Interconnection Jurisdiction

When considering a federal agency’s jurisdiction, we tend to think that jurisdiction is a legal issue, not a policy issue. Certainly, a federal agency can expand or narrow its jurisdiction through a new interpretation of a Congressional mandate, but FERC of late has taken actions that indicate that it views jurisdiction, as a matter of policy untethered to FPA. As already discussed in a blog article on Order No. 2222-A, FERC waved away thirty years of legal precedent on interconnection jurisdiction over distributed QFs selling power at wholesale, to third parties providing no legal basis for its decision to decline interconnection jurisdiction as to distributed QFs selling wholesale power to DER aggregators. FERC indicated that “state and local authorities, which have traditionally regulated distributed energy resource interconnections, have the requisite experience, interest, and capacity to oversee these distribution-level interconnections.” This decision was all the more profound because an aggregation of one was permitted.

In Order No. 2222, FERC already had decided to “decline” jurisdiction over second-use DER interconnections, without any discussion of its legal authority to decline jurisdiction given to it by Congress, particularly while reserving its right to reassert jurisdiction. Remarkably, FERC even stated that jurisdiction was matter of policy, not law, noting that “the Commission may revisit this policy decision in the future.” In the same decision, FERC implicitly declined to assert jurisdiction over sales of wholesale power in interstate commerce by DERs to aggregators, once again refusing to provide the basis for its authority to decline jurisdiction or, at the very least, deregulate such sales.

The August 26, 2022 ISO New England Inc. order, however, is perhaps even more stunning in its approach to jurisdiction. FERC ruled there that an RTO and its transmission owners could determine the bounds of FERC jurisdiction under the “independent entity variation” standard.
Continue Reading FERC Jurisdiction – A Matter of Policy?

One would think the issue of jurisdiction over interconnections to distribution facilities of resources selling wholesale power could not get more complex. Order No. 2222 proves that it could. Specifically, QF interconnections to distribution, an area where jurisdiction previously had been relatively clear, has been muddled a bit. For decades, FERC has claimed that it has jurisdiction over the interconnection of QFs connected to the distribution systems of FERC-jurisdictional utilities unless the QF was only selling (or could only sell) to the utility to which it was connected and the sales were under PURPA. Order No. 2222 perhaps continues this policy. Perhaps not. FERC stated: “This final rule also does not revise the Commission’s jurisdictional approach to the interconnections of QFs that participate in distributed energy resource aggregations.[fn]  [fn]See Order No. 2003, 104 FERC ¶ 61,103 at PP 813-815; Order No. 2006, 111 FERC ¶ 61,220 at PP 516-518; Order No. 845, 163 FERC ¶ 61,043.” The problem with the sentence is there is not really an “approach” for QFs “that participate in distributed energy resource aggregations.” The citations are instead to an approach that applies to QFs participating directly in wholesale markets. That said, the case for FERC jurisdiction appears more compelling than the case against FERC jurisdiction, absent further clarification.
Continue Reading Order No. 2222 – FERC Sows Some Confusion as to Interconnection Jurisdiction for QFs that Are Exclusively DER Aggregation Participants