FERC accepts rule changes for regional Elective Transmission Upgrades

New mechanisms for ETUs now in effect

On April 14, 2015, the Federal Energy Regulatory Commission accepted proposed changes to rules related to Elective Transmission Upgrades (ETUs)—merchant-funded transmission interconnections in New England.

ISO New England, the New England Power Pool (NEPOOL) Participants Committee, and the Participating Transmission Owners Administrative Committee jointly filed the proposed changes on February 13 (see filing part one and part two). The revisions are intended to both:

About ETUs

In New England, transmission lines that are voluntarily funded by project parties are defined as Elective Transmission Upgrades. This is in contrast to regulated transmission solutions deemed essential for maintaining power system reliability. Costs for the latter are shared by consumers across the region. Read more.

  • Improve the process for evaluating the interconnection of ETUs
  • Incorporate ETUs into the Forward Capacity Market

Improving the process: ending proposal “freefall”

Stakeholders submit ETU interconnection requests (formerly called ETU applications) for various reasons, such as:

  • Upgrades to better integrate generation inside the New England system
  • Interconnecting new transmission lines with neighboring control areas to import electricity

The ISO adds these proposals, along with proposals from generators seeking interconnection, to the ISO Interconnection Queue (the Queue).

All proposals are assigned a Queue position at the time of their application, which is used to determine the order of performing the interconnection studies and the cost responsibility for the facilities necessary to accommodate the interconnection request.

Under previous rules, generator projects, with their more rigorous interconnection requirements and firm timelines for different stages of study, could displace ETUs, sending ETU Queue positions into “free-fall.” These shifting Queue positions resulted in study uncertainties, project delays, re-studies, and added costs.

To enable ETUs to establish and hold a meaningful Queue position, a new schedule was added to the Open Access Transmission Tariff (OATT). Schedule 25, Elective Transmission Upgrade Interconnection Procedures, sets forth new requirements and obligations for ETUs that are similar to those of generating facilities.

Improving FCM participation

The ETU rule changes create new mechanisms for ETUs to facilitate resource participation in the Forward Capacity Market (FCM) as follows:

  • Internal ETUs (those within the region) can partner with an internal generating facility to help the generating facility qualify as a capacity resource in the FCM
  • External ETUs (those outside of the region) can partner with an import capacity resource so that the external ETU can achieve interconnection service to delivery capacity into the region

ETUs will also now be incorporated in the FCM network model, which is used for the FCM qualification process and the calculation of transmission interface limits.

Effective date

The ETU rule changes received unanimous support in the NEPOOL stakeholder process. Many stakeholders requested that the revised rules be in place when the show of interest window for the tenth Forward Capacity Auction (FCA #10) for the Capacity Commitment Period 2019/2020 opened on February 17, 2015. Accordingly, an effective date of February 16, 2015, was requested, and the ISO began implementing the rules as of that date.

Industry News & Developments
FERC, forward capacity market, transmission planning