Stakeholders are split on whether FERC should adopt more changes to its generator interconnection rules or focus on implementing Order 2023 while letting specific regions go further on their own (AD24-9).
After issuing the order in July 2023 and working on grid operators’ compliance filings for nearly a year, FERC held a technical conference in September looking into how to further speed up processing the country’s interconnection queues, which according to Lawrence Berkeley National Laboratory include about 11,600 projects totaling 2,600 GW. (See FERC Workshop Examines How to Speed up Interconnection Queues.)
In post-conference comments, submitted last week ahead of a Nov. 14 deadline, a group of “public interest organizations” — including the Natural Resources Defense Council, Sierra Club, Southern Environmental Law Center and Sustainable FERC Project — urged FERC to ensure that Order 2023 is fully implemented and to focus on future reforms that complement it.
“Transmission providers’ obstinate, superficial compliance filings and continued litigation against Order No. 2023 underscore the need for the commission to only entertain proposals that would build on — rather than detract from — the reforms of Order No. 2023,” they said.
They argued FERC should make improvements to surplus interconnection service and energy resource interconnection service (ERIS), which allow new resources to connect to the grid with fewer guarantees for delivery when the system is constrained. The services are not evenly implemented in organized markets, they said, and in some cases, ERIS interconnection costs can exceed network resource interconnection service (NRIS), which is intended to guarantee firmer connectivity.
“The commission should reject proposals that run counter to open access by allowing new interconnection requests to queue jump: passing on additional uncertainty, delays and unfavorable cost allocations to interconnection customers that have already struggled to maintain viability in extensive queue backlogs and now rely on the Order No. 2023 cluster process,” the groups said.
Advanced Energy United, the American Clean Power Association and the Solar Energy Industries Association did not warn FERC away from queue jumping entirely, but they cautioned against making that change permanent. Such Band-Aid approaches should be sunset by the end of the decade, they argued.
“Queue caps and prioritization processes may make models solvable but are likely to prove challenging to design and implement without undermining open-access principles,” the clean energy trade groups said. “Further, inequitable and inconsistent stopgap measures may limit development and ultimately harm reliability. The commission must not lose track of the fact that open access is good for consumers; it reduces costs and drives innovation. This is equally, if not more, true in times of rapid change — like today — as in times of relative stability.”
The high number of projects is logical and necessary to ensure healthy competition to serve new load, but high queue volumes were cited by other parties as the main problem that needed to be solved with caps and prioritization, the groups said. High project volumes are an issue only if they are a result of a faulty process.
“A Band-Aid can be a stopgap solution — but if surgery is what’s needed, it should be prepped for, scheduled and performed as soon as possible, even if the Band-Aid is helping to temporarily address symptoms in the meantime,” they said.
Region-specific Proposals
The Edison Electric Institute said FERC should focus on implementing Order 2023 but also let regions that propose revisions to their own processes to move forward with those.
“Given the reliability concerns in some regions, EEI believes that the commission should be open to regions proposing reasonable mechanisms to prioritize the interconnection of certain resources to ensure continued reliable energy supplies,” the investor-owned utility trade group said. “Finally, EEI recommends targeted reforms rather than generic action to further integrate the transmission and interconnection processes.”
New generic, nationally applicable processes risk disrupting ongoing compliance processes, consume significant time and financial resources, and could delay the goals advanced by Order 2023, EEI said.
American Electric Power called on FERC to ensure ISOs and RTOs have effective, nondiscriminatory processes in place to prioritize or fast track interconnection requests for replacing retiring generation and new capacity needed to meet reliability or resource adequacy requirements. Shovel-ready projects that support reliability, need only existing transmission to connect and support state policies should be prioritized.
Constellation Energy said FERC should adopt a new method that speeds up the queue, noting that PJM has talked about 2030 as being the year when reliability will come to a head.
“Accelerating the pace of new entry of reliable resources is critical to solving this problem,” Constellation said. “To do so, Constellation and PJM have proposed stopgap frameworks that would prioritize shovel-ready interconnection requests that address demonstrated resource adequacy or reliability needs.”
This “Expedited Reliability Process” would have the RTO establish objective criteria to determine whether a project is likely to satisfy the region’s reliability needs and whether it can be constructed on time to meet them. The proposal should be filed with FERC in December, the firm said.
MISO told FERC it is facing similar issues with narrowing reserve margins and a slow queue, which it has been working to improve through automation and tracking. Part of the problem in MISO is that 58 GW of generation have signed a generator interconnection agreement and have yet to come online.
“MISO will be launching an interactive tool on our website to understand the fuel type, location and reasons these generators are delayed in coming online,” it told FERC. “Additionally, MISO is pursuing a new study process known as the Expedited Resource Adequacy Study that will allow MISO to study interconnection requests necessary for resource adequacy in a matter of months.”
The RTO did a survey of those projects, of which 26 GW have announced they expect delays or just not been energized on time. An additional 15 GW responded, with 40% saying the delay was from transmission issues, 18% from regulatory/permitting issues and 11% from difficulties securing power purchase agreements. Equipment supply chain delays dating back to the COVID-19 pandemic are also often a factor.
Order 2023 is an improvement, but its reforms were narrow, and FERC should continue to work on interconnection issues, argued the Electricity Customer Alliance, the Electricity Consumers Resource Council and R Street Institute. FERC could do another rulemaking or let regional changes bloom, they suggested.
But they also argued the commission should announce an ongoing forum on the best generator interconnection processes that is held at least annually and articulate its policy objectives by issuing a statement.
“The salience of GI reform, beyond Order 2023, continues to grow,” the consumer groups said. “Unnecessarily slow and costly GI process has been a growing economic burden on consumers for years. Grid upgrade costs for generators to interconnect have grown by multiples in many regions, and most of these costs are passed through to consumers. Interconnection wait times have increased from less than two years to a median of five years last year, with some regions now explicitly delaying or pausing the processing of new GI requests. GI delays now present a material reliability risk to consumers, especially as expectations for load growth have increased.”
A New Type of Monitor?
The American Council on Renewable Energy suggested that FERC require regions with delayed queues to set up independent interconnection monitors to evaluate study practices, assumptions and outcomes, and then recommend improvements.
Grid Strategies published a report this month advocating for a similar concept that would require TOs to hire independent construction monitors “to ensure compliance with timelines, budgets and projects specifications, providing transparent and unbiased evaluation throughout the construction phase.”
“Available data — and data are very scarce — suggests that transmission owners’ budget priorities and construction management practices may play a substantial role in these construction phase delays,” the report says. “With perhaps half of all projects with interconnection agreements being significantly stalled or facing substantial cost overruns during the construction phase, this is a serious and widespread issue.”
Construction monitors would get access to often sensitive data and be an independent set of eyes that could identify issues causing delays and make expert recommendations on how to speed up construction and equipment procurement, the report says.
