New Entrants, Many Ways to Engage
Steve Huntoon is the principal of Energy Counsel, LLP. Mr. Huntoon is a former president of the Energy Bar Association, and for over 30 years of practice in energy regulatory law he has advised and represented such companies and institutions as Dynegy, PECO Energy (now part of Exelon), Florida Power & Light (NextEra Energy), ISO New England, Entergy, PacifiCorp, Williston Basin (MDU Resources) and Conectiv (now part of PHI, and Exelon).
No, not our kids’ notion of hooking up. This is about interconnecting new generation to the grid.
The ability of new entrants to interconnect new generation on a timely and fair basis is sine qua non for reliability and for just and reasonable prices. It is even more important now as the country makes a massive transition from coal to natural gas and renewables.1
Recent studies by the National Renewable Energy Laboratory, PJM Interconnection, and others inform us that the transition is manageable. What we don’t know is how cooperative, or uncooperative, incumbents will be about it.
FERC has always understood that incumbents are incented to frustrate new entry. In organized markets, new entrants drive down energy and capacity market prices for incumbents’ fleets to competitive levels. Outside of organized markets, new entrants compete with the incumbents’ own proposed projects for rate base treatment.
FERC has prescribed a kind of Golden Rule. Transmission owners with affiliated generation should treat new entrants the same as they would treat their affiliated generation company. By that standard there’s a whole lotta sinnin’ goin’ on.
Until recently, interconnection infighting has been between the well-heeled new entrants and the incumbents over new natural gas plants. Those new entrants have tended to have knowledgeable folks to help navigate the intricacies of interconnection.