Clean energy groups are calling for changes to ISO-NE’s surplus interconnection service (SIS) rules to use capacity headroom and help some resources avoid lengthy cluster study processes.
The RTO’s existing SIS rules stem from FERC Order 845, which required transmission providers to allow new resources to access unused capability behind existing interconnection points.
ISO-NE’s surplus process enables interconnection customers “to use any unused capability of interconnection service established in an interconnection agreement for a generating facility” while requiring the consent of the original customer and maintaining the original customer’s priority use of its interconnection rights.
The attractiveness of the surplus process lies in the ability for developers to avoid the interconnection cluster process, potentially enabling them to bring resources online more quickly.
But concerns about capacity revenue sharing, the extent of surplus studies and the lack of permanence of surplus interconnections appear to have limited the use of ISO-NE’s SIS pathway. To date, there is only one surplus interconnection agreement in the region.
ISO-NE has noted that surplus requests can still need extended studies when the resource has different performance characteristics from the original customer, including thermal analysis when adding charging capabilities to a site.
Surplus interconnection also does not equal permanent interconnection rights. If the original interconnection customer retired, the surplus customer would not retain its interconnection rights beyond a one-year grace period. It would need to proceed though the RTO’s general interconnection process to continue operations.
At the NEPOOL Transmission Committee meeting Feb. 24, several stakeholders emphasized the need for more clarity around the surplus application and study processes to help induce greater participation in the pathway.
ISO-NE “should focus on setting and meeting accelerated timelines in order to give developers confidence to proceed with projects,” said Bill Fowler, speaking on behalf of JERA Americas. JERA owns a fleet of large fossil generators in the region and has expressed interest in using SIS at its existing sites.
Fowler advocated for a nonbinding “target timeline” for ISO-NE approval of surplus requests set at “no more than six to nine months from filing an application.”
He said ISO-NE should consider changes to surplus accreditation in coordination with its ongoing capacity accreditation overhaul, and he recommended that the RTO “give SIS market participants flexibility in how the resources participate in the market, similar to how co-located facilities can choose to function as separate resources or as a single resource.”
Claire Lang-Ree, of the Natural Resources Defense Council, said ISO-NE “should recognize that surplus resources may improve the overall capacity value of the arrangement.”
She said ISO-NE’s proposed accreditation methodology for co-located storage and generation resources “could be a good fit for surplus arrangements.”
Speaking on behalf of RENEW Northeast, Carter Scott said changes would likely be needed to ISO-NE’s definition of unused capacity to account for the RTO’s proposed new accreditation framework, which would make resource accreditation values subject to change on a yearly and seasonal basis.
To reflect the new accreditation process, Scott said ISO-NE should allow both original and surplus resources to share capacity rights on a “more flexible, periodic basis.”
Multiple speakers noted that the proposed accreditation changes in the RTO’s Capacity Auction Reforms (CAR) project also likely will reduce the amount to accredited capacity in the region, potentially opening up headroom on the system.
Alex Lawton, director at Advanced Energy United, stressed that lowering barriers to surplus interconnection could help bring resources online more quickly and efficiently, helping prevent future resource adequacy issues.
“The current barriers that have prevented participants from using SIS to date stem primarily from difficulty participating in the capacity market, and the lack of permanent capacity interconnection rights,” Advanced Energy United wrote in a memo published prior to the TC meeting.
Lawton advocated for the creation of a process for capacity surplus customers to obtain permanent rights upon the retirement of the original customer without having to proceed through the interconnection cluster study process.
“If a [surplus interconnection customer] is required to go through a cluster study and potentially be responsible for network upgrade costs after it has already become operational, and if those upgrade costs are not supportable, this could lead to an unwanted market exit,” he said.
Responding to the stakeholder feedback, Alex Rost, director of transmission services at ISO-NE, detailed the RTO’s plans for a “gap analysis” intended to evaluate potential improvements to the surplus process and the potential “development of a comparable surplus interconnection service-like process” for co-location or resource repowering.
He committed to fully evaluating stakeholder proposals in the gap analysis, but he emphasized the subordinate nature of surplus interconnection customers. He noted that surplus customers can submit an interconnection request for permanent interconnection rights at any time.
He added that ISO-NE plans to evaluate surplus process timelines, surplus study scope and resource requirements in the gap analysis. He said the implementation of the CAR project would require an update to the definition of unused capability but added that this will depend on the outcome of the project.
ISO-NE plans to complete the analysis by early in the third quarter of the year, Rost said.
Stakeholders generally responded favorably to ISO-NE’s proposal for the gas analysis but expressed interest in expediting the timeline of the analysis and related discussions.
