Dive Brief:
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Federal and state utility regulators on Friday explored options for reducing the nationwide interconnection queue backlog, with general consensus that studying interconnection requests in clusters could help speed the process.
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There was less agreement on how interconnection costs should be paid for, with some regulators arguing that generators should pay for most of the costs, according to comments at the third meeting of the Federal Energy Regulatory Commission and National Association of Regulatory Utility Commissioners transmission task force.
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FERC Chairman Richard Glick said the comments at the meeting could feed into what he hopes is an upcoming commission proposal. “Interconnection reform is something that I'm very much hoping the commission, FERC gets to relatively quickly,” Glick said. “We need to do a lot of work to get things moving along more quickly.”
Dive Insight:
There are about 1,400 GW of proposals, mainly solar, energy storage and wind, sitting in interconnection queues across the U.S., according to a report released last month by the Lawrence Berkeley National Laboratory.
Not only have queues grown larger, it takes longer for transmission providers – 3.7 years on average in the last decade – to complete interconnection studies, which are needed to determine if grid upgrades are required to bring the proposed projects online, according to the report.
The process is a "quagmire" that state regulators deal with daily, said Maryland Public Service Commission Chairman Jason Stanek, a task force co-chair.
“The urgency of this problem is taking the same upward trajectory as shown on a natural gas price chart,” Arkansas Public Service Commission Chairman Ted Thomas said. “This urgency is up about 30% in the last three weeks. It is urgent that consumers have alternatives to natural gas-fired generation at these price levels.”
Studying interconnection requests in clusters instead of on a project-by-project basis may be a best practice that could streamline the process, according to FERC Commissioner Willie Phillips.
However, grouping interconnection requests into clusters, a practice that some transmission providers already use, isn’t a panacea and must be accompanied with other reforms, California Public Utilities Commission Commissioner Clifford Rechtschaffen said, noting that the state's grid operator conducts cluster studies.
Those reforms could include tighter requirements for transmission providers to meet their deadlines when conducting interconnection studies.
FERC may need to consider changing its requirement that transmission providers make “reasonable efforts” to meet those deadlines, according to agency Commissioner Allison Clements.
Transmission customers have little recourse under that standard when deadlines are missed, Clements said. Options include imposing penalties for missed deadlines, providing incentives for transmission providers to hire more people to manage the interconnection queues and reporting requirements, according to Clements.
FERC’s role on interconnection reform may be limited to providing guidance on the issue, Michigan Public Service Commission Chair Dan Scripps said. However, FERC may need to set more specific requirements for cross-regional transmission organization studies, such as “affected system” studies, which are a growing source of delays, according to Scripps.
Based on comments at the meeting, there is general consensus that FERC needs to change the queue process, but the bigger problem is that much transmission planning is effectively occurring through the process, Glick said.
The interconnection backlog is a symptom of inadequate long-range transmission planning, according to Kansas Corporation Commission Commissioner Andrew French. Even so, interconnection reform may be a needed interim step in addressing the overall problem, he said.
The task force explored options for how network upgrades should be paid for, ranging from generators paying all the costs to electricity customers paying for the expenses as well as a subscription model under which generators would sign up for capacity on proposed grid upgrades.
Regulators like FERC Commissioner Mark Christie, Pennsylvania Public Utility Commission Chair Gladys Brown Dutrieuille, and North Carolina Utilities Commission Commissioner Kimberly Duffley generally supported requiring generators to pay for network upgrades.
That practice ensures that customers don’t pay for “speculative” benefits from the upgrades and that the risk for the upgrades remains with the generators, not ratepayers, Brown Dutrieuille said.
Glick, however, noted that federal courts have directed FERC to ensure that transmission costs are roughly paid for by who benefits from them.
Cost-sharing may lead to more efficient transmission planning, which could be more cost-effective for consumers, according to Phillips. However, getting rid of participant funding completely doesn’t seem to make sense, he said.
There is growing evidence that high-voltage transmission projects provide regional benefits, which may make cost-sharing appropriate in those cases, according to French.
State regulators noted that transmission providers have been working on interconnection reform issues and they urged FERC not to take steps that would set back those efforts.
“Regional flexibility remains important, but so does a minimum national baseline,” Stanek said.
