As we previously reported, FERC hosted a workshop December 11 on filing reactive power rate schedules for which there is no compensation. The clear message to FERC from the industry panelists was: "Slow down the train, there are a wide variety of issues yet to be considered."

The bone of contention between the utilities and independent power producers appeared to be the issue of compensation, with the IPPs saying that they're providing a service so they should be paid, and the utilities wanting to maintain the status quo (i.e., zero compensation). The Edison Electric Institute's panelist argued that the best approach would be for FERC to grant a waiver of the filing requirement or some other "no filing" solution.

It was interesting to note that some of the FERC staff were taken aback upon hearing from the panelists that filing etariffs cost money (one of the suggestions for a reactive power filing). Several panelists stepped in to clarify that costs are actually involved (attorney time, along with the software to create xmls).
 
Some other issues raised at the workshop include:

• Is there value to the provision of reactive power, and if so, is the value the same for all grid operators?
• The provision of reactive power could be in any number of agreements - the interconnection agreement, a tolling agreement, a power purchase agreement. So who's responsible for filing - the utility or the generator? What do they file - the agreement (through eTariff)? Electric Quarterly Reports? Both?
• If the generator is the provider to a third party, is it a wholesale or retail sale?
• Should existing agreements be grandfathered? If so, what about new generation that may be added to an existing agreement?
• What about QFs that are either under 20 MW or selling only pursuant to PURPA and therefore don't file EQRs or etariffs? Would they be required to file?
• What about non-jurisdictional entities and distributed generation? Would they be required to file?
• What if the reactive power is provided as part of a black-box settlement, and new generation is added?
• Is there a difference if the generator is interconnected to an RTO or a non-RTO?
• Reactive power is also addressed as part of the NERC reliability standards, how is that consideration included in the filing requirement?

FERC intends to ask for written comments, which tentatively will be due January 24, 2014.