With a goal of modernizing New Jersey’s grid, the Board of Public Utilities (BPU) is close to concluding a new rules package that includes a requirement that utilities regularly identify barriers to interconnecting renewable energy resources.

The rules, which are in the final stages of public input before enactment, would require utilities to file a Proactive System Upgrade Plan (PSUP) every six months for needed “proactive circuit and system upgrades aimed at expanding opportunities for customer-generator facilities.” The plans would have to include the costs and benefits of the upgrades.

The package is part of the BPU’s effort to incorporate utilities in a regular planning cycle that would “eventually help drive a more nimble, flexible and responsive grid that accurately telegraphs intended capacity improvements and produces the highest societal benefits” for distributed energy resources, according to a BPU presentation at a meeting Feb. 10.

The proposal is under evaluation as the state and its utilities, like those in other states, are wrestling with the issue of how to connect the rapidly growing number of renewables to an aging grid that in some areas can’t handle any new interconnections; those it can take are often subject to lengthy delays.

The plan, and five other rules and process proposals outlined at the Feb. 10 hearing to solicit public input, were drawn from a report by consultancy Guidehouse on how to modernize the grid and improve interconnection rules. (See NJ Solar Sector Calls for Speedy Grid Modernization Plan.)

Paul Heitmann, program manager of the BPU’s Clean Energy Division, who moderated the hearing, said the board’s goal is to reduce barriers to the adoption of DERs. That means “improving access to relevant information for applicants, managing the queue and reducing processing intervals where we can,” he said.

To that end, the BPU’s rules include:

• a series of new definitions for parts of the interconnection process that would make it clearer how the process would proceed;
• improvements to the application process to give applicants greater access to key information needed in the process, to better manage the queue and make the process more transparent and accountable;
• an increase in the threshold of a project that requires more intense study before connection, so that more projects are considered smaller and allowed to proceed with a simpler study;
• revisions to “more clearly define the expected intervals and actions” needed by all stakeholders to move applications forward in a predictable and timely manner; and
• a requirement that utilities complete an annual hosting capacity analysis, which would identify locations with spare capacity. The analysis would include the compilation of data at both the circuit and substation level, and a requirement that updates to hosting capacity maps be done every three months.

Flagging Weak Links

The PSUP is intended to create a system that will enable utilities to easily detect and report “if they are seeing where things are really congested and closed, and not available for hosting,” Heitmann said.

Those kind of problems might emerge as utilities conduct routine studies for individual products or “cluster studies” for several projects, he said. If the analysis produces data that says, “‘Boy, if we can upgrade this substation at a reasonable cost; this should be a fast-track opportunity,’” then the PSUP will convey that information to the BPU, he said.

“We don’t have that mechanism right now,” BPU General Counsel Abe Silverman said. “But this opens up the channel for that to come in play.”

In response to a question from stakeholder on how the information would be used, Heitmann said the reports will provide a proactive look at “which segments of the distribution system have deficiencies, relative to hosting capacity and ability to connect.”

“When that’s filed, that is a reference point that we now have as useful information to see where new applications are coming in,” Heitmann said. “Does it align to this intent already? Does it support the deficiency?”

In some cases, the new process would mean the BPU allows a developer looking for an interconnection to “come in and request that the utility build the upgrade identified in the PSUP, and then pay their pro rata share of those costs,” Silverman said.

“This is a little bit of a departure from sort of normal business as usual,” he acknowledged, adding that the board is keen to get stakeholder thoughts on how the process should work.

Ensuring Equity in Upgrades

One attendee, who was identified only as Steve, encouraged the BPU to make decisions with the involvement of a consumer advocate who is focused on community equity and can provide a perspective that looks beyond a system in which upgrades are selected by the utilities “based on physics and best value.”

“We all know when people need to interpret results and make judgments, equity often suffers,” he said. “So, I just want to make sure that we’re not targeting upgrades and areas that are already benefiting from a lot of DER penetration and [that we are] keeping in mind communities that might not have benefited from it as of yet.”

Heitmann agreed, saying that the utility filings would have to “address that fairness and balance, as well as the physics.” He added that the governor’s Office of Equity would be involved in the process to make sure that happens.

Lyle Rawlings, president of the Mid-Atlantic Solar & Storage Industries Association, said the PSUPs will need to look beyond individual cases so that they can address issues from a broader view that includes taking into account the kind of problems that “can be anticipated to impact large sections of the grid.”

He cited the example of areas with a density of solar installations where it can be clearly expected that substations will need to be upgraded.

“It’s obvious that this is going to happen in areas where solar concentrates,” he said, explaining that “if it’s expected that many, many substations are going to need this,” the BPU should respond accordingly.

Silverman said that is precisely the kind of “fundamental” question that the BPU is looking to address, and he characterized it as asking, “How do we how do we advance distribution planning writ large?”

“I would think of this as an early attempt to identify those places, not necessarily as a replacement for a full integrated distribution planning proceeding,” which will have to take place later, he said. “Think of this as the first … baby toddler step towards accomplishing exactly what you’re saying.”