In what could be its most significant action in the last 20 years, the Federal Energy Regulatory Commission last Thursday (July 27) ordered a revolution in how new electric generation and storage can apply to get onto the transmission grid. The new approach to streamline grid interconnection — Order 2023 – (order nomenclature at FERC is a creative art) responds to what has become a crisis as the electric business is making generational changes in basic technology, as older, fossil-fueled plants are replaced by renewables and electricity storage.
According to FERC, some 2,000 GW of new capacity has been stacked up trying to get grid access, a process that is taking an average of five years. It is also the case, according to the agency, that a substantial although unknown number of applications for transmission service are not serious projects, ready to run, but placeholders while applicants develop their projects.
Chairman Willie Phillips told reporters after approving the order that the amount of electric generation waiting to be connected to the transmission grid is “double the amount of generation currently on the grid.” He said, “We have a backlog problem,” noting that there are “four times as many projects in the queue as in 2010.”
The new interconnection policy has three major elements.
- A first-ready, first-served cluster study process, replacing a first-come, first-served queue. A FERC fact sheet says, “Transmission providers will conduct larger interconnection studies encompassing numerous proposed generating facilities, rather than separate studies for each individual generating facility. This approach will increase the efficiency of the interconnection process, help minimize delays and improve cost allocation by analyzing the transmission system impacts of multiple projects at once.
- Accelerated processing of the interconnection queue, including “firm deadlines and establishes penalties if transmission providers fail to complete interconnection studies on time, but transmission providers may appeal their penalties at the commission. Additionally, the rule establishes a detailed affected systems study process, including uniform modeling standards and pro formaaffected system agreements.”
- Technological advancements “to allow more than one generating facility to co-locate on a shared site behind a single point of interconnection and share a single interconnection request, let customers “add a generating facility to an existing interconnection request under certain circumstances without such a request being automatically deemed a material modification,” and “establishes modeling and performance standards for inverter-based resources,” as solar and wind generators produce direct current that must be converted to alternating current to be on the grid.
The massive rulemaking has been three years in the making, starting in the summer of 2021 with an “advanced notice of proposed rulemaking,” and a formal rulemaking last June. Phillips said the docket generated “over 4,500 pages of comments” and the order itself is one of the longest in FERC history.
The four members of the five-member commission (two Democrats and two Republicans) unanimously approved the new order. Commissioner Allison Clements said, “The rule provides a strong baseline, based on best practices and lessons learned from around the country, to ensure all utilities are making strides towards breaking through their own interconnection log jams.”
Commissioner James Danly, often the commission’s most acerbic contrarian, noting that he “doesn’t often give compliments,” praised the congeniality of the process of coming up with Order 2023, while Commissioner Mark Christie called the order “a major step forward to reducing clogging in the queues,” noting “a lot of speculative projects in the queues.”
Compliance filings are due 90 days after the filing in the Federal Register. FERC is giving connection applicants “three options that can be exercised depending on the progress of the interconnection request. Those interconnection customers that have been tendered facilities study agreements by the transmission provider may proceed to a transitional serial study (a facilities study) or may opt to move to the transitional cluster study. Those interconnection customers in the interconnection queue that have not been tendered a facilities study agreement (have not completed the system impact study) will be eligible for the transitional cluster study. All other interconnection customers will be subject to the new interconnection procedures.”
Initial industry reaction has been positive.
Greg Whetstone, president and CEO of Washington-based American Council on Renewable Energy (ACORE) said, “This new rule from FERC is an important first step on this crucial issue for the energy transition, and I am pleased to see some improvements from the proposed rule, including measures to advance the use of grid enhancing technologies. But it is only a start.”
Caitlin Marquis, Managing Director at Advanced Energy United said, “In light of the scope of the interconnection challenge, we also appreciate Acting Chair Phillips’s recognition that there is ‘so much more to do,’ and hope to see this momentum maintained with follow-up efforts by the Commission to address additional interconnection reform needs.” The Washington-based group represents a broad coalition of energy generators, distributors, and customers.
The American Clean Power Association urged FERC “to build upon today’s order, and swiftly address regional and interregional electric transmission planning and cost allocation. Ensuring our grid is modernized and expanded is key to meeting the nation’s energy goals, providing low-cost energy for consumers, and ensuring reliability and resilience.”
–Kennedy Maize
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