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Interconnection Reform: Good for the Grid and the Climate

New York State is currently working to dramatically ramp up the deployment of solar and other distributed generation (DG) technologies in an effort to improve the resiliency and reliability of its electric system as well as to help combat climate change. In these efforts, interconnection reform plays a key role.

Interconnection refers to a state-established procedure that new distributed generation units must follow to connect in parallel with the utility’s distribution system. The interconnection process involves numerous steps and may take several months depending on the technical specifications of the project and the point of interconnection. Projects awaiting interconnection are put into an interconnection queue in the order of application.

In New York, the interconnection queue has been growing steadily, with 4,007 MW of projects in queue as of June 2016, a 38% increase from April 2016. Spurred primarily by a growing interest in community distributed generation (CDG), this unprecedented surge in project applications highlights the importance of proactive queue management to support the proliferation of DG throughout the state.

Interconnection procedure in New York State is governed by statewide rules known as the Standard Interconnection Requirements (SIR). SIR provide a general framework for interconnection application processing, including fees, timelines, and technical criteria.

For many years, SIR incentivized developers to file an application and reserve a place in the queue even if they had no intention of moving forward with their project; and further, SIR provided no process for removing the project from the queue without a customer’s permission. Thus, hundreds of these abandoned projects continue to clog the interconnection queue today.

On April 29, 2016, an update to SIR for systems between 50 kW to 5 MW went into effect, addressing some of the interconnection challenges raised by those involved in recent SIR proceedings. This update:

However, the new rules are applicable only to project applications submitted after the effective date, and so have done little to resolve the existing queue backlog. Further updates to SIR are expected to address this backlog.

These best practices for queue management are currently being considered by the recently created Interconnection Policy Working Group (IPWG), comprised of utility company, state, and industry representatives. In its most recent straw proposal, the IPWG is seeking to require all pre-April 29th applicants to take action by certain dates to remain in the queue or face removal. For instance, the applicants would be required to provide a landowner consent form within 10 days of a Public Service Commission Order to demonstrate site control and prevent site shopping by the developer.

In addition to addressing the backlog, the IPWG is working to reform interconnection by addressing cost sharing for required substation or distribution-level upgrades. These upgrades can often amount to hundreds of thousands of dollars and make a project cost-prohibitive for a single developer. Under the current rules, the first developer to proceed with a project on a given circuit/substation bears the full cost of upgrades. Any subsequent projects take advantage of those upgrades and forgo the expense. Cost-sharing mechanisms could ensure that every developer benefiting from an upgrade pays their fair share.

Together these reforms could significantly facilitate DG interconnection in New York, resulting in a more reliable, resilient, and efficient system that advances the state’s environmental and climate goals.