FERC on Thursday proposed long-awaited rule changes that it said would clear clogged interconnection queues and give generators more certainty on upgrade costs while ensuring fair treatment of new technologies.

The commission unanimously approved the Notice of Proposed Rulemaking (NOPR), which would replace the serial “first-come, first-served” study procedure with “first-ready, first-served” cluster studies (RM22-14).

The new approach “is a more efficient way of processing a large interconnection queue because it allows transmission providers to study numerous proposed generating facilities at the same time,” FERC staff said in a presentation at the commission’s monthly open meeting. “Additionally, conducting a single cluster study and cluster restudy each year can minimize delays that can arise from proposed generating facility interdependencies and minimize the risk of cascading restudies when a higher-queued interconnection customer withdraws.”

Delays caused by the inefficiency of the current process and the increasing volume of wind, solar and storage projects have been a major source of frustration for generation developers — and a threat to reliability, FERC said.

At the end of 2021, there were more than 1,000 GW of generation and 400 GW of storage pending in interconnection queues nationwide, more than triple the total of five years ago, officials said. Chairman Richard Glick (D) said projects now take an average of 3.7 years to complete the interconnection gauntlet, with less than a quarter of projects surviving to the end.

The NOPR would impose more stringent financial commitments and readiness requirements for interconnection customers, which FERC said would discourage speculative interconnection requests and allow transmission providers to concentrate on processing those with a greater chance of reaching commercial operation.

It also would impose tougher rules on transmission providers, replacing the current “reasonable efforts” standard for completing interconnection studies and subjecting those who fail to meet study deadlines to potential penalties.

Other provisions of the rule would:

• require transmission providers to allocate network upgrade costs among interconnection customers in a cluster based on the degree to which each generating facility contributes to the need for the upgrade. Under current rules, an interconnection customer that triggers a network upgrade can be saddled with its entire cost even though subsequent interconnection customers benefit from it.
• require transmission providers to use a standardized, transparent process for affected-systems studies, with specified modeling and pro forma study agreements.
• simplify the process of studying interconnection requests that are related to the same state-authorized or ‑mandated resource solicitation. Transmission providers would be required to offer an optional process allowing resource planning entities to determine the costs of different combinations of projects that may be selected in a solicitation.
• require transmission providers to allow more than one resource to co-locate on a shared site behind a single point of interconnection and using a single interconnection request. A generating facility could be added to an existing interconnection request without losing its place in the queue as long as it did not change the originally requested  service level.
• require transmission providers to consider “alternative transmission solutions” if requested by an interconnection customer.
• require interconnection studies to use assumptions that reflect the proposed operation of a generating facility.
• require non-synchronous generating facilities to be able to ride-through disturbances and continue providing power and voltage support, addressing the reliability problem of momentary cessation. (See NERC, WECC Repeat Solar Performance Warnings.)

In calling for a switch to a “first-ready, first-served” study process, the commission endorsed rules it has already approved for MISO and SPP, and which PJM proposed in a filing Tuesday. (See related story, PJM Files Interconnection Proposal with FERC.)

“There are RTOs and other transmission providers that are engaged in queue reform … and we said [in the NOPR] that we obviously want to take them into account. … We have to take each of those proposals on a case-by-case basis,” Glick said.

The commission proposed a transition process allowing late-stage customers to complete their interconnections under the existing process. Comments on the NOPR will be due 100 days after publication in the Federal Register, with reply comments due 30 days after that.

The current procedures resulted from Orders 2003 and 2006, which standardized interconnection procedures for large and small generating facilities, and Order 845, a 2018 attempt to streamline the process. (See FERC Order Seeks to Reduce Time, Uncertainty on Interconnections.)

Glick acknowledged FERC has done “queue reform” before, with Order 845. “But this is far and away the most aggressive [effort], and I believe it will finally help move the needle,” he said.

‘Second Track’

Notably, Commissioner James Danly (R), who frequently dissents from the commission’s actions, supported the majority Thursday. He opposed the commission’s April NOPR on transmission planning, saying he did not think the commission had sufficient evidence that the existing planning rules were unjust and unreasonable. (See FERC Issues 1st Proposal out of Transmission Proceeding.)

“That’s not the case here,” Danly said. “I think the problems of the interconnection queue are widespread and they’re manifest. … I always prefer it when the utilities grapple with their own problems rather than have their problems fixed by us, especially under widespread legislative fiat through rulemakings. But in this case, there were a number of meritorious proposals that are worthy of the commission’s and the public’s consideration. And while some of the proposals, I think, represent typical bureaucratic overreach and unnecessary nitpicking detail, others are truly worth us looking into. So I am looking forward to seeing the record developed.”

Glick said the April NOPR, which required transmission planners to make their planning processes more proactive, was the “first track” of the commission’s efforts to eliminate barriers to the connection of more renewables. “This is the second track … which is just as important, if not more important,” he said. “For the first time, we have real deadlines that [transmission providers] have to meet.”

At the same time, new rules on study deposits, demonstration of site control, commercial readiness milestones and withdrawal penalties will make it “much more difficult for” generators to make speculative interconnection requests, he said in a press conference after the meeting. “To me, both of those are significant.”

The two NOPRs arose from the commission’s Advance Notice of Proposed Rulemaking (ANOPR) on regional transmission planning, cost allocation and generator interconnection in July 2021. (See FERC Goes Back to the Drawing Board on Tx Planning, Cost Allocation.)

They won’t be the last actions resulting from the initiative, said Glick, who promised action on how to fund transmission upgrades and interregional transmission planning, among other issues. “I can’t give you a timetable, but I’m hoping sooner rather than later,” he said.

Reaction

The Solar Energy Industries Association expressed support for FERC’s “bold action,” saying the commission had adopted many of the recommendations the group made in an interconnection white paper issued earlier this week.

“The most significant part of these reforms is the built-in accountability for utilities,” said Ben Norris, SEIA’s senior director of regulatory affairs. “For years, utilities have been dragging their feet on interconnection, and this rulemaking would implement deadlines for completing interconnection studies and create penalties for utility inaction. … We also believe that the cluster studies, affected-system study changes and a more realistic look at operating conditions for renewable energy generators will significantly improve the interconnection process.”

Rob Gramlich, executive director of Americans for a Clean Energy Grid, also praised the commission’s action but said it must go further.

“The real root cause of the logjams is insufficient transmission capacity, which requires reform to transmission planning and cost allocation,” he said in a statement. “Problems with transmission planning are blocking economic development and job creation, especially in rural areas, and are leading to increasing electricity costs for consumers.”