FERC Eliminates Reactive Power Exemption For Wind Generators

 On June 17, 2016, the Federal Energy Regulatory Commission ("FERC" or the "Commission") issued a final rule ("Order No. 827") eliminating exemptions for wind generators (and an option for solar generators to elect certain exemptions) from the requirement to provide reactive power. Unlike real power, which transfers net energy to the grid for use by consumers, reactive power is used for grid reliability, supporting voltages used for grid stability.

FERC requires that power generators design their systems to provide adequate amounts of reactive power to the transmission system to which they are interconnecting in order to maintain grid stability. Prior to the entry of Order No. 827, however, wind generators were exempted from the reactive power requirement, which required an interconnecting generator to design its generating facilities to have a reactive power capability of 0.95 leading to 0.95 lagging. This reactive power band essentially represents the range of