Transmission Access and Interconnection--Essential Ingredients to Successful Integration of Geothermal Energy

Abstract

Interconnection and access to reliable interstate transmission capacity are essential elements of a successful geothermal project. Despite the critical role the grid will play in the U.S.’s energy future, the promotion and siting of interstate transmission facilities has historically been left largely to the discretion of individual states: a legacy of an industry built on the basis of vertically-integrated utilities and primary responsibility to the native load customer. Climate change/green power initiatives and increased emphasis on sustainable domestic energy resources are placing new demands on our electric grid, straining a resource whose adequacy is already questionable. In 2009, the federal government has taken a two steps forward and one step back approach to avoiding the electric form of gridlock, while there continues to be a lack of consensus among the states as to what role the federal government should play with respect to electric transmission. This paper, and the complementary PowerPoint presentation led by an attorney with over 25 years of experience in the area of alternative power generation, covers recent developments affecting access to and interconnecting with transmission facilities and their implications for the geothermal industry. More specifically, the presentation will cover the aspects of the Obama administration’s stimulus package (a.k.a. the American Recovery and Reinvestment Act of 2009)1 devoted to funding the “Smart Grid”; a February 2009 Circuit Court ruling seriously circumscribing Federal Energy Regulatory Commission (“FERC”) transmission siting backstop authority under the Federal Power Act as amended by the Energy Policy Act of 20052 (“EPAct05”); and current efforts to pass federal legislation specifically designed to increase the federal role in transmission facility siting. Time permitting, the presentation also will highlight the FERC’s attempts, through Order 890,3 to strengthen open-access transmission by preventing undue discrimination, enhance enforcement, increase transparency in planning and use of the transmission system. With respect to interconnection, the presentation will cover key points raised by FERC Order 2003 and its progeny, such as defining the capacity of Large Generator Interconnection, jurisdiction issues, pricing and generator responsibility over expenses. The presentation will provide an overview of the various phases of the Process (“LGIP”) including queue position, clustering, losing and maintaining queue priority in the initiation process. There will also be discussion regarding the LGIP study and agreement phases, and important Large Generator Initiation Agreement provisions.