change the 30-calendar day timeline to 60 days, as well as make several 
other changes to multiple timelines in Order No. 2023.\253\
---------------------------------------------------------------------------

    \252\ Id. at 13 (citing pro forma LGIP section 7.5(3)-(4)).
    \253\ Id. at 22-24.
---------------------------------------------------------------------------

    138. PJM argues that the Commission erred in its apparent 
requirement that transmission providers determine whether a change in a 
project's point of interconnection is a material modification.\254\ PJM 
explains that it interprets Order No. 2023 to mean that transmission 
providers will need to evaluate every single request from 
interconnection customers for a change to their point of 
interconnection to determine whether it is a material modification. PJM 
asserts, however, that analyzing each request would consume already 
limited engineering time, and that most change requests come from 
developers seeking to optimize their projects mid-process instead of 
performing their due diligence in advance of entering the queue. PJM 
also implies that most changes to points of interconnection would 
result in a material modification. PJM asks the Commission to clarify 
that transmission providers need not evaluate every single request to 
change a point of interconnection to determine if it would be a 
material modification. PJM recommends instead that the Commission allow 
transmission providers to establish rules that (1) changes to a 
project's point of interconnection may be made at certain defined 
points in the cluster cycle, and (2) changes to points of 
interconnection outside those defined times would be presumed material 
modifications. PJM seeks rehearing on this issue if the Commission 
declines to provide its requested clarification.
---------------------------------------------------------------------------

    \254\ PJM Rehearing Request at 44-45.
---------------------------------------------------------------------------

    139. NYTOs seek clarification of Order No. 2023's elimination of 
queue priority and finding that all interconnection requests in a 
cluster should hold equal priority.\255\ NYTOs explain that there is at 
least one instance in which interconnection priority is necessary: if 
it is not physically possible to connect all interconnection requests 
at a single point of interconnection, but it is feasible to connect 
some of the requests, then prioritization based on request dates should 
be applied to determine which interconnection customers have priority 
to proceed. NYTOs explain that this scenario occurs when the number of 
interconnection requests exceeds the available points of 
interconnection at a substation, and the substation cannot be expanded 
due to physical space or environmental limitations. NYTOs explain that 
allowing for this prioritization is critical in highly congested areas 
like New York City and Long Island. NYTOs state that the Commission 
should clarify that providing interconnection queue priority in this 
situation is permissible, at least under the independent entity 
variation. If the clarification is not provided, NYTOs request 
rehearing on the grounds that in the absence of such priority, the 
Commission acted arbitrarily and capriciously by failing to consider 
all aspects of the problem.
---------------------------------------------------------------------------

    \255\ NYTOs Rehearing Request at 9-10.
---------------------------------------------------------------------------

    140. Several commenters request rehearing regarding reforms the 
Commission did not adopt in Order No. 2023. AEP argues that the 
Commission failed to adequately consider the need for, benefits of, and 
record support for enhanced generation retirement replacement processes 
and erred in deeming the generation retirement replacement process 
beyond the scope of this proceeding.\256\ AEP states that four parties 
commented on the importance of generator replacement programs and 
argues that, while the Commission may not be able to direct with 
specificity the generator replacement reforms required, it has 
sufficient evidence to provide guidance on the basic requirements for 
such programs.\257\ MISO asks the Commission to clarify that Order No. 
2023 does not require transmission providers with Commission-approved 
generator replacement processes to change, abandon, or re-justify these 
processes on compliance.\258\ Alternatively, if the Commission did 
intend to require transmission providers with existing generator 
replacement processes to re-justify those processes, MISO requests 
rehearing.\259\ AEP urges the Commission to include in the pro forma 
LGIP an option for transmission providers to process some 
interconnection requests outside the cluster study process where 
required for LSEs to meet reserve margin requirements.\260\ AEP argues 
that, if not included in the pro forma LGIP, AEP asks the Commission, 
in the alternative, to remain open to the future consideration of 
tariff revisions that allow for such outside-the-cluster reviews or 
fast-track processing.\261\
---------------------------------------------------------------------------

    \256\ AEP Rehearing Request at 6.
    \257\ Id. at 24.
    \258\ MISO Rehearing Request at 21-22.
    \259\ Id. at 23.
    \260\ AEP Rehearing Request at 24-25.
    \261\ Id. at 25-26.
---------------------------------------------------------------------------

c. Determination
    141. We agree with Clean Energy Associations that revisions to the 
definition of stand alone network

[[Page 27030]]

upgrades in the pro forma LGIP and pro forma LGIA and option to build 
section of the pro forma LGIA are necessary to maintain the pre-Order 
No. 2023 status quo opportunity for interconnection customers to 
exercise the option to build as part of the cluster study process. 
Accordingly, we set aside this aspect of Order No. 2023 and modify the 
definition of stand alone network upgrades in section 1 (Definitions) 
of the pro forma LGIP and pro forma LGIA as follows, with brackets 
indicating deletions:

    Stand Alone Network Upgrades shall mean Network Upgrades that 
are not part of an Affected System that an Interconnection Customer 
may construct without affecting day-to-day operations of the 
Transmission System during their construction [and the following 
conditions are met: (1) a Substation Network Upgrade must only be 
required for a single Interconnection Customer in the Cluster and no 
other Interconnection Customer in that Cluster is required to 
interconnect to the same Substation Network Upgrades, and (2) a 
System Network Upgrade must only be required for a single 
Interconnection Customer in the Cluster, as indicated under the 
Transmission Provider's Proportional Impact Method]. Both 
Transmission Provider and Interconnection Customer must agree as to 
what constitutes Stand Alone Network Upgrades and identify them in 
Appendix A to the Standard Large Generator Interconnection 
Agreement. If Transmission Provider and Interconnection Customer 
disagree about whether a particular Network Upgrade is a Stand Alone 
Network Upgrade, Transmission Provider must provide Interconnection 
Customer a written technical explanation outlining why Transmission 
Provider does not consider the Network Upgrade to be a Stand Alone 
Network Upgrade within 15 days of its determination.

    142. Accordingly, we also modify article 5.1.3 (Option to Build) of 
the pro forma LGIA as follows, with italicized language indicating 
additions:

    Individual or Multiple Interconnection Customers shall have the 
option to assume responsibility for the design, procurement and 
construction of Transmission Provider's Interconnection Facilities 
and Stand Alone Network Upgrades on the dates specified in Article 
5.1.2, if the requirements of this Article 5.1.3 are met. When 
multiple Interconnection Customers exercise this option, multiple 
Interconnection Customers may agree to exercise this option provided 
(1) all Transmission Provider's Interconnection Facilities and Stand 
Alone Network upgrades constructed under this option are only 
required for Interconnection Customers in a single Cluster and (2) 
all impacted Interconnection Customers execute and provide to 
Transmission Provider an agreement regarding responsibilities, and 
payment for, the construction of Transmission Provider's 
Interconnection Facilities and Stand Alone Network Upgrades planned 
to be built under this option. Transmission Provider and the 
individual Interconnection Customer or each of the multiple 
Interconnection Customers must agree as to what constitutes Stand 
Alone Network Upgrades and identify such Stand Alone Network 
Upgrades in Appendix A. Except for Stand Alone Network Upgrades, 
Interconnection Customer shall have no right to construct Network 
Upgrades under this option.

    143. We find that this revision to the definition of stand alone 
network upgrades and addition to the option to build section in the pro 
forma LGIA will allow interconnection customers to exercise the option 
to build whether the stand alone network upgrade is attributable to a 
single interconnection customer or a shared network upgrade shared by 
multiple interconnection customers. These revisions will also avoid 
potentially lengthy disputes between interconnection customers, which 
was the Commission's original concern in Order No. 2023, because, for 
interconnection customers with shared network upgrades that qualify as 
stand alone network upgrades, interconnection customers must mutually 
agree to such agreement outside the transmission provider's 
interconnection process and thus will not slow down that process.\262\ 
We clarify that, for such circumstances, we expect such a written 
agreement among the relevant interconnection customers to be reached 
among the interconnection customers on their own and outside of the 
transmission provider's interconnection process. Further, we clarify 
that, if no mutual agreement is reached among the interconnection 
customers, no interconnection customer will have the ability to 
exercise the option to build a stand alone network upgrade that is a 
shared network upgrade.
---------------------------------------------------------------------------

    \262\ Order No. 2023, 184 FERC ] 61,054 at P 193.
---------------------------------------------------------------------------

    144. We are unpersuaded by Clean Energy Associations' argument that 
the Commission should modify the allowed reductions in project size in 
pro forma LGIP sections 4.4.1 and 4.4.2. We find that implementing 
Clean Energy Associations' requested change under a cluster study 
process is likely to lead to delays in the interconnection study 
process. Therefore, we continue to rely on the transmission provider to 
assess such a change under pro forma LGIP section 4.4 (Modifications), 
where the transmission provider would be able to assess whether 
modifications to project size (e.g., up to a 60 percent reduction) 
would have a material impact on the cost or timing of any 
interconnection requests with an equal or later queue position.
    145. We disagree with Clean Energy Associations' argument that the 
customer engagement window is too short. We note that Order No. 2023 
required transmission providers to develop a heatmap of public 
interconnection information to provide interconnection customers with 
information prior to submitting an interconnection request, which 
should obviate the need for a longer engagement window. We further note 
that Order No. 2023 adopted readiness requirements to encourage 
interconnection customers to submit commercially viable interconnection 
requests, so interconnection customers should be relatively confident 
in the viability of their interconnection requests.\263\
---------------------------------------------------------------------------

    \263\ Id. P 691.
---------------------------------------------------------------------------

    146. We also are unpersuaded by Clean Energy Associations' request 
regarding circumstances in which the transmission provider fails to 
issue a deficiency notice within five business days. We find the 
requested revision unnecessary because a transmission provider taking 
longer than five business days to issue the deficiency notice would 
violate its tariff requirements to issue such a notice within five 
business days. We find that the requirement for interconnection 
customers to cure deficiencies before the close of the cluster request 
window is necessary to ensure the timely processing of the 
interconnection queue.
    147. We disagree with [Oslash]rsted's and Clean Energy 
Associations' requests to require transmission owners (when not the 
transmission provider) to attend scoping meetings. The pro forma LGIP 
contemplates that the transmission owner and transmission provider may 
be the same entity, except in the case of an RTO/ISO, in which case the 
transmission owner does not have operational control of the facilities 
and does not perform cluster studies. We note that transmission 
providers have incentive, particularly in light of the study delay 
penalties adopted in Order No. 2023, to facilitate interconnection 
customers' access to information they need in order to efficiently 
navigate the interconnection study process. Accordingly, we will not 
require transmission owners to attend scoping meetings where the 
transmission owner and transmission provider are separate entities. 
However, RTOs/ISOs may seek an independent entity variation and propose 
to require attendance of any entities they feel are necessary to 
provide critical information to interconnection customers.

[[Page 27031]]

    148. We disagree with requests that the Commission include a 
feasibility study as part of the interconnection process. The NOPR did 
not propose, and Order No. 2023 did not adopt, a feasibility study. We 
reiterate our findings in Order No. 2023 that the move from a serial 
interconnection process to the new cluster study process, coupled with 
the Commission's heatmap requirements, render the feasibility study 
redundant and an unnecessary burden on transmission provider resources.
    149. However, in response to requests for clarification that 
transmission providers can continue performing feasibility studies as 
an independent entity variation, we reiterate that transmission 
providers may explain specific circumstances on compliance and justify 
why any deviations are either consistent with or superior to the pro 
forma LGIP, pro forma LGIA, pro forma SGIP, and/or pro forma SGIA or 
merit an independent entity variation in the context of RTOs/ISOs.
    150. In response to EEI's request that the Commission clarify that 
provisional interconnection service requests continue to be processed 
as received, we clarify that Order No. 2023 did not modify the process 
for transmission providers to study provisional interconnection service 
requests.
    151. In response to EEI's request that the Commission clarify how 
the 150-day study deadline applies to restudies, we clarify that 
transmission providers have 150 days from the point that they inform 
interconnection customers of the restudy to complete each restudy, 
which must occur within 30 calendar days after the cluster study report 
meeting. We further clarify that, in the case of multiple restudies, we 
expect that the transmission provider will not definitively know 
whether to initiate a restudy of later-in-time clusters--and thus 
inform those interconnection customers that restudy is needed--until it 
has completed the initial restudy.
    152. In response to Clean Energy Associations and IPP Coalition, we 
continue to find, as the Commission did in Order No. 2023, that 
interconnection customers must select a definitive point of 
interconnection to be studied when executing the cluster study 
agreement. As the Commission explained in Order No. 2023, requiring 
interconnection customers to select one definitive point of 
interconnection when executing the cluster study agreement allows the 
interconnection customer to submit its interconnection request with a 
proposed point of interconnection, participate in the scoping meeting 
during the customer engagement window, and receive feedback on its 
proposed point of interconnection. We continue to believe that this 
strikes the right balance between allowing for flexibility and 
potential adjustments to the point of interconnection, based on 
discussion with the transmission provider and the transmission 
provider's detailed knowledge of its transmission system, and providing 
transmission providers with the information necessary to conduct the 
cluster study, thus reducing the potential for restudies that would be 
required if interconnection customers could change their points of 
interconnection later in the process.\264\
---------------------------------------------------------------------------

    \264\ Id. P 200.
---------------------------------------------------------------------------

    153. Similarly, we continue to believe that allowing multiple 
points of interconnection (whether they are ``electrically proximate'' 
or not) to be studied before the interconnection customer is required 
to select the definitive point of interconnection fails to take into 
account the fact that, if an interconnection customer changes the 
definitive point of interconnection after the cluster study, it may 
impact the study results of the other interconnection customers in the 
cluster and could lead to restudies and delays. It may be the case that 
an ``electrically proximate'' point of interconnection location can be 
effectively implemented within a study process without materially 
impacting a study process, and the current process allows the 
transmission provider to determine whether that change to the point of 
interconnection will be considered a material modification. We find 
this sufficient to address IPP Coalition's concern.
    154. We find [Oslash]rsted's request for clarification regarding 
circumstances where a regulatory limitation requires a change to the 
point of interconnection to be beyond the scope of Order No. 2023. The 
Commission did not adopt a process to change the point of 
interconnection when there is a regulatory limitation in Order No. 
2023. In such a circumstance, changes to the point of interconnection 
are addressed in section 4.4 of the pro forma LGIP, which governs 
modifications to an interconnection request.
    155. We disagree with PJM's request for clarification, and in the 
alternative, rehearing, that transmission providers need not evaluate 
whether every request to change an interconnection customer's point of 
interconnection is a material modification. First, while we agree that 
evaluating a change of point of interconnection will require 
engineering labor, we note that the availability of the public 
interactive heatmap will provide interconnection customers with far 
more transparency into the viability of the points of interconnection 
on the transmission provider's system prior to entering the 
interconnection queue. Thus, we expect the heatmap requirement to 
reduce the frequency with which interconnection customers request 
changes to their point of interconnection, as they will be better 
informed prior to submitting an interconnection request. The pro forma 
LGIP defines ``material modifications'' as ``those modifications that 
have a material impact on the cost or timing of any Interconnection 
Request with an equal or later Queue Position.'' \265\ Other than that 
provision, we leave the determination of what constitutes a material 
modification to the transmission providers' currently-effective 
processes for determining materiality. We are unpersuaded that (1) 
interconnection customers should be limited to one change to their 
point of interconnection and (2) that all changes to points of 
interconnection should be presumed to be material outside of certain 
points in the cluster study, because interconnection customers already 
have a relatively limited window in which to request changes to points 
of interconnection. Pro forma LGIP sections 3.1.2, 4.4, and 4.4.3 make 
clear that a request to change an interconnection customer's point of 
interconnection that comes after the return of the executed cluster 
study agreement shall constitute a material modification. We find these 
provisions to address PJM's concern regarding point of interconnection 
change requests that arise from ``project developers seeking to 
optimize their projects in mid-process'' \266\ by limiting most point 
of interconnection change requests to early in the study process and 
presuming those later in the study process to be material 
modifications. We also find that this approach strikes a reasonable 
balance between the use of engineering labor to advance feasible 
projects and reducing late-stage interconnection request modifications 
or withdrawals that could slow down the study process or lead to 
restudy. For these reasons, we find that the existing pro forma LGIP 
provisions referenced above adequately address PJM's concerns, and 
therefore no clarification or rehearing is necessary.
---------------------------------------------------------------------------

    \265\ Pro forma LGIP, section 1 (Definitions).
    \266\ PJM Rehearing Request at 44.
---------------------------------------------------------------------------

    156. As we explain in detail below in section D.1.c.ii, we are 
unpersuaded by NYISO's assertions that the 150-day cluster study 
deadline is unjust and unreasonable and that the Commission's

[[Page 27032]]

determination reflects arbitrary and capricious decision-making. As we 
note below, and consistent with the Commission's statements in Order 
No. 2023, transmission providers may explain specific circumstances on 
compliance and justify why any deviations are either consistent with or 
superior to the pro forma LGIP or merit an independent entity variation 
in the context of RTOs/ISOs. Accordingly, we grant MISO's and NYISO's 
requests for clarification that Order No. 2023 does not preempt 
transmission providers from proposing tariff-defined study deadlines 
that may differ from the pro forma LGIP's 150-day schedule. Rather, the 
statements MISO and NYISO refer to in Order No. 2023 decline to allow 
transmission providers flexibility to set ad-hoc deadlines beyond their 
standard, tariff-defined deadlines.
    157. NYISO requests that the Commission clarify that, during the 
45-day cluster request window, interconnection customers are limited to 
one 10-business day opportunity to cure a deficiency in their 
applications. We disagree with NYISO's interpretation of the applicable 
pro forma LGIP language and note that NYISO offers no argument to 
support this interpretation. We therefore clarify that interconnection 
customers must receive as many cure periods as needed to remedy a 
deficient interconnection request, as long as the end of such cure 
periods fall prior to the last day of the 45-day cluster request 
window. In other words, if an interconnection customer fails to fully 
cure its application within the first cure period, transmission 
providers must issue a second (or third) deficiency notice to an 
interconnection customer during the cluster request window, if time 
allows. We clarify that, if a transmission provider finds an 
interconnection request to be deficient less than 10 days before the 
close of the cluster request window, the interconnection customer may 
have until the close of the cluster request window to cure those 
deficiencies.\267\
---------------------------------------------------------------------------

    \267\ See Order No. 2023, 184 FERC ] 61,054 at P 226.
---------------------------------------------------------------------------

    158. NYISO seeks clarification regarding the sentence in section 
3.4.4 of the pro forma LGIP, which reads ``At any time, if Transmission 
Provider finds that the technical data provided by Interconnection 
Customer is incomplete or contains errors, Interconnection Customer and 
Transmission Provider shall work expeditiously and in good faith to 
remedy such issues.'' We grant NYISO's requested clarification that 
this language is not meant to extend the time period by which an 
interconnection customer must address deficiencies for the transmission 
provider's acceptance of a valid, complete interconnection request, but 
instead is simply intended to permit the transmission provider and 
interconnection customer to address any issues that may be discovered 
in the interconnection process, subject to applicable deadlines. In 
other words, the interconnection customer and transmission provider 
shall work expeditiously and in good faith to remedy any errors or 
incomplete information (that do not merit finding the interconnection 
request deficient) either during the cluster request window or later, 
i.e., during the customer engagement window. We decline to modify the 
pro forma LGIP as proposed by NYISO because it is unnecessary.
    159. NYISO seeks further clarification around when a transmission 
provider must complete its determination that an interconnection 
request is valid, the timeline in which an interconnection customer may 
cure deficiencies in its application, and treatment of interconnection 
requests deemed invalid during the customer engagement window. We 
clarify that the transmission provider must complete its determination 
that an interconnection request is valid by the close of the cluster 
request window, and therefore, interconnection customers must also cure 
deficient interconnection requests by the close of the cluster request 
window. In other words, only interconnection customers with valid 
interconnection requests, for which there is no need to cure 
deficiencies, proceed to the customer engagement window. As such, 
transmission providers may not continue determining whether 
interconnection requests are valid into the customer engagement window. 
This means that there is no need for transmission providers to deem 
interconnection requests withdrawn during the customer engagement 
window, as all invalid interconnection requests will already have been 
deemed withdrawn at the close of the cluster request window. We 
acknowledge NYISO's confusion regarding Paragraph 234 of Order No. 
2023, which rejects the notion of withdrawing invalid interconnection 
requests before the end of the customer engagement window. We set aside 
Paragraph 234 of Order No. 2023 and clarify that an interconnection 
customer's cure period ends at the close of the cluster request window 
at the latest. Nevertheless, interconnection customers with valid 
interconnection requests may work with the transmission provider, per 
section 3.4.4 of the pro forma LIGP and as explained above, to resolve 
minor errors or incompletions in technical data throughout the process, 
without the need for the transmission provider to deem an 
interconnection request deficient, invalid, or withdrawn. To improve 
clarity with regard to these issues, we modify section 3.4.5 of the pro 
forma LGIP as follows, with italics indicating additions and brackets 
indicating deletions:

    At the end of the Customer Engagement Window, all 
Interconnection Requests deemed valid that have executed a Cluster 
Study Agreement in the form of Appendix 2 to this LGIP shall be 
included in the Cluster Study. Any Interconnection Requests for 
which the Interconnection Customer has not executed a Cluster Study 
Agreement [not deemed valid at the close of the Customer Engagement 
Window] shall be deemed withdrawn (without the cure period provided 
under Section 3.7 of this LGIP) by Transmission Provider, the 
application fee shall be forfeited to the Transmission Provider, and 
the Transmission Provider shall return the study deposit and 
Commercial Readiness Deposit to Interconnection Customer. 
Immediately following the Customer Engagement Window, Transmission 
Provider shall initiate the Cluster Study described in Section 7 of 
this LGIP.

    160. We also modify pro forma LGIP section 3.4.4 to clarify that 
all items in pro forma LGIP section 3.4.2 must be received during the 
cluster request window. Taken together, these modifications make clear 
that the condition to proceed from the cluster request window to the 
customer engagement window is a valid interconnection request, and the 
condition to proceed from the customer engagement window is an executed 
cluster study agreement.
    161. We are unpersuaded by NYISO's arguments to modify the 
requirement for transmission providers to post an anonymized list of 
the projects eligible to participate in the cluster study during the 
customer engagement window. NYISO's position is that the requirement 
would complicate NYISO's own specific processes, rather than the 
processes of transmission providers more broadly. Consistent with the 
Commission's statements in Order No. 2023, transmission providers may 
explain specific circumstances on compliance and justify why any 
deviations are either consistent with or superior to the pro forma 
LGIP, pro forma LGIA, pro forma SGIP, and/or pro forma SGIA or merit an 
independent entity variation in the context of RTOs/ISOs.
    162. We disagree with NewSun's request to extend the 30-calendar 
day

[[Page 27033]]

period for an interconnection customer to execute the facilities study 
agreement. The NOPR did not propose, and Order No. 2023 did not adopt, 
any modifications to section 8.1 of the pro forma LGIP regarding the 
30-calendar day period. We believe that 30 calendar days is a 
sufficient amount of time to meet the requirements of pro forma LGIP 
section 8.1. We believe that 30-calendar day timeframe balances 
providing certainty about the timeline for the interconnection process 
and ensuring that studies progress in a timely manner while providing 
sufficient time for an interconnection customer to execute the 
facilities study agreement and submit the appropriate deposit. We note 
that, while the Commission implemented changes in Order No. 2023 such 
as the commercial readiness deposit in pro forma LGIP section 8.1 that 
increase certain burdens on interconnection customers with the goal of 
discouraging speculative requests, the Commission also implemented 
changes such as the new study delay penalty structure that reasonably 
incentivizes transmission providers to ensure the timely processing of 
interconnection requests.\268\
---------------------------------------------------------------------------

    \268\ See id. P 962. We also note that MISO and SPP currently 
only provide for 15 days to enter the facilities study phase (called 
Decision Point 2 in their respective generator interconnection 
procedures), and they each require a 20% commercial readiness 
deposit to enter the facilities study, whereas Order No. 2023 only 
requires a 10% deposit.
---------------------------------------------------------------------------

    163. However, we are persuaded by NewSun's arguments regarding the 
overlapping timelines for the notice of restudy and execution of the 
facilities study agreement (with associated deposits). Therefore, we 
modify sections 7.3 and 8.1 of the pro forma LGIP to remove the 
requirement for transmission providers to tender an interconnection 
facilities study agreement simultaneously with issuance of a cluster 
study (or restudy) report. We modify section 8.1 of the pro forma LGIP 
to clarify that transmission providers shall tender the interconnection 
facilities study agreement within 5 business days after the 
transmission provider notifies interconnection customers that no 
further restudies are required. This modification addresses NewSun's 
concern that an interconnection customer will not know if a restudy is 
required before the interconnection customer is required to commit to a 
facilities study and make the required deposits.
    164. Regarding NYTOs' request for clarification about equal queue 
priority, we continue to find that, under the pro forma LGIP, 
interconnection requests studied in the same cluster have equal queue 
priority.\269\ To address the situation that NYTOs describe, which 
appears specific to New York, we reiterate that NYISO, as an ISO, may 
explain its specific circumstances on compliance and justify why any 
deviations merit an independent entity variation.
---------------------------------------------------------------------------

    \269\ Id. P 858.
---------------------------------------------------------------------------

    165. We are not persuaded by arguments raised by several commenters 
regarding reforms not adopted in Order No. 2023. We are not persuaded 
by AEP's argument that the Commission should have included a generator 
replacement process in the pro forma LGIP. The NOPR did not propose 
such a process, and we continue to believe that the record in this 
proceeding is insufficient to require such a process generically. To 
AEP's alternative request for clarification, we clarify that nothing in 
Order No. 2023 limits transmission providers' ability to make an FPA 
section 205 filing, and we will continue to assess such filings on a 
case-by-case basis. In response to MISO, we clarify that Order No. 2023 
does not require transmission providers to change, eliminate, or re-
justify existing Commission-approved generator replacement processes on 
compliance. We reiterate our determination in Order No. 2023 that 
comments concerning generator replacement processes are beyond the 
scope of Order No. 2023.\270\
---------------------------------------------------------------------------

    \270\ See id. PP 1736, 1743.
---------------------------------------------------------------------------

    166. We also disagree with AEP's argument that the Commission 
should include an option for processing some interconnection requests 
outside the cluster study process. We continue to find, as the 
Commission did in Order No. 2023, that, based on the record before us, 
establishing a separate interconnection process outside the cluster 
study process could detract from transmission providers' efforts to 
efficiently process cluster studies.\271\
---------------------------------------------------------------------------

    \271\ Id. P 392.
---------------------------------------------------------------------------

    167. Finally, we revise the pro forma LGIP to correct inadvertent 
errors and add minor, clarifying edits as follows. First, we revise 
section 3.4.6 to correct an inadvertent omission of the word ``or'' to 
clarify that the non-disclosure agreement used for the group cluster 
study scoping meeting will provide for confidentiality of identifying 
information or commercially sensitive information, consistent with the 
discussion in Order No. 2023.\272\ Second, we also revise pro forma 
LGIP section 7.5 to clarify that cluster restudies can be triggered by 
withdrawal of a higher-queued interconnection customer, and that 
interconnection customers being restudied are responsible for the cost 
of any restudy, except as provided in section 3.7. Third, we revise pro 
forma LGIP section 3.5.2.4 to clarify that the requirement to track and 
post metrics on interconnection queue withdrawals includes each stage 
of the study process. Fourth, we revise pro forma LGIP section 3.4.6 to 
remove the phrase ``and one or more available alternative Point(s) of 
Interconnection,'' consistent with the discussion in Order No. 
2023.\273\ Fifth, we revise the pro forma LGIP definition of 
``interconnection study'' to reference all interconnection studies 
discussed in the pro forma LGIP.
---------------------------------------------------------------------------

    \272\ Id. P 247.
    \273\ Id. P 202 (declining to permit interconnection customers 
to submit multiple alternative points of interconnection).
---------------------------------------------------------------------------

3. Allocation of Cluster Network Upgrade Costs
a. Order No. 2023 Requirements
    168. In Order No. 2023, the Commission added new section 4.2.1 
(Cost Allocation for Interconnection Facilities and Network Upgrades) 
to the pro forma LGIP to require that transmission providers (1) 
allocate network upgrade costs based on the proportional impact method 
and (2) allocate the costs of substation network upgrades on a per 
capita basis.\274\ To implement this requirement, the Commission added 
definitions for proportional impact method, substation network 
upgrades, and system network upgrades to the pro forma LGIP and pro 
forma LGIA and modified the existing definition of stand alone network 
upgrades. The Commission also required transmission providers to 
allocate the costs of interconnection facilities (i.e., both the 
interconnection customer's interconnection facilities and transmission 
provider's interconnection facilities) on a per capita basis.\275\ The 
Commission further provided that interconnection customers may agree to 
share interconnection facilities, that the per capita cost allocation 
will apply only where interconnection customers agree to share 
interconnection facilities, and that interconnection customers may 
choose a different cost sharing arrangement upon mutual agreement.
---------------------------------------------------------------------------

    \274\ Id. P 453.
    \275\ Id. P 454.
---------------------------------------------------------------------------

    169. The Commission found that transmission providers must provide 
tariff provisions that describe the method they will use for allocating 
costs of each type of network upgrade, but

[[Page 27034]]

specific metrics and thresholds for implementing the allocation, or 
other specific technical information, may be included in business 
practice manuals, or publicly posted on the transmission provider's 
website.\276\ The Commission found that, in particular, the technical 
information surrounding implementation of the proportional impact 
method by a particular transmission provider does not need to be 
included in the transmission provider's tariff under the rule of reason 
because these provisions are properly classified as implementation 
details that do not significantly affect rates, terms, and conditions 
of service.
---------------------------------------------------------------------------

    \276\ Id. P 462.
---------------------------------------------------------------------------

    170. In response to requests for the Commission to direct 
transmission providers to use a specific type of proportional impact 
method or distribution factor analysis and apply minimum distribution 
factor thresholds that will be used to evaluate NRIS and ERIS requests, 
the Commission stated that it was unpersuaded that such level of 
prescription is needed to ensure just, reasonable, and not unduly 
discriminatory or preferential rates.\277\ The Commission stated that, 
instead, it believes that flexibility for transmission providers to 
develop such details as part of their compliance filings--and in their 
business practice manuals, where consistent with the rule of reason--is 
important to ensure that the proportional impact method used by each 
transmission provider reflects the characteristics of its region (e.g., 
types of network upgrade facilities identified in the region, or 
preferred analyses in the region for determining the share of the need 
for the specific network upgrade type).
---------------------------------------------------------------------------

    \277\ Id. P 463.
---------------------------------------------------------------------------

b. Requests for Rehearing and Clarification
    171. Generation Developers request clarification that Order No. 
2023 does not prejudge whether any implementation detail regarding the 
proportional impact method needs to be included in the tariff rather 
than in a business practice manual, and that Order No. 2023 gives 
transmission providers flexibility to develop a method consistent with 
the Commission's rule of reason.\278\ Generation Developers express 
concern that Order No. 2023 could be misinterpreted such that any 
implementation detail regarding the proportional impact method does not 
significantly affect rates and thus need not be included in the tariff. 
Generation Developers aver that the Commission has recognized that the 
rule of reason must be applied on a case-by-case basis and thus it 
would be inappropriate to make a generic determination that any 
specific detail can be placed in a business practice manual.\279\ 
Generation Developers further argue that the Commission currently lacks 
the information necessary to make such a determination because whether 
a specific threshold or metric will significantly affect rates depends 
on several factors that will be detailed in the transmission provider's 
Order No. 2023 compliance filings.
---------------------------------------------------------------------------

    \278\ Generation Developers Rehearing Request at 3-5.
    \279\ Id. at 4 (citing Cal. Indep. Sys. Operator Corp., 141 FERC 
] 61,237, at P 35 (2012)).
---------------------------------------------------------------------------

    172. Longroad Energy requests rehearing of Order No. 2023's 
decision to not require minimum impact thresholds for purposes of the 
proportional impact method.\280\ Longroad Energy argues that minimum 
impact thresholds are necessary to ensure that interconnection 
customers are not required to finance network upgrades for which they 
have a de minimis impact.\281\ Longroad Energy avers that the absence 
of a minimum impact threshold is administratively burdensome for 
transmission providers because they must track a larger number of 
interconnection requests. Longroad Energy asserts that interconnection 
customers may be exposed to construction delays for network upgrades 
for which they only have a de minimis impact. Longroad Energy notes 
that the Commission has accepted minimum impact thresholds in other 
instances.\282\ Longroad Energy further argues that minimum impact 
thresholds are necessary to prevent any withdrawing interconnection 
request from materially impacting the remaining interconnection 
customers and thus triggering a withdrawal penalty.\283\ Finally, 
Longroad Energy requests clarification that Order No. 2023 does not 
preclude a transmission provider from using minimum impact thresholds.
---------------------------------------------------------------------------

    \280\ Longroad Energy Rehearing Request at 4-9.
    \281\ Id. at 5-6.
    \282\ Id. at 7-8 (citing Tenaska Clear Creek Wind, LLC v. Sw. 
Power Pool, Inc., 177 FERC ] 61,200, order on compliance and reh'g, 
180 FERC ] 61,160, at P 99 (2021), reh'g denied by operation of law, 
181 FERC ] 62,090 (2022), order addressing arguments on reh'g and 
denying motion for stay, 182 FERC ] 61,084, at PP 33, 36 (2023); 
Midcontinent Indep. Sys. Operator, Inc., 171 FERC ] 61,236, at PP 
44, 56, reh'g denied by operation of law, 172 FERC ] 62,102, order 
addressing arguments on reh'g, 172 FERC ] 61,235 (2020)).
    \283\ Id. at 8-9.
---------------------------------------------------------------------------

    173. Clean Energy Associations request clarification that 
substation network upgrade cost allocation is based on the number of 
interconnection facilities (i.e., generator tie lines) connecting to 
the substation at the point of interconnection and not based on the 
number of generating facilities connecting to the substation.\284\ 
Clean Energy Associations explain that it is the number of 
interconnection facilities, not the number of generating facilities, 
that drive substation expansion. Clean Energy Associations request that 
the Commission clarify that the transmission provider should first 
allocate substation network upgrade costs on a per capita basis for 
each interconnection facility connecting to the substation, and 
secondly divide those costs between the multiple generating facilities 
using that interconnection facility.
---------------------------------------------------------------------------

    \284\ Clean Energy Associations Rehearing Request at 54-55.
---------------------------------------------------------------------------

    174. Clean Energy Associations also request clarification that 
substation network upgrades are at distinctive voltage levels.\285\ 
Clean Energy Associations explain that definitive selection of a point 
of interconnection requires a voltage level to be specified as well as 
a substation, and that expansion costs for different voltage levels are 
normally unrelated and may be very different.
---------------------------------------------------------------------------

    \285\ Id. at 55-56.
---------------------------------------------------------------------------

c. Determination
    175. In response to Generation Developers' request for 
clarification regarding the location of details on the implementation 
of the proportional impact method, we clarify that, consistent with the 
rule of reason, the Commission will consider the details of the 
transmission provider's proposed proportional impact method and whether 
those details should be in the tariff in its individual Order No. 2023 
compliance filing.
    176. We are unpersuaded by Longroad Energy's request for rehearing 
to require all transmission providers to use minimum impact thresholds. 
We reiterate the Commission's finding in Order No. 2023 that it is 
appropriate for transmission providers to propose such details in their 
Order No. 2023 compliance filings to ensure that the method used by 
each transmission provider reflects the characteristics of its 
region.\286\ For example, different regions may identify different 
types of network upgrades or have preferred analyses for identifying 
specific network upgrade types. We disagree with Longroad Energy's 
assertion that minimum impact thresholds are necessary to prevent any 
withdrawal

[[Page 27035]]

from triggering a withdrawal penalty, as the transmission provider must 
still assess whether the withdrawal has a material impact on the cost 
or timing of equal or lower-queued interconnection requests in 
accordance with section 3.7.1 of the pro forma LGIP. In response to 
Longroad Energy's request for clarification, we clarify that Order No. 
2023 does not preclude transmission providers from proposing a minimum 
impact threshold.
---------------------------------------------------------------------------

    \286\ Order No. 2023, 184 FERC ] 61,054 at P 463.
---------------------------------------------------------------------------

    177. In response to Clean Energy Associations' request for 
clarification regarding substation network upgrade cost allocation, we 
clarify that the cost allocation is based on the number of 
interconnection facilities connecting to the substation located at the 
point of interconnection. Accordingly, to allocate such costs per 
capita to each generating facility in accordance with section 4.2.1.1.a 
of the pro forma LGIP, the transmission provider must first allocate 
the costs of substation network upgrades on a per capita basis for each 
interconnection facility connecting to the substation, and then 
allocate those costs on a per capita basis between each generating 
facility using the interconnection facility.
    178. We also grant Clean Energy Associations' request for 
clarification that substation network upgrades are at distinct voltage 
levels. Accordingly, we modify section 4.2.1.1.a of the pro forma LGIP 
as follows, with brackets indicating deletions and italics indicating 
additions:

    Substation Network Upgrades, including all switching stations, 
shall be allocated first to Interconnection Facilities 
interconnecting to the substation at the same voltage level, and 
then per capita to each Generating Facility sharing the 
Interconnection Facility [interconnecting at the same substation].
4. Shared Network Upgrades
a. Order No. 2023 Requirements
    179. In Order No. 2023, the Commission declined to adopt the NOPR 
proposal to implement cost sharing of network upgrades between 
interconnection customers in an earlier cluster and interconnection 
customers in a subsequent cluster.\287\ The Commission stated that it 
declined to adopt the NOPR proposal because of its potentially 
significant administrative burden and because Order No. 2023's cluster 
network upgrade cost allocation reform would address the ``first mover/
free rider'' issue that motivated the NOPR proposal.
---------------------------------------------------------------------------

    \287\ Id. PP 486-488.
---------------------------------------------------------------------------

b. Requests for Rehearing and Clarification
    180. Shell requests clarification that Order No. 2023 does not 
prohibit existing mechanisms of inter-cluster cost sharing of network 
upgrades and that the Commission will not prohibit inter-cluster cost 
sharing in the future.\288\ Shell avers that network upgrade cost 
sharing between initial and subsequent interconnection customers is 
common in the industry, for example in the ISO-NE market.
---------------------------------------------------------------------------

    \288\ Shell Rehearing Request at 14-15.
---------------------------------------------------------------------------

c. Determination
    181. We clarify that Order No. 2023 does not require transmission 
providers to eliminate, change, or re-justify existing tariff 
mechanisms regarding cost sharing of network upgrades between earlier-
in-time and later-in-time clusters because such provisions are not 
impacted by the requirements of Order No. 2023. We reiterate that 
transmission providers need only seek approval to maintain previously 
approved variations from the pro forma LGIP and pro forma LGIA if such 
variations are impacted by the requirements of Order No. 2023.
5. Increased Financial Commitments and Readiness Requirements
a. Financial Security Generally
i. Order No. 2023 Requirements
    182. In Order No. 2023, the Commission modified sections 3.4.2(vi), 
5.1.1.1, 5.1.1.2, 7.5, and 8.1(3) of the pro forma LGIP to require that 
an interconnection customer pay the commercial readiness deposit and 
deposits prior to the transitional serial study, transitional cluster 
study, cluster restudy and the interconnection facilities study via 
cash or a letter of credit.\289\ The Commission also established a pro 
forma two-party affected system facilities construction agreement in 
Appendix 11 to the pro forma LGIP and a pro forma multiparty affected 
system facilities construction agreement in Appendix 12 to the pro 
forma LGIP.\290\ In section 4.1 of Appendix 11 to the pro forma LGIP 
and section 4.1 of Appendix 12 to the pro forma LGIP, the Commission 
required that an affected system interconnection customer provide 
financial security to the transmission provider in an amount sufficient 
to cover the costs for constructing, procuring, and installing the 
applicable portion of affected system network upgrade(s) in the form of 
a guarantee, a surety bond, a letter of credit or other form of 
security that is reasonably acceptable to transmission provider, at the 
affected system interconnection customer's option.
---------------------------------------------------------------------------

    \289\ Order No. 2023, 184 FERC ] 61,054 at P 690.
    \290\ Id. P 1193.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    183. Clean Energy Associations request clarification or, in the 
alternative, rehearing that acceptable forms of security for the 
commercial readiness deposit, transitional serial study deposit, and 
transitional cluster study deposit are not limited to only irrevocable 
letters of credit and cash.\291\ Clean Energy Associations assert that 
the Commission did not explain the decision to list these forms of 
security to the exclusion of other forms, such as surety bonds or other 
forms of security that may be acceptable to the transmission provider, 
and ignored comments in the record explicitly requesting flexibility 
for these alternative forms of security to be considered.
---------------------------------------------------------------------------

    \291\ Clean Energy Associations Rehearing Request at 63-65.
---------------------------------------------------------------------------

    184. Similarly, Longroad Energy requests rehearing to allow 
generator interconnection customers to pay deposits or provide security 
in the form of cash, irrevocable letter of credit, surety bond, or 
other reasonably acceptable form of financial security, at the 
generator interconnection customer's discretion.\292\ Additionally, if 
the interconnection customer submits its required deposit or security 
in the form of a letter of credit or surety bond, and ultimately some 
or all of the security is drawn by the transmission provider, Longroad 
Energy argues that the interconnection customer should be given the 
option to pay the amount due in cash rather than drawing on the letter 
of credit or bond. Longroad Energy argues that limiting the acceptable 
forms of financial assurance to only irrevocable letters of credit and 
cash is arbitrary and capricious and an unexplained departure from 
Commission precedent in Order No. 2003.\293\ In addition to the 
deposits mentioned by Clean Energy Associations, Longroad Energy 
requests rehearing regarding the acceptable form of security for the 
deposits prior to the cluster restudy and the interconnection 
facilities study.\294\ Longroad Energy notes that Order No. 2023 
explicitly allows surety bonds or other forms of reasonably acceptable 
financial security for affected system network upgrade

[[Page 27036]]

deposits but not other deposits, which is unduly discriminatory.\295\
---------------------------------------------------------------------------

    \292\ Longroad Energy Rehearing Request at 12.
    \293\ Id. at 9-14.
    \294\ Id. at 10-11.
    \295\ Id. at 12-13.
---------------------------------------------------------------------------

iii. Determination
    185. We are persuaded by Clean Energy Associations and Longroad 
Energy's arguments on rehearing. We believe that allowing surety bonds 
or other forms of financial security that are reasonably acceptable to 
the transmission provider for the commercial readiness deposit and all 
study deposits will help ensure that interconnection customers do not 
face unjust and unreasonable or unduly discriminatory hurdles to the 
interconnection of new generation through limitations on the acceptable 
forms of financial security. We find that acceptable forms of security 
for the commercial readiness deposit and deposits prior to the 
transitional serial study, transitional cluster study, cluster restudy 
and the interconnection facilities study should include not only cash 
or an irrevocable letter of credit, but also surety bonds or other 
forms of financial security that are reasonably acceptable to the 
transmission provider. Accordingly, we modify sections 3.4.2, 5.1.1.1, 
5.1.1.2, 7.5, and 8.1 of the pro forma LGIP to reflect this finding.
    186. However, we are not persuaded by Longroad Energy's request 
that, if the interconnection customer submits its required deposit or 
security in the form of a letter of credit or surety bond, the 
interconnection customer should be given the option to pay any amount 
drawn by the transmission provider in cash rather than drawing on the 
letter of credit or surety bond. Longroad Energy did not provide 
sufficient reasoning or evidence as to why this clarification is 
necessary to ensure just and reasonable and not unduly discriminatory 
or preferential rates. However, we clarify that we do not preclude 
transmission providers from allowing interconnection customers to pay 
cash in lieu of drawing on a previously submitted letter of credit or 
surety bond.
b. Increased Study Deposits
i. Order No. 2023 Requirements
    187. In Order No. 2023, the Commission adopted the following study 
deposit framework in section 3.1.1.1 (Study Deposit) of the pro forma 
LGIP: \296\
---------------------------------------------------------------------------

    \296\ Order No. 2023, 184 FERC ] 61,054 at PP 502-503; pro forma 
LGIP section 3.1.1.1.

------------------------------------------------------------------------
   Size of proposed generating facility
 associated with  interconnection  request        Amount of deposit
------------------------------------------------------------------------
>20 MW <80 MW.............................  $35,000 + $1,000/MW.
>=80 MW <200 MW...........................  $150,000.
>=200 MW..................................  $250,000.
------------------------------------------------------------------------

    The Commission required transmission providers to collect this 
study deposit once, upon entry into the cluster.\297\
---------------------------------------------------------------------------

    \297\ Order No. 2023, 184 FERC ] 61,054 at P 505.
---------------------------------------------------------------------------

ii. Determination
    188. Given that interconnection customers developing small 
generating facilities requesting NRIS submit their interconnection 
requests under the relevant transmission providers' LGIP,\298\ we 
modify 3.1.1.1 as follows to clarify the applicable study deposits in 
such instances:
---------------------------------------------------------------------------

    \298\ Small Generator Interconnection Agreements & Procs., Order 
No. 792, 78 FR 73240 (Dec. 5, 2013), 145 FERC ] 61,159, at PP 232, 
235 (2013).

------------------------------------------------------------------------
   Size of proposed generating facility
 associated with  interconnection  request        Amount of deposit
         under the pro forma LGIP
------------------------------------------------------------------------
<80 MW....................................  $35,000 + $1,000/MW.
>=80 MW <200 MW...........................  $150,000.
>=200 MW..................................  $250,000.
------------------------------------------------------------------------

    189. We also modify section 3.1.1.1 of the pro forma LGIP to 
clarify that the $5,000 application fee is non-refundable. We also 
modify section 13.3 of the pro forma LGIP to remove language ``or 
offset against the cost of any future Interconnection Studies 
associated with the applicable Cluster prior to beginning of any such 
future Interconnection Studies,'' given that the study deposit 
structure under Order No. 2023 includes an initial study deposit at the 
beginning of the study process, rather than separate deposits before 
each phase of study.
c. Demonstration of Site Control
i. Order No. 2023 Requirements
    190. In Order No. 2023, the Commission adopted revisions to the pro 
forma LGIP and pro forma LGIA to add more stringency to the site 
control requirements and to help prevent speculative interconnection 
requests from entering the interconnection queue.\299\ The Commission 
found that, taken together, these reforms will help ensure that 
commercially viable interconnection requests with demonstrated site 
control or with demonstrated regulatory limitations will be able to 
enter the interconnection queue, thereby reducing the negative impacts 
of speculative interconnection requests.
---------------------------------------------------------------------------

    \299\ Order No. 2023, 184 FERC ] 61,054 at P 583.
---------------------------------------------------------------------------

    191. As relevant to the requests for rehearing and clarification, 
in Order No. 2023, the Commission revised: (1) the definition for 
``site control'' in section 1 of the pro forma LGIP and in article 1 of 
the pro forma LGIA; \300\ and (2) section 3.4.2 of the pro forma LGIP 
to include a limited option for interconnection customers to submit a 
deposit in lieu of site control when they submit their interconnection 
request--only if qualifying regulatory limitations prohibit the 
interconnection customer from obtaining site control.\301\
---------------------------------------------------------------------------

    \300\ Id. P 584 (``Site Control shall mean the exclusive land 
right to develop, construct, operate, and maintain the Generating 
Facility over the term of expected operation of the Generating 
Facility. Site Control may be demonstrated by documentation 
establishing: (1) ownership of, a leasehold interest in, or a right 
to develop a site of sufficient size to construct and operate the 
Generating Facility; (2) an option to purchase or acquire a 
leasehold site of sufficient size to construct and operate the 
Generating Facility for such purpose; or (3) any other documentation 
that clearly demonstrates the right of Interconnection Customer to 
exclusively occupy a site of sufficient size to construct and 
operate the Generating Facility. Transmission Provider will maintain 
acreage requirements for each Generating Facility type on its OASIS 
or public website.'').
    \301\ Id. P 605.
---------------------------------------------------------------------------

    192. Also relevant to the requests for clarification, in Order No. 
2023, the Commission clarified that deposits in lieu of site control 
for interconnection customers with regulatory limitations are 
refundable and cannot be applied to the costs of interconnection 
studies or withdrawal penalties.\302\ The Commission also clarified 
that the site control demonstration requirements apply only to the land 
needed for the generating facility and explained that, because it did 
not propose site control requirements for interconnection facilities in 
the NOPR, it declined to address comments suggesting alternative site 
control requirements for interconnection facilities or network 
upgrades.\303\
---------------------------------------------------------------------------

    \302\ Id. P 612.
    \303\ Id. P 604.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    193. IPP Coalition requests rehearing and urges the Commission to 
establish a requirement for full site control over generator 
interconnection facilities without a deposit in lieu of site control 
demonstration option at the facilities study phase.\304\ IPP Coalition 
contends that Order No. 2023 limited site control requirements to ``the 
land needed for

[[Page 27037]]

the generating facility'' and declined to extend any site control 
requirements to the interconnection customer's interconnection 
facilities without substantive consideration and a reasoned response to 
the comments urging such a requirement,\305\ which is contrary to 
reasoned decision-making principles in violation of the APA. IPP 
Coalition argues that requiring site control for interconnection 
facilities would increase the quality of interconnection study results 
and increase certainty for interconnection customers as the 
interconnection process becomes more costly and risky to navigate. IPP 
Coalition further argues that the record reflects that such a 
requirement could prevent gaming and reduce the risk of more 
speculative projects delaying the interconnection process.\306\
---------------------------------------------------------------------------

    \304\ IPP Coalition Rehearing Request at 6.
    \305\ Id. at 3-4 (citing AEE Initial Comments at 18; AEP Initial 
Comments at 21-23; Cypress Creek Initial Comments at 22; Enel 
Initial Comments at 41-42; MISO Initial Comments at 56; National 
Grid Initial Comments at 22-23; and Shell Reply Comments at 23).
    \306\ Id. at 4-5 (citing Order No. 2023, 184 FERC ] 61,054 at PP 
537-539).
---------------------------------------------------------------------------

    194. Clean Energy Associations ask the Commission to clarify that 
the revised definition of site control in the pro forma LGIP and pro 
forma LGIA is not meant to impose term requirements on site 
control.\307\ Further, Clean Energy Associations urge the Commission to 
clarify and modify the definition of site control to prevent future 
confusion and misinterpretation by transmission providers regarding any 
term requirements for site control. Clean Energy Associations assert 
that Order No. 2023 revised the definition of site control in a way 
that is not discussed in the order or in the preceding NOPR to include 
the words ``right to develop, construct, operate, and maintain the 
Generating Facility over the term of expected operation of the 
Generation Facility'' (emphasis added).\308\ Clean Energy Associations 
assert that this revision implies that a lease option or other form of 
site control must have a term that is valid for the entire life of the 
generating facility. Clean Energy Associations argue that such a term 
is contrary to standard industry practice,\309\ is unnecessary to 
ensure that developers have sufficient rights to develop, construct, 
operate, and maintain their generating facilities, and unnecessarily 
increases the cost of development, resulting in rates to consumers that 
are unjust and unreasonable.\310\
---------------------------------------------------------------------------

    \307\ Clean Energy Associations Rehearing Request at 63.
    \308\ Id. at 61.
    \309\ Clean Energy Associations states that the standard 
industry practice is to execute a development lease with a 
development term and an extended term. Clean Energy Associations 
explain that the development term typically lasts until the start of 
construction, is less than ten years, and expires if not extended by 
the interconnection customer. Clean Energy Associations further 
explain that, when an interconnection customer is ready to begin 
construction, the lease grants the customer the unilateral right to 
enter the extended term at a pre-determined higher payment rate. Id.
    \310\ Id. at 62-63.
---------------------------------------------------------------------------

    195. ACP requests that the Commission clarify that, in their 
compliance filings, transmission providers may seek to expand 
opportunities for interconnection customers to submit deposits in lieu 
of demonstrating 90% site control when submitting an interconnection 
request to address other exigent circumstances beyond regulatory 
constraints.\311\ ACP argues that land acquisition in dense urban areas 
where battery storage facilities are more frequently sited is much more 
difficult and costly to achieve at the time an interconnection request 
is submitted than is typically the case for project sites much further 
from load. ACP asserts that denying such flexibility on compliance 
could result in key battery storage projects and other projects near 
load being unable to move forward, endangering grid reliability where 
and when those resources are most needed.\312\ ACP argues that this 
clarification would not alter any aspect of Order No. 2023 but would 
provide valuable information to transmission providers and 
interconnection customers in developing effective compliance 
filings.\313\
---------------------------------------------------------------------------

    \311\ ACP Clarification Request at 1-3.
    \312\ Id. at 3 (also arguing that lease options available in 
dense urban areas typically have shorter terms than the phases of 
interconnection studies that determine project feasibility and 
capacity deliverability, which in turn can serve to justify more 
definitive site control).
    \313\ Id. at 4.
---------------------------------------------------------------------------

    196. In the event the point of interconnection must change due to a 
new government policy or regulatory requirement, [Oslash]rsted requests 
clarification that any deposits submitted in lieu of site control would 
still be treated as refundable and the project would not be subject to 
withdrawal penalties if the change cannot be accommodated.\314\
---------------------------------------------------------------------------

    \314\ [Oslash]rsted Rehearing Request at 11.
---------------------------------------------------------------------------

iii. Determination
    197. We are unpersuaded by IPP Coalition's request for rehearing of 
the Commission's decision to apply site control demonstration 
requirements only to the land needed for the generating facility. We 
reiterate that the Commission did not propose site control requirements 
for interconnection facilities in the NOPR. While we note that some 
comments were submitted on this topic,\315\ we continue to find the 
record insufficient for the Commission to assess alternative site 
control requirements for interconnection facilities and impose them on 
a nationwide basis. We also note that some of the comments that were 
submitted argued that interconnection customers require flexibility 
when siting interconnection facilities because the route for such 
facilities may not be identified until the very end of the 
interconnection process.\316\
---------------------------------------------------------------------------

    \315\ Order No. 2023, 184 FERC ] 61,054 at PP 535-539.
    \316\ Id. P 535.
---------------------------------------------------------------------------

    198. We are also unpersuaded by Clean Energy Associations' request 
for clarification and to modify the definition of site control to avoid 
imposing term limits. We disagree with Clean Energy Associations that 
Order No. 2023 revised the definition of site control in a way that was 
not discussed in the NOPR and note that the proposed definition of site 
control in the NOPR included the words ``right to develop, construct, 
operate, and maintain the Generating Facility over the term of expected 
operation of the Generation Facility.'' \317\ We find that allowing 
interconnection customers to submit site control documentation with a 
term shorter than the expected operation of the generating facility 
would increase risks for all parties. For example, in the event a 
shorter lease expires, an interconnection customer could face property 
rights disputes that threaten its ability to operate its generating 
facility, which in turn, could jeopardize the transmission provider's 
ability to reliably operate its transmission system. Consistent with 
Order No. 2023, we find that it is the interconnection customer's 
responsibility to obtain exclusive site control over the term of 
expected operation of the generating facility.
---------------------------------------------------------------------------

    \317\ NOPR, 179 FERC ] 61,194, at app. B, section 1.
---------------------------------------------------------------------------

    199. We are further unpersuaded by ACP's request for clarification. 
We reiterate that, because a deposit in lieu of site control does not 
demonstrate that an interconnection customer has the exclusive right to 
develop a site, it does not indicate that an interconnection customer 
is ready to proceed with construction and commercial operation of the 
generating facility. As a result, we believe that allowing transmission 
providers to expand the option for interconnection customers to submit 
a deposit in lieu of demonstrating site

[[Page 27038]]

control to address other exigent circumstances, beyond regulatory 
limitations, would not help to prevent speculative, commercially non-
viable interconnection requests from entering the interconnection 
queue. In cases where it is particularly challenging or costly to 
achieve exclusive site control, the interconnection customer may not be 
ready to proceed with the construction and commercial operation of the 
generating facility, and therefore it may be inappropriate to submit an 
interconnection request for such a facility. Thus, we decline to 
clarify that transmission providers may expand the option for 
interconnection customers to submit a deposit in lieu of demonstrating 
site control.
    200. In the event a new regulatory limitation requires a change to 
the point of interconnection that cannot be accommodated and results in 
an interconnection request being withdrawn, we grant [Oslash]rsted's 
request for clarification and clarify that any deposits submitted by 
the interconnection customer in lieu of site control must be 
refundable. Nevertheless, the interconnection customer may be subject 
to a withdrawal penalty. We acknowledge that certain interconnection 
customers, such as offshore wind resources, may be required to modify 
their point of interconnection, after they have already submitted an 
interconnection request, in response to a state or federal policy or 
regulation. However, the Commission did not adopt a process for 
interconnection customers to modify their point of interconnection due 
to a regulatory limitation in Order No. 2023. An interconnection 
customer can request to modify its interconnection request pursuant to 
section 4.4 of the pro forma LGIP, but if the transmission provider 
determines that the change to the point of interconnection is a 
material modification, and the interconnection customer elects to 
withdraw its interconnection request, the interconnection customer may 
be subject to a withdrawal penalty.
d. Commercial Readiness
i. Order No. 2023 Requirements
    201. In Order No. 2023, the Commission revised sections 3.4.2, 7.5, 
8.1, and 11.3 of the pro forma LGIP to require interconnection 
customers to submit commercial readiness deposits to help reduce the 
submission of speculative, commercially non-viable interconnection 
requests into interconnection queues.\318\ The Commission found that, 
because the interconnection customer's total commercial readiness 
deposit held by the transmission provider increases as the 
interconnection process proceeds, this approach will encourage 
interconnection customers not ready to proceed through the 
interconnection process--or whose projects become commercially non-
viable during the interconnection process--to withdraw earlier in the 
process, thereby lessening the incidence of late-stage withdrawals that 
result in delays and restudies.\319\
---------------------------------------------------------------------------

    \318\ Order No. 2023, 184 FERC ] 61,054 at P 690.
    \319\ Id. P 691.
---------------------------------------------------------------------------

    202. The Commission declined to adopt the non-financial commercial 
readiness demonstrations proposed in the NOPR because they were not 
necessary to address the need for reform--providing additional 
deterrence of speculative, commercially non-viable interconnection 
requests--given the significant, increasing commercial readiness 
deposits adopted instead.\320\ The Commission also indicated that the 
non-financial commercial readiness demonstrations proposed in the NOPR 
may not necessarily serve as appropriate indicators of a proposed 
generating facility's commercial viability on a national basis, or may 
not match the timelines of state procurement efforts.\321\ 
Additionally, the Commission expressed concern that the proposed non-
financial commercial readiness demonstrations could incentivize power 
purchasers in some regions to execute purchase contracts with 
interconnection customers whose generating facilities will later be 
determined to be commercially non-viable.\322\
---------------------------------------------------------------------------

    \320\ Id. P 694.
    \321\ Id. PP 695-696.
    \322\ Id. P 698.
---------------------------------------------------------------------------

    203. Because the Commission did not adopt the non-financial 
commercial readiness demonstrations proposed in the NOPR, the 
Commission found that it was unnecessary to address commenter concerns 
that certain non-financial commercial readiness demonstrations could 
provide an unduly discriminatory or preferential advantage to projects 
being developed by transmission providers or their affiliates.\323\ 
Although the Commission found that commercial readiness deposits are 
sufficient to address the need for reform in this proceeding, the 
Commission stated that this finding does not preclude transmission 
providers from proposing to adopt non-financial commercial readiness 
demonstrations on compliance, provided they meet the requirements of 
the relevant standards (i.e., an independent entity variation or the 
``consistent with and superior to'' standard) when requesting a 
variation.\324\
---------------------------------------------------------------------------

    \323\ Id. P 700.
    \324\ Id. P 701.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    204. Clean Energy Associations request that the Commission clarify 
Order No. 2023 by indicating the evaluation framework to determine if 
non-financial commercial readiness criteria are unduly discriminatory 
or preferential.\325\ Clean Energy Associations urge the Commission to 
clarify how it will ensure that any additional non-financial commercial 
readiness demonstrations that a transmission provider may propose will 
not provide an unduly or preferential advantage to projects being 
developed by the transmission provider or its affiliates. Clean Energy 
Associations further request that the Commission clarify whether it 
will require a proposing transmission provider to use the pro forma 
readiness requirements before, or along with, implementing non-
financial demonstrations. In the alternative, Clean Energy Associations 
seek rehearing on the basis that the Commission failed to meaningfully 
respond to evidence that the non-financial commercial readiness 
demonstrations present ample opportunity for non RTO/ISO transmission 
providers to discriminate against independent power producers.\326\ 
Clean Energy Associations argue that it is nearly impossible for 
independent power producers to enter the queue by making a non-
financial demonstration of commercial readiness, whereas transmission 
providers may be able to use non-financial readiness demonstrations to 
grant their own projects preferential contracts, resulting in undue 
discrimination against independent power producers.\327\
---------------------------------------------------------------------------

    \325\ Clean Energy Associations Rehearing Request at 67.
    \326\ Id. (citing ACORE Reply Comments at 4; ACPA And Renew 
Northeast Reply Comments at 4-6; AEE Initial Comments at 20; AEE 
Reply Comments at 12; Alliant Energy Initial Comments at 5-6; Clean 
Energy Associations Initial Comments at 34-35; CREA/New Sun Initial 
Comments at 57; CREA and NewSun Energy Reply Comments at 22-45; 
Cypress Creek Initial Comments at 22-23; Enel Initial Comments at 
44; ENGIE Initial Comments at 5; ENGIE Reply Comments at 2-3; EPSA 
Initial Comments at 9; Fervo Energy Reply Comments at 6-7; New 
Jersey Commission Reply Comments at 6-8; NextEra Initial Comments at 
25; NextEra Reply Comments at 14-16; Pine Gate Initial Comments at 
27; PIOs Initial Comments at 29-30; R Street Initial Comments at 13; 
SEIA Initial Comments at 25; and Vistra Initial Comments at 6).
    \327\ Id. at 68-69 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 667).

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[[Page 27039]]

iii. Determination
    205. We are unpersuaded by Clean Energy Associations' arguments on 
rehearing that the Commission must establish an evaluation framework to 
determine if non-financial commercial readiness criteria are unduly 
discriminatory or preferential. The Commission did not adopt non-
financial commercial readiness demonstrations in Order No. 2023, and 
therefore such an evaluation framework is not needed to evaluate 
compliance with Order No. 2023. Rather, we reiterate the Commission's 
finding that non-financial commercial readiness demonstrations are not 
necessary to address the need for reform--providing additional 
deterrence of speculative, commercially non-viable interconnection 
requests--given the significant, increasing commercial readiness 
deposits the Commission adopted in Order No. 2023. Given that the 
Commission did not adopt non-financial commercial readiness 
demonstrations, we do not need to respond to arguments that such 
demonstrations could be unduly discriminatory. As such, we are not 
prejudging any compliance proposals that might include non-financial 
commercial readiness demonstrations, and transmission providers may 
explain specific circumstances on compliance and justify why any 
deviations from Order No. 2023 are either consistent with or superior 
to the pro forma LGIP or merit an independent entity variation in the 
context of RTOs/ISOs.\328\
---------------------------------------------------------------------------

    \328\ Order No. 2023, 184 FERC ] 61,054 at P 1764.
---------------------------------------------------------------------------

e. Withdrawal Penalties
i. Order No. 2023 Requirements
    206. In Order No. 2023, the Commission added the term ``withdrawal 
penalty'' to section 1 of the pro forma LGIP; revised section 3.7 of 
the pro forma LGIP; and added sections 3.7.1, 3.7.1.1, and 3.7.1.2 
related to withdrawal penalties to the pro forma LGIP.\329\ The 
Commission required transmission providers to apply withdrawal 
penalties to an interconnection customer if: (1) the interconnection 
customer withdraws its interconnection request at any point in the 
interconnection process; (2) the interconnection customer's 
interconnection request has been deemed withdrawn by the transmission 
provider at any point in the interconnection process; or (3) the 
interconnection customer's generating facility does not reach 
commercial operation (such as when an interconnection customer's LGIA 
is terminated prior to reaching commercial operation).\330\ However, a 
withdrawal penalty must only be assessed if the withdrawal has a 
material impact on the cost or timing of any interconnection requests 
with an equal or lower queue position. The Commission stated that the 
interconnection customer will also be exempt from paying a withdrawal 
penalty if (1) the interconnection customer withdraws its 
interconnection request after receiving the most recent cluster study 
report and the network upgrade costs assigned to the interconnection 
customer's request have increased 25% compared to the previous cluster 
study report, or (2) the interconnection customer withdraws its 
interconnection request after receiving the individual facilities study 
report and the network upgrade costs assigned to the interconnection 
customer's request have increased by more than 100% compared to costs 
identified in the cluster study report.\331\
---------------------------------------------------------------------------

    \329\ Id. P 780.
    \330\ Id. P 783.
    \331\ Id. P 784.
---------------------------------------------------------------------------

    207. The Commission required a transmission provider to assess a 
withdrawal penalty on an interconnection customer with a proposed 
generating facility that does not reach commercial operation based 
either on the actual study costs or on a percentage of the 
interconnection customer's assigned network upgrade costs, depending on 
what phase the interconnection customer withdraws its interconnection 
request.\332\ Thus, the withdrawal penalty for an interconnection 
customer will be calculated as the greater of the study deposit or: (1) 
two times the study cost if the interconnection customer withdraws 
during the cluster study or after receipt of a cluster study report; 
(2) 5% of the interconnection customer's identified network upgrade 
costs if the interconnection customer withdraws during the cluster 
restudy or after receipt of any applicable restudy reports; (3) 10% of 
the interconnection customer's identified network upgrade costs if the 
interconnection customer withdraws during the facilities study, after 
receipt of the individual facilities study report, or after receipt of 
the draft LGIA; or (4) 20% of the interconnection customer's identified 
network upgrade costs if, after executing, or requesting to file 
unexecuted, the LGIA, the interconnection customer's LGIA is terminated 
before its generating facility achieves commercial operation.
---------------------------------------------------------------------------

    \332\ Id. P 791.
---------------------------------------------------------------------------

    208. The Commission required transmission providers to use the 
withdrawal penalty funds as follows: (1) to fund studies and restudies 
in the same cluster; (2) if withdrawal penalty funds remain, to offset 
net increases in costs borne by other remaining interconnection 
customers from the same cluster for network upgrades shared by both the 
withdrawing and non-withdrawing interconnection customers prior to the 
withdrawal; and (3) if any withdrawal penalty funds remain, to be 
returned to the withdrawing interconnection customer.\333\
---------------------------------------------------------------------------

    \333\ Id. P 798.
---------------------------------------------------------------------------

    209. Section 3.7.1.2.1 of the pro forma LGIP describes the 
transmission provider's handling of withdrawal penalty funds and the 
first step of distributing them to fund studies and restudies.\334\ For 
a single cluster, the transmission provider shall hold all withdrawal 
penalty funds until all interconnection customers in that cluster have: 
(1) withdrawn or been deemed withdrawn; (2) executed an LGIA; or (3) 
requested an LGIA to be filed unexecuted. Any withdrawal penalty funds 
collected shall first be used to fund studies for interconnection 
customers in the same cluster that have executed an LGIA or requested 
an LGIA to be filed unexecuted. Distribution of the withdrawal penalty 
funds for such study costs shall not exceed the total actual study 
costs.
---------------------------------------------------------------------------

    \334\ Id. P 801.
---------------------------------------------------------------------------

    210. The Commission adopted section 3.7.1.2.2 of the pro forma 
LGIP, which provides that if, after the first distribution step is 
complete, withdrawal penalty funds remain, the transmission provider 
must proceed to the second step of distributing them to offset net 
increases in network upgrade cost assignments driven by the 
withdrawal.\335\ The transmission provider will determine if the 
withdrawn interconnection customers, at any point in the cluster study 
process, shared cost assignment for one or more network upgrades with 
any remaining interconnection customers in the same cluster based on 
the cluster study report, cluster restudy report(s), interconnection 
facilities study report, and any subsequent issued restudy report for 
the cluster.
---------------------------------------------------------------------------

    \335\ Id. P 802.
---------------------------------------------------------------------------

    211. If the transmission provider determines that withdrawn 
interconnection customers shared cost assignment for network upgrades 
with remaining interconnection customers in the same cluster, the 
transmission provider will calculate the remaining interconnection 
customers' net increase in costs (i.e., financial impact) due to a 
shared cost assignment for network

[[Page 27040]]

upgrades with the withdrawn interconnection customer.\336\ It will then 
distribute withdrawal penalty funds as described in section 3.7.1.2.3 
of the pro forma LGIP, depending on whether the withdrawal occurred 
before the withdrawing interconnection customer executed an LGIA (i.e., 
during the cluster study process) or afterward.
---------------------------------------------------------------------------

    \336\ Id. P 803.
---------------------------------------------------------------------------

    212. If the transmission provider determines that more than one 
interconnection customer in the same cluster was financially impacted 
by the same withdrawn interconnection customer, the transmission 
provider will apply the relevant withdrawn interconnection customer's 
withdrawal penalty to reduce the financial impact to each impacted 
interconnection customer based on each withdrawn interconnection 
customer's proportional share of the financial impact.\337\ Each 
interconnection customer's proportional share will be determined by 
either the proportional impact method if the net cost increase is 
related to a system network upgrade or on a per capita basis if the net 
cost increase is related to a substation network upgrade.
---------------------------------------------------------------------------

    \337\ Id. P 804.
---------------------------------------------------------------------------

    213. Section 3.7.1.2.4 of the pro forma LGIP details the process by 
which the transmission provider will provide amended LGIAs to any 
interconnection customers in the cluster that qualify for distribution 
of withdrawal penalty funds under this framework.\338\ To account for 
withdrawals that occurred during the cluster study process, the 
transmission provider must do the following: within 30 calendar days of 
all interconnection customers in the same cluster having: (1) withdrawn 
or been deemed withdrawn; (2) executed an LGIA; or (3) requested an 
LGIA to be filed unexecuted, determine if, and to what extent, any 
interconnection customers qualify to have their increased network 
upgrade costs offset by withdrawal penalty funds and provide such 
interconnection customers with an amended LGIA that provides the 
reduction in network upgrade cost assignment and associated reduction 
to the interconnection customer's financial security requirements.
---------------------------------------------------------------------------

    \338\ Id. P 805.
---------------------------------------------------------------------------

    214. To account for withdrawals that occurred in the same cluster 
after the withdrawing interconnection customer executed an LGIA, or 
requests the filing of an unexecuted LGIA, the transmission provider 
must do the following: within 30 calendar days of such withdrawal or 
termination, determine if, and to what extent, any interconnection 
customers qualify to have their increased network upgrade costs offset 
by withdrawal penalty funds and provide such interconnection customers 
with an amended LGIA that provides the reduction in network upgrade 
cost assignment and associated reduction to the interconnection 
customer's financial security requirements.\339\
---------------------------------------------------------------------------

    \339\ Id. P 806.
---------------------------------------------------------------------------

    215. For any given withdrawal, if the transmission provider 
determines that there are no network upgrade cost assignments in the 
withdrawn interconnection customer's cluster shared with the withdrawn 
interconnection customer, or if the transmission provider determines 
that the withdrawn interconnection customer's withdrawal did not cause 
a net increase in the shared cost assignment for any remaining 
interconnection customers in the cluster, the transmission provider 
must return the remaining withdrawal penalty to the withdrawn 
interconnection customer.\340\ Such remaining withdrawal penalties will 
be returned to withdrawn interconnection customers based on the 
proportion of each withdrawn interconnection customer's contribution to 
the total amount of withdrawal penalty funds collected for the cluster. 
The transmission provider must make such disbursement within 60 
calendar days of the date on which all interconnection customers in the 
same cluster have either: (1) withdrawn or been deemed withdrawn; (2) 
executed an LGIA; or (3) requested an LGIA to be filed unexecuted.
---------------------------------------------------------------------------

    \340\ Id. P 807.
---------------------------------------------------------------------------

    216. Finally, section 3.7.1.2.5 of the pro forma LGIP provides that 
if, after the first and second distribution steps are complete, some or 
all of an interconnection customer's withdrawal penalty remains, the 
transmission provider must return the balance of the withdrawn 
interconnection customer's withdrawal penalty funds to the withdrawn 
interconnection customer.\341\
---------------------------------------------------------------------------

    \341\ Id. P 809.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    217. NYISO states that the Commission's withdrawal penalty 
structure adopted in Order No. 2023 does not reflect reasoned decision-
making as it is unnecessarily complicated and establishes significant 
new administrative burdens on the transmission provider that are at 
odds with the intent of Order No. 2023 to enable transmission providers 
to more efficiently and timely process interconnection requests.\342\ 
NYISO states that the Commission's framework substantially deviates 
from its straightforward proposal in the NOPR, in which the 
transmission provider would solely use the collected penalties to 
offset study costs for the cluster. NYISO asserts that the Commission 
has not provided a reasonable basis for expanding this process to 
insert an additional layer to address offsetting increases in network 
upgrade costs for shared network upgrades. NYISO states that the new 
requirements will require the transmission provider to keep track of 
multiple penalty streams tied to each withdrawing developer, of which 
there will likely be a substantial number, across multiple studies 
while also requiring the performance of extensive analysis concerning 
the impact of the withdrawal of each of these projects on the remaining 
projects. NYISO asserts that the Commission should select one approach 
that can be reasonably implemented without requiring the commitment of 
significant additional resources or, alternatively, should permit each 
transmission provider to determine how such collected penalty costs can 
be best put to use in its region.\343\
---------------------------------------------------------------------------

    \342\ NYISO Rehearing Request at 47-48.
    \343\ Id. at 48-49.
---------------------------------------------------------------------------

    218. NYISO states that, if the Commission elects to retain its 
withdrawal penalty approach, NYISO requests rehearing and/or 
clarification of certain elements of these requirements.\344\ First, 
NYISO states that the Commission should clearly establish that 
withdrawal penalties cannot exceed the dollar amount secured by 
transmission providers. NYISO asserts that transmission providers 
cannot be responsible for and should not have to incur the 
administrative resource and expense of having to hunt down or to enter 
into litigation with withdrawn interconnection customers to obtain any 
withdrawal penalties that they fail to pay, and should not be required 
to pass on any gaps in uncollected penalty amounts to their market 
participants. NYISO therefore argues that the Commission should modify 
the withdrawal penalty rules: (1) to permit the transmission provider 
to require increases in deposits from interconnection customers when it 
becomes evident that the secured amount is not sufficient to offset 
penalty amounts; and/or (2) to establish that, in the event of a gap 
between the secured amount and withdrawal penalties, the transmission 
provider is not required to

[[Page 27041]]

pay out any uncollected amount under the penalty distribution rules or 
to recover such difference from its market participants.
---------------------------------------------------------------------------

    \344\ Id. at 49-50.
---------------------------------------------------------------------------

    219. Clean Energy Associations request rehearing and state that, 
while they support the inclusion of the penalty-free withdrawal 
provisions as a necessary protection for interconnection customers, the 
thresholds set by the Commission are unjust and unreasonable and will 
result in significant uncertainty for interconnection customers and 
inefficient queue processing.\345\ Clean Energy Associations first 
argue that the 100% increase in network upgrade costs threshold for 
penalty-free withdrawal from the interconnection queue at the 
facilities study stage (compared to costs identified in a previous 
cluster study report) requires interconnection customers to withstand 
an unjust and unreasonable cost increase at such a late stage. Clean 
Energy Associations state that requiring a 100% increase after the 
facilities study for a penalty-free withdrawal is arbitrary and 
capricious, as well as unjust and unreasonable because it would serve 
to effectively penalize interconnection customers for determinations 
beyond their control, at a late phase when costs should become more 
certain--not subject to potential doubling. Clean Energy Associations 
assert that this is inconsistent with Order No. 2023's goal and 
justification for subjecting interconnection customers to increasing 
cost and risk in the form of higher milestone payments and withdrawal 
penalties as they move through the stages of the interconnection 
process, which is intended to incentivize interconnection customers to 
drop out as soon as they learn that their projects are commercially 
non-viable.\346\ Clean Energy Associations submit that the Commission 
should lower this threshold to a 50% cost increase post-study for a 
penalty-free withdrawal, consistent with the penalty-free withdrawal 
provisions approved in SPP, MISO, and PJM.\347\
---------------------------------------------------------------------------

    \345\ Clean Energy Associations Rehearing Request at 29-30.
    \346\ Id. at 30-31 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 691).
    \347\ Id. at 31 (citations omitted).
---------------------------------------------------------------------------

    220. NYISO explains that the Order No. 2023 withdrawal penalty 
requirements establish certain exceptions to an interconnection 
customer's responsibility for withdrawal penalties, including in cases 
in which the transmission provider determines that ``the withdrawal 
does not have a material impact on the cost or timing of any 
Interconnection Request with an equal or lower Queue Position.'' \348\ 
NYISO argues that the Commission should eliminate this material impact 
threshold exception, which it argues is inconsistent with the 
Commission's rationale for the withdrawal penalties, is not well 
defined, and will create an additional administrative, time-intensive 
burden on transmission providers. NYISO states that an interconnection 
customer's withdrawal at the conclusion of a study phase made use of 
the transmission provider's limited time and resources to the detriment 
of other interconnection customers that are ready to proceed and the 
overall time for completing the study phase, and that this harm occurs 
regardless of whether or not the actual study results indicate that the 
withdrawal of its project has a material impact on the cost or timing 
of other interconnection requests.
---------------------------------------------------------------------------

    \348\ NYISO Rehearing Request at 50-51.
---------------------------------------------------------------------------

    221. NYISO further states that the Commission neither defined nor 
provided guidance concerning what constitutes a material impact, 
leaving it instead to the transmission provider to determine.\349\ 
NYISO argues that this creates significant inefficiencies and 
administrative burdens to require transmission providers to assess each 
withdrawing project--which could potentially be dozens--at each study 
phase and determine on a case-by-case basis what individual impact that 
project has on the cost and timing of any interconnection request with 
an equal or lower queue position. NYISO states that this would require 
reviewing such impacts for not only all other projects participating in 
the cluster, but also all other lower queued large and small generating 
facilities in a transmission provider's interconnection queue. NYISO 
argues that this time intensive analysis required upon each withdrawal 
is counter to one of the primary goals of Order No. 2023: to increase 
efficiencies in the interconnection process.
---------------------------------------------------------------------------

    \349\ Id. at 51.
---------------------------------------------------------------------------

    222. Clean Energy Associations also seek clarification to provide 
consistency and objectivity regarding what constitutes a material 
impact resulting from a withdrawal.\350\ Clean Energy Associations urge 
the Commission to clarify that transmission providers must develop 
criteria to use in assessing materiality and include such criteria in 
their compliance filings and tariffs, and suggest modifications to pro 
forma LGIP section 3.7.1.\351\ Clean Energy Associations assert that 
such clarification would still allow transmission providers the 
deference to make materiality determinations, but would also provide 
interconnection customers with a clear understanding of how materiality 
will be determined by each provider, while also ensuring consistent 
treatment of interconnection customers by transmission providers and 
consistent application of the required withdrawal penalty approach. 
Clean Energy Associations also ask the Commission to clarify that, when 
a transmission provider makes a materiality determination after a 
withdrawal, that such determination or other information associated 
therewith be made available along with and at the same time as the 
penalty revenue posting required by revised pro forma LGIP section 
3.7.1.2. Clean Energy Associations argue that, absent the mechanisms 
requested in this clarification, the Commission and interconnection 
customers would have little or no visibility into transmission 
providers' implementation of the immateriality exemption, the 
inconsistent application of which could have significant impacts on 
competition and could result in undue discrimination and preferential 
treatment amongst similarly situated interconnection customers.
---------------------------------------------------------------------------

    \350\ Clean Energy Associations Rehearing Request at 56.
    \351\ Id. at 58-59.
---------------------------------------------------------------------------

    223. WIRES states that Order No. 2023 provides that any withdrawal 
penalty funds collected by the transmission provider are to be 
distributed among the remaining interconnection customers in the 
relevant cluster.\352\ Specifically, WIRES explains that Order No. 2023 
indicates that such withdrawal penalties are to be used to reduce any 
net increases to the existing network upgrade cost assignments to 
remaining customers that saw increased costs as a result of the 
withdrawing customer. WIRES states that, read together with new section 
3.7.1.2.2 of the pro forma, the new rule provides that penalty revenues 
are not directly returned to non-withdrawing customers; rather, the 
transmission provider is to use those funds to reduce the costs of 
network upgrades that are ultimately assigned to non-withdrawing 
interconnection customers. WIRES states that, because penalty revenues 
do not appear to be directly returned to non-withdrawing customers, it 
is unclear how the rule requires the transmission provider to use those 
funds to reduce the interconnection customers' network upgrade cost 
assignment. As a consequence, WIRES asserts that Order No. 2023 could 
be read to require the

[[Page 27042]]

transmission provider to reduce its construction costs included in 
rates associated with the network upgrade and preclude it from earning 
a return on the full cost of the network upgrades that transmission 
owners develop to serve the needs of the cluster. WIRES claims that, in 
effect, the withdrawal penalty crediting mechanism could infringe upon 
a transmission provider's right to self-fund network upgrades and earn 
a return of and on their investment. WIRES argues that the Commission's 
proposed rule never specified, much less suggested, that withdrawal 
penalties would be used to offset network upgrade costs, and the 
Commission should clarify that the Order No. 2023 withdrawal penalty 
distribution may be used to offset payment amounts by the remaining 
interconnection customers to the transmission owner but does not affect 
the overall revenue requirement for the network upgrades.
---------------------------------------------------------------------------

    \352\ WIRES Rehearing Request at 9-10.
---------------------------------------------------------------------------

    224. WIRES states that the Commission could also clarify that the 
withdrawal penalty funds are to be distributed directly to remaining 
interconnection customers as cash payments, which it claims would 
achieve the Commission's apparent objectives without impermissibly 
interfering with a transmission owner's right to fund network 
upgrades.\353\ WIRES states that, absent the Commission granting the 
above clarification, WIRES seeks rehearing on the basis that the 
Commission failed to provide adequate notice and opportunity for public 
comment on the consequences, impacts, and legality of, and possible 
alternatives to, this new withdrawal penalty distribution scheme prior 
to issuing Order No. 2023 as required by the Administrative Procedure 
Act, and failed to consider the effects of its withdrawal distribution 
penalty.
---------------------------------------------------------------------------

    \353\ Id. at 11.
---------------------------------------------------------------------------

    225. NYISO requests that the Commission confirm or otherwise 
clarify the timeframes for the specific withdrawal penalty application 
process steps from the date on which all interconnection customers in 
the cluster have either withdrawn or been deemed withdrawn, executed an 
LGIA, or requested the LGIA be filed unexecuted.\354\ NYISO states that 
it understands the transmission provider to have the following 
responsibilities within either 30 or 60 calendar days of this start 
date. NYISO understands that the transmission provider must within 30 
days: (1) determine the use of the collected withdrawal penalty funds 
for study costs; (2) refund study costs; (3) determine the use of any 
remaining collected withdrawal penalty funds for net increases to 
network upgrade costs; and (4) provide an amended LGIA in the case of 
any offset of increases to network upgrade costs. NYISO states that it 
further understands that the transmission provider must return any 
remaining security to interconnection customer within 60 calendar days. 
NYISO requests that the Commission confirm these are the intended 
deadlines or clarify the actual deadlines for these responsibilities.
---------------------------------------------------------------------------

    \354\ NYISO Rehearing Request at 52-53.
---------------------------------------------------------------------------

    226. NYISO next states that pro forma LGIP section 3.7.1.2.1 
indicates that the transmission provider must use the collected 
withdrawal penalties first ``to fund studies conducted under the 
cluster study process,'' and that the cluster study process is defined 
to include all of the interconnection studies and re-studies.\355\ 
However, NYISO states that section 3.7.1.2.1 elsewhere describes 
distributing withdrawal penalties only in the context of the cluster 
study. NYISO asks the Commission to clarify whether this tariff 
language was intended to apply solely to distribution of penalty funds 
for cluster study costs or for all the interconnection studies--e.g., 
cluster re-studies and the interconnection facilities study.
---------------------------------------------------------------------------

    \355\ Id. at 53 (citing revised pro forma LGIP section 1).
---------------------------------------------------------------------------

    227. NYISO also asks the Commission to clarify whether the 
requirements in pro forma LGIP section 3.7.1.2.2 for refunding any 
penalty amounts not used to offset study costs and net increases in 
upgrade costs are intended to be the same or different from the 
requirements for distributing such remaining penalty funds under 
section 3.7.1.2.5.\356\ NYISO requests that the Commission provide an 
expanded version of the helpful example it provided in Paragraph 808 of 
Order No. 2023 that walks through the different potential variations of 
this process.
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    \356\ Id.
---------------------------------------------------------------------------

    228. Clean Energy Associations and Shell ask the Commission to 
clarify the scope of the withdrawal penalty contained in revised pro 
forma LGIP sections 5.1.1.1 and 5.1.1.2.\357\ Clean Energy Associations 
state that the withdrawal penalty definition's reference to revised pro 
forma LGIP section 3.7.1, and its subsection 3.7.1.1, leads to a 
conclusion that every withdrawal penalty is to be calculated consistent 
with revised pro forma LGIP section 3.7.1.\358\ Clean Energy 
Associations and Shell state that section 5 of the revised pro forma 
LGIP procedures for the transitional cluster study process refers to 
the withdrawal penalty provisions of section 3.7, but that certain 
cross references are unclear.\359\ Clean Energy Associations argue that 
the Commission should clarify whether the term ``Withdrawal Penalty'' 
in revised pro forma LGIP sections 5.1.1.1 and 5.1.1.2 either: (1) 
should not be capitalized so that the revised pro forma LGIP section 1 
defined term ``Withdrawal Penalty,'' and its corresponding reference to 
the calculation in pro forma LGIP section 3.7.1, do not apply to 
withdrawals during the transition process; or (2) a new term 
``Transitional Withdrawal Penalty'' should be defined as a specific 
withdrawal penalty that applies only during the transition process and 
is calculated pursuant to Revised pro forma LGIP sections 5.1.1.1 and 
5.1.1.2.\360\ Clean Energy Associations and Shell further argue that 
the Commission also should clarify whether the term ``study cost,'' as 
used in the calculation of the transitional withdrawal penalty, 
includes the cost of the entire cluster study or the study cost that 
has been assigned to the withdrawing interconnection customer up to the 
point of its withdrawal.
---------------------------------------------------------------------------

    \357\ Clean Energy Associations Rehearing Request at 59-60; 
Shell Rehearing Request at 10.
    \358\ Clean Energy Associations Rehearing Request at 60.
    \359\ Id.; Shell Rehearing Request at 10.
    \360\ Clean Energy Associations Rehearing Request at 60-61; see 
also Shell Rehearing Request at 11.
---------------------------------------------------------------------------

    229. Clean Energy Associations ask the Commission to clarify that 
the new penalty-free withdrawal thresholds will apply to transitional 
projects.\361\ Clean Energy Associations argue that this clarification 
will increase project certainty and fairly allow projects that go 
through the transition to proceed in good faith without the risk that 
new results that show substantially higher costs will not allow them to 
withdraw penalty-free.
---------------------------------------------------------------------------

    \361\ Clean Energy Associations Rehearing Request at 74-75.
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iii. Determination
    230. We deny NYISO's rehearing request as it pertains to the 
withdrawal penalty structure. Specifically, we disagree with NYISO's 
assertion that the withdrawal penalty structure adopted in Order No. 
2023 is unnecessarily complicated and burdensome on transmission 
providers and that it does not reflect reasoned decision-making. While 
NYISO asserts that the requirement to distribute withdrawal penalties 
to remaining interconnection customers facing net increases of costs

[[Page 27043]]

for shared network upgrades will complicate and slow the 
interconnection study process, we continue to find that the benefits of 
reducing the harm of such cost shifts outweighs the potential for added 
complexity. We continue to maintain that incorporating such a mechanism 
will decrease the risk that very large cost shifts due to withdrawals 
result in cascading withdrawals,\362\ which in turn create substantial 
uncertainty, cost, and inefficiency for the interconnection study 
process. Moreover, the tracking of withdrawal penalty funds is 
necessary to ensure that funds related to individual interconnection 
customers' withdrawals are appropriately allocated. The concern of 
ensuring transparency to interconnection customers regarding such funds 
outweighs the perceived burden to transmission providers, especially 
because transmission providers are likely to track the impact of an 
interconnection customer's withdrawal regardless: this is valuable 
information to the transmission provider because withdrawals could lead 
to a study delay and accompanying penalty for the transmission provider 
and such information could be useful to the transmission provider in an 
appeal.
---------------------------------------------------------------------------

    \362\ Order No. 2023, 184 FERC ] 61,054 at P 799.
---------------------------------------------------------------------------

    231. We grant NYISO's request to clarify that withdrawal penalties 
cannot exceed the dollar amount collected from interconnection 
customers that have withdrawn from the interconnection study process 
secured by transmission providers. As stated in section 3.7.1.2.1 of 
the pro forma LGIP, withdrawal penalty funds are collected from the 
cluster for the purposes of (1) funding studies conducted under the 
cluster study process for interconnection customers in the same cluster 
that have executed the LGIA or requested the LGIA to be filed 
unexecuted, and (2) reducing net increases, for interconnection 
customers in the same cluster, in interconnection customers' network 
upgrade cost assignment and associated financial security requirements. 
The total amount of funds used for (1) and (2) must not exceed the 
total amount of withdrawal penalty funds collected from the cluster. We 
accordingly modify the language in pro forma LGIP section 3.7.1.2.1 to 
reflect this clarification. Given this clarification, we need not adopt 
NYISO's request for additional modifications.
    232. We are unpersuaded by Clean Energy Associations' request for 
rehearing as it pertains to the 100% increase in network upgrade costs 
requirement after the facilities study phase for penalty-free 
withdrawal. We disagree that the thresholds for penalty-free withdrawal 
laid out in Order No. 2023 expose interconnection customers to unjust 
and unreasonable cost increases. We continue to find that the trigger 
thresholds are set at an amount providing sufficient room for estimates 
to change as the cluster evolves while limiting interconnection 
customer exposure to withdrawal penalties when such estimates change by 
a significant amount. We acknowledge that the thresholds for penalty-
free withdrawal are higher at later stages of the interconnection study 
process, but continue to find that this structure is reasonable, given 
the greater harms of late-stage withdrawals and the importance of 
incentivizing earlier withdrawal of non-viable interconnection 
requests. An interconnection customer will know to factor in both the 
cost estimates and the potential withdrawal penalty but also the 
exemption trigger thresholds as it makes the business decision to 
proceed in the interconnection queue. Accordingly, we retain the 
penalty-free withdrawal threshold exemptions set forth in Order No. 
2023.
    233. We disagree with NYISO's and Clean Energy Associations' 
requests for the Commission to define materiality in the context of the 
withdrawal penalty exceptions in pro forma LGIP section 3.7.1. 
Consistent with the Commission's finding in Order No. 2003,\363\ we 
find it unnecessary to revise pro forma LGIP section 3.7.1 to specify 
what constitutes a material impact on the cost or timing of any 
interconnection request with an equal queue position. We also note a 
discrepancy between the pro forma LGIP language in section 3.7.1 and 
the withdrawal penalty framework as described in Order No. 2023. 
Accordingly, we revise section 3.7.1 such that there will be no 
withdrawal penalty assessed if the withdrawal does not have a material 
impact on any interconnection request in the same cluster. Withdrawal 
penalty funds are allocated to those interconnection customers in the 
same cluster as the withdrawing interconnection customer, so we find it 
necessary for clarity to remove the reference to lower-queued 
interconnection customers, as adopted in Order No. 2023. We note that 
the materiality of the impact caused by a withdrawal could depend on 
the factors pertaining to the individual project (size, location, type) 
and other projects in the cluster (proximity to the withdrawing 
project, size of remaining projects relative to the withdrawing 
project), as well as the configuration of the transmission provider's 
transmission system. Therefore, we leave it to the transmission 
provider to make this determination of materiality. We are also 
unpersuaded by Clean Energy Associations' request for clarification 
that, when a transmission provider makes a materiality determination 
after a withdrawal regarding a delay in timing or increase in cost of 
network upgrades of other proposed generating facilities in the same 
cluster, such determination or other information associated therewith 
be made available along with and at the same time as the penalty 
revenue posting required by revised pro forma LGIP section 3.7.1.2. The 
benefit to the interconnection customers would not outweigh the 
substantial burden on transmission providers to detail the materiality 
determination for each individual withdrawal.
---------------------------------------------------------------------------

    \363\ Order No. 2003, 106 FERC ] 61,220 at P 168.
---------------------------------------------------------------------------

    234. In response to WIRES, we clarify that using the Order No. 2023 
withdrawal penalties to offset financial security payment amounts 
provided to the transmission provider by the remaining interconnection 
customers would not reduce the total network upgrade cost that a 
transmission provider places in rate base. When the Order No. 2023 
withdrawal penalties are used to offset financial security payment 
amounts, some network upgrade payments will come from the withdrawal 
penalties and some will come from the remaining interconnection 
customer, but the fact that a portion of the network upgrade payment 
comes from withdrawal penalties does not reduce the total network 
upgrade cost that a transmission provider places in rate base. Order 
No. 2023 provides that an interconnection customer's reduced network 
upgrade cost obligation will be effectuated by the transmission 
provider amending the interconnection customer's LGIA or reducing the 
network upgrade cost estimate provided to the interconnection customer 
if there is not yet an LGIA to provide a reduction in network upgrade 
cost assignment and an associated reduction in the interconnection 
customer's financial security requirement.\364\ Given this 
clarification, we believe it unnecessary to address WIRES' alternative 
request for clarification that these withdrawal penalty disbursements 
must be distributed as cash payments. For the same reasons, we believe 
it unnecessary to address WIRES' alternative request for rehearing

[[Page 27044]]

regarding notice of the new withdrawal penalty regime.
---------------------------------------------------------------------------

    \364\ Order No. 2023, 184 FERC ] 61,054 at P 806.
---------------------------------------------------------------------------

    235. We are persuaded by NYISO's request to clarify the timeframes 
for the specific withdrawal penalty application process steps. The 
transmission provider is required to complete the following steps 
within 30 calendar days of all interconnection customers in the cluster 
having either withdrawn or been deemed withdrawn, executed an LGIA, or 
requested the LGIA be filed unexecuted: (1) apply a refund to invoiced 
study costs for interconnection customers that remain in the cluster 
(per pro forma LGIP section 3.7.1.2.1); (2) determine whether withdrawn 
interconnection customers, at any point in the cluster study process, 
shared cost assignment for one or more network upgrades with any 
remaining interconnection customers in the same cluster (per pro forma 
LGIP section 3.7.1.2.2); (3) where the withdrawn interconnection 
customers have shared a cost assignment for one or more network 
upgrades with any remaining interconnection customers in the same 
cluster, transmission provider is to perform the calculations described 
in pro forma LGIP subsection 3.7.1.2.3(a) to determine the reduction in 
the remaining interconnection customers' net increase in network 
upgrade costs and associated financial security requirements (per pro 
forma LGIP section 3.7.1.2.4); and (4) where applicable, provide 
interconnection customers with an amended LGIA that provides the 
reduction in network upgrade cost assignment and associated reduction 
to the interconnection customer's financial security requirements (per 
pro forma LGIP section 3.7.1.2.4).
    236. Where the transmission provider conducts step (2) above and 
determines that a withdrawn interconnection customer did not share cost 
assignments with remaining interconnection customers or cause a net 
increase in the cost assignment for any remaining interconnection 
customers in the same cluster, the transmission provider must return 
any remaining withdrawal penalty funds to the withdrawn interconnection 
customer(s) within 60 calendar days of all interconnection customers in 
the cluster having either withdrawn or been deemed withdrawn, executed 
an LGIA, or requested the LGIA be filed unexecuted (per pro forma LGIP 
section 3.7.1.2.2). The 60-day period here allows the transmission 
provider time to focus on steps 1-4 in the previous paragraph before it 
must disburse funds to withdrawn interconnection customers.
    237. We grant NYISO's request to clarify that pro forma LGIP 
section 3.7.1.2.1 requires the transmission provider to use the 
collected withdrawal penalties first to fund all the interconnection 
studies conducted for interconnection customers in the cluster--
including cluster restudies and the interconnection facilities study. 
We accordingly modify the language in section 3.7.1.2.1 of the pro 
forma LGIP to be inclusive of these studies.
    238. We grant NYISO's request to clarify the difference between the 
requirements to return withdrawal penalty funds to withdrawn 
interconnection customers in pro forma LGIP sections 3.7.1.2.2 and 
3.7.1.2.5. Pro forma LGIP section 3.7.1.2.2 establishes that, where the 
interconnection customer's withdrawal does not cause a net increase in 
the shared cost assignment for any remaining interconnection customers' 
network upgrades in the same cluster, the withdrawal penalty funds 
returned to the withdrawn interconnection customers will be net of the 
amount used to pay the study costs for interconnection customers in the 
same cluster that did not withdraw. Pro forma LGIP section 3.7.1.2.5 
addresses the case where any interconnection customer's withdrawal does 
cause a net increase in the shared cost assignment for any remaining 
interconnection customers' network upgrades. In this case, the 
withdrawal penalty funds returned to the withdrawn interconnection 
customers will be net of both the study costs and the amount paid to 
offset net increases in shared cost assignments for network upgrades.
    239. We are not persuaded by NYISO's request for an expanded 
version of the withdrawal penalty example included in Order No. 2023 
because another purely illustrative example is unnecessary.
    240. We agree with Clean Energy Associations and Shell regarding 
the withdrawal penalty contained in pro forma LGIP sections 5.1.1.1 and 
5.1.1.2. We agree that it is necessary to distinguish the transition 
process withdrawal penalty of nine times study costs from the 
withdrawal penalty assessed under the normal cluster study process 
which is calculated based on pro forma LGIP section 3.7.1. Accordingly, 
we modify section 1 to define ``transitional withdrawal penalty,'' 
\365\ and modify pro forma LGIP sections 5.1.1, 5.1.1.1, and 5.1.1.2 to 
reference the transitional withdrawal penalty.
---------------------------------------------------------------------------

    \365\ Transitional Withdrawal Penalty shall mean the penalty 
assessed by Transmission Provider to an Interconnection Customer 
that has entered the Transitional Cluster Study or Transitional 
Serial Interconnection Facilities Study and chooses to withdraw or 
is deemed withdrawn from Transmission Provider's interconnection 
queue or whose Generating Facility does not otherwise reach 
Commercial Operation. The calculation of the Transitional Withdrawal 
Penalty is set forth in sections 5.1.1.1 and 5.1.1.2 of this LGIP.
---------------------------------------------------------------------------

    241. We grant Clean Energy Associations' and Shell's requests for 
clarification of whether the term ``study cost,'' as used in the 
calculation of the transitional withdrawal penalty, includes the cost 
of the entire cluster study or the study cost that has been assigned to 
the withdrawing interconnection customer up to the point of withdrawal, 
inclusive of any costs incurred in the transition process under the 
transitional serial facilities study or transitional cluster study. We 
clarify that study costs include all costs incurred by the 
interconnection customer in the transmission provider's existing 
interconnection study process prior to the Commission-approved 
effective date of the transmission provider's Order No. 2023 compliance 
filing. For example, where a transmission provider was operating under 
the previous pro forma LGIP, the study costs would include the amount 
incurred by the interconnection customer for the completion of its 
interconnection feasibility study, interconnection system impact study, 
and the interconnection facilities study. As explained in Order No. 
2023 and pro forma LGIP sections 5.1.1.1 and 5.1.1.2, study costs for 
purposes of calculating this withdrawal penalty will also include any 
costs incurred in the transition process under the transitional serial 
facilities study or transitional cluster study.
    242. In response to Clean Energy Associations, we decline to 
clarify that the penalty-free withdrawal thresholds will apply to 
transitional projects. We find it important to the goal of reducing 
speculative behavior that any interconnection customer that enters the 
transition process is required to pay a penalty if it does not reach 
commercial operation. We note that interconnection customers can elect 
not to enter the transition process and instead enter the transmission 
provider's first annual cluster study where the withdrawal penalty 
exemptions will be applied. We also note that the penalty-free 
exemption provisions are more appropriate for the normal cluster study 
process where the withdrawal penalty could be much higher than the nine 
times study costs amount assessed as the transitional withdrawal 
penalty.
    243. We also add minor, clarifying edits to pro forma LGIP section 
3.7.1

[[Page 27045]]

and 3.7.1.1(a) to reference cluster restudies, where appropriate.
6. Transition Process
a. Order No. 2023 Requirements
    244. In Order No. 2023, the Commission established a transition 
process for moving to the first-ready, first-served cluster study 
process.\366\ The Commission required transmission providers to offer 
existing interconnection customers up to three transition options, 
depending on which phase of the serial study process their 
interconnection requests are in: (1) a transitional serial study, (2) a 
transitional cluster study, and (3) withdrawal from the interconnection 
queue without penalty.
---------------------------------------------------------------------------

    \366\ Order No. 2023, 184 FERC ] 61,054 at P 855.
---------------------------------------------------------------------------

    245. The Commission agreed with commenters that, given current 
interconnection queue backlogs in multiple regions, it is essential 
that the Commission craft a transition process to give interconnection 
customers, along with other market participants time to adjust to new 
processes and requirements.\367\ The Commission explained that the 
transition process will create an efficient way to prioritize and 
process interconnection requests based on how far they have advanced 
through the interconnection process and their level of commercial 
readiness.
---------------------------------------------------------------------------

    \367\ Id. P 856.
---------------------------------------------------------------------------

    246. The Commission required transmission providers to offer the 
transitional serial study option to interconnection customers that have 
been tendered a facilities study agreement, even if they have not yet 
executed the agreement, as of 30 calendar days after the filing date of 
the transmission provider's initial filing to comply with Order No. 
2023.\368\ Similarly, the Commission required transmission providers to 
offer the transitional cluster study option to interconnection 
customers with an assigned queue position as of 30 calendar days after 
the filing date of the transmission provider's initial filing to comply 
with Order No. 2023. The Commission found that the adopted transition 
process appropriately balances the need to move expeditiously to the 
new cluster study process with the need to respect the investments and 
expectations of interconnection customers at an advanced stage in the 
existing interconnection process.\369\
---------------------------------------------------------------------------

    \368\ Id. P 855.
    \369\ Id. P 856.
---------------------------------------------------------------------------

    247. The Commission stated that interconnection customers will have 
120 calendar days after the publication of Order No. 2023 to achieve 
eligibility for the transition process (90 calendar days for 
transmission providers to submit compliance filings, plus the 30-
calendar day eligibility cut-off).\370\ The Commission also required 
the transmission provider to tender the appropriate transitional study 
agreements to eligible interconnection customers no later than the 
Commission-approved effective date of the transmission provider's 
compliance filing with Order No. 2023.\371\ The Commission stated that 
this will help ensure that interconnection customers are informed about 
their eligibility for the transitional studies (including the 
associated requirements and deadlines) in a timely manner.
---------------------------------------------------------------------------

    \370\ Id. P 866. On rehearing, the Commission extended the 
compliance date to 150 calendar days of the effective date of the 
final rule but did not adjust the transition date. Improvements to 
Generator Interconnection Procs. & Agreements, 185 FERC ] 61,063 
(2023).
    \371\ Order No. 2023, 184 FERC ] 61,054 at P 867.
---------------------------------------------------------------------------

    248. The Commission also adopted transition process deposits, 
withdrawal penalties, and deadlines.\372\ The Commission required that: 
(1) interconnection customers electing the transitional serial study 
must provide a deposit equal to 100% of the interconnection facility 
and network upgrade costs allocated to the interconnection customer in 
the system impact study; and (2) interconnection customers electing the 
transitional cluster study must provide a deposit equal to $5 
million.\373\ The Commission explained that the transition process is 
anticipated to involve more interconnection customers than standard 
annual clusters (due to existing interconnection queue backlogs), which 
greatly increases the risk of late-stage withdrawals. The Commission 
found that adopting deposit requirements for the transitional studies 
higher than those adopted for the cluster study process will help to 
ensure that the transitional process is used by interconnection 
customers that intend to proceed with their proposed generating 
facilities. In response to arguments that the proposed deposit amounts 
are arbitrary and/or excessive, the Commission explained that the 
deposit amounts are ``based on expected costs to the extent practicable 
and that only a portion of these deposits are ultimately at-risk.'' 
\374\ The Commission noted that the withdrawal penalty is set at nine 
times the study cost with the remainder of deposits to be refunded. The 
Commission also noted that existing interconnection customers that are 
currently in an interconnection queue can opt to withdraw their 
interconnection requests without penalty and wait for the first 
standard cluster study with associated lower deposit requirements.
---------------------------------------------------------------------------

    \372\ Id. P 855.
    \373\ Id. P 859.
    \374\ Id.
---------------------------------------------------------------------------

    249. In response to EDF Renewable's claim that the transitional 
serial study deposit conflicts with the Commission's intentions in 
Order No. 2003,\375\ the Commission found that the heightened need to 
avoid late-stage withdrawals during the transition process--a need that 
the Commission could not have anticipated in Order No. 2003--warrants 
the use of this requirement for the transitional serial study.\376\
---------------------------------------------------------------------------

    \375\ EDF Renewables Initial Comments at 9 (stating that Order 
No. 2003 specifically rejected requiring interconnection customers, 
at the time of execution of the transitional serial study agreement, 
to provide a deposit equal to 100% of the interconnection facility 
and network upgrade costs allocated to them in the system impact 
study report in favor of requiring security for discrete portions of 
these costs).
    \376\ Order No. 2023, 184 FERC ] 61,054 at P 859.
---------------------------------------------------------------------------

    250. As noted earlier, the Commission established a transitional 
study withdrawal penalty equaling nine times the study cost.\377\ The 
Commission explained that the withdrawal penalty plays an important 
role in deterring speculative interconnection requests in both the 
standard cluster study and the transition process. The Commission 
disagreed with commenters that call for a lower penalty to apply during 
the transition process, given that the risk of withdrawals is 
heightened during the transition process. The Commission noted that, 
regardless of the cause, a withdrawal may cause harm to other 
interconnection customers in the transition process and therefore found 
it appropriate to impose penalties on those that choose to withdraw, 
notwithstanding that withdrawal may at times be due to circumstances 
beyond the interconnection customer's control. The Commission explained 
that interconnection customers will bear the risk of withdrawal 
penalties and should consider that risk in deciding whether to elect to 
join a transition process.
---------------------------------------------------------------------------

    \377\ Id. P 860.
---------------------------------------------------------------------------

b. Requests for Rehearing and Clarification
    251. Clean Energy Associations ask that the Commission grant 
rehearing to revise the deposit amounts required for customers entering 
the transitional serial or transitional cluster process, and revise the 
withdrawal penalty amounts for customers that proceed through the 
transitional process.\378\ Clean Energy

[[Page 27046]]

Associations argue that the Commission acted arbitrarily and 
capriciously by imposing excessive and arbitrary deposit requirements 
and withdrawal penalties on interconnection customers electing to 
proceed through transitional studies. Clean Energy Associations assert 
that the Commission ignored substantial record evidence, failed to 
``articulate a rational connection between the facts found and the 
choice made,'' and failed to respond meaningfully to the arguments of 
commenters.\379\
---------------------------------------------------------------------------

    \378\ Clean Energy Associations Rehearing Request at 36-39.
    \379\ Id. at 36 (citing Motor Vehicle Manufacturers, 463 U.S. at 
43 (action arbitrary and capricious if agency ``failed to consider 
an important aspect of the problem'' or ``offered an explanation for 
its decision that runs counter to the evidence before the agency''); 
Allentown Mack Sales & Serv., Inc. v. Nat'l Labor Relations Bd., 522 
U.S. 359 (1998); Del. Div. of Pub. Advoc. v. FERC, 3 F.4th 461, at 
469 (D.C. Cir. 2021) (Delaware Public Advocate); Pub. Utils. Comm'n 
of Cal. v. FERC, 462 F.3d 1027, 1051 (9th Cir. 2006); PPL 
Wallingford Energy v. FERC, 419 F.3d 1134, 1198 (D.C. Cir. 2005); N. 
States Power Co. v. FERC, 30 F.3d 177, 180 (D.C. Cir. 1994)).
---------------------------------------------------------------------------

    252. Clean Energy Associations argue that the Commission failed to 
provide any record evidence to support the $5 million deposit amount 
required for an interconnection customer to proceed to a transitional 
cluster study, nor did it meaningfully respond to contrary evidence 
that the transitional serial study deposit would be unduly burdensome 
or have unintended consequences that frustrate the purpose of Order No. 
2023.\380\ Clean Energy Associations argue that there is no discussion 
in the record of how Order No. 2023's calculus relates to expected 
costs, nor practical limitations to more accurately estimating those 
costs.\381\ Clean Energy Associations assert that the $5 million amount 
originates from a single utility's claim that $5 million is consistent 
with interconnection costs on its system, and not from Commission 
reasoning or evidence that this figure is appropriate on a pro forma 
basis. Clean Energy Associations argue that establishment of a flat 
deposit amount is inconsistent with the Commission's own determination 
elsewhere in Order No. 2023, where the Commission found that study 
deposits under the new cluster study process should differ based on 
project size and estimated network upgrade costs, depending on the 
stage of the process.\382\ Clean Energy Associations also contend that 
this deposit requirement could become a barrier to entry for smaller 
projects that do not have the ability to put up a $5 million deposit, 
and for which a $5 million deposit would have little linkage to actual 
upgrade costs or project economics, which the Commission acknowledged 
was the appropriate driver for deposit amounts.
---------------------------------------------------------------------------

    \380\ Id. at 37 (citing Advanced Energy Economy Initial Comments 
at 19-20; Clean Energy Associations Initial Comments at 43; CREA and 
NewSun Energy Initial Comments at 81; EDF Renewables Initial 
Comments at 9; Pine Gate Initial Comments at 36).
    \381\ Id. at 38-39 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 859; Del. Div. of Pub. Advoc., 3 F.4th at 469).
    \382\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at PP 502, 
690).
---------------------------------------------------------------------------

    253. Clean Energy Associations also argue that the Commission 
inappropriately disregarded EDF Renewable's concern that Order No. 2023 
conflicts with Order No. 2003, which specifically rejected a proposal 
to require customers to post security up front for the total cost of 
such facilities.\383\ Clean Energy Associations note that the 
Commission justifies its alternative approach due to the heightened 
need to avoid late-stage withdrawals during the transition process, but 
argues that the Commission failed to provide substantial evidence to 
further explain or support this heightened need.
---------------------------------------------------------------------------

    \383\ Id. at 39 (citing Order No. 2003, 104 FERC ] 61,103 at PP 
1, 171, 596).
---------------------------------------------------------------------------

    254. Clean Energy Associations request rehearing of the transition 
process set forth in revised pro forma LGIP section 5.1.1.2 because 
they argue that the scope of the transition cluster group established 
by the Commission is too broad.\384\ Clean Energy Associations assert 
that the Commission unjustly and unreasonably groups customers that 
submitted interconnection requests on the eve of the transmission 
providers' Order No. 2023 compliance filing with customers that have 
been pending in the queue for substantially longer periods of 
time.\385\ Clean Energy Associations state that recently-accepted queue 
reform transmission procedures have commonly implemented a ``cut-off'' 
date for transitional study entry that coincides with notice of the 
relevant reforms.\386\ Clean Energy Associations argue that this 
prevents ``mixing'' future interconnection customers' applications with 
existing interconnection customers relative to transitional studies. 
Clean Energy Associations argue that treating new and future 
interconnection customers the same as customers that have been waiting 
for an extended period of time to begin their studies is unjust and 
unreasonable.
---------------------------------------------------------------------------

    \384\ Id. at 44 (citing Order No. 2023, 184 FERC ] 61,054 at P 
1583).
    \385\ Id. at 44-45 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 6 (Comm'r Christie, Concurring)).
    \386\ Id. at 45 (noting PJM's recently implemented generator 
interconnection process tariff reforms, with a transition process 
that made projects assigned queue positions in the existing 
interconnection queue between April 1, 2018 through September 30, 
2021, subject to ``Transition Period Rules,'' requiring a ``retool'' 
study and commercial readiness deposits and site control evidence) 
(citing PJM Interconnection, L.L.C., 181 FERC ] 61,162 at PP 1, 8, 
31, reh'g denied by operation of law, 182 FERC ] 62,055, order 
addressing arguments raised on reh'g, 184 FERC ] 61,006 (2023)).
---------------------------------------------------------------------------

    255. Clean Energy Associations and Shell request that the 
Commission revise the transitional cluster study process and sections 
5.1.1.2 to set the July 28, 2023 issuance date of Order No. 2023 as the 
date of eligibility for transitional cluster study participation.\387\ 
Shell asserts that pro forma LGIP section 5.1.1.2 is too broad because 
it treats new and future generator interconnection customers the same 
as interconnection customers that may have been waiting in the queue 
for years.\388\ Shell contends that the regulatory expectations of 
existing and new customers subject to queue reform are fundamentally 
different because existing customers submitted their requests under one 
queue structure and new customers will submit their requests with 
reasonable notice of the new structure. Shell argues that allowing the 
transitional cluster study to remain open for several months beyond the 
Order No. 2023 issuance date may provide an opportunity for 
interconnection customers to develop strategies that will overwhelm 
specific transitional cluster studies with unnecessarily high volumes 
of new interconnection requests, which may enable them to alter the 
progress of the transitional cluster study by strategically withdrawing 
a specific subset of these generator interconnection requests at each 
decision point.\389\ Shell asserts that this is akin to the queue 
speculation the Commission is trying to discourage pursuant to Order 
No. 2023. Shell states that this may allow new interconnection requests 
to manipulate the transitional cluster study process, thereby 
triggering multiple restudies until they achieve a result that favors 
their projects.
---------------------------------------------------------------------------

    \387\ Id. at 46; Shell Rehearing Request at 6.
    \388\ Shell Rehearing Request at 4-5.
    \389\ Id. at 6-7.
---------------------------------------------------------------------------

    256. Clean Energy Associations also ask the Commission to clarify 
that any interconnection requests submitted after the Order No. 2023 
issuance date will be placed in the first cluster study that follows 
the transitional cluster study.\390\ Shell states that compliance 
filings that include interconnection requests in a transitional cluster 
study queued after

[[Page 27047]]

the deadline should explain why their proposed cut-off date for the 
transitional cluster study will advance the goals of facilitating the 
reduction of queue backlogs in a more efficient and cost-effective 
manner.\391\
---------------------------------------------------------------------------

    \390\ Clean Energy Associations Rehearing Request at 46.
    \391\ Shell Rehearing Request at 7.
---------------------------------------------------------------------------

c. Determination
    257. We are unpersuaded by Clean Energy Associations' request to 
revise the deposit amounts required for customers entering the 
transitional serial or transitional cluster process, and to revise the 
withdrawal penalty amounts for customers that proceed through the 
transitional process. As the Commission explained in Order No. 2023, 
the transition process is anticipated to involve more interconnection 
customers than standard annual clusters due to existing interconnection 
queue backlogs.\392\ With more interconnection customers than normal, 
there is an increased risk of late-stage withdrawals leading to 
restudies and delays that would further frustrate the goals of Order 
No. 2023. We continue to find that adopting deposit requirements for 
the transition studies that are higher than those adopted for the 
cluster study process will help to lower the risk of restudies and 
delays resulting from late-stage withdrawals from the transition 
studies. This requirement is necessary to ensure that the transition 
process is used by interconnection customers that accept the heightened 
financial risks and nevertheless remain confident in the commercial 
viability of their proposed generating facilities.
---------------------------------------------------------------------------

    \392\ Order No. 2023, 184 FERC ] 61,054 at P 859.
---------------------------------------------------------------------------

    258. We further note that the Commission explained in Order No. 
2023 that the transitional deposit amounts are based on expected costs 
``to the extent practicable.'' \393\ In the case of the transitional 
cluster study, it is not practical to create deposits based on 
individualized estimates of network upgrade costs because, unlike the 
transitional serial study, projects entering the transitional cluster 
study are not required to have any previous study results on which such 
estimates could be based. Therefore, the Commission reasonably relied 
upon available evidence as to general network upgrade cost 
estimates.\394\ We further note that no comments in the record provided 
a more persuasive estimate.
---------------------------------------------------------------------------

    \393\ Id. P 860.
    \394\ See Pub. Serv. Co. of Colo., Transmittal Letter, Docket 
No. ER19-2774-000, at 86-87 (filed Sept. 9, 2019) (explaining that 
$5 million is ``likely on the low end'' of estimated network upgrade 
costs that may be allocated to any individual interconnection 
customer); Pub. Serv. Co. of Colo., 169 FERC ] 61,182, at P 65 n.83 
(2019) (approving transitional cluster study deposit at $5 million); 
Tri-State Generation & Transmission Ass'n, Inc., 173 FERC ] 61,015, 
at PP 19, 56 (2020) (same); Tri-State Generation & Transmission 
Ass'n, Inc., 174 FERC ] 61,021, at P 19 (2021) (same).
---------------------------------------------------------------------------

    259. Additionally, we disagree with Clean Energy Associations' 
argument that a flat deposit is inconsistent with other Order No. 2023 
requirements because we find that the need for strict transition 
requirements warrants the use of a flat deposit. Furthermore, as the 
Commission explained, only a portion of these deposits are ultimately 
at risk, and there is no withdrawal penalty if existing interconnection 
customers currently in the queue opt to withdraw and wait for the first 
standard cluster study with associated lower deposit requirements 
rather than proceed in the transitional cluster.\395\ For similar 
reasons, we also decline to modify the withdrawal penalty amount. In 
light of the heightened risk of withdrawals leading to restudies and 
delays during the transition process, we disagree with Clean Energy 
Associations' argument that the withdrawal penalty is excessive and 
arbitrary.
---------------------------------------------------------------------------

    \395\ Order No. 2023, 184 FERC ] 61,054 at P 859.
---------------------------------------------------------------------------

    260. We are not persuaded by Clean Energy Associations' and Shell's 
calls to set an earlier cut-off date, the issuance date of Order No. 
2023, as the date for eligibility for transitional cluster study 
participation. Clean Energy Associations and Shell argue that an 
earlier cut-off date would be fair to those generators who have been 
waiting in interconnection queues for years and submitted their 
interconnection request under a different queue structure. However, the 
fact that more recent interconnection requests may be included in the 
transitional cluster does not in and of itself render the eligibility 
cut-off date unjust and unreasonable. As the Commission has stated in 
multiple queue reform proceedings, ``any cut-off date inevitably will 
[exclude certain interconnection customers].'' \396\ Likewise, the 
inverse of this statement holds true: any cut-off date inevitably will 
include certain interconnection customers. The Commission's decision to 
set the eligibility cut-off date as 30 calendar days after the filing 
date of the transmission provider's initial compliance filing was 
reasonable.
---------------------------------------------------------------------------

    \396\ PJM Interconnection, L.L.C., 181 FERC ] 61,162 at P 60; 
Tri-State Generation & Transmission Ass'n, Inc, 175 FERC ] 61,128, 
at P 14 (2021); PacifiCorp, 173 FERC ] 61,016, at P 25 (2020).
---------------------------------------------------------------------------

    261. Additionally, Commission precedent does not require a certain 
cluster size, nor do Clean Energy Associations and Shell provide 
evidence to suggest that the size of the transitional cluster would be 
unworkable. Rather, because there are stricter requirements to join the 
transitional cluster than those adopted for the cluster study 
process,\397\ it is unlikely that non-ready projects would be able to 
join the transitional cluster. Furthermore, due to existing 
interconnection queue backlogs, the Commission anticipated that the 
transition process will involve more interconnection customers than 
standard annual clusters and established the transition date along with 
the accompanying requirements to enter the transition with this 
knowledge in mind. The alternative, moving the eligibility date 
earlier, would simply shift interconnection customers into the first 
cluster following the transitional cluster. We lack a basis in the 
record to conclude, as Clean Energy Associations and Shell appear to 
argue, that a somewhat larger transitional cluster is not just and 
reasonable, but a somewhat larger post-transition cluster would be just 
and reasonable.
---------------------------------------------------------------------------

    \397\ Compare pro forma LGIP section 5.1.1.2 (Transitional 
Cluster Study) and section 3.4.2 (Initiating an Interconnection 
Request).
---------------------------------------------------------------------------

    262. We are also unpersuaded by Shell's assertion that the current 
eligibility cut-off date could lead to a queue rush. Such a concern is 
speculative. We reiterate that the higher deposit requirements for the 
transitional cluster study process than those adopted for the non-
transitional cluster study process helps ensure that the transitional 
process is used by interconnection customers that intend to proceed 
with their proposed generating facilities.
    263. Lastly, we add definitions to the pro forma LGIP for the terms 
``Transitional Cluster Study Agreement'' and ``Transitional Serial 
Interconnection Facilities Study Agreement.''

D. Reforms To Increase the Speed of Interconnection Queue Processing

1. Elimination of Reasonable Efforts Standard and Implementation of a 
Replacement Rate
a. Order No. 2023 Requirements
    264. In Order No. 2023, the Commission revised sections 2.2, 
3.5.4(i), 7.4, 8.3, and Attachment A to Appendix 3 (formerly Appendix 
4) of the pro forma LGIP to eliminate the reasonable efforts standard 
for conducting cluster studies, cluster restudies, facilities studies, 
and affected system studies by the tariff-specified deadlines.\398\ The 
Commission added new section 3.9 to the pro forma LGIP

[[Page 27048]]

to implement a study delay penalty structure. Specifically, delays of 
cluster studies beyond the tariff-specified deadline will incur a 
penalty of $1,000 per business day; delays of cluster restudies beyond 
the tariff-specified deadline will incur a penalty of $2,000 per 
business day; delays of affected system studies beyond the tariff-
specified deadline will incur a penalty of $2,000 per business day; and 
delays of facilities studies beyond the tariff-specified deadline will 
incur a penalty of $2,500 per business day. The Commission explained 
that, among other things, these penalty amounts are intended to 
incentivize transmission providers to meet study deadlines and that the 
structure of increasing penalties reflects the progressively greater 
harm caused by delayed studies at later interconnection stages.\399\
---------------------------------------------------------------------------

    \398\ Order No. 2023, 184 FERC ] 61,054 at P 962.
    \399\ Id. PP 974-978.
---------------------------------------------------------------------------

    265. The Commission also specified that the study delay penalty 
regime contains the following safeguards for transmission providers: 
(1) no study delay penalties will be assessed until the third cluster 
study cycle (including any transitional cluster study cycle, but not 
transitional serial studies) after the Commission-approved effective 
date of the transmission provider's filing in compliance with Order No. 
2023; (2) there will be a 10-business day grace period, such that no 
study delay penalties will be assessed for a study that is delayed by 
10 business days or fewer; (3) deadlines may be extended for a 
particular study by 30 business days by mutual agreement of the 
transmission provider and all interconnection customers with 
interconnection requests in the relevant study; (4) study delay 
penalties will be capped at 100% of the initial study deposits received 
for all of the interconnection requests in the relevant study; and (5) 
transmission providers will have the ability to appeal any study delay 
penalties to the Commission, with the Commission determining whether 
good cause exists to grant the relief requested on appeal.\400\
---------------------------------------------------------------------------

    \400\ Id. P 972.
---------------------------------------------------------------------------

    266. The Commission further included the following features in the 
study delay penalty structure: (1) transmission providers must 
distribute study delay penalties to interconnection customers in the 
relevant study that did not withdraw, or were not deemed withdrawn, 
from the interconnection queue before the missed study deadline on a 
pro rata per interconnection request basis to offset their study costs; 
(2) non-RTO/ISO transmission providers and transmission-owning members 
of RTOs/ISOs may not recover study delay penalties through transmission 
rates; (3) RTOs/ISOs may submit an FPA section 205 filing to propose a 
default structure for recovering study delay penalties and/or to 
recover the costs of any specific study delay penalties; \401\ and (4) 
transmission providers must post quarterly on their OASIS or other 
publicly accessible website (a) the total amount of study delay 
penalties from the previous reporting quarter and (b) the highest study 
delay penalty paid to a single interconnection customer in the previous 
reporting quarter.\402\ The Commission also added new section 
(f)(1)(ii) to 18 CFR 35.28(f)(1) to specify that any public utility 
that conducts interconnection studies shall be subject to and eligible 
to appeal penalties following that public utility's failure to complete 
an interconnection study by the appropriate deadline.\403\
---------------------------------------------------------------------------

    \401\ The typical standard of review under FPA section 205 would 
apply to these filings: i.e., the filer must show that any proposal 
to recover study delay penalties is just, reasonable, and not unduly 
discriminatory or preferential. See 16 U.S.C. 824d.
    \402\ Order No. 2023, 184 FERC ] 61,054 at P 963.
    \403\ Id. P 995.
---------------------------------------------------------------------------

    267. The Commission explained that the lengthy interconnection 
study delays and interconnection queue backlogs throughout the country 
support a conclusion that the reasonable efforts standard does not 
provide an adequate incentive for transmission providers to complete 
interconnection studies on time.\404\ The Commission stated that there 
is every reason to believe that many of the factors contributing to 
significant interconnection queue backlogs and delay--including the 
rapidly changing resource mix, market forces, and emerging 
technologies--will persist. The Commission explained that the 
reasonable efforts standard worsens current-day challenges, as it fails 
to ensure that transmission providers are keeping pace with the 
changing and complex dynamics of today's interconnection queues.\405\ 
Therefore, in response to those ongoing challenges and based on the 
record, the Commission found that the elimination of the reasonable 
efforts standard and its replacement with firm deadlines and penalties 
are needed to remedy unjust and unreasonable rates and ensure that 
interconnection customers are able to interconnect to the transmission 
system in a reliable, efficient, transparent, and timely manner.\406\
---------------------------------------------------------------------------

    \404\ Id. P 966.
    \405\ Id. P 967.
    \406\ Id. P 968.
---------------------------------------------------------------------------

    268. The Commission noted that its conclusions were not based on a 
finding that transmission providers have necessarily acted in bad faith 
or that their actions are the sole reason for the queue delays.\407\ 
The Commission explained that it adopted numerous other reforms to 
appropriately incentivize interconnection customers to help reduce 
interconnection delays that may result from their conduct. However, the 
Commission found that the elimination of the reasonable efforts 
standard and the adoption of firm deadlines and penalties for late 
studies are needed to create an incentive for transmission providers, 
which will help reduce interconnection delays and ensure that 
Commission-jurisdictional rates are just, reasonable, and not unduly 
discriminatory or preferential. The Commission further found that 
distribution of these penalties to interconnection customers in the 
relevant studies was appropriate as a means of offsetting these 
customers' study costs. The Commission further explained that the study 
delay penalty regime balances the harm to interconnection customers of 
interconnection study delays and the associated need to incentivize 
transmission providers to timely complete interconnection studies with 
the burdens on transmission providers of conducting interconnection 
studies and potentially facing penalties for delays, including those 
that may be caused or exacerbated by factors beyond their control.\408\
---------------------------------------------------------------------------

    \407\ Id. P 966.
    \408\ Id. P 972.
---------------------------------------------------------------------------

    269. As noted above, the Commission adopted a process for 
transmission providers to appeal any study delay penalties they 
incur.\409\ The Commission explained that any such appeal must be filed 
no later than 45 calendar days after the late study has been completed. 
The Commission stated that it will evaluate whether good cause exists 
to grant relief from the study delay penalty and will issue an order 
granting or denying relief. The Commission noted that in evaluating 
whether there is good cause to grant such relief, the Commission may 
consider, among other factors: (1) extenuating circumstances outside 
the transmission provider's control, such as delays in affected system 
study results; (2) efforts of the transmission provider to mitigate 
delays; and (3) the extent to which the transmission provider has 
proposed process enhancements either in the stakeholder process or at 
the Commission to prevent future delays. The Commission further 
provided that the filing of an appeal will stay the

[[Page 27049]]

transmission providers' obligation to distribute the study delay 
penalty funds to interconnection customers until 45 calendar days after 
(1) the deadline for filing a rehearing request has ended, if no 
requests for rehearing of the Commission's decision on the appeal have 
been filed, or (2) the date that any requests for rehearing of the 
Commission's decision on the appeal are no longer pending before the 
Commission. The Commission explained that the appeals process balances 
the need to ensure that transmission providers have an incentive to 
meet interconnection study deadlines with protections to ensure that 
any such penalties are fair and not triggered if good cause justifies 
the delay.\410\ The Commission further explained that the protections 
embedded in this appeal process address commenters' concerns that there 
should be adequate process and/or fact-finding before imposing a study 
delay penalty on transmission providers.
---------------------------------------------------------------------------

    \409\ Id. P 987.
    \410\ Id. P 988.
---------------------------------------------------------------------------

    270. Additionally, the Commission specified that transmission 
providers must distribute study delay penalties to the interconnection 
customers and affected system interconnection customers included in the 
relevant study that did not withdraw, or were not deemed withdrawn, 
from the interconnection queue before the missed study deadline.\411\ 
The Commission explained that, unless the transmission provider files 
an appeal to the study penalty, the study delay penalty must be 
distributed no later than 45 calendar days after the late study has 
been completed. The Commission further specified that a study delay 
penalty for a delayed cluster study or cluster restudy must be 
distributed on a pro rata basis per interconnection request to all 
interconnection customers in the cluster, while a study delay penalty 
for a delayed facilities study must be distributed to the 
interconnection customer whose facilities were being studied, and a 
study delay penalty for a delayed affected system study must be 
distributed to the affected system interconnection customer(s) whose 
generating facility was being studied by an affected system 
transmission provider. The Commission provided that the study delay 
penalties are on a per business day basis and will be distributed 
equally to each delayed interconnection customer per the requirements 
above. The Commission explained that this distribution defrays the 
study costs of the interconnection customers affected by that 
delay.\412\
---------------------------------------------------------------------------

    \411\ Id. P 990.
    \412\ Id. P 991.
---------------------------------------------------------------------------

    271. The Commission also declined to adopt the NOPR's proposed 
force majeure penalty exception.\413\ The Commission explained that 
this exemption is unwarranted given the adoption of an appeal 
mechanism, which provides transmission providers the opportunity to 
explain to the Commission any circumstances that caused the delay, 
including any events that qualify as force majeure.\414\
---------------------------------------------------------------------------

    \413\ Id. PP 963, 1003.
    \414\ Id. P 1003.
---------------------------------------------------------------------------

b. Elimination of the Reasonable Efforts Standard
i. Requests for Rehearing
    272. Many rehearing requests argue that the decision to eliminate 
the reasonable efforts standard is not supported by substantial record 
evidence.\415\ They argue that the Commission failed to meet its FPA 
section 206 burden because the Commission failed to show that (1) this 
standard is causing or materially contributing to delays or (2) the 
elimination of this standard will increase the timely provision of 
interconnection service, especially given the other factors that may 
cause study delays.\416\ NYTOs argue that Order No. 2023's observation 
that, under the reasonable efforts standard, interconnection studies 
have been delayed ``conflates correlation with causation.'' \417\ 
Others argue that the Commission failed to address the root cause of 
study delays--namely, the volume of interconnection requests, which 
they claim Order No. 2023 will increase.\418\ Avangrid disputes Order 
No. 2023's conclusion that the other reforms adopted therein are 
expected to ease the burdens on transmission providers by streamlining 
and reducing the number of interconnection studies.\419\
---------------------------------------------------------------------------

    \415\ AEP Rehearing Request at 10; Avangrid Rehearing Request at 
8-9; MISO TOs Rehearing Request at 11-13; NYISO Rehearing Request at 
39-40; NYTOs Rehearing Request at 15-19; PJM Rehearing Request at 
30; WIRES Rehearing Request at 4-6.
    \416\ AEP Rehearing Request at 11-13; Avangrid Rehearing Request 
at 8-9, 13-14; MISO TOs Rehearing Request at 11-13; NYTOs Rehearing 
Request at 15-17; WIRES Rehearing Request at 4-6.
    \417\ NYTOs Rehearing Request at 15-17 (asserting that the 
Commission has not undertaken a ``root cause assessment'' to 
determine the extent to which the reasonable efforts standard causes 
or contributes to study delays or shown that this standard is a 
``material contributing cause of study delays''); see id. at 18-19 
(noting the Commission's recognition that there are factors outside 
of the transmission providers' control that may contribute to 
delays, that timeframes for such studies have historically been 
treated by transmission providers as estimates, and that 
transmission customers may cause delays); see also Avangrid 
Rehearing Request at 8-9; Dominion Rehearing Request at 19; NYISO 
Rehearing Request at 40; WIRES Rehearing Request at 4-6.
    \418\ Avangrid Rehearing Request at 9-11; NYTOs Rehearing 
Request at 14; PJM Rehearing Request at 30.
    \419\ Avangrid Rehearing Request at 11-13 (``[T]here is scant 
evidence in the record that the easing of burdens will be sufficient 
to justify the broad imposition of arbitrary, strict, one-size-fits-
all deadlines and penalties for non-attainment.'').
---------------------------------------------------------------------------

    273. Several of the rehearing requests assert that the Commission 
has not demonstrated that interconnection study delays and backlogs are 
connected to transmission provider actions, such as wrongdoing, 
incompetence, lack of appropriate incentives, bad faith, or failure to 
exercise due diligence.\420\ SPP and ITC claim that there are already 
many strong incentives to timely perform interconnection studies and 
the record does not contain the necessary support to conclude that a 
lack of incentives, as opposed to various other factors outside of 
transmission providers' control, are the cause for interconnection 
queue backlogs or study delays.\421\ Many rehearing requests detail 
numerous factors contributing to delays and backlogs that they assert 
are outside of the transmission provider's control (e.g., the volume of 
interconnection requests, complexity of studies, staffing shortages, 
the shortage of qualified engineers, withdrawals triggering the need 
for restudies, delayed data from interconnection customers, affected 
system coordination, a rapidly changing resource mix, market forces, 
and emerging technologies) and argue that these conditions will 
persist, such that study delay penalties on transmission providers 
cannot be effective and are unsupported.\422\
---------------------------------------------------------------------------

    \420\ AEP Rehearing Request at 12-13; Dominion Rehearing Request 
at 18; EEI Rehearing Request at 4-7 (noting that the Commission 
identifies other factors as contributing to such delays and backlogs 
and has never found a transmission provider at fault for delays in 
the interconnection process); ITC Rehearing Request at 5; PacifiCorp 
Rehearing Request at 4-7 (noting that the Commission confirmed that 
it was not finding that transmission providers necessarily acted in 
bad faith or were the sole reason for queue delays); SPP Rehearing 
Request at 5-6 (noting that the Commission has never found a 
transmission provider to have violated the reasonable efforts 
standard, and commenters did not provide evidence that transmission 
providers have failed to use reasonable efforts).
    \421\ ITC Rehearing Request at 6; SPP Rehearing Request at 6-7.
    \422\ Avangrid Rehearing Request at 4-5, 12-13; Dominion 
Rehearing Request at 19-22; MISO TOs Rehearing Request at 14; 
PacifiCorp Rehearing Request at 11-13; SPP Rehearing Request at 6-7. 
Dominion also asserts that Order No. 2023 will increase demand for 
qualified engineers, such that hiring additional staff may not be 
feasible. Dominion Rehearing Request at 20-21.

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

[[Page 27050]]

    274. AEP, EEI, and MISO TOs contend that the Commission's 
elimination of the reasonable efforts standard and its replacement with 
the deadline and penalty framework is based on notions of fairness or 
equity between transmission providers and interconnection customers, 
but they contend that this is an inadequate basis for reform.\423\ EEI 
asserts that penalties assessed against transmission providers 
therefore cannot be effective in reducing such delays and 
backlogs.\424\
---------------------------------------------------------------------------

    \423\ AEP Rehearing Request at 11-12; EEI Rehearing Request at 
5, 7 (asserting that the Commission eliminated the reasonable 
efforts standard and imposed penalties to ``ensure that transmission 
providers are `doing their part' '' and to establish ``a strange 
kind of parity in its reforms''); MISO TOs Rehearing Request at 19 
(arguing that the Commission has not found bad faith on the part of 
transmission providers or that they are the sole reason for delays 
and transmission providers--unlike interconnection customers, who 
have control over burdens that the Commission has imposed on them--
will be penalized regardless of whether they had control of the 
factors causing a study delay); see also Indicated PJM TOs Rehearing 
Request at 39-40 (claiming that the Commission failed to address 
their comments that the testimony of Chairman LeVar of the Utah 
Public Service Commission does not support the use of penalties as 
incentives).
    \424\ EEI Rehearing Request at 6-7.
---------------------------------------------------------------------------

    275. Certain rehearing requests also cite the purported benefits of 
the reasonable efforts standard, including the consistency of that 
standard with good utility practice and the flexibility afforded by 
that standard, urging that the reasonable efforts standard remains just 
and reasonable.\425\ As a result, ITC argues that the ``reasonable 
efforts'' standard ensures that transmission providers treat other 
parties comparably to how they will protect their own interests.\426\ 
NYTOs assert that the reasonable efforts standard is just and 
reasonable because each generator project and interconnection request 
is unique, such that flexibility is warranted in the face of the 
challenges posed by the study process, the uniqueness of each study 
request, mounting volumes of such requests, and because delays in that 
process may not be the fault of transmission providers.\427\ EEI argues 
that retaining the reasonable efforts standard is particularly 
appropriate given the other requirements of Order No. 2023, contending 
that flexibility will be necessary given the complexity of the cluster 
study process, the new technologies that must be evaluated, and new 
NERC standards.\428\ Indicated PJM TOs assert that the reasonable 
efforts standard provides the optimal balance of incentives to complete 
studies in a timely manner and the reasonable flexibility for planners 
to take the time needed to ensure grid reliability will be maintained 
in a cost-effective manner.\429\
---------------------------------------------------------------------------

    \425\ Id. at 8-9; Indicated PJM TOs Rehearing Request at 5-6; 
ITC Rehearing Request at 4; MISO TOs Rehearing Request at 8-10; 
NYTOs Rehearing Request at 17-20.
    \426\ ITC Rehearing Request at 4 (arguing that this strikes an 
appropriate balance between competing interests); see also MISO TOs 
Rehearing Request at 8-10 (similar argument); id. at 20-24 (arguing 
that the Commission has long recognized the need for flexibility in 
the study process, which reflects why a ``no fault'' and less 
flexible regime of automatic penalties is illogical, particularly 
given increasing workload and complexity of interconnection 
studies).
    \427\ NYTOs Rehearing Request at 17-20; cf. id. at 26 (asserting 
that rigid deadlines and penalties are inconsistent with flexibility 
that Order No. 2023 claims to support).
    \428\ EEI Rehearing Request at 8-9.
    \429\ Indicated PJM TOs Rehearing Request at 5-6.
---------------------------------------------------------------------------

    276. Many of the rehearing requests assert that the Commission 
failed to demonstrate that there are steps that transmission providers 
can take that will, in fact, improve the timeliness of study processes 
and challenge the Commission's determination that transmission 
providers can feasibly take steps to better ensure timely 
interconnection request processing, such as deploying resources, 
exploring administrative efficiencies, and using innovative study 
approaches.\430\ They contend that this determination is vague, poorly 
supported, and based on ``notions that transmission providers are not 
sufficiently imaginative'' or that they will be easily able to find and 
hire qualified staff and deploy automation and computing solutions in 
short order.\431\ EEI asserts that replacing the reasonable efforts 
standard with deadlines and penalties cannot alter the number of 
requests submitted or the number of qualified individuals that can 
perform these studies.\432\ SPP observes that qualified engineers may 
not want to work for transmission providers if they risk being 
identified as a cause of study delays that result in penalties or face 
potential liability.\433\
---------------------------------------------------------------------------

    \430\ See Order No. 2023, 184 FERC ] 61,054 at P 967.
    \431\ AEP Rehearing Request at 12; EEI Rehearing Request at 6-7; 
MISO TOs Rehearing Request at 18 (arguing that the Commission 
acknowledges the shortage of qualified engineers but simply 
dismisses this problem); PJM Rehearing Request at 32-33; SPP 
Rehearing Request at 7; WIRES Rehearing Request at 7-8 (contending 
that these steps are ``more hopeful thinking than discrete, tangible 
actions'').
    \432\ EEI Rehearing Request at 6.
    \433\ SPP Rehearing Request at 7.
---------------------------------------------------------------------------

    277. A number of the rehearing requests also contend that the 
Commission should have allowed the other reforms in Order No. 2023 to 
take effect before eliminating the reasonable efforts standard and 
adopting a structure of study deadlines and penalties.\434\ AEP argues 
that the Commission should require transmission providers to augment 
the reports required under section 3.5 of the pro forma LGIP and Order 
No. 845 to require information regarding the effects of cluster study 
reforms, giving the Commission real world data regarding the causes of 
interconnection study delays.\435\
---------------------------------------------------------------------------

    \434\ AEP Rehearing Request at 15-16; Avangrid Rehearing Request 
at 9; EEI Rehearing Request at 5; NYTOs Rehearing Request at 17, 20-
22 (``Only if the variables outside of a transmission provider's 
control are removed will the Commission have a sufficient 
evidentiary foundation to make the determinations required under 
Section 206 with respect to whether the Reasonable Efforts standard 
is unjust and unreasonable as applied in context of actual 
performance.''); PacifiCorp Rehearing Request at 4-5.
    \435\ AEP Rehearing Request at 15-16 (setting forth AEP's view 
on how to augment those reports and noting other areas where 
reporting requirements were required and arguing that such reporting 
would incentivize transmission providers to perform studies in a 
timely fashion).
---------------------------------------------------------------------------

    278. Some rehearing requests also argue that the Commission relied 
on stale and inapposite evidence to support the elimination of the 
reasonable efforts standard and replacement with the deadline and 
penalty structure.\436\ Indicated PJM TOs assert that the vast majority 
of study delays reflected in the Order No. 845 data for the end of 2022 
came from PJM, which had recently transitioned to a first-ready, first-
served cluster cycle approach effective in January 2023.\437\ Indicated 
PJM TOs also assert that the Commission relied on a stale record from 
Order No. 890 as support for imposing penalties on RTOs/ISOs that fail 
to meet deadlines.\438\ PacifiCorp similarly contends that the evidence 
the Commission relied on relates to delays in the serial study process, 
rather than the new cluster-based process, and ``implementation of 
penalties, therefore, is attempting to fix a problem that has not been 
shown to exist.'' \439\ NYISO

[[Page 27051]]

argues that the data the Commission relied on concerns missed study 
deadlines in ``RTO/ISO regions that have been contending with 
unprecedented numbers of new interconnection requests and/or have 
recently made substantial improvements to their interconnection 
procedures that are not reflected in earlier metrics.'' \440\
---------------------------------------------------------------------------

    \436\ Indicated PJM TOs Rehearing Request at 17-18; NYISO 
Rehearing Request at 39-40; PacifiCorp Rehearing Request at 7-8.
    \437\ Indicated PJM TOs Rehearing Request at 17-18 (arguing 
that, while the Commission points to deficiencies with serial study 
approaches, they do not apply to regions that have already 
implemented cluster studies and that those regions should be allowed 
to fully implement those new approaches).
    \438\ Id. at 18-19 (arguing that the ``world has changed'' in 
certain respects since Order No. 890 was issued, that the Order No. 
890 deadlines were consistent with what was historically achievable, 
and the penalties in Order No. 890 were less draconian than those 
imposed by Order No. 2023).
    \439\ PacifiCorp Rehearing Request at 7-8 (referencing Nat'l 
Fuel Gas Supply Corp. v. FERC, 468 F.3d 831, 842 (D.C. Cir. 2006) 
(National Fuel), in which the D.C. Circuit vacated the prior version 
of the Commission's Standards of Conduct on the basis that, inter 
alia, the purported record evidence FERC relied upon were rulemaking 
comments that did not identify any actual examples of wrongdoing).
    \440\ NYISO Rehearing Request at 39-40.
---------------------------------------------------------------------------

    279. Indicated PJM TOs and NYISO also argue that the Commission 
failed to justify eliminating the reasonable efforts standard and 
imposition of deadlines and penalties through a generic 
rulemaking.\441\ Indicated PJM TOs contend that the Commission lacked 
substantial evidence to make a generic finding that all existing 
interconnection study regimes--some of which already use the cluster 
study approach--are unjust and unreasonable to the extent those regimes 
rely on the reasonable efforts standard rather than imposing deadlines 
and penalties.\442\ Indicated PJM TOs further assert the Commission 
cannot use general or generic findings to enact an industry-wide 
solution for a problem that exists only in isolated pockets and that 
study delays are not sufficiently widespread to justify the 
Commission's generic approach.\443\ NYISO argues that it is not 
reasoned decision-making to assume that all transmission providers need 
stronger incentives to timely complete studies and asserts that state 
regulators in New York support retaining some form of the reasonable 
efforts standard.\444\
---------------------------------------------------------------------------

    \441\ Id. at 40; Indicated PJM TOs Rehearing Request at 13-17.
    \442\ Indicated PJM TOs Rehearing Request at 13-17.
    \443\ Id. at 14 (citing S.C. Pub. Serv. Auth., 762 F.3d at 66-
67; Assoc. Gas, 824 F.2d at 1019; Wis. Gas., 770 F.2d at 1151, 
1168); see also id. at 15-16 (discussing the Order No. 845 data, 
noting that 14 of 24 non-RTOs/ISOs experienced no study delays; as 
to RTOs/ISOs, CAISO experienced no study delays, SPP's data was 
excluded, and urging that PJM's data should also have been 
excluded).
    \444\ NYISO Rehearing Request at 40.
---------------------------------------------------------------------------

ii. Determination
    280. The gravity of the problem of increased interconnection queue 
backlogs and delays, leading to unjust and unreasonable rates, prompted 
the Commission in Order No. 2023 to adopt a comprehensive set of 
reforms to the interconnection process, including reforms to the 
reasonable efforts standard for the completion of interconnection 
studies.\445\ As to that standard, the Commission explained that 
``interconnection queue backlogs and delays, and the accompanying 
uncertainty, are further compounded because transmission providers have 
limited incentive to perform interconnection studies in a timely 
manner.'' \446\ Under this standard, ``[t]here are no explicit 
consequences in the pro forma LGIP for transmission providers that fail 
to meet their study deadlines,'' \447\ allowing ``significant 
discretion to the transmission providers in extending their own 
deadlines.'' \448\ As the Commission found, ``[t]his outcome stands in 
stark contrast to interconnection customers that face financial and 
commercial consequences due to late interconnection study results and 
may be considered withdrawn from the interconnection queue for failing 
to meet their tariff-imposed deadlines.'' \449\
---------------------------------------------------------------------------

    \445\ The Commission explained in Order No. 2023 how 
interconnection queue backlogs result in unjust and unreasonable 
rates, including by hindering the development of new generation, 
stifling competition in wholesale electric markets, and creating 
uncertainty that increases costs. See, e.g., Order No. 2023, 184 
FERC ] 61,054 at PP 3, 27-29, 37-60; supra section II.A. We disagree 
with arguments that the Commission failed to adequately explain or 
that the record does not support this conclusion. See, e.g., 
Indicated PJM TOs Rehearing Request at 29-30.
    \446\ Order No. 2023, 184 FERC ] 61,054 at P 50.
    \447\ Id. P 872.
    \448\ Id. P 50 (noting that despite ``pervasive delays in 
completing interconnection studies by transmission providers . . . 
transmission providers have faced few, if any, consequences for 
failing to meet their tariff-imposed study deadlines under the 
reasonable efforts standard'').
    \449\ Id. (concluding that the reasonable efforts standard 
results in rates that are unjust and unreasonable).
---------------------------------------------------------------------------

    281. The history of the Commission's action with respect to 
interconnection queue backlogs, and particularly interconnection study 
delays as a contributor to such backlogs, reflects that the Commission 
has taken a gradual approach to addressing these problems. In Order No. 
2003, the Commission first imposed the reasonable efforts standard for 
the timely completion of interconnection studies, without adopting firm 
deadlines or a structure of automatic penalties for delays.\450\ As the 
Commission observed in Order No. 2023, the reasonable efforts standard 
allowed transmission providers significant discretion to extend their 
own deadlines for the completion of interconnection studies.\451\ In 
2018, in Order No. 845, the Commission rejected requests to eliminate 
the reasonable efforts standard in favor of firm interconnection study 
deadlines,\452\ explaining that reliance on increased reporting was a 
preferable approach because the ``current record'' did not support 
elimination of the reasonable efforts standard, such that doing so 
would be inappropriate ``[a]t this time.'' \453\ The Commission 
likewise decided not to implement automatic penalties for delayed 
studies, recognizing the extent to which delays could be caused by 
factors outside of transmission providers' control, instead adopting 
measures to ``improve transparency by highlighting where 
interconnection study delays are most common and the causes of delays 
in these regions.'' \454\ It further stated that ``[t]his information 
could also be useful to the Commission in determining if additional 
action is required to address interconnection study delays.'' \455\
---------------------------------------------------------------------------

    \450\ Order No. 2003, 104 FERC ] 61,103 (pro forma LGIP sections 
7.4, 8.3).
    \451\ Order No. 2023, 184 FERC ] 61,054 at P 50.
    \452\ See Order No. 845, 163 FERC ] 61,043 at PP 315-21; id. at 
322 (noting that the Commission had not proposed, in its notice of 
proposed rulemaking for Order No. 845, such firm study deadlines).
    \453\ Id. P 323.
    \454\ Id. P 309 (``Such information could highlight systemic 
problems for individual transmission providers and interconnection 
customers.'').
    \455\ Id.
---------------------------------------------------------------------------

    282. Order No. 2023 reflects a determination that such additional 
action is required. The reforms in Order No. 845 have not eliminated 
the problems of interconnection queue backlogs and delayed 
interconnection studies. These problems have only grown, 
notwithstanding the Commission's previous reforms.\456\
---------------------------------------------------------------------------

    \456\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 38-43 
(summarizing evidence of growing queue backlogs and study delays as 
contributors to those backlogs); supra section II.A.3.
---------------------------------------------------------------------------

    283. Broadly speaking, the Commission's conclusion that there is a 
need to reform the Commission's pro forma interconnection procedures 
and agreements received overwhelming support.\457\ However, as 
summarized above, many of the rehearing requests challenge the 
elimination of the reasonable efforts standard set forth in sections 
2.2, 3.5.4(i), 7.4, 8.3, and Attachment A to Appendix 4 of the pro 
forma LGIP,\458\ leading to the adoption of firm study deadlines, 
claiming that the Commission failed to meet its burden to justify this 
specific reform under FPA section 206.\459\ Many of these rehearing 
requests argue that the Commission recognized that there are many 
factors outside the control of transmission providers that can 
contribute to backlogs and delays in the

[[Page 27052]]

interconnection study process.\460\ In pointing to these other factors, 
the rehearing requests contend that holding transmission providers to 
standards of performance in terms of ensuring the timely completion of 
interconnection studies cannot be effective to ensure the timely 
completion of those studies. We disagree with this argument and 
continue to find that the elimination of the reasonable efforts 
standard, and its replacement with firm study deadlines, is warranted 
under FPA section 206 in order to address the unjust and unreasonable 
rates resulting from interconnection queue delays and backlogs.
---------------------------------------------------------------------------

    \457\ See Order No. 2023, 184 FERC ] 61,054 at P 30.
    \458\ Id. P 965; see also id. P 964 (``We adopt these reforms to 
remedy the unjust and unreasonable rates stemming from 
interconnection queue backlogs and to ensure that interconnection 
customers are able to interconnect to the transmission system in a 
reliable, efficient, transparent, and timely manner.'').
    \459\ See supra section II.D.1.b.i.
    \460\ See Order No. 2023, 184 FERC ] 61,054 at P 966.
---------------------------------------------------------------------------

    284. We are not persuaded by attempts to minimize the 
responsibility transmission providers have for--and the ways in which 
they can effectuate--the timely completion of interconnection studies. 
Attempts to do so fail to recognize the key role transmission providers 
play in timely interconnection study completion: the transmission 
provider conducting the study is the entity with the most control over 
whether the study deadline is met.\461\ As the entity that conducts the 
study, transmission providers have control over (among other things): 
the resources allocated to the study process; the actual conduct of the 
study, e.g., the use of advanced computing or other methods to improve 
efficiency; coordination with interconnection customers and 
consultants; and providing the conclusions of the study.\462\ They are 
the entities with the most complete knowledge of the transmission 
system to which the generator will be interconnecting.\463\ Moreover, 
transmission providers have significant authority to help ensure that 
other entities do not unduly delay the results of the interconnection 
study, including by deeming withdrawn the requests of interconnection 
customers that fail to adhere to the requirements of the pro forma 
LGIP.\464\
---------------------------------------------------------------------------

    \461\ See id. P 995.
    \462\ See, e.g., id. PP 967, 975, 1007 (noting transmission 
providers' ability deploy resources, hire additional personnel, 
invest in new software, and employ innovative study approaches).
    \463\ See, e.g., id. P 201 (noting ``the transmission provider's 
detailed knowledge of its transmission system''); Order No. 1000, 
136 FERC ] 61,051 at P 260 (``[W]e acknowledge that incumbent 
transmission providers may have unique knowledge of their own 
transmission systems . . . .'').
    \464\ See pro forma LGIP section 3.7 (``Transmission Provider 
shall deem the Interconnection Request to be withdrawn and shall 
provide written notice to Interconnection Customer of the deemed 
withdrawal and an explanation of the reasons for such deemed 
withdrawal . . . . Withdrawal shall result in the loss of 
Interconnection Customer's Queue Position. If an Interconnection 
Customer disputes the withdrawal and loss of its Queue Position, 
then during Dispute Resolution, Interconnection Customer's 
Interconnection Request is eliminated from the queue until such time 
that the outcome of Dispute Resolution would restore its Queue 
Position.'').
---------------------------------------------------------------------------

    285. That there are other factors that may also affect the timely 
completion of interconnection studies--and that these factors may not 
be within transmission providers' control, in whole or in part--does 
not negate the substantial control that transmission providers have 
over this process. To the contrary, the existence of multiple factors 
influencing interconnection study timeliness favors addressing the 
problem of interconnection queue backlogs from multiple angles, as with 
the comprehensive approach adopted in Order No. 2023. Even where 
multiple factors may cause or contribute to delays of interconnection 
studies, transmission providers are responsible for conducting the 
studies and their actions or inaction in doing so can cause or 
contribute to such delays.
    286. Overall, the record reflects a problem of delayed study 
results contributing to interconnection queue backlogs,\465\ numerous 
comments asserting that the reasonable efforts standard fails to ensure 
that transmission providers take adequate steps to ensure study 
timeliness,\466\ and evidence of significant, growing backlogs leading 
to unjust and unreasonable rates. Based on our statutory obligation to 
remedy these unjust and unreasonable rates, and also in light of the 
significant level of control transmission providers exercise over the 
timeliness of the study process, we continue to find that the 
elimination of the reasonable efforts standard, and its replacement 
with firm study deadlines, is warranted as part of a package of 
comprehensive reforms to address interconnection queue delays and 
backlogs.
---------------------------------------------------------------------------

    \465\ See Order No. 2023, 184 FERC ] 61,054 at P 40; see also 
supra P 39. While the rehearing requests generally point to factors 
that are beyond transmission providers' control (for instance, 
awaiting affected system study results or deficient information from 
interconnection customers), the record does not demonstrate that 
these are, in fact, the factors exclusively or even primarily 
causing study delays. See, e.g., Order No. 2023, 184 FERC ] 61,054 
at P 50.
    \466\ See, e.g., ACE NY Initial Comments at 11-12 (``The 
Commission's review of the reported Order No. 845 metrics helps to 
corroborate the anecdotal experiences of interconnection customers 
throughout the nation and demonstrates the widespread failure to 
complete interconnection studies consistent with the timelines 
identified in the pro forma LGIP.''); CAISO Initial Comments at 25 
(``The reasonable efforts standard has only served as the exception 
that swallows the rule of study deadlines.''); EPSA Initial Comments 
at 10-11 (acknowledging that other factors may contribute to delays 
but ``there have also been vast failures by Transmission Providers 
to process interconnection studies and provide necessary information 
to prospective and existing interconnection customers in a timely 
manner''); Invenergy Initial Comments at 29-30 (``[I]nterconnection 
studies are routinely delayed by several years. This is an ongoing 
problem and may reflect, among other things, an apparently low 
priority placed on adequate staffing and the lack of any 
accountability under the existing interconnection procedures.''); 
Public Interest Organizations Initial Comments at 33 (``[T]he slow 
pace at which interconnection requests are evaluated has contributed 
to a ballooning of interconnection queues across the country. . . . 
[B]inding deadlines are the most effective option for ensuring that 
prospective generation receives timely responses to interconnection 
requests.'').
---------------------------------------------------------------------------

    287. Consistent with this approach, we are not persuaded by 
arguments that the Commission conflated correlation and causation in 
concluding that unjust and unreasonable rates resulting from 
interconnection queue delays and backlogs, and delayed interconnection 
study completion, supported elimination of the reasonable efforts 
standard. In this vein, several of the rehearing requests assert that 
other factors, principally the volume and complexity of interconnection 
requests, are the real causes of such backlogs and delays, and that 
eliminating the reasonable efforts standard will not reduce the volume 
of such requests. We note, however, that Order No. 2023 did not claim 
that the reasonable efforts standard was the only driving force behind 
missed study deadlines. Order No. 2023 recognized that study delays are 
caused by a number of factors,\467\ and adopted a comprehensive package 
of reforms aimed at alleviating many of those factors from various 
angles.\468\ The reasonable efforts standard is but one of these 
factors.
---------------------------------------------------------------------------

    \467\ Order No. 2023, 184 FERC ] 61,054 at PP 40-45.
    \468\ See id. PP 45-56. For example, Order No. 2023 acknowledged 
that affected system study delays are a key contributor to overall 
delays in the interconnection queue, and adopted several specific 
reforms aimed at standardizing and streamlining affected system 
study processes. See id. P 51. Order No. 2023 also acknowledged that 
speculative interconnection requests contribute to study delays and 
queue backlogs, and adopted commercial readiness deposits and site 
control requirements aimed at alleviating this factor. See id. PP 
47-48.
---------------------------------------------------------------------------

    288. The Commission in Order No. 2023 took significant other steps 
to address the volume of interconnection requests including to reduce 
the number of speculative requests and to improve the efficiency of 
interconnection studies and interconnection queue processing.\469\ But 
to the extent that factors contributing to study delays,

[[Page 27053]]

including higher volumes or complexity of interconnection requests, are 
still expected to persist,\470\ this does not warrant failing to pursue 
other available solutions to reduce such backlogs that are within 
transmission providers' control, especially in light of the magnitude 
and growth of the overall interconnection queue backlog.\471\
---------------------------------------------------------------------------

    \469\ See id. P 968; see also id. P 966 (``Indeed, throughout 
this final rule, we adopt numerous reforms to appropriately 
incentivize interconnection customers to help reduce interconnection 
delays that may result from their conduct.'').
    \470\ See id. P 966 (``There is every reason to believe that 
many of the factors contributing to significant interconnection 
queue backlogs and delay--including the rapidly changing resource 
mix, market forces, and emerging technologies--will persist.'').
    \471\ See id. P 968 (``In this Section, we adopt reforms to 
ensure that transmission providers are doing their part as well by 
eliminating the reasonable efforts standard . . . . Based on the 
record, we find that the elimination of the reasonable efforts 
standard and its replacement with firm deadlines and penalties are 
needed to remedy unjust and unreasonable rates . . . .''); see also 
id. P 966 (reform to the reasonable efforts standard was warranted 
based on ``ongoing challenges'' that ``will persist'').
---------------------------------------------------------------------------

    289. Eliminating the reasonable efforts standard, which allowed for 
self-extensions of interconnection study deadlines and lacked 
appropriate incentives for transmission providers to help ensure study 
timeliness, is one such further solution.\472\ In its place, the 
Commission has specified standards of performance in the form of 
deadlines, accompanied by a penalty. This penalty is a self-
implementing performance incentive (subject to appropriate safeguards) 
that also effectively adjusts what transmission providers can charge 
for interconnection studies that fail to meet those standards. This 
incentive will help ensure that transmission providers exercise the 
control they have over the interconnection process as to the timely 
conduct of those studies,\473\ and thereby contribute to alleviating 
the problem of interconnection queue backlogs, including to address 
increased volumes of interconnection requests.\474\ As explained below 
and in Order No. 2023, these deadlines should be achievable and--where 
there may be factors outside of a transmission provider's control that 
influence whether these deadlines can be met--the Commission has 
adopted appropriate safeguards to account for this possibility.
---------------------------------------------------------------------------

    \472\ See id. P 967 (noting that this standard ``worsens 
current-day challenges'' and there are ``steps within transmission 
providers' control, from deploying transmission providers' resources 
to exploring administrative efficiencies and innovative study 
approaches, to better ensure timely processing of interconnection 
studies to remedy existing deficiencies'').
    \473\ See, e.g., Cent. Hudson Gas & Elec. Corp. v. FERC, 783 
F.3d 92, 109 (2d Cir. 2015) (Cent. Hudson) (``FERC may permissibly 
rely on economic theory alone to support its conclusions so long as 
it has applied the relevant economic principles in a reasonable 
manner and adequately explained its reasoning''); Sacramento Mun. 
Util. Dist. v. FERC, 616 F.3d 520, 531 (2010) (Sacramento) (``[I]t 
was perfectly legitimate for the Commission to base its findings 
about the benefits of marginal loss charges on basic economic theory 
. . . .''); Assoc. Gas, 824 F.2d at 1008-09 (``Agencies do not need 
to conduct experiments in order to rely on the prediction that an 
unsupported stone will fall . . . .'').
    \474\ Indicated PJM TOs single out one piece of evidence that 
the Commission cited in the NOPR as supporting use of such 
incentives, the testimony of Chairman LeVar of the Utah Public 
Service Commission, claiming that the Commission failed to address 
their comments that this testimony does not support the use of 
penalties as incentives. See Indicated PJM TOs Rehearing Request at 
39-40; Indicated PJM TOs Initial Comments at 38. We continue to find 
that this testimony is one piece of evidence that supports imposing 
such incentives: although Chairman LeVar testified that fines are 
not always the best approach, he described the need to impose 
consequences on transmission providers as ``a pretty intuitive, 
important step,'' testified that there ``needs to be some clear, 
predictable consequence for transmission providers not meeting their 
obligations,'' and identified such consequences as ``the first step 
in queue reform.'' May Joint Task Force Tr. 89:6-25.
---------------------------------------------------------------------------

    290. The rehearing requests misunderstand the Commission's approach 
in claiming that eliminating the reasonable efforts standard and 
adopting firm study deadlines cannot be warranted absent findings of 
intentional delay, bad faith, misconduct, or a ``lack of effort'' by 
transmission providers that fails to meet the reasonable efforts 
standard. Such findings are not necessary predicates to concluding that 
the interconnection study process must occur more expeditiously in 
order to help remedy the problem of unjust and unreasonable rates 
caused by interconnection queue backlogs. Nor are they predicates to 
concluding that the reasonable efforts standard was not accomplishing 
this goal, and that there are steps within transmission providers' 
control that can facilitate the timely completion of interconnection 
studies on timeframes set forth in Order No. 2023.\475\
---------------------------------------------------------------------------

    \475\ PacifiCorp's comparison of this case to Nat'l Fuel Gas 
Supply Co. v. FERC, 468 F.3d 831, 842 (vacating Commission standards 
of conduct that had been justified in part by a claimed record of 
abuse, where the court found no such record was apparent), is 
therefore not apt. See PacifiCorp Rehearing Request at 7. The 
Commission has not relied on claims of wrongdoing, bad faith, or 
abuse to justify the reforms in Order No. 2023, but rather acted 
based the substantial record that interconnection queue backlogs, 
driven in part by untimely interconnection studies, are resulting in 
unjust and unreasonable rates and transmission providers' have the 
ability to better ensure study timeliness.
---------------------------------------------------------------------------

    291. Similarly, we are not persuaded by arguments that the 
structure adopted in Order No. 2023 is disproportionate to the problems 
identified in that order or that study delays are not sufficiently 
widespread to justify adoption of penalties for study delays. As 
discussed above in section II.A., we find that Order No. 2023's generic 
finding that the existing pro forma interconnection procedures and 
agreements were unjust, unreasonable, unduly discriminatory or 
preferential was supported by substantial evidence. The D.C. Circuit 
has been clear that the Commission can rely on general findings of 
systemic conditions to impose an industry-wide remedy, unless the 
deficiencies identified exist only in isolated pockets: \476\ the 
record here indicates that interconnection study delays are a 
nationwide problem, not one that exists only in isolated pockets.\477\ 
Therefore, we continue to conclude that industry-wide reform is 
appropriate. Furthermore, interconnection study delays and queue 
backlogs are severe,\478\ and we continue to find that the deadline and 
penalty regime adopted in Order No. 2023 is proportional to the scope 
of the problem.
---------------------------------------------------------------------------

    \476\ TAPS, 225 F.3d at 687-88; INGAA, 285 F.3d at 37; S.C. Pub. 
Serv. Auth., 762 F.3d at 67.
    \477\ See supra section II.A.3.
    \478\ Order No. 2023, 184 FERC ] 61,054 at PP 38, 40, & app. B.
---------------------------------------------------------------------------

    292. It appears that, in arguing that study delays are not 
sufficiently widespread to justify a generically applicable incentive 
structure, Indicated PJM TOs misread the Order No. 845 data cited in 
Order No. 2023: Indicated PJM TOs state that the Commission 
acknowledges that at the end of 2022, 14 (of 24) non-RTO/ISO 
transmission providers experienced no study delays.\479\ However, the 
Commission actually stated, and the data shows, that at the end of 
2022, 14 (of 24) non-RTO/ISO transmission providers had delayed studies 
still pending at the end of the year.\480\ Furthermore, of the studies 
completed over the course of 2022, the data indicates that 16 non-RTO 
transmission providers completed one or more interconnection study past 
the deadline.\481\ As stated above in section II.A.2., we recognize 
that PJM's data reflects its previous, serial study process. However, 
even excluding both PJM and SPP, the data show that three of the four 
remaining RTOs/ISOs reported delayed studies at the end of 2022.\482\ 
Moreover, although we find the data even excluding PJM and SPP's 
backlogs is sufficient to show that study delays are not a problem that 
exists only in isolated pockets, the existing interconnection study 
backlogs in SPP and PJM reinforce that it is imperative that these 
entities, too, conduct their cluster study processes in a timely 
fashion, as will be facilitated by firm

[[Page 27054]]

study deadlines.\483\ The data indicate that study delays are not a 
problem that only exists in isolated pockets.
---------------------------------------------------------------------------

    \479\ Indicated PJM TOs Rehearing Request at 15-16.
    \480\ Order No. 2023, 184 FERC ] 61,054 at P 40 & app. B tbl. 3.
    \481\ Id.
    \482\ Id. at app. B.
    \483\ See id. P 40, app. B, tbls. 2 & 4; NOPR, 179 FERC ] 
61,194, at app. A, tbl. 1 n.489 (noting that SPP's ``normal 
interconnection queue processing has been modified to address its 
large queue backlog and transition to a new interconnection study 
process'').
---------------------------------------------------------------------------

    293. We disagree with arguments that it was disproportionate or 
inappropriate for the Commission to make a generic finding eliminating 
the reasonable efforts standard and adopting firm study deadlines, 
given that some regions have already adopted cluster study processes 
and are, therefore, generally in accord with a number of other reforms 
adopted in Order No. 2023. The data do not indicate that cluster 
studies alone are sufficient to remedy interconnection queue backlogs. 
To the contrary, a number of transmission providers that have already 
adopted cluster studies still experience substantial study delays.\484\ 
While cluster studies are a key component of the Order No. 2023 
reforms, clustering alone has not proved sufficient to solve the 
problems the Commission identified in Order No. 2023. We conclude that 
the elimination of the reasonable efforts standard, which has not yet 
been adopted by any transmission providers, is an appropriate and 
important component of the package of reforms in Order No. 2023 to 
remedy study delays and queue backlogs.
---------------------------------------------------------------------------

    \484\ Order No. 2023, 184 FERC ] 61,054 at P 40 (indicating that 
multiple transmission providers that have already adopted cluster 
studies--including, among others, MISO, APS, Dominion, Duke, El 
Paso, PNM, and PSCo--still have study delays).
---------------------------------------------------------------------------

    294. We disagree with arguments that the Commission relied on stale 
data to support the elimination of the reasonable efforts standard and 
the adoption of deadlines and study delay penalties. It appears that 
these rehearing requests are premised on speculation that future data 
might tell a different story than the data the Commission relied upon 
in Order No. 2023. Such speculation about potential future data does 
not render current data stale.\485\ Order No. 2023 relied on the most 
recent data available, from 2020-2022.\486\ Even if this dataset is not 
perfect, imperfection does not amount to arbitrary decision-
making.\487\ We also note that, for purposes of judicial review, the 
record consists of the information that was before the Commission at 
the time Order No. 2023 was issued.\488\ Particularly given the trends 
of worsening queue delays and backlogs, which we have found are likely 
to persist in the absence of Commission action,\489\ and the gravity of 
the problem of such delays in interconnecting new generation, the 
Commission was not required to wait for pending developments before 
issuing Order No. 2023, nor are we required to retract Order No. 2023 
in order to supplement the Commission's decision with new data.\490\
---------------------------------------------------------------------------

    \485\ See ICC v. Jersey City, 322 U.S. 503, 514 (1944) 
(``Administrative consideration of evidence . . . always creates a 
gap between the time the record is closed and the time the 
administrative decision is promulgated . . . [if] litigants might 
demand rehearings . . . because some new circumstance has arisen . . 
. there would be little hope that the administrative process could 
ever be consummated[.]''); Wis. Elec. Power Co. v. Costle, 715 F.2d 
323, 327 (7th Cir. 1983) (finding that the record was not stale just 
because it did not include data collected five days before the 
agency issued its decision); Vill. of Logan v. U.S. Dep't of 
Interior, 577 F. App'x 760, 770 (10th Cir. 2014) (``Defendants 
likewise cannot be faulted for failing to consider a study that was 
published after the [agency decision] was published[.]'').
    \486\ See Order No. 2023, 184 FERC ] 61,054 at app. B 
(summarizing data from 2020-2022); id. at P 38 (citing Queued Up 
2023 at 7-8). Cases in which courts have found data to be stale 
involve significantly older data. See N. Plains Res. Council, Inc. 
v. Surface Transp. Bd., 668 F.3d 1067, 1086 (9th Cir. 2011) (finding 
that ten-year-old data was stale); Lands Council v. Powell, 395 F.3d 
1019, 1031 (9th Cir. 2005) (finding that six-year-old data was 
stale).
    \487\ See White Stallion Energy Ctr., LLC v. EPA, 748 F.3d 1222, 
1248 (D.C. Cir. 2014) (agency's ``data-collection process was 
reasonable, even if it may not have resulted in a perfect 
dataset''); In re Polar Bear ESA Listing, 709 F.3d 1, 13 (D.C. Cir. 
2013) (``That a model is limited or imperfect is not, in itself, a 
reason to remand agency decisions based upon it.''); Allied Local & 
Reg'l Mfrs. Caucus v. EPA, 215 F.3d 61, 71 (D.C. Cir. 2000) (``We 
generally defer to an agency's decision to proceed on the basis of 
imperfect scientific information''); State of N.C. v. FERC, 112 F.3d 
1175, 1190 (D.C. Cir. 1997) (``The mere fact that the Commission 
relied on necessarily imperfect information . . . does not render 
[its decision] arbitrary.''); Chemical Mfrs. Ass'n v. EPA, 28 F.3d 
1259, 1265 (D.C. Cir. 1994) (agency may nonetheless use model ``even 
when faced with data indicating that it is not a perfect fit'').
    \488\ See Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. 
Council, Inc., 435 U.S. 519, 554-55 (1978) (Vt. Yankee) (explaining 
that an agency decision ``had to be judged by the information then 
available to it[.]'').
    \489\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at P 966.
    \490\ See Marsh v. Oregon Nat. Res. Council, 490 U.S. 360, 373 
(1989) (``agenc[ies] need not supplement [a decision] every time new 
information comes to light[.]''); Friends of the River v. FERC, 720 
F.2d 93, 109 (D.C. Cir. 1983) (``Were we to order the Commission to 
reassess its decisions every time new forecasts were released, we 
would risk immobilizing the agency.'').
---------------------------------------------------------------------------

    295. We disagree with Indicated PJM TOs' claim that Order No. 2023 
relied on the stale record from Order No. 890, even though the world 
has changed substantially since 2007. Order No. 2023 cited Order No. 
890 as precedent reflecting that the Commission has authority to (1) 
implement a study delay penalty structure for RTOs/ISOs for missed 
tariff deadlines notwithstanding their non-profit status,\491\ and (2) 
prohibit non-RTO transmission provider and transmission-owning members 
of RTOs/ISOs from recovering penalty amounts through transmission 
rates.\492\ Order No. 2023 further acknowledged differences between the 
transmission service studies addressed in Order No. 890 and 
interconnection studies and accounted for these differences in 
developing this study delay penalty regime.\493\
---------------------------------------------------------------------------

    \491\ See Order No. 2023, 184 FERC ] 61,054 at P 876.
    \492\ See id. P 992.
    \493\ See id. P 1013.
---------------------------------------------------------------------------

    296. We also disagree with rehearing requests that argue that the 
elimination of the reasonable efforts standard and the adoption of a 
structure of performance standards, in the form of deadlines, and 
performance incentives, in the form of penalties, is premature, and 
that the Commission should have waited until other reforms took effect 
before considering whether to implement this reform, or should have 
instead simply augmented the reporting approach set forth in Order No. 
845. While the Commission could have taken a more gradual approach in 
addressing interconnection queue backlogs, we find that such an 
approach would not represent a just and reasonable replacement rate. 
Indeed, not only have our prior reforms failed to adequately control 
interconnection backlogs and delays, but the problem has instead 
significantly worsened, leading to unjust and unreasonable rates. Thus, 
notwithstanding that certain commenters may prefer a different 
approach--and particularly favor one that preserves for as long as 
possible the ability of transmission providers to extend their own 
deadlines to complete interconnection studies--we sustain Order No. 
2023's finding that the reasonable efforts standard is contributing to 
those unjust and unreasonable rates such that reform of that standard 
is warranted now.\494\ As a result, we also continue to find that Order 
No. 2023's approach of addressing the problem of interconnection queue 
backlogs and delays from multiple angles is both permissible and 
warranted given the

[[Page 27055]]

extreme challenges identified in section II.A, above, and Order No. 
2023.\495\
---------------------------------------------------------------------------

    \494\ Notably, the rehearing requests cite no authority 
precluding the Commission from adopting the more comprehensive 
approach embodied in Order No. 2023. See Flyers Rts. Educ. Fund, 
Inc. v. U. S. Dep't of Transp., 810 F. App'x 1, 3 (D.C. Cir. 2020) 
(explaining that FCC v. Fox Television Stations, Inc., 556 U.S. 502 
(2009) ``permits, but does not require, an agency to act 
incrementally.''); WildEarth Guardians v. U.S. E.P.A., 751 F.3d 649, 
655-56 (D.C. Cir. 2014) (summarizing Defenders of Wildlife v. 
Gutierrez, 532 F.3d 913 (D.C. Cir. 2008), upholding a decision to 
focus on a comprehensive approach).
    \495\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 3, 27-
29, 37-60.
---------------------------------------------------------------------------

    297. Moreover, under FPA section 206, the Commission need only find 
that the existing pro forma is unjust and unreasonable and that the 
replacement rate is just and reasonable; the Commission need not 
demonstrate that the replacement rate is the only just and reasonable 
approach.\496\ We continue to find that a comprehensive approach, 
including the elimination of the reasonable efforts standard and 
adoption of performance standards and incentives (study deadlines and 
penalties), is necessary to remedy the unjust and unreasonable rates 
resulting from interconnection queue backlogs and is just and 
reasonable. We also note that arguments that this reform is premature 
are based on the premise that the other reforms in Order No. 2023 will 
be sufficient to remedy study delays. But at the same time, parties 
argue on rehearing that they cannot meet study deadlines, even with the 
other reforms in Order No. 2023. Both cannot be true. Either the other 
reforms in Order No. 2023 will be sufficient to ensure transmission 
providers can meet study deadlines, in which case they will not incur 
penalties under this regime, or--consistent with the Commission's 
conclusions in Order No. 2023 and herein--the other reforms will not be 
sufficient to ensure transmission providers meet study deadlines. In 
contrast, the Commission has here determined that a package of 
reforms--including both the elimination of the reasonable efforts 
standard and the other reforms required by the final rule--represents a 
reasonable and well-supported decision regarding the appropriate 
replacement rate.
---------------------------------------------------------------------------

    \496\ See Emera Me., 854 F.3d at 22-23 (explaining the two-step 
analysis under section 206 and that, on the second prong, there is a 
substantial spread of potentially just and reasonable rates).
---------------------------------------------------------------------------

    298. With regard to arguments that the Commission's adoption of a 
deadline and penalty structure does not take into account that some 
transmission providers have engaged in stakeholder processes on queue 
reform, we note that Order No. 2023 acknowledged these efforts.\497\ 
However, we disagree that these efforts mean that the Commission cannot 
or should not implement further reforms. In the regions where 
stakeholder reforms are ultimately successful in reducing queue 
backlogs and preventing delayed studies, the penalties adopted in Order 
No. 2023 may never be relevant. However, as explained above, many 
regions of the country are still seeing significant and even growing 
queue backlogs and study delays. It is clear that further action is 
warranted.
---------------------------------------------------------------------------

    \497\ Order No. 2023, 184 FERC ] 61,054 at PP 16, 59, 1765-67. 
Because Order No. 2023 adopted the NOPR proposal to continue to 
apply the ``consistent with or superior to'' and ``independent 
entity variation standards,'' see id. P 1764, the transmission 
providers that have engaged in these processes may still benefit 
from them, although we cannot prejudge any particular compliance 
filings.
---------------------------------------------------------------------------

    299. The rehearing requests also mischaracterize Order No. 2023 in 
claiming that the Commission eliminated the reasonable efforts standard 
based on ensuring parity or fairness, rather than evidence. Given the 
magnitude and growth of the interconnection queue backlog, the 
Commission adopted a comprehensive approach to remedying the unjust and 
unreasonable rates caused by that backlog.\498\ Order No. 2023's 
references to ensuring that transmission providers were ``doing their 
part'' \499\ and ``striking a balance'' \500\ were made in this 
context, reflecting that transmission providers have a role to play in 
addressing this backlog. This comprehensive approach recognizes the 
importance of addressing each of the principal factors contributing to 
interconnection queue backlogs, including those--like study 
timeliness--that are within the control, whether in whole or in part, 
of transmission providers. We are, therefore, not persuaded by 
arguments that the existence of factors beyond the control of 
transmission providers that may delay interconnection studies means 
that the elimination of the reasonable efforts standard, and its 
replacement with firm study deadlines and incentives in the form of 
penalties, cannot or will not be effective in reducing study delays.
---------------------------------------------------------------------------

    \498\ See id. P 968 (discussing the other reforms the Commission 
was adopting).
    \499\ Id.
    \500\ Id. P 972 (``The study delay penalty structure adopted in 
this final rule balances the harm to interconnection customers of 
interconnection study delays and the associated need to incentivize 
transmission providers to timely complete interconnection studies 
with the burdens on transmission providers of conducting 
interconnection studies and potentially facing penalties for delays, 
including those that may be caused or exacerbated by factors beyond 
their control.'').
---------------------------------------------------------------------------

    300. We further conclude that contentions that the reasonable 
efforts standard carries benefits, including the flexibility to account 
for the complexities and variability of interconnection requests that 
may arise in the study process, do not demonstrate that this standard 
remains just and reasonable. While there is some benefit to such 
flexibility, this benefit does not outweigh the need for reform the 
Commission has discussed and particularly does not change the fact that 
interconnection queue backlogs and study delays are resulting in unjust 
and unreasonable rates. Indeed, unwarranted flexibility to the 
detriment of timely study completion represents a defect in the 
reasonable efforts standard in light of the record demonstrating such 
backlogs: it allows transmission providers too much discretion to 
extend their own study deadlines. We thus disagree with arguments 
claiming that the reasonable efforts standard is sufficient to hold 
transmission providers accountable and appealing to the flexible nature 
of the reasonable efforts standard as purportedly demonstrating that it 
remains just and reasonable.
    301. Furthermore, we do not agree that the deadline and penalty 
structure set forth in Order No. 2023 is inflexible, as certain 
rehearing requests attempt to portray that structure in contrasting it 
with the reasonable efforts standard. Order No. 2023's deadline and 
penalty structure reasonably accounts for the interests of transmission 
providers, including in maintaining flexibility and accounting for the 
complexities of the interconnection study process,\501\ in light of the 
need for reform to set clear standards for timeliness and effective 
measures to ensure those standards are met.\502\ How each transmission 
provider determines to meet interconnection study deadlines is left up 
to that transmission provider. We find that this approach is 
appropriate given the variation in the operations of the transmission 
providers and how they conduct the study process, and that they have 
the most complete knowledge as to what actions to better ensure study 
timeliness will be most effective as to their specific processes. 
Rather than imposing a top-down approach that mandates specific 
actions, the Commission in Order No. 2023 provided flexibility to 
transmission providers as to how they achieve those standards,\503\ 
along with appropriate safeguards.
---------------------------------------------------------------------------

    \501\ See, e.g., supra section II.D.1.a. (summarizing the 
safeguards established in Order No. 2023, particularly including the 
appeals process).
    \502\ See also infra PP 374-382 (rejecting arguments that the 
deadline and penalty structure adopted by Order No. 2023 is not just 
and reasonable based on purported negative consequences of that 
structure).
    \503\ Cf., e.g., Transp. Div. of the Int'l Ass'n of Sheet Metal, 
Air, Rail & Transp. Workers v. Fed. R.R. Admin., 10 F.4th 869, 876 
(D.C. Cir. 2021) (affirming a performance-based approach, rather 
than prescriptive approach, as reasonable).
---------------------------------------------------------------------------

    302. We disagree with arguments that the Commission has not 
demonstrated that there are steps that transmission

[[Page 27056]]

providers can take to improve the timeliness of study processing, 
particularly given the factors that are outside of or not fully within 
their control, such that implementing a structure of performance 
standards and penalties to incentivize transmission to providers meet 
study deadlines is not just and reasonable. As described above, 
transmission providers exercise significant control over the study 
process through which they can influence whether the studies are timely 
completed.\504\ It is not the case that there is no nexus between the 
speed of the interconnection queue and the incentives imposed on 
transmission providers to timely complete interconnection studies. In 
Order No. 2023, the Commission explained that transmission providers 
should be able to implement reforms to ensure that their study process 
is efficient and to help meet the deadlines set forth in that rule, 
including examples of steps that they may be able to take.\505\ To the 
extent that transmission providers suggest that it is generically 
infeasible to allocate additional resources to ensure the timely 
completion of interconnection studies because that will require them to 
bear increased study costs, we are not persuaded by these concerns. As 
Order No. 2023 stated, ``interconnection customers, rather than 
transmission providers, ultimately bear the costs of interconnection 
studies.'' \506\ The allocation of such additional resources includes 
the allocation of additional personnel or consultants, as appropriate 
and available. Moreover, increased availability of qualified personnel 
may be driven, over time, by increased demand on the part of 
transmission providers. To the extent that transmission providers seek 
to retain additional personnel but there are extenuating circumstances 
rendering necessary personnel unavailable, leading to the assessment of 
penalties, transmission providers can explain the specific facts of 
their situation in an appeal to the Commission.
---------------------------------------------------------------------------

    \504\ See supra P 284.
    \505\ See Order No. 2023, 184 FERC ] 61,054 at PP 967, 975, 
1004, 1007 (identifying steps including the management of 
operational resources, implementing reforms to increase the 
efficiency of study processing, investing in new software, and 
hiring additional personnel).
    \506\ Id. P 1007 (``To the extent that it is more costly to 
complete studies in a timely and accurate fashion, these 
interconnection study costs will be passed on to interconnection 
customers.''). Nothing in Order No. 2023 or herein requires or 
suggests that transmission providers should attempt to hold 
personnel liable or punish them for study delays, and we therefore 
are not persuaded by SPP's claim that that qualified engineers may 
not want to work for transmission providers if they risk being 
identified as a cause of study delays that result in penalties.
---------------------------------------------------------------------------

    303. In addition, claims that transmission providers cannot take 
reasonable steps to achieve the deadlines set forth in Order No. 2023 
are premised on incorrectly portraying the substantive deadlines set in 
Order No. 2023 and the circumstances under which penalties will be 
assessed as unduly burdensome or punitive. In imposing these deadlines, 
the Commission was mindful of the burdens on transmission providers in 
conducting interconnection studies.\507\ Moreover, in Order No. 2023 
the Commission adopted a reasonable approach to selecting the deadlines 
in the pro forma interconnection procedures and, as further explained 
in greater detail below, we continue to conclude that the record 
supports that those deadlines should be achievable for the pro forma 
study process.\508\ The safeguards the Commission selected--including, 
but not limited to, the ability to appeal a penalty--further respond to 
transmission providers' objections, including the extent to which study 
delays may be due to factors outside of their control.\509\
---------------------------------------------------------------------------

    \507\ See, e.g., id. P 1004 (explaining that the Commission was 
adopting reforms from the NOPR such that it expected ``that a 
transmission provider that faces the potential of a study delay 
penalty for failing to meet interconnection study deadlines will be 
able to allocate sufficient resources to conduct interconnection 
studies, in addition to implementing reforms to ensure that its 
study process is efficient'' and declining to adopt certain 
proposals that might have resulted in greater burdens on 
transmission providers).
    \508\ See infra PP 318-320 (explaining that the pro forma study 
process should not impose a greater aggregate burden on transmission 
providers than the serial study process and discussing the available 
data reflecting the ability of transmission providers that have 
adopted a cluster study approach to conduct those studies within the 
timeframes set forth in Order No. 2023).
    \509\ See Order No. 2023, 184 FERC ] 61,054 at P 987 (``In 
evaluating whether there is good cause to grant such relief, the 
Commission may consider, among other factors: (1) extenuating 
circumstances outside the transmission provider's control, such as 
delays in affected system study results; (2) efforts of the 
transmission provider to mitigate delays; and (3) the extent to 
which the transmission provider has proposed process enhancements 
either in the stakeholder process or at the Commission to prevent 
future delay''); id. at 979 (providing a lengthy transition period 
to allow transmission providers time to adapt to the new processes).
---------------------------------------------------------------------------

c. Adoption of a Study Deadline and Penalty Structure Replacement Rate
    304. Having adopted the NOPR proposal to eliminate the reasonable 
efforts standard in Order No. 2023, the Commission was then required to 
adopt a replacement rate.\510\ It found that a structure in which 
transmission providers are required to meet firm study deadlines (a 
standard to measure performance) and subject to penalties (an incentive 
to meet the tariff-prescribed firm study deadlines) with appropriate 
safeguards, was a just and reasonable approach.\511\ This regulation of 
the interconnection study process is consistent with the Commission's 
long-standing regulation of the interconnection process, including the 
terms of the relationship between interconnection customers and 
transmission providers.
---------------------------------------------------------------------------

    \510\ See id. P 970.
    \511\ See id. PP 970-72.
---------------------------------------------------------------------------

    305. Courts have affirmed that this regulation of the 
interconnection process, and specifically the interaction between 
interconnection customers and transmission providers as necessary to 
avoid a degradation in service leading to unjust and unreasonable 
rates, falls squarely within the Commission's ratemaking 
authority.\512\ For instance, in NARUC v. FERC, the D.C. Circuit 
affirmed the Commission's authority to issue Order No. 2003, observing 
that ``Order No. 2003 asserts jurisdiction over the terms of 
interconnection between generators and transmission providers'' \513\ 
and citing the connection between those terms and the prices for 
regulated service. Indeed, the Commission established both the 
timelines for interconnection studies and the reasonable efforts 
standard in Order No. 2003,\514\ which reflects the Commission's long-
standing regulation of the timeliness of the interconnection study 
process.\515\
---------------------------------------------------------------------------

    \512\ See, e.g., S.C. Pub. Serv. Auth., 762 F.3d at 63; NARUC v. 
FERC, 475 F.3d at 1279-1280; see also FERC v. Elec. Power Supply 
Ass'n, 577 U.S. 260, 266 (2016) (EPSA) (discussing the Commission's 
authority to ``regulate `the transmission of electric energy in 
interstate commerce' and `the sale of electric energy at wholesale 
in interstate commerce' under FPA section 201(b), 16 U.S.C. 824(b), 
and describing FPA sections 205 and 206 as affording FERC authority 
to ``oversee all prices for those interstate transactions and all 
rules and practices affecting such prices''); see also id. at 277.
    \513\ NARUC v. FERC, 475 F.3d at 1279 (``By establishing 
standard agreements FERC has exercised its jurisdiction over the 
terms of those relationships.''); see id. at 1280; ESI Energy, LLC 
v. FERC, 892 F.3d 321, 324 (``[E]very time a new generator of 
electricity asked to use a transmission network owned by another--to 
interconnect the two entities--disputes between the generator and 
the owner of the transmission grid would arise, delaying completion 
of the interconnection process,'' which disputes ``delay[ed] entry 
into the market by new generators,'' thus ``providing an unfair 
competitive advantage to utilities owning both transmission and 
generation facilities.'').
    \514\ See Order No. 2003, 104 FERC ] 61,103, at app. C, LGIP 
section 1 (defining ``Reasonable Efforts''; id. sections 6.3, 7.4, 
8.3 (providing for the use of reasonable efforts to complete study 
processes within specified timeframes).
    \515\ The Commission further has regulated the charges for the 
interconnection study process through setting the study deposit 
amount, see pro forma LGIP section 3.1.1, and the recovery of the 
costs for interconnection studies, see Order No. 2023, 184 FERC ] 
61,054, pro forma LGIP sections 7.1, 8.1, 9.4, 13.3, app. 2 at 
section 6, app. 7 at section 7, app. 8 at sections 7-8, app. 9 at 
section 6, app. 10 at section 6 (reflecting revisions to the pro 
forma LGIP and appendices set forth in Order No. 2003).

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

[[Page 27057]]

    306. The deadline and penalty structure set forth in Order No. 2023 
is a replacement of the Commission's prior study timelines, including 
the reasonable efforts standard, with another standard directed toward 
that same end.\516\ Specifically, the deadline and penalty structure 
implemented in Order No. 2023 governs the terms of the relationship 
between the interconnection customer and transmission provider 
regarding the costs that transmission providers can recover for 
interconnection studies that fail to meet certain standards. Given that 
interconnection queue backlogs--which are driven, in part, by study 
delays--result in unjust and unreasonable rates through, e.g., 
increased costs and decreased competition,\517\ the study delay penalty 
structure is a means of ensuring just and reasonable rates, consistent 
with the Commission's authority under FPA section 206. Moreover, 
delayed interconnection studies impose costs on interconnection 
customers,\518\ such that the value of the interconnection study to 
such customers is linked to its timely performance. The implementation 
of study delay penalties reflects this fact, and--particularly because 
the penalties are distributed to interconnection customers in 
proportion to their study costs \519\--regulates what a transmission 
provider can charge for an interconnection study, accounting for study 
timeliness, as a matter of ensuring just and reasonable rates.
---------------------------------------------------------------------------

    \516\ See Order No. 2023, 184 FERC ] 61,054 at P 50.
    \517\ See id. PP 37, 43, 50, 963.
    \518\ See id. PP 43, 972.
    \519\ See id. PP 984, 990; infra P 439 (discussing the 
distribution of penalties to interconnection customers).
---------------------------------------------------------------------------

    307. The approach adopted in Order No. 2023 of employing penalties 
as an incentive for regulated actors to ensure adequate service, 
pursuant to the Commission's statutory mandate to ensure just and 
reasonable rates under FPA sections 205 and 206, is not novel. The 
Commission has previously accepted tariff mechanisms incorporating the 
use of penalties for failure to meet a performance standard as a 
component of a just and reasonable rate.\520\ Order No. 890's 
implementation of operational penalties for routinely delayed 
transmission studies similarly reflects a structure using such 
penalties to accomplish the Commission's ratemaking objectives.\521\
---------------------------------------------------------------------------

    \520\ See, e.g., Advanced Energy Mgmt. All. v. FERC, 860 F.3d 
656, 665 (D.C. Cir. 2017) (AEMA) (affirming Commission approval of 
revised market rules under which ``a resource that fails to meet its 
capacity commitment during an emergency hour must pay a penalty''); 
Belmont Mun. Light Dep't v. FERC, 38 F.4th 173, 177 (D.C. Cir. 
2022); Energy Harbor LLC, 185 FERC ] 61,203, at P 2 (2023) 
(explaining that ``PJM's Capacity Performance construct creates a 
penalty and bonus structure for Capacity Resources to deliver energy 
and reserves'' under certain conditions); PJM Interconnection, 
L.L.C., 155 FERC ] 61,157, at P 18 (2016) (further describing this 
capacity construct); ISO New England Inc., 174 FERC ] 61,252, at PP 
3-4 (2021) (discussing ISO-NE's ``pay-for-performance'' capacity 
market design); ISO New England Inc., 165 FERC ] 61,266, at PP 1, 22 
(2018) (accepting proposal to allow ISO-NE to levy a monthly 
``Failure to Cover Charge Rate,'' described as a ``just and 
reasonable penalty rate,'' explaining that it will incentivize 
resources to cover that obligation); cf. PJM Rehearing Request at 30 
(acknowledging that various ``RTO tariffs and other tariffs contain 
various penalty provisions''); Order No. 2003, 104 FERC ] 61,103 at 
PP 857, 898 (considering whether to provide for liquidated damages 
for delayed interconnection studies in the pro forma LGIP, and 
declining to do so, but observing that liquidated damages provisions 
are within the Commission's statutory authority).
    \521\ See, e.g., Order No. 890, 118 FERC ] 61,119 at P 1340 
(describing this structure and explaining that transmission 
providers ``must have a meaningful stake in meeting study time 
frames''); id. P 1347 (explaining the Commission's rationale for the 
penalty amounts selected as ``in line with the cost the transmission 
provider would incur to focus additional resources on processing'' 
study requests and as an effective incentive to comply with study 
deadlines); Order No. 2023, 184 FERC ] 61,054 at PP 1013, 1015 & 
nn.1958-60 (discussing the penalty structure implemented under Order 
No. 890 for transmission service studies and automatic penalties for 
``traffic ticket'' violations).
---------------------------------------------------------------------------

    308. To that end, the Commission adopted the study deadline and 
penalty structure pursuant to its authority under FPA section 206.\522\ 
In doing so, it stated that its approach was not based on a finding of 
bad faith on the part of transmission providers,\523\ or intended to 
create a punitive structure,\524\ but instead reflected the need for 
adequate incentives for transmission providers to take the steps within 
their control to help alleviate unjust and unreasonable rates stemming 
from interconnection queue delays and backlogs.\525\ In this respect, 
the implementation of the study deadline and penalty structure in Order 
No. 2023 reflects that--as a component of a comprehensive package of 
reforms to remedy the problem of severe interconnection queue delays 
and backlogs--transmission providers will be held to appropriate 
standards, with stated consequences for failure to meet those 
standards, as is also the case with interconnection customers.\526\ As 
discussed in detail below,\527\ the implementation of this incentive 
structure pursuant to FPA section 206 is further consistent with 
Supreme Court precedent differentiating civil penalties that are 
imposed as punishment to redress a wrong to the public versus those 
that serve other purposes, such as the regulation of the interaction 
between parties to serve a compensatory function.\528\ Order No. 2023's 
deadline and penalty structure falls within the latter category, 
supported by the Commission's well-established FPA authority over the 
interconnection process to avoid degradation of service, its authority 
to regulate the relationship of the parties involved in that process, 
and its authority to ensure just and reasonable rates under FPA section 
206.
---------------------------------------------------------------------------

    \522\ Order No. 2023, 184 FERC ] 61,054 at P 1014.
    \523\ See id. P 966.
    \524\ See, e.g., id. P 999 (``[W]e believe that the study delay 
penalty structure strikes a reasonable balance by providing an 
adequate incentive without being punitive'').
    \525\ See id. PP 37-43, 50, 970-72.
    \526\ See, e.g., supra section II.A.3 (discussing the need for 
comprehensive reform to address this problem); pro forma LGIP 
sections 3.4, 3.5, 3.7, 3.7.1 (reflecting examples of such 
consequences applicable to interconnection customers, including that 
their interconnection requests may be deemed withdrawn, loss of 
queue position, and application of the withdrawal penalty).
    \527\ See infra section II.D.1.c.iv.
    \528\ See Kokesh v. SEC, 581 U.S. 455, 461 (2017) (Kokesh).
---------------------------------------------------------------------------

i. Interconnection Study Deadlines
(a) Requests for Rehearing
    309. Several of the rehearing requests contend that the imposition 
of fixed, uniform study deadlines is arbitrary and capricious because 
it fails to account for the specific circumstances of the cluster being 
studied, particularly given the complexity and variability of the study 
process.\529\ For instance, Avangrid and EEI argue that the 
Commission's 150-day cluster study deadline is a ``one-size-fits-all'' 
approach that disregards that clusters of interconnection studies will 
vary widely in size and complexity, and there are numerous variables 
outside of transmission providers' control that contribute to 
delays.\530\ Indicated PJM TOs argue that the Commission failed to 
consider the uneven and unpredictable timing of interconnection 
requests.\531\
---------------------------------------------------------------------------

    \529\ Avangrid Rehearing Request at 4-5; EEI Rehearing Request 
at 10; Indicated PJM TOs Rehearing Request at 16; NYISO Rehearing 
Request at 4; NYTOs Rehearing Request at 13-15; 26-27 (arguing that 
there are conflicting directives in Order No. 2023 that support 
regional flexibility but also provide for study penalties following 
strict deadlines that do not account for unique challenges and 
dynamics in different regions, which it claims could hinder ongoing 
regional queue reform initiatives and stifle innovation); SPP 
Rehearing Request at 9-10.
    \530\ Avangrid Rehearing Request at 4-5; EEI Rehearing Request 
at 10.
    \531\ Indicated PJM TOs Rehearing Request at 16 (citing factors 
driving variability in the number and timing of interconnection 
requests in different locations); id. at 30-31 (arguing that the 
evidence of widespread study delays show that the aggressive 
deadlines are unreasonable, unrealistic, and arbitrary, particularly 
given the increased burdens that can be expected going forward, 
including new NERC standards; arguing that uniform study deadlines 
are not justified).

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

[[Page 27058]]

    310. Relatedly, Indicated PJM TOs also assert that the uniform 
study deadline and penalty framework is unduly discriminatory against 
transmission owners in regions with substantial renewable generation in 
development, because such regions with long queues will experience 
greater risk of penalties due to factors they cannot control.\532\ 
Dominion asserts that, within RTOs and ISOs, there may be disparate 
outcomes in different zones because of an uneven distribution of 
interconnection requests, such that different transmission owners or 
transmission providers will face very different risks.\533\
---------------------------------------------------------------------------

    \532\ Id. at 31-32.
    \533\ Dominion Rehearing Request at 24-25.
---------------------------------------------------------------------------

    311. A number of the rehearing requests also challenge the specific 
deadlines the Commission selected--including, in particular, the 150-
day cluster study deadline--as insufficiently supported and/or too 
short, risking a less efficient interconnection process.\534\ MISO TOs 
and NYISO argue that the deadlines imposed in Order No. 2023 have not 
been shown to be appropriate and achievable or are not supported by 
evidence.\535\ NYISO argues that study deadlines should be tailored to 
each region.\536\ NYISO and PJM argue that a 150-day timeframe for the 
cluster study is not achievable in their regions in particular.\537\ 
PacifiCorp asserts that the Commission should extend the 150-day 
cluster study and restudy deadlines by 45 days to provide transmission 
providers adequate time to address third-party delays.\538\
---------------------------------------------------------------------------

    \534\ EEI Rehearing Request at 9-10 (``Experience has shown that 
reliability and deliverability studies take longer than 50 days and 
that the development of binding cost estimates may be complex, 
especially in high-density urban areas.''); MISO TOs Rehearing 
Request at 11-12; NYISO Rehearing Request at 5-6; NYTOs Rehearing 
Request at 13-15; PacifiCorp Rehearing Request at 5, 15; PJM 
Rehearing Request at 32.
    \535\ MISO TOs Rehearing Request at 11-12 (also arguing that the 
Commission has not shown why a uniform deadline is appropriate 
irrespective of ``the cluster size, scope, geography, make up, 
proposed resource mix, and other circumstances of the particular 
cluster'' and that the automatic imposition of penalties exacerbates 
the problem posed by the deadlines); NYTOs Rehearing Request at 13-
15 (citing N.Y. v. EPA, 964 F.3d 1214, 1224 (D.C. Cir. 2020) and 
All. for Cannabis Therapeutics v. DEA., 930 F.2d 936, 940 (D.C. Cir. 
1991) for the propositions that standards that are not reasonably 
attainable and conditions which are ``impossible to fulfill'' are 
arbitrary and capricious).
    \536\ NYISO Rehearing Request at 5-6; see also id. at 15-17 
(arguing that the Commission should allow RTOs/ITOs to propose 
alternative study deadlines as independent entity variations, and 
that failure to do so unreasonably treats all transmission providers 
similarly, regardless of how they may be differently situated); id. 
at 40 (``[T]he Commission has not adequately addressed, or explained 
its response to, arguments that study deadlines themselves are 
unreasonable.'').
    \537\ Id. at 6-11 (describing the applicable New York 
reliability requirements and discussing particular challenges 
applicable to New York); PJM Rehearing Request at 32 (``This simply 
is not possible in a region such as the PJM Region, where the 
typical queue over a one-year period in the last few years has 
included in excess of 1,000 projects'').
    \538\ PacifiCorp Rehearing Request at 5, 15.
---------------------------------------------------------------------------

    312. Avangrid, NYISO, and PJM contend that the efficiency gains 
that can be expected from the other reforms set forth in Order No. 2023 
will not render the deadlines imposed by that decision more 
achievable.\539\ NYISO and PJM contend that the study entry 
requirements are not likely to materially deter participation in 
cluster studies, claiming that certain RTOs/ISOs--including NYISO--have 
already adopted similar requirements without a noticeable reduction in 
the number of study participants.\540\
---------------------------------------------------------------------------

    \539\ Avangrid Rehearing Request at 12; NYISO Rehearing Request 
at 12-15 (arguing that much of the work in cluster studies still 
concerns individual projects or subsets of projects, and thus 
require many of the same resources as would be necessary to conduct 
individual studies); see also id. at 34 (contending that the 
Commission assumes, without evidence, that other improvements will 
fully offset the burdens imposed by Order No. 2023 on transmission 
providers); PJM Rehearing Request at 32.
    \540\ NYISO Rehearing Request at 14-15 (asserting that the entry 
requirements and withdrawal penalties adopted by Order No. 2023 for 
cluster studies are comparatively modest and likely to be only 
minimal deterrent to speculative projects); PJM Rehearing Request at 
32 (noting that MISO received more than 960 requests following the 
close of its 2022 Definitive Planning Process cycle that closed in 
2022).
---------------------------------------------------------------------------

    313. Dominion, MISO TOs, and NYISO also challenge the effectiveness 
of one of the safeguards that the Commission imposed: the ability to 
extend a study deadline for 30 days, upon agreement of all 
interconnection customers.\541\ Dominion argues that there is no 
incentive for interconnection customers to agree to such an extension 
where they would otherwise be entitled to a share of the penalty 
assessed against a transmission provider.\542\ MISO TOs note that 
obtaining this relief requires unanimity among all interconnection 
customers.\543\
---------------------------------------------------------------------------

    \541\ Dominion Rehearing Request at 24; MISO TOs Rehearing 
Request at 18-19; NYISO Rehearing Request at 35.
    \542\ Dominion Rehearing Request at 24.
    \543\ MISO TOs Rehearing Request at 18-19 (contending that this 
safeguard is therefore ``wholly illusory''); see also NYISO 
Rehearing Request at 35 (arguing that a 30-day extension is not a 
reasonable safeguard; noting that it will be conducting 
interconnection studies potentially involving more than 100 
interconnection requests and arguing that each interconnection 
customer will have an incentive to oppose an extension since their 
study costs would be offset by penalty charges).
---------------------------------------------------------------------------

(b) Determination
    314. We are not persuaded by the rehearing requests challenging the 
study deadlines set forth in Order No. 2023. The timelines set forth in 
Order No. 2023 are reforms to the Commission's pro forma LGIP, against 
which individual compliance filings will be assessed.\544\ In Order No. 
2023, the Commission declined to ``adopt suggestions to allow 
transmission providers flexibility to set their own study deadlines,'' 
instead imposing standard deadlines for the specific study processes 
set forth in the pro forma LGIP.\545\ As explained below, we continue 
to find that the deadlines set in Order No. 2023 for the pro forma 
study process are just and reasonable and represent a reasonable policy 
determination that appropriately balances multiple competing 
considerations.\546\
---------------------------------------------------------------------------

    \544\ See Order No. 2023, 184 FERC ] 61,054 at P 10 (``We note 
that the compliance obligations that result from this final rule 
will be evaluated in light of the independent entity variation 
standard for [RTOs] and [ISOs] and the consistent with or superior 
to standard for non-RTO/ISO transmission providers.''); id. P 1764; 
see also Order No. 2003 104 FERC ] 61,103 at P 26 (discussing the 
standards for non-independent and independent transmission providers 
to seek variations from the terms of the pro forma LGIP and LGIA); 
Preventing Undue Discrimination & Preference in Transmission Serv., 
Order No. 890-B, 123 FERC ] 61,299, at PP 95, 101 (2008) (``The 
Commission clarifies, in response to NYISO, that transmission 
providers are free to make filings under FPA section 205 to seek 
variations from the pro forma OATT and demonstrate that alternative 
tariff provisions are consistent with or superior to the pro forma 
OATT.''); N.Y. Indep. Sys. Operator, Inc., 125 FERC ] 61,274, at P 
24 & n.23 (2008) (``NYISO proposed to increase the transmission 
study deadlines from 60 days to 120 days. The Commission accepted 
the filing . . . .'').
    \545\ Order No. 2023, 184 FERC ] 61,054 at P 331 (explaining 
that allowing transmission providers to propose their own deadlines 
in the first instance ``would undermine the purpose of ensuring that 
transmission providers complete interconnection studies by standard 
deadlines prescribed by their tariffs and would thus be insufficient 
to ensure that interconnection customers are able to interconnect to 
the transmission system in a reliable, efficient, transparent, and 
timely manner'').
    \546\ Transmission providers are also allowed to propose 
variations from the requirements of Order No. 2023, under the 
applicable standard, including as to the deadlines set for the pro 
forma study processes, although we cannot prejudge any such filings. 
See id. P 1764.
---------------------------------------------------------------------------

    315. We continue to conclude that the timeframes in Order No. 2023 
for the completion of studies, including the 150-day timeframe for the 
completion of cluster studies, are just and reasonable for the pro 
forma study approach set forth in Order No. 2023.\547\ The underlying 
reason for the reforms in Order No. 2023, including the deadlines 
imposed on transmission providers to

[[Page 27059]]

conduct studies, is that interconnection queue backlogs are causing 
unjust and unreasonable rates and that these backlogs must, therefore, 
be remedied pursuant to our statutory mandate.\548\ We find that the 
timelines set forth in Order No. 2023 appropriately address 
transmission providers' role and control in the interconnection study 
process and strike a reasonable balance between the transmission 
provider and other interests, such as those of interconnection 
customers, in addressing such unjust and unreasonable rates. As 
explained in greater detail below, we further find that these timelines 
are reasonably achievable to accomplish the pro forma study processes 
set forth in Order No. 2023. We therefore disagree that these timelines 
are too short or inappropriately uniform.
---------------------------------------------------------------------------

    \547\ See id. PP 324, 326.
    \548\ Id. P 964; see also 16 U.S.C. 824e(a); Coal. of MISO 
Transmission Customers v. FERC, 45 F.4th 1004, 1020 (D.C. Cir. 2022) 
(``[T]he Commission is under a statutory mandate to ensure that all 
rates are just and reasonable . . . .'').
---------------------------------------------------------------------------

    316. As the Commission explained in Order No. 2023, ``[t]he pro 
forma LGIP [set forth in Order No. 2003] requires that transmission 
providers use reasonable efforts to complete: (1) feasibility studies 
within 45 calendar days; (2) system impact studies within 90 calendar 
days; and (3) facilities studies within 90 or 180 calendar days.'' 
\549\ Under the Commission's pro forma LGIP set forth in Order No. 
2003, the interconnection study process for large generating facilities 
was a ``serial first-come, first-served study process by which 
transmission providers study interconnection requests individually in 
the order the transmission provider received them.'' \550\ Under this 
process, the transmission provider had 135 total days to conduct both 
the feasibility study and system impact study for each interconnection 
request, with each study conducted separately.
---------------------------------------------------------------------------

    \549\ Order No. 2023, 184 FERC ] 61,054 at P 13. Challenges to 
the timelines for interconnection studies set forth in Order No. 
2023 are focused on the deadlines for conducting cluster studies, 
rather than facilities studies. Order No. 2023 provides 90 or 180 
days to conduct facilities studies, which is consistent with the 
timeframe specified in Order No. 2003 under the reasonable efforts 
standard. See pro forma LGIP section 8.3. Thus, Order No. 2023 
effectively eliminates the ability of transmission providers to 
unilaterally grant themselves extensions as to the deadline for 
facilities studies, but provides other avenues for relief in the 
form of the safeguards adopted in Order No. 2023. We continue to 
conclude that this is a just and reasonable result.
    \550\ NOPR, 179 FERC ] 61,194 at P 18.
---------------------------------------------------------------------------

    317. Order No. 2023 eliminated the requirement to conduct a 
separate feasibility study under section 6 of the pro forma LGIP,\551\ 
and provides a modestly longer timeframe (150 days) to conduct the 
cluster study and another 150 days to conduct any necessary restudy. 
The 150-day period to conduct the cluster study runs from the 
conclusion of a new 60-day customer engagement window, during which 
time the transmission provider can begin to coordinate with customers 
that have submitted interconnection requests that will be included in a 
particular study and ensure that the provider is considering only valid 
interconnection requests.\552\
---------------------------------------------------------------------------

    \551\ Order No. 2023, 184 FERC ] 61,054 at PP 67, 92, 316. 
Instead, the stability analysis, short circuit analysis, and power 
flow analysis that were previously part of the feasibility study and 
conducted on a serial basis, see id. at PP 297, 317; pro forma LGIP 
section 7.3, are now conducted as components of the cluster study 
and restudy process.
    \552\ See LGIP section 3.4.5 (describing tasks to be performed 
in the Customer Engagement Window and that interconnection requests 
not deemed valid at the close of this window shall be deemed 
withdrawn, with no cure period); Order No. 2023, 184 FERC ] 61,054 
at PP 223, 233-34.
---------------------------------------------------------------------------

    318. We acknowledge that conducting a cluster study of many 
interconnection requests may involve increased complexity or require an 
increased commitment of resources in a given study timeframe as 
compared to conducting a single, individual study of a particular 
interconnection request under the serial process.\553\ However, 
arguments to this effect do not take into account the full package of 
reforms aimed at improving efficiency of the study process, supporting 
our determination that the 150-day cluster study and cluster restudy 
deadlines reflect a reasonable balance of competing interests.
---------------------------------------------------------------------------

    \553\ See Order No. 2023, 184 FERC ] 61,054 at P 326 (``While we 
have extended the timeline from that provided in the individual 
serial study process, we believe that 150 calendar days is a 
reasonable extension to account for the more complex study.'').
---------------------------------------------------------------------------

    319. Indeed, various reforms in Order No. 2023 are directed toward 
ensuring that transmission providers can conduct their interconnection 
studies more efficiently under the cluster study process than the pro 
forma study approach previously applicable under Order No. 2003.\554\ 
For instance, the Commission found that the cluster study ``process 
will increase efficiency because transmission providers can perform 
larger interconnection studies encompassing many proposed generating 
facilities, rather than separate studies for each individual 
interconnection customer.'' \555\ Under this approach, transmission 
providers will be able to focus their resources on a single study, 
rather than conducting multiple individual studies.\556\ For that 
reason, even if cluster studies prove more complex, that point does not 
undercut the Commission's conclusion that they can be performed in the 
time allotted in the pro forma LGIP. The Commission also explained that 
a cluster study process is likely to result in fewer interconnection 
customer withdrawals--which can result in cascading restudies, delays, 
and wasted resources which could otherwise be used productively--
because ``conducting a single cluster study and cluster restudy will 
minimize delays that arise from proposed generating facility 
interdependencies under the existing serial study process.'' \557\ The 
Commission also adopted further measures to increase efficiency, 
including to ``disincentivize interconnection customers from submitting 
interconnection requests for speculative generating facilities and 
ensure that ready, more viable proposed generating facilities can 
proceed through the study process.'' \558\
---------------------------------------------------------------------------

    \554\ Id. PP 326, 1004.
    \555\ Id. P 177.
    \556\ Id. P 326 (``We also note that transmission providers will 
be conducting only one interconnection study, or at most a small 
number of interconnection studies, at a time, allowing them to 
devote more resources to completing the studies in a timely 
manner.'').
    \557\ Id. P 177.
    \558\ Id. (discussing the cluster study process, combined with 
``the increased financial commitments and requirements to enter the 
interconnection queue, such as a demonstration of site control''); 
see also id. P 977 (noting the ``the new site control requirements, 
commercial readiness deposits, and withdrawal penalties we adopt in 
this final rule, which also become increasingly stringent as the 
study process progresses''); cf. also LGIP sections 3.4.5, 3.7 
(providing that, at the close of the customer engagement window, 
only valid interconnection request are included in the study 
process; further providing that interconnection requests may be 
deemed withdrawn if interconnection customers fail to adhere to the 
requirements of the LGIP).
---------------------------------------------------------------------------

    320. Thus, for the pro forma LGIP approach set forth in Order No. 
2023, we conclude that conducting cluster studies and restudies should 
not, in terms of the total transmission provider resources required, be 
materially more burdensome than conducting serial studies and expect 
that the process should, in fact, be more efficient. We acknowledge 
that conducting a cluster study in 150 days may require a more 
concerted deployment of transmission provider resources than conducting 
serial studies, because cluster studies typically involve the 
evaluation of multiple interconnection requests, rather than allowing a 
full 135 days to separately evaluate each interconnection request. 
However, even absent the efficiency gains the adopted in Order No. 
2023, the record here does

[[Page 27060]]

not reflect that conducting a cluster study will be, in aggregate, more 
burdensome, let alone significantly more burdensome, than conducting a 
study of each interconnection request on an individualized basis. 
Moreover, balancing this concern regarding the burdens associated with 
cluster studies against interconnection customers' need for timely 
processing of their requests, interconnection queue backlogs, and the 
unjust and unreasonable rates resulting from such backlogs, we conclude 
that this is a necessary reform in order to improve the timeliness of 
interconnection study processing and should be within transmission 
providers' capabilities.\559\
---------------------------------------------------------------------------

    \559\ Order No. 2023, 184 FERC ] 61,054 at P 1007.
---------------------------------------------------------------------------

    321. Data reported as required by Order No. 845 by the non-RTO/ISO 
transmission providers that conducted cluster studies in 2022 also 
supports our conclusion that the deadlines for conducting cluster 
studies, restudies, and facilities studies are just and 
reasonable.\560\ While the approaches of each transmission provider to 
conducting cluster studies vary and no transmission provider 
represented in this data employs precisely the pro forma study approach 
set forth in Order No. 2023, we find that this data provides a valid 
basis of comparison to assess the deadlines set in Order No. 2023. In 
general, this represents the most recent data set available at the time 
the record closed and these transmission providers' approach to cluster 
studies reflect some of the key substantive reforms required in Order 
No. 2023.\561\
---------------------------------------------------------------------------

    \560\ See app. B.
    \561\ Moreover, that several transmission providers with 
somewhat variable approaches to cluster studies completed system 
impact studies in fewer than 150 days, on average, corroborates 
that--in general--it is possible to conduct such studies on this 
time frame.
---------------------------------------------------------------------------

    322. The data reflects that five (of eight) such transmission 
providers were able, applying a cluster study approach, to complete 
system impact studies in an average of fewer than 150 days. In several 
cases, they did so for clusters containing significant numbers of 
interconnection requests. Thus, the experience of these transmission 
providers supports that it is reasonably feasible to complete cluster 
studies in the timeframe specified by Order No. 2023. Particularly 
given the other reforms provided in Order No. 2023 to increase the 
efficiency of this process, the ability of transmission providers to 
increase efficiency and devote more resources to this process, and the 
need to ensure timely processing of interconnection studies in order to 
ensure just and reasonable rates, this data supports our conclusion 
that the deadlines set by Order No. 2023 to complete such studies are 
just and reasonable.
    323. We acknowledge that three of the transmission providers 
represented in this data exceeded this timeframe, in some cases by a 
substantial amount. This, however, does not rebut the evidence from 
other transmission providers that these deadlines are reasonably 
achievable. Moreover, that these transmission providers did not 
complete their studies in fewer than 150 days, operating under a regime 
governed by the reasonable efforts standard and the ability to self-
extend such deadlines, does not demonstrate that they could not have 
done so if appropriately incentivized to meet these performance 
standards, as under the deadline and penalty structure adopted in Order 
No. 2023.\562\
---------------------------------------------------------------------------

    \562\ See, e.g., Cent. Hudson, 783 F.3d at 109 (holding that the 
Commission may permissibly rely on economic theory so long as it has 
applied the relevant economic principles in a reasonable manner and 
adequately explained its reasoning); Sacramento, 616 F.3d at 531 
(``[I]t was perfectly legitimate for the Commission to base its 
findings about the benefits of marginal loss charges on basic 
economic theory, given that it explained and applied the relevant 
economic principles in a reasonable manner.'').
---------------------------------------------------------------------------

    324. We also find that the safeguards provided in Order No. 2023 
help ensure that the balance struck by Order No. 2023 in setting the 
timeframes for the pro forma interconnection study process is 
reasonable because transmission providers will not unduly incur 
penalties for failing to meet these timeframes. Two of those 
safeguards, namely the ten-business day grace period and the potential 
availability of a 30-day extension upon agreement of the 
interconnection customers in the cluster study,\563\ help accommodate 
the possible need for extensions to study deadlines. The significant 
transition period that the Commission afforded before study delay 
penalties might be assessed allows transmission providers ``time to 
adapt to the new processes'' and ``will help ensure that transmission 
providers' implementation of this final rule has begun to reduce 
backlogged interconnection queues.'' \564\ The appeals process allows 
transmission providers the opportunity to demonstrate that, under their 
individualized circumstances, they should receive relief from the 
application of penalties for failing to meet the deadlines set in Order 
No. 2023.\565\ To the extent that transmission providers assert that 
factors allegedly outside of their control may render it difficult or 
infeasible to meet the interconnection study deadlines, this appeals 
process is the avenue to raise those considerations in particular cases 
and seek relief.\566\ Moreover, as addressed above, where transmission 
providers conclude that the 150-day deadline for the pro forma study 
process is not appropriate for their particular study processes, they 
can raise this issue in their compliance filings, under the appropriate 
standard. Thus, we continue to conclude that the deadlines imposed by 
Order No. 2023 are reasonable as to the pro forma LGIP approach to 
interconnection studies set forth therein.
---------------------------------------------------------------------------

    \563\ See Order No. 2023, 184 FERC ] 61,054 at PP 963, 981-83; 
see also infra P 335 (recognizing that the 30-day extension is not 
guaranteed in all cases but disagreeing with claims that it will be 
ineffective in practice).
    \564\ Order No. 2023, 184 FERC ] 61,054 at P 979.
    \565\ Id. PP 987-89.
    \566\ See also infra P 363 (noting that concerns that 
transmission providers may not be afforded relief in the appeals 
process, where they believe such relief would be warranted, are 
premature).
---------------------------------------------------------------------------

    325. The challenges on rehearing arguing that the timeframes set 
forth to conduct interconnection studies are too short or 
inappropriately uniform do not persuade us that these deadlines are not 
reasonable for the timely completion of the pro forma study process. We 
disagree with arguments that the Commission failed to adequately set 
forth its rationale for adopting these deadlines, and find that our 
reasons for adopting these deadlines have been adequately explained, 
including through our discussion herein. Arguments that the deadlines 
are too short are largely conclusory, do not support a finding that the 
deadlines set for the pro forma LGIP processes are not generally 
achievable as to those processes, and fail to establish that these 
deadlines--in light of the overall structure of Order No. 2023, 
including the relevant safeguards and ability to seek variations--
reflect an unreasonable balance of the competing interests.
    326. We are unpersuaded by arguments that uniform study deadlines 
are inappropriate. First, these arguments disregard the mechanisms in 
Order No. 2023 to account for variability, including the safeguards 
attendant to the potential assessment of penalties and the ability to 
seek variations from the pro forma LGIP in the compliance process. 
Second, general assertions that some transmission providers may have 
higher workloads than others do not establish that the relevant 
deadlines will not, as a general matter, be sufficient to allow most 
transmission providers to conduct the relevant studies. Third, to the 
extent that some transmission

[[Page 27061]]

providers have higher workloads associated with interconnection 
requests than other providers, the deadlines in Order No. 2023 
incentivize those transmission providers to devote resources 
commensurate with those workloads to the timely processing of the 
interconnection requests in their queue. On that point, it bears 
repeating that the Commission has determined that the status quo is 
leading to unjust and unreasonable rates. As such, while the reforms in 
Order No. 2023 may require transmission providers to reprioritize their 
allocation of resources, we find that such reallocation may be 
necessary to satisfy the statutory mandate.
    327. In response to arguments that the Commission ignored the 
uneven and unpredictable timing of interconnection requests, we 
conclude that Order No. 2023 adequately accounts for these 
considerations. First, interconnection requests will be submitted 
during an annual cluster request window, which is a 45-calendar day 
period with the start date to be determined by each transmission 
provider: under this structure, the timing of interconnection requests 
will not be unpredictable.\567\ Second, we acknowledge that the number 
of interconnection requests submitted in a given cluster request window 
is unpredictable and impacts the deployment of resources that may be 
required to complete that cluster of interconnection studies.\568\ 
However, we continue to find that it is necessary for transmission 
providers to have explicit and firm deadlines prescribed by their 
tariffs to ensure customers are able to interconnect to the 
transmission system in a reliable, efficient, transparent, and timely 
manner.\569\ These deadlines, subject to the safeguards articulated in 
Order No. 2023 (including the appeals process), represent a just and 
reasonable approach that balances the competing interests of 
transmission providers and other entities, and should be reasonably 
achievable for the pro forma study approach adopted in Order No. 2023. 
And as noted above, Order No. 2023 does not foreclose transmission 
providers from proposing different deadlines as part of their 
compliance filings and supporting such proposals using either the 
consistent with or superior to or independent entity variation 
standard, as appropriate.
---------------------------------------------------------------------------

    \567\ Order No. 2023, 184 FERC ] 61,054 at PP 223, 236.
    \568\ Cf. id. P 324 (``We note that depending on the cluster 
size, cluster studies may not always consume the entire 150 calendar 
days, and if a cluster study is complete prior to this deadline, 
transmission providers have flexibility to provide the cluster study 
report at that time prior to the deadline indicated in its 
LGIP[.]'')
    \569\ Id. P 331.
---------------------------------------------------------------------------

    328. NYISO specifically asserts that the 150-day deadline for 
completing cluster studies is not adequate to accommodate NYISO's 
process.\570\ In support, it introduces a new affidavit describing 
NYISO's performance of interconnection studies, and the timing 
associated with the relevant tasks.\571\ Acknowledging that the 
Commission does not typically consider new evidence on rehearing, NYISO 
asserts that the Nguyen Affidavit is not new evidence because it 
``provides clarifying details regarding publicly available information 
about the NYISO's Commission-approved interconnection procedures that 
the NYISO has already described in this proceeding.'' \572\ It further 
claims that, even if the Nguyen Affidavit constitutes new evidence, the 
Commission should accept it to because NYISO could not have reasonably 
anticipated certain alleged factual misunderstandings regarding the 
interconnection study process, the potential benefits of 
interconnection studies, and the level of collaboration required to 
complete studies in New York in Order No. 2023.
---------------------------------------------------------------------------

    \570\ See NYISO Rehearing Request at 5-6 (arguing that the 
Commission has not established a basis for the 150-day deadline for 
cluster studies and should allow each transmission provider to 
propose its own study deadline); id. at 6-12 (arguing that a 150-day 
study timeframe is not consistent the process NYISO follows).
    \571\ See id., attach. I (Nguyen Aff.).
    \572\ NYISO Rehearing Request at 7 n.15; see also NRG Power 
Mktg., LLC v. FERC, 862 F.3d 108, 116-17 (D.C. Cir. 2017) (citing 
PJM Interconnection, L.L.C., 108 FERC ] 61,187, at P 49 (2004) 
(``Parties seeking rehearing of Commission orders are not permitted 
to include additional evidence in support of their position, 
particularly when such evidence is available at the time of the 
initial filing.''); NO Gas Pipeline v. FERC, 756 F.3d 764, 770 (D.C. 
Cir. 2014) (NO Gas) (``FERC regularly rejects requests for rehearing 
that raise issues not previously presented where there is no showing 
that the issue is `based on matters not available for consideration 
. . . at the time of the final decision.' '').
---------------------------------------------------------------------------

    329. We are not persuaded that the Nguyen Affidavit is properly 
before us. To the extent that the Nguyen Affidavit contains material 
not otherwise present in the record, it is new evidence. And NYISO has 
not shown that the evidence in this affidavit could not have been 
presented previously; this affidavit is not prompted by information 
that only recently became available or concerns driven by a material 
change in circumstance.\573\ Indeed, NYISO's argument that the 
Commission should consider this evidence is, essentially, that it 
believes the Commission erred \574\ but--if so--NYISO's proper recourse 
would be to demonstrate that purported error based on the existing 
record.
---------------------------------------------------------------------------

    \573\ See 18 CFR 713.385(c)(3); Pub. Ser. Co. of N.M., 181 FERC 
] 61,013, at P 12 & n.25 (2022).
    \574\ We also disagree with NYISO's generalized assertion that 
the Commission misunderstood the interconnection study process, the 
benefits of such studies, or the level of collaboration involved in 
such studies.
---------------------------------------------------------------------------

    330. Regardless, we would not be persuaded by NYISO's arguments 
even if we were to consider the Nguyen Affidavit in assessing them. The 
question before the Commission in establishing the deadlines for the 
pro forma study process set forth in Order No. 2023 is whether those 
deadlines are reasonable as applied to that process. NYISO's argument 
does not address this question. Rather, NYISO's position is that the 
150-day timeframe is not sufficient for NYISO's specific 
interconnection process, which it has adopted under the independent 
entity variation standard and which differs significantly from the 
process specified in Order No. 2023.\575\ NYISO itself obliquely 
recognizes this point, asserting that ``NYISO anticipates that it will 
seek an independent entity variation from this study timeframe to 
better align with the study scope it will propose for the unique 
interconnection issues in New York.'' \576\ As noted above, we will 
consider such arguments in individual transmission provider compliance 
proceedings.
---------------------------------------------------------------------------

    \575\ See, e.g., NYISO Rehearing Request at 6-11; NYISO Initial 
Comments at 2-3 (``Among the significant variations, the NYISO 
already uses a first-ready, first served approach for managing 
projects in its interconnection queue and uses a cluster Class Year 
Study as the final, hallmark study in its LFIP.''); NYISO Initial 
Comments, app. A at 1 (explaining that ``NYISO's interconnection 
procedures include numerous independent-entity variations accepted 
by the Commission that are specifically tailored to the distinct 
circumstances in New York and the NYISO's wholesale market rules and 
planning processes.''); National Grid Initial Comments at 13-14 
(discussing the NYISO ``Class Year Study'' approach and asserting 
that 150 days may not be sufficient for this process).
    \576\ NYISO Rehearing Request at 4.
---------------------------------------------------------------------------

    331. NYISO more generally asserts that the efficiencies associated 
with a cluster study approach that the Commission identified in Order 
No. 2023 may be offset by increased volumes of interconnection requests 
that might participate in each cluster study.\577\ NYISO further claims 
that additional financial requirements to enter the interconnection 
queue have not, in its experience, materially decreased the number of 
projects entering the queue.\578\ Similarly,

[[Page 27062]]

Avangrid claims that there is insufficient evidence that the easing of 
burdens on transmission providers, under Order No. 2023's reforms, will 
be adequate to justify the deadlines imposed by Order No. 2023.\579\
---------------------------------------------------------------------------

    \577\ Id. at 12-14.
    \578\ Id. at 14-15 (stating that increasing study deposits and 
adding regulatory milestone deposits has not resulted in a 
corresponding decrease in projects entering the queue; also citing 
MISO's July 19, 2023, proposal to impose more stringent entry 
requirements); see also PJM Rehearing Request at 32 (asserting that 
MISO received more than 960 requests following the close of its 2022 
Definitive Planning Process cycle that closed in 2022).
    \579\ Avangrid Rehearing Request at 12.
---------------------------------------------------------------------------

    332. These arguments do not persuade us that the pro forma 
deadlines selected in Order No. 2023 for the conduct of interconnection 
studies are not just and reasonable. Neither NYISO nor Avangrid 
disputes that there will be efficiency gains from transitioning to 
cluster studies, which was a reform broadly supported by commenters. We 
further expect that the more stringent requirements to enter the 
interconnection queue set forth in Order No. 2023, including but not 
limited to financial requirements,\580\ will help reduce speculative 
interconnection requests. To the extent that volumes of interconnection 
requests remain high, this counsels in favor of--not against--ensuring 
that that transmission providers exercise the control they have over 
the process to help ensure interconnection studies proceed more 
expeditiously. As discussed, these reforms are necessary to ensure the 
timely processing of interconnection requests and thereby remedy the 
problem of unjust and unreasonable rates resulting from queue delays 
and backlogs.
---------------------------------------------------------------------------

    \580\ NYISO discusses the effects of increased deposits, but 
Order No. 2023 also imposed site control requirements and withdrawal 
penalties that we expect will also deter speculative interconnection 
requests. Moreover, the MISO PowerPoint presentation that NYISO 
cites is best understood as reflecting MISO's view that more 
stringent queue requirements will help reduce speculative 
interconnection requests. See MISO Presentation, Generator 
Interconnection Queue Improvements, Planning Advisory Committee 
(July 19, 2023), https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20GI%20Queue%20Improvements%20Proposal629634.pdf (proposing to increase such requirements and referring to its 
current tariff rules as incentivizing speculative projects because 
they require a ``small financial commitment'' and have ``ineffective 
withdrawal rules'' that allow withdrawn requests ``to get most of 
their money back, with interest, due to lack of penalties'').
---------------------------------------------------------------------------

    333. Indicated PJM TOs rely on a non-sequitur in claiming that the 
existence of widespread study delays in 2022 is evidence that the 
deadlines set in Order No. 2023 are ``inherently unreasonable.'' \581\ 
The mere existence of past study delays, under a standard that allowed 
transmission providers significant discretion to extend those 
deadlines, does not show that any given set of deadlines to perform 
studies are unachievable or unreasonable.\582\ It particularly does not 
demonstrate that the deadlines for the specific pro forma LGIP process 
set forth in Order No. 2023, with the accompanying reforms to improve 
efficiency, are not reasonable.\583\
---------------------------------------------------------------------------

    \581\ Indicated PJM TOs Rehearing Request at 30.
    \582\ Indeed, this is a one-size-fits-all argument that could be 
directed toward essentially any effort to impose an interconnection 
study deadline as a means of expediting the study process.
    \583\ Indicated PJM TOs also cite new NERC standards that may 
require additional study elements, broadly claiming that this will 
add to transmission providers' workloads, Indicated PJM TOs 
Rehearing Request at 30-31, but do not explain why any additional 
workload associated with these standards would render the deadlines 
set in Order No. 2023 unjust and unreasonable.
---------------------------------------------------------------------------

    334. Dominion, MISO TOs, and NYISO assert that the ability to 
extend a study deadline for 30 days by mutual agreement of the 
transmission provider and all interconnection customers with 
interconnection requests in the relevant study will not be effective in 
practice.\584\ They contend that interconnection customers lack 
incentives to agree to such an extension, particularly given that they 
will be the beneficiaries of any assessed penalty, and that it will be 
particularly infeasible to secure agreement from all interconnection 
customers to such an extension.
---------------------------------------------------------------------------

    \584\ Dominion Rehearing Request at 24; MISO TOs Rehearing 
Request at 18-19; NYISO Rehearing Request at 35.
---------------------------------------------------------------------------

    335. We are not persuaded by speculation that interconnection 
customers will adopt an unreasonably adversarial approach to requests 
for modest extensions to study deadlines. The interconnection process 
is one that, by its nature, tends to require cooperation and 
collaboration, and all parties have a continuing interest in this 
process functioning smoothly.\585\ Moreover, because interconnection 
customers have a particular interest in reliable interconnection 
studies, interconnection customers are not well served by refusing to 
accede to a transmission provider's reasonable request for an extension 
that is necessary, particularly in light of unique circumstances, to 
ensure accurate study results.\586\ Likewise, there may be 
circumstances in which a modest extension of a cluster study would save 
time, for all interconnection customers in a study, for example by 
helping reduce the need for a restudy.\587\ The prospect that 
interconnection customers may receive penalties for late studies is not 
likely to override this need for collaboration and cooperation, 
particularly given that any award of penalties to interconnection 
customers is uncertain (given the availability of an appeal) and any 
such penalties will be split among all interconnection customers 
involved in the study. Moreover, this 30-day extension is just one 
safeguard among several, to extend deadlines that we generally conclude 
should be achievable on their own terms, such that we would still reach 
the same result even if invocation of this safeguard turns out to be 
uncommon in practice.
---------------------------------------------------------------------------

    \585\ See, e.g., EEI Initial Comments at 16 (describing the 
interconnection study process as benefitting from collaboration, in 
which transmission providers ``work with project developers as they 
refine their requests, redesign projects, or modify study parameters 
for optimum results''); Eversource Initial Comments at 25 (similarly 
describing interconnection as a collaborative process between the 
interconnection customer and transmission provider); Indicated PJM 
TOs Rehearing Request at 37 (describing the ``cooperative 
engagement'' between transmission owners and interconnection 
customers and providing examples of such collaboration to resolve 
issues arising in the study process).
    \586\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at P 30 
(noting that the ``vast majority of commenters overwhelmingly 
agree'' that reform of the Commission's pro forma interconnection 
procedures and agreements is necessary ``to ensure that 
interconnection customers are able to interconnect to the 
transmission system in a reliable, efficient, transparent, and 
timely manner''); MISO Initial Comments at 78 (``Errors or omissions 
discovered later may drive the need for a restudy, causing 
unscheduled surprises for Interconnection Customers who have already 
made decisions based on the results of a rushed study.''); SPP 
Initial Comments at 12 (``Interconnection Customers have expressed 
to SPP that timely results that are inaccurate are useless and that 
it is imperative that they be able to rely on study results to make 
sound business decisions.''); cf. Order No. 2023, 184 FERC ] 61,054 
at P 1007 (rejecting arguments that imposing study deadlines and 
penalties will necessarily reduce study accuracy).
    \587\ In addition, any such extension would be time-limited and 
transparent, allowing interconnection customers to better plan 
around such extensions as compared to ad hoc self-extensions under 
the reasonable efforts standard. Cf. Fervo Reply Comments at 7-8 
(explaining that under the status quo with the reasonable efforts 
standard, interconnection customers face uncertainty, which imposes 
barriers to entry); NARUC Initial Comments at 14 (explaining that 
missed deadlines create uncertainty in bringing new generation 
online); SEIA Initial Comments at 32 (noting that backlogs deprive 
developers of needed business certainty, which can lead to issues 
like losing site control rights and financing).
---------------------------------------------------------------------------

    336. NYISO challenges the 10 day grace period, under which no 
penalties would be assessed for a study delayed by no more than 10 
business days, claiming that this grace period does not provide 
meaningful relief to transmission providers that will study large 
numbers of interconnection requests.\588\ This challenge is not 
persuasive. The grace period is one component of the penalty 
structure--and, again, one safeguard among several--through which Order 
No. 2023 strikes an appropriate balance between

[[Page 27063]]

creating an incentive for transmission providers to help ensure that 
interconnection studies are completed in a timely fashion, while not 
being punitive. Specifically, the grace period, in particular, provides 
a ``level of flexibility for transmission providers to address 
unforeseen circumstances or complexities that arise in the study 
process,'' \589\ which may necessitate modest delays. This grace period 
was not intended to provide an automatic, lengthy extension to the 
study deadlines.
---------------------------------------------------------------------------

    \588\ NYISO Rehearing Request at 35 (arguing also that the grace 
period should not be uniform given variability in study workloads 
and challenges to the study deadlines themselves).
    \589\ Order No. 2023, 184 FERC ] 61,054 at P 981.
---------------------------------------------------------------------------

    337. Likewise, the longer transition period the Commission adopted 
does not, as NYISO claims, simply ``postpone[ ] the RTO/ISO penalty 
cost recovery problem.'' \590\ Rather, the transition period \591\ is 
another measure to ensure that the structure adopted in Order No. 2023 
provides incentives that are appropriate, but fair. The transition 
period allows time for transmission providers to address and adapt to 
the requirements of Order No. 2023, reduce backlogs, and address other 
issues (which may include, for example, FPA section 205 filings to 
address RTO/ISO penalty cost recovery).\592\ The transition process 
will thus help ensure that the standards for timeliness set by Order 
No. 2023 are reasonably achievable before penalties are assessed. 
Neither of NYISO's arguments regarding the ten-day grace period or the 
transition period demonstrates any defect in Order No. 2023's deadline 
and penalty structure.
---------------------------------------------------------------------------

    \590\ NYISO Rehearing Request at 37.
    \591\ Under the transition process, in Order No. 2023, the 
Commission specified that transmission providers already using a 
cluster study process will not be subject to penalties until the 
third cluster study cycle after the transmission providers' 
compliance filing becomes effective. Order No. 2023, 184 FERC ] 
61,054 at P 980.
    \592\ Id. PP 979-80.
---------------------------------------------------------------------------

ii. Reasonableness of the Study Delay Penalty and Appeal Structure
(a) Requests for Rehearing
    338. Many of the rehearing requests state that Order No. 2023 
assigns penalties to transmission providers without an assessment of 
fault, as a ``strict liability'' matter, until they demonstrate their 
lack of fault through the appeals process.\593\ These rehearing 
requests variously contend that this is unjust and unreasonable, 
arbitrary and capricious, unsupported by substantial evidence, 
inequitable, and/or offends due process. Many of them object to this 
framework as placing the burden on the transmission provider or 
transmission owner to demonstrate an entitlement to relief from the 
assessed penalty.
---------------------------------------------------------------------------

    \593\ See, e.g., MISO TOs Rehearing Request at 27-29; NYISO 
Rehearing Request at 29-30 (arguing that ``[t]he Commission may not 
reasonably presume that RTOs/ISOs should be penalized at the same 
time that it recognizes that overwhelming record evidence 
demonstrates that other parties will often be solely or 
substantially responsible for delays'' and that RTO/ISO 
interconnection metrics compliance reports under Order No. 845 are 
specific evidence of how a variety of complex and interactive 
factors can cause study delays); NYTOs Rehearing Request at 11-12, 
23 (citing factors that may drive delays due to following Good 
Utility Practice; asserting that only if the variables outside of a 
transmission provider's control are removed can the Commission have 
a sufficient evidentiary basis to determine the reasonable efforts 
standard is unjust and unreasonable); PacifiCorp Rehearing Request 
at 8-9.
---------------------------------------------------------------------------

    339. Avangrid argues that the Commission has deemed transmission 
providers who fail to meet the deadlines set forth in Order No. 2023 
guilty unless they can prove their innocence and thereby denies 
transmission providers and transmission owners due process.\594\ 
Avangrid argues that the appeals process is inequitable because it does 
not ensure exoneration where a transmission provider is not at fault, 
such as in the case of force majeure.\595\ Avangrid further asserts 
that the lack of clarity concerning when relief will be granted 
violates the fair notice doctrine and renders the appeals process 
unjust and unreasonable.
---------------------------------------------------------------------------

    \594\ Avangrid Rehearing Request at 12-13.
    \595\ Id. at 15.
---------------------------------------------------------------------------

    340. Indicated PJM TOs argue that the imposition of penalties 
subject to an appeal mechanism applying a good cause standard 
contravenes due process requirements.\596\ They assert that it is not 
clear how the appeals process would apply to transmission owners 
seeking relief from a penalty after an RTO or ISO has determined that 
the transmission owner is responsible for some or all of the 
penalty.\597\ Indicated PJM TOs claim that an RTO/ISO assignment of a 
penalty cannot receive deference in a proceeding where a transmission 
owner seeks relief from a penalty.\598\
---------------------------------------------------------------------------

    \596\ Indicated PJM TOs Rehearing Request at 23.
    \597\ Id. at 23-24 (arguing that it is ``not clear whether the 
Commission intends to impose the burden of proof on transmission 
owners to demonstrate that the assignment of costs by the 
transmission provider was unreasonable'' or whether transmission 
owners can show good cause by showing that the transmission provider 
or another entity caused the delay).
    \598\ Id. at 24 (arguing that the appeals process must be 
conducted de novo); see also id. at 24-25 (asserting that the other 
safeguards to the imposition of penalties that the Commission 
adopted in Order No. 2023 are inadequate to alleviate these 
concerns).
---------------------------------------------------------------------------

    341. MISO TOs argue that the Commission erred in creating a ``no-
fault, strict liability regime'' whereas tort law reflects that strict 
liability is only warranted in circumstances involving very dangerous 
activities, such as product liability for harm caused.\599\ MISO TOs 
also claim that the penalty and appeals structure conflicts with 
Commission penalty procedures in enforcement cases by imposing a 
penalty automatically unless the transmission provider pursues an 
appeal, resulting in a deprivation of due process. They further contend 
that the appeals process is lacking in detail and fails to address 
these concerns because it puts the onus on the transmission provider to 
appeal penalties--which the Commission does not review de novo--and 
requires transmission providers to expend resources to seek relief for 
penalties caused by the actions of others.\600\
---------------------------------------------------------------------------

    \599\ MISO TOs Rehearing Request at 31-32 (citing Acosta 
Orellana v. CropLife Int'l, 711 F. Supp. 2d 81, 105 (D.D.C. 2010)).
    \600\ Id. at 34-36 (arguing that this inappropriately shifts the 
Commission's burden to prove a violation to the transmission 
provider to disprove it and asserting that it is not clear under 
what statutory provision, or under what authority, the penalty 
appeal will be conducted).
---------------------------------------------------------------------------

    342. PacifiCorp claims that ``[t]he assessment of a civil penalty 
before any agency adjudication is made violates the due process clause 
of the Fifth Amendment to the U.S. Constitution.'' \601\ PacifiCorp 
also objects that the transmission provider has the burden to show 
``good cause'' and that the Commission suggested that ``if the 
transmission provider offers proof that it did not cause the study 
delay at issue, that is only `potentially' exculpatory.'' \602\ 
PacifiCorp further contends that Order No. 2023 lacks a cogent 
explanation of the showing necessary to avoid a penalty, which offends 
due process requirements and renders the appeal a moving target.\603\
---------------------------------------------------------------------------

    \601\ PacifiCorp Rehearing Request at 8-9; see also id. at 4-5 
(``The Final Rule violates the due process clause of the Fifth 
Amendment to the U.S. Constitution by assessing penalties with no 
development of a factual record about whether the transmission 
provider did anything wrong.'').
    \602\ Id. at 9 (citing Order No. 2023, 184 FERC ] 61,054 at P 
993).
    \603\ Id. (asserting that the Commission has well-established 
standards for tariff waivers but has not been clear that the 
traditional waiver standards apply).
---------------------------------------------------------------------------

    343. NYISO contends that the appeals process wrongly places the 
burden on RTOs/ISOs to demonstrate that they are not at fault, when 
there are good reasons to anticipate that RTOs/ISO will not actually be 
responsible for many study delays.\604\ Moreover, NYISO asserts that, 
while the Commission has set forth certain factors it will consider, it 
does

[[Page 27064]]

not provide guidance as to what exactly a transmission provider must do 
to establish good cause for relief.\605\
---------------------------------------------------------------------------

    \604\ NYISO Rehearing Request at 32-33 (noting that due process 
requirements dictate fair and proportionate penalties, rather than 
excessively punitive penalties) (citing Enf't of Statutes, Ords., 
Rules & Reguls., 132 FERC ] 61,216, at P 222 (2008); Enf't of 
Statutes, Reguls. & Ords., 123 FERC ] 61,156, at PP 50-71 (2008)).
    \605\ Id. at 33-34 (claiming that the burden will be 
``unreasonably heavy'' given that the Commission decided not to 
adopt a structure providing for penalties only when a factor causing 
delay can conclusively be determined to be within a transmission 
provider's control).
---------------------------------------------------------------------------

    344. WIRES states that the penalty structure adopted by Order No. 
2023 is not just and reasonable because it is a strict liability 
approach that sanctions transmission providers for missing deadlines 
for reasons beyond the control of those providers.\606\ WIRES asserts 
that strict liability for penalties can only reasonably be imposed if 
transmission providers have full control over the interconnection study 
process, but the Commission has acknowledged that this is not the 
case.\607\
---------------------------------------------------------------------------

    \606\ WIRES Rehearing Request at 6-7.
    \607\ Id. (arguing that penalties cannot reduce delays that 
occur for reasons beyond the transmission providers' control).
---------------------------------------------------------------------------

    345. NYTOs argue that the deadline and penalty structure, with the 
right to seek relief through an appeal, is vague and impermissibly 
presumes fault without conducting a de novo review of whether a penalty 
is warranted.\608\ NYTOs claim that, in Order No. 2023, the Commission 
has reserved its discretion to uphold a penalty even in the absence of 
substantial evidence that a sanctioned transmission provider was at 
fault, and that the Commission will grant whatever relief it determines 
is appropriate.\609\
---------------------------------------------------------------------------

    \608\ NYTOs Rehearing Request at 12-13.
    \609\ Id. at 12; see also id. at 27 (asserting that Order No. 
2023 does not confirm that transmission providers will not be 
penalized when a delay is not their fault, and that the cost of an 
appeal may cause transmission providers to accede to minor 
penalties).
---------------------------------------------------------------------------

    346. PJM argues that the Commission failed to adequately explain 
its refusal to adopt a structure in which transmission providers incur 
penalties only where a study delay is due to a factor that can be 
conclusively demonstrated to be within a transmission provider's 
control, and that it failed to show that this approach was consistent 
with due process.\610\ PJM asserts that the appeals process is not just 
and reasonable and violates the constitutional guarantee of due process 
if it only provides due process ``to some extent.'' \611\ PJM argues 
that ``[i]f a transmission provider knows it will be penalized for any 
delay in interconnection studies regardless of its role in the delays, 
and will have to appeal that penalty and demonstrate that the penalty 
imposed on it should not be assessed, i.e., that it is guilty until it 
can prove its innocence, it might reasonably ask what deterrence or 
incentive purpose the penalty actually serves.'' \612\
---------------------------------------------------------------------------

    \610\ PJM Rehearing Request at 31 (arguing that the Commission 
has recognized the need to protect due process rights in other 
instances; citing Enf't of Statutes, Reguls. & Ords., 123 FERC ] 
61,156 at PP 40, 51; 16 U.S.C. 825o-1).
    \611\ Id. (asserting that Order No. 2023 stated that ``details 
such as whether the penalized transmission provider actually is 
responsible for the study delay are `addressed to some extent 
through the ability to appeal.' '' (quoting Order No. 2023, 184 FERC 
] 61,054 at P 989)).
    \612\ Id. at 31-32.
---------------------------------------------------------------------------

    347. Certain of the rehearing requests also assert that the appeals 
process set forth in Order No. 2023 is too vaguely defined. Avangrid 
refers to the appeal as a ``vaguely-defined waiver process.'' \613\ 
MISO TOs assert that ``the appeals process is rife with ambiguity, 
making it unworkable and overly time-consuming'' and lacks detail on 
the process for an appeal, including the form and forum, whether 
interventions will be permitted, whether discovery will be allowed, and 
under what statutory provision the appeal is conducted.\614\ NYISO 
asserts that the Commission did not indicate whether it would use fact-
finding neutrals, paper hearing procedures, or some other method to 
conduct appeals of penalties, or how appeals would be further reviewed 
on rehearing or under the APA.\615\ NYTOs state that the Commission 
failed to explain how the process will work, including whether--in 
assessing good cause--the Commission will apply the standard applicable 
to tariff waivers, the burdens of proof, how genuine issues of material 
fact will be adjudicated, clear standards for granting relief, and the 
parameters of the appeals process.\616\
---------------------------------------------------------------------------

    \613\ Avangrid Rehearing Request at 12-13.
    \614\ MISO TOs Rehearing Request at 35-36.
    \615\ NYISO Rehearing Request at 33-34.
    \616\ NYTOs Rehearing Request at 24-25 & n.67 (asserting that 
courts have found that due process requires hearing procedures for 
the adjudication of genuine disputes of material fact; arguing that 
the ``good cause'' standard is a novel ratemaking standard that the 
Commission fails to justify).
---------------------------------------------------------------------------

    348. A number of the rehearing requests assert that the Commission 
should have adopted exceptions to the assessment of penalties for 
failure to meet the required deadlines. Several of these rehearing 
requests challenge the Commission's decision not to provide an 
exception to such penalties for circumstances involving force 
majeure.\617\ PacifiCorp argues, more broadly, that because study 
delays are often driven by third parties or factors beyond the control 
of transmission providers, the Commission should have adopted self-
effectuating exemptions for study delays that are outside of a 
transmission provider's control.\618\ In support, PacifiCorp contends 
that failing to provide such exemptions ``(1) ignores the frequency at 
which delays are caused by third parties and; (2) mistakenly assumes: 
(a) transmission providers can take actions to mitigate delays caused 
by third parties, and (b) it is prudent for transmission providers to 
increase expenditures in an effort to offset causes for delays that are 
outside of their control.'' \619\
---------------------------------------------------------------------------

    \617\ See Avangrid Rehearing Request at 15 (arguing that the 
appeals process is inequitable because it does not ensure 
exoneration where a transmission provider is not at fault, such as 
in the case of force majeure or where the delay may be due to 
multiple factors); EEI Rehearing Request at 8 (arguing that the 
Commission failed to provide an exception for force majeure, which 
has a specific definition in the pro forma LGIP and pro forma LGIA 
reflecting circumstances beyond a parties' control, and asserting 
that where a transmission provider has declared force majeure 
assessing a penalty and requiring an appeal is an unnecessary burden 
and will take time away from completing pending studies); NYISO 
Rehearing Request at 37-38 (arguing that the Commission erroneously 
failed to adopt the force majeure exception given the purported 
flaws associated with the appeals process); NYTOs Rehearing Request 
at 27 (requesting clarification on this point); PJM Rehearing 
Request at 31-32 (``Moreover, the Final Rule fails to explain how 
removing force majeure as a reason penalties would not apply and 
refusing to impose penalties `only where a factor can be 
conclusively demonstrated to be within a transmission provider's 
control' is logical'').
    \618\ PacifiCorp Rehearing Request at 13-15 (``Transmission 
providers therefore should not: (1) be penalized if, as portrayed in 
the example above, it takes more than 150 Calendar Days to complete 
as the study due to responding to such interconnection customer 
actions; or (2) expend resources and effort to submit an appeal when 
the transmission provider is prudently incorporating changes from 
one or more interconnection customers . . . .'').
    \619\ Id. at 15.
---------------------------------------------------------------------------

    349. Indicated PJM TOs and NYTOs also take issue with the 
Commission's statement that appeals of penalties for missing study 
deadlines ``should not be filed under FPA section 206.'' \620\ 
Indicated PJM TOs assert that, to the extent that the Commission 
intends to withhold the right to seek relief under FPA section 206, 
``[t]he Commission cannot deprive any aggrieved party of the right to 
file a complaint under FPA section 206'' \621\ or limit the scope of 
such challenges.\622\ NYTOs state that ``the appeals process specified 
by the Order, which requires appeals to be

[[Page 27065]]

pursued under the Commission's procedural rules and not under section 
206, effectively imposes a mandatory waiver of transmission providers' 
statutory rights, which is contrary to law.'' \623\
---------------------------------------------------------------------------

    \620\ Indicated PJM TOs Rehearing Request at 26 (citing Order 
No. 2023, 184 FERC ] 61,054 at P 987 n.1911); NYTOs Rehearing 
Request at 23.
    \621\ Indicated PJM TOs Rehearing Request at 26 (citing Papago 
Tribal Util. Auth. v. FERC, 723 F.2d 950, 953 (D.C. Cir. 1983) 
(noting the Commission's ``indefeasible right . . . under [FPA 
section] 206 to replace rates that are contrary to the public 
interest''); Me. Pub. Util. Comm'n v. FERC, 454 F.3d 278, 283 (D.C. 
Cir. 2006) (same)).
    \622\ Id. (``The scope of a challenge could not be limited by 
the factors the Commission identified as affecting a ``good cause'' 
determination, nor could it be limited to whether the transmission 
owner caused or contributed to the study delay.'').
    \623\ NYTOs Rehearing Request at 23 (citing Atl. City Elec. Co. 
v. FERC, 295 F.3d 1, 10 (D.C. Cir. 2002) (Atl. City I)); see also 
id. at 13.
---------------------------------------------------------------------------

    350. Many of the rehearing requests argue that replacing the 
reasonable efforts standard with the deadline and penalty structure set 
forth in Order No. 2023 will have negative, unintended consequences. 
Avangrid contends that this structure will result in transmission 
providers focusing on ``processing speed and `checking the boxes' 
specified in Order No. 2023 over providing flexibility and 
collaboration with interconnecting generators on challenging issues 
unique to their situations.'' \624\ Indicated PJM TOs add that this 
structure will divert attention from optimal system planning.\625\ MISO 
TOs and SPP emphasize that interconnection studies must be conducted 
with precision to avoid inefficiency or costly mistakes.\626\ NYISO 
argues that this structure will incentivize transmission providers to 
prioritize meeting deadlines over ensuring the quality and completeness 
of studies and that inferior studies conducted under time pressure 
could lead to suboptimal results or negatively impact reliability.\627\ 
WIRES further asserts that this structure will require transmission 
providers to take a more rigid approach to managing the interconnection 
queue, reducing flexibility to allow interconnection customers to 
redesign projects or modify their requests, and inhibit efforts to 
streamline the interconnection process.\628\
---------------------------------------------------------------------------

    \624\ Avangrid Rehearing Request at 13.
    \625\ Indicated PJM TOs Rehearing Request at 34-37 (asserting 
that transmission providers have no incentive to delay 
interconnection studies and that it is ``is poor policy on the part 
of the Commission to confront transmission planners with the 
potential option of either avoiding concrete penalties associated 
with a strict arbitrary deadline or taking more time to ensure that 
a study is complete and comprehensive'' and noting the shortage of 
qualified engineers).
    \626\ MISO TOs Rehearing Request at 10, 16-17; SPP Rehearing 
Request at 6, 8-9 (discussing examples of the consequences of 
inaccurate or suboptimal studies).
    \627\ NYISO Rehearing Request at 27-29 (arguing that the 
Commission failed to provide a reasoned response to these concerns, 
but instead dismissed them by asserting transmission providers can 
increase timely study processing without necessarily facing such 
tradeoffs); see also id. at 19 (arguing that this problem is 
particularly acute for NYISO ``because New York State is pursuing 
what is arguably the most ambitious clean energy agenda in the 
country,'' driving high volumes of interconnection requests and that 
New York City also presents the most complex reliability challenges 
in the country).
    \628\ WIRES Rehearing Request at 7-8.
---------------------------------------------------------------------------

    351. Certain rehearing requests assert that the deadline and 
penalty structure in Order No. 2023 will foster a combative atmosphere 
and discord, potentially leading to delays. Avangrid asserts that this 
structure incentivizes transmission providers to no longer use 
reasonable efforts to work with interconnection customers to fulfill 
the completeness of their application information and improve 
effectiveness, but instead declare interconnection customers in breach 
for delays and remove them from the interconnection process.\629\ PJM 
asserts that the Commission failed to address arguments that this 
structure would undermine collaboration, with RTOs and transmission 
owners instead focusing on the need to simply protect against legal 
exposure.\630\ Indicated PJM TOs assert that this structure will lead 
to acrimony--particularly in the regions where the interconnection 
queues are the longest--that will counter any efficiency gains.\631\ 
SPP similarly argues that Order No. 2023 leaves open the question of 
how transmission providers would recover study delay penalties assessed 
to them, and could erode the working relationship of RTOs and the 
transmission owners in their footprint.\632\
---------------------------------------------------------------------------

    \629\ Avangrid Rehearing Request at 14-15.
    \630\ PJM Rehearing Request at 32-33.
    \631\ Indicated PJM TOs Rehearing Request at 37-38.
    \632\ SPP Rehearing Request at 8.
---------------------------------------------------------------------------

    352. Several of the rehearing requests argue that the deadline and 
penalty structure will create administrative or other burdens on 
transmission providers, which may be counterproductive because it will 
consume the same resources that would otherwise be used to perform 
interconnection studies. AEP argues that study delay penalties will 
overcomplicate the interconnection process and increase litigation, 
administrative burden, and costs.\633\ MISO TOs, PacifiCorp, and SPP 
claim that imposing penalties on transmission providers will make it 
more difficult to complete studies in a timely fashion because such 
penalties will deprive them of funds that could be used for qualified 
engineering personnel, and pursuing an appeal will create 
administrative burdens.\634\ PJM claims that the Commission failed to 
address difficulties in assigning fault for delays, which will likely 
lead to litigation.\635\ PJM also argues that the penalty structure 
will add time consuming study and reporting requirements, including 
administration to track study metrics, pursue penalty appeals, and 
collect and disburse penalty amounts. Indicated PJM TOs assert that the 
burdens imposed by the deadline and penalty structure will further 
strain already scarce utility resources, given other industry trends 
that will likely increase transmission providers' workloads.\636\
---------------------------------------------------------------------------

    \633\ AEP Rehearing Request at 28-29.
    \634\ MISO TOs Rehearing Request at 17-18 (noting also the 
shortage of qualified personnel and that the Commission did not 
point to evidence of better software that would allow transmission 
providers to escape study delay penalties); id. at 35 (noting that 
the same personnel that perform interconnection studies will likely 
be the fact witnesses in any Commission penalty appeal proceeding); 
PacifiCorp Rehearing Request at 11-13 (arguing that it is highly 
likely that appeals will be filed faster and more frequently than 
the Commission can process them and noting that interconnection 
customers will be incentivized to protest appeals, which will 
increase administrative and resource costs of pursuing such 
appeals); SPP Rehearing Request at 7, 9 (arguing also that this will 
create a litigious environment that threatens timely study 
completion).
    \635\ PJM Rehearing Request at 32-33.
    \636\ Indicated PJM TOs Rehearing Request at 38 (citing the need 
to analyze advanced transmission technologies and increased burdens 
surrounding modeling, and also noting that the same staff who are 
responsible for processing interconnection requests will need to be 
deployed to address disputes regarding interconnection study 
timeliness).
---------------------------------------------------------------------------

    353. Indicated PJM TOs also note that managing new study deadlines 
by deploying additional resources will come at a cost to transmission 
providers.\637\ Indicated PJM TOs contend that the Commission failed to 
consider the extent of such costs and their impacts in Order No. 2023. 
Indicated PJM TOs also argue that the Commission failed to respond to 
the argument that the NOPR misrepresented statements by Utah Public 
Service Commission Chairman LeVar as providing support for study delay 
penalties.
---------------------------------------------------------------------------

    \637\ Id. at 39-40.
---------------------------------------------------------------------------

    354. Indicated PJM TOs and NYTOs assert that Order No. 2023's 
deadline and penalty structure will negatively affect transmission 
providers' own efforts at reforming the interconnection process.\638\ 
Indicated PJM TOs claim that imposing this structure on regions that 
have already adopted cluster-study processes, but chose to retain the 
reasonable efforts standard, sends the message that their efforts to 
reach consensus as to appropriate reforms do not matter.\639\ NYTOs 
assert that strictly enforcing deadlines and penalties, without 
exceptions, will hinder ongoing regional queue reform efforts, perhaps 
stifling innovation and necessary

[[Page 27066]]

changes to address circumstances applicable in each region.\640\
---------------------------------------------------------------------------

    \638\ Id. at 16-17; NYTOs Rehearing Request at 27.
    \639\ Indicated PJM TOs Rehearing Request at 17.
    \640\ NYTOs Rehearing Request at 27.
---------------------------------------------------------------------------

    355. Dominion contends that the Commission failed to consider 
whether the study deposits assessed for interconnection studies would 
be sufficient to support the increased personnel costs required to 
complete those studies by the deadlines set forth in Order No. 
2023.\641\ Dominion further claims that there may be perverse 
incentives for interconnection customers to delay the completion of 
studies, given that customers can benefit from the penalty funds 
awarded to them, and Order No. 2023 does not penalize such customers 
for delays.
---------------------------------------------------------------------------

    \641\ Dominion Rehearing Request at 23-24 (``There is also no 
discussion in Order No. 2023 as to how cost recovery for these 
expenses would be recovered other than through the study 
deposits.''); see also id., attach. A (Affidavit of James R. 
Bailey).
---------------------------------------------------------------------------

    356. Certain of the rehearing requests also assert that the 
deadline and penalty structure set forth in Order No. 2023 is one-
sided, and therefore unduly discriminatory or unjust and unreasonable, 
noting that interconnection customers (or other parties) are not 
subject to potential penalties for the role they may play in delayed 
interconnection studies.\642\ Avangrid also contends that Order 2023's 
incentives are one-sided, with interconnecting generators having both 
``carrot'' incentives (in the form of profits from having generation 
interconnected) and ``stick'' incentives, but transmission providers 
and transmission owners, who perform generator interconnection 
activities (often on a non-profit basis) are limited to avoiding the 
``stick'' of a study delay penalty.\643\ Indicated PJM TOs assert that 
the Commission's reasoning for declining to assess such penalties 
against interconnection customers--that transmission providers may deem 
non-compliant interconnection requests withdrawn--underestimates the 
difficulty of removing an interconnection customer that fails to meet 
deadlines from the queue, particularly given that customers may seek 
redress at the Commission.\644\
---------------------------------------------------------------------------

    \642\ See Avangrid Rehearing Request at 14; Indicated PJM TOs 
Rehearing Request at 27-29; id. at 29 (arguing that while 
modification of Order No. 2023 to subject interconnection customers 
to penalties is necessary, it would only complicate the process 
further and is an additional reason the penalty structure is not 
workable); MISO TOs Rehearing Request at 28-29; NYTOs Rehearing 
Request at 23-24.
    \643\ Avangrid Rehearing Request at 7.
    \644\ Indicated PJM TOs Rehearing Request at 28.
---------------------------------------------------------------------------

    357. Avangrid, MISO TOs, and NYTOs assert that the assessment of 
penalties for failing to meet a study deadline without regard to fault 
is confiscatory, asserting that this renders the penalties regulatory 
takings in violation of the Takings Clause of the Constitution.\645\ 
Avangrid and NYTOs further contend that the penalty framework may 
potentially deny recovery of costs incurred for interconnection studies 
performed using good utility practice.\646\ MISO TOs assert that the 
penalty framework may require transmission providers to perform 
interconnection studies ``for free, simply if they miss a deadline.'' 
\647\
---------------------------------------------------------------------------

    \645\ Avangrid Rehearing Request at 16 (citing FPC v. Hope 
Natural Gas Co., 320 U.S. 591, 603 (1944) (Hope); Ameren Servs. Co. 
v. FERC, 880 F.3d 571, 580 (D.C. Cir. 2018) (Ameren)); MISO TOs 
Rehearing Request at 33-34; NYTOs Rehearing Request at 25-26.
    \646\ Avangrid Rehearing Request at 16; NYTOs Rehearing Request 
at 25-26 (``In properly balancing the interests of investors and 
consumers, the Commission is required to allow the public utility 
transmission provider to recover its reasonably incurred operating 
expenses.'' (citing Hope, 320 U.S. at 603; Bluefield Water Works & 
Improvement Co. v. Pub. Serv. Comm'n of the State of W.Va., 262 U.S. 
679, 690 (1923); Ameren, 880 F.3d at 580, 581-82, 584-85; Jersey 
Cent. Power & Light Co., 810 F.2d 1168, 1175 (D.C. Cir. 1987) 
(Jersey Cent.)); see also id. at 28 (``penalties are shifted to 
transmission owner members of RTOs/ISOs without regard to fault, 
equity and the Takings Clause demand that the transmission owners 
should be allowed to recover such costs'').
    \647\ MISO TOs Rehearing Request at 33-34 (``The FPA does not 
permit the Commission to compel utilities to provide service to 
others for free.'' (citing Ameren, 880 F.3d at 582)).
---------------------------------------------------------------------------

(b) Determination
    358. We disagree with the rehearing requests that argue that Order 
No. 2023's penalty structure is unjust and unreasonable, violates due 
process, or is otherwise inequitable because it is a ``strict 
liability'' structure that assigns penalties to transmission providers 
regardless of fault. To begin with, the imposition of standards of 
performance--namely, deadlines--on transmission providers to conduct 
interconnection studies was based on the need for reform to ensure the 
timely processing of such studies given the control that transmission 
providers exercise over the study process. Likewise, the deadlines were 
selected based on timeframes that, as a general matter, should be 
reasonably achievable for transmission providers under the pro forma 
LGIP process, including other reforms adopted in Order No. 2023. As a 
result, based on the record and the Commission's findings in this 
proceeding, we have concluded that a failure to meet these deadlines 
presumptively reflects that a transmission provider has failed to 
respond appropriately to the need for timely interconnection study 
processing such that a penalty is warranted in order to ensure just and 
reasonable rates. That penalty reduces what transmission providers can 
charge for interconnection studies that fail to meet the performance 
standards set forth in Order No. 2023.
    359. Moreover, the characterization of this structure as ``strict 
liability'' is inaccurate because section 3.9(3) of the pro forma LGIP 
provides a robust framework for transmission providers to appeal any 
study delay penalties to the Commission. Under that framework, and 
unlike a ``strict liability'' regime, transmission providers can raise 
case-specific facts and circumstances for the Commission's 
consideration in determining whether there is good cause to grant 
relief from a penalty. The list of factors that the Commission set 
forth in Order No. 2023 reflects that transmission providers have the 
opportunity to demonstrate that a penalty for a late study is not 
warranted, including based on considerations of the transmission 
provider's conduct or lack of fault for any delay.\648\ In fact, the 
Commission will consider affording relief based not just on the 
transmission provider's conduct in any particular study, but also their 
efforts to prevent future delays. This list of factors, while 
reflecting the considerations that the Commission deems most likely to 
be pertinent to establishing good cause for relief from a penalty, is 
also non-exhaustive such that transmission providers may raise, for the 
Commission's consideration, any other circumstances that they deem 
pertinent to a request for relief.\649\ Any final Commission order 
finding that there is not good cause for relief from a penalty is 
subject to rehearing, as appropriate, and may also be subject to 
judicial review, pursuant to FPA section 313.\650\
---------------------------------------------------------------------------

    \648\ Order No. 2023, 184 FERC ] 61,054 at P 987 (``[T]he 
Commission may consider, among other factors: (1) extenuating 
circumstances outside the transmission provider's control, such as 
delays in affected system study results; (2) efforts of the 
transmission provider to mitigate delays; and (3) the extent to 
which the transmission provider has proposed process enhancements 
either in the stakeholder process or at the Commission to prevent 
future delays . . . .'').
    \649\ In this respect, the ``good cause'' standard allows the 
Commission to consider the totality of the circumstances resulting 
in any delay, as appropriate given the variety of facts and 
circumstances that may arise; balances competing interests while 
addressing concerns that the Commission provide for adequate due 
process and fact-finding; and will help avoid punitive results. See 
id. PP 987-89; cf. NYTOs Rehearing Request at 24 (arguing that the 
``good cause'' standard is a novel standard that the Commission in 
Order No. 2023 failed to justify).
    \650\ 16 U.S.C. 825l (setting forth the procedures for a party 
aggrieved by an order issued by the Commission to obtain judicial 
review of such orders).
---------------------------------------------------------------------------

    360. Arguments in the rehearing requests that the deadline and 
penalty structure set forth in Order No. 2023

[[Page 27067]]

violates due process are not well developed, as they largely fail to 
address the governing legal standards,\651\ or explain how Order No. 
2023 is inconsistent with judicial or Commission precedent,\652\ in 
this respect. Moreover, the Commission's adoption of the deadline and 
penalty structure in Order No. 2023 reflects an exercise of its 
ratemaking authority under FPA section 206, setting performance 
standards associated with the conduct of interconnection studies and 
financial consequences for the failure to meet those standards.\653\ In 
this context, the Commission exercised its discretion to adopt an 
appeals process. Although commenters have not established what, if any, 
constitutional due process rights they might possess in this context, 
we need not reach this question. Rather, based on the arguments that 
have been presented and the record before us, we find that the deadline 
and penalty structure in Order No. 2023 does not violate any 
transmission providers' potential rights to due process and is just and 
reasonable.
---------------------------------------------------------------------------

    \651\ See, e.g., Mathews v. Eldridge, 424 U.S. 319 (1976) 
(Mathews).
    \652\ A limited exception is that certain of the rehearing 
requests contend that the Commission's approach is inconsistent with 
its enforcement policies. See NYISO Rehearing Request at 29-30; PJM 
Rehearing Request at 31; infra P 417 (explaining that those 
enforcement policies are not applicable in the ratemaking context).
    \653\ See supra section II.D.1.c; infra section II.D.1.c.iv.
---------------------------------------------------------------------------

    361. In particular, even assuming arguendo that transmission 
providers have due process rights relating to the appeals process the 
Commission chose to adopt in Order No. 2023, the hallmarks of due 
process are fair notice and an opportunity to be heard.\654\ 
Transmission providers have received fair notice and an extensive 
opportunity to be heard through this notice-and-comment rulemaking 
proceeding as to, among other things, the conduct that (absent an 
appeal demonstrating good cause for relief) will result in a 
penalty,\655\ the amount of the potential penalty,\656\ and the ability 
to seek relief from a penalty through the appeals process.\657\ The 
appeals process provides a further opportunity, prior to any obligation 
to distribute an assessed study penalty,\658\ for transmission 
providers to be heard regarding whether relief from a particular 
assessment of a penalty, on the facts of a given case, is 
warranted.\659\ A party aggrieved by a Commission order addressing such 
an appeal--which order will state the Commission's reasoning for any 
denial of relief--has yet another opportunity to be heard by seeking 
rehearing of that order.
---------------------------------------------------------------------------

    \654\ Mathews, 424 U.S. at 348-49 (``The essence of due process 
is the requirement that a person in jeopardy of serious loss (be 
given) notice of the case against him and opportunity to meet it. 
All that is necessary is that the procedures be tailored, in light 
of the decision to be made, to the capacities and circumstances of 
those who are to be heard to insure that they are given a meaningful 
opportunity to present their case.'' (citations and quotation marks 
omitted)).
    \655\ See Order No. 2023, 184 FERC ] 61,054 at PP 962-63, 979-
83.
    \656\ See id. PP 962, 973, 984.
    \657\ See id. P 987.
    \658\ See id. (``The filing of an appeal will stay the 
transmission providers' obligation to distribute the study delay 
penalty funds to interconnection customers until 45 calendar days 
after (1) the deadline for filing a rehearing request has ended, if 
no requests for rehearing of the Commission's decision or the appeal 
have been filed, or (2) the date that any requests for rehearing of 
the Commission's decision on the appeal are no longer pending before 
the Commission.'').
    \659\ See Opp Cotton Mills, Inc. v. Adm'r of Wage & Hour Div., 
312 U.S. 126, 152-53 (1941) (``The demands of due process do not 
require a hearing, at the initial stage or at any particular point 
or at more than one point in time in an administrative proceeding so 
long as the requisite hearing is held before the final order becomes 
effective.'').
---------------------------------------------------------------------------

    362. Transmission providers also have fair notice \660\ of the 
factors that the Commission has concluded are most likely to be 
pertinent to demonstrating good cause for relief.\661\ We disagree that 
the Commission must specify ``exactly'' what transmission providers 
must do to demonstrate good cause for relief or that failing to do so 
renders the appeal impermissibly vague or a ``moving target'' that 
offends due process. The Commission's decisions addressing appeals will 
also be subject to the standard requirements of administrative law 
regarding reasoned decision-making, including that the Commission 
develop a consistent body of precedent in considering such appeals and 
explain any deviation from that precedent in a reasoned fashion.\662\
---------------------------------------------------------------------------

    \660\ See, e.g., Fed. Express Corp. v. U.S. Dep't of Com., 39 
F.4th 756, 773 (D.C. Cir. 2022) (explaining that ``[t]he Due Process 
Clause's fair notice requirement generally requires only that the 
government make the requirements of the law public and afford the 
citizenry a reasonable opportunity to familiarize itself with its 
terms and to comply'' and that even trained lawyers may find it 
necessary to consult legal dictionaries, treatises, and precedent); 
Ramsingh v. Transport. Sec. Admin., 40 F.4th 625, 636 (D.C. Cir. 
2022) (``An enactment violates the Due Process Clause if it is so 
vague that it fails to give ordinary people fair notice of the 
conduct it punishes, or so standardless that it invites arbitrary 
enforcement.'' (quotation marks omitted)).
    \661\ Order No. 2023, 184 FERC ] 61,054 at P 987. Having set 
forth these factors as most likely to be pertinent to a showing of 
good cause, we do not intend to apply our traditional waiver factors 
and confirm that the appeals process, as a tariff-specified 
mechanism to seek relief from penalties, is distinct from seeking a 
waiver of a tariff provision. See PacifiCorp Rehearing Request at 9-
10 (asserting that the Commission had not been clear as to whether 
such waiver standards would apply).
    \662\ See, e.g., Fairless Energy, LLC v. FERC, 77 F.4th 1140, 
1147 (D.C. Cir. 2023) (agencies must generally conform to prior 
practice and decisions or explain the reasons for departure from 
precedent).
---------------------------------------------------------------------------

    363. Indeed, arguments speculating that the Commission might, in 
the appeals process, decline to afford relief where a transmission 
provider believes the facts warrant relief, are premature. Arguments 
that the Commission should or must grant relief from a penalty (such 
that failure to do so is arbitrary and capricious, violates due 
process, or is otherwise unlawful) can be raised in the context of the 
appeals process in a given case, rehearing, and--if appropriate--
judicial review, where the particular facts of the case at issue have 
been developed.\663\ The Commission is not at this time presented with 
determining, and declines to prejudge, whether any particular set of 
facts will necessarily warrant relief, as such considerations are best 
left to a case-by-case assessment.\664\
---------------------------------------------------------------------------

    \663\ See, e.g., Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 
U.S. 726, 732-33 (1998) (explaining that, in assessing whether an 
argument is ripe for resolution, courts consider ``(1) whether 
delayed review would cause hardship to the plaintiffs; (2) whether 
judicial intervention would inappropriately interfere with further 
administrative action; and (3) whether the courts would benefit from 
further factual development of the issues presented''); Abbott 
Lab'ys v. Gardner, 387 U.S. 136, 148-49 (1967) (explaining that the 
basic rationale the ripeness requirement ``is to prevent the courts, 
through avoidance of premature adjudication, from entangling 
themselves in abstract disagreements over administrative policies, 
and also to protect the agencies from judicial interference until an 
administrative decision has been formalized and its effects felt in 
a concrete way by the challenging parties'').
    \664\ See N. Y. State Comm'n on Cable Television v. F.C.C., 749 
F.2d 804, 815 (D.C. Cir. 1984) (``The decision whether to proceed by 
rulemaking or adjudication lies within the Commission's discretion'' 
(citing N.L.R.B. v. Bell Aerospace Co. Div. of Textron, 416 U.S. 
267, 293 (1974))).
---------------------------------------------------------------------------

    364. A number of the rehearing requests assert that the appeals 
process impermissibly places the burden of seeking relief from a 
penalty on the transmission provider, rather than requiring that the 
penalty be determined ``de novo'' before the Commission.\665\ Here, 
too, the rehearing requests cite no legal authority supporting this 
argument that the appeals process, for this reason, is unjust and 
unreasonable, offends due process, or is otherwise unlawful. In Order 
No. 2023, the Commission determined, as a rulemaking and based on the 
record before it, that in the

[[Page 27068]]

context of what constitutes a just and reasonable rate, failure to meet 
performance standards for the timely completion of interconnection 
studies warrants a penalty that effectively reduces what transmission 
providers can charge for interconnection studies that fail to meet 
those standards. The appeals process is a safeguard in which the 
transmission provider is the proponent of a requested order seeking 
relief from the penalty.\666\ Requiring the transmission provider to 
demonstrate good cause for relief is also just and reasonable under the 
circumstances. The application of a penalty in defined amounts for 
failure to meet study deadlines, absent a showing of good cause for 
relief, helps to ensure that transmission providers are on notice of 
the instances when penalties apply and in what magnitude, and that they 
will take seriously the prospect of a penalty. Transmission providers 
are also the entities with the most control over, and most knowledge 
regarding, the conduct of the study process and the reasons that the 
process may be delayed, such that it is reasonable to put the burden on 
transmission providers to establish a basis for relief from a penalty.
---------------------------------------------------------------------------

    \665\ See Order No. 2023, 184 FERC ] 61,054 at P 989 (``We 
disagree with Indicated PJM TOs that a complete de novo review is 
needed to assess study delay penalties. We find that the good cause 
standard adopted in this final rule provides an adequate framework 
through which the Commission can evaluate whether it is appropriate 
to grant relief from any applicable penalties.'').
    \666\ See, e.g., 5 U.S.C. 556(d) (``Except as otherwise provided 
by statute, the proponent of a rule or order has the burden of 
proof.''). Similarly, under FPA sections 205 and 206, the burden of 
proof typically rests with the proponent of a Commission order. See 
16 U.S.C. 824e(b); FirstEnergy Serv. Co. v. FERC, 758 F.3d 346, 353 
(D.C. Cir. 2014); Midwest Indep. Transmission Sys. Operator, Inc., 
148 FERC ] 61,206, at P 51 (2014).
---------------------------------------------------------------------------

    365. Likewise, we are not persuaded by arguments that, because 
there are other factors that can contribute to interconnection study 
delays, the imposition of penalties on transmission providers, under 
the structure set forth in Order No. 2023, is not just and reasonable. 
We disagree that adopting performance standards and incentives, in the 
form of deadlines and penalties, in Order No. 2023 cannot be just and 
reasonable unless the Commission first addresses and removes every 
other variable that may influence the timely completion of 
interconnection studies. As discussed above, the existence of multiple 
factors that may delay interconnection studies is a consideration that 
favors taking a comprehensive approach to address the unjust and 
unreasonable rates resulting from interconnection queue backlogs. 
Having found that the reasonable efforts standard was failing to ensure 
adequate incentives for transmission providers for timely study 
completion, we have also found that imposing deadlines \667\ subject to 
penalties for late interconnection studies--subject to appropriate 
safeguards \668\--will help ensure that transmission providers take the 
steps that are within their control to ensure study timeliness.
---------------------------------------------------------------------------

    \667\ See supra section II.D.1.c.i (explaining why the selected 
deadlines are just and reasonable).
    \668\ See supra PP 359, 361 (explaining, inter alia, that the 
appeal process is a safeguard to address considerations relevant to 
individual cases that may warrant relief).
---------------------------------------------------------------------------

    366. Arguments that the procedures for an appeal are too vaguely 
defined are not meritorious. The Commission has broad discretion as to 
procedural matters,\669\ and we conclude that the exercise of that 
discretion on a case-by-case basis is appropriate, including because 
doing so will help avoid undue administrative burdens attendant to 
employing set procedures in appeals that may not require those 
procedures. Similarly, as to NYTO's argument that cases involving 
genuine disputes of material fact require hearing beyond evaluation of 
a written record,\670\ the Commission can order such hearings in cases 
that require them. If parties believe that particular procedures in a 
given appeal are necessary or would be beneficial, they can so inform 
the Commission in the context of that case.\671\
---------------------------------------------------------------------------

    \669\ See Vt. Yankee, 435 U.S. at 524-25 (agencies have broad 
discretion over the formulation of their procedures); Mich. Pub. 
Power Agency v. FERC, 963 F.2d 1574, 1578-79 (D.C. Cir. 1992) (the 
Commission has discretion to mold its procedures to the exigencies 
of the particular case); Woolen Mill Assoc. v. FERC, 917 F.2d 589, 
592 (D.C. Cir. 1990) (the decision as to whether to conduct an 
evidentiary hearing is in the Commission's discretion).
    \670\ See NYTO Rehearing Request at 24 n.67.
    \671\ Similar to our reasoning above, see supra P 363, arguments 
contending that a particular procedure may be required in a 
particular case are premature.
---------------------------------------------------------------------------

    367. We disagree with arguments that the Commission inappropriately 
discouraged transmission providers from filing appeals of study delay 
penalties under FPA section 206. Order No. 2023 only clarified that, 
when a transmission provider that conducts interconnection studies 
appeals study delay penalties incurred automatically under 18 CFR 
35.28(f)(1)(ii) or Sec.  3.9 of the pro forma LGIP, that appeal should 
not be filed under FPA section 206.\672\ The appeals process 
supplements, rather than diminishes, the transmission provider's 
ability to make a section 206 filing. To the extent that commenters are 
concerned about the ability of a transmission owner to challenge a 
penalty assigned to it by a transmission provider,\673\ we note that 
nothing in Order No. 2023 prevents any entity from protesting a 
transmission providers' FPA section 205 filing that seeks to assign 
penalties or seeks to create a default structure for recovery of 
penalty costs. Nor does Order No. 2023 prevent any entity from 
challenging a transmission provider's assignment of study delay 
penalties to that entity under FPA section 206. Nothing in Order No. 
2023 prevents any entity from exercising any statutory filing rights.
---------------------------------------------------------------------------

    \672\ Order No. 2023, 184 FERC ] 61,054 at PP 963, 987 n.1911.
    \673\ Indicated PJM TOs Rehearing Request at 26 (``transmission 
owners should be entitled to challenge the propriety or size of the 
penalty amount assigned to it either `automatically' or by a 
transmission provider as an unjust, unreasonable, or unduly 
discriminatory rate based on grounds of its own choosing.).
---------------------------------------------------------------------------

    368. We also disagree with NYTOs' suggestion that the requirement 
for transmission providers to pursue appeals under the Commission's 
procedural rules and not under FPA section 206 ``effectively imposes a 
mandatory waiver of transmission providers' statutory rights, which is 
contrary to law.'' \674\ The Commission did not foreclose transmission 
providers' abilities to exercise their statutory rights, but rather 
provided the appeals process as the avenue for transmission providers 
to seek relief under the just and reasonable tariff process established 
by Order No. 2023, applying the ``good cause'' standard, which provides 
more flexibility and is more favorable to transmission providers than 
requiring them to show that the penalty would be ``unjust and 
unreasonable'' under FPA section 206. Because Order No. 2023 provided a 
specific tariff-based mechanism for appeals, the filing of such appeals 
under FPA section 206 is unnecessary.\675\
---------------------------------------------------------------------------

    \674\ NYTOs Rehearing Request at 23 (citing Atl. City I, 295 
F.3d at 10).
    \675\ Transmission providers have initiated complaints under FPA 
section 206 alleging that their own tariff provisions are unjust and 
unreasonable, but this procedure is generally used when there is no 
other mechanism by which a transmission provider could change or 
challenge such tariff provisions. For example, PJM has initiated FPA 
section 206 complaints regarding its own Operating Agreement because 
it does not have FPA section 205 filing authority to file market 
rule changes to the Operating Agreement without supermajority 
stakeholder approval. See, e.g., PJM Intra-PJM Tariffs, Sec.  8.4, 
OA Sec.  8.4 (Manner of Acting) (1.0.0); PJM Interconnection, 
L.L.C., 180 FERC ] 61,051, at PP 8-9 (2022).
---------------------------------------------------------------------------

    369. We sustain the decision, in Order No. 2023, not to create 
generic exceptions for study delay penalties or to exempt transmission 
providers from such penalties in cases where they assert that force 
majeure applies, for the reasons articulated in Order No. 2023.\676\ In 
further support, we find that creating ``self-effectuating'' exceptions

[[Page 27069]]

to penalties where a delay is caused by factors outside of the control 
of the transmission provider is not a preferable approach to the 
appeals process, particularly given that there may be disputes as to 
whether and to what extent a delay was within a transmission provider's 
control. Creating an exemption for circumstances of force majeure is an 
example of this problem, as there may be disputes as to whether the 
declaration of force majeure was valid or the extent to which a delay 
is attributable to the alleged force majeure. The appeals process is a 
just and reasonable approach to addressing these issues.
---------------------------------------------------------------------------

    \676\ See Order No. 2023, 184 FERC ] 61,054 at PP 1003, 1019, 
1024 (explaining that transmission providers could raise these 
issues in an appeal). For the same reasons, we deny NYTO's request 
for clarification on this point.
---------------------------------------------------------------------------

    370. MISO TOs' argument that strict liability under tort law is 
only imposed in circumstances involving very dangerous activities is 
not persuasive. As discussed above,\677\ the adoption of a deadline and 
penalty structure in Order No. 2023 is supported by the record in this 
case and does not reflect a ``strict liability'' approach that is 
analogous to these tort law regimes. Nor did the Commission rely on 
tort law governing hazardous activities to support Order No. 2023.\678\
---------------------------------------------------------------------------

    \677\ See supra PP 358-359.
    \678\ Cf. Order No. 2023, 184 FERC ] 61,054 at PP 1001, 1013, 
1015 (discussing Commission precedent for the approach in Order No. 
2023 including traffic ticket penalties and penalties under Order 
No. 890); infra section II.D.1.c.v (same); infra section II.D.1.c.iv 
(discussing Order No. 2023 as an application of the Commission's 
ratemaking authority).
---------------------------------------------------------------------------

    371. We disagree with arguments that Order No. 2023 created a 
strict liability structure. The portion of Order No. 2023 quoted by 
NYISO's request for rehearing in this respect \679\ was addressing the 
ability to appeal--the mechanism through which transmission providers' 
responsibility for delay in individual cases can be assessed.\680\ We 
have already explained, in both Order No. 2023 and herein, why the 
presumptive imposition of penalties on transmission providers should 
they fail to meet their study deadlines, with a subsequent evaluation 
of whether relief is warranted in a particular case, reflects reasoned 
decision-making and is a just and reasonable approach.
---------------------------------------------------------------------------

    \679\ See NYISO Rehearing Request at 29-30.
    \680\ Order No. 2023, 184 FERC ] 61,054 at P 989. The Commission 
was particularly explaining that it would be inappropriate to adopt 
a structure providing for penalties ``only where a factor can be 
conclusively demonstrated to be within a transmission provider's 
control, as this would impose significant administrative burden.'' 
Id.
---------------------------------------------------------------------------

    372. We also disagree with arguments that Order No. 2023's 
implementation of a study delay penalty structure is unjust and 
unreasonable, or unduly discriminatory or preferential, because it 
limits the assessment of penalties for late studies to transmission 
providers rather than also extending them to other entities--including 
interconnection customers--that may contribute to delays of 
interconnection studies. We similarly disagree with claims that Order 
No. 2023's incentives are impermissibly one-sided. Interconnection 
customers and transmission providers are not similarly situated with 
respect to the conduct of interconnection studies: transmission 
providers control and are responsible for the conduct of those studies, 
while other entities, including interconnection customers, generally 
are not.\681\ Moreover, transmission providers are further differently 
situated from interconnection customers because interconnection 
customers already are subject to significant incentives to avoid 
delaying the study process that transmission providers do not face. 
These include interconnection customers' interest in achieving timely 
commercial operation of their facilities, that failure to meet their 
obligations in the interconnection process may result in their 
interconnection requests being deemed withdrawn,\682\ and that they may 
be subject to withdrawal penalties.\683\ The adoption of a penalty 
structure for transmission providers that fail to meet the study 
timeframes set by Order No. 2023 reflects, in part, that transmission 
providers lacked adequate incentives to ensure study timeliness and the 
role they can play in ensuring the timeliness of interconnection study 
processes.\684\ It further reflects that the value of interconnection 
studies depends in part on their timely completion and, therefore, that 
it is reasonable that transmission providers may recover less for these 
studies where they are delayed without good cause.\685\ Thus, we 
disagree that we must apply the study delay penalties set by Order No. 
2023 to these other entities.
---------------------------------------------------------------------------

    \681\ See, e.g., Ark. Elec. Energy Consumers v. FERC, 290 F.3d 
362, 367 (D.C. Cir. 2002) (``A rate is not `unduly' preferential or 
`unreasonably' discriminatory if the utility can justify the 
disparate effect.''); Cities of Bethany v. FERC, 727 F.2d 1131, 1139 
(D.C. Cir. 1984) (Cities of Bethany); El Paso Nat. Gas Co., 104 FERC 
] 61,045, at P 115 (2003) (``Discrimination is undue when there is a 
difference in rates or services among similarly situated customers 
that is not justified by some legitimate factor.'').
    \682\ Being deemed withdrawn from the interconnection queue 
carries significant consequences for an interconnection customer, 
and--while the interconnection customer may dispute that decision--
loss of queue position occurs automatically after a failure to cure 
(if an opportunity to cure is allowed) and lasts ``until such time 
that the outcome of Dispute Resolution would restore its Queue 
Position.'' Pro forma LGIP section 3.7. We are therefore not 
persuaded by Indicated PJM TOs' suggestion that this will not be a 
significant consideration discouraging interconnection customers 
from delaying interconnection studies. See Indicated PJM TOs 
Rehearing Request at 28.
    \683\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 37, 43, 
50, 780-84, 1020; pro forma LGIP section 3.7.
    \684\ See Order No. 2023, 184 FERC ] 61,054 at PP 50, 968, 972.
    \685\ See id. P 972 (``The study delay penalty structure adopted 
in this final rule balances the harm to interconnection customers of 
interconnection study delays and the associated need to incentivize 
transmission providers to timely complete interconnection studies 
with the burdens on transmission providers of conducting 
interconnection studies and potentially facing penalties for delays, 
including those that may be caused or exacerbated by factors beyond 
their control.'').
---------------------------------------------------------------------------

    373. We are also not persuaded by arguments that under Order No. 
2023's deadline and penalty structure, interconnection customers are 
incentivized to affirmatively delay the completion of interconnection 
studies. As explained in Order No. 2023, the economic harms to the 
interconnection customer of delayed study completion significantly 
outweigh any incentive to delay the interconnection process.\686\ 
Moreover, the appeals process available to transmission providers 
undermines any incentive for strategic delay on the part of 
interconnection customers because it provides an opportunity for 
transmission providers to argue for relief from penalties, including 
because delays were caused by factors beyond their control, such as the 
actions of interconnection customers. And even if a transmission 
provider is subject to a penalty, those amounts will be distributed 
among all the interconnection customers included in the relevant study 
that did not withdraw, which further reduces the purported incentive 
for any individual interconnection customer to cause delays, as they 
will not receive the entirety of any penalty assessed to the 
transmission provider.
---------------------------------------------------------------------------

    \686\ Id. P 1020.
---------------------------------------------------------------------------

    374. Many of the rehearing requests contend that the study deadline 
and penalty structure under Order No. 2023 will have certain negative 
consequences. As explained below, we continue to find this structure to 
be just and reasonable, notwithstanding these arguments. In many cases 
we disagree that these purported negative consequences will manifest 
and, to the extent there may be such consequences, we continue to find 
that Order No. 2023's deadline and penalty structure is just and 
reasonable.
    375. The Commission in Order No. 2023 concluded that there is not 
an inherent trade-off between firm study deadlines with study delay 
penalties

[[Page 27070]]

versus ``interconnection study flexibility and accuracy, as well as 
system reliability.'' \687\ As explained in Order No. 2023, we are not 
persuaded by arguments on rehearing that such deadlines and penalties 
will necessarily incentivize speed and meeting deadlines over accuracy, 
with deleterious results. These arguments present a false dichotomy 
between the accuracy of interconnection studies and their timely 
completion,\688\ fail to give appropriate weight to the reliability and 
economic risks associated with failure to timely interconnect new 
generating facilities,\689\ and fail to consider the safeguards adopted 
in the deadline and penalty structure that allow transmission providers 
avenues of relief from the strict application of study deadlines.\690\
---------------------------------------------------------------------------

    \687\ Id. P 1007.
    \688\ See id. (``We reiterate that it is within transmission 
providers' ability to improve interconnection study processes and 
policies and take other measures, such as hiring additional staff, 
to efficiently process interconnection queues without sacrificing 
accuracy, flexibility, or reliability.''); id. (also noting that 
transmission providers can recover increased costs of 
interconnection studies); see also supra section II.D.1.c.i 
(explaining that the deadlines selected for the completion of 
interconnection studies are just and reasonable).
    \689\ See Order No. 2023, 184 FERC ] 61,054 at P 1007 (``[W]e 
further agree that the failure to bring new generating facilities 
online in a timely manner can also create reliability and economic 
risk.'').
    \690\ See id. (``[T]he study delay penalty structure includes 
significant safeguards for the transmission provider, such as the 
transition period, the 10-business day grace period, the penalty 
cap, the ability to extend deadlines by mutual agreement, and the 
ability to appeal any study delay penalties to the Commission.''); 
id. P 1005 (``If, for whatever reason, the transmission provider is 
not able to meet firm study deadlines, that is an issue the 
transmission provider is free to raise in appealing any penalties it 
incurs.'').
---------------------------------------------------------------------------

    376. We are also not persuaded that Order No. 2023's deadline and 
penalty structure will foster a combative atmosphere, potentially 
increasing delays. As noted above, the interconnection process is one 
that has generally been characterized by cooperation.\691\ 
Interconnection customers and transmission providers--who are all 
generally professional and sophisticated parties--share a reciprocal 
interest in the smooth functioning of the interconnection process. 
While it is possible that, in some cases, the increased accountability 
on transmission providers for timely interconnection study completion 
may mean that transmission providers are less inclined to accede to 
interconnection customer actions that may delay the study process, we 
find that--given the need to ensure timely interconnection study 
completion to ensure just and reasonable rates--this possibility is an 
acceptable consequence of Order No. 2023.\692\ Indeed, it reflects that 
transmission providers can use the knowledge and control they have with 
respect to the study process to ensure that individual interconnection 
customers are not allowed to unduly delay the overall study 
process.\693\ As to claims that the deadline and penalty structure may 
motivate transmission providers, including RTOs/ISOs and transmission 
owners, to focus on the need to protect against exposure to penalties 
and undermine constructive collaboration among them, the principal way 
for these entities to minimize that exposure will be to endeavor to 
complete interconnection studies in a timely fashion, which is the 
purpose of the deadline and penalty structure. In this respect, the 
interests of RTOs/ISOs and transmission owners will be aligned, and we 
expect that Order No. 2023 will not undermine the incentives for 
cooperation among RTOs/ISOs and transmission owners.
---------------------------------------------------------------------------

    \691\ See supra P 335.
    \692\ The various safeguards attendant to the deadline and 
penalty structure should also limit the likelihood that transmission 
providers feel constrained to take an unduly stringent response to 
reasonable interconnection customer requests.
    \693\ In this respect, the adoption of a deadline and penalty 
structure for transmission providers to ensure timely study 
completion may translate into increased accountability for 
interconnection customers not to delay the study process.
---------------------------------------------------------------------------

    377. Several of the rehearing requests contend that adoption of 
interconnection study deadlines and penalties, with an appeals process, 
will divert resources that would otherwise be used for interconnection 
studies. We sustain the Commission's rejection of these arguments, for 
the reasons already stated in Order No. 2023.\694\ We particularly note 
that it is not the case that the funds used to pay for penalties (or to 
appeal such penalties) necessarily must be diverted from those used to 
perform interconnection studies.\695\ Indeed, although we do not 
prejudge the facts of any particular case, it would not appear to be 
generally rational or appropriate for a transmission provider to 
respond to the assessment of a penalty for a late interconnection study 
by diverting significant resources from future interconnection studies 
in a way that will increase the likelihood that it will incur 
additional penalties.
---------------------------------------------------------------------------

    \694\ See Order No. 2023, 184 FERC ] 61,054 at P 1005; see also 
id. P 1007 (noting that the costs of timely completing 
interconnection studies are ultimately borne by interconnection 
customers)
    \695\ See, id. P 992 (noting that at-fault transmission 
provider's shareholders may pay the penalty).
---------------------------------------------------------------------------

    378. Similarly, while several rehearing requests contend that 
managing deadlines and penalties, as well as the appeals process, may 
create burdens on transmission providers, we conclude that--
particularly given the need for replacement of the reasonable efforts 
standard with a standard that will better ensure the timeliness of 
interconnection study completion--the deadline and penalty structure is 
just and reasonable notwithstanding such burdens. Here, too, we do not 
believe it would be rational or appropriate for a transmission provider 
to divert significant resources from the timely completion of 
interconnection studies to the appeals process. As stated above, when 
considering appeals the Commission intends to exercise its discretion 
as to procedural matters on a case-by-case basis, which will help 
reduce the burdens attendant to pursuing an appeal.\696\ Moreover, many 
alternative mechanisms directed toward ensuring study timeliness would 
consume transmission provider resources to explain why they are not 
responsible for study delays, and likewise invite arguments from other 
entities addressing such responsibility, but would have lesser utility 
in responding to the problem of interconnection queue backlogs.\697\ In 
addition, the amounts of the penalties \698\ are not so large that we 
expect that transmission providers will unduly divert large amounts of 
resources to an appeal of penalties, particularly those assessed for 
relatively short delays.\699\ While the administrative appeals process 
may draw protests, e.g., by interconnection customers, resulting in 
litigation, filing those protests and engaging in such litigation will 
also consume resources for the filing parties and any penalty funds 
assessed to the transmission provider will be allocated among the 
relevant interconnection customers.

[[Page 27071]]

This decreases the incentive to file protests in cases where delays are 
small and penalty amounts are low or where there is not a genuine, 
credible dispute as to where responsibility for a delay of an 
interconnection study properly resides.\700\ We conclude that the 
burdens that Order No. 2023 places on transmission providers do not 
render the rule unjust and unreasonable.
---------------------------------------------------------------------------

    \696\ See supra P 366.
    \697\ See infra PP 429-430 (discussing why the Commission found 
that differences between deadline and penalty structure under Order 
No. 2023 and the structure under Order No. 890 were warranted).
    \698\ See Order No. 2023, 184 FERC ] 61,054 at P 962 (``[D]elays 
of cluster studies beyond the tariff-specified deadline will incur a 
penalty of $1,000 per business day; delays of cluster restudies 
beyond the tariff-specified deadline will incur a penalty of $2,000 
per business day; delays of affected system studies beyond the 
tariff-specified deadline will incur a penalty of $2,000 per 
business day; and delays of facilities studies beyond the tariff-
specified deadline will incur a penalty of $2,500 per business 
day.'').
    \699\ The 10-day grace period also helps to address concerns 
that, for relatively short delays leading to minor penalties, 
transmission providers may wish to forego the burdens of seeking 
such an appeal. See NYTOs Rehearing Request at 27. It is, of course, 
up to transmission providers to manage their resources and determine 
whether taking an appeal of a minor penalty is in their best 
interest.
    \700\ We are also not persuaded by PacifiCorp's suggestion that 
the appeals process is not workable because ``it is highly likely 
that appeals will be filed faster and more frequently than the 
Commission can process them,'' PacifiCorp Rehearing Request at 12, 
which is founded on speculation that transmission providers will 
frequently fail to meet their deadlines leading to such appeals, and 
that such appeals will be onerous to process.
---------------------------------------------------------------------------

    379. While Dominion argues that higher study deposits may be 
necessary to address increased personnel costs resulting from the 
penalty regime, Dominion fails to acknowledge that the Commission has 
already significantly increased the required study deposits for 
interconnection customers in Order No. 2023,\701\ and that study costs 
exceeding study deposits can be recovered from interconnection 
customers.\702\ We are therefore not persuaded by this argument.
---------------------------------------------------------------------------

    \701\ See pro forma LGIP section 3.1.1.1. To the extent that 
study deposits must be further increased, beyond these levels, the 
Commission can consider that going forward, including in response to 
compliance proposals or--if necessary--further reforms to the pro 
forma LGIP.
    \702\ Order No. 2023, 184 FERC ] 61,054 at P 1007; see also, 
e.g., pro forma LGIP sections 7.1, 8.1, 9.4, 13.3, app. 2 at section 
6, app. 7 at section 7, app. 8 at sections 7-8, app. 9 at section 6, 
app. 10 at section 6.
---------------------------------------------------------------------------

    380. We do not agree with Indicated PJM TOs' contention that 
adopting a structure of deadlines and penalties for regions that have 
already adopted a cluster study process sends a message that their 
stakeholder processes do not matter. That the Commission found, in 
generic proceedings, that a suite of reforms to its pro forma LGIP and 
pro forma LGIA approach to interconnection were necessary to ensure 
just and reasonable rates does not reflect any disparagement of an 
individual entity's or region's efforts at similar reforms, such as the 
adoption of cluster studies. The Commission has found that adoption of 
a cluster study approach is such a just and reasonable reform, but that 
additional reforms are also necessary. Adopting Indicated PJM TOs' 
contrary view in this case would--in effect--be to conclude that the 
Commission should have adopted a self-imposed limit on acting through a 
generic proceeding out of deference to stakeholder processes that have 
resulted in only a partial solution to the problem at hand, contrary to 
the Commission's FPA section 206 authority and obligation to ensure 
just and reasonable rates.\703\
---------------------------------------------------------------------------

    \703\ This argument also overlooks transmission providers' 
ability to propose alternative reforms, as informed by their 
stakeholder processes, under the ``consistent with or superior to'' 
or ``independent entity variation'' standards, as applicable. See 
Order No. 2023, 184 FERC ] 61,054 at P 1764.
---------------------------------------------------------------------------

    381. We are further not convinced by NYTOs' claim that if Order No. 
2023's deadlines and penalties are strictly enforced without exceptions 
(such as demonstration of compliance with Good Utility Practice or the 
presence of force majeure), it will hinder ongoing regional queue 
reform initiatives. This argument is conclusory and unexplained as to 
why strict application of deadlines and penalties without such 
exceptions would have this alleged effect.\704\ Regardless, Order No. 
2023 does not provide for an unduly inflexible approach by allowing for 
numerous flexibilities including the appeals process, as explained 
above.
---------------------------------------------------------------------------

    \704\ Cf. id. P 967 (``The reasonable efforts standard worsens 
current-day challenges, as it fails to ensure that transmission 
providers are keeping pace with the changing and complex dynamics of 
today's interconnection queues.'').
---------------------------------------------------------------------------

    382. We are not persuaded by PJM's claim that under Order No. 2023 
transmission providers will incur penalties on a strict liability 
basis, reducing their deterrence and incentive effects. As already 
discussed, Order No. 2023 does not adopt a ``strict liability'' 
approach to penalties.\705\ More fundamentally, PJM fails to explain 
why a penalty as a presumptive matter, based on objective conduct, that 
is then subject to an appeal, would reduce the incentive to avoid 
triggering the penalty.\706\ Indeed, PJM's argument here appears 
circular: in support of its claim that the penalty structure in Order 
No. 2023 will reduce the deterrence and incentive effects of a penalty, 
PJM offers nothing more than a characterization of that structure and 
assertion that this structure will cause transmission providers to 
question the deterrence or incentive purpose of the penalty.
---------------------------------------------------------------------------

    \705\ See supra PP -360. Indeed, PJM acknowledges that 
transmission providers have the ability to ``demonstrate that the 
penalty imposed on it should not be assessed.'' PJM Rehearing 
Request at 31.
    \706\ The economically rational response to a potential penalty, 
even one that is presumptively applied subject to an appeal, is to 
take the steps necessary to avoid or reduce the penalty, to the 
extent that the cost of taking such steps is lower than the expected 
value of the reduction in the amount of the penalty.
---------------------------------------------------------------------------

    383. NYISO also claims that the Commission increased penalty levels 
from the levels proposed by the NOPR without sufficient explanation. It 
asserts that the example the Commission provided in support of doing 
so--explaining that, under the NOPR approach, a full six months of 
study delay (roughly 126 business days) would result in an estimated 
penalty of only $63,000 \707\--does not support this result or show 
that the penalties adopted in Order No. 2023 will be non-punitive.\708\ 
We sustain the Commission's determination to increase the study delay 
penalties as specified in Order No. 2023.\709\ This example reflects 
that, under the NOPR penalty amount, a transmission provider that takes 
roughly twice as long as allowed to perform a cluster study would incur 
a relatively modest penalty,\710\ which we find would not provide an 
appropriate incentive to spur the investments or allocation of 
resources necessary to facilitate timely study completion, or strike an 
appropriate balance between transmission provider and interconnection 
customer interests.\711\ One point of comparison supporting this 
conclusion is to consider that a single proposed 250 MW generating 
facility is required to tender $755,000 (i.e., a $5,000 application 
fee, a $250,000 study deposit, and a $500,000 commercial readiness 
deposit in cash or as an irrevocable a letter of credit) to enter the 
study process under the Commission's pro forma LGIP.\712\ That facility 
must then progressively increase its investment in the process through 
increasing deposits, study costs, and potential withdrawal penalties, 
not to mention the dedication of resources to develop the project and 
shepherd it through the interconnection process.\713\

[[Page 27072]]

Viewed in this context, we disagree that the revised penalty amounts 
are punitive on their own, and they are particularly not punitive when 
considered in light of the safeguards \714\ provided and avenues for 
RTO/ISO penalty cost recovery.
---------------------------------------------------------------------------

    \707\ See Order No. 2023, 184 FERC ] 61,054 at P 975.
    \708\ NYISO Rehearing Request at 37 (arguing that this does not 
demonstrate that the Commission has set non-punitive penalty levels, 
particularly as applied to RTOs/ISOs).
    \709\ See Order No. 2023, 184 FERC ] 61,054 at PP 973-78.
    \710\ Cf., e.g., pro forma LGIP section 3.1.1.1 (specify study 
deposit amounts for each interconnection request).
    \711\ See Order No. 2023, 184 FERC ] 61,054 at P 975 (``We view 
such a penalty as insufficient considering that the purpose of the 
penalty is to incentivize timely study completion that may be 
achieved, for example, by hiring additional personnel or investing 
in new software.''); cf., e.g., EPSA, 577 U.S. at 295 (ratemaking 
involves both technical understanding and policy judgment); Cities 
of Bethany, 727 F.2d at 1138 (explaining that because ``ratemaking 
is less of a science than it is an art'' such that ``substantial 
deference'' to the Commission's expert judgment is warranted (citing 
Alabama Elec. Co-op., Inc. v. FERC, 684 F.2d 20, 27 (D.C. Cir. 
1982)).
    \712\ See pro forma LGIP section 3.1.1.1 (requiring $5,000 
application fee and a $250,000 study deposit for interconnection 
requests greater than or equal to 200 MW) and section 3.4.2(vi) 
(requiring a commercial readiness deposit of twice the study 
deposit).
    \713\ See, e.g., pro forma LGIP sections 7.5(1)(b), 8.1(3), 11.3 
(requiring adjustments to commercial readiness deposits to equal an 
increasing percentage of interconnection customer's assigned network 
upgrade cost as the customer progresses through the interconnection 
process); section 13.3 (requiring the interconnection customer to 
pay for interconnection study costs); and section 3.7.1 (unless 
certain exemptions apply, requiring interconnection customer that 
withdraws from the interconnection process to pay a withdrawal 
penalty that increases as the customer progresses through the 
interconnection process).
    \714\ Order No. 2023, 184 FERC ] 61,054 at P 976 (``Based on the 
record before us, we believe the $1,000/$2,000/$2,500 per business 
day penalty structure, combined with the transition, grace period, 
cap on penalties, and ability to appeal that we adopt below, strikes 
an appropriate balance because it creates an incentive for 
transmission providers to meet study deadlines while not being 
overly punitive.'').
---------------------------------------------------------------------------

    384. We disagree with Indicated PJM TOs' and Dominion's contentions 
that the penalty and deadline framework is unduly discriminatory, 
citing the uneven distribution of interconnection requests among 
transmission providers, such that some transmission providers may face 
a heightened risk of penalties as compared to other transmission 
providers. At the outset, given the structure of Order No. 2023--under 
which we have imposed deadlines that should be reasonably achievable, 
replaced the serial study process with cluster studies, and afforded 
several safeguards, including the appeals process \715\--it is not 
necessarily the case that some transmission providers will be more 
likely to have to pay penalties than others based on the uneven 
distribution of interconnection requests. Moreover, transmission 
providers may propose variations from the requirements of Order No. 
2023, under the applicable standard, which provides a further vehicle 
to ensure that the late study deadline and penalty structure does not 
unduly burden certain transmission providers as compared to others.
---------------------------------------------------------------------------

    \715\ Dominion and Indicated PJM TOs' arguments also presuppose 
that, in any appeal, the Commission would find there is not good 
cause for relief from penalties, on the facts of the relevant case. 
That the Commission can consider the individualized factors in a 
particular case to determine whether to grant relief from penalties 
is another avenue to ensure that undue discrimination does not 
occur.
---------------------------------------------------------------------------

    385. But even accepting, arguendo, the premise of this argument 
that such disparate outcomes might occur, we disagree that this would 
necessarily render Order No. 2023's penalty structure unduly 
discriminatory. The increased possibility for penalties to be assessed 
in regions facing higher volumes of interconnection requests 
necessarily results from the increased likelihood of delayed results in 
those regions. That, however, correspondingly reflects in an increased 
need in these regions to ensure timely processing of those 
requests.\716\ Thus, any increased possibility of penalties in those 
regions is a just and reasonable and not unduly discriminatory 
result.\717\
---------------------------------------------------------------------------

    \716\ Similarly, where transmission providers are facing 
comparatively high volumes of interconnection requests in a given 
cluster study, there are more interconnection customers who will 
face uncertainty and increased costs due to any delays.
    \717\ See, e.g., AEMA, 860 F.3d at 670-71 (``The law provides no 
basis to claim the Commission cannot approve uniform performance 
requirements simply because those requirements will be easier to 
satisfy for some generators than for others. . . . Using an annual 
performance standard is a reflection of the Commission's policy 
judgment as to the level of capacity performance the market 
requires, not an undue privileging of one resource's costs over 
another's.''); BP Energy Co. v. FERC, 828 F.3d 959, 967 (D.C. Cir. 
2016) (``No undue discrimination exists where there is `a rational 
basis for treating [two entities] differently' and such differential 
treatment is `based on relevant, significant facts which are 
explained.'' (quoting Complex Consol. Edison Co. of N.Y., Inc. v. 
FERC, 165 F.3d 992, 1012-13 (D.C. Cir. 1999))); Town of Norwood, 
Mass. v. FERC, 202 F.3d 393, 402 (1st Cir. 2000) (explaining that 
``differential treatment does not necessarily amount to undue 
preference where the difference in treatment can be explained by 
some factor deemed acceptable by the regulators (and the courts)'' 
(emphasis in original) (citing Cities of Newark v. FERC, 763 F.2d 
533, 546 (3d Cir. 1985))).
---------------------------------------------------------------------------

    386. We reject arguments from Avangrid, MISO TOs, and NYTOs that 
incurring a penalty for failure to meet an interconnection study 
deadline is confiscatory, compelling transmission providers to provide 
service while not allowing them to recover their costs,\718\ because 
these arguments were not raised in the comments received in response to 
the NOPR but have instead been raised for the first time on rehearing. 
We typically reject arguments raised for the first time on rehearing, 
unless those arguments could not have been previously presented, e.g., 
claims based on information that only recently became available or 
concerns prompted by a change in material circumstances.\719\ 
Commenters had the opportunity to argue that the study deadline and 
penalty structure is confiscatory in response to the NOPR but did not 
do so. We find that these arguments are, therefore, not properly before 
us.\720\
---------------------------------------------------------------------------

    \718\ Although Avangrid and NYTOs assert that study delay 
penalties are ``regulatory takings,'' their arguments focus on the 
purportedly confiscatory nature of the study delay penalties and 
they do not otherwise argue that the penalties are regulatory 
takings under the relevant legal standard. See, e.g., N. Y. Indep. 
Sys. Operator, Inc., 151 FERC ] 61,075, 61,534, at PP 64-67 (2015) 
(discussing the three-factor test to determine whether an action 
constitutes a regulatory taking under Penn Cent. Transport. Co. v. 
City of New York, which requires consideration of ``[t]he economic 
impact of the regulation on the claimant and, particularly, the 
extent to which the regulation has interfered with distinct 
investment-backed expectations;'' and ``the character of the 
governmental action.'' 438 U.S. 104, 123 (1978)).
    \719\ See Ala. Power Co., 179 FERC ] 61,128, at P 15 (2022); KEI 
(Me.) Power Mgmt. (III) LLC, 173 FERC ] 61,069, at P 38 n.77 (2020); 
Tex. E. Transmission, LP, 141 FERC ] 61,043, at P 19 (2012) (``We do 
so because (1) our regulations preclude other parties from 
responding to a request for rehearing and (2) such behavior is 
disruptive to the administrative process because it has the effect 
of moving the target for parties seeking a final administrative 
decision.'' (quotation marks omitted)); Calpine Oneta Power v. Am. 
Elec. Power Serv. Corp., 114 FERC ] 61,030, at P 7 (2006); Iroquois 
Gas Transmission Sys., L.P., 86 FERC ] 61,261, at 61,949 (1999)); 
Ocean State Power II, 69 FERC ] 61,146, at 61,548 (1994); NO Gas 
Pipeline, 756 F.3d at 770 (``We finally note that Jersey City's 
alleged constitutional claim of actual bias is also barred as 
untimely. Jersey City has shown us nothing of record to establish 
that it raised this issue before FERC's issuance of the initial 
order.''); see also 18 CFR 385.713(c)(3) (providing that any request 
for rehearing must ``[s]et forth the matters relied upon by the 
party requesting rehearing, if rehearing is sought based on matters 
not available for consideration by the Commission at the time of the 
final decision or final order.'').
    \720\ See U.S. v. L. A. Tucker Truck Lines, Inc., 344 U.S. 33, 
37 (1952) (``Simple fairness to those who are engaged in the tasks 
of administration, and to litigants, requires as a general rule that 
courts should not topple over administrative decisions unless the 
administrative body not only has erred but has erred against 
objection made at the time appropriate under its practice.''); cf. 
Reytblatt v. U.S. Nuclear Regul. Comm'n, 105 F.3d 715, 723 (D.C. 
Cir. 1997) (agencies are not required to respond to untimely 
comments).
---------------------------------------------------------------------------

    387. Even had these arguments been properly raised, these arguments 
would also be premature because they depend on speculative assertions 
that the result of applying penalties to transmission providers will be 
confiscatory.\721\ For a transmission provider to establish this 
premise will necessarily depend on the facts of each individual case. 
Transmission providers will have the opportunity to argue on appeal 
that there is good cause to grant relief from the penalty, for example, 
because delays in completing interconnection studies were due to 
factors beyond their control

[[Page 27073]]

and that, as a result, they should be entitled to recovery of their 
costs of performing such studies; and that failure to allow such 
recovery would be confiscatory.
---------------------------------------------------------------------------

    \721\ See Avangrid Rehearing Request at 16 (similarly arguing 
that penalties that ``potentially denies recovery of reasonable 
costs incurred for interconnection studies performed according to 
Good Utility Practice''); MISO TOs Rehearing Request at 33-34 
(arguing that ``[t]he FPA does not permit the Commission to compel 
utilities to provide service to others for free'' and that applying 
a penalty in a ``strict liability'' fashion to transmission 
providers ``when the fault is not theirs'' is particularly 
problematic); NYTOs Rehearing Request at 25-26 (arguing that 
penalties will be ``confiscatory'' because transmission providers 
may not be provided ``cost recovery plus a reasonable return on 
prudent investment'' such that the imposition of penalties will 
``conscript public utility transmission providers into performing 
services without just and reasonable compensation'').
---------------------------------------------------------------------------

    388. In the alternative, even if we were to consider these 
arguments as properly raised as a procedural matter and ripe for 
consideration at this time, we would reject them. While transmission 
providers have historically recovered the full costs of interconnection 
studies from interconnection customers, the structure adopted in Order 
No. 2023 reflects a different approach under which the amount 
transmission providers can charge for such studies will be effectively 
reduced if transmission providers fail to meet the relevant 
deadlines.\722\ As the Supreme Court explained in FPC v. Hope Natural 
Gas Co., ratemaking involves ``a balancing of the investor and the 
consumer interests,'' \723\ under which regulated utilities are 
generally entitled to a reasonable opportunity to recover their 
prudently incurred costs, but are not guaranteed such cost 
recovery.\724\
---------------------------------------------------------------------------

    \722\ For the reasons provided herein and in Order No. 2023, we 
find that this approach, under which transmission providers will be 
held to appropriate performance standards and incentivized to 
complete studies in a timely fashion, is permitted under FPA section 
206, see supra section II.D.1.c; infra section II.D.1.c.iv, is just 
and reasonable, and reflects a preferable policy approach in light 
of the gravity of the problem of interconnection queue delays and 
backlogs.
    \723\ Hope320 U.S. at 603; see also Jersey Cent., 810 F.2d at 
1177-78. Hope interpreted the Natural Gas Act, whereas the instant 
proceedings concern the FPA. Nevertheless, ``courts rely 
interchangeably on cases construing each of these Acts when 
interpreting the other,'' including the standards articulated by the 
Court in Hope. See Jersey Cent., 810 F.2d at 1175.
    \724\ See Hope, 320 U.S. at 603 (ratemaking does not guarantee 
that the regulated utility will produce net revenues).
---------------------------------------------------------------------------

    389. Order No. 2023's deadline and penalty structure reflects this 
balancing of interests, providing a reasonable opportunity for cost 
recovery dependent on the transmission provider's performance in 
providing the service at issue. It allows the opportunity for full cost 
recovery for the conduct of interconnection studies, should 
transmission providers meet the relevant standards of performance 
(deadlines) for the timely conduct of those studies. Should 
transmission providers fail to meet those standards, the penalties 
reduce the compensation available, consistent with interconnection 
customers' interests in the timely completion of those studies and the 
extent to which delays in the completion of those studies contribute to 
interconnection queue backlogs, resulting in unjust and unreasonable 
rates to consumers. Even then, however, transmission providers may 
still obtain relief from penalties through the appeals process, 
including by arguing that factors outside of their control rather than 
their own conduct caused the delay, further confirming their reasonable 
opportunity to recover their costs.\725\ Avangrid, MISO TOs, and NYTOs 
do not demonstrate that the deadline and penalty structure under Order 
No. 2023 is confiscatory.
---------------------------------------------------------------------------

    \725\ The arguments that Order No. 2023 is confiscatory or works 
a regulatory taking also depend on claims that the penalty structure 
set forth in Order No. 2023 is ``strict liability'' or that the 
deadlines selected for the completion of studies are ``unjustified 
and arbitrary.'' See Avangrid Rehearing Request at 16; MISO TOs 
Rehearing Request at 33e. As explained above, these arguments are 
not meritorious. See supra section II.D.1.c.i; PP 359-360.
---------------------------------------------------------------------------

iii. RTO/ISO Issues
(a) Requests for Rehearing
    390. Several parties on rehearing raise challenges to the 
Commission's treatment of RTOs/ISOs under the deadline and penalty 
structure. NYISO asserts that imposing penalties on RTOs/ISOs is 
inappropriate because such penalties will be disproportionate or 
ineffective, and may pose an existential risk to RTOs/ISOs given their 
non-profit nature, lack of shareholders, and the risk that they will be 
denied recovery of their costs.\726\ NYISO argues that Commission 
precedent prevents passing penalty costs to customers, but RTOs/ISOs 
lack shareholders to absorb the costs such that penalties pose an 
existential risk--and that the Commission arbitrarily and capriciously 
dismissed these concerns.\727\ NYISO claims that the ability to make 
FPA section 205 filings to recover costs associated with penalties 
(whether through individual filings or a default structure) does not 
eliminate the risk that penalties pose, because such proposals will 
likely be contested and may be rejected.\728\ NYISO also observes that 
Order No. 2023 ``asserts for the first time that RTOs/ISOs actually are 
authorized to pay penalty costs, seemingly without first making any 
kind of section 205 filing, by using funds that are not related to 
transmission services,'' but claims that the Commission ignores that 
any funds collected by RTOs/ISOs must come from market 
participants.\729\ NYISO asserts that it is not clear why the 
Commission would allow recovery of penalty costs automatically from 
non-transmission charges but require FPA section 205 filings to recover 
costs from transmission customers.\730\ NYISO also claims it is unduly 
discriminatory to subject them to the same penalty regime as 
traditional transmission providers.\731\
---------------------------------------------------------------------------

    \726\ NYISO Rehearing Request at 17-18 (asserting that this 
penalty structure as applied to RTOs/ISOs is ``unjust, unreasonable, 
unduly discriminatory, and violative of due process, and would 
impede the Commission's policy goals'').
    \727\ Id. at 21-23 (arguing that NYISO and similarly-situated 
RTOs/ISOs cannot pay penalties without recovering costs from 
customers in some form and that being denied permission to recover 
such costs could threaten their financial viability).
    \728\ Id. at 23-24 (noting that in N.Y. Indep. Sys. Operator, 
Inc., 127 FERC ] 61,196, at P 36 (2009), the Commission indicated 
that Commission review serves as a check on NYISO's ability to pass 
through a penalty and that denial of relief or other appropriate 
action is a possibility).
    \729\ Id. at 25.
    \730\ Id. at 25-26 (noting that NYISO anticipates that there 
will be objections to allowing automatic recovery via non-
transmission related charges, such that recovery through this avenue 
is also not guaranteed).
    \731\ Id. at 38-39 (arguing that ``the same penalties are 
harsher when applied to the RTO/ISO'' because of potential 
uncertainties around the ability of RTOs/ISOs to recover penalty 
costs and the risks penalties pose to RTOs/ISOs).
---------------------------------------------------------------------------

    391. AEP argues that the Commission's approach to penalties as 
applied to RTOs/ISOs--providing that the transmission owner responsible 
for conducting a late study in an RTO/ISO will directly incur the 
penalty and allowing recovery of penalty costs incurred by RTOs/ISOs 
through FPA section 205 filings--underestimates the complexity of 
assigning fault for study delays.\732\ AEP argues that assigning fault 
for study delays is not a straightforward proposition in RTOs/ISOs, 
noting the collaborative nature of the study process and citing an 
example from a recent SPP informational report that identified multiple 
drivers of delays, at least two of which were outside of SPP's control. 
AEP argues that the Commission failed to justify the imposition of 
administrative and litigative burdens on RTOs and ISOs related to 
assigning fault for delays to the completion of interconnection 
studies.\733\ AEP also contends that the Commission appears to have 
restricted the appeal process to the party that conducts the 
interconnection study, such that other contributors to fault--to whom 
the RTO/ISO assigns some portion of the penalty--may be unable to 
appeal.\734\ In addition, AEP argues that, at a minimum, the Commission 
should reconsider who has standing to appeal penalties under the Order 
No. 2023 procedures and broaden the

[[Page 27074]]

standard to include parties taking part in the study process that are 
not tasked with conducting a study.
---------------------------------------------------------------------------

    \732\ AEP Rehearing Request at 17-19.
    \733\ Id. at 18-19 (arguing that imposing such burdens is 
particularly unwarranted because the record does not support that 
penalties will reduce delays and if penalties are not assigned to 
the right entity, penalties cannot constitute an effective 
incentive).
    \734\ Id. at 19-20 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 963).
---------------------------------------------------------------------------

    392. As to the direct assignment of study delay penalties, 
Indicated PJM TOs contend that penalties cannot be automatically 
assigned in this fashion and the Commission is incorrect to suggest 
that such assignment could occur with little to no factfinding.\735\ 
Indicated PJM TOs assert that, to the extent that the Commission 
intends to assign the penalty only to the singular entity that 
performed the study, it is not clear how the penalty would be assigned 
if the study is primarily executed by the RTO/ISO but also depends on a 
collaborative effort between the RTO/ISO and transmission owners. On 
the other hand, they argue that, to the extent the Commission intends 
that penalties be directly assigned to the entity with the ``most 
control'' over the study (or allocated proportionately based on the 
level of control or responsibility for the delay), significant 
factfinding will be required, given the collaborative nature of the 
process. Indicated PJM TOs also note that interconnection customers may 
be responsible for delays, reinforcing the need for a factual analysis 
to determine which entity had ``more control'' over a study and caused 
or contributed to the study delay.\736\ In addition, Indicated PJM TOs 
assert that Order No. 2023 empowers RTOs/ISOs to determine a 
transmission owner's responsibility for study delay penalties, such 
that RTOs/ISOs will have incentives to blame transmission owners for 
delays, rather than assigning fault to themselves or mitigating delays, 
and forcing transmission owners to appeal penalties.\737\ Furthermore, 
they argue that the Commission cannot delegate to third parties (i.e., 
RTOs/ISOs) the obligation to ensure the justness and reasonableness of 
rates.\738\
---------------------------------------------------------------------------

    \735\ Indicated PJM TOs Rehearing Request at 9-10.
    \736\ Id. at 11, 21.
    \737\ Id. at 25.
    \738\ Id. at 22.
---------------------------------------------------------------------------

    393. MISO TOs also contend that, in providing for the direct 
assignment of penalties where the transmission-owning members of an 
RTO/ISO perform interconnection studies, the Commission failed to 
consider the complexity of the study process and how fault for delays 
can rest with more than one entity.\739\ They argue that, in the RTO 
context, both the RTO and transmission owner perform critical tasks for 
the completion of studies and factors outside of their control may 
cause delays.
---------------------------------------------------------------------------

    \739\ MISO TOs Rehearing Request at 30-31.
---------------------------------------------------------------------------

    394. NYISO claims that the automatic assignment of penalties to 
transmission-owning members of RTOs/ISOs for studies that they conduct 
is not a reasoned solution to how penalties should apply to RTOs/ISOs, 
likewise citing the complexities of how the study process works in 
practice and collaborative nature of that process.\740\ NYISO argues 
that allocating responsibility for delays will be highly subjective and 
contentious, leading to adversarial postures and undermining necessary 
cooperation. NYISO further argues that if ``transmission owners bear 
100% of the penalty for any study that they have any involvement with 
then there will foreseeably be transmission owner challenges to every 
penalty assignment'' and that assigning penalties to transmission 
owners ``only to the extent that they contributed to a missed 
deadline'' will require a determination of relative 
responsibility.\741\
---------------------------------------------------------------------------

    \740\ NYISO Rehearing Request at 35-37 (``In the NYISO, 
transmission owners perform some part of all interconnection 
studies, and none are performed entirely by transmission owners.'').
    \741\ Id. at 36.
---------------------------------------------------------------------------

    395. Dominion also questions the automatic allocation of the 
penalty for missing deadlines to the transmission owner versus the RTO/
ISO.\742\ Pointing to the collaborative nature of the study process in 
PJM, Dominion challenges the Commission's blanket assumption that the 
interconnection transmission owner conducting the study has the most 
control over the study.
---------------------------------------------------------------------------

    \742\ Dominion Rehearing Request at 25.
---------------------------------------------------------------------------

    396. A number of the rehearing requests assert that the deadline 
and penalty structure does not impose proper or effective incentives on 
RTOs/ISOs. Avangrid asserts that the Commission failed to establish how 
this structure would incentivize RTOs/ISOs to meet fixed deadlines, but 
rather ``asks the non-profit transmission provider to propose how it 
would penalize itself.'' \743\ NYSPSC argues that the Commission failed 
to explain how, given the mechanisms it discussed for RTOs/ISOs to 
recover the costs of penalties, RTOs/ISOs will be subject to an 
incentive to meet the study deadlines set in Order No. 2023, asserting 
that if RTOs/ISOs can pass-through penalty costs to market participants 
they will be indifferent to those penalties.\744\ NYTOs argue that 
allowing RTOs/ISOs to avoid penalty costs ``contradicts the intended 
incentive, making the penalty ineffective and therefore arbitrary and 
capricious.'' \745\ Avangrid also notes that allowing RTOs/ISOs to 
collect penalties from market participants ``provides no financial 
motivation to the ISO to change behavior to meet deadlines, as the ISO 
would merely be passing along the penalty costs to others.'' \746\
---------------------------------------------------------------------------

    \743\ Avangrid Rehearing Request at 6 (noting that the 
Commission indicated that RTOs/ISOs could submit FPA section 205 
filings).
    \744\ NYSPSC Rehearing Request at 6-8 (arguing the Commission 
recognized, for non-RTO/ISO transmission providers and transmission-
owning members of RTOs/ISOs, the need to have ``skin in the game'' 
by making shareholders accountable and urging the Commission to 
consider other mechanisms to incentivize RTOs/ISOs).
    \745\ NYTOs Rehearing Request at 28 (citing Garcia v. U.S. Bd. 
of Parole, 409 F. Supp. 1230, 1239 (N.D. Ill. 1976)).
    \746\ Avangrid Rehearing Request at 6-7.
---------------------------------------------------------------------------

    397. Avangrid, NYISO, NYSPC, and NYTOs assert that RTOs/ISOs may 
attempt to recover the cost of penalties in a manner that is not 
consistent with principles of cost causation or is otherwise unjust and 
unreasonable. Avangrid argues that allowing RTOs/ISOs to collect 
penalties from market participants violates cost causation principles 
and expresses concerns that RTOs/ISOs may attempt to allocate 100% of 
the penalty to a transmission owner that contributes to a delay in only 
a minor fashion, particularly if the RTO/ISO has no other way to 
recover the penalty costs. NYISO argues that RTOs/ISOs must recover 
costs associated with a penalty regime from their customers, and that 
penalties would simply punish customers that have nothing to do with 
missed deadlines.\747\ NYSPSC contends that it is unjust and 
unreasonable to allow RTOs/ISOs to seek to recover the costs associated 
with penalties from administrative fees charged to market participants, 
as these are beyond the costs necessary to provide electric service to 
customers and should not be borne by them.\748\ NYTOs claim that 
``passing penalties to transmission owner members of RTOs/ISOs when 
those providers are not responsible for a delay violates cost causation 
and is not just and reasonable.'' \749\
---------------------------------------------------------------------------

    \747\ NYISO Rehearing Request at 18.
    \748\ NYSPC Rehearing Request at 8-9.
    \749\ NYTOs Rehearing Request at 28.
---------------------------------------------------------------------------

    398. NYISO argues that that it was unlawful for the Commission in 
Order No. 2023 to not further address the question of how RTOs/ISOs 
will recover the costs of study delay penalties that are not 
automatically imposed on a transmission-owning member, asserting that 
this question was raised in comments, acknowledged by the Commission, 
and is central to Order No. 2023's penalty regime.\750\ Similarly,

[[Page 27075]]

Dominion asserts that the Commission has not articulated a sensible 
approach to RTO/ISO penalty costs that is supported by substantial 
evidence in the first instance, but is instead inappropriately 
deferring the issue to future RTO/ISO filings to propose a penalty 
allocation structure.\751\
---------------------------------------------------------------------------

    \750\ NYISO Rehearing Request at 19-20 (``The Commission should 
not defer the question to future section 205 or penalty appeal 
proceedings. It must resolve the problem now.'').
    \751\ Dominion Rehearing Request at 25-26.
---------------------------------------------------------------------------

    399. MISO argues that Order No. 2023 should be revised to provide 
that RTOs are not required to pay any penalties until there is a 
Commission accepted mechanism to collect such penalties--and that the 
Commission failed to respond to comments raising this concern in a 
reasoned fashion.\752\ MISO notes that the Commission recognizes that 
RTOs have no ability to pay study delay penalties without collecting 
them from another party and asserts that, until there is a mechanism in 
place to collect the funds to pay study delay penalties in RTOS, the 
RTOs may lack the authority and funds to collect and pay the penalties. 
However, MISO also notes that section 3.9 of the pro forma LGIP 
provides for distribution of penalties no later than 45 calendar days 
after the late study has been completed or 45 calendar days after the 
completion of any appeal and rehearing of the penalty.
---------------------------------------------------------------------------

    \752\ MISO Rehearing Request at 8-11.
---------------------------------------------------------------------------

(b) Determination
    400. As an initial matter, we disagree with arguments that applying 
the penalty regime to RTOs/ISOs is inappropriate or unduly 
discriminatory because RTOs/ISOs do not have shareholders or guaranteed 
means of absorbing penalty costs whereas non-RTO/ISO transmission 
providers do. We believe that it would be inappropriate to 
categorically exempt RTOs/ISOs from the study delay penalties adopted 
in Order No. 2023.\753\ RTOs/ISOs manage interconnection queues and 
process interconnection studies like non-RTO transmission providers. 
The available evidence indicates that study delays are just as 
significant a problem in RTOs/ISOs as non-RTO/ISO regions.\754\ RTOs/
ISOs, just like non-RTOs, are facing increases in interconnection queue 
size, study duration, and length of time interconnection customers are 
spending in the queue.\755\ As noted above, Order No. 2023 explained 
the gravity of the national problem of interconnection queue 
backlogs,\756\ and we continue to believe that this is a dire problem 
that requires nationally implemented solutions.
---------------------------------------------------------------------------

    \753\ See also Order No. 890, 118 FERC ] 61,119 at P 1353.
    \754\ See Order No. 2023, 184 FERC ] 61,054 at app. B.
    \755\ Queued Up 2023 at 9, 27, 32.
    \756\ Order No. 2023, 184 FERC ] 61,054 at PP 37-58.
---------------------------------------------------------------------------

    401. Moreover, while we agree that there are differences between 
RTOs/ISOs and non-RTO transmission providers, we conclude that the 
penalty regime adopted in Order No. 2023 sufficiently accounts for the 
differences. First, in RTOs/ISOs, where an interconnection study is 
performed by a transmission-owning member of the RTO/ISO (as is often 
the case for facilities studies), under Order No. 2023 the penalty for 
missing a study deadline is incurred by that transmission-owning 
member, not the RTO/ISO.\757\ Second, as to penalties that are incurred 
directly by the RTO/ISO, the RTO/ISO is permitted to seek cost recovery 
of penalty costs from their transmission-owning members or other market 
participants, whereas non-RTO/ISO transmission providers are not. 
Additionally, RTOs/ISOs, as well as non-RTOs, can appeal the imposition 
of penalties in specific instances. In light of these avenues for an 
RTO/ISO to avoid or reduce the prospect that it is responsible for 
payment of a penalty, we find that any residual uncertainty as to an 
RTO/ISO's ability to recover penalty costs is outweighed by the 
critical need for all transmission providers, including RTOs/ISOs, to 
process interconnection studies in a timely manner. Furthermore, 
particularly given that the daily amount of the penalties is not 
punitive and that the penalties will be capped, we do not view the 
possibility that RTOs/ISOs may face some uncertainty in recovering 
penalty costs as an existential threat.
---------------------------------------------------------------------------

    \757\ Id. P 995.
---------------------------------------------------------------------------

    402. We are not persuaded by the following arguments to eliminate 
or modify the penalty regime: (1) RTOs/ISOs will not be incentivized to 
meet study deadlines; (2) the complexity of studies in RTOs/ISOs may 
lead to inappropriate assignment of cost responsibility; or (3) where 
RTOs/ISOs have dispute resolution processes, these procedures may delay 
assignment of fault. We continue to find that allowing RTOs/ISOs to 
recover penalty costs is warranted because RTOs/ISOs are differently 
situated than non-RTO transmission providers in terms of their ability 
to bear penalty costs, as RTOs/ISOs are non-profit entities and do not 
have shareholders. Therefore, it is appropriate for RTOs/ISOs to be 
permitted to seek to recover the cost of penalties they incur. We 
disagree that this structure will not incentivize RTOs/ISOs to mitigate 
study delays. Comments on the NOPR explained that RTOs/ISOs have good 
reason to try to avoid collecting penalty costs from their 
transmission-owning members, as that could create tension between RTOs/
ISOs and their transmission-owning members.\758\ RTO/ISOs have an 
interest in limiting unnecessary charges to their member transmission 
owners or other market participants because the case for participating 
in RTO/ISOs, which remains voluntary and subject to state law, is 
founded on the increased efficiencies and cost-savings of RTO/ISO 
membership. If RTO/ISOs ignore opportunities within their control to 
eliminate or reduce the risk of incurring penalties, they erode these 
benefits.
---------------------------------------------------------------------------

    \758\ See id. P 921; OPSI Initial Comments at 9.
---------------------------------------------------------------------------

    403. As a result, the record indicates that RTOs/ISOs will be 
incentivized to avoid incurring penalties in the first instance. And to 
the extent that an RTO/ISO does incur a penalty cost, it will be 
incentivized to appeal that penalty, where appropriate, to avoid the 
need to collect that penalty cost. For these reasons, we find that the 
incentive structure created by Order No. 2023 will function as the 
Commission contemplated, helping to ensure just and reasonable rates.
    404. In response to the argument that assigning penalties directly 
to the transmission owner that conducted the study is complicated 
because of the collaboration between the RTO and its transmission-
owning members, we note that penalties will only be directly assigned 
to the applicable transmission owner within an RTO/ISO where there is 
an identifiable transmission-owning member who is formally responsible 
for conducting the applicable study. In other words, even where there 
is collaboration between entities, it is only if the transmission-
owning member is the formally designated ``lead'' of the process that 
the transmission-owning member will directly incur the study delay 
penalty. To contrast, where there is no identifiable transmission-
owning member that is formally responsible for leading the 
interconnection study, the penalty will be incurred by the RTO/ISO 
itself.
    405. We decline to implement MISO's suggestion that Order No. 2023 
be revised to provide that RTOs/ISOs should not be required to pay any 
penalties until there is a Commission-accepted mechanism to recover 
such penalties. Order No. 2023 provides that RTOs/ISOs may--but are not 
required to--submit section 205 filings to propose cost recovery 
mechanisms to recover the costs of penalties they

[[Page 27076]]

incur.\759\ Revising the penalty structure as MISO suggests would leave 
open the possibility that RTOs/ISOs could avoid the penalty regime 
altogether by simply not proposing any cost recovery mechanism. 
Additionally, Order No. 2023 notes that RTOs/ISOs have multiple options 
for collecting necessary funds, and that one of these options is to 
submit an FPA section 205 filing after-the-fact to assign the cost of a 
specific study delay penalty. MISO's suggested revision is inconsistent 
with that potential avenue for cost recovery.
---------------------------------------------------------------------------

    \759\ Order No. 2023, 184 FERC ] 61,054 at P 994.
---------------------------------------------------------------------------

    406. We find speculative arguments that RTOs/ISOs may attempt to 
recover penalties in a manner inconsistent with cost causation. RTOs/
ISOs may propose under FPA section 205 either a default structure for 
recovering penalty costs or file section 205 proceedings to recover the 
costs of individual penalty costs. We will not prejudge those filings. 
Any arguments that those hypothetical proposals might violate cost 
causation principles are best addressed in the context of the specific 
proposal and should be raised in those FPA section 205 proceedings.
    407. We disagree with arguments that it is unlawful for the 
Commission to defer resolution of how RTOs/ISOs can recover penalties 
to future section 205 filings. In Order No. 2023, the Commission 
responded to comments on the penalty regime as it relates to RTOs/ISOs 
by identifying potential avenues for RTOs/ISOs to recover penalties and 
modifying the NOPR proposal where appropriate.\760\ We do not believe 
that it is unlawful to allow section 205 filings to implement specific 
details of this regime. We further disagree that the particulars of how 
RTOs/ISOs recover penalty costs are integral to this rulemaking, which 
is focused on the overarching penalty structure that will apply 
nationwide. The specifics of RTO/ISO cost recovery will be highly fact 
dependent based on regional tariff variations. We continue to believe 
that it is appropriate to address cost recovery issues in individual 
proceedings that can take into account the variations in tariffs in 
each RTO/ISO region.
---------------------------------------------------------------------------

    \760\ Id. PP 994-1001.
---------------------------------------------------------------------------

iv. Statutory Authority To Implement a Study Delay Penalty Structure 
Under FPA Section 206
(a) Requests for Rehearing
    408. Certain of the rehearing requests challenge the Commission's 
authority to adopt the deadline and penalty structure set forth in 
Order No. 2023 and/or contend that it is contrary to or not supported 
by Commission precedent. NYTOs and PacifiCorp claim that the penalty 
structure is ultra vires because the Commission's civil penalty 
authority resides in FPA sections 316 \761\ and 316A,\762\ and that the 
Commission is impermissibly reading such authority into section 206, 
which contains no civil penalty authority.\763\ PacifiCorp argues that 
the Commission is attempting to ``get around due process and other 
limits on its civil penalty authority by claiming it is only engaged in 
a rate-setting exercise'' but ``[a] civil penalty is a civil penalty.'' 
\764\ NYTOs also assert that, under the Commission's policy statements 
on enforcement and compliance, penalties are meted out for wrongdoing 
or misconduct.\765\ Thus, NYTOs claim, the Commission cannot adopt a 
structure in which transmission providers will incur penalties where 
the willful and knowing mens rea requirement is absent, or where the 
transmission provider is not at fault for a study delay.
---------------------------------------------------------------------------

    \761\ 16 U.S.C. 825o.
    \762\ 16 U.S.C. 825o-1.
    \763\ NYTOs Rehearing Request at 22-23; PacifiCorp Rehearing 
Request at 10-11 (asserting that the Commission cites no precedent 
for civil penalties under section 206; also claiming that the 
Commission failed to address whether a study timely violation was 
itself a tariff violation).
    \764\ PacifiCorp Rehearing Request at 11.
    \765\ NYTOs Rehearing Request at 22 (citing Enf't of Statutes, 
Ords., Rules, & Reguls., 113 FERC ] 61,068, at PP 14, 26 (2005); 
Kokesh, 581 U.S. at 461 (government-assessed penalties are ``for the 
purpose of punishment, and to deter others from offending in like 
manner.'')).
---------------------------------------------------------------------------

    409. PJM asserts that the study delay penalty structure violates 
FPA section 315 \766\ because that section governs forfeitures for 
willful failures to comply with a Commission order, rule, or regulation 
or timely file a required report, and requires that such forfeitures be 
remitted to the United States Treasury.\767\ PJM concedes that RTO 
tariffs, including its own, and other tariffs contain various penalty 
provisions; however, PJM attempts to differentiate these provisions by 
asserting that here, the Commission is imposing a mandate on 
transmission providers to include such a provision in their tariffs 
involuntarily, calling it a penalty, and using the compliance process 
to bypass the penalty provisions that Congress established in section 
315 of the FPA.
---------------------------------------------------------------------------

    \766\ 16 U.S.C. 825n.
    \767\ PJM Rehearing Request at 29-30.
---------------------------------------------------------------------------

    410. AEP asserts that the penalty structure set forth in Order No. 
2023 is unlawful because it constitutes monetary damages--defraying the 
study costs of the interconnection customers affected by a delay--and 
the Commission lacks authority to grant such damages.\768\ AEP also 
contends that the Commission's decision to adopt a penalty structure 
for late studies is contrary to precedent, including Order No. 2003 and 
Order No. 845, in which the Commission rejected proposed requirements 
to impose liquidated damages or automatic penalties if a transmission 
provider failed to meet deadlines.\769\
---------------------------------------------------------------------------

    \768\ AEP Rehearing Request at 7-8 (citing Bachofer v. Calpine 
Corp., 134 FERC ] 61,100, at P 9 (2011); New England Power Pool, 98 
FERC ] 61,299, at 62,290 n.6 (2002); TranSource, LLC v. PJM 
Interconnection, L.L.C., 168 FERC ] 61,119 at n.896 (2019)).
    \769\ Id. at 8-9 (asserting that the Commission failed to 
explain this change) (citing Order No. 2003, 104 FERC ] 61,103 at PP 
883, 898; Order No. 2003-A, 106 FERC ] 61,220 at P 249; Order No. 
845, 163 FERC ] 61,043 at P 309; N.Y. Indep. Sys. Operator, Inc., 
108 FERC ] 61,159, at PP 77-78 (2004)).
---------------------------------------------------------------------------

(b) Determination
    411. We are not convinced by PacifiCorp's, NYTOs', or PJM's 
arguments that the Commission lacked authority to implement Order No. 
2023's performance standard and incentive structure by relying on 
deadlines and penalties because, they argue, the Commission's civil 
penalty authority resides exclusively in certain provisions of the FPA. 
To begin with, these arguments were not raised prior to rehearing, as 
required by the Commission's Rule of Practice and Procedure 
713(c)(3).\770\ Here, because the NOPR proposed the elimination of the 
reasonable efforts standard and its replacement with a materially 
similar penalty structure to that adopted in Order No. 2023,\771\ 
nothing precluded commenters from raising these arguments prior to the 
issuance of Order No. 2023--yet they did not do so. Thus, here too, 
these arguments are not properly before us.
---------------------------------------------------------------------------

    \770\ See supra P 386 & nn. 723-724; 18 CFR 385.713(c)(3) 
(providing that any request for rehearing must ``[s]et forth the 
matters relied upon by the party requesting rehearing, if rehearing 
is sought based on matters not available for consideration by the 
Commission at the time of the final decision or final order'').
    \771\ See NOPR, 179 FERC ] 61,194 at PP 161-73.
---------------------------------------------------------------------------

    412. Regardless, even considering these arguments on their 
substance, we find that they are not meritorious. As discussed above, 
the deadline and penalty structure adopted in Order No. 2023 reflects 
an exercise of the Commission's authority under FPA section 206, 
consistent with its longstanding regulation of the interconnection 
process.\772\ PJM, NYTOs, and PacifiCorp fail to acknowledge this 
authority or precedent. Instead, they view FPA sections 315, 316, and 
316A's grant of

[[Page 27077]]

authority to assess a particular kind of monetary sanction--a civil 
penalty pursuant to statutorily-granted enforcement authority--as 
necessarily reflecting an across-the-board restriction of the 
Commission's other authority, including its FPA section 206 ratemaking 
authority. For instance, NYTOs cite the Supreme Court's decision in 
Kokesh v. SEC as standing for the proposition that ``government-
assessed penalties are `for the purpose of punishment, and to deter 
others from offending in like manner,' '' \773\ while PacifiCorp 
asserts that ``a civil penalty is a civil penalty.'' \774\ These 
arguments fail to recognize that not all monetary sanctions, even when 
labeled as penalties, are civil penalties and that monetary sanctions 
can serve different purposes, have different structures, and flow from 
different sources of authority.
---------------------------------------------------------------------------

    \772\ See supra section II.D.1.c.
    \773\ NYTOs Rehearing Request at 22-23 n.60 (quoting Kokesh, 581 
U.S. at 461); see also id. at 22-23 nn. 56, 61 (citing Cal. Indep. 
Sys. Operator Corp. v. FERC, 372 F.3d 395, 398 (D.C. Cir. 2004) (the 
Commission's authority is defined by Congress); Altamont Gas 
Transmission Co. v. FERC, 92 F.3d 1239, 1248 (D.C. Cir. 1996) (the 
Commission cannot do indirectly what it could not do directly)).
    \774\ PacifiCorp Rehearing Request at 11.
---------------------------------------------------------------------------

    413. The Supreme Court's decision in Kokesh \775\ supports our 
conclusion that the fact that a financial sanction is assessed for 
conduct--here, failure to complete a study by the required deadline--
does not render it a civil penalty of the sort that conflicts with or 
exceeds Congress's enactment of statutory civil penalty authorities in 
the FPA. In Kokesh, the Supreme Court differentiated between penalties, 
even those expressly labeled as ``penal,'' that are imposed as 
punishment versus other pecuniary sanctions. It explained that this 
inquiry turned on whether (1) the wrong sought to be redressed is a 
wrong to the public (an offense committed against the State) or a wrong 
to the individual and (2) whether it was imposed for the purpose of 
punishment and to deter others from offending in like manner, as 
opposed to compensating a victim for a loss.\776\ Similarly, in Meeker 
v. Lehigh Valley Railroad Company, the Court held that an order by the 
Interstate Commerce Commission, which directed a railroad company to 
refund and pay damages to a shipping company for excessive shipping 
rates, was not imposing a penalty for purposes of the statute of 
limitations, given that the payment was to redress a private injury, 
rather than punitive.\777\ Here, Order No. 2023 implemented a system of 
deadlines and penalties for late studies not to redress a wrong to the 
public, as under FPA sections 315, 316, and 316A, or to punish, but 
instead to effectively adjust what transmission providers can charge 
based on study timeliness.
---------------------------------------------------------------------------

    \775\ In Kokesh, the Court considered whether the general 
statute of limitations applicable for ``action, suit or proceeding 
for the enforcement of any civil fine, penalty, or forfeiture, 
pecuniary or otherwise,'' 28 U.S.C. 2462, applied to claims for 
disgorgement as a sanction for violating a federal securities law. 
581 U.S. at 457.
    \776\ Id. at 461 (quoting Huntington v. Attrill, 146 U.S. 657, 
667 (1892)).
    \777\ 236 U.S. 412, 423 (1915) (``The words `penalty or 
forfeiture' in this section refer to something imposed in a punitive 
way for an infraction of a public law, and do not include a 
liability imposed solely for the purpose of redressing a private 
injury, even though the wrongful act be a public offense, and 
punishable as such. Here the liability sought to be enforced was not 
punitive, but strictly remedial . . . .'').
---------------------------------------------------------------------------

    414. Specifically, Order No. 2023's deadline and penalty structure 
was adopted to define substantive terms of the commercial relationship 
between particular parties--transmission providers and interconnection 
customers--in the Commission-jurisdictional context of regulating 
interconnection, ensuring just and reasonable rates, and avoiding 
degradation of service.\778\ The Commission in Order No. 2023 did not 
invoke a need to punish or to label transmission providers as 
wrongdoers as a rationale for its action and, in fact, stated that it 
was ``not finding that transmission providers have necessarily acted in 
bad faith.'' \779\ The Commission established safeguards to avoid 
punitive results, including the cap on penalties \780\ and the appeals 
process.\781\ The appeals process also takes into account the broader 
economic effects of regulating this interaction between interconnection 
customers and transmission providers by ensuring that transmission 
providers are not held to unduly strict standards that could result in 
economically inefficient outcomes or unjust and unreasonable 
rates.\782\ Likewise, and contrary to PJM's claim that the failure to 
remit the penalties under Order No. 2023 to the Treasury demonstrates 
that these penalties are beyond the Commission's authority, the fact 
that the penalties are disbursed to interconnection customers 
distinguishes them from the sort of sanctions addressed in Kokesh and 
authorized in FPA sections 315, 316, and 316A.\783\ And, as the 
Commission recognized, delayed interconnection studies impose financial 
harm on interconnection customers,\784\ reinforcing that the penalties 
under Order No. 2023 help to ensure that the transmission provider is 
compensated for performing interconnection studies based on whether it 
achieves (or the extent that it fails to achieve) performance standards 
relating to the timeliness of those studies.\785\
---------------------------------------------------------------------------

    \778\ See supra section II.D.1.c (explaining that the penalty 
structure reflects how the interconnection relationship may impact 
overall rates for consumers and the costs to interconnection 
customers of late studies, in terms of defining the charges 
transmission providers may assess for such studies as a function of 
their timeliness); Kokesh, 581 U.S. at 463 (explaining that one 
factor that favored concluding that disgorgement was a penalty 
falling within 28 U.S.C. 2462 was that the SEC was acting to protect 
the public interest, writ large, rather than standing in the shoes 
of particular parties, reflecting that the violation for which the 
remedy was sought was committed against the United States, rather 
than aggrieved individuals); cf. Oneok, Inc. v. Learjet, Inc., 575 
U.S. 373, 385 (2015) (discussing, in the context of preemption, the 
importance of looking to the aim of an initiative in assessing 
whether it crosses a jurisdictional boundary).
    \779\ Order No. 2023, 184 FERC ] 61,054 at P 966; see Gabelli v. 
SEC., 568 U.S. 442, 451-52 (2013).
    \780\ See Kokesh, 581 U.S. at 466-67 (finding it significant 
that disgorgement sometimes exceeds the profits gained as the result 
of a violation, in rejecting an argument that disgorgement was 
remedial rather than punitive); cf. also Liu v. Sec. & Exch. Comm'n, 
140 S. Ct. 1936, 1940, 1947 (2020) (holding that ``a disgorgement 
award that does not exceed a wrongdoer's net profits and is awarded 
for victims is equitable relief permissible under [15 U.S.C. 
78u(d)(5)]'').
    \781\ See Order No. 2023, 184 FERC ] 61,054 at PP 875, 972, 984-
85.
    \782\ Cf. id. P 1003 (noting that the appeals process is an 
avenue to account for delays beyond a transmission provider's 
control, such as those due to force majeure, which could excuse a 
failure to perform at a particular standard).
    \783\ Kokesh, 581 U.S. at 464-65 (explaining that in many cases 
SEC disgorgement is not compensatory, because disgorged profits are 
not necessarily paid to investors but rather paid to the district 
court and may ultimately be paid to the Treasury); see also id. at 
462-63.
    \784\ See Order No. 2023, 184 FERC ] 61,054 at P 971.
    \785\ Cf. Kokesh, 581 U.S. at 462-63 (discussing cases in which 
liability was found to remedy private wrongs, with payments made to 
the party suffering the injury, as essentially compensatory not 
imposing penalties).
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    415. Thus, and consistent with our broad discretion in determining 
how to ensure just and reasonable rates,\786\ we continue to find that 
the study delay penalty structure implemented in Order No. 2023 is an 
appropriate exercise of our authority under FPA section 206. Likewise, 
we also are not persuaded by related arguments asserting that the study 
delay penalty structure is

[[Page 27078]]

otherwise in tension with the civil penalty provisions in the FPA or 
contradicts the Commission's policies on enforcement.
---------------------------------------------------------------------------

    \786\ See, e.g., Morgan Stanley Cap. Grp. Inc. v. Pub. Util. 
Dist. No. 1 of Snohomish Cnty., Wash., 554 U.S. 527, 532 (2008) 
(explaining that the just and reasonable standard is ``obviously 
incapable of precise definition'' such that the Commission is 
afforded ``great deference'' in its rate decisions); Mobil Oil Expl. 
& Producing Se. Inc. v. United Distrib. Cos., 498 U.S. 211, 214 
(1991) (explaining that the just and reasonable standard, ``far from 
binding the Commission . . . accords it broad ratemaking authority'' 
and does not compel a particular approach); MISO Transmission Owners 
v. FERC, 45 F.4th at 261 (``FERC is entitled to adopt any 
methodology it believes will help it ensure that rates are just and 
reasonable, so long as it doesn't adopt that methodology in an 
arbitrary and capricious manner.'') (citing S. Cal. Edison Co. v. 
FERC, 717 F.3d 177, 182 (D.C. Cir. 2013)).
---------------------------------------------------------------------------

    416. For instance, PJM argues that, in contrast to other tariff 
penalty provisions adopted pursuant to FPA section 205, the Commission 
in Order No. 2023 ``impos[ed] a mandate on transmission providers to 
include such a provision in their tariffs involuntarily,'' thereby 
bypassing the penalty provision in FPA section 315.\787\ As just 
discussed, the study delay penalty structure does not bypass any 
penalty provisions of the FPA but, instead, was adopted pursuant to the 
Commission's independent ratemaking authority. Moreover, PJM fails to 
explain its assertion that the scope of permissible tariff mechanisms 
to ensure such rates are just and reasonable should substantially 
differ between FPA sections 205 and 206.\788\ We do not find this 
argument supported by the statute, particularly given that a purpose of 
section 206 is to allow the Commission to replace, by its own 
initiative, rates that may have resulted from section 205 filings but 
have since become unjust and unreasonable.
---------------------------------------------------------------------------

    \787\ PJM Rehearing Request at 30.
    \788\ PJM's implication that penalties have only been previously 
adopted under FPA section 205 is also incorrect. See Order No. 890, 
118 FERC ] 61,119 at PP 40, 1324-57, order on reh'g, Order No. 890-
A, 121 FERC ] 61,297, order on reh'g, Order No. 890-B, 123 FERC ] 
61,299, order on reh'g, Order No. 890-C, 126 FERC ] 61,228, order on 
clarification, Order No. 890-D, 129 FERC ] 61,126 (adopting, through 
generic proceedings under FPA section 206, a penalty structure that 
is similar in several respects to that adopted in Order No. 2023).
---------------------------------------------------------------------------

    417. We are also not persuaded by NYTO's reliance on the 
Commission's policy statements in the enforcement context.\789\ These 
policy statements are not directed toward the study delay penalty 
structure set forth in Order No. 2023 as an exercise of the 
Commission's authority under FPA section 206, but instead address how 
the Commission will consider civil penalties and other remedies 
pursuant to its separate enforcement authorities granted under other 
sections of the FPA. As to similar arguments by MISO TOs, PJM, and 
NYISO asserting that the study delay penalty structure set forth in 
Order No. 2023 is in tension with Commission policy in enforcement 
cases,\790\ the study delay penalty structure adopted in Order No. 2023 
is not an implementation of the Commission's enforcement authority 
under FPA sections 315, 316, or 316A. Moreover, and contrary to these 
arguments, the Commission has adopted appropriate mechanisms to ensure 
that the study delay penalty structure is not punitive and can account 
for the facts of particular cases, as discussed above.
---------------------------------------------------------------------------

    \789\ See NYTOs Rehearing Request at 22 & n.60 (``Under the 
Commission's policy statements on enforcement and compliance, 
penalties are meted out for wrongdoing and misconduct.'' (citing 
Enf't of Statutes, Ords., Rules, and Reguls., 113 FERC ] 61,068 at 
PP 14, 26); see also id. at 27.
    \790\ See MISO TOs Rehearing Request at 31 (asserting that the 
study delay penalty structure results in a deprivation of due 
process whereas ``both the Commission's Office of Enforcement and 
NERC Reliability Standard enforcement involve fact finding and 
affording the targeted entity the opportunity to present evidence to 
demonstrate lack of fault or mitigating circumstances before a 
penalty is imposed''); NYISO Rehearing Request at 31 & n.89 (arguing 
that ``the Commission may not establish penalties that are 
excessively punitive in relation to the severity of a violation'' 
and citing Commission policies in the enforcement context); PJM 
Rehearing Request at 31 n.67.
---------------------------------------------------------------------------

    418. We disagree with PacifiCorp's claim that the Commission erred 
in Order No. 2023 because it failed to address a comment questioning 
whether a violation of the study deadlines giving rise to penalties 
under Order No. 2023 could also be treated as a tariff violation under 
the FPA. As an invocation of the Commission's ratemaking authority 
under section 206, Order No. 2023 did not address or invoke the 
Commission's civil enforcement authority, practices, or policies. The 
Commission may consider whether a particular failure to meet a study 
deadline meets the statutory, regulatory, and policy considerations to 
constitute a tariff violation warranting enforcement action in an 
appropriate case, on the facts presented. Attempting to further resolve 
this issue at this time is beyond the scope of this proceeding.
    419. We further disagree with AEP's claim that the Commission lacks 
authority to adopt the study delay penalty structure set forth in Order 
No. 2023 on the theory that Commission precedent forbids it from 
awarding monetary damages. None of the cases AEP cites addressed a 
penalty structure similar to that presented here, supported by the 
Commission's authority to ensure just and reasonable rates. Rather, in 
Bachofer v. Calpine Corp., the Commission found that it lacked 
jurisdiction to address claims for property damage due to the alleged 
actions of a generation facility, that such allegations ``are more 
appropriately addressed in some other forum,'' and that ``monetary 
damages are also beyond the scope of the Commission's authority under 
Part II of the Federal Power Act.'' \791\ In TranSource, LLC v. PJM 
Interconnection, L.L.C., the Commission explained that monetary relief 
for ``lost business opportunities and other litigation-related 
expense'' allegedly suffered by TranSource was beyond the scope of 
relief the Commission could award.\792\ New England Power Pool involved 
a rehearing request directed toward the effective date of certain 
tariff changes, where no waiver of the Commission's prior notice 
requirements had been sought, and reflected that the Commission cannot 
engage in retroactive ratemaking.\793\ Here, the Commission is not 
confronted by claims seeking post-hoc, consequential monetary damages 
to make a specific party whole following alleged wrongdoing. Rather, it 
is exercising its FPA section 206 authority to prospectively and 
generically regulate the commercial relationship between 
interconnection customers and transmission providers, including as to 
the appropriate charges for interconnection studies.
---------------------------------------------------------------------------

    \791\ 134 FERC ] 61,100 at P 9.
    \792\ 168 FERC ] 61,119 at P 285 & n.896.
    \793\ 98 FERC ] 61,299 at 62,290 & n.6.
---------------------------------------------------------------------------

v. Commission Precedent
(a) Requests for Rehearing
    420. MISO TOs assert that the Commission failed to heed its 
precedent in Order No. 2003, which rejected liquidated damages for 
study delays, because that approach might undermine the transmission 
provider's ability to economically administer its study process.\794\ 
Likewise, MISO TOs also point to Order No. 845, asserting that the 
Commission there rejected requests to include penalties for study 
delays, recognizing that often the transmission provider will not be at 
fault for such delays.\795\ MISO TOs also contend that, as recently as 
November 29, 2022, the Commission affirmed the reasonable efforts 
standard and rejected firm study deadlines and does not discuss in 
Order No. 2023 why it now abandons that result.\796\ Additionally, MISO 
TOs claim that Order Nos. 890 and 890-A reflect that the Commission 
imposed study delay penalties only when transmission providers 
routinely failed to meet deadlines, failed to meet deadlines for a 
certain number of studies, and were imposed only after they had the 
opportunity to present evidence of extenuating circumstances.\797\ MISO

[[Page 27079]]

TOs contrast Order No. 2023's penalty structure with that in Order No. 
890, arguing that it does not make sense to grant less flexibility to 
transmission providers for conducting interconnection studies than 
transmission studies, given that interconnection studies are more 
complex, more numerous, and involve more requests to be studied.\798\
---------------------------------------------------------------------------

    \794\ MISO TOs Rehearing Request at 24-25 (arguing that the 
Commission failed to respond to MISO TOs comments on this point).
    \795\ Id. at 25 (arguing that the Commission failed to 
articulate a meaningful response, but instead simply asserts that it 
is attempting to remedy unjust and unreasonable rates and ensure 
interconnection in a reliable, efficient, transparent, and timely 
manner; contending that the penalty structure will not accomplish 
these aims).
    \796\ Id. at 26 (citing PJM Interconnection, L.L.C., 181 FERC ] 
61,162 at P 138).
    \797\ Id. at 20-24 (noting that in Order 890-A, the Commission 
clarified that such penalties would apply only to transmission 
providers unable to justify their repeated failure to meet deadlines 
and discussed the factors that might excuse such failures).
    \798\ Id. at 23-24; see also NYISO Rehearing Request at 31-32.
---------------------------------------------------------------------------

    421. NYISO and Indicated PJM TOs assert that the Commission was 
wrong in Order No. 2023 to compare the penalty structure it adopted to 
``traffic ticket'' penalties, asserting that such penalties are applied 
solely based on objective criteria that can be applied automatically, 
whereas study delays raise more complex questions regarding the fault 
for any delay.\799\ NYISO contends that the Commission failed to 
address, in a reasoned fashion, NYISO's argument that reliability 
penalties are distinguishable from the penalty structure adopted under 
Order No. 2023 because reliability penalties are generally non-
financial and, when such penalties apply, there are numerous mechanisms 
in place to avoid unfairly harsh results.\800\
---------------------------------------------------------------------------

    \799\ NYISO Rehearing Request at 31 (stating that ``[t]he fact 
that the Commission recognized the need for an appeals process to 
resolve inevitable factual disputes about penalties demonstrates 
that the traffic ticket model is not relevant''); Indicated PJM TOs 
Rehearing Request at 19-21.
    \800\ NYISO Rehearing Request at 31-32 (asserting that the 
appeals process, which the Commission discussed in response to these 
arguments, is not an adequate process because it is inchoate and 
unreasonably presumes fault on the part of transmission providers 
and presumes that penalties are warranted for delays); see id. at 31 
n.85 (``Violators may avoid penalties for a variety of reasons 
including demonstrating a culture of compliance, cooperating with 
investigations, and taking effective remedial actions. Thus, the 
reliability penalty regime incorporates due process.'').
---------------------------------------------------------------------------

    422. Indicated PJM TOs also claim that Order No. 2023's penalty 
structure is unlawful because it impermissibly attempts to override 
RTO/ISO governing documents.\801\ In particular, they assert that the 
PJM Consolidated Transmission Owners Agreement (PJM CTOA) does not 
authorize PJM to assign penalty amounts to PJM transmission owners. 
According to Indicated PJM TOs, under the Atlantic City precedent, the 
Commission cannot prevent transmission providers from deciding how to 
propose to recover their costs and cannot direct transmission providers 
to make cost recovery filings in any prescribed manner (here, in 
alleged contravention of the CTOA).\802\
---------------------------------------------------------------------------

    \801\ Indicated PJM TOs Rehearing Request at 8-12 (citing Atl. 
City I, 295 F.3d at 10 (``Nor may FERC prohibit public utilities 
from filing changes in the first instance.''); Atl. City Elec. Co. 
v. FERC, 329 F.3d 856, 859 (2003) (per curiam) (Atl. City II) 
(``FERC has no jurisdiction to enter limitations requiring utilities 
to surrender their rights under Sec.  205 of the FPA to make filings 
to initiate rate changes.'')).
    \802\ Id. at 11-12.
---------------------------------------------------------------------------

(b) Determination
    423. We are not persuaded by arguments that the deadline and 
penalty structure in Order No. 2023 is inconsistent with the 
Commission's precedent or that, to the extent it differs from other 
penalty structures in the Commission's precedent, that departure is 
insufficiently explained. For instance, certain parties argue that in 
Order No. 845 the Commission acknowledged that study delays may be 
attributable to factors not within the control of transmission 
providers and that the Commission in Order No. 845 declined to 
implement automatic penalties for study delays.\803\ The Commission in 
Order No. 2023, however, explained the reasons for its change in 
approach: that its determination was based on the evidence in the 
record, including evidence of worsening queue delays based on the 
reporting data collected under Order No. 845 and that failure on the 
part of transmission providers to timely complete studies was a 
significant reason for those delays.\804\ Thus, even though it remains 
the case that there are factors outside of a transmission providers' 
control that may contribute to interconnection study delays, on this 
record the Commission reasonably concluded that elimination of the 
reasonable efforts standard and adoption of a study delay penalty 
structure is warranted notwithstanding that it took a different 
approach in Order No. 845.\805\ We sustain that determination.
---------------------------------------------------------------------------

    \803\ See AEP Rehearing Request at 7-8; MISO TOs Rehearing 
Request at 24-25.
    \804\ Order No. 2023, 184 FERC ] 61,054 at P 1012; see supra PP 
281-282.
    \805\ In particular, the Commission has established the appeals 
process to take into account the possibility that an interconnection 
study is delayed due to factors beyond the control of the 
transmission provider.
---------------------------------------------------------------------------

    424. We are also not convinced that the adoption of penalties for 
late interconnection studies conflicts with Order No. 2003, in which 
the Commission declined to include a liquidated damages provision in 
the pro forma LGIP, observing that it ``may undermine the Transmission 
Provider's ability to economically administer its study process.'' 
\806\ At the outset, to the extent that the rehearing requests rely on 
the Commission's decision not to include the proposed liquidated 
damages provision in Article 5.1 of the pro forma LGIA, that proposed 
liquidated damages provision is distinguishable in that it is related 
to a transmission provider's failure to complete construction of 
interconnection facilities in a timely fashion.\807\ Furthermore, even 
in this context, the Commission simply declined to impose a liquidated 
damages provision in the pro forma LGIP, but was clear that such 
provisions were permissible in LGIAs upon agreement of the 
parties.\808\
---------------------------------------------------------------------------

    \806\ Order No. 2003, 104 FERC ] 61,103 at P 898.
    \807\ See id. PP 851-52 (describing the liquidated damages 
provision proposed the Commission proposed to include in Article 
5.1); id. P 854 (explaining that while there were some common issues 
regarding the two liquidated damages provisions the Commission was 
considering, ``the provisions serve different functions''); id. PP 
868-85 (discussing the proposed LGIA liquidated damages provision, 
and the Commission's rationale for declining to adopt it).
    \808\ See, e.g., Order No. 2003-A, 106 FERC ] 61,220 at P 249; 
see also N.Y. Indep. Sys. Operator, Inc. 108 FERC ] 61,159 at PP 77-
78 (liquidated damages are permissible upon agreement of the 
parties).
---------------------------------------------------------------------------

    425. Moreover, the Commission in Order No. 2023 did not take action 
based on the record that was available in 2003. Instead, the Commission 
has adopted the specific deadline and penalty structure set forth in 
Order No. 2023, as clarified herein, based on the record before us in 
this proceeding. This record is informed by an additional two decades 
of experience,\809\ which justify the need for the reforms adopted in 
Order No. 2023, including the adoption of study delay penalties.\810\ 
The Commission has also taken steps (e.g., site control requirements, 
commercial readiness deposits, and withdrawal penalties) directed 
toward reducing the number of speculative interconnection requests and 
has discussed the costs to interconnection customers of interconnection 
queue backlogs and late interconnection studies.\811\ The penalty 
structure adopted in Order No. 2023 further includes several 
safeguards,

[[Page 27080]]

including the appeal mechanism to seek relief from penalties, and we do 
not believe that the penalty structure will be punitive.\812\ On the 
record before us now, we continue to find that a structure where 
penalties are incurred for late interconnection studies is warranted 
notwithstanding that the Commission declined to adopt a proposal for 
liquidated damages for study delays on a different record twenty years 
ago.
---------------------------------------------------------------------------

    \809\ See Order No. 2023, 184 FERC ] 61,054 at P 3 (``The 
electricity sector has transformed significantly since the issuance 
of Order Nos. 2003 and 2006 . . . . These new challenges are 
creating large interconnection queue backlogs and uncertainty 
regarding the cost and timing of interconnecting to the transmission 
system, increasing costs for consumers.'').
    \810\ Even in Order No. 2003--when it was not confronting the 
magnitude of interconnection queue backlogs and late studies 
occurring now--the Commission recognized ``value of providing an 
incentive to complete Interconnection Studies.'' Order No. 2003, 104 
FERC ] 61,103 at P 898. It also concluded that it had statutory 
authority to adopt liquidated damages provisions. Id. P 857.
    \811\ See, e.g., Order No. 2023, 184 FERC ] 61,054 at PP 3, 27, 
37-40, 43, 50.
    \812\ Id. P 972.
---------------------------------------------------------------------------

    426. MISO TOs also point to a Commission decision from the end of 
2022 in which--MISO TOs claim--the Commission ``affirmed the reasonable 
efforts standard and eschewed the adoption of firm study deadlines.'' 
\813\ In that decision, however, the Commission approved PJM's FPA 
section 205 proposal because, at that time, the reasonable efforts 
standard was ``the currently applicable standard under the Commission's 
pro forma LGIP and LGIA,'' noting that in Order No. 845 the Commission 
had declined to eliminate the reasonable efforts standard.\814\ The 
Commission has now determined, based on the record in this proceeding 
and under FPA section 206, that the reasonable efforts standard is no 
longer just and reasonable and specified the replacement standards, and 
transmission providers (including PJM) are required to submit 
compliance filings to adopt the requirements of Order No. 2023, as 
modified herein.
---------------------------------------------------------------------------

    \813\ MISO TOs Rehearing Request at 26 (citing PJM 
Interconnection, L.L.C., 181 FERC ] 61,162 at P 138).
    \814\ PJM Interconnection, L.L.C., 181 FERC ] 61,162 at P 138 
(``Accordingly, at this time, we decline to require PJM to adopt 
firm study deadlines instead of its proposed `Reasonable Efforts' 
standard.'' (emphasis added)). Because the Commission relied on the 
fact that the reasonable efforts standard was the then-applicable 
pro forma standard, nothing in that case conflicts with our decision 
here.
---------------------------------------------------------------------------

    427. We disagree with Indicated PJM TOs' and NYISO's claims that 
the Commission erred in comparing the penalty structure under Order No. 
2023 to traffic ticket penalties, asserting that such traffic ticket 
penalties are assessed solely based on objective criteria. Under Order 
No. 2023's penalty structure, penalties are incurred based on 
objectively identifiable criteria set forth in the tariff (failure to 
complete the study in the required timeframe) and transmission 
providers are not subject to sanctions or consequences other than the 
penalty set forth in the tariff and approved by the Commission.\815\ 
While Indicated PJM TOs and NYISO argue that, in light of the appeal 
process, the ultimate imposition of the penalty is not based on 
objectively identifiable behavior, the approach adopted in Order No. 
2023 is consistent with the Commission's traffic ticket penalty 
precedent which includes an ``appeals process'' under which the 
Commission considers ``all relevant circumstances.'' \816\
---------------------------------------------------------------------------

    \815\ See Cal. Indep. Sys. Operator Corp., 134 FERC ] 61,050, at 
P 34 (2011) (``[T]hree qualifications must be met: (1) The activity 
must be expressly set forth in the tariff; (2) The activity must 
involve objectively identifiable behavior; and (3) The activity does 
not subject the actor to sanctions or consequences other than those 
expressly approved by the Commission and set forth in the tariff, 
with the right of appeal to the Commission.'').
    \816\ Id. P 37.
---------------------------------------------------------------------------

    428. Nor, contrary to Indicated PJM TOs' claim, is any aspect of 
the penalty structure impermissibly ``delegate[d] . . . to third 
parties'' such as ``jurisdictional utilities.'' \817\ As just 
discussed, the trigger for penalties occurs through objective criteria, 
which were determined by the Commission on the record in this 
proceeding. The appeals process is conducted by the Commission. To the 
extent that RTOs/ISOs seek to recover the costs of penalties assessed 
to them through section 205 filings, whether through individual filings 
or a default structure, the Commission will review those filings to 
determine whether they are just and reasonable, and not unduly 
discriminatory or preferential.\818\
---------------------------------------------------------------------------

    \817\ Indicated PJM TOs Rehearing Request at 22.
    \818\ Indicated PJM TOs also argue that the Commission ``cannot 
delegate authority to RTOs and ISOs to determine the reasonableness 
of study delay penalty allocations'' such that it would be 
inappropriate to ``giv[e] deference to the RTO's/ISO's decision in a 
`good cause' proceeding.'' Indicated PJM TOs Rehearing Request at 
24. This argument conflates appeals of penalties incurred by RTOs/
ISOs with how those penalties may be allocated as a matter of RTO/
ISO cost recovery under FPA section 205 proposals. Moreover, as just 
explained, the Commission has not impermissibly delegated its 
authority to RTOs/ISOs.
---------------------------------------------------------------------------

    429. As to NYISO's argument that Order No. 890's transmission study 
penalties are not relevant to the Commission's adoption of the penalty 
structure in Order No. 2023, NYISO does not refute the numerous 
similarities between these two structures. These include that, in Order 
No. 890, the Commission: imposed set time frames for the completion of 
transmission studies and found that transmission providers must have a 
meaningful stake in meeting those deadlines; \819\ included a process 
to waive penalties in unique circumstances but declined to create broad 
categories of exemptions from penalties; \820\ rejected arguments that 
imposing deadlines and penalties will necessarily decrease study 
quality or harm system reliability; \821\ discussed other reforms that 
would help achieve transmission deadlines, but did not take piecemeal 
action by waiting to observe the effects of those reforms; \822\ 
provided for the distribution of penalties to transmission customers; 
\823\ did not exempt RTOs; \824\ and prohibited transmission providers 
from recovering study delay penalties through their transmission 
rates.\825\ In light of these similarities, we continue to conclude 
that Order No. 890 is relevant Commission precedent supporting the 
study delay penalty structure adopted in Order No. 2023.\826\
---------------------------------------------------------------------------

    \819\ Order No. 890, 118 FERC ] 61,119 at P 1340; Order No. 890-
A, 121 FERC ] 61,297 at P 741.
    \820\ Order No. 890, 118 FERC ] 61,119 at PP 1342-43, 1349; 
Order No. 890-A, 121 FERC ] 61,297 at PP 743-45.
    \821\ Order No. 890, 118 FERC ] 61,119 at P 1345; Order No. 890-
A, 121 FERC ] 61,297 at P 742.
    \822\ Order No. 890, 118 FERC ] 61,119 at P 1346.
    \823\ Id. P 1351.
    \824\ Id. P 1353.
    \825\ Id. P 1357; see also Order No. 890-A, 121 FERC ] 61,297 at 
PP 486, 754-57 (noting that the Commission could consider case-
specific cost recovery proposals from RTOs/ISOs under FPA section 
205).
    \826\ NYISO's argument that it does not conduct the kinds of 
transmission studies that Order No. 890 addressed and that such 
studies are ``not a major issue for most other RTOs/ISOs,'' NYISO 
Initial Comments at 36; see also NYISO Rehearing Request at 32 n.87, 
does not negate these similarities for purposes of determining a 
just and reasonable pro forma approach to ensuring interconnection 
study timeliness under Order No. 2023. See Order No. 2023, 184 FERC 
] 61,054 at P 1001 (rejecting NYISO's argument); cf.id. PP 965-72 
(finding that the imposition of study delay penalties was just and 
reasonable and would not be punitive as to transmission providers); 
id. PP 1004-07, 1013.
---------------------------------------------------------------------------

    430. The Commission in Order No. 2023 also recognized that there 
were differences between the penalty structure in Order No. 2023 as 
compared to Order No. 890, but found that they were ``warranted by the 
significant and growing interconnection queue backlogs.'' \827\ In 
other words, far from NYISO's suggestion that the Commission was 
unreasonably citing ``the fact that interconnection studies are more 
numerous, complex, and susceptible to delays than transmission studies 
as a reason for treating the two identically,'' \828\ the Commission 
was here explaining why the differences between these two structures 
were appropriate.\829\ We continue to find

[[Page 27081]]

those differences warranted, based on the same considerations 
articulated in Order No. 2023,\830\ notwithstanding arguments that the 
approach in Order No. 2023 represents a departure from the approach the 
Commission took in Order No. 890. These considerations reflect greater 
need for direct, clear, and straightforward incentives for transmission 
providers to achieve interconnection study timeliness than were 
pertinent in the context of transmission studies in Order No. 890.
---------------------------------------------------------------------------

    \827\ Order No. 2023, 184 FERC ] 61,054 at P 1013 (noting that 
interconnection studies ``are more numerous, complex, and 
susceptible to delays'' and ``there is a growing number of 
interconnection customers affected by study delays. We believe that 
these factors underscore the need for transmission providers to meet 
study deadlines and the need to provide an incentive, in the form of 
study delay penalties'').
    \828\ NYISO Rehearing Request at 32 n.87.
    \829\ See also supra PP 281-282 (explaining how previous reforms 
had failed to ensure timely interconnection study queue processing 
or resolve significant interconnection queue backlogs). This 
explanation for the differences between Order No. 2023 and Order No. 
890 also addresses the substance of NYISO's comment in which it also 
observed such differences. See NYISO Rehearing Request at 32 n.87; 
NYISO Initial Comments at 36 (arguing that the penalty structure 
proposed in the NOPR differed from that in Order No. 890 because 
transmission study penalties were not imposed automatically, without 
notification to the Commission). We further note that NYISO's 
characterization of Order No. 2023 as strict liability is 
inaccurate, and that the appeal process in particular addresses 
these concerns. See supra PP -360.
    \830\ Order No. 2023, 184 FERC ] 61,054 at P 1013 (``[C]ompared 
to transmission service requests, interconnection studies are more 
numerous, complex, and susceptible to delays. Further, as noted 
above, there is a growing number of interconnection customers 
affected by study delays. We believe that these factors underscore 
the need for transmission providers to meet study deadlines.'').
---------------------------------------------------------------------------

    431. We also find that the Commission adequately responded to 
NYISO's argument that ``reliability penalties are generally non-
financial and that when financial penalties do apply there are numerous 
mechanisms in place to avoid unfairly harsh results,'' particularly a 
``risk-based evaluation of all the facts and circumstances related to 
an individual violation.'' \831\ Under Order No. 2023, transmission 
providers have ``the opportunity to seek relief from a penalty by 
filing an appeal, which the Commission will closely scrutinize and in 
response to which the Commission will issue an order.'' \832\ We have 
elsewhere rejected arguments that this appeals process is impermissibly 
``inchoate'' and arguments that Order No. 2023 unreasonably presumes 
that ``transmission providers are at fault for study delays and that 
all study delays warrant penalties.'' \833\
---------------------------------------------------------------------------

    \831\ NYISO Rehearing Request at 31-32 & n.85.
    \832\ Order No. 2023, 184 FERC ] 61,054 at P 1001.
    \833\ NYISO Rehearing Request at 31; see, e.g., supra section 
II.D.1.c.ii.
---------------------------------------------------------------------------

    432. Indicated PJM TOs' contention that Order No. 2023 is unlawful 
because the Commission has attempted therein to override RTO/ISO 
governing documents, in contravention of Atlantic City I and Atlantic 
City II,\834\ is misplaced.\835\ Indicated PJM TOs are misreading 
Atlantic City I and Atlantic City II, which do not stand for the 
proposition that a particular RTO/ISO's approach to its own governance 
can override the Commission's authority under FPA section 206 to set 
just and reasonable rates. Rather, in Atlantic City I, the Commission 
had required modifications to a proposed ISO structure including ``to 
eliminate a provision allowing utilities `to unilaterally file to make 
changes in rate design, terms or conditions of jurisdictional 
services,' except that they could still unilaterally seek a change in 
the transmission revenue requirements.'' \836\ As a result of these 
required modifications, changes in rate design could not be made 
through unilateral FPA section 205 filings by individual utilities, but 
instead ``only the ISO could propose changes in rate design.'' \837\ 
The court held that the Commission erred in doing so, explaining that 
the Commission lacked statutory authority ``to require the utility 
petitioners to cede rights expressly given to them in section 205 of 
the Federal Power Act.'' \838\
---------------------------------------------------------------------------

    \834\ See Indicated PJM TOs Rehearing Request at 6 (arguing that 
``the PJM CTOA does not authorize PJM to assign penalty amounts to 
PJM transmission owners'' and, under these cases ``the Commission 
cannot prevent public utilities from deciding how to recover their 
costs and cannot direct public utilities to make cost recovery 
filings in any prescribed manner''); id. at 8-12.
    \835\ We note that this argument overstates the effect of Order 
No. 2023, which did not ``direct'' any RTOs/ISOs, including PJM, to 
make cost recovery filings at all, let alone do so according to any 
particular structure. See Order No. 2023, 184 FERC ] 61,054 at P 994 
(providing that RTOs/ISOs ``may'' submit FPA section 205 filings and 
that they may propose a default structure or make individual section 
205 filings to recover costs); id. P 998 (noting potential avenues 
to fund study delay penalties, such as collecting administrative 
fees).
    \836\ Atl. City I, 295 F.3d at 7; see also id. at 6-7 
(explaining that the proposed agreement permitted the ``transmission 
owners to file changes in transmission service rate design and non-
rate terms and conditions to the tariff under section 205,'' subject 
to potential rejection of a proposed change by the independent PJM 
Board by majority vote).
    \837\ Id. at 7.
    \838\ Id. at 9; see also id. at 10 (explaining that the 
Commission was ``purport[ing] to deny the utility petitioners any 
ability to initiate rate design changes with respect to services 
provided with their own assets,'' thereby ``eliminat[ing] the very 
thing that the statute was designed to protect--the ability of the 
utility owner to set the rates it will charge prospective customers, 
and change them at will, subject to review by the Commission.'' 
(quotation marks omitted); id. at 11 (holding that the Commission 
cannot deny ``the petitioners their rights provided for by a statute 
enacted by both houses of Congress and signed into law by the 
[p]resident''); Atl. City II, 329 F.3d at 859 (``[W]e reaffirm and 
clarify our prior decision that FERC has no jurisdiction to enter 
limitations requiring utilities to surrender their rights under 
Sec.  205 of the FPA to make filings to initiate rate changes.'').
---------------------------------------------------------------------------

    433. Thus, the basis for the court's remands in Atlantic City I and 
Atlantic City II was that the Commission exceeded its jurisdiction in 
requiring utilities to surrender, to an RTO/ISO, their FPA section 205 
right to propose changes to rate designs. These cases do not establish 
that the Commission's power under FPA section 206, following 
appropriate findings, to ``determine the just and reasonable rate, 
charge, classification, rule, regulation, practice, or contract to be 
thereafter observed and in force'' \839\ is subordinate to a particular 
RTO/ISO's governing documents. To the contrary, the court acknowledged 
the Commission's authority to require transmission providers to file 
particular rates upon a finding that existing rates are unlawful, under 
FPA section 206.\840\
---------------------------------------------------------------------------

    \839\ 16 U.S.C. 824e(a).
    \840\ See, e.g., Atl. City I, 295 F.3d at 10 (``The courts have 
repeatedly held that FERC has no power to force public utilities to 
file particular rates unless it first finds the existing filed rates 
unlawful. . . . [T]he power to initiate rate changes rests with the 
utility and cannot be appropriated by FERC in the absence of a 
finding that the existing rate was unlawful.'' (emphasis added)).
---------------------------------------------------------------------------

vi. Alternative Approaches and Miscellaneous Issues
(a) Requests for Rehearing
    434. A number of the rehearing requests assert that the Commission 
could have taken an alternative approach to eliminating the reasonable 
efforts standard and adopting the deadline and penalty structure set 
forth in Order No. 2023. EEI urges that the Commission could have 
instead ``ensure[d] transmission providers are afforded specified 
timeframes to complete certain tasks during studies.'' \841\ MISO TOs 
assert that the Commission should have taken an approach that parallels 
the one adopted for transmission studies in Order No. 890 of monitoring 
for chronic delays, investigating causes, and then imposing a 
remedy.\842\ NYISO argues that the Commission could instead allow 
``individual RTO/ISO regions to propose alternative rules as 
independent entity variations'' or build on Order No. 845 by updating 
and enhancing its reporting requirements, which would allow more 
targeted actions to address problems.\843\
---------------------------------------------------------------------------

    \841\ EEI Rehearing Request at 9 (arguing that this approach 
acknowledges that one entity's actions often cannot commence until 
another entity's work is completed).
    \842\ MISO TOs Rehearing Request at 36-37.
    \843\ NYISO Rehearing Request at 20-21.
---------------------------------------------------------------------------

    435. NYISO asserts that Order No. 2023's adoption of a 10 business-
day grace period does not provide meaningful relief to transmission 
providers, like NYISO, that will be required to study large numbers of 
interconnection requests, and that affording the same grace period to 
all transmission providers despite differing

[[Page 27082]]

workloads is not reasoned decision-making.\844\ It further argues that 
the transition period the Commission adopted in Order No. 2023 simply 
postpones the problems with RTO/ISO penalty cost recovery, without 
resolving that problem.\845\ And NYISO claims that the Commission 
significantly increased penalty levels from the levels proposed by the 
NOPR, without a reasoned basis for doing so.\846\
---------------------------------------------------------------------------

    \844\ Id. at 35.
    \845\ Id. at 37.
    \846\ Id. (asserting that the Commission's example estimating a 
$63,000 penalty for a six-month delay under the NOPR structure does 
not show that the penalties assessed under Order No. 2023 will be 
proportionate or non-punitive, particularly as to not-for-profit 
RTOs/ISOs).
---------------------------------------------------------------------------

    436. Indicated PJM TOs argue that pro rata disbursement of 
penalties to interconnection customers is unduly discriminatory, given 
that study deposits increase based on the size of the generating 
facility making the interconnection request.\847\ They assert that 
Order No. 2023 disregards the different costs associated with larger 
generating facilities and seeks to treat interconnection customers with 
substantially fewer costs as equals, which they claim is inconsistent 
with precedent.\848\
---------------------------------------------------------------------------

    \847\ Indicated PJM TOs Rehearing Request at 40-41.
    \848\ Id. at 40 (citing Ala. Elec. Coop., 684 F.2d at 28).
---------------------------------------------------------------------------

    437. Invenergy argues that the Commission erred in failing to 
provide for penalties when an affected system misses a pre-study 
deadline, such as the 20 business day deadline to indicate whether it 
will conduct an affected system study, or the 15 business day deadline 
to provide a cost estimate and schedule for that study.\849\ Invenergy 
notes that, in contrast to the 150-day deadline for cluster studies, 
which is measured from the end of the customer engagement window, an 
affected system will be expected to meet pre-study deadlines only when 
and if the host transmission provider provides a notice that it has 
been identified as an affected system for a particular interconnection 
customer.\850\ Invenergy argues that the Commission should apply a 
$2,000 per business day penalty on affected systems for failing to meet 
pre-study deadlines. Clean Energy Associations present similar 
arguments in a request for clarification.\851\
---------------------------------------------------------------------------

    \849\ Invenergy Rehearing Request at 2-3.
    \850\ Id. (asserting that there is a ``risk that the failure of 
an Affected System to meet pre-study deadlines will delay 
commencement of the Affected System study (and thus the start of the 
150-day clock applicable to that study)'').
    \851\ See Clean Energy Associations Rehearing Request at 76-77.
---------------------------------------------------------------------------

    438. MISO argues that Order No. 2023 should be revised to provide 
that RTOs that conduct multiple system impact studies may include a 
combined timeline for cluster studies for penalty purposes.\852\ MISO 
also argues that the Commission should modify the transition period to 
properly account for delays in clusters that pre-date the effective 
date of Order No. 2023, because delays in such clusters could cause 
backlogs that will affect future studies.\853\ It claims that doing so 
is necessary to avoid retroactive effects that penalize RTOs for delays 
prior to Order No. 2023's effective date, which would contravene the 
filed rate doctrine and the rule against retroactive ratemaking.
---------------------------------------------------------------------------

    \852\ MISO Rehearing Request at 11-14.
    \853\ Id. at 15-16.
---------------------------------------------------------------------------

(b) Determination
    439. In Order No. 2023, the Commission stated that transmission 
providers should distribute any collected study delay penalties ``to 
interconnection customers in the relevant study on a pro rata per 
interconnection request basis to offset their study costs.'' \854\ 
Indicated PJM TOs assert that this approach is unduly discriminatory 
because it results in equal treatment of differently situated 
customers, specifically those that paid larger study deposits or that 
may have larger final study costs versus those that paid smaller study 
deposits or that may have smaller final study costs.\855\ While the 
Commission in Order No. 2023 stated that disbursement of 
interconnection study delay penalties would be on a ``pro rata'' (i.e., 
proportionate) basis per interconnection request, it did not further 
specify how penalties would be distributed. We clarify here that study 
delay penalties must be distributed on a pro rata basis proportionate 
to the final study costs paid by each interconnection customer in the 
relevant study. This approach ensures that the distribution of the 
penalty (i.e., the amount of the ``offset'' each interconnection 
customer receives) is related to the costs paid by the interconnection 
customer for the relevant study.
---------------------------------------------------------------------------

    \854\ Order No. 2023, 184 FERC ] 61,054 at P 963; see also id. 
at P 990; pro forma LGIP section 3.9.
    \855\ Indicated PJM TOs Rehearing Request at 40-41.
---------------------------------------------------------------------------

    440. We decline Invenergy's request that the Commission grant 
rehearing and find that the study delay penalty of $2,000 per business 
day applies to the pre-study deadlines for affected systems.\856\ The 
penalties the Commission adopted in Order No. 2023 focus on the process 
of conducting interconnection studies, and how delays in that process 
contribute to interconnection queue backlogs. The record in this 
proceeding does not contain sufficient information regarding persistent 
delays in the pre-study process for affected systems that contribute to 
interconnection queue backlogs to persuade us to extend the study delay 
penalties to such pre-study deadlines.\857\ We further find that 
imposing penalties on affected system transmission providers would 
result in unduly discriminatory treatment of similarly situated 
entities: host transmission providers are also required to meet pre-
study deadlines in the pro forma LGIP,\858\ including deadlines for 
communications with affected system transmission providers, but incur 
no penalties for missing those deadlines.
---------------------------------------------------------------------------

    \856\ For the same reasons discussed in this paragraph, we also 
reject Clean Energy Associations' similar argument couched as a 
request for clarification.
    \857\ The opportunities for delay that Invenergy cites are 
associated with tasks that--particularly compared to the conduct of 
an interconnection study--are relatively straightforward: providing 
notice of intent to conduct an affected system study and a non-
binding cost estimate and schedule for that study. See id. It is 
therefore not apparent that there should be significant delays 
associated with these tasks as a general matter, and we will not 
presume that affected systems will tactically delay such tasks to 
avoid triggering other deadlines. If such delays arise we may 
consider further action.
    \858\ See, e.g., pro forma LGIP sections 3.1, 3.4, 3.6.
---------------------------------------------------------------------------

    441. In Order No. 2023, the Commission explained that it 
``decline[d] to adopt alternative proposals [instead of the deadline 
and penalty approach set forth in Order No. 2023] suggested by various 
commenters,'' \859\ and we sustain that decision here in response to 
similar arguments on rehearing.\860\ As to MISO TOs' argument that the 
Commission should grant rehearing and adopt an approach similar to the 
approach taken in Order No. 890, the Commission considered the 
differences from the approach set forth in Order No. 890. It determined 
that these differences were

[[Page 27083]]

warranted,\861\ and--on rehearing--we affirm that conclusion. The study 
delay penalty structure appropriately responds to the problem of 
interconnection study delays contributing to unjust and unreasonable 
rates by creating strong, direct, and clear incentives on transmission 
providers while recognizing that the value of interconnection studies 
is related to their timeliness. Moreover, given that interconnection 
study delays are already a significant and widespread problem, we find 
that it would not be appropriate to further delay imposing meaningful 
incentives while we further ``monitor for chronic study delays'' \862\ 
by individual transmission providers. Likewise, we find that ``updating 
and enhancing [Order No. 845's] reporting requirements'' to ``create 
even more transparency,'' as NYISO urges,\863\ or that, instead of 
imposing deadlines supported by penalties, the Commission simply 
provide ``specified timeframes to complete certain tasks during 
studies'' as EEI suggests,\864\ would not be sufficient to address the 
problem of interconnection queue backlogs and repeatedly delayed 
interconnection studies.\865\
---------------------------------------------------------------------------

    \859\ Order No. 2023, 184 FERC ] 61,054 at P 1025.
    \860\ Even assuming that one or more of these alternative 
approaches might also address the problem of late interconnection 
studies contributing to interconnection queue backlogs, leading to 
unjust and unreasonable rates, this does not demonstrate that the 
deadline and penalty structure in Order No. 2023 is not just and 
reasonable. See Petal Gas Storage, LLC v. FERC, 496 F.3d 695, 703 
(D.C. Cir. 2007) (``[The Commission]is not required to choose the 
best solution, only a reasonable one.''); ExxonMobil Oil Corp. v. 
FERC, 487 F.3d 945, 955 (D.C. Cir. 2007) (``We need not decide 
whether the Commission has adopted the best possible policy as long 
as the agency has acted within the scope of its discretion and 
reasonably explained its actions.''); Midwest Indep. Transmission 
Sys. Operator, Inc., 127 FERC ] 61,109, at P 20 (2009) (``It is well 
established that there can be more than one just and reasonable rate 
. . . .'').
    \861\ See Order No. 2023, 184 FERC ] 61,054 at P 1013 (noting 
that interconnection studies ``are more numerous, complex, and 
susceptible to delays'' and ``there is a growing number of 
interconnection customers affected by study delays. We believe that 
these factors underscore the need for transmission providers to meet 
study deadlines and the need to provide an incentive, in the form of 
study delay penalties''); id. P 1025.
    \862\ MISO TOs Rehearing Request at 36.
    \863\ NYISO Rehearing Request at 21.
    \864\ EEI Rehearing Request at 9.
    \865\ See Order No. 2023, 184 FERC ] 61,054 at P 1025; supra PP 
281-282 (explaining that the Commission's previous efforts to 
address interconnection queue backlogs through Order No. 845's 
reporting requirements have not been sufficient to remedy this 
problem, which has worsened since those efforts were undertaken). 
The Commission has already addressed NYISO's suggestion that ``the 
Commission could allow individual RTO/ISO regions to propose 
alternative rules as independent entity variations in their Order 
No. 2023 compliance filings.'' NYISO Rehearing Request at 20-21; see 
Order No. 2023, 184 FERC ] 61,054 at P 1764. We do not, and cannot, 
prejudge whether such requested variations will be acceptable.
---------------------------------------------------------------------------

    442. We also decline AEP's request to expand appeal rights beyond 
the transmission provider that is directly assigned the penalty. In 
instances where an RTO/ISO incurs a penalty and seeks to recover the 
cost of that penalty from transmission-owning members, such 
transmission owners would have the right to intervene in any proceeding 
under FPA section 205 or file a complaint challenging the recovery of 
that penalty cost under FPA section 206, as appropriate. We believe 
that this adequately protects the interests of transmission-owning 
members of RTOs/ISOs.
    443. MISO argues that the Commission should modify the transition 
period to account for delays in clusters that pre-date the effective 
date of Order No. 2023 and can cause backlogs that will affect future 
studies, claiming that this modification is necessary because delays in 
prior study clusters may affect studies in future clusters.\866\ 
According to MISO, it must be allowed to ``clear all pre-effective date 
`baked-in' delays before penalties begin'' in order to avoid 
``statutory retroactive effects by penalizing RTOs based on delays that 
occur prior to its effective date.'' \867\ We do not agree. Order No. 
2023 is directed toward future cluster studies, and--in fact--already 
provides a generous transition period to adapt and address existing 
backlogs, as a matter of ensuring that the impacts of the deadline and 
penalty structure are not unduly burdensome or punitive. It is not 
clear to us how the prospective application of penalties to the third 
cluster study cycle after a transmission provider's compliance filing 
becomes effective implicates concerns about retroactivity or the filed 
rate doctrine.\868\ More generally, all transmission providers, 
including RTOs/ISOs, retain the option to argue on compliance why their 
particular circumstances warrant variations from Order No. 2023 using 
the appropriate standard.
---------------------------------------------------------------------------

    \866\ See MISO Rehearing Request at 15-16.
    \867\ Id. at 16.
    \868\ Neither of the cases MISO cites supports the notion that, 
where the Commission regulates future activity, retroactivity and 
filed rate concerns may arise simply because pre-existing facts 
might influence the ease of compliance with the Commission's 
forward-looking regulation. See Ark. La. Gas Co. v. Hall, 453 U.S. 
571, 573 (1981) (considering whether the filed rate doctrine 
``forbids a state court to calculate damages in a breach-of-contract 
action based on an assumption that had a higher rate been filed, the 
Commission would have approved it''); Old Dominion Elec. Coop. v. 
FERC, 892 F.3d 1223, 1226 (D.C. Cir. 2018) (affirming Commission 
decision that it could ``waive provisions of the governing tariff 
retroactively so that [Old Dominion] could recover its costs'').
---------------------------------------------------------------------------

vii. Requests for Clarification
(a) Summary of Requests for Clarification
    444. AEP asks the Commission to clarify that the study delay 
penalties will not incur interest prior to distribution of the penalty 
funds and that the entity (i.e., transmission provider or transmission 
owner) conducting the study will have no obligation to pay interest on 
study delay penalties.\869\
---------------------------------------------------------------------------

    \869\ AEP Rehearing Request at 21.
---------------------------------------------------------------------------

    445. Joint RTOs ask the Commission to clarify that Order No. 2023's 
one-phase cluster study was not intended to require RTOs or others that 
conduct multiple system impact studies in a multi-phase study process 
(e.g., MISO, SPP, and PJM) to impose penalties for each delayed system 
impact study on an individual basis.\870\ They argue that an RTO with a 
multi-phase interconnection process should be allowed to propose on 
compliance that the penalty for delayed interconnection studies will be 
assessed based on whether the RTO has complied with the aggregate 
timeline provided for all of the system impact studies in a 
cluster.\871\ They also seek clarification from the Commission that, in 
establishing study completion timelines in their tariffs (to the extent 
such timelines do not already exist), they may propose specific factors 
they would apply in assessing the complexity of individual clusters for 
the purposes of establishing such timelines and the application of 
penalties for exceeding such timelines.\872\
---------------------------------------------------------------------------

    \870\ Joint RTOs Rehearing Request at 10.
    \871\ Id. at 10-11 (noting that in its three-phase study 
process, MISO is required to complete a preliminary, revised, and 
final system impact study in 65, 75, and 50 calendar days, 
respectively).
    \872\ Id. at 12.
---------------------------------------------------------------------------

    446. Joint RTOs and PJM seek clarification that all penalties for 
delayed studies will apply on a per cluster basis, per business day 
rather than per interconnection customer in the cluster, per business 
day.\873\
---------------------------------------------------------------------------

    \873\ Id.; PJM Rehearing Request at 28.
---------------------------------------------------------------------------

    447. Joint RTOs ask the Commission to clarify that the RTO/ISO 
penalty recovery options provided in Order No. 2023 are not mutually 
exclusive, nor intended to be an exhaustive list, and that an RTO/ISO 
may propose using a combination of such options.\874\ They also ask the 
Commission to clarify that, where interconnection customers contributed 
to the study delay, any resulting penalty may be collected from such 
interconnection customers under the penalty collection mechanism(s) 
that an RTO/ISO may adopt pursuant to Order No. 2023 and that an RTO/
ISO may propose to limit any penalty distribution to those 
interconnection customers that have not contributed to a study delay. 
In addition, Joint RTOs ask the Commission to clarify that, in cases 
where a transmission-owing member(s) conducted the late study, the 
tariff mechanisms by which payments flow can be addressed in individual 
compliance filings where transmission providers can account for their 
regional processes. Lastly, Joint RTOs ask the Commission to clarify 
that RTOs/ISOs

[[Page 27084]]

are not required to collect any penalty prior to concluding the appeals 
process under section 3.9(3) of the pro forma LGIP.
---------------------------------------------------------------------------

    \874\ Joint RTOs Rehearing Request at 13-14.
---------------------------------------------------------------------------

    448. NYTOs request clarification that Order No. 2023's prohibition 
against transmission owners recovering delay penalties in rates does 
not preclude a transmission owner from recovering such penalty costs 
that were caused by, and initially assessed to, the RTO/ISO.\875\
---------------------------------------------------------------------------

    \875\ NYTOs Rehearing Request at 29 (arguing that 
``[t]ransmission providers' investors should not bear such third-
party risks and costs, especially when they have no ownership stake 
in the non-profit RTO/ISO,'' and that ``forcing such a burden 
breaches basic cost causation principles, is arbitrary and 
capricious, and is an uncompensated taking'').
---------------------------------------------------------------------------

    449. NYISO asks the Commission to clarify that Order No. 2023 
authorizes RTOs/ISOs to recover study penalty costs from consumers 
without first seeking the Commission's permission, so long as they do 
so through non-transmission-related charges, such as administrative 
fees assessed against market participants.\876\
---------------------------------------------------------------------------

    \876\ NYISO Rehearing Request at 26.
---------------------------------------------------------------------------

    450. NYISO asks the Commission to clarify that the Commission will 
allow penalty waivers when a transmission provider is not solely 
responsible for a study delay \877\ or in cases where identifying the 
extent to which different parties are to blame for a late study would 
be difficult and time-consuming.\878\ NYISO also asks the Commission to 
clarify that reasonable penalty waiver requests will be compatible with 
its traditional four-prong waiver analysis.\879\
---------------------------------------------------------------------------

    \877\ Id. at 40 (for example, if it were shown that 
interconnection customers substantially caused a study delay with 
transmission owners and/or an RTO/ISO playing comparatively smaller 
roles or other potentially likely scenarios).
    \878\ Id. at 41 (arguing that it would be better for all parties 
and the Commission to avoid complex contested appeal proceedings).
    \879\ Id. (for example, if a study delay impacts numerous 
interconnection customers, that will not mean that a waiver request 
would be denied because it is ``not limited in scope'').
---------------------------------------------------------------------------

    451. NYISO requests clarification that RTOs/ISOs may include study 
penalty cost recovery proposals in their individual compliance 
filings.\880\ Specifically, it asks the Commission to clarify that 
``default structure'' penalty cost recovery proposals may be included 
in Order No. 2023 compliance filings in addition to FPA section 205 
filings.\881\ NYISO argues that the Commission has traditionally 
afforded RTOs/ISOs considerable flexibility regarding the scope of 
compliance filings made in response to major new rules and that it 
would be unduly discriminatory for the Commission to leave RTOs/ISOs 
that need stakeholder approval to file tariff revisions with less 
ability to recover study penalty costs than those that do not.\882\
---------------------------------------------------------------------------

    \880\ Id. at 41-42.
    \881\ Id. at 42 (explaining that, because it must obtain super 
majority stakeholder approval to submit tariff revisions under FPA 
section 205, it and other similarly situated RTOs/ISOs would be 
prevented from filing ``default structure'' recovery mechanisms if a 
minority of their stakeholders opposed them).
    \882\ Id. at 43.
---------------------------------------------------------------------------

(b) Determination
    452. We grant AEP's request for clarification that study delay 
penalties will not incur interest prior to distribution of the penalty 
funds and that the entity conducting the study (i.e., transmission 
provider or transmission owner) will have no obligation to pay interest 
on study delay penalties. Assessing interest during the pendency of an 
appeal could be viewed as penalizing the transmission provider for 
making the appeal, particularly to the extent that the transmission 
provider does not control the timeline for resolution of the appeal.
    453. We deny requests for clarification of how the penalty process 
would apply to RTOs/ISOs with multi-phase interconnection procedures 
that include multiple sequential cluster studies. Order No. 2023 did 
not contemplate such sequential phased cluster study procedures: thus, 
any such procedures and attendant penalty processes are outside the 
scope of the rule. However, the Commission recognized that many 
transmission providers have adopted or are in the process of adopting 
similar reforms to those adopted in Order No. 2023 and noted that it 
did not intend to disrupt these ongoing transition processes.\883\ On 
compliance, transmission providers can propose deviations from the 
requirements adopted in Order No. 2023 and demonstrate how those 
deviations meet the relevant standard.\884\
---------------------------------------------------------------------------

    \883\ Order No. 2023, 184 FERC ] 61,054 at P 1765.
    \884\ Id. PP 1764-1765 (citing Order No. 2003, 104 FERC ] 61,103 
at P 825; Order No. 2006, 111 FERC ] 61,220 at PP 546-547; Order No. 
845, 163 FERC ] 61,043 at P 43 (explaining that a transmission 
provider that is not an RTO/ISO that seeks a variation from the 
requirements of the final rule must present its justification for 
the variation as consistent with or superior to the pro forma LGIA 
or pro forma LGIP); Order No. 2003, 104 FERC ] 61,103 at P 826 
(``[w]ith respect to an RTO or ISO . . . we will allow it to seek 
`independent entity variations' from the Final Rule . . .)).
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    454. We grant requests for clarification that all penalties for 
delayed studies will apply on a per-study basis, per business day that 
the study is delayed past the tariff-specific deadline, rather than per 
interconnection customer. As noted in Order No. 2023, delays of cluster 
studies beyond the tariff-specified deadline will incur a penalty of 
$1,000 per business day; delays of cluster restudies beyond the tariff-
specified deadline will incur a penalty of $2,000 per business day; 
delays of affected system studies beyond the tariff-specified deadline 
will incur a penalty of $2,000 per business day; and delays of 
facilities studies beyond the tariff-specified deadline will incur a 
penalty of $2,500 per business day.\885\
---------------------------------------------------------------------------

    \885\ Order No. 2023, 184 FERC ] 61,054 at P 973.
---------------------------------------------------------------------------

    455. We grant Joint RTOs' request for clarification regarding the 
mutual exclusivity of RTO/ISO penalty recovery options and reiterate 
that Order No. 2023 did not require adoption of any specific RTO/ISO 
penalty recovery mechanism. Order No. 2023 recognized that RTOs/ISOs 
have several options for collecting study delay penalties, such as 
submitting FPA section 205 filings to seek recovery for study delay 
penalties from transmission owners contributing to study delays or 
proposing to either establish a tariff mechanism for assigning costs 
generally or for assigning costs for specific study delay 
penalties.\886\ These options were not intended to be mutually 
exclusive or exhaustive; rather, the Commission recognized RTOs/ISOs' 
flexibility to propose penalty recovery mechanisms that work for their 
regions.
---------------------------------------------------------------------------

    \886\ Id. P 998.
---------------------------------------------------------------------------

    456. We deny Joint RTOs' request to clarify that, where 
interconnection customers contribute to a study delay, any resulting 
penalty may be collected from such interconnection customers under the 
penalty collection mechanisms that an RTO/ISO may adopt pursuant to 
Order No. 2023. Indeed, the Commission explicitly stated in Order No. 
2023 that it ``decline[d] to allow any transmission provider to recover 
study delay penalties from interconnection customers to the extent the 
interconnection customers cause delays.'' \887\ We note, however, that 
to the extent that study delays result from an interconnection 
customer's actions, transmission providers may record the length of 
those delays and report that information in any appeal of study delay 
penalties filed with the Commission.\888\ Further, in the event that an 
interconnection request is incomplete or an interconnection customer 
misses a deadline, those interconnection requests are subject to the 
withdrawal provisions of pro forma LGIP section 3.7.
---------------------------------------------------------------------------

    \887\ Id. P 993.
    \888\ See id. P 1019.
---------------------------------------------------------------------------

    457. We deny Joint RTOs' request to clarify that an RTO/ISO may 
propose to

[[Page 27085]]

limit any penalty distribution to those interconnection customers that 
have not contributed to a study delay. We note that we agree with the 
principle that interconnection customers who contribute to study delays 
should not benefit from penalty payments the same as other 
interconnection customers who were affected by, but did not contribute 
to, the delayed study. However, the appeals process established by 
Order No. 2023 provides a strong safeguard against that scenario. 
Specifically, transmission providers will be able to appeal any 
penalties to the Commission and show that there is good cause to grant 
relief from such penalties. As Order No. 2023 noted, to the extent that 
study delays result from an interconnection customer's actions, 
transmission providers may record the length of those delays and report 
that information in any appeal of study delay penalties filed with the 
Commission.\889\ Thus, if the record shows that a study delay is caused 
solely by the actions or inactions of interconnection customers, the 
Commission is likely to grant relief from that penalty, meaning that 
there will be no penalty to distribute to interconnection customers.
---------------------------------------------------------------------------

    \889\ Id.
---------------------------------------------------------------------------

    458. We recognize that a study delay might be caused only in part 
by an interconnection customer and in part by the actions of the 
transmission provider, in which case the transmission provider could 
incur a penalty that would then be distributed to all interconnection 
customers affected by the delay. Even so, we provide two reasons why 
the at-fault interconnection customer in that situation would likely 
still not benefit from penalty payments. First, interconnection 
customers that contribute to study delays, for example because they 
fail to timely submit information needed to commence a study, are not 
likely to remain in the queue past the missed study deadline. This is 
because all interconnection customers have strict deadlines during the 
study process and, as Order No. 2023 noted, if an interconnection 
customer fails to adhere to all requirements in the pro forma LGIP 
(except in the case of disputes), the transmission provider may deem 
the interconnection customer's interconnection request to be withdrawn 
pursuant to section 3.7 of the pro forma LGIP, in which case they would 
be ineligible to receive study delay penalty payments. Second, in the 
unlikely scenario that interconnection customers that contribute to 
study delays remain in the queue past the missed study deadline, and a 
study penalty is incurred by the transmission provider, the 
transmission provider would be able to provide, in an appeal to the 
Commission, facts sufficient to assess the length of the delay caused 
by the interconnection customers, because any missed LGIP deadlines and 
subsequent delays should be well-documented. Thus, the Commission 
could, for example, reduce the penalty by the length of the delay (in 
business days) that is attributable to the interconnection customers. 
In this case, the penalty distributed to all interconnection customers 
would exclude the number of business days the study was delayed due to 
the actions of the at-fault interconnection customers and would only be 
calculated based on the number of business days the study was delayed 
due to the actions of the transmission provider. In this fashion, the 
interconnection customers that contributed to the delay would not 
benefit from their contributions to the study delay.
    459. For these reasons, we believe that the burden of establishing 
such a penalty distribution limitation would outweigh the benefit. This 
process would create additional litigation around penalties beyond the 
established appeals process, which would take up more of the parties' 
and Commission's resources. As discussed above, given the low 
likelihood that interconnection customers who contribute to study 
delays would be eligible for distribution of the penalty amount 
assessed for such delays, we do not find that the additional 
administrative burden is warranted.
    460. We deny Joint RTOs' request for clarification that, in cases 
where the transmission-owning member(s) conducted the late study, the 
mechanisms by which payments flow can be addressed in individual 
compliance filings where transmission providers can account for their 
regional tariff processes. In Order No. 2023, the Commission adopted 18 
CFR 35.28(f)(1)(ii) to specify that, for RTOs/ISOs in which the 
transmission-owning members perform certain interconnection studies, 
the study delay penalties under the new pro forma LGIP will be incurred 
directly by the transmission-owning member(s) that conducted the late 
study, thereby mooting the issue of how RTOs/ISOs recover those 
specific penalties. RTOs/ISOs will thus not be required to make any 
filings establishing how late study penalty payments flow from at-fault 
transmission owners. However, we note that RTOs/ISOs may explain 
specific circumstances on compliance and justify any deviations under 
the independent entity variation standard.
    461. We grant Joint RTOs' request for clarification that 
transmission providers are not required to collect or earmark any late 
study penalty prior to concluding the appeals process under section 
3.9(3) of the pro forma LGIP. We agree that this is not required 
because collecting or earmarking study penalties before the appeals 
process runs its course would be administratively burdensome and could 
entail unnecessary refund processes.
    462. In response to NYISO's request for clarification that the 
Commission will entertain requests for appeal of a penalty in various 
situations, we clarify that the Commission did not limit the evidence 
that a transmission provider might present in its appeal. The 
Commission will evaluate each appeal on a case-by-case basis and 
determine whether good cause has been shown to grant relief from any 
applicable penalties.
    463. We deny NYISO's request for clarification that reasonable 
penalty waiver requests will be compatible with the Commission's 
traditional four-prong waiver analysis. The four-prong waiver analysis 
will not be the relevant standard used in the penalty appeals process; 
rather, as the Commission made clear in Order No. 2023, the Commission 
will evaluate whether good cause exists to grant relief from the study 
delay penalty and will issue an order granting or denying relief.\890\ 
We continue to find that the good cause standard provides an adequate 
framework through which the Commission can evaluate whether it is 
appropriate to grant relief from any applicable penalties.
---------------------------------------------------------------------------

    \890\ Id. PP 987, 989.
---------------------------------------------------------------------------

    464. We deny NYISO's request to clarify that ``default structure'' 
penalty cost recovery proposals may be included in Order No. 2023 
compliance filings in addition to FPA section 205 filings. Order No. 
2023 declined to adopt the NOPR proposal to require RTOs/ISOs to submit 
requests to recover the costs of specific study delay penalties; 
instead, Order No. 2023 stated that RTOs/ISOs may make such filings 
under FPA section 205 in the future if they choose.\891\ We find it 
inappropriate to invite such proposals on compliance because the 
Commission did not make an FPA section 206 finding that any such 
default penalty structure would be just, reasonable, and not unduly 
discriminatory or preferential. In response to NYISO's concerns about 
obtaining majority stakeholder approval

[[Page 27086]]

for FPA section 205 filings, we note that, to the extent it is 
concerned that the lack of a mechanism for the transmission provider to 
recover the costs of delay penalties renders its tariff unjust and 
unreasonable, NYISO has the opportunity to file an FPA section 206 
complaint.
---------------------------------------------------------------------------

    \891\ Id. P 994.
---------------------------------------------------------------------------

    465. We deny NYTOs' request to clarify that Order No. 2023's 
prohibition against transmission providers recovering delay penalties 
in rates does not preclude a transmission owner from recovering such 
penalty costs that were caused by, and initially assessed to, the RTO/
ISO. NYTOs are concerned that RTOs/ISOs will pass penalties to 
transmission owner members when those providers are not responsible for 
a delay. We find this concern premature because the Commission does not 
yet have before it any FPA section 205 proposals by an RTO/ISO to 
recover the costs of study delay penalties. We continue to find that 
concerns about any RTO/ISO proposal to recover the costs of study delay 
penalties are best addressed on a case-by-case basis in the relevant 
FPA section 205 proceedings.\892\
---------------------------------------------------------------------------

    \892\ Id. P 996.
---------------------------------------------------------------------------

2. Affected Systems
a. Affected Systems Study Process
i. Order No. 2023 Requirements
    466. In Order No. 2023, the Commission adopted an affected system 
study process and added several related definitions to the pro forma 
LGIP.\893\ The Commission found that a detailed affected system study 
process in the pro forma LGIP would: (1) prevent the use of ad hoc 
approaches that may give rise to interconnection customers being 
treated in an unjust, unreasonable, and unduly discriminatory or 
preferential manner; (2) provide interconnection customers greater 
certainty regarding expectations throughout the interconnection 
process, including greater cost certainty, which will lead to fewer 
late-stage withdrawals and fewer delays; (3) ensure that the affected 
system study process moves along expediently, providing clarity, cost 
certainty, and increased transparency throughout the study process, 
which will minimize opportunities for undue discrimination, through 
firm affected system study deadlines; and (4) ensure that 
interconnection customers are able to interconnect to the transmission 
system in a reliable, efficient, transparent, and timely manner.
---------------------------------------------------------------------------

    \893\ Id. P 1110.
---------------------------------------------------------------------------

    467. The Commission adopted several definitions in section 1 of the 
pro forma LGIP related to the affected system reforms, specifically, 
``affected system facilities construction agreement,'' ``affected 
system interconnection customer,'' ``affected system network 
upgrades,'' ``affected system queue position,'' ``affected system 
study,'' ``affected system study agreement,'' ``affected system study 
report,'' ``multiparty affected system facilities construction 
agreement,'' and ``multiparty affected system study agreement.'' \894\
---------------------------------------------------------------------------

    \894\ Id. P 1112; see pro forma LGIP section 1.
---------------------------------------------------------------------------

    468. The Commission adopted section 3.6.1 (Initial Notification) of 
the pro forma LGIP, which requires the transmission provider to notify 
the affected system operator within 10 business days of the first 
instance of an identified potential affected system impact, which may 
occur at the completion of either the cluster study or the cluster 
restudy.\895\
---------------------------------------------------------------------------

    \895\ Order No. 2023 184 FERC ] 61,054 at P 1119; see pro forma 
LGIP section 3.6.1.
---------------------------------------------------------------------------

    469. The Commission next adopted several requirements for the 
transmission provider when it is acting as the affected system 
transmission provider (i.e., when the transmission provider is studying 
the impacts on its own transmission system of proposed interconnections 
to other transmission providers' transmission systems) in pro forma 
LGIP section 9 (Affected System Study).\896\ First, the Commission 
adopted section 9.2 (Response to Initial Notification) of the pro forma 
LGIP, which requires the affected system transmission provider to 
respond to notification of a potential affected system impact in 
writing within 20 business days indicating whether it intends to 
conduct an affected system study.\897\ Section 9.2 also requires that, 
within 15 business days of the affected system transmission provider's 
affirmative response of its intent to conduct an affected system study, 
the affected system transmission provider must share a non-binding good 
faith estimate of the cost and schedule to complete the affected system 
study.
---------------------------------------------------------------------------

    \896\ Order No. 2023, 184 FERC ] 61,054 at P 1113; see pro forma 
LGIP section 9.1.
    \897\ Order No. 2023, 184 FERC ] 61,054 at P 1120; see pro forma 
LGIP section 9.2.
---------------------------------------------------------------------------

    470. The Commission next adopted section 9.3 (Affected System Queue 
Position) of the pro forma LGIP.\898\ Under section 9.3, the 
interconnection requests of affected system interconnection customers 
that have executed an affected system study agreement will be higher-
queued than the interconnection requests of those host system 
interconnection customers that have not yet received their cluster 
study results, and lower-queued than those interconnection customers 
that have already received their cluster study results. All affected 
system interconnection requests studied within the same affected system 
cluster will be equally queued.
---------------------------------------------------------------------------

    \898\ Order No. 2023, 184 FERC ] 61,054 at P 1138; see pro forma 
LGIP section 9.3.
---------------------------------------------------------------------------

    471. The Commission next adopted section 9.4 (Affected System Study 
Agreement/Multiparty Affected System Study Agreement) of the pro forma 
LGIP to require that the transmission provider tender the affected 
system study agreement within 10 business days of sharing the schedule 
for the study with the affected system interconnection customers.\899\ 
Section 9.4 also requires the affected system interconnection customer 
to compensate the affected system transmission provider for the actual 
costs of the affected system study, and the difference between the 
affected system study deposit and actual cost of the affected system 
study will be detailed in an invoice and paid by or refunded to the 
affected system interconnection customer within 30 calendar days of the 
receipt of such invoice.\900\ An affected system interconnection 
customer's failure to pay the difference between these amounts will 
result in loss of that affected system interconnection customer's 
affected system queue position. Section 9.4 also requires that the 
affected system transmission provider notify the host transmission 
provider of the affected system interconnection customer's breach of 
its obligations under this section, should such breach occur.\901\
---------------------------------------------------------------------------

    \899\ Order No. 2023, 184 FERC ] 61,054 at P 1154; see pro forma 
LGIP section 9.4.
    \900\ Order No. 2023, 184 FERC ] 61,054 at P 1157.
    \901\ Id. P 1159.
---------------------------------------------------------------------------

    472. The Commission next adopted section 9.5 (Execution of Affected 
System Study Agreement/Multiparty Affected System Study Agreement) of 
the pro forma LGIP, which provides the affected system interconnection 
customer with 10 business days from the date of receipt of the affected 
system study agreement to execute and deliver it to the affected system 
transmission provider.\902\ Section 9.5 also provides that, if the 
affected system interconnection customer does not provide all required 
technical data when it delivers the affected system study agreement, 
the affected system transmission provider shall notify the affected 
system interconnection customer of the deficiency within five business 
days of the receipt of the

[[Page 27087]]

affected system study agreement, and the affected system 
interconnection customer has 10 business days to cure the deficiency 
after receipt of such notice (provided that the deficiency does not 
include failure to deliver the executed affected system study agreement 
or deposit).
---------------------------------------------------------------------------

    \902\ Id. P 1158; see pro forma LGIP section 9.5.
---------------------------------------------------------------------------

    473. The Commission next adopted section 9.6 (Scope of Affected 
System Study) of the pro forma LGIP, which requires the affected system 
study to consider the base case as well as all higher-queued generating 
facilities on the affected system transmission provider's transmission 
system and to consist of a power flow, stability, and short circuit 
analysis.\903\ Section 9.6 also requires the affected system study to 
provide a list of affected system network upgrades that are required 
because of the affected system interconnection customer's proposed 
interconnection, a non-binding good faith estimate of cost 
responsibility, and a non-binding good faith estimated time to 
construct.
---------------------------------------------------------------------------

    \903\ Order No. 2023, 184 FERC ] 61,054 at P 1160; see pro forma 
LGIP section 9.6.
---------------------------------------------------------------------------

    474. The Commission next adopted section 9.7 of the pro forma LGIP 
(Affected System Study Procedures), which requires clustering of 
affected system interconnection customers for study purposes where 
multiple interconnection requests that are part of a single cluster in 
the host system's cluster study process cause the need for an affected 
system study.\904\ Section 9.7 also requires the affected system 
transmission provider to complete the affected system study and provide 
the affected system interconnection customer with affected system study 
results within 150 calendar days after receipt of the affected system 
study agreement. Section 9.7 also requires the affected system 
transmission provider to provide the affected system study report to 
the host transmission provider at the same time it provides the report 
to the affected system interconnection customer. The affected system 
transmission provider must notify the affected system interconnection 
customer that an affected system study will be late.\905\ Lastly, pro 
forma LGIP section 9.7 requires affected system transmission providers 
to study all affected system interconnection requests using ERIS 
modeling standards.\906\
---------------------------------------------------------------------------

    \904\ Order No. 2023, 184 FERC ] 61,054 at P 1133; see pro forma 
LGIP section 9.7.
    \905\ Order No. 2023, 184 FERC ] 61,054 at P 1135.
    \906\ Id. P 1276.
---------------------------------------------------------------------------

    475. The Commission added a new section 11.2.1 to the pro forma 
LGIP (Delay in LGIA Execution, or Filing Unexecuted, to Await Affected 
System Study Report).\907\ Under this section, if the interconnection 
customer does not receive its affected system study results before the 
deadline in its host system for LGIA execution, or the deadline to 
request that the LGIA be filed unexecuted, the host transmission 
provider must, at the interconnection customer's request, delay the 
deadline for the interconnection customer to finalize its LGIA.\908\ 
The interconnection customer will have 30 calendar days after receipt 
of the affected system study report to execute the LGIA, or request 
that the LGIA be filed unexecuted. Additionally, if the interconnection 
customer prefers to proceed to the execution of its LGIA, or request 
that the LGIA be filed unexecuted, before it has received its affected 
system study results, it may notify the host transmission provider of 
its intent to proceed with the execution of the LGIA, or request that 
the LGIA be filed unexecuted.\909\ If the host transmission provider 
determines that further delay to the LGIA execution date would cause a 
material impact on the cost or timing of an equal- or lower-queued 
interconnection customer, the transmission provider must notify the 
relevant interconnection customer of such impact and establish that the 
new deadline is 30 calendar days after such notice is provided.
---------------------------------------------------------------------------

    \907\ Id. P 1123; see pro forma LGIP section 11.2.1.
    \908\ Any interconnection customer that is not awaiting the 
results of an affected system study must proceed under the timelines 
set forth in pro forma LGIP section 11.1.
    \909\ Order No. 2023, 184 FERC ] 61,054 at P 1124.
---------------------------------------------------------------------------

    476. The Commission adopted section 9.8 of the pro forma LGIP 
(Meeting with Transmission Provider), which requires the affected 
system transmission provider and the affected system interconnection 
customer to meet within 10 business days of the affected system 
transmission provider tendering the affected system study report to the 
affected system interconnection customer.\910\
---------------------------------------------------------------------------

    \910\ Id. P 1169; see pro forma LGIP section 9.8.
---------------------------------------------------------------------------

    477. The Commission adopted section 9.9 of the pro forma LGIP 
(Affected System Cost Allocation), which requires the allocation of 
affected system network upgrade costs using a proportional impact 
method in accordance with pro forma LGIP section 4.2.1(1)(b).\911\
---------------------------------------------------------------------------

    \911\ Order No. 2023, 184 FERC ] 61,054 at P 1149; see pro forma 
LGIP section 9.9.
---------------------------------------------------------------------------

    478. The Commission adopted section 9.10 of the pro forma LGIP 
(Tender of Affected System Facilities Construction Agreement/Multiparty 
Affected System Facilities Construction Agreement).\912\ Under section 
9.10, an affected system transmission provider must tender an affected 
system facilities construction agreement to the affected system 
interconnection customer within 30 calendar days of providing the 
affected system study report. The affected system transmission provider 
must provide 10 business days after receipt of the affected system 
facilities construction agreement for the affected system 
interconnection customer to execute the agreement or have the affected 
system transmission provider file it unexecuted with the Commission.
---------------------------------------------------------------------------

    \912\ Order No. 2023, 184 FERC ] 61,054 at P 1165; see pro forma 
LGIP section 9.10.
---------------------------------------------------------------------------

    479. The Commission adopted section 9.11 of the pro forma LGIP 
(Restudy) to include a maximum 60-calendar day restudy period for any 
affected system restudies.\913\ Section 9.11 also adopts a 30-calendar 
day notification requirement for the affected system transmission 
provider to notify the affected system interconnection customer of the 
need for affected system restudy upon discovery of such need.\914\
---------------------------------------------------------------------------

    \913\ Order No. 2023, 184 FERC ] 61,054 at P 1170; see pro forma 
LGIP section 9.11.
    \914\ Order No. 2023, 184 FERC ] 61,054 at P 1171.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    480. Clean Energy Associations and Invenergy ask the Commission to 
clarify that there are deadlines for determining that an affected 
system study will be conducted.\915\ Clean Energy Associations and 
Invenergy note that Order No. 2023 requires transmission providers to 
notify affected system transmission providers of potential affected 
system impacts at the completion of the cluster study or cluster 
restudy, and affected system transmission providers have 20 business 
days to determine whether or not to conduct an affect system study. 
However, Clean Energy Associations and Invenergy state that it is 
unclear whether an affected system may decline to conduct an affected 
system study after the initial notification but later elect to conduct 
an affected system study after the cluster restudy, even if no new 
potential affected system impact is found. Clean Energy Associations 
and Invenergy argue that affected system transmission providers may 
have an incentive to perform affected system studies as late as 
possible to: (1) give priority to queue requests on their own system; 
(2) avoid the volume of studies created by restudies; or (3) reduce the 
amount of necessary studies to reduce

[[Page 27088]]

the risk of study delay penalties. Clean Energy Associations and 
Invenergy explain that interconnection customers need to know as soon 
as possible if affected system studies will be performed and what the 
results of those studies are. Clean Energy Associations and Invenergy 
argue that, while it is possible that new information about an affected 
system impact could show up when the host transmission provider 
conducts its restudy (which would then require the affected system to 
conduct its own study), the affected system should not be permitted to 
wait until the restudy stage to make its determination to perform 
studies unless new information has been identified in the restudy. 
Clean Energy Associations and Invenergy therefore request clarification 
that, if an affected system declines to perform an affected system 
study after the cluster study and host transmission provider's 
notification of an impact on the affected system, the affected system 
is not eligible to run a study after the cluster restudy unless the 
cluster restudy results in information that was not identified in the 
initial notification.
---------------------------------------------------------------------------

    \915\ Clean Energy Associations Rehearing Request at 78-79; 
Invenergy Rehearing Request at 18-19.
---------------------------------------------------------------------------

    481. Clean Energy Associations and Invenergy agree with Order No. 
2023's directive that, if the interconnection customer does not have 
the results of the affected system study prior to finalizing the LGIA, 
the interconnection customer may request that the host transmission 
provider delay finalizing the LGIA.\916\ However, Clean Energy 
Associations and Invenergy argue that a host transmission provider 
should not be able to reject that request if it determines that 
delaying the LGIA pending completion of the affected system study would 
materially impact the cost or timing of equal or lower-queued 
interconnection customers. Clean Energy Associations and Invenergy 
explain that, when an interconnection customer executes its LGIA, it 
should be able to rely on those costs and other agreement provisions 
without significant changes, and that allowing the host transmission 
provider to reject requests for delaying LGIA execution is directly at 
odds with the Commission's goal of ensuring that interconnection 
customers have adequate time to evaluate their costs prior to 
committing to the LGIA. When the affected system costs are not known, 
Clean Energy Associations and Invenergy explain, it exacerbates the 
cost uncertainty and late-stage upgrades that Order No. 2023 sought to 
ameliorate.\917\ Further, they argue, allowing the host transmission 
provider alone to determine when the material threshold is met creates 
potential for undue discrimination. Therefore, Clean Energy 
Associations and Invenergy request that the Commission strike the last 
sentence in revised pro forma LGIP, section 11.2.1.
---------------------------------------------------------------------------

    \916\ Clean Energy Associations Rehearing Request at 79; 
Invenergy Rehearing Request at 4 (both citing Order No. 2023, 184 
FERC ] 61,054 at PP 1124-1125).
    \917\ Clean Energy Associations Rehearing Request at 80; 
Invenergy Rehearing Request at 5.
---------------------------------------------------------------------------

    482. Clean Energy Associations and Invenergy also seek 
clarification of pro forma LGIP section 11.2.1, which states that the 
interconnection customer is not required to post security under the 
LGIA and fund network upgrades if the deadline for LGIA execution, or 
to request that the LGIA be filed unexecuted, is delayed.\918\ Clean 
Energy Associations state that the ability to not post security or fund 
network upgrades should also apply when the host transmission provider 
determines a material impact from delay and requires that the 
interconnection customer move forward with LGIA execution. If the 
Commission does not grant this request, Clean Energy Associations and 
Invenergy contend that the Commission should clarify that, when an 
interconnection customer is not allowed to delay LGIA execution under 
the material impact standard, the interconnection customer will receive 
a refund of the deposit upon deciding to not move forward with the 
interconnection after receiving the affected system studies.
---------------------------------------------------------------------------

    \918\ Clean Energy Associations Rehearing Request at 80-81; 
Invenergy Rehearing Request at 5-6.
---------------------------------------------------------------------------

    483. Duke Southeast Utilities ask for clarification of the 
requirement for a host transmission provider to notify an affected 
system transmission provider within 10 days of the completion of a 
cluster study or restudy of potential affected system impacts 
identified in the study.\919\ Specifically, Duke Southeast Utilities 
ask the Commission to clarify the meaning of the ``completion of'' a 
cluster study or restudy, referring to a number of possible 
interpretations, including: (1) the date stated on the study report; 
(2) the date the report is provided to interconnection customers; (3) 
the date the report is posted to OASIS; and (4) the date of the cluster 
study report meeting. Duke Southeast Utilities assert that a lack of 
clarity will lead to lack of uniformity in how transmission providers 
calculate their 10-day deadline. Further, Duke Southeast Utilities note 
that, because affected system transmission providers have 20 days to 
decide whether to conduct an affected system study, and host 
transmission providers have 30 days after the cluster study report 
meeting to decide whether to conduct a cluster restudy, there is 
potential for an affected system transmission provider to have begun 
conducting an affected system study before being notified that the host 
transmission provider will conduct a cluster restudy. Duke Southeast 
Utilities request clarification on whether an affected system 
transmission provider may terminate an affected system study once it 
learns of the host transmission provider's restudy, or whether it must 
continue with the affected system study. Duke Southeast Utilities 
explain that continuing an affected system study in this case would 
cause affected system interconnection customers to pay for an 
unnecessary study.
---------------------------------------------------------------------------

    \919\ Duke Southeast Utilities Rehearing Request at 2-4.
---------------------------------------------------------------------------

    484. Clean Energy Associations and Invenergy ask for rehearing or 
clarification with respect to the exclusion of affected system network 
upgrade costs from the penalty-free withdrawal calculation in pro forma 
LGIP section 3.7.1, which allows for penalty-free withdrawal if the 
withdrawal follows significant, unanticipated increases in network 
upgrade cost estimates.\920\ Clean Energy Associations request 
rehearing and argue that failing to include affected system network 
upgrade costs in withdrawal penalty exemption calculations will 
discourage generating facilities that experience significant cost 
increases from withdrawing from the interconnection process in a timely 
way.\921\ Clean Energy Associations state that an interconnection 
customer will be incentivized to remain in the queue despite 
significant cost increases from the transmission provider and affected 
system transmission provider in the hopes that either other 
interconnection customers withdraw, or other conditions change such 
that the generating facility faces reduced network upgrade and affected 
system network upgrade costs and becomes financially viable again. 
Clean Energy Associations further state that it is unreasonable to 
penalize an interconnection customer for proceeding when its costs 
increase dramatically due to affected system interconnection study 
results. Clean Energy Associations state that affected system study 
results are not known at the conclusion of the cluster study and are 
also subject to errors or significant

[[Page 27089]]

inaccuracies. Invenergy argues that the differing treatment in 
withdrawal penalties for host transmission system studies versus 
affected system studies is arbitrary and capricious and not a result of 
reasoned decision-making.\922\
---------------------------------------------------------------------------

    \920\ Clean Energy Associations Rehearing Request at 34; 
Invenergy Rehearing Request at 7.
    \921\ Clean Energy Associations Rehearing Request at 34-35.
    \922\ Invenergy Rehearing Request at 7.
---------------------------------------------------------------------------

    485. Clean Energy Associations and Invenergy further argue that the 
Commission erred by failing to set any penalty-free withdrawal 
threshold based upon costs identified in an affected system study, 
which would result in essentially uncapped liability for 
interconnection customers.\923\
---------------------------------------------------------------------------

    \923\ Id. at 6; Clean Energy Associations Rehearing Request at 
31.
---------------------------------------------------------------------------

    486. Clean Energy Associations and Invenergy disagree with the 
Commission's statement that the use of ERIS modeling standard to 
conduct affected system studies should reduce the number and total cost 
of affected system network upgrades assigned to affected system 
interconnection customers.\924\ Clean Energy Associations argue that 
the ERIS modeling standard in no way guarantees a small number of 
assigned affected system network upgrades or total assigned network 
upgrade costs to any one affected system interconnection customer, and 
that significant impacts can occur in both large and small transmission 
systems.\925\ Invenergy similarly argues that the ERIS modeling 
standard does not guarantee fewer assigned costs, and that even if 
using ERIS modeling decreases the number of interconnection customers 
receiving significant affected system upgrade costs, the lack of 
penalty-free withdrawal for when affected system network upgrade costs 
remain significant is unjust and unreasonable.\926\ Invenergy states 
that the Commission's reasoning does not ameliorate the differing 
treatment of interconnection customers with significant network 
upgrades and those with significant affected system network upgrades 
merely because significant affected system upgrade costs might occur 
less often.
---------------------------------------------------------------------------

    \924\ Clean Energy Associations Rehearing Request at 33; 
Invenergy Rehearing Request at 7-8 (both citing Order No. 2023, 184 
FERC ] 61,054 at P 1151).
    \925\ Clean Energy Associations Rehearing Request at 33.
    \926\ Invenergy Rehearing Request at 7-8.
---------------------------------------------------------------------------

    487. Clean Energy Associations request that the Commission match 
the penalty-free withdrawal cost increase thresholds for both the host 
and affected systems at the facilities study phase at 50%.\927\ In the 
alternative, Clean Energy Associations argue that the Commission should 
allow penalty-free withdrawal for interconnection customers based upon 
the same 100% cost increase on the affected system as on the host 
transmission system. Invenergy requests that the Commission modify pro 
forma LGIP section 3.7.1 to include that an interconnection customer 
may withdraw penalty free after receiving the affected system study and 
the affected system network upgrade costs identified in the report have 
increased the interconnection customer's costs by more than 25% 
compared to the costs assigned by the host system.\928\ Invenergy 
asserts that such modification is consistent with MISO's withdrawal 
process, which progressively increases when interconnection customers 
may withdraw penalty free, including for affected system network 
upgrade costs.\929\
---------------------------------------------------------------------------

    \927\ Clean Energy Associations Rehearing Request at 36.
    \928\ Invenergy Rehearing Request at 9.
    \929\ Id. at 9-10 (citing MISO, Open Access Transmission, Energy 
and Operating Markets Tariff, attach. X (Generator Interconnection 
Procedures (GIP)) (161.0.0), Sec.  7.6.2.4).
---------------------------------------------------------------------------

    488. SPP states that the Commission's decision to require affected 
system operators to study all interconnection requests on neighboring 
systems using the ERIS modeling standard is unsupported.\930\ SPP 
argues that limiting affected system transmission providers to use of 
the ERIS standard will result in significant equity issues when certain 
generating facilities that are deemed firm by one transmission provider 
will not be required to mitigate issues on another transmission 
provider's system unless they impact a constraint at a level 
significantly higher than internal generating facilities requesting 
firm service. SPP asserts that Order No. 2023 ignores this issue by 
claiming to ensure that all affected system interconnection customers 
are studied similarly, while the root issue of the inequity (i.e., the 
point at which deliverability is determined) remains unaddressed. SPP 
states that the Commission's rationalization, that studying affected 
system impacts using ERIS lowers affected system network upgrade costs 
and makes requests less likely to withdraw at a late stage, conflicts 
with the Commission's long-standing policy that interconnection 
customers should be responsible for the costs of all network upgrades 
that would not be required ``but for'' their interconnection.
---------------------------------------------------------------------------

    \930\ SPP Rehearing Request at 12-14.
---------------------------------------------------------------------------

    489. SPP contends that the Commission's reliance on MISO's use of 
only ERIS in affected system studies fails to recognize that SPP 
assesses deliverability through the transmission service process.\931\ 
As such, SPP asserts that MISO has the opportunity to assess the 
impacts on its system of firm deliverability granted to generating 
facilities on the SPP system through transmission service study 
coordination. SPP states that it does not get the same opportunity as 
MISO, who determines and grants deliverability on its own system 
through its awarding of NRIS during the interconnection process without 
a subsequent request for transmission service. SPP concludes that the 
Commission's failure to recognize this problem renders Order No. 2023 
both discriminatory toward interconnection customers in RTOs/ISOs like 
SPP and arbitrary and capricious.
---------------------------------------------------------------------------

    \931\ Id. at 14.
---------------------------------------------------------------------------

    490. Similarly, PJM asserts that, because it studies affected 
system interconnection customers to ensure deliverability anywhere on 
PJM's transmission system, studying affected systems interconnection 
customers based on a lesser standard than that applied to directly 
connected interconnection customers would be unduly discriminatory and 
inconsistent with how PJM plans its transmission system.\932\ PJM 
requests clarification that the requirement for all affected system 
studies to be performed using ERIS will not apply to affected system 
studies that PJM performs under the interconnection reforms accepted by 
the Commission in November 2022.
---------------------------------------------------------------------------

    \932\ PJM Rehearing Request at 24.
---------------------------------------------------------------------------

    491. SPP notes that Order No. 2023 directly contradicts recent 
Commission precedent holding that use of NRIS modeling standards in 
affected system studies is just and reasonable where the 
interconnection customer requested NRIS-level interconnection service 
on the host transmission system.\933\ SPP asserts that, by failing to 
acknowledge its prior holdings and relying on a blanket unsupported 
assertion that any significant impact would generally be captured by an 
ERIS study, the Commission's determination in Order No. 2023 
constitutes an arbitrary and capricious departure from prior precedent.
---------------------------------------------------------------------------

    \933\ SPP Rehearing Request at 16-17 (citing Tenaska Clear Creek 
Wind, LLC v. Sw. Power Pool, Inc., 180 FERC ] 61,160 at P 62; EDF 
Renewable Energy Inc. v. Midcontinent Indep. Sys. Operator, Inc., 
168 FERC ] 61,173, at P 86 (2019)).
---------------------------------------------------------------------------

iii. Determination
    492. In response to Clean Energy Associations' and Invenergy's 
requests for clarification that there are deadlines for determining 
that an affected system study will be conducted, we clarify that there 
are such deadlines. Pursuant to

[[Page 27090]]

pro forma LGIP section 9.2, the affected system transmission provider 
is required to respond in writing within 20 business days of receipt of 
the initial notification from the host transmission provider that 
interconnection requests may impact the affected system transmission 
provider's transmission system. From the point of written notification 
of the intention to conduct the affected system study, the affected 
system transmission provider then has 15 business days to share a non-
binding good faith estimate of the cost and schedule to complete the 
affected system study.
    493. We reject Clean Energy Associations' and Invenergy's requests 
for clarification that, if an affected system transmission provider 
declines to perform an affected system study after the cluster study 
and the host transmission provider's notification of an impact on the 
affected system, the affected system transmission provider is 
ineligible to run a study after the cluster restudy unless the cluster 
restudy results in information that was not identified in the initial 
notification. We understand Clean Energy Associations' and Invenergy's 
concern to be that affected system transmission providers may have an 
incentive to perform affected system studies as late as possible, and 
therefore might decline to conduct an affected system study after the 
initial notification but later elect to conduct an affected system 
study, even if no new potential affected system impact is found. We 
expect affected system transmission providers to adhere to the affected 
system study process timelines prescribed in Order No. 2023. We 
therefore expect that an affected system transmission provider will 
respond within 20 business days following notification, pursuant to pro 
forma LGIP section 9.2, if it intends to conduct an affected system 
study based on the initial host transmission provider notification, and 
there is no need for the further clarification requested.
    494. We are not persuaded by Clean Energy Associations' request to 
strike the last sentence of pro forma LGIP section 11.2.1, which allows 
a transmission provider to reject an interconnection customer's request 
for extension of the deadline to execute its LGIA (or request that the 
LGIA be filed unexecuted) if the transmission provider determines that 
such delay would cause a material impact on the cost or timing of an 
equal- or lower-queued interconnection customer. We also disagree with 
Invenergy's assertion that the material exception language in pro forma 
LGIP section 11.2.1 makes Order No. 2023 arbitrary and capricious and 
not the result of reasoned decision-making. We find that allowing a 
transmission provider to determine what constitutes a material impact 
on interconnection customers in a single cluster due to another 
interconnection customer's delay in LGIA execution appropriately 
balances the benefits of delay due to one interconnection customer's 
network upgrade cost certainty with the potential burdens on other 
interconnection customers in that cluster as a result of such delay. 
Allowing the transmission provider discretion in determining what 
constitutes a material impact provides a necessary degree of 
flexibility for each transmission provider. We disagree with Clean 
Energy Associations that this provision undermines the goal of LGIA 
cost certainty for interconnection customers because there is no 
requirement for affected system network upgrade costs to be known at 
the time of LGIA execution: the costs included in the LGIA are 
estimates and always subject to true-up once final costs are known, 
pursuant to pro forma LGIA article 12.2 (Final Invoice). The goal is a 
better estimate of costs at the time of LGIA execution, and the 
material impact language in pro forma LGIP section 11.2.1 provides a 
check to ensure a balance between multiple interconnection customers' 
competing needs for certainty.
    495. We reject Clean Energy Associations' and Invenergy's requests 
for clarification that the interconnection customer should be exempt 
from the requirement to post security or fund network upgrades when the 
host transmission provider determines a material impact from delay and 
requires that the interconnection customer moves forward with LGIA 
execution. We further disagree with Clean Energy Associations' 
assertion that we should clarify that when an interconnection customer 
is not allowed to delay LGIA execution under the material impact 
standard the interconnection customer will receive a refund of the 
deposit upon deciding to not move forward with the interconnection 
after receiving the affected system studies. Once an interconnection 
customer executes an LGIA, or requests that it be filed unexecuted, it 
must fulfill its obligations under the LGIA, which include the 
requirements to provide financial security and fund assigned network 
upgrades.\934\ Similarly, an interconnection customer that has 
finalized its LGIA is not entitled to a refund of its deposit.\935\ We 
note that the transmission provider may only require an interconnection 
customer to finalize its LGIA, despite waiting for its affected system 
study report, because it materially impacts other interconnection 
customers. Allowing an interconnection customer to avoid its financial 
responsibilities under a finalized LGIA or to have its deposit refunded 
upon withdrawal after it has finalized its LGIA would nullify the 
purpose of requiring the interconnection customer to finalize its 
LGIA--to provide greater certainty to other interconnection customers 
that would be materially impacted by the interconnection request's 
delay or withdrawal. To the contrary, allowing an interconnection 
customer to evade these financial risks increases the likelihood it 
proceeds to finalize its LGIA although its proposed generating facility 
may no longer be commercially viable. The other materially impacted 
interconnection customers, who, for example, may share network upgrade 
costs with the delayed interconnection customer, would face greater 
risk of cost increases or timing delays should the delayed 
interconnection request later be withdrawn, even as they are required 
to finalize their LGIAs.\936\
---------------------------------------------------------------------------

    \934\ See pro forma LGIA arts. 11.5, 12.1.
    \935\ See pro forma LGIP section 11.3.
    \936\ See infra P 502.
---------------------------------------------------------------------------

    496. In response to Duke Southeast Utilities' request for 
clarification of the requirement for a host transmission provider to 
notify an affected system transmission provider within 10 days of the 
completion of a cluster study or restudy of potential affected system 
impacts identified in the study, we clarify that the meaning of the 
``completion of'' a cluster study or restudy is the date the cluster 
study report or cluster restudy report is provided to interconnection 
customers.
    497. In response to Duke Southeast Utilities' request for 
clarification regarding whether an affected system transmission 
provider may terminate an affected system study once it learns of the 
host transmission provider's restudy or whether it must continue with 
the affected system study, we clarify that an affected system 
transmission provider may pause an affected system study that is 
planned or in progress if the host transmission provider decides to 
conduct a cluster restudy. We also clarify that, if a host transmission 
provider decides to conduct a cluster restudy, then the affected system 
transmission provider may delay the affected system study until after 
the completion of the cluster restudy, following which the host 
transmission provider will notify the affected system transmission 
provider that the cluster

[[Page 27091]]

restudy is complete and of any possible affected system impacts. The 
cluster restudy may result in further withdrawals on the host 
transmission system, which in turn, would impact the affected system 
study results, possibly resulting in an affected system restudy. 
Allowing an affected system transmission provider to delay the affected 
system study in the event that the host transmission provider is 
conducting a cluster restudy will prevent unnecessary studies, and 
potentially cascading restudies, and the resultant costs to 
interconnection customers, in the affected system transmission 
provider's queue.
    498. To ensure that the affected system transmission provider is 
timely informed of the host transmission provider's decision to conduct 
a cluster restudy, we add to pro forma LGIP section 3.6.2 (Notification 
of Cluster Restudy) the requirement that the host transmission provider 
notify any relevant affected system operators of a cluster restudy at 
the same time that it notifies the interconnection customers in the 
cluster restudy. Through this modification, the affected system 
transmission provider will receive notification of the cluster restudy 
before commencement or completion of a planned or in-progress affected 
system study and can use that information to decide whether to move 
forward with the affected system study or to delay the affected system 
study until the host transmission provider completes the cluster 
restudy. We also add pro forma LGIP section 9.2.2 (Response to 
Notification of Cluster Restudy) to allow the affected system 
transmission provider five business days from receiving notification of 
the cluster restudy to send a written notification to the relevant 
affected system interconnection customers and the host transmission 
provider if it intends to delay commencement or completion of a planned 
or in-progress affected system study until after the completion of the 
cluster restudy. If the affected system transmission provider decides 
to delay the affected system study, then it is not required to perform 
its obligations under pro forma LGIP section 9 until the time that it 
receives notification from the host transmission provider that the 
cluster restudy is complete. In contrast, if the affected system 
transmission provider decides to move forward with its affected system 
study despite the cluster restudy, then it must meet all obligations to 
proceed with the affected system study process under pro forma LGIP 
section 9.
    499. Additionally, we modify pro forma LGIP section 9.5 (Execution 
of Affected System Study Agreement/Multiparty Affected System Study 
Agreement) to remove the requirement for an affected system 
interconnection customer to execute and return its previously received 
affected system study agreement/multiparty affected system study 
agreement and submit its affected system study deposit if the affected 
system transmission provider decides to delay the affected system 
study, pursuant to pro forma LGIP section 9.2.2. We find this 
modification necessary because the affected system transmission 
provider will provide the affected system interconnection customer with 
a new affected system study agreement/multiparty affected system study 
agreement in this circumstance, and the previously tendered agreement 
will be moot.
    500. We add a new pro forma LGIP section 3.6.3 (Notification of 
Cluster Restudy Completion) to require that, upon the completion of the 
host transmission provider's cluster restudy, the host transmission 
provider will notify the affected system transmission provider the 
completion of the cluster restudy and of a potential affected system 
impact caused by an interconnection request within 10 business days of 
the completion of the cluster restudy, regardless of whether that 
potential affected system impact was previously identified. At the time 
of the notification of the completion of the cluster restudy to the 
affected system operator, the host transmission provider must provide 
the interconnection customer with a list of potential affected systems, 
along with relevant contact information.
    501. Moreover, we clarify that, upon the receipt of notification of 
any potential affected system impacts from interconnection customers in 
the cluster restudy, the affected system transmission provider must 
respond in writing to such interconnection customers within 20 business 
days whether it intends to conduct an affected system study. 
Accordingly, we rename former pro forma LGIP section 9.2 (Response to 
Initial Notification) to ``Response to Notifications'' and move the 
requirements into new section 9.2.1 (Response to Initial Notification). 
We revise the requirements to clarify that an affected system 
transmission provider's obligations under section 9.2.1 apply whether 
in response to a notification that an affected system interconnection 
customer's proposed interconnection to its host transmission provider 
may impact the affected system based on a cluster study or a cluster 
restudy. Finally, we revise a reference in pro forma LGIP section 9.4 
(Affected System Study Agreement/Multiparty Affected System Study 
Agreement) from section 9.2 to section 9.2.1.
    502. We disagree with Clean Energy Associations' and Invenergy's 
assertions that Order No. 2023 was arbitrary and capricious because it 
failed to allow interconnection customers to withdraw penalty-free from 
the interconnection queue if such withdrawal follows significant, 
unanticipated increases in affected system network upgrade cost 
estimates. Although the affected system study process reforms seek to 
coordinate the host system and affected system studies, there is no 
guarantee that affected system network upgrade costs will be known even 
at the time of LGIA finalization, particularly where the affected 
system is non-jurisdictional and, therefore, not governed by the pro 
forma LGIP affected systems processes. The possibility of a long lag 
between delivery of host system facilities study report and affected 
system study report could lead to uncertainty for other interconnection 
customers in the same cluster who are not awaiting affected system 
study reports and thus must finalize their LGIAs pursuant to pro forma 
LGIP section 11.2.1. Allowing late-stage, penalty-free withdrawal for 
interconnection customers after potentially delayed receipt of the 
affected system study report could substantially harm those 
interconnection customers who had to finalize their LGIAs and share 
network upgrade costs with the withdrawing interconnection customer. 
Such a practice of penalty-free withdrawal after other interconnection 
customers in the same cluster have finalized their LGIAs would give 
greater weight to cost certainty of a few interconnection customers who 
are awaiting affected system study results than to the many 
interconnection customers who did not impact an affected system and had 
to finalize their LGIAs. Furthermore, penalty-free withdrawal of 
interconnection customers after they have received their affected 
system study results and after other interconnection customers in the 
same cluster have finalized their LGIAs could lead to one of the very 
problems Order No. 2023 sought to mitigate--cascading withdrawals and 
restudies--which can result in cost increases and delays, which in turn 
can prompt further late-stage withdrawals.\937\ It is, therefore, more 
important for all interconnection customers in a cluster to have 
greater certainty that, once interconnection customers decide whether 
to proceed after the final facilities study report,

[[Page 27092]]

withdrawals are less likely, than for one or few interconnection 
customers in a cluster to have cost estimate certainty inclusive of 
affected system study results.
---------------------------------------------------------------------------

    \937\ Order No. 2023, 184 FERC ] 61,054 at P 49.
---------------------------------------------------------------------------

    503. We expect that the affected system study process reforms in 
Order No. 2023 should reduce affected system network upgrade costs. 
Specifically, as Clean Energy Associations and Invenergy point out, the 
Commission stated in Order No. 2023 that the use of ERIS to conduct 
affected system studies should reduce the number and total cost of 
affected system network upgrades assigned to interconnection customers 
with affected system impacts. We did not, as Invenergy implies, state 
that the use of ERIS in affected system studies guarantees fewer 
assigned costs. As the Commission noted in Order No. 2023, 
interconnection customers inherently assume some risk.\938\ 
Interconnection customers will calculate that risk into their decision 
as to whether to stay in the queue following the receipt of their 
facilities study reports, and we note that interconnection customers 
are always able to withdraw, pursuant to pro forma LGIP section 3.7, if 
their project becomes uneconomical based on significant affected system 
network upgrade costs. We also note that the language in pro forma LGIP 
section 3.7.1 applies to network upgrades costs assigned to the 
interconnection request, and, because an affected system network 
upgrade is a subset of network upgrades, affected system network 
upgrade cost estimates should be included in the total cost increase if 
listed in the facilities study report. In such a situation, if the 
network upgrades costs (including the affected system network upgrade 
costs) in the facilities study report were more than 100% higher than 
the cluster study report, then the interconnection customer may be 
eligible for penalty-free withdrawals.
---------------------------------------------------------------------------

    \938\ Id. P 1151.
---------------------------------------------------------------------------

    504. We are unpersuaded by Clean Energy Associations' and 
Invenergy's assertions that, even if ERIS modeling decreases the number 
of interconnection customers receiving significant affected system 
network upgrades costs, this does not ameliorate the differing 
treatment between interconnection customers with significant network 
upgrades and those with significant affected system network upgrades. 
An interconnection customer that is notified of significant network 
upgrades and one that is notified of significant affected system 
network upgrades are not differently situated, as alleged, because 
affected system network upgrade costs may occur less often, but rather 
because of the timing within the interconnection study process that 
such notices occur, and the increased impacts on other interconnection 
customers of allowing for penalty-free withdrawal late within that 
process. As discussed above, because allowing late-stage, penalty-free 
withdrawal for interconnection customers after potentially delayed 
receipt of the affected system study report could substantially harm 
those interconnection customers who had to finalize their LGIAs and 
share network upgrade costs with the withdrawing interconnection 
customer, the differing requirements are justified.
    505. We, therefore, are not persuaded to extend penalty-free 
withdrawal provisions to interconnection customers for affected system 
network upgrade cost increases beyond a certain threshold. As noted, in 
the interest of greater cost certainty for all interconnection 
customers, we maintain that penalty-free withdrawal exemptions 
triggered by cost increases above a certain threshold are not 
applicable after the finalization of the LGIA for any interconnection 
customers in the same cluster, even an interconnection customer that 
must finalize its LGIA before receiving its affected system study 
report. We also disagree that the lack of penalty-free withdrawal 
thresholds essentially results in uncapped liability because the 
interconnection customer may still withdraw and face only the 
withdrawal penalty.
    506. We disagree with Clean Energy Associations' and Invenergy's 
arguments that failing to include affected system network upgrade costs 
in withdrawal penalty exemption calculations will discourage generating 
facilities that experience significant cost increases from withdrawing 
from the interconnection process in a timely manner. As long as the 
interconnection customer fulfills its obligations under the pro forma 
LGIP, it may opt to stay in the queue until it decides that its project 
is uneconomical. If the interconnection customer decides after 
receiving its affected system study report that significant cost 
increases render its project uneconomical, nothing in the pro forma 
LGIP prohibits it from withdrawing from the queue at that time. 
Moreover, if affected system network upgrade costs were included as a 
basis for withdrawal penalty-free in all cases, this could encourage 
interconnection customers waiting for their affected systems study 
results to remain in the queue, even if they have determined that their 
proposed generating facility is no longer commercially viable, because 
the possibility of significant affected systems network upgrade costs 
in such study could allow for withdrawal penalty-free.
    507. We disagree with SPP's assertion that requiring affected 
system transmission providers to use ERIS in affected system studies 
will result in significant equity issues because of the differences in 
how neighboring transmission providers study generators requesting firm 
transmission service. SPP states that each RTO/ISO evaluates 
deliverability of resources pursuant to its individual Commission-
approved processes and relies on the differences between SPP's and 
MISO's interconnection and transmission service study processes as 
evidence for its need to use NRIS for affected system interconnection 
requests requesting NRIS on their host system to ensure deliverability. 
However, as the Commission found in Order No. 2003 and reiterated in 
Order No. 2023, interconnection service is an element of, but 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.\939\ Furthermore, the differences between SPP's 
and MISO's interconnection and transmission study processes that SPP 
describes do not undermine the bases on which the Commission determined 
that continuing to permit affected system transmission providers to 
study affected system interconnection customers using NRIS assumptions 
would allow unjust and unreasonable rates to persist.\940\ A primary 
basis on which the Commission found the ERIS requirement just and 
reasonable is that even when an interconnection customer seeks NRIS on 
the host system, it does not seek--and an affected system transmission 
provider has no obligation to continually ensure--deliverability on the 
affected system.\941\ To instead permit an affected system transmission 
provider to use NRIS assumptions risks

[[Page 27093]]

``an affected system interconnection customer [facing] increased costs 
without a commensurate increase in service.'' \942\ We continue to find 
that adopting the ERIS requirement for affected system transmission 
providers will provide important benefits \943\ even where the details 
of study processes may differ somewhat across transmission providers, 
and that such requirement is sufficient to capture reliability impacts 
of affected system interconnection requests on the affected 
system.\944\
---------------------------------------------------------------------------

    \939\ Id. P 1288 (citing Order No. 2003, 104 FERC ] 61,103 at PP 
118-120; Order No. 2003-A, 106 FERC ] 61,220 at P 113); see also 
Tenn. Power Co., 90 FERC ] 61,238, at 61,761 (2000) (finding that 
interconnection is an element of transmission service but that the 
interconnection component of transmission service may be requested 
separately from the delivery component (i.e., interconnection is 
distinct from transmission service)); see also Fervo Energy Initial 
Comments at 6, Shell Initial Comments at 32, Utah Municipal Power 
Initial Comments at 6 (all stating that the use of ERIS in affected 
system studies will reduce the assignment of unnecessary network 
upgrades).
    \940\ Id. P 1278.
    \941\ Id. P 1277. See also infra n.1193.
    \942\ Order No. 2023, 184 FERC ] 61,054 at P 1278.
    \943\ Id. at PP 1278-1280 (identifying as benefits that affected 
system interconnection customers (1) will not be required to 
construct significant network upgrades on the affected system while 
not receiving deliverability on that system due to curtailment or 
congestion on the affected system; (2) will not face significant 
upfront costs to construct affected system network upgrades, which 
could lead to late-stage withdrawals given that interconnection 
customers will not receive affected system study results until late 
in the interconnection process; and (3) will be studied in a 
consistent and transparent manner across transmission provider 
regions, thus avoiding potentially dramatically different affected 
system network upgrades costs due to varying modeling standards 
without any factual or service differences to justify discriminatory 
treatment).
    \944\ Id. PP 1285, 1290. As Order No. 2023 explained 
transmission providers may explain specific circumstances on 
compliance and justify why any deviations are either ``consistent 
with or superior to'' the pro forma LGIP or merit an independent 
entity variation in the context of RTOs/ISOs. Id. P 1764.
---------------------------------------------------------------------------

    508. We similarly reject PJM's request for clarification that Order 
No. 2023's requirement for affected system transmission providers to 
use ERIS when conducting affected system studies will not apply to 
PJM's affected system studies. We reject this clarification because it 
is essentially a request for the Commission to allow PJM to deviate 
from the requirements outlined in Order No. 2023 based on its 
individual interconnection study procedures. Consistent with the 
Commission's statements in Order No. 2023, transmission providers may 
explain specific circumstances on compliance and justify why any 
deviations are either `consistent with or superior to' the pro forma 
LGIP or merit an independent entity variation in the context of RTOs/
ISOs.\945\
---------------------------------------------------------------------------

    \945\ Id.
---------------------------------------------------------------------------

    509. We also disagree with SPP's assertion that the Commission's 
rationale for requiring ERIS conflicts with the Commission's long-
standing policy that interconnection customers should be responsible 
for the costs of all network upgrades that would not be required ``but 
for'' their interconnection. This policy only requires interconnection 
customers to pay initially the costs of network upgrades that would not 
have been needed but for the interconnection of the interconnection 
customer's generating facility.\946\ The Commission has not defined a 
particular technical approach that must be implemented in order to 
reasonably capture these ``but for'' network upgrade costs; instead, 
the Commission has accepted varying approaches as just and reasonable 
and not unduly discriminatory or preferential.\947\ In Order No. 2023, 
the Commission found that ``any significant impact would generally be 
captured by an ERIS study'' and such study would ``ensure any 
reliability impacts on the affected system are mitigated to accommodate 
the affected systems interconnection customer's proposed generating 
facility to the host system.'' \948\ Accordingly, requiring use of an 
ERIS study to assign affected system network upgrades to affected 
system interconnection customers does not conflict with the 
Commission's ``but for'' pricing policy.
---------------------------------------------------------------------------

    \946\ Order No. 2003, 104 FERC ] 61,103 at P 694 (finding that 
``it is appropriate for the Interconnection Customer to pay 
initially the full cost of . . . Network Upgrades that would not be 
needed but for the interconnection'').
    \947\ We note that MISO's joint operating agreement with SPP 
states that MISO will use ERIS to study the impact of SPP's 
interconnection customers on MISO's system. See Southwest Power Pool 
Inc., Rate and Schedules and Seams Agreement Tariff, MISO-SPP Joint 
Operating Agreement, Sec.  9.4 (Analysis of Interconnection 
Requests) Sec.  9.4.d.iii (7.0.0); Xcel Energy Servs., Inc. v. FERC, 
77 F.4th 1057, 1064 (D.C. Cir. 2023) (finding that the plain text of 
SPP's Attachment Z2, Section II.B, was ambiguous with respect to 
what methodology could be used to calculate charges under the ``but 
for'' standard in the tariff).
    \948\ Order No. 2023, 184 FERC ] 61,054 at P 1285.
---------------------------------------------------------------------------

    510. We disagree with SPP's assertion that the Commission's 
reliance on MISO's use of ERIS in affected system studies fails to 
recognize that SPP assesses deliverability through the transmission 
service process. Order No. 2023 relies on MISO's use of ERIS in 
affected system studies simply to demonstrate that, as noted by MISO 
itself, this requirement does not result in reliability issues and will 
not cause unnecessary curtailment or redispatch on affected 
systems.\949\
---------------------------------------------------------------------------

    \949\ Id. P 1285 (citing MISO Initial Comments at 98).
---------------------------------------------------------------------------

    511. We are unpersuaded by SPP's claim that the findings in Order 
No. 2023 contradict recent Commission precedent holding that the use of 
NRIS modeling standards in affected system studies is just and 
reasonable where the interconnection customer requested NRIS-level 
interconnection service on the host transmission system.\950\ While the 
Commission previously allowed affected system transmission providers to 
justify their own approach to selecting the modeling standard used to 
evaluate affected system impacts, we found in Order No. 2023 that the 
assignment of significant affected system network upgrades under an 
NRIS study without a commensurate increase in service would result in 
unjust and unreasonable rates.\951\ This is because the affected system 
transmission provider has no obligation 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.\952\ The Commission found that the 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 studied so that it could be integrated on the affected 
system similar to generating facilities that serve the affected system 
transmission provider's native load or customers 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.\953\ Thus, we sustain Order No. 2023's finding 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

[[Page 27094]]

commensurate increase in service.\954\ Given this finding, the 
Commission's previous permissiveness in allowing transmission providers 
to justify their own approach to affected system study modeling 
criteria is no longer appropriate.
---------------------------------------------------------------------------

    \950\ See Tenaska Clear Creek Wind, LLC v. Sw. Power Pool, Inc., 
180 FERC ] 61,160; EDF Renewable Energy Inc. v. Midcontinent Indep. 
Sys. Operator, Inc., 168 FERC ] 61,173.
    \951\ Order No. 2023, 184 FERC ] 61,054 at P 1288.
    \952\ 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.
    \953\ Order No. 2023, 184 FERC ] 61,054 at P 1278.
    \954\ Id. P 1288; F.C.C. v. Fox Television Stations, Inc., 556 
U.S. 502, 536 (2009) (``The question in each case is whether the 
agency's reasons for the change, when viewed in light of the data 
available to it, and when informed by the experience and expertise 
of the agency, suffice to demonstrate that the new policy rests upon 
principles that are rational, neutral, and in accord with the 
agency's proper understanding of its authority.'').
---------------------------------------------------------------------------

    512. Additionally, we note that the issue raised in EDF Renewable 
Energy Inc. v. Midcontinent Indep. Sys. Operator, Inc. was not whether 
the use of NRIS in affected system studies results in just and 
reasonable and not unduly discriminatory or preferential treatment of 
affected system interconnection customers. Rather, the issue was 
whether lack of transparency as to whether MISO, SPP, and PJM, as 
affected system transmission providers, would conduct affected system 
studies using NRIS or ERIS standards results in unjust and unreasonable 
rates. The Commission addressed in its holding the complainants' core 
concerns regarding transparency, finding, on the record in that 
proceeding, that there was not sufficient evidence to demonstrate that 
current modeling practices in those RTOs were unjust and 
unreasonable.\955\ In any event, the Commission has sufficiently 
explained its evolution in thinking, as discussed above.
---------------------------------------------------------------------------

    \955\ EDF Renewable Energy Inc. v. Midcontinent Indep. Sys. 
Operator, Inc., 168 FERC ] 61,173 at P 86.
---------------------------------------------------------------------------

b. Affected System Pro Forma Agreements
i. Order No. 2023 Requirements
    513. The Commission adopted several pro forma agreements to improve 
the efficiency and transparency of the interactions among the parties 
during the affected system study process. The Commission first adopted 
a pro forma affected system study agreement in new Appendix 9 of the 
pro forma LGIP and a pro forma multiparty affected system study 
agreement in new Appendix 10 of the pro forma LGIP.\956\ These pro 
forma affected system study agreements stipulate how to study the 
impact of interconnecting generating facilities on an affected system 
to identify network upgrades needed to accommodate the interconnection 
request. The Commission next adopted a pro forma affected system 
facilities construction agreement in new Appendix 11 of the pro forma 
LGIP and a pro forma multiparty affected system facilities construction 
agreement in new Appendix 12 of the pro forma LGIP.\957\ These pro 
forma affected system facilities construction agreements standardize 
the terms and conditions regarding construction of affected system 
network upgrades.
---------------------------------------------------------------------------

    \956\ Order No. 2023, 184 FERC ] 61,054 at PP 1171, 1232; see 
pro forma LGIP, apps. 9, 10.
    \957\ Order No. 2023, 184 FERC ] 61,054 at P 1233; see pro forma 
LGIP, apps. 10, 11.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    514. Duke Southeast Utilities take issue with article 3.2.2.1 
(Repayment) of the pro forma affected system facilities construction 
agreement, which states that the affected system interconnection 
customer shall be entitled to a cash repayment of the amount it paid 
for any affected system network upgrades.\958\
---------------------------------------------------------------------------

    \958\ Duke Southeast Utilities Rehearing Request at 4.
---------------------------------------------------------------------------

    515. Duke Southeast Utilities state that, despite conceding that 
the repayment policy for affected system network upgrades was a NOPR 
proposal, the Commission declined to address arguments on the merits of 
this policy on the basis that the Commission simply proposed to 
memorialize the Commission's existing policy in a pro forma agreement 
for affected systems.\959\ Duke Southeast Utilities contend that the 
Commission's refusal to engage on this critical question was wrong on 
the law and renders this portion of Order No. 2023 reversible error. 
Duke Southeast Utilities state that the Commission's central argument 
is that the cost allocation question is beyond the scope of Order No. 
2023 because the Commission did not propose to change its existing 
policy. Duke Southeast Utilities assert that the Commission's 
``existing policy'' is the subject of significant debate and ongoing 
litigation in the courts.\960\ Duke Southeast Utilities state that they 
have steadfastly maintained that, before Order No. 2023, there was no 
such existing policy that required affected system operators to 
reimburse distant interconnection customers. Duke Southeast Utilities 
explain that, first, because there was no pro forma affected system 
facilities construction agreement before now, transmission owners 
fashioned their own agreements and filed them with the Commission. Duke 
Southeast Utilities state that the Commission had routinely accepted 
such affected system agreements without reimbursement provisions, which 
it clearly would not have done if such filed agreements violated an 
``existing policy'' of the Commission.\961\
---------------------------------------------------------------------------

    \959\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at PP 1211, 
1244).
    \960\ Id. at 5 (citing Duke Energy Progress, LLC v. FERC, 
Petitions for Review, Case No. 21-1272, (D.C. Cir., Dec. 27, 2021), 
Case No. 22-1072 (D.C. Cir., May 4, 2022), Case No. 22-1284 (D.C. 
Cir., Nov. 3, 2022), Case No. 22-1327 (D.C. Cir., Dec. 20, 2022); 
Duke Energy Progress, LLC v. FERC, Petition for Review, Case No. 23-
1114 (D.C. Cir. Apr. 14, 2023)).
    \961\ Id. (citing S. Co. Servs., Inc., Docket No. ER21-1701-000 
(June 10, 2021) (delegated letter order); S. Co. Servs., Inc., 
Docket No. ER20-2825-000 (Oct. 9, 2020) (delegated letter order); 
Duke Energy Fla., LLC, Docket No. ER20-2419-000 (Sept. 2, 2020) 
(delegated letter order) (accepting two agreements); Fla. Power & 
Light Co., Docket No. ER19-2445-000 (Aug. 30, 2019) (delegated 
letter order); MidAmerican Energy Co., Docket No. ER09-1654-000 
(Oct. 22, 2009) (delegated letter order)).
---------------------------------------------------------------------------

    516. Duke Southeast Utilities explain that, second, while the 
Commission has claimed that Order No. 2003 and the LGIA contain a 
requirement that affected system operators reimburse distant 
interconnection customers, the Commission was equally clear that the 
LGIA adopted in Order No. 2003 by its terms does not apply to affected 
system operators.\962\ Duke Southeast Utilities state that, in Midwest 
Independent Transmission System Operator, Inc., the Commission accepted 
an agreement between an affected system and an interconnection customer 
that allocated 50% of the network upgrade costs to the interconnection 
customer without reimbursement.\963\ Duke Southeast Utilities state 
that, in the process of accepting that agreement, the Commission 
rejected the interconnection customer's argument that Order No. 2003 
entitled it to 100% reimbursement, because the affected system there 
``was not a party to the interconnection agreement and cannot be bound 
by a contract to which it is not a party'' and because ``Order [ ] 2003 
[ ] acknowledges that an Affected System is not bound by the Final Rule 
[Large Generator Interconnection Procedures] and interconnection 
agreement.'' \964\ Duke Southeast Utilities conclude that it is 
therefore clear that there was no ``existing policy'' that would 
justify the Commission's refusal to engage this question in the present 
rulemaking.
---------------------------------------------------------------------------

    \962\ Id.
    \963\ Id. at 5-6 (citing Midcontinent Indep. Trans. Sys. 
Operator, Inc., 120 FERC ] 61,066, at PP 16, 23-25 (2007) (Midwest 
ISO)).
    \964\ Id. at 6 (citing Midwest ISO, 120 FERC ] 61,066 at P 25 
(capitalization altered) (citation omitted)).
---------------------------------------------------------------------------

    517. Duke Southeast Utilities state that the Commission adopted a 
brand new agreement--the pro forma affected system facilities 
construction agreement--that includes a mandatory reimbursement 
requirement without acknowledging its past practice of accepting such 
agreements without

[[Page 27095]]

reimbursement language.\965\ Duke Southeast Utilities assert that the 
Commission has repeatedly accepted proposed affected system agreements 
that allocate affected system network upgrade costs to affected system 
interconnection customers without reimbursement.\966\ Duke Southeast 
Utilities argue that this reflects the Commission's practice of 
accepting as just and reasonable and not unduly discriminatory affected 
system agreements in which the affected system interconnection customer 
has no right to reimbursement. Duke Southeast Utilities contend that 
the Commission's failure to explain its change of course on its 
reimbursement policy without addressing the precedent from which it 
departs is a direct violation of the APA.\967\
---------------------------------------------------------------------------

    \965\ Id. at 8.
    \966\ Id. (citing Duke Energy Progress, LLC, 177 FERC ] 61,001, 
at P 7 & n.16 (2021) (listing numerous examples cited by DEP with 
full allocation), appeal pending, Petition for Review, Case No. 21-
1272, order on reh'g, 179 FERC ] 61,007 (2022), appeal pending, 
Petition for Review, Case No. 22-107).
    \967\ Id. (citing 5 U.S.C. 551 et seq).
---------------------------------------------------------------------------

    518. Duke Southeast Utilities contend that, under this repayment 
provision, customers on the affected system must bear higher 
transmission costs to pay for network upgrades they do not need (by 
reimbursing interconnection customers who provide upfront funding), so 
that an interconnection customer can interconnect on a neighboring 
transmission system.\968\ Duke Southeast Utilities state that, in the 
case of the Duke Southeast Utilities, and as shown in the rulemaking 
comments filed by North Carolina state regulators and consumer advocate 
bodies, this often means that the retail customers of North Carolina 
are forced to subsidize generating facilities interconnecting to, and 
selling into, PJM.\969\ Duke Southeast Utilities assert that the 
Commission was not entitled to willfully ignore changed circumstances 
and refuse to provide meaningful answers to arguments presented by 
North Carolina stakeholders.\970\ Duke Southeast Utilities state that 
the Commission (1) acted arbitrarily and capriciously by failing to 
address the various commenters' concerns, and such actions without 
substantial evidence in support is grounds for reversal on its own 
under the APA \971\ and (2) violated section 205 of the FPA by 
mandating a new pro forma cost allocation agreement without 
meaningfully considering the needs of impacted customers.\972\
---------------------------------------------------------------------------

    \968\ Id. at 4.
    \969\ Id. at 4, 10 (citing Joint Comments of the North Carolina 
Utilities Commission and the North Carolina Utilities Commission 
Public Staff, at 23, Docket No. RM22-14-000 (filed Oct. 13, 2022). 
The North Carolina Commission and Staff further provided that the 
total of the affected system costs for DEP of recent projects in the 
DENC territory that have already been studied is currently estimated 
at $126 million and there are several additional PJM queues for 
which affected system studies have yet to be completed and are 
projected to interconnect a total of 7,312 MW. Id. at 21-22.
    \970\ Id. at 6.
    \971\ Id. at 7.
    \972\ Id. at 9.
---------------------------------------------------------------------------

    519. Duke Southeast Utilities state that the Commission has not 
conducted an analysis based on the specific facts and record presented 
in this case to justify allocating these network upgrade costs to Duke 
Southeast Utilities' existing transmission customers.\973\ Duke 
Southeast Utilities state that Order No. 2023 contains no explanation 
or evidence that the Commission considered the impacts to native 
transmission customers at all. Duke Southeast Utilities assert that, if 
the Commission undertook such a balancing of interests, it had a 
responsibility under the APA to explain itself.\974\ Duke Southeast 
Utilities argue that, on rehearing, the Commission should explain in 
detail what this analysis entailed.\975\
---------------------------------------------------------------------------

    \973\ Id. at 10.
    \974\ Id. at 10-11 (citing Gen. Chem. Corp. v. U.S., 817 F.2d 
844, 857 (D.C. Cir. 1987) (finding an administrative agency order 
arbitrary and capricious because the agency's analysis was 
``internally inconsistent and inadequately explained.''))
    \975\ Id. at 11.
---------------------------------------------------------------------------

    520. Duke Southeast Utilities argues that the Commission's cost 
allocation decision is inconsistent with the cost causation principle, 
which states that all approved rates must reflect to some degree the 
costs actually caused by the customer who must pay them \976\ and that 
benefits must be at least roughly commensurate with costs.\977\
---------------------------------------------------------------------------

    \976\ Id. at 11-12 (citing Order No. 845-A, 166 FERC ] 61,137 at 
P 78 (citation omitted); Ill. Commerce Comm'n, 576 F.3d 470, at 476 
(7th Cir. 2009)).
    \977\ Id. (citing Ill. Commerce Comm'n, 756 F.3d 556, at 562 
(7th Cir. 2014)).
---------------------------------------------------------------------------

    521. Duke Southeast Utilities state that the Commission declined in 
Order No. 2023 to respond to Duke Southeast Utilities' arguments that 
the reimbursement policy goes against the Commission's cost causation 
principles.\978\ Duke Southeast Utilities state that the mere fact is 
that, ``but for'' the affected system interconnection customers' 
interconnection with the host transmission provider, there would be no 
need for the affected system network upgrades. Duke Southeast Utilities 
contend that customers on the affected system will not benefit from the 
interconnection of the affected system interconnection customers onto 
the interconnecting transmission provider's transmission system from an 
energy and capacity perspective because the affected system is not 
receiving energy and capacity from the host transmission provider: 
therefore, Duke Southeast Utilities' retail customers will not be 
receiving the generation. Duke Southeast Utilities state that the 
required network upgrades also provide no benefit to the customers of 
the affected system from a transmission perspective because they are 
not needed ``but for'' the affected system interconnection customers 
interconnection to the host transmission provider.
---------------------------------------------------------------------------

    \978\ Id. at 12-13 (citing Order No. 2023, 184 FERC ] 61,054 at 
PP 1243-44).
---------------------------------------------------------------------------

    522. Duke Southeast Utilities' argue that, in the context of 
affected system network upgrades, the Commission should require 
affected system interconnection customers to fund the cost of affected 
system network upgrades because (a) such network upgrades would not be 
necessary but for the affected system interconnection request and (b) 
doing so would allocate the network upgrades costs to the party that 
caused the costs to be incurred and reaps the resulting benefits--the 
affected system interconnection customers.\979\
---------------------------------------------------------------------------

    \979\ Id. at 13.
---------------------------------------------------------------------------

iii. Determination
    523. We disagree with Duke Southeast Utilities' characterization 
that the Commission conceded that the affected system network upgrade 
reimbursement provisions in the pro forma affected system facilities 
construction agreements were a ``NOPR proposal;'' rather, the 
Commission merely acknowledged that in the NOPR it included the 
existing affected system network upgrade reimbursement in the newly 
proposed pro forma affected system facilities construction agreements. 
The Commission did not state that the affected system network upgrade 
reimbursement was a ``NOPR proposal'' of new regulations.
    524. In response to Duke Southeast Utilities' request for rehearing 
of the affected system network upgrade reimbursement provisions in the 
pro forma affected system facilities construction agreements, we note 
that, although we are not changing existing Commission policy, we 
continue to find that policy to be just, reasonable, and not unduly 
discriminatory or preferential. We disagree with Duke Southeast 
Utilities' assertion that, before Order No. 2023, there was no such 
existing affected system network

[[Page 27096]]

upgrade reimbursement policy. As the Commission concluded in Order No. 
2003, and we affirm here, the Commission's interconnection pricing 
policy as it applies to a non-independent affected system transmission 
provider should be consistent with the policy the Commission adopted 
for non-independent host transmission providers.\980\ Specifically, 
under the Commission's interconnection pricing policy, the costs of 
interconnection facilities are the responsibility of the 
interconnection customer and the costs of network upgrades are funded 
initially by the interconnection customer (unless the transmission 
provider elects to fund them), and the interconnection customer is 
entitled to a cash equivalent refund equal to the total amount paid for 
the network upgrades.\981\
---------------------------------------------------------------------------

    \980\ Order No. 2003, 106 FERC ] 61,220 at P 738; Order No. 
2003-A, 106 FERC ] 61,220 at P 636.
    \981\ Order No. 2003, 106 FERC ] 61,220 at PP 676, 693.
---------------------------------------------------------------------------

    525. We find that it is important for the repayment provisions for 
affected system interconnection customers to be consistent with the 
manner that the transmission provider repays its own interconnection 
customers. For example, the Commission in Order No. 2003 explained that 
non-independent transmission providers have an incentive to frustrate 
rival interconnection customers, and, absent a reimbursement 
requirement, such transmission providers might discriminate against 
independent interconnection customers by, for example, finding that a 
disproportionate share of the costs of expansions needed to serve its 
own power customers is attributable to competing interconnection 
customers.\982\ This rationale applies equally to affected system 
transmission providers.
---------------------------------------------------------------------------

    \982\ Id. P 696.
---------------------------------------------------------------------------

    526. Affected system transmission providers might source generation 
from the host transmission provider's transmission system to serve its 
own load, and such affected system transmission provider's interests 
might benefit from additional network upgrades to facilitate 
transactions across the seam between transmission providers. If that is 
the case, the affected system transmission provider would have an 
incentive to impose additional burdensome and unnecessary affected 
system network upgrades on affected system interconnection customers; 
however, because under Commission policy the affected system 
transmission providers are required to reimburse the affected system 
interconnection customer for those network upgrade costs, the incentive 
for discriminatory behavior is absent.
    527. The Commission also found in Order No. 2003 that the 
reimbursement requirement would enhance competition by promoting new 
generation.\983\ We similarly find that the requirement for affected 
system transmission providers to repay affected system interconnection 
customers will enhance competition because it will discourage affected 
system transmission providers from assigning unnecessary affected 
system network upgrade costs to interconnection customers if the 
transmission provider ultimately must reimburse the affected system 
interconnection customer for such costs.\984\ In doing so, we continue 
to maintain that such additional generation and related enhanced 
competition will generally cause the average embedded cost transmission 
rate to decline for all remaining customers.\985\
---------------------------------------------------------------------------

    \983\ Id. PP 694-696.
    \984\ See id. P 696.
    \985\ Order No. 2003-A, 106 FERC ] 61,220 at P 581 (stating that 
the Commission's ``experience indicates that the incremental rate 
associated with network upgrades required to interconnect a new 
generator (dividing the costs of any necessary network upgrades by 
the projected transmission usage by the new generator) will 
generally be less that the embedded average cost rate (including the 
costs of the new facilities in the numerator and the additional 
usage of the system in the denominator).'').
---------------------------------------------------------------------------

    528. We also continue to find, as we did in Order Nos. 2003 and 
2003-A, that ``network facilities are not `sole use' facilities but 
facilities that benefit all Transmission Customers . . . the addition 
[of a network upgrade facility] represents a system expansion used by 
and benefiting all users due to the integrated nature of the grid.'' 
\986\
---------------------------------------------------------------------------

    \986\ Order No. 2003, 106 FERC ] 61,220 at PP 21, 65, Order No. 
2003-A, 106 FERC ] 61,220 at P 585; see also Pub Serv. Co. Colo., 59 
FERC ] 61,311 (1992), reh'g denied, 62 FERC ] 61,013 (1993); W. 
Mass. Elec. Co., 77 FERC ] 61,268, at 62,119 (1996).
---------------------------------------------------------------------------

    529. In response to Duke Southeast Utilities' assertion that the 
Commission has routinely accepted affected system agreements without 
affected system network upgrade reimbursement provisions, we clarify 
that such acceptances were in error and in contravention of Commission 
policy as established in Order No. 2003.\987\ In Docket No. ER20-2419-
000, the two service agreements at issue involved system protection 
facilities, the costs of which, per Duke Southeast Utilities' tariff, 
are directly assignable to an interconnection customer without 
reimbursement.\988\
---------------------------------------------------------------------------

    \987\ See Duke Energy Progress, LLC, 181 FERC ] 61,197, at P 39 
(2022); Duke Energy Progress, LLC, 177 FERC ] 61,001 at P 37.
    \988\ Duke Energy Fla., LLC, Docket No. ER20-2419-000 (Sept. 20, 
2020) (delegated letter order).
---------------------------------------------------------------------------

    530. We also disagree with Duke Southeast Utilities' assertion that 
the Commission has been clear that the pro forma LGIA adopted in Order 
No. 2003 does not apply to affected system operators. We reiterate that 
Order No. 2003's reimbursement requirements are reflected both in the 
preamble of Order No. 2003 and pro forma LGIA Article 11.4, which Order 
No. 2003 explicitly made applicable to all jurisdictional affected 
system operators.\989\
---------------------------------------------------------------------------

    \989\ Order No. 2003, 106 FERC ] 61,220 at P 738; see also Duke 
Energy Progress, LLC, 177 FERC ] 61,001, on reh'g, 179 FERC ] 
61,007, at P 33 (``Order No. 2003 explicitly requires jurisdictional 
affected system operators to reimburse interconnection customers for 
network upgrade costs.'').
---------------------------------------------------------------------------

    531. The Midwest Independent Transmission System Operator, Inc. 
proceeding that Duke Southeast Utilities cites is inapposite to the 
status quo as established in Order No. 2003. First, the affected system 
transmission owner was not a party to the agreement in that proceeding 
and was not required to reimburse the interconnection customer in a 
region that had transitioned to participant funding prior to the filing 
of the interconnection agreement at issue in that proceeding.\990\ 
Second, the affected system ``operator'' was a transmission owner 
within the MISO footprint, not a transmission provider in a separate 
service territory with its own tariff.\991\ Furthermore, in Order No. 
2003, the Commission limited the use of participant funding to 
independent transmission providers, such as MISO, because of its 
concern that for a non-independent transmission provider, such as Duke 
Southeast Utilities, the implementation of participant funding creates 
opportunities for undue discrimination.\992\ The Commission also stated 
that, if the affected system operator is an independent transmission 
provider, then it has flexibility regarding its interconnection pricing 
policy (including participant funding) that the affected system 
operator may propose while as discussed above, an affected system 
operator that is not independent must be consistent with the policy 
adopted for non-independent transmission providers (i.e.,

[[Page 27097]]

reimbursement).\993\ This circumstance does not even speak to Order No. 
2003's network upgrade reimbursement requirement for jurisdictional 
affected system operators, much less undermine it.
---------------------------------------------------------------------------

    \990\ Midwest Indep. Transmission Sys. Operator, Inc., 120 FERC 
] 61,066, at PP 24-25.
    \991\ In MISO, the definition of affected system encompasses an 
electric transmission or distribution system other than the 
transmission owner's transmission system that is affected by an 
interconnection request. MISO, FERC Electric Tariff, attach. X 
(Generator Interconnection Procedures (GIP)), (161.0.0) Sec.  1.
    \992\ Order No. 2003, 106 FERC ] 61,220 at P 696.
    \993\ Order No. 2003-A, 106 FERC ] 61,220 at PP 636-637.
---------------------------------------------------------------------------

    532. In response to Duke Southeast Utilities' allegation that the 
Commission failed to address commenters' concerns in Order No. 2023, we 
are not obligated to respond to each argument that goes to issues 
outside the scope of the proceeding one-by-one.\994\ We reiterate that 
the affected system network upgrade reimbursement provisions in the pro 
forma affected system facilities construction agreements are a 
codification of existing Commission policy and are not a new policy 
proposal. Order No. 2023 is not a vehicle for challenging existing 
Commission policy \995\ and, accordingly, the Commission did not need 
to address each individual argument attempting to undermine existing 
Commission policy because Order No. 2023 did not revise the 
Commission's existing reimbursement policy.
---------------------------------------------------------------------------

    \994\ See Pub. Serv. Elec. & Gas Co. v. FERC, 989 F.3d 10, 20 
(D.C. Cir. 2021) (finding that the Commission need only respond to 
significant comments raised on rehearing and is free to ignore 
insignificant ones (citing NARUC v. FERC, 475 F.3d at 1285).
    \995\ See Order No. 2003, 104 FERC ] 61,103 at PP 738-739; see 
also pro forma LGIA art. 11.4.
---------------------------------------------------------------------------

    533. Finally, we remove from the pro forma affected system 
facilities construction agreements sections 3.1.2.2 (Recommencing of 
Work) and 3.1.2.3 (Right to Suspend Due to Default). We find that these 
provisions are inconsistent with the pro forma LGIA and, accordingly, 
are unnecessary.
c. Miscellaneous
i. Requests for Rehearing and Clarification
    534. MISO asks the Commission to require MISO, PJM, and SPP to 
coordinate their affected systems revisions on compliance.\996\ MISO 
explains that Order No. 2023 only encourages, but does not require, 
``voluntary coordination between transmission providers who share 
transmission system seams and whose customers frequently impact each 
other's systems.'' \997\ MISO argues that this could potentially allow 
neighboring RTOs/ISOs to independently develop affected systems 
approaches that could conflict with each other's procedures and disrupt 
or sideline existing joint operating agreement coordination 
processes.\998\ MISO states that MISO, PJM, and SPP would need to 
intervene in each other's compliance proceedings to monitor proposed 
revisions and protest if needed, which would be less efficient than the 
current joint affected system coordination process. MISO adds that 
misalignment on affected systems studies between MISO, PJM, and SPP 
could lead to delayed study penalties. Further, MISO explains that the 
Commission has previously required coordinated filings by RTO/ISOs 
proposing identical changes to their joint operating agreements. MISO 
states that it addressed these concerns in its comments but asserts 
that Order No. 2023 did not meaningfully respond to them and failed to 
acknowledge the unique status of MISO, PJM, and SPP's affected system 
coordination procedures. Rather, MISO explains that Order No. 2023 
states that the Commission ``is not persuaded that any potential 
efficiencies of such coordination outweigh the burdens that may be 
placed on host transmission providers.'' \999\ MISO argues that 
ignoring these arguments violates the requirement of reasoned decision-
making and asserts that it is arbitrary and capricious that the 
Commission did not justify its departure from its precedent of 
requiring coordination between transmission providers.
---------------------------------------------------------------------------

    \996\ MISO Rehearing Request at 17.
    \997\ Id. at 18 (citing Order No. 2023, 184 FERC ] 61,054 at P 
1172).
    \998\ Id. at 19-20.
    \999\ Id. at 21 (citing Order No. 2023, 184 FERC ] 61,054 at P 
1172).
---------------------------------------------------------------------------

    535. Shell requests clarification that affected system transmission 
providers must reimburse affected system interconnection customers for 
affected system network upgrades, not only when those network upgrades 
are identified via a traditional affected system study, but also when 
identified through a seams study.\1000\ Shell explains that seams 
studies integrate generator interconnection and regional and inter-
regional transmission planning and cost allocation. Shell asserts that 
it would be unjust, unreasonable, and unduly discriminatory to 
reimburse interconnection customers for affected systems network 
upgrades identified under the revised pro forma, but not those 
identified under a seams arrangement.
---------------------------------------------------------------------------

    \1000\ Shell Rehearing Request at 13-14.
---------------------------------------------------------------------------

    536. Southeastern Utilities agree with the Commission that, in most 
cases, an affected system transmission provider will receive the 
opportunity to study a delivery request if the ``affected system 
interconnection customer subsequently seeks deliverability on either 
the host system or an affected system.'' \1001\ However, Southeastern 
Utilities explain that, in some cases, the host transmission provider 
may not perform a transmission service study before power flows from a 
generating facility based on an NRIS request, and in those cases, it is 
not clear how or when the affected system transmission provider would 
have the opportunity to study the transmission service request. For 
example, Southeastern Utilities note that MISO's business practice 
manual allows MISO to accept a network service request ``without 
further analysis'' if the generating facility implicated in the request 
is a MISO aggregate deliverable resource that is identified during an 
NRIS deliverability study.\1002\ Therefore, Southeastern Utilities ask 
the Commission to clarify that, in the event a host transmission 
provider performs a delivery analysis as part of its interconnection 
study, the affected system transmission provider can also study both 
interconnection and delivery requirements because the affected system 
transmission provider may not have an opportunity to study a 
transmission service request related to the generating facility.\1003\ 
Southeastern Utilities argue that this clarification is needed to 
better consider impacts on their systems from delivery of power on 
neighboring systems. If the Commission does not provide clarification, 
Southeastern Utilities request rehearing on this matter. Southeastern 
Utilities argue that prohibiting affected system transmission providers 
to perform a delivery study along with an interconnection study under 
the circumstances it describes would be arbitrary and capricious and 
contrary to law for failing to consider all aspects of the issue under 
consideration, inconsistent with the Commission's stated rationale, and 
would jeopardize system reliability.
---------------------------------------------------------------------------

    \1001\ Southeastern Utilities Clarification and Rehearing 
Request at 4 (citing Order 2023, 184 FERC ] 61,054 at P 1288).
    \1002\ Id. (citing MISO, BPM-020-r29 (Transmission Planning 
Business Practices Manual), section 5.2.3 (May 2023)).
    \1003\ Id. at 5-6.
---------------------------------------------------------------------------

ii. Determination
    537. We reject MISO's request that the Commission require MISO, 
PJM, and SPP to coordinate their affected systems revisions on 
compliance. We disagree with MISO's argument that failing to include a 
directive for joint operating parties to coordinate affected systems 
was arbitrary and capricious. Order No. 2023 sets the requirements in 
the pro forma LGIP for the affected system study process. As MISO 
acknowledges

[[Page 27098]]

in its rehearing request, the RTOs'/ISOs' joint operating agreements 
are ``unique'' and thus are not part of the Commission's pro forma 
LGIP. We recognize that MISO has joint operating agreements with SPP 
and PJM that may need to be updated to reflect the requirements of 
Order No. 2023, and to the extent that revisions are needed, then we 
expect that MISO, PJM, and SPP will propose revisions to their joint 
operating agreements to ensure that there are no conflicts among their 
joint operating agreements, their LGIPs, and Order No. 2023's 
requirements.
    538. We also disagree with MISO's argument that failing to include 
a directive for joint operating parties to coordinate affected systems 
is a departure from Commission precedent. We note that MISO points to a 
complaint that was specifically filed against MISO's, PJM's, and SPP's 
joint operating agreements and tariffs. However, here, we are revising 
the Commission's pro forma LGIP. Order No. 2023 does not modify or 
address individual seams arrangements, which are not part of the 
Commission's pro forma LGIP. We agree that alignment among neighboring 
processes is important, and we continue to encourage voluntary 
coordination between transmission providers who share transmission 
seams.\1004\
---------------------------------------------------------------------------

    \1004\ Order No. 2023, 184 FERC ] 61,054 at PP 1172, 1194.
---------------------------------------------------------------------------

    539. We also reject Shell's request for clarification that affected 
system transmission providers must reimburse affected system 
interconnection customers for affected system network upgrades whether 
identified via a traditional affected system study or through a seams 
study, because such clarification is outside of the scope of Order No. 
2023. As discussed above, Order No. 2023 modifies the Commission's pro 
forma LGIP to establish a standardized affected system study process. 
Additionally, as discussed above, we note that Order No. 2023 does not 
alter the Commission's existing reimbursement requirements for affected 
system network upgrades.
    540. We reject Southeastern Utilities' request for rehearing that, 
in the event a host transmission provider does not perform a delivery 
analysis as part of its interconnection study, the affected system 
transmission provider can also study both interconnection and delivery 
requirements. In Order No. 2023, the Commission found, and we continue 
to find, that an affected system transmission provider must use ERIS 
studies on affected system interconnection requests regardless of the 
level of service requested on the host system. Southeastern Utilities 
argue that there are some instances where the affected system 
transmission provider will not have the opportunity to study the impact 
of the generating facility in the context of the associated 
transmission service request before any power flow from that generating 
facility and notes, as an example, that MISO does not conduct a 
deliverability study for network service requests when an 
interconnection customer requests NRIS. However, as discussed in Order 
No. 2023, the ERIS modeling requirement applies to the pro forma LGIP 
affected system study process and the Commission explicitly stated that 
it would not address whether a transmission provider has adequate 
transmission service studies.\1005\ As discussed above, the Commission 
found in Order No. 2003 and reiterated in Order No. 2023 that 
interconnection service is an element of, but separate from the 
delivery component of, transmission service.\1006\
---------------------------------------------------------------------------

    \1005\ Id. P 1290.
    \1006\ Id. P 1288 (citing Order No. 2003, 104 FERC ] 61,103 at P 
118; Order No. 2003-A, 106 FERC ] 61,220 at P 113).
---------------------------------------------------------------------------

E. Reforms To Incorporate Technological Advancements Into the 
Interconnection Process

1. Increasing Flexibility in the Generation Interconnection Process
a. Co-Located Generating Facilities Behind One Point of Interconnection
i. Order No. 2023 Requirements
    541. In Order No. 2023, the Commission revised 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.\1007\ 
The Commission clarified that interconnection customers have the choice 
to structure their interconnection requests for co-located generating 
facilities according to their preference (i.e., as separate 
interconnection requests or as a shared interconnection request) and 
that Order No. 2023 does not require interconnection customers to share 
a single interconnection request for multiple generating facilities 
located on the same site.\1008\ The Commission also clarified that co-
located generating facilities can be owned by a single interconnection 
customer with multiple generating facilities sharing a site, or by 
multiple interconnection customers that have a contract or other 
agreement that allows for shared land use.\1009\
---------------------------------------------------------------------------

    \1007\ Id. P 1346.
    \1008\ Id. PP 1351-1352.
    \1009\ Id. P 1355.
---------------------------------------------------------------------------

    542. The Commission found that co-located generating facilities, in 
spite of being prevalent in current interconnection queues, face 
barriers to interconnection under existing interconnection procedures, 
and that this reform will effectively remove such barriers.\1010\ The 
Commission further found that requiring transmission providers to allow 
interconnection customers to submit a single interconnection request 
that represents multiple generating facilities that are located behind 
a single point of interconnection is required to ensure just and 
reasonable rates. The Commission stated that this reform will improve 
efficiency for transmission providers in the study process by reducing 
the number of interconnection requests in the interconnection queue and 
will reduce costs for interconnection customers because they will only 
submit a single set of deposits to enter the interconnection queue. The 
Commission also stated that this reform will improve interconnection 
queue efficiency without imposing an adverse impact on the efficacy of 
interconnection study results or other interconnection customers.\1011\
---------------------------------------------------------------------------

    \1010\ Id. P 1349.
    \1011\ Id. P 1350.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    543. MISO urges the Commission to clarify that the requirement to 
allow co-located resources to share an interconnection request is 
limited to co-located resources owned by the same interconnection 
customer.\1012\ MISO states that requiring or even allowing separate 
interconnection customers to combine their projects into a single 
interconnection request would create numerous opportunities for 
conflict and interconnection management challenges. MISO argues, for 
example, that, if one of two interconnection customers sharing an 
interconnection request fails to adhere to the requirements of MISO's 
LGIP and must be withdrawn, MISO would need to develop an extensive set 
of revisions to the LGIP and new procedures for separating one 
interconnection customer's facilities out of a shared interconnection 
request. MISO asserts that it is not necessary to require a 
transmission provider to allow separate interconnection customers to 
share an interconnection request for separate projects just to allow 
them to co-locate

[[Page 27099]]

behind a common point of interconnection. Therefore, MISO asks the 
Commission to clarify that allowing multiple interconnection customers 
to share an interconnection request is merely one mechanism to achieve 
Order No. 2023's goal allowing interconnection customers to co-locate 
their generating facilities and that transmission providers are not 
required to use that particular mechanism provided they adopt 
procedures to allow the intended result.
---------------------------------------------------------------------------

    \1012\ MISO Rehearing Request at 23-25.
---------------------------------------------------------------------------

    544. NYTOs ask the Commission to clarify the definition of stand 
alone network upgrades and the option to build standalone network 
upgrades in situations of co-located generating facilities.\1013\ 
Specifically, NYTOs note that Order No. 2023 maintains the definition 
of stand alone network upgrades as ``only those required for a single 
interconnection customer,'' \1014\ but also requires transmission 
providers to allow interconnection customers to submit a single 
interconnection request that represents multiple generating facilities 
that are located behind a single point of interconnection.\1015\ 
Therefore, NYTOs urge the Commission to clarify application of the 
option to build stand alone network upgrades when required for a shared 
interconnection request.
---------------------------------------------------------------------------

    \1013\ NYTOs Rehearing Request at 39.
    \1014\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 193).
    \1015\ Id. (citing Order No. 2023, 184 FERC ] 61,054 at P 1349).
---------------------------------------------------------------------------

iii. Determination
    545. We are unpersuaded by MISO's arguments that the requirement to 
allow co-located resources to share an interconnection request should 
be limited to co-located resources owned by the same interconnection 
customer. We sustain our findings in Order No. 2023 that transmission 
providers must 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, and that such co-located generating 
facilities can be owned by a single interconnection customer with 
multiple generating facilities sharing a site, or by multiple 
interconnection customers that have a contract or other agreement that 
allows for shared land use.\1016\ We continue to find that this reform 
will improve efficiency for transmission providers in the study process 
by reducing the number of interconnection requests in the 
interconnection queue and will reduce costs for interconnection 
customers because they will only submit a single set of deposits to 
enter the interconnection queue. For these reasons, we continue to 
believe that this reform will improve efficiency for both transmission 
providers and interconnection customers, and that this reform is 
necessary to ensure just and reasonable rates.
---------------------------------------------------------------------------

    \1016\ Order No. 2023, 184 FERC ] 61,054 at P 1355.
---------------------------------------------------------------------------

    546. Regarding the situation that MISO describes, in which one of 
the co-located generating facilities sharing an interconnection request 
is withdrawn or requested to be withdrawn, we do not believe that 
revisions to the pro forma LGIP are needed to separate the facilities 
in the shared interconnection request. Rather, we believe that 
transmission providers should determine whether the entire shared 
interconnection request should proceed or be withdrawn using the 
existing withdrawal provisions in section 3.7 of the pro forma LGIP or 
the existing material modification procedures in section 4.4 of the pro 
forma LGIP. If a transmission provider would like to propose revisions 
to its LGIP to allow one co-located generating facility sharing an 
interconnection request to withdraw from the queue while allowing 
another co-located generating facility sharing the same interconnection 
request to proceed in the interconnection queue, it may do so in an FPA 
section 205 filing.
    547. In response to NYTOs' request for clarification, we believe 
that the revisions to the definition of stand alone network upgrades 
earlier in this order in response to Clean Energy Associations' request 
for rehearing should resolve NYTOs' concern and clarify the option to 
build stand alone network upgrades when required for a shared 
interconnection request.\1017\
---------------------------------------------------------------------------

    \1017\ See supra section II.C.2.c.
---------------------------------------------------------------------------

b. Revisions to the Modification Process To Require Consideration of 
Generating Facility Additions
i. Order No. 2023 Requirements
    548. In Order No. 2023, the Commission revised section 4.4.3 of the 
pro forma LGIP to require transmission providers to evaluate the 
proposed addition of a generating facility at the same point of 
interconnection prior to deeming such an addition a material 
modification, if the addition does not change the originally requested 
interconnection service level.\1018\ The Commission found that 
automatically deeming a request to add a generating facility to an 
existing interconnection request to be a material modification without 
such evaluation creates a significant barrier to access to the 
transmission system and renders existing interconnection processes 
unjust and unreasonable.\1019\
---------------------------------------------------------------------------

    \1018\ Order No. 2023, 184 FERC ] 61,054 at P 1406.
    \1019\ Id. P 1407.
---------------------------------------------------------------------------

    549. The Commission clarified that interconnection customers may 
continue to request changes to proposed generating facilities at any 
time in the interconnection process; however, transmission providers 
are only required to evaluate whether a request to add a generating 
facility to an existing interconnection request is material if the 
request is submitted before the interconnection customer returns the 
executed facilities study agreement to the transmission provider. Once 
the executed facilities study agreement is returned, the transmission 
provider may decide to automatically treat requests to add a generating 
facility to an existing interconnection request as material 
modifications without review.\1020\ The Commission also created an 
exception from these requirements for transmission providers that 
employ fuel-based dispatch assumptions.\1021\
---------------------------------------------------------------------------

    \1020\ Id. PP 1409-1410.
    \1021\ Id. P 1411.
---------------------------------------------------------------------------

    550. The Commission clarified that, per pro forma LGIP section 
4.4.1, prior to the return of the cluster study agreement from the 
transmission provider to the interconnection customer, a decrease of up 
to 60% of electrical output (MW) must not be considered a material 
modification.\1022\ In addition, per pro forma LGIP section 4.4.2, 
prior to the return of the executed interconnection facilities study, 
an additional 15% decrease of electrical output of the proposed project 
must not be considered a material modification if the change occurred 
either through a decrease in plant size (MW) or a decrease in 
interconnection service level accomplished by applying transmission 
provider-approved injection-limiting equipment.
---------------------------------------------------------------------------

    \1022\ Id. P 1417.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    551. PJM seeks rehearing of this reform because it believes that 
the Commission fails to address the concerns PJM raised in its NOPR 
comments that locating an additional facility at the site of the first 
project can affect other interconnection customers, especially if the 
additional facility has a different fuel type than the initial 
facility.\1023\ PJM adds that the Commission's determination is 
arbitrary and capricious because a project developer who is unsure 
which facilities it seeks to interconnect at the time of its 
application is not ready to

[[Page 27100]]

proceed and performing a material modification analysis is time-
consuming: therefore, this requirement is inconsistent with Order No. 
2023's stated goal of facilitating a prompt study process that allows 
ready projects to move forward.
---------------------------------------------------------------------------

    \1023\ PJM Rehearing Request at 41-42.
---------------------------------------------------------------------------

    552. Shell seeks rehearing regarding the deadlines by which an 
interconnection customer can reduce the size of its generating 
facilities without the change being deemed a material 
modification.\1024\ Shell notes that Order No. 2023 allows an initial 
60% size reduction prior to the interconnection customer executing the 
cluster study agreement. Shell states that, because Order No. 2023 
eliminated the feasibility study from the interconnection study 
process, interconnection customers no longer have a basis at that point 
in the study process from which to determine if they should decrease 
the size of their generating facility. Shell argues that the Commission 
should revise pro forma LGIP section 4.4.1 to allow interconnection 
customers to reduce their project size after the initial cluster study 
report and prior to the start of the subsequent cluster re-study or 
facilities study.
---------------------------------------------------------------------------

    \1024\ Shell Rehearing Request at 7.
---------------------------------------------------------------------------

    553. Clean Energy Associations ask the Commission to clarify that 
changing solar modules or wind turbines, adding storage capacity, or 
making minor adjustment to inverter performance are presumptively 
immaterial if the project's planned export and import capacity remains 
the same.\1025\ Clean Energy Associations state that finalizing 
procurement is highly reliant on the results and timing of the 
interconnection studies and argue that this clarification is necessary 
to ensure that project developers are not effectively forced into 
locking in inefficient equipment early in the interconnection process.
---------------------------------------------------------------------------

    \1025\ Clean Energy Associations Rehearing Request at 75-76.
---------------------------------------------------------------------------

iii. Determination
    554. We disagree with PJM that the Commission did not sufficiently 
address PJM's concerns that locating an additional facility at the site 
of the first project could affect other interconnection customers. In 
Order No. 2023, the Commission established a procedural requirement for 
transmission providers to evaluate the proposed addition of a 
generating facility at the same point of interconnection prior to 
deeming such an addition a material modification, if the addition does 
not change the originally requested interconnection service 
level.\1026\ The Commission did not require any particular substantive 
outcome following this evaluation; rather, transmission providers may 
still find that a proposed modification involving the proposed addition 
of a generating facility at the same point of interconnection would 
have a material impact on the cost or timing of any interconnection 
request with an equal or later queue position, and therefore 
constitutes a material modification. While such evaluation likely 
entails some additional burden on the transmission provider, we 
continue to find that this outcome is warranted given the 
countervailing benefits. Specifically, we sustain our finding that 
transmission providers automatically deeming a request to add a 
generating facility to an existing interconnection request to be a 
material modification creates a significant barrier to access to the 
transmission system and renders existing interconnection processes 
unjust and unreasonable.\1027\ Further, we continue to find that this 
reform will ensure that interconnection customers are able to 
interconnect to the transmission system in a reliable, efficient, 
transparent, and timely manner, and will prevent undue discrimination.
---------------------------------------------------------------------------

    \1026\ Order No. 2023, 184 FERC ] 61,054 at P 1406.
    \1027\ Id. P 1407.
---------------------------------------------------------------------------

    555. We are not persuaded by Shell's arguments on rehearing that 
the Commission should allow a 60% size reduction after the initial 
cluster study report and prior to the start of the subsequent cluster 
re-study or facilities study. We find that allowing every 
interconnection customer in a cluster a 60% size reduction after the 
initial cluster study report will significantly impact the amount of 
uncertainty faced by interconnection customers in a cluster--because 
each change in proposed generating facility size may shift network 
upgrade costs to other interconnection customers, who in turn, may 
elect to re-size--and may lead to withdrawals and restudies. Rather, we 
reiterate our finding that, per pro forma LGIP section 4.4.1, prior to 
the return of the cluster study agreement from the transmission 
provider to the interconnection customer, the proposed decrease of up 
to 60% of a generating facility's electrical output (MW) must not be 
considered a material modification.\1028\ We clarify that this 
allowable decrease of up to 60% of a generating facility's electrical 
output may occur during the customer engagement window (i.e., prior to 
the return of the cluster study agreement from the transmission 
provider to the interconnection customer). Further, we note that 
interconnection customers have an additional opportunity to propose a 
decrease in the output of the generation facility after the cluster 
study report: per pro forma LGIP section 4.4.2, prior to the return of 
the executed interconnection facilities study, an additional 15% 
decrease of electrical output of the proposed project must not be 
considered a material modification if the change occurred either 
through a decrease in plant size (MW) or a decrease in interconnection 
service level accomplished by applying transmission provider-approved 
injection-limiting equipment.
---------------------------------------------------------------------------

    \1028\ Id. P 1417.
---------------------------------------------------------------------------

    556. We find Clean Energy Associations' requested clarification 
that changing solar modules or wind turbines, adding storage capacity, 
or making minor adjustments to inverter performance are presumptively 
immaterial if the project's planned export and import capacity remains 
the same, is outside the scope of this rulemaking. In Order No. 2023, 
the Commission did not establish a presumption of immateriality for any 
specific changes to an interconnection request that do not impact the 
requested interconnection service level. Rather, the Commission 
established a procedural requirement for transmission providers to 
evaluate the proposed addition of a generating facility at the same 
point of interconnection prior to deeming such an addition a material 
modification, if the addition does not change the originally requested 
interconnection service level.\1029\ We decline to establish any 
presumption of immateriality here for specific changes to an 
interconnection request that do not impact the requested 
interconnection service level. We do note that Order No. 845 
established the technological change procedure to provide for the 
evaluation of whether a technological advancement can be incorporated 
into an interconnection request without the change being considered a 
material modification (i.e., whether the change is a permissible 
technological advancement).\1030\ Any such technical change procedures 
are in the transmission provider's tariff, and Order No. 2023 did not 
affect them.
---------------------------------------------------------------------------

    \1029\ Id. P 1406.
    \1030\ Order No. 845, 163 FERC ] 61,043 at PP 510-536.

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

[[Page 27101]]

c. Availability of Surplus Interconnection Service
i. Order No. 2023 Requirements
    557. In Order No. 2023, the Commission revised section 3.3.1 of the 
pro forma LGIP to require transmission providers to allow 
interconnection customers to access the surplus interconnection service 
process once the original interconnection customer has an executed LGIA 
or requests the filing of an unexecuted LGIA.\1031\ The Commission 
found that this reform will enable interconnection customers with 
unused interconnection service to let other generating facilities use 
that interconnection service earlier than is currently allowed and, 
therefore, increase overall efficiency of the interconnection queue and 
in turn ensure just and reasonable rates.\1032\ The Commission 
clarified that this reform does not modify how the surplus 
interconnection service process is conducted, but rather addresses when 
a request for surplus interconnection service may be submitted.\1033\ 
The Commission further clarified that the original interconnection 
customer must have an LGIA in place, either executed or requested to be 
filed unexecuted with the Commission, prior to the transmission 
provider tendering any LGIA for surplus interconnection service.\1034\
---------------------------------------------------------------------------

    \1031\ Order No. 2023, 184 FERC ] 61,054 at P 1436.
    \1032\ Id. P 1437.
    \1033\ Id. P 1447.
    \1034\ Id. P 1445.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    558. PJM requests clarification or, in the alternative, rehearing 
of Order No. 2023's requirement regarding surplus interconnection 
service.\1035\ PJM asserts that, when the initial interconnection 
customer signs an LGIA, none of the network upgrades or customer 
interconnection facilities will have been built, such that there will 
be no service, much less ``surplus'' service, available. PJM argues 
that the requirement would introduce additional administrative burden, 
thereby detracting from the timely completion of interconnection 
studies and increasing the potential for study delay penalties, while 
providing little additional benefit to interconnection customers.\1036\ 
PJM adds that studying co-located generating facilities of different 
fuel types is appropriate within the same cluster study rather than at 
disjointed points in time given that such generating facilities can 
have very different electrical characteristics. Therefore, PJM seeks 
clarification that it is entitled to an independent entity variation to 
not provide surplus interconnection service at such an early stage of 
project development or to not provide the service at any stage if it 
demonstrates that surplus interconnection service requests are 
inconsistent with its cluster study processes and will hinder efficient 
and timely clustered interconnection studies. In the alternative, PJM 
seeks rehearing of the requirement for being arbitrary and capricious 
because the expansion of surplus interconnection service runs contrary 
to Order No. 2023's goal of speeding up interconnection processes.
---------------------------------------------------------------------------

    \1035\ PJM Rehearing Request at 35-36 (citing Order No. 2023, 
184 FERC ] 61,054 at P 1438).
    \1036\ Id. at 37-38.
---------------------------------------------------------------------------

    559. SPP asks the Commission to clarify that Order No. 2023 
requires transmission providers to allow interconnection customers to 
apply for surplus interconnection service once the underlying GIA is 
executed or filed unexecuted, not that transmission providers must 
allow interconnection customers to begin receiving surplus 
interconnection service at that point.\1037\ Because surplus 
interconnection service fundamentally relies upon another 
interconnection service request, SPP asks the Commission to clarify 
that Order No. 2023 does not obligate transmission providers to provide 
surplus interconnection service earlier than they provide 
interconnection service to the underlying interconnection service 
request. In the alternative, SPP requests rehearing of the requirement 
because it would be impossible for transmission providers to provide 
surplus interconnection service before providing service for the 
underlying interconnection request and would threaten system 
reliability.
---------------------------------------------------------------------------

    \1037\ SPP Rehearing Request at 21.
---------------------------------------------------------------------------

iii. Determination
    560. We are unpersuaded by PJM's arguments on rehearing that the 
Commission should eliminate this reform because it would detract from 
the timely completion of interconnection studies without providing any 
measurable benefit to interconnection customers. We reiterate that the 
reform solely modifies when an interconnection customer can submit a 
request for surplus interconnection service, allowing interconnection 
customers to access the surplus interconnection service process once 
the initial interconnection customer has an executed LGIA or requests 
the filing of an unexecuted LGIA. Surplus interconnection service is 
defined as any unneeded portion of interconnection service established 
in an LGIA, such that if surplus interconnection service is utilized, 
the total amount of interconnection service at the point of 
interconnection would remain the same.\1038\ PJM notes that, when the 
initial interconnection customer signs an LGIA, the interconnection 
facilities and network upgrades to accommodate the initial 
interconnection customer's generating facility will not yet have been 
built. At that point, however, it will be known whether there is any 
unneeded portion of interconnection service established in the LGIA 
that a surplus interconnection customer could utilize. For this reason, 
we disagree with PJM that interconnection customers should not be 
allowed to request surplus interconnection service once the initial 
interconnection customer signs an LGIA. We continue to find that this 
reform will enable interconnection customers with unused 
interconnection service to allow other generating facilities to use 
that interconnection service earlier than was previously allowed and, 
therefore, will increase the overall efficiency of the interconnection 
queue. We continue to find that this reform will ensure that 
interconnection customers are able to interconnect to the transmission 
system in a reliable, efficient, transparent, and timely manner, and 
will prevent undue discrimination.
---------------------------------------------------------------------------

    \1038\ Pro forma LGIP section 1.
---------------------------------------------------------------------------

    561. We also decline to grant PJM's request for clarification that 
PJM is entitled to an independent entity variation to not provide 
surplus interconnection service. Consistent with the Commission's 
statements in Order No. 2023, transmission providers may explain 
specific circumstances on compliance and justify why any deviations are 
either consistent with or superior to the pro forma LGIP or merit an 
independent entity variation in the context of RTOs/ISOs.
    562. We grant SPP's request for clarification that Order No. 2023 
requires transmission providers to allow interconnection customers to 
apply for surplus interconnection service once the underlying LGIA is 
executed or filed unexecuted, not that transmission providers must 
allow interconnection customers to begin receiving surplus 
interconnection service at that point. As the Commission stated in 
Order No. 2023, and as SPP describes, this reform modifies when a 
request for surplus interconnection service may be submitted.\1039\ We 
reiterate the

[[Page 27102]]

clarification in Order No. 2023 that the initial interconnection 
customer must have an LGIA in place, either executed or requested to be 
filed unexecuted with the Commission, prior to the transmission 
provider tendering any LGIA for surplus interconnection service.\1040\
---------------------------------------------------------------------------

    \1039\ Order No. 2023, 184 FERC ] 61,054 at P 1447.
    \1040\ Id. P 1445.
---------------------------------------------------------------------------

d. Operating Assumptions for Interconnection Studies
i. Order No. 2023 Requirements
    563. In Order No. 2023, the Commission revised sections 3.1.2, 
3.2.1.2, 3.2.2.2, 3.3.1, 3.4.2, 4.4.3, 7.3, 8.2, and Appendix 1 of the 
pro forma LGIP and article 17.2 and Appendix H of the pro forma LGIA to 
require transmission providers, at the request of the interconnection 
customer, to use operating assumptions in interconnection studies that 
reflect the proposed charging behavior of electric storage resources 
\1041\ (whether standalone, co-located generating facilities,\1042\ or 
part of a hybrid generating facility \1043\)--i.e., whether the 
interconnecting generating facility will or will not charge during peak 
load conditions--unless good utility practice, including applicable 
reliability standards,\1044\ otherwise requires the use of different 
operating assumptions.\1045\ The Commission clarified that studying 
electric storage resources, at the request of the interconnection 
customer, according to their planned operating assumptions refers only 
to the operating assumptions for withdrawals of energy (e.g., the 
charging of an electric storage resource) in interconnection studies. 
The Commission further clarified that the reforms described in that 
determination section of Order No. 2023 and the related sections of the 
pro forma LGIP apply to all interconnecting electric storage resources, 
whether they are standalone, co-located generating facilities, or part 
of a hybrid generating facility.\1046\
---------------------------------------------------------------------------

    \1041\ An electric storage resource is a generating facility 
capable of receiving electric energy from the grid and storing it 
for later injection of electricity. See id. P 1509 n.2854.
    \1042\ Co-located generating facilities are more than one 
generating facility that are located on the same site and that are 
connected at the same point of interconnection that are operated and 
dispatched as separate generating facilities. See id. P 1346 n. 
2552.
    \1043\ A hybrid generating facility is a generating facility 
composed of more than one device of different technology types for 
the production and/or storage for later injection of electricity 
that are located on the same site and are operated and dispatched as 
a single integrated generating facility. See id. P 604 n.1204.
    \1044\ Applicable reliability standards means ``the requirements 
and guidelines of the Electric Reliability Organization and the 
Balancing Authority Area of the Transmission System to which the 
Generating Facility is directly interconnected.'' See pro forma LGIP 
section 1 (Definitions).
    \1045\ Order No. 2023, 184 FERC ] 61,054 at P 1509.
    \1046\ Id. n.2858.
---------------------------------------------------------------------------

    564. The Commission stated that, if an interconnection customer 
fails to operate its electric storage resource in accordance with the 
operating assumptions memorialized in the interconnection customer's 
LGIA, the procedure for termination of the LGIA pursuant to articles 
17.1.1 and 17.1.2 of the pro forma LGIA is appropriate.\1047\ The 
Commission further found that an electric storage resource that 
operates contrary to the operating assumptions specified in its LGIA 
must not be considered in breach of its LGIA by the transmission 
provider if its operation is at the direction of the transmission 
provider to maintain the reliable and efficient operation of the 
transmission system.
---------------------------------------------------------------------------

    \1047\ Id. P 1521.
---------------------------------------------------------------------------

    565. The Commission found that, by more accurately reflecting the 
technical capabilities of electric storage resources in interconnection 
studies through the use of appropriate operating assumptions, this 
reform will ensure the reliable interconnection of new electric storage 
resources without overestimating their impact on the transmission 
system, thereby ensuring just and reasonable rates by avoiding 
excessive and unnecessary network upgrades that may hinder the timely 
development of new generating facilities that stifles competition in 
the wholesale market.\1048\ The Commission also found that this reform 
reduces unduly discriminatory or preferential barriers to the 
interconnection of electric storage resources.
---------------------------------------------------------------------------

    \1048\ Id. P 1510.
---------------------------------------------------------------------------

    566. The Commission found that, taken together, the revisions to 
the pro forma LGIP and pro forma LGIA adopted in Order No. 2023 will 
ensure that interconnection customers adhere to the operating 
assumptions used to study their electric storage resource and 
ameliorate concerns about possible reliability problems expressed by 
commenters.\1049\ The Commission further found that: (1) control 
devices can prevent electric storage resources from charging during 
peak load conditions; (2) modern electric storage resources can respond 
to signals from the transmission provider within seconds; (3) electric 
storage resources generally do not have an economic incentive to charge 
during peak load conditions; and (4) the consequence of being 
considered in breach of the LGIA provides an additional incentive for 
electric storage resources to follow the agreed-upon operating 
assumptions memorialized in their LGIA. Further, the Commission noted 
that some transmission providers already assume in their 
interconnection studies that electric storage resources will not charge 
during peak load conditions.\1050\ The Commission emphasized that, 
irrespective of these changes to operating assumptions, all electric 
storage resources must continue to meet all requirements in the pro 
forma LGIP and pro forma LGIA, as well as all applicable reliability 
standards.
---------------------------------------------------------------------------

    \1049\ Id. P 1522.
    \1050\ Id. n.2865 (citing to Bonneville Initial Comments at 23; 
MISO Comments at 117; PacifiCorp, 182 FERC ] 61,131 (2023) 
(accepting, subject to condition, revisions to PacifiCorp's LGIP and 
LGIA to allow PacifiCorp to study electric storage resources in its 
interconnection study process using operating assumptions that more 
accurately reflect their expected operation)).
---------------------------------------------------------------------------

    567. The Commission found that the speed and control with which 
electric storage resources can respond to signals from transmission 
providers sufficiently distinguishes the charging behavior of electric 
storage resources from that of firm customer end-use load.\1051\ 
Therefore, for purposes of determining any network upgrades necessary 
to accommodate the reliable interconnection of electric storage 
resources, the Commission found that the charging of electric storage 
resources should not be modeled equivalently to firm customer end-use 
load in interconnection studies if the interconnection customer 
memorializes its operating assumptions in the LGIA and installs control 
technologies, if required, to limit its operations as specified. The 
Commission further clarified that the transmission provider must not 
assign network upgrade costs to the interconnection customer based on 
those worst-case operating assumptions (e.g., charging at maximum 
capacity during peak load conditions) where there is agreement from the 
interconnection customer to, if required, implement operating 
restrictions including installing or demonstrating that the generating 
facility already has control technologies (software and/or hardware) to 
limit its operations during peak load conditions.\1052\
---------------------------------------------------------------------------

    \1051\ Id. P 1523.
    \1052\ Id. P 1525.
---------------------------------------------------------------------------

    568. Additionally, in Order No. 2023 the Commission declined to 
extend the reform to apply to additional generating facility 
technologies (e.g., natural gas, solar, wind) or to other operating 
assumptions, including the injection of power.\1053\ The Commission 
encouraged

[[Page 27103]]

transmission providers to examine on an individual basis what operating 
assumptions used to study the injection of power may be appropriate to 
render the study process more accurate. The Commission also clarified 
that this requirement does not apply to transmission service requests 
and that Order No. 2023 does not modify the process for requesting 
transmission service.\1054\
---------------------------------------------------------------------------

    \1053\ Id. P 1529.
    \1054\ Id. P 1526.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    569. Joint RTOs and PJM request rehearing of the operating 
assumptions reform because they assert that the Commission failed to 
respond meaningfully to the concerns raised that the use of customer-
provided operating assumptions in interconnection studies (1) is not 
consistent with how planning studies are performed, (2) will add 
additional administrative burdens for transmission providers, and (3) 
may jeopardize reliability and shift costs to load.\1055\ Joint RTOs 
also urge the Commission to revise or clarify Order No. 2023 to allow 
RTOs/ISOs to develop generally applicable procedures for addressing 
storage charging assumptions rather than burdensome ad hoc analyses for 
each interconnection customer.\1056\ Joint RTOs argue that the 
operating assumptions reform is impractical and creates reliability 
problems due to the complexities of the required studies and lack of 
feasible enforcement mechanisms, and will burden real-time operations 
to limit these units to assumptions they provided as part of their 
interconnection application.\1057\
---------------------------------------------------------------------------

    \1055\ Joint RTOs Rehearing Request at 3, 6; PJM Rehearing 
Request at 12, 38.
    \1056\ Joint RTOs Rehearing Request at 6.
    \1057\ Id. at 4.
---------------------------------------------------------------------------

    570. Joint RTOs and PJM assert that transmission providers have no 
ability to monitor in real time if an interconnection customer violates 
its operating limits, which could threaten reliability, and contend 
that Order No. 2023 does not explain how transmission providers would 
police storage resources' operations and enforce the operating 
assumptions on which their interconnection studies were based.\1058\ 
Joint RTOs and PJM add that, to the extent electric storage resources 
exceed their operating parameters in real time, the costs of network 
upgrades would fall unfairly upon load because, once interconnected, 
load (rather than the interconnection customer) is responsible for the 
costs of upgrading the system to maintain the unit's deliverability 
over its lifetime.\1059\ Joint RTOs and PJM state that interconnection 
studies are not designed to incorporate the real-time dispatch of 
resources or withdrawals of load or storage resources, arguing that the 
Commission fails to distinguish how storage resources differ from other 
generating facilities so as to justify this unwarranted departure from 
the principles which underlie planning and interconnection analyses. 
Joint RTOs and PJM also argue that implementing this reform, including 
the requirement to provide an interconnection customer with an 
explanation of why the submitted operating assumptions are insufficient 
or inappropriate and allow the interconnection customer to revise and 
resubmit the operating assumptions, is likely to add more time to the 
interconnection study process and engender arguments of unequal 
treatment by other resources within a cluster.\1060\ PJM adds that 
Order No. 2023 is unduly discriminatory and provides no clear basis for 
favoring storage projects over all other types of generating resources 
or other types of load.\1061\
---------------------------------------------------------------------------

    \1058\ Id. at 7-8; PJM Rehearing Request at 40.
    \1059\ Joint RTOs Rehearing Request at 5-6; PJM Rehearing 
Request at 40-41.
    \1060\ Joint RTOs Rehearing Request at 6-7; PJM Rehearing 
Request at 39.
    \1061\ PJM Rehearing Request at 38-39.
---------------------------------------------------------------------------

    571. NYISO requests rehearing of the operating assumptions reform 
because it is inconsistent with the NYISO-administered markets given 
that storage resources participating as installed capacity suppliers 
are required to bid, schedule, and/or declare unavailable their entire 
withdrawal operating range during the day-ahead market, or otherwise 
may be subject to financial penalties.\1062\ NYISO adds that grid or 
market conditions may make it desirable for storage resources to charge 
during peak demand hours and/or during NYISO's peak load window, for 
example to capture energy production during peak output of solar 
generating facilities.\1063\ NYISO argues that the reform will add 
significant new complexity to interconnection studies and increase the 
time required to complete such studies, which is at odds with the 
intent of Order No. 2023 to expedite such studies by establishing firm 
deadlines subject to penalties.\1064\ NYISO asserts that requiring a 
transmission provider to consider the individual operating assumptions 
of each storage project would require that it create additional off-
peak system base cases that are tailored for each individual project as 
the standardized set of system base cases may not represent the system 
conditions where the developer of the storage project opts to charge.
---------------------------------------------------------------------------

    \1062\ NYISO Rehearing Request at 3, 54-55.
    \1063\ Id. at 54 (citing NYISO, Market Administration and 
Control Area Services Tariff, Sec.  5.12 (MST Requirements 
Applicable to Installed Capacity Supply) (41.0.0) Sec.  5.12.14).
    \1064\ Id. at 55-56.
---------------------------------------------------------------------------

    572. In contrast, Public Interest Organizations argue that the 
Commission erred in limiting the reform to only the operating 
parameters for withdrawals of energy by storage resources and declining 
to extend it to storage injections or other technologies.\1065\ Public 
Interest Organizations contend that the Commission's reasoning that the 
potential reliability impacts and administrative burden of extending 
the reform to injections of energy is arbitrary and capricious given 
(1) the broad support among commenters that the failure to use 
realistic operating assumptions for injections of power can result in 
unnecessary network upgrades, stifle competition, and create unduly 
discriminatory barriers and (2) the ample evidence presented of how the 
reliability impacts of injections are already being sufficiently 
managed by grid operators during real-time operations. Public Interest 
Organizations aver that, without consideration of operating parameters 
in interconnection studies, certain interconnection customers will be 
forced to pay for increasingly excessive and unnecessary upgrades that 
will sit unused, which will ultimately lead to a less efficient power 
system and unjust and unreasonable electricity costs for 
ratepayers.\1066\
---------------------------------------------------------------------------

    \1065\ Public Interest Organizations Rehearing Request at 17-18.
    \1066\ Id. at 19-20.
---------------------------------------------------------------------------

    573. Clean Energy Associations request clarification, or in the 
alternative rehearing, so that the pro forma LGIP requires that the 
interconnection customer and transmission provider mutually agree in 
the cluster study agreement as to (1) which loading cases are applied 
to storage charging and discharging and (2) what power level or 
percentage output or percentage charging is applied to each case.\1067\ 
Clean Energy Associations also ask the Commission to require 
transmission providers to identify which loading case triggered 
identified upgrades in the cluster study results. Further, to ensure 
that interconnection customers and transmission providers have clarity

[[Page 27104]]

about the operating constraints that apply in an LGIA, Clean Energy 
Associations urge the Commission to specify requirements for operating 
assumptions in the cluster study agreement as well as what the 
transmission provider must deliver to the electric storage resource 
owner interconnection customer in cluster study results, rather than 
having the utility state when their peak load applies. Clean Energy 
Associations state that, because Order No. 2023 does not provide for 
any means to address situations in which the interconnection customer 
and transmission provider continue to have a disagreement after the 
revision and resubmittal of the operating assumptions during the 
customer engagement window, they seek clarification or, in the 
alternative rehearing, that interconnection customers may submit 
conflicting situations to the Commission along with a request to file 
the applicable study agreement unexecuted, with a request that the 
Commission determine which operating assumption should be used in the 
applicable study.
---------------------------------------------------------------------------

    \1067\ Clean Energy Associations Rehearing Request at 70-73.
---------------------------------------------------------------------------

    574. Clean Energy Associations ask the Commission to clarify that 
the planned operating assumptions of electric storage resources must be 
considered as part of the interconnection process.\1068\ Clean Energy 
Associations assert that planned operating assumptions should also be 
considered part of transmission service requests. Clean Energy 
Associations also ask the Commission to clarify that the operating 
assumption requirement applies not just to standalone storage, but to 
hybrid and co-located resources as well. Clean Energy Associations add 
that, given the Commission's findings regarding the capabilities and 
incentives of energy storage resources, the Commission should clarify 
that modeling energy storage charging equivalently to firm customer 
end-use load for purposes of determining network upgrades is 
inconsistent with good utility practice going forward.\1069\
---------------------------------------------------------------------------

    \1068\ Id. at 69-70.
    \1069\ Id. at 72-73.
---------------------------------------------------------------------------

iii. Determination
    575. We are not persuaded by PJM's and Joint RTOs' arguments on 
rehearing. First, we disagree with PJM and Joint RTOs that the 
Commission did not sufficiently articulate how electric storage 
resources are distinct from other types of generating facilities, why 
this reform is needed to ensure just and reasonable rates, and why this 
reform is not unduly discriminatory or preferential. As the Commission 
stated in Order No. 2023, electric storage resources have operating 
parameters that differ from traditional types of generating facilities 
for which the generator interconnection process was originally 
designed, namely their ability to both inject power and withdraw 
power.\1070\ The instant reform is directed specifically and 
exclusively at how transmission providers study the withdrawal of power 
from electric storage resources (i.e., the unique feature of electric 
storage resources compared to other types of generating facilities) 
within the generator interconnection process.
---------------------------------------------------------------------------

    \1070\ Order No. 2023, 184 FERC ] 61,054 at P 1448.
---------------------------------------------------------------------------

    576. As the record indicates, the existing practice of some 
transmission providers is to study withdrawals of power from electric 
storage resources during peak load conditions equivalently to firm 
customer end-use load, and this practice results in excessive and 
unnecessary network upgrades and may hinder the timely development of 
new generation, thereby stifling competition in the wholesale markets, 
and resulting in rates, terms, and conditions that are unjust and 
unreasonable.\1071\ We continue to find that the speed and control with 
which electric storage resources can respond to signals from 
transmission providers sufficiently distinguishes the charging behavior 
of electric storage resources from that of firm customer end-use load, 
and that reflecting the technical capabilities of electric storage 
resources through the use of appropriate operating assumptions in 
interconnection studies reduces unduly discriminatory or preferential 
barriers to the interconnection of electric storage resources.\1072\
---------------------------------------------------------------------------

    \1071\ See, e.g., AEE Initial Comments at 42; Alliant Energy 
Initial Comments at 8; Clean Energy Associations Initial Comments at 
52-53; Hydropower Commenters Initial Comments at 21-22; Longroad 
Reply Comments at 10-12; NARUC Initial Comments at 36-37; NESCOE 
Reply Comments at 18; Pine Gate Initial Comments at 51, 54; Public 
Interest Organizations Initial Comments at 47; rPlus Initial 
Comments at 6; SEIA Initial Comments at 40; SEIA Reply Comments at 
27.
    \1072\ Order No. 2023, 184 FERC ] 61,054 at P 1523.
---------------------------------------------------------------------------

    577. We are unpersuaded by PJM's and Joint RTOs' arguments that 
reflecting whether an interconnecting electric storage resource will or 
will not charge during peak load conditions is fundamentally 
incompatible with interconnection studies. We reiterate that Order No. 
2023 requires transmission providers, at the request of the 
interconnection customer, to reflect in their interconnection studies 
whether an interconnecting electric storage resource will or will not 
charge during peak load conditions (unless good utility practice, 
including applicable reliability standards, otherwise requires the use 
of different operating assumptions).\1073\ We clarify that the instant 
reform does not require transmission providers to develop new base 
cases for each interconnecting electric storage resource to reflect 
when that resource intends to charge. Rather, the reform requires 
transmission providers to reflect whether an electric storage resource 
will or will not charge in any studies of peak load conditions in the 
interconnection process. Transmission providers regularly evaluate the 
impact of an interconnecting generating facility on the transmission 
system during anticipated peak load conditions as part of their 
interconnection studies, and we note that some transmission providers 
already assume in their interconnection studies that electric storage 
resources will not charge during peak load conditions.\1074\ Further, 
we agree with commenters in this record that, when transmission 
providers' interconnection studies rely on the assumption that all 
electric storage resources will withdraw power at their maximum 
capacity during peak load conditions (i.e., modeling the charging of 
electric storage resources equivalently to firm end-use customer 
demand), this practice fails to recognize the real-time attributes of 
electric storage resources, such as the ability to respond within 
seconds to dispatch signals from the transmission provider.\1075\
---------------------------------------------------------------------------

    \1073\ Id. P 1509.
    \1074\ See Bonneville Initial Comments at 23; MISO Comments at 
117; see also PacifiCorp, 182 FERC ] 61,131 (accepting, subject to 
condition, revisions to PacifiCorp's LGIP and LGIA to allow 
PacifiCorp to study electric storage resources in its 
interconnection study process using operating assumptions that more 
accurately reflect their expected operation).
    \1075\ See, e.g., Clean Energy Alliance Initial Comments at 14-
15; NARUC Initial Comments at 37; NESCOE Reply Comments at 18; 
PacifiCorp Initial Comments at 41; Pattern Energy Initial Comments 
at 12; Pine Gate Initial Comments at 51; SEIA Initial Comments at 
40; Union of Concerned Scientists Reply Comments at 10-11.
---------------------------------------------------------------------------

    578. We disagree with PJM and Joint RTOs that this requirement will 
compromise reliability because, they argue, transmission providers are 
unable to monitor and enforce interconnection customer-provided 
operating assumptions. We continue to maintain that this reform will 
ensure the reliable operation of the transmission system because: (1) 
control devices are able to prevent electric storage resources from 
charging during peak load conditions; (2) modern electric storage 
resources are able to respond to signals from the transmission provider 
within seconds; (3) electric storage resources generally

[[Page 27105]]

do not have an economic incentive to charge during peak load 
conditions; and (4) the consequence of being considered in breach of 
the LGIA provides an additional incentive for electric storage 
resources to follow the agreed-upon operating assumptions memorialized 
in their LGIA, unless otherwise directed by the transmission provider. 
Further, we believe that ensuring that an electric storage resource 
adheres to the operating assumptions memorialized in its LGIA presents 
substantially similar concerns to ensuring that any generating facility 
stays within its interconnection service level (e.g., a generating 
facility that requests interconnection service less than its full 
generating facility capacity). We emphasize again that, irrespective of 
these changes to operating assumptions, all electric storage resources 
must continue to meet all requirements in the pro forma LGIP and pro 
forma LGIA, as well as all applicable reliability standards.
    579. We disagree with Joint RTOs and PJM that, if an electric 
storage resource fails to adhere to its operating assumptions during 
real-time operations, load will be required to bear the costs of 
network upgrades needed to maintain deliverability of the electric 
storage resource over its lifetime. As the Commission stated in Order 
No. 2023, if an interconnection customer fails to operate its electric 
storage resource in accordance with the operating assumptions 
memorialized in the interconnection customer's LGIA (absent 
instructions from the transmission provider to the contrary), the 
transmission provider may consider the electric storage resource to be 
in breach and may pursue termination of the LGIA pursuant to article 17 
of the LGIA.\1076\
---------------------------------------------------------------------------

    \1076\ Order No. 2023, 184 FERC ] 61,054 at P 1521.
---------------------------------------------------------------------------

    580. Regarding Joint RTOs' and PJM's argument that this reform will 
add administrative burdens for transmission providers, we continue to 
find that the benefits of this reform--reducing unduly discriminatory 
or preferential barriers to the interconnection of electric storage 
resources--outweigh the added burden to transmission providers. We 
decline to grant Joint RTOs' request for clarification that the Joint 
RTOs are entitled to an independent entity variation to develop 
generally applicable procedures for addressing storage charging 
assumptions rather than the reform as constructed in Order No. 2023. 
Consistent with the Commission's statements in Order No. 2023, 
transmission providers may explain specific circumstances on compliance 
and justify why any deviations are either consistent with or superior 
to the pro forma LGIP or merit an independent entity variation in the 
context of RTOs/ISOs.
    581. We are not persuaded by NYISO's arguments on rehearing. We 
note that NYISO's arguments relate to NYISO's specific market rules and 
do not necessarily apply to the reform more broadly. In Order No. 2023, 
the Commission clarified that, if done so at the direction of the 
transmission provider to maintain the reliable and efficient operation 
of the transmission system, an electric storage resource that operates 
contrary to the operating assumptions specified in its LGIA must not be 
considered in breach of its LGIA by the transmission provider.\1077\ We 
believe this clarification ensures that the instant reform will work in 
concert with RTOs'/ISOs' existing congestion management practices. 
Additionally, we reiterate the clarification above that the instant 
reform does not require transmission providers to develop new base 
cases for each interconnecting electric storage resource to reflect 
when that resource intends to charge, as NYISO suggests. Rather, the 
reform requires transmission providers to reflect whether an electric 
storage resource will or will not charge in any studies of peak load 
conditions in the interconnection process. However, if NYISO continues 
to believe the instant reform conflicts with its market rules, NYISO 
may explain the specific circumstances on compliance and justify why 
any deviations merit an independent entity variation.
---------------------------------------------------------------------------

    \1077\ Id. P 1521.
---------------------------------------------------------------------------

    582. We are unpersuaded by Public Interest Organizations' arguments 
on rehearing that the Commission should extend this reform to apply to 
operating assumptions for injections of power from electric storage 
resources and other technologies. Although several commenters urged the 
use of more accurate operating assumptions for injections of power from 
certain types of generating facilities, we believe that the current 
record does not sufficiently support extending the instant reform to 
injections of power from all types of generating facilities and does 
not provide sufficient information on the incremental burden that such 
a reform could place on transmission providers' study methods and 
timelines. Further, we are concerned that extending the reform to apply 
to operating assumptions for injections of power from only some types 
of generating facilities and not all types of generating facilities 
that are capable of injecting power could potentially be unduly 
discriminatory or preferential. We continue to encourage transmission 
providers to examine on an individual basis what operating assumptions 
used to study the injection of power from generating facilities may be 
appropriate to render the study process more accurate. Similarly, we 
continue to acknowledge that fuel-based dispatch assumptions may be 
able to address some of the identified challenges associated with 
inaccurate modeling assumptions for all generating facility types and 
encourage transmission providers to evaluate the merits of adopting 
them.\1078\
---------------------------------------------------------------------------

    \1078\ Id. P 1529.
---------------------------------------------------------------------------

    583. We decline to grant Clean Energy Associations' requested 
clarification that the pro forma LGIP requires the interconnection 
customer and transmission provider to mutually agree in the cluster 
study agreement as to (1) which loading cases are applied to storage 
charging and discharging and (2) what power level or % output or % 
charging is applied to each case. The instant reform is directed 
specifically and exclusively at how transmission providers study the 
withdrawal of power from electric storage resources within the 
generator interconnection process (namely, whether an electric storage 
resource will or will not charge during peak load conditions). The 
Commission did not require transmission providers to revise how they 
study injections of power from electric storage resources, and we 
decline to do so now. For the same reason, we are unpersuaded by Clean 
Energy Associations' rehearing request on the same issue.
    584. We also decline to grant Clean Energy Associations' requested 
clarification that, in situations in which the interconnection customer 
and transmission provider disagree about operating assumptions, the 
interconnection customers may request to file the applicable study 
agreement with the Commission unexecuted, with a request that the 
Commission determine which operating assumptions should be used in the 
applicable study. In such a situation, we find it more appropriate for 
the interconnection customer to instead use the dispute resolution 
procedures in section 13.5 of the pro forma LGIP. For the same reason, 
we are unpersuaded by Clean Energy Associations' rehearing request on 
the same issue.
    585. We decline to grant Energy Associations' requested 
clarification that the planned operating assumptions of electric 
storage resources must be considered as part of the

[[Page 27106]]

interconnection process and in transmission service requests. In Order 
No. 2023, the Commission explained that the instant reform does not 
require transmission providers to study charging as part of the 
interconnection process if they do not already to so, and we decline to 
require so now.\1079\ We reiterate that, if a transmission provider 
does not determine the network upgrades needed to accommodate the 
charging of an electric storage resource through the interconnection 
process (e.g., the transmission provider determines such upgrades as 
part of the transmission service request process), then the 
transmission provider must demonstrate on compliance why this reform 
does not apply to that particular transmission provider. Additionally, 
the Commission clarified in Order No. 2023 that the instant reform does 
not apply to transmission service requests, and Order No. 2023 does not 
modify the process for requesting transmission service.
---------------------------------------------------------------------------

    \1079\ Id. P 1526.
---------------------------------------------------------------------------

    586. In response to Clean Energy Associations' requested 
clarification that all aspects of the operating assumption reform of 
Order No. 2023 \1080\ apply not just to standalone storage, but also to 
hybrid and co-located generating facilities that contain an electric 
storage resource, we reiterate the clarification the Commission made in 
Order No. 2023: ``For clarity, we note that the reforms described in 
this determination section and the related sections of the pro forma 
LGIP apply to all interconnecting electric storage resources, whether 
they are standalone, co-located generating facilities, or part of a 
hybrid generating facility.'' \1081\
---------------------------------------------------------------------------

    \1080\ Id. PP 1509-1533.
    \1081\ Id. P 1509 n.2858.
---------------------------------------------------------------------------

    587. We decline to grant Clean Energy Associations' requested 
clarification that modeling the charging of an electric storage 
resource equivalently to firm customer end-use load for purposes of 
determining network upgrades is inconsistent with good utility 
practice. We reiterate our finding that, for purposes of determining 
any network upgrades necessary to accommodate the reliable 
interconnection of electric storage resources, the charging of electric 
storage resources should not be modeled equivalently to firm customer 
end-use load in interconnection studies if the interconnection customer 
agrees to memorialize its operating assumptions in the LGIA and 
installs control technologies, if required by the transmission 
provider, to limit its operations as specified.\1082\ However, there 
are still situations in which we believe it is acceptable, and Order 
No. 2023 allows, for a transmission provider to continue to model an 
electric storage resource in interconnection studies as charging during 
peak load conditions, for example: (1) if the interconnection customer 
does not request during the interconnection process that the 
transmission provider study the electric storage resource as not 
charging during peak load conditions; (2) if the interconnection 
customer declines the transmission provider's request to install or 
demonstrate that it has installed control technologies sufficient to 
prevent it from charging during peak load conditions unless otherwise 
directed by the transmission provider; or (3) if the interconnection 
customer declines the transmission provider's request to memorialize 
the requested operating assumptions in its LGIA.
---------------------------------------------------------------------------

    \1082\ Id. P 1523.
---------------------------------------------------------------------------

2. Incorporating the Enumerated Alternative Transmission Technologies 
Into the Generator Interconnection Process
a. Consideration of the Enumerated Alternative Transmission 
Technologies in Interconnection Studies Upon Request of the 
Interconnection Customer
i. Order No. 2023 Requirements
    588. In Order No. 2023, the Commission revised section 7.3 of the 
pro forma LGIP, and sections 3.3.6 and 3.4.10 of the pro forma 
SGIP.\1083\ The Commission required transmission providers to evaluate 
the following enumerated list of alternative transmission technologies: 
static synchronous compensators, static VAR compensators, advanced 
power flow control devices, transmission switching, synchronous 
condensers, voltage source converters, advanced conductors, and tower 
lifting. The Commission revised pro forma LGIP section 7.3 to require 
transmission providers to evaluate the list of alternative transmission 
technologies enumerated in Order No. 2023 during the cluster study, 
including any restudies, of the generator interconnection process in 
all instances (i.e., for all interconnection customers in a cluster), 
without the need for a request from an interconnection customer. The 
Commission required transmission providers to evaluate each alternative 
transmission technology listed in pro forma LGIP section 7.3 and to 
determine, in the transmission provider's sole discretion, whether it 
should be used, consistent with good utility practice, applicable 
reliability standards, and other applicable regulatory requirements. 
Finally, the Commission required transmission providers to include, in 
the pro forma LGIP cluster study report, an explanation of the results 
of the evaluation of the enumerated alternative transmission 
technologies for feasibility, cost, and time savings as an alternative 
to a traditional network upgrade.
---------------------------------------------------------------------------

    \1083\ Id. P 1578.
---------------------------------------------------------------------------

    589. The Commission modified the enumerated list of alternative 
transmission technologies from the NOPR proposal to: (1) retain 
synchronous, static VAR compensators, advanced power flow control, and 
transmission switching in the list; (2) add synchronous condensers, 
voltage source converters, advanced conductors, and tower lifting to 
the list; and (3) remove dynamic line ratings from the list.\1084\ 
Generally, the Commission found that these enumerated alternative 
transmission technologies are those with the most potential to be 
useful to reduce interconnection costs by providing lower cost network 
upgrades to interconnect new generating facilities and thus required 
transmission providers to evaluate these technologies in the 
interconnection process for their feasibility, cost, and time savings 
potential.
---------------------------------------------------------------------------

    \1084\ Id. P 1579.
---------------------------------------------------------------------------

    590. The Commission revised sections 3.3.6 and 3.4.10 of the pro 
forma SGIP, consistent with the pro forma LGIP requirement, to require 
transmission providers to evaluate the enumerated alternative 
transmission technologies when performing interconnection studies for 
small generating facilities, without the need for a request from an 
interconnection customer.\1085\ The Commission required such 
evaluations to occur during the pro forma SGIP feasibility study and 
system impact study of the generator interconnection process. The 
Commission found that it is appropriate for these evaluations to occur 
during the relevant pro forma SGIP studies where network upgrades are 
identified, consistent with the pro forma LGIP requirement. The 
Commission required transmission providers to evaluate each alternative 
transmission technology listed in pro forma SGIP sections 3.3.6 and 
3.4.10 and determine, in the transmission provider's sole discretion, 
whether it should be used, consistent with good utility practice, 
applicable reliability standards, and other applicable regulatory 
requirements.
---------------------------------------------------------------------------

    \1085\ Id. P 1580.
---------------------------------------------------------------------------

    591. Finally, the Commission required transmission providers to 
include, in the feasibility study report and system impact study 
report, an explanation of

[[Page 27107]]

the results of the evaluation of the enumerated alternative 
transmission technologies for feasibility, cost, and time savings as an 
alternative to a traditional network upgrade.\1086\ The Commission 
noted that this reform is one of the few reforms in Order No. 2023 that 
applies to small generating facilities, in addition to large generating 
facilities. The Commission found that the enumerated alternative 
transmission technologies that it required transmission providers to 
evaluate in their interconnection studies are appropriate for 
evaluation in the pro forma SGIP context because they are scalable and 
that the enumerated alternative transmission technologies have the 
potential to provide similar benefits in the context of both small and 
large generating facilities, including cost and time savings.
---------------------------------------------------------------------------

    \1086\ Id. P 1581.
---------------------------------------------------------------------------

    592. Based on the record, the Commission found that alternative 
transmission technologies have the potential to provide benefits to 
optimize the transmission system in specific scenarios.\1087\ The 
Commission found that failing to evaluate the enumerated alternative 
transmission technologies renders Commission-jurisdictional rates 
unjust and unreasonable and fails to ensure that interconnection 
customers are able to interconnect in a reliable, efficient, 
transparent, and timely manner.\1088\
---------------------------------------------------------------------------

    \1087\ Id. P 1583 (noting arguments that selecting alternative 
transmission technologies: may reduce interconnection costs by 
providing lower cost transmission solutions to interconnecting new 
generating facilities; may allow faster interconnection by providing 
solutions that can be implemented more quickly; may allow better use 
of the existing transmission system, enhance reliability, reduce 
withdrawals, restudies, and overall interconnection delays; would 
decrease network upgrade costs that will reduce the number of 
withdrawals from interconnection queues, ultimately creating a more 
efficient interconnection process by reducing the number of 
restudies triggered by withdrawals; and would offer additional value 
because they are scalable and modular to address evolving needs and 
can be redeployed as those needs continue to change).
    \1088\ Id. (citing NOPR, 179 FERC ] 61,194 at P 296; see Clean 
Energy Associations Reply Comments at 9-10; Environmental Defense 
Fund Initial Comments at 7; Fervo Reply Comments at 9; NARUC Initial 
Comments at 38).
---------------------------------------------------------------------------

    593. The Commission found that the record demonstrated that the 
requirements adopted in Order No. 2023 will not overly burden 
transmission providers.\1089\ The Commission also maintained that the 
requirement that transmission providers evaluate the enumerated 
alternative transmission technologies for an entire cluster--rather 
than on an individual interconnection customer-request basis--and the 
modifications to the enumerated list of alternative transmission 
technologies will ease the burden on transmission providers, thereby 
lessening the risk that they are unable to complete studies by the 
required deadlines.\1090\ The Commission noted that it was not 
dictating how a transmission provider must evaluate each enumerated 
alternative transmission technology on the list in each instance. The 
Commission recognized that in some cases transmission providers may be 
able to rapidly determine if a certain enumerated alternative 
transmission technology is inappropriate for further study.
---------------------------------------------------------------------------

    \1089\ Id. P 1586 (citing AEE Initial Comments at 44; ENGIE 
Initial Comments at 13; ACORE Reply Comments at 3-4).
    \1090\ Id. P 1590.
---------------------------------------------------------------------------

    594. The Commission also found that the benefits of evaluating and 
implementing the enumerated alternative transmission technologies 
outweigh any potential burden or the potential of increased study 
times.\1091\ The Commission stated that, as recognized by commenters 
and explained earlier in Order No. 2023, the evaluation and use, at the 
transmission provider's sole discretion, of the enumerated alternative 
transmission technologies could decrease network upgrade costs, 
withdrawals, and restudies, thereby increasing the efficiency of the 
interconnection process overall. For these reasons, the Commission 
disagreed with commenters who argued that requiring transmission 
providers to evaluate the enumerated alternative transmission 
technologies is contrary to the NOPR's goal of increasing the speed of 
interconnection queue processing.
---------------------------------------------------------------------------

    \1091\ Id. P 1586 (citing AEE Initial Comments at 44; ENGIE 
Initial Comments at 13; ACORE Reply Comments at 3-4).
---------------------------------------------------------------------------

    595. The Commission explained that Order No. 2023 did not create a 
presumption in favor of substituting alternative transmission 
technologies for necessary traditional network upgrades, either 
categorically or in specific cases.\1092\ The Commission stated that 
Order No. 2023 is agnostic as to whether, in a specific case, an 
alternative transmission technology is an acceptable alternative to a 
traditional network upgrade.\1093\ The Commission explained that the 
rule mandates a process of evaluation of alternatives to traditional 
network upgrades, not outcomes in specific cases.\1094\
---------------------------------------------------------------------------

    \1092\ Id. PP 1582, 1584 (citing PJM Initial Comments at 68 
(``PJM therefore cautions the Commission not to conflate the 
operational benefits of alternative transmission technologies . . . 
with the need to address significant capacity enhancement needs 
(short and long-term) or long-range transmission needs under rapid 
growth or changing resource mix scenarios.''); MISO Initial Comments 
at 120 (``However, the Commission fails to recognize that these 
technologies may be evaluated in the generator interconnection 
process already but may nonetheless not be adopted as they are not 
the appropriate solution to a Transmission Issue related to an 
interconnection.'')).
    \1093\ Id. P 1582 (citing MISO Initial Comments at 121-22 
(``Further, although these technologies may be evaluated, the 
technologies identified by the Commission still may not provide the 
appropriate solution from a planning perspective. Many of the 
technologies identified are appropriately considered as operational 
tools or short-term solutions but are not necessarily appropriate 
for planning to support a particular generator interconnection.'') 
(citation omitted)).
    \1094\ Id. PP 1582, 1584.
---------------------------------------------------------------------------

    596. The Commission stated that the requirement is to evaluate the 
enumerated alternative transmission technologies in the interconnection 
process for feasibility, cost, and time savings and to determine 
whether, in the transmission provider's sole discretion, an alternative 
transmission technology should be used as a solution--consistent with 
good utility practice, applicable reliability standards, and other 
applicable regulatory requirements.\1095\ The Commission found that it 
is appropriate to continue to rely on transmission providers to use 
good utility practice, applicable reliability standards, and other 
applicable regulatory requirements, in their evaluations of alternative 
transmission technologies, including the enumerated list, because the 
specific evaluation may depend on the transmission provider's 
individual transmission system, cluster makeup, and other 
factors.\1096\
---------------------------------------------------------------------------

    \1095\ Id. PP 1584, 1587, 1589.
    \1096\ Id. P 1589 (adding that ``the transmission provider--
consistent with good utility practice, applicable reliability 
standards, and other applicable regulatory requirements--retains the 
sole discretion to determine whether a particular technology in the 
enumerated list of alternative transmission technologies is 
appropriate and reliable as a network upgrade, or not, for a given 
cluster.'').
---------------------------------------------------------------------------

    597. The Commission explained that the transmission provider must 
determine whether using any of the enumerated alternative transmission 
technologies is an appropriate and reliable network upgrade ``that 
would allow the interconnection customer to flow the output of its 
generating facility onto the transmission provider's transmission 
system in a safe and reliable manner.'' \1097\ The Commission

[[Page 27108]]

further explained that the requirement to make such a determination 
before allowing for the use of the enumerated alternative transmission 
technologies addresses concerns that their use may impinge on 
reliability, delay network upgrades instead of reducing the need for 
them or obviating the need for them altogether, or fail to address all 
transmission system issues that a traditional network upgrade would 
address. The Commission recognized the need to avoid time-consuming 
delays and costly disputes or litigation over interconnection costs 
that could arise as a result of this reform.\1098\ Therefore, the 
Commission found that, if a transmission provider evaluates the 
enumerated alternative transmission technologies as required herein 
and, in its sole discretion, determines not to use any enumerated 
alternative transmission technologies as an alternative to a 
traditional network upgrade, the transmission provider has complied 
with Order No. 2023, including tariffs filed pursuant thereto.
---------------------------------------------------------------------------

    \1097\ Id. P 1582 (citing Order No. 2003, 104 FERC ] 61,103 at P 
767 (``Both Energy Resource Interconnection Service and Network 
Resource Interconnection Service provide for the construction of 
Network Upgrades that would allow the Interconnection Customer to 
flow the output of its Generating Facility onto the Transmission 
Provider's Transmission System in a safe and reliable manner''); 
Order No. 2003-A, 106 FERC ] 61,220 at P 404; pro forma LGIA art. 
9.3 (``Transmission Provider shall cause the Transmission System and 
the Transmission Provider's Interconnection Facilities to be 
operated, maintained and controlled in a safe and reliable manner 
and in accordance with this LGIA''); Midwest Indep. Transmission 
Sys. Operator, Inc., 138 FERC ] 61,233, at P 190, reh'g denied, 139 
FERC ] 61,253, partial reh'g granted on other grounds, 150 FERC ] 
61,035). See also pro forma LGIA art. 9.4 (``Interconnection 
Customer shall at its own expense operate, maintain and control the 
Large Generating Facility and Interconnection Customer's 
Interconnection Facilities in a safe and reliable manner and in 
accordance with this LGIA'')).
    \1098\ Order No. 2023, 184 FERC ] 61,054 at P 1587 (citing SPP 
Initial Comments at 26 (``Even though the Commission has stated that 
transmission providers retain the discretion regarding whether to 
use such technologies, the very fact that the transmission provider 
is required to evaluate them will lead to disputes if the 
transmission provider then exercises that discretion.'')).
---------------------------------------------------------------------------

    598. The Commission explained that transmission providers are 
required to include an explanation of the results of the evaluation of 
the required alternative transmission technologies for feasibility, 
cost, and time savings as an alternative to a traditional network 
upgrade in the applicable study report.\1099\ The Commission found the 
required explanation of the results of the transmission provider's 
evaluation included in the applicable study report provides sufficient 
transparency without placing a further burden on transmission providers 
that would delay the processing of interconnection requests.
---------------------------------------------------------------------------

    \1099\ Id. P 1590.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    599. SPP seeks rehearing of the requirement for transmission 
providers to evaluate certain enumerated alternative transmission 
technologies in the interconnection study process because SPP argues 
that this requirement will burden transmission providers and lengthen 
the interconnection process.\1100\ SPP also asserts that the Commission 
does not provide adequate guidance on what metrics would be sufficient 
to support the use or non-use of a specific alternative technology, 
which SPP contends will invite litigation from interconnection 
customers and further lengthen the interconnection process. WATT 
Coalition also contends that, to comply with the FPA, the Commission 
must grant rehearing to set a meaningful standard for evaluation and 
ensure that alternative transmission technologies are used if they are 
the most cost-effective and fastest interconnection upgrade 
solution.\1101\
---------------------------------------------------------------------------

    \1100\ SPP Rehearing Request at 19.
    \1101\ WATT Coalition Rehearing Request at 24.
---------------------------------------------------------------------------

    600. PJM asks the Commission to clarify that Order No. 2023's 
requirement for transmission providers to explain their evaluation of 
the enumerated alternative transmission technologies in their cluster 
study reports does not apply when a transmission provider already 
includes all the enumerated technologies in its studies.\1102\ PJM 
argues that this reporting requirement is administratively burdensome 
with no corresponding benefit because PJM already studies all of the 
enumerated technologies in its interconnection process. PJM also 
asserts that Order No. 2023's requirement that transmission providers 
evaluate the enumerated alternative transmission technologies will be 
burdensome because interconnection customers are likely to demand re-
evaluation of the technologies.
---------------------------------------------------------------------------

    \1102\ PJM Rehearing Request at 45-46.
---------------------------------------------------------------------------

    601. Clean Energy Associations, Public Interest Organizations, and 
WATT Coalition request rehearing of Order No. 2023's requirement that 
transmission providers have sole discretion over the evaluation and use 
of an enumerated alternative transmission technologies.\1103\ Public 
Interest Organizations argue that Order No. 2023's requirement that 
transmission providers' decisions be consistent with good utility 
practice, applicable reliability standards, and other applicable 
regulatory requirements is vague and will allow transmission providers 
to reject the enumerated alternative transmission technologies, even 
when studies demonstrate them to be lower cost and faster than 
traditional network upgrades.\1104\ Public Interest Organizations 
further argue that, because transmission providers have sole discretion 
over implementing the enumerated alternative transmission technologies, 
the study process will be a mere formality that allows the transmission 
provider to reject an enumerated alternative transmission technology, 
even if its own studies have demonstrated that they are the least cost 
and/or fastest solutions. Public Interest Organizations contend that 
requiring traditional network upgrades when a transmission provider's 
own study has found that an enumerated alternative transmission 
technology would be cheaper and/or faster imposes excessive costs on 
consumers, leading to unjust and unreasonable rates, and unduly 
discriminates against providers of alternative transmission 
technologies.
---------------------------------------------------------------------------

    \1103\ Clean Energy Associations Rehearing Request at 48; Public 
Interest Organizations Rehearing Request at 13-15; WATT Coalition 
Rehearing Request at 1-2, 14-15, 24-30.
    \1104\ Public Interest Organizations Rehearing Request at 13-15.
---------------------------------------------------------------------------

    602. Clean Energy Associations contend that giving transmission 
providers sole discretion insulates transmission providers from 
challenges to inadequate evaluations or unjustified adoption 
decisions.\1105\ Clean Energy Associations assert that, absent some 
form of review and recourse, transmission providers might only 
cursorily evaluate alternative transmission technologies and 
interconnection customers will have no opportunity to respond to unjust 
and unreasonable charges. Clean Energy Associations argue that the FPA 
requires a more nuanced analysis than Order No. 2023's requirement that 
determinations be consistent with good utility practice, applicable 
reliability standards, and other applicable regulatory requirements. 
Clean Energy Associations ask the Commission to allow challenges to the 
transmission provider's evaluation of the enumerated alternative 
transmission technologies as a means to ensure meaningful consideration 
of these technologies.
---------------------------------------------------------------------------

    \1105\ Clean Energy Associations Rehearing Request at 46-48.
---------------------------------------------------------------------------

    603. WATT Coalition argues that Order No. 2023 unlawfully gives 
transmission providers unfettered discretion to disregard and 
disadvantage alternative transmission technologies as

[[Page 27109]]

network upgrades.\1106\ WATT Coalition argues that the Commission 
undermined its decision to provide a pre-defined list of alternative 
transmission technologies evaluated as a matter of course in every 
cluster study by failing to require meaningful consideration of 
alternative transmission technologies and by placing alternative 
transmission technologies at an artificial disadvantage to 
``traditional'' network upgrades.\1107\ WATT Coalition asserts that 
enshrining a preferential advantage for more expensive and longer lead-
time traditional network upgrades, at the expense of more efficient, 
cost-effective, and quicker solutions, will increase rates and slow 
down the interconnection process. WATT Coalition points to dynamic line 
ratings' ability to resolve a thermal overload, rather than spending 
$50 million on a line rebuild, to demonstrate that requiring a 
traditional network upgrade would unduly discriminate against 
interconnection customers and in favor of transmission providers, 
impose excessive costs on interconnection customers (and ultimately 
consumers), and work against Order No. 2023's goal of making the 
interconnection process more efficient. WATT Coalition argues that, 
contrary to the FPA, the Commission has deprived interconnection 
customers of the opportunity to interconnect at a just and reasonable 
rate and unduly discriminates against interconnection customers to the 
benefit of transmission providers.
---------------------------------------------------------------------------

    \1106\ WATT Coalition Rehearing Request at 1-2, 14 (arguing that 
Order No. 2023 violates APA section 706(2)(A)).
    \1107\ Id. at 24-25 (citing Order No. 2023, 184 FERC ] 61,054 at 
P 1585).
---------------------------------------------------------------------------

    604. WATT Coalition questions the Commission's reliance on MISO's 
initial comments as ground for allowing transmission providers to use 
their sole discretion consistent with ``good utility practice'' and 
``applicable regulatory standards.'' \1108\ WATT Coalition argues that 
MISO's comments merely quoted the NOPR, which suggested that the use of 
alternative transmission technologies may not meet these standards, 
without providing justification. WATT Coalition contends that requiring 
transmission providers to ``use good utility practice, applicable 
reliability standards, and other applicable regulatory requirements'' 
is insufficient because making such a determination is not the same as 
determining whether that decision is consistent with the FPA, which is 
a transmission provider's most fundamental responsibility.\1109\ WATT 
Coalition argues that the Commission made no attempt to explain whether 
it believes satisfying those standards will, in all cases, produce a 
lawful result under the FPA.\1110\ WATT Coalition argues that the 
Commission has no authority to grant transmission providers the ability 
to unduly discriminate or implement a rate that is unjust and 
unreasonable.\1111\ WATT Coalition asserts that the Commission's 
failure to explain and support that decision violates the APA.\1112\
---------------------------------------------------------------------------

    \1108\ Id. at 26.
    \1109\ Id. at 27 (quoting Order No. 2023, 184 FERC ] 61,054 at P 
1589).
    \1110\ Id. at 26.
    \1111\ Id. at 27 (quoting Order No. 2023, 184 FERC ] 61,054 at P 
1589).
    \1112\ Id. at 26.
---------------------------------------------------------------------------

    605. WATT Coalition adds that Order No. 2023 deprives 
interconnection customers of a meaningful opportunity to inform the 
evaluations and appears to close off any input or challenge to 
transmission provider evaluation.\1113\ WATT Coalition asks the 
Commission to grant rehearing to allow interconnection customers to 
engage in the transmission provider's alternative transmission 
technologies evaluations and ensure that they are both technically 
sound and consistent with the FPA. WATT Coalition suggests allowing 
either the interconnection customer or the transmission provider to 
request such an evaluation at any point during the interconnection 
study process as more information becomes available. WATT Coalition 
asks the Commission to allow developers to conduct their own analysis 
in response to an initial interconnection study result to demonstrate 
that a FERC-enumerated technology, or another technology, can reduce 
interconnection costs or timelines and require transmission providers 
to evaluate those solutions. WATT Coalition states that interconnection 
customers' right to register objections and identify deficiencies in a 
transmission provider's identification of network upgrades in 
interconnection studies must extend to an interconnection study's 
evaluation of alternative transmission technologies, not just 
traditional network upgrades.\1114\ WATT Coalition asserts that 
including interconnection customer input on the evaluation of 
alternative transmission technologies after the initial phase of the 
cluster study, with a requirement for the transmission provider's 
decision regarding deployment to be in line with the FPA, would achieve 
just and reasonable rates.\1115\
---------------------------------------------------------------------------

    \1113\ Id. at 29 (citing Order No. 2023, 184 FERC ] 61,054 at P 
1587).
    \1114\ Id. (citing, e.g., MISO Business Practice Manual 015 
Section 5.3.1).
    \1115\ Id. at 24, 30.
---------------------------------------------------------------------------

    606. If the Commission does not grant rehearing, WATT Coalition 
requests that the Commission make two clarifications.\1116\ First, WATT 
Coalition asks the Commission to clarify that interconnection customers 
have the right and opportunity to identify potential deficiencies and 
errors in a transmission provider's evaluation of alternative 
transmission technologies in a cluster study, and the transmission 
provider must address those potential deficiencies and errors in its 
cluster study report. WATT Coalition states that the Commission must 
correct the implication that a transmission provider's evaluation and 
determination to deploy or not deploy alternative transmission 
technologies are immune from challenge by allowing interconnection 
customers to review the initial evaluation and provide their own 
analysis to inform the transmission provider's decision. Second, WATT 
Coalition asks the Commission to clarify that it did not intend to 
exempt transmission providers' consideration of, and determinations 
regarding, the use of alternative transmission technologies in a 
cluster study from compliance with the FPA, making clear that complying 
with ``good utility practice'' does not supersede the foundational 
requirements of the FPA.
---------------------------------------------------------------------------

    \1116\ Id. at 30.
---------------------------------------------------------------------------

    607. A number of parties seek rehearing or clarification regarding 
the technologies included in the list of the enumerated alternative 
transmission technologies that transmission providers are required to 
evaluate. SPP asks the Commission to reconsider the inclusion of 
transmission switching in the list of enumerated alternative 
transmission technologies, arguing that it is a short-term operational 
tool that is inappropriate for use in long-term planning 
applications.\1117\ VEIR asks the Commission to clarify the scope of 
the technologies that are considered advanced conductors under Order 
No. 2023.\1118\ VEIR argues that, although Order No. 2023 does not 
describe the advanced conductors that must be studied, it is consistent 
with the Commission's intent and the intent of the Energy Policy Act of 
2005 for the Commission to clarify that there are a range of 
permissible present and future technologies that ``significantly 
increase transmission capacity and allow for the interconnection of new 
generating facilities without the construction of

[[Page 27110]]

new network upgrades.'' \1119\ VEIR contends that this clarification 
will help ensure that Commission regulations will help stimulate 
innovation--rather than freeze it within the confines of an existing 
set of technologies--consistent with the Commission's overall mandate 
that alternative transmission technologies be considered by 
transmission providers seeking to provide reliable transmission 
solutions in the most cost effective manner. VEIR adds that this 
clarification will ensure that the term ``advanced conductors'' 
contemplates a wide-range of present and future transmission line 
technologies, such as VEIR's technology, whose power flow capacities 
exceed the power flow capacities of conventional transmission line 
technologies, thus achieving the Commission's objectives for 
transmission providers to evaluate technologies that are deployed more 
quickly and at a lower cost than other network upgrades.\1120\
---------------------------------------------------------------------------

    \1117\ SPP Rehearing Request at 20.
    \1118\ VEIR Rehearing Request at 3-6.
    \1119\ Id. at 4-5 (quoting Order No. 2023, 184 FERC ] 61,054 at 
P 1597 (citing Energy Policy Act of 2005, 42 U.S.C. 16422(a), (b))). 
VEIR points to several definitions of advanced conductors: (1) 
advanced conductor technology include advanced composite conductors 
high temperature low-sag conductors, and fiber optic temperature 
sensing conductors, 42 U.S.C. 16422(a); (2) advanced conductors and 
cables include advanced overhead conductors that are facilities that 
``employ advanced aluminum alloys, steel, and composite material in 
novel ways that provide enhanced performance over conventional 
overhead conductors,'' advanced-transmission-technologies-report 
(energy.gov), at p. 26, and (3) advanced conductors and cables are 
``superconducting cables'' composed of materials that have near zero 
resistance at extremely low temperatures, offering little to no 
electrical losses if used in transmission, advanced-transmission-
technologies-report (energy.gov), at p. 26.
    \1120\ VEIR Rehearing Request at 5-6.
---------------------------------------------------------------------------

    608. Clean Energy Associations and WATT Coalition request rehearing 
of Order No. 2023's exclusion of dynamic line ratings from the 
enumerated list of alternative transmission technologies.\1121\ WATT 
Coalition claims that the Commission excluded dynamic line ratings, 
while retaining four other technologies in the NOPR and adding four 
that were not included in the NOPR, without a reasoned basis for why 
dynamic line ratings provided less relative potential to be useful in 
reducing interconnection costs.\1122\ WATT Coalition argues that it is 
arbitrary and capricious and contrary to law to exclude dynamic line 
ratings on the basis that they ``may'' not be as beneficial, while at 
the same time conceding that other technologies that were included on 
the list have certain limitations that render them no more or less 
useful than dynamic line ratings. WATT Coalition states that dynamic 
line ratings are regularly a cost-effective solution in generator 
interconnection. WATT Coalition claims that its comments on the value 
of dynamic line ratings in planning, including interconnection, and 
statements in support of dynamic line ratings are not addressed in the 
Commission's reasoning.\1123\ WATT Coalition states that the only 
citation the Commission provided to support its determination to 
exclude dynamic line ratings refers only to the few adverse comments 
submitted by PJM Transmission Owners, ISO-NE, NYTOs, PacifiCorp, Tri-
State, and the Chamber of Commerce.\1124\ WATT Coalition argues that 
the Commission did not address the Environmental Defense Fund's 
argument that excluding dynamic line ratings is not consistent with 
transmission providers' least-cost obligation and concerns about 
technology implementation do not warrant failing to consider 
alternative transmission technologies.\1125\ Clean Energy Associations 
assert that the Commission's general justification that alternative 
transmission technology could decrease network upgrade costs, 
withdrawals, and restudies, which increases the efficiency of the 
interconnection process, applies to dynamic line ratings, arguing that 
the Commission acknowledges that dynamic line ratings could be 
beneficial to the interconnection process.\1126\
---------------------------------------------------------------------------

    \1121\ Clean Energy Associations Rehearing Request at 44; WATT 
Coalition Rehearing Request at 1-31.
    \1122\ WATT Coalition Rehearing Request at 13-14 (citing Order 
No. 2023, 184 FERC ] 61,054 at PP 1578, 1598).
    \1123\ Id. at 19-20 (citing WATT Coalition Reply Comments at 7-
15, 16-17).
    \1124\ Id. at 20 (citing Order No. 2023, 184 FERC ] 61,054 at P 
1598 (citing PJM Transmission Owners Initial Comments at 56; ISO-NE 
Initial Comments at 41; NYTOs Initial Comments at 32-33; PacifiCorp 
Initial Comments at 4; Tri-State Initial Comments at 23; Chamber of 
Commerce Initial Comments at 12-13)).
    \1125\ Id. at 20-21 (Environmental Defense Fund NOPR Reply 
Comments at 11-12).
    \1126\ Clean Energy Associations Rehearing Request at 41.
---------------------------------------------------------------------------

    609. Clean Energy Associations and WATT Coalition contend that the 
Commission did not address the benefits of dynamic line ratings set 
forth in the record.\1127\ WATT Coalition notes the Commission 
previously recognized the potential of dynamic line ratings to provide 
benefits to the interconnection process.\1128\ WATT Coalition further 
notes that, in Order No. 881, the Commission took initial steps to 
reduce barriers to operational deployment by requiring RTO/ISOs to 
``establish and implement the systems and procedures necessary to allow 
transmission owners to electronically update transmission line ratings 
at least hourly.'' \1129\ WATT Coalition argues that dynamic line 
ratings is a solution that could bring projects into viability if 
permitted by the transmission owner.\1130\
---------------------------------------------------------------------------

    \1127\ Id. at 40-42; WATT Coalition Rehearing Request at 6-11, 
20-21. See WATT Coalition Rehearing Request at 6-9 (pointing to use 
of dynamic line ratings in Europe, Australia and Sweden, including 
the European Network of Transmission System Operators for 
Electricity Technopedia rating dynamic line ratings as ``system 
ready for full-scale deployment;''; to the U.S. Canada Power System 
Outage Task Force recommendation for NERC to use dynamic line 
ratings to prevent and mitigate outages; to the U.S. Department of 
Energy support for the deployment of dynamic line ratings in the 
United States (e.g., the Oncor Electric Delivery Company pilot); to 
U.S. utilities piloting dynamic line ratings and the 95th Edison 
Award in 2023 to PPL Electric Utilities for the first operational 
deployment of dynamic line ratings in the United States, and to the 
use of dynamic line ratings in the place of a 200MW standalone 
battery in MISO).
    \1128\ Id. at 9-11 (citing NOPR, 179 FERC ] 61,194 at PP 289-
290, 294-95; FERC, Grid-Enhancing Technologies, Notice of Workshop, 
Docket No. AD19-19-000 (Sept. 9, 2019); Bldg. for the Future Through 
Elec. Reg'l Transmission Planning & Cost Allocation & Generator 
Interconnection, 86 FR 40266 (July 15, 2021), 176 FERC ] 61,024 at P 
158 (2021)).
    \1129\ Id. at 13 (citing Order No. 2023, 184 FERC ] 61,054 at P 
1598; Managing Transmission Line Ratings, Order No. 881, 87 FR 2244 
(Jan. 13, 2022), 177 FERC 61,179 at P 251 (2021)).
    \1130\ Id. at 9.
---------------------------------------------------------------------------

    610. WATT Coalition contends that the Commission has failed to meet 
its burden to provide an explanation supported by evidence in the 
record for its suggestion that dynamic line ratings are better applied 
in operations and planning.\1131\ WATT Coalition adds that, because 
transmission planning and interconnection processes typically use 
similar or identical study processes (for example, steady state, short 
circuit, and stability analysis) and share common models of the 
transmission system representing expected future system conditions such 
as Summer Peak or High Wind Low Load, it is not logical to expect the 
consideration of dynamic line ratings to benefit transmission planning 
and interconnection in a demonstrably different manner.
---------------------------------------------------------------------------

    \1131\ Id. at 21-22.
---------------------------------------------------------------------------

    611. However, WATT Coalition argues that the relative value of 
dynamic line ratings in interconnection versus transmission planning is 
irrelevant.\1132\ WATT Coalition contends that the Commission made no 
determination as to the absolute value of dynamic line ratings in the 
interconnection context, which it argues is the relevant inquiry in 
determining whether the interconnection reforms are just and 
reasonable.\1133\ WATT Coalition argues

[[Page 27111]]

that, if dynamic line ratings are highly beneficial in one and 
extremely beneficial in the other, it should be adopted in both, not 
excluded from the former.\1134\ WATT Coalition adds that the example 
the Commission gave for why dynamic line ratings may be less beneficial 
in the interconnection context is flawed. WATT Coalition argues that 
the assertion that its value ``depends on favorable weather and 
congestion parameters'' is wrong. WATT Coalition explains that many 
lines are chronically underrated, regardless of weather and congestion 
parameters, ``congestion parameters'' themselves are often inaccurate 
precisely because dynamic line ratings are not used on a line.
---------------------------------------------------------------------------

    \1132\ Id. at 22.
    \1133\ Id. at 22-23 (citing Am. Clean Power Ass'n v. FERC, 54 
F.4th 722 (D.C. Cir. 2022) (finding that the Commission failed to 
reasonably explain its decision, noting it gave short shrift to the 
Petitioner's concern)).
    \1134\ Id. at 22 (pointing to the background information 
demonstrating that dynamic line ratings have specific and 
appreciable value in generator interconnection).
---------------------------------------------------------------------------

    612. WATT Coalition claims that the following statement in Order 
No. 2023 is inaccurate and does not reflect the record:

    [W]hile dynamic line ratings may relieve congestion to increase 
available interconnection service temporarily or in the short-term, 
they may not be an adequate substitute for building interconnection 
facilities and/or traditional network upgrades identified through 
the interconnection study process that are needed to reliably 
interconnect a generating facility to the transmission system during 
all hours.\1135\
---------------------------------------------------------------------------

    \1135\ Id. at 23 (citing Order No. 2023, 184 FERC ] 61,054 at P 
1598).

    WATT Coalition states that dynamic line ratings are not a temporary 
or short-term fix; they are a long-term fix for the specific parameters 
of the cluster study. WATT Coalition explains that, if system 
conditions change subsequent to the cluster study such that additional 
investment in the transmission system is needed, that does not mean 
that the value of dynamic line ratings is diminished. WATT Coalition 
states that any other alternative transmission technology or even 
traditional upgrade could see its value change based on system 
conditions in the same way. WATT Coalition argues that implementing 
network upgrades when dynamic line ratings would satisfy the identified 
need will cause overbuilding the system and saddling interconnection 
customers and consumers with unnecessary costs.
    613. WATT Coalition contends that these unnecessary costs mean that 
the Commission's decision is also contrary to the FPA.\1136\ WATT 
Coalition argues that the Commission has failed to demonstrate that the 
rates established through this order will be just and reasonable 
because it lacks justification for the exclusion of dynamic line 
ratings and fails to respond to the comments arguing that including 
dynamic line ratings would reduce costs to consumers. WATT Coalition 
claims that, if the Commission included dynamic line ratings in all 
studies, all generators would potentially see their interconnection 
costs reduced and timelines shortened. WATT Coalition argues that, by 
excluding dynamic line ratings, generators in windy regions especially 
will be disadvantaged because one of the core solutions for increasing 
transmission capacity rapidly will not be evaluated in their 
interconnection studies. WATT Coalition notes Advanced Energy Economy's 
comment that, ``[w]hile not all interconnections may benefit from [grid 
enhancing technologies], evaluating their use at every opportunity 
ensures that their contributions and savings will not be lost.'' \1137\ 
WATT Coalition contends that the Commission erred by instead ensuring 
that dynamic line ratings' contributions and savings will be lost, 
interconnection customers will pay vastly higher costs for network 
upgrades, and consumers ultimately will pay higher rates as a 
result.\1138\
---------------------------------------------------------------------------

    \1136\ Id.
    \1137\ Id. (citing Advanced Energy Economy NOPR Reply Comments 
at 41-42).
    \1138\ Id. at 23-24.
---------------------------------------------------------------------------

    614. Clean Energy Associations request rehearing of Order No. 
2023's exclusion of energy storage serving as a transmission asset from 
the enumerated list of alternative transmission technologies.\1139\ 
Clean Energy Associations argue that excluding storage resources 
because ``the evaluation of whether a storage resource performs a 
transmission function requires a case-by-case analysis'' does not 
constitute reasoned decision-making because the Commission directs the 
transmission providers to conduct a case-by-case evaluation of the 
alternative transmission technologies included in Order No. 2023's list 
of enumerated technologies.\1140\ Clean Energy Associations assert 
that, without a specific requirement to evaluate dynamic line ratings 
and energy storage, these technologies will be excluded from the 
interconnection process despite the record demonstrating that these 
technologies can improve interconnection process efficiency.\1141\
---------------------------------------------------------------------------

    \1139\ Clean Energy Associations Rehearing Request at 44.
    \1140\ Id. at 42-43 (citing Order No. 2023, 184 FERC ] 61,054 at 
PP 1582, 1584).
    \1141\ Id. at 43-44.
---------------------------------------------------------------------------

iii. Determination
    615. We are not persuaded by SPP's request to revisit the 
requirement to evaluate the enumerated list of alternative transmission 
technologies, which SPP argues will burden transmission providers and 
lengthen the interconnection process. As explained in Order No. 2023, 
the Commission found that the record supported a finding that these 
alternative transmission technologies can provide benefits to optimize 
the transmission system in specific scenarios.\1142\ SPP has not 
convinced us otherwise. We also find it unnecessary to provide metrics 
for determining what would support the use, or non-use of, an 
alternative transmission technology to avoid litigation and lengthening 
the interconnection process, as SPP requests. In Order No. 2023, the 
Commission recognized the need to avoid time-consuming delays and 
costly disputes or litigation over interconnection costs that could 
arise as a result of this reform.\1143\ Consequently, the Commission 
found that, if a transmission provider evaluates the enumerated 
alternative transmission technologies as required herein and, in its 
sole discretion, determines not to use any enumerated alternative 
transmission technologies as an alternative to a traditional network 
upgrade, the transmission provider has complied with Order No. 2023, 
including tariffs filed pursuant to Order No. 2023. Similarly, we 
disagree with WATT's contention that Order No. 2023 does not set a 
standard for evaluation and does not ensure that alternative 
transmission technologies are used if they are the most cost-effective 
and fastest interconnection upgrade solution. In Order No. 2023, as 
modified below, the Commission set forth the standard for evaluation, 
explaining that the requirement is to evaluate the enumerated 
alternative transmission technologies in the interconnection process 
for feasibility, cost, and time savings and to determine whether, in 
the transmission provider's sole discretion, an alternative 
transmission technology should be used as a solution--consistent with 
good utility practice, applicable reliability standards, and applicable 
laws and

[[Page 27112]]

regulations.\1144\ This standard will ensure transmission providers 
identify network upgrades in a manner that ensures just and reasonable 
rates.
---------------------------------------------------------------------------

    \1142\ Order No. 2023, 184 FERC ] 61,054 at P 1583 (citing NOPR, 
179 FERC ] 61,194 at PP 294-295).
    \1143\ Id. P 1587 (citing SPP Initial Comments at 26 (``Even 
though the Commission has stated that transmission providers retain 
the discretion regarding whether to use such technologies, the very 
fact that the transmission provider is required to evaluate them 
will lead to disputes if the transmission provider then exercises 
that discretion.'')).
    \1144\ Id. PP 1578, 1579, 1581, 1587, 1590.
---------------------------------------------------------------------------

    616. We deny PJM's requested clarification about whether Order No. 
2023 requires transmission providers that already include all the 
enumerated technologies in its studies to explain their evaluation of 
the enumerated alternative transmission technologies in their cluster 
study reports. Consistent with the Commission's statements in Order No. 
2023, transmission providers may explain specific circumstances on 
compliance and justify why any deviations are either consistent with or 
superior to the pro forma LGIP or merit an independent entity variation 
in the context of RTOs/ISOs.\1145\
---------------------------------------------------------------------------

    \1145\ Id. P 1764.
---------------------------------------------------------------------------

    617. We disagree with PJM that the requirement in Order No. 2023 
for transmission providers to evaluate the enumerated alternative 
transmission technologies will be burdensome because interconnection 
customers are likely to demand re-evaluation of the technologies. The 
Commission determined that, if a transmission provider evaluates the 
enumerated alternative transmission technologies as required herein 
and, in its sole discretion, determines not to use any enumerated 
alternative transmission technologies as an alternative to a 
traditional network upgrade, and explains its evaluation of the 
enumerated alternative transmission technologies in the applicable 
study report(s), the transmission provider has complied with Order No. 
2023, including tariffs filed pursuant thereto. We continue to find 
that these limitations on review address concerns about time-consuming 
delays and costly disputes or litigation.
    618. In response to Clean Energy Associations', Public Interest 
Organizations', and WATT Coalition's requests for rehearing regarding 
transmission provider discretion, we sustain the discretion that Order 
No. 2023 affords transmission providers in determining whether to use 
an alternative transmission technology for several reasons. First, we 
continue to find that this level of discretion is justified because (1) 
the transmission provider is responsible for determining whether using 
any of the enumerated alternative transmission technologies is an 
appropriate and reliable network upgrade that allows the 
interconnection customer to flow the output of its generating facility 
onto the transmission provider's transmission system in a safe and 
reliable manner; \1146\ (2) the requirement to make such a 
determination before allowing for the use of the enumerated alternative 
transmission technologies addresses concerns that their use may impinge 
on reliability, delay network upgrades instead of reducing the need for 
them or obviating the need for them altogether, or fail to address all 
transmission system issues that a traditional network upgrade would 
address; \1147\ and (3) there is a need to avoid time-consuming delays 
and costly disputes or litigation over interconnection costs that could 
arise as a result of this reform.\1148\
---------------------------------------------------------------------------

    \1146\ Id. P 1589.
    \1147\ Id. P 1587.
    \1148\ Id. P 1764.
---------------------------------------------------------------------------

    619. Second, contrary to WATT Coalition's and Clean Energy 
Associations' assertions, Order No. 2023 does not give transmission 
providers unfettered discretion to disregard alternative transmission 
technologies. In spite of the discretion provided to transmission 
providers, they must explain their evaluation of the enumerated 
alternative transmission technologies for feasibility, cost, and time 
savings as an alternative to a traditional network upgrade in their 
applicable study report(s), and their use determinations must be 
consistent with good utility practice, applicable reliability 
standards, and applicable laws and regulations.\1149\ An 
interconnection customer may contest a transmission provider's 
evaluation and use determination, just as it does with respect to 
traditional network upgrades.\1150\ This ensures that the transmission 
provider's explanation of its evaluation of the enumerated alternative 
transmission technologies for feasibility, cost, and time savings as an 
alternative to a traditional network upgrade in its applicable study 
report(s) as well as its determinations regarding the use of a network 
upgrade and/or an alternative transmission technology are consistent 
with the FPA and the transmission provider's tariff.
---------------------------------------------------------------------------

    \1149\ See infra PP 621-627.
    \1150\ See, e.g., Sw. Power Pool, Inc., 171 FERC ] 61,068, order 
on reh'g, 172 FERC ] 61,286 (2020).
---------------------------------------------------------------------------

    620. Finally, the level of discretion that Order No. 2023 affords 
transmission providers is consistent with the general discretion the 
Commission affords transmission providers to maintain a reliable 
system.\1151\ The transmission provider is the only entity responsible 
for determining appropriate and reliable network upgrades for its 
transmission system. Applying this general interconnection status quo 
ante to the determination of whether an alternative transmission 
technology could serve as a network upgrade inevitably means that the 
transmission provider is the only entity responsible for determining 
``whether using any of the enumerated alternative transmission 
technologies is an appropriate and reliable network upgrade `that would 
allow the interconnection customer to flow the output of its generating 
facility onto the transmission provider's transmission system in a safe 
and reliable manner.' '' \1152\ In fact, the transmission provider may 
be subject to penalties if its transmission system does not function in 
a reliable manner as required by the provisions of the Reliability 
Standards.\1153\ Thus, Commission precedent supports a finding that the 
transmission provider is the entity with sole discretion as to which 
network upgrades must be constructed to ensure the safe and reliable 
operation of the transmission system as a new generating facility 
interconnects.\1154\ The term ``sole discretion'' does not absolve the 
transmission provider from making a use determination that is 
consistent with the FPA and its tariff.
---------------------------------------------------------------------------

    \1151\ Order No. 2003-A, 106 FERC ] 61,220 at P 404; pro forma 
LGIA art. 9.3 (``Transmission Provider shall cause the Transmission 
System and the Transmission Provider's Interconnection Facilities to 
be operated, maintained and controlled in a safe and reliable manner 
and in accordance with this LGIA''); Interconnection for Wind 
Energy, 111 FERC ] 61,353, at P51, reh'g granted in part on other 
grounds, 113 FERC ] 61,254 (2005) (``because the Transmission 
Provider is responsible for the safe and reliable operation of its 
transmission system (pursuant to NERC and regional reliability 
council standards), it is in the best position to establish if 
reactive power is needed in individual circumstances''); Big Sandy 
Peaker Plant, LLC v. PJM Interconnection, L.L.C., 154 FERC ] 61,216, 
at P 50 (2016) (the Commission gives ``reliability-related 
discretion to [ISOs], and [will] not second-guess their decisions in 
that regard'').
    \1152\ Order No. 2023, 184 FERC ] 61,054 at PP 1582, 1584, 1589.
    \1153\ See, e.g., Reliability Standard TOP-001-5, ``Transmission 
Operations,'' which requires each Transmission Operator to act to 
maintain the reliability of its Transmission Operator Area; see also 
Interconnection for Wind Energy, 113 FERC ] 61,254, at P 42 (2005) 
(``Transmission Providers are required to complete a detailed System 
Impact Study, and are required to ensure that NERC reliability 
standards are met in all instances.'').
    \1154\ Order No. 2023, 184 FERC ] 61,054 at P 1582 (citing Order 
No. 2003, 104 FERC ] 61,103 at P 767; Order No. 2003-A, 106 FERC ] 
61,220 at P 404; pro forma LGIA arts. 9.3, 9.4).
---------------------------------------------------------------------------

    621. We sustain the performance standards that Order No. 2023 
applies to a transmission provider's evaluation of each alternative 
transmission technology listed in pro forma LGIP section 7.3 and pro 
forma SGIP sections 3.3.6 and 3.4.10 and to its determination whether 
it should be used. Specifically, Order No. 2023 requires that a

[[Page 27113]]

transmission provider evaluate each alternative transmission technology 
listed in pro forma LGIP section 7.3 and pro forma SGIP sections 3.3.6 
and 3.4.10 and determine whether it should be used ``consistent with 
good utility practice, applicable reliability standards, and other 
applicable regulatory requirements.'' \1155\ Order No. 2023 also 
adopted corresponding modifications to the pro forma LGIP and pro forma 
SGIP. Below, we discuss further modifications to these pro forma 
documents.
---------------------------------------------------------------------------

    \1155\ Id. PP 1578, 1580, 1582, 1584, 1587, 1589. Below, we 
discuss modifying this standard to refer to ``applicable laws and 
regulations'' rather than ``other applicable regulatory 
requirements.'' See infra PP 624, 626-627.
---------------------------------------------------------------------------

    622. As discussed above, Order No. 2023 requires transmission 
providers to conduct their alternative transmission technology 
evaluations and use determinations consistent with good utility 
practice, applicable reliability standards, and other applicable 
regulatory requirements. We address each performance standard in turn. 
First, we disagree with Public Interest Organizations that ``good 
utility practice'' is vague or ambiguous because that term is defined 
in the pro forma LGIP \1156\ and the pro forma SGIP.\1157\
---------------------------------------------------------------------------

    \1156\ Pro forma LGIP section 1 (Definitions).
    \1157\ Pro forma SGIP attach. 1 (Glossary of Terms).
---------------------------------------------------------------------------

    623. Second, we disagree with Public Interest Organizations that 
``applicable reliability standards'' is vague or ambiguous because that 
term is defined in the pro forma LGIP.\1158\ We note, however, that, 
unlike the pro forma LGIP, ``applicable reliability standards'' is not 
defined in the pro forma SGIP. Therefore, consistent with the 
definition in the pro forma LGIP and Order No. 2023, we modify the pro 
forma SGIP to define ``Applicable Reliability Standards'' as ``the 
requirements and guidelines of the Electric Reliability Organization 
and the Balancing Authority Area of the Transmission System to which 
the Generating Facility is directly interconnected.'' \1159\ We also 
find that the words ``applicable reliability standards'' were 
inadvertently not included in the performance standards that Order No. 
2023 added to pro forma LGIP section 7.3 and pro forma SGIP sections 
3.3.6 and 3.4.10. Therefore, we include that term in those pro forma 
sections now.
---------------------------------------------------------------------------

    \1158\ Pro forma LGIP section 1 (Definitions).
    \1159\ See id.
---------------------------------------------------------------------------

    624. Finally, we find that the use of the catchall phrase ``other 
applicable regulatory requirements'' is vague or ambiguous. Unlike the 
two standards discussed above, this phrase is not defined in either the 
pro forma LGIP or the pro forma SGIP. In order to remedy this 
deficiency, we modify Order No. 2023 to replace ``other applicable 
regulatory requirements'' with the term ``applicable laws and 
regulations,'' which is a defined term in the pro forma LGIP. We note, 
however, that, unlike the pro forma LGIP, ``applicable laws and 
regulations'' is not defined in the pro forma SGIP. Therefore, 
consistent with the definition in the pro forma LGIP and Order No. 
2023, we modify the pro forma SGIP to define ``applicable laws and 
regulations'' as ``all duly promulgated applicable federal, state and 
local laws, regulations, rules, ordinances, codes, decrees, judgments, 
directives, or judicial or administrative orders, permits and other 
duly authorized actions of any Governmental Authority.'' \1160\ We also 
modify pro forma LGIP section 7.3 and pro forma SGIP sections 3.3.6 and 
3.4.10 to reflect this change in terminology.
---------------------------------------------------------------------------

    \1160\ See id.
---------------------------------------------------------------------------

    625. Finally, we find that, although Order No. 2023 applies the 
performance standards to both the transmission provider's evaluation of 
the enumerated alternative transmission technologies and the 
determination to use the technology,\1161\ pro forma LGIP section 7.3 
does not apply the standards to the former. We therefore modify pro 
forma LGIP section 7.3 to remedy this deficiency.
---------------------------------------------------------------------------

    \1161\ Order No. 2023, 184 FERC ] 61,054 at P 1589.
---------------------------------------------------------------------------

    626. Based on these findings, we modify pro forma LGIP section 7.3, 
in relevant part, as follows: ``Transmission Provider shall evaluate 
each identified alternative transmission technology and determine 
whether the above technologies should be used, consistent with Good 
Utility Practice, Applicable Reliability Standards, and [other 
applicable regulatory requirements]Applicable Laws and Regulations.''
    627. We also modify pro forma SGIP sections 3.3.6 and 3.4.10, in 
relevant part, as follows: ``Transmission Provider shall evaluate each 
identified alternative transmission technology and determine whether it 
should be used, consistent with Good Utility Practice, Applicable 
Reliability Standards, and [other applicable regulatory 
requirements]Applicable Laws and Regulations.''
    628. We disagree with Clean Energy Associations, Public Interest 
Organizations and WATT Coalition that requiring a transmission provider 
to evaluate the list of enumerated alternative transmission 
technologies and determine the use of those technologies consistent 
with these performance standards will negatively impact an 
interconnection customer's ability to challenge a transmission 
provider's actions. As explained above, the performance standards 
applied in this context are the same as, or similar to, those that 
apply to other sections of the pro forma LGIP and pro forma SGIP. 
Therefore, the use of these performance standards in this context does 
not in and of itself change an interconnection customer's ability to 
challenge a transmission provider's conduct. As discussed above, an 
interconnection customer may challenge a transmission provider's 
evaluation of the enumerated alternative transmission technologies and 
its determination about whether to use alternative transmission 
technologies as it can challenge other conduct in the pro forma LGIP 
and pro forma SGIP that is allegedly inconsistent with the performance 
standards.\1162\
---------------------------------------------------------------------------

    \1162\ See supra P 619.
---------------------------------------------------------------------------

    629. We do not believe that WATT's suggestion to allow an 
interconnection customer to provide input on the evaluation of 
alternative transmission technologies after the initial phase of the 
cluster study within the pro forma LGIP is necessary. The existing 
interconnection procedures already provide the opportunity for 
interconnection customer input with respect to all aspects of a cluster 
study after the cluster study report is completed, which necessarily 
provides an opportunity for input as to the evaluation of the 
enumerated alternative transmission technologies. Specifically, pro 
forma LGIP section 7.4 provides that, ``[w]ithin ten (10) Business Days 
of simultaneously furnishing a Cluster Study Report to each 
Interconnection Customer within the Cluster and posting such report on 
OASIS, Transmission Provider shall convene a Cluster Study Report 
Meeting.'' Pro forma LGIP section 7.5 provides a similar opportunity 
for input after the completion of a cluster restudy report. WATT 
Coalition does not explain how an additional opportunity to provide 
input after the initial phase of a cluster study would be beneficial 
and ensure just and reasonable rates. We find that, to the contrary, 
WATT's request for an additional opportunity to provide input would 
slow down the interconnection process, which would undermine the 
Commission's efforts to ensure a reliable, efficient, transparent, and 
timely interconnection process.
    630. We address in turn rehearing parties' requests for rehearing 
and/or clarification related to the list of enumerated alternative 
transmission

[[Page 27114]]

technologies in Order No. 2023. We are not persuaded by SPP's request 
to reconsider the inclusion of transmission switching in the list of 
enumerated alternative transmission technologies. While transmission 
switching may be used more often in short-term, operational timeframes, 
we continue to find that it is just and reasonable to include 
transmission switching on the list of technologies that transmission 
providers are required to evaluate because it could provide topology 
solutions that relieve transmission constraints for the duration of the 
requested interconnection service and does not rely only on transient 
conditions. As discussed above, Order No. 2023 did not create a 
presumption in favor of substituting alternative transmission 
technologies for necessary traditional network upgrades, either 
categorically or in specific cases.\1163\
---------------------------------------------------------------------------

    \1163\ Order No. 2023, 184 FERC ] 61,054 at PP 1582, 1584.
---------------------------------------------------------------------------

    631. We are persuaded by VEIR's arguments raised on rehearing and 
clarify that there are a range of permissible present and future 
advanced conductor technologies that fall within this class of 
technologies that transmission providers are required to evaluate 
pursuant to Order No. 2023. We agree that this clarification will 
ensure that the term ``advanced conductors'' includes present and 
future transmission line technologies whose power flow capacities 
exceed the power flow capacities of conventional transmission line 
technologies, thus achieving the Commission's objectives in Order No. 
2023. Consistent with VEIR's request for clarification, we further 
clarify that advanced conductors are advanced relative to conventional 
aluminum conductor steel reinforced conductors and include, but are not 
limited to, superconducting cables, advanced composite conductors, high 
temperature low-sag conductors, fiber optic temperature sensing 
conductors, and advanced overhead conductors.\1164\
---------------------------------------------------------------------------

    \1164\ See VEIR Rehearing Request at 3-6 (citing 42 U.S.C. 
16422(a); U.S. Department of Energy December 2020 Report (Advanced 
Transmission Technologies)).
---------------------------------------------------------------------------

    632. We sustain the Commission's decision in Order No. 2023 not to 
include dynamic line ratings in the enumerated list of alternative 
transmission technologies that a transmission provider must evaluate. 
In Order No. 2023, the Commission properly exercised its discretion to 
determine just and reasonable rates and balanced various factors to 
establish a list of alternative transmission technologies that 
transmission providers are required to evaluate.\1165\ Specifically, 
the Commission balanced two competing objectives in its effort to 
ensure just and reasonable rates: (1) the speed of interconnection 
queue processing times and (2) the cost and the speed at which network 
upgrades can be constructed. In particular, the Commission recognized 
that evaluating the enumerated alternative transmission technologies in 
the cluster studies has the potential to identify network upgrade 
solutions that are cheaper and faster to construct but, all else equal, 
may also increase interconnection study processing times by increasing 
the scope and complexity of the cluster studies.\1166\
---------------------------------------------------------------------------

    \1165\ Order No. 2023, 184 FERC ] 61,054 at P 1586.
    \1166\ We acknowledge that the Commission found that ``in some 
cases transmission providers may be able to rapidly determine if a 
certain enumerated alternative transmission technology is 
inappropriate for further study.'' See id. P 1590. In such 
instances, the transmission provider would be able to exclude 
dynamic line ratings as a possible solution for certain reliability 
violations identified in the cluster study. In so doing, 
interconnection queue processing times would be unaffected.
---------------------------------------------------------------------------

    633. The list of alternative transmission technologies enumerated 
in Order No. 2023 that transmission providers must evaluate includes 
those technologies that can serve as network upgrade solutions even in 
high stress conditions and scenarios in which weather conditions are 
less favorable. Unlike the alternative transmission technologies on the 
list, dynamic line ratings are dependent on weather conditions (e.g., 
wind speed and direction and solar irradiance level). If weather 
conditions change, the interconnection customer and the load reliant on 
that interconnection customer are both at risk of the interconnection 
customer's energy not being deliverable during real-time operations. 
Given that interconnection studies for NRIS incorporate a range of 
simulations assuming worst-case conditions,\1167\ worst-case line 
rating input assumptions are appropriate in this context as inputs to 
interconnection studies, as explained further below. Because dynamic 
line ratings use non-worst case scenario input assumptions, it is not 
arbitrary and capricious to exempt dynamic line ratings from the 
enumerated list of technologies that must be considered in 
interconnection studies.
---------------------------------------------------------------------------

    \1167\ Order No. 2003-A, 106 FERC ] 61,220 at P 500.
---------------------------------------------------------------------------

    634. WATT Coalition further asserts that line ratings in 
interconnection studies are chronically underrated, and that, without 
dynamic line ratings, lower wind assumptions are used, causing 
transmission lines to be rated lower in planning studies. This 
assertion does not properly address how transmission providers conduct 
interconnection studies. Under the current approach to interconnection 
studies, which the Commission did not fundamentally change in Order No. 
2023, transmission providers study requests for NRIS using line ratings 
that assume worst case inputs in order to ensure reliability under the 
most restrictive operating conditions anticipated to occur.\1168\
---------------------------------------------------------------------------

    \1168\ Id.
---------------------------------------------------------------------------

    635. We also disagree that the evaluation of potential benefits of 
dynamic line ratings in transmission planning and interconnection 
should be analogous. Operational studies, transmission planning 
studies, and interconnection studies have distinct goals. The objective 
of an interconnection study, which is inherently a type of reliability 
study, is to identify interconnection facilities and/or traditional 
network upgrades that are needed to safely and reliably interconnect a 
generating facility to the transmission system.\1169\ Contrary to WATT 
Coalition's assertion, there is limited record evidence that dynamic 
line ratings are well-suited to meeting the reliability goals of 
interconnection studies, and several commenters express concerns that 
dynamic line ratings cannot reliably serve as network upgrades.\1170\ 
In particular, dynamic line ratings only alter line ratings as 
operational conditions, such as wind speed and direction or solar 
irradiance level, warrant as forecasted over a particular timeframe. 
Therefore, dynamic line ratings cannot guarantee that an increased line 
rating will be available at any particular time, including times of 
system stress such as those studied to evaluate the reliability impact 
of an interconnection request.
---------------------------------------------------------------------------

    \1169\ See, e.g., LGIP section 7.3 (``[t]he [c]luster [s]tudy 
shall evaluate the impact of the proposed interconnection on the 
reliability of the [t]ransmission [s]ystem.'').
    \1170\ Order No. 2023, 184 FERC ] 61,054 at P 1545 (citing AECI 
Initial Comments at 9; AEP Initial Comments at 51; Avangrid Initial 
Comments at 36; Southern Initial Comments at 29; U.S. Chamber of 
Commerce Initial Comments at 12).
---------------------------------------------------------------------------

    636. In terms of evidence, WATT Coalition provides instances in 
which dynamic line ratings have been studied as a pilot project or have 
been used in operations and some theoretical examples of how dynamic 
line ratings can raise line ratings and thus could be helpful in 
interconnection; however, WATT Coalition does not provide evidence that 
interconnection studies have relied upon dynamic line ratings in the 
place of a network upgrade to resolve potential reliability violations.

[[Page 27115]]

We are not persuaded by the examples that WATT Coalition uses as the 
basis for its rehearing request for both procedural and substantive 
reasons. First, WATT Coalition provides a few examples for the first 
time on rehearing that could have been provided earlier in the 
proceeding, which is impermissible under the Commission's 
precedent.\1171\
---------------------------------------------------------------------------

    \1171\ See supra PP 386, 609 n.1145.
---------------------------------------------------------------------------

    637. Second, substantively, WATT Coalition's reliance on the 
scenarios is also misplaced. In particular, in the case of high-wind 
scenarios cited by WATT Coalition, it is possible that a dynamic line 
rating studied in lieu of a traditional network upgrade would be able 
to resolve a thermal overload in a high-wind scenario. However, under 
NRIS, ``[t]ransmission [p]roviders must study the [t]ransmission 
[s]ystem at peak load, under a variety of severely stressed conditions 
to determine whether, with the [g]enerating [f]acility at full output, 
the aggregate of generation in the local area can be delivered to the 
aggregate of load, consistent with [t]ransmission [p]rovider's 
reliability criteria and procedures.'' \1172\ As a weather dependent 
technology, if there are thermal overloads or other contingencies not 
connected to a high-wind scenario, dynamic line ratings cannot 
necessarily ensure the needed local area deliverability to the 
aggregate of load.\1173\
---------------------------------------------------------------------------

    \1172\ Order No. 2003-A, 106 FERC ] 61,220 at P 500 (also 
stating that, ``[h]owever, [NRIS] does not necessarily provide the 
[i]nterconnection [c]ustomer with the capability to physically 
deliver the output of its [g]enerating [f]acility to any particular 
load without incurring congestion costs. Nor does [NRIS] convey a 
right to deliver the output of the [g]enerating [f]acility to any 
particular customer.'').
    \1173\ Id. See also Order No. 881, 177 FERC ] 61,179 at P 35 
(explaining that ``while current transmission line rating practices 
usually understate transfer capability, they can also overstate 
transfer capability . . .'').
---------------------------------------------------------------------------

    638. We are also not persuaded by WATT Coalition's contention that 
Order No. 2023's statements that dynamic line ratings may relieve 
congestion by increasing available interconnection capacity only 
temporarily or in the short-term are incorrect and that, instead, 
dynamic line ratings are a long-term solution for the specific 
parameter of the cluster study. The issue is not whether dynamic line 
ratings can provide additional transmission capacity at a specific 
point in time; rather, the issue is whether, as a weather dependent 
technology, they can be relied upon to replace the need for a different 
network upgrade by ensuring the necessary local area deliverability to 
the aggregate of load if there are thermal overloads or other 
contingencies not connected to a high-wind scenario. Moreover, because 
transmission providers generally consider worst-case scenarios in 
interconnection studies, such transmission providers would still have 
to use worst-case line rating input assumptions, which are typically 
the seasonal line rating (assuming high air temperature, full sun, and 
low or no wind) on a system using dynamic line ratings, not the highest 
dynamic rating that would apply in more favorable conditions (e.g., low 
air temperature, no sun, strong sustained winds). For these reasons, 
WATT Coalition's rehearing arguments do not refute Order No. 2023's 
finding that dynamic line ratings ``may be less beneficial in the 
interconnection context.'' \1174\ As explained above, in Order No. 
2023, the Commission balanced various factors (i.e., the potential 
benefits of studying the technology with the burden on the transmission 
provider and the increase in study times) and established a list of 
alternative transmission technologies that are most likely to ensure 
just and reasonable rates.\1175\
---------------------------------------------------------------------------

    \1174\ WATT Coalition Rehearing Request at 21-23 (quoting Order 
No. 2023, 184 FERC ] 61,054 at P 1598).
    \1175\ Order No. 2023, 184 FERC ] 61,054 at P 1586.
---------------------------------------------------------------------------

    639. We disagree with WATT Coalition's assertion that the 
Commission did not engage in reasoned decision-making by excluding 
dynamic line ratings from this enumerated list of alternative 
transmission technologies. In Order No. 2023, the Commission explained 
that, because the benefits of evaluating dynamic line ratings did not 
outweigh the burden and the potential increase in study times, dynamic 
line ratings were less beneficial than other alternative transmission 
technologies in the interconnection context and did not include it on 
the final enumerated list. Regarding the burden, for example, both MISO 
and the MISO TOs highlighted the additional studies and requirements 
that an obligation to evaluate dynamic line ratings would impose on the 
first phase of the interconnection study process.\1176\ These entities 
further highlighted that these additional obligations could also 
necessitate further debate about the impact that such dynamic line 
ratings may have on the rest of the transmission system and were in 
contrast to the need to accelerate the interconnection process. After 
having determined that the existing pro forma LGIP and pro forma SGIP 
are not just and reasonable, the Commission must determine, based on 
substantial evidence, a replacement rate that is just, reasonable and 
not unduly preferential.\1177\ Thus, the Commission both provided a 
reasoned explanation for excluding dynamic line ratings from the final 
enumerated list of alternative transmission technologies and 
established a just and reasonable replacement rate. Further, we note, 
that the Commission did not ``exclude'' dynamic line ratings from 
consideration in cluster studies, as WATT Coalition claims. Order No. 
2023 specifically provided that transmission providers are permitted to 
go beyond the enumerated list and can do so without changing their 
tariffs.\1178\
---------------------------------------------------------------------------

    \1176\ Id. P 1549 (citing MISO TOs Initial Comments at 30; MISO 
Initial Comments at 11).
    \1177\ FPA section 206 requires that, when the Commission finds 
a rate subject to its jurisdiction to be ``unjust, unreasonable, 
unduly discriminatory or preferential, the Commission shall 
determine the just and reasonable rate, charge, classification, 
rule, regulation, practice, or contract to be thereafter observed 
and in force, and shall fix the same by order.'' 16 U.S.C. 824e; see 
also Del. Pub. Serv. Comm'n v. PJM Interconnection, L.L.C, 166 FERC 
] 61,161, at P 16 (2019) (``In finding [certain tariff provisions] 
unjust and unreasonable . . . pursuant to FPA section 206, the 
Commission is required to establish the just and reasonable 
replacement rate.'').
    \1178\ Order No. 2023, 184 FERC ] 61,054 at P 1600. While we are 
declining to include dynamic line ratings among the enumerated 
technologies for the reasons explained herein, we note that dynamic 
line ratings may have greater utility when studying an 
interconnection customer requesting ERIS because such a customer is 
opting for ``as available'' service. See Order No. 2003-A, 106 FERC 
] 61,220 at P 499. By contrast, for NRIS, ``[t]ransmission 
[p]roviders must study the [t]ransmission [s]ystem at peak load, 
under a variety of severely stressed conditions to determine 
whether, with the [g]enerating [f]acility at full output, the 
aggregate of generation in the local area can be delivered to the 
aggregate of load, consistent with [t]ransmission [p]rovider's 
reliability criteria and procedures.'' Order No. 2003-A, 106 FERC ] 
61,220 at P 500.
---------------------------------------------------------------------------

    640. We are not persuaded by Clean Energy Associations' arguments 
that energy storage serving as a transmission asset should be included 
in the enumerated list of alternative transmission technologies. We 
agree with Clean Energy Associations that energy storage, like other 
alternative transmission technologies on the list, would need to be 
evaluated on a case-by-case basis to determine if the technology can 
serve in the place of a network upgrade. However, we continue to find 
that, as discussed in Order No. 2023, energy storage requires an 
additional case-by-case analysis that distinguishes it from the 
enumerated list of alternative transmission technologies: storage 
resources must also be evaluated to determine whether a storage 
resource performs a transmission function through a case-by-case 
analysis of either how a particular storage resource would be operated 
or the requirements set forth in a tariff governing selection of such

[[Page 27116]]

storage resources.\1179\ That analysis would determine whether the 
storage resource's cost can be recovered in transmission rate base or 
as a network upgrade. This additional analysis distinguishes energy 
storage from the other technologies on the enumerated list of 
alternative transmission technologies and is the basis for its 
exclusion from the list. We reiterate, however, that Order No. 2023 
does not preclude a transmission provider from studying or evaluating 
any technology that was not included in the enumerated list of 
alternative transmission technologies.\1180\
---------------------------------------------------------------------------

    \1179\ Order No. 2023, 184 FERC ] 61,054 at P 1599. In Order No. 
2023, the Commission pointed to the process in SPP, which takes into 
account five considerations that, together, ensure that a selected 
storage resource will serve a transmission function. Id. (citing Sw. 
Power Pool, Inc., 183 FERC ] 61,153, at P 29 (2023)).
    \1180\ Id. P 1600.
---------------------------------------------------------------------------

3. Modeling and Ride Through Requirements for Non-Synchronous 
Generating Facilities
a. Modeling Requirements
i. Order No. 2023 Requirements
    641. In Order No. 2023, the Commission revised Attachment A to 
Appendix 1 of the pro forma LGIP and Attachment 2 of the pro forma SGIP 
to require each interconnection customer requesting to interconnect a 
non-synchronous generating facility to submit to the transmission 
provider: (1) a validated user-defined root mean square (RMS) positive 
sequence dynamic model; (2) an appropriately parameterized generic 
library RMS positive sequence dynamic model, including a model block 
diagram of the inverter control system and plant control system, that 
corresponds to a model listed in a new table of acceptable models or a 
model otherwise approved by the Western Electricity Coordinating 
Council (WECC); and (3) a validated electromagnetic transient (EMT) 
model, if the transmission provider performs an EMT study as part of 
the interconnection study process.\1181\
---------------------------------------------------------------------------

    \1181\ Id. P 1659.
---------------------------------------------------------------------------

    642. The Commission also adopted the NOPR proposals to: (1) define 
a user-defined model as any set of programming code created by 
equipment manufacturers or developers that captures the latest features 
of controllers that are mainly software-based and represent the 
entities' control strategies but does not necessarily correspond to any 
particular generic library model, as contained in Attachment A to 
Appendix 1 of the pro forma LGIP and Attachment 2 of the pro forma 
SGIP; (2) revise Attachment A to Appendix 1 of the pro forma LGIP and 
Attachment 2 of the pro forma SGIP to add a table of acceptable generic 
library models, based on the current WECC list of approved dynamic 
models for renewable energy generating facilities; and (3) revise 
section 4.4.4 of the pro forma LGIP and section 1.4 of the pro forma 
SGIP to require that any proposed modification of the interconnection 
request be accompanied by updated models of the proposed generating 
facility.\1182\
---------------------------------------------------------------------------

    \1182\ Id. P 1660.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    643. Invenergy asks the Commission to modify the pro forma LGIP, 
Appendix 1, Attachment A to state that, if a validated EMT model is not 
available, a preliminary EMT model may be provided, and, if a validated 
EMT model is determined to be necessary, the interconnection customer 
shall submit the validated EMT model no later than needed for the 
cluster restudy.\1183\ Invenergy argues that requiring validation of 
EMT models at the time of the interconnection application will impede 
an interconnection customer's ability to use an advanced product with 
higher annual energy production values because such products will not 
be validated.\1184\ Invenergy explains that the only equipment with an 
available, validated EMT model is equipment that has been in the market 
for some years, and it is unreasonable to require an interconnection 
customer to submit a validated EMT model at the time of interconnection 
application even if the proposed commercial operation date may be in 
five or six years. Invenergy asserts that it is unclear whether a 
project developer might be able to provide EMT models for different 
equipment later in the process as newer equipment becomes field tested 
without the transmission provider determining that it is a material 
modification, leading some developers to forego using state-of-the-art 
technology otherwise available under the commercial operation deadline.
---------------------------------------------------------------------------

    \1183\ Invenergy Rehearing Request at 13.
    \1184\ Id. at 10-12.
---------------------------------------------------------------------------

    644. Invenergy contends that the Commission's alternative to a 
validated EMT model that the customer could pursue is not 
accurate.\1185\ Invenergy asserts that the interconnection customer 
cannot attest to the accuracy of model information because model 
information is provided by the manufacturer, and equipment 
manufacturers will not attest to model data until the field test is 
done, which is later in the process. Invenergy argues that requiring 
validation is not necessary to achieve the Commission's goal of 
ensuring that accurate information is used in studies. In particular, 
Invenergy notes that preliminary models contain the same information as 
a validated model and are developed based on real design codes but have 
not been field tested.
---------------------------------------------------------------------------

    \1185\ Id. at 12-13.
---------------------------------------------------------------------------

    645. Invenergy contends that, much like EMT models, requiring 
validated RMS models at the beginning of the interconnection process 
will force developers to use older technology and thus stifle 
innovation and waste time and resources.\1186\ Invenergy also argues 
that the Commission's requirement is not necessary to ensure accurate 
model information. Therefore, Invenergy asks the Commission to modify 
the pro forma LGIP, Appendix 1, Attachment A and pro forma SGIP, 
Attachment 2, to state that, if a validated RMS model is not available, 
a preliminary RMS model may be provided and the interconnection 
customer shall submit the validated RMS model no later than needed for 
the cluster restudy.
---------------------------------------------------------------------------

    \1186\ Id. at 14.
---------------------------------------------------------------------------

    646. [Oslash]rsted argues that the Commission's decision to require 
a validated EMT model when seeking to interconnect is arbitrary and 
capricious and not supported by reasoned decision-making.\1187\ 
[Oslash]rsted contends that accurate models for nonsynchronous 
resources may not be available early in the interconnection process due 
to rapid advances in inverter and control technologies and that some 
resources may need customization requiring interconnection customers to 
make decisions about specific types of technology they may use later in 
the interconnection process. [Oslash]rsted claims that the Commission's 
requirement does not provide a path forward for such resources and 
could deter the use of new and more efficient technologies or delay 
interconnection of needed resources.
---------------------------------------------------------------------------

    \1187\ [Oslash]rsted Rehearing Request at 6-7.
---------------------------------------------------------------------------

    647. [Oslash]rsted also argues that transmission providers 
generally do not conduct EMT studies until much later in the 
interconnection process, resulting in minimal value in the 
interconnection customer providing and subsequently updating EMT models 
at the time of interconnection application.\1188\ [Oslash]rsted asserts 
that EMT study results typically reveal the need for items such as 
control

[[Page 27117]]

tuning rather than additional transmission system upgrades, but this 
requires an EMT model that accurately represents how the plant is 
installed and configured as well as transmission system data that can 
only be provided by the transmission provider, so the Commission's 
requirement is not likely to provide information that is useful for 
reliability studies and will waste time and resources for both the 
interconnection customer and the transmission provider.\1189\
---------------------------------------------------------------------------

    \1188\ Id. at 7-8.
    \1189\ Id. at 8-9.
---------------------------------------------------------------------------

    648. [Oslash]rsted asks the Commission to clarify how to provide a 
validated model for equipment that does not yet exist.\1190\ 
[Oslash]rsted suggests, as example, that the interconnection customer 
or vendor could self-attest that, to the best of their knowledge, the 
equipment response is expected to be consistent with the RMS and the 
EMT models provided at the time of interconnection study.
---------------------------------------------------------------------------

    \1190\ Id. at 9.
---------------------------------------------------------------------------

    649. PacifiCorp asks the Commission to add two models to the table 
of acceptable models that are approved by WECC and relate to ride 
through requirements.\1191\ PacifiCorp states that these qualify as 
validated user-defined root mean squared positive sequency dynamic 
models and their inclusion will allow transmission providers to 
accurately model the ride through characteristics of these resources 
and help understand if the resource will be tripped for any 
transmission related event away from the resource.
---------------------------------------------------------------------------

    \1191\ PacifiCorp Rehearing Request at 23-24.
---------------------------------------------------------------------------

iii. Determination
    650. We are unpersuaded by Invenergy's request for rehearing 
regarding potential barriers to validation of EMT models at the time of 
the interconnection application. Pursuant to Order No. 2023's 
definition of a validated model, the interconnection customer has a 
number of options that do not require field data, such as an 
attestation that the models accurately reflect the expected behavior of 
a proposed generating facility based on the interconnection customer's 
best understanding at the time of the interconnection request.\1192\ 
Therefore, we are not persuaded that the interconnection customer is 
unable to provide this attestation, even for advanced products.
---------------------------------------------------------------------------

    \1192\ Order No. 2023, 184 FERC ] 61,054 at P 1675.
---------------------------------------------------------------------------

    651. We also find it unnecessary to grant Invenergy's request to 
modify the pro forma LGIP, Appendix 1, Attachment A and pro forma SGIP, 
Attachment 2, to state that, if a validated EMT or RMS model is not 
available, a preliminary model may be provided, and the interconnection 
customer shall submit the validated model no later than needed for the 
cluster restudy. As noted above, such preliminary models are acceptable 
under Order No. 2023's definition of a validated model, as long as it 
is based on the actual programming code used by the manufacturer to 
program equipment.
    652. We deny [Oslash]rsted's request for clarification regarding 
how to provide a validated model for equipment that does not yet exist. 
An interconnection request that fails to specify the equipment to be 
used, including, for example, the inverter manufacturer, model name, 
number, and version, is not a complete application.\1193\ However, we 
acknowledge that equipment, including inverters, may advance over the 
period of time an interconnection customer proceeds through the queue. 
We note that section 4.6 of the pro forma LGIP contains the 
transmission provider's technological change procedure, which is 
designed to allow transmission providers to evaluate equipment changes 
to an interconnection request.\1194\
---------------------------------------------------------------------------

    \1193\ See pro forma LGIP, attach. A to app. 1.
    \1194\ Order No. 2023, 184 FERC ] 61,054 at P 1682.
---------------------------------------------------------------------------

    653. We are unpersuaded by Invenergy's request for rehearing 
regarding whether a project developer might be able to provide EMT 
models for different equipment later in the process as newer equipment 
becomes field tested without the transmission provider determining that 
it is a material modification. Order No. 2023 was clear that section 
4.4 of the pro forma LGIP and section 1.4 of the pro forma SGIP set 
forth procedures for modifications to an interconnection request, 
including the evaluation of technical changes to a request, and such 
changes may be determined to be a material modification.\1195\ 
Furthermore, as noted above, section 4.6 of the pro forma LGIP contains 
the transmission provider's technological change procedure, which is 
designed to allow transmission providers to evaluate equipment changes 
to an interconnection request.
---------------------------------------------------------------------------

    \1195\ Id.
---------------------------------------------------------------------------

    654. We are unpersuaded by [Oslash]rsted's rehearing request 
regarding the timing of EMT model availability. While the Commission 
has approved proposals to perform an EMT study following execution of 
the LGIA, the pro forma LGIP and pro forma SGIP contain no such 
study.\1196\ We sustain the finding in Order No. 2023 that requiring 
models to be submitted with the interconnection request is consistent 
with the principles underpinning other requirements in the pro forma 
LGIP and pro forma SGIP. Allowing model validation at a point further 
into the interconnection process could lead to restudies and subsequent 
delays that would frustrate the efficiency gained by the other reforms 
in Order No. 2023.\1197\
---------------------------------------------------------------------------

    \1196\ See Sw. Power Pool Inc., 181 FERC ] 61,018, at P 8 
(2022).
    \1197\ Order No. 2023, 184 FERC ] 61,054 at P 1669.
---------------------------------------------------------------------------

    655. We are unpersuaded by PacifiCorp's request for the Commission 
to add two models to the table of acceptable models that are approved 
by WECC and relate to ride through requirements.\1198\ PacifiCorp 
presents this issue for the first time in its rehearing request. In 
general, we reject rehearing requests that raise a new issue, unless we 
find that the issue could not have been previously presented.\1199\ We 
are not persuaded that PacifiCorp could not have raised this issue 
earlier in this proceeding. However, we also note that transmission 
providers may explain specific circumstances on compliance and justify 
why any deviations are either consistent with or superior to the pro 
forma LGIP or merit an independent entity variation in the context of 
RTOs/ISOs.
---------------------------------------------------------------------------

    \1198\ PacifiCorp Rehearing Request at 23-24. It is unclear 
which models PacifiCorp would like to add, but it appears that they 
might be LHFRT (Low/High Frequency Ride Through) and LHVRT (Low/High 
Voltage Ride Through).
    \1199\ See supra P 386.
---------------------------------------------------------------------------

b. Ride Through Requirements
i. Order No. 2023 Requirements
    656. The Commission revised article 9.7.3 of the pro forma LGIA and 
article 1.5.7 of the pro forma SGIA to require that, during abnormal 
frequency conditions and voltage conditions within the ``no trip zone'' 
defined by Reliability Standard PRC-024-3 or successor mandatory ride 
through reliability standards, the non-synchronous generating facility 
must ensure that, within any physical limitations of the generating 
facility, its control and protection settings are configured or set to: 
(1) continue active power production during disturbance and post 
disturbance periods at pre-disturbance levels unless providing primary 
frequency response or fast frequency response; (2) minimize reductions 
in active power and remain within dynamic voltage and current limits, 
if reactive power priority mode is enabled, unless providing primary 
frequency response or fast frequency response; (3) not artificially 
limit

[[Page 27118]]

dynamic reactive power capability during disturbances; and (4) return 
to pre-disturbance active power levels without artificial ramp rate 
limits if active power is reduced, unless providing primary frequency 
response or fast frequency response.\1200\
---------------------------------------------------------------------------

    \1200\ Order No. 2023, 184 FERC ] 61,054 at P 1715.
---------------------------------------------------------------------------

ii. Requests for Rehearing and Clarification
    657. Invenergy argues that the proposed ride through requirements 
impose requirements on non-synchronous generators that they may not be 
able to meet because the generator can only maintain active current, 
not power, and may not have a choice to choose between reactive and 
real power output during a disturbance due to equipment 
limitations.\1201\ Invenergy asserts that requiring a non-synchronous 
generator to produce active power instead of providing reactive support 
is very likely to exacerbate, rather than alleviate, the disturbance. 
Therefore, Invenergy asks the Commission to modify section 9.7.3 of the 
pro forma LGIA to limit the prioritization of active power to frequency 
response disturbances and clarify that the default ride-though rule for 
other disturbances can be prioritizing reactive power. Invenergy also 
asks the Commission to consider establishing a technical conference to 
obtain information directly from the standards setting bodies, the 
companies that design and supply the equipment, and other engineering 
experts to support the Commission's determinations.
---------------------------------------------------------------------------

    \1201\ Invenergy Rehearing Request at 16-17.
---------------------------------------------------------------------------

    658. Similarly, Clean Energy Associations ask the Commission to 
clarify that the text ``within any physical limitations of the 
generating facility'' allows a resource that is responding to a 
disturbance in reactive power priority mode to reduce its active power 
production if it does not have sufficient headroom to increase reactive 
power to provide required voltage support, without violating the 
requirement to continue active power production during disturbance and 
post disturbance periods at pre-disturbance levels.\1202\
---------------------------------------------------------------------------

    \1202\ Clean Energy Associations Rehearing Request at 83.
---------------------------------------------------------------------------

iii. Determination
    659. We are not persuaded by Invenergy's request to modify section 
9.7.3 of the pro forma LGIA to limit the prioritization of active power 
to frequency response disturbances and clarify that the default ride-
though rule for other disturbances can be prioritizing reactive power. 
As further explained below, Order No. 2023 allows a non-synchronous 
generating facility with physical limitations to prioritize reactive 
power. The extent to which a non-synchronous generating facility 
prioritizes real or reactive power is best handled on a case-by-case 
basis based on the transmission provider's evaluation of the 
reliability needs of its system, because different transmission systems 
and different operating conditions may require different responses from 
interconnected resources, as opposed to a default response.
    660. We grant Clean Energy Associations' request for clarification. 
In Order No. 2023, the Commission noted that the modified reform 
accommodates existing technical capabilities and physical limitations 
of non-synchronous generating facilities by providing for reductions in 
active power to prioritize reactive power.\1203\ A generating 
facility's inability to prioritize reactive power without a reduction 
in active power is considered one of the ``physical limitations of the 
generating facility'' that provides an exception, albeit limited, to 
the requirement that the generating facility continue active power 
production during disturbance and post disturbance periods at pre-
disturbance levels.
---------------------------------------------------------------------------

    \1203\ Order No. 2023, 184 FERC ] 61,054 at P 1717.
---------------------------------------------------------------------------

    661. However, given the importance of prioritization of reactive 
power, we are persuaded that additional clarity is necessary. 
Accordingly, we revise section 9.7.3 of the pro forma LGIA and article 
1.5.7 of the pro forma SGIA to state that a non-synchronous generating 
facility must ensure that, within any physical limitations of the 
generating facility:

. . . its control and protection settings are configured or set to 
(1) continue active power production during disturbance and post 
disturbance periods at pre-disturbance levels, unless reactive power 
priority mode is enabled or unless providing primary frequency 
response or fast frequency response. . . .

    662. Given this modification, we do not believe a technical 
conference, as suggested by Invenergy, is necessary at this time.

F. Compliance Procedures

1. Order No. 2023 Requirements
    663. The Commission required transmission providers to submit 
compliance filings within 90 calendar days of the publication date of 
Order No. 2023 in the Federal Register, rather than the proposed 180 
days from the effective date of Order No. 2023.
2. Requests for Rehearing and Clarification
    664. A number of entities asked the Commission to extend the 
deadline for compliance established in Order No. 2023.\1204\
---------------------------------------------------------------------------

    \1204\ See AEP Rehearing Request at 26-28 (requesting more time 
for compliance); Dominion Rehearing Request at 26-30 (requesting a 
year to submit compliance filings); EEI Rehearing Request at 10-11 
(requesting the compliance deadline be set to 180 days from the 
effective date of the final rule); PacifiCorp Rehearing Request at 
20-22 (requesting the compliance deadline be set to 180 days from 
the effective date of the final rule, or alternatively, 120 days); 
PJM Rehearing Request at 46-48 (requesting the Commission delay 
compliance such that the 90 day clock would start upon the 
Commission's issuance of an order on rehearing).
---------------------------------------------------------------------------

    665. Indicated PJM TOs argue that Order No. 2023 is unduly 
discriminatory and will inappropriately impose substantial 
administrative burdens on all transmission providers, even though 
transmission providers who have already adopted cluster study processes 
are not similarly situated to those transmission providers who have not 
adopted such processes.\1205\
---------------------------------------------------------------------------

    \1205\ Indicated PJM TOs Rehearing Request at 17.
---------------------------------------------------------------------------

    666. Dominion states that it understands that the Commission 
intended tariff revisions made in compliance with Order No. 2023 to be 
prospective, but Dominion argues that the Commission did not provide 
guidance as to what effective date transmission providers should use 
for purposes of their compliance filing.\1206\ Dominion asks the 
Commission to clarify that any compliance filings can be made effective 
in a way that will align with cluster processing dates, such as the 
start of a new processing window. Dominion asserts that such an 
effective date would allow the required revisions to be implemented on 
a going-forward and efficient basis and would not require any mid-
process changes by requiring revisions to go into effect in the middle 
of a cluster window.
---------------------------------------------------------------------------

    \1206\ Dominion Rehearing Request at 30 (citing Order No. 2023, 
184 FERC ] 61,054 at P 1769 (``This final rule will be effective as 
described above; however, the pro forma LGIP, pro forma LGIA, pro 
forma SGIP], and pro forma SGIP requirements in transmission 
providers' tariffs will not be effective until the Commission-
approved effective date of the transmission provider's filing in 
compliance with this final rule.'')).
---------------------------------------------------------------------------

3. Determination
    667. On October 25, 2023, the Commission addressed arguments on 
rehearing regarding extending the deadline for compliance established 
in Order No. 2023.\1207\ The Commission

[[Page 27119]]

extended the compliance deadline to require compliance filings to be 
submitted within 210 calendar days of the publication of Order No. 2023 
in the Federal Register (i.e., within 149 calendar days of the 
effective date of Order No. 2023, or April 3, 2024). To incorporate the 
changes made herein, we further extend the deadline until the effective 
date of this order (i.e., the deadline for compliance with Order No. 
2023 will be 30 days after the publication of this order in the Federal 
Register, and must include the further revisions reflected in this 
order).
---------------------------------------------------------------------------

    \1207\ Order on Motions and Addressing Limited Arguments Raised 
on Rehearing and Setting Aside Prior Order, In Part, Docket No. 
RM22-14 (Oct. 25, 2023).
---------------------------------------------------------------------------

    668. We disagree with arguments that Order No. 2023 imposes an 
inappropriately large compliance burden on regions already generally in 
accord with the approach adopted in Order No. 2023, or that it is 
unduly discriminatory to impose the same compliance obligations on both 
entities that have already adopted cluster study processes and those 
that have not. We find that the compliance burden imposed by Order No. 
2023 is appropriate given the scope of the problem at hand. It is not 
unduly discriminatory to require all transmission providers subject to 
the Commission's jurisdiction to comply with Commission rules.
    669. Regarding Dominion's request for clarification, we confirm 
that transmission providers may propose effective dates in their 
compliance filings that align with their existing queue processing 
dates, such as the start of a new processing window. We will consider 
these requests on a case-by-case basis in each individual compliance 
filing. To the extent Order No. 2023 suggested, by referencing MISO's 
compliance filing, that transmission providers may not be granted an 
effective date that predates the Commission order on compliance,\1208\ 
we clarify that the Commission will consider, and may grant, requests 
from transmission providers for an effective date that predates the 
Commission's order on their compliance filing, on a case-by-case basis.
---------------------------------------------------------------------------

    \1208\ Order No. 2023, 184 FERC ] 61,054 at P 1769.
---------------------------------------------------------------------------

III. Information Collection Statement

    670. The information collection requirements contained in this 
final rule are subject to review by the Office of Management and Budget 
(OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995.\1209\ OMB's regulations require approval of certain information 
collection requirements imposed by agency rules.\1210\ Respondents 
subject to the filing requirements of this order on rehearing will not 
be penalized for failing to respond to the collection of information 
unless the collection of information displays a valid OMB control 
number.
---------------------------------------------------------------------------

    \1209\ 44 U.S.C. 3507(d).
    \1210\ 5 CFR 1320.11.
---------------------------------------------------------------------------

    671. Previously, the Commission submitted to OMB the information 
collection requirements arising from Order No. 2023 and OMB approved 
those requirements. In this order on rehearing, the Commission makes no 
substantive changes to those requirements, but does make some 
modifications to the Commission's standard large generator 
interconnection procedures and agreements (i.e., the pro forma LGIP and 
pro forma LGIA) and the Commission's standard small generator 
interconnection procedures and agreement (i.e., the pro forma SGIP and 
pro forma SGIA) that every public utility transmission provider is 
required to include in their tariff under section 35.28 of the 
Commission's regulations.\1211\ This order on rehearing in Docket No. 
RM22-14-001 requires each transmission provider to amend its tariff to 
implement the modifications adopted in this order on rehearing and 
submit a compliance filing to the Commission for approval of those 
modifications. Therefore, the Commission finds it necessary to make a 
formal submission to OMB for review and approval under section 3507(d) 
of the Paperwork Reduction Act of 1995.\1212\
---------------------------------------------------------------------------

    \1211\ 18 CFR 35.28(f)(1).
    \1212\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    672. The modifications in the Docket No. RM22-14-001 affect the 
following currently approved information collections: FERC-516, 
Electric Rate Schedules and Tariff Filings (Control No. 1902-0096); and 
FERC-516A, Standardization of Small Generator Interconnection 
Agreements and Procedures (Control No. 1902-0203). The Commission, in 
this order on rehearing, is updating the burden \1213\ estimates 
associated with FERC-516 and FERC-516A information collections to 
reflect the incremental burden of complying with the new requirements 
set forth in this order.
---------------------------------------------------------------------------

    \1213\ 5 CFR 1320.3(b)(1).
---------------------------------------------------------------------------

    673. Summary of the Revisions to the Collection of Information due 
to the order on rehearing in Docket No. RM22-14-001:
     FERC-516: This order on rehearing revises the Commission's 
pro forma LGIP and LGIA and requires each public utility to amend its 
LGIP and LGIA. The amendments pertain to the first ready, first served 
cluster study process, withdrawal penalties, affected systems study 
process, the evaluation of alternative transmission technologies, and 
the maintenance of power production during abnormal frequency 
conditions and certain voltage conditions.
     FERC-516A: This order on rehearing amends the Commission's 
standard small generator interconnection procedures and agreement 
(i.e., the pro forma SGIP and pro forma SGIA) regarding the evaluation 
of alternative transmission technologies and the maintenance of power 
production during abnormal frequency conditions and certain voltage 
conditions.
     Title: Electric Rate Schedules and Tariff Filings (FERC-
516), and Standardization of Small Generator Interconnection Agreements 
and Procedures (FERC-516A).
     Action: Revision of information collections in accordance 
with Docket No. RM22-14-001.
     OMB Control Nos.: 1902-0096 (FERC-516) and 1902-0203 
(FERC-516A).
     Respondents: Public utility transmission providers, 
including RTOs/ISOs.
     Frequency of Information Collection: One time during Year 
1.
     Necessity of Information: The LGIP, LGIA, SGIP, and SGIA 
modifications in this order on rehearing ensure that interconnection 
customers can interconnect to the transmission system in a reliable, 
efficient, transparent, and timely manner, and prevent undue 
discrimination. The modifications are intended to ensure that the 
generator interconnection process is just, reasonable, and not unduly 
discriminatory or preferential.
     Internal Review: We have reviewed the requirements set 
forth in this order on rehearing that impose information collection 
burdens and have determined that such requirements are necessary. These 
requirements conform to the Commission's need for efficient information 
collection, communication, and management within the energy industry. 
We have specific, objective support for the burden estimates associated 
with the information collection requirements.
     Public Reporting Burden: As with Order No. 2023, we 
estimate that 44 transmission providers, including RTOs/ISOs, will be 
subject to this order on rehearing. The burden and cost estimates below 
reflect the incremental burden of complying with this order on 
rehearing, which will require a single

[[Page 27120]]

compliance filing to be submitted to the Commission. We estimate no 
ongoing information collection burden because there is either no 
information collection aspect of the requirement or the requirements 
would merely supplant existing ones. The Commission estimates that the 
order on rehearing in Docket No. RM22-14-001 will adjust the burden and 
cost of FERC-516 and FERC-516A as follows:
---------------------------------------------------------------------------

    \1214\ Commission staff estimate that respondents' hourly wages 
plus benefits are comparable to those of FERC employees (2024). 
Therefore, the 2024 FERC hourly cost estimate in this analysis is 
$100 per hour ($207,786 per year).
    \1215\ Order No. 2023 erroneously reported 44 ongoing responses 
for Affected Systems Study Process reforms. This was an error and 
the current number of estimated ongoing responses is zero. However, 
the burden cost per response and total burden estimates for Affected 
Systems Study Process reforms were correctly calculated and 
reported.

                                                      Table 1--Information Collection Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Changes due to order on rehearing in Docket No. RM22-14-001
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Annual number of                            Average burden (hr.) &
           Reforms                 Number of        responses per        Total number of        cost ($) per response      Total annual burden hours &
                                  respondents         respondent       responses (rounded)             \1214\            total annual cost ($) (rounded)
                               (1)..............  (2)..............  (1) * (2) = (3).......  (4).......................  (3) * (4) = (5)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        FERC-516
--------------------------------------------------------------------------------------------------------------------------------------------------------
First Ready, First Served      44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 2 hr; $200........  Year 1: 88 hr;
 Cluster Study.                                   Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  $8,800
                                                                                                                         Ongoing: 0
Allocation of Cluster Network  44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
 Upgrade Costs.                                   Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
Affected System Study Process  44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 2 hr; $200........  Year 1: 88 hr; $8,800
                                                  Ongoing: 0.......  Ongoing: 0 \1215\.....  Ongoing: 0................  Ongoing: 0
Study Deposits and LGIA        44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100          Year 1: 44 hr; $4,400 Ongoing:
 Deposit.                                         Ongoing: 0.......  Ongoing: 0............   Ongoing: 0.                 0
Commercial Readiness.........  44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 3 hrs;............  Year 1: 132 hr;
                                                  Ongoing: 0.......  Ongoing: 0............  $300......................  $13,200
                                                                                             Ongoing: 0................  Ongoing: 0
Withdrawal Penalties.........  44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 2 hr; $200........  Year 1: 88 hr; $8,800
                                                  Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
Elimination of Reasonable      44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
 Efforts Standard.                                Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
Transition Process...........  44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
                                                  Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
Co-Located Generating          44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
 Facilities Behind One Point                      Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
 of Interconnection with
 Shared Interconnection
 Requests.
Ride Through Requirements....  44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
                                                  Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
Incorporating Enumerated       44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
 Alternative Transmission                         Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
 Technologies into the
 Generator Interconnection
 Process.
                              --------------------------------------------------------------------------------------------------------------------------
    Total New Burden for FERC-                     Year 1: 484 responses
     516 (due to Docket No.
     RM22-14-001).
                                      Year 1: 704 hr; $70,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Ongoing: 0
                                         Ongoing: 0 hr; 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        FERC-516A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ride Through Requirements....  44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
                                                  Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
Incorporating Enumerated       44 (TPs).........  Year 1: 1........  Year 1: 44............  Year 1: 1 hr; $100........  Year 1: 44 hr; $4,400
 Alternative Transmission                         Ongoing: 0.......  Ongoing: 0............  Ongoing: 0................  Ongoing: 0
 Technologies into the
 Generator Interconnection
 Process.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total New Burden for FERC-               Year 1: 88 responses; Ongoing: 0
     516A (due to Docket No.
     RM22-14-001).
                                 Year 1: 88 hr; $8,800; Ongoing: 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Grand Total (FERC-516                    Year 1: 572 responses; Ongoing: 0
     plus FERC-516A,
     including all
     respondents).
                                Year 1: 792 hr; $79,200; Ongoing: 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Grand Total Average Per
     Entity Cost (44 TPs).
                                    Year 1: $1,800; Ongoing: 0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    674. Interested persons may obtain information on the reporting 
requirements by contacting Jean Sonneman via email at 
[email protected] or telephone (202) 502-6362.

IV. Environmental Analysis

    675. 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.\1216\ We 
conclude that neither an Environmental Assessment nor an Environmental 
Impact Statement is required for this final rule under Sec.  
380.4(a)(15) of the Commission's regulations, which provides a 
categorical exemption for approval of actions under sections 205 and 
206 of

[[Page 27121]]

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, classification, 
and services.\1217\
---------------------------------------------------------------------------

    \1216\ Reguls. Implementing the Nat'l. Env't Pol'y Act, Order 
No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Preambles 
1986-1990 ] 30,783 (1987) (cross-referenced at 41 FERC ] 61,284).
    \1217\ 18 CFR 380.4(a)(15).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act

    676. The Regulatory Flexibility Act of 1980 \1218\ requires a 
description and analysis of proposed and final rules that will have 
significant economic impact on a substantial number of small entities. 
The Commission continues to certify that the reforms adopted in this 
order on rehearing would not have a significant economic impact on a 
substantial number of small entities.
---------------------------------------------------------------------------

    \1218\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    677. The Small Business Administration (SBA) sets the threshold for 
what constitutes a small business. Under SBA's size standards,\1219\ 
transmission providers and RTOs/ISOs fall under the category of 
Electric Bulk Power Transmission and Control (NAICS code 221121), that 
has a size threshold of under 950 employees including the entity and 
its associates.\1220\ This order on rehearing modifies the Commission's 
standard large generator interconnection procedures and agreements 
(i.e., the pro forma LGIP and pro forma LGIA) and the Commission's 
standard small generator interconnection procedures and agreement 
(i.e., the pro forma SGIP and pro forma SGIA) that every public utility 
transmission provider is required to include in their tariff under 
section 35.28 of the Commission's regulations, regardless of the size 
of the entity.\1221\
---------------------------------------------------------------------------

    \1219\ 13 CFR 121.201.
    \1220\ The RFA definition of ``small entity'' refers to the 
definition provided in the Small Business Act, which defines a 
``small business concern'' as a business that is independently owned 
and operated and that is not dominant in its field of operation. The 
Small Business Administration's regulations define the threshold for 
a small Electric Bulk Power Transmission and Control entity (NAICS 
code 221121) to be 950 employees (``the maximum allowed for a 
concern and its affiliates to be considered small''). See 13 CFR 
121.201; see also 5 U.S.C. Sec.  601(3) (citing to section 3 of the 
Small Business Act, 15 U.S.C. Sec.  632).
    \1221\ 18 CFR 35.28(f)(1).
---------------------------------------------------------------------------

    678. As with Order No. 2023, we estimate that there are 44 
transmission providers affected by the reforms proposed in this order 
on rehearing. Furthermore, we estimate that six of the 44 total 
transmission providers, approximately 14% (rounded), are small 
entities.
    679. We estimate that one-time costs (in Year 1) associated with 
the reforms required by this order on rehearing for one transmission 
provider (as shown in the table in the Information Collection Statement 
above) would be $1,800. Following Year 1, we estimate that there will 
be no ongoing costs for transmission providers. According to SBA 
guidance, the determination of significance of impact ``should be seen 
as relative to the size of the business, the size of the competitor's 
business, and the impact the regulation has on larger competitors.'' 
\1222\ The Year 1 estimated cost of this order on rehearing reflects 
2.5% of the Year 1 estimated cost of Order No. 2023, which the 
Commission found to not have a significant economic impact. Further, 
this order on rehearing will create no ongoing costs for transmission 
providers in addition to those in Order No. 2023. We therefore do not 
consider the estimated cost of $1,800 per transmission provider due to 
this order on rehearing to be a significant economic impact. As a 
result, as the Commission concluded in Order 2023, we certify that the 
reforms proposed in this order on rehearing would not have a 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \1222\ U.S. Small Business Administration, A Guide for 
Government Agencies How to Comply with the Regulatory Flexibility 
Act, at 18 (Aug. 2017), https://cdn.advocacy.sba.gov/wp-content/uploads/2019/06/21110349/How-to-Comply-with-the-RFA.pdf.
---------------------------------------------------------------------------

VI. Document Availability

    680. 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).
    681. From FERC'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 excluding the last three digits of this document in the docket 
number field.
    682. User assistance is available for eLibrary and the FERC's 
website during normal business hours from FERC 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].

VII. Effective Date

    683. This order is effective May 16, 2024.
    By the Commission. Commissioner Christie is concurring with a 
separate statement attached.

    Issued: March 22, 2024.
Debbie-Anne A. Reese,
Acting Secretary.

    Note: The following appendices will not appear in the Code of 
Federal Regulations.

Appendix A: Abbreviated Names of Rehearing Parties

American Clean Power Association............  ACP.
American Electric Power Service Corporation.  AEP.
Avangrid, Inc...............................  Avangrid.
California Independent System Operator        CAISO.
 Corporation.
Advanced Energy United, American Clean Power  Clean Energy Associations.
 Association, and Solar Energy Industries
 Association.
Dominion Energy Services, Inc...............  Dominion.
Duke Energy Carolinas, LLC; Duke Energy       Duke Southeast Utilities.
 Progress, LLC; and Duke Energy Florida, LLC.
Edison Electric Institute...................  EEI.
National Grid Renewables Development, LLC,    Generation Developers.
 Clearway Energy Group LLC, and Pine Gate
 Renewables, LLC.
Cypress Creek Renewables, LLC, New Leaf       IPP Coalition.
 Energy, Inc., and Enel Green Power.
Indicated PJM Transmission Owners...........  Indicated PJM TOs.
Invenergy Solar Development North America     Invenergy.
 LLC; Invenergy Thermal Development LLC;
 Invenergy Wind Development North America
 LLC; and Invenergy Transmission LLC.

[[Page 27122]]

 
ITC Holdings Corp., on behalf of its          ITC.
 operating subsidiaries International
 Transmission Company d/b/a ITC
 Transmission, Michigan Electric
 Transmission Company, LLC, ITC Midwest LLC,
 and ITC Great Plains, LLC.
PJM Interconnection, LLC, Midcontinent        Joint RTOs.
 Independent System Operator, Inc., and
 Southwest Power Pool, Inc.
Longroad Energy Holdings, LLC...............  Longroad Energy.
Midcontinent Independent System Operator,     MISO.
 Inc.
MISO Transmission Owners....................  MISO TOs.
New York Independent System Operator, Inc...  NYISO.
New York Public Service Commission..........  NYSPSC.
New York Transmission Owners................  NYTOs.
NewSun Energy LLC...........................  NewSun.
Dominion Energy South Carolina, Inc.,         Non-RTO Providers.
 Florida Power & Light Company, and Public
 Service Company of Colorado.
Nevada Power Company and Sierra Pacific       NV Energy.
 Power Company.
[Oslash]rsted North America, LLC............  [Oslash]rsted.
PacifiCorp..................................  PacifiCorp.
PJM Interconnection, L.L.C..................  PJM.
Sustainable FERC Project, Sierra Club,        Public Interest Organizations.
 Natural Resources Defense Council,
 Earthjustice, Acadia Center, Environmental
 Defense Fund, National Audubon Society,
 Southern Environmental Law Center, and
 Southface.
Dominion Energy South Carolina, Inc.,         Revised Early Adopters Coalition.
 PacifiCorp, and Tri-State Generation and
 Transmission Association, Inc.
Shell Energy North America (US), L.P., Shell  Shell.
 New Energies US, LLC, and Savion, LLC.
Duke Energy Carolinas, LLC, Duke Energy       Southeastern Utilities.
 Progress, LLC, Louisville Gas and Electric
 Company and Kentucky Utilities Company,
 PowerSouth Energy Cooperative, and Southern
 Company Services, Inc., acting as agent for
 Alabama Power Company, Georgia Power
 Company, and Mississippi Power Company.
Southwest Power Pool, Inc...................  SPP.
VEIR Inc....................................  VEIR.
Working for Advanced Transmission             WATT Coalition.
 Technologies Coalition.
WIRES.......................................  WIRES.
----------------------------------------------------------------------------------------------------------------

Appendix B: Interconnection Study Metrics

       Table 1--2022 Interconnection Study Metrics From Non-RTOs/ISOs With a Clustered System Impact Study
----------------------------------------------------------------------------------------------------------------
                                              Number of
                                           interconnection    Average number of   Number of
                                            requests with     days to complete    facilities   Average number of
         Transmission provider                completed       clustered system     studies     days to complete
                                          clustered system      impact study      completed    facilities study
                                           impact studies
----------------------------------------------------------------------------------------------------------------
Arizona Public Service.................                  21                 511           19                 144
Avista Corp............................                  22                  61            7                 136
Dominion Energy South Carolina.........                   0  ..................            0  ..................
Duke Energy Carolinas..................                  14                 N/A            1                 185
El Paso Electric Co....................                   5                  76            1                  76
Nevada Power...........................                  67                 119           36                 120
PacifiCorp.............................                 189                 146           13                  90
Public Service Company of Colorado.....                  25                 246           16                 143
Public Service Company of New Mexico...                  17                 507            4                 168
Tri-State Generation and Transmission                    10                 119           10                  85
 \1223\................................
----------------------------------------------------------------------------------------------------------------

Appendix C: Changes to the Pro Forma LGIP

    Note: Deletions are in brackets and additions are in italics.

Standard Large Generator Interconnection Procedures (LGIP)

Including

Standard Large Generator Interconnection Agreement (LGIA)

Standard Large Generator Interconnection Procedures (LGIP)

(Applicable to Generating Facilities That Exceed 20 MW)
---------------------------------------------------------------------------

    \1223\ Data drawn from the following sources, respectively: 
https://www.oasis.oati.com/azps/ (Arizona Public Service); https://www.oasis.oati.com/avat/ (Avista Corp.); https://www.oasis.oati.com/SCEG/ (Dominion Energy South Carolina); http://www.oasis.oati.com/duk/index.html (Duke Energy Carolinas); https://www.oasis.oati.com/epe/index.html (El Paso Electric Co.); http://www.oasis.oati.com/NEVP/ (Nevada Power); https://www.oasis.oati.com/PPW/ (PacifiCorp); 
https://www.oasis.oati.com/psco/index.html (Public Service Company 
of Colorado); https://www.oasis.oati.com/PNM/ (Public Service 
Company of New Mexico); and https://www.oasis.oati.com/tsgt/index.html (Tri-State Generation and Transmission).
---------------------------------------------------------------------------

Table of Contents

Section 1. Definitions
Section 2. Scope and Application
    2.1 Application of Standard Large Generator Interconnection 
Procedures

[[Page 27123]]

    2.2 Comparability
    2.3 Base Case Data
    2.4 No Applicability to Transmission Service
Section 3. Interconnection Requests
    3.1 Interconnection Requests
    3.1.1 Study Deposits
    3.1.2 Submission
    3.2 Identification of Types of Interconnection Services
    3.2.1 Energy Resource Interconnection Service
    3.2.2 Network Resource Interconnection Service
    3.3 Utilization of Surplus Interconnection Service
    3.3.1 Surplus Interconnection Service Requests
    3.4 Valid Interconnection Request
    3.4.1 Cluster Request Window
    3.4.2 Initiating an Interconnection Request
    3.4.3 Acknowledgment of Interconnection Request
    3.4.4 Deficiencies in Interconnection Request
    3.4.5 Customer Engagement Window
    3.4.6 Cluster Study Scoping Meeting
    3.5. OASIS Posting
    3.5.1 OASIS Posting
    3.5.2 Requirement to Post Interconnection Study Metrics
    3.6 Coordination with Affected Systems
    3.7 Withdrawal
    3.8 Identification of Contingent Facilities
Section 4. Interconnection Request Evaluation Process
    4.1 Queue Position
    4.1.1 Assignment of Queue Position
    4.1.2 Higher Queue Position
    4.2. General Study Process
    4.2.1 Cost Allocation for Interconnection Facilities and Network 
Upgrades
    4.3 Transferability of Queue Position
    4.4 Modifications
    4.4.6 Technological Change Procedures
Section 5. Procedures for Interconnection Requests Submitted Prior 
to Effective Date of the Cluster Study Revisions
    5.1 Procedures for Transitioning to the Cluster Study Process
    5.2 New Transmission Provider
Section 6. Interconnection Information Access
    6.1 Publicly Posted Interconnection Information
Section 7. Cluster Study
    7.1 Cluster Study Agreement
    7.2 Execution of Cluster Study Agreement
    7.3 Scope of Cluster Study
    7.4 Cluster Study Procedures
    7.5 Cluster Study Restudies
Section 8. Interconnection Facilities Study
    8.1 Interconnection Facilities Study Agreement
    8.2 Scope of Interconnection Facilities Study
    8.3 Interconnection Facilities Study Procedures
    8.4 Meeting With Transmission Provider
    8.5 Restudy
Section 9. Affected System Study
    9.1 Applicability
    9.2 Response to Initial Notification
    9.3 Affected System Queue Position
    9.4 Affected System Study Agreement/Multiparty Affected System 
Study Agreement
    9.5 Execution of Affected System Study Agreement/Multiparty 
Affected System Study Agreement
    9.6 Scope of Affected System Study
    9.7 Affected System Study Procedures
    9.8 Meeting With Transmission Provider
    9.9 Affected System Cost Allocation
    9.10 Tender of Affected Systems Facilities Construction 
Agreement/Multiparty Affected System Facilities Construction 
Agreement
    9.11 Restudy
Section 10. Optional Interconnection Study
    10.1 Optional Interconnection Study Agreement
    10.2 Scope of Optional Interconnection Study
    10.3 Optional Interconnection Study Procedures
Section 11. Standard Large Generator Interconnection Agreement 
(LGIA)
    11.1 Tender
    11.2 Negotiation
    11.2.1 Delay in LGIA Execution, or Filing Unexecuted, To Await 
Affected System Study Report
    11.3 Execution and Filing
    11.4 Commencement of Interconnection Activities
Section 12. Construction of Transmission Provider's Interconnection 
Facilities and Network Upgrades
    12.1 Schedule
    12.2 Construction Sequencing
    12.2.1 General
    12.2.2 Advance Construction of Network Upgrades That are an 
Obligation of an Entity Other Than Interconnection Customer
    12.2.3 Advancing Construction of Network Upgrades that are Part 
of an Expansion Plan of [the] Transmission Provider
    12.2.4 Amended Interconnection Cluster Study Report
Section 13. Miscellaneous
    13.1 Confidentiality
    13.1.1 Scope
    13.1.2 Release of Confidential Information
    13.1.3 Rights
    13.1.4 No Warranties
    13.1.5 Standard of Care
    13.1.6 Order of Disclosure
    13.1.7 Remedies
    13.1.8 Disclosure to FERC, its Staff, or a State
    13.2 Delegation of Responsibility
    13.3 Obligation for Study Costs
    13.4 Third Parties Conducting Studies
    13.5 Disputes
    13.5.1 Submission
    13.5.2 External Arbitration Procedures
    13.5.3 Arbitration Decisions
    13.5.4 Costs
    13.5.5 Non-Binding Dispute Resolution Procedures
    13.6 Local Furnishing Bonds
    13.6.1 Transmission Providers That Own Facilities Financed by 
Local Furnishing Bonds
    13.6.2 Alternative Procedures for Requesting Interconnection 
Service
    13.7 Engineering & Procurement (`E&P') Agreement
Appendix 1--Interconnection Request for a Large Generating Facility
Appendix 2--Cluster Study Agreement
Appendix 3--Interconnection Facilities Study Agreement
Appendix 4--Optional Interconnection Study Agreement
Appendix 5--Standard Large Generator Interconnection Agreement
Appendix 6--Interconnection Procedures for a Wind Generating Plant
Appendix 7--Transitional Cluster Study Agreement
Appendix 8--Transitional Serial Interconnection Facilities Study 
Agreement
Appendix 9--Two-Party Affected System Study Agreement
Appendix 10--Multiparty Affected System Study Agreement
Appendix 11--Two-Party Affected System Facilities Construction 
Agreement
Appendix 12--Multiparty Affected System Facilities Construction 
Agreement

Section 1. Definitions

    Adverse System Impact shall mean the negative effects due to 
technical or operational limits on conductors or equipment being 
exceeded that may compromise the safety and reliability of the electric 
system.
    Affected System shall mean an electric system other than 
Transmission Provider's Transmission System that may be affected by the 
proposed interconnection.
    Affected System Facilities Construction Agreement shall mean the 
agreement contained in Appendix 11 to this LGIP that is made between 
Transmission Provider and Affected System Interconnection Customer to 
facilitate the construction of and to set forth cost responsibility for 
necessary Affected System Network Upgrades on Transmission Provider's 
Transmission System.
    Affected System Interconnection Customer shall mean any entity that 
submits an interconnection request for a generating facility to a 
transmission system other than Transmission Provider's Transmission 
System that may cause the need for Affected System Network Upgrades on 
[the] Transmission Provider's Transmission System.
    Affected System Network Upgrades shall mean the additions, 
modifications, and upgrades to Transmission Provider's Transmission 
System required to accommodate Affected System Interconnection 
Customer's proposed interconnection to a transmission system other than 
Transmission Provider's Transmission System.
    Affected System Operator shall mean the entity that operates an 
Affected System.
    Affected System Queue Position shall mean the queue position of an 
Affected System Interconnection Customer in Transmission Provider's 
interconnection queue relative to Transmission Provider's 
Interconnection Customers' Queue Positions.
    Affected System Study shall mean the evaluation of Affected System 
Interconnection Customers' proposed interconnection(s) to a 
transmission system other than Transmission Provider's Transmission 
System that have an impact on Transmission Provider's Transmission 
System, as described in Section 9 of this LGIP.

[[Page 27124]]

    Affected System Study Agreement shall mean the agreement contained 
in Appendix 9 to this LGIP that is made between Transmission Provider 
and Affected System Interconnection Customer to conduct an Affected 
System Study pursuant to Section 9 of this LGIP.
    Affected System Study Report shall mean the report issued following 
completion of an Affected System Study pursuant to Section 9.[6]7 of 
this LGIP.
    Affiliate shall mean, with respect to a corporation, partnership or 
other entity, each such other corporation, partnership or other entity 
that directly or indirectly, through one or more intermediaries, 
controls, is controlled by, or is under common control with, such 
corporation, partnership or other entity.
    Ancillary Services shall mean those services that are necessary to 
support the transmission of capacity and energy from resources to loads 
while maintaining reliable operation of [the] Transmission Provider's 
Transmission System in accordance with Good Utility Practice.
    Applicable Laws and Regulations shall mean all duly promulgated 
applicable federal, state and local laws, regulations, rules, 
ordinances, codes, decrees, judgments, directives, or judicial or 
administrative orders, permits and other duly authorized actions of any 
Governmental Authority.
    Applicable Reliability Standards shall mean the requirements and 
guidelines of the Electric Reliability Organization and the Balancing 
Authority Area of the Transmission System to which the Generating 
Facility is directly interconnected.
    Balancing Authority shall mean an entity that integrates resource 
plans ahead of time, maintains demand and resource balance within a 
Balancing Authority Area, and supports interconnection frequency in 
real time.
    Balancing Authority Area shall mean the collection of generation, 
transmission, and loads within the metered boundaries of the Balancing 
Authority. The Balancing Authority maintains load-resource balance 
within this area.
    Base Case shall mean the base case power flow, short circuit, and 
stability data bases used for the Interconnection Studies by 
Transmission Provider or Interconnection Customer.
    Breach shall mean the failure of a Party to perform or observe any 
material term or condition of the Standard Large Generator 
Interconnection Agreement.
    Breaching Party shall mean a Party that is in Breach of the 
Standard Large Generator Interconnection Agreement.
    Business Day shall mean Monday through Friday, excluding Federal 
Holidays.
    Calendar Day shall mean any day including Saturday, Sunday or a 
Federal Holiday.
    Cluster shall mean a group of one or more Interconnection Requests 
that are studied together for the purpose of conducting a Cluster 
Study.
    Cluster Request Window shall mean the time period set forth in 
Section 3.4.1 of this LGIP.
    Cluster Restudy shall mean a restudy of a Cluster Study conducted 
pursuant to Section 7.5 of this LGIP.
    Cluster Restudy Report shall mean the report issued following 
completion of a Cluster Restudy pursuant to Section 7.5 of this LGIP.
    Cluster Restudy Report Meeting shall mean the meeting held to 
discuss the results of a Cluster Restudy pursuant to Section 7.5 of 
this LGIP.
    [Cluster Restudy Report shall mean the report issued following 
completion of a Cluster Restudy pursuant to Section 7.5 of this LGIP.]
    Cluster Study shall mean the evaluation of one or more 
Interconnection Requests within a Cluster as described in Section 7 of 
this LGIP.
    Cluster Study Agreement shall mean the agreement contained in 
Appendix 2 to this LGIP for conducting the Cluster Study.
    Cluster Study Process shall mean the following processes, conducted 
in sequence: the Cluster Request Window; the Customer Engagement Window 
and Scoping Meetings therein; the Cluster Study; any needed Cluster 
Restudies; and the Interconnection Facilities Study.
    Cluster Study Report shall mean the report issued following 
completion of a Cluster Study pursuant to Section 7 of this LGIP.
    Cluster Study Report Meeting shall mean the meeting held to discuss 
the results of a Cluster Study pursuant to Section 7 of this LGIP.
    Clustering shall mean the process whereby one or more 
Interconnection Requests are studied together, instead of serially, as 
described in Section 7 of this LGIP.
    Commercial Operation shall mean the status of a Generating Facility 
that has commenced generating electricity for sale, excluding 
electricity generated during Trial Operation.
    Commercial Operation Date of a unit shall mean the date on which 
the Generating Facility commences Commercial Operation as agreed to by 
the Parties pursuant to Appendix E to the Standard Large Generator 
Interconnection Agreement.
    Commercial Readiness Deposit shall mean a deposit paid as set forth 
in Sections 3.4.2, 7.5, and 8.1 of this LGIP.
    Confidential Information shall mean any confidential, proprietary 
or trade secret information of a plan, specification, pattern, 
procedure, design, device, list, concept, policy or compilation 
relating to the present or planned business of a Party, which is 
designated as confidential by the Party supplying the information, 
whether conveyed orally, electronically, in writing, through 
inspection, or otherwise.
    Contingent Facilities shall mean those unbuilt Interconnection 
Facilities and Network Upgrades upon which the Interconnection 
Request's costs, timing, and study findings are dependent, and if 
delayed or not built, could cause a need for restudies of the 
Interconnection Request or a reassessment of the Interconnection 
Facilities and/or Network Upgrades and/or costs and timing.
    Customer Engagement Window shall mean the time period set forth in 
Section 3.4.5 of this LGIP.
    Default shall mean the failure of a Breaching Party to cure its 
Breach in accordance with Article 17 of the Standard Large Generator 
Interconnection Agreement.
    Dispute Resolution shall mean the procedure for resolution of a 
dispute between the Parties in which they will first attempt to resolve 
the dispute on an informal basis.
    Distribution System shall mean [the] Transmission Provider's 
facilities and equipment used to transmit electricity to ultimate usage 
points such as homes and industries directly from nearby generators or 
from interchanges with higher voltage transmission networks which 
transport bulk power over longer distances. The voltage levels at which 
distribution systems operate differ among areas.
    Distribution Upgrades shall mean the additions, modifications, and 
upgrades to [the] Transmission Provider's Distribution System at or 
beyond the Point of Interconnection to facilitate interconnection of 
the Generating Facility and render the transmission service necessary 
to effect Interconnection Customer's wholesale sale of electricity in 
interstate commerce. Distribution Upgrades do not include 
Interconnection Facilities.
    Effective Date shall mean the date on which the Standard Large 
Generator Interconnection Agreement becomes effective upon execution by 
the Parties subject to acceptance by FERC, or if filed unexecuted, upon 
the date specified by FERC.
    Electric Reliability Organization shall mean the North American 
Electric Reliability Corporation (NERC) or its successor organization.
    Emergency Condition shall mean a condition or situation: (1) that 
in the judgment of the Party making the claim is imminently likely to 
endanger life or property; or (2) that, in the case of a Transmission 
Provider, is imminently likely (as determined in a non-discriminatory 
manner) to cause a material adverse effect on the security of, or 
damage to Transmission Provider's Transmission System, Transmission 
Provider's Interconnection Facilities or the electric systems of others 
to which [the] Transmission Provider's Transmission System is directly 
connected; or (3) that, in the case of Interconnection Customer, is 
imminently likely (as determined in a non-discriminatory manner) to 
cause a material adverse effect on the security of, or damage to, the 
Generating Facility or Interconnection Customer's Interconnection 
Facilities. System restoration and black start shall be considered 
Emergency Conditions; provided that Interconnection Customer is not 
obligated by the Standard Large Generator Interconnection Agreement to 
possess black start capability.
    Energy Resource Interconnection Service shall mean an 
Interconnection Service that allows [the] Interconnection Customer to 
connect its Generating Facility to [the] Transmission Provider's 
Transmission System to be eligible to deliver the Generating Facility's 
electric output using the existing firm or nonfirm capacity of [the] 
Transmission Provider's Transmission System on an as available basis. 
Energy Resource Interconnection Service in and of itself does not 
convey transmission service.

[[Page 27125]]

    Engineering & Procurement (E&P) Agreement shall mean an agreement 
that authorizes [the] Transmission Provider to begin engineering and 
procurement of long lead-time items necessary for the establishment of 
the interconnection in order to advance the implementation of the 
Interconnection Request.
    Environmental Law shall mean Applicable Laws or Regulations 
relating to pollution or protection of the environment or natural 
resources.
    Federal Power Act shall mean the Federal Power Act, as amended, 16 
U.S.C. Sec. Sec.  791a et seq.
    FERC shall mean the Federal Energy Regulatory Commission 
(Commission) or its successor.
    Force Majeure shall mean any act of God, labor disturbance, act of 
the public enemy, war, insurrection, riot, fire, storm or flood, 
explosion, breakage or accident to machinery or equipment, any order, 
regulation or restriction imposed by governmental, military or lawfully 
established civilian authorities, or any other cause beyond a Party's 
control. A Force Majeure event does not include acts of negligence or 
intentional wrongdoing by the Party claiming Force Majeure.
    Generating Facility shall mean Interconnection Customer's device(s) 
for the production and/or storage for later injection of electricity 
identified in the Interconnection Request, but shall not include 
Interconnection Customer's Interconnection Facilities.
    Generating Facility Capacity shall mean the net capacity of the 
Generating Facility or the aggregate net capacity of the Generating 
Facility where it includes more than one device for the production and/
or storage for later injection of electricity.
    Good Utility Practice shall mean any of the practices, methods and 
acts engaged in or approved by a significant portion of the electric 
industry during the relevant time period, or any of the practices, 
methods and acts which, in the exercise of reasonable judgment in light 
of the facts known at the time the decision was made, could have been 
expected to accomplish the desired result at a reasonable cost 
consistent with good business practices, reliability, safety and 
expedition. Good Utility Practice is not intended to be limited to the 
optimum practice, method, or act to the exclusion of all others, but 
rather to be acceptable practices, methods, or acts generally accepted 
in the region.
    Governmental Authority shall mean any federal, state, local or 
other governmental regulatory or administrative agency, court, 
commission, department, board, or other governmental subdivision, 
legislature, rulemaking board, tribunal, or other governmental 
authority having jurisdiction over the Parties, their respective 
facilities, or the respective services they provide, and exercising or 
entitled to exercise any administrative, executive, police, or taxing 
authority or power; provided, however, that such term does not include 
Interconnection Customer, Transmission Provider, or any Affiliate 
thereof.
    Hazardous Substances shall mean any chemicals, materials or 
substances defined as or included in the definition of ``hazardous 
substances,'' ``hazardous wastes,'' ``hazardous materials,'' 
``hazardous constituents,'' ``restricted hazardous materials,'' 
``extremely hazardous substances,'' ``toxic substances,'' ``radioactive 
substances,'' ``contaminants,'' ``pollutants,'' ``toxic pollutants'' or 
words of similar meaning and regulatory effect under any applicable 
Environmental Law, or any other chemical, material or substance, 
exposure to which is prohibited, limited or regulated by any applicable 
Environmental Law.
    Initial Synchronization Date shall mean the date upon which the 
Generating Facility is initially synchronized and upon which Trial 
Operation begins.
    In-Service Date shall mean the date upon which [the] 
Interconnection Customer reasonably expects it will be ready to begin 
use of [the] Transmission Provider's Interconnection Facilities to 
obtain back feed power.
    Interconnection Customer shall mean any entity, including [the] 
Transmission Provider, Transmission Owner or any of the Affiliates or 
subsidiaries of either, that proposes to interconnect its Generating 
Facility with [the] Transmission Provider's Transmission System.
    Interconnection Customer's Interconnection Facilities shall mean 
all facilities and equipment, as identified in Appendix A of the 
Standard Large Generator Interconnection Agreement, that are located 
between the Generating Facility and the Point of Change of Ownership, 
including any modification, addition, or upgrades to such facilities 
and equipment necessary to physically and electrically interconnect the 
Generating Facility to Transmission Provider's Transmission System. 
Interconnection Customer's Interconnection Facilities are sole use 
facilities.
    Interconnection Facilities shall mean Transmission Provider's 
Interconnection Facilities and Interconnection Customer's 
Interconnection Facilities. Collectively, Interconnection Facilities 
include all facilities and equipment between the Generating Facility 
and the Point of Interconnection, including any modification, additions 
or upgrades that are necessary to physically and electrically 
interconnect the Generating Facility to Transmission Provider's 
Transmission System. Interconnection Facilities are sole use facilities 
and shall not include Distribution Upgrades, Stand Alone Network 
Upgrades or Network Upgrades.
    Interconnection Facilities Study shall mean a study conducted by 
Transmission Provider or a third party consultant for Interconnection 
Customer to determine a list of facilities (including Transmission 
Provider's Interconnection Facilities and Network Upgrades as 
identified in the Cluster Study), the cost of those facilities, and the 
time required to interconnect the Generating Facility with Transmission 
Provider's Transmission System. The scope of the study is defined in 
Section 8 of this LGIP.
    Interconnection Facilities Study Agreement shall mean the form of 
agreement contained in Appendix 3 of this LGIP for conducting the 
Interconnection Facilities Study.
    Interconnection Facilities Study Report shall mean the report 
issued following completion of an Interconnection Facilities Study 
pursuant to Section 8 of this LGIP.
    Interconnection Request shall mean an Interconnection Customer's 
request, in the form of Appendix 1 to this LGIP, in accordance with the 
Tariff, to interconnect a new Generating Facility, or to increase the 
capacity of, or make a Material Modification to the operating 
characteristics of, an existing Generating Facility that is 
interconnected with [the] Transmission Provider's Transmission System.
    Interconnection Service shall mean the service provided by [the] 
Transmission Provider associated with interconnecting [the] 
Interconnection Customer's Generating Facility to [the] Transmission 
Provider's Transmission System and enabling it to receive electric 
energy and capacity from the Generating Facility at the Point of 
Interconnection, pursuant to the terms of the Standard Large Generator 
Interconnection Agreement and, if applicable, [the] Transmission 
Provider's Tariff.
    Interconnection Study shall mean any of the following studies: the 
Cluster Study, the Cluster Restudy, the Surplus Interconnection Service 
[System Impact] Study, [and] the Interconnection Facilities Study, the 
Affected System Study, Optional Interconnection Study, and Material 
Modification assessment, described in this LGIP.
    IRS shall mean the Internal Revenue Service.
    Joint Operating Committee shall be a group made up of 
representatives from Interconnection Customers and [the] Transmission 
Provider to coordinate operating and technical considerations of 
Interconnection Service.
    Large Generating Facility shall mean a Generating Facility having a 
Generating Facility Capacity of more than 20 MW.
    LGIA Deposit shall mean the deposit Interconnection Customer 
submits when returning the executed LGIA, or within ten (10) Business 
Days of requesting that the LGIA be filed unexecuted at the Commission, 
in accordance with Section 11.3 of this LGIP.
    Loss shall mean any and all losses relating to injury to or death 
of any person or damage to property, demand, suits, recoveries, costs 
and expenses, court costs, attorney fees, and all other obligations by 
or to third parties, arising out of or resulting from the other Party's 
performance, or non-performance of its obligations under the Standard 
Large Generator Interconnection Agreement on behalf of the Indemnifying 
Party, except in cases of gross negligence or intentional wrongdoing by 
the Indemnifying Party.
    Material Modification shall mean those modifications that have a 
material impact on the cost or timing of any Interconnection Request 
with an equal or later Queue Position.
    Metering Equipment shall mean all metering equipment installed or 
to be installed at the Generating Facility pursuant to the Standard 
Large Generator Interconnection Agreement at the metering points, 
including but not limited to

[[Page 27126]]

instrument transformers, MWh-meters, data acquisition equipment, 
transducers, remote terminal unit, communications equipment, phone 
lines, and fiber optics.
    Multiparty Affected System Facilities Construction Agreement shall 
mean the agreement contained in Appendix 12 to this LGIP that is made 
among Transmission Provider and multiple Affected System 
Interconnection Customers to facilitate the construction of and to set 
forth cost responsibility for necessary Affected System Network 
Upgrades on Transmission Provider's Transmission System.
    Multiparty Affected System Study Agreement shall mean the agreement 
contained in Appendix 10 to this LGIP that is made among Transmission 
Provider and multiple Affected System Interconnection Customers to 
conduct an Affected System Study pursuant to Section 9 of this LGIP.
    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.
    Network Resource Interconnection Service shall mean 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.
    Network Upgrades shall mean the additions, modifications, and 
upgrades to [the] Transmission Provider's Transmission System required 
at or beyond the point at which the Interconnection Facilities connect 
to [the] Transmission Provider's Transmission System to accommodate the 
interconnection of the Large Generating Facility to [the] Transmission 
Provider's Transmission System.
    Notice of Dispute shall mean a written notice of a dispute or claim 
that arises out of or in connection with the Standard Large Generator 
Interconnection Agreement or its performance.
    Optional Interconnection Study shall mean a sensitivity analysis 
based on assumptions specified by [the] Interconnection Customer in the 
Optional Interconnection Study Agreement.
    Optional Interconnection Study Agreement shall mean the form of 
agreement contained in Appendix 4 of this LGIP for conducting the 
Optional Interconnection Study.
    Party or Parties shall mean Transmission Provider, Transmission 
Owner, Interconnection Customer or any combination of the above.
    Permissible Technological Advancement {Transmission Provider 
inserts definition here{time} .
    Point of Change of Ownership shall mean the point, as set forth in 
Appendix A to the Standard Large Generator Interconnection Agreement, 
where [the] Interconnection Customer's Interconnection Facilities 
connect to [the] Transmission Provider's Interconnection Facilities.
    Point of Interconnection shall mean 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.
    Proportional Impact Method shall mean a technical analysis 
conducted by Transmission Provider to determine the degree to which 
each Generating Facility in the Cluster Study contributes to the need 
for a specific System Network Upgrade.
    Provisional Interconnection Service shall mean Interconnection 
Service provided by Transmission Provider associated with 
interconnecting [the] Interconnection Customer's Generating Facility to 
Transmission Provider's Transmission System and enabling that 
Transmission System to receive electric energy and capacity from the 
Generating Facility at the Point of Interconnection, pursuant to the 
terms of the Provisional Large Generator Interconnection Agreement and, 
if applicable, the Tariff.
    Provisional Large Generator Interconnection Agreement shall mean 
the interconnection agreement for Provisional Interconnection Service 
established between Transmission Provider and/or [the] Transmission 
Owner and [the] Interconnection Customer. This agreement shall take the 
form of the Standard Large Generator Interconnection Agreement, 
modified for provisional purposes.
    Queue Position shall mean the order of a valid Interconnection 
Request, relative to all other pending valid Interconnection Requests, 
established pursuant to Section 4.1 of this LGIP.
    Reasonable Efforts shall mean, with respect to an action required 
to be attempted or taken by a Party under the Standard Large Generator 
Interconnection Agreement, efforts that are timely and consistent with 
Good Utility Practice and are otherwise substantially equivalent to 
those a Party would use to protect its own interests.
    Scoping Meeting shall mean the meeting between representatives of 
Interconnection Customer(s) and Transmission Provider conducted for the 
purpose of discussing the proposed Interconnection Request and any 
alternative interconnection options, exchanging information including 
any transmission data and earlier study evaluations that would be 
reasonably expected to impact such interconnection options, refining 
information and models provided by Interconnection Customer(s), 
discussing the Cluster Study materials posted to OASIS pursuant to 
Section 3.5 of this LGIP, and analyzing such information.
    Site Control shall mean the exclusive land right to develop, 
construct, operate, and maintain the Generating Facility over the term 
of expected operation of the Generating Facility. Site Control may be 
demonstrated by documentation establishing: (1) ownership of, a 
leasehold interest in, or a right to develop a site of sufficient size 
to construct and operate the Generating Facility; (2) an option to 
purchase or acquire a leasehold site of sufficient size to construct 
and operate the Generating Facility; or (3) any other documentation 
that clearly demonstrates the right of Interconnection Customer to 
exclusively occupy a site of sufficient size to construct and operate 
the Generating Facility. Transmission Provider will maintain acreage 
requirements for each Generating Facility type on its OASIS or public 
website.
    Small Generating Facility shall mean a Generating Facility that has 
a Generating Facility Capacity of no more than 20 MW.
    Stand Alone Network Upgrades shall mean Network Upgrades that are 
not part of an Affected System that [an] Interconnection Customer may 
construct without affecting day-to-day operations of the Transmission 
System during their construction [and the following conditions are met: 
(1) a Substation Network Upgrade must only be required for a single 
Interconnection Customer in the Cluster and no other Interconnection 
Customer in that Cluster is required to interconnect to the same 
Substation Network Upgrades, and (2) a System Network Upgrade must only 
be required for a single Interconnection Customer in the Cluster, as 
indicated under the Transmission Provider's Proportional Impact 
Method]. Both Transmission Provider and Interconnection Customer must 
agree as to what constitutes Stand Alone Network Upgrades and identify 
them in Appendix A to the Standard Large Generator Interconnection 
Agreement. If Transmission Provider and Interconnection Customer 
disagree about whether a particular Network Upgrade is a Stand Alone 
Network Upgrade, Transmission Provider must provide Interconnection 
Customer a written technical explanation outlining why Transmission 
Provider does not consider the Network Upgrade to be a Stand Alone 
Network Upgrade within fifteen (15) Business [d]Days of its 
determination.
    Standard Large Generator Interconnection Agreement (LGIA) shall 
mean the form of interconnection agreement applicable to an 
Interconnection Request pertaining to a Large Generating Facility that 
is included in [the] Transmission Provider's Tariff.
    Standard Large Generator Interconnection Procedures (LGIP) shall 
mean the interconnection procedures applicable to an Interconnection 
Request pertaining to a Large Generating Facility that are included in 
[the] Transmission Provider's Tariff.
    Substation Network Upgrades shall mean Network Upgrades that are 
required at the substation located at the Point of Interconnection.
    Surplus Interconnection Service shall mean any unneeded portion of 
Interconnection Service established in a Standard Large Generator 
Interconnection Agreement, such that if Surplus Interconnection Service 
is utilized, the total amount of Interconnection Service at the Point 
of Interconnection would remain the same.
    System Network Upgrades shall mean Network Upgrades that are 
required beyond the substation located at the Point of Interconnection.

[[Page 27127]]

    System Protection Facilities shall mean the equipment, including 
necessary protection signal communications equipment, required to 
protect (1) [the] Transmission Provider's Transmission System from 
faults or other electrical disturbances occurring at the Generating 
Facility and (2) the Generating Facility from faults or other 
electrical system disturbances occurring on [the] Transmission 
Provider's Transmission System or on other delivery systems or other 
generating systems to which [the] Transmission Provider's Transmission 
System is directly connected.
    Tariff shall mean [the] Transmission Provider's Tariff through 
which open access transmission service and Interconnection Service are 
offered, as filed with FERC, and as amended or supplemented from time 
to time, or any successor tariff.
    Transitional Cluster Study shall mean an Interconnection Study 
evaluating a Cluster of Interconnection Requests during the transition 
to the Cluster Study Process, as set forth in Section 5.1.1.2 of this 
LGIP.
    Transitional Cluster Study Agreement shall mean the agreement 
contained in Appendix 7 to this LGIP that is made between Transmission 
Provider and Interconnection Customer to conduct a Transitional Cluster 
Study pursuant to Section 5.1.1.2 of this LGIP.
    Transitional Cluster Study Report shall mean the report issued 
following completion of a Transitional Cluster Study pursuant to 
Section 5.1.1.2 of this LGIP.
    Transitional Serial Interconnection Facilities Study shall mean an 
Interconnection Facilities Study evaluating an Interconnection Request 
on a serial basis during the transition to the Cluster Study Process, 
as set forth in Section 5.1.1.1 of this LGIP.
    Transitional Serial Interconnection Facilities Study Agreement 
shall mean the agreement contained in Appendix 8 to this LGIP that is 
made between Transmission Provider and Interconnection Customer to 
conduct a Transitional Serial Interconnection Facilities Study pursuant 
to Section 5.1.1.1 of this LGIP.
    Transitional Serial Interconnection Facilities Study Report shall 
mean the report issued following completion of a Transitional Serial 
Interconnection Facilities Study pursuant to Section 5.1.1.1 of this 
LGIP.
    Transitional Withdrawal Penalty shall mean the penalty assessed by 
Transmission Provider to Interconnection Customer that has entered the 
Transitional Cluster Study or Transitional Serial Interconnection 
Facilities Study and chooses to withdraw or is deemed withdrawn from 
Transmission Provider's interconnection queue or whose Generating 
Facility does not otherwise reach Commercial Operation. The calculation 
of the Transitional Withdrawal Penalty is set forth in Sections 5.1.1.1 
and 5.1.1.2 of this LGIP.
    Transmission Owner shall mean an entity that owns, leases or 
otherwise possesses an interest in the portion of the Transmission 
System at the Point of Interconnection and may be a Party to the 
Standard Large Generator Interconnection Agreement to the extent 
necessary.
    Transmission Provider shall mean the public utility (or its 
designated agent) that owns, controls, or operates transmission or 
distribution facilities used for the transmission of electricity in 
interstate commerce and provides transmission service under the Tariff. 
The term Transmission Provider should be read to include the 
Transmission Owner when the Transmission Owner is separate from [the] 
Transmission Provider.
    Transmission Provider's Interconnection Facilities shall mean all 
facilities and equipment owned, controlled, or operated by Transmission 
Provider from the Point of Change of Ownership to the Point of 
Interconnection as identified in Appendix A to the Standard Large 
Generator Interconnection Agreement, including any modifications, 
additions or upgrades to such facilities and equipment. Transmission 
Provider's Interconnection Facilities are sole use facilities and shall 
not include Distribution Upgrades, Stand Alone Network Upgrades or 
Network Upgrades.
    Transmission System shall mean the facilities owned, controlled or 
operated by [the] Transmission Provider or Transmission Owner that are 
used to provide transmission service under the Tariff.
    Trial Operation shall mean the period during which Interconnection 
Customer is engaged in on-site test operations and commissioning of the 
Generating Facility prior to Commercial Operation.
    Withdrawal Penalty shall mean the penalty assessed by Transmission 
Provider to an Interconnection Customer that chooses to withdraw or is 
deemed withdrawn from Transmission Provider's interconnection queue or 
whose Generating Facility does not otherwise reach Commercial 
Operation. The calculation of the Withdrawal Penalty is set forth in 
Section 3.7.1 of this LGIP.

Section 2. Scope and Application

2.1 Application of Standard Large Generator Interconnection Procedures
    Sections 2 through 13 of this LGIP apply to processing an 
Interconnection Request pertaining to a Large Generating Facility.
2.2 Comparability
    Transmission Provider shall receive, process and analyze all 
Interconnection Requests in a timely manner as set forth in this LGIP. 
Transmission Provider shall process and analyze Interconnection 
Requests from all Interconnection Customers comparably, regardless of 
whether the Generating Facilities are owned by Transmission Provider, 
its subsidiaries or Affiliates or others.
2.3 Base Case Data
    Transmission Provider shall maintain base power flow, short circuit 
and stability databases, including all underlying assumptions, and 
contingency list on either its OASIS site or a password-protected 
website, subject to confidentiality provisions in LGIP Section 13.1. In 
addition, Transmission Provider shall maintain network models and 
underlying assumptions on either its OASIS site or a password-protected 
website. Such network models and underlying assumptions should 
reasonably represent those used during the most recent 
[i]Interconnection [s]Study and be representative of current system 
conditions. If Transmission Provider posts this information on a 
password-protected website, a link to the information must be provided 
on Transmission Provider's OASIS site. Transmission Provider is 
permitted to require that Interconnection Customers, OASIS site users 
and password-protected website users sign a confidentiality agreement 
before the release of commercially sensitive information or Critical 
Energy Infrastructure Information in the Base Case data. Such databases 
and lists, hereinafter referred to as Base Cases, shall include all (1) 
generation projects and (2) transmission projects, including merchant 
transmission projects that are proposed for the Transmission System for 
which a transmission expansion plan has been submitted and approved by 
the applicable authority.
2.4 No Applicability to Transmission Service
    Nothing in this LGIP shall constitute a request for transmission 
service or confer upon an Interconnection Customer any right to receive 
transmission service.

Section 3. Interconnection Requests

3.1 Interconnection Requests
3.1.1 Study Deposits
3.1.1.1 Study Deposit
    Interconnection Customer shall submit to Transmission Provider, 
during a Cluster Request Window, an Interconnection Request in the form 
of Appendix 1 to this LGIP, a[n] non-refundable application fee of 
$5,000, and a refundable study deposit of:
    (a) $35,000 plus $1,000 per MW for Interconnection Requests [>= 20 
MW] < 80 MW; or
    (b) $150,000 for Interconnection Requests >= 80 MW < 200 MW; or
    (c) $250,000 for Interconnection Requests >= 200 MW.
    Transmission Provider shall apply the study deposit toward the cost 
of the Cluster Study Process.
3.1.2 Submission
    Interconnection Customer shall submit a separate Interconnection 
Request for each site. Where multiple Generating Facilities share a 
site, Interconnection Customer(s) may submit separate Interconnection 
Requests or a single Interconnection Request. An Interconnection 
Request to evaluate one site at two different voltage levels shall be 
treated as two Interconnection Requests.
    At Interconnection Customer's option, Transmission Provider and 
Interconnection Customer will identify alternative Point(s) of 
Interconnection and configurations at a Scoping Meeting within the 
Customer Engagement Window to evaluate in this process and attempt to 
eliminate alternatives in a reasonable fashion given resources and 
information available. Interconnection Customer will select the 
definitive Point of Interconnection to be studied no later than the 
execution of the Cluster Study Agreement. For purposes of clustering 
Interconnection Requests, Transmission Provider may propose changes to 
the requested Point of Interconnection to

[[Page 27128]]

facilitate efficient interconnection of Interconnection Customers at 
common Point(s) of Interconnection. Transmission Provider shall notify 
Interconnection Customers in writing of any intended changes to the 
requested Point of Interconnection within the Customer Engagement 
Window, and the Point of Interconnection shall only change upon mutual 
agreement.
    Transmission Provider shall have a process in place to consider 
requests for Interconnection Service below the Generating Facility 
Capacity. These requests for Interconnection Service shall be studied 
at the level of Interconnection Service requested for purposes of 
Interconnection Facilities, Network Upgrades, and associated costs, but 
may be subject to other studies at the full Generating Facility 
Capacity to ensure safety and reliability of the system, with the study 
costs borne by Interconnection Customer. If after the additional 
studies are complete, Transmission Provider determines that additional 
Network Upgrades are necessary, then Transmission Provider must: (1) 
specify which additional Network Upgrade costs are based on which 
studies; and (2) provide a detailed explanation of why the additional 
Network Upgrades are necessary. Any Interconnection Facility and/or 
Network Upgrade costs required for safety and reliability also would be 
borne by Interconnection Customer. Interconnection Customers may be 
subject to additional control technologies as well as testing and 
validation of those technologies consistent with Article 6 of the LGIA. 
The necessary control technologies and protection systems shall be 
established in Appendix C of that executed, or requested to be filed 
unexecuted, LGIA.
    Transmission Provider shall have a process in place to study 
Generating Facilities that include at least one electric storage 
resource using operating assumptions (i.e., whether the interconnecting 
Generating Facility will or will not charge at peak load) that reflect 
the proposed charging behavior of the Generating Facility as requested 
by Interconnection Customer, unless Transmission Provider determines 
that Good Utility Practice, including Applicable Reliability Standards, 
otherwise requires the use of different operating assumptions. If 
Transmission Provider finds Interconnection Customer's requested 
operating assumptions conflict with Good Utility Practice, Transmission 
Provider must provide Interconnection Customer an explanation in 
writing of why the submitted operating assumptions are insufficient or 
inappropriate by no later than thirty (30) Calendar Days before the end 
of the Customer Engagement Window and allow Interconnection Customer to 
revise and resubmit requested operating assumptions one time at least 
ten (10) Calendar Days prior to the end of the Customer Engagement 
Window. Transmission Provider shall study these requests for 
Interconnection Service, with the study costs borne by Interconnection 
Customer, using the submitted operating assumptions for purposes of 
Interconnection Facilities, Network Upgrades, and associated costs. 
These requests for Interconnection Service also may be subject to other 
studies at the full Generating Facility Capacity to ensure safety and 
reliability of the system, with the study costs borne by 
Interconnection Customer. Interconnection Customer's Generating 
Facility may be subject to additional control technologies as well as 
testing and validation of such additional control technologies 
consistent with Article 6 of the LGIA. The necessary control 
technologies and protection systems shall be set forth in Appendix C of 
[the] Interconnection Customer's LGIA.
3.2 Identification of Types of Interconnection Services
    At the time the Interconnection Request is submitted, 
Interconnection Customer must request either Energy Resource 
Interconnection Service or Network Resource Interconnection Service, as 
described; provided, however, any Interconnection Customer requesting 
Network Resource Interconnection Service may also request that it be 
concurrently studied for Energy Resource Interconnection Service, up to 
the point when an Interconnection Facilities Study Agreement is 
executed. Interconnection Customer may then elect to proceed with 
Network Resource Interconnection Service or to proceed under a lower 
level of interconnection service to the extent that only certain 
upgrades will be completed.
3.2.1 Energy Resource Interconnection Service
3.2.1.1 The Product
    Energy Resource Interconnection Service allows Interconnection 
Customer to connect the Large Generating Facility to the Transmission 
System and be eligible to deliver the Large Generating Facility's 
output using the existing firm or non-firm capacity of the Transmission 
System on an ``as available'' basis. Energy Resource Interconnection 
Service does not in and of itself convey any right to deliver 
electricity to any specific customer or Point of Delivery.
3.2.1.2 The Study
    The study consists of short circuit/fault duty, steady state 
(thermal and voltage) and stability analyses. The short circuit/fault 
duty analysis would identify direct Interconnection Facilities required 
and the Network Upgrades necessary to address short circuit issues 
associated with the Interconnection Facilities. The stability and 
steady state studies would identify necessary upgrades to allow full 
output of the proposed Large Generating Facility, except for Generating 
Facilities that include at least one electric storage resource that 
request to use operating assumptions pursuant to Section 3.1.2, unless 
[the] Transmission Provider determines that Good Utility Practice, 
including Applicable Reliability Standards, otherwise requires the use 
of different operating assumptions, and would also identify the maximum 
allowed output, at the time the study is performed, of the 
interconnecting Large Generating Facility without requiring additional 
Network Upgrades.
3.2.2 Network Resource Interconnection Service
3.2.2.1 The Product
    Transmission Provider must conduct the necessary studies and 
construct the Network Upgrades needed to integrate the Large Generating 
Facility (1) in a manner comparable to that in which Transmission 
Provider integrates its generating facilities to serve native load 
customers; or (2) in an ISO or RTO with market based congestion 
management, in the same manner as Network Resources. Network Resource 
Interconnection Service [A]allows Interconnection Customer's Large 
Generating Facility to be designated as a Network Resource, up to the 
Large Generating Facility's full output, on the same basis as existing 
Network Resources interconnected to Transmission Provider's 
Transmission System, and to be studied as a Network Resource on the 
assumption that such a designation will occur.
3.2.2.2 The Study
    The Interconnection Study for Network Resource Interconnection 
Service shall assure that Interconnection Customer's Large Generating 
Facility meets the requirements for Network Resource Interconnection 
Service and as a general matter, that such Large Generating Facility's 
interconnection is also studied with Transmission Provider's 
Transmission System at peak load, under a variety of severely stressed 
conditions, to determine whether, with the Large Generating Facility at 
full output, except for Generating Facilities that include at least one 
electric storage resource that request to use, and for which 
Transmission Provider approves, operating assumptions pursuant to 
Section 3.1.2, the aggregate of generation in the local area can be 
delivered to the aggregate of load on Transmission Provider's 
Transmission System, consistent with Transmission Provider's 
reliability criteria and procedures. This approach assumes that some 
portion of existing Network Resources are displaced by the output of 
Interconnection Customer's Large Generating Facility. Network Resource 
Interconnection Service in and of itself does not convey any right to 
deliver electricity to any specific customer or Point of Delivery. 
[The] Transmission Provider may also study the Transmission System 
under non-peak load conditions. However, upon request by [the] 
Interconnection Customer, [the] Transmission Provider must explain in 
writing to [the] Interconnection Customer why the study of non-peak 
load conditions is required for reliability purposes.
3.3 Utilization of Surplus Interconnection Service
    Transmission Provider must provide a process that allows an 
Interconnection Customer to utilize or transfer Surplus Interconnection 
Service at an existing Point of Interconnection. The original 
Interconnection Customer or one of its affiliates shall have priority 
to utilize Surplus Interconnection Service. If the existing 
Interconnection Customer or one of its affiliates does not exercise its 
priority, then that service may be made available to other potential 
Interconnection Customers.

[[Page 27129]]

3.3.1 Surplus Interconnection Service Requests
    Surplus Interconnection Service requests may be made by the 
existing Interconnection Customer or one of its affiliates or may be 
submitted once Interconnection Customer has executed the LGIA or 
requested that the LGIA be filed unexecuted. Surplus Interconnection 
Service requests also may be made by another Interconnection Customer. 
Transmission Provider shall provide a process for evaluating 
Interconnection Requests for Surplus Interconnection Service. Studies 
for Surplus Interconnection Service shall consist of reactive power, 
short circuit/fault duty, stability analyses, and any other appropriate 
studies. Steady-state (thermal/voltage) analyses may be performed as 
necessary to ensure that all required reliability conditions are 
studied. If the Surplus Interconnection Service was not studied under 
off-peak conditions, off-peak steady state analyses shall be performed 
to the required level necessary to demonstrate reliable operation of 
the Surplus Interconnection Service. If the original system impact 
study report or Cluster Study Report is not available for the Surplus 
Interconnection Service, both off-peak and peak analysis may need to be 
performed for the existing Generating Facility associated with the 
request for Surplus Interconnection Service. The reactive power, short 
circuit/fault duty, stability, and steady-state analyses for Surplus 
Interconnection Service will identify any additional Interconnection 
Facilities and/or Network Upgrades necessary.
    Transmission Provider shall study Surplus Interconnection Service 
requests for a Generating Facility that includes at least one electric 
storage resource using operating assumptions (i.e., whether the 
interconnecting Generating Facility will or will not charge at peak 
load) that reflect the proposed charging behavior of the Generating 
Facility as requested by Interconnection Customer, unless Transmission 
Provider determines that Good Utility Practice, including Applicable 
Reliability Standards, otherwise requires the use of different 
operating assumptions.
3.4 Valid Interconnection Request
3.4.1 Cluster Request Window
    Transmission Provider shall accept Interconnection Requests during 
a forty-five (45) Calendar Day period (the Cluster Request Window). The 
initial Cluster Request Window shall open for Interconnection Requests 
beginning {Transmission Provider to provide number of Calendar 
Days{time}  after the conclusion of the transition process set out in 
Section 5.1 of this LGIP and successive Cluster Request Windows shall 
open annually every {Transmission Provider to provide Month and Day 
(e.g., January 1){time}  thereafter.
3.4.2 Initiating an Interconnection Request
    An Interconnection Customer seeking to join a Cluster shall submit 
its Interconnection Request to Transmission Provider within, and no 
later than the close of, the Cluster Request Window. Interconnection 
Requests submitted outside of the Cluster Request Window will not be 
considered. To initiate an Interconnection Request, Interconnection 
Customer must submit all of the following:
    (i) [a]Applicable study deposit amount, pursuant to Section 3.1.1.1 
of this LGIP,
    (ii) [a]A completed application in the form of Appendix 1,
    (iii) [d]Demonstration of no less than ninety percent (90%) Site 
Control or (1) a signed affidavit from an officer of the company 
indicating that Site Control is unobtainable due to regulatory 
limitations as such term is defined by [the] Transmission Provider; and 
(2) documentation sufficiently describing and explaining the source and 
effects of such regulatory limitations, including a description of any 
conditions that must be met to satisfy the regulatory limitations and 
the anticipated time by which Interconnection Customer expects to 
satisfy the regulatory requirements and (3) a deposit in lieu of Site 
Control of $10,000 per MW, subject to a minimum of $500,000 and a 
maximum of $2,000,000. Interconnection Requests from multiple 
Interconnection Customers for multiple Generating Facilities that share 
a site must include a contract or other agreement that allows for 
shared land use[.],
    (iv) Generating Facility Capacity (MW) (and requested 
Interconnection Service level if the requested Interconnection Service 
is less than the Generating Facility Capacity),
    (v) If applicable, (1) the requested operating assumptions (i.e., 
whether the interconnecting Generating Facility will or will not charge 
at peak load) to be used by Transmission Provider that reflect the 
proposed charging behavior of the Generating Facility that includes at 
least one electric storage resource, and (2) a description of any 
control technologies (software and/or hardware) that will limit the 
operation of the Generating Facility to the operating assumptions 
submitted by Interconnection Customer[.],
    (vi) A Commercial Readiness Deposit equal to two times the study 
deposit described in Section 3.1.1.1 of this LGIP in the form of an 
irrevocable letter of credit, [or] cash, a surety bond, or other form 
of security that is reasonably acceptable to Transmission Provider. 
This Commercial Readiness Deposit is refunded to Interconnection 
Customer according to Section 3.7 of this LGIP,
    (vii) A Point of Interconnection, and
    (viii) Whether the Interconnection Request shall be studied for 
Network Resource Interconnection Service or for Energy Resource 
Interconnection Service, consistent with Section 3.2 of this LGIP.
    An Interconnection Customer that submits a deposit in lieu of Site 
Control due to demonstrated regulatory limitations must demonstrate 
that it is taking identifiable steps to secure the necessary regulatory 
approvals from the applicable federal, state, and/or tribal entities 
before execution of the Cluster Study Agreement. Such deposit will be 
held by Transmission Provider until Interconnection Customer provides 
the required Site Control demonstration for its point in the Cluster 
Study Process. Interconnection Customers facing qualifying regulatory 
limitations must demonstrate one[-] hundred percent (100%) Site Control 
within one[-] hundred eighty (180) Calendar Days of the effective date 
of the LGIA.
    Interconnection Customer shall promptly inform Transmission 
Provider of any material change to Interconnection Customer's 
demonstration of Site Control under Section 3.4.2(iii) of this LGIP. If 
Transmission Provider determines, based on Interconnection Customer's 
information, that Interconnection Customer no longer satisfies the Site 
Control requirement, Transmission Provider shall give Interconnection 
Customer ten (10) Business Days to demonstrate satisfaction with the 
applicable requirement subject to Transmission Provider's approval. 
Absent such, Transmission Provider shall deem the Interconnection 
Request withdrawn pursuant to Section 3.7 of this LGIP.
    The expected In-Service Date of the new Large Generating Facility 
or increase in capacity of the existing Generating Facility shall be no 
more than the process window for the regional expansion planning period 
(or in the absence of a regional planning process, the process window 
for Transmission Provider's expansion planning period) not to exceed 
seven (7) years from the date the Interconnection Request is received 
by Transmission Provider, unless Interconnection Customer demonstrates 
that engineering, permitting and construction of the new Large 
Generating Facility or increase in capacity of the existing Generating 
Facility will take longer than the regional expansion planning period. 
The In-Service Date may succeed the date the Interconnection Request is 
received by Transmission Provider by a period up to ten (10) years, or 
longer where Interconnection Customer and Transmission Provider agree, 
such agreement not to be unreasonably withheld.
3.4.3 Acknowledgment of Interconnection Request
    Transmission Provider shall acknowledge receipt of the 
Interconnection Request within five (5) Business Days of receipt of the 
request and attach a copy of the received Interconnection Request to 
the acknowledgement.
3.4.4 Deficiencies in Interconnection Request
    An Interconnection Request will not be considered to be a valid 
request until all items in Section 3.4.2 of this LGIP have been 
received by Transmission Provider during the Cluster Request Window. If 
an Interconnection Request fails to meet the requirements set forth in 
Section 3.4.2 of this LGIP, Transmission Provider shall notify 
Interconnection Customer within five (5) Business Days of receipt of 
the initial Interconnection Request of the reasons for such failure and 
that the Interconnection Request does not constitute a valid request. 
Interconnection Customer shall provide Transmission Provider the 
additional requested information needed to constitute a valid request 
within ten (10) Business Days after receipt of such notice but no later 
than the close of the Cluster Request Window. At any time, if 
Transmission Provider finds that the technical data provided by 
Interconnection Customer is incomplete or contains errors, 
Interconnection Customer and Transmission Provider shall work

[[Page 27130]]

expeditiously and in good faith to remedy such issues. In the event 
that Interconnection Customer fails to comply with this Section 3.4.4 
of this LGIP, Transmission Provider[s] shall deem the Interconnection 
Request withdrawn (without the cure period provided under Section 3.7 
of this LGIP), the application fee is forfeited to [the] Transmission 
Provider, and the study deposit and Commercial Readiness Deposit shall 
be returned to Interconnection Customer.
3.4.5 Customer Engagement Window
    Upon the close of each Cluster Request Window, Transmission 
Provider shall open a sixty (60) Calendar Day period (Customer 
Engagement Window). During the Customer Engagement Window, Transmission 
Provider shall hold a Scoping Meeting with all interested 
Interconnection Customers. Notwithstanding the preceding requirements 
and upon written consent of all Interconnection Customers within the 
Cluster, Transmission Provider may shorten the Customer Engagement 
Window and begin the Cluster Study. Within ten (10) Business Days of 
the opening of the Customer Engagement Window, Transmission Provider 
shall post on its OASIS a list of Interconnection Requests for that 
Cluster. The list shall identify, for each anonymized Interconnection 
Request: (1) the requested amount of Interconnection Service; (2) the 
location by county and state; (3) the station or transmission line or 
lines where the interconnection will be made; (4) the projected In-
Service Date; (5) the type of Interconnection Service requested; and 
(6) the type of Generating Facility or Facilities to be constructed, 
including fuel types, such as coal, natural gas, solar, or wind. [The] 
Transmission Provider must ensure that project information is 
anonymized and does not reveal the identity or commercial information 
of [i]Interconnection [c]Customers with submitted requests. During the 
Customer Engagement Window, Transmission Provider shall provide to 
Interconnection Customer a non-binding updated good faith estimate of 
the cost and timeframe for completing the cluster Study and a Cluster 
Study Agreement to be executed prior to the close of the Customer 
Engagement Window.
    At the end of the Customer Engagement Window, all Interconnection 
Requests deemed valid that have executed a Cluster Study Agreement in 
the form of Appendix 2 to this LGIP shall be included in the Cluster 
Study. Any Interconnection Requests for which Interconnection Customer 
has not executed a Cluster Study Agreement [not deemed valid at the 
close of the Customer Engagement Window] shall be deemed withdrawn 
(without the cure period provided under Section 3.7 of this LGIP) by 
Transmission Provider, the application fee shall be forfeited to [the] 
Transmission Provider, and [the] Transmission Provider shall return the 
study deposit and Commercial Readiness Deposit to Interconnection 
Customer. Immediately following the Customer Engagement Window, 
Transmission Provider shall initiate the Cluster Study described in 
Section 7 of this LGIP.
3.4.6 Cluster Study Scoping Meeting
    During the Customer Engagement Window, Transmission Provider shall 
hold a Scoping Meeting with all Interconnection Customers whose valid 
Interconnection Requests were received in that Cluster Request Window.
    The purpose of the Cluster Study Scoping Meeting shall be to 
discuss alternative interconnection options, to exchange information 
including any transmission data and earlier study evaluations that 
would reasonably be expected to impact such interconnection options, to 
discuss the Cluster Study materials posted to OASIS pursuant to Section 
3.5 of this LGIP, if applicable, and to analyze such information. 
Transmission Provider and Interconnection Customer(s) will bring to the 
meeting such technical data, including, but not limited to: (i) general 
facility loadings, (ii) general instability issues, (iii) general short 
circuit issues, (iv) general voltage issues, and (v) general 
reliability issues as may be reasonably required to accomplish the 
purpose of the meeting. Transmission Provider and Interconnection 
Customer(s) will also bring to the meeting personnel and other 
resources as may be reasonably required to accomplish the purpose of 
the meeting in the time allocated for the meeting. On the basis of the 
meeting, Interconnection Customer(s) shall designate its Point of 
Interconnection [and one or more available alternative Point(s) of 
Interconnection]. The duration of the meeting shall be sufficient to 
accomplish its purpose. If the Cluster Study Scoping Meeting consists 
of more than one Interconnection Customer, Transmission Provider shall 
issue, no later than fifteen (15) Business Days after the commencement 
of the Customer Engagement Window, and Interconnection Customer shall 
execute a non-disclosure agreement prior to a group Cluster Study 
Scoping Meeting, which will provide for confidentiality of identifying 
information or commercially sensitive information pertaining to any 
other Interconnection Customers.
3.5. OASIS Posting
3.5.1 OASIS Posting
    Transmission Provider will maintain on its OASIS a list of all 
Interconnection Requests. The list will identify, for each 
Interconnection Request: (i) the maximum summer and winter megawatt 
electrical output; (ii) the location by county and state; (iii) the 
station or transmission line or lines where the interconnection will be 
made; (iv) the projected In-Service Date; (v) the status of the 
Interconnection Request, including Queue Position; (vi) the type of 
Interconnection Service being requested; [and] (vii) the availability 
of any studies related to the Interconnection Request; (viii) the date 
of the Interconnection Request; (ix) the type of Generating Facility to 
be constructed; and (x) for Interconnection Requests that have not 
resulted in a completed interconnection, an explanation as to why it 
was not completed. Except in the case of an Affiliate, the list will 
not disclose the identity of Interconnection Customer until 
Interconnection Customer executes an LGIA or requests that Transmission 
Provider file an unexecuted LGIA with FERC. Before holding a Scoping 
Meeting with its Affiliate, Transmission Provider shall post on OASIS 
an advance notice of its intent to do so. Transmission Provider shall 
post to its OASIS site any deviations from the study timelines set 
forth herein. Interconnection Study reports and Optional 
Interconnection Study reports shall be posted to Transmission 
Provider's OASIS site subsequent to the meeting between Interconnection 
Customer and Transmission Provider to discuss the applicable study 
results. Transmission Provider shall also post any known deviations in 
the Large Generating Facility's In-Service Date.
3.5.2 Requirement To Post Interconnection Study Metrics
    Transmission Provider will maintain on its OASIS or its website 
summary statistics related to processing Interconnection Studies 
pursuant to Interconnection Requests, updated quarterly. If 
Transmission Provider posts this information on its website, a link to 
the information must be provided on Transmission Provider's OASIS site. 
For each calendar quarter, Transmission Provider[s] must calculate and 
post the information detailed in Sections 3.5.2.1 through 3.5.2.4 of 
this LGIP.
3.5.2.1 Interconnection Cluster Study Processing Time
    (A) Number of Interconnection Requests that had Cluster Studies 
completed within Transmission Provider's coordinated region during the 
reporting quarter,
    (B) Number of Interconnection Requests that had Cluster Studies 
completed within Transmission Provider's coordinated region during the 
reporting quarter that were completed more than one hundred fifty (150) 
Calendar Days after the close of the Customer Engagement Window,
    (C) At the end of the reporting quarter, the number of active valid 
Interconnection Requests with ongoing incomplete Cluster Studies where 
such Interconnection Requests had executed a Cluster Study Agreement 
received by Transmission Provider more than one hundred fifty (150) 
Calendar Days before the reporting quarter end,
    (D) Mean time (in days), Cluster Studies completed within 
Transmission Provider's coordinated region during the reporting 
quarter, from the commencement of the Cluster Study to the date when 
Transmission Provider provided the completed Cluster Study Report to 
Interconnection Customer,
    (E) Mean time (in days), Cluster Studies were completed within 
Transmission Provider's coordinated region during the reporting 
quarter, from the close of the Cluster Request Window to the date when 
Transmission Provider provided the completed Cluster Study Report to 
Interconnection Customer,[.]
    (F) Percentage of Cluster Studies exceeding one hundred fifty (150) 
Calendar Days to complete this reporting quarter, calculated as the sum 
of Section 3.5.2.1(B) plus Section 3.5.2.1(C) divided by the sum of 
Section 3.5.2.1(A) plus Section 3.5.2.1(C) of this LGIP.
3.5.2.2 Cluster Restudies Processing Time
    (A) Number of Interconnection Requests that had Cluster Restudies 
completed within

[[Page 27131]]

Transmission Provider's coordinated region during the reporting 
quarter,
    (B) Number of Interconnection Requests that had Cluster Restudies 
completed within Transmission Provider's coordinated region during the 
reporting quarter that were completed more than one hundred fifty (150) 
Calendar Days after Transmission Provider notifies Interconnection 
Customers in the Cluster that a Cluster Restudy is required pursuant to 
Section 7.5(4) of this LGIP,
    (C) At the end of the reporting quarter, the number of active valid 
Interconnection Requests with ongoing incomplete Cluster Restudies 
where Transmission Provider notified Interconnection Customers in the 
Cluster that a Cluster Restudy is required pursuant to Section 7.5(4) 
of this LGIP more than one hundred fifty (150) Calendar Days before the 
reporting quarter end,
    (D) Mean time (in days), Cluster Restudies completed within 
Transmission Provider's coordinated region during the reporting 
quarter, from the date when Transmission Provider notifies 
Interconnection Customers in the Cluster that a Cluster Restudy is 
required pursuant to Section 7.5(4) of this LGIP to the date when 
Transmission Provider provided the completed Cluster Restudy Report to 
Interconnection Customer,
    (E) Mean time (in days), Cluster Restudies completed within 
Transmission Provider's coordinated region during the reporting 
quarter, from the close of the Cluster Request Window to the date when 
Transmission Provider provided the completed Cluster Restudy Report to 
Interconnection Customer,[.]
    (F) Percentage of Cluster Restudies exceeding one hundred fifty 
(150) Calendar Days to complete this reporting quarter, calculated as 
the sum of Section 3.5.2.2(B) plus Section 3.5.2.2(C) divided by the 
sum of Section 3.5.2.2(A) plus Section 3.5.2.2(C)[)] of this LGIP.
3.5.2.3 Interconnection Facilities Studies Processing Time
    (A) Number of Interconnection Requests that had Interconnection 
Facilities Studies that are completed within Transmission Provider's 
coordinated region during the reporting quarter,
    (B) Number of Interconnection Requests that had Interconnection 
Facilities Studies that are completed within Transmission Provider's 
coordinated region during the reporting quarter that were completed 
more than {timeline as listed in Transmission Provider's LGIP{time}  
after receipt by Transmission Provider of [the] Interconnection 
Customer's executed Interconnection Facilities Study Agreement,
    (C) At the end of the reporting quarter, the number of active valid 
Interconnection Service requests with ongoing incomplete 
Interconnection Facilities Studies where such Interconnection Requests 
had executed Interconnection Facilities Studies Agreement received by 
Transmission Provider more than {timeline as listed in Transmission 
Provider's LGIP{time}  before the reporting quarter end,
    (D) Mean time (in days), for Interconnection Facilities Studies 
completed within Transmission Provider's coordinated region during the 
reporting quarter, calculated from the date when Transmission Provider 
received the executed Interconnection Facilities Study Agreement to the 
date when Transmission Provider provided the completed Interconnection 
Facilities Study to [the] Interconnection Customer,
    (E) Mean time (in days), Interconnection Facilities Studies 
completed within Transmission Provider's coordinated region during the 
reporting quarter, from the close of the Cluster Request Window to the 
date when Transmission Provider provided the completed Interconnection 
Facilities Study to Interconnection Customer,[.]
    (F) Percentage of delayed Interconnection Facilities Studies this 
reporting quarter, calculated as the sum of Section 3.5.2.3(B) plus 
Section 3.5.2.3(C) divided by the sum of Section 3.5.2.3(A) plus 
Section 3.5.2.3(C)[)] of this LGIP.
3.5.2.4 Interconnection Service Requests Withdrawn From Interconnection 
Queue
    (A) Number of Interconnection Requests withdrawn from Transmission 
Provider's interconnection queue during the reporting quarter,
    (B) Number of Interconnection Requests withdrawn from Transmission 
Provider's interconnection queue during the reporting quarter before 
completion of any [i]Interconnection [s]Studies or execution of any 
[i]Interconnection [s]Study agreements,
    (C) Number of Interconnection Requests withdrawn from Transmission 
Provider's interconnection queue during the reporting quarter before 
completion of a Cluster Study,
    (D) Number of Interconnection Requests withdrawn from Transmission 
Provider's interconnection queue during the reporting quarter before 
completion of an Interconnection Facilities Study,
    (E) Number of Interconnection Requests withdrawn from Transmission 
Provider's interconnection queue after completion of an Interconnection 
Facilities Study but before execution of an [generator interconnection 
agreement] LGIA or Interconnection Customer requests the filing of an 
unexecuted, new [interconnection agreement] LGIA,
    (F) Number of Interconnection Requests withdrawn from Transmission 
Provider's interconnection queue after execution of an LGIA or 
Interconnection Customer requests the filing of an unexecuted, new LGIA
    ([F]G) Mean time (in days), for all withdrawn Interconnection 
Requests, from the date when the request was determined to be valid to 
when Transmission Provider received the request to withdraw from the 
queue.
3.5.3
    Transmission Provider is required to post on OASIS or its website 
the measures in [paragraph] Section 3.5.2.1(A) through [paragraph] 
Section 3.5.2.4([F]G) for each calendar quarter within thirty (30) 
Calendar [d]Days of the end of the calendar quarter. Transmission 
Provider will keep the quarterly measures posted on OASIS or its 
website for three (3) calendar years with the first required report to 
be in the first quarter of 2020. If Transmission Provider retains this 
information on its website, a link to the information must be provided 
on Transmission Provider's OASIS site.
3.5.4
    In the event that any of the values calculated in [paragraphs] 
Sections 3.5.2.1(E), 3.5.2.2(E) or 3.5.2.3(E) exceeds twenty-five [25] 
percent (25%) for two (2) consecutive calendar quarters, Transmission 
Provider will have to comply with the measures below for the next four 
(4) consecutive calendar quarters and must continue reporting this 
information until Transmission Provider reports four (4) consecutive 
calendar quarters without the values calculated in Sections 3.5.2.1(E), 
3.5.2.2(E) or 3.5.2.3(E) exceeding [25] twenty-five percent (25%) for 
two (2) consecutive calendar quarters:
    (i) Transmission Provider must submit a report to the Commission 
describing the reason for each Cluster Study, Cluster Restudy, or 
individual Interconnection Facilities Study pursuant to one or more 
Interconnection Request(s) that exceeded its deadline (i.e., 150, 90 or 
180 Calendar [d]Days) for completion. Transmission Provider must 
describe the reasons for each study delay and any steps taken to remedy 
these specific issues and, if applicable, prevent such delays in the 
future. The report must be filed at the Commission within forty-five 
(45) Calendar [d]Days of the end of the calendar quarter.
    (ii) Transmission Provider shall aggregate the total number of 
employee-hours and third party consultant hours expended towards 
[i]Interconnection [s]Studies within its coordinated region that 
quarter and post on OASIS or its website. If Transmission Provider 
posts this information on its website, a link to the information must 
be provided on Transmission Provider's OASIS site. This information is 
to be posted within thirty (30) Calendar [d]Days of the end of the 
calendar quarter.
3.6 Coordination With Affected Systems
    Transmission Provider will coordinate the conduct of any studies 
required to determine the impact of the Interconnection Request on 
Affected Systems with Affected System Operators. Interconnection 
Customer will cooperate with Transmission Provider and Affected System 
Operator in all matters related to the conduct of studies and the 
determination of modifications to Affected Systems.
    A Transmission Provider whose system may be impacted by a proposed 
interconnection on another transmission provider's transmission system 
shall cooperate with [the] transmission provider with whom 
interconnection has been requested in all matters related to the 
conduct of studies and the determination of modifications to 
Transmission Provider's Transmission System.
3.6.1 Initial Notification
    Transmission Provider must notify Affected System Operator of a 
potential Affected System impact caused by an Interconnection Request 
within ten (10) Business Days of the completion of the Cluster Study[ 
or, if the potential Affected System impact is only determined in the 
Cluster Restudy, the completion of the Cluster Restudy].

[[Page 27132]]

    At the time of initial notification, Transmission Provider must 
provide Interconnection Customer with a list of potential Affected 
Systems, along with relevant contact information.

3.6.2 Notification of Cluster Restudy

    Transmission Provider must notify Affected System Operator of a 
Cluster Restudy concurrently with its notification of such Cluster 
Restudy to Interconnection Customers.

3.6.3 Notification of Cluster Restudy Completion

    Upon the completion of Transmission Provider's Cluster Restudy, 
Transmission Provider will notify Affected System Operator of a 
potential Affected System impact caused by an Interconnection Request 
within ten (10) Business Days of the completion of the Cluster Restudy, 
regardless of whether that potential Affected System impact was 
previously identified. At the time of the notification of the 
completion of the Cluster Restudy to the Affected System Operator, 
Transmission Provider must provide Interconnection Customer with a list 
of potential Affected System Operators, along with relevant contact 
information.
3.7 Withdrawal
    Interconnection Customer may withdraw its Interconnection Request 
at any time by written notice of such withdrawal to Transmission 
Provider. In addition, if Interconnection Customer fails to adhere to 
all requirements of this LGIP, except as provided in Section 13.5 
(Disputes), Transmission Provider shall deem the Interconnection 
Request to be withdrawn and shall provide written notice to 
Interconnection Customer of the deemed withdrawal and an explanation of 
the reasons for such deemed withdrawal. Upon receipt of such written 
notice, Interconnection Customer shall have fifteen (15) Business Days 
in which to either respond with information or actions that cures the 
deficiency or to notify Transmission Provider of its intent to pursue 
Dispute Resolution.
    Withdrawal shall result in the loss of Interconnection Customer's 
Queue Position. If an Interconnection Customer disputes the withdrawal 
and loss of its Queue Position, then during Dispute Resolution, 
Interconnection Customer's Interconnection Request is eliminated from 
the queue until such time that the outcome of Dispute Resolution would 
restore its Queue Position. An Interconnection Customer that withdraws 
or is deemed to have withdrawn its Interconnection Request shall pay to 
Transmission Provider all costs that Transmission Provider prudently 
incurs with respect to that Interconnection Request prior to 
Transmission Provider's receipt of notice described above. 
Interconnection Customer must pay all monies due to Transmission 
Provider before it is allowed to obtain any Interconnection Study data 
or results.
    If Interconnection Customer withdraws its Interconnection Request 
or is deemed withdrawn by Transmission Provider under Section 3.7 of 
this LGIP, Transmission Provider shall (i) update the OASIS Queue 
Position posting; (ii) impose the Withdrawal Penalty described in 
Section 3.7.1 of this LGIP; and (iii) refund to Interconnection 
Customer any portion of the refundable portion of Interconnection 
Customer's study deposit that exceeds the costs that Transmission 
Provider has incurred, including interest calculated in accordance with 
Section 35.19a(a)(2) of FERC's regulations. Transmission Provider shall 
also refund any portion of the Commercial Readiness Deposit not applied 
to the Withdrawal Penalty and, if applicable, the deposit in lieu of 
site control. In the event of such withdrawal, Transmission Provider, 
subject to the confidentiality provisions of Section 13.1 of this LGIP, 
shall provide, at Interconnection Customer's request, all information 
that Transmission Provider developed for any completed study conducted 
up to the date of withdrawal of the Interconnection Request.
3.7.1 Withdrawal Penalty
    Interconnection Customer shall be subject to a Withdrawal Penalty 
if it withdraws its Interconnection Request or is deemed withdrawn, or 
the Generating Facility does not otherwise reach Commercial Operation 
unless: (1) the withdrawal does not have a material impact on the cost 
or timing of any Interconnection Request [with an equal or lower Queue 
Position]in the same Cluster; (2) Interconnection Customer withdraws 
after receiving Interconnection Customer's most recent Cluster Restudy 
Report and the Network Upgrade costs assigned to the Interconnection 
Request identified in that report have increased by more than twenty-
five percent (25%) compared to costs identified in Interconnection 
Customer's preceding Cluster Study Report or Cluster Restudy Report; or 
(3) Interconnection Customer withdraws after receiving Interconnection 
Customer's Interconnection Facilities Study Report and the Network 
Upgrade costs assigned to the Interconnection Request identified in 
that report have increased by more than one hundred percent (100%) 
compared to costs identified in the Cluster Study Report or Cluster 
Restudy Report.
3.7.1.1 Calculation of the Withdrawal Penalty
    If Interconnection Customer withdraws its Interconnection Request 
or is deemed withdrawn prior to the commencement of the initial Cluster 
Study, Interconnection Customer shall not be subject to a Withdrawal 
Penalty. If Interconnection Customer withdraws, is deemed withdrawn, or 
otherwise does not reach Commercial Operation at any point after the 
commencement of the initial Cluster Study, that Interconnection 
Customer's Withdrawal Penalty will be the greater of: (1) [the] 
Interconnection Customer's study deposit required under Section 3.1.1.1 
of this LGIP; or (2) as follows in (a)-(d):
    (a) If Interconnection Customer withdraws or is deemed withdrawn 
during the Cluster Study or after receipt of a Cluster Study Report, 
but prior to commencement of the Cluster Restudy or Interconnection 
Facilities Study if no Cluster Restudy is required, Interconnection 
Customer shall be charged two (2) times its actual allocated cost of 
all studies performed for Interconnection Customers in the Cluster up 
until that point in the [i]Interconnection [s]Study process.
    (b) If Interconnection Customer withdraws or is deemed withdrawn 
during the Cluster Restudy or after receipt of any applicable restudy 
reports issued pursuant to Section 7.5 of this LGIP, but prior to 
commencement of the Interconnection Facilities Study, Interconnection 
Customer shall be charged five percent (5%) its estimated Network 
Upgrade costs.
    (c) If Interconnection Customer withdraws or is deemed withdrawn 
during the Interconnection Facilities Study, after receipt of the 
Interconnection Facilities Study Report issued pursuant to Section 8.3 
of this LGIP, or after receipt of the draft LGIA but before 
Interconnection Customer has executed an LGIA or has requested that its 
LGIA be filed unexecuted, and has satisfied the other requirements 
described in Section 11.3 of this LGIP (i.e., Site Control 
demonstration, LGIA Deposit, reasonable evidence of one or more 
milestones in the development of the Generating Facility), 
Interconnection Customer shall be charged ten percent (10%) its 
estimated Network Upgrade costs.
    (d) If Interconnection Customer has executed an LGIA or has 
requested that its LGIA be filed unexecuted and has satisfied the other 
requirements described in Section 11.3 of this LGIP (i.e., Site Control 
demonstration, LGIA Deposit, reasonable evidence of one or more 
milestones in the development of the Generating Facility) and 
subsequently withdraws its Interconnection Request or if 
Interconnection Customer's Generating Facility otherwise does not reach 
Commercial Operation, that Interconnection Customer's Withdrawal 
Penalty shall be twenty percent (20%) its estimated Network Upgrade 
costs.
3.7.1.2 Distribution of the Withdrawal Penalty
3.7.1.2.1 Initial Distribution of Withdrawal Penalties Prior to 
Assessment of Network Upgrade Costs Previously Shared With Withdrawn 
Interconnection Customers in the Same Cluster
    For a single [c]Cluster, Transmission Provider shall hold all 
Withdrawal Penalty funds until all Interconnection Customers in that 
Cluster have either: (1) withdrawn or been deemed withdrawn; (2) 
executed an LGIA; or (3) requested an LGIA to be filed unexecuted. Any 
Withdrawal Penalty funds collected from the Cluster shall first be used 
to fund studies conducted under the Cluster Study Process for 
Interconnection Customers in the same Cluster that have executed the 
LGIA or requested the LGIA to be filed unexecuted. Next, after the 
Withdrawal Penalty funds are applied to relevant study costs in the 
same Cluster, Transmission Provider will apply the remaining Withdrawal 
Penalty funds to reduce net increases, for Interconnection Customers in 
the same Cluster, in Interconnection Customers' Network Upgrade cost 
assignment and associated financial security requirements under Article 
11.5 of the pro forma LGIA attributable to the impacts of withdrawn 
Interconnection Customers that shared an obligation with the remaining

[[Page 27133]]

Interconnection Customers to fund a Network Upgrade, as described in 
more detail in Sections 3.7.1.2.3 and 3.7.1.2.4. The total amount of 
funds used to fund these studies under the Cluster Study Process or 
those applied to any net increases in Network Upgrade costs for 
Interconnection Customers in the same Cluster shall not exceed the 
total amount of Withdrawal Penalty funds collected from the Cluster.
    Withdrawal Penalty funds shall first be applied as a refund to 
invoiced study costs for Interconnection Customers in the same Cluster 
that did not withdraw within thirty (30) Calendar Days of such 
Interconnection Customers executing their LGIA or requesting to have 
their LGIA filed unexecuted. Distribution of Withdrawal Penalty funds 
within one specific Cluster [Study ]for study costs shall not exceed 
the total actual Cluster Study Process costs for the Cluster. 
Withdrawal Penalty funds applied to study costs shall be allocated 
within the same Cluster to Interconnection Customers in a manner 
consistent with [the] Transmission Provider's method in Section 13.3 of 
this LGIP for allocating the costs of [i]Interconnection [s]Studies 
conducted on a clustered basis. Transmission Provider shall post the 
balance of Withdrawal Penalty funds held by Transmission Provider but 
not yet dispersed on its OASIS site and update this posting on a 
quarterly basis.
    If an Interconnection Customer withdraws after it executes, or 
requests the unexecuted filing of, its LGIA, Transmission Provider 
shall first apply such Interconnection Customer's Withdrawal Penalty 
funds to any restudy costs required due to [the] Interconnection 
Customer's withdrawal as a credit to as-yet-to be invoiced study costs 
to be charged to the remaining Interconnection Customers in the same 
Cluster in a manner consistent with [the] Transmission Provider's 
method in Section 13.3 of this LGIP for allocating the costs of 
[i]Interconnection [s]Studies conducted on a clustered basis. 
Distribution of the Withdrawal Penalty funds for such restudy costs 
shall not exceed the total actual restudy costs.
3.7.1.2.2 Assessment of Network Upgrade Costs Previously Shared With 
Withdrawn Interconnection Customers in the Same Cluster
    If Withdrawal Penalty funds remain for the same Cluster after the 
Withdrawal Penalty funds are applied to relevant study costs, 
Transmission Provider will determine if the withdrawn Interconnection 
Customers, at any point in the Cluster Study Process, shared cost 
assignment for one or more Network Upgrades with any remaining 
Interconnection Customers in the same Cluster based on the Cluster 
Study Report, Cluster Restudy Report(s), Interconnection Facilities 
Study Report, and any subsequent issued restudy report issued for the 
Cluster.
    In [s]Section 3.7.1.2 of this LGIP, shared cost assignments for 
Network Upgrades refers to the cost of Network Upgrades still needed 
for the same Cluster for which an Interconnection Customer, prior to 
withdrawing its Interconnection Request, shared the obligation to fund 
along with Interconnection Customers that have executed an LGIA, or 
requested the LGIA to filed unexecuted.
    If Transmission Provider's assessment determines that there are no 
shared cost assignments for any Network Upgrades in the same Cluster 
for the withdrawn Interconnection Customer, or determines that the 
withdrawn Interconnection Customer's withdrawal did not cause a net 
increase in the shared cost assignment for any remaining 
Interconnection Customers' Network Upgrade(s) in the same Cluster, 
Transmission Provider will return any remaining Withdrawal Penalty 
funds to the withdrawn Interconnection Customer(s). Such remaining 
Withdrawal Penalty funds will be returned to withdrawn Interconnection 
Customers based on the proportion of each withdrawn Interconnection 
Customer's contribution to the total amount of Withdrawal Penalty funds 
collected for the Cluster (i.e., the total amount before the initial 
disbursement required under Section 3.7.1.2.1 of this LGIP). 
Transmission Provider must make such disbursement within sixty (60) 
Calendar Days of the date on which all Interconnection Customers in the 
same Cluster have either: (1) withdrawn or been deemed withdrawn; (2) 
executed an LGIA; or (3) requested an LGIA to be filed unexecuted. For 
the withdrawn Interconnection Customers that Transmission Provider 
determines have caused a net increase in the shared cost assignment for 
one or more Network Upgrade(s) in the same Cluster under [subs]Section 
3.7.1.2.3(a) of this LGIP, Transmission Provider will determine each 
such withdrawn Interconnection Customers' Withdrawal Penalty funds 
remaining balance that will be applied toward net increases in Network 
Upgrade shared costs calculated under [subs]Sections 3.7.1.2.3(a) and 
3.7.1.2.3(b) of this LGIP based on each such withdrawn Interconnection 
Customer's proportional contribution to the total amount of Withdrawal 
Penalty funds collected for the same Cluster (i.e., the total amount 
before the initial disbursement requirement under Section 3.7.1.2.1 of 
this LGIP).
    If [the] Transmission Provider's assessment determines that there 
are shared cost assignments for Network Upgrades in the same Cluster, 
Transmission Provider will calculate the remaining Interconnection 
Customers' net increase in cost assignment for Network Upgrades due to 
a shared cost assignment for Network Upgrades with the withdrawn 
Interconnection Customer and distribute Withdrawal Penalty funds as 
described in Section 3.7.1.2.3, depending on whether the withdrawal 
occurred before the withdrawing Interconnection Customer executed the 
LGIA (or filed unexecuted), as described in [subs]Section 3.7.1.2.3(a) 
of this LGIP, or after such execution (or filing unexecuted) of an 
LGIA, as described in [subs]Section 3.7.1.2.3(b) of this LGIP.
    As discussed in [subs]Section 3.7.1.2.4 of this LGIP, Transmission 
Provider will amend executed (or filed unexecuted) LGIAs of the 
remaining Interconnection Customers in the same Cluster to apply the 
remaining Withdrawal Penalty funds to reduce net increases in 
Interconnection Customers' Network Upgrade cost assignment and 
associated financial security requirements under Article 11.5 of the 
pro forma LGIA attributable to the impacts of withdrawn Interconnection 
Customers on Interconnection Customers remaining in the same Cluster 
that had a shared cost assignment for Network Upgrades with the 
withdrawn Interconnection Customers.
3.7.1.2.3 Impact Calculations
3.7.1.2.3(a) Impact Calculation for Withdrawals During the Cluster 
Study Process
    If an Interconnection Customer withdraws before it executes, or 
requests the unexecuted filing of, its LGIA, [the] Transmission 
Provider will distribute in the following manner the Withdrawal Penalty 
funds to reduce the Network Upgrade cost impact on the remaining 
Interconnection Customers in the same Cluster who had a shared cost 
assignment for a Network Upgrade with the withdrawn Interconnection 
Customer.
    To calculate the reduction in the remaining Interconnection 
Customers' net increase in Network Upgrade costs and associated 
financial security requirements under Article 11.5 of the pro forma 
LGIA, [the] Transmission Provider will determine the financial impact 
of a withdrawing Interconnection Customer on other Interconnection 
Customers in the same Cluster that shared an obligation to fund the 
same Network Upgrade(s). Transmission Provider shall calculate this 
financial impact once all [the] Interconnection Customers in the same 
Cluster either: (1) have withdrawn or have been deemed withdrawn; (2) 
executed an LGIA; or (3) request an LGIA to be filed unexecuted. 
Transmission Provider will perform the financial impact calculation 
using the following steps.
    First, Transmission Provider must determine which withdrawn 
Interconnection Customers shared an obligation to fund Network Upgrades 
with Interconnection Customers from the same Cluster that have LGIAs 
that are executed or have been requested to be filed unexecuted. Next, 
Transmission Provider shall perform the calculation of the financial 
impact of a withdrawal on another Interconnection Request in the same 
Cluster by performing a comparison of the Network Upgrade cost 
estimates between each of the following:
    (1) Cluster Study phase to Cluster Restudy phase (if Cluster 
Restudy was necessary);
    (2) Cluster Restudy phase to Interconnection Facilities Study phase 
(if a Cluster Restudy was necessary);
    (3) Cluster Study phase to Interconnection Facilities Study phase 
(if no Cluster Restudy was performed);
    (4) Interconnection Facilities Study phase to any subsequent 
restudy that was performed before the execution or filing of an 
unexecuted LGIA;
    (5) the restudy to the executed, or filed unexecuted, LGIA (if a 
restudy was performed after the Interconnection Facilities Study phase 
and before the execution or filing of an unexecuted LGIA).
    If, based on the above calculations, Transmission Provider 
determines:
    (i) that the costs assigned to an Interconnection Customer in the 
same Cluster for Network Upgrades that a

[[Page 27134]]

withdrawn Interconnection Customer shared cost assignment for increased 
between any two studies, and
    (ii) after the impacted Interconnection Customer's LGIA was 
executed or filed unexecuted, [the] Interconnection Customer's cost 
assignment for the relevant Network Upgrade is greater than it was 
prior to the withdrawal of [the] Interconnection Customer in the same 
Cluster that shared cost assignment for the Network Upgrade, then 
Transmission Provider shall apply the withdrawn Interconnection 
Customer's Withdrawal Penalty funds that has not already been applied 
to study costs in the amount of the financial impact by reducing, in 
the same Cluster, the remaining Interconnection Customer's Network 
Upgrade costs and associated financial security requirements under 
Article 11.5 of the pro forma LGIA.
    If Transmission Provider determines that more than one 
Interconnection Customer in the same Cluster was financially impacted 
by the same withdrawn Interconnection Customer, Transmission Provider 
will apply the relevant withdrawn Interconnection Customer's Withdrawal 
Penalty funds that has not already been applied to study costs to 
reduce the financial impact to each Interconnection Customer based on 
each Interconnection Customer's proportional share of the financial 
impact, as determined by either the [p]Proportional [i]Impact [m]Method 
if it is a System Network Upgrade or on a per capita basis if it is a 
Substation Network Upgrade, as described under Section 4.2.1 of this 
LGIP.
3.7.1.2.3(b) Impact Calculation for Withdrawals in the Same Cluster 
After the Cluster Study Process
    If an Interconnection Customer withdraws after it executes, or 
requests the unexecuted filing of, its LGIA, Transmission Provider will 
distribute in the following manner the remaining Withdrawal Penalty 
funds to reduce the Network Upgrade cost impact on the remaining 
Interconnection Customers in the same Cluster who had a shared cost 
assignment with the withdrawn Interconnection Customer for one or more 
Network Upgrades.
    Transmission Provider will determine the financial impact on the 
remaining Interconnection Customers in the same Cluster within thirty 
(30) [c]Calendar [d]Days after the withdrawal occurs. [The] 
Transmission Provider will determine that financial impact by comparing 
the Network Upgrade cost funding obligations [the] Interconnection 
Customers shared with the withdrawn Interconnection Customer before the 
withdrawal of [the] Interconnection Customer and after the withdrawal 
of [the] Interconnection Customer. If that comparison indicates an 
increase in Network Upgrade costs for an Interconnection Customer, 
Transmission Provider shall apply the withdrawn Interconnection 
Customer's Withdrawal Penalty funds to the increased costs each 
impacted Interconnection Customer in the same Cluster experienced 
associated with such Network Upgrade(s) in proportion to each 
Interconnection Customer's increased cost assignment, as determined by 
Transmission Provider.
3.7.1.2.4 Amending LGIA To Apply Reductions to Interconnection 
Customer's Assigned Network Upgrade Costs and Associated Financial 
Security Requirement With Respect to Withdrawals in the Same Cluster
    Within thirty (30) Calendar Days of all Interconnection Customers 
in the same Cluster having: (1) withdrawn or been deemed withdrawn; (2) 
executed an LGIA; or (3) requested an LGIA to be filed unexecuted, 
Transmission Provider must perform the calculations described in 
[subs]Section 3.7.1.2.3(a) of this LGIP and provide such 
Interconnection Customers with an amended LGIA that provides the 
reduction in Network Upgrade cost assignment and associated reduction 
to [the] Interconnection Customer's financial security requirements, 
under Article 11.5 of the pro forma LGIA, due from [the] 
Interconnection Customer to [the] Transmission Provider.
    Where an Interconnection Customer executes the LGIA (or requests 
the filing of an unexecuted LGIA) and is later withdrawn or its LGIA is 
terminated, Transmission Provider must, within thirty (30) Calendar 
Days of such withdrawal or termination, perform the calculations 
described in [subs]Section 3.7.1.2.3(b) of this LGIP and provide such 
Interconnection Customers in the same Cluster with an amended LGIA that 
provides the reduction in Network Upgrade cost assignment and 
associated reduction to [the] Interconnection Customer's financial 
security requirements, under Article 11.5 of the pro forma LGIA, due 
from [the] Interconnection Customer to Transmission Provider.
    Any repayment by Transmission Provider to Interconnection Customer 
under Article 11.4 of the pro forma LGIA of amounts advanced for 
Network Upgrades after the Generating Facility achieves Commercial 
Operation shall be limited to [the] Interconnection Customer's total 
amount of Network Upgrade costs paid and associated financial security 
provided to Transmission Provider under Article 11.5 of the pro forma 
LGIA.
3.7.1.2.5 Final Distribution of Withdrawal Penalty Funds
    If Withdrawal Penalty funds remain for the Cluster after the 
Withdrawal Penalty funds are applied to relevant study costs and net 
increases in shared cost assignments for Network Upgrades to remaining 
Interconnection Customers, Transmission Provider will return any 
remaining Withdrawal Penalty funds to the withdrawn Interconnection 
Customers in the same Cluster net of the amount of each withdrawn 
Interconnection Customer's Withdrawal Penalty funds applied to study 
costs and net increases in shared cost assignments for Network Upgrades 
to remaining Interconnection Customers.
3.8 Identification of Contingent Facilities
    Transmission Provider shall post in this section a method for 
identifying the Contingent Facilities to be provided to Interconnection 
Customer at the conclusion of the Cluster Study and included in 
Interconnection Customer's Large Generator Interconnection Agreement. 
The method shall be sufficiently transparent to determine why a 
specific Contingent Facility was identified and how it relates to the 
Interconnection Request. Transmission Provider shall also provide, upon 
request of Interconnection Customer, the estimated Interconnection 
Facility and/or Network Upgrade costs and estimated in-service 
completion time of each identified Contingent Facility when this 
information is readily available and not commercially sensitive.
3.9 Penalties for Failure To Meet Study Deadlines
    (1) Transmission Provider shall be subject to a penalty if it fails 
to complete a Cluster Study, Cluster Restudy, Interconnection 
Facilities Study, or Affected Systems Study by the applicable deadline 
set forth in this LGIP. Transmission Provider must pay the penalty for 
each late Cluster Study, Cluster Restudy, and Interconnection 
Facilities Study on a pro rata basis per Interconnection Request to all 
Interconnection Customer(s) included in the relevant study that did not 
withdraw, or were not deemed withdrawn, from Transmission Provider's 
interconnection queue before the missed study deadline, in proportion 
to each Interconnection Customer's final study cost. Transmission 
Provider must pay the penalty for a late Affected Systems Study on a 
pro rata basis per interconnection request to all Affected System 
Interconnection Customer(s) included in the relevant Affected System 
Study that did not withdraw, or were not deemed withdrawn, from the 
host transmission provider's interconnection queue before the missed 
study deadline, in proportion to each Interconnection Customer's final 
study cost. The study delay penalty for each late study shall be 
distributed no later than forty-five (45) Calendar Days after the late 
study has been completed.
    (2) For penalties assessed in accordance with this Section, the 
penalty amount will be equal to: $1,000 per Business Day for delays of 
Cluster Studies beyond the applicable deadline set forth in this LGIP; 
$2,000 per Business Day for delays of Cluster Re[-S]studies beyond the 
applicable deadline set forth in this LGIP; $2,000 per Business Day for 
delays of Affected System Studies beyond the applicable deadline set 
forth in this LGIP; and $2,500 per Business Day for delays of 
Interconnection Facilities Studies beyond the applicable deadline set 
forth in this LGIP. The total amount of a penalty assessed under this 
Section shall not exceed: (a) one hundred percent (100%) of the initial 
study deposit(s) received for all of the Interconnection Requests in 
the Cluster for Cluster Studies and Cluster Restudies; (b) one hundred 
percent (100%) of the initial study deposit received for the single 
Interconnection Request in the study for Interconnection Facilities 
Studies; and (c) one hundred percent (100%) of the study deposit(s) 
that Transmission Provider collects for conducting the Affected System 
Study.
    (3) Transmission Provider may appeal to the Commission any 
penalties imposed under this Section. Any such appeal must be filed no 
later than forty-five (45) Calendar

[[Page 27135]]

Days after the late study has been completed. While an appeal to the 
Commission is pending, Transmission Provider shall remain liable for 
the penalty, but need not distribute the penalty until forty-five (45) 
Calendar Days after (1) the deadline for filing a rehearing request has 
ended, if no requests for rehearing of the appeal have been filed, or 
(2) the date that any requests for rehearing of the Commission's 
decision on the appeal are no longer pending before the Commission. The 
Commission may excuse Transmission Provider from penalties under this 
Section for good cause.
    (4) No penalty will be assessed under this Section where a study is 
delayed by ten (10) Business Days or less. If the study is delayed by 
more than ten (10) Business Days, the penalty amount will be calculated 
from the first Business Day [the] Transmission Provider misses the 
applicable study deadline.
    (5) If (a) Transmission Provider needs to extend the deadline for a 
particular study subject to penalties under this Section and (b) all 
Interconnection Customers or Affected System Interconnection Customers 
included in the relevant study mutually agree to such an extension, the 
deadline for that study shall be extended thirty (30) Business Days 
from the original deadline. In such a scenario, no penalty will be 
assessed for Transmission Provider missing the original deadline.
    (6) No penalties shall be assessed until the third Cluster Study 
cycle (including any Transitional Cluster Study cycle, but not 
Transitional Serial Interconnection Facilities Studies) after the 
Commission-approved effective date of Transmission Provider's filing 
made in compliance with the Final Rule in Docket No. RM22-14-000.
    (7) Transmission Provider must maintain on its OASIS or its public 
website summary statistics related to penalties assessed under this 
Section, updated quarterly. For each calendar quarter, Transmission 
Provider must calculate and post (1) the total amount of penalties 
assessed under this Section during the previous reporting quarter and 
(2) the highest penalty assessed under this Section paid to a single 
Interconnection Customer or Affected System Interconnection Customer 
during the previous reporting quarter. Transmission Provider must post 
on its OASIS or its website these penalty amounts for each calendar 
quarter within thirty (30) Calendar Days of the end of the calendar 
quarter. Transmission Provider must maintain the quarterly measures 
posted on its OASIS or its website for three (3) calendar years with 
the first required posting to be the third Cluster Study cycle 
(including any Transitional Cluster Study cycle, but not Transitional 
Serial Interconnection Facilities Studies) after Transmission Provider 
transitions to the Cluster Study Process.

Section 4. Interconnection Request Evaluation Process

    Once an Interconnection Customer has submitted a valid 
Interconnection Request pursuant to Section 3.4 of this LGIP, such 
Interconnection Request shall become part of [the] Transmission 
Provider's interconnection queue for further processing pursuant to the 
following procedures.
4.1 Queue Position
4.1.1 Assignment of Queue Position
    Transmission Provider shall assign a Queue Position as follows: the 
Queue Position within the queue shall be assigned based upon the date 
and time of receipt of all items required pursuant to the provisions of 
Section 3.4 of this LGIP. All Interconnection Requests submitted and 
validated in a single Cluster Request Window shall be considered 
equally queued.
4.1.2 Higher Queue Position
    A higher Queue Position assigned to an Interconnection Request is 
one that has been placed ``earlier'' in the queue in relation to 
another Interconnection Request that is assigned a lower Queue 
Position. All requests studied in a single Cluster shall be considered 
equally queued. Interconnection Customers that are part of Clusters 
initiated earlier in time than an instant [Q]queue shall be considered 
to have a higher Queue Position than Interconnection Customers that are 
part of Clusters initiated later than an instant [Q]queue.
4.2 General Study Process
    Interconnection Studies performed within the Cluster Study Process 
shall be conducted in such a manner to ensure the efficient 
implementation of the applicable regional transmission expansion plan 
in light of the Transmission System's capabilities at the time of each 
study and consistent with Good Utility Practice.
    Transmission Provider may use subgroups in the Cluster Study 
Process. In all instances in which Transmission Provider elects to use 
subgroups in the [c]Cluster [s]Study [p]Process, Transmission Provider 
must publish the criteria used to define and determine subgroups on its 
OASIS or public website.
4.2.1 Cost Allocation for Interconnection Facilities and Network 
Upgrades
    (1) For Network Upgrades identified in Cluster Studies, 
Transmission Provider shall calculate each Interconnection Customer's 
share of the costs as follows:
    (a) Substation Network Upgrades, including all switching stations, 
shall be allocated first per capita to Interconnection Facilities 
interconnecting to the substation at the same voltage level, and then 
per capita to each Generating Facility sharing the Interconnection 
Facility [interconnecting at the same substation].
    (b) System Network Upgrades shall be allocated based on the 
proportional impact of each individual Generating Facility in the 
Cluster Study on the need for a specific System Network Upgrade. 
{Transmission Provider shall include in this section a description of 
how cost for each facility type designated as a network upgrade will be 
allocated using its proportional impact method.{time} 
    (c) An Interconnection Customer that funds Substation Network 
Upgrades and/or System Network Upgrades shall be entitled to 
transmission credits as provided in Article 11.4 of the LGIA.
    (2) The costs of any needed Interconnection Facilities identified 
in the Cluster Study Process will be directly assigned to [the] 
Interconnection Customer(s) using such facilities. Where 
Interconnection Customers in the Cluster agree to share Interconnection 
Facilities, the cost of such Interconnection Facilities shall be 
allocated based on the number of Generating Facilities sharing use of 
such Interconnection Facilities on a per capita basis (i.e., on a per 
Generating Facility basis), unless Parties mutually agree to a 
different cost sharing arrangement.
4.3 Transferability of Queue Position
    An Interconnection Customer may transfer its Queue Position to 
another entity only if such entity acquires the specific Generating 
Facility identified in the Interconnection Request and the Point of 
Interconnection does not change.
4.4 Modifications
    Interconnection Customer shall submit to Transmission Provider, in 
writing, modifications to any information provided in the 
Interconnection Request. Interconnection Customer shall retain its 
Queue Position if the modifications are in accordance with Sections 
4.4.1, 4.4.2, or 4.4.5 of this LGIP, or are determined not to be 
Material Modifications pursuant to Section 4.4.3 of this LGIP.
    Notwithstanding the above, during the course of the Interconnection 
Studies, either Interconnection Customer or Transmission Provider may 
identify changes to the planned interconnection that may improve the 
costs and benefits (including reliability) of the interconnection, and 
the ability of the proposed change to accommodate the Interconnection 
Request. To the extent the identified changes are acceptable to 
Transmission Provider and Interconnection Customer, such acceptance not 
to be unreasonably withheld, Transmission Provider shall modify the 
Point of Interconnection prior to return of the executed Cluster Study 
Agreement, and Interconnection Customer shall retain its Queue 
Position.
    4.4.1 Prior to the return of the executed Cluster Study Agreement 
to Transmission Provider, modifications permitted under this Section 
shall include specifically: (a) a decrease of up to [60] sixty percent 
(60%) of electrical output (MW) of the proposed project, through either 
(1) a decrease in plant size or (2) a decrease in Interconnection 
Service level (consistent with the process described in Section 3.1 of 
this LGIP) accomplished by applying Transmission Provider-approved 
injection-limiting equipment; (b) modifying the technical parameters 
associated with the Large Generating Facility technology or the Large 
Generating Facility step-up transformer impedance characteristics; and 
(c) modifying the interconnection configuration. For plant increases, 
the incremental increase in plant output will go in the next Cluster 
[Study]Request Window for the purposes of cost allocation and study 
analysis.
    4.4.2 Prior to the return of the executed Interconnection 
Facilities Study Agreement to Transmission Provider, the modifications 
permitted under this Section shall include specifically: (a) additional 
[15] fifteen percent (15%) decrease of electrical output of the

[[Page 27136]]

proposed project through either (1) a decrease in plant size (MW) or 
(2) a decrease in Interconnection Service level (consistent with the 
process described in Section 3.1) accomplished by applying Transmission 
Provider-approved injection-limiting equipment; (b) Large Generating 
Facility technical parameters associated with modifications to Large 
Generating Facility technology and transformer impedances; provided, 
however, the incremental costs associated with those modifications are 
the responsibility of the requesting Interconnection Customer; and (c) 
a Permissible Technological Advancement for the Large Generating 
Facility after the submission of the Interconnection Request. Section 
4.4.6 of this LGIP specifies a separate technological change procedure 
including the requisite information and process that will be followed 
to assess whether [the] Interconnection Customer's proposed 
technological advancement under Section 4.4.2(c) of this LGIP is a 
Material Modification. Section 1 of this LGIP contains a definition of 
Permissible Technological Advancement.
    4.4.3 Prior to making any modification other than those 
specifically permitted by Sections 4.4.1, 4.4.2, and 4.4.5 of this 
LGIP, Interconnection Customer may first request that Transmission 
Provider evaluate whether such modification is a Material Modification. 
In response to Interconnection Customer's request, Transmission 
Provider shall evaluate the proposed modifications prior to making them 
and inform Interconnection Customer in writing of whether the 
modifications would constitute a Material Modification. Any change to 
the Point of Interconnection, except those deemed acceptable under 
Sections 3.1.2 or 4.4 of this LGIP or so allowed elsewhere, shall 
constitute a Material Modification. Interconnection Customer may then 
withdraw the proposed modification or proceed with a new 
Interconnection Request for such modification. Transmission Provider 
shall study the addition of a Generating Facility that includes at 
least one electric storage resource using operating assumptions (i.e., 
whether the interconnecting Generating Facility will or will not charge 
at peak load) that reflect the proposed charging behavior of the 
Generating Facility as requested by Interconnection Customer, unless 
Transmission Provider determines that Good Utility Practice, including 
Applicable Reliability Standards, otherwise requires the use of 
different operating assumptions.
    {Transmission Providers using fuel-based dispatch assumptions in 
Interconnection Studies are not required to include Section 4.4.3.1 
because it does not apply to them{time} 
    4.4.3.1 Interconnection Customer may request, and Transmission 
Provider shall evaluate, the addition to the Interconnection Request of 
a Generating Facility with the same Point of Interconnection indicated 
in the initial Interconnection Request, if the addition of the 
Generating Facility does not increase the requested Interconnection 
Service level. Transmission Provider must evaluate such modifications 
prior to deeming them a Material Modification, but only if 
Interconnection Customer submits them prior to the return of the 
executed Interconnection Facilities Study Agreement by Interconnection 
Customer to Transmission Provider. Interconnection Customers requesting 
that such a modification be evaluated must demonstrate the required 
Site Control at the time such request is made.
    4.4.4 Upon receipt of Interconnection Customer's request for 
modification permitted under this Section 4.4 of this LGIP, 
Transmission Provider shall commence and perform any necessary 
additional studies as soon as practicable, but in no event shall 
Transmission Provider commence such studies later than thirty (30) 
Calendar Days after receiving notice of Interconnection Customer's 
request. Any additional studies resulting from such modification shall 
be done at Interconnection Customer's cost. Any such request for 
modification of the Interconnection Request must be accompanied by any 
resulting updates to the models described in Attachment A to Appendix 1 
of this LGIP.
    4.4.5 Extensions of less than three (3) cumulative years in the 
Commercial Operation Date of the Large Generating Facility to which the 
Interconnection Request relates are not material and should be handled 
through construction sequencing. For purposes of this section, the 
Commercial Operation Date reflected in the initial Interconnection 
Request shall be used to calculate the permissible extension prior to 
Interconnection Customer executing an LGIA or requesting that the LGIA 
be filed unexecuted. After an LGIA is executed or requested to be filed 
unexecuted, the Commercial Operation Date reflected in the LGIA shall 
be used to calculate the permissible extension. Such cumulative 
extensions may not exceed three years including both extensions 
requested after execution of the LGIA by Interconnection Customer or 
the filing of an unexecuted LGIA by Transmission Provider and those 
requested prior to execution of the LGIA by Interconnection Customer or 
the filing of an unexecuted LGIA by Transmission Provider.
4.4.6 Technological Change Procedures
    {Insert technological change procedure here{time} 

Section 5. Procedures for Interconnection Requests Submitted Prior to 
Effective Date of the Cluster Study Revisions

5.1 Procedures for Transitioning to the Cluster Study Process
    5.1.1 Any Interconnection Customer assigned a Queue Position as of 
thirty (30) Calendar Days after {Transmission Provider to insert filing 
date{time}  (the filing date of this LGIP) shall retain that Queue 
Position subject to the requirements in Sections 5.1.1.1 and 5.1.1.2 of 
this LGIP. Any Interconnection Customer that fails to meet these 
requirements shall have its Interconnection Request deemed withdrawn by 
Transmission Provider pursuant to Section 3.7 of this LGIP. In such 
case, Transmission Provider shall not assess [the] Interconnection 
Customer any Withdrawal Penalty.
    Any Interconnection Customer that has received a final 
Interconnection Facilities Study Report before the commencement of the 
studies under the transition process set forth in this [s]Section shall 
be tendered an LGIA pursuant to Section 11 of this LGIP, and shall not 
be required to enter this transition process.
5.1.1.1 Transitional Serial Study
    An Interconnection Customer that has been tendered an 
Interconnection Facilities Study Agreement as of thirty (30) Calendar 
Days after {Transmission Provider to insert filing date{time}  (the 
filing date of this LGIP) may opt to proceed with an Interconnection 
Facilities Study. Transmission Provider shall tender each eligible 
Interconnection Customer a Transitional Serial Interconnection 
Facilities Study Agreement, in the form of Appendix 8 to this LGIP, no 
later than the Commission-approved effective date of this LGIP. 
Transmission Provider shall proceed with the Interconnection Facilities 
Study, provided that [the] Interconnection Customer: (1) meets each of 
the following requirements; and (2) executes the Transitional Serial 
Interconnection Facilities Study Agreement within sixty (60) Calendar 
Days of the Commission-approved effective date of this LGIP. If an 
eligible Interconnection Customer does not meet these requirements, its 
Interconnection Request shall be deemed withdrawn without penalty. 
Transmission Provider must commence the Transitional Serial 
Interconnection Facilities Study at the conclusion of this sixty (60) 
Calendar Day period. Transitional Serial Interconnection Facilities 
Study costs shall be allocated according to the method described in 
Section 13.3 of this LGIP.
    All of the following must be included when an Interconnection 
Customer returns the Transitional Serial Interconnection Facilities 
Study Agreement:
    (1) A deposit equal to one hundred percent (100%) of the costs 
identified for Transmission Provider's Interconnection Facilities and 
Network Upgrades in Interconnection Customer's system impact study 
report. If Interconnection Customer does not withdraw, the deposit 
shall be trued up to actual costs once they are known and applied to 
future construction costs described in Interconnection Customer's 
eventual LGIA. Any amounts in excess of the actual construction costs 
shall be returned to Interconnection Customer within thirty (30) 
Calendar Days of the issuance of a final invoice for construction 
costs, in accordance with Article 12.2 of the pro forma LGIA. If 
Interconnection Customer withdraws or otherwise does not reach 
Commercial Operation, Transmission Provider shall refund the remaining 
deposit after the final invoice for study costs and Transitional 
Withdrawal Penalty is settled. The deposit shall be in the form of an 
irrevocable letter of credit,[ or] cash, a surety bond, or other form 
of security that is reasonably acceptable to Transmission Provider, 
where cash deposits shall be treated according to Section 3.7 of this 
LGIP.
    (2) Exclusive Site Control for 100% of the proposed Generating 
Facility.
    Transmission Provider shall conduct each Transitional Serial 
Interconnection Facilities Study and issue the associated Transitional 
Serial Interconnection Facilities Study Report within one hundred fifty 
(150)

[[Page 27137]]

Calendar Days of the Commission-approved effective date of this LGIP.
    After Transmission Provider issues each Transitional 
Interconnection Facilities Study Report, Interconnection Customer shall 
proceed pursuant to Section 11 of this LGIP. If Interconnection 
Customer withdraws its Interconnection Request or if Interconnection 
Customer's Generating Facility otherwise does not reach Commercial 
Operation, a Transitional Withdrawal Penalty shall be imposed on 
Interconnection Customer equal to nine (9) times Interconnection 
Customer's total study cost incurred since entering [the] Transmission 
Provider's interconnection queue (including the cost of studies 
conducted under Section 5 of this LGIP).
5.1.1.2 Transitional Cluster Study
    An Interconnection Customer with an assigned Queue Position as of 
thirty (30) Calendar Days after {Transmission Provider to insert filing 
date{time}  (the filing date of this LGIP) may opt to proceed with a 
Transitional Cluster Study. Transmission Provider shall tender each 
eligible Interconnection Customer a Transitional Cluster Study 
Agreement, in the form of Appendix 7 to this LGIP, no later than the 
Commission-approved effective date of this LGIP. Transmission Provider 
shall proceed with the Transitional Cluster Study that includes each 
Interconnection Customer that: (1) meets each of the following 
requirements listed as (1)-(3) in this section; and (2) executes the 
Transitional Cluster Study Agreement within sixty (60) Calendar Days of 
the Commission-approved effective date of this LGIP. All 
Interconnection Requests that enter the Transitional Cluster Study 
shall be considered to have an equal Queue Position that is lower than 
Interconnection Customer(s) proceeding with Transitional Serial 
Interconnection Facilities Study. If an eligible Interconnection 
Customer does not meet these requirements, its Interconnection Request 
shall be deemed withdrawn without penalty. Transmission Provider must 
commence the Transitional Cluster Study at the conclusion of this sixty 
(60) Calendar Day period. All identified Transmission Provider's 
Interconnection Facilities and Network Upgrade costs shall be allocated 
according to Section 4.2.1 of this LGIP. Transitional Cluster Study 
costs shall be allocated according to the method described in Section 
13.3 of this LGIP.
    Interconnection Customer may make a one-time extension to its 
requested Commercial Operation Date upon entry into the Transitional 
Cluster Study, where any such extension shall not result in a 
Commercial Operation Date later than December 31, 2027.
    All of the following must be included when an Interconnection 
Customer returns the Transitional Cluster Study Agreement:
    (1) A selection of either Energy Resource Interconnection Service 
or Network Resource Interconnection Service.
    (2) A deposit of five million dollars ($5,000,000) in the form of 
an irrevocable letter of credit,[ or] cash, a surety bond, or other 
form of security that is reasonably acceptable to Transmission 
Provider, where cash deposits will be treated according to Section 3.7 
of this LGIP. If Interconnection Customer does not withdraw, the 
deposit shall be reconciled with and applied towards future 
construction costs described in the LGIA. Any amounts in excess of the 
actual construction costs shall be returned to Interconnection Customer 
within thirty (30) Calendar Days of the issuance of a final invoice for 
construction costs, in accordance with Article 12.2 of the pro forma 
LGIA. If Interconnection Customer withdraws or otherwise does not reach 
Commercial Operation, Transmission Provider must refund the remaining 
deposit once the final invoice for study costs and Transitional 
Withdrawal Penalty is settled.
    (3) Exclusive Site Control for 100% of the proposed Generating 
Facility.
    Transmission Provider shall conduct the Transitional Cluster Study 
and issue both an associated interim Transitional Cluster Study Report 
and an associated final Transitional Cluster Study Report. The interim 
Transitional Cluster Study Report shall provide the following 
information:

--identification of any circuit breaker short circuit capability limits 
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response to 
system disturbances resulting from the interconnection; and
--Transmission Provider's Interconnection Facilities and Network 
Upgrades that are expected to be required as a result of the 
Interconnection Request(s) and a non-binding, good faith estimate of 
cost responsibility and a non-binding, good faith estimated time to 
construct.

    In addition to the information provided in the interim Transitional 
Cluster Study Report, the final Transitional Cluster Study Report shall 
provide a description of, estimated cost of, and schedule for 
construction of [the] Transmission Provider's Interconnection 
Facilities and Network Upgrades required to interconnect the Generating 
Facility to the Transmission System that resolve issues identified in 
the interim Transitional Cluster Study Report.
    The interim and final Transitional Cluster Study Reports shall be 
issued within three hundred (300) and three hundred sixty (360) 
Calendar Days of the Commission-approved effective date of this LGIP, 
respectively, and shall be posted on Transmission Provider's OASIS 
consistent with the posting of other study results pursuant to Section 
3.5.1 of this LGIP. Interconnection Customer shall have thirty (30) 
Calendar Days to comment on the interim Transitional Cluster Study 
Report, once it has been received.
    After Transmission Provider issues the final Transitional Cluster 
Study Report, Interconnection Customer shall proceed pursuant to 
Section 11 of this LGIP. If Interconnection Customer withdraws its 
Interconnection Request or if Interconnection Customer's Generating 
Facility otherwise does not reach Commercial Operation, a Transitional 
Withdrawal Penalty will be imposed on[m] Interconnection Customer equal 
to nine (9) times Interconnection Customer's total study cost incurred 
since entering [the] Transmission Provider's interconnection queue 
(including the cost of studies conducted under Section 5 of this LGIP).

5.1.2 Transmission Providers With Existing Cluster Study Processes or 
Currently in Transition

    If Transmission Provider is not conducting a transition process 
under Section 5.1.1, it will continue processing Interconnection 
Requests under its current Cluster Study Process. Within sixty (60) 
Calendar Days of the Commission-approved effective date of this LGIP, 
Interconnection Customers that have not executed an LGIA or requested 
an LGIA to be filed unexecuted must meet the requirements of Sections 
3.4.2, 7.5, or 8.1 of this LGIP, based on Interconnection Customer's 
Queue Position.
    Any Interconnection Customer that fails to meet these requirements 
within sixty (60) Calendar Days of the Commission-approved effective 
date of this LGIP shall have its Interconnection Request deemed 
withdrawn by Transmission Provider pursuant to Section 3.7 of this 
LGIP. In such case, Transmission Provider shall not assess 
Interconnection Customer any Withdrawal Penalty.
5.2 New Transmission Provider
    If Transmission Provider transfers control of its Transmission 
System to a successor Transmission Provider during the period when an 
Interconnection Request is pending, the original Transmission Provider 
shall transfer to the successor Transmission Provider any amount of the 
deposit or payment with interest thereon that exceeds the cost that it 
incurred to evaluate the request for interconnection. Any difference 
between such net amount and the deposit or payment required by this 
LGIP shall be paid by or refunded to [the] Interconnection Customer, as 
appropriate. The original Transmission Provider shall coordinate with 
the successor Transmission Provider to complete any Interconnection 
Study, as appropriate, that the original Transmission Provider has 
begun but has not completed. If Transmission Provider has tendered a 
draft LGIA to Interconnection Customer but Interconnection Customer has 
not either executed the LGIA or requested the filing of an unexecuted 
LGIA with FERC, unless otherwise provided, Interconnection Customer 
must complete negotiations with the successor Transmission Provider.

Section 6. Interconnection Information Access

6.1 Publicly Posted Interconnection Information
    Transmission Provider shall maintain and make publicly available: 
(1) an interactive visual representation of the estimated incremental 
injection capacity (in megawatts) available at each point of 
interconnection in Transmission Provider's footprint under N-1 
conditions, and (2) a table of metrics concerning the estimated impact 
of a potential Generating Facility on Transmission Provider's 
Transmission System based on a user-specified addition of a particular 
number of megawatts at a particular voltage level at a particular point

[[Page 27138]]

of interconnection. At a minimum, for each transmission facility 
impacted by the user-specified megawatt addition, the following 
information will be provided in the table: (1) the distribution factor; 
(2) the megawatt impact (based on the megawatt values of the proposed 
Generating Facility and the distribution factor); (3) the percentage 
impact on each impacted transmission facility (based on the megawatt 
values of the proposed Generating Facility and the facility rating); 
(4) the percentage of power flow on each impacted transmission facility 
before the injection of the proposed project; (5) the percentage power 
flow on each impacted transmission facility after the injection of the 
proposed Generating Facility. These metrics must be calculated based on 
the power flow model of the Transmission System with the transfer 
simulated from each point of interconnection to the whole Transmission 
Provider's footprint (to approximate Network Resource Interconnection 
Service), and with the incremental capacity at each point of 
interconnection decremented by the existing and queued Generating 
Facilities (based on the existing or requested interconnection service 
limit of the generation). These metrics must be updated within thirty 
(30) Calendar Days after the completion of each Cluster Study and 
Cluster Restudy. This information must be publicly posted, without a 
password or a fee. The website will define all underlying assumptions, 
including the name of the most recent Cluster Study or Restudy used in 
the Base Case.

Section 7. Cluster Study

7.1 Cluster Study Agreement
    No later than five (5) Business Days after the close of a Cluster 
Request Window, Transmission Provider shall tender to each 
Interconnection Customer that submitted a valid Interconnection Request 
a Cluster Study Agreement in the form of Appendix 2 to this LGIP. The 
Cluster Study Agreement shall require Interconnection Customer to 
compensate Transmission Provider for the actual cost of the Cluster 
Study pursuant to Section 13.3 of this LGIP. The specifications, 
assumptions, or other provisions in the appendices of the Cluster Study 
Agreement provided pursuant to Section 7.1 of this LGIP shall be 
subject to change by Transmission Provider following the conclusion of 
the Scoping Meeting.
7.2 Execution of Cluster Study Agreement
    Interconnection Customer shall execute the Cluster Study Agreement 
and deliver the executed Cluster Study Agreement to Transmission 
Provider no later than the close of the Customer Engagement Window.
    If Interconnection Customer does not provide all required technical 
data when it delivers the Cluster Study Agreement, Transmission 
Provider shall notify Interconnection Customer of the deficiency within 
five (5) Business Days of the receipt of the executed Cluster Study 
Agreement and Interconnection Customer shall cure the deficiency within 
ten (10) Business Days of receipt of the notice, provided, however, 
such deficiency does not include failure to deliver the executed 
Cluster Study Agreement or [S]study [D]deposit.
7.3 Scope of Cluster Study
    The Cluster Study shall evaluate the impact of the proposed 
interconnection on the reliability of the Transmission System. The 
Cluster Study will consider the Base Case as well as all Generating 
Facilities (and with respect to (iii) below, any identified Network 
Upgrades associated with such higher queued interconnection) that, on 
the date the Cluster Study is commenced: (i) are directly 
interconnected to the Transmission System; (ii) are interconnected to 
Affected Systems and may have an impact on the Interconnection Request; 
(iii) have a pending higher queued Interconnection Request to 
interconnect to the Transmission System; and (iv) have no Queue 
Position but have executed an LGIA or requested that an unexecuted LGIA 
be filed with FERC.
    For purposes of determining necessary Interconnection Facilities 
and Network Upgrades, the Cluster Study shall use the level of 
Interconnection Service requested by Interconnection Customers in the 
Cluster, except where [the] Transmission Provider otherwise determines 
that it must study the full Generating Facility Capacity due to safety 
or reliability concerns.
    The Cluster Study will consist of power flow, stability, and short 
circuit analyses, the results of which are documented in a single 
Cluster Study Report, as applicable. At the conclusion of the Cluster 
Study, Transmission Provider shall issue a Cluster Study Report. The 
Cluster Study Report will state the assumptions upon which it is based; 
state the results of the analyses; and provide the requirements or 
potential impediments to providing the requested [i]Interconnection 
[s]Service, including a preliminary indication of the cost and length 
of time that would be necessary to correct any problems identified in 
those analyses and implement the interconnection. The Cluster Study 
Report shall identify the Interconnection Facilities and Network 
Upgrades expected to be required to reliably interconnect the 
Generating Facilities in that Cluster Study at the requested 
Interconnection Service level and shall provide non-binding cost 
estimates for required Network Upgrades. The Cluster Study Report shall 
identify each Interconnection Customer's estimated allocated costs for 
Interconnection Facilities and Network Upgrades pursuant to the method 
in Section 4.2.1 of this LGIP. Transmission Provider shall hold an open 
stakeholder meeting pursuant to Section 7.4 of this LGIP.
    For purposes of determining necessary Interconnection Facilities 
and Network Upgrades, the Cluster Study shall use operating assumptions 
(i.e., whether the interconnecting Generating Facility will or will not 
charge at peak load) that reflect the proposed charging behavior of a 
Generating Facility that includes at least one electric storage 
resource as requested by Interconnection Customer, unless Transmission 
Provider determines that Good Utility Practice, including Applicable 
Reliability Standards, otherwise requires the use of different 
operating assumptions. Transmission Provider may require the inclusion 
of control technologies sufficient to limit the operation of the 
Generating Facility per the operating assumptions as set forth in the 
Interconnection Request and to respond to dispatch instructions by 
Transmission Provider. As determined by Transmission Provider, 
Interconnection Customer may be subject to testing and validation of 
those control technologies consistent with Article 6 of the LGIA.
    [The Cluster Study Report will provide a list of facilities that 
are required as a result of the Interconnection Requests within the 
Cluster and a non-binding good faith estimate of cost responsibility 
and a non-binding good faith estimated time to construct.]
    [Upon issuance of a Cluster Study Report, or Cluster Restudy 
Report, if any, Transmission Provider shall simultaneously tender a 
draft Interconnection Facilities Study Agreement to each 
Interconnection Customer within the Cluster, subject to the conditions 
in Section 8.1 of this LGIP.]
    The Cluster Study shall evaluate the use of static synchronous 
compensators, static VAR compensators, advanced power flow control 
devices, transmission switching, synchronous condensers, voltage source 
converters, advanced conductors, and tower lifting. Transmission 
Provider shall evaluate each identified alternative transmission 
technology and determine whether the above technologies should be used, 
consistent with Good Utility Practice, Applicable Reliability 
Standards, and Applicable Laws and Regulations[other applicable 
regulatory requirements]. Transmission Provider shall include an 
explanation of the results of [the] Transmission Provider's evaluation 
for each technology in the Cluster Study Report.
    The Cluster Study Report will provide a list of facilities that are 
required as a result of the Interconnection Requests within the Cluster 
and a non-binding good faith estimate of cost responsibility and a non-
binding good faith estimated time to construct.
7.4 Cluster Study Procedures
    Transmission Provider shall coordinate the Cluster Study with any 
Affected System Operator that is affected by the Interconnection 
Request pursuant to Section 3.6 of this LGIP. Transmission Provider 
shall utilize existing studies to the extent practicable when it 
performs the Cluster Study. Interconnection Requests for a Cluster 
Study may be submitted only within the Cluster Request Window and 
Transmission Provider shall initiate the Cluster Study [p]Process 
pursuant to Section 7 of this LGIP.
    Transmission Provider shall complete the Cluster Study within one 
hundred fifty (150) Calendar Days of the close of the Customer 
Engagement Window.
    Within ten (10) Business Days of simultaneously furnishing a 
Cluster Study Report to each Interconnection Customer within the 
Cluster and posting such report on OASIS, Transmission Provider shall 
convene a Cluster Study Report Meeting.
    At the request of Interconnection Customer or at any time 
Transmission Provider determines that it will not meet the required 
time frame for completing the Cluster Study, Transmission Provider 
shall notify Interconnection Customers as to the schedule status of the 
Cluster Study. If Transmission Provider is unable to complete the 
Cluster Study within the time period, it shall notify

[[Page 27139]]

Interconnection Customers and provide an estimated completion date with 
an explanation of the reasons why additional time is required. Upon 
request, Transmission Provider shall provide Interconnection Customers 
all supporting documentation, workpapers and relevant pre-
Interconnection Request and post-Interconnection Request power flow, 
short circuit and stability databases for the Cluster Study, subject to 
confidentiality arrangements consistent with Section 13.1 of this LGIP.
7.5 Cluster Study Restudies
    (1) Within twenty (20) Calendar Days after the Cluster Study Report 
Meeting, Interconnection Customer must provide the following:
    (a) Demonstration of continued Site Control pursuant to Section 
3.4.2(iii) of this LGIP; and
    (b) An additional deposit that brings the total Commercial 
Readiness Deposit submitted to Transmission Provider to five percent 
(5%) of [the] Interconnection Customer's Network Upgrade cost 
assignment identified in the Cluster Study in the form of an 
irrevocable letter of credit,[ or] cash, a surety bond, or other form 
of security that is reasonably acceptable to Transmission Provider. 
Transmission Provider shall refund the deposit to Interconnection 
Customer upon withdrawal in accordance with Section 3.7 of this LGIP.
    Interconnection Customer shall promptly inform Transmission 
Provider of any material change to Interconnection Customer's 
demonstration of Site Control under Section 3.4.2(iii) of this LGIP. 
Upon Transmission Provider determining that Interconnection Customer no 
longer satisfies the Site Control requirement, Transmission Provider 
shall notify Interconnection Customer. Within ten (10) Business Days of 
such notification, Interconnection Customer must demonstrate compliance 
with the applicable requirement subject to Transmission Provider's 
approval, not to be unreasonably withheld. Absent such demonstration, 
Transmission Provider shall deem the subject Interconnection Request 
withdrawn pursuant to Section 3.7 of this LGIP.
    (2) If no Interconnection Customer withdraws from the Cluster after 
completion of the Cluster Study or Cluster Restudy or is deemed 
withdrawn pursuant to Section 3.7 of this LGIP after completion of the 
Cluster Study or Cluster Restudy, Transmission Provider shall notify 
Interconnection Customers in the Cluster that a Cluster Restudy is not 
required.
    (3) If one or more Interconnection Customers withdraw from the 
Cluster or are deemed withdrawn pursuant to Section 3.7 of this LGIP, 
Transmission Provider shall determine if a Cluster Restudy is necessary 
within thirty (30) Calendar Days after the Cluster Study Report 
Meeting. If Transmission Provider determines a Cluster Restudy is not 
necessary, Transmission Provider shall notify Interconnection Customers 
in the Cluster that a Cluster Restudy is not required and Transmission 
Provider shall provide an updated Cluster Study Report within thirty 
(30) Calendar Days of such determination.
    (4) If one or more Interconnection Customers withdraws from the 
Cluster or is deemed withdrawn pursuant to Section 3.7 of this LGIP, 
and Transmission Provider determines a Cluster Restudy is necessary as 
a result, Transmission Provider shall notify Interconnection Customers 
in the Cluster and post on OASIS that a Cluster Restudy is required 
within thirty (30) Calendar Days after the Cluster Study Report 
Meeting. Transmission Provider shall continue with such restudies until 
Transmission Provider determines that no further restudies are 
required. If an Interconnection Customer withdraws or is deemed 
withdrawn pursuant to Section 3.7 of this LGIP during the 
Interconnection Facilities Study, or after other Interconnection 
Customers in the same Cluster have executed LGIAs, or requested that 
unexecuted LGIAs be filed, and Transmission Provider determines a 
Cluster Restudy is necessary, the Cluster shall be restudied. If a 
Cluster Restudy is required due to a higher queued project withdrawing 
from the queue, or a modification of a higher or equally queued project 
subject to Section 4.4 of this LGIP, Transmission Provider shall so 
notify affected Interconnection Customers in writing. Except as 
provided in Section 3.7 of this LGIP in the case of withdrawing 
Interconnection Customers, any cost of Restudy shall be borne by 
Interconnection Customers being restudied.
    (5) The scope of any Cluster Restudy shall be consistent with the 
scope of an initial Cluster Study pursuant to Section 7.3 of this LGIP. 
Transmission Provider shall complete the Cluster Restudy within one 
hundred fifty (150) Calendar Days of [the] Transmission Provider 
informing [the] Interconnection Customers in the [c]Cluster that 
restudy is needed. The results of the Cluster Restudy shall be combined 
into a single report (Cluster Restudy Report). Transmission Provider 
shall hold a meeting with [the] Interconnection Customers in the 
[c]Cluster (Cluster Restudy Report Meeting) within ten (10) Business 
Days of simultaneously furnishing the Cluster Restudy Report to each 
Interconnection Customer in the Cluster Restudy and publishing the 
Cluster Restudy Report on OASIS.
    If additional restudies are required, Interconnection Customer and 
Transmission Provider shall follow the procedures of this Section 7.5 
of this LGIP until such time that Transmission Provider determines that 
no further restudies are required. Transmission Provider shall notify 
each Interconnection Customer within the Cluster when no further 
restudies are required.

Section 8. Interconnection Facilities Study

8.1 Interconnection Facilities Study Agreement
    [Simultaneously with the delivery of the Cluster Study Report, or 
Cluster Restudy Report if applicable,] Within five (5) Business Days 
following Transmission Provider notifying each Interconnection Customer 
within the Cluster that no further Cluster Restudy is required (per 
Section 7.5 of this LGIP), Transmission Provider shall provide to 
Interconnection Customer an Interconnection Facilities Study Agreement 
in the form of Appendix 3 to this LGIP. Interconnection Customer shall 
compensate Transmission Provider for the actual cost of the 
Interconnection Facilities Study. Within five (5) Business Days 
following the Cluster Report Meeting or Cluster Restudy Report Meeting 
if applicable, Transmission Provider shall provide to Interconnection 
Customer a non-binding good faith estimate of the cost and timeframe 
for completing the Interconnection Facilities Study. Interconnection 
Customer shall execute the Interconnection Facilities Study Agreement 
and deliver the executed Interconnection Facilities Study Agreement to 
Transmission Provider within thirty (30) Calendar Days after its 
receipt, together with:
    (1) Any required technical data;
    (2) Demonstration of one-hundred percent (100%) Site Control or 
demonstration of a regulatory limitation and applicable deposit in lieu 
of Site Control provided to [the] Transmission Provider in accordance 
with [s]Section 3.4.2 of this LGIP; and
    (3) An additional deposit that brings the total Commercial 
Readiness Deposit submitted to [the] Transmission Provider to ten 
percent (10%) of [the] Interconnection Customer's Network Upgrade cost 
assignment identified in the Cluster Study or Cluster Restudy, if 
applicable, in the form of an irrevocable letter of credit,[ or] cash, 
a surety bond, or other form of security that is reasonably acceptable 
to Transmission Provider. Transmission Provider shall refund the 
deposit to Interconnection Customer upon withdrawal in accordance with 
Section 3.7 of this LGIP.
    Interconnection Customer shall promptly inform Transmission 
Provider of any material change to Interconnection Customer's 
demonstration of Site Control under Section 3.4.2(iii) of this LGIP. 
Upon Transmission Provider determining separately that Interconnection 
Customer no longer satisfies the Site Control requirement, Transmission 
Provider shall notify Interconnection Customer. Within ten (10) 
Business Days of such notification, Interconnection Customer must 
demonstrate compliance with the applicable requirement subject to 
Transmission Provider's approval, not to be unreasonably withheld. 
Absent such demonstration, Transmission Provider shall deem the subject 
Interconnection Request withdrawn pursuant to Section 3.7 of this LGIP.
8.2 Scope of Interconnection Facilities Study
    The Interconnection Facilities Study shall be specific to each 
Interconnection Request and performed on an individual, i.e., non-
clustered, basis. The Interconnection Facilities Study shall specify 
and provide a non-binding estimate of the cost of the equipment, 
engineering, procurement and construction work needed to implement the 
conclusions of the Cluster Study Report (and any associated restudies) 
in accordance with Good Utility Practice to physically and electrically 
connect the Interconnection Facilities to the Transmission System. The 
Interconnection Facilities Study shall also identify the electrical 
switching configuration of the connection equipment, including, without 
limitation: the transformer, switchgear, meters, and other

[[Page 27140]]

station equipment; the nature and estimated cost of any Transmission 
Provider's Interconnection Facilities and Network Upgrades necessary to 
accomplish the interconnection; and an estimate of the time required to 
complete the construction and installation of such facilities. The 
Interconnection Facilities Study will also identify any potential 
control equipment for (1) requests for Interconnection Service that are 
lower than the Generating Facility Capacity, and/or (2) requests to 
study a Generating Facility that includes at least one electric storage 
resource using operating assumptions (i.e., whether the interconnecting 
Generating Facility will or will not charge at peak load) that reflect 
its proposed charging behavior, as requested by Interconnection 
Customer, unless Transmission Provider determines that Good Utility 
Practice, including Applicable Reliability Standards, otherwise require 
the use of different operating assumptions.
8.3 Interconnection Facilities Study Procedures
    Transmission Provider shall coordinate the Interconnection 
Facilities Study with any Affected System Operator pursuant to Section 
3.6 of this LGIP. Transmission Provider shall utilize existing studies 
to the extent practicable in performing the Interconnection Facilities 
Study. Transmission Provider shall complete the study and issue a draft 
Interconnection Facilities Study Report to Interconnection Customer 
within the following number of days after receipt of an executed 
Interconnection Facilities Study Agreement: ninety (90) Calendar Days 
after receipt of an executed Interconnection Facilities Study 
Agreement, with no more than a +/- [20] twenty percent (20%) cost 
estimate contained in the report; or one hundred eighty (180) Calendar 
Days, if Interconnection Customer requests a +/- [10] ten percent (10%) 
cost estimate.
    At the request of Interconnection Customer or at any time 
Transmission Provider determines that it will not meet the required 
time frame for completing the Interconnection Facilities Study, 
Transmission Provider shall notify Interconnection Customer as to the 
schedule status of the Interconnection Facilities Study. If 
Transmission Provider is unable to complete the Interconnection 
Facilities Study and issue a draft Interconnection Facilities Study 
Report within the time required, it shall notify Interconnection 
Customer and provide an estimated completion date and an explanation of 
the reasons why additional time is required.
    Interconnection Customer may, within thirty (30) Calendar Days 
after receipt of the draft Interconnection Facilities Study Report, 
provide written comments to Transmission Provider, which Transmission 
Provider shall include in completing the final Interconnection 
Facilities Study Report. Transmission Provider shall issue the final 
Interconnection Facilities Study Report within fifteen (15) Business 
Days of receiving Interconnection Customer's comments or promptly upon 
receiving Interconnection Customer's statement that it will not provide 
comments. Transmission Provider may reasonably extend such fifteen (15) 
Business Day period upon notice to Interconnection Customer if 
Interconnection Customer's comments require Transmission Provider to 
perform additional analyses or make other significant modifications 
prior to the issuance of the final Interconnection Facilities Study 
Report. Upon request, Transmission Provider shall provide 
Interconnection Customer supporting documentation, workpapers, and 
databases or data developed in the preparation of the Interconnection 
Facilities Study, subject to confidentiality arrangements consistent 
with Section 13.1 of this LGIP.
8.4 Meeting with Transmission Provider
    Within ten (10) Business Days of providing a draft Interconnection 
Facilities Study Report to Interconnection Customer, Transmission 
Provider and Interconnection Customer shall meet to discuss the results 
of the Interconnection Facilities Study.
8.5 Restudy
    If [R]restudy of the Interconnection Facilities Study is required 
due to a higher or equally queued project withdrawing from the queue or 
a modification of a higher or equally queued project pursuant to 
Section 4.4 of this LGIP, Transmission Provider shall so notify 
Interconnection Customer in writing. Transmission Provider shall ensure 
that such [R]restudy takes no longer than sixty (60) Calendar Days from 
the date of notice. Except as provided in Section 3.7 of this LGIP in 
the case of withdrawing Interconnection Customers, any cost of 
[R]restudy shall be borne by Interconnection Customer being restudied.

Section 9. Affected System Study

9.1 Applicability
    This Section 9 outlines the duties of Transmission Provider when it 
receives notification that an Affected System Interconnection 
Customer's proposed interconnection to its host transmission provider 
may impact Transmission Provider's Transmission System.
9.2 Response to Notifications

9.2.1 Response to Initial Notification

    When Transmission Provider receives initial notification either 
following the Cluster Study or a Cluster Restudy that an Affected 
System Interconnection Customer's proposed interconnection to its host 
transmission provider may impact Transmission Provider's Transmission 
System, Transmission Provider must respond in writing within twenty 
(20) Business Days whether it intends to conduct an Affected System 
Study.
    By fifteen (15) Business Days after [the] Transmission Provider 
responds with its affirmative intent to conduct an Affected System 
Study, Transmission Provider shall share with Affected System 
Interconnection Customer(s) and the Affected System Interconnection 
Customer's host transmission provider a non-binding good faith estimate 
of the cost and the schedule to complete the Affected System Study.

9.2.2 Response to Notification of Cluster Restudy

    Within five (5) Business Days of receipt of notification of Cluster 
Restudy, Transmission Provider will send written notification to 
Affected System Interconnection Customer(s) involved in the Cluster 
Restudy and the host transmission provider that Transmission Provider 
intends to delay a planned or in-progress Affected System Study until 
after completion of the Cluster Restudy. If Transmission Provider 
decides to delay the Affected System Study, it is not required to meet 
its obligations under Section 9 of this LGIP until the time that it 
receives notification from the host transmission provider that the 
Cluster Restudy is complete. If Transmission Provider decides to move 
forward with its Affected System Study despite the Cluster Restudy, 
then it must meet all requirements under Section 9 of this LGIP.
9.3 Affected System Queue Position
    Transmission Provider must assign an Affected System Queue Position 
to Affected System Interconnection Customer(s) that require(s) an 
Affected System Study. Such Affected System Queue Position shall be 
assigned based upon the date of execution of the Affected System Study 
Agreement. Relative to [the] Transmission Provider's Interconnection 
Customers, this Affected System Queue Position shall be higher-queued 
than any Cluster that has not yet received its Cluster Study Report and 
shall be lower-queued than any Cluster that has already received its 
Cluster Study Report. Consistent with Section 9.7 of this LGIP, 
Transmission Provider shall study the Affected System Interconnection 
Customer(s) via Clustering, and all Affected System Interconnection 
Customers studied in the same Cluster under Section 9.7 of this LGIP 
shall be equally queued. For Affected System Interconnection Customers 
that are equally queued, the Affected System Queue Position shall have 
no bearing on the assignment of Affected System Network Upgrades 
identified in the applicable Affected System Study. The costs of the 
Affected System Network Upgrades shall be allocated among the Affected 
System Interconnection Customers in accordance with Section 9.9 of this 
LGIP.
9.4 Affected System Study Agreement/Multiparty Affected System Study 
Agreement
    Unless otherwise agreed, Transmission Provider shall provide to 
Affected System Interconnection Customer(s) an Affected System Study 
Agreement/Multiparty Affected System Study Agreement, in the form of 
Appendix 9 or Appendix 10 to this LGIP, as applicable, within ten (10) 
Business Days of Transmission Provider sharing the schedule for the 
Affected System Study per Section 9.2.1 of this LGIP.
    Upon Affected System Interconnection Customer(s)' receipt of the 
Affected System Study Report, Affected System Interconnection 
Customer(s) shall compensate Transmission Provider for the actual cost 
of the Affected System Study. Any difference between the study deposit 
and the actual cost of the Affected System Study shall be paid by or 
refunded to the

[[Page 27141]]

Affected System Interconnection Customer(s). Any invoices for the 
Affected System Study shall include a detailed and itemized accounting 
of the cost of the study. Affected System Interconnection Customer(s) 
shall pay any excess costs beyond the already-paid Affected System 
Study deposit or be reimbursed for any costs collected over the actual 
cost of the Affected System Study within thirty (30) Calendar Days of 
receipt of an invoice thereof. If Affected System Interconnection 
Customer(s) fail to pay such undisputed costs within the time allotted, 
it shall lose its Affected System Queue Position. Transmission Provider 
shall notify Affected System Interconnection Customer's host 
transmission provider of such failure to pay.
9.5 Execution of Affected System Study Agreement/Multiparty Affected 
System Study Agreement
    Affected System Interconnection Customer(s) shall execute the 
Affected System Study Agreement/Multiparty Affected System Study 
Agreement, deliver the executed Affected System Study Agreement/
Multiparty Affected System Study Agreement to Transmission Provider, 
and provide the Affected System Study deposit within ten (10) Business 
Days of receipt. If Transmission Provider notifies Affected System 
Interconnection Customer(s) that it will delay the Affected System 
Study pursuant to Section 9.2.2 of this LGIP, Affected System 
Interconnection Customer(s) are neither required to execute and return 
the previously tendered Affected System Study/Multiparty Affected 
System Study Agreement nor provide the Affected System Study deposit 
for the previously tendered Affected System Study/Multiparty Affected 
System Study Agreement.
    If Affected System Interconnection Customer does not provide all 
required technical data when it delivers the Affected System Study 
Agreement/Multiparty Affected System Study Agreement, Transmission 
Provider shall notify the deficient Affected System Interconnection 
Customer, as well as the host transmission provider with which Affected 
System Interconnection Customer seeks to interconnect, of the technical 
data deficiency within five (5) Business Days of the receipt of the 
executed Affected System Study Agreement/Multiparty Affected System 
Study Agreement and the deficient Affected System Interconnection 
Customer shall cure the technical deficiency within ten (10) Business 
Days of receipt of the notice: provided, however, that such deficiency 
does not include failure to deliver the executed Affected System Study 
Agreement/Multiparty Affected System Study Agreement or deposit for the 
Affected System Study Agreement/Multiparty Affected System Study 
Agreement. If Affected System Interconnection Customer does not cure 
the technical data deficiency within the cure period or fails to 
execute the Affected System Study Agreement/Multiparty Affected System 
Study Agreement or provide the deposit, the Affected System 
Interconnection Customer shall lose its Affected System Queue Position.
9.6 Scope of Affected System Study
    The Affected System Study shall evaluate the impact that any 
Affected System Interconnection Customer's proposed interconnection to 
another transmission provider's transmission system will have on the 
reliability of Transmission Provider's Transmission System. The 
Affected System Study shall consider the Base Case as well as all 
Generating Facilities (and with respect to (iii) below, any identified 
Affected System Network Upgrades associated with such higher-queued 
Interconnection Request) that, on the date the Affected System Study is 
commenced: (i) are directly interconnected to Transmission Provider's 
Transmission System; (ii) are directly interconnected to another 
transmission provider's transmission system and may have an impact on 
Affected System Interconnection Customer's interconnection request; 
(iii) have a pending higher-queued Interconnection Request to 
interconnect to Transmission Provider's Transmission System; and (iv) 
have no queue position but have executed an LGIA or requested that an 
unexecuted LGIA be filed with FERC. Transmission Provider has no 
obligation to study impacts of Affected System Interconnection 
Customers of which it is not notified.
    The Affected System Study shall consist of a power flow, stability, 
and short circuit analysis. The Affected System Study Report will: 
state the assumptions upon which it is based; state the results of the 
analyses; and provide the potential impediments to Affected System 
Interconnection Customer's receipt if interconnection service on its 
host transmission provider's transmission system, including a 
preliminary indication of the cost and length of time that would be 
necessary to correct any problems identified in those analyses and 
implement the interconnection. For purposes of determining necessary 
Affected System Network Upgrades, the Affected System Study shall 
consider the level of interconnection service requested in megawatts by 
Affected System Interconnection Customer, unless otherwise required to 
study the full generating facility capacity due to safety or 
reliability concerns. The Affected System Study Report shall provide a 
list of facilities that are required as a result of Affected System 
Interconnection Customer's proposed interconnection to another 
transmission provider's system, a non-binding good faith estimate of 
cost responsibility, and a non-binding good faith estimated time to 
construct. The Affected System Study may consist of a system impact 
study, a facilities study, or some combination thereof.
9.7 Affected System Study Procedures
    Transmission Provider shall use Clustering in conducting the 
Affected System Study and shall use existing studies to the extent 
practicable, when multiple Affected System Interconnection Customers 
that are part of a single Cluster may cause the need for Affected 
System Network Upgrades. Transmission Provider shall complete the 
Affected System Study and provide the Affected System Study Report to 
Affected System Interconnection Customer(s) and the host transmission 
provider with whom interconnection has been requested within one 
hundred fifty (150) Calendar Days after the receipt of the Affected 
System Study Agreement and deposit.
    At the request of Affected System Interconnection Customer, 
Transmission Provider shall notify Affected System Interconnection 
Customer as to the status of the Affected System Study. If Transmission 
Provider is unable to complete the Affected System Study within the 
requisite time period, it shall notify Affected System Interconnection 
Customer(s), as well as [the] transmission provider with which Affected 
System Interconnection Customer seeks to interconnect, and shall 
provide an estimated completion date with an explanation of the reasons 
why additional time is required. If Transmission Provider does not meet 
the deadlines in this [s]Section, Transmission Provider shall be 
subject to the financial penalties as described in Section 3.9 of this 
LGIP. Upon request, Transmission Provider shall provide Affected System 
Interconnection Customer(s) with all supporting documentation, 
workpapers and relevant power flow, short circuit and stability 
databases for the Affected System Study, subject to confidentiality 
arrangements consistent with Section 13.1 of this LGIP.
    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.
9.8 Meeting with Transmission Provider
    Within ten (10) Business Days of providing the Affected System 
Study Report to Affected System Interconnection Customer(s), 
Transmission Provider and Affected System Interconnection Customer(s) 
shall meet to discuss the results of the Affected System Study.
9.9 Affected System Cost Allocation
    Transmission Provider shall allocate Affected System Network 
Upgrade costs identified during the Affected System Study to Affected 
System Interconnection Customer(s) using a proportional impact method, 
consistent with Section 4.2.1(1)(b) of this LGIP.
9.10 Tender of Affected Systems Facilities Construction Agreement/
Multiparty Affected System Facilities Construction Agreement
    Transmission Provider shall tender to Affected System 
Interconnection Customer(s) an Affected System Facilities Construction 
Agreement/Multiparty Affected System Facilities Construction Agreement, 
as applicable, in the form of Appendix 11 or 12 to this LGIP, within 
thirty (30) Calendar Days of providing the Affected System Study 
Report. Within ten (10) Business Days of the receipt of the Affected 
System Facilities Construction Agreement/Multiparty Affected System 
Facilities Construction Agreement, the Affected System Interconnection 
Customer(s) must execute the agreement or

[[Page 27142]]

request the agreement to be filed unexecuted with FERC. Transmission 
Provider shall execute the agreement or file the agreement unexecuted 
within five (5) Business Days after receiving direction from Affected 
System Interconnection Customer(s). Affected System Interconnection 
Customer's failure to execute the Affected System Facilities 
Construction Agreement/Multiparty Affected System Facilities 
Construction Agreement, or failure to request the agreement to be filed 
unexecuted with FERC, shall result in the loss of its Affected System 
Queue Position.
9.11 Restudy
    If restudy of the Affected System Study is required, Transmission 
Provider shall notify Affected System Interconnection Customer(s) in 
writing within thirty (30) Calendar Days of discovery of the need for 
restudy. Such restudy shall take no longer than sixty (60) Calendar 
Days from the date of notice. Any cost of restudy shall be borne by the 
Affected System Interconnection Customer(s) being restudied.

Section 10. Optional Interconnection Study

10.1 Optional Interconnection Study Agreement
    On or after the date when Interconnection Customer receives Cluster 
Study results, Interconnection Customer may request, and Transmission 
Provider shall perform a reasonable number of Optional Interconnection 
Studies. The request shall describe the assumptions that 
Interconnection Customer wishes Transmission Provider to study within 
the scope described in Section 10.2 of this LGIP. Within five (5) 
Business Days after receipt of a request for an Optional 
Interconnection Study, Transmission Provider shall provide to 
Interconnection Customer an Optional Interconnection Study Agreement in 
the form of Appendix 4.
    The Optional Interconnection Study Agreement shall: (i) specify the 
technical data that Interconnection Customer must provide for each 
phase of the Optional Interconnection Study, (ii) specify 
Interconnection Customer's assumptions as to which Interconnection 
Requests with earlier queue priority dates will be excluded from the 
Optional Interconnection Study case and assumptions as to the type of 
I[i]nterconnection S[s]ervice for Interconnection Requests remaining in 
the Optional Interconnection Study case, and (iii) Transmission 
Provider's estimate of the cost of the Optional Interconnection Study. 
To the extent known by Transmission Provider, such estimate shall 
include any costs expected to be incurred by any Affected System 
Operator whose participation is necessary to complete the Optional 
Interconnection Study. Notwithstanding the above, Transmission Provider 
shall not be required as a result of an Optional Interconnection Study 
request to conduct any additional Interconnection Studies with respect 
to any other Interconnection Request.
    Interconnection Customer shall execute the Optional Interconnection 
Study Agreement within ten (10) Business Days of receipt and deliver 
the Optional Interconnection Study Agreement, the technical data and a 
$10,000 deposit to Transmission Provider.
10.2 Scope of Optional Interconnection Study
    The Optional Interconnection Study will consist of a sensitivity 
analysis based on the assumptions specified by Interconnection Customer 
in the Optional Interconnection Study Agreement. The Optional 
Interconnection Study will also identify Transmission Provider's 
Interconnection Facilities and the Network Upgrades, and the estimated 
cost thereof, that may be required to provide transmission service or 
Interconnection Service based upon the results of the Optional 
Interconnection Study. The Optional Interconnection Study shall be 
performed solely for informational purposes. Transmission Provider 
shall use Reasonable Efforts to coordinate the study with any Affected 
Systems that may be affected by the types of Interconnection Services 
that are being studied. Transmission Provider shall utilize existing 
studies to the extent practicable in conducting the Optional 
Interconnection Study.
10.3 Optional Interconnection Study Procedures
    The executed Optional Interconnection Study Agreement, the 
prepayment, and technical and other data called for therein must be 
provided to Transmission Provider within ten (10) Business Days of 
Interconnection Customer receipt of the Optional Interconnection Study 
Agreement. Transmission Provider shall use Reasonable Efforts to 
complete the Optional Interconnection Study within a mutually agreed 
upon time period specified within the Optional Interconnection Study 
Agreement. If Transmission Provider is unable to complete the Optional 
Interconnection Study within such time period, it shall notify 
Interconnection Customer and provide an estimated completion date and 
an explanation of the reasons why additional time is required. Any 
difference between the study payment and the actual cost of the study 
shall be paid to Transmission Provider or refunded to Interconnection 
Customer, as appropriate. Upon request, Transmission Provider shall 
provide Interconnection Customer supporting documentation and 
workpapers and databases or data developed in the preparation of the 
Optional Interconnection Study, subject to confidentiality arrangements 
consistent with Section 13.1 of this LGIP.

Section 11. Standard Large Generator Interconnection Agreement (LGIA)

 11.1 Tender
    Interconnection Customer shall tender comments on the draft 
Interconnection Facilities Study Report within thirty (30) Calendar 
Days of receipt of the report. Within thirty (30) Calendar Days after 
the comments are submitted or after Interconnection Customer notifies 
Transmission Provider that it will not provide comments, Transmission 
Provider shall tender a draft LGIA, together with draft appendices. The 
draft LGIA shall be in the form of Transmission Provider's FERC-
approved standard form LGIA, which is in Appendix 5. Interconnection 
Customer shall execute and return the LGIA and completed draft 
appendices within thirty (30) Calendar Days, unless (1) the sixty (60) 
Calendar Day negotiation period under Section 11.2 of this LGIP has 
commenced, or (2) LGIA execution, or filing unexecuted, has been 
delayed to await the Affected System Study Report pursuant to Section 
11.2.1 of this LGIP.
11.2 Negotiation
    Notwithstanding Section 11.1 of this LGIP, at the request of 
Interconnection Customer, Transmission Provider shall begin 
negotiations with Interconnection Customer concerning the appendices to 
the LGIA at any time after Interconnection Customer executes the 
Interconnection Facilities Study Agreement. Transmission Provider and 
Interconnection Customer shall negotiate concerning any disputed 
provisions of the appendices to the draft LGIA for not more than sixty 
(60) Calendar Days after tender of the final Interconnection Facilities 
Study Report. If Interconnection Customer determines that negotiations 
are at an impasse, it may request termination of the negotiations at 
any time after tender of the draft LGIA pursuant to Section 11.1 of 
this LGIP and request submission of the unexecuted LGIA with FERC or 
initiate Dispute Resolution procedures pursuant to Section 13.5 of this 
LGIP. If Interconnection Customer requests termination of the 
negotiations, but within sixty (60) Calendar Days thereafter fails to 
request either the filing of the unexecuted LGIA or initiate Dispute 
Resolution, it shall be deemed to have withdrawn its Interconnection 
Request. Unless otherwise agreed by the Parties, if Interconnection 
Customer has not executed the LGIA, requested filing of an unexecuted 
LGIA, or initiated Dispute Resolution procedures pursuant to Section 
13.5 of this LGIP within sixty (60) Calendar Days of tender of draft 
LGIA, it shall be deemed to have withdrawn its Interconnection Request. 
Transmission Provider shall provide to Interconnection Customer a final 
LGIA within fifteen (15) Business Days after the completion of the 
negotiation process.
11.2.1 Delay in LGIA Execution, or Filing Unexecuted, To Await Affected 
System Study Report
    If Interconnection Customer has not received its Affected System 
Study Report from the Affected System Operator prior to the date that 
it would be required to execute its LGIA (or request that its LGIA be 
filed unexecuted) pursuant to Section 11.1 of this LGIP, Transmission 
Provider shall, upon request of Interconnection Customer, extend this 
deadline to thirty (30) Calendar Days after Interconnection Customer's 
receipt of the Affected System Study Report. If Interconnection 
Customer, after delaying LGIA execution, or requesting unexecuted 
filing, to await Affected System Study [Results]Report, decides to 
proceed to LGIA execution, or request unexecuted filing, without those 
results, it may notify Transmission Provider of its intent to proceed 
with LGIA execution (or request that its LGIA be filed unexecuted) 
pursuant to Section 11.1 of this LGIP. If Transmission Provider 
determines that further delay to the

[[Page 27143]]

LGIA execution date would cause a material impact on the cost or timing 
of an equal- or lower-queued [i]Interconnection [c]Customer, 
Transmission Provider must notify Interconnection Customer of such 
impacts and set the deadline to execute the LGIA (or request that the 
LGIA be filed unexecuted) to thirty (30) Calendar Days after such 
notice is provided.
11.3 Execution and Filing
    Simultaneously with submitting the executed LGIA to Transmission 
Provider, or within ten (10) Business Days after [the] Interconnection 
Customer requests that [the] Transmission Provider file the LGIA 
unexecuted at the Commission, Interconnection Customer shall provide 
Transmission Provider with the following: (1) demonstration of 
continued Site Control pursuant to Section 8.1(2) of this LGIP; and (2) 
the LGIA Deposit equal to twenty percent (20%) of Interconnection 
Customer's estimated Network Upgrade costs identified in the draft LGIA 
minus the total amount of Commercial Readiness Deposits that 
Interconnection Customer has provided to Transmission Provider for its 
Interconnection Request. Transmission Provider shall use LGIA Deposit 
as (or as a portion of) [the] Interconnection Customer's security 
required under LGIA Article 11.5. Interconnection Customer may not 
request to suspend its LGIA under LGIA Article 5.16 until 
Interconnection Customer has provided (1) and (2) to Transmission 
Provider. If Interconnection Customer fails to provide (1) and (2) to 
Transmission Provider within the thirty (30) Calendar Days allowed for 
returning the executed LGIA and appendices under LGIP Section 11.1, or 
within ten (10) Business Days after Interconnection Customer requests 
that Transmission Provider file the LGIA unexecuted at the Commission 
as allowed in this Section 11.3 of this LGIP, the Interconnection 
Request will be deemed withdrawn pursuant to Section 3.7 of this LGIP.
    At the same time, Interconnection Customer also shall provide 
reasonable evidence that one or more of the following milestones in the 
development of the Large Generating Facility, at Interconnection 
Customer election, has been achieved (unless such milestone is 
inapplicable due to the characteristics of the Generating Facility): 
(i) the execution of a contract for the supply or transportation of 
fuel to the Large Generating Facility; (ii) the execution of a contract 
for the supply of cooling water to the Large Generating Facility; (iii) 
execution of a contract for the engineering for, procurement of major 
equipment for, or construction of, the Large Generating Facility; (iv) 
execution of a contract (or comparable evidence) for the sale of 
electric energy or capacity from the Large Generating Facility; or (v) 
application for an air, water, or land use permit.
    Interconnection Customer shall either: (i) execute two originals of 
the tendered LGIA and return them to Transmission Provider; or (ii) 
request in writing that Transmission Provider file with FERC an LGIA in 
unexecuted form. As soon as practicable, but not later than ten (10) 
Business Days after receiving either the two executed originals of the 
tendered LGIA (if it does not conform with a FERC-approved [standard 
form of interconnection agreement] Standard Large Generator 
Interconnection Agreement) or the request to file an unexecuted LGIA, 
Transmission Provider shall file the LGIA with FERC, together with its 
explanation of any matters as to which Interconnection Customer and 
Transmission Provider disagree and support for the costs that 
Transmission Provider proposes to charge to Interconnection Customer 
under the LGIA. An unexecuted LGIA should contain terms and conditions 
deemed appropriate by Transmission Provider for the Interconnection 
Request. If the Parties agree to proceed with design, procurement, and 
construction of facilities and upgrades under the agreed-upon terms of 
the unexecuted LGIA, they may proceed pending FERC action.
11.4 Commencement of Interconnection Activities
    If Interconnection Customer executes the final LGIA, Transmission 
Provider and Interconnection Customer shall perform their respective 
obligations in accordance with the terms of the LGIA, subject to 
modification by FERC. Upon submission of an unexecuted LGIA, 
Interconnection Customer and Transmission Provider shall promptly 
comply with the unexecuted LGIA, subject to modification by FERC.

Section 12. Construction of Transmission Provider's Interconnection 
Facilities and Network Upgrades

12.1 Schedule
    Transmission Provider and Interconnection Customer shall negotiate 
in good faith concerning a schedule for the construction of 
Transmission Provider's Interconnection Facilities and the Network 
Upgrades.
12.2 Construction Sequencing
12.2.1 General
    In general, the In-Service Date of an Interconnection Customer[s] 
seeking interconnection to the Transmission System will determine the 
sequence of construction of Network Upgrades.
12.2.2 Advance Construction of Network Upgrades That Are an Obligation 
of an Entity Other Than Interconnection Customer
    An Interconnection Customer with an LGIA, in order to maintain its 
In-Service Date, may request that Transmission Provider advance to the 
extent necessary the completion of Network Upgrades that: (i) were 
assumed in the Interconnection Studies for such Interconnection 
Customer, (ii) are necessary to support such In-Service Date, and (iii) 
would otherwise not be completed, pursuant to a contractual obligation 
of an entity other than Interconnection Customer that is seeking 
interconnection to the Transmission System, in time to support such In-
Service Date. Upon such request, Transmission Provider will use 
Reasonable Efforts to advance the construction of such Network Upgrades 
to accommodate such request; provided that Interconnection Customer 
commits to pay Transmission Provider: (i) any associated expediting 
costs and (ii) the cost of such Network Upgrades.
    Transmission Provider will refund to Interconnection Customer both 
the expediting costs and the cost of Network Upgrades, in accordance 
with Article 11.4 of the LGIA. Consequently, the entity with a 
contractual obligation to construct such Network Upgrades shall be 
obligated to pay only that portion of the costs of the Network Upgrades 
that Transmission Provider has not refunded to Interconnection 
Customer. Payment by that entity shall be due on the date that it would 
have been due had there been no request for advance construction. 
Transmission Provider shall forward to Interconnection Customer the 
amount paid by the entity with a contractual obligation to construct 
the Network Upgrades as payment in full for the outstanding balance 
owed to Interconnection Customer. Transmission Provider then shall 
refund to that entity the amount that it paid for the Network Upgrades, 
in accordance with Article 11.4 of the LGIA.
12.2.3 Advancing Construction of Network Upgrades That Are Part of an 
Expansion Plan of [the] Transmission Provider
    An Interconnection Customer with an LGIA, in order to maintain its 
In-Service Date, may request that Transmission Provider advance to the 
extent necessary the completion of Network Upgrades that: (i) are 
necessary to support such In-Service Date and (ii) would otherwise not 
be completed, pursuant to an expansion plan of Transmission Provider, 
in time to support such In-Service Date. Upon such request, 
Transmission Provider will use Reasonable Efforts to advance the 
construction of such Network Upgrades to accommodate such request; 
provided that Interconnection Customer commits to pay Transmission 
Provider any associated expediting costs. Interconnection Customer 
shall be entitled to transmission credits, if any, for any expediting 
costs paid.
12.2.4 Amended Interconnection Cluster Study Report
    An Interconnection Cluster Study Report will be amended to 
determine the facilities necessary to support the requested In-Service 
Date. This amended study report will include those transmission and 
Large Generating Facilities that are expected to be in service on or 
before the requested In-Service Date.

Section 13. Miscellaneous

13.1 Confidentiality
    Confidential Information shall include, without limitation, all 
information relating to a Party's technology, research and development, 
business affairs, and pricing, and any information supplied by either 
of the Parties to the other prior to the execution of an LGIA.
    Information is Confidential Information only if it is clearly 
designated or marked in writing as confidential on the face of the 
document, or, if the information is conveyed orally or by inspection, 
if the Party providing the information orally informs the Party 
receiving the information that the information is confidential.
    If requested by either Party, the other Party shall provide in 
writing, the basis for asserting that the information referred to in

[[Page 27144]]

this Article warrants confidential treatment, and the requesting Party 
may disclose such writing to the appropriate Governmental Authority. 
Each Party shall be responsible for the costs associated with affording 
confidential treatment to its information.
13.1.1 Scope
    Confidential Information shall not include information that the 
receiving Party can demonstrate: (1) is generally available to the 
public other than as a result of a disclosure by the receiving Party; 
(2) was in the lawful possession of the receiving Party on a non-
confidential basis before receiving it from the disclosing Party; (3) 
was supplied to the receiving Party without restriction by a third 
party, who, to the knowledge of the receiving Party after due inquiry, 
was under no obligation to the disclosing Party to keep such 
information confidential; (4) was independently developed by the 
receiving Party without reference to Confidential Information of the 
disclosing Party; (5) is, or becomes, publicly known, through no 
wrongful act or omission of the receiving Party or Breach of the LGIA; 
or (6) is required, in accordance with Section 13.1.6 of this LGIP, 
Order of Disclosure, to be disclosed by any Governmental Authority or 
is otherwise required to be disclosed by law or subpoena, or is 
necessary in any legal proceeding establishing rights and obligations 
under the LGIA. Information designated as Confidential Information will 
no longer be deemed confidential if the Party that designated the 
information as confidential notifies the other Party that it no longer 
is confidential.
13.1.2 Release of Confidential Information
    Neither Party shall release or disclose Confidential Information to 
any other person, except to its Affiliates (limited by the Standards of 
Conduct requirements), employees, consultants, or to parties who may be 
or considering providing financing to or equity participation with 
Interconnection Customer, or to potential purchasers or assignees of 
Interconnection Customer, on a need-to-know basis in connection with 
these procedures, unless such person has first been advised of the 
confidentiality provisions of this Section 13.1 and has agreed to 
comply with such provisions. Notwithstanding the foregoing, a Party 
providing Confidential Information to any person shall remain primarily 
responsible for any release of Confidential Information in 
contravention of this Section 13.1.
13.1.3 Rights
    Each Party retains all rights, title, and interest in the 
Confidential Information that each Party discloses to the other Party. 
The disclosure by each Party to the other Party of Confidential 
Information shall not be deemed a waiver by either Party or any other 
person or entity of the right to protect the Confidential Information 
from public disclosure.
13.1.4 No Warranties
    By providing Confidential Information, neither Party makes any 
warranties or representations as to its accuracy or completeness. In 
addition, by supplying Confidential Information, neither Party 
obligates itself to provide any particular information or Confidential 
Information to the other Party nor to enter into any further agreements 
or proceed with any other relationship or joint venture.
13.1.5 Standard of Care
    Each Party shall use at least the same standard of care to protect 
Confidential Information it receives as it uses to protect its own 
Confidential Information from unauthorized disclosure, publication or 
dissemination. Each Party may use Confidential Information solely to 
fulfill its obligations to the other Party under these procedures or 
its regulatory requirements.
13.1.6 Order of Disclosure
    If a court or a Government Authority or entity with the right, 
power, and apparent authority to do so requests or requires either 
Party, by subpoena, oral deposition, interrogatories, requests for 
production of documents, administrative order, or otherwise, to 
disclose Confidential Information, that Party shall provide the other 
Party with prompt notice of such request(s) or requirement(s) so that 
the other Party may seek an appropriate protective order or waive 
compliance with the terms of the LGIA. Notwithstanding the absence of a 
protective order or waiver, the Party may disclose such Confidential 
Information which, in the opinion of its counsel, the Party is legally 
compelled to disclose. Each Party will use Reasonable Efforts to obtain 
reliable assurance that confidential treatment will be accorded any 
Confidential Information so furnished.
13.1.7 Remedies
    The Parties agree that monetary damages would be inadequate to 
compensate a Party for the other Party's Breach of its obligations 
under this Section 13.1. Each Party accordingly agrees that the other 
Party shall be entitled to equitable relief, by way of injunction or 
otherwise, if the first Party Breaches or threatens to Breach its 
obligations under this Section 13.1, which equitable relief shall be 
granted without bond or proof of damages, and the receiving Party shall 
not plead in defense that there would be an adequate remedy at law. 
Such remedy shall not be deemed an exclusive remedy for the Breach of 
this Section 13.1, but shall be in addition to all other remedies 
available at law or in equity. The Parties further acknowledge and 
agree that the covenants contained herein are necessary for the 
protection of legitimate business interests and are reasonable in 
scope. No Party, however, shall be liable for indirect, incidental, or 
consequential or punitive damages of any nature or kind resulting from 
or arising in connection with this Section 13.1.
13.1.8 Disclosure to FERC, its Staff, or a State
    Notwithstanding anything in this Section 13.1 to the contrary, and 
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of an 
investigation or otherwise, requests information from one of the 
Parties that is otherwise required to be maintained in confidence 
pursuant to the LGIP, the Party shall provide the requested information 
to FERC or its staff, within the time provided for in the request for 
information. In providing the information to FERC or its staff, the 
Party must, consistent with 18 CFR 388.112, request that the 
information be treated as confidential and non-public by FERC and its 
staff and that the information be withheld from public disclosure. 
Parties are prohibited from notifying the other Party prior to the 
release of the Confidential Information to FERC or its staff. The Party 
shall notify the other Party to the LGIA when it[s] is notified by FERC 
or its staff that a request to release Confidential Information has 
been received by FERC, at which time either of the Parties may respond 
before such information would be made public, pursuant to 18 CFR 
388.112. Requests from a state regulatory body conducting a 
confidential investigation shall be treated in a similar manner, 
consistent with applicable state rules and regulations.
13.1.9
    Subject to the exception in Section 13.1.8 of this LGIP, any 
information that a Party claims is competitively sensitive, commercial 
or financial information (``Confidential Information'') shall not be 
disclosed by the other Party to any person not employed or retained by 
the other Party, except to the extent disclosure is (i) required by 
law; (ii) reasonably deemed by the disclosing Party to be required to 
be disclosed in connection with a dispute between or among the Parties, 
or the defense of litigation or dispute; (iii) otherwise permitted by 
consent of the other Party, such consent not to be unreasonably 
withheld; or (iv) necessary to fulfill its obligations under this LGIP 
or as a transmission service provider or a Balancing Authority Area 
operator including disclosing the Confidential Information to an RTO or 
ISO or to a subregional, regional or national reliability organization 
or planning group. The Party asserting confidentiality shall notify the 
other Party in writing of the information it claims is confidential. 
Prior to any disclosures of the other Party's Confidential Information 
under this subparagraph, or if any third party or Governmental 
Authority makes any request or demand for any of the information 
described in this subparagraph, the disclosing Party agrees to promptly 
notify the other Party in writing and agrees to assert confidentiality 
and cooperate with the other Party in seeking to protect the 
Confidential Information from public disclosure by confidentiality 
agreement, protective order or other reasonable measures.
13.1.10
    This provision shall not apply to any information that was or is 
hereafter in the public domain (except as a result of a Breach of this 
provision).
13.1.11
    Transmission Provider shall, at Interconnection Customer's 
election, destroy, in a confidential manner, or return the Confidential 
Information provided at the time of Confidential Information is no 
longer needed.

[[Page 27145]]

13.2 Delegation of Responsibility
    Transmission Provider may use the services of subcontractors as it 
deems appropriate to perform its obligations under this LGIP. 
Transmission Provider shall remain primarily liable to Interconnection 
Customer for the performance of such subcontractors and compliance with 
its obligations of this LGIP. The subcontractor shall keep all 
information provided confidential and shall use such information solely 
for the performance of such obligation for which it was provided and no 
other purpose.
13.3 Obligation for Study Costs
    In the event an Interconnection Customer withdraws its 
Interconnection Request prior to the commencement of the Cluster Study, 
Interconnection Customer must pay Transmission Provider the actual 
costs of processing its Interconnection Request. In the event an 
Interconnection Customer withdraws after the commencement of the 
Cluster Study, Transmission Provider shall charge and Interconnection 
Customer shall pay the actual costs of the Interconnection Studies. The 
costs of any interconnection study conducted on a clustered basis shall 
be allocated among each Interconnection Customer within the cluster as 
follows: {Transmission Provider shall include in this section a 
description of how the cost of any clustered interconnection study will 
be allocated.{time} 
    Any difference between the study deposit and the actual cost of the 
[applicable] Interconnection Studies[y] shall be paid by or refunded 
to, except as otherwise provided herein, to Interconnection Customers 
[or offset against the cost of any future Interconnection Studies 
associated with the applicable Cluster prior to beginning of any such 
future Interconnection Studies]. Any invoices for Interconnection 
Studies shall include a detailed and itemized accounting of the cost of 
each Interconnection Study. Interconnection Customers shall pay any 
such undisputed costs within thirty (30) Calendar Days of receipt of an 
invoice therefor. If [an] Interconnection Customer fails to pay such 
undisputed costs within the time allotted, its Interconnection Request 
shall be deemed withdrawn from the Cluster Study Process and will be 
subject to Withdrawal Penalties pursuant to Section 3.7 of this LGIP.
13.4 Third Parties Conducting Studies
    If (i) at the time of the signing of an Interconnection Study 
Agreement there is disagreement as to the estimated time to complete an 
Interconnection Study, (ii) Interconnection Customer receives notice 
pursuant to Sections 6.3, 7.4 or 8.3 of this LGIP that Transmission 
Provider will not complete an Interconnection Study within the 
applicable timeframe for such Interconnection Study, or (iii) 
Interconnection Customer receives neither the Interconnection Study nor 
a notice under Sections 6.3, 7.4 or 8.3 of this LGIP within the 
applicable timeframe for such Interconnection Study, then 
Interconnection Customer may require Transmission Provider to utilize a 
third party consultant reasonably acceptable to Interconnection 
Customer and Transmission Provider to perform such Interconnection 
Study under the direction of Transmission Provider. At other times, 
Transmission Provider may also utilize a third party consultant to 
perform such Interconnection Study, either in response to a general 
request of Interconnection Customer, or on its own volition.
    In all cases, use of a third party consultant shall be in accord 
with Article 26 of the LGIA (Subcontractors) and limited to situations 
where Transmission Provider determines that doing so will help maintain 
or accelerate the study process for Interconnection Customer's pending 
Interconnection Request and not interfere with Transmission Provider's 
progress on Interconnection Studies for other pending Interconnection 
Requests. In cases where Interconnection Customer requests use of a 
third party consultant to perform such Interconnection Study, 
Interconnection Customer and Transmission Provider shall negotiate all 
of the pertinent terms and conditions, including reimbursement 
arrangements and the estimated study completion date and study review 
deadline. Transmission Provider shall convey all workpapers, data 
bases, study results and all other supporting documentation prepared to 
date with respect to the Interconnection Request as soon as soon as 
practicable upon Interconnection Customer's request subject to the 
confidentiality provision in Section 13.1 of this LGIP. In any case, 
such third party contract may be entered into with either 
Interconnection Customer or Transmission Provider at Transmission 
Provider's discretion. In the case of (iii) Interconnection Customer 
maintains its right to submit a claim to Dispute Resolution to recover 
the costs of such third party study. Such third party consultant shall 
be required to comply with this LGIP, Article 26 of the LGIA 
(Subcontractors), and the relevant Tariff procedures and protocols as 
would apply if Transmission Provider were to conduct the 
Interconnection Study and shall use the information provided to it 
solely for purposes of performing such services and for no other 
purposes. Transmission Provider shall cooperate with such third party 
consultant and Interconnection Customer to complete and issue the 
Interconnection Study in the shortest reasonable time.
13.5 Disputes
13.5.1 Submission
    In the event either Party has a dispute, or asserts a claim, that 
arises out of or in connection with the LGIA, the LGIP, or their 
performance, such Party (the ``disputing Party'') shall provide the 
other Party with written notice of the dispute or claim (``Notice of 
Dispute''). Such dispute or claim shall be referred to a designated 
senior representative of each Party for resolution on an informal basis 
as promptly as practicable after receipt of the Notice of Dispute by 
the other Party. In the event the designated representatives are unable 
to resolve the claim or dispute through unassisted or assisted 
negotiations within thirty (30) Calendar Days of the other Party's 
receipt of the Notice of Dispute, such claim or dispute may, upon 
mutual agreement of the Parties, be submitted to arbitration and 
resolved in accordance with the arbitration procedures set forth below. 
In the event the Parties do not agree to submit such claim or dispute 
to arbitration, each Party may exercise whatever rights and remedies it 
may have in equity or at law consistent with the terms of this LGIA.
13.5.2 External Arbitration Procedures
    Any arbitration initiated under these procedures shall be conducted 
before a single neutral arbitrator appointed by the Parties. If the 
Parties fail to agree upon a single arbitrator within ten (10) Calendar 
Days of the submission of the dispute to arbitration, each Party shall 
choose one arbitrator who shall sit on a three-member arbitration 
panel. The two arbitrators so chosen shall within twenty (20) Calendar 
Days select a third arbitrator to chair the arbitration panel. In 
either case, the arbitrators shall be knowledgeable in electric utility 
matters, including electric transmission and bulk power issues, and 
shall not have any current or past substantial business or financial 
relationships with any party to the arbitration (except prior 
arbitration). The arbitrator(s) shall provide each of the Parties an 
opportunity to be heard and, except as otherwise provided herein, shall 
conduct the arbitration in accordance with the Commercial Arbitration 
Rules of the American Arbitration Association (``Arbitration Rules'') 
and any applicable FERC regulations or RTO rules; provided, however, in 
the event of a conflict between the Arbitration Rules and the terms of 
this Section 13, the terms of this Section 13 shall prevail.
13.5.3 Arbitration Decisions
    Unless otherwise agreed by the Parties, the arbitrator(s) shall 
render a decision within ninety (90) Calendar Days of appointment and 
shall notify the Parties in writing of such decision and the reasons 
therefor. The arbitrator(s) shall be authorized only to interpret and 
apply the provisions of the LGIA and LGIP and shall have no power to 
modify or change any provision of the LGIA and LGIP in any manner. The 
decision of the arbitrator(s) shall be final and binding upon the 
Parties, and judgment on the award may be entered in any court having 
jurisdiction. The decision of the arbitrator(s) may be appealed solely 
on the grounds that the conduct of the arbitrator(s), or the decision 
itself, violated the standards set forth in the Federal Arbitration Act 
or the Administrative Dispute Resolution Act. The final decision of the 
arbitrator must also be filed with FERC if it affects jurisdictional 
rates, terms and conditions of service, Interconnection Facilities, or 
Network Upgrades.
13.5.4 Costs
    Each Party shall be responsible for its own costs incurred during 
the arbitration process and for the following costs, if applicable: (1) 
the cost of the arbitrator chosen by the Party to sit on the three 
member panel and one half of the cost of the third arbitrator chosen; 
or (2) one half the cost of the single arbitrator jointly chosen by the 
Parties.
13.5.5 Non-Binding Dispute Resolution Procedures
    If a Party has submitted a Notice of Dispute pursuant to Section 
13.5.1 of this LGIP, and

[[Page 27146]]

the Parties are unable to resolve the claim or dispute through 
unassisted or assisted negotiations within the thirty (30) Calendar 
Days provided in that section, and the Parties cannot reach mutual 
agreement to pursue the Section 13.5 arbitration process, a Party may 
request that Transmission Provider engage in Non-binding Dispute 
Resolution pursuant to this [s]Section by providing written notice to 
Transmission Provider (``Request for Non-binding Dispute Resolution''). 
Conversely, either Party may file a Request for Non-binding Dispute 
Resolution pursuant to this [s]Section without first seeking mutual 
agreement to pursue the Section 13.5 arbitration process. The process 
in this Section 13.5.5 shall serve as an alternative to, and not a 
replacement of, the Section 13.5 arbitration process. Pursuant to this 
process, a Transmission Provider must within thirty (30) Calendar 
[d]Days of receipt of the Request for Non-binding Dispute Resolution 
appoint a neutral decision-maker that is an independent subcontractor 
that shall not have any current or past substantial business or 
financial relationships with either Party. Unless otherwise agreed by 
the Parties, the decision-maker shall render a decision within sixty 
(60) Calendar Days of appointment and shall notify the Parties in 
writing of such decision and reasons therefore. This decision-maker 
shall be authorized only to interpret and apply the provisions of the 
LGIP and LGIA and shall have no power to modify or change any provision 
of the LGIP and LGIA in any manner. The result reached in this process 
is not binding, but, unless otherwise agreed, the Parties may cite the 
record and decision in the non-binding dispute resolution process in 
future dispute resolution processes, including in a Section 13.5 
arbitration, or in a Federal Power Act section 206 complaint. Each 
Party shall be responsible for its own costs incurred during the 
process and the cost of the decision-maker shall be divided equally 
among each Party to the dispute.
13.6 Local Furnishing Bonds
13.6.1 Transmission Providers That Own Facilities Financed by Local 
Furnishing Bonds
    This provision is applicable only to a Transmission Provider that 
has financed facilities for the local furnishing of electric energy 
with tax-exempt bonds, as described in Section 142(f) of the Internal 
Revenue Code (``local furnishing bonds''). Notwithstanding any other 
provision of this LGIA and LGIP, Transmission Provider shall not be 
required to provide Interconnection Service to Interconnection Customer 
pursuant to this LGIA and LGIP if the provision of such Transmission 
Service would jeopardize the tax-exempt status of any local furnishing 
bond(s) used to finance Transmission Provider's facilities that would 
be used in providing such Interconnection Service.
13.6.2 Alternative Procedures for Requesting Interconnection Service
    If Transmission Provider determines that the provision of 
Interconnection Service requested by Interconnection Customer would 
jeopardize the tax-exempt status of any local furnishing bond(s) used 
to finance its facilities that would be used in providing such 
Interconnection Service, it shall advise [the] Interconnection Customer 
within thirty (30) Calendar Days of receipt of the Interconnection 
Request.
    Interconnection Customer thereafter may renew its request for 
interconnection using the process specified in [Article]Section 5.2(ii) 
of [the] Transmission Provider's Tariff.
13.7 Engineering & Procurement (`E&P') Agreement
    Prior to executing an LGIA, an Interconnection Customer may, in 
order to advance the implementation of its interconnection, request and 
Transmission Provider shall offer Interconnection Customer, an E&P 
Agreement that authorizes Transmission Provider to begin engineering 
and procurement of long lead-time items necessary for the establishment 
of the interconnection. However, Transmission Provider shall not be 
obligated to offer an E&P Agreement if Interconnection Customer is in 
Dispute Resolution as a result of an allegation that Interconnection 
Customer has failed to meet any milestones or comply with any 
prerequisites specified in other parts of the LGIP. The E&P Agreement 
is an optional procedure and it will not alter Interconnection 
Customer's Queue Position or In-Service Date. The E&P Agreement shall 
provide for Interconnection Customer to pay the cost of all activities 
authorized by Interconnection Customer and to make advance payments or 
provide other satisfactory security for such costs.
    Interconnection Customer shall pay the cost of such authorized 
activities and any cancellation costs for equipment that is already 
ordered for its interconnection, which cannot be mitigated as hereafter 
described, whether or not such items or equipment later become 
unnecessary. If Interconnection Customer withdraws its Interconnection 
Request or either Party terminates the E&P Agreement, to the extent the 
equipment ordered can be canceled under reasonable terms, 
Interconnection Customer shall be obligated to pay the associated 
cancellation costs. To the extent that the equipment cannot be 
reasonably canceled, Transmission Provider may elect: (i) to take title 
to the equipment, in which event Transmission Provider shall refund 
Interconnection Customer any amounts paid by Interconnection Customer 
for such equipment and shall pay the cost of delivery of such 
equipment, or (ii) to transfer title to and deliver such equipment to 
Interconnection Customer, in which event Interconnection Customer shall 
pay any unpaid balance and cost of delivery of such equipment.

Appendix 1 to LGIP

Interconnection Request for a Large Generating Facility

    1. The undersigned Interconnection Customer submits this request to 
interconnect its Large Generating Facility with Transmission Provider's 
Transmission System pursuant to a Tariff.
    2. This Interconnection Request is for (check one):
    __ A proposed new Large Generating Facility.
    __ An increase in the generating capacity or a Material 
Modification of an existing Generating Facility.
    3. The type of interconnection service requested (check one):
    __ Energy Resource Interconnection Service.
    __ Network Resource Interconnection Service.
    4. __ Check here only if Interconnection Customer requesting 
Network Resource Interconnection Service also seeks to have its 
Generating Facility studied for Energy Resource Interconnection 
Service.
    5. Interconnection Customer provides the following information:
    a. Address or location or the proposed new Large Generating 
Facility site (to the extent known) or, in the case of an existing 
Generating Facility, the name and specific location of the existing 
Generating Facility;
    b. Maximum summer at __ degrees C and winter at __ degrees C 
megawatt electrical output of the proposed new Large Generating 
Facility or the amount of megawatt increase in the generating capacity 
of an existing Generating Facility;
    c. General description of the equipment configuration;
    d. Commercial Operation Date (Day, Month, and Year);
    e. Name, address, telephone number, and email address of 
Interconnection Customer's contact person;
    f. Approximate location of the proposed Point of Interconnection 
(optional);
    g. Interconnection Customer Data (set forth in Attachment A);
    h. Primary frequency response operating range for electric storage 
resources;
    i. Requested capacity (in MW) of Interconnection Service (if lower 
than the Generating Facility Capacity);
    j. If applicable, (1) the requested operating assumptions (i.e., 
whether the interconnecting Generating Facility will or will not charge 
at peak load) to be used by Transmission Provider that reflect the 
proposed charging behavior of a Generating Facility that includes at 
least one electric storage resource, and (2) a description of any 
control technologies (software and/or hardware) that will limit the 
operation of the Generating Facility to its intended operation.
    6. Applicable deposit amount as specified in the LGIP.
    7. Evidence of Site Control as specified in the LGIP (check one).
    __ Is attached to this Interconnection Request.
    __ Will be provided at a later date in accordance with this LGIP.
    8. This Interconnection Request shall be submitted to the 
representative indicated below:
    {To be completed by Transmission Provider{time} 
    9. Representative of Interconnection Customer to contact:
    {To be completed by Interconnection Customer{time} 
    10. This Interconnection Request is submitted by:

Name of Interconnection Customer:--------------------------------------

[[Page 27147]]

By (signature):--------------------------------------------------------
Name (type or print):--------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
BILLING CODE 6717-01-P

Attachment A to Appendix 1

Interconnection Request
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BILLING CODE 6717-01-C

    Note: A completed General Electric Company Power Systems Load 
Flow (PSLF) data sheet or other compatible formats, such as IEEE and 
PTI power flow models, must be

[[Page 27153]]

supplied with the Interconnection Request. If other data sheets are 
more appropriate to the proposed device, then they shall be provided 
and discussed at Scoping Meeting.

Induction Generators

(*) Field Volts:-------------------------------------------------------
(*) Field Amperes:-----------------------------------------------------
(*) Motoring Power (kW):-----------------------------------------------
(*) Neutral Grounding Resistor (If Applicable):------------------------
(*) I2\2\t or K (Heating Time Constant):--------------------
(*) Rotor Resistance:--------------------------------------------------
(*) Stator Resistance:-------------------------------------------------
(*) Stator Reactance:--------------------------------------------------
(*) Rotor Reactance:---------------------------------------------------
(*) Magnetizing Reactance:---------------------------------------------
(*) Short Circuit Reactance:-------------------------------------------
(*) Exciting Current:--------------------------------------------------
(*) Temperature Rise:--------------------------------------------------
(*) Frame Size:--------------------------------------------------------
(*) Design Letter:-----------------------------------------------------
(*) Reactive Power Required In Vars (No Load):-------------------------
(*) Reactive Power Required In Vars (Full Load):-----------------------
(*) Total Rotating Inertia, H: Per Unit on KVA Base--------------------

    Note: Please consult Transmission Provider prior to submitting 
the Interconnection Request to determine if the information 
designated by (*) is required.

Models for Non-Synchronous Generators

    For a non-synchronous Large Generating Facility, Interconnection 
Customer shall provide (1) a validated user-defined root mean squared 
(RMS) positive sequence dynamics model; (2) an appropriately 
parameterized generic library RMS positive sequence dynamics model, 
including model block diagram of the inverter control and plant control 
systems, as defined by the selection in Table 1 or a model otherwise 
approved by the Western Electricity Coordinating Council, that 
corresponds to Interconnection Customer's Large Generating Facility; 
and (3) if applicable, a validated electromagnetic transient model if 
Transmission Provider performs an electromagnetic transient study as 
part of the interconnection study process. A user-defined model is a 
set of programming code created by equipment manufacturers or 
developers that captures the latest features of controllers that are 
mainly software based and represents the entities' control strategies 
but does not necessarily correspond to any generic library model. 
Interconnection Customer must also demonstrate that the model is 
validated by providing evidence that the equipment behavior is 
consistent with the model behavior (e.g., an attestation from 
Interconnection Customer that the model accurately represents the 
entire Large Generating Facility; attestations from each equipment 
manufacturer that the user defined model accurately represents the 
component of the Large Generating Facility; or test data).

                    Table 1--Acceptable Generic Library RMS Positive Sequence Dynamics Models
----------------------------------------------------------------------------------------------------------------
         GE PSLF               Siemens PSS/E*       PowerWorld simulator                Description
----------------------------------------------------------------------------------------------------------------
pvd1....................  .......................  PVD1..................  Distributed PV system model.
der_a...................  DERAU1.................  DER_A.................  Distributed energy resource model.
regc_a..................  REGCAU1, REGCA1........  REGC_A................  Generator/converter model.
regc_b..................  REGCBU1................  REGC_B................  Generator/converter model.
wt1g....................  WT1G1..................  WT1G and WT1G1........  Wind turbine model for Type-1 wind
                                                                            turbines (conventional directly
                                                                            connected induction generator).
wt2g....................  WT2G1..................  WT2G and WT2G1........  Generator model for generic Type-2
                                                                            wind turbines.
wt2e....................  WT2E1..................  WT2E and WT2E1........  Rotor resistance control model for
                                                                            wound-rotor induction wind-turbine
                                                                            generator wt2g.
reec_a..................  REECAU1, REECA1........  REEC_A................  Renewable energy electrical control
                                                                            model.
reec_c..................  REECCU1................  REEC_C................  Electrical control model for battery
                                                                            energy storage system.
reec_d..................  REECDU1................  REEC_D................  Renewable energy electrical control
                                                                            model.
wt1t....................  WT12T1.................  WT1T and WT12T1.......  Wind turbine model for Type-1 wind
                                                                            turbines (conventional directly
                                                                            connected induction generator).
wt1p_b..................  wt1p_b.................  WT12A1U_B.............  Generic wind turbine pitch controller
                                                                            for WTGs of Types 1 and 2.
wt2t....................  WT12T1.................  WT2T..................  Wind turbine model for Type-2 wind
                                                                            turbines (directly connected
                                                                            induction generator wind turbines
                                                                            with an external rotor resistance).
wtgt_a..................  WTDTAU1, WTDTA1........  WTGT_A................  Wind turbine drive train model.
wtga_a..................  WTARAU1, WTARA1........  WTGA_A................  Simple aerodynamic model.
wtgp_a..................  WTPTAU1, WTPTA1........  WTGPT_A...............  Wind Turbine Generator Pitch
                                                                            controller.
wtgq_a..................  WTTQAU1, WTTQA1........  WTGTRQ_A..............  Wind Turbine Generator Torque
                                                                            controller.
wtgwgo_a................  WTGWGOAU...............  WTGWGO_A..............  Supplementary control model for Weak
                                                                            Grids.
wtgibffr_a..............  WTGIBFFRA..............  WTGIBFFR_A............  Inertial-base fast frequency response
                                                                            control.
wtgp_b..................  WTPTBU1................  WTGPT_B...............  Wind Turbine Generator Pitch
                                                                            controller.
wtgt_b..................  WTDTBU1................  WTGT_B................  Drive train model.
repc_a..................  Type 4: REPCAU1 (v33),   REPC_A................  Power Plant Controller.
                           REPCA1 (v34).
                          Type 3: REPCTAU1 (v33),
                           REPCTA1 (v34).
repc_b..................  PLNTBU1................  REPC_B................  Power Plant Level Controller for
                                                                            controlling several plants/devices.
                                                                           In regard to Siemens PSS/E*: Names of
                                                                            other models for interface with
                                                                            other devices:
                                                                           REA3XBU1, REAX4BU1--for interface
                                                                            with Type 3 and 4 renewable
                                                                            machines.
                                                                           SWSAXBU1--for interface with SVC
                                                                            (modeled as switched shunt in
                                                                            powerflow).
                                                                           SYNAXBU1--for interface with
                                                                            synchronous condenser.
                                                                           FCTAXBU1--for interface with FACTS
                                                                            device.
repc_c..................  REPCCU.................  REPC_C................  Power plant controller.
----------------------------------------------------------------------------------------------------------------


[[Page 27154]]

Appendix 2 to LGIP

Cluster Study Agreement

    This Agreement is made and entered into this __day of____, 20__ by 
and between ____, a ____ organized and existing under the laws of the 
State of____, (``Interconnection Customer,'') and ____a ____ organized 
and existing under the laws of the State of __, (``Transmission 
Provider''). Interconnection Customer and Transmission Provider each 
may be referred to as a ``Party,'' or collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a Large 
Generating Facility or generating capacity addition to an existing 
Generating Facility consistent with the Interconnection Request 
submitted by Interconnection Customer dated ____; and
    Whereas, Interconnection Customer desires to interconnect the Large 
Generating Facility with the Transmission System; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform a Cluster Study to assess the impact of 
interconnecting the Large Generating Facility to the Transmission 
System, and of any Affected Systems; and
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in this LGIP.
    2.0 Interconnection Customer elects and Transmission Provider shall 
cause to be performed a Cluster Study consistent with Section 7.0 of 
this LGIP in accordance with the Tariff.
    3.0 The scope of the Cluster Study shall be subject to the 
assumptions set forth in Attachment A to this Agreement.
    4.0 The Cluster Study will be based upon the technical information 
provided by Interconnection Customer in the Interconnection Request, 
subject to any modifications in accordance with Section 4.4 of this 
LGIP. Transmission Provider reserves the right to request additional 
technical information from Interconnection Customer as may reasonably 
become necessary consistent with Good Utility Practice during the 
course of the Cluster Study.
    5.0 The Cluster Study Report shall provide the following 
information:

--identification of any circuit breaker short circuit capability limits 
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response to 
system disturbances resulting from the interconnection and
--description and non-binding, good faith estimated cost of facilities 
required to interconnect the Large Generating Facility to the 
Transmission System and to address the identified short circuit, 
instability, and power flow issues.
    6.0 Transmission Provider's good faith estimate for the time of 
completion of the Cluster Study is {insert date{time} .
    Upon receipt of the Cluster Study Report, Transmission Provider 
shall charge and Interconnection Customer shall pay its share of the 
actual costs of the Cluster Study, consistent with Section 13.3 of this 
LGIP.
    Any difference between the deposit and the actual cost of the study 
shall be paid by or refunded to Interconnection Customer, as 
appropriate.
    7.0 Miscellaneous. The Cluster Study Agreement shall include 
standard miscellaneous terms including, but not limited to, 
indemnities, representations, disclaimers, warranties, governing law, 
amendment, execution, waiver, enforceability and assignment, that 
reflect best practices in the electric industry, that are consistent 
with regional practices, Applicable Laws and Regulations and the 
organizational nature of each Party. All of these provisions, to the 
extent practicable, shall be consistent with the provisions of this 
LGIP and the LGIA.
    In witness thereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment A to Appendix 2

Cluster Study Agreement

Assumptions Used in Conducting the Cluster Study

    The Cluster Study will be based upon the technical information 
provided by [the] Interconnection Customer in the Interconnection 
Request, subject to any modifications in accordance with Section 4.4 of 
this LGIP, and the following assumptions:
    Designation of Point of Interconnection and configuration to be 
studied.
    Designation of alternative Point(s) of Interconnection and 
configuration.

{Above assumptions to be completed by Interconnection Customer and 
other assumptions to be provided by Interconnection Customer and 
Transmission Provider{time} 

Appendix 3 to LGIP

Interconnection Facilities Study Agreement

    This agreement is made and entered into this __ day of ____, 20__by 
and between ____, a ____organized and existing under the laws of the 
State of ____, (``Interconnection Customer,'') and ____ a ____ 
organized and existing under the laws of the State of ____, 
(``Transmission Provider''). Interconnection Customer and Transmission 
Provider each may be referred to as a ``Party,'' or collectively as the 
``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a Large 
Generating Facility or generating capacity addition to an existing 
Generating Facility consistent with the Interconnection Request 
submitted by Interconnection Customer dated _ ; and
    Whereas, Interconnection Customer desires to interconnect the Large 
Generating Facility with the Transmission System; and
    Whereas, Transmission Provider has completed a[n Interconnection] 
Cluster Study (the ``Cluster Study'') and provided the results of said 
study to Interconnection Customer; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform an Interconnection Facilities Study to specify and 
estimate the cost of the equipment, engineering, procurement and 
construction work needed to implement the conclusions of the Cluster 
Study in accordance with Good Utility Practice to physically and 
electrically connect the Large Generating Facility to the Transmission 
System.
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in Transmission 
Provider's FERC-approved LGIP.
    2.0 Interconnection Customer elects and Transmission Provider shall 
cause an Interconnection Facilities Study consistent with Section 8.0 
of this LGIP to be performed in accordance with the Tariff.
    3.0 The scope of the Interconnection Facilities Study shall be 
subject to the assumptions set forth in Attachment A and the data 
provided in Attachment B to this Agreement.
    4.0 The Interconnection Facilities Study Report (i) shall provide a 
description, estimated cost of (consistent with Attachment A), schedule 
for required facilities to interconnect the Large Generating Facility 
to the Transmission System and (ii) shall address the short circuit, 
instability, and power flow issues identified in the Cluster Study.
    5.0 Interconnection Customer shall provide a Commercial Readiness 
Deposit per Section 8.1 of this LGIP to enter the Interconnection 
Facilities Study. The time for completion of the Interconnection 
Facilities Study is specified in Attachment A.
    6.0 Miscellaneous. The Interconnection Facilities Study Agreement 
shall include standard miscellaneous terms including, but not limited 
to, indemnities, representations, disclaimers, warranties, governing 
law, amendment, execution, waiver, enforceability and assignment, that 
reflect best practices in the electric industry, and that are 
consistent with regional practices, Applicable Laws and Regulations, 
and the organizational nature of each Party. All of these provisions, 
to the extent practicable, shall be consistent with the provisions of 
the LGIP and the LGIA.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their

[[Page 27155]]

duly authorized officers or agents on the day and year first above 
written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment A To Appendix 3

Interconnection Facilities Study Agreement

Interconnection Customer Schedule Election for Conducting the 
Interconnection Facilities Study

    Transmission Provider shall complete the study and issue a draft 
Interconnection Facilities Study Report to Interconnection Customer 
within the following number of days after receipt of an executed copy 
of this Interconnection Facilities Study Agreement:

--ninety (90) Calendar Days with no more than a +/- 20 percent cost 
estimate contained in the report, or
--one hundred eighty (180) Calendar Days with no more than a +/- 10 
percent cost estimate contained in the report.

Attachment B to Appendix 3

Interconnection Facilities Study Agreement

BILLING CODE 6717-01-P

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BILLING CODE 6717-01-C

Appendix 4 to LGIP

Optional Interconnection Study Agreement

    This agreement is made and entered into this __ day of ____, 20__ 
by and between ____, a ____ organized and existing under the laws of 
the State of ____, (``Interconnection Customer,'') and ____ a ____ 
organized and existing under the laws of the State of __-__, 
(``Transmission Provider''). Interconnection Customer and Transmission 
Provider each may be referred to as a ``Party,'' or collectively as the 
``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a Large 
Generating Facility or generating capacity addition to an existing 
Generating Facility consistent with the Interconnection Request 
submitted by Interconnection Customer dated ____; and
    Whereas, Interconnection Customer is proposing to establish an 
interconnection with the Transmission System; and
    Whereas, Interconnection Customer has submitted to Transmission 
Provider an Interconnection Request; and
    Whereas, on or after the date when Interconnection Customer 
receives the Cluster Study results, Interconnection Customer has 
further requested that Transmission Provider prepare an Optional 
Interconnection Study;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in Transmission 
Provider's FERC-approved LGIP.
    2.0 Interconnection Customer elects and Transmission Provider shall 
cause an Optional Interconnection Study consistent with Section 10.0 of 
this LGIP to be performed in accordance with the Tariff.
    3.0 The scope of the Optional Interconnection Study shall be 
subject to the assumptions set forth in Attachment A to this Agreement.
    4.0 The Optional Interconnection Study shall be performed solely 
for informational purposes.
    5.0 The Optional Interconnection Study report shall provide a 
sensitivity analysis based on the assumptions specified by 
Interconnection Customer in Attachment A to this Agreement. The 
Optional Interconnection Study will identify Transmission Provider's 
Interconnection Facilities and the Network Upgrades, and the estimated 
cost thereof, that may be required to provide transmission service or 
interconnection service based upon the assumptions specified by 
Interconnection Customer in Attachment A.
    6.0 Interconnection Customer shall provide a deposit of $10,000 for 
the performance of the Optional Interconnection Study. Transmission 
Provider's good faith estimate for the time of completion of the 
Optional Interconnection Study is {insert date{time} .
    Upon receipt of the Optional Interconnection Study, Transmission 
Provider shall charge and Interconnection Customer shall pay the actual 
costs of the Optional Study.
    Any difference between the initial payment and the actual cost of 
the study shall be paid by or refunded to Interconnection Customer, as 
appropriate.
    7.0 Miscellaneous. The Optional Interconnection Study Agreement 
shall include standard miscellaneous terms including, but not limited 
to, indemnities, representations, disclaimers, warranties, governing 
law, amendment, execution, waiver, enforceability and assignment, that 
reflect best practices in the electric industry, and that are 
consistent with regional practices, Applicable Laws and Regulations, 
and the organizational nature of each Party. All of these provisions, 
to the extent practicable, shall be consistent with the provisions of 
the LGIP and the LGIA.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Appendix 5 to LGIP

Large Generator Interconnection Agreement (See LGIA)

Appendix 6 to LGIP

Interconnection Procedures for a Wind Generating Plant

    Appendix 6 sets forth procedures specific to a wind generating 
plant. All other requirements of this LGIP continue to apply to wind 
generating plant interconnections.

A. Special Procedures Applicable to Wind Generators

    The wind plant Interconnection Customer, in completing the 
Interconnection Request required by Section 3.3 of this LGIP, may 
provide to [the] Transmission Provider a set of preliminary electrical 
design specifications depicting the wind plant as a single equivalent 
generator. Upon satisfying these and other applicable Interconnection 
Request conditions, the wind plant may enter the queue and receive the 
base case data as provided for in this LGIP.
    No later than six months after submitting an Interconnection 
Request completed in this manner, the wind plant Interconnection 
Customer must submit completed detailed electrical design 
specifications and other data (including collector system layout data) 
needed to allow [the] Transmission Provider to complete the Cluster 
Study.

Appendix 7 to LGIP

Transitional Cluster Study Agreement

    This agreement is made and entered into this __ day of ____, 20__ 
by and between ____, a ____ organized and existing under the laws of 
the State of ____ (``Interconnection Customer''), and ____, a ____ 
organized and existing under the laws of the State of ____ 
(``Transmission Provider''). Interconnection

[[Page 27159]]

Customer and Transmission Provider each may be referred to as a 
``Party,'' or collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a Large 
Generating Facility or generating capacity addition to an existing 
Generating Facility consistent with the Interconnection Request 
submitted by Interconnection Customer dated ____;
    Whereas, Interconnection Customer desires to interconnect the Large 
Generating Facility with the Transmission System; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform a ``Transitional Cluster Study,'' which combines 
the Cluster Study and Interconnection Facilities Study, in a single 
cluster study, followed by any needed restudies, to specify and 
estimate the cost of the equipment, engineering, procurement, and 
construction work needed to physically and electrically connect the 
Large Generating Facility to Transmission Provider's Transmission 
System; and
    Whereas, Interconnection Customer has a valid Queue Position as of 
the {Transmission Provider to insert Commission-approved effective date 
of compliance filing{time} .
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in this LGIP.
    2.0 Interconnection Customer elects, and Transmission Provider 
shall cause to be performed, a Transitional Cluster Study.
    3.0 The Transitional Cluster Study shall be based upon the 
technical information provided by Interconnection Customer in the 
Interconnection Request. Transmission Provider reserves the right to 
request additional technical information from Interconnection Customer 
as may reasonably become necessary consistent with Good Utility 
Practice during the course of the Transitional Cluster Study and 
Interconnection Customer shall provide such data as quickly as 
reasonable.
    4.0 Pursuant to Section 5.1.1.2 of this LGIP, the interim 
Transitional Cluster Study Report shall provide the information below:

--identification of any circuit breaker short circuit capability limits 
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response to 
system disturbances resulting from the interconnection; and
--Transmission Provider's Interconnection Facilities and Network 
Upgrades that are expected to be required as a result of the 
Interconnection Request(s) and a non-binding, good faith estimate of 
cost responsibility and a non-binding, good faith estimated time to 
construct.

    5.0 Pursuant to Section 5.1.1.2 of this LGIP, the final 
Transitional Cluster Study Report shall: (1) provide all the 
information included in the interim Transitional Cluster Study Report; 
(2) provide a description of, estimated cost of, and schedule for 
required facilities to interconnect the Generating Facility to the 
Transmission System; and (3) address the short circuit, instability, 
and power flow issues identified in the interim Transitional Cluster 
Study Report.
    6.0 Interconnection Customer has met the requirements described in 
Section 5.1.1.2 of this LGIP.
    7.0 Interconnection Customer previously provided a deposit for the 
performance of Interconnection Studies. Upon receipt of the final 
Transitional Cluster Study Report, Transmission Provider shall charge 
and Interconnection Customer shall pay the actual costs of the 
Transitional Cluster Study. Any difference between the study deposit 
and the actual cost of the study shall be paid by or refunded to 
Interconnection Customer, in accordance with the provisions of Section 
13.3 of this LGIP.
    8.0 Miscellaneous. The Transitional Cluster Study Agreement shall 
include standard miscellaneous terms including, but not limited to, 
indemnities, representations, disclaimers, warranties, governing law, 
amendment, execution, waiver, enforceability and assignment, that 
reflect best practices in the electric industry, and that are 
consistent with regional practices, Applicable Laws and Regulations, 
and the organizational nature of each Party. All of these provisions, 
to the extent practicable, shall be consistent with the provisions of 
this LGIP and the LGIA.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Appendix 8 to LGIP

Transitional Serial Interconnection Facilities Study Agreement

    This agreement is made and entered into this __ day of __, 20__, by 
and between ____, a ____ organized and existing under the laws of the 
State of ____ (``Interconnection Customer'') and ____, a ____ organized 
and existing under the laws of the State of ____ (``Transmission 
Provider''). Interconnection Customer and Transmission Provider each 
may be referred to as a ``Party,'' or collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a Large 
Generating Facility or generating capacity addition to an existing 
Large Generating Facility consistent with the Interconnection Request 
submitted by Interconnection Customer dated __; and
    Whereas, Interconnection Customer desires to interconnect the Large 
Generating Facility with the Transmission System; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to continue processing its Interconnection Facilities Study to 
specify and estimate the cost of the equipment, engineering, 
procurement, and construction work needed to implement the conclusions 
of the final interconnection system impact study (from the previously 
effective serial study process) in accordance with Good Utility 
Practice to physically and electrically connect the Large Generating 
Facility to the Transmission System; and
    Whereas, Transmission Provider has provided an Interconnection 
Facilities Study Agreement to [the] Interconnection Customer on or 
before {Transmission Provider to insert Commission-approved effective 
date of compliance filing{time} .
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in this LGIP.
    2.0 Interconnection Customer elects and Transmission Provider shall 
cause to be performed an Interconnection Facilities Study consistent 
with Section 8 of this LGIP.
    3.0 The scope of the Interconnection Facilities Study shall be 
subject to the assumptions set forth in Attachment A to this Agreement, 
which shall be the same assumptions as the previous Interconnection 
Facilities Study Agreement executed by [the] Interconnection Customer.
    4.0 The Interconnection Facilities Study Report shall: (1) provide 
a description, estimated cost of (consistent with Attachment A), and 
schedule for required facilities to interconnect the Large Generating 
Facility to the Transmission System; and (2) address the short circuit, 
instability, and power flow issues identified in the most recently 
published Cluster Study Report.
    5.0 Interconnection Customer has met the requirements described in 
Section 5.1.1.1 of this LGIP. The time for completion of the 
Interconnection Facilities Study is specified in Attachment A, and 
shall be no later than one hundred fifty (150) Calendar Days after 
{Transmission Provider to insert Commission-approved effective date 
[accepted on]of compliance filing{time} .
    6.0 Interconnection Customer previously provided a deposit of ____ 
dollars ($__) for the performance of the Interconnection Facilities 
Study.
    7.0 Upon receipt of the Interconnection Facilities Study results, 
Transmission Provider shall charge and Interconnection Customer shall 
pay the actual costs of the Interconnection Facilities Study.
    8.0 Any difference between the study deposit and the actual cost of 
the study shall be paid by or refunded to Interconnection Customer, as 
appropriate.
    9.0 Miscellaneous. The Interconnection Facilities Study Agreement 
shall include standard miscellaneous terms including, but not limited 
to, indemnities, representations, disclaimers, warranties, governing 
law, amendment, execution, waiver, enforceability and assignment, that 
reflect best practices in the electric industry, and that are 
consistent with regional practices,

[[Page 27160]]

Applicable Laws and Regulations, and the organizational nature of each 
Party. All of these provisions, to the extent practicable, shall be 
consistent with the provisions of this LGIP and this LGIA.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment A to Appendix 8

Transitional Serial Interconnection Facilities Study Agreement

Assumptions Used in Conducting the Transitional Serial Interconnection 
Facilities Study

{Assumptions to be completed by Interconnection Customer and 
Transmission Provider{time} 

Appendix 9 to LGIP

Two-Party Affected System Study Agreement

    This agreement is made and entered into this __ day of ____, 20, by 
and between ____, a ____ organized and existing under the laws of the 
State of ____ (Affected System Interconnection Customer) and ____, a 
organized and existing under the laws of the State of ____ 
(Transmission Provider). Affected System Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Affected System Interconnection Customer is proposing to 
develop a {description of generating facility or generating capacity 
addition to an existing generating facility{time}  consistent with the 
interconnection request submitted by Affected System Interconnection 
Customer to {name of host transmission provider{time} , dated ____, for 
which {name of host transmission provider{time}  found impacts on 
Transmission Provider's Transmission System; and
    Whereas, Affected System Interconnection Customer desires to 
interconnect the {generating facility{time}  with {name of host 
transmission provider{time} 's transmission system;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in this LGIP.
    2.0 Transmission Provider shall coordinate with Affected System 
Interconnection Customer to perform an Affected System Study consistent 
with Section 9 of this LGIP.
    3.0 The scope of the Affected System Study shall be subject to the 
assumptions set forth in Attachment A to this Agreement.
    4.0 The Affected System Study will be based upon the technical 
information provided by Affected System Interconnection Customer and 
{name of host transmission provider{time} . Transmission Provider 
reserves the right to request additional technical information from 
Affected System Interconnection Customer as may reasonably become 
necessary consistent with Good Utility Practice during the course of 
the Affected System Study.
    5.0 The Affected System Study shall provide the following 
information:

--identification of any circuit breaker short circuit capability limits 
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response to 
system disturbances resulting from the interconnection;
--non-binding, good faith estimated cost and time required to construct 
facilities required on Transmission Provider's Transmission System to 
accommodate the interconnection of the {generating facility{time}  to 
the transmission system of the host transmission provider; and
--description of how such facilities will address the identified short 
circuit, instability, and power flow issues.

    6.0 Affected System Interconnection Customer shall provide a 
deposit of __ for performance of the Affected System Study. Upon 
receipt of the results of the Affected System Study by the Affected 
System Interconnection Customer, Transmission Provider shall charge, 
and Affected System Interconnection Customer shall pay, the actual cost 
of the Affected System Study. Any difference between the deposit and 
the actual cost of the Affected System Study shall be paid by or 
refunded to Affected System Interconnection Customer, as appropriate, 
including interest calculated in accordance with section 35.19a(a)(2) 
of FERC's regulations.
    7.0 This Agreement shall include standard miscellaneous terms 
including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, waiver, 
enforceability, and assignment, which reflect best practices in the 
electric industry, that are consistent with regional practices, 
Applicable Laws and Regulations and the organizational nature of each 
Party. All of these provisions, to the extent practicable, shall be 
consistent with the provisions of the LGIP.
    In witness thereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

    {Insert name of Affected System Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Project No. __

Attachment A to Appendix 9

Two-Party Affected System Study Agreement

Assumptions Used in Conducting the Affected System Study

    The Affected System Study will be based upon the following 
assumptions:

    {Assumptions to be completed by Affected System Interconnection 
Customer and Transmission Provider{time} 

Appendix 10 to LGIP

Multiparty Affected System Study Agreement

    This agreement is made and entered into this __ day of ____, 20 __, 
by and among ____, a ____ organized and existing under the laws of the 
State of ____ (Affected System Interconnection Customer); ____, a ____ 
organized and existing under the laws of the State of ____ (Affected 
System Interconnection Customer); and ____, a ____ organized and 
existing under the laws of the State of ____ (Transmission Provider). 
Affected System Interconnection Customers and Transmission Provider 
each may be referred to as a ``Party,'' or collectively as the 
``Parties.'' When it is not important to differentiate among them, 
Affected System Interconnection Customers each may be referred to as 
``Affected System Interconnection Customer'' or collectively as the 
``Affected System Interconnection Customers.''

Recitals

    Whereas, Affected System Interconnection Customers are proposing to 
develop {description of generating facilities or generating capacity 
additions to an existing generating facility{time} , consistent with 
the interconnection requests submitted by Affected System 
Interconnection Customers to {name of host transmission 
provider{time} , dated ____, for which {name of host transmission 
provider{time}  found impacts on Transmission Provider's Transmission 
System; and
    Whereas, Affected System Interconnection Customers desire to 
interconnect the {generating facilities{time}  with {name of host 
transmission provider{time} 's transmission system;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:
    1.0 When used in this Agreement, with initial capitalization, the 
terms specified shall have the meanings indicated in this LGIP.
    2.0 Transmission Provider shall coordinate with Affected System 
Interconnection Customers to perform an Affected System Study 
consistent with Section 9 of this LGIP.

[[Page 27161]]

    3.0 The scope of the Affected System Study shall be subject to the 
assumptions set forth in Attachment A to this Agreement.
    4.0 The Affected System Study will be based upon the technical 
information provided by Affected System Interconnection Customers and 
{name of host transmission provider{time} . Transmission Provider 
reserves the right to request additional technical information from 
Affected System Interconnection Customers as may reasonably become 
necessary consistent with Good Utility Practice during the course of 
the Affected System Study.
    5.0 The Affected System Study shall provide the following 
information:

--identification of any circuit breaker short circuit capability limits 
exceeded as a result of the interconnection;
--identification of any thermal overload or voltage limit violations 
resulting from the interconnection;
--identification of any instability or inadequately damped response to 
system disturbances resulting from the interconnection;
--non-binding, good faith estimated cost and time required to construct 
facilities required on Transmission Provider's Transmission System to 
accommodate the interconnection of the {generating facilities{time}  to 
the transmission system of the host transmission provider; and
--description of how such facilities will address the identified short 
circuit, instability, and power flow issues.

    6.0 Affected System Interconnection Customers shall each provide a 
deposit of __ for performance of the Affected System Study. Upon 
receipt of the results of the Affected System Study by the Affected 
System Interconnection Customers, Transmission Provider shall charge, 
and Affected System Interconnection Customers shall pay, the actual 
cost of the Affected System Study. Any difference between the deposit 
and the actual cost of the Affected System Study shall be paid by or 
refunded to Affected System Interconnection Customers, as appropriate, 
including interest calculated in accordance with section 35.19a(a)(2) 
of FERC's regulations.
    7.0 This Agreement shall include standard miscellaneous terms 
including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, waiver, 
enforceability, and assignment, which reflect best practices in the 
electric industry, that are consistent with regional practices, 
Applicable Laws and Regulations, and the organizational nature of each 
Party. All of these provisions, to the extent practicable, shall be 
consistent with the provisions of the LGIP.
    In witness thereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Affected System Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Project No. __

{Insert name of Affected System Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------
Project No. __

Attachment A to Appendix 10

Multiparty Affected System Study Agreement

Assumptions Used in Conducting the Multiparty Affected System Study

    The Affected System Study will be based upon the following 
assumptions:

{Assumptions to be completed by Affected System Interconnection 
Customers and Transmission Provider{time} 

Appendix 11 to LGIP

Two-Party Affected System Facilities Construction Agreement

    This agreement is made and entered into this __ day of ____, 20__, 
by and between ____, organized and existing under the laws of the State 
of ____ (Affected System Interconnection Customer) and ____, an entity 
organized and existing under the laws of the State of ____ 
(Transmission Provider). Affected System Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Affected System Interconnection Customer is proposing to 
develop a {description of generating facility or generating capacity 
addition to an existing generating facility{time}  consistent with the 
interconnection request submitted by Affected System Interconnection 
Customer to {name of host transmission provider{time} , dated ____, for 
which {name of host transmission provider{time}  found impacts on 
Transmission Provider's Transmission System; and
    Whereas, Affected System Interconnection Customer desires to 
interconnect the {generating facility{time}  to {name of host 
transmission provider{time} 's transmission system; and
    Whereas, additions, modifications, and upgrade(s) must be made to 
certain existing facilities of Transmission Provider's Transmission 
System to accommodate such interconnection; and
    Whereas, Affected System Interconnection Customer has requested, 
and Transmission Provider has agreed, to enter into this Agreement for 
the purpose of facilitating the construction of necessary Affected 
System Network Upgrade(s);
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:

Article 1--Definitions

    When used in this Agreement, with initial capitalization, the terms 
specified and not otherwise defined in this Agreement shall have the 
meanings indicated in this LGIP.

Article 2--Term of Agreement

    2.1 Effective Date. This Agreement shall become effective upon 
execution by the Parties subject to acceptance by FERC (if applicable), 
or if filed unexecuted, upon the date specified by FERC.
    2.2 Term.
    2.2.1 General. This Agreement shall become effective as provided in 
Article 2.1 and shall continue in full force and effect until the 
earlier of (1) the final repayment, where applicable, by Transmission 
Provider of the amount funded by Affected System Interconnection 
Customer for Transmission Provider's design, procurement, construction 
and installation of the Affected System Network Upgrade(s) provided in 
Appendix A; (2) the Parties agree to mutually terminate this Agreement; 
(3) earlier termination is permitted or provided for under Appendix A 
of this Agreement; or (4) Affected System Interconnection Customer 
terminates this Agreement after providing Transmission Provider with 
written notice at least sixty (60) Calendar Days prior to the proposed 
termination date, provided that Affected System Interconnection 
Customer has no outstanding contractual obligations to Transmission 
Provider under this Agreement. No termination of this Agreement shall 
be effective until the Parties have complied with all Applicable Laws 
and Regulations applicable to such termination. The term of this 
Agreement may be adjusted upon mutual agreement of the Parties if (1) 
the commercial operation date for the {generating facility{time}  is 
adjusted in accordance with the rules and procedures established by 
{name of host transmission provider{time}  or (2) the in-service date 
for the Affected System Network Upgrade(s) is adjusted in accordance 
with the rules and procedures established by Transmission Provider.
    2.2.2 Termination Upon Default. Default shall mean the failure of a 
Breaching Party to cure its Breach in accordance with Article 5 of this 
Agreement where Breach and Breaching Party are defined in Article 5. 
Defaulting Party shall mean the Party that is in Default. In the event 
of a Default by a Party, the non-Defaulting Party shall have the 
termination rights described in Articles 5 and 6; provided, however, 
Transmission Provider may not terminate this Agreement if Affected 
System Interconnection Customer is the Defaulting Party and compensates 
Transmission Provider within thirty (30) Calendar Days for the amount 
of damages billed to Affected System Interconnection Customer by 
Transmission Provider for any such damages, including costs and 
expenses, incurred by Transmission Provider as a result of such 
Default.
    2.2.3 Consequences of Termination. In the event of a termination by 
either Party, other than a termination by Affected System 
Interconnection Customer due to a Default by Transmission Provider, 
Affected System Interconnection Customer shall be responsible for the 
payment to Transmission

[[Page 27162]]

Provider of all amounts then due and payable for construction and 
installation of the Affected System Network Upgrade(s) (including, 
without limitation, any equipment ordered related to such 
construction), plus all out-of-pocket expenses incurred by Transmission 
Provider in connection with the construction and installation of the 
Affected System Network Upgrade(s), through the date of termination, 
and, in the event of the termination of the entire Agreement, any 
actual costs which Transmission Provider reasonably incurs in (1) 
winding up work and construction demobilization and (2) ensuring the 
safety of persons and property and the integrity and safe and reliable 
operation of Transmission Provider's Transmission System. Transmission 
Provider shall use Reasonable Efforts to minimize such costs.
    2.2.4 Reservation of Rights. Transmission Provider shall have the 
right to make a unilateral filing with FERC to modify this Agreement 
with respect to any rates, terms and conditions, charges, 
classifications of service, rule or regulation under section 205 or any 
other applicable provision of the Federal Power Act and FERC's rules 
and regulations thereunder, and Affected System Interconnection 
Customer shall have the right to make a unilateral filing with FERC to 
modify this Agreement pursuant to section 206 or any other applicable 
provision of the Federal Power Act and FERC's rules and regulations 
thereunder; provided that each Party shall have the right to protest 
any such filing by the other Party and to participate fully in any 
proceeding before FERC in which such modifications may be considered. 
Nothing in this Agreement shall limit the rights of the Parties or of 
FERC under sections 205 or 206 of the Federal Power Act and FERC's 
rules and regulations thereunder, except to the extent that the Parties 
otherwise mutually agree as provided herein.
    2.3 Filing. Transmission Provider shall file this Agreement (and 
any amendment hereto) with the appropriate Governmental Authority, if 
required. Affected System Interconnection Customer may request that any 
information so provided be subject to the confidentiality provisions of 
Article 8. If Affected System Interconnection Customer has executed 
this Agreement, or any amendment thereto, Affected System 
Interconnection Customer shall reasonably cooperate with Transmission 
Provider with respect to such filing and to provide any information 
reasonably requested by Transmission Provider needed to comply with 
applicable regulatory requirements.
    2.4 Survival. This Agreement shall continue in effect after 
termination, to the extent necessary, to provide for final billings and 
payments and for costs incurred hereunder, including billings and 
payments pursuant to this Agreement; to permit the determination and 
enforcement of liability and indemnification obligations arising from 
acts or events that occurred while this Agreement was in effect; and to 
permit each Party to have access to the lands of the other Party 
pursuant to this Agreement or other applicable agreements, to 
disconnect, remove, or salvage its own facilities and equipment.
    2.5 Termination Obligations. Upon any termination pursuant to this 
Agreement, Affected System Interconnection Customer shall be 
responsible for the payment of all costs or other contractual 
obligations incurred prior to the termination date, including 
previously incurred capital costs, penalties for early termination, and 
costs of removal and site restoration.

Article 3--Construction of Affected System Network Upgrade(s)

    3.1 Construction.
    3.1.1 Transmission Provider Obligations. Transmission Provider 
shall (or shall cause such action to) design, procure, construct, and 
install, and Affected System Interconnection Customer shall pay, 
consistent with Article 3.2, the costs of all Affected System Network 
Upgrade(s) identified in Appendix A. All Affected System Network 
Upgrade(s) designed, procured, constructed, and installed by 
Transmission Provider pursuant to this Agreement shall satisfy all 
requirements of applicable safety and/or engineering codes and comply 
with Good Utility Practice, and further, shall satisfy all Applicable 
Laws and Regulations. Transmission Provider shall not be required to 
undertake any action which is inconsistent with its standard safety 
practices, its material and equipment specifications, its design 
criteria and construction procedures, its labor agreements, or any 
Applicable Laws and Regulations.
    3.1.2 Suspension of Work.
    3.1.2.1 Right to Suspend. Affected System Interconnection Customer 
must provide to Transmission Provider written notice of its request for 
suspension. Only the milestones described in the Appendices of this 
Agreement are subject to suspension under this Article 3.1.2. Affected 
System Network Upgrade(s) will be constructed on the schedule described 
in the Appendices of this Agreement unless: (1) construction is 
prevented by the order of a Governmental Authority; (2) the Affected 
System Network Upgrade(s) are not needed by any other Interconnection 
Customer; or (3) Transmission Provider determines that a Force Majeure 
event prevents construction. In the event of (1), (2), or (3), any 
security paid to Transmission Provider under Article 4.1 of this 
Agreement shall be released by Transmission Provider upon the 
determination by Transmission Provider that the Affected System Network 
Upgrade(s) will no longer be constructed. If suspension occurs, 
Affected System Interconnection Customer shall be responsible for the 
costs which Transmission Provider incurs (i) in accordance with this 
Agreement prior to the suspension; (ii) in suspending such work, 
including any costs incurred to perform such work as may be necessary 
to ensure the safety of persons and property and the integrity of 
Transmission Provider's Transmission System and, if applicable, any 
costs incurred in connection with the cancellation of contracts and 
orders for material which Transmission Provider cannot reasonably 
avoid; and (iii) reasonably incurs in winding up work and construction 
demobilization; provided, however, that, prior to canceling any such 
contracts or orders, Transmission Provider shall obtain Affected System 
Interconnection Customer's authorization. Affected System 
Interconnection Customer shall be responsible for all costs incurred in 
connection with Affected System Interconnection Customer's failure to 
authorize cancellation of such contracts or orders.
    Interest on amounts paid by Affected System Interconnection 
Customer to Transmission Provider for the design, procurement, 
construction, and installation of the Affected System Network 
Upgrade(s) shall not accrue during periods in which Affected System 
Interconnection Customer has suspended construction under this Article 
3.1.2.
    Transmission Provider shall invoice Affected System Interconnection 
Customer pursuant to Article 4 and will use Reasonable Efforts to 
minimize its costs. In the event Affected System Interconnection 
Customer suspends work by Affected System Transmission Provider 
required under this Agreement pursuant to this Article 3.1.2.1, and has 
not requested Affected System Transmission Provider to recommence the 
work required under this Agreement on or before the expiration of three 
(3) years following commencement of such suspension, this Agreement 
shall be deemed terminated. The three-year period shall begin on the 
date the suspension is requested, or the date of the written notice to 
Affected System Transmission Provider, whichever is earlier, if no 
effective date of suspension is specified.
    [3.1.2.2 Recommencing of Work. If Affected System Interconnection 
Customer requests that Transmission Provider recommence construction of 
Affected System Network Upgrade(s), Transmission Provider shall have no 
obligation to afford such work the priority it would have had but for 
the prior actions of Affected System Interconnection Customer to 
suspend the work. In such event, Affected System Interconnection 
Customer shall be responsible for any costs incurred in recommencing 
the work. All recommenced work shall be completed pursuant to an 
amended schedule for the interconnection agreed to by the Parties. 
Transmission Provider has the right to conduct a restudy of the 
Affected System Study if conditions have materially changed subsequent 
to the request to suspend. Affected System Interconnection Customer 
shall be responsible for the costs of any studies or restudies 
required.]
    [3.1.2.3 Right to Suspend Due to Default. Transmission Provider 
reserves the right, upon written notice to Affected System 
Interconnection Customer, to suspend, at any time, work by Transmission 
Provider due to Default by Affected System Interconnection Customer. 
Affected System Interconnection Customer shall be responsible for any 
additional expenses incurred by Transmission Provider associated with 
the construction and installation of the Affected System Network 
Upgrade(s) (as set forth in Article 2.2.3) upon the occurrence of 
either a Breach that Affected System Interconnection Customer is unable 
to cure-

[[Page 27163]]

pursuant to Article 5 or a Default pursuant to Article 5. Any form of 
suspension by Transmission Provider shall not be barred by Articles 
2.2.2, 2.2.3, or 5.2.2, nor shall it affect Transmission Provider's 
right to terminate the work or this Agreement pursuant to Article 6.]
    3.1.3 Construction Status. Transmission Provider shall keep 
Affected System Interconnection Customer advised periodically as to the 
progress of its design, procurement and construction efforts, as 
described in Appendix A. Affected System Interconnection Customer may, 
at any time and reasonably, request a progress report from Transmission 
Provider. If, at any time, Affected System Interconnection Customer 
determines that the completion of the Affected System Network 
Upgrade(s) will not be required until after the specified in-service 
date, Affected System Interconnection Customer will provide written 
notice to Transmission Provider of such later date upon which the 
completion of the Affected System Network Upgrade(s) would be required. 
Transmission Provider may delay the in-service date of the Affected 
System Network Upgrade(s) accordingly.
    3.1.4 Timely Completion. Transmission Provider shall use Reasonable 
Efforts to design, procure, construct, install, and test the Affected 
System Network Upgrade(s) in accordance with the schedule set forth in 
Appendix A, which schedule may be revised from time to time by mutual 
agreement of the Parties. If any event occurs that will affect the time 
or ability to complete the Affected System Network Upgrade(s), 
Transmission Provider shall promptly notify Affected System 
Interconnection Customer. In such circumstances, Transmission Provider 
shall, within fifteen (15) Calendar Days of such notice, convene a 
meeting with Affected System Interconnection Customer to evaluate the 
alternatives available to Affected System Interconnection Customer. 
Transmission Provider shall also make available to Affected System 
Interconnection Customer all studies and work papers related to the 
event and corresponding delay, including all information that is in the 
possession of Transmission Provider that is reasonably needed by 
Affected System Interconnection Customer to evaluate alternatives, 
subject to confidentiality arrangements consistent with Article 8. 
Transmission Provider shall, at Affected System Interconnection 
Customer's request and expense, use Reasonable Efforts to accelerate 
its work under this Agreement to meet the schedule set forth in 
Appendix A, provided that (1) Affected System Interconnection Customer 
authorizes such actions, such authorization to be withheld, 
conditioned, or delayed by Affected System Interconnection Customer 
only if it can demonstrate that the acceleration would have a material 
adverse effect on it; and (2) the Affected System Interconnection 
Customer funds costs associated therewith in advance.
    3.2 Interconnection Costs.
    3.2.1 Costs. Affected System Interconnection Customer shall pay to 
Transmission Provider costs (including taxes and financing costs) 
associated with seeking and obtaining all necessary approvals and of 
designing, engineering, constructing, and testing the Affected System 
Network Upgrade(s), as identified in Appendix A, in accordance with the 
cost recovery method provided herein. Unless Transmission Provider 
elects to fund the Affected System Network Upgrade(s), they shall be 
initially funded by Affected System Interconnection Customer.
    3.2.1.1 Lands of Other Property Owners. If any part of the Affected 
System Network Upgrade(s) is to be installed on property owned by 
persons other than Affected System Interconnection Customer or 
Transmission Provider, Transmission Provider shall, at Affected System 
Interconnection Customer's expense, use efforts similar in nature and 
extent to those that it typically undertakes on its own behalf or on 
behalf of its Affiliates, including use of its eminent domain authority 
to the extent permitted and consistent with Applicable Laws and 
Regulations and, to the extent consistent with such Applicable Laws and 
Regulations, to procure from such persons any rights of use, licenses, 
rights-of-way, and easements that are necessary to construct, operate, 
maintain, test, inspect, replace, or remove the Affected System Network 
Upgrade(s) upon such property.
    3.2.2 Repayment.
    3.2.2.1 Repayment. Consistent with Articles 11.4.1 and 11.4.2 of 
[the] Transmission Provider's pro forma LGIA, Affected System 
Interconnection Customer shall be entitled to a cash repayment by 
Transmission Provider of the amount paid to Transmission Provider, if 
any, for the Affected System Network Upgrade(s), including any tax 
gross-up or other tax-related payments associated with the Affected 
System Network Upgrade(s), and not refunded to Affected System 
Interconnection Customer pursuant to Article 3.3.1 or otherwise. The 
Parties may mutually agree to a repayment schedule, to be outlined in 
Appendix A, not to exceed twenty (20) years from the commercial 
operation date, for the complete repayment for all applicable costs 
associated with the Affected System Network Upgrade(s). Any repayment 
shall include interest calculated in accordance with the methodology 
set forth in FERC's regulations at 18 CFR 35.19 a(a)(2)(iii) from the 
date of any payment for Affected System Network Upgrade(s) through the 
date on which Affected System Interconnection Customer receives a 
repayment of such payment pursuant to this subparagraph. Interest shall 
not accrue during periods in which Affected System Interconnection 
Customer has suspended construction pursuant to Article 3.1.2. Affected 
System Interconnection Customer may assign such repayment rights to any 
person.
    3.2.2.2 Impact of Failure to Achieve Commercial Operation. If the 
Affected System Interconnection Customer's generating facility fails to 
achieve commercial operation, but it or another generating facility is 
later constructed and makes use of the Affected System Network 
Upgrade(s), Transmission Provider shall at that time reimburse Affected 
System Interconnection Customer for the amounts advanced for the 
Affected System Network Upgrade(s). Before any such reimbursement can 
occur, Affected System Interconnection Customer (or the entity that 
ultimately constructs the generating facility, if different), is 
responsible for identifying the entity to which the reimbursement must 
be made.
    3.3 Taxes.
    3.3.1 Indemnification for Contributions in Aid of Construction. 
With regard only to payments made by Affected System Interconnection 
Customer to Transmission Provider for the installation of the Affected 
System Network Upgrade(s), Transmission Provider shall not include a 
gross-up for income taxes in the amounts it charges Affected System 
Interconnection Customer for the installation of the Affected System 
Network Upgrade(s) unless (1) Transmission Provider has determined, in 
good faith, that the payments or property transfers made by Affected 
System Interconnection Customer to Transmission Provider should be 
reported as income subject to taxation, or (2) any Governmental 
Authority directs Transmission Provider to report payments or property 
as income subject to taxation. Affected System Interconnection Customer 
shall reimburse Transmission Provider for such costs on a fully 
grossed-up basis, in accordance with this Article, within thirty (30) 
Calendar Days of receiving written notification from Transmission 
Provider of the amount due, including detail about how the amount was 
calculated.
    The indemnification obligation shall terminate at the earlier of 
(1) the expiration Of the ten (10)-year testing period and the 
applicable statute of limitation, as it may be extended by Transmission 
Provider upon request of the Internal Revenue Service, to keep these 
years open for audit or adjustment, or (2) the occurrence of a 
subsequent taxable event and the payment of any related indemnification 
obligations as contemplated by this Article. Notwithstanding the 
foregoing provisions of this Article 3.3.1, and to the extent permitted 
by law, to the extent that the receipt of such payments by Transmission 
Provider is determined by any Governmental Authority to constitute 
income by Transmission Provider subject to taxation, Affected System 
Interconnection Customer shall protect, indemnify, and hold harmless 
Transmission Provider and its Affiliates, from all claims by any such 
Governmental Authority for any tax, interest, and/or penalties 
associated with such determination. Upon receiving written notification 
of such determination from the Governmental Authority, Transmission 
Provider shall provide Affected System Interconnection Customer with 
written notification within thirty (30) Calendar Days of such 
determination and notification. Transmission Provider, upon the timely 
written request by Affected System Interconnection Customer and at 
Affected System Interconnection Customer's expense, shall appeal, 
protest, seek abatement of, or otherwise oppose such determination. 
Transmission Provider reserves the right to make all decisions with 
regard to the prosecution of such appeal, protest, abatement, or other 
contest, including the compromise or settlement of the claim; provided 
that Transmission Provider shall

[[Page 27164]]

cooperate and consult in good faith with Affected System 
Interconnection Customer regarding the conduct of such contest. 
Affected System Interconnection Customer shall not be required to pay 
Transmission Provider for the tax, interest, and/or penalties prior to 
the seventh (7th) Calendar Day before the date on which Transmission 
Provider (1) is required to pay the tax, interest, and/or penalties or 
other amount in lieu thereof pursuant to a compromise or settlement of 
the appeal, protest, abatement, or other contest; (2) is required to 
pay the tax, interest, and/or penalties as the result of a final, non-
appealable order by a Governmental Authority; or (3) is required to pay 
the tax, interest, and/or penalties as a prerequisite to an appeal, 
protest, abatement, or other contest. In the event such appeal, 
protest, abatement, or other contest results in a determination that 
Transmission Provider is not liable for any portion of any tax, 
interest, and/or penalties for which Affected System Interconnection 
Customer has already made payment to Transmission Provider, 
Transmission Provider shall promptly refund to Affected System 
Interconnection Customer any payment attributable to the amount 
determined to be non-taxable, plus any interest (calculated in 
accordance with 18 CFR 35.19a(a)(2)(iii)) or other payments 
Transmission Provider receives or which Transmission Provider may be 
entitled with respect to such payment. Affected System Interconnection 
Customer shall provide Transmission Provider with credit assurances 
sufficient to meet Affected System Interconnection Customer's estimated 
liability for reimbursement of Transmission Provider for taxes, 
interest, and/or penalties under this Article 3.3.1. Such estimated 
liability shall be stated in Appendix A.
    To the extent that Transmission Provider is a limited liability 
company and not a corporation, and has elected to be taxed as a 
partnership, then the following shall apply: Transmission Provider 
represents, and the Parties acknowledge, that Transmission Provider is 
a limited liability company and is treated as a partnership for federal 
income tax purposes. Any payment made by Affected System 
Interconnection Customer to Transmission Provider for Affected System 
Network Upgrade(s) is to be treated as an upfront payment. It is 
anticipated by the Parties that any amounts paid by Affected System 
Interconnection Customer to Transmission Provider for Affected System 
Network Upgrade(s) will be reimbursed to Affected System 
Interconnection Customer in accordance with the terms of this 
Agreement, provided Affected System Interconnection Customer fulfills 
its obligations under this Agreement.
    3.3.2 Private Letter Ruling. At Affected System Interconnection 
Customer's request and expense, Transmission Provider shall file with 
the Internal Revenue Service a request for a private letter ruling as 
to whether any property transferred or sums paid, or to be paid, by 
Affected System Interconnection Customer to Transmission Provider under 
this Agreement are subject to federal income taxation. Affected System 
Interconnection Customer will prepare the initial draft of the request 
for a private letter ruling and will certify under penalties of perjury 
that all facts represented in such request are true and accurate to the 
best of Affected System Interconnection Customer's knowledge. 
Transmission Provider and Affected System Interconnection Customer 
shall cooperate in good faith with respect to the submission of such 
request.
    3.3.3 Other Taxes. Upon the timely request by Affected System 
Interconnection Customer, and at Affected System Interconnection 
Customer's sole expense, Transmission Provider shall appeal, protest, 
seek abatement of, or otherwise contest any tax (other than federal or 
state income tax) asserted or assessed against Transmission Provider 
for which Affected System Interconnection Customer may be required to 
reimburse Transmission Provider under the terms of this Agreement. 
Affected System Interconnection Customer shall pay to Transmission 
Provider on a periodic basis, as invoiced by Transmission Provider, 
Transmission Provider's documented reasonable costs of prosecuting such 
appeal, protest, abatement, or other contest. Affected System 
Interconnection Customer and Transmission Provider shall cooperate in 
good faith with respect to any such contest. Unless the payment of such 
taxes is a prerequisite to an appeal or abatement or cannot be 
deferred, no amount shall be payable by Affected System Interconnection 
Customer to Transmission Provider for such taxes until they are 
assessed by a final, non-appealable order by any court or agency of 
competent jurisdiction. In the event that a tax payment is withheld and 
ultimately due and payable after appeal, Affected System 
Interconnection Customer will be responsible for all taxes, interest 
and penalties, other than penalties attributable to any delay caused by 
Transmission Provider. Each Party shall cooperate with the other Party 
to maintain each Party's tax status. Nothing in this Agreement is 
intended to adversely affect any Party's tax-exempt status with respect 
to the issuance of bonds including, but not limited to, local 
furnishing bonds, as described in section 142(f) of the Internal 
Revenue Code.

Article 4--Security, Billing, and Payments

    4.1 Provision of Security. By the earlier of (1) thirty (30) 
Calendar Days prior to the due date for Affected System Interconnection 
Customer's first payment under the payment schedule specified in 
Appendix A, or (2) the first date specified in Appendix A for the 
ordering of equipment by Transmission Provider for installing the 
Affected System Network Upgrade(s), Affected System Interconnection 
Customer shall provide Transmission Provider, at Affected System 
Interconnection Customer's option, a guarantee, a surety bond, letter 
of credit or other form of security that is reasonably acceptable to 
Transmission Provider. Such 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 Upgrade(s) 
and shall be reduced on a dollar-for-dollar basis for payments made to 
Transmission Provider for these purposes.
    The guarantee must be made by an entity that meets the 
creditworthiness requirements of Transmission Provider and contain 
terms and conditions that guarantee payment of any amount that may be 
due from Affected System Interconnection Customer, up to an agreed-to 
maximum amount. The letter of credit must be issued by a financial 
institution reasonably acceptable to Transmission Provider and must 
specify a reasonable expiration date. The surety bond must be issued by 
an insurer reasonably acceptable to Transmission Provider and must 
specify a reasonable expiration date.
    4.2 Invoice. Each Party shall submit to the other Party, on a 
monthly basis, invoices of amounts due, if any, for the preceding 
month. Each invoice shall state the month to which the invoice applies 
and fully describe the services and equipment provided. The Parties may 
discharge mutual debts and payment obligations due and owing to each 
other on the same date through netting, in which case all amounts a 
Party owes to the other Party under this Agreement, including interest 
payments, shall be netted so that only the net amount remaining due 
shall be paid by the owing Party.
    4.3 Payment. Invoices shall be rendered to the paying Party at the 
address specified by the Parties. The Party receiving the invoice shall 
pay the invoice within thirty (30) Calendar Days of receipt. All 
payments shall be made in immediately available funds payable to the 
other Party, or by wire transfer to a bank named and account designated 
by the invoicing Party. Payment of invoices by a Party will not 
constitute a waiver of any rights or claims that Party may have under 
this Agreement.
    4.4 Final Invoice. Within six (6) months after completion of the 
construction of the Affected System Network Upgrade(s), Transmission 
Provider shall provide an invoice of the final cost of the construction 
of the Affected System Network Upgrade(s) and shall set forth such 
costs in sufficient detail to enable Affected System Interconnection 
Customer to compare the actual costs with the estimates and to 
ascertain deviations, if any, from the cost estimates. Transmission 
Provider shall refund, with interest (calculated in accordance with 18 
CFR 35.19a(a)(2)(iii)), to Affected System Interconnection Customer any 
amount by which the actual payment by Affected System Interconnection 
Customer for estimated costs exceeds the actual costs of construction 
within thirty (30) Calendar Days of the issuance of such final 
construction invoice.
    4.5 Interest. Interest on any unpaid amounts shall be calculated in 
accordance with 18 CFR 35.19a(a)(2)(iii).
    4.6 Payment During Dispute. In the event of a billing dispute among 
the Parties, Transmission Provider shall continue to construct the 
Affected System Network Upgrade(s) under this Agreement as long as 
Affected System Interconnection Customer: (1) continues to make all 
payments not in dispute; and (2) pays to Transmission Provider or into 
an independent escrow account the portion of the invoice in dispute, 
pending resolution of such dispute. If Affected System Interconnection 
Customer

[[Page 27165]]

fails to meet these two requirements, then Transmission Provider may 
provide notice to Affected System Interconnection Customer of a Default 
pursuant to Article 5. Within thirty (30) Calendar Days after the 
resolution of the dispute, the Party that owes money to another Party 
shall pay the amount due with interest calculated in accordance with 
the methodology set forth in 18 CFR 35.19a(a)(2)(iii).

Article 5--Breach, Cure and Default

    5.1 Events of Breach. A Breach of this Agreement shall include the:
    (a) Failure to pay any amount when due;
    (b) Failure to comply with any material term or condition of this 
Agreement, including but not limited to any material Breach of a 
representation, warranty, or covenant made in this Agreement;
    (c) Failure of a Party to provide such access rights, or a Party's 
attempt to revoke access or terminate such access rights, as provided 
under this Agreement; or
    (d) Failure of a Party to provide information or data to another 
Party as required under this Agreement, provided the Party entitled to 
the information or data under this Agreement requires such information 
or data to satisfy its obligations under this Agreement.
    5.2 Definition. Breaching Party shall mean the Party that is in 
Breach.
    5.3 Notice of Breach, Cure, and Default. Upon the occurrence of an 
event of Breach, the Party not in Breach, when it becomes aware of the 
Breach, shall give written notice of the Breach to the Breaching Party 
and to any other person representing a Party to this Agreement 
identified in writing to the other Party in advance. Such notice shall 
set forth, in reasonable detail, the nature of the Breach, and where 
known and applicable, the steps necessary to cure such Breach.
    5.3.1 Upon receiving written notice of the Breach hereunder, the 
Breaching Party shall have a period to cure such Breach (hereinafter 
referred to as the ``Cure Period'') which shall be sixty (60) Calendar 
Days.
    5.3.2 In the event the Breaching Party fails to cure within the 
Cure Period, the Breaching Party will be in Default of this Agreement, 
and the non-Defaulting Party may terminate this Agreement in accordance 
with Article 6.2 of this Agreement or take whatever action at law or in 
equity as may appear necessary or desirable to enforce the performance 
or observance of any rights, remedies, obligations, agreement, or 
covenants under this Agreement.
    5.4 Rights in the Event of Default. Notwithstanding the foregoing, 
upon the occurrence of a Default, the non-Defaulting Party shall be 
entitled to exercise all rights and remedies it may have in equity or 
at law.

Article 6--Termination of Agreement

    6.1 Expiration of Term. Except as otherwise specified in this 
Article 6, the Parties' obligations under this Agreement shall 
terminate at the conclusion of the term of this Agreement.
    6.2 Termination. In addition to the termination provisions set 
forth in Article 2.2, a Party may terminate this Agreement upon the 
Default of the other Party in accordance with Article 5.2.2 of this 
Agreement. Subject to the limitations set forth in Article 6.3, in the 
event of a Default, the termination of this Agreement by the non-
Defaulting Party shall require a filing at FERC of a notice of 
termination, which filing must be accepted for filing by FERC.
    6.3 Disposition of Facilities Upon Termination of Agreement.
    6.3.1 Transmission Provider Obligations. Upon termination of this 
Agreement, unless otherwise agreed to by the Parties in writing, 
Transmission Provider:
    (a) shall, prior to the construction and installation of any 
portion of the Affected System Network Upgrade(s) and to the extent 
possible, cancel any pending orders of, or return, such equipment or 
material for such Affected System Network Upgrade(s);
    (b) may keep in place any portion of the Affected System Network 
Upgrade(s) already constructed and installed; and,
    (c) shall perform such work as may be necessary to ensure the 
safety of persons and property and to preserve the integrity of 
Transmission Provider's Transmission System (e.g., construction 
demobilization to return the system to its original state, wind-up 
work).
    6.3.2 Affected System Interconnection Customer Obligations. Upon 
billing by Transmission Provider, Affected System Interconnection 
Customer shall reimburse Transmission Provider for any costs incurred 
by Transmission Provider in performance of the actions required or 
permitted by Article 6.3.1 and for the cost of any Affected System 
Network Upgrade(s) described in Appendix A. Transmission Provider shall 
use Reasonable Efforts to minimize costs and shall offset the amounts 
owed by any salvage value of facilities, if applicable. Affected System 
Interconnection Customer shall pay these costs pursuant to Article 4.3 
of this Agreement.
    6.3.3 Pre-construction or Installation. Upon termination of this 
Agreement and prior to the construction and installation of any portion 
of the Affected System Network Upgrade(s), Transmission Provider may, 
at its option, retain any portion of such Affected System Network 
Upgrade(s) not cancelled or returned in accordance with Article 
6.3.1(a), in which case Transmission Provider shall be responsible for 
all costs associated with procuring such Affected System Network 
Upgrade(s). To the extent that Affected System Interconnection Customer 
has already paid Transmission Provider for any or all of such costs, 
Transmission Provider shall refund Affected System Interconnection 
Customer for those payments. If Transmission Provider elects to not 
retain any portion of such facilities, Transmission Provider shall 
convey and make available to Affected System Interconnection Customer 
such facilities as soon as practicable after Affected System 
Interconnection Customer's payment for such facilities.
    6.4 Survival of Rights. Termination or expiration of this Agreement 
shall not relieve either Party of any of its liabilities and 
obligations arising hereunder prior to the date termination becomes 
effective, and each Party may take whatever judicial or administrative 
actions as appear necessary or desirable to enforce its rights 
hereunder. The applicable provisions of this Agreement will continue in 
effect after expiration, or early termination hereof to the extent 
necessary to provide for (1) final billings, billing adjustments, and 
other billing procedures set forth in this Agreement; (2) the 
determination and enforcement of liability and indemnification 
obligations arising from acts or events that occurred while this 
Agreement was in effect; and (3) the confidentiality provisions set 
forth in Article 8.

Article 7--Subcontractors

    7.1 Subcontractors. Nothing in this Agreement shall prevent a Party 
from utilizing the services of subcontractors, as it deems appropriate, 
to perform its obligations under this Agreement; provided, however, 
that each Party shall require its subcontractors to comply with all 
applicable terms and conditions of this Agreement in providing such 
services, and each Party shall remain primarily liable to the other 
Party for the performance of such subcontractor.
    7.1.1 Responsibility of Principal. The creation of any subcontract 
relationship shall not relieve the hiring Party of any of its 
obligations under this Agreement. In accordance with the provisions of 
this Agreement, each Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor it hires as if no 
subcontract had been made. Any applicable obligation imposed by this 
Agreement upon a Party shall be equally binding upon, and shall be 
construed as having application to, any subcontractor of such Party.
    7.1.2 No Third-Party Beneficiary. Except as may be specifically set 
forth to the contrary herein, no subcontractor or any other party is 
intended to be, nor will it be deemed to be, a third-party beneficiary 
of this Agreement.
    7.1.3 No Limitation by Insurance. The obligations under this 
Article 7 will not be limited in any way by any limitation of any 
insurance policies or coverages, including any subcontractor's 
insurance.

Article 8--Confidentiality

    8.1 Confidentiality. Confidential Information shall include, 
without limitation, all information relating to a Party's technology, 
research and development, business affairs, and pricing, and any 
information supplied to the other Party prior to the execution of this 
Agreement.
    Information is Confidential Information only if it is clearly 
designated or marked in writing as confidential on the face of the 
document, or, if the information is conveyed orally or by inspection, 
if the Party providing the information orally informs the Party 
receiving the information that the information is confidential. The 
Parties shall maintain as confidential any information that is provided 
and identified by a Party as Critical Energy Infrastructure Information 
(CEII), as that term is defined in 18 CFR 388.113(c).
    Such confidentiality will be maintained in accordance with this 
Article 8. If requested by the receiving Party, the disclosing Party 
shall provide in writing, the basis for

[[Page 27166]]

asserting that the information referred to in this Article warrants 
confidential treatment, and the requesting Party may disclose such 
writing to the appropriate Governmental Authority. Each Party shall be 
responsible for the costs associated with affording confidential 
treatment to its information.
    8.1.1 Term. During the term of this Agreement, and for a period of 
three (3) years after the expiration or termination of this Agreement, 
except as otherwise provided in this Article 8 or with regard to CEII, 
each Party shall hold in confidence and shall not disclose to any 
person Confidential Information. CEII shall be treated in accordance 
with FERC policies and regulations.
    8.1.2 Scope. Confidential Information shall not include information 
that the receiving Party can demonstrate: (1) is generally available to 
the public other than as a result of a disclosure by the receiving 
Party; (2) was in the lawful possession of the receiving Party on a 
non-confidential basis before receiving it from the disclosing Party; 
(3) was supplied to the receiving Party without restriction by a non-
Party, who, to the knowledge of the receiving Party after due inquiry, 
was under no obligation to the disclosing Party to keep such 
information confidential; (4) was independently developed by the 
receiving Party without reference to Confidential Information of the 
disclosing Party; (5) is, or becomes, publicly known, through no 
wrongful act or omission of the receiving Party or Breach of this 
Agreement; or (6) is required, in accordance with Article 8.1.6 of this 
Agreement, to be disclosed by any Governmental Authority or is 
otherwise required to be disclosed by law or subpoena, or is necessary 
in any legal proceeding establishing rights and obligations under this 
Agreement. Information designated as Confidential Information will no 
longer be deemed confidential if the Party that designated the 
information as confidential notifies the receiving Party that it no 
longer is confidential.
    8.1.3 Release of Confidential Information. No Party shall release 
or disclose Confidential Information to any other person, except to its 
Affiliates (limited by the Standards of Conduct requirements), 
subcontractors, employees, agents, consultants, or to non-Parties that 
may be or are considering providing financing to or equity 
participation with Affected System Interconnection Customer, or to 
potential purchasers or assignees of Affected System Interconnection 
Customer, on a need-to-know basis in connection with this Agreement, 
unless such person has first been advised of the confidentiality 
provisions of this Article 8 and has agreed to comply with such 
provisions. Notwithstanding the foregoing, a Party providing 
Confidential Information to any person shall remain primarily 
responsible for any release of Confidential Information in 
contravention of this Article 8.
    8.1.4 Rights. Each Party shall retain all rights, title, and 
interest in the Confidential Information that it discloses to the 
receiving Party. The disclosure by a Party to the receiving Party of 
Confidential Information shall not be deemed a waiver by the disclosing 
Party or any other person or entity of the right to protect the 
Confidential Information from public disclosure.
    8.1.5 Standard of Care. Each Party shall use at least the same 
standard of care to protect Confidential Information it receives as it 
uses to protect its own Confidential Information from unauthorized 
disclosure, publication, or dissemination. Each Party may use 
Confidential Information solely to fulfill its obligations to the other 
Party under this Agreement or its regulatory requirements.
    8.1.6 Order of Disclosure. If a court or a Government Authority or 
entity with the right, power, and apparent authority to do so requests 
or requires either Party, by subpoena, oral deposition, 
interrogatories, requests for production of documents, administrative 
order, or otherwise, to disclose Confidential Information, that Party 
shall provide the disclosing Party with prompt notice of such 
request(s) or requirement(s) so that the disclosing Party may seek an 
appropriate protective order or waive compliance with the terms of this 
Agreement. Notwithstanding the absence of a protective order or waiver, 
the Party may disclose such Confidential Information which, in the 
opinion of its counsel, the Party is legally compelled to disclose. 
Each Party will use Reasonable Efforts to obtain reliable assurance 
that confidential treatment will be accorded any Confidential 
Information so furnished.
    8.1.7 Termination of Agreement. Upon termination of this Agreement 
for any reason, each Party shall, within ten (10) Business Days of 
receipt of a written request from the other Party, use Reasonable 
Efforts to destroy, erase, or delete (with such destruction, erasure, 
and deletion certified in writing to the requesting Party) or return to 
the requesting Party any and all written or electronic Confidential 
Information received from the requesting Party, except that each Party 
may keep one copy for archival purposes, provided that the obligation 
to treat it as Confidential Information in accordance with this Article 
8 shall survive such termination.
    8.1.8 Remedies. The Parties agree that monetary damages would be 
inadequate to compensate a Party for the other Party's Breach of its 
obligations under this Article 8. Each Party accordingly agrees that 
the disclosing Party shall be entitled to equitable relief, by way of 
injunction or otherwise, if the receiving Party Breaches or threatens 
to Breach its obligations under this Article 8, which equitable relief 
shall be granted without bond or proof of damages, and the breaching 
Party shall not plead in defense that there would be an adequate remedy 
at law. Such remedy shall not be deemed an exclusive remedy for the 
Breach of this Article 8, but it shall be in addition to all other 
remedies available at law or in equity. The Parties further acknowledge 
and agree that the covenants contained herein are necessary for the 
protection of legitimate business interests and are reasonable in 
scope. Neither Party, however, shall be liable for indirect, 
incidental, or consequential or punitive damages of any nature or kind 
resulting from or arising in connection with this Article 8.
    8.1.9 Disclosure to FERC, its Staff, or a State Regulatory Body. 
Notwithstanding anything in this Article 8 to the contrary, and 
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of an 
investigation or otherwise, requests information from a Party that is 
otherwise required to be maintained in confidence pursuant to this 
Agreement, the Party shall provide the requested information to FERC or 
its staff, within the time provided for in the request for information. 
In providing the information to FERC or its staff, the Party must, 
consistent with 18 CFR 388.112, request that the information be treated 
as confidential and non-public by FERC and its staff and that the 
information be withheld from public disclosure. Parties are prohibited 
from notifying the other Party to this Agreement prior to the release 
of the Confidential Information to FERC or its staff. The Party shall 
notify the other Party to the Agreement when it is notified by FERC or 
its staff that a request to release Confidential Information has been 
received by FERC, at which time either of the Parties may respond 
before such information would be made public, pursuant to 18 CFR 
388.112. Requests from a state regulatory body conducting a 
confidential investigation shall be treated in a similar manner if 
consistent with the applicable state rules and regulations.
    8.1.10 Subject to the exception in Article 8.1.9, any information 
that a disclosing Party claims is competitively sensitive, commercial, 
or financial information under this Agreement shall not be disclosed by 
the receiving Party to any person not employed or retained by the 
receiving Party, except to the extent disclosure is (1) required by 
law; (2) reasonably deemed by the disclosing Party to be required to be 
disclosed in connection with a dispute between or among the Parties, or 
the defense of litigation or dispute; (3) otherwise permitted by 
consent of the disclosing Party, such consent not to be unreasonably 
withheld; or (4) necessary to fulfill its obligations under this 
Agreement or as [the] Transmission Provider or a balancing authority, 
including disclosing the Confidential Information to a regional or 
national reliability organization. The Party asserting confidentiality 
shall notify the receiving Party in writing of the information that 
Party claims is confidential. Prior to any disclosures of that Party's 
Confidential Information under this subparagraph, or if any non-Party 
or Governmental Authority makes any request or demand for any of the 
information described in this subparagraph, the Party that received the 
Confidential Information from the disclosing Party agrees to promptly 
notify the disclosing Party in writing and agrees to assert 
confidentiality and cooperate with the disclosing Party in seeking to 
protect the Confidential Information from public disclosure by 
confidentiality agreement, protective order, or other reasonable 
measures.

Article 9--Information Access and Audit Rights

    9.1 Information Access. Each Party shall make available to the 
other Party information

[[Page 27167]]

necessary to verify the costs incurred by the other Party for which the 
requesting Party is responsible under this Agreement and carry out 
obligations and responsibilities under this Agreement, provided that 
the Parties shall not use such information for purposes other than 
those set forth in this Article 9.1 and to enforce their rights under 
this Agreement.
    9.2 Audit Rights. Subject to the requirements of confidentiality 
under Article 8 of this Agreement, the accounts and records related to 
the design, engineering, procurement, and construction of the Affected 
System Network Upgrade(s) shall be subject to audit during the period 
of this Agreement and for a period of twenty-four (24) months following 
Transmission Provider's issuance of a final invoice in accordance with 
Article 4.4. Affected System Interconnection Customer at its expense 
shall have the right, during normal business hours, and upon prior 
reasonable notice to Transmission Provider, to audit such accounts and 
records. Any audit authorized by this Article 9.2 shall be performed at 
the offices where such accounts and records are maintained and shall be 
limited to those portions of such accounts and records that relate to 
obligations under this Agreement.

Article 10--Notices

    10.1--General. Any notice, demand, or request required or permitted 
to be given by a Party to the other Party, and any instrument required 
or permitted to be tendered or delivered by a Party in writing to 
another Party, may be so given, tendered, or delivered, as the case may 
be, by depositing the same with the United States Postal Service with 
postage prepaid, for transmission by certified or registered mail, 
addressed to the Parties, or personally delivered to the Parties, at 
the address set out below:

To Transmission Provider:
To Affected System Interconnection Customer:

    10.2 Billings and Payments. Billings and payments shall be sent to 
the addresses shown in Article 10.1 unless otherwise agreed to by the 
Parties.
    10.3 Alternative Forms of Notice. Any notice or request required or 
permitted to be given by a Party to the other Party and not required by 
this Agreement to be given in writing may be so given by telephone, 
facsimile or email to the telephone numbers and email addresses set out 
below:

To Transmission Provider:
To Affected System Interconnection Customer:

    10.4 Execution and Filing. Affected System Interconnection Customer 
shall either: (i) execute two originals of this tendered Agreement and 
return them to Transmission Provider; or (ii) request in writing that 
Transmission Provider file with FERC this Agreement in unexecuted form. 
As soon as practicable, but not later than ten (10) Business Days after 
receiving either the two executed originals of this tendered Agreement 
(if it does not conform with a FERC-approved standard form of this 
Agreement) or the request to file this Agreement unexecuted, 
Transmission Provider shall file this Agreement with FERC, together 
with its explanation of any matters as to which Affected System 
Interconnection Customer and Transmission Provider disagree and support 
for the costs that Transmission Provider proposes to charge to Affected 
System Interconnection Customer under this Agreement. An unexecuted 
version of this Agreement should contain terms and conditions deemed 
appropriate by Transmission Provider for the Affected System 
Interconnection Customer's generating facility. If the Parties agree to 
proceed with design, procurement, and construction of facilities and 
upgrades under the agreed-upon terms of the unexecuted version of this 
Agreement, they may proceed pending FERC action.

Article 11--Miscellaneous

    11.1 This Agreement shall include standard miscellaneous terms 
including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, waiver, 
enforceability and assignment, which reflect best practices in the 
electric industry, that are consistent with regional practices, 
Applicable Laws and Regulations and the organizational nature of each 
Party. All of these provisions, to the extent practicable, shall be 
consistent with the provisions of this LGIP.

    {Signature Page to Follow{time} 

    In witness whereof, the Parties have executed this Agreement in 
multiple originals, each of which shall constitute and be an original 
Agreement among the Parties.

Transmission Provider
{Transmission Provider{time} 

By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

Affected System Interconnection Customer
{Affected System Interconnection Customer{time} 

By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Project No. __

Attachment A to Appendix 11

Two-Party Affected System Facilities Construction Agreement

Affected System Network Upgrade(s), Cost Estimates and Responsibility, 
Construction Schedule and Monthly Payment Schedule

    This Appendix A is a part of the Affected System Facilities 
Construction Agreement between Affected System Interconnection Customer 
and Transmission Provider.
    1.1 Affected System Network Upgrade(s) to be installed by 
Transmission Provider.

{description{time} 

    1.2 First Equipment Order (including permitting).

{description{time} 

    1.2.1. Permitting and Land Rights--Transmission Provider Affected 
System Network Upgrade(s)

{description{time} 

    1.3 Construction Schedule. Where applicable, construction of the 
Affected System Network Upgrade(s) is scheduled as follows and will be 
periodically updated as necessary:

                             Table 1--Transmission Provider Construction Activities
----------------------------------------------------------------------------------------------------------------
           Milestone No.                    Description                Start date                End date
----------------------------------------------------------------------------------------------------------------
 
 
 
 
 
 
----------------------------------------------------------------------------------------------------------------


    Note:  Construction schedule assumes that Transmission Provider 
has obtained final authorizations and security from Affected System 
Interconnection Customer and all necessary permits from Governmental 
Authorities as necessary prerequisites to commence construction of 
any of the Affected System Network Upgrade(s).

    1.4 Payment Schedule.
    1.4.1 Timing of and Adjustments to Affected System Interconnection 
Customer's Payments and Security.

{description{time} 

    1.4.2 Monthly Payment Schedule. Affected System Interconnection 
Customer's payment schedule is as follows.

{description{time} 

[[Page 27168]]



  Table 2--Affected System Interconnection Customer's Payment/Security
           Obligations for Affected System Network Upgrade(s)
------------------------------------------------------------------------
         Milestone No.                  Description              Date
------------------------------------------------------------------------
 
 
 
 
------------------------------------------------------------------------


    Note: Affected System Interconnection Customer's payment or 
provision of security as provided in this Agreement operates as a 
condition precedent to Transmission Provider's obligations to 
construct any Affected System Network Upgrade(s), and failure to 
meet this schedule will constitute a Breach pursuant to Article 5.1 
of this Agreement.

    1.5 Permits, Licenses, and Authorizations.

{description{time} 

Attachment B to Appendix 11

Two-Party Affected System Facilities Construction Agreement

Notification of Completed Construction

    This Appendix B is a part of the Affected Systems Facilities 
Construction Agreement between Affected System Interconnection Customer 
and Transmission Provider. Where applicable, when Transmission Provider 
has completed construction of the Affected System Network Upgrade(s), 
Transmission Provider shall send notice to Affected System 
Interconnection Customer in substantially the form following:

{Date{time} 
{Affected System Interconnection Customer Address{time} 

Re: Completion of Affected System Network Upgrade(s)

Dear {Name or Title{time} :

    This letter is sent pursuant to the Affected System Facilities 
Construction Agreement between {Transmission Provider{time}  and 
{Affected System Interconnection Customer{time} , dated ________, 20__.
    On {Date{time} , Transmission Provider completed to its 
satisfaction all work on the Affected System Network Upgrade(s) 
required to facilitate the safe and reliable interconnection and 
operation of Affected System Interconnection Customer's {description of 
generating facility{time} . Transmission Provider confirms that the 
Affected System Network Upgrade(s) are in place.

    Thank you.

{Signature{time} 
{Transmission Provider Representative{time} 

Attachment C to Appendix 11

Two-Party Affected System Facilities Construction Agreement

Exhibits

    This Appendix C is a part of the Affected System Facilities 
Construction Agreement [among] between Affected System Interconnection 
Customer and Transmission Provider.

Exhibit A1--Transmission Provider Site Map

Exhibit A2--Site Plan

Exhibit A3--Affected System Network Upgrade(s) Plan & Profile

Exhibit A4--Estimated Cost of Affected System Network Upgrade(s)

------------------------------------------------------------------------
                                     Facilities to be
            Location                  constructed by        Estimate in
                                  transmission provider       dollars
------------------------------------------------------------------------
 
                                 Total
------------------------------------------------------------------------

Appendix 12 to LGIP

Multiparty Affected System Facilities Construction Agreement

    This Agreement is made and entered into this __ day of ______, 
20__, by and among ________, organized and existing under the laws of 
the State of ______ (Affected System Interconnection Customer); ______, 
a ______ organized and existing under the laws of the State of ______ 
(Affected System Interconnection Customer); and ______, an entity 
organized and existing under the laws of the State of _____ 
(Transmission Provider). Affected System Interconnection Customers and 
Transmission Provider each may be referred to as a ``Party'' or 
collectively as the ``Parties.'' When it is not important to 
differentiate among them, Affected System Interconnection Customers 
each may be referred to as ``Affected System Interconnection Customer'' 
or collectively as ``Affected System Interconnection Customers.''

Recitals

    Whereas, Affected System Interconnection Customers are proposing to 
develop {description of generating facilities or generating capacity 
additions to an existing generating facility{time} , consistent with 
the interconnection requests submitted by Affected System 
Interconnection Customers to {name of host transmission 
provider{time} , dated ______, for which {name of host transmission 
provider{time}  found impacts on Transmission Provider's Transmission 
System; and
    Whereas, Affected System Interconnection Customers desire to 
interconnect the {generating facilities{time}  to {name of host 
transmission provider{time} 's transmission system; and
    Whereas, additions, modifications, and upgrade(s) must be made to 
certain existing facilities of Transmission Provider's Transmission 
System to accommodate such interconnection; and
    Whereas, Affected System Interconnection Customers have requested, 
and Transmission Provider has agreed, to enter into this Agreement for 
the purpose of facilitating the construction of necessary Affected 
System Network Upgrade(s);
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein, the Parties agree as follows:

Article 1--Definitions

    When used in this Agreement, with initial capitalization, the terms 
specified and not otherwise defined in this Agreement shall have the 
meanings indicated in this LGIP.

Article 2--Term of Agreement

    2.1 Effective Date. This Agreement shall become effective upon 
execution by the Parties subject to acceptance by FERC (if applicable), 
or if filed unexecuted, upon the date specified by FERC.
    2.2 Term.
    2.2.1 General. This Agreement shall become effective as provided in 
Article 2.1 and shall continue in full force and effect until the 
earlier of (1) the final repayment, where applicable, by Transmission 
Provider of the amount funded by Affected System Interconnection 
Customers for Transmission Provider's design, procurement, 
construction, and installation of the Affected System Network 
Upgrade(s) provided in Appendix A; (2) the Parties agree to mutually 
terminate this Agreement; (3) earlier termination is permitted or 
provided for under Appendix A of this Agreement; or (4) Affected System 
Interconnection Customers terminate this Agreement after providing 
Transmission Provider with written notice at least sixty (60) Calendar 
Days prior to the proposed termination date, provided that Affected 
System Interconnection Customers have no outstanding contractual 
obligations to Transmission Provider under this Agreement. No 
termination of this Agreement shall be effective until the Parties have 
complied with all Applicable Laws and Regulations applicable to such 
termination. The term of this Agreement may be adjusted upon mutual 
agreement of the Parties if the commercial operation date(s) for the 
{generating facilities{time}  is adjusted in accordance with the rules 
and procedures established by {name of host transmission 
provider{time}  or the in-service date for the Affected System Network 
Upgrade(s) is adjusted in accordance with the rules and procedures 
established by Transmission Provider.

[[Page 27169]]

    2.2.2 Termination Upon Default. Default shall mean the failure of a 
Breaching Party to cure its Breach in accordance with Article 5 of this 
Agreement where Breach and Breaching Party are defined in Article 5. 
Defaulting Party shall mean the Party that is in Default. In the event 
of a Default by a Party, each non-Defaulting Party shall have the 
termination rights described in Articles 5 and 6; provided, however, 
Transmission Provider may not terminate this Agreement if an Affected 
System Interconnection Customer is the Defaulting Party and compensates 
Transmission Provider within thirty (30) Calendar Days for the amount 
of damages billed to Affected System Interconnection Customer(s) by 
Transmission Provider for any such damages, including costs and 
expenses incurred by Transmission Provider as a result of such Default. 
Notwithstanding the foregoing, Default by one or more Affected System 
Interconnection Customers shall not provide the other Affected System 
Interconnection Customer(s), either individually or in concert, with 
the right to terminate the entire Agreement. The non-Defaulting Party/
Parties may, individually or in concert, initiate the removal of an 
Affected System Interconnection Customer that is a Defaulting Party 
from this Agreement. Transmission Provider shall not terminate this 
Agreement or the participation of any Affected System Interconnection 
Customer without provision being made for Transmission Provider to be 
fully reimbursed for all of its costs incurred under this Agreement.
    2.2.3 Consequences of Termination. In the event of a termination by 
a Party, other than a termination by Affected System Interconnection 
Customer(s) due to a Default by Transmission Provider, each Affected 
System Interconnection Customer whose participation in this Agreement 
is terminated shall be responsible for the payment to Transmission 
Provider of all amounts then due and payable for construction and 
installation of the Affected System Network Upgrade(s) (including, 
without limitation, any equipment ordered related to such 
construction), plus all out-of-pocket expenses incurred by Transmission 
Provider in connection with the construction and installation of the 
Affected System Network Upgrade(s), through the date of termination, 
and, in the event of the termination of the entire Agreement, any 
actual costs which Transmission Provider reasonably incurs in (1) 
winding up work and construction demobilization and (2) ensuring the 
safety of persons and property and the integrity and safe and reliable 
operation of Transmission Provider's Transmission System. Transmission 
Provider shall use Reasonable Efforts to minimize such costs. The cost 
responsibility of other Affected System Interconnection Customers shall 
be adjusted, as necessary, based on the payments by an Affected System 
Interconnection Customer that is terminated from the Agreement.
    2.2.4 Reservation of Rights. Transmission Provider shall have the 
right to make a unilateral filing with FERC to modify this Agreement 
with respect to any rates, terms and conditions, charges, 
classifications of service, rule or regulation under section 205 or any 
other applicable provision of the Federal Power Act and FERC's rules 
and regulations thereunder, and Affected System Interconnection 
Customers shall have the right to make a unilateral filing with FERC to 
modify this Agreement pursuant to section 206 or any other applicable 
provision of the Federal Power Act and FERC's rules and regulations 
thereunder; provided that each Party shall have the right to protest 
any such filing by the other Party and to participate fully in any 
proceeding before FERC in which such modifications may be considered. 
Nothing in this Agreement shall limit the rights of the Parties or of 
FERC under sections 205 or 206 of the Federal Power Act and FERC's 
rules and regulations thereunder, except to the extent that the Parties 
otherwise mutually agree as provided herein.
    2.3 Filing. Transmission Provider shall file this Agreement (and 
any amendment hereto) with the appropriate Governmental Authority, if 
required. Affected System Interconnection Customers may request that 
any information so provided be subject to the confidentiality 
provisions of Article 8. Each Affected System Interconnection Customer 
that has executed this Agreement, or any amendment thereto, shall 
reasonably cooperate with Transmission Provider with respect to such 
filing and to provide any information reasonably requested by 
Transmission Provider needed to comply with applicable regulatory 
requirements.
    2.4 Survival. This Agreement shall continue in effect after 
termination, to the extent necessary, to provide for final billings and 
payments and for costs incurred hereunder, including billings and 
payments pursuant to this Agreement; to permit the determination and 
enforcement of liability and indemnification obligations arising from 
acts or events that occurred while this Agreement was in effect; and to 
permit each Party to have access to the lands of the other Party 
pursuant to this Agreement or other applicable agreements, to 
disconnect, remove, or salvage its own facilities and equipment.
    2.5 Termination Obligations. Upon any termination pursuant to this 
Agreement or termination of the participation in this Agreement of an 
Affected System Interconnection Customer, each Affected System 
Interconnection Customer shall be responsible for the payment of its 
proportionate share of all costs or other contractual obligations 
incurred prior to the termination date, including previously incurred 
capital costs, penalties for early termination, and costs of removal 
and site restoration. The cost responsibility of the other Affected 
System Interconnection Customers shall be adjusted as necessary.

Article 3--Construction of Affected System Network Upgrade(s)

    3.1 Construction.
    3.1.1 Transmission Provider Obligations. Transmission Provider 
shall (or shall cause such action to) design, procure, construct, and 
install, and Affected System Interconnection Customers shall pay, 
consistent with Article 3.2, the costs of all Affected System Network 
Upgrade(s) identified in Appendix A. All Affected System Network 
Upgrade(s) designed, procured, constructed, and installed by 
Transmission Provider pursuant to this Agreement shall satisfy all 
requirements of applicable safety and/or engineering codes and comply 
with Good Utility Practice, and further, shall satisfy all Applicable 
Laws and Regulations. Transmission Provider shall not be required to 
undertake any action which is inconsistent with its standard safety 
practices, its material and equipment specifications, its design 
criteria and construction procedures, its labor agreements, or any 
Applicable Laws and Regulations.
    3.1.2 Suspension of Work.
    3.1.2.1 Right to Suspend. Affected System Interconnection Customers 
must jointly provide to Transmission Provider written notice of their 
request for suspension. Only the milestones described in the Appendices 
of this Agreement are subject to suspension under this Article 3.1.2. 
Affected System Network Upgrade(s) will be constructed on the schedule 
described in the Appendices of this Agreement unless: (1) construction 
is prevented by the order of a Governmental Authority; (2) the Affected 
System Network Upgrade(s) are not needed by any other Interconnection 
Customer; or (3) Transmission Provider determines that a Force Majeure 
event prevents construction. In the event of (1), (2), or (3), any 
security paid to Transmission Provider under Article 4.1 of this 
Agreement shall be released by Transmission Provider upon the 
determination by Transmission Provider that the Affected System Network 
Upgrade(s) will no longer be constructed. If suspension occurs, 
Affected System Interconnection Customers shall be responsible for the 
costs which Transmission Provider incurs (i) in accordance with this 
Agreement prior to the suspension; (ii) in suspending such work, 
including any costs incurred to perform such work as may be necessary 
to ensure the safety of persons and property and the integrity of 
Transmission Provider's Transmission System and, if applicable, any 
costs incurred in connection with the cancellation of contracts and 
orders for material which Transmission Provider cannot reasonably 
avoid; and (iii) reasonably incurs in winding up work and construction 
demobilization; provided, however, that, prior to canceling any such 
contracts or orders, Transmission Provider shall obtain Affected System 
Interconnection Customers' authorization. Affected System 
Interconnection Customers shall be responsible for all costs incurred 
in connection with Affected System Interconnection Customers' failure 
to authorize cancellation of such contracts or orders.
    Interest on amounts paid by Affected System Interconnection 
Customers to Transmission Provider for the design, procurement, 
construction, and installation of the Affected System Network 
Upgrade(s) shall not accrue during periods in which Affected System 
Interconnection Customers have suspended construction under this 
Article 3.1.2.
    Transmission Provider shall invoice Affected System Interconnection 
Customers

[[Page 27170]]

pursuant to Article 4 and will use Reasonable Efforts to minimize its 
costs. In the event Affected System Interconnection Customers suspend 
work by Affected System Transmission Provider required under this 
Agreement pursuant to this Article 3.1.2.1, and have not requested 
Affected System Transmission Provider to recommence the work required 
under this Agreement on or before the expiration of three (3) years 
following commencement of such suspension, this Agreement shall be 
deemed terminated. The three-year period shall begin on the date the 
suspension is requested, or the date of the written notice to Affected 
System Transmission Provider, whichever is earlier, if no effective 
date of suspension is specified.
    [3.1.2.2 Recommencing of Work. If Affected System Interconnection 
Customers request that Transmission Provider recommence construction of 
Affected System Network Upgrade(s), Transmission Provider shall have no 
obligation to afford such work the priority it would have had but for 
the prior actions of Affected System Interconnection Customers to 
suspend the work. In such event, Affected System Interconnection 
Customers shall be responsible for any costs incurred in recommencing 
the work. All recommenced work shall be completed pursuant to an 
amended schedule for the interconnection agreed to by the Parties. 
Transmission Provider has the right to conduct a restudy of the 
Affected System Study if conditions have materially changed subsequent 
to the request to suspend. Affected System Interconnection Customers 
shall be responsible for the costs of any studies or restudies 
required.]
    [3.1.2.3 Right to Suspend Due to Default. Transmission Provider 
reserves the right, upon written notice to Affected System 
Interconnection Customers, to suspend, at any time, work by 
Transmission Provider due to a Default by Affected System 
Interconnection Customer(s). Defaulting-Affected System Interconnection 
Customer(s) shall be responsible for any additional expenses incurred 
by Transmission Provider associated with the construction and 
installation of the Affected System Network Upgrade(s) (as set forth in 
Article 2.2.3) upon the occurrence of a Default pursuant to Article 5. 
Any form of suspension by Transmission Provider shall not be barred by 
Articles 2.2.2, 2.2.3, or 5.2.2, nor shall it affect Transmission 
Provider's right to terminate the work or this Agreement pursuant to 
Article 6.]
    3.1.3 Construction Status. Transmission Provider shall keep 
Affected System Interconnection Customers advised periodically as to 
the progress of its design, procurement, and construction efforts, as 
described in Appendix A. An Affected System Interconnection Customer 
may, at any time and reasonably, request a progress report from 
Transmission Provider. If, at any time, an Affected System 
Interconnection Customer determines that the completion of the Affected 
System Network Upgrade(s) will not be required until after the 
specified in-service date, such Affected System Interconnection 
Customer will provide written notice to all other Parties of such later 
date for which the completion of the Affected System Network Upgrade(s) 
would be required. Transmission Provider may delay the in-service date 
of the Affected System Network Upgrade(s) accordingly, but only if 
agreed to by all other Affected System Interconnection Customers.
    3.1.4 Timely Completion. Transmission Provider shall use Reasonable 
Efforts to design, procure, construct, install, and test the Affected 
System Network Upgrade(s) in accordance with the schedule set forth in 
Appendix A, which schedule may be revised from time to time by mutual 
agreement of the Parties. If any event occurs that will affect the time 
or ability to complete the Affected System Network Upgrade(s), 
Transmission Provider shall promptly notify all other Parties. In such 
circumstances, Transmission Provider shall, within fifteen (15) 
Calendar Days of such notice, convene a meeting with Affected System 
Interconnection Customers to evaluate the alternatives available to 
Affected System Interconnection Customers. Transmission Provider shall 
also make available to Affected System Interconnection Customers all 
studies and work papers related to the event and corresponding delay, 
including all information that is in the possession of transmission 
Provider that is reasonably needed by Affected System Interconnection 
Customers to evaluate alternatives, subject to confidentiality 
arrangements consistent with Article 8. Transmission Provider shall, at 
any Affected System Interconnection Customer's request and expense, use 
Reasonable Efforts to accelerate its work under this Agreement to meet 
the schedule set forth in Appendix A, provided that (1) Affected System 
Interconnection Customers jointly authorize such actions, such 
authorizations to be withheld, conditioned, or delayed by a given 
Affected System Interconnection Customer only if it can demonstrate 
that the acceleration would have a material adverse effect on it; and 
(2) the requesting Affected System Interconnection Customer(s) funds 
the costs associated therewith in advance, or all Affected System 
Interconnection Customers agree in advance to fund such costs based on 
such other allocation method as they may adopt.
    3.2 Interconnection Costs.
    3.2.1 Costs. Affected System Interconnection Customers shall pay to 
Transmission Provider costs (including taxes and financing costs) 
associated with seeking and obtaining all necessary approvals and of 
designing, engineering, constructing, and testing the Affected System 
Network Upgrade(s), as identified in Appendix A, in accordance with the 
cost recovery method provided herein. Except as expressly otherwise 
agreed, Affected System Interconnection Customers shall be collectively 
responsible for these costs, based on their proportionate share of cost 
responsibility, as provided in Appendix A. Unless Transmission Provider 
elects to fund the Affected System Network Upgrade(s), they shall be 
initially funded by the applicable Affected System Interconnection 
Customer.
    3.2.1.1 Lands of Other Property Owners. If any part of the Affected 
System Network Upgrade(s) is to be installed on property owned by 
persons other than Affected System Interconnection Customers or 
Transmission Provider, Transmission Provider shall, at Affected System 
Interconnection Customers' expense, use efforts similar in nature and 
extent to those that it typically undertakes on its own behalf or on 
behalf of its Affiliates, including use of its eminent domain authority 
to the extent permitted and consistent with Applicable Laws and 
Regulations and, to the extent consistent with such Applicable Laws and 
Regulations, to procure from such persons any rights of use, licenses, 
rights-of-way, and easements that are necessary to construct, operate, 
maintain, test, inspect, replace, or remove the Affected System Network 
Upgrade(s) upon such property.
    3.2.2 Repayment.
    3.2.2.1 Repayment. Consistent with articles 11.4.1 and 11.4.2 of 
[the] Transmission Provider's pro forma LGIA, each Affected System 
Interconnection Customer shall be entitled to a cash repayment by 
Transmission Provider of the amount each Affected System 
Interconnection Customer paid to Transmission Provider, if any, for the 
Affected System Network Upgrade(s), including any tax gross-up or other 
tax-related payments associated with the Affected System Network 
Upgrade(s), and not refunded to Affected System Interconnection 
Customer pursuant to Article 3.3.1 or otherwise. The Parties may 
mutually agree to a repayment schedule, to be outlined in Appendix A, 
not to exceed twenty (20) years from the commercial operation date, for 
the complete repayment for all applicable costs associated with the 
Affected System Network Upgrade(s). Any repayment shall include 
interest calculated in accordance with the methodology set forth in 
FERC's regulations at 18 CFR 35.19 a(a)(2)(iii) from the date of any 
payment for Affected System Network Upgrade(s) through the date on 
which Affected System Interconnection Customers receive a repayment of 
such payment pursuant to this subparagraph. Interest shall not accrue 
during periods in which Affected System Interconnection Customers have 
suspended construction pursuant to Article 3.1.2.1. Affected System 
Interconnection Customers may assign such repayment rights to any 
person.
    3.2.2.2 Impact of Failure to Achieve Commercial Operation. If an 
Affected System Interconnection Customer's generating facility fails to 
achieve commercial operation, but it or another generating facility is 
later constructed and makes use of the Affected System Network 
Upgrade(s), Transmission Provider shall at that time reimburse such 
Affected System Interconnection Customers for the portion of the 
Affected System Network Upgrade(s) it funded. Before any such 
reimbursement can occur, Affected System Interconnection Customer (or 
the entity that ultimately constructs the generating facility, if 
different), is responsible for identifying the entity to which the 
reimbursement must be made.
    3.3 Taxes.
    3.3.1 Indemnification for Contributions in Aid of Construction. 
With regard only to

[[Page 27171]]

payments made by Affected System Interconnection Customers to 
Transmission Provider for the installation of the Affected System 
Network Upgrade(s), Transmission Provider shall not include a gross-up 
for income taxes in the amounts it charges Affected System 
Interconnection Customers for the installation of the Affected System 
Network Upgrade(s) unless (1) Transmission Provider has determined, in 
good faith, that the payments or property transfers made by Affected 
System Interconnection Customers to Transmission Provider should be 
reported as income subject to taxation, or (2) any Governmental 
Authority directs Transmission Provider to report payments or property 
as income subject to taxation. Affected System Interconnection 
Customers shall reimburse Transmission Provider for such costs on a 
fully grossed-up basis, in accordance with this Article, within thirty 
(30) Calendar Days of receiving written notification from Transmission 
Provider of the amount due, including detail about how the amount was 
calculated.
    The indemnification obligation shall terminate at the earlier of 
(1) the expiration of the ten (10)-year testing period and the 
applicable statute of limitation, as it may be extended by Transmission 
Provider upon request of the Internal Revenue Service, to keep these 
years open for audit or adjustment, or (2) the occurrence of a 
subsequent taxable event and the payment of any related indemnification 
obligations as contemplated by this Article. Notwithstanding the 
foregoing provisions of this Article 3.3.1, and to the extent permitted 
by law, to the extent that the receipt of such payments by Transmission 
Provider is determined by any Governmental Authority to constitute 
income by Transmission Provider subject to taxation, Affected System 
Interconnection Customers shall protect, indemnify, and hold harmless 
Transmission Provider and its Affiliates, from all claims by any such 
Governmental Authority for any tax, interest, and/or penalties 
associated with such determination. Upon receiving written notification 
of such determination from the Governmental Authority, Transmission 
Provider shall provide Affected System Interconnection Customers with 
written notification within thirty (30) Calendar Days of such 
determination and notification. Transmission Provider, upon the timely 
written request by any one or more Affected System Interconnection 
Customer(s) and at the expense of such Affected System Interconnection 
Customer(s), shall appeal, protest, seek abatement of, or otherwise 
oppose such determination. Transmission Provider reserves the right to 
make all decisions with regard to the prosecution of such appeal, 
protest, abatement or other contest, including the compromise or 
settlement of the claim; provided that Transmission Provider shall 
cooperate and consult in good faith with the requesting Affected System 
Interconnection Customer(s) regarding the conduct of such contest. 
Affected System Interconnection Customer(s) shall not be required to 
pay Transmission Provider for the tax, interest, and/or penalties prior 
to the seventh (7th) Calendar Day before the date on which Transmission 
Provider (1) is required to pay the tax, interest, and/or penalties or 
other amount in lieu thereof pursuant to a compromise or settlement of 
the appeal, protest, abatement, or other contest; (2) is required to 
pay the tax, interest, and/or penalties as the result of a final, non-
appealable order by a Governmental Authority; or (3) is required to pay 
the tax, interest, and/or penalties as a prerequisite to an appeal, 
protest, abatement, or other contest. In the event such appeal, 
protest, abatement, or other contest results in a determination that 
Transmission Provider is not liable for any portion of any tax, 
interest, and/or penalties for which any Affected System 
Interconnection Customer(s) has already made payment to Transmission 
Provider, Transmission Provider shall promptly refund to such Affected 
System Interconnection Customer(s) any payment attributable to the 
amount determined to be non-taxable, plus any interest (calculated in 
accordance with 18 CFR 35.19a(a)(2)(iii)) or other payments 
Transmission Provider receives or to which Transmission Provider may be 
entitled with respect to such payment. Each Affected System 
Interconnection Customer shall provide Transmission Provider with 
credit assurances sufficient to meet each Affected System 
Interconnection Customer's estimated liability for reimbursement of 
Transmission Provider for taxes, interest, and/or penalties under this 
Article 3.3.1. Such estimated liability shall be stated in Appendix A.
    To the extent that Transmission Provider is a limited liability 
company and not a corporation, and has elected to be taxed as a 
partnership, then the following shall apply: Transmission Provider 
represents, and the Parties acknowledge, that Transmission Provider is 
a limited liability company and is treated as a partnership for federal 
income tax purposes. Any payment made by Affected System 
Interconnection Customers to Transmission Provider for Affected System 
Network Upgrade(s) is to be treated as an upfront payment. It is 
anticipated by the Parties that any amounts paid by each Affected 
System Interconnection Customer to Transmission Provider for Affected 
System Network Upgrade(s) will be reimbursed to such Affected System 
Interconnection Customer in accordance with the terms of this 
Agreement, provided such Affected System Interconnection Customer 
fulfills its obligations under this Agreement.
    3.3.2 Private Letter Ruling. At the request and expense of any 
Affected System Interconnection Customer(s), Transmission Provider 
shall file with the Internal Revenue Service a request for a private 
letter ruling as to whether any property transferred or sums paid, or 
to be paid, by such Affected System Interconnection Customer(s) to 
Transmission Provider under this Agreement are subject to federal 
income taxation. Each Affected System Interconnection Customer desiring 
such a request will prepare the initial draft of the request for a 
private letter ruling and will certify under penalties of perjury that 
all facts represented in such request are true and accurate to the best 
of such Affected System Interconnection Customer's knowledge. 
Transmission Provider and such Affected System Interconnection 
Customer(s) shall cooperate in good faith with respect to the 
submission of such request.
    3.3.3 Other Taxes. Upon the timely request by any one or more 
Affected System Interconnection Customer(s), and at such Affected 
System Interconnection Customer(s)' sole expense, Transmission Provider 
shall appeal, protest, seek abatement of, or otherwise contest any tax 
(other than federal or state income tax) asserted or assessed against 
Transmission Provider for which such Affected System Interconnection 
Customer(s) may be required to reimburse Transmission Provider under 
the terms of this Agreement. Affected System Interconnection 
Customer(s) who requested the action shall pay to Transmission Provider 
on a periodic basis, as invoiced by Transmission Provider, Transmission 
Provider's documented reasonable costs of prosecuting such appeal, 
protest, abatement, or other contest. The requesting Affected System 
Interconnection Customer(s) and Transmission Provider shall cooperate 
in good faith with respect to any such contest. Unless the payment of 
such taxes is a prerequisite to an appeal or abatement or cannot be 
deferred, no amount shall be payable by Affected System Interconnection 
Customer(s) to Transmission Provider for such taxes until they are 
assessed by a final, non-appealable order by any court or agency of 
competent jurisdiction. In the event that a tax payment is withheld and 
ultimately due and payable after appeal, Affected System 
Interconnection Customer(s) will be responsible for all taxes, 
interest, and penalties, other than penalties attributable to any delay 
caused by Transmission Provider. Each Party shall cooperate with the 
other Party to maintain each Party's tax status. Nothing in this 
Agreement is intended to adversely affect any Party's tax-exempt status 
with respect to the issuance of bonds including, but not limited to, 
local furnishing bonds, as described in section 142(f) of the Internal 
Revenue Code.

Article 4

Security, Billing, and Payments

    4.1 Provision of Security. By the earlier of (1) thirty (30) 
Calendar Days prior to the due date for each Affected System 
Interconnection Customer's first payment under the payment schedule 
specified in Appendix A, or (2) the first date specified in Appendix A 
for the ordering of equipment by Transmission Provider for installing 
the Affected System Network Upgrade(s), each Affected System 
Interconnection Customer shall provide Transmission Provider, at each 
Affected System Interconnection Customer's option, a guarantee, a 
surety bond, letter of credit, or other form of security that is 
reasonably acceptable to Transmission Provider. Such 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 Upgrade(s) and shall be reduced on a dollar-
for-dollar basis for payments made to Transmission Provider for these 
purposes.
    The guarantee must be made by an entity that meets the 
creditworthiness requirements of Transmission Provider and contain 
terms and conditions that guarantee payment of

[[Page 27172]]

any amount that may be due from such Affected System Interconnection 
Customer, up to an agreed-to maximum amount. The letter of credit must 
be issued by a financial institution reasonably acceptable to 
Transmission Provider and must specify a reasonable expiration date. 
The surety bond must be issued by an insurer reasonably acceptable to 
Transmission Provider and must specify a reasonable expiration date.
    4.2 Invoice. Each Party shall submit to the other Parties, on a 
monthly basis, invoices of amounts due, if any, for the preceding 
month. Each invoice shall state the month to which the invoice applies 
and fully describe the services and equipment provided. The Parties may 
discharge mutual debts and payment obligations due and owing to each 
other on the same date through netting, in which case all amounts a 
Party owes to another Party under this Agreement, including interest 
payments, shall be netted so that only the net amount remaining due 
shall be paid by the owing Party.
    4.3 Payment. Invoices shall be rendered to the paying Party at the 
address specified by the Parties. The Party receiving the invoice shall 
pay the invoice within thirty (30) Calendar Days of receipt. All 
payments shall be made in immediately available funds payable to the 
other Party, or by wire transfer to a bank named and account designated 
by the invoicing Party. Payment of invoices by a Party will not 
constitute a waiver of any rights or claims that Party may have under 
this Agreement.
    4.4 Final Invoice. Within six (6) months after completion of the 
construction of the Affected System Network Upgrade(s) Transmission 
Provider shall provide an invoice of the final cost of the construction 
of the Affected System Network Upgrade(s) and shall set forth such 
costs in sufficient detail to enable each Affected System 
Interconnection Customer to compare the actual costs with the estimates 
and to ascertain deviations, if any, from the cost estimates. 
Transmission Provider shall refund, with interest (calculated in 
accordance with 18 CFR 35.19a(a)(2)(iii)), to each Affected System 
Interconnection Customer any amount by which the actual payment by 
Affected System Interconnection Customer for estimated costs exceeds 
the actual costs of construction within thirty (30) Calendar Days of 
the issuance of such final construction invoice.
    4.5 Interest. Interest on any unpaid amounts shall be calculated in 
accordance with 18 CFR 35.19a(a)(2)(iii).
    4.6 Payment During Dispute. In the event of a billing dispute among 
the Parties, Transmission Provider shall continue to construct the 
Affected System Network Upgrade(s) under this Agreement as long as each 
Affected System Interconnection Customer: (1) continues to make all 
payments not in dispute; and (2) pays to Transmission Provider or into 
an independent escrow account the portion of the invoice in dispute, 
pending resolution of such dispute. If any Affected System 
Interconnection Customer fails to meet these two requirements, then 
Transmission Provider may provide notice to such Affected System 
Interconnection Customer of a Default pursuant to Article 5. Within 
thirty (30) Calendar Days after the resolution of the dispute, the 
Party that owes money to another Party shall pay the amount due with 
interest calculated in accordance with the methodology set forth in 18 
CFR 35.19a(a)(2)(iii).

Article 5

Breach, Cure, and Default

    5.1 Events of Breach. A Breach of this Agreement shall include the:
    (a) Failure to pay any amount when due;
    (b) Failure to comply with any material term or condition of this 
Agreement, including but not limited to any material Breach of a 
representation, warranty, or covenant made in this Agreement;
    (c) Failure of a Party to provide such access rights, or a Party's 
attempt to revoke access or terminate such access rights, as provided 
under this Agreement; or
    (d) Failure of a Party to provide information or data to another 
Party as required under this Agreement, provided the Party entitled to 
the information or data under this Agreement requires such information 
or data to satisfy its obligations under this Agreement.
    5.2 Definition. Breaching Party shall mean the Party that is in 
Breach.
    5.3 Notice of Breach, Cure, and Default. Upon the occurrence of an 
event of Breach, any Party aggrieved by the Breach, when it becomes 
aware of the Breach, shall give written notice of the Breach to the 
Breaching Party and to any other person representing a Party to this 
Agreement identified in writing to the other Party in advance. Such 
notice shall set forth, in reasonable detail, the nature of the Breach, 
and where known and applicable, the steps necessary to cure such 
Breach.
    5.2.1 Upon receiving written notice of the Breach hereunder, the 
Breaching Party shall have a period to cure such Breach (hereinafter 
referred to as the ``Cure Period'') which shall be sixty (60) Calendar 
Days. If an Affected System Interconnection Customer is the Breaching 
Party and the Breach results from a failure to provide payments or 
security under Article 4.1 of this Agreement, the other Affected System 
Interconnection Customers, either individually or in concert, may cure 
the Breach by paying the amounts owed or by providing adequate 
security, without waiver of contribution rights against the breaching 
Affected System Interconnection Customer. Such cure for the Breach of 
an Affected System Interconnection Customer is subject to the 
reasonable consent of Transmission Provider. Transmission Provider may 
also cure such Breach by funding the proportionate share of the 
Affected System Network Upgrade costs related to the Breach of Affected 
System Interconnection Customer. Transmission Provider must notify all 
Parties that it will exercise this option within thirty (30) Calendar 
Days of notification that an Affected System Interconnection Customer 
has failed to provide payments or security under Article 4.1.
    5.2.2 In the event the Breach is not cured within the Cure Period, 
the Breaching Party will be in Default of this Agreement, and the non-
Defaulting Parties may (1) act in concert to amend the Agreement to 
remove an Affected System Interconnection Customer that is in Default 
from this Agreement for cause and to make other changes as necessary, 
or (2) either in concert or individually take whatever action at law or 
in equity as may appear necessary or desirable to enforce the 
performance or observance of any rights, remedies, obligations, 
agreement, or covenants under this Agreement.
    5.3 Rights in the Event of Default. Notwithstanding the foregoing, 
upon the occurrence of Default, the non-Defaulting Parties shall be 
entitled to exercise all rights and remedies it may have in equity or 
at law.

Article 6

Termination of Agreement

    6.1 Expiration of Term. Except as otherwise specified in this 
Article 6, the Parties' obligations under this Agreement shall 
terminate at the conclusion of the term of this Agreement.
    6.2 Termination and Removal. Subject to the limitations set forth 
in Article 6.3, in the event of a Default, termination of this 
Agreement, as to a given Affected System Interconnection Customer or in 
its entirety, shall require a filing at FERC of a notice of 
termination, which filing must be accepted for filing by FERC.
    6.3 Disposition of Facilities Upon Termination of Agreement.
    6.3.1 Transmission Provider Obligations. Upon termination of this 
Agreement, unless otherwise agreed to by the Parties in writing, 
Transmission Provider:
    (a) shall, prior to the construction and installation of any 
portion of the Affected System Network Upgrade(s) and to the extent 
possible, cancel any pending orders of, or return, such equipment or 
material for such Affected System Network Upgrade(s);
    (b) may keep in place any portion of the Affected System Network 
Upgrade(s) already constructed and installed; and,
    (c) shall perform such work as may be necessary to ensure the 
safety of persons and property and to preserve the integrity of 
Transmission Provider's Transmission System (e.g., construction 
demobilization to return the system to its original state, wind-up 
work).
    6.3.2 Affected System Interconnection Customer Obligations. Upon 
billing by Transmission Provider, each Affected System Interconnection 
Customer shall reimburse Transmission Provider for its share of any 
costs incurred by Transmission Provider in performance of the actions 
required or permitted by Article 6.3.1 and for its share of the cost of 
any Affected System Network Upgrade(s) described in Appendix A. 
Transmission Provider shall use Reasonable Efforts to minimize costs 
and shall offset the amounts owed by any salvage value of facilities, 
if applicable. Each Affected System Interconnection Customer shall pay 
these costs pursuant to Article 4.3 of this Agreement.
    6.3.3 Pre-construction or Installation. Upon termination of this 
Agreement and prior to the construction and installation of any portion 
of the Affected System Network Upgrade(s), Transmission Provider may, 
at its

[[Page 27173]]

option, retain any portion of such Affected System Network Upgrade(s) 
not cancelled or returned in accordance with Article 6.3.1(a), in which 
case Transmission Provider shall be responsible for all costs 
associated with procuring such Affected System Network Upgrade(s). To 
the extent that an Affected System Interconnection Customer has already 
paid Transmission Provider for any or all of such costs, Transmission 
Provider shall refund Affected System Interconnection Customer for 
those payments. If Transmission Provider elects to not retain any 
portion of such facilities, and one or more of Affected System 
Interconnection Customers wish to purchase such facilities, 
Transmission Provider shall convey and make available to the applicable 
Affected System Interconnection Customer(s) such facilities as soon as 
practicable after Affected System Interconnection Customer(s)' payment 
for such facilities.
    6.4 Survival of Rights. Termination or expiration of this Agreement 
shall not relieve any Party of any of its liabilities and obligations 
arising hereunder prior to the date termination becomes effective, and 
each Party may take whatever judicial or administrative actions as 
appear necessary or desirable to enforce its rights hereunder. The 
applicable provisions of this Agreement will continue in effect after 
expiration, or early termination hereof, to the extent necessary to 
provide for (1) final billings, billing adjustments, and other billing 
procedures set forth in this Agreement; (2) the determination and 
enforcement of liability and indemnification obligations arising from 
acts or events that occurred while this Agreement was in effect; and 
(3) the confidentiality provisions set forth in Article 8.

Article 7

Subcontractors

    7.1 Subcontractors. Nothing in this Agreement shall prevent a Party 
from utilizing the services of subcontractors, as it deems appropriate, 
to perform its obligations under this Agreement; provided, however, 
that each Party shall require its subcontractors to comply with all 
applicable terms and conditions of this Agreement in providing such 
services, and each Party shall remain primarily liable to the other 
Parties for the performance of such subcontractor.
    7.1.1 Responsibility of Principal. The creation of any subcontract 
relationship shall not relieve the hiring Party of any of its 
obligations under this Agreement. In accordance with the provisions of 
this Agreement, each Party shall be fully responsible to the other 
Parties for the acts or omissions of any subcontractor it hires as if 
no subcontract had been made. Any applicable obligation imposed by this 
Agreement upon a Party shall be equally binding upon, and shall be 
construed as having application to, any subcontractor of such Party.
    7.1.2 No Third-Party Beneficiary. Except as may be specifically set 
forth to the contrary herein, no subcontractor or any other party is 
intended to be, nor will it be deemed to be, a third-party beneficiary 
of this Agreement.
    7.1.3 No Limitation by Insurance. The obligations under this 
Article 7 will not be limited in any way by any limitation of any 
insurance policies or coverages, including any subcontractor's 
insurance.

Article 8

Confidentiality

    8.1 Confidentiality. Confidential Information shall include, 
without limitation, all information relating to a Party's technology, 
research and development, business affairs, and pricing, and any 
information supplied to the other Parties prior to the execution of 
this Agreement.
    Information is Confidential Information only if it is clearly 
designated or marked in writing as confidential on the face of the 
document, or, if the information is conveyed orally or by inspection, 
if the Party providing the information orally informs the Party 
receiving the information that the information is confidential. The 
Parties shall maintain as confidential any information that is provided 
and identified by a Party as Critical Energy Infrastructure Information 
(CEII), as that term is defined in 18 CFR 388.113(c).
    Such confidentiality will be maintained in accordance with this 
Article 8. If requested by the receiving Party, the disclosing Party 
shall provide in writing, the basis for asserting that the information 
referred to in this Article warrants confidential treatment, and the 
requesting Party may disclose such writing to the appropriate 
Governmental Authority. Each Party shall be responsible for the costs 
associated with affording confidential treatment to its information.
    8.1.1 Term. During the term of this Agreement, and for a period of 
three (3) years after the expiration or termination of this Agreement, 
except as otherwise provided in this Article 8 or with regard to CEII, 
each Party shall hold in confidence and shall not disclose to any 
person Confidential Information. CEII shall be treated in accordance 
with FERC policies and regulations.
    8.1.2 Scope. Confidential Information shall not include information 
that the receiving Party can demonstrate: (1) is generally available to 
the public other than as a result of a disclosure by the receiving 
Party; (2) was in the lawful possession of the receiving Party on a 
non-confidential basis before receiving it from the disclosing Party; 
(3) was supplied to the receiving Party without restriction by a non-
Party, who, to the knowledge of the receiving Party after due inquiry, 
was under no obligation to the disclosing Party to keep such 
information confidential; (4) was independently developed by the 
receiving Party without reference to Confidential Information of the 
disclosing Party; (5) is, or becomes, publicly known, through no 
wrongful act or omission of the receiving Party or Breach of this 
Agreement; or (6) is required, in accordance with Article 8.1.6 of this 
Agreement, to be disclosed by any Governmental Authority or is 
otherwise required to be disclosed by law or subpoena, or is necessary 
in any legal proceeding establishing rights and obligations under this 
Agreement. Information designated as Confidential Information will no 
longer be deemed confidential if the Party that designated the 
information as confidential notifies the receiving Party that it no 
longer is confidential.
    8.1.3 Release of Confidential Information. No Party shall release 
or disclose Confidential Information to any other person, except to its 
Affiliates (limited by the Standards of Conduct requirements), 
subcontractors, employees, agents, consultants, or to non-Parties that 
may be or are considering providing financing to or equity 
participation with Affected System Interconnection Customer(s), or to 
potential purchasers or assignees of Affected System Interconnection 
Customer(s), on a need-to-know basis in connection with this Agreement, 
unless such person has first been advised of the confidentiality 
provisions of this Article 8 and has agreed to comply with such 
provisions. Notwithstanding the foregoing, a Party providing 
Confidential Information to any person shall remain primarily 
responsible for any release of Confidential Information in 
contravention of this Article 8.
    8.1.4 Rights. Each Party shall retain all rights, title, and 
interest in the Confidential Information that it discloses to the 
receiving Party. The disclosure by a Party to the receiving Party of 
Confidential Information shall not be deemed a waiver by the disclosing 
Party or any other person or entity of the right to protect the 
Confidential Information from public disclosure.
    8.1.5 Standard of Care. Each Party shall use at least the same 
standard of care to protect Confidential Information it receives as it 
uses to protect its own Confidential Information from unauthorized 
disclosure, publication, or dissemination. Each Party may use 
Confidential Information solely to fulfill its obligations to the other 
Party under this Agreement or its regulatory requirements.
    8.1.6 Order of Disclosure. If a court or a Government Authority or 
entity with the right, power, and apparent authority to do so requests 
or requires any Party, by subpoena, oral deposition, interrogatories, 
requests for production of documents, administrative order, or 
otherwise, to disclose Confidential Information, that Party shall 
provide the disclosing Party with prompt notice of such request(s) or 
requirement(s) so that the disclosing Party may seek an appropriate 
protective order or waive compliance with the terms of this Agreement. 
Notwithstanding the absence of a protective order or waiver, the Party 
may disclose such Confidential Information which, in the opinion of its 
counsel, the Party is legally compelled to disclose. Each Party will 
use Reasonable Efforts to obtain reliable assurance that confidential 
treatment will be accorded any Confidential Information so furnished.
    8.1.7 Termination of Agreement. Upon termination of this Agreement 
for any reason, each Party shall, within ten (10) Business Days of 
receipt of a written request from the other Party, use Reasonable 
Efforts to destroy, erase, or delete (with such destruction, erasure, 
and deletion certified in writing to the requesting Party) or return to 
the requesting Party any and all written or electronic Confidential 
Information received from the requesting Party, except that each

[[Page 27174]]

Party may keep one copy for archival purposes, provided that the 
obligation to treat it as Confidential Information in accordance with 
this Article 8 shall survive such termination.
    8.1.8 Remedies. The Parties agree that monetary damages would be 
inadequate to compensate a Party for another Party's Breach of its 
obligations under this Article 8. Each Party accordingly agrees that 
the disclosing Party shall be entitled to equitable relief, by way of 
injunction or otherwise, if the receiving Party Breaches or threatens 
to Breach its obligations under this Article 8, which equitable relief 
shall be granted without bond or proof of damages, and the Breaching 
Party shall not plead in defense that there would be an adequate remedy 
at law. Such remedy shall not be deemed an exclusive remedy for the 
Breach of this Article 8, but it shall be in addition to all other 
remedies available at law or in equity. The Parties further acknowledge 
and agree that the covenants contained herein are necessary for the 
protection of legitimate business interests and are reasonable in 
scope. No Party, however, shall be liable for indirect, incidental, or 
consequential or punitive damages of any nature or kind resulting from 
or arising in connection with this Article 8.
    8.1.9 Disclosure to FERC, its Staff, or a State Regulatory Body. 
Notwithstanding anything in this Article 8 to the contrary, and 
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of an 
investigation or otherwise, requests information from a Party that is 
otherwise required to be maintained in confidence pursuant to this 
Agreement, the Party shall provide the requested information to FERC or 
its staff, within the time provided for in the request for information. 
In providing the information to FERC or its staff, the Party must, 
consistent with 18 CFR 388.112, request that the information be treated 
as confidential and non-public by FERC and its staff and that the 
information be withheld from public disclosure. Parties are prohibited 
from notifying the other Parties to this Agreement prior to the release 
of the Confidential Information to FERC or its staff. The Party shall 
notify the other Parties to the Agreement when it is notified by FERC 
or its staff that a request to release Confidential Information has 
been received by FERC, at which time either of the Parties may respond 
before such information would be made public, pursuant to 18 CFR 
388.112. Requests from a state regulatory body conducting a 
confidential investigation shall be treated in a similar manner if 
consistent with the applicable state rules and regulations.
    8.1.10 Subject to the exception in Article 8.1.9, any information 
that a disclosing Party claims is competitively sensitive, commercial, 
or financial information under this Agreement shall not be disclosed by 
the receiving Party to any person not employed or retained by the 
receiving Party, except to the extent disclosure is (1) required by 
law; (2) reasonably deemed by the disclosing Party to be required to be 
disclosed in connection with a dispute between or among the Parties, or 
the defense of litigation or dispute; (3) otherwise permitted by 
consent of the disclosing Party, such consent not to be unreasonably 
withheld; or (4) necessary to fulfill its obligations under this 
Agreement or as Transmission Provider or a balancing authority, 
including disclosing the Confidential Information to a regional or 
national reliability organization. The Party asserting confidentiality 
shall notify the receiving Party in writing of the information that 
Party claims is confidential. Prior to any disclosures of that Party's 
Confidential Information under this subparagraph, or if any non-Party 
or Governmental Authority makes any request or demand for any of the 
information described in this subparagraph, the Party that received the 
Confidential Information from the disclosing Party agrees to promptly 
notify the disclosing Party in writing and agrees to assert 
confidentiality and cooperate with the disclosing Party in seeking to 
protect the Confidential Information from public disclosure by 
confidentiality agreement, protective order, or other reasonable 
measures.

Article 9

Information Access and Audit Rights

    9.1 Information Access. Each Party shall make available to the 
other Parties information necessary to verify the costs incurred by the 
other Parties for which the requesting Party is responsible under this 
Agreement and carry out obligations and responsibilities under this 
Agreement, provided that the Parties shall not use such information for 
purposes other than those set forth in this Article 9.1 and to enforce 
their rights under this Agreement.
    9.2 Audit Rights. Subject to the requirements of confidentiality 
under Article 8 of this Agreement, the accounts and records related to 
the design, engineering, procurement, and construction of the Affected 
System Network Upgrade(s) shall be subject to audit during the period 
of this Agreement and for a period of twenty-four (24) months following 
Transmission Provider's issuance of a final invoice in accordance with 
Article 4.4. Affected System Interconnection Customers may, jointly or 
individually, at the expense of the requesting Party(ies), during 
normal business hours, and upon prior reasonable notice to Transmission 
Provider, audit such accounts and records. Any audit authorized by this 
Article 9.2 shall be performed at the offices where such accounts and 
records are maintained and shall be limited to those portions of such 
accounts and records that relate to obligations under this Agreement.

Article 10

Notices

    10.1 General. Any notice, demand, or request required or permitted 
to be given by a Party to the other Parties, and any instrument 
required or permitted to be tendered or delivered by a Party in writing 
to another Party, may be so given, tendered, or delivered, as the case 
may be, by depositing the same with the United States Postal Service 
with postage prepaid, for transmission by certified or registered mail, 
addressed to the Parties, or personally delivered to the Parties, at 
the address set out below:

To Transmission Provider:
To Affected System Interconnection Customers:

    10.2 Billings and Payments. Billings and payments shall be sent to 
the addresses shown in Article 10.1 unless otherwise agreed to by the 
Parties.
    10.3 Alternative Forms of Notice. Any notice or request required or 
permitted to be given by a Party to the other Parties and not required 
by this Agreement to be given in writing may be so given by telephone, 
facsimile, or email to the telephone numbers and email addresses set 
out below:

To Transmission Provider:
To Affected System Interconnection Customers:

    10.4 Execution and Filing. Affected System Interconnection 
Customers shall either: (i) execute two originals of this tendered 
Agreement and return them to Transmission Provider; or (ii) request in 
writing that Transmission Provider file with FERC this Agreement in 
unexecuted form. As soon as practicable, but not later than ten (10) 
Business Days after receiving either the two executed originals of this 
tendered Agreement (if it does not conform with a FERC-approved 
standard form of this Agreement) or the request to file this Agreement 
unexecuted, Transmission Provider shall file this Agreement with FERC, 
together with its explanation of any matters as to which Affected 
System Interconnection Customers and Transmission Provider disagree and 
support for the costs that Transmission Provider proposes to charge to 
Affected System Interconnection Customers under this Agreement. An 
unexecuted version of this Agreement should contain terms and 
conditions deemed appropriate by Transmission Provider for the Affected 
System Interconnection Customers' generating facilities. If the Parties 
agree to proceed with design, procurement, and construction of 
facilities and upgrades under the agreed-upon terms of the unexecuted 
version of this Agreement, they may proceed pending FERC action.

Article 11

Miscellaneous

    11.1 This Agreement shall include standard miscellaneous terms 
including, but not limited to, indemnities, representations, 
disclaimers, warranties, governing law, amendment, execution, waiver, 
enforceability, and assignment, which reflect best practices in the 
electric industry, that are consistent with regional practices, 
Applicable Laws and Regulations, and the organizational nature of each 
Party. All of these provisions, to the extent practicable, shall be 
consistent with the provisions of this LGIP.

{Signature Page to Follow{time} 

    In witness whereof, the Parties have executed this Agreement in 
multiple originals, each of which shall constitute and be an original 
Agreement among the Parties.

Transmission Provider
{Transmission Provider{time} 

By:--------------------------------------------------------------------
Name:------------------------------------------------------------------

[[Page 27175]]

Title:-----------------------------------------------------------------

Affected System Interconnection Customer
{Affected System Interconnection Customer{time} 

By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

Project No.------------------------------------------------------------

Affected System Interconnection Customer
{Affected System Interconnection Customer{time} 

By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Project No.------------------------------------------------------------

Attachment A to Appendix 12

Multiparty Affected System Facilities Construction Agreement

Affected System Network Upgrade(s), Cost Estimates and Responsibility, 
Construction Schedule, and Monthly Payment Schedule

    This Appendix A is a part of the Multiparty Affected System 
Facilities Construction Agreement [between] among Affected System 
Interconnection Customers and Transmission Provider.
    1.1 Affected System Network Upgrade(s) to be installed by 
Transmission Provider.

{description{time} 

    1.2 First Equipment Order (including permitting).

{description{time} 

    1.2.1. Permitting and Land Rights--Transmission Provider Affected 
System Network Upgrade(s)

{description{time} 

    1.3 Construction Schedule. Where applicable, construction of the 
Affected System Network Upgrade(s) is scheduled as follows and will be 
periodically updated as necessary:

                             Table 3--Transmission Provider Construction Activities
----------------------------------------------------------------------------------------------------------------
           Milestone No.                    Description                Start Date                End Date
----------------------------------------------------------------------------------------------------------------
 
 
 
 
 
----------------------------------------------------------------------------------------------------------------


    Note:  Construction schedule assumes that Transmission Provider 
has obtained final authorizations and security from Affected System 
Interconnection Customers and all necessary permits from 
Governmental Authorities as necessary prerequisites to commence 
construction of any of the Affected System Network Upgrade(s).

    1.4 Payment Schedule.
    1.4.1 Timing of and Adjustments to Affected System Interconnection 
Customers' Payments and Security.

{description{time} 

    1.4.2 Monthly Payment Schedule. Affected System Interconnection 
Customers' payment schedule is as follows.

{description{time} 

  Table 4--Affected System Interconnection Customers' Payment/Security
           Obligations for Affected System Network Upgrade(s)
------------------------------------------------------------------------
         Milestone No.                  Description              Date
------------------------------------------------------------------------
 
 
 
 
 
 
 
 
------------------------------------------------------------------------

    * Affected System Interconnection Customers' proportionate 
responsibility for each payment is as follows:


Affected System Interconnection Customer 1 __._%
Affected System Interconnection Customer 2 __._%
Affected System Interconnection Customer N __._%

    Note:  Affected System Interconnection Customers' payment or 
provision of security as provided in this Agreement operates as a 
condition precedent to Transmission Provider's obligations to 
construct any Affected System Network Upgrade(s), and failure to 
meet this schedule will constitute a Breach pursuant to Article 5.1 
of this Agreement.

    1.5 Permits, Licenses, and Authorizations.

{description{time} 

Attachment B to Appendix 12

Multiparty Affected System Facilities Construction Agreement

Notification of Completed Construction

    This Appendix B is a part of the Multiparty Affected System 
Facilities Construction Agreement among Affected System 
Interconnection Customers and Transmission Provider. Where 
applicable, when Transmission Provider has completed construction of 
the Affected System Network Upgrade(s), Transmission Provider shall 
send notice to Affected System Interconnection Customers in 
substantially the form following:

{Date{time} 
{Affected System Interconnection Customers Addresses{time} 
Re: Completion of Affected System Network Upgrade(s)
Dear {Name or Title{time} :

    This letter is sent pursuant to the Multiparty Affected System 
Facilities Construction Agreement among {Transmission 
Provider{time}  and {Affected System Interconnection 
Customers{time} , dated , 20.
    On {Date{time} , Transmission Provider completed to its 
satisfaction all work on the Affected System Network Upgrade(s) 
required to facilitate the safe and reliable interconnection and 
operation of Affected System Interconnection Customer's generating 
facilities. Transmission Provider confirms that the Affected System 
Network Upgrade(s) are in place.
    Thank you.

{Signature{time} 
{Transmission Provider Representative{time} 

Attachment C to Appendix 12

Multiparty Affected System Facilities Construction Agreement

EXHIBITS

    This Appendix C is a part of the Multiparty Affected System 
Facilities Construction Agreement among Affected System 
Interconnection Customers and Transmission Provider.

Exhibit A1--Transmission Provider Site Map

Exhibit A2--Site Plan

Exhibit A3--Affected System Network Upgrade(s) Plan & Profile

Exhibit A4--Estimated Cost of Affected System Network Upgrade(s)

------------------------------------------------------------------------
                                             Facilities to
                                             be constructed  Estimate in
                                  Location  by transmission    dollars
                                                provider
------------------------------------------------------------------------
 
                                                     Total:
------------------------------------------------------------------------

Appendix D: Changes to pro forma LGIA

Appendix 5 to the Standard Large Generator Interconnection Procedures

Standard Large Generator Interconnection Agreement (LGIA)

Table of Contents

Article 1. Definitions
Article 2. Effective Date, Term, and Termination
2.1 Effective Date
2.2 Term of Agreement
2.3 Termination Procedures
2.3.1 Written Notice
2.3.2 Default
2.4 Termination Costs
2.5 Disconnection.
2.6 Survival

[[Page 27176]]

Article 3. Regulatory Filings
3.1 Filing
Article 4. Scope of Service
4.1 Interconnection Product Options
4.1.1 Energy Resource Interconnection Service
4.1.2 Network Resource Interconnection Service
4.2 Provision of Service
4.3 Performance Standards
4.4 No Transmission Delivery Service
4.5 Interconnection Customer Provided Services
Article 5. Interconnection Facilities Engineering, Procurement, and 
Construction
5.1 Options
5.1.1 Standard Option
5.1.2 Alternate Option
5.1.3 Option to Build
5.1.4 Negotiated Option
5.2 General Conditions Applicable to Option To Build
5.3 Liquidated Damages
5.4 Power System Stabilizers
5.5 Equipment Procurement
5.6 Construction Commencement
5.7 Work Progress
5.8 Information Exchange
5.9 Other Interconnection Options
5.9.1 Limited Operation
5.9.2 Provisional Interconnection Service
5.10 Interconnection Customer's Interconnection Facilities (`ICIF')
5.10.1 Interconnection Customer's Interconnection Facility 
Specifications
5.10.2 Transmission Provider's Review
5.10.3 ICIF Construction
5.11 Transmission Provider's Interconnection Facilities Construction
5.12 Access Rights
5.13 Lands of Other Property Owners
5.14 Permits
5.15 Early Construction of Base Case Facilities
5.16 Suspension
5.17 Taxes
5.17.1 Interconnection Customer Payments Not Taxable
5.17.2 Representations and Covenants
5.17.3 Indemnification for the Cost Consequences of Current Tax 
Liability Imposed Upon [the] Transmission Provider
5.17.4 Tax Gross-Up Amount
5.17.5 Private Letter Ruling or Change or Clarification of Law
5.17.6 Subsequent Taxable Events
5.17.7 Contests
5.17.8 Refund
5.17.9 Taxes Other Than Income Taxes
5.17.10 Transmission Owners Who Are Not Transmission Providers
5.18 Tax Status
5.19 Modification
5.19.1 General
5.19.2 Standards
5.19.3 Modification Costs
Article 6. Testing and Inspection
6.1 Pre-Commercial Operation Date Testing and Modifications
6.2 Post-Commercial Operation Date Testing and Modifications
6.3 Right to Observe Testing
6.4 Right to Inspect
Article 7. Metering
7.1 General
7.2 Check Meters
7.3 Standards
7.4 Testing of Metering Equipment
7.5 Metering Data
Article 8. Communications
8.1 Interconnection Customer Obligations
8.2 Remote Terminal Unit
8.3 No Annexation
8.4 Provision of Data from a Variable Energy Resource
Article 9. Operations
9.1 General
9.2 Balancing Authority Area Notification
9.3 Transmission Provider Obligations
9.4 Interconnection Customer Obligations
9.5 Start-Up and Synchronization
9.6 Reactive Power and Primary Frequency Response
9.6.1 Power Factor Design Criteria
9.6.2 Voltage Schedules
9.6.3 Payment for Reactive Power
9.6.4 Primary Frequency Response
9.7 Outages and Interruptions
9.7.1 Outages
9.7.2 Interruption of Service
9.7.3 Ride Through Capability and Performance
9.7.4 System Protection and Other Control Requirements
9.7.5 Requirements for Protection
9.7.6 Power Quality
9.8 Switching and Tagging Rules
9.9 Use of Interconnection Facilities by Third Parties
9.9.1 Purpose of Interconnection Facilities
9.9.2 Third Party Users
9.10 Disturbance Analysis Data Exchange
Article 10. Maintenance
10.1 Transmission Provider Obligations
10.2 Interconnection Customer Obligations
10.3 Coordination
10.4 Secondary Systems
10.5 Operating and Maintenance Expenses
Article 11. Performance Obligation
11.1 Interconnection Customer Interconnection Facilities
11.2 Transmission Provider's Interconnection Facilities
11.3 Network Upgrades and Distribution Upgrades
11.4 Transmission Credits
11.4.1 Repayment of Amounts Advanced for Network Upgrades
11.4.2 Special Provisions for Affected Systems
11.5 Provision of Security
    11.6 Interconnection Customer Compensation
11.6.1 Interconnection Customer Compensation for Actions During 
Emergency Condition
Article 12. Invoice
12.1 General
12.2 Final Invoice
12.3 Payment
12.4 Disputes
Article 13. Emergencies
13.1 Definition
13.2 Obligations
13.3 Notice
13.4 Immediate Action
13.5 Transmission Provider Authority
13.5.1 General
13.5.2 Reduction and Disconnection
13.6 Interconnection Customer Authority
13.7 Limited Liability
Article 14. Regulatory Requirements and Governing Law
14.1 Regulatory Requirements
14.2 Governing Law
Article 15. Notices
15.1 General
15.2 Billings and Payments
15.3 Alternative Forms of Notice
15.4 Operations and Maintenance Notice
Article 16. Force Majeure
16.1 Force Majeure
Article 17. Default
17.1 Default
17.1.1 General
17.1.2 Right to Terminate
17.2 Violation of Operating Assumptions for Generating Facilities
Article 18. Indemnity, Consequential Damages and Insurance
18.1 Indemnity
18.1.1 Indemnified Person
18.1.2 Indemnifying Party
18.1.3 Indemnity Procedures
18.2 Consequential Damages
18.3 Insurance
Article 19. Assignment
19.1 Assignment
Article 20. Severability
20.1 Severability
Article 21. Comparability
21.1 Comparability
Article 22. Confidentiality
22.1 Confidentiality
22.1.1 Term
22.1.2 Scope
22.1.3 Release of Confidential Information
22.1.4 Rights
22.1.5 No Warranties
22.1.6 Standard of Care
22.1.7 Order of Disclosure
22.1.8 Termination of Agreement
22.1.9 Remedies
22.1.10 Disclosure to FERC, its Staff, or a State
Article 23. Environmental Releases
Article 24. Information Requirements
24.1 Information Acquisition
24.2 Information Submission by Transmission Provider
24.3 Updated Information Submission by Interconnection Customer
24.4 Information Supplementation
Article 25. Information Access and Audit Rights
25.1 Information Access
25.2 Reporting of Non-Force Majeure Events
25.3 Audit Rights
25.4 Audit Rights Periods
25.4.1 Audit Rights Period for Construction-Related Accounts and 
Records
25.4.2 Audit Rights Period for All Other Accounts and Records
25.5 Audit Results
Article 26. Subcontractors
26.1 General
26.2 Responsibility of Principal
26.3 No Limitation by Insurance
Article 27. Disputes
27.1 Submission
27.2 External Arbitration Procedures
27.3 Arbitration Decisions
27.4 Costs
Article 28. Representations, Warranties, and Covenants
28.1 General
28.1.1 Good Standing

[[Page 27177]]

28.1.2 Authority
28.1.3 No Conflict
28.1.4 Consent and Approval
Article 29. Joint Operating Committee
29.1 Joint Operating Committee
Article 30. Miscellaneous
30.1 Binding Effect
30.2 Conflicts
30.3 Rules of Interpretation
30.4 Entire Agreement
30.5 No Third Party Beneficiaries
30.6 Waiver
30.7 Headings
30.8 Multiple Counterparts
30.9 Amendment
30.10 Modification by the Parties
30.11 Reservation of Rights
30.12 No Partnership
Appendix A--Interconnection Facilities, Network Upgrades, and 
Distribution Upgrades
Appendix B--Milestones
Appendix C--Interconnection Details
Appendix D--Security Arrangements Details
Appendix E--Commercial Operation Date
Appendix F--Addresses for Delivery of Notices and Billings
Appendix G--Interconnection Requirements for a Wind Generating Plant
Appendix H--Operating Assumptions for Generating Facility

Standard Large Generator Interconnection Agreement

    This Standard Large Generator Interconnection Agreement 
(``Agreement'') is made and entered into this __ day of ____ 20__, 
by and between ________, a ________ organized and existing under the 
laws of the State/Commonwealth of _____ (``Interconnection 
Customer'' with a Large Generating Facility), and ________ , a 
______ organized and existing under the laws of the State/
Commonwealth of _____ (``Transmission Provider and/or Transmission 
Owner''). Interconnection Customer and Transmission Provider each 
may be referred to as a ``Party'' or collectively as the 
``Parties.''

Recitals

    Whereas, Transmission Provider operates the Transmission System; 
and
    Whereas, Interconnection Customer intends to own, lease and/or 
control and operate the Generating Facility identified as a Large 
Generating Facility in Appendix C to this Agreement; and
    Whereas, Interconnection Customer and Transmission Provider have 
agreed to enter into this Agreement for the purpose of 
interconnecting the Large Generating Facility with the Transmission 
System;
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein, it is agreed:
    When used in this Standard Large Generator Interconnection 
Agreement, terms with initial capitalization that are not defined in 
Article 1 shall have the meanings specified in the Article in which 
they are used or the Open Access Transmission Tariff (Tariff).

Article 1. Definitions

    Adverse System Impact shall mean the negative effects due to 
technical or operational limits on conductors or equipment being 
exceeded that may compromise the safety and reliability of the 
electric system.
    Affected System shall mean an electric system other than [the] 
Transmission Provider's Transmission System that may be affected by 
the proposed interconnection.
    Affected System Operator shall mean the entity that operates an 
Affected System.
    Affiliate shall mean, with respect to a corporation, partnership 
or other entity, each such other corporation, partnership or other 
entity that directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under common 
control with, such corporation, partnership or other entity.
    Ancillary Services shall mean those services that are necessary 
to support the transmission of capacity and energy from resources to 
loads while maintaining reliable operation of [the] Transmission 
Provider's Transmission System in accordance with Good Utility 
Practice.
    Applicable Laws and Regulations shall mean all duly promulgated 
applicable federal, state and local laws, regulations, rules, 
ordinances, codes, decrees, judgments, directives, or judicial or 
administrative orders, permits and other duly authorized actions of 
any Governmental Authority.
    Applicable Reliability Standards shall mean the requirements and 
guidelines of the Electric Reliability Organization and the 
Balancing Authority Area of the Transmission System to which the 
Generating Facility is directly interconnected.
    Balancing Authority shall mean an entity that integrates 
resource plans ahead of time, maintains demand and resource balance 
within a Balancing Authority Area, and supports interconnection 
frequency in real time.
    Balancing Authority Area shall mean the collection of 
generation, transmission, and loads within the metered boundaries of 
the Balancing Authority. The Balancing Authority maintains load-
resource balance within this area.
    Base Case shall mean the base case power flow, short circuit, 
and stability data bases used for the Interconnection Studies by 
Transmission Provider or Interconnection Customer.
    Breach shall mean the failure of a Party to perform or observe 
any material term or condition of the Standard Large Generator 
Interconnection Agreement.
    Breaching Party shall mean a Party that is in Breach of the 
Standard Large Generator Interconnection Agreement.
    Business Day shall mean Monday through Friday, excluding Federal 
Holidays.
    Calendar Day shall mean any day including Saturday, Sunday or a 
Federal Holiday.
    Cluster shall mean a group of one or more Interconnection 
Requests that are studied together for the purpose of conducting a 
Cluster Study.
    Cluster Restudy shall mean a restudy of a Cluster Study 
conducted pursuant to Section 7.5 of the LGIP.
    Cluster Study shall mean the evaluation of one or more 
Interconnection Requests within a Cluster as described in Section 7 
of the LGIP.
    Clustering shall mean the process whereby one or more 
Interconnection Requests are studied together, instead of serially, 
as described in Section 7 of the LGIP.
    Commercial Operation shall mean the status of a Generating 
Facility that has commenced generating electricity for sale, 
excluding electricity generated during Trial Operation.
    Commercial Operation Date of a unit shall mean the date on which 
the Generating Facility commences Commercial Operation as agreed to 
by the Parties pursuant to Appendix E to the Standard Large 
Generator Interconnection Agreement.
    Confidential Information shall mean any confidential, 
proprietary or trade secret information of a plan, specification, 
pattern, procedure, design, device, list, concept, policy or 
compilation relating to the present or planned business of a Party, 
which is designated as confidential by the Party supplying the 
information, whether conveyed orally, electronically, in writing, 
through inspection, or otherwise.
    Contingent Facilities shall mean those unbuilt Interconnection 
Facilities and Network Upgrades upon which the Interconnection 
Request's costs, timing, and study findings are dependent, and if 
delayed or not built, could cause a need for restudies of the 
Interconnection Request or a reassessment of the Interconnection 
Facilities and/or Network Upgrades and/or costs and timing.
    Default shall mean the failure of a Breaching Party to cure its 
Breach in accordance with Article 17 of the Standard Large Generator 
Interconnection Agreement.
    Dispute Resolution shall mean the procedure for resolution of a 
dispute between the Parties in which they will first attempt to 
resolve the dispute on an informal basis.
    Distribution System shall mean [the] Transmission Provider's 
facilities and equipment used to transmit electricity to ultimate 
usage points such as homes and industries directly from nearby 
generators or from interchanges with higher voltage transmission 
networks which transport bulk power over longer distances. The 
voltage levels at which distribution systems operate differ among 
areas.
    Distribution Upgrades shall mean the additions, modifications, 
and upgrades to [the] Transmission Provider's Distribution System at 
or beyond the Point of Interconnection to facilitate interconnection 
of the Generating Facility and render the transmission service 
necessary to effect Interconnection Customer's wholesale sale of 
electricity in interstate commerce. Distribution Upgrades do not 
include Interconnection Facilities.
    Effective Date shall mean the date on which the Standard Large 
Generator Interconnection Agreement becomes effective upon execution 
by the Parties subject to acceptance by FERC, or if filed 
unexecuted, upon the date specified by FERC.
    Electric Reliability Organization shall mean the North American 
Electric Reliability Corporation (NERC) or its successor 
organization.

[[Page 27178]]

    Emergency Condition shall mean a condition or situation: (1) 
that in the judgment of the Party making the claim is imminently 
likely to endanger life or property; or (2) that, in the case of a 
Transmission Provider, is imminently likely (as determined in a non-
discriminatory manner) to cause a material adverse effect on the 
security of, or damage to Transmission Provider's Transmission 
System, Transmission Provider's Interconnection Facilities or the 
electric systems of others to which [the] Transmission Provider's 
Transmission System is directly connected; or (3) that, in the case 
of Interconnection Customer, is imminently likely (as determined in 
a non-discriminatory manner) to cause a material adverse effect on 
the security of, or damage to, the Generating Facility or 
Interconnection Customer's Interconnection Facilities. System 
restoration and black start shall be considered Emergency 
Conditions; provided, that Interconnection Customer is not obligated 
by the Standard Large Generator Interconnection Agreement to possess 
black start capability.
    Energy Resource Interconnection Service shall mean an 
Interconnection Service that allows [the] Interconnection Customer 
to connect its Generating Facility to [the] Transmission Provider's 
Transmission System to be eligible to deliver the Generating 
Facility's electric output using the existing firm or nonfirm 
capacity of [the] Transmission Provider's Transmission System on an 
as available basis. Energy Resource Interconnection Service in and 
of itself does not convey transmission service.
    Engineering & Procurement (E&P) Agreement shall mean an 
agreement that authorizes [the] Transmission Provider to begin 
engineering and procurement of long lead-time items necessary for 
the establishment of the interconnection in order to advance the 
implementation of the Interconnection Request.
    Environmental Law shall mean Applicable Laws or Regulations 
relating to pollution or protection of the environment or natural 
resources.
    Federal Power Act shall mean the Federal Power Act, as amended, 
16 U.S.C. Sec. Sec.  791a et seq.
    FERC shall mean the Federal Energy Regulatory Commission 
(Commission) or its successor.
    Force Majeure shall mean any act of God, labor disturbance, act 
of the public enemy, war, insurrection, riot, fire, storm or flood, 
explosion, breakage or accident to machinery or equipment, any 
order, regulation or restriction imposed by governmental, military 
or lawfully established civilian authorities, or any other cause 
beyond a Party's control. A Force Majeure event does not include 
acts of negligence or intentional wrongdoing by the Party claiming 
Force Majeure.
    Generating Facility shall mean Interconnection Customer's 
devices for the production and/or storage for later injection of 
electricity identified in the Interconnection Request, but shall not 
include Interconnection Customer's Interconnection Facilities.
    Generating Facility Capacity shall mean the net capacity of the 
Generating Facility or the aggregate net capacity of the Generating 
Facility where it includes more than one device for the production 
and/or storage for later injection of electricity.
    Good Utility Practice shall mean any of the practices, methods 
and acts engaged in or approved by a significant portion of the 
electric industry during the relevant time period, or any of the 
practices, methods and acts which, in the exercise of reasonable 
judgment in light of the facts known at the time the decision was 
made, could have been expected to accomplish the desired result at a 
reasonable cost consistent with good business practices, 
reliability, safety and expedition. Good Utility Practice is not 
intended to be limited to the optimum practice, method, or act to 
the exclusion of all others, but rather to be acceptable practices, 
methods, or acts generally accepted in the region.
    Governmental Authority shall mean any federal, state, local or 
other governmental regulatory or administrative agency, court, 
commission, department, board, or other governmental subdivision, 
legislature, rulemaking board, tribunal, or other governmental 
authority having jurisdiction over the Parties, their respective 
facilities, or the respective services they provide, and exercising 
or entitled to exercise any administrative, executive, police, or 
taxing authority or power; provided, however, that such term does 
not include Interconnection Customer, Transmission Provider, or any 
Affiliate thereof.
    Hazardous Substances shall mean any chemicals, materials or 
substances defined as or included in the definition of ``hazardous 
substances,'' ``hazardous wastes,'' ``hazardous materials,'' 
``hazardous constituents,'' ``restricted hazardous materials,'' 
``extremely hazardous substances,'' ``toxic substances,'' 
``radioactive substances,'' ``contaminants,'' ``pollutants,'' 
``toxic pollutants'' or words of similar meaning and regulatory 
effect under any applicable Environmental Law, or any other 
chemical, material or substance, exposure to which is prohibited, 
limited or regulated by any applicable Environmental Law.
    Initial Synchronization Date shall mean the date upon which the 
Generating Facility is initially synchronized and upon which Trial 
Operation begins.
    In-Service Date shall mean the date upon which [the] 
Interconnection Customer reasonably expects it will be ready to 
begin use of [the] Transmission Provider's Interconnection 
Facilities to obtain back feed power.
    Interconnection Customer shall mean any entity, including [the] 
Transmission Provider, Transmission Owner or any of the Affiliates 
or subsidiaries of either, that proposes to interconnect its 
Generating Facility with [the] Transmission Provider's Transmission 
System.
    Interconnection Customer's Interconnection Facilities shall mean 
all facilities and equipment, as identified in Appendix A of the 
Standard Large Generator Interconnection Agreement, that are located 
between the Generating Facility and the Point of Change of 
Ownership, including any modification, addition, or upgrades to such 
facilities and equipment necessary to physically and electrically 
interconnect the Generating Facility to [the] Transmission 
Provider's Transmission System. Interconnection Customer's 
Interconnection Facilities are sole use facilities.
    Interconnection Facilities shall mean Transmission Provider's 
Interconnection Facilities and Interconnection Customer's 
Interconnection Facilities. Collectively, Interconnection Facilities 
include all facilities and equipment between the Generating Facility 
and the Point of Interconnection, including any modification, 
additions or upgrades that are necessary to physically and 
electrically interconnect the Generating Facility to Transmission 
Provider's Transmission System. Interconnection Facilities are sole 
use facilities and shall not include Distribution Upgrades, Stand 
Alone Network Upgrades or Network Upgrades.
    Interconnection Facilities Study shall mean a study conducted by 
Transmission Provider or a third party consultant for 
Interconnection Customer to determine a list of facilities 
(including Transmission Provider's Interconnection Facilities and 
Network Upgrades as identified in the Cluster Study), the cost of 
those facilities, and the time required to interconnect the 
Generating Facility with Transmission Provider's Transmission 
System. The scope of the study is defined in Section 8 of the LGIP.
    Interconnection Facilities Study Agreement shall mean the form 
of agreement contained in Appendix 3 of the Standard Large Generator 
Interconnection Procedures for conducting the Interconnection 
Facilities Study.
    Interconnection Request shall mean an Interconnection Customer's 
request, in the form of Appendix 1 to the LGIP, in accordance with 
the Tariff, to interconnect a new Generating Facility, or to 
increase the capacity of, or make a Material Modification to the 
operating characteristics of, an existing Generating Facility that 
is interconnected with [the] Transmission Provider's Transmission 
System.
    Interconnection Service shall mean the service provided by [the] 
Transmission Provider associated with interconnecting [the] 
Interconnection Customer's Generating Facility to [the] Transmission 
Provider's Transmission System and enabling it to receive electric 
energy and capacity from the Generating Facility at the Point of 
Interconnection, pursuant to the terms of the Standard Large 
Generator Interconnection Agreement and, if applicable, [the] 
Transmission Provider's Tariff.
    Interconnection Study shall mean any of the following studies: 
the Cluster Study, the Cluster Restudy, the Surplus Interconnection 
Service [System Impact] Study, [and] the Interconnection Facilities 
Study, the Affected System Study, Optional Interconnection Study, 
and Material Modification assessment, described in the LGIP.
    IRS shall mean the Internal Revenue Service.
    Joint Operating Committee shall be a group made up of 
representatives from Interconnection Customers and [the]

[[Page 27179]]

Transmission Provider to coordinate operating and technical 
considerations of Interconnection Service.
    Large Generating Facility shall mean a Generating Facility 
having a Generating Facility Capacity of more than 20 MW.
    LGIA Deposit shall mean the deposit Interconnection Customer 
submits when returning the executed LGIA, or within ten (10) 
Business Days of requesting that the LGIA be filed unexecuted at the 
Commission, in accordance with Section 11.3 of the LGIP.
    Loss shall mean any and all losses relating to injury to or 
death of any person or damage to property, demand, suits, 
recoveries, costs and expenses, court costs, attorney fees, and all 
other obligations by or to third parties, arising out of or 
resulting from the other Party's performance, or non-performance of 
its obligations under the Standard Large Generator Interconnection 
Agreement on behalf of the Indemnifying Party, except in cases of 
gross negligence or intentional wrongdoing by the Indemnifying 
Party.
    Material Modification shall mean those modifications that have a 
material impact on the cost or timing of any Interconnection Request 
with an equal or later Queue Position.
    Metering Equipment shall mean all metering equipment installed 
or to be installed at the Generating Facility pursuant to the 
Standard Large Generator Interconnection Agreement at the metering 
points, including but not limited to instrument transformers, MWh-
meters, data acquisition equipment, transducers, remote terminal 
unit, communications equipment, phone lines, and fiber optics.
    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.
    Network Resource Interconnection Service shall mean 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.
    Network Upgrades shall mean the additions, modifications, and 
upgrades to [the] Transmission Provider's Transmission System 
required at or beyond the point at which the Interconnection 
Facilities connect to [the] Transmission Provider's Transmission 
System to accommodate the interconnection of the Large Generating 
Facility to [the] Transmission Provider's Transmission System.
    Notice of Dispute shall mean a written notice of a dispute or 
claim that arises out of or in connection with the Standard Large 
Generator Interconnection Agreement or its performance.
    Optional Interconnection Study shall mean a sensitivity analysis 
based on assumptions specified by [the] Interconnection Customer in 
the Optional Interconnection Study Agreement.
    Optional Interconnection Study Agreement shall mean the form of 
agreement contained in Appendix 4 of the LGIP for conducting the 
Optional Interconnection Study.
    Party or Parties shall mean Transmission Provider, Transmission 
Owner, Interconnection Customer or any combination of the above.
    Point of Change of Ownership shall mean the point, as set forth 
in Appendix A to the Standard Large Generator Interconnection 
Agreement, where [the] Interconnection Customer's Interconnection 
Facilities connect to [the] Transmission Provider's Interconnection 
Facilities.
    Point of Interconnection shall mean 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.
    Proportional Impact Method shall mean a technical analysis 
conducted by Transmission Provider to determine the degree to which 
each Generating Facility in the Cluster Study contributes to the 
need for a specific System Network Upgrade.
    Provisional Interconnection Service shall mean Interconnection 
Service provided by Transmission Provider associated with 
interconnecting [the] Interconnection Customer's Generating Facility 
to Transmission Provider's Transmission System and enabling that 
Transmission System to receive electric energy and capacity from the 
Generating Facility at the Point of Interconnection, pursuant to the 
terms of the Provisional Large Generator Interconnection Agreement 
and, if applicable, the Tariff.
    Provisional Large Generator Interconnection Agreement shall mean 
the interconnection agreement for Provisional Interconnection 
Service established between Transmission Provider and/or the 
Transmission Owner and [the] Interconnection Customer. This 
agreement shall take the form of the Standard Large Generator 
Interconnection Agreement, modified for provisional purposes.
    Queue Position shall mean the order of a valid Interconnection 
Request, relative to all other pending valid Interconnection 
Requests, established pursuant to Section 4.1 of this LGIP.
    Reasonable Efforts shall mean, with respect to an action 
required to be attempted or taken by a Party under the Standard 
Large Generator Interconnection Agreement, efforts that are timely 
and consistent with Good Utility Practice and are otherwise 
substantially equivalent to those a Party would use to protect its 
own interests.
    Scoping Meeting shall mean the meeting between representatives 
of Interconnection Customer(s) and Transmission Provider conducted 
for the purpose of discussing the proposed Interconnection Request 
and any alternative interconnection options, exchanging information 
including any transmission data and earlier study evaluations that 
would be reasonably expected to impact such interconnection options, 
refining information and models provided by Interconnection 
Customer(s), discussing the Cluster Study materials posted to OASIS 
pursuant to Section 3.5 of the LGIP, and analyzing such information.
    Site Control shall mean the exclusive land right to develop, 
construct, operate, and maintain the Generating Facility over the 
term of expected operation of the Generating Facility. Site Control 
may be demonstrated by documentation establishing: (1) ownership of, 
a leasehold interest in, or a right to develop a site of sufficient 
size to construct and operate the Generating Facility; (2) an option 
to purchase or acquire a leasehold site of sufficient size to 
construct and operate the Generating Facility for such purpose; or 
(3) any other documentation that clearly demonstrates the right of 
Interconnection Customer to exclusively occupy a site of sufficient 
size to construct and operate the Generating Facility. Transmission 
Provider will maintain acreage requirements for each Generating 
Facility type on its OASIS or public website.
    Small Generating Facility shall mean a Generating Facility that 
has a Generating Facility Capacity of no more than 20 MW.
    Stand Alone Network Upgrades shall mean Network Upgrades that 
are not part of an Affected System that an Interconnection Customer 
may construct without affecting day-to-day operations of the 
Transmission System during their construction [and the following 
conditions are met: (1) a Substation Network Upgrade must only be 
required for a single Interconnection Customer in the Cluster and no 
other Interconnection Customer in that Cluster is required to 
interconnect to the same Substation Network Upgrades, and (2) a 
System Network Upgrade must only be required for a single 
Interconnection Customer in the Cluster, as indicated under 
Transmission Provider's Proportional Impact Method]. Both 
Transmission Provider and Interconnection Customer must agree as to 
what constitutes Stand Alone Network Upgrades and identify them in 
Appendix A to the Standard Large Generator Interconnection 
Agreement. If Transmission Provider and Interconnection Customer 
disagree about whether a particular Network Upgrade is a Stand Alone 
Network Upgrade, Transmission Provider must provide Interconnection 
Customer a written technical explanation outlining why Transmission 
Provider does not consider the Network Upgrade to be a Stand Alone 
Network Upgrade within fifteen (15) Business [d]Days of its 
determination.
    Standard Large Generator Interconnection Agreement (LGIA) shall 
mean the form of interconnection agreement applicable to an 
Interconnection Request pertaining to a Large Generating Facility 
that is included in [the] Transmission Provider's Tariff.
    Standard Large Generator Interconnection Procedures (LGIP) shall 
mean the interconnection procedures applicable to an Interconnection 
Request pertaining to a Large Generating Facility that are included 
in [the] Transmission Provider's Tariff.
    Substation Network Upgrades shall mean Network Upgrades that are 
required at the

[[Page 27180]]

substation located at the Point of Interconnection.
    Surplus Interconnection Service shall mean any unneeded portion 
of Interconnection Service established in a Standard Large Generator 
Interconnection Agreement, such that if Surplus Interconnection 
Service is utilized the total amount of Interconnection Service at 
the Point of Interconnection would remain the same.
    System Network Upgrades shall mean Network Upgrades that are 
required beyond the substation located at the Point of 
Interconnection.
    System Protection Facilities shall mean the equipment, including 
necessary protection signal communications equipment, required to 
protect (1) [the] Transmission Provider's Transmission System from 
faults or other electrical disturbances occurring at the Generating 
Facility and (2) the Generating Facility from faults or other 
electrical system disturbances occurring on [the] Transmission 
Provider's Transmission System or on other delivery systems or other 
generating systems to which [the] Transmission Provider's 
Transmission System is directly connected.
    Tariff shall mean [the] Transmission Provider's Tariff through 
which open access transmission service and Interconnection Service 
are offered, as filed with FERC, and as amended or supplemented from 
time to time, or any successor tariff.
    Transmission Owner shall mean an entity that owns, leases or 
otherwise possesses an interest in the portion of the Transmission 
System at the Point of Interconnection and may be a Party to the 
Standard Large Generator Interconnection Agreement to the extent 
necessary.
    Transmission Provider shall mean the public utility (or its 
designated agent) that owns, controls, or operates transmission or 
distribution facilities used for the transmission of electricity in 
interstate commerce and provides transmission service under the 
Tariff. The term Transmission Provider should be read to include the 
Transmission Owner when the Transmission Owner is separate from 
[the] Transmission Provider.
    Transmission Provider's Interconnection Facilities shall mean 
all facilities and equipment owned, controlled, or operated by 
Transmission Provider from the Point of Change of Ownership to the 
Point of Interconnection as identified in Appendix A to the Standard 
Large Generator Interconnection Agreement, including any 
modifications, additions or upgrades to such facilities and 
equipment. Transmission Provider's Interconnection Facilities are 
sole use facilities and shall not include Distribution Upgrades, 
Stand Alone Network Upgrades or Network Upgrades.
    Transmission System shall mean the facilities owned, controlled 
or operated by [the] Transmission Provider or Transmission Owner 
that are used to provide transmission service under the Tariff.
    Trial Operation shall mean the period during which 
Interconnection Customer is engaged in on-site test operations and 
commissioning of the Generating Facility prior to Commercial 
Operation.
    Variable Energy Resource shall mean a device for the production 
of electricity that is characterized by an energy source that: (1) 
is renewable; (2) cannot be stored by the facility owner or 
operator; and (3) has variability that is beyond the control of the 
facility owner or operator.
    Withdrawal Penalty shall mean the penalty assessed by 
Transmission Provider to an Interconnection Customer that chooses to 
withdraw or is deemed withdrawn from Transmission Provider's 
interconnection queue or whose Generating Facility does not 
otherwise reach Commercial Operation. The calculation of the 
Withdrawal Penalty is set forth in Section 3.7.1 of the LGIP.

Article 2. Effective Date, Term, and Termination

    2.1 Effective Date. This LGIA shall become effective upon 
execution by the Parties subject to acceptance by FERC (if 
applicable), or if filed unexecuted, upon the date specified by 
FERC. Transmission Provider shall promptly file this LGIA with FERC 
upon execution in accordance with Article 3.1, if required.
    2.2 Term of Agreement. Subject to the provisions of Article 2.3, 
this LGIA shall remain in effect for a period of ten (10) years from 
the Effective Date or such other longer period as Interconnection 
Customer may request (Term to be specified in individual agreements) 
and shall be automatically renewed for each successive one-year 
period thereafter.
    2.3 Termination Procedures.
    2.3.1 Written Notice. This LGIA may be terminated by 
Interconnection Customer after giving Transmission Provider ninety 
(90) Calendar Days advance written notice, or by Transmission 
Provider notifying FERC after the Generating Facility permanently 
ceases Commercial Operation.
    2.3.2 Default. Either Party may terminate this LGIA in 
accordance with Article 17.
    2.3.3 Notwithstanding Articles 2.3.1 and 2.3.2, no termination 
shall become effective until the Parties have complied with all 
Applicable Laws and Regulations applicable to such termination, 
including the filing with FERC of a notice of termination of this 
LGIA, which notice has been accepted for filing by FERC.
    2.4 Termination Costs. If a Party elects to terminate this 
Agreement pursuant to Article 2.3 above, each Party shall pay all 
costs incurred (including any cancellation costs relating to orders 
or contracts for Interconnection Facilities and equipment) or 
charges assessed by the other Party, as of the date of the other 
Party's receipt of such notice of termination, that are the 
responsibility of the Terminating Party under this LGIA. In the 
event of termination by a Party, the Parties shall use commercially 
Reasonable Efforts to mitigate the costs, damages and charges 
arising as a consequence of termination. Upon termination of this 
LGIA, unless otherwise ordered or approved by FERC:
    2.4.1 With respect to any portion of Transmission Provider's 
Interconnection Facilities that have not yet been constructed or 
installed, Transmission Provider shall to the extent possible and 
with Interconnection Customer's authorization cancel any pending 
orders of, or return, any materials or equipment for, or contracts 
for construction of, such facilities; provided that in the event 
Interconnection Customer elects not to authorize such cancellation, 
Interconnection Customer shall assume all payment obligations with 
respect to such materials, equipment, and contracts, and 
Transmission Provider shall deliver such material and equipment, 
and, if necessary, assign such contracts, to Interconnection 
Customer as soon as practicable, at Interconnection Customer's 
expense. To the extent that Interconnection Customer has already 
paid Transmission Provider for any or all such costs of materials or 
equipment not taken by Interconnection Customer, Transmission 
Provider shall promptly refund such amounts to Interconnection 
Customer, less any costs, including penalties incurred by 
Transmission Provider to cancel any pending orders of or return such 
materials, equipment, or contracts.
    If an Interconnection Customer terminates this LGIA, it shall be 
responsible for all costs incurred in association with that 
Interconnection Customer's interconnection, including any 
cancellation costs relating to orders or contracts for 
Interconnection Facilities and equipment, and other expenses 
including any Network Upgrades for which Transmission Provider has 
incurred expenses and has not been reimbursed by Interconnection 
Customer.
    2.4.2 Transmission Provider may, at its option, retain any 
portion of such materials, equipment, or facilities that 
Interconnection Customer chooses not to accept delivery of, in which 
case Transmission Provider shall be responsible for all costs 
associated with procuring such materials, equipment, or facilities.
    2.4.3 With respect to any portion of the Interconnection 
Facilities, and any other facilities already installed or 
constructed pursuant to the terms of this LGIA, Interconnection 
Customer shall be responsible for all costs associated with the 
removal, relocation or other disposition or retirement of such 
materials, equipment, or facilities.
    2.5 Disconnection. Upon termination of this LGIA, the Parties 
will take all appropriate steps to disconnect the Large Generating 
Facility from the Transmission System. All costs required to 
effectuate such disconnection shall be borne by the terminating 
Party, unless such termination resulted from the non-terminating 
Party's Default of this LGIA or such non-terminating Party otherwise 
is responsible for these costs under this LGIA.
    2.6 Survival. This LGIA shall continue in effect after 
termination to the extent necessary to provide for final billings 
and payments and for costs incurred hereunder, including billings 
and payments pursuant to this LGIA; to permit the determination and 
enforcement of liability and indemnification obligations arising 
from acts or events that occurred while this LGIA was in effect; and 
to permit each Party to have access to the lands of the other Party 
pursuant to this LGIA or other applicable agreements, to disconnect, 
remove or salvage its own facilities and equipment.

[[Page 27181]]

Article 3. Regulatory Filings

    3.1 Filing. Transmission Provider shall file this LGIA (and any 
amendment hereto) with the appropriate Governmental Authority, if 
required. Interconnection Customer may request that any information 
so provided be subject to the confidentiality provisions of Article 
22. If Interconnection Customer has executed this LGIA, or any 
amendment thereto, Interconnection Customer shall reasonably 
cooperate with Transmission Provider with respect to such filing and 
to provide any information reasonably requested by Transmission 
Provider needed to comply with applicable regulatory requirements.

Article 4. Scope of Service

    4.1 Interconnection Product Options. Interconnection Customer 
has selected the following (checked) type of Interconnection 
Service:
    4.1.1 Energy Resource Interconnection Service.
    4.1.1.1 The Product. Energy Resource Interconnection Service 
allows Interconnection Customer to connect the Large Generating 
Facility to the Transmission System and be eligible to deliver the 
Large Generating Facility's output using the existing firm or non-
firm capacity of the Transmission System on an ``as available'' 
basis. To the extent Interconnection Customer wants to receive 
Energy Resource Interconnection Service, Transmission Provider shall 
construct facilities identified in Attachment A.
    4.1.1.2 Transmission Delivery Service Implications.
    Under Energy Resource Interconnection Service, Interconnection 
Customer will be eligible to inject power from the Large Generating 
Facility into and deliver power across the interconnecting 
Transmission Provider's Transmission System on an ``as available'' 
basis up to the amount of MWs identified in the applicable stability 
and steady state studies to the extent the upgrades initially 
required to qualify for Energy Resource Interconnection Service have 
been constructed. Where eligible to do so (e.g., PJM, ISO-NE, 
NYISO), Interconnection Customer may place a bid to sell into the 
market up to the maximum identified Large Generating Facility 
output, subject to any conditions specified in the interconnection 
service approval, and the Large Generating Facility will be 
dispatched to the extent Interconnection Customer's bid clears. In 
all other instances, no transmission delivery service from the Large 
Generating Facility is assured, but Interconnection Customer may 
obtain Point-to-Point Transmission Service, Network Integration 
Transmission Service, or be used for secondary network transmission 
service, pursuant to Transmission Provider's Tariff, up to the 
maximum output identified in the stability and steady state studies. 
In those instances, in order for Interconnection Customer to obtain 
the right to deliver or inject energy beyond the Large Generating 
Facility Point of Interconnection or to improve its ability to do 
so, transmission delivery service must be obtained pursuant to the 
provisions of Transmission Provider's Tariff. [The] Interconnection 
Customer's ability to inject its Large Generating Facility output 
beyond the Point of Interconnection, therefore, will depend on the 
existing capacity of Transmission Provider's Transmission System at 
such time as a transmission service request is made that would 
accommodate such delivery. The provision of firm Point-to-Point 
Transmission Service or Network Integration Transmission Service may 
require the construction of additional Network Upgrades.
    4.1.2 Network Resource Interconnection Service.
    4.1.2.1 The Product. Transmission Provider must conduct the 
necessary studies and construct the Network Upgrades needed to 
integrate the Large Generating Facility (1) in a manner comparable 
to that in which Transmission Provider integrates its generating 
facilities to serve native load customers; or (2) in an ISO or RTO 
with market based congestion management, in the same manner as all 
Network Resources. To the extent Interconnection Customer wants to 
receive Network Resource Interconnection Service, Transmission 
Provider shall construct the facilities identified in Attachment A 
to this LGIA.
    4.1.2.2 Transmission Delivery Service Implications. Network 
Resource Interconnection Service allows Interconnection Customer's 
Large Generating Facility to be designated by any Network Customer 
under the Tariff on Transmission Provider's Transmission System as a 
Network Resource, up to the Large Generating Facility's full output, 
on the same basis as existing Network Resources interconnected to 
Transmission Provider's Transmission System, and to be studied as a 
Network Resource on the assumption that such a designation will 
occur. Although Network Resource Interconnection Service does not 
convey a reservation of transmission service, any Network Customer 
under the Tariff can utilize its network service under the Tariff to 
obtain delivery of energy from the interconnected Interconnection 
Customer's Large Generating Facility in the same manner as it 
accesses Network Resources. A Large Generating Facility receiving 
Network Resource Interconnection Service may also be used to provide 
Ancillary Services after technical studies and/or periodic analyses 
are performed with respect to the Large Generating Facility's 
ability to provide any applicable Ancillary Services, provided that 
such studies and analyses have been or would be required in 
connection with the provision of such Ancillary Services by any 
existing Network Resource. However, if an Interconnection Customer's 
Large Generating Facility has not been designated as a Network 
Resource by any load, it cannot be required to provide Ancillary 
Services except to the extent such requirements extend to all 
generating facilities that are similarly situated. The provision of 
Network Integration Transmission Service or firm Point-to-Point 
Transmission Service may require additional studies and the 
construction of additional upgrades. Because such studies and 
upgrades would be associated with a request for delivery service 
under the Tariff, cost responsibility for the studies and upgrades 
would be in accordance with FERC's policy for pricing transmission 
delivery services.
    Network Resource Interconnection Service does not necessarily 
provide Interconnection Customer with the capability to physically 
deliver the output of its Large Generating Facility to any 
particular load on Transmission Provider's Transmission System 
without incurring congestion costs. In the event of transmission 
constraints on Transmission Provider's Transmission System, 
Interconnection Customer's Large Generating Facility shall be 
subject to the applicable congestion management procedures in 
Transmission Provider's Transmission System in the same manner as 
Network Resources.
    There is no requirement either at the time of study or 
interconnection, or at any point in the future, that Interconnection 
Customer's Large Generating Facility be designated as a Network 
Resource by a Network Service Customer under the Tariff or that 
Interconnection Customer identify a specific buyer (or sink). To the 
extent a Network Customer does designate the Large Generating 
Facility as a Network Resource, it must do so pursuant to 
Transmission Provider's Tariff.
    Once an Interconnection Customer satisfies the requirements for 
obtaining Network Resource Interconnection Service, any future 
transmission service request for delivery from the Large Generating 
Facility within Transmission Provider's Transmission System of any 
amount of capacity and/or energy, up to the amount initially 
studied, will not require that any additional studies be performed 
or that any further upgrades associated with such Large Generating 
Facility be undertaken, regardless of whether or not such Large 
Generating Facility is ever designated by a Network Customer as a 
Network Resource and regardless of changes in ownership of the Large 
Generating Facility. However, the reduction or elimination of 
congestion or redispatch costs may require additional studies and 
the construction of additional upgrades.
    To the extent Interconnection Customer enters into an 
arrangement for long term transmission service for deliveries from 
the Large Generating Facility outside Transmission Provider's 
Transmission System, such request may require additional studies and 
upgrades in order for Transmission Provider to grant such request.
    4.2 Provision of Service. Transmission Provider shall provide 
Interconnection Service for the Large Generating Facility at the 
Point of Interconnection.
    4.3 Performance Standards. Each Party shall perform all of its 
obligations under this LGIA in accordance with Applicable Laws and 
Regulations, Applicable Reliability Standards, and Good Utility 
Practice, and to the extent a Party is required or prevented or 
limited in taking any action by such regulations and standards, such 
Party shall not be deemed to be in Breach of this LGIA for its 
compliance therewith. If such Party is a Transmission Provider or 
Transmission Owner, then that Party shall amend the LGIA and submit 
the amendment to FERC for approval.

[[Page 27182]]

    4.4 No Transmission Delivery Service. The execution of this LGIA 
does not constitute a request for, nor the provision of, any 
transmission delivery service under Transmission Provider's Tariff, 
and does not convey any right to deliver electricity to any specific 
customer or Point of Delivery.
    4.5 Interconnection Customer Provided Services. The services 
provided by Interconnection Customer under this LGIA are set forth 
in Article 9.6 and Article 13.5.1. Interconnection Customer shall be 
paid for such services in accordance with Article 11.6.

Article 5. Interconnection Facilities Engineering, Procurement, and 
Construction

    5.1 Options. Unless otherwise mutually agreed to between the 
Parties, Interconnection Customer shall select the In-Service Date, 
Initial Synchronization Date, and Commercial Operation Date; and 
either the Standard Option or Alternate Option set forth below, and 
such dates and selected option shall be set forth in Appendix B, 
Milestones. At the same time, Interconnection Customer shall 
indicate whether it elects to exercise the Option to Build set forth 
in Article 5.1.3 below. If the dates designated by Interconnection 
Customer are not acceptable to Transmission Provider, Transmission 
Provider shall so notify Interconnection Customer within thirty (30) 
Calendar Days. Upon receipt of the notification that Interconnection 
Customer's designated dates are not acceptable to Transmission 
Provider, [the] Interconnection Customer shall notify Transmission 
Provider within thirty (30) Calendar Days whether it elects to 
exercise the Option to Build if it has not already elected to 
exercise the Option to Build.
    5.1.1 Standard Option. Transmission Provider shall design, 
procure, and construct Transmission Provider's Interconnection 
Facilities and Network Upgrades, using Reasonable Efforts to 
complete Transmission Provider's Interconnection Facilities and 
Network Upgrades by the dates set forth in Appendix B, Milestones. 
Transmission Provider shall not be required to undertake any action 
which is inconsistent with its standard safety practices, its 
material and equipment specifications, its design criteria and 
construction procedures, its labor agreements, and Applicable Laws 
and Regulations. In the event Transmission Provider reasonably 
expects that it will not be able to complete Transmission Provider's 
Interconnection Facilities and Network Upgrades by the specified 
dates, Transmission Provider shall promptly provide written notice 
to Interconnection Customer and shall undertake Reasonable Efforts 
to meet the earliest dates thereafter.
    5.1.2 Alternate Option. If the dates designated by 
Interconnection Customer are acceptable to Transmission Provider, 
Transmission Provider shall so notify Interconnection Customer 
within thirty (30) Calendar Days, and shall assume responsibility 
for the design, procurement and construction of Transmission 
Provider's Interconnection Facilities by the designated dates.
    If Transmission Provider subsequently fails to complete 
Transmission Provider's Interconnection Facilities by the In-Service 
Date, to the extent necessary to provide back feed power; or fails 
to complete Network Upgrades by the Initial Synchronization Date to 
the extent necessary to allow for Trial Operation at full power 
output, unless other arrangements are made by the Parties for such 
Trial Operation; or fails to complete the Network Upgrades by the 
Commercial Operation Date, as such dates are reflected in Appendix 
B, Milestones; Transmission Provider shall pay Interconnection 
Customer liquidated damages in accordance with Article 5.3, 
Liquidated Damages, provided, however, the dates designated by 
Interconnection Customer shall be extended day for day for each day 
that the applicable RTO or ISO refuses to grant clearances to 
install equipment.
    5.1.3 Option to Build. Individual or Multiple Interconnection 
Customer shall have the option to assume responsibility for the 
design, procurement and construction of Transmission Provider's 
Interconnection Facilities and Stand Alone Network Upgrades on the 
dates specified in Article 5.1.2, if the requirements of this 
Article 5.1.3 are met. When multiple Interconnection Customers 
exercise this option, multiple Interconnection Customers may agree 
to exercise this option provided (1) all Transmission Provider's 
Interconnection Facilities and Stand Alone Network upgrades 
constructed under this option are only required for Interconnection 
Customers in a single Cluster and (2) all impacted Interconnection 
Customers execute and provide to Transmission Provider an agreement 
regarding responsibilities and payment for the construction of 
Transmission Provider's Interconnection Facilities and Stand Alone 
Network Upgrades planned to be built under this option. Transmission 
Provider and the individual Interconnection Customer or each of the 
multiple Interconnection Customers must agree as to what constitutes 
Stand Alone Network Upgrades and identify such Stand Alone Network 
Upgrades in Appendix A. Except for Stand Alone Network Upgrades, 
Interconnection Customer shall have no right to construct Network 
Upgrades under this option.
    5.1.4 Negotiated Option. If the dates designated by 
Interconnection Customer are not acceptable to Transmission 
Provider, the Parties shall in good faith attempt to negotiate terms 
and conditions (including revision of the specified dates and 
liquidated damages, the provision of incentives, or the procurement 
and construction of all facilities other than Transmission 
Provider's Interconnection Facilities and Stand Alone Network 
Upgrades if [the] Interconnection Customer elects to exercise the 
Option to Build under Article 5.1.3). If the Parties are unable to 
reach agreement on such terms and conditions, then pursuant to 
Article 5.1.1 (Standard Option), Transmission Provider shall assume 
responsibility for the design, procurement and construction of all 
facilities other than Transmission Provider's Interconnection 
Facilities and Stand Alone Network Upgrades if [the] Interconnection 
Customer elects to exercise the Option to Build.
    5.2 General Conditions Applicable to Option to Build. If 
Interconnection Customer assumes responsibility for the design, 
procurement and construction of Transmission Provider's 
Interconnection Facilities and Stand Alone Network Upgrades,
    (1) Interconnection Customer shall engineer, procure equipment, 
and construct Transmission Provider's Interconnection Facilities and 
Stand Alone Network Upgrades (or portions thereof) using Good 
Utility Practice and using standards and specifications provided in 
advance by Transmission Provider;
    (2) Interconnection Customer's engineering, procurement and 
construction of Transmission Provider's Interconnection Facilities 
and Stand Alone Network Upgrades shall comply with all requirements 
of law to which Transmission Provider would be subject in the 
engineering, procurement or construction of Transmission Provider's 
Interconnection Facilities and Stand Alone Network Upgrades;
    (3) Transmission Provider shall review and approve the 
engineering design, equipment acceptance tests, and the construction 
of Transmission Provider's Interconnection Facilities and Stand 
Alone Network Upgrades;
    (4) prior to commencement of construction, Interconnection 
Customer shall provide to Transmission Provider a schedule for 
construction of Transmission Provider's Interconnection Facilities 
and Stand Alone Network Upgrades, and shall promptly respond to 
requests for information from Transmission Provider;
    (5) at any time during construction, Transmission Provider shall 
have the right to gain unrestricted access to Transmission 
Provider's Interconnection Facilities and Stand Alone Network 
Upgrades and to conduct inspections of the same;
    (6) at any time during construction, should any phase of the 
engineering, equipment procurement, or construction of Transmission 
Provider's Interconnection Facilities and Stand Alone Network 
Upgrades not meet the standards and specifications provided by 
Transmission Provider, Interconnection Customer shall be obligated 
to remedy deficiencies in that portion of Transmission Provider's 
Interconnection Facilities and Stand Alone Network Upgrades;
    (7) Interconnection Customer shall indemnify Transmission 
Provider for claims arising from Interconnection Customer's 
construction of Transmission Provider's Interconnection Facilities 
and Stand Alone Network Upgrades under the terms and procedures 
applicable to Article 18.1 Indemnity;
    (8) Interconnection Customer shall transfer control of 
Transmission Provider's Interconnection Facilities and Stand Alone 
Network Upgrades to Transmission Provider;
    (9) Unless Parties otherwise agree, Interconnection Customer 
shall transfer ownership of Transmission Provider's Interconnection 
Facilities and Stand-Alone Network Upgrades to Transmission 
Provider;
    (10) Transmission Provider shall approve and accept for 
operation and maintenance

[[Page 27183]]

Transmission Provider's Interconnection Facilities and Stand Alone 
Network Upgrades to the extent engineered, procured, and constructed 
in accordance with this Article 5.2; and
    (11) Interconnection Customer shall deliver to Transmission 
Provider ``as-built'' drawings, information, and any other documents 
that are reasonably required by Transmission Provider to assure that 
the Interconnection Facilities and Stand-Alone Network Upgrades are 
built to the standards and specifications required by Transmission 
Provider.
    (12) If Interconnection Customer exercises the Option to Build 
pursuant to Article 5.1.3, Interconnection Customer shall pay 
Transmission Provider the agreed upon amount of {$ 
PLACEHOLDER{time}  for Transmission Provider to execute the 
responsibilities enumerated to Transmission Provider under Article 
5.2. Transmission Provider shall invoice Interconnection Customer 
for this total amount to be divided on a monthly basis pursuant to 
Article 12.
    5.3 Liquidated Damages. The actual damages to Interconnection 
Customer, in the event Transmission Provider's Interconnection 
Facilities or Network Upgrades are not completed by the dates 
designated by Interconnection Customer and accepted by Transmission 
Provider pursuant to subparagraphs 5.1.2 or 5.1.4, above, may 
include Interconnection Customer's fixed operation and maintenance 
costs and lost opportunity costs. Such actual damages are uncertain 
and impossible to determine at this time. Because of such 
uncertainty, any liquidated damages paid by Transmission Provider to 
Interconnection Customer in the event that Transmission Provider 
does not complete any portion of Transmission Provider's 
Interconnection Facilities or Network Upgrades by the applicable 
dates, shall be an amount equal to \1/2\ of 1 percent per day of the 
actual cost of Transmission Provider's Interconnection Facilities 
and Network Upgrades, in the aggregate, for which Transmission 
Provider has assumed responsibility to design, procure and 
construct.
    However, in no event shall the total liquidated damages exceed 
20 percent of the actual cost of Transmission Provider's 
Interconnection Facilities and Network Upgrades for which 
Transmission Provider has assumed responsibility to design, procure, 
and construct. The foregoing payments will be made by Transmission 
Provider to Interconnection Customer as just compensation for the 
damages caused to Interconnection Customer, which actual damages are 
uncertain and impossible to determine at this time, and as 
reasonable liquidated damages, but not as a penalty or a method to 
secure performance of this LGIA. Liquidated damages, when the 
Parties agree to them, are the exclusive remedy for [the] 
Transmission Provider's failure to meet its schedule.
    No liquidated damages shall be paid to Interconnection Customer 
if: (1) Interconnection Customer is not ready to commence use of 
Transmission Provider's Interconnection Facilities or Network 
Upgrades to take the delivery of power for the Large Generating 
Facility's Trial Operation or to export power from the Large 
Generating Facility on the specified dates, unless Interconnection 
Customer would have been able to commence use of Transmission 
Provider's Interconnection Facilities or Network Upgrades to take 
the delivery of power for Large Generating Facility's Trial 
Operation or to export power from the Large Generating Facility, but 
for Transmission Provider's delay; (2) Transmission Provider's 
failure to meet the specified dates is the result of the action or 
inaction of Interconnection Customer or any other Interconnection 
Customer who has entered into an LGIA with Transmission Provider or 
any cause beyond Transmission Provider's reasonable control or 
reasonable ability to cure; (3) [the] Interconnection Customer has 
assumed responsibility for the design, procurement and construction 
of Transmission Provider's Interconnection Facilities and Stand 
Alone Network Upgrades; or (4) the Parties have otherwise agreed.
    5.4 Power System Stabilizers. Interconnection Customer shall 
procure, install, maintain and operate Power System Stabilizers in 
accordance with the guidelines and procedures established by the 
Electric Reliability Organization. Transmission Provider reserves 
the right to reasonably establish minimum acceptable settings for 
any installed Power System Stabilizers, subject to the design and 
operating limitations of the Large Generating Facility. If the Large 
Generating Facility's Power System Stabilizers are removed from 
service or not capable of automatic operation, Interconnection 
Customer shall immediately notify Transmission Provider's system 
operator, or its designated representative. The requirements of this 
paragraph shall not apply to wind generators.
    5.5 Equipment Procurement. If responsibility for construction of 
Transmission Provider's Interconnection Facilities or Network 
Upgrades is to be borne by Transmission Provider, then Transmission 
Provider shall commence design of Transmission Provider's 
Interconnection Facilities or Network Upgrades and procure necessary 
equipment as soon as practicable after all of the following 
conditions are satisfied, unless the Parties otherwise agree in 
writing:
    5.5.1 Transmission Provider has completed the Interconnection 
Facilities Study pursuant to the Interconnection Facilities Study 
Agreement;
    5.5.2 Transmission Provider has received written authorization 
to proceed with design and procurement from Interconnection Customer 
by the date specified in Appendix B, Milestones; and
    5.5.3 Interconnection Customer has provided security to 
Transmission Provider in accordance with Article 11.5 by the dates 
specified in Appendix B, Milestones.
    5.6 Construction Commencement. Transmission Provider shall 
commence construction of Transmission Provider's Interconnection 
Facilities and Network Upgrades for which it is responsible as soon 
as practicable after the following additional conditions are 
satisfied:
    5.6.1 Approval of the appropriate Governmental Authority has 
been obtained for any facilities requiring regulatory approval;
    5.6.2 Necessary real property rights and rights-of-way have been 
obtained, to the extent required for the construction of a discrete 
aspect of Transmission Provider's Interconnection Facilities and 
Network Upgrades;
    5.6.3 Transmission Provider has received written authorization 
to proceed with construction from Interconnection Customer by the 
date specified in Appendix B, Milestones; and
    5.6.4 Interconnection Customer has provided security to 
Transmission Provider in accordance with Article 11.5 by the dates 
specified in Appendix B, Milestones.
    5.7 Work Progress. The Parties will keep each other advised 
periodically as to the progress of their respective design, 
procurement and construction efforts. Either Party may, at any time, 
request a progress report from the other Party. If, at any time, 
Interconnection Customer determines that the completion of 
Transmission Provider's Interconnection Facilities will not be 
required until after the specified In-Service Date, Interconnection 
Customer will provide written notice to Transmission Provider of 
such later date upon which the completion of Transmission Provider's 
Interconnection Facilities will be required.
    5.8 Information Exchange. As soon as reasonably practicable 
after the Effective Date, the Parties shall exchange information 
regarding the design and compatibility of the Parties' 
Interconnection Facilities and compatibility of the Interconnection 
Facilities with Transmission Provider's Transmission System, and 
shall work diligently and in good faith to make any necessary design 
changes.
    5.9 Other Interconnection Options.
    5.9.1 Limited Operation. If any of Transmission Provider's 
Interconnection Facilities or Network Upgrades are not reasonably 
expected to be completed prior to the Commercial Operation Date of 
the Large Generating Facility, Transmission Provider shall, upon the 
request and at the expense of Interconnection Customer, perform 
operating studies on a timely basis to determine the extent to which 
the Large Generating Facility and Interconnection Customer's 
Interconnection Facilities may operate prior to the completion of 
Transmission Provider's Interconnection Facilities or Network 
Upgrades consistent with Applicable Laws and Regulations, Applicable 
Reliability Standards, Good Utility Practice, and this LGIA. 
Transmission Provider shall permit Interconnection Customer to 
operate the Large Generating Facility and Interconnection Customer's 
Interconnection Facilities in accordance with the results of such 
studies.
    5.9.2 Provisional Interconnection Service. Upon the request of 
Interconnection Customer, and prior to completion of requisite 
Interconnection Facilities, Network Upgrades, Distribution Upgrades, 
or System Protection Facilities Transmission Provider may execute a 
Provisional Large Generator Interconnection Agreement or

[[Page 27184]]

Interconnection Customer may request the filing of an unexecuted 
Provisional Large Generator Interconnection Agreement with [the] 
Interconnection Customer for limited Interconnection Service at the 
discretion of Transmission Provider based upon an evaluation that 
will consider the results of available studies. Transmission 
Provider shall determine, through available studies or additional 
studies as necessary, whether stability, short circuit, thermal, 
and/or voltage issues would arise if Interconnection Customer 
interconnects without modifications to the Generating Facility or 
Transmission System. Transmission Provider shall determine whether 
any Interconnection Facilities, Network Upgrades, Distribution 
Upgrades, or System Protection Facilities that are necessary to meet 
the requirements of the Electric Reliability Organization, or any 
applicable Regional Entity for the interconnection of a new, 
modified and/or expanded Generating Facility are in place prior to 
the commencement of Interconnection Service from the Generating 
Facility. Where available studies indicate that such, 
Interconnection Facilities, Network Upgrades, Distribution Upgrades, 
and/or System Protection Facilities that are required for the 
interconnection of a new, modified and/or expanded Generating 
Facility are not currently in place, Transmission Provider will 
perform a study, at [the] Interconnection Customer's expense, to 
confirm the facilities that are required for Provisional 
Interconnection Service. The maximum permissible output of the 
Generating Facility in the Provisional Large Generator 
Interconnection Agreement shall be studied and updated {on a 
frequency determined by Transmission Provider and at [the] 
Interconnection Customer's expense{time} . Interconnection Customer 
assumes all risk and liabilities with respect to changes between the 
Provisional Large Generator Interconnection Agreement and the Large 
Generator Interconnection Agreement, including changes in output 
limits and Interconnection Facilities, Network Upgrades, 
Distribution Upgrades, and/or System Protection Facilities cost 
responsibilities.
    5.10 Interconnection Customer's Interconnection Facilities 
(`ICIF'). Interconnection Customer shall, at its expense, design, 
procure, construct, own and install the ICIF, as set forth in 
Appendix A, Interconnection Facilities, Network Upgrades and 
Distribution Upgrades.
    5.10.1 Interconnection Customer's Interconnection Facility 
Specifications. Interconnection Customer shall submit initial 
specifications for the ICIF, including System Protection Facilities, 
to Transmission Provider at least one hundred eighty (180) Calendar 
Days prior to the Initial Synchronization Date; and final 
specifications for review and comment at least ninety (90) Calendar 
Days prior to the Initial Synchronization Date. Transmission 
Provider shall review such specifications to ensure that the ICIF 
are compatible with the technical specifications, operational 
control, and safety requirements of Transmission Provider and 
comment on such specifications within thirty (30) Calendar Days of 
Interconnection Customer's submission. All specifications provided 
hereunder shall be deemed confidential.
    5.10.2 Transmission Provider's Review. Transmission Provider's 
review of Interconnection Customer's final specifications shall not 
be construed as confirming, endorsing, or providing a warranty as to 
the design, fitness, safety, durability or reliability of the Large 
Generating Facility, or the ICIF. Interconnection Customer shall 
make such changes to the ICIF as may reasonably be required by 
Transmission Provider, in accordance with Good Utility Practice, to 
ensure that the ICIF are compatible with the technical 
specifications, operational control, and safety requirements of 
Transmission Provider.
    5.10.3 ICIF Construction. The ICIF shall be designed and 
constructed in accordance with Good Utility Practice. Within one 
hundred twenty (120) Calendar Days after the Commercial Operation 
Date, unless the Parties agree on another mutually acceptable 
deadline, Interconnection Customer shall deliver to Transmission 
Provider ``as-built'' drawings, information and documents for the 
ICIF, such as: a one-line diagram, a site plan showing the Large 
Generating Facility and the ICIF, plan and elevation drawings 
showing the layout of the ICIF, a relay functional diagram, relaying 
AC and DC schematic wiring diagrams and relay settings for all 
facilities associated with Interconnection Customer's step-up 
transformers, the facilities connecting the Large Generating 
Facility to the step-up transformers and the ICIF, and the 
impedances (determined by factory tests) for the associated step-up 
transformers and the Large Generating Facility. [The] 
Interconnection Customer shall provide Transmission Provider 
specifications for the excitation system, automatic voltage 
regulator, Large Generating Facility control and protection 
settings, transformer tap settings, and communications, if 
applicable.
    5.11 Transmission Provider's Interconnection Facilities 
Construction. Transmission Provider's Interconnection Facilities 
shall be designed and constructed in accordance with Good Utility 
Practice. Upon request, within one hundred twenty (120) Calendar 
Days after the Commercial Operation Date, unless the Parties agree 
on another mutually acceptable deadline, Transmission Provider shall 
deliver to Interconnection Customer the following ``as-built'' 
drawings, information and documents for Transmission Provider's 
Interconnection Facilities {include appropriate drawings and relay 
diagrams{time} .
    Transmission Provider will obtain control of Transmission 
Provider's Interconnection Facilities and Stand Alone Network 
Upgrades upon completion of such facilities.
    5.12 Access Rights. Upon reasonable notice and supervision by a 
Party, and subject to any required or necessary regulatory 
approvals, a Party (``Granting Party'') shall furnish at no cost to 
the other Party (``Access Party'') any rights of use, licenses, 
rights of way and easements with respect to lands owned or 
controlled by the Granting Party, its agents (if allowed under the 
applicable agency agreement), or any Affiliate, that are necessary 
to enable the Access Party to obtain ingress and egress to 
construct, operate, maintain, repair, test (or witness testing), 
inspect, replace or remove facilities and equipment to: (i) 
interconnect the Large Generating Facility with the Transmission 
System; (ii) operate and maintain the Large Generating Facility, the 
Interconnection Facilities and the Transmission System; and (iii) 
disconnect or remove the Access Party's facilities and equipment 
upon termination of this LGIA. In exercising such licenses, rights 
of way and easements, the Access Party shall not unreasonably 
disrupt or interfere with normal operation of the Granting Party's 
business and shall adhere to the safety rules and procedures 
established in advance, as may be changed from time to time, by the 
Granting Party and provided to the Access Party.
    5.13 Lands of Other Property Owners. If any part of Transmission 
Provider or Transmission Owner's Interconnection Facilities and/or 
Network Upgrades is to be installed on property owned by persons 
other than Interconnection Customer or Transmission Provider or 
Transmission Owner, Transmission Provider or Transmission Owner 
shall at Interconnection Customer's expense use efforts, similar in 
nature and extent to those that it typically undertakes on its own 
behalf or on behalf of its Affiliates, including use of its eminent 
domain authority, and to the extent consistent with state law, to 
procure from such persons any rights of use, licenses, rights of way 
and easements that are necessary to construct, operate, maintain, 
test, inspect, replace or remove Transmission Provider or 
Transmission Owner's Interconnection Facilities and/or Network 
Upgrades upon such property.
    5.14 Permits. Transmission Provider or Transmission Owner and 
Interconnection Customer shall cooperate with each other in good 
faith in obtaining all permits, licenses, and authorizations that 
are necessary to accomplish the interconnection in compliance with 
Applicable Laws and Regulations. With respect to this paragraph, 
Transmission Provider or Transmission Owner shall provide permitting 
assistance to Interconnection Customer comparable to that provided 
to Transmission Provider's own, or an Affiliate's generation.
    5.15 Early Construction of Base Case Facilities. Interconnection 
Customer may request Transmission Provider to construct, and 
Transmission Provider shall construct, using Reasonable Efforts to 
accommodate Interconnection Customer's In-Service Date, all or any 
portion of any Network Upgrades required for Interconnection 
Customer to be interconnected to the Transmission System which are 
included in the Base Case of the Interconnection Facilities Study 
for Interconnection Customer, and which also are required to be 
constructed for another Interconnection Customer, but where such 
construction is not scheduled to be completed in time to achieve 
Interconnection Customer's In-Service Date.
    5.16 Suspension. Interconnection Customer reserves the right, 
upon written

[[Page 27185]]

notice to Transmission Provider, to suspend at any time all work by 
Transmission Provider associated with the construction and 
installation of Transmission Provider's Interconnection Facilities 
and/or Network Upgrades required under this LGIA with the condition 
that Transmission System shall be left in a safe and reliable 
condition in accordance with Good Utility Practice and Transmission 
Provider's safety and reliability criteria. In such event, 
Interconnection Customer shall be responsible for all reasonable and 
necessary costs which Transmission Provider (i) has incurred 
pursuant to this LGIA prior to the suspension and (ii) incurs in 
suspending such work, including any costs incurred to perform such 
work as may be necessary to ensure the safety of persons and 
property and the integrity of the Transmission System during such 
suspension and, if applicable, any costs incurred in connection with 
the cancellation or suspension of material, equipment and labor 
contracts which Transmission Provider cannot reasonably avoid; 
provided, however, that prior to canceling or suspending any such 
material, equipment or labor contract, Transmission Provider shall 
obtain Interconnection Customer's authorization to do so.
    Transmission Provider shall invoice Interconnection Customer for 
such costs pursuant to Article 12 and shall use due diligence to 
minimize its costs. In the event Interconnection Customer suspends 
work by Transmission Provider required under this LGIA pursuant to 
this Article 5.16, and has not requested Transmission Provider to 
recommence the work required under this LGIA on or before the 
expiration of three (3) years following commencement of such 
suspension, this LGIA shall be deemed terminated. The three-year 
period shall begin on the date the suspension is requested, or the 
date of the written notice to Transmission Provider, if no effective 
date is specified.
    5.17 Taxes.
    5.17.1 Interconnection Customer Payments Not Taxable. The 
Parties intend that all payments or property transfers made by 
Interconnection Customer to Transmission Provider for the 
installation of Transmission Provider's Interconnection Facilities 
and the Network Upgrades shall be non-taxable, either as 
contributions to capital, or as an advance, in accordance with the 
Internal Revenue Code and any applicable state income tax laws and 
shall not be taxable as contributions in aid of construction or 
otherwise under the Internal Revenue Code and any applicable state 
income tax laws.
    5.17.2 Representations and Covenants. In accordance with IRS 
Notice 2001-82 and IRS Notice 88-129, Interconnection Customer 
represents and covenants that (i) ownership of the electricity 
generated at the Large Generating Facility will pass to another 
party prior to the transmission of the electricity on the 
Transmission System, (ii) for income tax purposes, the amount of any 
payments and the cost of any property transferred to Transmission 
Provider for Transmission Provider's Interconnection Facilities will 
be capitalized by Interconnection Customer as an intangible asset 
and recovered using the straight-line method over a useful life of 
twenty (20) years, and (iii) any portion of Transmission Provider's 
Interconnection Facilities that is a ``dual-use intertie,'' within 
the meaning of IRS Notice 88-129, is reasonably expected to carry 
only a de minimis amount of electricity in the direction of the 
Large Generating Facility. For this purpose, ``de minimis amount'' 
means no more than 5 percent of the total power flows in both 
directions, calculated in accordance with the ``5 percent test'' set 
forth in IRS Notice 88-129. This is not intended to be an exclusive 
list of the relevant conditions that must be met to conform to IRS 
requirements for non-taxable treatment.
    At Transmission Provider's request, Interconnection Customer 
shall provide Transmission Provider with a report from an 
independent engineer confirming its representation in clause (iii), 
above. Transmission Provider represents and covenants that the cost 
of Transmission Provider's Interconnection Facilities paid for by 
Interconnection Customer will have no net effect on the base upon 
which rates are determined.
    5.17.3 Indemnification for the Cost Consequences of Current Tax 
Liability Imposed Upon [the] Transmission Provider. Notwithstanding 
Article 5.17.1, Interconnection Customer shall protect, indemnify 
and hold harmless Transmission Provider from the cost consequences 
of any current tax liability imposed against Transmission Provider 
as the result of payments or property transfers made by 
Interconnection Customer to Transmission Provider under this LGIA 
for Interconnection Facilities, as well as any interest and 
penalties, other than interest and penalties attributable to any 
delay caused by Transmission Provider.
    Transmission Provider shall not include a gross-up for the cost 
consequences of any current tax liability in the amounts it charges 
Interconnection Customer under this LGIA unless (i) Transmission 
Provider has determined, in good faith, that the payments or 
property transfers made by Interconnection Customer to Transmission 
Provider should be reported as income subject to taxation or (ii) 
any Governmental Authority directs Transmission Provider to report 
payments or property as income subject to taxation; provided, 
however, that Transmission Provider may require Interconnection 
Customer to provide security for Interconnection Facilities, in a 
form reasonably acceptable to Transmission Provider (such as a 
parental guarantee or a letter of credit), in an amount equal to the 
cost consequences of any current tax liability under this Article 
5.17. Interconnection Customer shall reimburse Transmission Provider 
for such costs on a fully grossed-up basis, in accordance with 
Article 5.17.4, within thirty (30) Calendar Days of receiving 
written notification from Transmission Provider of the amount due, 
including detail about how the amount was calculated.
    The indemnification obligation shall terminate at the earlier of 
(1) the expiration of the ten year testing period and the applicable 
statute of limitation, as it may be extended by Transmission 
Provider upon request of the IRS, to keep these years open for audit 
or adjustment, or (2) the occurrence of a subsequent taxable event 
and the payment of any related indemnification obligations as 
contemplated by this Article 5.17.
    5.17.4 Tax Gross-Up Amount. Interconnection Customer's liability 
for the cost consequences of any current tax liability under this 
Article 5.17 shall be calculated on a fully grossed-up basis. Except 
as may otherwise be agreed to by the parties, this means that 
Interconnection Customer will pay Transmission Provider, in addition 
to the amount paid for the Interconnection Facilities and Network 
Upgrades, an amount equal to (1) the current taxes imposed on 
Transmission Provider (``Current Taxes'') on the excess of (a) the 
gross income realized by Transmission Provider as a result of 
payments or property transfers made by Interconnection Customer to 
Transmission Provider under this LGIA (without regard to any 
payments under this Article 5.17) (the ``Gross Income Amount'') over 
(b) the present value of future tax deductions for depreciation that 
will be available as a result of such payments or property transfers 
(the ``Present Value Depreciation Amount''), plus (2) an additional 
amount sufficient to permit Transmission Provider to receive and 
retain, after the payment of all Current Taxes, an amount equal to 
the net amount described in clause (1).
    For this purpose, (i) Current Taxes shall be computed based on 
Transmission Provider's composite federal and state tax rates at the 
time the payments or property transfers are received and 
Transmission Provider will be treated as being subject to tax at the 
highest marginal rates in effect at that time (the ``Current Tax 
Rate''), and (ii) the Present Value Depreciation Amount shall be 
computed by discounting Transmission Provider's anticipated tax 
depreciation deductions as a result of such payments or property 
transfers by Transmission Provider's current weighted average cost 
of capital. Thus, the formula for calculating Interconnection 
Customer's liability to Transmission Owner pursuant to this Article 
5.17.4 can be expressed as follows: (Current Tax Rate x (Gross 
Income Amount--Present Value of Tax Depreciation))/(1-Current Tax 
Rate). Interconnection Customer's estimated tax liability in the 
event taxes are imposed shall be stated in Appendix A, 
Interconnection Facilities, Network Upgrades and Distribution 
Upgrades.
    5.17.5 Private Letter Ruling or Change or Clarification of Law. 
At Interconnection Customer's request and expense, Transmission 
Provider shall file with the IRS a request for a private letter 
ruling as to whether any property transferred or sums paid, or to be 
paid, by Interconnection Customer to Transmission Provider under 
this LGIA are subject to federal income taxation. Interconnection 
Customer will prepare the initial draft of the request for a private 
letter ruling, and will certify under penalties of perjury that all 
facts represented in such request are true and accurate to the best 
of Interconnection Customer's knowledge. Transmission Provider and 
Interconnection Customer shall cooperate in good faith with respect 
to the submission of such request.

[[Page 27186]]

    Transmission Provider shall keep Interconnection Customer fully 
informed of the status of such request for a private letter ruling 
and shall execute either a privacy act waiver or a limited power of 
attorney, in a form acceptable to the IRS, that authorizes 
Interconnection Customer to participate in all discussions with the 
IRS regarding such request for a private letter ruling. Transmission 
Provider shall allow Interconnection Customer to attend all meetings 
with IRS officials about the request and shall permit 
Interconnection Customer to prepare the initial drafts of any 
follow-up letters in connection with the request.
    5.17.6 Subsequent Taxable Events. If, within 10 years from the 
date on which the relevant Transmission Provider's Interconnection 
Facilities are placed in service, (i) Interconnection Customer 
Breaches the covenants contained in Article 5.17.2, (ii) a 
``disqualification event'' occurs within the meaning of IRS Notice 
88-129, or (iii) this LGIA terminates and Transmission Provider 
retains ownership of the Interconnection Facilities and Network 
Upgrades, Interconnection Customer shall pay a tax gross-up for the 
cost consequences of any current tax liability imposed on 
Transmission Provider, calculated using the methodology described in 
Article 5.17.4 and in accordance with IRS Notice 90-60.
    5.17.7 Contests. In the event any Governmental Authority 
determines that Transmission Provider's receipt of payments or 
property constitutes income that is subject to taxation, 
Transmission Provider shall notify Interconnection Customer, in 
writing, within thirty (30) Calendar Days of receiving notification 
of such determination by a Governmental Authority. Upon the timely 
written request by Interconnection Customer and at Interconnection 
Customer's sole expense, Transmission Provider may appeal, protest, 
seek abatement of, or otherwise oppose such determination. Upon 
Interconnection Customer's written request and sole expense, 
Transmission Provider may file a claim for refund with respect to 
any taxes paid under this Article 5.17, whether or not it has 
received such a determination. Transmission Provider reserves the 
right to make all decisions with regard to the prosecution of such 
appeal, protest, abatement or other contest, including the selection 
of counsel and compromise or settlement of the claim, but 
Transmission Provider shall keep Interconnection Customer informed, 
shall consider in good faith suggestions from Interconnection 
Customer about the conduct of the contest, and shall reasonably 
permit Interconnection Customer or an Interconnection Customer 
representative to attend contest proceedings.
    Interconnection Customer shall pay to Transmission Provider on a 
periodic basis, as invoiced by Transmission Provider, Transmission 
Provider's documented reasonable costs of prosecuting such appeal, 
protest, abatement or other contest. At any time during the contest, 
Transmission Provider may agree to a settlement either with 
Interconnection Customer's consent or after obtaining written advice 
from nationally-recognized tax counsel, selected by Transmission 
Provider, but reasonably acceptable to Interconnection Customer, 
that the proposed settlement represents a reasonable settlement 
given the hazards of litigation. Interconnection Customer's 
obligation shall be based on the amount of the settlement agreed to 
by Interconnection Customer, or if a higher amount, so much of the 
settlement that is supported by the written advice from nationally-
recognized tax counsel selected under the terms of the preceding 
sentence. The settlement amount shall be calculated on a fully 
grossed-up basis to cover any related cost consequences of the 
current tax liability. Any settlement without Interconnection 
Customer's consent or such written advice will relieve 
Interconnection Customer from any obligation to indemnify 
Transmission Provider for the tax at issue in the contest.
    5.17.8 Refund. In the event that (a) a private letter ruling is 
issued to Transmission Provider which holds that any amount paid or 
the value of any property transferred by Interconnection Customer to 
Transmission Provider under the terms of this LGIA is not subject to 
federal income taxation, (b) any legislative change or 
administrative announcement, notice, ruling or other determination 
makes it reasonably clear to Transmission Provider in good faith 
that any amount paid or the value of any property transferred by 
Interconnection Customer to Transmission Provider under the terms of 
this LGIA is not taxable to Transmission Provider, (c) any 
abatement, appeal, protest, or other contest results in a 
determination that any payments or transfers made by Interconnection 
Customer to Transmission Provider are not subject to federal income 
tax, or (d) if Transmission Provider receives a refund from any 
taxing authority for any overpayment of tax attributable to any 
payment or property transfer made by Interconnection Customer to 
Transmission Provider pursuant to this LGIA, Transmission Provider 
shall promptly refund to Interconnection Customer the following:
    (i) any payment made by Interconnection Customer under this 
Article 5.17 for taxes that is attributable to the amount determined 
to be non-taxable, together with interest thereon,
    (ii) interest on any amounts paid by Interconnection Customer to 
Transmission Provider for such taxes which Transmission Provider did 
not submit to the taxing authority, calculated in accordance with 
the methodology set forth in FERC's regulations at 18 CFR 
35.19a(a)(2)(iii) from the date payment was made by Interconnection 
Customer to the date Transmission Provider refunds such payment to 
Interconnection Customer, and
    (iii) with respect to any such taxes paid by Transmission 
Provider, any refund or credit Transmission Provider receives or to 
which it may be entitled from any Governmental Authority, interest 
(or that portion thereof attributable to the payment described in 
clause (i), above) owed to Transmission Provider for such 
overpayment of taxes (including any reduction in interest otherwise 
payable by Transmission Provider to any Governmental Authority 
resulting from an offset or credit); provided, however, that 
Transmission Provider will remit such amount promptly to 
Interconnection Customer only after and to the extent that 
Transmission Provider has received a tax refund, credit or offset 
from any Governmental Authority for any applicable overpayment of 
income tax related to Transmission Provider's Interconnection 
Facilities.
    The intent of this provision is to leave the Parties, to the 
extent practicable, in the event that no taxes are due with respect 
to any payment for Interconnection Facilities and Network Upgrades 
hereunder, in the same position they would have been in had no such 
tax payments been made.
    5.17.9 Taxes Other Than Income Taxes. Upon the timely request by 
Interconnection Customer, and at Interconnection Customer's sole 
expense, Transmission Provider may appeal, protest, seek abatement 
of, or otherwise contest any tax (other than federal or state income 
tax) asserted or assessed against Transmission Provider for which 
Interconnection Customer may be required to reimburse Transmission 
Provider under the terms of this LGIA. Interconnection Customer 
shall pay to Transmission Provider on a periodic basis, as invoiced 
by Transmission Provider, Transmission Provider's documented 
reasonable costs of prosecuting such appeal, protest, abatement, or 
other contest. Interconnection Customer and Transmission Provider 
shall cooperate in good faith with respect to any such contest. 
Unless the payment of such taxes is a prerequisite to an appeal or 
abatement or cannot be deferred, no amount shall be payable by 
Interconnection Customer to Transmission Provider for such taxes 
until they are assessed by a final, non-appealable order by any 
court or agency of competent jurisdiction. In the event that a tax 
payment is withheld and ultimately due and payable after appeal, 
Interconnection Customer will be responsible for all taxes, interest 
and penalties, other than penalties attributable to any delay caused 
by Transmission Provider.
    5.17.10 Transmission Owners Who Are Not Transmission Providers. 
If Transmission Provider is not the same entity as the Transmission 
Owner, then (i) all references in this Article 5.17 to Transmission 
Provider shall be deemed also to refer to and to include the 
Transmission Owner, as appropriate, and (ii) this LGIA shall not 
become effective until such Transmission Owner shall have agreed in 
writing to assume all of the duties and obligations of Transmission 
Provider under this Article 5.17 of this LGIA.
    5.18 Tax Status. Each Party shall cooperate with the other to 
maintain the other Party's tax status. Nothing in this LGIA is 
intended to adversely affect any Transmission Provider's tax exempt 
status with respect to the issuance of bonds including, but not 
limited to, Local Furnishing Bonds.
    5.19 Modification.
    5.19.1 General. Either Party may undertake modifications to its 
facilities. If a Party plans to undertake a modification that 
reasonably may be expected to affect the other Party's facilities, 
that Party shall provide to the other Party sufficient information 
regarding such modification so

[[Page 27187]]

that the other Party may evaluate the potential impact of such 
modification prior to commencement of the work. Such information 
shall be deemed to be confidential hereunder and shall include 
information concerning the timing of such modifications and whether 
such modifications are expected to interrupt the flow of electricity 
from the Large Generating Facility. The Party desiring to perform 
such work shall provide the relevant drawings, plans, and 
specifications to the other Party at least ninety (90) Calendar Days 
in advance of the commencement of the work or such shorter period 
upon which the Parties may agree, which agreement shall not 
unreasonably be withheld, conditioned or delayed.
    In the case of Large Generating Facility modifications that do 
not require Interconnection Customer to submit an Interconnection 
Request, Transmission Provider shall provide, within thirty (30) 
Calendar Days (or such other time as the Parties may agree), an 
estimate of any additional modifications to the Transmission System, 
Transmission Provider's Interconnection Facilities or Network 
Upgrades necessitated by such Interconnection Customer modification 
and a good faith estimate of the costs thereof.
    5.19.2 Standards. Any additions, modifications, or replacements 
made to a Party's facilities shall be designed, constructed and 
operated in accordance with this LGIA and Good Utility Practice.
    5.19.3 Modification Costs. Interconnection Customer shall not be 
directly assigned for the costs of any additions, modifications, or 
replacements that Transmission Provider makes to Transmission 
Provider's Interconnection Facilities or the Transmission System to 
facilitate the interconnection of a third party to Transmission 
Provider's Interconnection Facilities or the Transmission System, or 
to provide transmission service to a third party under Transmission 
Provider's Tariff. Interconnection Customer shall be responsible for 
the costs of any additions, modifications, or replacements to 
Interconnection Customer's Interconnection Facilities that may be 
necessary to maintain or upgrade such Interconnection Customer's 
Interconnection Facilities consistent with Applicable Laws and 
Regulations, Applicable Reliability Standards or Good Utility 
Practice.

Article 6. Testing and Inspection

    6.1 Pre-Commercial Operation Date Testing and Modifications. 
Prior to the Commercial Operation Date, Transmission Provider shall 
test Transmission Provider's Interconnection Facilities and Network 
Upgrades and Interconnection Customer shall test the Large 
Generating Facility and Interconnection Customer's Interconnection 
Facilities to ensure their safe and reliable operation. Similar 
testing may be required after initial operation. Each Party shall 
make any modifications to its facilities that are found to be 
necessary as a result of such testing. Interconnection Customer 
shall bear the cost of all such testing and modifications. 
Interconnection Customer shall generate test energy at the Large 
Generating Facility only if it has arranged for the delivery of such 
test energy.
    6.2 Post-Commercial Operation Date Testing and Modifications. 
Each Party shall at its own expense perform routine inspection and 
testing of its facilities and equipment in accordance with Good 
Utility Practice as may be necessary to ensure the continued 
interconnection of the Large Generating Facility with the 
Transmission System in a safe and reliable manner. Each Party shall 
have the right, upon advance written notice, to require reasonable 
additional testing of the other Party's facilities, at the 
requesting Party's expense, as may be in accordance with Good 
Utility Practice.
    6.3 Right to Observe Testing. Each Party shall notify the other 
Party in advance of its performance of tests of its Interconnection 
Facilities. The other Party has the right, at its own expense, to 
observe such testing.
    6.4 Right to Inspect. Each Party shall have the right, but shall 
have no obligation to: (i) observe the other Party's tests and/or 
inspection of any of its System Protection Facilities and other 
protective equipment, including Power System Stabilizers; (ii) 
review the settings of the other Party's System Protection 
Facilities and other protective equipment; and (iii) review the 
other Party's maintenance records relative to the Interconnection 
Facilities, the System Protection Facilities and other protective 
equipment. A Party may exercise these rights from time to time as it 
deems necessary upon reasonable notice to the other Party. The 
exercise or non-exercise by a Party of any such rights shall not be 
construed as an endorsement or confirmation of any element or 
condition of the Interconnection Facilities or the System Protection 
Facilities or other protective equipment or the operation thereof, 
or as a warranty as to the fitness, safety, desirability, or 
reliability of same. Any information that a Party obtains through 
the exercise of any of its rights under this Article 6.4 shall be 
deemed to be Confidential Information and treated pursuant to 
Article 22 of this LGIA.

Article 7. Metering

    7.1 General. Each Party shall comply with the Electric 
Reliability Organization requirements. Unless otherwise agreed by 
the Parties, Transmission Provider shall install Metering Equipment 
at the Point of Interconnection prior to any operation of the Large 
Generating Facility and shall own, operate, test and maintain such 
Metering Equipment. Power flows to and from the Large Generating 
Facility shall be measured at or, at Transmission Provider's option, 
compensated to, the Point of Interconnection. Transmission Provider 
shall provide metering quantities, in analog and/or digital form, to 
Interconnection Customer upon request. Interconnection Customer 
shall bear all reasonable documented costs associated with the 
purchase, installation, operation, testing and maintenance of the 
Metering Equipment.
    7.2 Check Meters. Interconnection Customer, at its option and 
expense, may install and operate, on its premises and on its side of 
the Point of Interconnection, one or more check meters to check 
Transmission Provider's meters. Such check meters shall be for check 
purposes only and shall not be used for the measurement of power 
flows for purposes of this LGIA, except as provided in Article 7.4 
below. The check meters shall be subject at all reasonable times to 
inspection and examination by Transmission Provider or its designee. 
The installation, operation and maintenance thereof shall be 
performed entirely by Interconnection Customer in accordance with 
Good Utility Practice.
    7.3 Standards. Transmission Provider shall install, calibrate, 
and test revenue quality Metering Equipment in accordance with 
applicable ANSI standards.
    7.4 Testing of Metering Equipment. Transmission Provider shall 
inspect and test all Transmission Provider-owned Metering Equipment 
upon installation and at least once every two (2) years thereafter. 
If requested to do so by Interconnection Customer, Transmission 
Provider shall, at Interconnection Customer's expense, inspect or 
test Metering Equipment more frequently than every two (2) years. 
Transmission Provider shall give reasonable notice of the time when 
any inspection or test shall take place, and Interconnection 
Customer may have representatives present at the test or inspection. 
If at any time Metering Equipment is found to be inaccurate or 
defective, it shall be adjusted, repaired or replaced at 
Interconnection Customer's expense, in order to provide accurate 
metering, unless the inaccuracy or defect is due to Transmission 
Provider's failure to maintain, then Transmission Provider shall 
pay. If Metering Equipment fails to register, or if the measurement 
made by Metering Equipment during a test varies by more than two 
percent from the measurement made by the standard meter used in the 
test, Transmission Provider shall adjust the measurements by 
correcting all measurements for the period during which Metering 
Equipment was in error by using Interconnection Customer's check 
meters, if installed. If no such check meters are installed or if 
the period cannot be reasonably ascertained, the adjustment shall be 
for the period immediately preceding the test of the Metering 
Equipment equal to one-half the time from the date of the last 
previous test of the Metering Equipment.
    7.5 Metering Data. At Interconnection Customer's expense, the 
metered data shall be telemetered to one or more locations 
designated by Transmission Provider and one or more locations 
designated by Interconnection Customer. Such telemetered data shall 
be used, under normal operating conditions, as the official 
measurement of the amount of energy delivered from the Large 
Generating Facility to the Point of Interconnection.

Article 8. Communications

    8.1 Interconnection Customer Obligations. Interconnection 
Customer shall maintain satisfactory operating communications with 
Transmission Provider's Transmission System dispatcher or 
representative designated by Transmission Provider. Interconnection 
Customer shall

[[Page 27188]]

provide standard voice line, dedicated voice line and facsimile 
communications at its Large Generating Facility control room or 
central dispatch facility through use of either the public telephone 
system, or a voice communications system that does not rely on the 
public telephone system. Interconnection Customer shall also provide 
the dedicated data circuit(s) necessary to provide Interconnection 
Customer data to Transmission Provider as set forth in Appendix D, 
Security Arrangements Details. The data circuit(s) shall extend from 
the Large Generating Facility to the location(s) specified by 
Transmission Provider. Any required maintenance of such 
communications equipment shall be performed by Interconnection 
Customer. Operational communications shall be activated and 
maintained under, but not be limited to, the following events: 
system paralleling or separation, scheduled and unscheduled 
shutdowns, equipment clearances, and hourly and daily load data.
    8.2 Remote Terminal Unit. Prior to the Initial Synchronization 
Date of the Large Generating Facility, a Remote Terminal Unit, or 
equivalent data collection and transfer equipment acceptable to the 
Parties, shall be installed by Interconnection Customer, or by 
Transmission Provider at Interconnection Customer's expense, to 
gather accumulated and instantaneous data to be telemetered to the 
location(s) designated by Transmission Provider through use of a 
dedicated point-to-point data circuit(s) as indicated in Article 
8.1. The communication protocol for the data circuit(s) shall be 
specified by Transmission Provider. Instantaneous bi-directional 
analog real power and reactive power flow information must be 
telemetered directly to the location(s) specified by Transmission 
Provider.
    Each Party will promptly advise the other Party if it detects or 
otherwise learns of any metering, telemetry or communications 
equipment errors or malfunctions that require the attention and/or 
correction by the other Party. The Party owning such equipment shall 
correct such error or malfunction as soon as reasonably feasible.
    8.3 No Annexation. Any and all equipment placed on the premises 
of a Party shall be and remain the property of the Party providing 
such equipment regardless of the mode and manner of annexation or 
attachment to real property, unless otherwise mutually agreed by the 
Parties.
    8.4 Provision of Data from a Variable Energy Resource. [The] 
Interconnection Customer whose Generating Facility contains at least 
one Variable Energy Resource shall provide meteorological and forced 
outage data to [the] Transmission Provider to the extent necessary 
for [the] Transmission Provider's development and deployment of 
power production forecasts for that class of Variable Energy 
Resources. [The] Interconnection Customer with a Variable Energy 
Resource having wind as the energy source, at a minimum, will be 
required to provide [the] Transmission Provider with site-specific 
meteorological data including: temperature, wind speed, wind 
direction, and atmospheric pressure. [The] Interconnection Customer 
with a Variable Energy Resource having solar as the energy source, 
at a minimum, will be required to provide [the] Transmission 
Provider with site-specific meteorological data including: 
temperature, atmospheric pressure, and irradiance. [The] 
Transmission Provider and Interconnection Customer whose Generating 
Facility contains a Variable Energy Resource shall mutually agree to 
any additional meteorological data that are required for the 
development and deployment of a power production forecast. [The] 
Interconnection Customer whose Generating Facility contains a 
Variable Energy Resource also shall submit data to [the] 
Transmission Provider regarding all forced outages to the extent 
necessary for [the] Transmission Provider's development and 
deployment of power production forecasts for that class of Variable 
Energy Resources. The exact specifications of the meteorological and 
forced outage data to be provided by [the] Interconnection Customer 
to [the] Transmission Provider, including the frequency and timing 
of data submittals, shall be made taking into account the size and 
configuration of the Variable Energy Resource, its characteristics, 
location, and its importance in maintaining generation resource 
adequacy and transmission system reliability in its area. All 
requirements for meteorological and forced outage data must be 
commensurate with the power production forecasting employed by [the] 
Transmission Provider. Such requirements for meteorological and 
forced outage data are set forth in Appendix C, Interconnection 
Details, of this LGIA, as they may change from time to time.

Article 9. Operations

    9.1 General. Each Party shall comply with the Electric 
Reliability Organization requirements. Each Party shall provide to 
the other Party all information that may reasonably be required by 
the other Party to comply with Applicable Laws and Regulations and 
Applicable Reliability Standards.
    9.2 Balancing Authority Area Notification. At least three months 
before Initial Synchronization Date, Interconnection Customer shall 
notify Transmission Provider in writing of the Balancing Authority 
Area in which the Large Generating Facility will be located. If 
Interconnection Customer elects to locate the Large Generating 
Facility in a Balancing Authority Area other than the Balancing 
Authority Area in which the Large Generating Facility is physically 
located, and if permitted to do so by the relevant transmission 
tariffs, all necessary arrangements, including but not limited to 
those set forth in Article 7 and Article 8 of this LGIA, and remote 
Balancing Authority Area generator interchange agreements, if 
applicable, and the appropriate measures under such agreements, 
shall be executed and implemented prior to the placement of the 
Large Generating Facility in the other Balancing Authority Area.
    9.3 Transmission Provider Obligations. Transmission Provider 
shall cause the Transmission System and Transmission Provider's 
Interconnection Facilities to be operated, maintained and controlled 
in a safe and reliable manner and in accordance with this LGIA. 
Transmission Provider may provide operating instructions to 
Interconnection Customer consistent with this LGIA and Transmission 
Provider's operating protocols and procedures as they may change 
from time to time. Transmission Provider will consider changes to 
its operating protocols and procedures proposed by Interconnection 
Customer.
    9.4 Interconnection Customer Obligations. Interconnection 
Customer shall at its own expense operate, maintain and control the 
Large Generating Facility and Interconnection Customer's 
Interconnection Facilities in a safe and reliable manner and in 
accordance with this LGIA. Interconnection Customer shall operate 
the Large Generating Facility and Interconnection Customer's 
Interconnection Facilities in accordance with all applicable 
requirements of the Balancing Authority Area of which it is part, as 
such requirements are set forth in Appendix C, Interconnection 
Details, of this LGIA. Appendix C, Interconnection Details, will be 
modified to reflect changes to the requirements as they may change 
from time to time. Either Party may request that the other Party 
provide copies of the requirements set forth in Appendix C, 
Interconnection Details, of this LGIA.
    9.5 Start-Up and Synchronization. Consistent with the Parties' 
mutually acceptable procedures, Interconnection Customer is 
responsible for the proper synchronization of the Large Generating 
Facility to Transmission Provider's Transmission System.
    9.6 Reactive Power and Primary Frequency Response.
    9.6.1 Power Factor Design Criteria.
    9.6.1.1 Synchronous Generation. 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 synchronous generators in 
the Balancing Authority Area on a comparable basis.
    9.6.1.2 Non-Synchronous Generation. Interconnection Customer 
shall design the Large Generating Facility to maintain a composite 
power delivery at continuous rated power output at the high-side of 
the generator substation at a power factor within the range of 0.95 
leading to 0.95 lagging, unless Transmission Provider has 
established a different power factor range that applies to all non-
synchronous generators in the Balancing Authority Area on a 
comparable basis. This power factor range standard shall be dynamic 
and can be met using, for example, power electronics designed to 
supply this level of reactive capability (taking into account any 
limitations due to voltage level, real power output, etc.) or fixed 
and switched capacitors, or a combination of the two. This 
requirement shall only apply to newly interconnecting non-
synchronous generators that have not yet executed a Facilities Study 
Agreement as of the effective date of the Final Rule establishing 
this requirement (Order No. 827).

[[Page 27189]]

    9.6.2 Voltage Schedules. Once Interconnection Customer has 
synchronized the Large Generating Facility with the Transmission 
System, Transmission Provider shall require Interconnection Customer 
to operate the Large Generating Facility to produce or absorb 
reactive power within the design limitations of the Large Generating 
Facility set forth in Article 9.6.1 (Power Factor Design Criteria). 
Transmission Provider's voltage schedules shall treat all sources of 
reactive power in the Balancing Authority Area in an equitable and 
not unduly discriminatory manner. Transmission Provider shall 
exercise Reasonable Efforts to provide Interconnection Customer with 
such schedules at least one (1) day in advance, and may make changes 
to such schedules as necessary to maintain the reliability of the 
Transmission System. Interconnection Customer shall operate the 
Large Generating Facility to maintain the specified output voltage 
or power factor at the Point of Interconnection within the design 
limitations of the Large Generating Facility set forth in Article 
9.6.1 (Power Factor Design Criteria). If Interconnection Customer is 
unable to maintain the specified voltage or power factor, it shall 
promptly notify the System Operator.
    9.6.2.1 Voltage Regulators. Whenever the Large Generating 
Facility is operated in parallel with the Transmission System and 
voltage regulators are capable of operation, Interconnection 
Customer shall operate the Large Generating Facility with its 
voltage regulators in automatic operation. If the Large Generating 
Facility's voltage regulators are not capable of such automatic 
operation, Interconnection Customer shall immediately notify 
Transmission Provider's system operator, or its designated 
representative, and ensure that such Large Generating Facility's 
reactive power production or absorption (measured in MVARs) are 
within the design capability of the Large Generating Facility's 
generating unit(s) and steady state stability limits. 
Interconnection Customer shall not cause its Large Generating 
Facility to disconnect automatically or instantaneously from the 
Transmission System or trip any generating unit comprising the Large 
Generating Facility for an under or over frequency condition unless 
the abnormal frequency condition persists for a time period beyond 
the limits set forth in ANSI/IEEE Standard C37.106, or such other 
standard as applied to other generators in the Balancing Authority 
Area on a comparable basis.
    9.6.3 Payment for Reactive Power. Transmission Provider is 
required to pay Interconnection Customer for reactive power that 
Interconnection Customer provides or absorbs from the Large 
Generating Facility when Transmission Provider requests 
Interconnection Customer to operate its Large Generating Facility 
outside the range specified in Article 9.6.1, provided that if 
Transmission Provider pays its own or affiliated generators for 
reactive power service within the specified range, it must also pay 
Interconnection Customer. Payments shall be pursuant to Article 11.6 
or such other agreement to which the Parties have otherwise agreed.
    9.6.4 Primary Frequency Response. Interconnection Customer shall 
ensure the primary frequency response capability of its Large 
Generating Facility by installing, maintaining, and operating a 
functioning governor or equivalent controls. The term ``functioning 
governor or equivalent controls'' as used herein shall mean the 
required hardware and/or software that provides frequency responsive 
real power control with the ability to sense changes in system 
frequency and autonomously adjust the Large Generating Facility's 
real power output in accordance with the droop and deadband 
parameters and in the direction needed to correct frequency 
deviations. Interconnection Customer is required to install a 
governor or equivalent controls with the capability of operating: 
(1) with a maximum 5 percent droop and 0.036 Hz 
deadband; or (2) in accordance with the relevant droop, deadband, 
and timely and sustained response settings from an approved Electric 
Reliability Organization reliability standard providing for 
equivalent or more stringent parameters. The droop characteristic 
shall be: (1) based on the nameplate capacity of the Large 
Generating Facility, and shall be linear in the range of frequencies 
between 59 to 61 Hz that are outside of the deadband parameter; or 
(2) based an approved Electric Reliability Organization reliability 
standard providing for an equivalent or more stringent parameter. 
The deadband parameter shall be: the range of frequencies above and 
below nominal (60 Hz) in which the governor or equivalent controls 
is not expected to adjust the Large Generating Facility's real power 
output in response to frequency deviations. The deadband shall be 
implemented: (1) without a step to the droop curve, that is, once 
the frequency deviation exceeds the deadband parameter, the expected 
change in the Large Generating Facility's real power output in 
response to frequency deviations shall start from zero and then 
increase (for under-frequency deviations) or decrease (for over-
frequency deviations) linearly in proportion to the magnitude of the 
frequency deviation; or (2) in accordance with an approved Electric 
Reliability Organization reliability standard providing for an 
equivalent or more stringent parameter. Interconnection Customer 
shall notify Transmission Provider that the primary frequency 
response capability of the Large Generating Facility has been tested 
and confirmed during commissioning. Once Interconnection Customer 
has synchronized the Large Generating Facility with the Transmission 
system, Interconnection Customer shall operate the Large Generating 
Facility consistent with the provisions specified in [Sections] 
articles 9.6.4.1 and 9.6.4.2 of this Agreement. The primary 
frequency response requirements contained herein shall apply to both 
synchronous and non-synchronous Large Generating Facilities.
    9.6.4.1 Governor or Equivalent Controls. Whenever the Large 
Generating Facility is operated in parallel with the Transmission 
System, Interconnection Customer shall operate the Large Generating 
Facility with its governor or equivalent controls in service and 
responsive to frequency. Interconnection Customer shall: (1) in 
coordination with Transmission Provider and/or the relevant 
balancing authority, set the deadband parameter to: (1) a maximum of 
0.036 Hz and set the droop parameter to a maximum of 5 
percent; or (2) implement the relevant droop and deadband settings 
from an approved Electric Reliability Organization reliability 
standard that provides for equivalent or more stringent parameters. 
Interconnection Customer shall be required to provide the status and 
settings of the governor or equivalent controls to Transmission 
Provider and/or the relevant balancing authority upon request. If 
Interconnection Customer needs to operate the Large Generating 
Facility with its governor or equivalent controls not in service, 
Interconnection Customer shall immediately notify Transmission 
Provider and the relevant balancing authority, and provide both with 
the following information: (1) the operating status of the governor 
or equivalent controls (i.e., whether it is currently out of service 
or when it will be taken out of service); (2) the reasons for 
removing the governor or equivalent controls from service; and (3) a 
reasonable estimate of when the governor or equivalent controls will 
be returned to service. Interconnection Customer shall make 
Reasonable Efforts to return its governor or equivalent controls 
into service as soon as practicable. Interconnection Customer shall 
make Reasonable Efforts to keep outages of the Large Generating 
Facility's governor or equivalent controls to a minimum whenever the 
Large Generating Facility is operated in parallel with the 
Transmission System.
    9.6.4.2 Timely and Sustained Response. Interconnection Customer 
shall ensure that the Large Generating Facility's real power 
response to sustained frequency deviations outside of the deadband 
setting is automatically provided and shall begin immediately after 
frequency deviates outside of the deadband, and to the extent the 
Large Generating Facility has operating capability in the direction 
needed to correct the frequency deviation. Interconnection Customer 
shall not block or otherwise inhibit the ability of the governor or 
equivalent controls to respond and shall ensure that the response is 
not inhibited, except under certain operational constraints 
including, but not limited to, ambient temperature limitations, 
physical energy limitations, outages of mechanical equipment, or 
regulatory requirements. The Large Generating Facility shall sustain 
the real power response at least until system frequency returns to a 
value within the deadband setting of the governor or equivalent 
controls. A Commission-approved reliability standard with equivalent 
or more stringent requirements shall supersede the above 
requirements.
    9.6.4.3 Exemptions. Large Generating Facilities that are 
regulated by the United States Nuclear Regulatory Commission shall 
be exempt from [Sections]articles 9.6.4, 9.6.4.1, and 9.6.4.2 of 
this Agreement. Large Generating Facilities that are behind the 
meter generation that is sized-to-load (i.e., the thermal load and 
the generation are near-balanced in real-time operation and the 
generation is primarily controlled to maintain the unique thermal, 
chemical, or

[[Page 27190]]

mechanical output necessary for the operating requirements of its 
host facility) shall be required to install primary frequency 
response capability in accordance with the droop and deadband 
capability requirements specified in [Section]article 9.6.4, but 
shall be otherwise exempt from the operating requirements in 
[Sections]articles 9.6.4, 9.6.4.1, 9.6.4.2, and 9.6.4.4 of this 
Agreement.
    9.6.4.4[.] Electric Storage Resources. Interconnection Customer 
interconnecting a Generating Facility that contains an electric 
storage resource shall establish an operating range in Appendix C of 
its LGIA that specifies a minimum state of charge and a maximum 
state of charge between which the electric storage resource will be 
required to provide primary frequency response consistent with the 
conditions set forth in [Sections] articles 9.6.4, 9.6.4.1, 9.6.4.2 
and 9.6.4.3 of this Agreement. Appendix C shall specify whether the 
operating range is static or dynamic, and shall consider (1) the 
expected magnitude of frequency deviations in the interconnection; 
(2) the expected duration that system frequency will remain outside 
of the deadband parameter in the interconnection; (3) the expected 
incidence of frequency deviations outside of the deadband parameter 
in the interconnection; (4) the physical capabilities of the 
electric storage resource; (5) operational limitations of the 
electric storage resource due to manufacturer specifications; and 
(6) any other relevant factors agreed to by Transmission Provider 
and Interconnection Customer, and in consultation with the relevant 
transmission owner or balancing authority as appropriate. If the 
operating range is dynamic, then Appendix C must establish how 
frequently the operating range will be reevaluated and the factors 
that may be considered during its reevaluation.
    Interconnection Customer's electric storage resource is required 
to provide timely and sustained primary frequency response 
consistent with [Section]article 9.6.4.2 of this Agreement when it 
is online and dispatched to inject electricity to the Transmission 
System and/or receive electricity from the Transmission System. This 
excludes circumstances when the electric storage resource is not 
dispatched to inject electricity to the Transmission System and/or 
dispatched to receive electricity from the Transmission System. If 
Interconnection Customer's electric storage resource is charging at 
the time of a frequency deviation outside of its deadband parameter, 
it is to increase (for over-frequency deviations) or decrease (for 
under-frequency deviations) the rate at which it is charging in 
accordance with its droop parameter. Interconnection Customer's 
electric storage resource is not required to change from charging to 
discharging, or vice versa, unless the response necessitated by the 
droop and deadband settings requires it to do so and it is 
technically capable of making such a transition.
    9.7 Outages and Interruptions.
    9.7.1 Outages.
    9.7.1.1 Outage Authority and Coordination. Each Party may in 
accordance with Good Utility Practice in coordination with the other 
Party remove from service any of its respective Interconnection 
Facilities or Network Upgrades that may impact the other Party's 
facilities as necessary to perform maintenance or testing or to 
install or replace equipment. Absent an Emergency Condition, the 
Party scheduling a removal of such facility(ies) from service will 
use Reasonable Efforts to schedule such removal on a date and time 
mutually acceptable to the Parties. In all circumstances, any Party 
planning to remove such facility(ies) from service shall use 
Reasonable Efforts to minimize the effect on the other Party of such 
removal.
    9.7.1.2 Outage Schedules. Transmission Provider shall post 
scheduled outages of its transmission facilities on the OASIS. 
Interconnection Customer shall submit its planned maintenance 
schedules for the Large Generating Facility to Transmission Provider 
for a minimum of a rolling twenty-four month period. Interconnection 
Customer shall update its planned maintenance schedules as 
necessary. Transmission Provider may request Interconnection 
Customer to reschedule its maintenance as necessary to maintain the 
reliability of the Transmission System; provided, however, adequacy 
of generation supply shall not be a criterion in determining 
Transmission System reliability. Transmission Provider shall 
compensate Interconnection Customer for any additional direct costs 
that Interconnection Customer incurs as a result of having to 
reschedule maintenance, including any additional overtime, breaking 
of maintenance contracts or other costs above and beyond the cost 
Interconnection Customer would have incurred absent Transmission 
Provider's request to reschedule maintenance. Interconnection 
Customer will not be eligible to receive compensation, if during the 
twelve (12) months prior to the date of the scheduled maintenance, 
Interconnection Customer had modified its schedule of maintenance 
activities.
    9.7.1.3 Outage Restoration. If an outage on a Party's 
Interconnection Facilities or Network Upgrades adversely affects the 
other Party's operations or facilities, the Party that owns or 
controls the facility that is out of service shall use Reasonable 
Efforts to promptly restore such facility(ies) to a normal operating 
condition consistent with the nature of the outage. The Party that 
owns or controls the facility that is out of service shall provide 
the other Party, to the extent such information is known, 
information on the nature of the Emergency Condition, an estimated 
time of restoration, and any corrective actions required. Initial 
verbal notice shall be followed up as soon as practicable with 
written notice explaining the nature of the outage.
    9.7.2 Interruption of Service. If required by Good Utility 
Practice to do so, Transmission Provider may require Interconnection 
Customer to interrupt or reduce deliveries of electricity if such 
delivery of electricity could adversely affect Transmission 
Provider's ability to perform such activities as are necessary to 
safely and reliably operate and maintain the Transmission System. 
The following provisions shall apply to any interruption or 
reduction permitted under this Article 9.7.2:
    9.7.2.1 The interruption or reduction shall continue only for so 
long as reasonably necessary under Good Utility Practice;
    9.7.2.2 Any such interruption or reduction shall be made on an 
equitable, non-discriminatory basis with respect to all generating 
facilities directly connected to the Transmission System;
    9.7.2.3 When the interruption or reduction must be made under 
circumstances which do not allow for advance notice, Transmission 
Provider shall notify Interconnection Customer by telephone as soon 
as practicable of the reasons for the curtailment, interruption, or 
reduction, and, if known, its expected duration. Telephone 
notification shall be followed by written notification as soon as 
practicable;
    9.7.2.4 Except during the existence of an Emergency Condition, 
when the interruption or reduction can be scheduled without advance 
notice, Transmission Provider shall notify Interconnection Customer 
in advance regarding the timing of such scheduling and further 
notify Interconnection Customer of the expected duration. 
Transmission Provider shall coordinate with Interconnection Customer 
using Good Utility Practice to schedule the interruption or 
reduction during periods of least impact to Interconnection Customer 
and Transmission Provider;
    9.7.2.5 The Parties shall cooperate and coordinate with each 
other to the extent necessary in order to restore the Large 
Generating Facility, Interconnection Facilities, and the 
Transmission System to their normal operating state, consistent with 
system conditions and Good Utility Practice.
    9.7.3 Ride Through Capability and Performance. The Transmission 
System is designed to automatically activate a load-shed program as 
required by the Electric Reliability Organization in the event of an 
under-frequency system disturbance. Interconnection Customer shall 
implement under-frequency and over-frequency relay set points for 
the Large Generating Facility as required by the Electric 
Reliability Organization to ensure frequency ``ride through'' 
capability of the Transmission System. Large Generating Facility 
response to frequency deviations of pre-determined magnitudes, both 
under-frequency and over-frequency deviations, shall be studied and 
coordinated with Transmission Provider in accordance with Good 
Utility Practice. Interconnection Customer shall also implement 
under-voltage and over-voltage relay set points, or equivalent 
electronic controls, as required by the Electric Reliability 
Organization to ensure voltage ``ride through'' capability of the 
Transmission System. The term ``ride through'' as used herein shall 
mean the ability of a Generating Facility to stay connected to and 
synchronized with the Transmission System during system disturbances 
within a range of under-frequency, over-frequency, under-voltage, 
and over-voltage conditions, in accordance with Good Utility 
Practice and consistent with any standards and guidelines that are 
applied to other Generating Facilities in the Balancing Authority 
Area on a comparable basis. For abnormal frequency conditions and

[[Page 27191]]

voltage conditions within the ``no trip zone'' defined by 
Reliability Standard PRC-024-3 or successor mandatory ride through 
reliability standards, the non-synchronous Large Generating Facility 
must ensure that, within any physical limitations of the Large 
Generating Facility, its control and protection settings are 
configured or set to (1) continue active power production during 
disturbance and post disturbance periods at pre-disturbance levels, 
unless reactive power priority mode is enabled or unless providing 
primary frequency response or fast frequency response; (2) minimize 
reductions in active power and remain within dynamic voltage and 
current limits, if reactive power priority mode is enabled, unless 
providing primary frequency response or fast frequency response; (3) 
not artificially limit dynamic reactive power capability during 
disturbances; and (4) return to pre-disturbance active power levels 
without artificial ramp rate limits if active power is reduced, 
unless providing primary frequency response or fast frequency 
response.
    9.7.4 System Protection and Other Control Requirements.
    9.7.4.1 System Protection Facilities. Interconnection Customer 
shall, at its expense, install, operate and maintain System 
Protection Facilities as a part of the Large Generating Facility or 
Interconnection Customer's Interconnection Facilities. Transmission 
Provider shall install at Interconnection Customer's expense any 
System Protection Facilities that may be required on Transmission 
Provider's Interconnection Facilities or the Transmission System as 
a result of the interconnection of the Large Generating Facility and 
Interconnection Customer's Interconnection Facilities.
    9.7.4.2 Each Party's protection facilities shall be designed and 
coordinated with other systems in accordance with Good Utility 
Practice.
    9.7.4.3 Each Party shall be responsible for protection of its 
facilities consistent with Good Utility Practice.
    9.7.4.4 Each Party's protective relay design shall incorporate 
the necessary test switches to perform the tests required in Article 
6. The required test switches will be placed such that they allow 
operation of lockout relays while preventing breaker failure schemes 
from operating and causing unnecessary breaker operations and/or the 
tripping of Interconnection Customer's units.
    9.7.4.5 Each Party will test, operate and maintain System 
Protection Facilities in accordance with Good Utility Practice.
    9.7.4.6 Prior to the In-Service Date, and again prior to the 
Commercial Operation Date, each Party or its agent shall perform a 
complete calibration test and functional trip test of the System 
Protection Facilities. At intervals suggested by Good Utility 
Practice and following any apparent malfunction of the System 
Protection Facilities, each Party shall perform both calibration and 
functional trip tests of its System Protection Facilities. These 
tests do not require the tripping of any in-service generation unit. 
These tests do, however, require that all protective relays and 
lockout contacts be activated.
    9.7.5 Requirements for Protection. In compliance with Good 
Utility Practice, Interconnection Customer shall provide, install, 
own, and maintain relays, circuit breakers and all other devices 
necessary to remove any fault contribution of the Large Generating 
Facility to any short circuit occurring on the Transmission System 
not otherwise isolated by Transmission Provider's equipment, such 
that the removal of the fault contribution shall be coordinated with 
the protective requirements of the Transmission System. Such 
protective equipment shall include, without limitation, a 
disconnecting device or switch with load-interrupting capability 
located between the Large Generating Facility and the Transmission 
System at a site selected upon mutual agreement (not to be 
unreasonably withheld, conditioned or delayed) of the Parties. 
Interconnection Customer shall be responsible for protection of the 
Large Generating Facility and Interconnection Customer's other 
equipment from such conditions as negative sequence currents, over- 
or under-frequency, sudden load rejection, over- or under-voltage, 
and generator loss-of-field. Interconnection Customer shall be 
solely responsible to disconnect the Large Generating Facility and 
Interconnection Customer's other equipment if conditions on the 
Transmission System could adversely affect the Large Generating 
Facility.
    9.7.6 Power Quality. Neither Party's facilities shall cause 
excessive voltage flicker nor introduce excessive distortion to the 
sinusoidal voltage or current waves as defined by ANSI Standard 
C84.1-1989, in accordance with IEEE Standard 519, or any applicable 
superseding electric industry standard. In the event of a conflict 
between ANSI Standard C84.1-1989, or any applicable superseding 
electric industry standard, ANSI Standard C84.1-1989, or the 
applicable superseding electric industry standard, shall control.
    9.8 Switching and Tagging Rules. Each Party shall provide the 
other Party a copy of its switching and tagging rules that are 
applicable to the other Party's activities. Such switching and 
tagging rules shall be developed on a non-discriminatory basis. The 
Parties shall comply with applicable switching and tagging rules, as 
amended from time to time, in obtaining clearances for work or for 
switching operations on equipment.
    9.9 Use of Interconnection Facilities by Third Parties.
    9.9.1 Purpose of Interconnection Facilities. Except as may be 
required by Applicable Laws and Regulations, or as otherwise agreed 
to among the Parties, the Interconnection Facilities shall be 
constructed for the sole purpose of interconnecting the Large 
Generating Facility to the Transmission System and shall be used for 
no other purpose.
    9.9.2 Third Party Users. If required by Applicable Laws and 
Regulations or if the Parties mutually agree, such agreement not to 
be unreasonably withheld, to allow one or more third parties to use 
Transmission Provider's Interconnection Facilities, or any part 
thereof, Interconnection Customer will be entitled to compensation 
for the capital expenses it incurred in connection with the 
Interconnection Facilities based upon the pro rata use of the 
Interconnection Facilities by Transmission Provider, all third party 
users, and Interconnection Customer, in accordance with Applicable 
Laws and Regulations or upon some other mutually-agreed upon 
methodology. In addition, cost responsibility for ongoing costs, 
including operation and maintenance costs associated with the 
Interconnection Facilities, will be allocated between 
Interconnection Customer and any third party users based upon the 
pro rata use of the Interconnection Facilities by Transmission 
Provider, all third party users, and Interconnection Customer, in 
accordance with Applicable Laws and Regulations or upon some other 
mutually agreed upon methodology. If the issue of such compensation 
or allocation cannot be resolved through such negotiations, it shall 
be submitted to FERC for resolution.
    9.10 Disturbance Analysis Data Exchange. The Parties will 
cooperate with one another in the analysis of disturbances to either 
the Large Generating Facility or Transmission Provider's 
Transmission System by gathering and providing access to any 
information relating to any disturbance, including information from 
oscillography, protective relay targets, breaker operations and 
sequence of events records, and any disturbance information required 
by Good Utility Practice.

Article 10. Maintenance

    10.1 Transmission Provider Obligations. Transmission Provider 
shall maintain the Transmission System and Transmission Provider's 
Interconnection Facilities in a safe and reliable manner and in 
accordance with this LGIA.
    10.2 Interconnection Customer Obligations. Interconnection 
Customer shall maintain the Large Generating Facility and 
Interconnection Customer's Interconnection Facilities in a safe and 
reliable manner and in accordance with this LGIA.
    10.3 Coordination. The Parties shall confer regularly to 
coordinate the planning, scheduling and performance of preventive 
and corrective maintenance on the Large Generating Facility and the 
Interconnection Facilities.
    10.4 Secondary Systems. Each Party shall cooperate with the 
other in the inspection, maintenance, and testing of control or 
power circuits that operate below 600 volts, AC or DC, including, 
but not limited to, any hardware, control or protective devices, 
cables, conductors, electric raceways, secondary equipment panels, 
transducers, batteries, chargers, and voltage and current 
transformers that directly affect the operation of a Party's 
facilities and equipment which may reasonably be expected to impact 
the other Party. Each Party shall provide advance notice to the 
other Party before undertaking any work on such circuits, especially 
on electrical circuits involving circuit breaker trip and close 
contacts, current transformers, or potential transformers.
    10.5 Operating and Maintenance Expenses. Subject to the 
provisions herein addressing the use of facilities by others, and 
except for operations and maintenance expenses associated with 
modifications made

[[Page 27192]]

for providing interconnection or transmission service to a third 
party and such third party pays for such expenses, Interconnection 
Customer shall be responsible for all reasonable expenses including 
overheads, associated with: (1) owning, operating, maintaining, 
repairing, and replacing Interconnection Customer's Interconnection 
Facilities; and (2) operation, maintenance, repair and replacement 
of Transmission Provider's Interconnection Facilities.

Article 11. Performance Obligation

    11.1 Interconnection Customer Interconnection Facilities. 
Interconnection Customer shall design, procure, construct, install, 
own and/or control Interconnection Customer Interconnection 
Facilities described in Appendix A, Interconnection Facilities, 
Network Upgrades and Distribution Upgrades, at its sole expense.
    11.2 Transmission Provider's Interconnection Facilities. 
Transmission Provider or Transmission Owner shall design, procure, 
construct, install, own and/or control [the] Transmission Provider's 
Interconnection Facilities described in Appendix A, Interconnection 
Facilities, Network Upgrades and Distribution Upgrades, at the sole 
expense of [the] Interconnection Customer.
    11.3 Network Upgrades and Distribution Upgrades. Transmission 
Provider or Transmission Owner shall design, procure, construct, 
install, and own the Network Upgrades and Distribution Upgrades 
described in Appendix A, Interconnection Facilities, Network 
Upgrades and Distribution Upgrades. Interconnection Customer shall 
be responsible for all costs related to Distribution Upgrades. 
Unless Transmission Provider or Transmission Owner elects to fund 
the capital for the Network Upgrades, they shall be solely funded by 
Interconnection Customer.
    11.4 Transmission Credits.
    11.4.1 Repayment of Amounts Advanced for Network Upgrades. 
Interconnection Customer shall be entitled to a cash repayment, 
equal to the total amount paid to Transmission Provider and Affected 
System Operator, if any, for the Network Upgrades, including any tax 
gross-up or other tax-related payments associated with Network 
Upgrades, and not refunded to Interconnection Customer pursuant to 
Article 5.17.8 or otherwise, to be paid to Interconnection Customer 
on a dollar-for-dollar basis for the non-usage sensitive portion of 
transmission charges, as payments are made under Transmission 
Provider's Tariff and Affected System's Tariff for transmission 
services with respect to the Large Generating Facility. Any 
repayment shall include interest calculated in accordance with the 
methodology set forth in FERC's regulations at 18 CFR 
35.19a(a)(2)(iii) from the date of any payment for Network Upgrades 
through the date on which [the] Interconnection Customer receives a 
repayment of such payment pursuant to this subparagraph. 
Interconnection Customer may assign such repayment rights to any 
person.
    Notwithstanding the foregoing, Interconnection Customer, 
Transmission Provider, and Affected System Operator may adopt any 
alternative payment schedule that is mutually agreeable so long as 
Transmission Provider and Affected System Operator take one of the 
following actions no later than five years from the Commercial 
Operation Date: (1) return to Interconnection Customer any amounts 
advanced for Network Upgrades not previously repaid, or (2) declare 
in writing that Transmission Provider or Affected System Operator 
will continue to provide payments to Interconnection Customer on a 
dollar-for-dollar basis for the non-usage sensitive portion of 
transmission charges, or develop an alternative schedule that is 
mutually agreeable and provides for the return of all amounts 
advanced for Network Upgrades not previously repaid; however, full 
reimbursement shall not extend beyond twenty (20) years from the 
Commercial Operation Date.
    If the Large Generating Facility fails to achieve commercial 
operation, but it or another Generating Facility is later 
constructed and makes use of the Network Upgrades, Transmission 
Provider and Affected System Operator shall at that time reimburse 
Interconnection Customer for the amounts advanced for the Network 
Upgrades. Before any such reimbursement can occur, [the] 
Interconnection Customer, or the entity that ultimately constructs 
the Generating Facility, if different, is responsible for 
identifying the entity to which reimbursement must be made.
    11.4.2 Special Provisions for Affected Systems. Unless 
Transmission Provider provides, under the LGIA, for the repayment of 
amounts advanced to Affected System Operator for Network Upgrades, 
Interconnection Customer and Affected System Operator shall enter 
into an agreement that provides for such repayment. The agreement 
shall specify the terms governing payments to be made by 
Interconnection Customer to the Affected System Operator as well as 
the repayment by the Affected System Operator.
    11.4.3 Notwithstanding any other provision of this LGIA, nothing 
herein shall be construed as relinquishing or foreclosing any 
rights, including but not limited to firm transmission rights, 
capacity rights, transmission congestion rights, or transmission 
credits, that Interconnection Customer, shall be entitled to, now or 
in the future under any other agreement or tariff as a result of, or 
otherwise associated with, the transmission capacity, if any, 
created by the Network Upgrades, including the right to obtain cash 
reimbursements or transmission credits for transmission service that 
is not associated with the Large Generating Facility.
    11.5 Provision of Security. At least thirty (30) Calendar Days 
prior to the commencement of the procurement, installation, or 
construction of a discrete portion of a Transmission Provider's 
Interconnection Facilities, Network Upgrades, or Distribution 
Upgrades, Interconnection Customer shall provide Transmission 
Provider, at Interconnection Customer's option, a guarantee, a 
surety bond, letter of credit or other form of security that is 
reasonably acceptable to Transmission Provider and is consistent 
with the Uniform Commercial Code of the jurisdiction identified in 
Article 14.2.1. Such security for payment, as specified in Appendix 
B of this LGIA, shall be in an amount sufficient to cover the costs 
for constructing, procuring and installing the applicable portion of 
Transmission Provider's Interconnection Facilities, Network 
Upgrades, or Distribution Upgrades and shall be reduced on a dollar-
for-dollar basis for payments made to Transmission Provider for 
these purposes. Transmission Provider must use the LGIA Deposit 
required in Section 11.3 of the LGIP before requiring 
Interconnection Customer to submit security in addition to that LGIA 
Deposit. Transmission Provider must specify, in Appendix B of this 
LGIA, the dates for which Interconnection Customer must provide 
additional security for construction of each discrete portion of 
Transmission Provider's Interconnection Facilities, Network 
Upgrades, or Distribution Upgrades and Interconnection Customer must 
provide such additional security.
    In addition:
    11.5.1 The guarantee must be made by an entity that meets the 
creditworthiness requirements of Transmission Provider, and contain 
terms and conditions that guarantee payment of any amount that may 
be due from Interconnection Customer, up to an agreed-to maximum 
amount.
    11.5.2 The letter of credit must be issued by a financial 
institution reasonably acceptable to Transmission Provider and must 
specify a reasonable expiration date.
    11.5.3 The surety bond must be issued by an insurer reasonably 
acceptable to Transmission Provider and must specify a reasonable 
expiration date.
    11.6 Interconnection Customer Compensation. If Transmission 
Provider requests or directs Interconnection Customer to provide a 
service pursuant to Articles 9.6.3 (Payment for Reactive Power), or 
13.5.1 of this LGIA, Transmission Provider shall compensate 
Interconnection Customer in accordance with Interconnection 
Customer's applicable rate schedule then in effect unless the 
provision of such service(s) is subject to an RTO or ISO FERC-
approved rate schedule. Interconnection Customer shall serve 
Transmission Provider or RTO or ISO with any filing of a proposed 
rate schedule at the time of such filing with FERC. To the extent 
that no rate schedule is in effect at the time [the] Interconnection 
Customer is required to provide or absorb any Reactive Power under 
this LGIA, Transmission Provider agrees to compensate 
Interconnection Customer in such amount as would have been due 
Interconnection Customer had the rate schedule been in effect at the 
time service commenced; provided, however, that such rate schedule 
must be filed at FERC or other appropriate Governmental Authority 
within sixty (60) Calendar Days of the commencement of service.
    11.6.1 Interconnection Customer Compensation for Actions During 
Emergency Condition. Transmission Provider or RTO or ISO shall 
compensate Interconnection Customer for its provision of real and 
reactive power and other Emergency Condition services that 
Interconnection Customer provides to support the Transmission System 
during an Emergency Condition in accordance with Article 11.6.

[[Page 27193]]

Article 12. Invoice

    12.1 General. Each Party shall submit to the other Party, on a 
monthly basis, invoices of amounts due for the preceding month. Each 
invoice shall state the month to which the invoice applies and fully 
describe the services and equipment provided. The Parties may 
discharge mutual debts and payment obligations due and owing to each 
other on the same date through netting, in which case all amounts a 
Party owes to the other Party under this LGIA, including interest 
payments or credits, shall be netted so that only the net amount 
remaining due shall be paid by the owing Party.
    12.2 Final Invoice. Within six months after completion of the 
construction of Transmission Provider's Interconnection Facilities 
and the Network Upgrades, Transmission Provider shall provide an 
invoice of the final cost of the construction of Transmission 
Provider's Interconnection Facilities and the Network Upgrades and 
shall set forth such costs in sufficient detail to enable 
Interconnection Customer to compare the actual costs with the 
estimates and to ascertain deviations, if any, from the cost 
estimates. Transmission Provider shall refund to Interconnection 
Customer any amount by which the actual payment by Interconnection 
Customer for estimated costs exceeds the actual costs of 
construction within thirty (30) Calendar Days of the issuance of 
such final construction invoice.
    12.3 Payment. Invoices shall be rendered to the paying Party at 
the address specified in Appendix F. The Party receiving the invoice 
shall pay the invoice within thirty (30) Calendar Days of receipt. 
All payments shall be made in immediately available funds payable to 
the other Party, or by wire transfer to a bank named and account 
designated by the invoicing Party. Payment of invoices by either 
Party will not constitute a waiver of any rights or claims either 
Party may have under this LGIA.
    12.4 Disputes. In the event of a billing dispute between 
Transmission Provider and Interconnection Customer, Transmission 
Provider shall continue to provide Interconnection Service under 
this LGIA as long as Interconnection Customer: (i) continues to make 
all payments not in dispute; and (ii) pays to Transmission Provider 
or into an independent escrow account the portion of the invoice in 
dispute, pending resolution of such dispute. If Interconnection 
Customer fails to meet these two requirements for continuation of 
service, then Transmission Provider may provide notice to 
Interconnection Customer of a Default pursuant to Article 17. Within 
thirty (30) Calendar Days after the resolution of the dispute, the 
Party that owes money to the other Party shall pay the amount due 
with interest calculated in accord with the methodology set forth in 
FERC's regulations at 18 CFR 35.19a(a)(2)(iii).

Article 13. Emergencies

    13.1 Definition. ``Emergency Condition'' shall mean a condition 
or situation: (i) that in the judgment of the Party making the claim 
is imminently likely to endanger life or property; or (ii) that, in 
the case of Transmission Provider, is imminently likely (as 
determined in a non-discriminatory manner) to cause a material 
adverse effect on the security of, or damage to the Transmission 
System, Transmission Provider's Interconnection Facilities or the 
Transmission Systems of others to which the Transmission System is 
directly connected; or (iii) that, in the case of Interconnection 
Customer, is imminently likely (as determined in a non-
discriminatory manner) to cause a material adverse effect on the 
security of, or damage to, the Large Generating Facility or 
Interconnection Customer's Interconnection Facilities' System 
restoration and black start shall be considered Emergency 
Conditions; provided, that Interconnection Customer is not obligated 
by this LGIA to possess black start capability.
    13.2 Obligations. Each Party shall comply with the Emergency 
Condition procedures of the applicable ISO/RTO, the Electric 
Reliability Organization, Applicable Laws and Regulations, and any 
emergency procedures agreed to by the Joint Operating Committee.
    13.3 Notice. Transmission Provider shall notify Interconnection 
Customer promptly when it becomes aware of an Emergency Condition 
that affects Transmission Provider's Interconnection Facilities or 
the Transmission System that may reasonably be expected to affect 
Interconnection Customer's operation of the Large Generating 
Facility or Interconnection Customer's Interconnection Facilities. 
Interconnection Customer shall notify Transmission Provider promptly 
when it becomes aware of an Emergency Condition that affects the 
Large Generating Facility or Interconnection Customer's 
Interconnection Facilities that may reasonably be expected to affect 
the Transmission System or Transmission Provider's Interconnection 
Facilities. To the extent information is known, the notification 
shall describe the Emergency Condition, the extent of the damage or 
deficiency, the expected effect on the operation of Interconnection 
Customer's or Transmission Provider's facilities and operations, its 
anticipated duration and the corrective action taken and/or to be 
taken. The initial notice shall be followed as soon as practicable 
with written notice.
    13.4 Immediate Action. Unless, in Interconnection Customer's 
reasonable judgment, immediate action is required, Interconnection 
Customer shall obtain the consent of Transmission Provider, such 
consent to not be unreasonably withheld, prior to performing any 
manual switching operations at the Large Generating Facility or 
Interconnection Customer's Interconnection Facilities in response to 
an Emergency Condition either declared by Transmission Provider or 
otherwise regarding the Transmission System.
    13.5 Transmission Provider Authority.
    13.5.1 General. Transmission Provider may take whatever actions 
or inactions with regard to the Transmission System or Transmission 
Provider's Interconnection Facilities it deems necessary during an 
Emergency Condition in order to (i) preserve public health and 
safety, (ii) preserve the reliability of the Transmission System or 
Transmission Provider's Interconnection Facilities, (iii) limit or 
prevent damage, and (iv) expedite restoration of service.
    Transmission Provider shall use Reasonable Efforts to minimize 
the effect of such actions or inactions on the Large Generating 
Facility or Interconnection Customer's Interconnection Facilities. 
Transmission Provider may, on the basis of technical considerations, 
require the Large Generating Facility to mitigate an Emergency 
Condition by taking actions necessary and limited in scope to remedy 
the Emergency Condition, including, but not limited to, directing 
Interconnection Customer to shut-down, start-up, increase or 
decrease the real or reactive power output of the Large Generating 
Facility; implementing a reduction or disconnection pursuant to 
Article 13.5.2; directing Interconnection Customer to assist with 
blackstart (if available) or restoration efforts; or altering the 
outage schedules of the Large Generating Facility and 
Interconnection Customer's Interconnection Facilities. 
Interconnection Customer shall comply with all of Transmission 
Provider's operating instructions concerning Large Generating 
Facility real power and reactive power output within the 
manufacturer's design limitations of the Large Generating Facility's 
equipment that is in service and physically available for operation 
at the time, in compliance with Applicable Laws and Regulations.
    13.5.2 Reduction and Disconnection. Transmission Provider may 
reduce Interconnection Service or disconnect the Large Generating 
Facility or Interconnection Customer's Interconnection Facilities, 
when such, reduction or disconnection is necessary under Good 
Utility Practice due to Emergency Conditions. These rights are 
separate and distinct from any right of curtailment of Transmission 
Provider pursuant to Transmission Provider's Tariff. When 
Transmission Provider can schedule the reduction or disconnection in 
advance, Transmission Provider shall notify Interconnection Customer 
of the reasons, timing and expected duration of the reduction or 
disconnection. Transmission Provider shall coordinate with 
Interconnection Customer using Good Utility Practice to schedule the 
reduction or disconnection during periods of least impact to 
Interconnection Customer and Transmission Provider. Any reduction or 
disconnection shall continue only for so long as reasonably 
necessary under Good Utility Practice. The Parties shall cooperate 
with each other to restore the Large Generating Facility, the 
Interconnection Facilities, and the Transmission System to their 
normal operating state as soon as practicable consistent with Good 
Utility Practice.
    13.6 Interconnection Customer Authority. Consistent with Good 
Utility Practice and the LGIA and the LGIP, Interconnection Customer 
may take actions or inactions with regard to the Large Generating 
Facility or Interconnection Customer's Interconnection Facilities 
during an Emergency Condition in order to (i) preserve public health 
and safety, (ii) preserve the reliability of the Large Generating 
Facility or Interconnection Customer's Interconnection Facilities, 
(iii)

[[Page 27194]]

limit or prevent damage, and (iv) expedite restoration of service. 
Interconnection Customer shall use Reasonable Efforts to minimize 
the effect of such actions or inactions on the Transmission System 
and Transmission Provider's Interconnection Facilities. Transmission 
Provider shall use Reasonable Efforts to assist Interconnection 
Customer in such actions.
    13.7 Limited Liability. Except as otherwise provided in Article 
11.6.1 of this LGIA, neither Party shall be liable to the other for 
any action it takes in responding to an Emergency Condition so long 
as such action is made in good faith and is consistent with Good 
Utility Practice.

Article 14. Regulatory Requirements and Governing Law

    14.1 Regulatory Requirements. Each Party's obligations under 
this LGIA shall be subject to its receipt of any required approval 
or certificate from one or more Governmental Authorities in the form 
and substance satisfactory to the applying Party, or the Party 
making any required filings with, or providing notice to, such 
Governmental Authorities, and the expiration of any time period 
associated therewith. Each Party shall in good faith seek and use 
its Reasonable Efforts to obtain such other approvals. Nothing in 
this LGIA shall require Interconnection Customer to take any action 
that could result in its inability to obtain, or its loss of, status 
or exemption under the Federal Power Act, the Public Utility Holding 
Company Act of 1935, as amended, or the Public Utility Regulatory 
Policies Act of 1978.
    14.2 Governing Law.
    14.2.1 The validity, interpretation and performance of this LGIA 
and each of its provisions shall be governed by the laws of the 
state where the Point of Interconnection is located, without regard 
to its conflicts of law principles.
    14.2.2 This LGIA is subject to all Applicable Laws and 
Regulations.
    14.2.3 Each Party expressly reserves the right to seek changes 
in, appeal, or otherwise contest any laws, orders, rules, or 
regulations of a Governmental Authority.

Article 15. Notices

    15.1 General. Unless otherwise provided in this LGIA, any 
notice, demand or request required or permitted to be given by 
either Party to the other and any instrument required or permitted 
to be tendered or delivered by either Party in writing to the other 
shall be effective when delivered and may be so given, tendered or 
delivered, by recognized national courier, or by depositing the same 
with the United States Postal Service with postage prepaid, for 
delivery by certified or registered mail, addressed to the Party, or 
personally delivered to the Party, at the address set out in 
Appendix F, Addresses for Delivery of Notices and Billings.
    Either Party may change the notice information in this LGIA by 
giving five (5) Business Days written notice prior to the effective 
date of the change.
    15.2 Billings and Payments. Billings and payments shall be sent 
to the addresses set out in Appendix F.
    15.3 Alternative Forms of Notice. Any notice or request required 
or permitted to be given by a Party to the other and not required by 
this Agreement to be given in writing may be so given by telephone, 
facsimile or email to the telephone numbers and email addresses set 
out in Appendix F.
    15.4 Operations and Maintenance Notice. Each Party shall notify 
the other Party in writing of the identity of the person(s) that it 
designates as the point(s) of contact with respect to the 
implementation of Articles 9 and 10.

Article 16. Force Majeure

    16.1 Force Majeure.
    16.1.1 Economic hardship is not considered a Force Majeure 
event.
    16.1.2 Neither Party shall be considered to be in Default with 
respect to any obligation hereunder, (including obligations under 
Article 4), other than the obligation to pay money when due, if 
prevented from fulfilling such obligation by Force Majeure. A Party 
unable to fulfill any obligation hereunder (other than an obligation 
to pay money when due) by reason of Force Majeure shall give notice 
and the full particulars of such Force Majeure to the other Party in 
writing or by telephone as soon as reasonably possible after the 
occurrence of the cause relied upon. Telephone notices given 
pursuant to this article shall be confirmed in writing as soon as 
reasonably possible and shall specifically state full particulars of 
the Force Majeure, the time and date when the Force Majeure occurred 
and when the Force Majeure is reasonably expected to cease. The 
Party affected shall exercise due diligence to remove such 
disability with reasonable dispatch, but shall not be required to 
accede or agree to any provision not satisfactory to it in order to 
settle and terminate a strike or other labor disturbance.

Article 17. Default

    17.1 Default
    17.1.1 General. No Default shall exist where such failure to 
discharge an obligation (other than the payment of money) is the 
result of Force Majeure as defined in this LGIA or the result of an 
act of omission of the other Party. Upon a Breach, the non-breaching 
Party shall give written notice of such Breach to the breaching 
Party. Except as provided in Article 17.1.2, the breaching Party 
shall have thirty (30) Calendar Days from receipt of the Default 
notice within which to cure such Breach; provided however, if such 
Breach is not capable of cure within thirty (30) Calendar Days, the 
breaching Party shall commence such cure within thirty (30) Calendar 
Days after notice and continuously and diligently complete such cure 
within ninety (90) Calendar Days from receipt of the Default notice; 
and, if cured within such time, the Breach specified in such notice 
shall cease to exist.
    17.1.2 Right to Terminate. If a Breach is not cured as provided 
in this article, or if a Breach is not capable of being cured within 
the period provided for herein, the non-breaching Party shall have 
the right to declare a Default and terminate this LGIA by written 
notice at any time until cure occurs, and be relieved of any further 
obligation hereunder and, whether or not that Party terminates this 
LGIA, to recover from the breaching Party all amounts due hereunder, 
plus all other damages and remedies to which it is entitled at law 
or in equity. The provisions of this article will survive 
termination of this LGIA.
    17.2 Violation of Operating Assumptions for Generating 
Facilities. If Transmission Provider requires Interconnection 
Customer to memorialize the operating assumptions for the charging 
behavior of a Generating Facility that includes at least one 
electric storage resource in Appendix H of this LGIA, Transmission 
Provider may consider Interconnection Customer to be in Breach of 
the LGIA if Interconnection Customer fails to operate the Generating 
Facility in accordance with those operating assumptions for charging 
behavior. However, if Interconnection Customer operates contrary to 
the operating assumptions for charging behavior specified in 
Appendix H of this LGIA at the direction of Transmission Provider, 
Transmission Provider shall not consider Interconnection Customer in 
Breach of this LGIA.

Article 18. Indemnity, Consequential Damages and Insurance

    18.1 Indemnity. The Parties shall at all times indemnify, 
defend, and hold the other Party harmless from, any and all damages, 
losses, claims, including claims and actions relating to injury to 
or death of any person or damage to property, demand, suits, 
recoveries, costs and expenses, court costs, attorney fees, and all 
other obligations by or to third parties, arising out of or 
resulting from the other Party's action or inactions of its 
obligations under this LGIA on behalf of the Indemnifying Party, 
except in cases of gross negligence or intentional wrongdoing by the 
indemnified Party.
    18.1.1 Indemnified Person. If an Indemnified Person is entitled 
to indemnification under this Article 18 as a result of a claim by a 
third party, and the Indemnifying Party fails, after notice and 
reasonable opportunity to proceed under Article 18.1, to assume the 
defense of such claim, such Indemnified Person may at the expense of 
the Indemnifying Party contest, settle or consent to the entry of 
any judgment with respect to, or pay in full, such claim.
    18.1.2 Indemnifying Party. If an Indemnifying Party is obligated 
to indemnify and hold any Indemnified Person harmless under this 
Article 18, the amount owing to the Indemnified Person shall be the 
amount of such Indemnified Person's actual Loss, net of any 
insurance or other recovery.
    18.1.3 Indemnity Procedures. Promptly after receipt by an 
Indemnified Person of any claim or notice of the commencement of any 
action or administrative or legal proceeding or investigation as to 
which the indemnity provided for in Article 18.1 may apply, the 
Indemnified Person shall notify the Indemnifying Party of such fact. 
Any failure of or delay in such notification shall not affect a 
Party's indemnification obligation unless such failure or delay is 
materially prejudicial to the Indemnifying Party.
    The Indemnifying Party shall have the right to assume the 
defense thereof with

[[Page 27195]]

counsel designated by such Indemnifying Party and reasonably 
satisfactory to the Indemnified Person. If the defendants in any 
such action include one or more Indemnified Persons and the 
Indemnifying Party and if the Indemnified Person reasonably 
concludes that there may be legal defenses available to it and/or 
other Indemnified Persons which are different from or additional to 
those available to the Indemnifying Party, the Indemnified Person 
shall have the right to select separate counsel to assert such legal 
defenses and to otherwise participate in the defense of such action 
on its own behalf. In such instances, the Indemnifying Party shall 
only be required to pay the fees and expenses of one additional 
attorney to represent an Indemnified Person or Indemnified Persons 
having such differing or additional legal defenses.
    The Indemnified Person shall be entitled, at its expense, to 
participate in any such action, suit or proceeding, the defense of 
which has been assumed by the Indemnifying Party. Notwithstanding 
the foregoing, the Indemnifying Party (i) shall not be entitled to 
assume and control the defense of any such action, suit or 
proceedings if and to the extent that, in the opinion of the 
Indemnified Person and its counsel, such action, suit or proceeding 
involves the potential imposition of criminal liability on the 
Indemnified Person, or there exists a conflict or adversity of 
interest between the Indemnified Person and the Indemnifying Party, 
in such event the Indemnifying Party shall pay the reasonable 
expenses of the Indemnified Person, and (ii) shall not settle or 
consent to the entry of any judgment in any action, suit or 
proceeding without the consent of the Indemnified Person, which 
shall not be reasonably withheld, conditioned or delayed.
    18.2 Consequential Damages. Other than the Liquidated Damages 
heretofore described, in no event shall either Party be liable under 
any provision of this LGIA for any losses, damages, costs or 
expenses for any special, indirect, incidental, consequential, or 
punitive damages, including but not limited to loss of profit or 
revenue, loss of the use of equipment, cost of capital, cost of 
temporary equipment or services, whether based in whole or in part 
in contract, in tort, including negligence, strict liability, or any 
other theory of liability; provided, however, that damages for which 
a Party may be liable to the other Party under another agreement 
will not be considered to be special, indirect, incidental, or 
consequential damages hereunder.
    18.3 Insurance. Each party shall, at its own expense, maintain 
in force throughout the period of this LGIA, and until released by 
the other Party, the following minimum insurance coverages, with 
insurers authorized to do business in the state where the Point of 
Interconnection is located:
    18.3.1 Employers' Liability and Workers' Compensation Insurance 
providing statutory benefits in accordance with the laws and 
regulations of the state in which the Point of Interconnection is 
located.
    18.3.2 Commercial General Liability Insurance including premises 
and operations, personal injury, broad form property damage, broad 
form blanket contractual liability coverage (including coverage for 
the contractual indemnification) products and completed operations 
coverage, coverage for explosion, collapse and underground hazards, 
independent contractors coverage, coverage for pollution to the 
extent normally available and punitive damages to the extent 
normally available and a cross liability endorsement, with minimum 
limits of One Million Dollars ($1,000,000) per occurrence/One 
Million Dollars ($1,000,000) aggregate combined single limit for 
personal injury, bodily injury, including death and property damage.
    18.3.3 Comprehensive Automobile Liability Insurance for coverage 
of owned and non-owned and hired vehicles, trailers or semi-trailers 
designed for travel on public roads, with a minimum, combined single 
limit of One Million Dollars ($1,000,000) per occurrence for bodily 
injury, including death, and property damage.
    18.3.4 Excess Public Liability Insurance over and above the 
Employers' Liability Commercial General Liability and Comprehensive 
Automobile Liability Insurance coverage, with a minimum combined 
single limit of Twenty Million Dollars ($20,000,000) per occurrence/
Twenty Million Dollars ($20,000,000) aggregate.
    18.3.5 The Commercial General Liability Insurance, Comprehensive 
Automobile Insurance and Excess Public Liability Insurance policies 
shall name the other Party, its parent, associated and Affiliate 
companies and their respective directors, officers, agents, servants 
and employees (``Other Party Group'') as additional insured. All 
policies shall contain provisions whereby the insurers waive all 
rights of subrogation in accordance with the provisions of this LGIA 
against the Other Party Group and provide thirty (30) Calendar Days 
advance written notice to the Other Party Group prior to anniversary 
date of cancellation or any material change in coverage or 
condition.
    18.3.6 The Commercial General Liability Insurance, Comprehensive 
Automobile Liability Insurance and Excess Public Liability Insurance 
policies shall contain provisions that specify that the policies are 
primary and shall apply to such extent without consideration for 
other policies separately carried and shall state that each insured 
is provided coverage as though a separate policy had been issued to 
each, except the insurer's liability shall not be increased beyond 
the amount for which the insurer would have been liable had only one 
insured been covered. Each Party shall be responsible for its 
respective deductibles or retentions.
    18.3.7 The Commercial General Liability Insurance, Comprehensive 
Automobile Liability Insurance and Excess Public Liability Insurance 
policies, if written on a Claims First Made Basis, shall be 
maintained in full force and effect for two (2) years after 
termination of this LGIA, which coverage may be in the form of tail 
coverage or extended reporting period coverage if agreed by the 
Parties.
    18.3.8 The requirements contained herein as to the types and 
limits of all insurance to be maintained by the Parties are not 
intended to and shall not in any manner, limit or qualify the 
liabilities and obligations assumed by the Parties under this LGIA.
    18.3.9 Within ten (10) Business [d]Days following execution of 
this LGIA, and as soon as practicable after the end of each fiscal 
year or at the renewal of the insurance policy and in any event 
within ninety (90) Calendar [d]Days thereafter, each Party shall 
provide certification of all insurance required in this LGIA, 
executed by each insurer or by an authorized representative of each 
insurer.
    18.3.10 Notwithstanding the foregoing, each Party may self-
insure to meet the minimum insurance requirements of Articles 18.3.2 
through 18.3.8 to the extent it maintains a self-insurance program; 
provided that, such Party's senior secured debt is rated at 
investment grade or better by Standard & Poor's and that its self-
insurance program meets the minimum insurance requirements of 
Articles 18.3.2 through 18.3.8. For any period of time that a 
Party's senior secured debt is unrated by Standard & Poor's or is 
rated at less than investment grade by Standard & Poor's, such Party 
shall comply with the insurance requirements applicable to it under 
Articles 18.3.2 through 18.3.9. In the event that a Party is 
permitted to self-insure pursuant to this article, it shall notify 
the other Party that it meets the requirements to self-insure and 
that its self-insurance program meets the minimum insurance 
requirements in a manner consistent with that specified in Article 
18.3.9.
    18.3.11 The Parties agree to report to each other in writing as 
soon as practical all accidents or occurrences resulting in injuries 
to any person, including death, and any property damage arising out 
of this LGIA.

Article 19. Assignment

    19.1 Assignment. This LGIA may be assigned by either Party only 
with the written consent of the other; provided that either Party 
may assign this LGIA without the consent of the other Party to any 
Affiliate of the assigning Party with an equal or greater credit 
rating and with the legal authority and operational ability to 
satisfy the obligations of the assigning Party under this LGIA; and 
provided further that Interconnection Customer shall have the right 
to assign this LGIA, without the consent of Transmission Provider, 
for collateral security purposes to aid in providing financing for 
the Large Generating Facility, provided that Interconnection 
Customer will promptly notify Transmission Provider of any such 
assignment. Any financing arrangement entered into by 
Interconnection Customer pursuant to this article will provide that 
prior to or upon the exercise of the secured party's, trustee's or 
mortgagee's assignment rights pursuant to said arrangement, the 
secured creditor, the trustee or mortgagee will notify Transmission 
Provider of the date and particulars of any such exercise of 
assignment right(s), including providing [the] Transmission Provider 
with proof that it meets the requirements of Articles 11.5 and 18.3. 
Any attempted assignment that violates this article is void and 
ineffective. Any assignment under this LGIA shall not relieve a 
Party of its obligations, nor shall a Party's obligations be 
enlarged, in whole or in part,

[[Page 27196]]

by reason thereof. Where required, consent to assignment will not be 
unreasonably withheld, conditioned or delayed.

Article 20. Severability

    20.1 Severability. If any provision in this LGIA is finally 
determined to be invalid, void or unenforceable by any court or 
other Governmental Authority having jurisdiction, such determination 
shall not invalidate, void or make unenforceable any other 
provision, agreement or covenant of this LGIA; provided that if 
Interconnection Customer (or any third party, but only if such third 
party is not acting at the direction of Transmission Provider) seeks 
and obtains such a final determination with respect to any provision 
of the Alternate Option (Article 5.1.2), or the Negotiated Option 
(Article 5.1.4), then none of these provisions shall thereafter have 
any force or effect and the Parties' rights and obligations shall be 
governed solely by the Standard Option (Article 5.1.1).

Article 21. Comparability

    21.1 Comparability. The Parties will comply with all applicable 
comparability and code of conduct laws, rules and regulations, as 
amended from time to time.

Article 22. Confidentiality

    22.1 Confidentiality. Confidential Information shall include, 
without limitation, all information relating to a Party's 
technology, research and development, business affairs, and pricing, 
and any information supplied by either of the Parties to the other 
prior to the execution of this LGIA.
    Information is Confidential Information only if it is clearly 
designated or marked in writing as confidential on the face of the 
document, or, if the information is conveyed orally or by 
inspection, if the Party providing the information orally informs 
the Party receiving the information that the information is 
confidential.
    If requested by either Party, the other Party shall provide in 
writing, the basis for asserting that the information referred to in 
this Article 22 warrants confidential treatment, and the requesting 
Party may disclose such writing to the appropriate Governmental 
Authority. Each Party shall be responsible for the costs associated 
with affording confidential treatment to its information.
    22.1.1 Term. During the term of this LGIA, and for a period of 
three (3) years after the expiration or termination of this LGIA, 
except as otherwise provided in this Article 22, each Party shall 
hold in confidence and shall not disclose to any person Confidential 
Information.
    22.1.2 Scope. Confidential Information shall not include 
information that the receiving Party can demonstrate: (1) is 
generally available to the public other than as a result of a 
disclosure by the receiving Party; (2) was in the lawful possession 
of the receiving Party on a non-confidential basis before receiving 
it from the disclosing Party; (3) was supplied to the receiving 
Party without restriction by a third party, who, to the knowledge of 
the receiving Party after due inquiry, was under no obligation to 
the disclosing Party to keep such information confidential; (4) was 
independently developed by the receiving Party without reference to 
Confidential Information of the disclosing Party; (5) is, or 
becomes, publicly known, through no wrongful act or omission of the 
receiving Party or Breach of this LGIA; or (6) is required, in 
accordance with Article 22.1.7 of the LGIA, Order of Disclosure, to 
be disclosed by any Governmental Authority or is otherwise required 
to be disclosed by law or subpoena, or is necessary in any legal 
proceeding establishing rights and obligations under this LGIA. 
Information designated as Confidential Information will no longer be 
deemed confidential if the Party that designated the information as 
confidential notifies the other Party that it no longer is 
confidential.
    22.1.3 Release of Confidential Information. Neither Party shall 
release or disclose Confidential Information to any other person, 
except to its Affiliates (limited by the Standards of Conduct 
requirements), subcontractors, employees, consultants, or to parties 
who may be or considering providing financing to or equity 
participation with Interconnection Customer, or to potential 
purchasers or assignees of Interconnection Customer, on a need-to-
know basis in connection with this LGIA, unless such person has 
first been advised of the confidentiality provisions of this Article 
22 and has agreed to comply with such provisions. Notwithstanding 
the foregoing, a Party providing Confidential Information to any 
person shall remain primarily responsible for any release of 
Confidential Information in contravention of this Article 22.
    22.1.4 Rights. Each Party retains all rights, title, and 
interest in the Confidential Information that each Party discloses 
to the other Party. The disclosure by each Party to the other Party 
of Confidential Information shall not be deemed a waiver by either 
Party or any other person or entity of the right to protect the 
Confidential Information from public disclosure.
    22.1.5 No Warranties. By providing Confidential Information, 
neither Party makes any warranties or representations as to its 
accuracy or completeness. In addition, by supplying Confidential 
Information, neither Party obligates itself to provide any 
particular information or Confidential Information to the other 
Party nor to enter into any further agreements or proceed with any 
other relationship or joint venture.
    22.1.6 Standard of Care. Each Party shall use at least the same 
standard of care to protect Confidential Information it receives as 
it uses to protect its own Confidential Information from 
unauthorized disclosure, publication or dissemination. Each Party 
may use Confidential Information solely to fulfill its obligations 
to the other Party under this LGIA or its regulatory requirements.
    22.1.7 Order of Disclosure. If a court or a Government Authority 
or entity with the right, power, and apparent authority to do so 
requests or requires either Party, by subpoena, oral deposition, 
interrogatories, requests for production of documents, 
administrative order, or otherwise, to disclose Confidential 
Information, that Party shall provide the other Party with prompt 
notice of such request(s) or requirement(s) so that the other Party 
may seek an appropriate protective order or waive compliance with 
the terms of this LGIA. Notwithstanding the absence of a protective 
order or waiver, the Party may disclose such Confidential 
Information which, in the opinion of its counsel, the Party is 
legally compelled to disclose. Each Party will use Reasonable 
Efforts to obtain reliable assurance that confidential treatment 
will be accorded any Confidential Information so furnished.
    22.1.8 Termination of Agreement. Upon termination of this LGIA 
for any reason, each Party shall, within ten (10) Calendar Days of 
receipt of a written request from the other Party, use Reasonable 
Efforts to destroy, erase, or delete (with such destruction, 
erasure, and deletion certified in writing to the other Party) or 
return to the other Party, without retaining copies thereof, any and 
all written or electronic Confidential Information received from the 
other Party.
    22.1.9 Remedies. The Parties agree that monetary damages would 
be inadequate to compensate a Party for the other Party's Breach of 
its obligations under this Article 22. Each Party accordingly agrees 
that the other Party shall be entitled to equitable relief, by way 
of injunction or otherwise, if the first Party Breaches or threatens 
to Breach its obligations under this Article 22, which equitable 
relief shall be granted without bond or proof of damages, and the 
receiving Party shall not plead in defense that there would be an 
adequate remedy at law. Such remedy shall not be deemed an exclusive 
remedy for the Breach of this Article 22, but shall be in addition 
to all other remedies available at law or in equity. The Parties 
further acknowledge and agree that the covenants contained herein 
are necessary for the protection of legitimate business interests 
and are reasonable in scope. No Party, however, shall be liable for 
indirect, incidental, or consequential or punitive damages of any 
nature or kind resulting from or arising in connection with this 
Article 22.
    22.1.10 Disclosure to FERC, its Staff, or a State. 
Notwithstanding anything in this Article 22 to the contrary, and 
pursuant to 18 CFR 1b.20, if FERC or its staff, during the course of 
an investigation or otherwise, requests information from one of the 
Parties that is otherwise required to be maintained in confidence 
pursuant to this LGIA, the Party shall provide the requested 
information to FERC or its staff, within the time provided for in 
the request for information. In providing the information to FERC or 
its staff, the Party must, consistent with 18 CFR 388.112, request 
that the information be treated as confidential and non-public by 
FERC and its staff and that the information be withheld from public 
disclosure. Parties are prohibited from notifying the other Party to 
this LGIA prior to the release of the Confidential Information to 
FERC or its staff. The Party shall notify the other Party to the 
LGIA when it is notified by FERC or its staff that a request to 
release Confidential Information has been received by FERC, at which 
time either of the Parties may respond before such information would 
be made public, pursuant to 18 CFR 388.112. Requests from a state 
regulatory body conducting a

[[Page 27197]]

confidential investigation shall be treated in a similar manner if 
consistent with the applicable state rules and regulations.
    22.1.11 Subject to the exception in Article 22.1.10, any 
information that a Party claims is competitively sensitive, 
commercial or financial information under this LGIA (``Confidential 
Information'') shall not be disclosed by the other Party to any 
person not employed or retained by the other Party, except to the 
extent disclosure is (i) required by law; (ii) reasonably deemed by 
the disclosing Party to be required to be disclosed in connection 
with a dispute between or among the Parties, or the defense of 
litigation or dispute; (iii) otherwise permitted by consent of the 
other Party, such consent not to be unreasonably withheld; or (iv) 
necessary to fulfill its obligations under this LGIA or as a 
transmission service provider or a Balancing Authority Area operator 
including disclosing the Confidential Information to an RTO or ISO 
or to a regional or national reliability organization. The Party 
asserting confidentiality shall notify the other Party in writing of 
the information it claims is confidential. Prior to any disclosures 
of the other Party's Confidential Information under this 
subparagraph, or if any third party or Governmental Authority makes 
any request or demand for any of the information described in this 
subparagraph, the disclosing Party agrees to promptly notify the 
other Party in writing and agrees to assert confidentiality and 
cooperate with the other Party in seeking to protect the 
Confidential Information from public disclosure by confidentiality 
agreement, protective order or other reasonable measures.

Article 23. Environmental Releases

    23.1 Each Party shall notify the other Party, first orally and 
then in writing, of the release of any Hazardous Substances, any 
asbestos or lead abatement activities, or any type of remediation 
activities related to the Large Generating Facility or the 
Interconnection Facilities, each of which may reasonably be expected 
to affect the other Party. The notifying Party shall: (i) provide 
the notice as soon as practicable, provided such Party makes a good 
faith effort to provide the notice no later than twenty-four hours 
after such Party becomes aware of the occurrence; and (ii) promptly 
furnish to the other Party copies of any publicly available reports 
filed with any Governmental Authorities addressing such events.

Article 24. Information Requirements

    24.1 Information Acquisition. Transmission Provider and 
Interconnection Customer shall submit specific information regarding 
the electrical characteristics of their respective facilities to 
each other as described below and in accordance with Applicable 
Reliability Standards.
    24.2 Information Submission by Transmission Provider. The 
initial information submission by Transmission Provider shall occur 
no later than one hundred eighty (180) Calendar Days prior to Trial 
Operation and shall include Transmission System information 
necessary to allow Interconnection Customer to select equipment and 
meet any system protection and stability requirements, unless 
otherwise agreed to by the Parties. On a monthly basis Transmission 
Provider shall provide Interconnection Customer a status report on 
the construction and installation of Transmission Provider's 
Interconnection Facilities and Network Upgrades, including, but not 
limited to, the following information: (1) progress to date; (2) a 
description of the activities since the last report (3) a 
description of the action items for the next period; and (4) the 
delivery status of equipment ordered.
    24.3 Updated Information Submission by Interconnection Customer. 
The updated information submission by Interconnection Customer, 
including manufacturer information, shall occur no later than one 
hundred eighty (180) Calendar Days prior to the Trial Operation. 
Interconnection Customer shall submit a completed copy of the Large 
Generating Facility data requirements contained in Appendix 1 to the 
LGIP. It shall also include any additional information provided to 
Transmission Provider for the Cluster Study and Facilities Study. 
Information in this submission shall be the most current Large 
Generating Facility design or expected performance data. Information 
submitted for stability models shall be compatible with Transmission 
Provider standard models. If there is no compatible model, 
Interconnection Customer will work with a consultant mutually agreed 
to by the Parties to develop and supply a standard model and 
associated information.
    If Interconnection Customer's data is materially different from 
what was originally provided to Transmission Provider pursuant to 
the Interconnection Study Agreement between Transmission Provider 
and Interconnection Customer, then Transmission Provider will 
conduct appropriate studies to determine the impact on Transmission 
Provider Transmission System based on the actual data submitted 
pursuant to this Article 24.3. Interconnection Customer shall not 
begin Trial Operation until such studies are completed.
    24.4 Information Supplementation. Prior to the Operation Date, 
the Parties shall supplement their information submissions described 
above in this Article 24 with any and all ``as-built'' Large 
Generating Facility information or ``as-tested'' performance 
information that differs from the initial submissions or, 
alternatively, written confirmation that no such differences exist. 
[The] Interconnection Customer shall conduct tests on the Large 
Generating Facility as required by Good Utility Practice such as an 
open circuit ``step voltage'' test on the Large Generating Facility 
to verify proper operation of the Large Generating Facility's 
automatic voltage regulator.
    Unless otherwise agreed, the test conditions shall include: (1) 
Large Generating Facility at synchronous speed; (2) automatic 
voltage regulator on and in voltage control mode; and (3) a five 
percent change in Large Generating Facility terminal voltage 
initiated by a change in the voltage regulators reference voltage. 
Interconnection Customer shall provide validated test recordings 
showing the responses of Large Generating Facility terminal and 
field voltages. In the event that direct recordings of these 
voltages is impractical, recordings of other voltages or currents 
that mirror the response of the Large Generating Facility's terminal 
or field voltage are acceptable if information necessary to 
translate these alternate quantities to actual Large Generating 
Facility terminal or field voltages is provided. Large Generating 
Facility testing shall be conducted and results provided to 
Transmission Provider for each individual generating unit in a 
station.
    Subsequent to the Operation Date, Interconnection Customer shall 
provide Transmission Provider any information changes due to 
equipment replacement, repair, or adjustment. Transmission Provider 
shall provide Interconnection Customer any information changes due 
to equipment replacement, repair or adjustment in the directly 
connected substation or any adjacent Transmission Provider-owned 
substation that may affect Interconnection Customer's 
Interconnection Facilities equipment ratings, protection or 
operating requirements. The Parties shall provide such information 
no later than thirty (30) Calendar Days after the date of the 
equipment replacement, repair or adjustment.

Article 25. Information Access and Audit Rights

    25.1 Information Access. Each Party (the ``disclosing Party'') 
shall make available to the other Party information that is in the 
possession of the disclosing Party and is necessary in order for the 
other Party to: (i) verify the costs incurred by the disclosing 
Party for which the other Party is responsible under this LGIA; and
    (ii) carry out its obligations and responsibilities under this 
LGIA. The Parties shall not use such information for purposes other 
than those set forth in this Article 25.1 and to enforce their 
rights under this LGIA.
    25.2 Reporting of Non-Force Majeure Events. Each Party (the 
``notifying Party'') shall notify the other Party when the notifying 
Party becomes aware of its inability to comply with the provisions 
of this LGIA for a reason other than a Force Majeure event. The 
Parties agree to cooperate with each other and provide necessary 
information regarding such inability to comply, including the date, 
duration, reason for the inability to comply, and corrective actions 
taken or planned to be taken with respect to such inability to 
comply. Notwithstanding the foregoing, notification, cooperation or 
information provided under this article shall not entitle the Party 
receiving such notification to allege a cause for anticipatory 
breach of this LGIA.
    25.3 Audit Rights. Subject to the requirements of 
confidentiality under Article 22 of this LGIA, each Party shall have 
the right, during normal business hours, and upon prior reasonable 
notice to the other Party, to audit at its own expense the other 
Party's accounts and records pertaining to either Party's 
performance or either Party's satisfaction of obligations under this 
LGIA. Such audit rights shall include audits of the other Party's 
costs, calculation of invoiced amounts, Transmission Provider's 
efforts to allocate responsibility for the provision of

[[Page 27198]]

reactive support to the Transmission System, Transmission Provider's 
efforts to allocate responsibility for interruption or reduction of 
generation on the Transmission System, and each Party's actions in 
an Emergency Condition. Any audit authorized by this article shall 
be performed at the offices where such accounts and records are 
maintained and shall be limited to those portions of such accounts 
and records that relate to each Party's performance and satisfaction 
of obligations under this LGIA. Each Party shall keep such accounts 
and records for a period equivalent to the audit rights periods 
described in Article 25.4.

25.4 Audit Rights Periods.

    25.4.1 Audit Rights Period for Construction-Related Accounts and 
Records. Accounts and records related to the design, engineering, 
procurement, and construction of Transmission Provider's 
Interconnection Facilities and Network Upgrades shall be subject to 
audit for a period of twenty-four months following Transmission 
Provider's issuance of a final invoice in accordance with Article 
12.2.
    25.4.2 Audit Rights Period for All Other Accounts and Records. 
Accounts and records related to either Party's performance or 
satisfaction of all obligations under this LGIA other than those 
described in Article 25.4.1 shall be subject to audit as follows: 
(i) for an audit relating to cost obligations, the applicable audit 
rights period shall be twenty-four months after the auditing Party's 
receipt of an invoice giving rise to such cost obligations; and (ii) 
for an audit relating to all other obligations, the applicable audit 
rights period shall be twenty-four months after the event for which 
the audit is sought.
    25.5 Audit Results. If an audit by a Party determines that an 
overpayment or an underpayment has occurred, a notice of such 
overpayment or underpayment shall be given to the other Party 
together with those records from the audit which support such 
determination.

Article 26. Subcontractors

    26.1 General. Nothing in this LGIA shall prevent a Party from 
utilizing the services of any subcontractor as it deems appropriate 
to perform its obligations under this LGIA; provided, however, that 
each Party shall require its subcontractors to comply with all 
applicable terms and conditions of this LGIA in providing such 
services and each Party shall remain primarily liable to the other 
Party for the performance of such subcontractor.
    26.2 Responsibility of Principal. The creation of any 
subcontract relationship shall not relieve the hiring Party of any 
of its obligations under this LGIA. The hiring Party shall be fully 
responsible to the other Party for the acts or omissions of any 
subcontractor the hiring Party hires as if no subcontract had been 
made; provided, however, that in no event shall Transmission 
Provider be liable for the actions or inactions of Interconnection 
Customer or its subcontractors with respect to obligations of 
Interconnection Customer under Article 5 of this LGIA. Any 
applicable obligation imposed by this LGIA upon the hiring Party 
shall be equally binding upon, and shall be construed as having 
application to, any subcontractor of such Party.
    26.3 No Limitation by Insurance. The obligations under this 
Article 26 will not be limited in any way by any limitation of 
subcontractor's insurance.

Article 27. Disputes

    27.1 Submission. In the event either Party has a dispute, or 
asserts a claim, that arises out of or in connection with this LGIA 
or its performance, such Party (the ``disputing Party'') shall 
provide the other Party with written notice of the dispute or claim 
(``Notice of Dispute''). Such disp ute or claim shall be referred to 
a designated senior representative of each Party for resolution on 
an informal basis as promptly as practicable after receipt of the 
Notice of Dispute by the other Party. In the event the designated 
representatives are unable to resolve the claim or dispute through 
unassisted or assisted negotiations within thirty (30) Calendar Days 
of the other Party's receipt of the Notice of Dispute, such claim or 
dispute may, upon mutual agreement of the Parties, be submitted to 
arbitration and resolved in accordance with the arbitration 
procedures set forth below. In the event the Parties do not agree to 
submit such claim or dispute to arbitration, each Party may exercise 
whatever rights and remedies it may have in equity or at law 
consistent with the terms of this LGIA.
    27.2 External Arbitration Procedures. Any arbitration initiated 
under this LGIA shall be conducted before a single neutral 
arbitrator appointed by the Parties. If the Parties fail to agree 
upon a single arbitrator within ten (10) Calendar Days of the 
submission of the dispute to arbitration, each Party shall choose 
one arbitrator who shall sit on a three-member arbitration panel. 
The two arbitrators so chosen shall within twenty (20) Calendar Days 
select a third arbitrator to chair the arbitration panel. In either 
case, the arbitrators shall be knowledgeable in electric utility 
matters, including electric transmission and bulk power issues, and 
shall not have any current or past substantial business or financial 
relationships with any party to the arbitration (except prior 
arbitration). The arbitrator(s) shall provide each of the Parties an 
opportunity to be heard and, except as otherwise provided herein, 
shall conduct the arbitration in accordance with the Commercial 
Arbitration Rules of the American Arbitration Association 
(``Arbitration Rules'') and any applicable FERC regulations or RTO 
rules; provided, however, in the event of a conflict between the 
Arbitration Rules and the terms of this Article 27, the terms of 
this Article 27 shall prevail.
    27.3 Arbitration Decisions. Unless otherwise agreed by the 
Parties, the arbitrator(s) shall render a decision within ninety 
(90) Calendar Days of appointment and shall notify the Parties in 
writing of such decision and the reasons therefor. The arbitrator(s) 
shall be authorized only to interpret and apply the provisions of 
this LGIA and shall have no power to modify or change any provision 
of this Agreement in any manner. The decision of the arbitrator(s) 
shall be final and binding upon the Parties, and judgment on the 
award may be entered in any court having jurisdiction. The decision 
of the arbitrator(s) may be appealed solely on the grounds that the 
conduct of the arbitrator(s), or the decision itself, violated the 
standards set forth in the Federal Arbitration Act or the 
Administrative Dispute Resolution Act. The final decision of the 
arbitrator must also be filed with FERC if it affects jurisdictional 
rates, terms and conditions of service, Interconnection Facilities, 
or Network Upgrades.
    27.4 Costs. Each Party shall be responsible for its own costs 
incurred during the arbitration process and for the following costs, 
if applicable: (1) the cost of the arbitrator chosen by the Party to 
sit on the three member panel and one half of the cost of the third 
arbitrator chosen; or (2) one half the cost of the single arbitrator 
jointly chosen by the Parties.

Article 28. Representations, Warranties, and Covenants

    28.1 General. Each Party makes the following representations, 
warranties and covenants:
    28.1.1 Good Standing. Such Party is duly organized, validly 
existing and in good standing under the laws of the state in which 
it is organized, formed, or incorporated, as applicable; that it is 
qualified to do business in the state or states in which the Large 
Generating Facility, Interconnection Facilities and Network Upgrades 
owned by such Party, as applicable, are located; and that it has the 
corporate power and authority to own its properties, to carry on its 
business as now being conducted and to enter into this LGIA and 
carry out the transactions contemplated hereby and perform and carry 
out all covenants and obligations on its part to be performed under 
and pursuant to this LGIA.
    28.1.2 Authority. Such Party has the right, power and authority 
to enter into this LGIA, to become a Party hereto and to perform its 
obligations hereunder. This LGIA is a legal, valid and binding 
obligation of such Party, enforceable against such Party in 
accordance with its terms, except as the enforceability thereof may 
be limited by applicable bankruptcy, insolvency, reorganization or 
other similar laws affecting creditors' rights generally and by 
general equitable principles (regardless of whether enforceability 
is sought in a proceeding in equity or at law).
    28.1.3 No Conflict. The execution, delivery and performance of 
this LGIA does not violate or conflict with the organizational or 
formation documents, or bylaws or operating agreement, of such 
Party, or any judgment, license, permit, order, material agreement 
or instrument applicable to or binding upon such Party or any of its 
assets.
    28.1.4 Consent and Approval. Such Party has sought or obtained, 
or, in accordance with this LGIA will seek or obtain, each consent, 
approval, authorization, order, or acceptance by any Governmental 
Authority in connection with the execution, delivery and performance 
of this LGIA, and it will provide to any Governmental Authority 
notice of any actions under this LGIA that are required by 
Applicable Laws and Regulations.

[[Page 27199]]

Article 29. Joint Operating Committee

    29.1 Joint Operating Committee. Except in the case of ISOs and 
RTOs, Transmission Provider shall constitute a Joint Operating 
Committee to coordinate operating and technical considerations of 
Interconnection Service. At least six (6) months prior to the 
expected Initial Synchronization Date, Interconnection Customer and 
Transmission Provider shall each appoint one representative and one 
alternate to the Joint Operating Committee. Each Interconnection 
Customer shall notify Transmission Provider of its appointment in 
writing. Such appointments may be changed at any time by similar 
notice. The Joint Operating Committee shall meet as necessary, but 
not less than once each calendar year, to carry out the duties set 
forth herein. The Joint Operating Committee shall hold a meeting at 
the request of either Party, at a time and place agreed upon by the 
representatives. The Joint Operating Committee shall perform all of 
its duties consistent with the provisions of this LGIA. Each Party 
shall cooperate in providing to the Joint Operating Committee all 
information required in the performance of the Joint Operating 
Committee's duties. All decisions and agreements, if any, made by 
the Joint Operating Committee, shall be evidenced in writing. The 
duties of the Joint Operating Committee shall include the following:
    29.1.1 Establish data requirements and operating record 
requirements.
    29.1.2 Review the requirements, standards, and procedures for 
data acquisition equipment, protective equipment, and any other 
equipment or software.
    29.1.3 Annually review the one (1) year forecast of maintenance 
and planned outage schedules of Transmission Provider's and 
Interconnection Customer's facilities at the Point of 
Interconnection.
    29.1.4 Coordinate the scheduling of maintenance and planned 
outages on the Interconnection Facilities, the Large Generating 
Facility and other facilities that impact the normal operation of 
the interconnection of the Large Generating Facility to the 
Transmission System.
    29.1.5 Ensure that information is being provided by each Party 
regarding equipment availability.
    29.1.6 Perform such other duties as may be conferred upon it by 
mutual agreement of the Parties.

Article 30. Miscellaneous

    30.1 Binding Effect. This LGIA and the rights and obligations 
hereof, shall be binding upon and shall inure to the benefit of the 
successors and assigns of the Parties hereto.
    30.2 Conflicts. In the event of a conflict between the body of 
this LGIA and any attachment, appendices or exhibits hereto, the 
terms and provisions of the body of this LGIA shall prevail and be 
deemed the final intent of the Parties.
    30.3 Rules of Interpretation. This LGIA, unless a clear contrary 
intention appears, shall be construed and interpreted as follows: 
(1) the singular number includes the plural number and vice versa; 
(2) reference to any person includes such person's successors and 
assigns but, in the case of a Party, only if such successors and 
assigns are permitted by this LGIA, and reference to a person in a 
particular capacity excludes such person in any other capacity or 
individually; (3) reference to any agreement (including this LGIA), 
document, instrument or tariff means such agreement, document, 
instrument, or tariff as amended or modified and in effect from time 
to time in accordance with the terms thereof and, if applicable, the 
terms hereof; (4) reference to any Applicable Laws and Regulations 
means such Applicable Laws and Regulations as amended, modified, 
codified, or reenacted, in whole or in part, and in effect from time 
to time, including, if applicable, rules and regulations promulgated 
thereunder; (5) unless expressly stated otherwise, reference to any 
Article, Section or Appendix means such Article of this LGIA or such 
Appendix to this LGIA, or such Section to the LGIP or such Appendix 
to the LGIP, as the case may be; (6) ``hereunder'', ``hereof'', 
``herein'', ``hereto'' and words of similar import shall be deemed 
references to this LGIA as a whole and not to any particular Article 
or other provision hereof or thereof; (7) ``including'' (and with 
correlative meaning ``include'') means including without limiting 
the generality of any description preceding such term; and (8) 
relative to the determination of any period of time, ``from'' means 
``from and including,'' ``to'' means ``to but excluding'' and 
``through'' means ``through and including.''
    30.4 Entire Agreement. This LGIA, including all Appendices and 
Schedules attached hereto, constitutes the entire agreement between 
the Parties with reference to the subject matter hereof, and 
supersedes all prior and contemporaneous understandings or 
agreements, oral or written, between the Parties with respect to the 
subject matter of this LGIA. There are no other agreements, 
representations, warranties, or covenants which constitute any part 
of the consideration for, or any condition to, either Party's 
compliance with its obligations under this LGIA.
    30.5 No Third Party Beneficiaries. This LGIA is not intended to 
and does not create rights, remedies, or benefits of any character 
whatsoever in favor of any persons, corporations, associations, or 
entities other than the Parties, and the obligations herein assumed 
are solely for the use and benefit of the Parties, their successors 
in interest and, where permitted, their assigns.
    30.6 Waiver. The failure of a Party to this LGIA to insist, on 
any occasion, upon strict performance of any provision of this LGIA 
will not be considered a waiver of any obligation, right, or duty 
of, or imposed upon, such Party.
    Any waiver at any time by either Party of its rights with 
respect to this LGIA shall not be deemed a continuing waiver or a 
waiver with respect to any other failure to comply with any other 
obligation, right, duty of this LGIA. Termination or Default of this 
LGIA for any reason by Interconnection Customer shall not constitute 
a waiver of Interconnection Customer's legal rights to obtain an 
interconnection from Transmission Provider. Any waiver of this LGIA 
shall, if requested, be provided in writing.
    30.7 Headings. The descriptive headings of the various Articles 
of this LGIA have been inserted for convenience of reference only 
and are of no significance in the interpretation or construction of 
this LGIA.
    30.8 Multiple Counterparts. This LGIA may be executed in two or 
more counterparts, each of which is deemed an original but all 
constitute one and the same instrument.
    30.9 Amendment. The Parties may by mutual agreement amend this 
LGIA by a written instrument duly executed by the Parties.
    30.10 Modification by the Parties. The Parties may by mutual 
agreement amend the Appendices to this LGIA by a written instrument 
duly executed by the Parties. Such amendment shall become effective 
and a part of this LGIA upon satisfaction of all Applicable Laws and 
Regulations.
    30.11 Reservation of Rights. Transmission Provider shall have 
the right to make a unilateral filing with FERC to modify this LGIA 
with respect to any rates, terms and conditions, charges, 
classifications of service, rule or regulation under section 205 or 
any other applicable provision of the Federal Power Act and FERC's 
rules and regulations thereunder, and Interconnection Customer shall 
have the right to make a unilateral filing with FERC to modify this 
LGIA pursuant to section 206 or any other applicable provision of 
the Federal Power Act and FERC's rules and regulations thereunder; 
provided that each Party shall have the right to protest any such 
filing by the other Party and to participate fully in any proceeding 
before FERC in which such modifications may be considered. Nothing 
in this LGIA shall limit the rights of the Parties or of FERC under 
sections 205 or 206 of the Federal Power Act and FERC's rules and 
regulations thereunder, except to the extent that the Parties 
otherwise mutually agree as provided herein.
    30.12 No Partnership. This LGIA shall not be interpreted or 
construed to create an association, joint venture, agency 
relationship, or partnership between the Parties or to impose any 
partnership obligation or partnership liability upon either Party. 
Neither Party shall have any right, power, or authority to enter 
into any agreement or undertaking for, or act on behalf of, or to 
act as or be an agent or representative of, or to otherwise bind, 
the other Party.
    In witness whereof, the Parties have executed this LGIA in 
duplicate originals, each of which shall constitute and be an 
original effective Agreement between the Parties.

{Insert name of Transmission Provider or Transmission Owner, if 
applicable{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

{Insert name of Interconnection Customer{time} 

By:--------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

[[Page 27200]]

Appendix A to LGIA

Interconnection Facilities, Network Upgrades and Distribution Upgrades

    1. Interconnection Facilities:
    (a) {insert Interconnection Customer's Interconnection 
Facilities{time} :
    (b) {insert Transmission Provider's Interconnection 
Facilities{time} :
    2. Network Upgrades:
    (a) {insert Stand Alone Network Upgrades{time} :
    (b) {insert Substation Network Upgrades{time} :
    (c) {insert System Network Upgrades{time} :
    3. Distribution Upgrades:

Appendix B to LGIA

Milestones

Site Control

    Check box if applicable { {time} 
    Interconnection Customer with qualifying regulatory limitations 
must demonstrate 100% Site Control by {Transmission Provider to 
insert date one hundred eighty (180) Calendar [d]Days from the 
effective date of this LGIA{time}  or the LGIA may be terminated per 
Article 17 (Default) of this LGIA and [the] Interconnection Customer 
may be subject to Withdrawal Penalties per Section 3.7.1.1 of [the] 
Transmission Provider's LGIP (Calculation of the Withdrawal 
Penalty).

Appendix C to LGIA

Interconnection Details

Appendix D to LGIA

Security Arrangements Details

    Infrastructure security of Transmission System equipment and 
operations and control hardware and software is essential to ensure 
day-to-day Transmission System reliability and operational security. 
FERC will expect all Transmission Providers, market participants, 
and Interconnection Customers interconnected to the Transmission 
System to comply with the recommendations offered by the President's 
Critical Infrastructure Protection Board and, eventually, best 
practice recommendations from the electric reliability authority. 
All public utilities will be expected to meet basic standards for 
system infrastructure and operational security, including physical, 
operational, and cyber-security practices.

Appendix E to LGIA

Commercial Operation Date

    This Appendix E is a part of the LGIA between Transmission 
Provider and Interconnection Customer.
    {Date{time} 
    {Transmission Provider Address{time} 
    Re: ____ Large Generating Facility
    Dear ____:
    On {Date{time}  {Interconnection Customer{time}  has completed 
Trial Operation of Unit No. __. This letter confirms that 
{Interconnection Customer{time}  commenced Commercial Operation of 
Unit No. __ at the Large Generating Facility, effective as of {Date 
plus one day{time} .
    Thank you.
    {Signature{time} 
    {Interconnection Customer Representative{time} 

Appendix F to LGIA

Addresses for Delivery of Notices and Billings

    Notices:[.]
    Transmission Provider:
    {To be supplied.{time} 
    Interconnection Customer:
    {To be supplied.{time} 
    Billings and Payments:
    Transmission Provider:
    {To be supplied.{time} 
    Interconnection Customer:
    {To be supplied.{time} 
    Alternative Forms of Delivery of Notices (telephone, facsimile 
or email):
    Transmission Provider:
    {To be supplied.{time} 
    Interconnection Customer:
    {To be supplied.{time} 

Appendix G

Interconnection Requirements for a Wind Generating Plant

    Appendix G sets forth requirements and provisions specific to a 
wind generating plant or a Generating Facility that contains a wind 
generating plant. All other requirements of this LGIA continue to 
apply to wind generating plant interconnections.

A. Technical Standards Applicable to a Wind Generating Plant

i. Low Voltage Ride-Through (LVRT) Capability

    A wind generating plant shall be able to remain online during 
voltage disturbances up to the time periods and associated voltage 
levels set forth in the standard below. The LVRT standard provides 
for a transition period standard and a post-transition period 
standard.

Transition Period LVRT Standard

    The transition period standard applies to wind generating plants 
subject to FERC Order 661 that have either: (i) interconnection 
agreements signed and filed with the Commission, filed with the 
Commission in unexecuted form, or filed with the Commission as non-
conforming agreements between January 1, 2006 and December 31, 2006, 
with a scheduled in-service date no later than December 31, 2007, or 
(ii) wind generating turbines subject to a wind turbine procurement 
contract executed prior to December 31, 2005, for delivery through 
2007.
    1. Wind generating plants are required to remain in-service 
during three-phase faults with normal clearing (which is a time 
period of approximately 4-9 cycles) and single line to ground faults 
with delayed clearing, and subsequent post-fault voltage recovery to 
prefault voltage unless clearing the fault effectively disconnects 
the generator from the system. The clearing time requirement for a 
three-phase fault will be specific to the wind generating plant 
substation location, as determined by and documented by [the] 
transmission provider. The maximum clearing time the wind generating 
plant shall be required to withstand for a three-phase fault shall 
be 9 cycles at a voltage as low as 0.15 p.u., as measured at the 
high side of the wind generating plant step-up transformer (i.e. the 
transformer that steps the voltage up to the transmission 
interconnection voltage or ``GSU''), after which, if the fault 
remains following the location-specific normal clearing time for 
three-phase faults, the wind generating plant may disconnect from 
the transmission system.
    2. This requirement does not apply to faults that would occur 
between the wind generator terminals and the high side of the GSU or 
to faults that would result in a voltage lower than 0.15 per unit on 
the high side of the GSU serving the facility.
    3. Wind generating plants may be tripped after the fault period 
if this action is intended as part of a special protection system.
    4. Wind generating plants may meet the LVRT requirements of this 
standard by the performance of the generators or by installing 
additional equipment (e.g., Static VAr Compensator, etc.) within the 
wind generating plant or by a combination of generator performance 
and additional equipment.
    5. Existing individual generator units that are, or have been, 
interconnected to the network at the same location at the effective 
date of the Appendix G LVRT
    Standard are exempt from meeting the Appendix G LVRT Standard 
for the remaining life of the existing generation equipment. 
Existing individual generator units that are replaced are required 
to meet the Appendix G LVRT Standard.

Post-Transition Period LVRT Standard

    All wind generating plants subject to FERC Order No. 661 and not 
covered by the transition period described above must meet the 
following requirements:
    1. Wind generating plants are required to remain in-service 
during three-phase faults with normal clearing (which is a time 
period of approximately 4-9 cycles) and single line to ground faults 
with delayed clearing, and subsequent post-fault voltage recovery to 
prefault voltage unless clearing the fault effectively disconnects 
the generator from the system. The clearing time requirement for a 
three-phase fault will be specific to the wind generating plant 
substation location, as determined by and documented by [the] 
transmission provider. The maximum clearing time the wind generating 
plant shall be required to withstand for a three-phase fault shall 
be 9 cycles after which, if the fault remains following the 
location-specific normal clearing time for three-phase faults, the 
wind generating plant may disconnect from the transmission system. A 
wind generating plant shall remain interconnected during such a 
fault on the transmission system for a voltage level as low as zero 
volts, as measured at the high voltage side of the wind GSU.
    2. This requirement does not apply to faults that would occur 
between the wind generator terminals and the high side of the GSU.
    3. Wind generating plants may be tripped after the fault period 
if this action is intended as part of a special protection system.
    4. Wind generating plants may meet the LVRT requirements of this 
standard by the performance of the generators or by installing

[[Page 27201]]

additional equipment (e.g., Static VAR Compensator) within the wind 
generating plant or by a combination of generator performance and 
additional equipment.
    Existing individual generator units that are, or have been, 
interconnected to the network at the same location at the effective 
date of the Appendix G LVRT Standard are exempt from meeting the 
Appendix G LVRT Standard for the remaining life of the existing 
generation equipment. Existing individual generator units that are 
replaced are required to meet the Appendix G LVRT Standard.

ii. Power Factor Design Criteria (Reactive Power)

    The following reactive power requirements apply only to a newly 
interconnecting wind generating plant that has executed a Facilities 
Study Agreement as of the effective date of the Final Rule 
establishing the reactive power requirements for non-synchronous 
generators in [Section]article 9.6.1 of this LGIA (Order No. 827). A 
wind generating plant to which this provision applies 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 Cluster 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] Cluster Study 
shows this to be required for system safety or reliability.

iii. Supervisory Control and Data Acquisition (SCADA) Capability

    The wind plant shall provide SCADA capability to transmit data 
and receive instructions from [the] Transmission Provider to protect 
system reliability. [The] Transmission Provider and the wind plant 
Interconnection Customer shall determine what SCADA information is 
essential for the proposed wind plant, taking into account the size 
of the plant and its characteristics, location, and importance in 
maintaining generation resource adequacy and transmission system 
reliability in its area.

Appendix H to LGIA

Operating Assumptions for Generating Facility

    Check box if applicable { {time} 
    Operating Assumptions:
    {insert operating assumptions that reflect the charging behavior 
of the Generating Facility that includes at least one electric 
storage resource{time} 

Appendix E: Changes to Pro Forma SGIP

Small Generator Interconnection Procedures (SGIP)

(For Generating Facilities No Larger Than 20 MW)

Table of Contents

Section 1. Application
    1.1 Applicability
    1.2 Pre-Application
    1.3 Interconnection Request
    1.4 Modification of the Interconnection Request
    1.5 Site Control
    1.6 Queue Position
    1.7 Interconnection Requests Submitted Prior to the Effective 
Date of the SGIP
Section 2. Fast Track Process
    2.1 Applicability
    2.2 Initial Review
    2.3 Customer Options Meeting
    2.4 Supplemental Review
Section 3. Study Process
    3.1 Applicability
    3.2 Scoping Meeting
    3.3 Feasibility Study
    3.4 System Impact Study
    3.5 Facilities Study
Section 4. Provisions that Apply to All Interconnection Requests
    4.1 Reasonable Efforts
    4.2 Disputes
    4.3 Interconnection Metering
    4.4 Commissioning
    4.5. Confidentiality
    4.6 Comparability
    4.7 Record Retention
    4.8 Interconnection Agreement
    4.9 Coordination with Affected Systems
    4.10 Capacity of the Small Generating Facility
Attachment 1--Glossary of Terms
Attachment 2--Small Generator Interconnection Request
Attachment 3--Certification Codes and Standards
Attachment 4--Certification of Small Generator Equipment Packages
Attachment 5--Application, Procedures, and Terms and Conditions for 
Interconnecting a Certified Invertor-Based Small Generating Facility 
No Larger than 10 kW (``10 kW Inverter Process'').
Attachment 6--Feasibility Study Agreement
Attachment 7--System Impact Study Agreement
Attachment 8--Facilities Study Agreement

Section 1. Application

    1.1 Applicability
    1.1.1 A request to interconnect a certified Small Generating 
Facility (See Attachments 3 and 4 for description of certification 
criteria) to [the] Transmission Provider's Distribution System shall 
be evaluated under the section 2 Fast Track Process if the 
eligibility requirements of section 2.1 are met. A request to 
interconnect a certified inverter-based Small Generating Facility no 
larger than 10 kilowatts (kW) shall be evaluated under the 
Attachment 5 10 kW Inverter Process. A request to interconnect a 
Small Generating Facility no larger than 20 megawatts (MW) that does 
not meet the eligibility requirements of section 2.1, or does not 
pass the Fast Track Process or the 10 kW Inverter Process, shall be 
evaluated under the section 3 Study Process. If [the] 
Interconnection Customer wishes to interconnect its Small Generating 
Facility using Network Resource Interconnection Service, it must do 
so under the Standard Large Generator Interconnection Procedures and 
execute the Standard Large Generator Interconnection Agreement.
    1.1.2 Capitalized terms used herein shall have the meanings 
specified in the Glossary of Terms in Attachment 1 or the body of 
these procedures.
    1.1.3 Neither these procedures nor the requirements included 
hereunder apply to Small Generating Facilities interconnected or 
approved for interconnection prior to sixty (60) Business Days after 
the effective date of these procedures.
    1.1.4 Prior to submitting its Interconnection Request 
(Attachment 2), [the] Interconnection Customer may ask [the] 
Transmission Provider's interconnection contact employee or office 
whether the proposed interconnection is subject to these procedures. 
[The] Transmission Provider shall respond within fifteen (15) 
Business Days.
    1.1.5 Infrastructure security of electric system equipment and 
operations and control hardware and software is essential to ensure 
day-to-day reliability and operational security. The Federal Energy 
Regulatory Commission expects all Transmission Providers, market 
participants, and Interconnection Customers interconnected with 
electric systems to comply with the recommendations offered by the 
President's Critical Infrastructure Protection Board and best 
practice recommendations from the electric reliability authority. 
All public utilities are expected to meet basic standards for 
electric system infrastructure and operational security, including 
physical, operational, and cyber-security practices.
    1.1.6 References in these procedures to interconnection 
agreement are to the Small Generator Interconnection Agreement 
(SGIA).
    1.2 Pre-Application
    1.2.1 [The] Transmission Provider shall designate an employee or 
office from which information on the application process and on an 
Affected System can be obtained through informal requests from [the] 
Interconnection Customer presenting a proposed project for a 
specific site. The name, telephone number, and email address of such 
contact employee or office shall be made available on [the] 
Transmission Provider's internet website. Electric system 
information provided to [the] Interconnection Customer should 
include relevant system studies, interconnection studies, and other 
materials useful to an understanding of an interconnection at a 
particular point on [the] Transmission Provider's Transmission 
System, to the extent such provision does not violate 
confidentiality provisions of prior agreements or critical 
infrastructure requirements. [The] Transmission Provider shall 
comply with reasonable requests for such information.
    1.2.2 In addition to the information described in section 1.2.1, 
which may be

[[Page 27202]]

provided in response to an informal request, an Interconnection 
Customer may submit a formal written request form along with a non-
refundable fee of $300 for a pre-application report on a proposed 
project at a specific site. [The] Transmission Provider shall 
provide the pre-application data described in section 1.2.3 to [the] 
Interconnection Customer within twenty (20) Business Days of receipt 
of the completed request form and payment of the $300 fee. The pre-
application report produced by [the] Transmission Provider is non-
binding, does not confer any rights, and [the] Interconnection 
Customer must still successfully apply to interconnect to [the] 
Transmission Provider's system. The written pre-application report 
request form shall include the information in sections 1.2.2.1 
through 1.2.2.8 below to clearly and sufficiently identify the 
location of the proposed Point of Interconnection.
    1.2.2.1 Project contact information, including name, address, 
phone number, and email address.
    1.2.2.2 Project location (street address with nearby cross 
streets and town)
    1.2.2.3 Meter number, pole number, or other equivalent 
information identifying proposed Point of Interconnection, if 
available.
    1.2.2.4 Generator Type (e.g., solar, wind, combined heat and 
power, etc.)
    1.2.2.5 Size (alternating current kW)
    1.2.2.6 Single or three phase generator configuration
    1.2.2.7 Stand-alone generator (no onsite load, not including 
station service--Yes or No?)
    1.2.2.8 Is new service requested? Yes or No? If there is 
existing service, include the customer account number, site minimum 
and maximum current or proposed electric loads in kW (if available) 
and specify if the load is expected to change.
    1.2.3 Using the information provided in the pre-application 
report request form in section 1.2.2, [the] Transmission Provider 
will identify the substation/area bus, bank or circuit likely to 
serve the proposed Point of Interconnection. This selection by [the] 
Transmission Provider does not necessarily indicate, after 
application of the screens and/or study, that this would be the 
circuit the project ultimately connects to. [The] Interconnection 
Customer must request additional pre-application reports if 
information about multiple Points of Interconnection is requested. 
Subject to section 1.2.4, the pre-application report will include 
the following information:
    1.2.3.1 Total capacity (in MW) of substation/area bus, bank or 
circuit based on normal or operating ratings likely to serve the 
proposed Point of Interconnection.
    1.2.3.2 Existing aggregate generation capacity (in MW) 
interconnected to a substation/area bus, bank or circuit (i.e., 
amount of generation online) likely to serve the proposed Point of 
Interconnection.
    1.2.3.3 Aggregate queued generation capacity (in MW) for a 
substation/area bus, bank or circuit (i.e., amount of generation in 
the queue) likely to serve the proposed Point of Interconnection.
    1.2.3.4 Available capacity (in MW) of substation/area bus or 
bank and circuit likely to serve the proposed Point of 
Interconnection (i.e., total capacity less the sum of existing 
aggregate generation capacity and aggregate queued generation 
capacity).
    1.2.3.5 Substation nominal distribution voltage and/or 
transmission nominal voltage if applicable.
    1.2.3.6 Nominal distribution circuit voltage at the proposed 
Point of Interconnection.
    1.2.3.7 Approximate circuit distance between the proposed Point 
of Interconnection and the substation.
    1.2.3.8 Relevant line section(s) actual or estimated peak load 
and minimum load data, including daytime minimum load as described 
in section 2.4.4.1.1 below and absolute minimum load, when 
available.
    1.2.3.9 Number and rating of protective devices and number and 
type (standard, bi-directional) of voltage regulating devices 
between the proposed Point of Interconnection and the substation/
area. Identify whether the substation has a load tap changer.
    1.2.3.10 Number of phases available at the proposed Point of 
Interconnection. If a single phase, distance from the three-phase 
circuit.
    1.2.3.11 Limiting conductor ratings from the proposed Point of 
Interconnection to the distribution substation.
    1.2.3.12 Whether the Point of Interconnection is located on a 
spot network, grid network, or radial supply.
    1.2.3.13 Based on the proposed Point of Interconnection, 
existing or known constraints such as, but not limited to, 
electrical dependencies at that location, short circuit interrupting 
capacity issues, power quality or stability issues on the circuit, 
capacity constraints, or secondary networks.
    1.2.4 The pre-application report need only include existing 
data. A pre-application report request does not obligate [the] 
Transmission Provider to conduct a study or other analysis of the 
proposed generator in the event that data is not readily available. 
If [the] Transmission Provider cannot complete all or some of a pre-
application report due to lack of available data, the Transmission 
Provider shall provide [the] Interconnection Customer with a pre-
application report that includes the data that is available. The 
provision of information on ``available capacity'' pursuant to 
section 1.2.3.4 does not imply that an interconnection up to this 
level may be completed without impacts since there are many 
variables studied as part of the interconnection review process, and 
data provided in the pre-application report may become outdated at 
the time of the submission of the complete Interconnection Request. 
Notwithstanding any of the provisions of this section, [the] 
Transmission Provider shall, in good faith, include data in the pre-
application report that represents the best available information at 
the time of reporting.
    1.3 Interconnection Request
    [The] Interconnection Customer shall submit its Interconnection 
Request to [the] Transmission Provider, together with the processing 
fee or deposit specified in the Interconnection Request. The 
Interconnection Request shall be date- and time-stamped upon 
receipt. The original date- and time-stamp applied to the 
Interconnection Request at the time of its original submission shall 
be accepted as the qualifying date- and time-stamp for the purposes 
of any timetable in these procedures. [The] Interconnection Customer 
shall be notified of receipt by [the] Transmission Provider within 
three (3) Business Days of receiving the Interconnection Request. 
[The] Transmission Provider shall notify [the] Interconnection 
Customer within ten (10) Business Days of the receipt of the 
Interconnection Request as to whether the Interconnection Request is 
complete or incomplete. If the Interconnection Request is 
incomplete, [the] Transmission Provider shall provide along with the 
notice that the Interconnection Request is incomplete, a written 
list detailing all information that must be provided to complete the 
Interconnection Request. [The] Interconnection Customer will have 
ten (10) Business Days after receipt of the notice to submit the 
listed information or to request an extension of time to provide 
such information. If [the] Interconnection Customer does not provide 
the listed information or a request for an extension of time within 
the deadline, the Interconnection Request will be deemed withdrawn. 
An Interconnection Request will be deemed complete upon submission 
of the listed information to [the] Transmission Provider.
    1.4 Modification of the Interconnection Request
    Any modification to machine data or equipment configuration or 
to the interconnection site of the Small Generating Facility not 
agreed to in writing by [the] Transmission Provider and [the] 
Interconnection Customer may be deemed a withdrawal of the 
Interconnection Request and may require submission of a new 
Interconnection Request, unless proper notification of each Party by 
the other and a reasonable time to cure the problems created by the 
changes are undertaken. Any such modification of the Interconnection 
Request must be accompanied by any resulting updates to the models 
described in Attachment 2 of this SGIP.
    1.5 Site Control
    Documentation of site control must be submitted with the 
Interconnection Request. Site control may be demonstrated through:
    1.5.1 Ownership of, a leasehold interest in, or a right to 
develop a site for the purpose of constructing the Small Generating 
Facility;
    1.5.2 An option to purchase or acquire a leasehold site for such 
purpose; or
    1.5.3 An exclusivity or other business relationship between 
[the] Interconnection Customer and the entity having the right to 
sell, lease, or grant [the] Interconnection Customer the right to 
possess or occupy a site for such purpose.
    1.6 Queue Position
    [The] Transmission Provider shall assign a Queue Position based 
upon the date- and time-stamp of the Interconnection Request. The 
Queue Position of each Interconnection Request will be used to 
determine the cost responsibility for the Upgrades necessary to 
accommodate the interconnection. [The]

[[Page 27203]]

Transmission Provider shall maintain a single queue per geographic 
region. At [the] Transmission Provider's option, Interconnection 
Requests may be studied serially or in clusters for the purpose of 
the system impact study.
    1.7 Interconnection Requests Submitted Prior to the Effective 
Date of the SGIP
    Nothing in this SGIP affects an Interconnection Customer's Queue 
Position assigned before the effective date of this SGIP. The 
Parties agree to complete work on any interconnection study 
agreement executed prior the effective date of this SGIP in 
accordance with the terms and conditions of that interconnection 
study agreement. Any new studies or other additional work will be 
completed pursuant to this SGIP.

Section 2. Fast Track Process

    2.1 Applicability
    The Fast Track Process is available to an Interconnection 
Customer proposing to interconnect its Small Generating Facility 
with [the] Transmission Provider's Distribution System if the Small 
Generating Facility's capacity does not exceed the size limits 
identified in the table below. Small Generating Facilities below 
these limits are eligible for Fast Track review. However, Fast Track 
eligibility is distinct from the Fast Track Process itself, and 
eligibility does not imply or indicate that a Small Generating 
Facility will pass the Fast Track screens in section 2.2.1 below or 
the Supplemental Review screens in section 2.4.4 below.
    Fast Track eligibility is determined based upon the generator 
type, the size of the generator, voltage of the line and the 
location of and the type of line at the Point of Interconnection. 
All Small Generating Facilities connecting to lines greater than 69 
kilovolt (kV) are ineligible for the Fast Track Process regardless 
of size. All synchronous and induction machines must be no larger 
than 2 MW to be eligible for the Fast Track Process, regardless of 
location. For certified inverter-based systems, the size limit 
varies according to the voltage of the line at the proposed Point of 
Interconnection. Certified inverter-based Small Generating 
Facilities located within 2.5 electrical circuit miles of a 
substation and on a mainline (as defined in the table below) are 
eligible for the Fast Track Process under the higher thresholds 
according to the table below. In addition to the size threshold, 
[the] Interconnection Customer's proposed Small Generating Facility 
must meet the codes, standards, and certification requirements of 
Attachments 3 and 4 of these procedures, or [the] Transmission 
Provider has to have reviewed the design or tested the proposed 
Small Generating Facility and is satisfied that it is safe to 
operate.

                                Fast Track Eligibility for Inverter-Based Systems
----------------------------------------------------------------------------------------------------------------
                                                                                          Fast track eligibility
                                                                                          on a mainline \1\ and
                         Line voltage                            Fast track eligibility      <=2.5 electrical
                                                                 regardless of location     circuit miles from
                                                                                              substation \2\
----------------------------------------------------------------------------------------------------------------
<5 kV.........................................................                 <=500 kW                 <=500 kW
>=5 kV and <15 kV.............................................                   <=2 MW                   <=3 MW
>=15 kV and <30 kV............................................                   <=3 MW                   <=4 MW
>=30 kV and <=69 kV...........................................                   <=4 MW                   <=5 MW
----------------------------------------------------------------------------------------------------------------

    2.2 Initial Review
---------------------------------------------------------------------------

    \1\ For purposes of this table, a mainline is the three-phase 
backbone of a circuit. It will typically constitute lines with wire 
sizes of 4/0 American wire gauge, 336.4 kcmil, 397.5 kcmil, 477 
kcmil and 795 kcmil.
    \2\ An Interconnection Customer can determine this information 
about its proposed interconnection location in advance by requesting 
a pre-application report pursuant to section 1.2.
---------------------------------------------------------------------------

    Within fifteen (15) Business Days after [the] Transmission 
Provider notifies [the] Interconnection Customer it has received a 
complete Interconnection Request, [the] Transmission Provider shall 
perform an initial review using the screens set forth below, shall 
notify [the] Interconnection Customer of the results, and include 
with the notification copies of the analysis and data underlying 
[the] Transmission Provider's determinations under the screens.
    2.2.1 Screens
    2.2.1.1 The proposed Small Generating Facility's Point of 
Interconnection must be on a portion of [the] Transmission 
Provider's Distribution System that is subject to the Tariff.
    2.2.1.2 For interconnection of a proposed Small Generating 
Facility to a radial distribution circuit, the aggregated 
generation, including the proposed Small Generating Facility, on the 
circuit shall not exceed 15% of the line section annual peak load as 
most recently measured at the substation. A line section is that 
portion of a Transmission Provider's electric system connected to a 
customer bounded by automatic sectionalizing devices or the end of 
the distribution line.
    2.2.1.3 For interconnection of a proposed Small Generating 
Facility to the load side of spot network protectors, the proposed 
Small Generating Facility must utilize an inverter-based equipment 
package and, together with the aggregated other inverter-based 
generation, shall not exceed the smaller of 5% of a spot network's 
maximum load or 50 kW.\3\
---------------------------------------------------------------------------

    \3\ A spot network is a type of distribution system found within 
modern commercial buildings to provide high reliability of service 
to a single customer. (Standard Handbook for Electrical Engineers, 
11th edition, Donald Fink, McGraw Hill Book Company).
---------------------------------------------------------------------------

    2.2.1.4 The proposed Small Generating Facility, in aggregation 
with other generation on the distribution circuit, shall not 
contribute more than 10% to the distribution circuit's maximum fault 
current at the point on the high voltage (primary) level nearest the 
proposed point of change of ownership.
    2.2.1.5 The proposed Small Generating Facility, in aggregate 
with other generation on the distribution circuit, shall not cause 
any distribution protective devices and equipment (including, but 
not limited to, substation breakers, fuse cutouts, and line 
reclosers), or Interconnection Customer equipment on the system to 
exceed 87.5% of the short circuit interrupting capability; nor shall 
the interconnection be proposed for a circuit that already exceeds 
87.5% of the short circuit interrupting capability.
    2.2.1.6 Using the table below, determine the type of 
interconnection to a primary distribution line. This screen includes 
a review of the type of electrical service provided to the 
Interconnecting Customer, including line configuration and the 
transformer connection to limit the potential for creating over-
voltages on [the] Transmission Provider's electric power system due 
to a loss of ground during the operating time of any anti-islanding 
function.

----------------------------------------------------------------------------------------------------------------
                                          Type of interconnection to
    Primary distribution line type         primary distribution line                 Result/criteria
----------------------------------------------------------------------------------------------------------------
Three-phase, three wire...............  3-phase or single phase, phase- Pass screen.
                                         to-phase.
Three-phase, four wire................  Effectively-grounded 3 phase    Pass screen.
                                         or Single-phase, line-to-
                                         neutral.
----------------------------------------------------------------------------------------------------------------


[[Page 27204]]

    2.2.1.7 If the proposed Small Generating Facility is to be 
interconnected on single-phase shared secondary, the aggregate 
generation capacity on the shared secondary, including the proposed 
Small Generating Facility, shall not exceed 20 kW.
    2.2.1.8 If the proposed Small Generating Facility is single-
phase and is to be interconnected on a center tap neutral of a 240 
volt service, its addition shall not create an imbalance between the 
two sides of the 240 volt service of more than 20% of the nameplate 
rating of the service transformer.
    2.2.1.9 The Small Generating Facility, in aggregate with other 
generation interconnected to the transmission side of a substation 
transformer feeding the circuit where the Small Generating Facility 
proposes to interconnect shall not exceed 10 MW in an area where 
there are known, or posted, transient stability limitations to 
generating units located in the general electrical vicinity (e.g., 
three or four transmission busses from the point of 
interconnection).
    2.2.1.10 No construction of facilities by [the] Transmission 
Provider on its own system shall be required to accommodate the 
Small Generating Facility.
    2.2.2 If the proposed interconnection passes the screens, the 
Interconnection Request shall be approved and [the] Transmission 
Provider will provide [the] Interconnection Customer an executable 
interconnection agreement within five (5) Business Days after the 
determination.
    2.2.3 If the proposed interconnection fails the screens, but 
[the] Transmission Provider determines that the Small Generating 
Facility may nevertheless be interconnected consistent with safety, 
reliability, and power quality standards, [the] Transmission 
Provider shall provide [the] Interconnection Customer an executable 
interconnection agreement within five (5) Business Days after the 
determination.
    2.2.4 If the proposed interconnection fails the screens, and 
[the] Transmission Provider does not or cannot determine from the 
initial review that the Small Generating Facility may nevertheless 
be interconnected consistent with safety, reliability, and power 
quality standards unless [the] Interconnection Customer is willing 
to consider minor modifications or further study, [the] Transmission 
Provider shall provide [the] Interconnection Customer with the 
opportunity to attend a customer options meeting.
    2.3 Customer Options Meeting
    If [the] Transmission Provider determines the Interconnection 
Request cannot be approved without (1) minor modifications at 
minimal cost, (2) a supplemental study or other additional studies 
or actions, or (3) incurring significant cost to address safety, 
reliability, or power quality problems, [the] Transmission Provider 
shall notify [the] Interconnection Customer of that determination 
within five (5) Business Days after the determination and provide 
copies of all data and analyses underlying its conclusion. Within 
ten (10) Business Days of [the] Transmission Provider's 
determination, [the] Transmission Provider shall offer to convene a 
customer options meeting with [the] Transmission Provider to review 
possible Interconnection Customer facility modifications or the 
screen analysis and related results, to determine what further steps 
are needed to permit the Small Generating Facility to be connected 
safely and reliably. At the time of notification of [the] 
Transmission Provider's determination, or at the customer options 
meeting, [the] Transmission Provider shall:
    2.3.1 Offer to perform facility modifications or minor 
modifications to [the] Transmission Provider's electric system 
(e.g., changing meters, fuses, relay settings) and provide a non-
binding good faith estimate of the limited cost to make such 
modifications to [the] Transmission Provider's electric system. If 
[the] Interconnection Customer agrees to pay for the modifications 
to the Transmission Provider's electric system, [the] Transmission 
Provider will provide [the] Interconnection Customer with an 
executable interconnection agreement within ten (10) Business Days 
of the customer options meeting; or
    2.3.2 Offer to perform a supplemental review in accordance with 
section 2.4 and provide a non-binding good faith estimate of the 
costs of such review; or
    2.3.3 Obtain [the] Interconnection Customer's agreement to 
continue evaluating the Interconnection Request under the section 3 
Study Process.
    2.4 Supplemental Review
    2.4.1 To accept the offer of a supplemental review, [the] 
Interconnection Customer shall agree in writing and submit a deposit 
for the estimated costs of the supplemental review in the amount of 
[the] Transmission Provider's good faith estimate of the costs of 
such review, both within fifteen (15) Business Days of the offer. If 
the written agreement and deposit have not been received by [the] 
Transmission Provider within that timeframe, the Interconnection 
Request shall continue to be evaluated under the section 3 Study 
Process unless it is withdrawn by [the] Interconnection Customer.
    2.4.2 [The] Interconnection Customer may specify the order in 
which [the] Transmission Provider will complete the screens in 
section 2.4.4.
    2.4.3 [The] Interconnection Customer shall be responsible for 
[the] Transmission Provider's actual costs for conducting the 
supplemental review. [The] Interconnection Customer must pay any 
review costs that exceed the deposit within twenty (20) Business 
Days of receipt of the invoice or resolution of any dispute. If the 
deposit exceeds the invoiced costs, [the] Transmission Provider will 
return such excess within twenty (20) Business Days of the invoice 
without interest.
    2.4.4 Within thirty (30) Business Days following receipt of the 
deposit for a supplemental review, [the] Transmission Provider shall 
(1) perform a supplemental review using the screens set forth below; 
(2) notify in writing [the] Interconnection Customer of the results; 
and (3) include with the notification copies of the analysis and 
data underlying [the] Transmission Provider's determinations under 
the screens. Unless [the] Interconnection Customer provided 
instructions for how to respond to the failure of any of the 
supplemental review screens below at the time [the] Interconnection 
Customer accepted the offer of supplemental review, [the] 
Transmission Provider shall notify [the] Interconnection Customer 
following the failure of any of the screens, or if it is unable to 
perform the screen in section 2.4.4.1, within two (2) Business Days 
of making such determination to obtain [the] Interconnection 
Customer's permission to: (1) continue evaluating the proposed 
interconnection under this section 2.4.4; (2) terminate the 
supplemental review and continue evaluating the Small Generating 
Facility under section 3; or (3) terminate the supplemental review 
upon withdrawal of the Interconnection Request by [the] 
Interconnection Customer.
    2.4.4.1 Minimum Load Screen: Where 12 months of line section 
minimum load data (including onsite load but not station service 
load served by the proposed Small Generating Facility) are 
available, can be calculated, can be estimated from existing data, 
or determined from a power flow model, the aggregate Generating 
Facility capacity on the line section is less than 100% of the 
minimum load for all line sections bounded by automatic 
sectionalizing devices upstream of the proposed Small Generating 
Facility. If minimum load data is not available, or cannot be 
calculated, estimated or determined, [the] Transmission Provider 
shall include the reason(s) that it is unable to calculate, estimate 
or determine minimum load in its supplemental review results 
notification under section 2.4.4.
    2.4.4.1.1 The type of generation used by the proposed Small 
Generating Facility will be taken into account when calculating, 
estimating, or determining circuit or line section minimum load 
relevant for the application of screen 2.4.4.1. Solar photovoltaic 
(PV) generation systems with no battery storage use daytime minimum 
load (i.e., 10 a.m. to 4 p.m. for fixed panel systems and 8 a.m. to 
6 p.m. for PV systems utilizing tracking systems), while all other 
generation uses absolute minimum load.
    2.4. 4.1.2 When this screen is being applied to a Small 
Generating Facility that serves some station service load, only the 
net injection into [the] Transmission Provider's electric system 
will be considered as part of the aggregate generation.
    2.4. 4.1.3 Transmission Provider will not consider as part of 
the aggregate generation for purposes of this screen generating 
facility capacity known to be already reflected in the minimum load 
data.
    2.4.4.2 Voltage and Power Quality Screen: In aggregate with 
existing generation on the line section: (1) the voltage regulation 
on the line section can be maintained in compliance with relevant 
requirements under all system conditions; (2) the voltage 
fluctuation is within acceptable limits as defined by Institute of 
Electrical and Electronics Engineers (IEEE) Standard 1453, or 
utility practice similar to IEEE Standard 1453; and (3) the harmonic 
levels meet IEEE Standard 519 limits.
    2.4.4.3 Safety and Reliability Screen: The location of the 
proposed Small Generating Facility and the aggregate generation 
capacity on the line section do not create impacts to

[[Page 27205]]

safety or reliability that cannot be adequately addressed without 
application of the Study Process. [The] Transmission Provider shall 
give due consideration to the following and other factors in 
determining potential impacts to safety and reliability in applying 
this screen.
    2.4.4.3.1 Whether the line section has significant minimum 
loading levels dominated by a small number of customers (e.g., 
several large commercial customers).
    2.4.4.3.2 Whether the loading along the line section is uniform 
or even.
    2.4.4.3.3 Whether the proposed Small Generating Facility is 
located in close proximity to the substation (i.e., less than 2.5 
electrical circuit miles), and whether the line section from the 
substation to the Point of Interconnection is a Mainline rated for 
normal and emergency ampacity.
    2.4.4.3.4 Whether the proposed Small Generating Facility 
incorporates a time delay function to prevent reconnection of the 
generator to the system until system voltage and frequency are 
within normal limits for a prescribed time.
    2.4.4.3.5 Whether operational flexibility is reduced by the 
proposed Small Generating Facility, such that transfer of the line 
section(s) of the Small Generating Facility to a neighboring 
distribution circuit/substation may trigger overloads or voltage 
issues.
    2.4.4.3.6 Whether the proposed Small Generating Facility employs 
equipment or systems certified by a recognized standards 
organization to address technical issues such as, but not limited 
to, islanding, reverse power flow, or voltage quality.
    2.4.5 If the proposed interconnection passes the supplemental 
screens in sections 2.4.4.1, 2.4.4.2, and 2.4.4.3 above, the 
Interconnection Request shall be approved and [the] Transmission 
Provider will provide [the] Interconnection Customer with an 
executable interconnection agreement within the timeframes 
established in sections 2.4.5.1 and 2.4.5.2 below. If the proposed 
interconnection fails any of the supplemental review screens and 
[the] Interconnection Customer does not withdraw its Interconnection 
Request, it shall continue to be evaluated under the section 3 Study 
Process consistent with section 2.4.5.3 below.
    2.4.5.1 If the proposed interconnection passes the supplemental 
screens in sections 2.4.4.1, 2.4.4.2, and 2.4.4.3 above and does not 
require construction of facilities by [the] Transmission Provider on 
its own system, the interconnection agreement shall be provided 
within ten (10) Business Days after the notification of the 
supplemental review results.
    2.4.5.2 If interconnection facilities or minor modifications to 
[the] Transmission Provider's system are required for the proposed 
interconnection to pass the supplemental screens in sections 
2.4.4.1, 2.4.4.2, and 2.4.4.3 above, and [the] Interconnection 
Customer agrees to pay for the modifications to [the] Transmission 
Provider's electric system, the interconnection agreement, along 
with a non-binding good faith estimate for the interconnection 
facilities and/or minor modifications, shall be provided to [the] 
Interconnection Customer within fifteen (15) Business Days after 
receiving written notification of the supplemental review results.
    2.4.5.3 If the proposed interconnection would require more than 
interconnection facilities or minor modifications to [the] 
Transmission Provider's system to pass the supplemental screens in 
sections 2.4.4.1, 2.4.4.2, and 2.4.4.3 above, [the] Transmission 
Provider shall notify [the] Interconnection Customer, at the same 
time it notifies [the] Interconnection Customer with the 
supplemental review results, that the Interconnection Request shall 
be evaluated under the section 3 Study Process unless [the] 
Interconnection Customer withdraws its Small Generating Facility.

Section 3. Study Process

    3.1 Applicability
    The Study Process shall be used by an Interconnection Customer 
proposing to interconnect its Small Generating Facility with [the] 
Transmission Provider's Transmission System or Distribution System 
if the Small Generating Facility (1) is larger than 2 MW but no 
larger than 20 MW, (2) is not certified, or (3) is certified but did 
not pass the Fast Track Process or the 10 kW Inverter Process.
    3.2 Scoping Meeting
    3.2.1 A scoping meeting will be held within ten (10) Business 
Days after the Interconnection Request is deemed complete, or as 
otherwise mutually agreed to by the Parties. [The] Transmission 
Provider and [the] Interconnection Customer will bring to the 
meeting personnel, including system engineers and other resources as 
may be reasonably required to accomplish the purpose of the meeting.
    3.2.2 The purpose of the scoping meeting is to discuss the 
Interconnection Request and review existing studies relevant to the 
Interconnection Request. The Parties shall further discuss whether 
[the] Transmission Provider should perform a feasibility study or 
proceed directly to a system impact study, or a facilities study, or 
an interconnection agreement. If the Parties agree that a 
feasibility study should be performed, [the] Transmission Provider 
shall provide [the] Interconnection Customer, as soon as possible, 
but not later than five (5) Business Days after the scoping meeting, 
a feasibility study agreement (Attachment 6) including an outline of 
the scope of the study and a non-binding good faith estimate of the 
cost to perform the study.
    3.2.3 The scoping meeting may be omitted by mutual agreement. In 
order to remain in consideration for interconnection, an 
Interconnection Customer who has requested a feasibility study must 
return the executed feasibility study agreement within fifteen (15) 
Business Days. If the Parties agree not to perform a feasibility 
study, [the] Transmission Provider shall provide [the] 
Interconnection Customer, no later than five (5) Business Days after 
the scoping meeting, a system impact study agreement (Attachment 7) 
including an outline of the scope of the study and a non-binding 
good faith estimate of the cost to perform the study.
    3.3 Feasibility Study
    3.3.1 The feasibility study shall identify any potential adverse 
system impacts that would result from the interconnection of the 
Small Generating Facility.
    3.3.2 A deposit of the lesser of 50 percent of the good faith 
estimated feasibility study costs or earnest money of $1,000 may be 
required from [the] Interconnection Customer.
    3.3.3 The scope of and cost responsibilities for the feasibility 
study are described in the attached feasibility study agreement 
(Attachment 6).
    3.3.4 If the feasibility study shows no potential for adverse 
system impacts, [the] Transmission Provider shall send [the] 
Interconnection Customer a facilities study agreement, including an 
outline of the scope of the study and a non-binding good faith 
estimate of the cost to perform the study. If no additional 
facilities are required, [the] Transmission Provider shall send 
[the] Interconnection Customer an executable interconnection 
agreement within five (5) Business Days.
    3.3.5 If the feasibility study shows the potential for adverse 
system impacts, the review process shall proceed to the appropriate 
system impact study(s).
    3.3.6 The feasibility study shall evaluate static synchronous 
compensators, static VAR compensators, advanced power flow control 
devices, transmission switching, synchronous condensers, voltage 
source converters, advanced conductors, and tower lifting. 
Transmission Provider shall evaluate each identified alternative 
transmission technology and determine whether it should be used, 
consistent with Good Utility Practice, Applicable Reliability 
Standards, and Applicable Laws and Regulations [other applicable 
regulatory requirements]. Transmission Provider shall include an 
explanation of the results of Transmission Provider's evaluation for 
each technology in the feasibility study report.
    3.4 System Impact Study
    3.4.1 A system impact study shall identify and detail the 
electric system impacts that would result if the proposed Small 
Generating Facility were interconnected without project 
modifications or electric system modifications, focusing on the 
adverse system impacts identified in the feasibility study, or to 
study potential impacts, including but not limited to those 
identified in the scoping meeting. A system impact study shall 
evaluate the impact of the proposed interconnection on the 
reliability of the electric system.
    3.4.2 If no transmission system impact study is required, but 
potential electric power Distribution System adverse system impacts 
are identified in the scoping meeting or shown in the feasibility 
study, a distribution system impact study must be performed. [The] 
Transmission Provider shall send [the] Interconnection Customer a 
distribution system impact study agreement within fifteen (15) 
Business Days of transmittal of the feasibility study report, 
including an outline of the scope of the study and a non-binding 
good faith estimate of the cost to perform the study, or following 
the scoping meeting if no feasibility study is to be performed.

[[Page 27206]]

    3.4.3 In instances where the feasibility study or the 
distribution system impact study shows potential for transmission 
system adverse system impacts, within five (5) Business Days 
following transmittal of the feasibility study report, [the] 
Transmission Provider shall send [the] Interconnection Customer a 
transmission system impact study agreement, including an outline of 
the scope of the study and a non-binding good faith estimate of the 
cost to perform the study, if such a study is required.
    3.4.4 If a transmission system impact study is not required, but 
electric power Distribution System adverse system impacts are shown 
by the feasibility study to be possible and no distribution system 
impact study has been conducted, Transmission Provider shall send 
Interconnection Customer a distribution system impact study 
agreement.
    3.4.5 If the feasibility study shows no potential for 
transmission system or Distribution System adverse system impacts, 
[the] Transmission Provider shall send [the] Interconnection 
Customer either a facilities study agreement (Attachment 8), 
including an outline of the scope of the study and a non-binding 
good faith estimate of the cost to perform the study, or an 
executable interconnection agreement, as applicable.
    3.4.6 In order to remain under consideration for 
interconnection, [the] Interconnection Customer must return executed 
system impact study agreements, if applicable, within thirty (30) 
Business Days.
    3.4.7 A deposit of the good faith estimated costs for each 
system impact study may be required from [the] Interconnection 
Customer.
    3.4.8 The scope of and cost responsibilities for a system impact 
study are described in the attached system impact study agreement.
    3.4.9 Where transmission systems and Distribution Systems have 
separate owners, such as is the case with transmission-dependent 
utilities (``TDUs'')--whether investor-owned or not--[the] 
Interconnection Customer may apply to the nearest Transmission 
Provider (Transmission Owner, Regional Transmission Operator, or 
Independent Transmission Provider) providing transmission service to 
the TDU to request project coordination. Affected Systems shall 
participate in the study and provide all information necessary to 
prepare the study.
    3.4.10 The system impact study shall evaluate static synchronous 
compensators, static VAR compensators, advanced power flow control 
devices, transmission switching, synchronous condensers, voltage 
source converters, advanced conductors, and tower lifting. 
Transmission Provider shall evaluate each identified alternative 
transmission technology and determine whether it should be used, 
consistent with Good Utility Practice, Applicable Reliability 
Standards, and Applicable Laws and Regulations [other applicable 
regulatory requirements]. Transmission Provider shall include an 
explanation of the results of Transmission Provider's evaluation for 
each technology in the system impact study report.
    3.5 Facilities Study
    3.5.1 Once the required system impact study(s) is completed, a 
system impact study report shall be prepared and transmitted to 
[the] Interconnection Customer along with a facilities study 
agreement within five (5) Business Days, including an outline of the 
scope of the study and a non-binding good faith estimate of the cost 
to perform the facilities study. In the case where one or both 
impact studies are determined to be unnecessary, a notice of the 
fact shall be transmitted to [the] Interconnection Customer within 
the same timeframe.
    3.5.2 In order to remain under consideration for 
interconnection, or, as appropriate, in [the] Transmission 
Provider's interconnection queue, [the] Interconnection Customer 
must return the executed facilities study agreement or a request for 
an extension of time within thirty (30) Business Days.
    3.5.3 The facilities study shall specify and estimate the cost 
of the equipment, engineering, procurement and construction work 
(including overheads) needed to implement the conclusions of the 
system impact study(s).
    3.5.4 Design for any required Interconnection Facilities and/or 
Upgrades shall be performed under the facilities study agreement. 
[The] Transmission Provider may contract with consultants to perform 
activities required under the facilities study agreement. [The] 
Interconnection Customer and [the] Transmission Provider may agree 
to allow [the] Interconnection Customer to separately arrange for 
the design of some of the Interconnection Facilities. In such cases, 
facilities design will be reviewed and/or modified prior to 
acceptance by [the] Transmission Provider, under the provisions of 
the facilities study agreement. If the Parties agree to separately 
arrange for design and construction, and provided security and 
confidentiality requirements can be met, [the] Transmission Provider 
shall make sufficient information available to [the] Interconnection 
Customer in accordance with confidentiality and critical 
infrastructure requirements to permit [the] Interconnection Customer 
to obtain an independent design and cost estimate for any necessary 
facilities.
    3.5.5 A deposit of the good faith estimated costs for the 
facilities study may be required from [the] Interconnection 
Customer.
    3.5.6 The scope of and cost responsibilities for the facilities 
study are described in the attached facilities study agreement.
    3.5.7 Upon completion of the facilities study, and with the 
agreement of [the] Interconnection Customer to pay for 
Interconnection Facilities and Upgrades identified in the facilities 
study, [the] Transmission Provider shall provide [the] 
Interconnection Customer an executable interconnection agreement 
within five (5) Business Days.

Section 4. Provisions That Apply to All Interconnection Requests

    4.1 Reasonable Efforts
    [The] Transmission Provider shall make reasonable efforts to 
meet all time frames provided in these procedures unless [the] 
Transmission Provider and [the] Interconnection Customer agree to a 
different schedule. If [the] Transmission Provider cannot meet a 
deadline provided herein, it shall notify [the] Interconnection 
Customer, explain the reason for the failure to meet the deadline, 
and provide an estimated time by which it will complete the 
applicable interconnection procedure in the process.
    4.2 Disputes
    4.2.1 The Parties agree to attempt to resolve all disputes 
arising out of the interconnection process according to the 
provisions of this article.
    4.2.2 In the event of a dispute, either Party shall provide the 
other Party with a written Notice of Dispute. Such Notice shall 
describe in detail the nature of the dispute.
    4.2.3 If the dispute has not been resolved within two (2) 
Business Days after receipt of the Notice, either Party may contact 
FERC's Dispute Resolution Service (DRS) for assistance in resolving 
the dispute.
    4.2.4 The DRS will assist the Parties in either resolving their 
dispute or in selecting an appropriate dispute resolution venue 
(e.g., mediation, settlement judge, early neutral evaluation, or 
technical expert) to assist the Parties in resolving their dispute. 
DRS can be reached at 1-877-337-2237 or via the internet at http://www.ferc.gov/legal/adr.asp.
    4.2.5 Each Party agrees to conduct all negotiations in good 
faith and will be responsible for one-half of any costs paid to 
neutral third-parties.
    4.2.6 If neither Party elects to seek assistance from the DRS, 
or if the attempted dispute resolution fails, then either Party may 
exercise whatever rights and remedies it may have in equity or law 
consistent with the terms of these procedures.
    4.3 Interconnection Metering
    Any metering necessitated by the use of the Small Generating 
Facility shall be installed at [the] Interconnection Customer's 
expense in accordance with Federal Energy Regulatory Commission, 
state, or local regulatory requirements or [the] Transmission 
Provider's specifications.
    4.4 Commissioning
    Commissioning tests of [the] Interconnection Customer's 
installed equipment shall be performed pursuant to applicable codes 
and standards. [The] Transmission Provider must be given at least 
five (5) Business Days written notice, or as otherwise mutually 
agreed to by the Parties, of the tests and may be present to witness 
the commissioning tests.
    4.5. Confidentiality
    4.5.1 Confidential information shall mean any confidential and/
or proprietary information provided by one Party to the other Party 
that is clearly marked or otherwise designated ``Confidential.'' For 
purposes of these procedures all design, operating specifications, 
and metering data provided by [the] Interconnection Customer shall 
be deemed confidential information regardless of whether it is 
clearly marked or otherwise designated as such.
    4.5.2 Confidential Information does not include information 
previously in the public domain, required to be publicly submitted 
or divulged by Governmental Authorities (after notice to the other 
Party and after exhausting any opportunity to oppose such 
publication

[[Page 27207]]

or release), or necessary to be divulged in an action to enforce 
these procedures. Each Party receiving Confidential Information 
shall hold such information in confidence and shall not disclose it 
to any third party nor to the public without the prior written 
authorization from the Party providing that information, except to 
fulfill obligations under these procedures, or to fulfill legal or 
regulatory requirements.
    4.5.2.1 Each Party shall employ at least the same standard of 
care to protect Confidential Information obtained from the other 
Party as it employs to protect its own Confidential Information.
    4.5.2.2 Each Party is entitled to equitable relief, by 
injunction or otherwise, to enforce its rights under this provision 
to prevent the release of Confidential Information without bond or 
proof of damages, and may seek other remedies available at law or in 
equity for breach of this provision.
    4.5.3 Notwithstanding anything in this article to the contrary, 
and pursuant to 18 CFR 1b.20, if FERC, during the course of an 
investigation or otherwise, requests information from one of the 
Parties that is otherwise required to be maintained in confidence 
pursuant to these procedures, the Party shall provide the requested 
information to FERC, within the time provided for in the request for 
information. In providing the information to FERC, the Party may, 
consistent with 18 CFR 388.112, request that the information be 
treated as confidential and non-public by FERC and that the 
information be withheld from public disclosure. Parties are 
prohibited from notifying the other Party prior to the release of 
the Confidential Information to FERC. The Party shall notify the 
other Party when it is notified by FERC that a request to release 
Confidential Information has been received by FERC, at which time 
either of the Parties may respond before such information would be 
made public, pursuant to 18 CFR 388.112. Requests from a state 
regulatory body conducting a confidential investigation shall be 
treated in a similar manner if consistent with the applicable state 
rules and regulations.
    4.6 Comparability
    [The] Transmission Provider shall receive, process and analyze 
all Interconnection Requests in a timely manner as set forth in this 
document. [The] Transmission Provider shall use the same reasonable 
efforts in processing and analyzing Interconnection Requests from 
all Interconnection Customers, whether the Small Generating Facility 
is owned or operated by [the] Transmission Provider, its 
subsidiaries or affiliates, or others.
    4.7 Record Retention
    [The] Transmission Provider shall maintain for three years 
records, subject to audit, of all Interconnection Requests received 
under these procedures, the times required to complete 
Interconnection Request approvals and disapprovals, and 
justification for the actions taken on the Interconnection Requests.
    4.8 Interconnection Agreement
    After receiving an interconnection agreement from [the] 
Transmission Provider, [the] Interconnection Customer shall have 
thirty (30) Business Days or another mutually agreeable timeframe to 
sign and return the interconnection agreement or request that [the] 
Transmission Provider file an unexecuted interconnection agreement 
with the Federal Energy Regulatory Commission. If [the] 
Interconnection Customer does not sign the interconnection 
agreement, or ask that it be filed unexecuted by [the] Transmission 
Provider within thirty (30) Business Days, the Interconnection 
Request shall be deemed withdrawn. After the interconnection 
agreement is signed by the Parties, the interconnection of the Small 
Generating Facility shall proceed under the provisions of the 
interconnection agreement.
    4.9 Coordination with Affected Systems
    [The] Transmission Provider shall coordinate the conduct of any 
studies required to determine the impact of the Interconnection 
Request on Affected Systems with Affected System operators and, if 
possible, include those results (if available) in its applicable 
interconnection study within the time frame specified in these 
procedures. [The] Transmission Provider will include such Affected 
System operators in all meetings held with [the] Interconnection 
Customer as required by these procedures. [The] Interconnection 
Customer will cooperate with [the] Transmission Provider in all 
matters related to the conduct of studies and the determination of 
modifications to Affected Systems. A Transmission Provider which may 
be an Affected System shall cooperate with [the] Transmission 
Provider with whom interconnection has been requested in all matters 
related to the conduct of studies and the determination of 
modifications to Affected Systems.
    4.10 Capacity of the Small Generating Facility
    4.10.1 If the Interconnection Request is for an increase in 
capacity for an existing Small Generating Facility, the 
Interconnection Request shall be evaluated on the basis of the new 
total capacity of the Small Generating Facility.
    4.10.2 If the Interconnection Request is for a Small Generating 
Facility that includes multiple energy production devices at a site 
for which [the] Interconnection Customer seeks a single Point of 
Interconnection, the Interconnection Request shall be evaluated on 
the basis of the aggregate capacity of the multiple devices.
    4.10.3 The Interconnection Request shall be evaluated using the 
maximum capacity that the Small Generating Facility is capable of 
injecting into [the] Transmission Provider's electric system. 
However, if the maximum capacity that the Small Generating Facility 
is capable of injecting into [the] Transmission Provider's electric 
system is limited (e.g., through use of a control system, power 
relay(s), or other similar device settings or adjustments), then 
[the] Interconnection Customer must obtain [the] Transmission 
Provider's agreement, with such agreement not to be unreasonably 
withheld, that the manner in which [the] Interconnection Customer 
proposes to implement such a limit will not adversely affect the 
safety and reliability of [the] Transmission Provider's system. If 
[the] Transmission Provider does not so agree, then the 
Interconnection Request must be withdrawn or revised to specify the 
maximum capacity that the Small Generating Facility is capable of 
injecting into [the] Transmission Provider's electric system without 
such limitations. Furthermore, nothing in this section shall prevent 
a Transmission Provider from considering an output higher than the 
limited output, if appropriate, when evaluating system protection 
impacts.

Attachment 1

Glossary of Terms

    10 kW Inverter Process--The procedure for evaluating an 
Interconnection Request for a certified inverter-based Small 
Generating Facility no larger than 10 kW that uses the section 2 
screens. The application process uses an all-in-one document that 
includes a simplified Interconnection Request, simplified 
procedures, and a brief set of terms and conditions. See SGIP 
Attachment 5.
    Affected System--An electric system other than [the] 
Transmission Provider's Transmission System that may be affected by 
the proposed interconnection.
    Applicable Reliability Standards--The requirements and 
guidelines of the Electric Reliability Organization and the 
Balancing Authority Area of the Transmission System to which the 
Generating Facility is directly interconnected.
    Applicable Laws and Regulations--All duly promulgated applicable 
federal, state and local laws, regulations, rules, ordinances, 
codes, decrees, judgments, directives, or judicial or administrative 
orders, permits and other duly authorized actions of any 
Governmental Authority.
    Business Day--Monday through Friday, excluding Federal Holidays.
    Distribution System--[The] Transmission Provider's facilities 
and equipment used to transmit electricity to ultimate usage points 
such as homes and industries directly from nearby generators or from 
interchanges with higher voltage transmission networks which 
transport bulk power over longer distances. The voltage levels at 
which Distribution Systems operate differ among areas.
    Distribution Upgrades--The additions, modifications, and 
upgrades to [the] Transmission Provider's Distribution System at or 
beyond the Point of Interconnection to facilitate interconnection of 
the Small Generating Facility and render the transmission service 
necessary to effect [the] Interconnection Customer's wholesale sale 
of electricity in interstate commerce. Distribution Upgrades do not 
include Interconnection Facilities.
    Fast Track Process--The procedure for evaluating an 
Interconnection Request for a certified Small Generating Facility 
that meets the eligibility requirements of section 2.1 and includes 
the section 2 screens, customer options meeting, and optional 
supplemental review.
    Good Utility Practice--Any of the practices, methods and acts 
engaged in or approved by a significant portion of the electric 
industry during the relevant time period, or any of the practices, 
methods and act which, in the exercise of reasonable

[[Page 27208]]

judgment in light of the facts known at the time the decision was 
made, could have been expected to accomplish the desired result at a 
reasonable cost consistent with good business practices, 
reliability, safety and expedition. Good Utility Practice is not 
intended to be limited to the optimum practice, method, or act to 
the exclusion of all others, but rather to be acceptable practices, 
methods, or acts generally accepted in the region.
    Interconnection Customer--Any entity, including [the] 
Transmission Provider, the Transmission Owner or any of the 
affiliates or subsidiaries of either, that proposes to interconnect 
its Small Generating Facility with [the] Transmission Provider's 
Transmission System.
    Interconnection Facilities--[The] Transmission Provider's 
Interconnection Facilities and [the] Interconnection Customer's 
Interconnection Facilities. Collectively, Interconnection Facilities 
include all facilities and equipment between the Small Generating 
Facility and the Point of Interconnection, including any 
modification, additions or upgrades that are necessary to physically 
and electrically interconnect the Small Generating Facility to [the] 
Transmission Provider's Transmission System. Interconnection 
Facilities are sole use facilities and shall not include 
Distribution Upgrades or Network Upgrades.
    Interconnection Request--[The] Interconnection Customer's 
request, in accordance with the Tariff, to interconnect a new Small 
Generating Facility, or to increase the capacity of, or make a 
Material Modification to the operating characteristics of, an 
existing Small Generating Facility that is interconnected with [the] 
Transmission Provider's Transmission System.
    Material Modification--A modification that has a material impact 
on the cost or timing of any Interconnection Request with a later 
queue priority date.
    Network Resource--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.
    Network Resource Interconnection Service--An Interconnection 
Service that allows [the] Interconnection Customer to integrate its 
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 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.
    Network Upgrades--Additions, modifications, and upgrades to 
[the] Transmission Provider's Transmission System required at or 
beyond the point at which the Small Generating Facility 
interconnects with [the] Transmission Provider's Transmission System 
to accommodate the interconnection with the Small Generating 
Facility to [the] Transmission Provider's Transmission System. 
Network Upgrades do not include Distribution Upgrades.
    Party or Parties--[The] Transmission Provider, Transmission 
Owner, Interconnection Customer or any combination of the above.
    Point of Interconnection--The point where the Interconnection 
Facilities connect with [the] Transmission Provider's Transmission 
System.
    Queue Position--The order of a valid Interconnection Request, 
relative to all other pending valid Interconnection Requests, that 
is established based upon the date and time of receipt of the valid 
Interconnection Request by [the] Transmission Provider.
    Small Generating Facility--[The] Interconnection Customer's 
device for the production and/or storage for later injection of 
electricity identified in the Interconnection Request, but shall not 
include [the] Interconnection Customer's Interconnection Facilities.
    Study Process--The procedure for evaluating an Interconnection 
Request that includes the section 3 scoping meeting, feasibility 
study, system impact study, and facilities study.
    Transmission Owner--The entity that owns, leases or otherwise 
possesses an interest in the portion of the Transmission System at 
the Point of Interconnection and may be a Party to the Small 
Generator Interconnection Agreement to the extent necessary.
    Transmission Provider--The public utility (or its designated 
agent) that owns, controls, or operates transmission or distribution 
facilities used for the transmission of electricity in interstate 
commerce and provides transmission service under the Tariff. The 
term Transmission Provider should be read to include the 
Transmission Owner when the Transmission Owner is separate from 
[the] Transmission Provider.
    Transmission System--The facilities owned, controlled or 
operated by [the] Transmission Provider or the Transmission Owner 
that are used to provide transmission service under the Tariff.
    Upgrades--The required additions and modifications to [the] 
Transmission Provider's Transmission System at or beyond the Point 
of Interconnection. Upgrades may be Network Upgrades or Distribution 
Upgrades. Upgrades do not include Interconnection Facilities.
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Excitation and Governor System Data for Synchronous Generators Only

    Provide appropriate IEEE model block diagram of excitation 
system, governor system and power system stabilizer (PSS) in 
accordance with the regional reliability council criteria. A PSS may 
be determined to be required by applicable studies. A copy of the 
manufacturer's block diagram may not be substituted.

Models for Non-Synchronous Small Generating Facilities

    For a non-synchronous Small Generating Facility, Interconnection 
Customer shall provide (1) a validated user-defined root mean 
squared (RMS) positive sequence dynamics model; (2) an appropriately 
parameterized generic library RMS positive sequence dynamics model, 
including model block diagram of the inverter control and plant 
control systems, as defined by the selection in Table 1 or a model 
otherwise approved by the Western Electricity Coordinating Council, 
that corresponds to Interconnection Customer's Small Generating 
Facility; and (3) if applicable, a validated electromagnetic 
transient model if Transmission Provider performs an electromagnetic 
transient study as part of the interconnection study process. A 
user-defined model is a set of programming code created by equipment 
manufacturers or developers that captures the latest features of 
controllers that are mainly software based and represents the 
entities' control strategies but does not necessarily correspond to 
any generic library model. Interconnection Customer must also 
demonstrate that the model is validated by providing evidence that 
the equipment behavior is consistent with the model behavior (e.g., 
an attestation from Interconnection Customer that the model 
accurately represents the entire Small Generating Facility; 
attestations from each equipment manufacturer that the user defined 
model accurately represents the component of the Small Generating 
Facility; or test data).

                    Table 1--Acceptable Generic Library RMS Positive Sequence Dynamics Models
----------------------------------------------------------------------------------------------------------------
              GE PSLF                    Siemens PSS/E*       PowerWorld simulator           Description
----------------------------------------------------------------------------------------------------------------
pvd1...............................  ......................  PVD1..................  Distributed PV system
                                                                                      model.
der_a..............................  DERAU1................  DER_A.................  Distributed energy resource
                                                                                      model.
regc_a.............................  REGCAU1, REGCA1.......  REGC_A................  Generator/converter model.
regc_b.............................  REGCBU1...............  REGC_B................  Generator/converter model.
wt1g...............................  WT1G1.................  WT1G and WT1G1........  Wind turbine model for Type-
                                                                                      1 wind turbines
                                                                                      (conventional directly
                                                                                      connected induction
                                                                                      generator).
wt2g...............................  WT2G1.................  WT2G and WT2G1........  Generator model for generic
                                                                                      Type-2 wind turbines.
wt2e...............................  WT2E1.................  WT2E and WT2E1........  Rotor resistance control
                                                                                      model for wound-rotor
                                                                                      induction wind-turbine
                                                                                      generator wt2g.
reec_a.............................  REECAU1, REECA1.......  REEC_A................  Renewable energy electrical
                                                                                      control model.
reec_c.............................  REECCU1...............  REEC_C................  Electrical control model
                                                                                      for battery energy storage
                                                                                      system.
reec_d.............................  REECDU1...............  REEC_D................  Renewable energy electrical
                                                                                      control model.
wt1t...............................  WT12T1................  WT1T and WT12T1.......  Wind turbine model for Type-
                                                                                      1 wind turbines
                                                                                      (conventional directly
                                                                                      connected induction
                                                                                      generator).
wt1p_b.............................  wt1p_b................  WT12A1U_B.............  Generic wind turbine pitch
                                                                                      controller for WTGs of
                                                                                      Types 1 and 2.

[[Page 27215]]

 
wt2t...............................  WT12T1................  WT2T..................  Wind turbine model for Type-
                                                                                      2 wind turbines (directly
                                                                                      connected induction
                                                                                      generator wind turbines
                                                                                      with an external rotor
                                                                                      resistance).
wtgt_a.............................  WTDTAU1, WTDTA1.......  WTGT_A................  Wind turbine drive train
                                                                                      model.
wtga_a.............................  WTARAU1, WTARA1.......  WTGA_A................  Simple aerodynamic model.
wtgp_a.............................  WTPTAU1, WTPTA1.......  WTGPT_A...............  Wind Turbine Generator
                                                                                      Pitch controller.
wtgq_a.............................  WTTQAU1, WTTQA1.......  WTGTRQ_A..............  Wind Turbine Generator
                                                                                      Torque controller.
wtgwgo_a...........................  WTGWGOAU..............  WTGWGO_A..............  Supplementary control model
                                                                                      for Weak Grids.
wtgibffr_a.........................  WTGIBFFRA.............  WTGIBFFR_A............  Inertial-base fast
                                                                                      frequency response
                                                                                      control.
wtgp_b.............................  WTPTBU1...............  WTGPT_B...............  Wind Turbine Generator
                                                                                      Pitch controller.
wtgt_b.............................  WTDTBU1...............  WTGT_B................  Drive train model.
repc_a.............................  Type 4: REPCAU1 (v33),  REPC_A................  Power Plant Controller.
                                      REPCA1 (v34) Type 3:
                                      REPCTAU1 (v33),
                                      REPCTA1 (v34).
repc_b.............................  PLNTBU1...............  REPC_B................  Power Plant Level
                                                                                      Controller for controlling
                                                                                      several plants/devices In
                                                                                      regard to Siemens PSS/E*:
                                                                                      Names of other models for
                                                                                      interface with other
                                                                                      devices: REA3XBU1,
                                                                                      REAX4BU1--for interface
                                                                                      with Type 3 and 4
                                                                                      renewable machines
                                                                                      SWSAXBU1--for interface
                                                                                      with SVC (modeled as
                                                                                      switched shunt in
                                                                                      powerflow) SYNAXBU1--for
                                                                                      interface with synchronous
                                                                                      condenser FCTAXBU1--for
                                                                                      interface with FACTS
                                                                                      device.
repc_c.............................  REPCCU................  REPC_C................  Power plant controller.
----------------------------------------------------------------------------------------------------------------

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BILLING CODE 6717-01-C

Attachment 3

Certification Codes and Standards

IEEE1547 Standard for Interconnecting Distributed Resources with 
Electric Power Systems (including use of IEEE 1547.1 testing 
protocols to establish conformity)
UL 1741 Inverters, Converters, and Controllers for Use in 
Independent Power Systems
IEEE Std 929-2000 IEEE Recommended Practice for Utility Interface of 
Photovoltaic (PV) Systems
NFPA 70 (2002), National Electrical Code
IEEE Std C37.90.1-1989 (R1994), IEEE Standard Surge Withstand 
Capability (SWC) Tests for Protective Relays and Relay Systems
IEEE Std C37.90.2 (1995), IEEE Standard Withstand Capability of 
Relay Systems to Radiated Electromagnetic Interference from 
Transceivers
IEEE Std C37.108-1989 (R2002), IEEE Guide for the Protection of 
Network Transformers
IEEE Std C57.12.44-2000, IEEE Standard Requirements for Secondary 
Network Protectors
IEEE Std C62.41.2-2002, IEEE Recommended Practice on 
Characterization of Surges in Low Voltage (1000V and Less) AC Power 
Circuits
IEEE Std C62.45-1992 (R2002), IEEE Recommended Practice on Surge 
Testing for Equipment Connected to Low-Voltage (1000V and Less) AC 
Power Circuits
ANSI C84.1-1995 Electric Power Systems and Equipment--Voltage 
Ratings (60 Hertz)
IEEE Std 100-2000, IEEE Standard Dictionary of Electrical and 
Electronic Terms
NEMA MG 1-1998, Motors and Small Resources, Revision 3
IEEE Std 519-1992, IEEE Recommended Practices and Requirements for 
Harmonic Control in Electrical Power Systems
NEMA MG 1-2003 (Rev 2004), Motors and Generators, Revision 1

Attachment 4

Certification of Small Generator Equipment Packages

    1.0 Small Generating Facility equipment proposed for use 
separately or packaged with other equipment in an interconnection 
system shall be considered certified for interconnected operation if 
(1) it has been tested in accordance with industry standards for 
continuous utility interactive operation in compliance with the 
appropriate codes and standards referenced below by any Nationally 
Recognized Testing Laboratory (NRTL) recognized by the United States 
Occupational Safety and Health Administration to test and certify 
interconnection equipment pursuant to the relevant codes and 
standards listed in SGIP Attachment 3, (2) it has been labeled and 
is publicly listed by such NRTL at the time of the interconnection 
application, and (3) such NRTL makes readily available for 
verification all test standards and procedures it utilized in 
performing such equipment certification, and, with consumer 
approval, the test data itself. The NRTL may make such information 
available on its website and by encouraging such information to be 
included in the manufacturer's literature accompanying the 
equipment.
    2.0 [The] Interconnection Customer must verify that the intended 
use of the equipment falls within the use or uses for which the 
equipment was tested, labeled, and listed by the NRTL.
    3.0 Certified equipment shall not require further type-test 
review, testing, or additional equipment to meet the requirements of 
this interconnection procedure; however, nothing herein shall 
preclude the need for an on-site commissioning test by the parties 
to the interconnection nor follow-up production testing by the NRTL.
    4.0 If the certified equipment package includes only interface 
components (switchgear, inverters, or other interface devices), then 
an Interconnection Customer must show that the generator or other 
electric source being utilized with the equipment package is 
compatible with the equipment package and is consistent with the 
testing and listing specified for this type of interconnection 
equipment.
    5.0 Provided the generator or electric source, when combined 
with the equipment package, is within the range of capabilities for 
which it was tested by the NRTL, and does not violate the interface 
components' labeling and listing performed by the NRTL, no further 
design review, testing or additional equipment on the customer side 
of the point of common coupling shall be required to meet the 
requirements of this interconnection procedure.
    6.0 An equipment package does not include equipment provided by 
the utility.
    7.0 Any equipment package approved and listed in a state by that 
state's regulatory body for interconnected operation in that state 
prior to the effective date of these small generator interconnection 
procedures shall be considered certified under these procedures for 
use in that state.

Attachment 5

Application, Procedures, and Terms and Conditions for Interconnecting a 
Certified Inverter-Based Small Generating Facility No Larger Than 10 kW 
(``10 kW Inverter Process'')

    1.0 [The] Interconnection Customer (``Customer'') completes the 
Interconnection Request (``Application'') and submits it to [the] 
Transmission Provider (``Company'').

[[Page 27220]]

    2.0 The Company acknowledges to the Customer receipt of the 
Application within three (3) Business Days of receipt.
    3.0 The Company evaluates the Application for completeness and 
notifies the Customer within ten (10) Business Days of receipt that 
the Application is or is not complete and, if not, advises what 
material is missing.
    4.0 The Company verifies that the Small Generating Facility can 
be interconnected safely and reliably using the screens contained in 
the Fast Track Process in the Small Generator Interconnection 
Procedures (SGIP). The Company has fifteen (15) Business Days to 
complete this process. Unless the Company determines and 
demonstrates that the Small Generating Facility cannot be 
interconnected safely and reliably, the Company approves the 
Application and returns it to the Customer. Note to Customer: Please 
check with the Company before submitting the Application if 
disconnection equipment is required.
    5.0 After installation, the Customer returns the Certificate of 
Completion to the Company. Prior to parallel operation, the Company 
may inspect the Small Generating Facility for compliance with 
standards which may include a witness test, and may schedule 
appropriate metering replacement, if necessary.
    6.0 The Company notifies the Customer in writing that 
interconnection of the Small Generating Facility is authorized. If 
the witness test is not satisfactory, the Company has the right to 
disconnect the Small Generating Facility. The Customer has no right 
to operate in parallel until a witness test has been performed, or 
previously waived on the Application. The Company is obligated to 
complete this witness test within ten (10) Business Days of the 
receipt of the Certificate of Completion. If the Company does not 
inspect within ten (10) Business Days or by mutual agreement of the 
Parties, the witness test is deemed waived.
    7.0 Contact Information--The Customer must provide the contact 
information for the legal applicant (i.e., [the] Interconnection 
Customer). If another entity is responsible for interfacing with the 
Company, that contact information must be provided on the 
Application.
    8.0 Ownership Information--Enter the legal names of the owner(s) 
of the Small Generating Facility. Include the percentage ownership 
(if any) by any utility or public utility holding company, or by any 
entity owned by either.
    9.0 UL1741 Listed--This standard (``Inverters, Converters, and 
Controllers for Use in Independent Power Systems'') addresses the 
electrical interconnection design of various forms of generating 
equipment. Many manufacturers submit their equipment to a Nationally 
Recognized Testing Laboratory (NRTL) that verifies compliance with 
UL1741. This ``listing'' is then marked on the equipment and 
supporting documentation.
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BILLING CODE 6717-01-C

Terms and Conditions for Interconnecting an Inverter-Based Small 
Generating Facility No Larger Than 10kW

    1.0 Construction of the Facility
    [The] Interconnection Customer (the ``Customer'') may proceed to 
construct (including operational testing not to exceed two hours) 
the Small Generating Facility when [the] Transmission Provider (the 
``Company'') approves the Interconnection Request (the 
``Application'') and returns it to the Customer.
    2.0 Interconnection and Operation
    The Customer may operate Small Generating Facility and 
interconnect with the Company's electric system once all of the 
following have occurred:
    2.1 Upon completing construction, the Customer will cause the 
Small Generating Facility to be inspected or otherwise certified by 
the appropriate local electrical wiring inspector with jurisdiction, 
and
    2.2 The Customer returns the Certificate of Completion to the 
Company, and
    2.3 The Company has either:
    2.3.1 Completed its inspection of the Small Generating Facility 
to ensure that all equipment has been appropriately installed and 
that all electrical connections have been made in accordance with 
applicable codes. All inspections must be conducted by the Company, 
at its own expense, within ten (10) Business Days after receipt of 
the Certificate of Completion and shall take place at a time 
agreeable to the Parties. The Company shall provide a written 
statement that the Small Generating Facility has passed inspection 
or shall notify the Customer of what steps it must take to pass 
inspection as soon as practicable after the inspection takes place; 
or
    2.3.2 If the Company does not schedule an inspection of the 
Small Generating Facility within ten (10) [b]Business [d]Days after 
receiving the Certificate of Completion, the witness test is deemed 
waived (unless the Parties agree otherwise); or
    2.3.3 The Company waives the right to inspect the Small 
Generating Facility.
    2.4 The Company has the right to disconnect the Small Generating 
Facility in the event of improper installation or failure to return 
the Certificate of Completion.
    2.5 Revenue quality metering equipment must be installed and 
tested in accordance with applicable ANSI standards.
    3.0 Safe Operations and Maintenance
    The Customer shall be fully responsible to operate, maintain, 
and repair the Small Generating Facility as required to ensure that 
it complies at all times with the interconnection standards to which 
it has been certified.
    4.0 Access
    The Company shall have access to the disconnect switch (if the 
disconnect switch is required) and metering equipment of the Small 
Generating Facility at all times. The Company shall provide 
reasonable notice to the Customer when possible prior to using its 
right of access.
    5.0 Disconnection
    The Company may temporarily disconnect the Small Generating 
Facility upon the following conditions:
    5.1 For scheduled outages upon reasonable notice.
    5.2 For unscheduled outages or emergency conditions.
    5.3 If the Small Generating Facility does not operate in the 
manner consistent with these Terms and Conditions.
    5.4 The Company shall inform the Customer in advance of any 
scheduled disconnection, or as is reasonable after an unscheduled 
disconnection.
    6.0 Indemnification
    The Parties shall at all times indemnify, defend, and save the 
other Party harmless from, any and all damages, losses, claims, 
including claims and actions relating to injury to or death of any 
person or damage to property, demand, suits, recoveries, costs and 
expenses, court costs, attorney fees, and all other obligations by 
or to third parties, arising out of or resulting from the other 
Party's action or inactions of its obligations under this agreement 
on behalf of the indemnifying Party, except in cases of gross 
negligence or intentional wrongdoing by the indemnified Party.
    7.0 Insurance
    The Parties agree to follow all applicable insurance 
requirements imposed by the state in which the Point of 
Interconnection is located. All insurance policies must be 
maintained with insurers authorized to do business in that state.
    8.0 Limitation of Liability
    Each party's liability to the other party for any loss, cost, 
claim, injury, liability, or expense, including reasonable 
attorney's fees, relating to or arising from any act or omission in 
its performance of this Agreement, shall be limited to the amount of 
direct damage actually incurred. In no event shall either party be 
liable to the other party for any indirect, incidental, special, 
consequential, or punitive damages of any kind whatsoever, except as 
allowed under paragraph 6.0.
    9.0 Termination
    The agreement to operate in parallel may be terminated under the 
following conditions:
    9.1 By the Customer
    By providing written notice to the Company.
    9.2 By the Company
    If the Small Generating Facility fails to operate for any 
consecutive 12 month period or the Customer fails to remedy a 
violation of these Terms and Conditions.
    9.3 Permanent Disconnection
    In the event this Agreement is terminated, the Company shall 
have the right to disconnect its facilities or direct the Customer 
to disconnect its Small Generating Facility.
    9.4 Survival Rights
    This Agreement shall continue in effect after termination to the 
extent necessary to allow or require either Party to fulfill rights 
or obligations that arose under the Agreement.
    10.0 Assignment/Transfer of Ownership of the Facility
    This Agreement shall survive the transfer of ownership of the 
Small Generating Facility to a new owner when the new owner agrees 
in writing to comply with the terms of this Agreement and so 
notifies the Company.

Attachment 6

Feasibility Study Agreement

    This Agreement is made and entered into this__ day of ____ 20__ 
by and between ____, a ____ organized and existing under the laws of 
the State of ____, (``Interconnection Customer,'') and ____, a ____ 
organized and existing under the laws of the State of ____, 
(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a 
Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by Interconnection Customer on 
____; and
    Whereas, Interconnection Customer desires to interconnect the 
Small Generating Facility with [the] Transmission Provider's 
Transmission System; and
    Whereas, Interconnection Customer has requested [the] 
Transmission Provider to perform a feasibility study to assess the 
feasibility of interconnecting the proposed Small Generating 
Facility with [the] Transmission Provider's Transmission System, and 
of any Affected Systems;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated or the 
meanings specified in the standard Small Generator Interconnection 
Procedures.
    2.0 [The] Interconnection Customer elects and [the] Transmission 
Provider shall cause to be performed an interconnection feasibility 
study consistent the standard Small Generator Interconnection 
Procedures in accordance with the Open Access Transmission Tariff.
    3.0 The scope of the feasibility study shall be subject to the 
assumptions set forth in Attachment A to this Agreement.
    4.0 The feasibility study shall be based on the technical 
information provided by [the] Interconnection Customer in the 
Interconnection Request, as may be modified as the result of the 
scoping meeting. [The] Transmission Provider reserves the right to 
request additional technical information from [the] Interconnection 
Customer as may reasonably become necessary consistent with Good 
Utility Practice during the course of the feasibility study and as 
designated in accordance with the standard Small Generator 
Interconnection Procedures. If [the] Interconnection Customer 
modifies its Interconnection Request, the time to complete the 
feasibility study may be extended by agreement of the Parties.
    5.0 In performing the study, [the] Transmission Provider shall 
rely, to the extent reasonably practicable, on existing studies of 
recent vintage. [The] Interconnection Customer shall not be charged 
for such existing studies; however, [the] Interconnection Customer 
shall be

[[Page 27227]]

responsible for charges associated with any new study or 
modifications to existing studies that are reasonably necessary to 
perform the feasibility study.
    6.0 The feasibility study report shall provide the following 
analyses for the purpose of identifying any potential adverse system 
impacts that would result from the interconnection of the Small 
Generating Facility as proposed:
    6.1 Initial identification of any circuit breaker short circuit 
capability limits exceeded as a result of the interconnection;
    6.2 Initial identification of any thermal overload or voltage 
limit violations resulting from the interconnection;
    6.3 Initial review of grounding requirements and electric system 
protection; and
    6.4 Description and non-binding estimated cost of facilities 
required to interconnect the proposed Small Generating Facility and 
to address the identified short circuit and power flow issues.
    7.0 The feasibility study shall model the impact of the Small 
Generating Facility regardless of purpose in order to avoid the 
further expense and interruption of operation for reexamination of 
feasibility and impacts if [the] Interconnection Customer later 
changes the purpose for which the Small Generating Facility is being 
installed.
    8.0 The study shall include the feasibility of any 
interconnection at a proposed project site where there could be 
multiple potential Points of Interconnection, as requested by [the] 
Interconnection Customer and at [the] Interconnection Customer's 
cost.
    9.0 A deposit of the lesser of 50 percent of good faith 
estimated feasibility study costs or earnest money of $1,000 may be 
required from [the] Interconnection Customer.
    10.0 Once the feasibility study is completed, a feasibility 
study report shall be prepared and transmitted to [the] 
Interconnection Customer. Barring unusual circumstances, the 
feasibility study must be completed and the feasibility study report 
transmitted within thirty (30) Business Days of [the] 
Interconnection Customer's agreement to conduct a feasibility study.
    11.0 Any study fees shall be based on [the] Transmission 
Provider's actual costs and will be invoiced to [the] 
Interconnection Customer after the study is completed and delivered 
and will include a summary of professional time.
    12.0 [The] Interconnection Customer must pay any study costs 
that exceed the deposit without interest within thirty (30) 
[c]Calendar [d]Days on receipt of the invoice or resolution of any 
dispute. If the deposit exceeds the invoiced fees, [the] 
Transmission Provider shall refund such excess within thirty (30) 
[c]Calendar [d]Days of the invoice without interest.
    13.0 Governing Law, Regulatory Authority, and Rules
    The validity, interpretation and enforcement of this Agreement 
and each of its provisions shall be governed by the laws of the 
state of ____(where the Point of Interconnection is located), 
without regard to its conflicts of law principles. This Agreement is 
subject to all Applicable Laws and Regulations. Each Party expressly 
reserves the right to seek changes in, appeal, or otherwise contest 
any laws, orders, or regulations of a Governmental Authority.
    14.0 Amendment
    The Parties may amend this Agreement by a written instrument 
duly executed by both Parties.
    15.0 No Third-Party Beneficiaries
    This Agreement is not intended to and does not create rights, 
remedies, or benefits of any character whatsoever in favor of any 
persons, corporations, associations, or entities other than the 
Parties, and the obligations herein assumed are solely for the use 
and benefit of the Parties, their successors in interest and where 
permitted, their assigns.
    16.0 Waiver
    16.1 The failure of a Party to this Agreement to insist, on any 
occasion, upon strict performance of any provision of this Agreement 
will not be considered a waiver of any obligation, right, or duty 
of, or imposed upon, such Party.
    16.2 Any waiver at any time by either Party of its rights with 
respect to this Agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this Agreement. Termination or default of 
this Agreement for any reason by Interconnection Customer shall not 
constitute a waiver of [the] Interconnection Customer's legal rights 
to obtain an interconnection from [the] Transmission Provider. Any 
waiver of this Agreement shall, if requested, be provided in 
writing.
    17.0 Multiple Counterparts
    This Agreement may be executed in two or more counterparts, each 
of which is deemed an original but all constitute one and the same 
instrument.
    18.0 No Partnership
    This Agreement shall not be interpreted or construed to create 
an association, joint venture, agency relationship, or partnership 
between the Parties or to impose any partnership obligation or 
partnership liability upon either Party. Neither Party shall have 
any right, power or authority to enter into any agreement or 
undertaking for, or act on behalf of, or to act as or be an agent or 
representative of, or to otherwise bind, the other Party.
    19.0 Severability
    If any provision or portion of this Agreement shall for any 
reason be held or adjudged to be invalid or illegal or unenforceable 
by any court of competent jurisdiction or other Governmental 
Authority, (1) such portion or provision shall be deemed separate 
and independent, (2) the Parties shall negotiate in good faith to 
restore insofar as practicable the benefits to each Party that were 
affected by such ruling, and (3) the remainder of this Agreement 
shall remain in full force and effect.
    20.0 Subcontractors
    Nothing in this Agreement shall prevent a Party from utilizing 
the services of any subcontractor as it deems appropriate to perform 
its obligations under this Agreement; provided, however, that each 
Party shall require its subcontractors to comply with all applicable 
terms and conditions of this Agreement in providing such services 
and each Party shall remain primarily liable to the other Party for 
the performance of such subcontractor.
    20.1 The creation of any subcontract relationship shall not 
relieve the hiring Party of any of its obligations under this 
Agreement. The hiring Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor the hiring 
Party hires as if no subcontract had been made; provided, however, 
that in no event shall [the] Transmission Provider be liable for the 
actions or inactions of [the] Interconnection Customer or its 
subcontractors with respect to obligations of [the] Interconnection 
Customer under this Agreement. Any applicable obligation imposed by 
this Agreement upon the hiring Party shall be equally binding upon, 
and shall be construed as having application to, any subcontractor 
of such Party.
    20.2 The obligations under this article will not be limited in 
any way by any limitation of subcontractor's insurance.
    21.0 Reservation of Rights
    [The] Transmission Provider shall have the right to make a 
unilateral filing with FERC to modify this Agreement with respect to 
any rates, terms and conditions, charges, classifications of 
service, rule or regulation under section 205 or any other 
applicable provision of the Federal Power Act and FERC's rules and 
regulations thereunder, and [the] Interconnection Customer shall 
have the right to make a unilateral filing with FERC to modify this 
Agreement under any applicable provision of the Federal Power Act 
and FERC's rules and regulations; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications may be considered. Nothing in this Agreement shall 
limit the rights of the Parties or of FERC under sections 205 or 206 
of the Federal Power Act and FERC's rules and regulations, except to 
the extent that the Parties otherwise agree as provided herein.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider{time} 
-----------------------------------------------------------------------
Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
-----------------------------------------------------------------------
Title:-----------------------------------------------------------------

{Insert name of Interconnection Customer{time} 
-----------------------------------------------------------------------
Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
-----------------------------------------------------------------------
Title:-----------------------------------------------------------------

Attachment A to

Feasibility Study Agreement

Assumptions Used in Conducting the Feasibility Study

    The feasibility study will be based upon the information set 
forth in the Interconnection Request and agreed upon in the scoping 
meeting held on ____:
    (1) Designation of Point of Interconnection and configuration to 
be studied.

[[Page 27228]]

    (2) Designation of alternative Points of Interconnection and 
configuration.
    (1) and (2) are to be completed by the Interconnection Customer. 
Other assumptions (listed below) are to be provided by [the] 
Interconnection Customer and [the] Transmission Provider.

Attachment 7

System Impact Study Agreement

    This agreement is made and entered into this __ day of____ 20__ 
by and between______, a____ organized and existing under the laws of 
the State of ____, (``Interconnection Customer,'') and ____, a ____ 
organized and existing under the laws of the State of ____, 
(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, [the] Interconnection Customer is proposing to develop 
a Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by [the] Interconnection Customer 
on ____; and
    Whereas, [the] Interconnection Customer desires to interconnect 
the Small Generating Facility with [the] Transmission Provider's 
Transmission System;
    Whereas, [the] Transmission Provider has completed a feasibility 
study and provided the results of said study to [the] 
Interconnection Customer (This recital to be omitted if the Parties 
have agreed to forego the feasibility study.); and
    Whereas, [the] Interconnection Customer has requested [the] 
Transmission Provider to perform a system impact study(s) to assess 
the impact of interconnecting the Small Generating Facility with 
[the] Transmission Provider's Transmission System, and of any 
Affected Systems;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated or the 
meanings specified in the standard Small Generator Interconnection 
Procedures.
    2.0 [The] Interconnection Customer elects and [the] Transmission 
Provider shall cause to be performed a system impact study(s) 
consistent with the standard Small Generator Interconnection 
Procedures in accordance with the Open Access Transmission Tariff.
    3.0 The scope of a system impact study shall be subject to the 
assumptions set forth in Attachment A to this Agreement.
    4.0 A system impact study will be based upon the results of the 
feasibility study and the technical information provided by 
Interconnection Customer in the Interconnection Request. [The] 
Transmission Provider reserves the right to request additional 
technical information from [the] Interconnection Customer as may 
reasonably become necessary consistent with Good Utility Practice 
during the course of the system impact study. If [the] 
Interconnection Customer modifies its designated Point of 
Interconnection, Interconnection Request, or the technical 
information provided therein is modified, the time to complete the 
system impact study may be extended.
    5.0 A system impact study shall consist of a short circuit 
analysis, a stability analysis, a power flow analysis, voltage drop 
and flicker studies, protection and set point coordination studies, 
and grounding reviews, as necessary. A system impact study shall 
state the assumptions upon which it is based, state the results of 
the analyses, and provide the requirement or potential impediments 
to providing the requested interconnection service, including a 
preliminary indication of the cost and length of time that would be 
necessary to correct any problems identified in those analyses and 
implement the interconnection. A system impact study shall provide a 
list of facilities that are required as a result of the 
Interconnection Request and non-binding good faith estimates of cost 
responsibility and time to construct.
    6.0 A distribution system impact study shall incorporate a 
distribution load flow study, an analysis of equipment interrupting 
ratings, protection coordination study, voltage drop and flicker 
studies, protection and set point coordination studies, grounding 
reviews, and the impact on electric system operation, as necessary.
    7.0 Affected Systems may participate in the preparation of a 
system impact study, with a division of costs among such entities as 
they may agree. All Affected Systems shall be afforded an 
opportunity to review and comment upon a system impact study that 
covers potential adverse system impacts on their electric systems, 
and [the] Transmission Provider has twenty (20) additional Business 
Days to complete a system impact study requiring review by Affected 
Systems.
    8.0 If [the] Transmission Provider uses a queuing procedure for 
sorting or prioritizing projects and their associated cost 
responsibilities for any required Network Upgrades, the system 
impact study shall consider all generating facilities (and with 
respect to paragraph 8.3 below, any identified Upgrades associated 
with such higher queued interconnection) that, on the date the 
system impact study is commenced--
    8.1 Are directly interconnected with [the] Transmission 
Provider's electric system; or
    8.2 Are interconnected with Affected Systems and may have an 
impact on the proposed interconnection; and
    8.3 Have a pending higher queued Interconnection Request to 
interconnect with [the] Transmission Provider's electric system.
    9.0 A distribution system impact study, if required, shall be 
completed and the results transmitted to [the] Interconnection 
Customer within thirty (30) Business Days after this Agreement is 
signed by the Parties. A transmission system impact study, if 
required, shall be completed and the results transmitted to [the] 
Interconnection Customer within forty-five (45) Business Days after 
this Agreement is signed by the Parties, or in accordance with [the] 
Transmission Provider's queuing procedures.
    10.0 A deposit of the equivalent of the good faith estimated 
cost of a distribution system impact study and the one half the good 
faith estimated cost of a transmission system impact study may be 
required from [the] Interconnection Customer.
    11.0 Any study fees shall be based on [the] Transmission 
Provider's actual costs and will be invoiced to [the] 
Interconnection Customer after the study is completed and delivered 
and will include a summary of professional time.
    12.0 [The] Interconnection Customer must pay any study costs 
that exceed the deposit without interest within thirty (30) 
[c]Calendar [d]Days on receipt of the invoice or resolution of any 
dispute. If the deposit exceeds the invoiced fees, [the] 
Transmission Provider shall refund such excess within thirty (30) 
[c]Calendar [d]Days of the invoice without interest.
    13.0 Governing Law, Regulatory Authority, and Rules
    The validity, interpretation and enforcement of this Agreement 
and each of its provisions shall be governed by the laws of the 
state of ____ (where the Point of Interconnection is located), 
without regard to its conflicts of law principles. This Agreement is 
subject to all Applicable Laws and Regulations. Each Party expressly 
reserves the right to seek changes in, appeal, or otherwise contest 
any laws, orders, or regulations of a Governmental Authority.
    14.0 Amendment
    The Parties may amend this Agreement by a written instrument 
duly executed by both Parties.
    15.0 No Third-Party Beneficiaries
    This Agreement is not intended to and does not create rights, 
remedies, or benefits of any character whatsoever in favor of any 
persons, corporations, associations, or entities other than the 
Parties, and the obligations herein assumed are solely for the use 
and benefit of the Parties, their successors in interest and where 
permitted, their assigns.
    16.0 Waiver
    16.1 The failure of a Party to this Agreement to insist, on any 
occasion, upon strict performance of any provision of this Agreement 
will not be considered a waiver of any obligation, right, or duty 
of, or imposed upon, such Party.
    16.2 Any waiver at any time by either Party of its rights with 
respect to this Agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this Agreement. Termination or default of 
this Agreement for any reason by Interconnection Customer shall not 
constitute a waiver of [the] Interconnection Customer's legal rights 
to obtain an interconnection from [the] Transmission Provider. Any 
waiver of this Agreement shall, if requested, be provided in 
writing.
    17.0 Multiple Counterparts
    This Agreement may be executed in two or more counterparts, each 
of which is deemed an original but all constitute one and the same 
instrument.
    18.0 No Partnership
    This Agreement shall not be interpreted or construed to create 
an association, joint venture, agency relationship, or partnership 
between the Parties or to impose any partnership obligation or 
partnership liability

[[Page 27229]]

upon either Party. Neither Party shall have any right, power or 
authority to enter into any agreement or undertaking for, or act on 
behalf of, or to act as or be an agent or representative of, or to 
otherwise bind, the other Party.
    19.0 Severability
    If any provision or portion of this Agreement shall for any 
reason be held or adjudged to be invalid or illegal or unenforceable 
by any court of competent jurisdiction or other Governmental 
Authority, (1) such portion or provision shall be deemed separate 
and independent, (2) the Parties shall negotiate in good faith to 
restore insofar as practicable the benefits to each Party that were 
affected by such ruling, and (3) the remainder of this Agreement 
shall remain in full force and effect.
    20.0 Subcontractors
    Nothing in this Agreement shall prevent a Party from utilizing 
the services of any subcontractor as it deems appropriate to perform 
its obligations under this Agreement; provided, however, that each 
Party shall require its subcontractors to comply with all applicable 
terms and conditions of this Agreement in providing such services 
and each Party shall remain primarily liable to the other Party for 
the performance of such subcontractor.
    20.1 The creation of any subcontract relationship shall not 
relieve the hiring Party of any of its obligations under this 
Agreement. The hiring Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor the hiring 
Party hires as if no subcontract had been made; provided, however, 
that in no event shall [the] Transmission Provider be liable for the 
actions or inactions of [the] Interconnection Customer or its 
subcontractors with respect to obligations of [the] Interconnection 
Customer under this Agreement. Any applicable obligation imposed by 
this Agreement upon the hiring Party shall be equally binding upon, 
and shall be construed as having application to, any subcontractor 
of such Party.
    20.2 The obligations under this article will not be limited in 
any way by any limitation of subcontractor's insurance.
    21.0 Reservation of Rights
    [The] Transmission Provider shall have the right to make a 
unilateral filing with FERC to modify this Agreement with respect to 
any rates, terms and conditions, charges, classifications of 
service, rule or regulation under section 205 or any other 
applicable provision of the Federal Power Act and FERC's rules and 
regulations thereunder, and [the] Interconnection Customer shall 
have the right to make a unilateral filing with FERC to modify this 
Agreement under any applicable provision of the Federal Power Act 
and FERC's rules and regulations; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications may be considered. Nothing in this Agreement shall 
limit the rights of the Parties or of FERC under sections 205 or 206 
of the Federal Power Act and FERC's rules and regulations, except to 
the extent that the Parties otherwise agree as provided herein.
    In witness thereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider{time} 
-----------------------------------------------------------------------
Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
-----------------------------------------------------------------------
Title:-----------------------------------------------------------------

{Insert name of Interconnection Customer{time} 
-----------------------------------------------------------------------
Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
-----------------------------------------------------------------------
Title:-----------------------------------------------------------------

Attachment A to System

Impact Study Agreement Assumptions Used in Conducting the System Impact 
Study

    The system impact study shall be based upon the results of the 
feasibility study, subject to any modifications in accordance with 
the standard Small Generator Interconnection Procedures, and the 
following assumptions:
    (1) Designation of Point of Interconnection and configuration to 
be studied.
    (2) Designation of alternative Points of Interconnection and 
configuration.
    (1) and (2) are to be completed by [the] Interconnection 
Customer. Other assumptions (listed below) are to be provided by 
[the] Interconnection Customer and [the] Transmission Provider.

Attachment 8

Facilities Study Agreement

    This agreement is made and entered into this __ day of ____ 20__ 
by and between ____, a ____ organized and existing under the laws of 
the State of ____, (``Interconnection Customer,'') and ____, a ____ 
organized and existing under the laws of the State of ____, 
(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, [the] Interconnection Customer is proposing to develop 
a Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by [the] Interconnection Customer 
on ____; and
    Whereas, [the] Interconnection Customer desires to interconnect 
the Small Generating Facility with [the] Transmission Provider's 
Transmission System;
    Whereas, [the] Transmission Provider has completed a system 
impact study and provided the results of said study to [the] 
Interconnection Customer; and
    Whereas, [the] Interconnection Customer has requested [the] 
Transmission Provider to perform a facilities study to specify and 
estimate the cost of the equipment, engineering, procurement and 
construction work needed to implement the conclusions of the system 
impact study in accordance with Good Utility Practice to physically 
and electrically connect the Small Generating Facility with [the] 
Transmission Provider's Transmission System.
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated or the 
meanings specified in the standard Small Generator Interconnection 
Procedures.
    2.0 [The] Interconnection Customer elects and [the] Transmission 
Provider shall cause a facilities study consistent with the standard 
Small Generator Interconnection Procedures to be performed in 
accordance with the Open Access Transmission Tariff.
    3.0 The scope of the facilities study shall be subject to data 
provided in Attachment A to this Agreement.
    4.0 The facilities study shall specify and estimate the cost of 
the equipment, engineering, procurement and construction work 
(including overheads) needed to implement the conclusions of the 
system impact study(s). The facilities study shall also identify (1) 
the electrical switching configuration of the equipment, including, 
without limitation, transformer, switchgear, meters, and other 
station equipment, (2) the nature and estimated cost of [the] 
Transmission Provider's Interconnection Facilities and Upgrades 
necessary to accomplish the interconnection, and (3) an estimate of 
the time required to complete the construction and installation of 
such facilities.
    5.0 [The] Transmission Provider may propose to group facilities 
required for more than one Interconnection Customer in order to 
minimize facilities costs through economies of scale, but any 
Interconnection Customer may require the installation of facilities 
required for its own Small Generating Facility if it is willing to 
pay the costs of those facilities.
    6.0 A deposit of the good faith estimated facilities study costs 
may be required from [the] Interconnection Customer.
    7.0 In cases where Upgrades are required, the facilities study 
must be completed within forty-five (45) Business Days of the 
receipt of this Agreement. In cases where no Upgrades are necessary, 
and the required facilities are limited to Interconnection 
Facilities, the facilities study must be completed within thirty 
(30) Business Days.
    8.0 Once the facilities study is completed, a ``draft'' 
facilities study report shall be prepared and transmitted to [the] 
Interconnection Customer. Barring unusual circumstances, the 
facilities study must be completed and the ``draft'' facilities 
study report transmitted within thirty (30) Business Days of [the] 
Interconnection Customer's agreement to conduct a facilities study.
    9.0 Interconnection Customer may, within thirty (30) Calendar 
Days after receipt of the draft report, provide written comments to 
Transmission Provider, which Transmission Provider shall include in 
the final report. Transmission Provider shall issue the final 
Interconnection Facilities Study report within fifteen (15) Business 
Days of receiving Interconnection Customer's comments or promptly 
upon receiving Interconnection Customer's statement that it

[[Page 27230]]

will not provide comments. Transmission Provider may reasonably 
extend such fifteen-day period upon notice to Interconnection 
Customer if Interconnection Customer's comments require Transmission 
Provider to perform additional analyses or make other significant 
modifications prior to the issuance of the final Interconnection 
Facilities Report. Upon request, Transmission Provider shall provide 
Interconnection Customer supporting documentation, workpapers, and 
databases or data developed in the preparation of the 
Interconnection Facilities Study, subject to confidentiality 
arrangements consistent with Section 4.5 of the standard Small 
Generator Interconnection Procedures.
    10.0 Within ten (10) Business Days of providing a draft 
Interconnection Facilities Study report to Interconnection Customer, 
Transmission Provider and Interconnection Customer shall meet to 
discuss the results of the Interconnection Facilities Study.
    11.0 Any study fees shall be based on [the] Transmission 
Provider's actual costs and will be invoiced to [the] 
Interconnection Customer after the study is completed and delivered 
and will include a summary of professional time.
    12.0 [The] Interconnection Customer must pay any study costs 
that exceed the deposit without interest within thirty (30) 
[c]Calendar [d]Days on receipt of the invoice or resolution of any 
dispute. If the deposit exceeds the invoiced fees, [the] 
Transmission Provider shall refund such excess within thirty (30) 
[c]Calendar [d]Days of the invoice without interest.
    13.0 Governing Law, Regulatory Authority, and Rules
    The validity, interpretation and enforcement of this Agreement 
and each of its provisions shall be governed by the laws of the 
state of ____ (where the Point of Interconnection is located), 
without regard to its conflicts of law principles. This Agreement is 
subject to all Applicable Laws and Regulations. Each Party expressly 
reserves the right to seek changes in, appeal, or otherwise contest 
any laws, orders, or regulations of a Governmental Authority.
    14.0 Amendment
    The Parties may amend this Agreement by a written instrument 
duly executed by both Parties.
    15.0 No Third-Party Beneficiaries
    This Agreement is not intended to and does not create rights, 
remedies, or benefits of any character whatsoever in favor of any 
persons, corporations, associations, or entities other than the 
Parties, and the obligations herein assumed are solely for the use 
and benefit of the Parties, their successors in interest and where 
permitted, their assigns.
    16.0 Waiver
    16.1 The failure of a Party to this Agreement to insist, on any 
occasion, upon strict performance of any provision of this Agreement 
will not be considered a waiver of any obligation, right, or duty 
of, or imposed upon, such Party.
    16.2 Any waiver at any time by either Party of its rights with 
respect to this Agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this Agreement. Termination or default of 
this Agreement for any reason by Interconnection Customer shall not 
constitute a waiver of [the] Interconnection Customer's legal rights 
to obtain an interconnection from [the] Transmission Provider. Any 
waiver of this Agreement shall, if requested, be provided in 
writing.
    17.0 Multiple Counterparts
    This Agreement may be executed in two or more counterparts, each 
of which is deemed an original but all constitute one and the same 
instrument.
    18.0 No Partnership
    This Agreement shall not be interpreted or construed to create 
an association, joint venture, agency relationship, or partnership 
between the Parties or to impose any partnership obligation or 
partnership liability upon either Party. Neither Party shall have 
any right, power or authority to enter into any agreement or 
undertaking for, or act on behalf of, or to act as or be an agent or 
representative of, or to otherwise bind, the other Party.
    19.0 Severability
    If any provision or portion of this Agreement shall for any 
reason be held or adjudged to be invalid or illegal or unenforceable 
by any court of competent jurisdiction or other Governmental 
Authority, (1) such portion or provision shall be deemed separate 
and independent, (2) the Parties shall negotiate in good faith to 
restore insofar as practicable the benefits to each Party that were 
affected by such ruling, and (3) the remainder of this Agreement 
shall remain in full force and effect.
    20.0 Subcontractors
    Nothing in this Agreement shall prevent a Party from utilizing 
the services of any subcontractor as it deems appropriate to perform 
its obligations under this Agreement; provided, however, that each 
Party shall require its subcontractors to comply with all applicable 
terms and conditions of this Agreement in providing such services 
and each Party shall remain primarily liable to the other Party for 
the performance of such subcontractor.
    20.1 The creation of any subcontract relationship shall not 
relieve the hiring Party of any of its obligations under this 
Agreement. The hiring Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor the hiring 
Party hires as if no subcontract had been made; provided, however, 
that in no event shall [the] Transmission Provider be liable for the 
actions or inactions of [the] Interconnection Customer or its 
subcontractors with respect to obligations of [the] Interconnection 
Customer under this Agreement. Any applicable obligation imposed by 
this Agreement upon the hiring Party shall be equally binding upon, 
and shall be construed as having application to, any subcontractor 
of such Party.
    20.2 The obligations under this article will not be limited in 
any way by any limitation of subcontractor's insurance.
    21.0 Reservation of Rights
    [The] Transmission Provider shall have the right to make a 
unilateral filing with FERC to modify this Agreement with respect to 
any rates, terms and conditions, charges, classifications of 
service, rule or regulation under section 205 or any other 
applicable provision of the Federal Power Act and FERC's rules and 
regulations thereunder, and [the] Interconnection Customer shall 
have the right to make a unilateral filing with FERC to modify this 
Agreement under any applicable provision of the Federal Power Act 
and FERC's rules and regulations; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications may be considered. Nothing in this Agreement shall 
limit the rights of the Parties or of FERC under sections 205 or 206 
of the Federal Power Act and FERC's rules and regulations, except to 
the extent that the Parties otherwise agree as provided herein.
    In witness whereof, the Parties have caused this Agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.

{Insert name of Transmission Provider{time} 

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Signed-----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
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Title------------------------------------------------------------------
{Insert name of Interconnection Customer{time} 

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Title------------------------------------------------------------------
BILLING CODE 6717-01-P

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BILLING CODE 6717-01-C

Appendix F: Changes to Pro Forma SGIA

Small Generator Interconnection Agreement (SGIA)

(For Generating Facilities No Larger Than 20 MW)

Table of Contents

Article 1. Scope and Limitations of Agreement
    1.5 Responsibilities of the Parties
    1.6 Parallel Operation Obligations
    1.7 Metering
    1.8 Reactive Power and Primary Frequency Response
    1.8.1 Power Factor Design Criteria
    1.8.4 Primary Frequency Response
Article 2. Inspection, Testing, Authorization, and Right of Access
    2.1 Equipment Testing and Inspection
    2.2 Authorization Required Prior to Parallel Operation
    2.3 Right of Access
Article 3. Effective Date, Term, Termination, and Disconnection
    3.1 Effective Date
    3.2 Term of Agreement
    3.3 Termination
    3.4 Temporary Disconnection
    3.4.1 Emergency Conditions
    3.4.2 Routine Maintenance, Construction, and Repair
    3.4.3 Forced Outages
    3.4.4 Adverse Operating Effects
    3.4.5 Modification of the Small Generating Facility
    3.4.6 Reconnection
Article 4. Cost Responsibility for Interconnection Facilities and 
Distribution Upgrades
    4.1 Interconnection Facilities
    4.2 Distribution Upgrades
Article 5. Cost Responsibility for Network Upgrades
    5.1 Applicability
    5.2 Network Upgrades
    5.2.1 Repayment of Amounts Advanced for Network Upgrades
    5.3 Special Provisions for Affected Systems
    5.4 Rights Under Other Agreements
Article 6. Billing, Payment, Milestones, and Financial Security
    6.1 Billing and Payment Procedures and Final Accounting
    6.2 Milestones
    6.3 Financial Security Arrangements
Article 7. Assignment, Liability, Indemnity, Force Majeure, 
Consequential Damages, and Default
    7.1 Assignment
    7.2 Limitation of Liability
    7.3 Indemnity
    7.4 Consequential Damages
    7.5 Force Majeure
    7.6 Default
Article 8. Insurance
Article 9. Confidentiality
Article 10. Disputes
Article 11. Taxes
Article 12. Miscellaneous
    12.1 Governing Law, Regulatory Authority, and Rules
    12.2 Amendment
    12.3 No Third-Party Beneficiaries
    12.4 Waiver
    12.5 Entire Agreement
    12.6 Multiple Counterparts
    12.7 No Partnership
    12.8 Severability
    12.9 Security Arrangements
    12.10 Environmental Releases
    12.11 Subcontractors
    12.12 Reservation of Rights
Article 13. Notices
    13.1 General
    13.2 Billing and Payment
    13.3 Alternative Forms of Notice
    13.4 Designated Operating Representative
    13.5 Changes to the Notice Information
Article 14. Signatures
Attachment 1--Glossary of Terms
Attachment 2--Description and Costs of the Small Generating 
Facility, Interconnection Facilities, and Metering Equipment
Attachment 3--One-line Diagram Depicting the Small Generating 
Facility, Interconnection Facilities, Metering Equipment, and 
Upgrades
Attachment 4--Milestones
Attachment 5--Additional Operating Requirements for [the] 
Transmission Provider's Transmission System and Affected Systems 
Needed to Support [the] Interconnection Customer's Needs
Attachment 6--Transmission Provider's Description of its Upgrades 
and Best Estimate of Upgrade Costs

    This Interconnection Agreement (``Agreement'') is made and 
entered into this __ day of ____, 20__, by ____ (``Transmission 
Provider''), and ____
    (``Interconnection Customer'') each hereinafter sometimes 
referred to individually as ``Party'' or both referred to 
collectively as the ``Parties.''

Transmission Provider Information

Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------

Interconnection Customer Information

Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
    Interconnection Customer Application No: ____

    In consideration of the mutual covenants set forth herein, the 
Parties agree as follows:

Article 1. Scope and Limitations of Agreement

    1.1 Applicability
    This Agreement shall be used for all Interconnection Requests 
submitted under the Small Generator Interconnection Procedures 
(SGIP) except for those submitted under the 10 kW Inverter Process 
contained in SGIP Attachment 5.
    1.2 Purpose
    This Agreement governs the terms and conditions under which 
[the] Interconnection Customer's Small Generating Facility will 
interconnect with, and operate in parallel with, [the] Transmission 
Provider's Transmission System.
    1.3 No Agreement to Purchase or Deliver Power
    This Agreement does not constitute an agreement to purchase or 
deliver [the] Interconnection Customer's power. The purchase or 
delivery of power and other services that [the] Interconnection 
Customer may require will be covered under separate agreements, if 
any. [The] Interconnection Customer will be responsible for 
separately making all necessary arrangements (including scheduling) 
for delivery of electricity with the applicable Transmission 
Provider.
    1.4 Limitations
    Nothing in this Agreement is intended to affect any other 
agreement between [the] Transmission Provider and [the] 
Interconnection Customer.
    1.5 Responsibilities of the Parties
    1.5.1 The Parties shall perform all obligations of this 
Agreement in accordance with all Applicable Laws and Regulations, 
Operating Requirements, and Good Utility Practice.
    1.5.2 [The] Interconnection Customer shall construct, 
interconnect, operate and maintain its Small Generating Facility and 
construct, operate, and maintain its Interconnection Facilities in 
accordance with the applicable manufacturer's recommended 
maintenance schedule, and in accordance with this Agreement, and 
with Good Utility Practice.
    1.5.3 [The] Transmission Provider shall construct, operate, and 
maintain its Transmission System and Interconnection Facilities in 
accordance with this Agreement, and with Good Utility Practice.
    1.5.4 [The] Interconnection Customer agrees to construct its 
facilities or systems in accordance with applicable specifications 
that meet or exceed those provided by the National Electrical Safety 
Code, the American National Standards Institute, IEEE, Underwriter's 
Laboratory, and Operating Requirements in effect at the time of 
construction and other applicable national and state codes and 
standards. [The] Interconnection Customer agrees to design, install, 
maintain, and operate its Small Generating Facility so as to 
reasonably minimize the likelihood of a disturbance adversely 
affecting or impairing the system or equipment of [the] Transmission 
Provider and any Affected Systems.
    1.5.5 Each Party shall operate, maintain, repair, and inspect, 
and shall be fully responsible for the facilities that it now or 
subsequently may own unless otherwise specified in the Attachments 
to this Agreement. Each Party shall be responsible for the safe 
installation, maintenance, repair and condition of their respective 
lines and appurtenances on their respective sides of the point of 
change of ownership. [The] Transmission Provider and [the] 
Interconnection Customer, as appropriate, shall provide 
Interconnection Facilities that

[[Page 27234]]

adequately protect [the] Transmission Provider's Transmission 
System, personnel, and other persons from damage and injury. The 
allocation of responsibility for the design, installation, 
operation, maintenance and ownership of Interconnection Facilities 
shall be delineated in the Attachments to this Agreement.
    1.5.6 [The] Transmission Provider shall coordinate with all 
Affected Systems to support the interconnection.
    1.5.7 [The] Interconnection Customer shall ensure ``frequency 
ride through'' capability and ``voltage ride through'' capability of 
its Small Generating Facility. [The] Interconnection Customer shall 
enable these capabilities such that its Small Generating Facility 
shall not disconnect automatically or instantaneously from the 
system or equipment of [the] Transmission Provider and any Affected 
Systems for a defined under-frequency or over-frequency condition, 
or an under-voltage or over-voltage condition, as tested pursuant to 
Section 2.1 of this agreement. The defined conditions shall be in 
accordance with Good Utility Practice and consistent with any 
standards and guidelines that are applied to other generating 
facilities in the Balancing Authority Area on a comparable basis. 
The Small Generating Facility's protective equipment settings shall 
comply with [the] Transmission Provider's automatic load-shed 
program. [The] Transmission Provider shall review the protective 
equipment settings to confirm compliance with the automatic load-
shed program. The term ``ride through'' as used herein shall mean 
the ability of a Small Generating Facility to stay connected to and 
synchronized with the system or equipment of [the] Transmission 
Provider and any Affected Systems during system disturbances within 
a range of conditions, in accordance with Good Utility Practice and 
consistent with any standards and guidelines that are applied to 
other generating facilities in the Balancing Authority Area on a 
comparable basis. The term ``frequency ride through'' as used herein 
shall mean the ability of a Small Generating Facility to stay 
connected to and synchronized with the system or equipment of [the] 
Transmission Provider and any Affected Systems during system 
disturbances within a range of under-frequency and over-frequency 
conditions, in accordance with Good Utility Practice and consistent 
with any standards and guidelines that are applied to other 
generating facilities in the Balancing Authority Area on a 
comparable basis. The term ``voltage ride through'' as used herein 
shall mean the ability of a Small Generating Facility to stay 
connected to and synchronized with the system or equipment of [the] 
Transmission Provider and any Affected Systems during system 
disturbances within a range of under-voltage and over-voltage 
conditions, in accordance with Good Utility Practice and consistent 
with any standards and guidelines that are applied to other 
generating facilities in the Balancing Authority Area on a 
comparable basis. For abnormal frequency conditions and voltage 
conditions within the ``no trip zone'' defined by Reliability 
Standard PRC-024-3 or successor mandatory ride through Applicable 
Reliability Standards, the non-synchronous Small Generating Facility 
must ensure that, within any physical limitations of the Small 
Generating Facility, its control and protection settings are 
configured or set to (1) continue active power production during 
disturbance and post disturbance periods at pre-disturbance levels 
unless reactive power priority mode is enabled or unless providing 
primary frequency response or fast frequency response; (2) minimize 
reductions in active power and remain within dynamic voltage and 
current limits, if reactive power priority mode is enabled, unless 
providing primary frequency response or fast frequency response; (3) 
not artificially limit dynamic reactive power capability during 
disturbances; and (4) return to pre-disturbance active power levels 
without artificial ramp rate limits if active power is reduced, 
unless providing primary frequency response or fast frequency 
response.
    1.6 Parallel Operation Obligations
    Once the Small Generating Facility has been authorized to 
commence parallel operation, [the] Interconnection Customer shall 
abide by all rules and procedures pertaining to the parallel 
operation of the Small Generating Facility in the applicable 
Balancing Authority Area, including, but not limited to; (1) the 
rules and procedures concerning the operation of generation set 
forth in the Tariff or by the applicable system operator(s) for 
[the] Transmission Provider's Transmission System and; (2) the 
Operating Requirements set forth in Attachment 5 of this Agreement.
    1.7 Metering
    [The] Interconnection Customer shall be responsible for [the] 
Transmission Provider's reasonable and necessary cost for the 
purchase, installation, operation, maintenance, testing, repair, and 
replacement of metering and data acquisition equipment specified in 
Attachments 2 and 3 of this Agreement. [The] Interconnection 
Customer's metering (and data acquisition, as required) equipment 
shall conform to applicable industry rules and Operating 
Requirements.
    1.8 Reactive Power and Primary Frequency Response
    1.8.1 Power Factor Design Criteria
    1.8.1.1 Synchronous Generation. [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 
synchronous generators in the Balancing Authority Area on a 
comparable basis.
    1.8.1.2 Non-Synchronous Generation. [The] Interconnection 
Customer shall design its Small Generating Facility to maintain a 
composite power delivery at continuous rated power output at the 
high-side of the generator substation at a power factor within the 
range of 0.95 leading to 0.95 lagging, unless [the] Transmission 
Provider has established a different power factor range that applies 
to all similarly situated non-synchronous generators in the 
Balancing Authority Area on a comparable basis. This power factor 
range standard shall be dynamic and can be met using, for example, 
power electronics designed to supply this level of reactive 
capability (taking into account any limitations due to voltage 
level, real power output, etc.) or fixed and switched capacitors, or 
a combination of the two. This requirement shall only apply to newly 
interconnecting non-synchronous generators that have not yet 
executed a Facilities Study Agreement as of the effective date of 
the Final Rule establishing this requirement (Order No. 827).
    1.8.2 [The] Transmission Provider is required to pay [the] 
Interconnection Customer for reactive power that [the] 
Interconnection Customer provides or absorbs from the Small 
Generating Facility when [the] Transmission Provider requests [the] 
Interconnection Customer to operate its Small Generating Facility 
outside the range specified in Article 1.8.1. In addition, if [the] 
Transmission Provider pays its own or affiliated generators for 
reactive power service within the specified range, it must also pay 
[the] Interconnection Customer.
    1.8.3 Payments shall be in accordance with [the] Interconnection 
Customer's applicable rate schedule then in effect unless the 
provision of such service(s) is subject to a regional transmission 
organization or independent system operator FERC-approved rate 
schedule. To the extent that no rate schedule is in effect at the 
time [the] Interconnection Customer is required to provide or absorb 
reactive power under this Agreement, the Parties agree to 
expeditiously file such rate schedule and agree to support any 
request for waiver of the Commission's prior notice requirement in 
order to compensate [the] Interconnection Customer from the time 
service commenced.
    1.8.4 Primary Frequency Response. Interconnection Customer shall 
ensure the primary frequency response capability of its Small 
Generating Facility by installing, maintaining, and operating a 
functioning governor or equivalent controls. The term ``functioning 
governor or equivalent controls'' as used herein shall mean the 
required hardware and/or software that provides frequency responsive 
real power control with the ability to sense changes in system 
frequency and autonomously adjust the Small Generating Facility's 
real power output in accordance with the droop and deadband 
parameters and in the direction needed to correct frequency 
deviations. Interconnection Customer is required to install a 
governor or equivalent controls with the capability of operating: 
(1) with a maximum 5 percent droop and 0.036 Hz 
deadband; or (2) in accordance with the relevant droop, deadband, 
and timely and sustained response settings from an approved Electric 
Reliability Organization reliability standard providing for 
equivalent or more stringent parameters. The droop characteristic 
shall be: (1) based on the nameplate capacity of the Small 
Generating Facility, and shall be linear in the range of frequencies 
between 59 to 61 Hz that are outside of the deadband parameter; or 
(2) based on an approved Electric Reliability Organization 
reliability standard providing for an equivalent or more stringent 
parameter. The deadband parameter shall be:

[[Page 27235]]

the range of frequencies above and below nominal (60 Hz) in which 
the governor or equivalent controls is not expected to adjust the 
Small Generating Facility's real power output in response to 
frequency deviations. The deadband shall be implemented: (1) without 
a step to the droop curve, that is, once the frequency deviation 
exceeds the deadband parameter, the expected change in the Small 
Generating Facility's real power output in response to frequency 
deviations shall start from zero and then increase (for under-
frequency deviations) or decrease (for over-frequency deviations) 
linearly in proportion to the magnitude of the frequency deviation; 
or (2) in accordance with an approved Electric Reliability 
Organization reliability standard providing for an equivalent or 
more stringent parameter. Interconnection Customer shall notify 
Transmission Provider that the primary frequency response capability 
of the Small Generating Facility has been tested and confirmed 
during commissioning. Once Interconnection Customer has synchronized 
the Small Generating Facility with the Transmission System, 
Interconnection Customer shall operate the Small Generating Facility 
consistent with the provisions specified in Sections 1.8.4.1 and 
1.8.4.2 of this Agreement. The primary frequency response 
requirements contained herein shall apply to both synchronous and 
non-synchronous Small Generating Facilities.
    1.8.4.1 Governor or Equivalent Controls. Whenever the Small 
Generating Facility is operated in parallel with the Transmission 
System, Interconnection Customer shall operate the Small Generating 
Facility with its governor or equivalent controls in service and 
responsive to frequency. Interconnection Customer shall: (1) in 
coordination with Transmission Provider and/or the relevant 
Balancing Authority, set the deadband parameter to: (1) a maximum of 
0.036 Hz and set the droop parameter to a maximum of 5 
percent; or (2) implement the relevant droop and deadband settings 
from an approved Electric Reliability Organization reliability 
standard that provides for equivalent or more stringent parameters. 
Interconnection Customer shall be required to provide the status and 
settings of the governor or equivalent controls to Transmission 
Provider and/or the relevant Balancing Authority upon request. If 
Interconnection Customer needs to operate the Small Generating 
Facility with its governor or equivalent controls not in service, 
Interconnection Customer shall immediately notify Transmission 
Provider and the relevant Balancing Authority, and provide both with 
the following information: (1) the operating status of the governor 
or equivalent controls (i.e., whether it is currently out of service 
or when it will be taken out of service); (2) the reasons for 
removing the governor or equivalent controls from service; and (3) a 
reasonable estimate of when the governor or equivalent controls will 
be returned to service. Interconnection Customer shall make 
Reasonable Efforts to return its governor or equivalent controls 
into service as soon as practicable. Interconnection Customer shall 
make Reasonable Efforts to keep outages of the Small Generating 
Facility's governor or equivalent controls to a minimum whenever the 
Small Generating Facility is operated in parallel with the 
Transmission System.
    1.8.4.2 Timely and Sustained Response. Interconnection Customer 
shall ensure that the Small Generating Facility's real power 
response to sustained frequency deviations outside of the deadband 
setting is automatically provided and shall begin immediately after 
frequency deviates outside of the deadband, and to the extent the 
Small Generating Facility has operating capability in the direction 
needed to correct the frequency deviation. Interconnection Customer 
shall not block or otherwise inhibit the ability of the governor or 
equivalent controls to respond and shall ensure that the response is 
not inhibited, except under certain operational constraints 
including, but not limited to, ambient temperature limitations, 
physical energy limitations, outages of mechanical equipment, or 
regulatory requirements. The Small Generating Facility shall sustain 
the real power response at least until system frequency returns to a 
value within the deadband setting of the governor or equivalent 
controls. A Commission-approved Reliability Standard with equivalent 
or more stringent requirements shall supersede the above 
requirements.
    1.8.4.3 Exemptions. Small Generating Facilities that are 
regulated by the United States Nuclear Regulatory Commission shall 
be exempt from Sections 1.8.4, 1.8.4.1, and 1.8.4.2 of this 
Agreement. Small Generating Facilities that are behind the meter 
generation that is sized-to-load (i.e., the thermal load and the 
generation are near-balanced in real-time operation and the 
generation is primarily controlled to maintain the unique thermal, 
chemical, or mechanical output necessary for the operating 
requirements of its host facility) shall be required to install 
primary frequency response capability in accordance with the droop 
and deadband capability requirements specified in Section 1.8.4, but 
shall be otherwise exempt from the operating requirements in 
Sections 1.8.4, 1.8.4.1, 1.8.4.2, and 1.8.4.4 of this Agreement.
    1.8.4.4 Electric Storage Resources. Interconnection Customer 
interconnecting an electric storage resource shall establish an 
operating range in Attachment 5 of its SGIA that specifies a minimum 
state of charge and a maximum state of charge between which the 
electric storage resource will be required to provide primary 
frequency response consistent with the conditions set forth in 
Sections 1.8.4, 1.8.4.1, 1.8.4.2 and 1.8.4.3 of this Agreement. 
Attachment 5 shall specify whether the operating range is static or 
dynamic, and shall consider: (1) the expected magnitude of frequency 
deviations in the interconnection; (2) the expected duration that 
system frequency will remain outside of the deadband parameter in 
the interconnection; (3) the expected incidence of frequency 
deviations outside of the deadband parameter in the interconnection; 
(4) the physical capabilities of the electric storage resource; (5) 
operational limitations of the electric storage resource due to 
manufacturer specifications; and (6) any other relevant factors 
agreed to by Transmission Provider and Interconnection Customer, and 
in consultation with the relevant transmission owner or Balancing 
Authority as appropriate. If the operating range is dynamic, then 
Attachment 5 must establish how frequently the operating range will 
be reevaluated and the factors that may be considered during its 
reevaluation.
    Interconnection Customer's electric storage resource is required 
to provide timely and sustained primary frequency response 
consistent with Section 1.8.4.2 of this Agreement when it is online 
and dispatched to inject electricity to the Transmission System and/
or receive electricity from the Transmission System. This excludes 
circumstances when the electric storage resource is not dispatched 
to inject electricity to the Transmission System and/or dispatched 
to receive electricity from the Transmission System. If 
Interconnection Customer's electric storage resource is charging at 
the time of a frequency deviation outside of its deadband parameter, 
it is to increase (for over-frequency deviations) or decrease (for 
under-frequency deviations) the rate at which it is charging in 
accordance with its droop parameter. Interconnection Customer's 
electric storage resource is not required to change from charging to 
discharging, or vice versa, unless the response necessitated by the 
droop and deadband settings requires it to do so and it is 
technically capable of making such a transition.
    1.9 Capitalized terms used herein shall have the meanings 
specified in the Glossary of Terms in Attachment 1 or the body of 
this Agreement.

Article 2. Inspection, Testing, Authorization, and Right of Access

    2.1 Equipment Testing and Inspection
    2.1.1 [The] Interconnection Customer shall test and inspect its 
Small Generating Facility and Interconnection Facilities prior to 
interconnection. [The] Interconnection Customer shall notify [the] 
Transmission Provider of such activities no fewer than five (5) 
Business Days (or as may be agreed to by the Parties) prior to such 
testing and inspection. Testing and inspection shall occur on a 
Business Day. [The] Transmission Provider may, at its own expense, 
send qualified personnel to the Small Generating Facility site to 
inspect the interconnection and observe the testing. [The] 
Interconnection Customer shall provide [the] Transmission Provider a 
written test report when such testing and inspection is completed.
    2.1.2 [The] Transmission Provider shall provide [the] 
Interconnection Customer written acknowledgment that it has received 
[the] Interconnection Customer's written test report. Such written 
acknowledgment shall not be deemed to be or construed as any 
representation, assurance, guarantee, or warranty by [the] 
Transmission Provider of the safety, durability, suitability, or 
reliability of the Small Generating Facility or any associated 
control, protective, and safety devices owned or controlled by [the] 
Interconnection Customer or the quality of power produced by the 
Small Generating Facility.

[[Page 27236]]

    2.2 Authorization Required Prior to Parallel Operation
    2.2.1 [The] Transmission Provider shall use Reasonable Efforts 
to list applicable parallel operation requirements in Attachment 5 
of this Agreement. Additionally, [the] Transmission Provider shall 
notify [the] Interconnection Customer of any changes to these 
requirements as soon as they are known. [The] Transmission Provider 
shall make Reasonable Efforts to cooperate with [the] 
Interconnection Customer in meeting requirements necessary for [the] 
Interconnection Customer to commence parallel operations by the in-
service date.
    2.2.2 [The] Interconnection Customer shall not operate its Small 
Generating Facility in parallel with [the] Transmission Provider's 
Transmission System without prior written authorization of [the] 
Transmission Provider. [The] Transmission Provider will provide such 
authorization once [the] Transmission Provider receives notification 
that [the] Interconnection Customer has complied with all applicable 
parallel operation requirements. Such authorization shall not be 
unreasonably withheld, conditioned, or delayed.
    2.3 Right of Access
    2.3.1 Upon reasonable notice, [the] Transmission Provider may 
send a qualified person to the premises of [the] Interconnection 
Customer at or immediately before the time the Small Generating 
Facility first produces energy to inspect the interconnection, and 
observe the commissioning of the Small Generating Facility 
(including any required testing), startup, and operation for a 
period of up to three (3) Business Days after initial start-up of 
the unit. In addition, [the] Interconnection Customer shall notify 
[the] Transmission Provider at least five (5) Business Days prior to 
conducting any on-site verification testing of the Small Generating 
Facility.
    2.3.2 Following the initial inspection process described above, 
at reasonable hours, and upon reasonable notice, or at any time 
without notice in the event of an emergency or hazardous condition, 
[the] Transmission Provider shall have access to [the] 
Interconnection Customer's premises for any reasonable purpose in 
connection with the performance of the obligations imposed on it by 
this Agreement or if necessary to meet its legal obligation to 
provide service to its customers.
    2.3.3 Each Party shall be responsible for its own costs 
associated with following this article.

Article 3. Effective Date, Term, Termination, and Disconnection

    3.1 Effective Date
    This Agreement shall become effective upon execution by the 
Parties subject to acceptance by FERC (if applicable), or if filed 
unexecuted, upon the date specified by the FERC. [The] Transmission 
Provider shall promptly file this Agreement with the FERC upon 
execution, if required.
    3.2 Term of Agreement
    This Agreement shall become effective on the Effective Date and 
shall remain in effect for a period of ten years from the Effective 
Date or such other longer period as [the] Interconnection Customer 
may request and shall be automatically renewed for each successive 
one-year period thereafter, unless terminated earlier in accordance 
with article 3.3 of this Agreement.
    3.3 Termination
    No termination shall become effective until the Parties have 
complied with all Applicable Laws and Regulations applicable to such 
termination, including the filing with FERC of a notice of 
termination of this Agreement (if required), which notice has been 
accepted for filing by FERC.
    3.3.1 [The] Interconnection Customer may terminate this 
Agreement at any time by giving [the] Transmission Provider twenty 
(20) Business Days written notice.
    3.3.2 Either Party may terminate this Agreement after Default 
pursuant to article 7.6.
    3.3.3 Upon termination of this Agreement, the Small Generating 
Facility will be disconnected from [the] Transmission Provider's 
Transmission System. All costs required to effectuate such 
disconnection shall be borne by the terminating Party, unless such 
termination resulted from the non-terminating Party's Default of 
this SGIA or such non-terminating Party otherwise is responsible for 
these costs under this SGIA.
    3.3.4 The termination of this Agreement shall not relieve either 
Party of its liabilities and obligations, owed or continuing at the 
time of the termination.
    3.3.5 The provisions of this article shall survive termination 
or expiration of this Agreement.
    3.4 Temporary Disconnection
    Temporary disconnection shall continue only for so long as 
reasonably necessary under Good Utility Practice.
    3.4.1 Emergency Conditions--``Emergency Condition'' shall mean a 
condition or situation: (1) that in the judgment of the Party making 
the claim is imminently likely to endanger life or property; or (2) 
that, in the case of [the] Transmission Provider, is imminently 
likely (as determined in a non-discriminatory manner) to cause a 
material adverse effect on the security of, or damage to the 
Transmission System, [the] Transmission Provider's Interconnection 
Facilities or the Transmission Systems of others to which the 
Transmission System is directly connected; or (3) that, in the case 
of [the] Interconnection Customer, is imminently likely (as 
determined in a non-discriminatory manner) to cause a material 
adverse effect on the security of, or damage to, the Small 
Generating Facility or [the] Interconnection Customer's 
Interconnection Facilities. Under Emergency Conditions, [the] 
Transmission Provider may immediately suspend interconnection 
service and temporarily disconnect the Small Generating Facility. 
[The] Transmission Provider shall notify [the] Interconnection 
Customer promptly when it becomes aware of an Emergency Condition 
that may reasonably be expected to affect [the] Interconnection 
Customer's operation of the Small Generating Facility. [The] 
Interconnection Customer shall notify [the] Transmission Provider 
promptly when it becomes aware of an Emergency Condition that may 
reasonably be expected to affect [the] Transmission Provider's 
Transmission System or any Affected Systems. To the extent 
information is known, the notification shall describe the Emergency 
Condition, the extent of the damage or deficiency, the expected 
effect on the operation of both Parties' facilities and operations, 
its anticipated duration, and the necessary corrective action.
    3.4.2 Routine Maintenance, Construction, and Repair
    [The] Transmission Provider may interrupt interconnection 
service or curtail the output of the Small Generating Facility and 
temporarily disconnect the Small Generating Facility from [the] 
Transmission Provider's Transmission System when necessary for 
routine maintenance, construction, and repairs on [the] Transmission 
Provider's Transmission System. [The] Transmission Provider shall 
provide [the] Interconnection Customer with five (5) Business Days 
notice prior to such interruption. [The] Transmission Provider shall 
use Reasonable Efforts to coordinate such reduction or temporary 
disconnection with [the] Interconnection Customer.
    3.4.3 Forced Outages
    During any forced outage, [the] Transmission Provider may 
suspend interconnection service to effect immediate repairs on [the] 
Transmission Provider's Transmission System. [The] Transmission 
Provider shall use Reasonable Efforts to provide [the] 
Interconnection Customer with prior notice. If prior notice is not 
given, [the] Transmission Provider shall, upon request, provide 
[the] Interconnection Customer written documentation after the fact 
explaining the circumstances of the disconnection.
    3.4.4 Adverse Operating Effects
    [The] Transmission Provider shall notify [the] Interconnection 
Customer as soon as practicable if, based on Good Utility Practice, 
operation of the Small Generating Facility may cause disruption or 
deterioration of service to other customers served from the same 
electric system, or if operating the Small Generating Facility could 
cause damage to [the] Transmission Provider's Transmission System or 
Affected Systems. Supporting documentation used to reach the 
decision to disconnect shall be provided to [the] Interconnection 
Customer upon request. If, after notice, [the] Interconnection 
Customer fails to remedy the adverse operating effect within a 
reasonable time, [the] Transmission Provider may disconnect the 
Small Generating Facility. [The] Transmission Provider shall provide 
[the] Interconnection Customer with five Business Day notice of such 
disconnection, unless the provisions of article 3.4.1 apply.
    3.4.5 Modification of the Small Generating Facility
    [The] Interconnection Customer must receive written 
authorization from [the] Transmission Provider before making any 
change to the Small Generating Facility that may have a material 
impact on the safety or reliability of the Transmission System. Such 
authorization shall not be unreasonably withheld. Modifications 
shall be done in accordance with Good Utility Practice. If [the] 
Interconnection Customer makes such

[[Page 27237]]

modification without [the] Transmission Provider's prior written 
authorization, the latter shall have the right to temporarily 
disconnect the Small Generating Facility.
    3.4.6 Reconnection
    The Parties shall cooperate with each other to restore the Small 
Generating Facility, Interconnection Facilities, and [the] 
Transmission Provider's Transmission System to their normal 
operating state as soon as reasonably practicable following a 
temporary disconnection.

Article 4. Cost Responsibility for Interconnection Facilities and 
Distribution Upgrades

    4.1 Interconnection Facilities
    4.1.1 [The] Interconnection Customer shall pay for the cost of 
the Interconnection Facilities itemized in Attachment 2 of this 
Agreement. [The] Transmission Provider shall provide a best estimate 
cost, including overheads, for the purchase and construction of its 
Interconnection Facilities and provide a detailed itemization of 
such costs. Costs associated with Interconnection Facilities may be 
shared with other entities that may benefit from such facilities by 
agreement of [the] Interconnection Customer, such other entities, 
and [the] Transmission Provider.
    4.1.2 [The] Interconnection Customer shall be responsible for 
its share of all reasonable expenses, including overheads, 
associated with (1) owning, operating, maintaining, repairing, and 
replacing its own Interconnection Facilities, and (2) operating, 
maintaining, repairing, and replacing [the] Transmission Provider's 
Interconnection Facilities.
    4.2 Distribution Upgrades
    [The] Transmission Provider shall design, procure, construct, 
install, and own the Distribution Upgrades described in Attachment 6 
of this Agreement. If [the] Transmission Provider and [the] 
Interconnection Customer agree, [the] Interconnection Customer may 
construct Distribution Upgrades that are located on land owned by 
[the] Interconnection Customer. The actual cost of the Distribution 
Upgrades, including overheads, shall be directly assigned to [the] 
Interconnection Customer.

Article 5. Cost Responsibility for Network Upgrades

    5.1 Applicability
    No portion of this article 5 shall apply unless the 
interconnection of the Small Generating Facility requires Network 
Upgrades.
    5.2 Network Upgrades
    [The] Transmission Provider or the Transmission Owner shall 
design, procure, construct, install, and own the Network Upgrades 
described in Attachment 6 of this Agreement. If [the] Transmission 
Provider and [the] Interconnection Customer agree, [the] 
Interconnection Customer may construct Network Upgrades that are 
located on land owned by [the] Interconnection Customer. Unless 
[the] Transmission Provider elects to pay for Network Upgrades, the 
actual cost of the Network Upgrades, including overheads, shall be 
borne initially by [the] Interconnection Customer.
    5.2.1 Repayment of Amounts Advanced for Network Upgrades
    [The] Interconnection Customer shall be entitled to a cash 
repayment, equal to the total amount paid to [the] Transmission 
Provider and Affected System operator, if any, for Network Upgrades, 
including any tax gross-up or other tax-related payments associated 
with the Network Upgrades, and not otherwise refunded to [the] 
Interconnection Customer, to be paid to [the] Interconnection 
Customer on a dollar-for-dollar basis for the non-usage sensitive 
portion of transmission charges, as payments are made under [the] 
Transmission Provider's Tariff and Affected System's Tariff for 
transmission services with respect to the Small Generating Facility. 
Any repayment shall include interest calculated in accordance with 
the methodology set forth in FERC's regulations at 18 CFR 
35.19a(a)(2)(iii) from the date of any payment for Network Upgrades 
through the date on which [the] Interconnection Customer receives a 
repayment of such payment pursuant to this subparagraph. [The] 
Interconnection Customer may assign such repayment rights to any 
person.
    5.2.1.1 Notwithstanding the foregoing, [the] Interconnection 
Customer, [the] Transmission Provider, and any applicable Affected 
System operators may adopt any alternative payment schedule that is 
mutually agreeable so long as [the] Transmission Provider and said 
Affected System operators take one of the following actions no later 
than five years from the Commercial Operation Date: (1) return to 
[the] Interconnection Customer any amounts advanced for Network 
Upgrades not previously repaid, or (2) declare in writing that [the] 
Transmission Provider or any applicable Affected System operators 
will continue to provide payments to [the] Interconnection Customer 
on a dollar-for-dollar basis for the non-usage sensitive portion of 
transmission charges, or develop an alternative schedule that is 
mutually agreeable and provides for the return of all amounts 
advanced for Network Upgrades not previously repaid; however, full 
reimbursement shall not extend beyond twenty (20) years from the 
commercial operation date.
    5.2.1.2 If the Small Generating Facility fails to achieve 
commercial operation, but it or another generating facility is later 
constructed and requires use of the Network Upgrades, [the] 
Transmission Provider and Affected System operator shall at that 
time reimburse [the] Interconnection Customer for the amounts 
advanced for the Network Upgrades. Before any such reimbursement can 
occur, [the] Interconnection Customer, or the entity that ultimately 
constructs the generating facility, if different, is responsible for 
identifying the entity to which reimbursement must be made.
    5.3 Special Provisions for Affected Systems
    Unless [the] Transmission Provider provides, under this 
Agreement, for the repayment of amounts advanced to any applicable 
Affected System operators for Network Upgrades, [the] 
Interconnection Customer and Affected System operator shall enter 
into an agreement that provides for such repayment. The agreement 
shall specify the terms governing payments to be made by [the] 
Interconnection Customer to Affected System operator as well as the 
repayment by Affected System operator.
    5.4 Rights Under Other Agreements
    Notwithstanding any other provision of this Agreement, nothing 
herein shall be construed as relinquishing or foreclosing any 
rights, including but not limited to firm transmission rights, 
capacity rights, transmission congestion rights, or transmission 
credits, that [the] Interconnection Customer shall be entitled to, 
now or in the future, under any other agreement or tariff as a 
result of, or otherwise associated with, the transmission capacity, 
if any, created by the Network Upgrades, including the right to 
obtain cash reimbursements or transmission credits for transmission 
service that is not associated with the Small Generating Facility.

Article 6. Billing, Payment, Milestones, and Financial Security

    6.1 Billing and Payment Procedures and Final Accounting
    6.1.1 [The] Transmission Provider shall bill [the] 
Interconnection Customer for the design, engineering, construction, 
and procurement costs of Interconnection Facilities and Upgrades 
contemplated by this Agreement on a monthly basis, or as otherwise 
agreed by the Parties. [The] Interconnection Customer shall pay each 
bill within thirty (30) [c]Calendar [d]Days of receipt, or as 
otherwise agreed to by the Parties.
    6.1.2 Within three months of completing the construction and 
installation of [the] Transmission Provider's Interconnection 
Facilities and/or Upgrades described in the Attachments to this 
Agreement, [the] Transmission Provider shall provide [the] 
Interconnection Customer with a final accounting report of any 
difference between (1) [the] Interconnection Customer's cost 
responsibility for the actual cost of such facilities or Upgrades, 
and (2) [the] Interconnection Customer's previous aggregate payments 
to [the] Transmission Provider for such facilities or Upgrades. If 
[the] Interconnection Customer's cost responsibility exceeds its 
previous aggregate payments, [the] Transmission Provider shall 
invoice [the] Interconnection Customer for the amount due and [the] 
Interconnection Customer shall make payment to [the] Transmission 
Provider within thirty (30) [c]Calendar [d]Days. If [the] 
Interconnection Customer's previous aggregate payments exceed its 
cost responsibility under this Agreement, [the] Transmission 
Provider shall refund to [the] Interconnection Customer an amount 
equal to the difference within thirty (30) [c]Calendar [d]Days of 
the final accounting report.
    6.2 Milestones
    The Parties shall agree on milestones for which each Party is 
responsible and list them in Attachment 4 of this Agreement. A 
Party's obligations under this provision may be extended by 
agreement. If a Party anticipates that it will be unable to meet a 
milestone for any reason other than a Force Majeure Event,

[[Page 27238]]

it shall immediately notify the other Party of the reason(s) for not 
meeting the milestone and (1) propose the earliest reasonable 
alternate date by which it can attain this and future milestones, 
and (2) requesting appropriate amendments to Attachment 4. The Party 
affected by the failure to meet a milestone shall not unreasonably 
withhold agreement to such an amendment unless it will suffer 
significant uncompensated economic or operational harm from the 
delay, (2) attainment of the same milestone has previously been 
delayed, or (3) it has reason to believe that the delay in meeting 
the milestone is intentional or unwarranted notwithstanding the 
circumstances explained by the Party proposing the amendment.
    6.3 Financial Security Arrangements
    At least twenty (20) Business Days prior to the commencement of 
the design, procurement, installation, or construction of a discrete 
portion of [the] Transmission Provider's Interconnection Facilities 
and Upgrades, [the] Interconnection Customer shall provide [the] 
Transmission Provider, at [the] Interconnection Customer's option, a 
guarantee, a surety bond, letter of credit or other form of security 
that is reasonably acceptable to [the] Transmission Provider and is 
consistent with the Uniform Commercial Code of the jurisdiction 
where the Point of Interconnection is located. Such security for 
payment shall be in an amount sufficient to cover the costs for 
constructing, designing, procuring, and installing the applicable 
portion of [the] Transmission Provider's Interconnection Facilities 
and Upgrades and shall be reduced on a dollar-for-dollar basis for 
payments made to [the] Transmission Provider under this Agreement 
during its term. In addition:
    6.3.1 The guarantee must be made by an entity that meets the 
creditworthiness requirements of [the] Transmission Provider, and 
contain terms and conditions that guarantee payment of any amount 
that may be due from [the] Interconnection Customer, up to an 
agreed-to maximum amount.
    6.3.2 The letter of credit or surety bond must be issued by a 
financial institution or insurer reasonably acceptable to [the] 
Transmission Provider and must specify a reasonable expiration date.

Article 7. Assignment, Liability, Indemnity, Force Majeure, 
Consequential Damages, and Default

    7.1 Assignment
    This Agreement may be assigned by either Party upon fifteen (15) 
Business Days prior written notice and opportunity to object by the 
other Party; provided that:
    7.1.1 Either Party may assign this Agreement without the consent 
of the other Party to any affiliate of the assigning Party with an 
equal or greater credit rating and with the legal authority and 
operational ability to satisfy the obligations of the assigning 
Party under this Agreement, provided that [the] Interconnection 
Customer promptly notifies [the] Transmission Provider of any such 
assignment;
    7.1.2 [The] Interconnection Customer shall have the right to 
assign this Agreement, without the consent of [the] Transmission 
Provider, for collateral security purposes to aid in providing 
financing for the Small Generating Facility, provided that [the] 
Interconnection Customer will promptly notify [the] Transmission 
Provider of any such assignment.
    7.1.3 Any attempted assignment that violates this article is 
void and ineffective. Assignment shall not relieve a Party of its 
obligations, nor shall a Party's obligations be enlarged, in whole 
or in part, by reason thereof. An assignee is responsible for 
meeting the same financial, credit, and insurance obligations as 
[the] Interconnection Customer. Where required, consent to 
assignment will not be unreasonably withheld, conditioned or 
delayed.
    7.2 Limitation of Liability
    Each Party's liability to the other Party for any loss, cost, 
claim, injury, liability, or expense, including reasonable 
attorney's fees, relating to or arising from any act or omission in 
its performance of this Agreement, shall be limited to the amount of 
direct damage actually incurred. In no event shall either Party be 
liable to the other Party for any indirect, special, consequential, 
or punitive damages, except as authorized by this Agreement.
    7.3 Indemnity
    7.3.1 This provision protects each Party from liability incurred 
to third parties as a result of carrying out the provisions of this 
Agreement. Liability under this provision is exempt from the general 
limitations on liability found in article 7.2.
    7.3.2 The Parties shall at all times indemnify, defend, and hold 
the other Party harmless from, any and all damages, losses, claims, 
including claims and actions relating to injury to or death of any 
person or damage to property, demand, suits, recoveries, costs and 
expenses, court costs, attorney fees, and all other obligations by 
or to third parties, arising out of or resulting from the other 
Party's action or failure to meet its obligations under this 
Agreement on behalf of the indemnifying Party, except in cases of 
gross negligence or intentional wrongdoing by the indemnified Party.
    7.3.3 If an indemnified person is entitled to indemnification 
under this article as a result of a claim by a third party, and the 
indemnifying Party fails, after notice and reasonable opportunity to 
proceed under this article, to assume the defense of such claim, 
such indemnified person may at the expense of the indemnifying Party 
contest, settle or consent to the entry of any judgment with respect 
to, or pay in full, such claim.
    7.3.4 If an indemnifying party is obligated to indemnify and 
hold any indemnified person harmless under this article, the amount 
owing to the indemnified person shall be the amount of such 
indemnified person's actual loss, net of any insurance or other 
recovery.
    7.3.5 Promptly after receipt by an indemnified person of any 
claim or notice of the commencement of any action or administrative 
or legal proceeding or investigation as to which the indemnity 
provided for in this article may apply, the indemnified person shall 
notify the indemnifying party of such fact. Any failure of or delay 
in such notification shall not affect a Party's indemnification 
obligation unless such failure or delay is materially prejudicial to 
the indemnifying party.
    7.4 Consequential Damages
    Other than as expressly provided for in this Agreement, neither 
Party shall be liable under any provision of this Agreement for any 
losses, damages, costs or expenses for any special, indirect, 
incidental, consequential, or punitive damages, including but not 
limited to loss of profit or revenue, loss of the use of equipment, 
cost of capital, cost of temporary equipment or services, whether 
based in whole or in part in contract, in tort, including 
negligence, strict liability, or any other theory of liability; 
provided, however, that damages for which a Party may be liable to 
the other Party under another agreement will not be considered to be 
special, indirect, incidental, or consequential damages hereunder.
    7.5 Force Majeure
    7.5.1 As used in this article, a Force Majeure Event shall mean 
``any act of God, labor disturbance, act of the public enemy, war, 
insurrection, riot, fire, storm or flood, explosion, breakage or 
accident to machinery or equipment, any order, regulation or 
restriction imposed by governmental, military or lawfully 
established civilian authorities, or any other cause beyond a 
Party's control. A Force Majeure Event does not include an act of 
negligence or intentional wrongdoing.''
    7.5.2 If a Force Majeure Event prevents a Party from fulfilling 
any obligations under this Agreement, the Party affected by the 
Force Majeure Event (Affected Party) shall promptly notify the other 
Party, either in writing or via the telephone, of the existence of 
the Force Majeure Event. The notification must specify in reasonable 
detail the circumstances of the Force Majeure Event, its expected 
duration, and the steps that the Affected Party is taking to 
mitigate the effects of the event on its performance. The Affected 
Party shall keep the other Party informed on a continuing basis of 
developments relating to the Force Majeure Event until the event 
ends. The Affected Party will be entitled to suspend or modify its 
performance of obligations under this Agreement (other than the 
obligation to make payments) only to the extent that the effect of 
the Force Majeure Event cannot be mitigated by the use of Reasonable 
Efforts. The Affected Party will use Reasonable Efforts to resume 
its performance as soon as possible.
    7.6 Default
    7.6.1 No Default shall exist where such failure to discharge an 
obligation (other than the payment of money) is the result of a 
Force Majeure Event as defined in this Agreement or the result of an 
act or omission of the other Party. Upon a Default, the non-
defaulting Party shall give written notice of such Default to the 
defaulting Party. Except as provided in article 7.6.2, the 
defaulting Party shall have sixty (60) [c]Calendar [d]Days from 
receipt of the Default notice within which to cure such Default; 
provided however, if such Default is not capable of cure within 
sixty (60) [c]Calendar [d]Days, the defaulting Party shall commence 
such cure within twenty (20) [c]Calendar [d]Days after notice and 
continuously and diligently complete such cure within six months 
from

[[Page 27239]]

receipt of the Default notice; and, if cured within such time, the 
Default specified in such notice shall cease to exist.
    7.6.2 If a Default is not cured as provided in this article, or 
if a Default is not capable of being cured within the period 
provided for herein, the non-defaulting Party shall have the right 
to terminate this Agreement by written notice at any time until cure 
occurs, and be relieved of any further obligation hereunder and, 
whether or not that Party terminates this Agreement, to recover from 
the defaulting Party all amounts due hereunder, plus all other 
damages and remedies to which it is entitled at law or in equity. 
The provisions of this article will survive termination of this 
Agreement.

Article 8. Insurance

    8.1 [The] Interconnection Customer shall, at its own expense, 
maintain in force general liability insurance without any exclusion 
for liabilities related to the interconnection undertaken pursuant 
to this Agreement. The amount of such insurance shall be sufficient 
to insure against all reasonably foreseeable direct liabilities 
given the size and nature of the generating equipment being 
interconnected, the interconnection itself, and the characteristics 
of the system to which the interconnection is made. [The] 
Interconnection Customer shall obtain additional insurance only if 
necessary as a function of owning and operating a generating 
facility. Such insurance shall be obtained from an insurance 
provider authorized to do business in the State where the 
interconnection is located. Certification that such insurance is in 
effect shall be provided upon request of [the] Transmission 
Provider, except that [the] Interconnection Customer shall show 
proof of insurance to [the] Transmission Provider no later than ten 
(10) Business Days prior to the anticipated commercial operation 
date. An Interconnection Customer of sufficient credit-worthiness 
may propose to self-insure for such liabilities, and such a proposal 
shall not be unreasonably rejected.
    8.2 [The] Transmission Provider agrees to maintain general 
liability insurance or self-insurance consistent with [the] 
Transmission Provider's commercial practice. Such insurance or self-
insurance shall not exclude coverage for [the] Transmission 
Provider's liabilities undertaken pursuant to this Agreement.
    8.3 The Parties further agree to notify each other whenever an 
accident or incident occurs resulting in any injuries or damages 
that are included within the scope of coverage of such insurance, 
whether or not such coverage is sought.

Article 9. Confidentiality

    9.1 Confidential Information shall mean any confidential and/or 
proprietary information provided by one Party to the other Party 
that is clearly marked or otherwise designated ``Confidential.'' For 
purposes of this Agreement all design, operating specifications, and 
metering data provided by [the] Interconnection Customer shall be 
deemed Confidential Information regardless of whether it is clearly 
marked or otherwise designated as such.
    9.2 Confidential Information does not include information 
previously in the public domain, required to be publicly submitted 
or divulged by Governmental Authorities (after notice to the other 
Party and after exhausting any opportunity to oppose such 
publication or release), or necessary to be divulged in an action to 
enforce this Agreement. Each Party receiving Confidential 
Information shall hold such information in confidence and shall not 
disclose it to any third party nor to the public without the prior 
written authorization from the Party providing that information, 
except to fulfill obligations under this Agreement, or to fulfill 
legal or regulatory requirements.
    9.2.1 Each Party shall employ at least the same standard of care 
to protect Confidential Information obtained from the other Party as 
it employs to protect its own Confidential Information.
    9.2.2 Each Party is entitled to equitable relief, by injunction 
or otherwise, to enforce its rights under this provision to prevent 
the release of Confidential Information without bond or proof of 
damages, and may seek other remedies available at law or in equity 
for breach of this provision.
    9.3 Notwithstanding anything in this article to the contrary, 
and pursuant to 18 CFR 1b.20, if FERC, during the course of an 
investigation or otherwise, requests information from one of the 
Parties that is otherwise required to be maintained in confidence 
pursuant to this Agreement, the Party shall provide the requested 
information to FERC, within the time provided for in the request for 
information. In providing the information to FERC, the Party may, 
consistent with 18 CFR 388.112, request that the information be 
treated as confidential and non-public by FERC and that the 
information be withheld from public disclosure. Parties are 
prohibited from notifying the other Party to this Agreement prior to 
the release of the Confidential Information to FERC. The Party shall 
notify the other Party to this Agreement when it is notified by FERC 
that a request to release Confidential Information has been received 
by FERC, at which time either of the Parties may respond before such 
information would be made public, pursuant to 18 CFR 388.112. 
Requests from a state regulatory body conducting a confidential 
investigation shall be treated in a similar manner if consistent 
with the applicable state rules and regulations.

Article 10. Disputes

    10.1 The Parties agree to attempt to resolve all disputes 
arising out of the interconnection process according to the 
provisions of this article.
    10.2 In the event of a dispute, either Party shall provide the 
other Party with a written Notice of Dispute. Such Notice shall 
describe in detail the nature of the dispute.
    10.3 If the dispute has not been resolved within two (2) 
Business Days after receipt of the Notice, either Party may contact 
FERC's Dispute Resolution Service (DRS) for assistance in resolving 
the dispute.
    10.4 The DRS will assist the Parties in either resolving their 
dispute or in selecting an appropriate dispute resolution venue 
(e.g., mediation, settlement judge, early neutral evaluation, or 
technical expert) to assist the Parties in resolving their dispute. 
DRS can be reached at 1-877-337-2237 or via the internet at http://www.ferc.gov/legal/adr.asp.
    10.5 Each Party agrees to conduct all negotiations in good faith 
and will be responsible for one-half of any costs paid to neutral 
third-parties.
    10.6 If neither Party elects to seek assistance from the DRS, or 
if the attempted dispute resolution fails, then either Party may 
exercise whatever rights and remedies it may have in equity or law 
consistent with the terms of this Agreement.

Article 11. Taxes

    11.1 The Parties agree to follow all applicable tax laws and 
regulations, consistent with FERC policy and Internal Revenue 
Service requirements.
    11.2 Each Party shall cooperate with the other to maintain the 
other Party's tax status. Nothing in this Agreement is intended to 
adversely affect [the] Transmission Provider's tax exempt status 
with respect to the issuance of bonds including, but not limited to, 
local furnishing bonds.

Article 12. Miscellaneous

    12.1 Governing Law, Regulatory Authority, and Rules
    The validity, interpretation and enforcement of this Agreement 
and each of its provisions shall be governed by the laws of the 
state of ____ (where the Point of Interconnection is located), 
without regard to its conflicts of law principles. This Agreement is 
subject to all Applicable Laws and Regulations. Each Party expressly 
reserves the right to seek changes in, appeal, or otherwise contest 
any laws, orders, or regulations of a Governmental Authority.
    12.2 Amendment
    The Parties may amend this Agreement by a written instrument 
duly executed by both Parties, or under article 12.12 of this 
Agreement.
    12.3 No Third-Party Beneficiaries
    This Agreement is not intended to and does not create rights, 
remedies, or benefits of any character whatsoever in favor of any 
persons, corporations, associations, or entities other than the 
Parties, and the obligations herein assumed are solely for the use 
and benefit of the Parties, their successors in interest and where 
permitted, their assigns.
    12.4 Waiver
    12.4.1 The failure of a Party to this Agreement to insist, on 
any occasion, upon strict performance of any provision of this 
Agreement will not be considered a waiver of any obligation, right, 
or duty of, or imposed upon, such Party.
    12.4.2 Any waiver at any time by either Party of its rights with 
respect to this Agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this Agreement. Termination or default of 
this Agreement for any reason by Interconnection Customer shall not 
constitute a waiver of [the] Interconnection Customer's legal rights 
to obtain an interconnection from [the] Transmission Provider. Any 
waiver of this Agreement shall, if requested, be provided in 
writing.

[[Page 27240]]

    12.5 Entire Agreement
    This Agreement, including all Attachments, constitutes the 
entire agreement between the Parties with reference to the subject 
matter hereof, and supersedes all prior and contemporaneous 
understandings or agreements, oral or written, between the Parties 
with respect to the subject matter of this Agreement. There are no 
other agreements, representations, warranties, or covenants which 
constitute any part of the consideration for, or any condition to, 
either Party's compliance with its obligations under this Agreement.
    12.6 Multiple Counterparts
    This Agreement may be executed in two or more counterparts, each 
of which is deemed an original but all constitute one and the same 
instrument.
    12.7 No Partnership
    This Agreement shall not be interpreted or construed to create 
an association, joint venture, agency relationship, or partnership 
between the Parties or to impose any partnership obligation or 
partnership liability upon either Party. Neither Party shall have 
any right, power or authority to enter into any agreement or 
undertaking for, or act on behalf of, or to act as or be an agent or 
representative of, or to otherwise bind, the other Party.
    12.8 Severability
    If any provision or portion of this Agreement shall for any 
reason be held or adjudged to be invalid or illegal or unenforceable 
by any court of competent jurisdiction or other Governmental 
Authority, (1) such portion or provision shall be deemed separate 
and independent, (2) the Parties shall negotiate in good faith to 
restore insofar as practicable the benefits to each Party that were 
affected by such ruling, and (3) the remainder of this Agreement 
shall remain in full force and effect.
    12.9 Security Arrangements
    Infrastructure security of electric system equipment and 
operations and control hardware and software is essential to ensure 
day-to-day reliability and operational security. FERC expects all 
Transmission Providers, market participants, and Interconnection 
Customers interconnected to electric systems to comply with the 
recommendations offered by the President's Critical Infrastructure 
Protection Board and, eventually, best practice recommendations from 
the electric reliability authority. All public utilities are 
expected to meet basic standards for system infrastructure and 
operational security, including physical, operational, and cyber-
security practices.
    12.10 Environmental Releases
    Each Party shall notify the other Party, first orally and then 
in writing, of the release of any hazardous substances, any asbestos 
or lead abatement activities, or any type of remediation activities 
related to the Small Generating Facility or the Interconnection 
Facilities, each of which may reasonably be expected to affect the 
other Party. The notifying Party shall (1) provide the notice as 
soon as practicable, provided such Party makes a good faith effort 
to provide the notice no later than 24 hours after such Party 
becomes aware of the occurrence, and (2) promptly furnish to the 
other Party copies of any publicly available reports filed with any 
governmental authorities addressing such events.
    12.11 Subcontractors
    Nothing in this Agreement shall prevent a Party from utilizing 
the services of any subcontractor as it deems appropriate to perform 
its obligations under this Agreement; provided, however, that each 
Party shall require its subcontractors to comply with all applicable 
terms and conditions of this Agreement in providing such services 
and each Party shall remain primarily liable to the other Party for 
the performance of such subcontractor.
    12.11.1 The creation of any subcontract relationship shall not 
relieve the hiring Party of any of its obligations under this 
Agreement. The hiring Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor the hiring 
Party hires as if no subcontract had been made; provided, however, 
that in no event shall [the] Transmission Provider be liable for the 
actions or inactions of [the] Interconnection Customer or its 
subcontractors with respect to obligations of [the] Interconnection 
Customer under this Agreement. Any applicable obligation imposed by 
this Agreement upon the hiring Party shall be equally binding upon, 
and shall be construed as having application to, any subcontractor 
of such Party.
    12.11.2 The obligations under this article will not be limited 
in any way by any limitation of subcontractor's insurance.
    12.12 Reservation of Rights
    [The] Transmission Provider shall have the right to make a 
unilateral filing with FERC to modify this Agreement with respect to 
any rates, terms and conditions, charges, classifications of 
service, rule or regulation under section 205 or any other 
applicable provision of the Federal Power Act and FERC's rules and 
regulations thereunder, and [the] Interconnection Customer shall 
have the right to make a unilateral filing with FERC to modify this 
Agreement under any applicable provision of the Federal Power Act 
and FERC's rules and regulations; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications may be considered. Nothing in this Agreement shall 
limit the rights of the Parties or of FERC under sections 205 or 206 
of the Federal Power Act and FERC's rules and regulations, except to 
the extent that the Parties otherwise agree as provided herein.

Article 13. Notices

    13.1 General
    Unless otherwise provided in this Agreement, any written notice, 
demand, or request required or authorized in connection with this 
Agreement (``Notice'') shall be deemed properly given if delivered 
in person, delivered by recognized national currier service, or sent 
by first class mail, postage prepaid, to the person specified below:
    If to [the] Interconnection Customer:

Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------

    If to [the] Transmission Provider:

Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------

    13.2 Billing and Payment
    Billings and payments shall be sent to the addresses set out 
below:

Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------

Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------

    13.3 Alternative Forms of Notice
    Any notice or request required or permitted to be given by 
either Party to the other and not required by this Agreement to be 
given in writing may be so given by telephone, facsimile or email to 
the telephone numbers and email addresses set out below:
    If to [the] Interconnection Customer:

Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------

    If to [the] Transmission Provider:

Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------

    13.4 Designated Operating Representative
    The Parties may also designate operating representatives to 
conduct the communications which may be necessary or convenient for 
the administration of this Agreement. This person will also serve as 
the point of contact with respect to operations and maintenance of 
the Party's facilities.
    Interconnection Customer's Operating Representative:

Interconnection Customer:----------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------


[[Page 27241]]

-----------------------------------------------------------------------
    Transmission Provider's Operating Representative:

Transmission Provider:-------------------------------------------------
Attention:-------------------------------------------------------------
Address:---------------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
Phone:-----------------------------------------------------------------
Fax:-------------------------------------------------------------------
    13.5 Changes to the Notice Information
    Either Party may change this information by giving five (5) 
Business Days written notice prior to the effective date of the 
change.

Article 14. Signatures

    In witness whereof, the Parties have caused this Agreement to be 
executed by their respective duly authorized representatives.
    For [the] Transmission Provider

Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

    For [the] Interconnection Customer

Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------
Date:------------------------------------------------------------------

Attachment 1

Glossary of Terms

    Affected System--An electric system other than [the] 
Transmission Provider's Transmission System that may be affected by 
the proposed interconnection.
    Applicable Laws and Regulations--All duly promulgated applicable 
federal, state and local laws, regulations, rules, ordinances, 
codes, decrees, judgments, directives, or judicial or administrative 
orders, permits and other duly authorized actions of any 
Governmental Authority.
    Applicable Reliability Standards--The requirements and 
guidelines of the Electric Reliability Organization and the 
Balancing Authority Area of the Transmission System to which the 
Generating Facility is directly interconnected.
    Balancing Authority [shall mean]--[a]An entity that integrates 
resource plans ahead of time, maintains demand and resource balance 
within a Balancing Authority Area, and supports interconnection 
frequency in real time.
    Balancing Authority Area [shall mean]--[t]The collection of 
generation, transmission, and loads within the metered boundaries of 
the Balancing Authority. The Balancing Authority maintains load-
resource balance within this area.
    Business Day--Monday through Friday, excluding Federal Holidays.
    Default--The failure of a breaching Party to cure its breach 
under the Small Generator Interconnection Agreement.
    Distribution System--[The] Transmission Provider's facilities 
and equipment used to transmit electricity to ultimate usage points 
such as homes and industries directly from nearby generators or from 
interchanges with higher voltage transmission networks which 
transport bulk power over longer distances. The voltage levels at 
which Distribution Systems operate differ among areas.
    Distribution Upgrades--The additions, modifications, and 
upgrades to [the] Transmission Provider's Distribution System at or 
beyond the Point of Interconnection to facilitate interconnection of 
the Small Generating Facility and render the transmission service 
necessary to effect [the] Interconnection Customer's wholesale sale 
of electricity in interstate commerce. Distribution Upgrades do not 
include Interconnection Facilities.
    Good Utility Practice--Any of the practices, methods and acts 
engaged in or approved by a significant portion of the electric 
industry during the relevant time period, or any of the practices, 
methods and acts which, in the exercise of reasonable judgment in 
light of the facts known at the time the decision was made, could 
have been expected to accomplish the desired result at a reasonable 
cost consistent with good business practices, reliability, safety 
and expedition. Good Utility Practice is not intended to be limited 
to the optimum practice, method, or act to the exclusion of all 
others, but rather to be acceptable practices, methods, or acts 
generally accepted in the region.
    Governmental Authority--Any federal, state, local or other 
governmental regulatory or administrative agency, court, commission, 
department, board, or other governmental subdivision, legislature, 
rulemaking board, tribunal, or other governmental authority having 
jurisdiction over the Parties, their respective facilities, or the 
respective services they provide, and exercising or entitled to 
exercise any administrative, executive, police, or taxing authority 
or power; provided, however, that such term does not include [the] 
Interconnection Customer, the Interconnection Provider, or any 
Affiliate thereof.
    Interconnection Customer--Any entity, including [the] 
Transmission Provider, the Transmission Owner or any of the 
affiliates or subsidiaries of either, that proposes to interconnect 
its Small Generating Facility with [the] Transmission Provider's 
Transmission System.
    Interconnection Facilities--[The] Transmission Provider's 
Interconnection Facilities and [the] Interconnection Customer's 
Interconnection Facilities. Collectively, Interconnection Facilities 
include all facilities and equipment between the Small Generating 
Facility and the Point of Interconnection, including any 
modification, additions or upgrades that are necessary to physically 
and electrically interconnect the Small Generating Facility to [the] 
Transmission Provider's Transmission System. Interconnection 
Facilities are sole use facilities and shall not include 
Distribution Upgrades or Network Upgrades.
    Interconnection Request--[The] Interconnection Customer's 
request, in accordance with the Tariff, to interconnect a new Small 
Generating Facility, or to increase the capacity of, or make a 
Material Modification to the operating characteristics of, an 
existing Small Generating Facility that is interconnected with [the] 
Transmission Provider's Transmission System.
    Material Modification--A modification that has a material impact 
on the cost or timing of any Interconnection Request with a later 
queue priority date.
    Network Upgrades--Additions, modifications, and upgrades to 
[the] Transmission Provider's Transmission System required at or 
beyond the point at which the Small Generating Facility 
interconnects with [the] Transmission Provider's Transmission System 
to accommodate the interconnection of the Small Generating Facility 
with [the] Transmission Provider's Transmission System. Network 
Upgrades do not include Distribution Upgrades.
    Operating Requirements--Any operating and technical requirements 
that may be applicable due to Regional Transmission Organization, 
Independent System Operator, Balancing Authority Area, or 
Transmission Provider's requirements, including those set forth in 
the Small Generator Interconnection Agreement.
    Party or Parties--[The] Transmission Provider, Transmission 
Owner, Interconnection Customer or any combination of the above.
    Point of Interconnection--The point where the Interconnection 
Facilities connect with [the] Transmission Provider's Transmission 
System.
    Reasonable Efforts--With respect to an action required to be 
attempted or taken by a Party under the Small Generator 
Interconnection Agreement, efforts that are timely and consistent 
with Good Utility Practice and are otherwise substantially 
equivalent to those a Party would use to protect its own interests.
    Small Generating Facility--[The] Interconnection Customer's 
device for the production and/or storage for later injection of 
electricity identified in the Interconnection Request, but shall not 
include [the] Interconnection Customer's Interconnection Facilities.
    Tariff--[The] Transmission Provider or Affected System's Tariff 
through which open access transmission service and Interconnection 
Service are offered, as filed with the FERC, and as amended or 
supplemented from time to time, or any successor tariff.
    Transmission Owner--The entity that owns, leases or otherwise 
possesses an interest in the portion of the Transmission System at 
the Point of Interconnection and may be a Party to the Small 
Generator Interconnection Agreement to the extent necessary.
    Transmission Provider--The public utility (or its designated 
agent) that owns, controls, or operates transmission or distribution 
facilities used for the transmission of electricity in interstate 
commerce and provides transmission service under the Tariff. The 
term Transmission Provider should be read to include the 
Transmission Owner when the Transmission Owner is separate from 
[the] Transmission Provider.
    Transmission System--The facilities owned, controlled or 
operated by [the] Transmission Provider or the Transmission Owner 
that are used to provide transmission service under the Tariff.
    Upgrades--The required additions and modifications to [the] 
Transmission Provider's Transmission System at or beyond the Point 
of Interconnection. Upgrades may

[[Page 27242]]

be Network Upgrades or Distribution Upgrades. Upgrades do not 
include Interconnection Facilities.

Attachment 2

Description and Costs of the Small Generating Facility, Interconnection 
Facilities, and Metering Equipment

    Equipment, including the Small Generating Facility, 
Interconnection Facilities, and metering equipment shall be itemized 
and identified as being owned by [the] Interconnection Customer, 
[the] Transmission Provider, or the Transmission Owner. [The] 
Transmission Provider will provide a best estimate itemized cost, 
including overheads, of its Interconnection Facilities and metering 
equipment, and a best estimate itemized cost of the annual operation 
and maintenance expenses associated with its Interconnection 
Facilities and metering equipment.

Attachment 3

One-Line Diagram Depicting the Small Generating Facility, 
Interconnection Facilities, Metering Equipment, and Upgrades

Attachment 4

Milestones

In-Service Date:-------------------------------------------------------

    Critical milestones and responsibility as agreed to by the 
Parties:

------------------------------------------------------------------------
             Milestone/date                     Responsible party
------------------------------------------------------------------------
(1) ____________________                 ____________________
(2) ____________________                 ____________________
(3) ____________________                 ____________________
(4) ____________________                 ____________________
(5) ____________________                 ____________________
(6) __                                   __
(7) ____________________                 ____________________
(8) ____________________                 ____________________
(9) ____________________                 ____________________
(10) ____________________                ____________________
------------------------------------------------------------------------

Agreed to by:

For [the] Transmission Provider----------------------------------------
Date-------------------------------------------------------------------

For [the] Transmission Owner (If Applicable)---------------------------
Date-------------------------------------------------------------------

For [the] Interconnection Customer-------------------------------------
Date-------------------------------------------------------------------

Attachment 5

Additional Operating Requirements for [the] Transmission Provider's 
Transmission System and Affected Systems Needed To Support [the] 
Interconnection Customer's Needs

    [The] Transmission Provider shall also provide requirements that 
must be met by [the] Interconnection Customer prior to initiating 
parallel operation with [the] Transmission Provider's Transmission 
System.

Attachment 6

Transmission Provider's Description of Its Upgrades and Best Estimate 
of Upgrade Costs

    [The] Transmission Provider shall describe Upgrades and provide 
an itemized best estimate of the cost, including overheads, of the 
Upgrades and annual operation and maintenance expenses associated 
with such Upgrades. [The] Transmission Provider shall functionalize 
Upgrade costs and annual expenses as either transmission or 
distribution related.

UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION

Improvements to Generator Interconnection Procedures and Agreements

Docket No. RM22-14-001

(Issued March 21, 2024)

CHRISTIE, Commissioner, concurring:

    1. I concur with Order No. 2023-A,\1\ which largely sustains the 
findings and determinations of its predecessor, Order No. 2023. I 
write separately to highlight two issues in the order, which I 
previously discussed in my concurrence to Order No. 2023.\2\
---------------------------------------------------------------------------

    \1\ Improvements to Generator Interconnection Procedures and 
Agreements, Order No. 2023-A, 186 FERC ] 61,199 (2024).
    \2\ Improvements to Generator Interconnection Procedures and 
Agreements, Order No. 2023, 88 FR 61014 (Sept. 6, 2023), 184 FERC ] 
61,054 (2023) (Christie, Comm'r, concurring at P 1) (Order No. 2023 
Concurrence), https://www.ferc.gov/news-events/news/e-1-commissioner-christie-concurrence-order-no-2023-interconnection-final-rule.
---------------------------------------------------------------------------

I. Enumerated Alternative Transmission Technologies (Section 
II.E.2.a.iii)

    2. Order No. 2023-A sustains the determination in Order No. 2023 
that transmission providers have the sole discretion in determining 
whether to use an alternative transmission technology, or grid-
enhancing technology (GET), in the interconnection process. As I 
explained in my concurrence to Order No. 2023:
    A GET may hold the potential of squeezing more juice--
literally--out of the existing transmission grid. By increasing the 
capacity of the existing grid, a GET could reduce or even eliminate 
the need for the future construction of new transmission assets. So 
the potential for cost-savings from the use of GETs is too important 
to ignore.\3\
---------------------------------------------------------------------------

    \3\ Id. P 2.

    I emphasized, however, that GETs are operational applications, 
which should be deployed when and where their efficacy can be 
proven, and should not be mandated as planning assumptions or as 
potential substitutes for network upgrades caused by interconnection 
requests.\4\ I also noted the different financial incentives at 
play: transmission owners will typically favor the construction of 
costly new transmission assets over deploying GETs, whereas 
companies who sell GETs and generation developers--particularly 
those in RTOs/ISOs that use participant funding to pay for the costs 
of network upgrades caused by the interconnecting customers--want 
GETs to be mandated.\5\ Therefore, it was crucial to strike the 
right balance in the order.\6\
---------------------------------------------------------------------------

    \4\ Id. P 5 (footnote omitted).
    \5\ Id. PP 6-7.
    \6\ Id. P 8.
---------------------------------------------------------------------------

    3. And Order No. 2023 did just that. Order No. 2023 required the 
evaluation of certain listed GETs in the interconnection studies 
process but did not require that a GET must be deployed as an 
alternative to a necessary network upgrade.\7\ Further, and most 
importantly, Order No. 2023 made clear that the determination in 
each case was to be made at the sole discretion of the transmission 
provider (i.e., RTO/ISOs or non-RTO transmission providers).\8\ This 
is crucial because transmission providers are responsible for 
resolving the reliability issues caused by a particular 
interconnection, and there is a risk that a GET could fail, 
prompting a later, potentially more costly, network upgrade.\9\ And, 
of course, for that subsequent reliability upgrade, consumers would 
likely get stuck with the bill, not the generation developer.
---------------------------------------------------------------------------

    \7\ Id. P 9.
    \8\ Id. P 10.
    \9\ Id. P 11.
---------------------------------------------------------------------------

    4. Order No. 2023-A rightly sustains the discretion that Order 
No. 2023 affords transmission providers in determining whether to 
use a GET. This level of discretion continues to be justified 
because:
    (1) the transmission provider is responsible for determining 
whether using any of the enumerated alternative transmission 
technologies is an appropriate and reliable network upgrade that 
allows the interconnection customer to flow the output of its 
generating facility onto the transmission provider's transmission 
system

[[Page 27243]]

in a safe and reliable manner; (2) the requirement to make such a 
determination before allowing for the use of the enumerated 
alternative transmission technologies addresses concerns that their 
use may impinge on reliability, delay network upgrades instead of 
reducing the need for them or obviating the need for them 
altogether, or fail to address all transmission system issues that a 
traditional network upgrade would address; and (3) there is a need 
to avoid time-consuming delays and costly disputes or litigation 
over interconnection costs that could arise as a result of this 
reform.\10\
---------------------------------------------------------------------------

    \10\ Order No. 2023-A, 186 FERC ] 61,199 at P 618 (citations 
omitted).
---------------------------------------------------------------------------

    Order No. 2023-A also clarifies that transmission providers must 
explain their evaluation of GETs for feasibility, cost, and time 
savings as an alternative to a traditional network upgrade in their 
applicable study report(s), and their use determinations must be 
consistent with good utility practice, applicable reliability 
standards, and applicable laws and regulations.\11\ Thus, as I 
observed, Order No. 2023 ``strikes the appropriate balance between 
requiring the evaluation of GETs, but not mandating the use of a GET 
in specific cases unless the transmission provider--and only the 
transmission provider--determines it would work from a real-world 
applicability standpoint.'' \12\ And Order No. 2023-A preserves that 
balance.
---------------------------------------------------------------------------

    \11\ Id. P 619 (citation omitted); see also id. PP 626-627.
    \12\ Order No. 2023 Concurrence at P 12 (emphasis added).
---------------------------------------------------------------------------

II. Inappropriate Allocation of Certain Costs to Consumers

    5. I remain concerned that study delay penalties on RTOs/ISOs 
and the costs of transmission provider heatmaps used as a tool for 
interconnection customers will be inappropriately allocated to 
consumers even though they both appear to provide much more of a 
benefit to generation developers than consumers.\13\ I address each 
in turn.
---------------------------------------------------------------------------

    \13\ Id. P 17.
---------------------------------------------------------------------------

A. Study Delay Penalties on RTO/ISOs (Section II.D.1.c.iii)

    6. Order No. 2023-A sustains the imposition of penalties on 
transmission providers who miss study deadlines. As I expressed in 
my Order No. 2023 Concurrence, I have concerns about assessing study 
penalties on RTOs/ISOs, which are not-for-profit entities with no 
stockholders.\14\
---------------------------------------------------------------------------

    \14\ Id. P 18.
---------------------------------------------------------------------------

    7. Order No. 2023 left open the question of how RTOs/ISOs will 
recover those study delay penalties that are not automatically 
imposed on a transmission-owning member by explaining that RTOs/ISOs 
may submit an FPA section 205 filing to propose a cost recovery 
scheme for these penalties.\15\ Unfortunately, Order No. 2023-A 
continues to punt this question, stating that it will address any 
future RTO/ISO section 205 proposal to recover the costs of study 
delay penalties on case-by-case basis.\16\ I urge that any such RTO/
ISO filing make protections to consumers paramount. In any scenario, 
the costs of penalties should not be imposed on retail customers, 
for the obvious reason they are not the cause of the penalties. I 
would add that the fact that Order No. 2023-A still fails to answer 
the fundamental question of ``who pays?'' illustrates the legal and 
policy flaws in the penalty scheme as applied to RTOs/ISOs. No doubt 
we will continue to hear more about this issue.
---------------------------------------------------------------------------

    \15\ Id. P 20.
    \16\ Order No. 2023-A, 186 FERC ] 61,199 at P 465 (citation 
omitted).
---------------------------------------------------------------------------

B. Cost of Heatmap (Section II.C.1.c)

    8. In addition, although I support the heatmap requirement, I 
remain concerned over its potential funding through transmission 
rates.\17\ Order No. 2023-A sustains the determination that 
transmission providers must bear the costs associated with their 
heatmaps or recover them through transmission rates to the extent 
they are recoverable consistent with Commission accounting and 
ratemaking policy, finding that interconnection customers are not 
the sole or primary beneficiaries of the heatmap requirement.\18\
---------------------------------------------------------------------------

    \17\ Order No. 2023 Concurrence at PP 21-22.
    \18\ Order No. 2023-A, 186 FERC ] 61,199 at P 106.
---------------------------------------------------------------------------

    9. I agree with this rationale only with respect to those 
regions in which transmission providers which do not use participant 
funding--i.e., in those regions where the transmission provider's 
load ultimately reimburses (or more accurately, subsidizes) 
interconnection customers for their interconnection costs. As 
heatmaps serve to identify viable points of interconnection and 
improve queue efficiency, they help to reduce interconnection costs. 
Thus, ceteris paribus, heatmaps will indirectly reduce the magnitude 
of the reimbursements of interconnection costs paid by load to 
interconnection customers.
    10. On the other hand, in regions in which the transmission 
provider uses participant funding--such as in PJM and MISO--I fail 
to see how interconnection customers are not the sole or primary 
beneficiaries of the heatmap requirement. In those regions, as 
interconnection customers are ultimately responsible for 
interconnection costs--with the exception of MISO's (questionable, 
in my opinion) assignment to load of 10% of the cost of network 
upgrades 345 kV and above--the savings that heatmaps provide would 
inure to generation developers. I question, therefore, whether the 
recovery of the cost of heatmaps from load in those regions would be 
just and reasonable. As I stated in my Order No. 2023 Concurrence:
    Commission policy may dictate that interconnection queue 
efficiency benefits transmission customers; however, that should not 
result in the costs of a requirement that best benefits 
interconnection customers, and really prospective interconnection 
customers that may ultimately not seek to interconnect, being 
recovered from consumers through transmission rates carte 
blanche.\19\
---------------------------------------------------------------------------

    \19\ Order No. 2023 Concurrence at P 22 (emphasis in original).
---------------------------------------------------------------------------

    For these reasons, I concur.

Mark C. Christie
Commissioner.

[FR Doc. 2024-06563 Filed 4-15-24; 8:45 am]
BILLING CODE 6717-01-P