The Federal Energy Regulatory Commission on March 21 proposed to remove the requirement that a transmission provider pay an interconnection customer for reactive power within the standard power factor range.
In a notice of proposed rulemaking, it also proposes to prohibit transmission providers from charging customers associated with the supply of reactive power within that standards power factor range.
Different transmission providers, including the various regional transmission organizations, have different mechanisms for paying resources to provide reactive power capability. Some transmission providers do not pay for reactive power capability at all.
Where transmission providers choose to pay resources for reactive power capability, they are generally required to do so on a comparable basis and payments should be cost-based.
In a series of orders, beginning in 2003, FERC imposed a requirement that interconnection customers must maintain a power factor within the 0.95 leading to 0.95 lagging range (or any other standard range established by the transmission provider).
Since resources are already obligated to maintain a power factor within the standard band, FERC proposes to find that separately charging for reactive power provided within that standard band is unjust and unreasonable.
FERC is seeking comment on the reliability impacts of the proposal, whether the proposal will affect generating facilities' ability to recover their costs, how it may affect investment decisions, and on the compliance time frame.
