FERC approves PacifiCorp’s proposed interconnection process for replacing retired generation

Dive Brief:

The Federal Energy Regulatory Commission late Monday approved PacifiCorp’s proposal for an expedited interconnection process to allow power plant owners to replace retiring generating units, rejecting concerns it could give the utility company an unfair advantage.
PacifiCorp’s plan creates efficiencies by using existing interconnection service, speeds the interconnection process, creates cost savings and reduces interconnection-related uncertainty in resource planning, FERC said in the 3-1 decision.
FERC Commissioner Allison Clements dissented, saying PacifiCorp failed to show its plan wouldn’t give it an unfair edge in access to the grid. She called for a broad review of generator replacement rules that allow power plant owners to retain their interconnection capacity in perpetuity.

Dive Insight:

In November, PacifiCorp proposed a process allowing power plant owners to replace retiring generating units without going through a clustered interconnection procedure required of greenfield power projects.

PacifiCorp, based in Portland, Oregon, also proposed hiring Excel Engineering of MN as the independent “generator replacement coordinator” to oversee the process.

The generator replacement proposal would affect a major portion of the West where PacifiCorp, with customers in California, Idaho, Oregon, Utah, Washington and Wyoming, is the largest grid operator. The utility company provides transmission service in 10 states.

PacifiCorp’s plan offers “substantial benefits” and is similar to what the agency approved for Dominion Energy South Carolina, Duke Energy Carolinas and Public Service Co. of Colorado, an Xcel Energy utility, according to FERC.

FERC rejected anti-competitive concerns raised by NewSun Energy, a renewable energy developer, and Utah Associated Municipal Power Systems.

“A separate, resource-neutral generator replacement process for owners of existing generation, administered by the Independent Coordinator, does not provide an undue preference to the transmission provider’s existing generation,” FERC said.

The Utah Division of Public Utilities, which represents ratepayers, said in comments at FERC that PacifiCorp’s proposed generator replacement coordinator and state regulatory authorities have adequate tools to ensure fair competition for replacing old power plants, including assigning PacifiCorp interconnection rights to winning bidders.

TerraPower, an advanced nuclear power plant developer, supported PacifiCorp’s proposal, saying it would allow the company to replace retiring coal-fired power plants with nuclear plants while avoiding the utility’s extensive cluster study process for new interconnections.

Rather than taking a utility-by-utility approach to reviewing plans for replacing power plants, FERC should take a holistic look at interconnection rules for retiring power plants, Clements said.

“I worry that by continuing to approve these rules one region at a time, we are sleepwalking into a fundamental reshaping of interconnection policy without the careful scrutiny that such a shift demands,” she said.