UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION
Reactive Power Capability Compensation } Docket No. RM22-2-000
COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION
The Electric Power Supply Association (EPSA) submitted comments in response to the Notice of Inquiry (NOI) issued on November 18, 2021 by the Federal Energy Regulatory Commission (FERC) in Docket No. RM22-2-000 with respect to reactive power compensation and market design.
As explained in more detail in the comments and in accompanying affidavit of Adrian J. Kimbrough, the AEP methodology has been used for over twenty years to determine just and reasonable rates for reactive power. Notwithstanding the questions and concerns raised in the NOI, the AEP methodology, as clarified and modified by more recent Commission orders, can be applied to a variety of types of resources and remains an efficient and fair methodology that should continue to be used to determine the costs of producing reactive power.
At the same time, EPSA has been concerned about the significant burden imposed on resource owners in numerous recent cases where reactive power rate filings have been set for hearing and settlement judge procedures, even when no protests have been filed or when the filing complies with Commission precedent. Accordingly, EPSA urges the Commission to provide additional guidance that will help resource owners compile their rate filings and streamline the Commission’s review of such filings. In addition, the Commission should re-examine its policies and, consistent with the statutory scheme of, and the Commission’s ratemaking obligations under, the Federal Power Act, ensure that all resource owners have the ability to seek reactive power compensation.