On January 21, 2010, FERC issued a Notice of Inquiry (“NOI”) seeking comments on existing barriers to integrating variable energy resources (“VERs”) into the electric grid and whether reforms are needed to remove those barriers.  FERC will use the comments to determine whether changes to wholesale electricity tariffs are necessary to ensure they are “just, reasonable and not unduly discriminatory.” VERs are renewable energy resources, including wind and solar generation facilities and some hydroelectric resources that are characterized by variability in the fuel source that is beyond the control of the facility’s operator.  Recent expansion of renewable energy technology prompted FERC to look at the benefits and challenges that these new resources represent for existing regulatory policies.  FERC identified two key difficulties with integrating VERs into the electric grid: location constraints and limited dispatchability.

FERC has attempted to prevent undue discrimination against VERs by updating its pro forma Open Access Transmission Tariff to accommodate interconnection of wind generation and also reducing the amount of generation imbalance penalties for intermittent generators.  Despite these efforts, FERC noted that revisions to wholesale electric tariffs may be necessary to ensure that rates are just and reasonable and that no particular type of customer or resource suffers undue discrimination.  FERC also said that any reforms must be consistent with North American Electric Reliability Corp. Reliability Standards.

The NOI requested comments in the following specific subject areas:

(1) Data and reporting requirements, including forecasting tools
(2) Scheduling practices, flexibility and incentives for accurate scheduling of VERs
(3) Forward market structure and reliability commitment processes
(4) Balancing authority area coordination and/or consolidation
(5) Suitability of reserve products and reforms necessary to encourage efficient use of  reserve products
(6) Capacity market reforms
(7) Redispatch and curtailment practices necessary to accommodate VERs in real time

A copy of FERC’s NOI is available at www.ferc.gov under Docket No. RM10-11-000.