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FERC Issues Proposals Regarding Inverter-Based Resources to Improve Grid Reliability

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On November 17, 2022, FERC issued three orders intended to address the reliability impacts of the rapid integration of inverter-based resources (“IBRs”), including solar, wind, fuel cell, and battery storage resources, on the Bulk-Power System (“BPS”). Specifically, in the first proceeding, FERC directed the North American Electric Reliability Corporation (“NERC”) to develop a plan to register the entities that own and operate IBRs so that NERC may monitor their compliance with NERC’s Reliability Standards. In the second proceeding, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to direct NERC to develop new or modified Reliability Standards that address reliability gaps related to IBRs. Lastly, in the final proceeding, FERC approved revisions to two of NERC’s Reliability Standards.

In the first proceeding, in Docket No. RD22-4, FERC directed NERC to develop and submit a work plan to identify IBR operators that are connected to the BPS but not yet registered with NERC under the bulk electric system (“BES”) definition and that have an “aggregate, material impact on the reliable operation” of the BPS. The BES identifies elements, and element groups, that are necessary for the reliable planning and operation of the BPS. The BES definition establishes a threshold for identifying all “transmission” elements; specifically, those operated at 100 kV or higher. The 100 kV threshold is applied to both real and reactive power resources. As FERC recognized, most of the newly interconnected IBRs are either connecting at voltages at less than 100 kV or with capacity less than 75 MVA, and thus do not meet the minimum size criteria under the BES definition. FERC noted that it issued the order because reports demonstrate the potential for IBRs, in the aggregate, to have a material impact on the reliable operation of the BPS. FERC’s regulations require each user, owner, and operator of the BPS to be registered with NERC and to comply with its Reliability Standards. FERC noted that the work plan must detail how NERC plans to identify and register owners and operators that are not currently required to register with NERC under the BES definition but are connected to the BPS.

In the second proceeding, in Docket No. RM22-12, FERC issued a NOPR to direct NERC to develop Reliability Standards for IBRs covering data sharing, model validation, planning and operational studies, and performance requirements. FERC additionally proposed to direct NERC to submit a compliance filing within 90 days of the final rule’s effective date containing its plan, which must include a detailed, comprehensive standards development and implementation plan to ensure all new or modified Reliability Standards identified in the final rule are submitted to FERC within 36 months of approval of the plan. FERC noted that while IBRs provide many benefits, they also raise new considerations for transmission planning and operation of the BPS. Initial comments on the NOPR are due 60 days after the date of publication in the Federal Register, and reply comments are due 90 days thereafter.

In the last proceeding, in Docket No. RD22-5, FERC issued an order in response to a petition filed by NERC on June 14, 2022, in which NERC sought to revise FAC Reliability Standards FAC-001-4 (Facility Interconnection Requirements) and FAC-002-4 (Facility Interconnection Studies). In its petition, NERC requested that FERC approve the associated violation risk factors and violation severity levels of the proposed implementation plan and the retirement of the currently effective versions of the FAC Reliability Standards. FERC approved NERC’s proposed revisions, noting that they improve on the current FAC Reliability Standards. FERC also found that the proposed Reliability Standard FAC-002-4 Requirement R6 will avoid potential disputes over changes to facilities by authorizing the planning coordinator to define the term “qualified change” and requiring the public posting of the definition. Furthermore, FERC approved the proposed implementation plan on the basis that it provides a reasonable period for entities to comply with the new requirements. FERC additionally approved NERC’s proposed clarifying revisions to the existing violation risk factor and violation severity level assignments for these FAC Reliability Standards.

You can find a copy of the above-referenced orders here: Docket No. RD22-4, Docket No. RM22-12, and Docket No. RD22-5.

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