FERC Issues Order No. 764-B Clarifying Variable Energy Resource Integration Rule

On September 19, 2013, FERC issued Order No. 764-B, further clarifying its Integration of Variable Energy Resources (“VER”) rule originally established in Order No. 764. Powerex Corporation (“Powerex”) and Iberdrola Renewables, LLC (“Iberdrola Renewables”) had sought clarification, or in the alternative rehearing, of issues related to e-Tagging and the Bonneville Power Administration’s (“Bonneville”) practice of curtailments pursuant to its Dispatcher Standing Order (“DSO”) 216 protocol.

Order No. 764, issued in June of 2012, was designed to address the increase in VERs being brought online and to remove barriers for VER integration. Specifically, in Order No. 764, FERC required transmission providers to give customers the option of adjusting their transmission schedules at 15-minute intervals, but also required VER generators to provide transmission owners with certain meteorological and forced outage data in order to improve power production forecasting.

After issuing Order No. 764, FERC received multiple requests for rehearing and clarification. Addressing these requests in Order No. 764-A, FERC affirmed all the basic determinations of Order No. 764 and provided clarification on multiple issues, including: that the intra-hour scheduling reform applies to all transmission customers that schedule transmission service under an Open Access Transmission Tariff; that when a transmission customer using 15-minute scheduling is taking service from a transmission provider using an hourly imbalance charge, the transmission provider must average the imbalances of each 15-minute scheduling period over the entire hour; and that a firm transmission schedule has curtailment priority over a non-firm transmission schedule using a 15-minute interval schedule. FERC also denied requests to allow transmission providers to unilaterally amend existing Large Generator Interconnection Agreements to include data reporting requirements for existing interconnection customers. See January 4, 2013 edition of the WER.

In issuing Order No. 764-B, FERC responded to the requests for clarification and/or rehearing of Order No. 764-A filed by Iberdrola Renewables and Powerex. Both parties requested clarification of FERC’s decision in Order No. 764-A regarding curtailment of energy e-Tagged as firm. In Order No. 764-A, FERC stated that the e-Tagging of energy as firm or non-firm was “more of a commercial matter between the buyer and the seller of power being exported from Bonneville’s system.” Both parties specifically requested clarification of this statement. In Order No. 764-B, FERC clarified “that although certain events could interrupt the flow of energy scheduled by an e-Tag, that does not change or diminish the firmness of the underlying transmission service.” FERC also explained that its discussion “contrasting the firmness of transmission service with the firmness energy, was illustrative and in no way a substantive determination about the appropriateness or lawfulness of [Bonneville’s] DSO 216.”

At the request of Powerex, FERC also clarified that it will not require any changes to current regional e-Tag practices. FERC determined that Powerex’s other requested clarifications pertaining to curtailments were outside of the scope of the proceeding, explaining that “Order No. 764-A did not address the specific application of curtailments, but rather reiterated the requirement that the transmission provider exhaust all other options before curtailing service on a not unduly discriminatory basis.”

A copy of the order is available here.

*Disclosure – Troutman Sanders LLP represented Iberdrola Renewables, LLC in this FERC proceeding