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FERC prohibits payments for “deadband” reactive power and four other outstanding meeting results

FERC prohibits payments for “deadband” reactive power and four other outstanding meeting results

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Against resistance from power producers, the Federal Energy Regulatory Commission issued a rule on Thursday that prohibits payments to power plant owners Reactive power within the standard power factor range.

“This reform will ensure that transmission providers do not pass on unwarranted and unreasonable charges to transmission customers that lack a sufficient economic basis or justification and that do not provide a commensurate benefit to the ratepayer,” FERC said.

This results in interconnection customers only being paid for reactive power when the transmission provider requests or instructs the interconnection customer to operate its system outside the “dead zone area” specified in its interconnection contract. FERC said in the final rule.

Generating facilities must either generate or absorb reactive power for the transmission system to maintain required voltage levels, FERC said in its rule, which is scheduled to take effect 60 days after its issuance Federal Register. RReactive power provided outside the dead band region – within 0.95, resulting in a delay of 0.95 – is considered auxiliary service, according to FERC.

“Ultimately, this is about affordability, and we are doing everything we can to improve prices for consumers,” FERC Chairman Willie Phillips said during the commission’s monthly meeting Thursday.

“I am proud to vote on this order because it allows us to take a special step forward in reducing tax rates that are not adequately justified to taxpayers,” said FERC Commissioner Lindsay See.

According to FERC, only PJM Interconnection, ISO New England and the New York Independent System Operator pay generators for reactive power within their dead zone areas.

According to PJM’s market monitor, the grid operator paid generators $388 million for reactive power capability in 2023, and NYISO and ISO-NE paid $75 million and $18 million, respectively, according to FERC.

Opponents of FERC’s proposal to ban payments for reactive power within a generator’s dead zone included the American Council on Renewable Energy, the Solar Energy Industries Association, the American Clean Power Association, the North American Generator Forum and Public Service Enterprise companies Group. NYISO and ISO-NE also rejected the proposal. In part, they said FERC incorrectly claimed that providing reactive power had minimal costs.

Proponents of the FERC rule included PJM, ratepayer advocates in New England and the PJM area, and American Electric Power.

For example, in comments on the proposed rule, AEP said the rule could result in cost savings for customers and reduce the burdens associated with “resource- and time-intensive reactive power tariffing procedures for individual generating facilities.”

Here are four other takeaways from the meeting.

Phillips is “optimistic” about the prospects for nuclear energy. “I’m very optimistic and very excited about the interest in nuclear energy across the country,” Phillips said during a media briefing in response to a question about it Amazon And Google support small modular reactors for their data centers. “I believe there is also great hope and optimism when it comes to small modular nuclear power plants.”

Phillips said he supports an “all of the above” energy strategy. “I have always said that we must have every tool at our disposal on the table to meet the urgent demands of utilization and increasing demand. This is a good development.”

FERC rejects challenges to its backstop location rule. FERC affirmed its May decision Changing its rules for applications for building permits Electricity transmission facilities in corridors of national interest in cases where states do not make an application decision within a year. In its decision, the agency rejected arguments from Earthjustice and other environmental groups, as well as energy regulators from Louisiana, New York and Pennsylvania.

FERC said, among other things, that permit applicants must demonstrate that they have made good faith efforts to communicate with stakeholders. However, in its decision, FERC said permit applicants must work with tribes and individual Indian landowners if their projects require rights of way on lands held in trust or restricted status.