NextEra Energy, Invenergy and other renewable energy developers say they generally support the Federal Energy Regulatory Commission’s plan to reform the grid interconnection process, but they contend the agency’s proposal needs changes to make it effective, according to comments they made at the agency last week.
The companies and clean energy trade groups said they agree with FERC that there is a massive backlog of projects waiting to move through grid operator and transmission provider interconnection study queues and that reforms are needed.
However, some elements of FERC’s notice of proposed rulemaking, such as “commercial readiness” requirements designed to weed out speculative projects, are flawed, they said.
The notice of proposed rulemaking “is a mixed bag of proposals of differing value that collectively fall short of remedying the significant issues currently facing renewable generation developers seeking grid interconnections,” NextEra said in comments filed Oct. 13 at FERC.
While NextEra supports parts of the proposal, like easing requirements for projects that combine energy storage with generation, the company said it opposes other provisions, such as “misguided” commercial readiness requirements for entering interconnection queues.
Commercial readiness requirements may be appropriate later in the interconnection process, according to NextEra, but they may stymie viable projects if they are needed to begin the review process.
“Most projects are not commercially viable until after interconnection costs are known, which is impossible to predict in advance,” NextEra said. “Being part of the queue is an essential step in the competitive process and precluding entry into the queue would be an anti-competitive measure that would favor entities such as vertically integrated utilities that could squeeze their own projects through ahead of others on the basis that their projects are commercially ready.”
A group of Invenergy companies echoed NextEra’s concerns. Needing a power purchase agreement or term sheet as ways to show a project is commercially viable may not be possible for independent developers, they said, noting that information about an interconnection’s cost and timing that are critical to negotiations with an off-taker is only available late in the study process.
“Readiness criteria, if any, should be applicable evenly to all types of developers, utility and independent developers alike,” Invenergy said in its comments.
Instead of adopting the proposed commercial readiness requirements, FERC should order interconnection customers to post “readiness” deposits that are increasingly at risk as a project moves further through the interconnection study process, according to the American Clean Power Association.
“More directly associating readiness deposits to the estimated costs and likely impact to other interconnection customers should a project withdraw would provide greater accountability for interconnection customers and for transmission providers,” the trade group said in its comments.
While panning FERC’s proposed commercial readiness requirements, Advanced Energy Economy urged the agency to make corresponding reforms to long-term regional transmission planning and cost allocation.
“Without a planning process that enables more robust buildout of transmission infrastructure and that accounts for transmission needs driven by interconnection queues, the interconnection process will continue to be bogged down by its de-facto role as a transmission planning process of last resort,” the trade group said.
FERC should “converge” its transmission planning and interconnection reform efforts with inter-regional transmission planning, according to Pattern Energy Group.
“A converged and more integrated planning construct will move the industry to achieve processes resulting in more efficient and cost-effective transmission planning and generator interconnection,” the company said.
Cypress Creek Renewables urged FERC to set a cost threshold so interconnection requests with high costs can be assigned to future near-term transmission planning processes.
“Transmission providers could consider pooling cluster study results that reach or exceed this threshold, in order to look for portfolio-based, cost-effective solutions,” Cypress Creek said.
