FERC Issues Order Closing Loophole In CAISO Generator Interconnection Process

On November 24, 2015, FERC issued an order accepting proposed CAISO tariff revisions, closing what has been described by CAISO as a loophole in CAISO's generator interconnection process. CAISO proposed the corrective tariff revisions to prevent interconnection customers from taking advantage of CAISO's annual opportunity to decrease the size of queued projects. CAISO expressed concern that queued projects were using this "downsizing" process for the sole purpose of reducing the amount of financial security that an interconnection customer could be required to forfeit upon withdrawal from CAISO's interconnection queue.

The potential issue arose as a result of two prior tariff amendments. The first, adopted in 2008, required CAISO's interconnection customers to post additional financial security for network upgrades, which would be non-refundable unless the customer met one of several criteria. If the customer met one of these criteria, then the customer would be