CAISO‘s Board of Governors on Thursday approved the second and more-complex phase of its interconnection enhancements meant to streamline the addition of resources to its grid and shrink its long interconnection queue.
Applications for new interconnections more than tripled to 373 last year as the state aimed to add more renewable and storage resources to meet its 100% clean-energy mandate by 2045 and bolster system reliability.
“The ISO experienced unseen volumes of projects seeking to position themselves to compete in procurement processes,” CAISO Vice President of Infrastructure and Operations Planning Neil Millar wrote in a memo to the board. “Across the country and in California, stakeholders and regulators have initiated discussions on methods to better accommodate increasing pressure on interconnection processes.”
CAISO started meeting with stakeholders last year in a fast-tracked initiative to “improve its Generator Interconnection and Deliverability Allocation Procedures (GIDAP) and make process enhancements as resource interconnection needs evolve.”
“To date, the ISO has processed nearly 2,000 interconnection study requests, providing interconnection customers with the information needed to make decisions on how to proceed with their projects and to compete for a power purchase agreement with California procurement entities,” Millar wrote. “Of that amount, approximately 200 projects [totaling 24 GW] have gone into commercial operation.
“With the significant acceleration in procurement targets, numerous generator retirements, load growth, and state mandates for non-carbon emitting generation, the ISO’s processes must continue to evolve,” he wrote. “The dramatic increase in competition among suppliers has significantly increased the pressure on the GIDAP.”
The initiative’s first phase focused on simpler, near-term enhancements that had broad stakeholder support. The CAISO Board of Governors approved that phase in May, and CAISO received FERC approval of the changes in August. (See FERC OKs CAISO Interconnection Updates.)
Phase 2 dealt with more complex, long-term enhancements. One involved cost allocation for network upgrades to local systems of less than 200 kV. It would cap costs recoverable from local ratepayers at 15%.
“There is ongoing concern that the current practice for generator-interconnection-driven local upgrades could unduly impact local ratepayers who solely bear their costs,” Millar wrote.
Costs for lower-voltage network upgrades in excess of 15% “will be financed by interconnection customers without cash reimbursement, but with merchant transmission congestion revenue rights if created,” the memo said.
Another change established a new network upgrade reimbursement policy when the ISO is an “affected system.”
“In the last decade, there have been no instances where a generator’s interconnection to a neighboring balancing authority area affected the reliability of the ISO grid such that network upgrades were required,” Millar’s memo said. “In interconnection terms, the ISO is almost never an “affected system,” and has only been asked to perform affected system studies a handful of times. Most of these studies were not performed because the project quickly withdrew.
“However, recently the ISO has received a few notices from neighboring areas that a proposed interconnection potentially may affect the ISO and could warrant ISO study,” it said. “Although the probability is very remote that an external interconnection would require network upgrades on the ISO system, Management believes the ISO tariff should have a clear policy on this issue.”
The changes still require FERC approval.
Other enhancements do not require tariff changes or board approval, such as making data more easily accessible and publicly available to help developers determine the best locations to connect new resources and to better understand the status of projects in queue.