United States: Complaint Asserts PJM Impermissibly Revised Generation Site Control Requirements

On May 22, 2018, GlidePath Power Solutions LLC ("GlidePath") filed a complaint with FERC under sections 206 and 306 of the Federal Power Act alleging that PJM Interconnection, L.L.C. ("PJM") improperly rejected GlidePath's interconnection request for a proposed battery storage facility (the "Project").  GlidePath alleged that PJM relied on an impermissible interpretation of its generator interconnection rules, which require demonstration of site control, to unjustly deny interconnection service for the Project, resulting in cancellation of the Project's interconnection request.  In its complaint, GlidePath requested that FERC find that PJM unjustly, unreasonably, and incorrectly applied its rules regarding site control, and that PJM must restore the queue position held by the Project. 

On March 15, 2018, GlidePath filed an interconnection request with PJM.  On March 21, 2018, PJM informed GlidePath that its request was deficient because it did not conform to PJM's site control requirement under its generation interconnection rules, and, on March 22, 2018, assigned the Project a tentative queue position in one of its queue windows.  PJM terminated GlidePath's interconnection request on April 3, 2018, after PJM and GlidePath could not reach an acceptable resolution of their dispute.

GlidePath states in its complaint that PJM includes several threshold criteria to establish a valid interconnection request, among which is the requirement that the customer demonstrate that it has control over the site where a project is to be located.  Under PJM's Open Access Transmission Tariff (the "Tariff"), a customer can satisfy this requirement by demonstrating that it either owns or leases, or has the right to acquire or control, the site for at least three years, as evidenced through a deed, option agreement, lease, or similar arrangement.  GlidePath contends that PJM has accepted option agreements in the past, which grants the applicant an exclusive option to purchase the site for a sufficient time period, as evidence of meeting these site control requirements.  Furthermore, according to GlidePath, based on PJM's past practice and interpretation of its interconnection rules, an option agreement could consist of renewable, one year options so long as: (1) renewal was at the exclusive option of the applicant, and the owner of the site had no approval, consent, or similar rights; and (2) the overall time period covered by the option agreement, including renewals, lasted for the requisite time period.

In its complaint, GlidePath noted that it negotiated a Renewable Option Agreement that included the exclusive right to purchase the site on which the Project was to be developed through March 31, 2021, more than three years from the date of its interconnection request.  However, GlidePath argued that PJM reinterpreted its site control requirements for the first time to not allow renewable option contracts.  GlidePath further alleges that this revised interpretation of PJM's site control requirements has not been accepted by FERC.  As result, GlidePath's complaint claims PJM discriminated against the Project by holding it to a different standard than other past and present interconnection customers.

GlidePath also argues in its complaint that since PJM has made a material change to its Tariff by adopting a revised interpretation of the site control requirements, it must seek FERC approval before forcing its customers to abide by its revised interpretation.  GlidePath also states that PJM has suggested that it would require an order from FERC to undo its decision to remove the Project from its queue.

GlidePath has requested fast track processing of its complaint, and requests that FERC promptly reach a decision on the merits, based on the written record alone.  GlidePath requests that FERC direct PJM to reinstate GlidePath's interconnection request and queue position.

A copy of the complaint can be found here.  It has been assigned to FERC Docket Number EL18-153.  Interventions, protests, and comments are due on or before June 21, 2018.

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