Midwest states urged to update grid access rules ahead of growth

Source: Jeffrey Tomich, E&E reporter • Posted: Tuesday, October 18, 2016

When Xcel Energy Inc. began accepting applications for community solar projects in December 2014, the utility and virtually everyone else who worked with regulators to develop rules for the program were stunned by the magnitude of the response.

Within weeks, Minneapolis-based Xcel received requests totaling hundreds of megawatts of shared solar capacity. To date, more than 1,000 applications pending represent more than 1 gigawatt of capacity.

The backlog that accompanied the community solar boom in Xcel’s service area — the product of a 2013 law — not only led to frustration and anger among developers, it served as a cautionary tale for regulators, utilities and solar developers in other states.

While other Midwest states might not see such sudden and dramatic growth, solar advocates believe it’s a matter of when, not if, those markets take off. And when that happens, they want states to have the tools to smoothly handle the increase in projects wanting grid access and not repeat the Minnesota experience.

“That’s exactly the type of situation we’re trying to avoid,” said Brad Klein, a senior attorney with the Environmental Law & Policy Center, a Midwest clean energy advocacy group.

The Chicago-based ELPC and the Interstate Renewable Energy Council have worked in a few Midwest states to update so-called interconnection standards — one of several policy initiatives to encourage growth in distributed generation.

Just last week, an Illinois legislative committee signed off on new standards established last fall by the Illinois Commerce Commission. In doing so, Illinois joined Ohio as the only Midwest states to adopt up-to-date interconnection standards.

Working with the Chicago-based Citizens Utility Board, a consumer advocacy group, ELPC and IREC set out two years ago to update the interconnection rules in Illinois, and attorneys for the groups said they hope their work can be helpful elsewhere across the region.

In an era when regulations are struggling to keep pace with technology, the work in Illinois is viewed as significant because it was done proactively.

“We’re just trying to lay the groundwork for future market growth in Illinois,” Klein said. “We had the advantage here of being able to work on this before we saw an inflection point.”

Keeping up with the times

Interconnection standards lay out the process and a set of rules for a customer or solar developer that wants to connect a solar project or other distributed energy resource to a utility’s grid.

Many Midwest states adopted interconnection standards a decade ago. But much has changed, including a dramatic reduction in solar costs and the Federal Energy Regulatory Commission’s publication of small generator interconnection procedures in 2013.

The rules, which have been updated a couple of times since then, represent a model for states to help make interconnection of solar and other distributed generation up to 20 MW as efficient and transparent as possible.

The FERC rules helped lay the groundwork for Illinois and have been proposed as a basis for new rules in Minnesota (EnergyWire, May 16).

Among key elements in the updated Illinois standards is a pre-application report — a tool for distributed generation applicants to get information from the utility about conditions on the grid at a specific site, said Sky Stanfield, a San Francisco attorney representing IREC, a nonprofit that works to encourage renewable energy growth.

The pre-report process, generally intended for larger distributed energy projects, promotes transparency and is meant to eliminate a “black box” interconnection queue where developers are blindly submitting speculative applications.

Another key provision for interconnection standards is a supplemental review process for projects that don’t pass a set of initial technical screens.

Without supplemental review, developers of projects that fail the initial screening can be required to conduct a full grid-impact study at a cost of $10,000 to $20,000.

“That can be a deal-breaker,” Stanfield said.

Stanfield and Klein said Illinois and other states working on updates to interconnections standards like Minnesota and Iowa can benefit from FERC’s rules and work already done in states with high solar penetration, like California and Massachusetts.

“These are extremely well-tested rules by this point,” Stanfield said.

Leaning on FERC’s rules and the work of leading states also promotes consistency in interconnection procedures across state lines. That’s important not only for regional and national solar developers, but also for utilities that operate in multiple states, she said.

And having regional and national consistency in interconnection standards also makes it simpler to update them in the future.

“It’s easier to plug them into your standards if they’re similar,” Stanfield said.