FERC Reveals Interconnection Reforms That Could Unleash Solar Energy Potential

WASHINGTON, D.C. — Today, the Federal Energy Regulatory Commission (FERC) issued a notice of proposed rulemaking (NOPR) detailing the proposed interconnection reforms the Commission would like to adopt in order to clear interconnection backlogs and speed clean energy deployment.

The proposed rules closely follow joint recommendations that the Solar Energy Industries Association (SEIA) and its partners submitted in February 2022 on interconnection reform. SEIA recently explained and expanded on these comments in an interconnection whitepaper it released earlier this week.

• FERC revealed a number of meaningful proposals, including:
• Firm deadlines for utilities conducting interconnection studies;
• New interconnection study processes that will simultaneously study the impact of a number of projects trying to connect to the grid, also known as a standard cluster study;
• Studies based on actual operating conditions for renewable energy generators; and
• Transparent and standard affected systems study processes.

Following is a statement from Ben Norris, senior director of regulatory affairs at SEIA on the development:

“We are excited to see the Federal Energy Regulatory Commission (FERC) take bold action to clear interconnection queues across the country, which have swelled to more than a terawatt of generation and storage projects. SEIA has long advocated for changes to the interconnection process, and we are pleased to see that FERC followed many of SEIA’s recommendations.

“Interconnection challenges have been simmering below the surface for years and remain one of the biggest impediments to meeting our state and federal clean energy goals today. We commend FERC for putting this issue front and center and taking action before it’s too late.

“The most significant part of these reforms is the built-in accountability for utilities. For years, utilities have been dragging their feet on interconnection, and this rulemaking would implement deadlines for completing interconnection studies and create penalties for utility inaction. This will add more predictability and transparency to the process, and greatly speed review times. We also believe that the cluster studies, affected system study changes, and a more realistic look at operating conditions for renewable energy generators will significantly improve the interconnection process.

“All of these proposed reforms are a significant step forward and will help to greatly improve efficiency and reduce application withdrawals. They will also help to reduce overall project costs and keep lowering the costs of affordable clean energy.

“We look forward to supporting these recommendations and continuing to work with FERC on the many opportunities they have to improve both distribution and transmission level interconnection.”

Press release courtesy of SEIA.

Earlier in the week, the whitepaper news release:

WASHINGTON, D.C. — Thursday, June 16, the Solar Energy Industries Association (SEIA) released a whitepaper detailing the extensive interconnection reforms needed to rapidly decarbonize the electricity grid. Across the country state and federal leaders are doubling down on their clean energy goals, but distribution utilities and regional transmission organizations (RTOs) are struggling to keep up with overflowing interconnection queues.

The new whitepaper, Lessons from the Front Line: Principles and Recommendations for Large-scale and Distributed Energy Interconnection Reforms, discusses the various opportunities utilities and regulators have to standardize, automate, and clarify interconnection procedures and policies.

“If we don’t make major strides on interconnection reforms in the next few years, it will be impossible to achieve our more aggressive state and national clean energy goals,” said Sean Gallagher, vice president of state and regulatory affairs at SEIA. “Improving project interconnection must become an urgent priority for the Federal Energy Regulatory Commission, distribution utilities, and state commissions if we want to build an equitable clean energy economy this decade.”

Decarbonizing the electric grid requires extensive reforms to #interconnection policies.

A new SEIA whitepaper outlines ways to improve interconnection procedures and keep up with the overflow of projects in the queue: https://t.co/SIrfxzs7yy pic.twitter.com/KP6kGZOd1d

— Solar Industry (@SEIA) June 15, 2022

The key to avoiding interconnection logjams is providing companies with more information about transmission and distribution grid operations. The policies must also build in accountability and consequences for utility inaction. New cost-sharing models for transmission and distribution system upgrades will make it easier to connect projects to the grid and reduce overall project costs.

Creating a central database for interconnection upgrade costs will help project developers make more informed decisions when considering an interconnection application submission. Better transparency will clarify utility overhead costs and create downward pricing pressure on monopolistic utilities that do not currently have any incentives or requirements to disclose pricing information.

“Transparency is the most important part of interconnection reform,” said David Gahl, executive director of the Solar and Storage Industries Institute (SI2) and SEIA’s former senior director of state policy, East. “Companies are left in the dark when it comes to grid planning and how much infrastructure upgrades might cost, increasing the likelihood that interconnection applications will be withdrawn. This whitepaper lays out the many ways lawmakers and regulators can eliminate this guessing game and put us on a path to reaching the president’s climate goals.”

Utilities and RTOs should standardize queue management processes and focus on hiring more staff members with dedicated expertise, the whitepaper says. Web-based portals that enable online application submissions and rapid information exchanges will also help to streamline the interconnection process. In addition, utilities and RTOs should automate as much of the processes as possible to reduce delays and speed the time it takes to process and study applications.

In the long term, the whitepaper says regulators should consider more systemic changes for RTOs and utilities like flexible interconnection agreements. These agreements, already in place in Europe, can be used to connect the resource to the grid without major infrastructure costs.

SEIA’s regulatory affairs experts have been engaging with the Federal Energy Regulatory Commission (FERC) on its transmission and interconnection dockets, and recently submitted recommendations to FERC’s Joint Federal-State Task Force on Electric Transmission. On June 16, FERC is expected to publish a proposed rule that will cover many of the same topics raised in this whitepaper.

Featured image from related story: 5 Grid Plans To Cut Fossil Fuel Dependence.

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