Commissioner Mark C. Christie Statement
December 1, 2021
Docket No. ER21-2807-000
I dissent from today’s order denying Invenergy Wind Development LLC’s and Invenergy Solar Development LLC’s (collectively, Invenergy) request for waiver of the financial security posting requirements set forth in the Southwest Power Pool, Inc.’s (SPP) Generator Interconnection Procedures. When read in conjunction with the Commission’s rehearing order in Lookout Solar Park I, LLC,[1] also issued today, I can reach no conclusion other than that today’s order unduly discriminates against Invenergy in an unlawful manner.
The relevant background of this proceeding is simple. As I predicted, Invenergy saw the Commission’s initial order in Lookout Solar and subsequently sought a waiver that would put them on equal footing – that is, provide Invenergy with the ability to review the final results of the Phase 2 restudy before any of its posted financial security was “at risk.” After all, both Lookout Solar and Invenergy are in the same SPP cluster; both raised questions regarding the accuracy of the initial Phase 2 results; both were unable to resolve their concerns with SPP prior to the financial security posting deadline; and both were informed that a restudy was necessary, raising additional uncertainty regarding their ultimate Phase 2 cost responsibility. The only substantial difference between Lookout Solar and Invenergy is that, unlike Lookout Solar, Invenergy followed the Tariff’s requirements and posted the necessary security by the Phase 2 deadline, while Lookout Solar did not. What reasonable basis, then, could the Commission have for denying Invenergy’s waiver?
And yet, today’s order does just that. And it does so by making a puzzling finding: that Invenergy’s waiver request is distinguishable from the request in Lookout Solar because Invenergy’s request does not contain “undisputed allegations in the record of inconsistent communications and actions by SPP.”[2] These “inconsistent communications” apparently consist of a single email received by Lookout Solar from SPP allegedly agreeing that Lookout Solar’s Phase 1 cost allocation was too high.
In essence, in today’s order, the Commission is hanging its hat entirely on the fact that: (i) SPP sent Lookout Solar an email (in response to questions received from Lookout Solar) acknowledging that its Phase 1 cluster results may contain errors that resulted in incorrect cost allocations, but (ii) did not send a similar email (or other communication) to Invenergy. I do not dispute this fact. What I do dispute, however, is its relevance to the Commission’s determination – which should be zero.
As I explain at length in my dissent to today’s Lookout Solar rehearing order, a generator’s Phase 1 financial security is subsumed within its subsequent Phase 2 financial security. For example, if during Phase 2, a generator was required to post financial security of $10 million, but had previously been required to post $6 million in Phase 1, it would only be required to post an additional $4 million to meet its financial posting requirements. As I also explained, despite any unique[3] “inconsistent communications” that may have happened between Lookout Solar and SPP, any concerns regarding the inaccuracies acknowledged in Phase 1 were rendered moot by SPP’s confirmation that the Phase 2 allocations were correct. Thus, the only uncertainty left regarding Lookout Solar’s Phase 2 costs was created by a subsequent queue drop-out, which required Phase 2 to be restudied. This uncertainty, however, was shared by all members of the Phase 2 cluster, including Invenergy, and was in no way unique to Lookout Solar.
There is thus no rational basis for distinguishing Invenergy from Lookout Solar, and the Commission’s decision to deny Invenergy’s waiver on such thin factual differences is mystifying. Under the Federal Power Act we are required to ensure just, reasonable and not unduly discriminatory or preferential rates, terms, or conditions of service. Today the Commission relies on semantics to get itself out of the mess it inevitably made by granting the initial waiver in Lookout Solar—the result of which is to put Invenergy (and presumably any subsequent waiver applicants in the cluster) at a patently discriminatory commercial disadvantage to another member of the queue without any rational basis to distinguish the two waiver requests. As a result, regardless of how I would have applied the Commission’s four-pronged test to the facts of this case, I cannot find that today’s order reaches a lawful result.
Today’s order highlights a larger issue at play as well, one which has been appropriately teed up in the Advance Notice of Proposed Rulemaking (ANOPR) on transmission.[4] It is no secret that the interconnection queues in RTOs/ISOs need major reforms to reduce or eliminate, among other problems, the occurrence of long and costly delays, frequent waiver requests and inconsistent treatment of factually similar waiver requests, as described above. The blame does not lie with RTOs/ISOs, which have been the recipients of a flood of interconnection requests in the past several years from applicants, not all of which represent “ready” projects, many of which are speculative, and which are thus delaying the “ready” projects. It is unrealistic to expect SPP—or any other RTO, for that matter—to answer every question raised by any generator or, frankly, avoid the occasional error in their studies, while trying to manage a severely backlogged and inefficient queue. At the same time, I am sympathetic to generators’ need for accuracy and certainty in order to move forward with commercially viable projects. Ideally, the necessary interconnection queue reforms would come quickly from the RTOs/ISOs themselves, but whether they come first from the RTOs/ISOs or in parallel with Commission action in the ANOPR proceeding that lays out basic guidelines for the reforms, this case illustrates that the need for immediate and significant queue reform is compelling.
For these reasons, I respectfully dissent.
[1] Lookout Solar Park I, LLC, 177 FERC ¶ 61,127.
[2] Order at P 31.
[3] And I question whether a single email, or lack thereof, is enough to make Lookout Solar “unique” from any other generator in the cluster who, presumably, would also be directly affected by any study errors made by SPP.
[4] Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection, 176 FERC ¶ 61,024 (2021) (ANOPR).