Chairman James Danly Statement
November 23, 2020
Docket No. ER20-1668-003
I agree with the Commission’s decision in the order issued in this docket because I agree that Dominion Energy South Carolina, Inc.’s (Dominion) generator replacement proposal should be approved. I write separately because I do not believe that the Generator Replacement Coordinator (Independent GRC) proposed by Dominion is necessary in order for us to find that Dominion’s generator replacement proposal is “consistent with or superior to” the pro forma LGIP and LGIA.[1]
In MISO, the Commission accepted a similar generation replacement program, finding that it provided significant benefits.[2] The Commission also found in MISO that the proposed tariff revisions were not unduly discriminatory or preferential because owners of existing generating facilities are not similarly situated to new entrants when obtaining interconnection service.[3] Shortly thereafter, however, in our decision in PSCo, the Commission rejected a virtually identical generator replacement program, reasoning that the proposal could give PSCo undue preference by allowing circumvention of the full interconnection process, while requiring it of new generation.[4] The Commission justified the different results in these two decisions on the grounds that MISO, as an RTO, is subject to Order No. 2003’s independent entity variation standard, which permits greater deviations from the pro forma LGIP for RTOs and ISOs.[5]
I voted for the Commission’s order in PSCo. However, after reconsidering that decision, particularly in light of Dominion’s proposal in this proceeding, I now believe that our PSCo decision was in error. We failed to recognize that, consistent with our holding in MISO, owners of existing generating facilities are not similarly situated to new entrants for the purpose of obtaining interconnection service and that as a consequence there could be no undue discrimination or preference resulting from PSCo’s proposal. Existing generating facilities have already undergone the interconnection process and, unlike new entrants, have born the cost of necessary network upgrades. The Commission’s failure to recognize this distinction led us to reject PSCo’s proposal notwithstanding the significant benefits promised.
And the Commission’s order in this proceeding implicitly acknowledges our error in PSCo. Dominion enjoys an even greater share (90%) of its existing designated network resources than did PSCo (60%). The Commission’s reasoning in PSCo would apply with even greater force here if owners of existing generation facilities were similarly situated with new entrants. But they are not, as we correctly found in MISO. For this reason, I agree that we should approve Dominion’s generator replacement proposal, with its attendant benefits.
The Commission’s attempt to distinguish its decision here from PSCo by pointing to the Independent GRC is not persuasive. We did not even hint in PSCo that we were concerned about the potential for discriminatory implementation of the generation replacement process. Nor did the Commission suggest in MISO that its approval of the generation replacement proposal depended upon the independent administration of the program.
There is no reason to believe that the Independent GRC is necessary to prevent undue discrimination. The right of existing generation owners to opt for generation replacement is established in the tariff and cannot be applied discriminatorily. And while some studies may be required for generation replacement, they will be less complex, less time consuming, and less expensive than studies performed for new entrants because all necessary upgrades will have already been installed for the existing generation that will be replaced. If it is not unduly discriminatory to allow incumbent utilities to perform the studies and otherwise implement the requirements for new interconnection service, we cannot find otherwise with respect to the implementation of generation replacement.
It is true that implementation of the Independent GRC proposal will not add significantly to Dominion’s costs—which it almost certainly will be allowed to pass through to its customers as a cost of administering its interconnection queues—nor will the Independent GRC significantly increase Dominion’s administrative burden. And it likewise is true that our approval of the Independent GRC in this proceeding will allow other utilities located outside of RTOs, including PSCo, to obtain the benefits of similar generation replacement provisions through the employment of an Independent GRC. It is for these reasons that I concur here. But imposing any cost or administrative burden, no matter how minor, is inappropriate when, as here, it is unnecessary and allows us to sidestep an admission of error in an earlier decision.
For these reasons, I respectfully concur.
[1] Standardization of Generator Interconnection Agreements and Procedures, Order No. 2003, 104 FERC ¶ 61,103, at PP 26, 825-826 (2003), order on reh’g, Order No. 2003-A,106 FERC ¶ 61,220, order on reh’g, Order No. 2003-B, 109 FERC ¶ 61,287 (2004), order on reh’g, Order No. 2003-C, 111 FERC ¶ 61,401 (2005), aff’d sub nom. Nat’l Ass’n of Regulatory Util. Comm’rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007); see, e.g., Ameren Servs. Co., 106 FERC ¶ 61,261, at P 3 (2004).
[2] See Midcontinent Indep. Sys. Operator, Inc., 167 FERC ¶ 61,146, at PP 61-62 (2019) (MISO).
[3] See id. PP 63-65.
[4] See Pub. Serv. Co. of Colo., 171 FERC ¶ 61,115, at P 36 (2020) (PSCo).
[5] See id. P 38.