FERC proposes ‘first-ready, first-served’ interconnection rules to help spur new generation, storage

The Federal Energy Regulatory Commission on Thursday proposed requiring transmission providers to adopt “first-ready, first-served” interconnection requirements in an effort to bring proposed generation and energy storage projects online more quickly.

“Our [interconnection] queues are clogged, it takes forever to get new generation through,” FERC Chairman Richard Glick said during the commission’s monthly open meeting, noting the delays potentially hurt grid reliability and prevent lower-cost energy from reaching consumers.

There are about 8,100 proposed generation and storage projects in interconnection queues across the United States, totaling about 1,000 GW and 400 GW, respectively, Glick said. Regional transmission organizations and other transmission providers are studying what grid upgrades are needed to safely connect those projects to the grid and how much the upgrades would cost.

The review process takes about 3.7 years to complete, on average, and about three-quarters of the projects drop out before finishing it, Glick said.

FERC aims to help remove the interconnection logjam by adopting tactics already used by some grid operators: studying interconnection requests in groups, or clusters, instead of one by one, and imposing requirements, such as larger financial commitments, that aim to weed out speculative projects that have little chance of being built.

The proposal also would impose fines on transmission providers that miss interconnection review deadlines, Tristan Kessler, a staffer with the FERC Office of Energy Policy and Innovation, said in a presentation on the proposal. Currently, deadlines are allowed to slip if the transmission providers make “reasonable” efforts to meet them.

In a move that could affect projects that combine generation with energy storage, FERC proposed requiring transmission providers to allow co-located resources behind a single point of interconnection to share a single interconnection request, according to Kessler.

Also, solar and other non-synchronous generating facilities would have to include in their interconnection requests the models needed for accurate interconnection studies, Kessler said. Those facilities would have to be able to ride through abnormal frequency and voltage conditions to address challenges associated with “momentary cessation,” he said.

The proposal is largely based on existing reform efforts and ideas, according to FERC Commissioner Mark Christie.

“It’s all ideas that have been talked about in technical conferences,” Christie said. “I don’t think anybody will see anything radically new.”

Also, FERC doesn’t want the proposal to disrupt efforts by RTOs and others to reform their interconnection rules, according to Christie. The PJM Interconnection, for example, filed a reform proposal this week that is broadly similar to FERC’s plan.

Comments are due 100 days after the proposal is published in the Federal Register, with reply comments set to be due in February.

The proposal is part of a sweeping effort by the agency to update its rules around the U.S. transmission system, which is seen as a key part of supporting the energy transition.

Earlier this year, FERC proposed reforming its transmission planning and cost allocation rules. Glick said he hopes the agency will next offer proposals around issues such as inter-regional transmission planning, incentives for building transmission facilities and how to manage transmission costs.

There is no timetable for upcoming proposals, but Glick told reporters after the meeting he hopes FERC can issue them “sooner rather than later.” 

Proposal sets ‘best practice’ standards, experts say

While some grid operators have been working in recent years to improve their interconnection processes, FERC’s proposal will provide consistent guidance across the country, according to Rob Gramlich, Grid Strategies president.

“It’s very hard to get regional agreement, particularly when nobody really knows what ultimately would be approved by FERC,” Gramlich said Thursday. “This [notice of proposed rulemaking] provides a lot more clarity to those processes.”

One of the key elements of the proposal is the imposition of strict deadlines for completing stages of the interconnection process, and fines for missing them, according to Gramlich.

“Making ‘best efforts’ hasn’t really worked and the deadlines keep slipping and there’s all kinds of delays and it’s almost been normalized now,” Gramlich said.

FERC’s proposal appears to do a good job in setting minimum “best practice” standards that RTOs and non-RTOs must meet, according to Jeff Dennis, Advanced Energy Economy managing director and general counsel.

The proposal appears to tackle key problems identified by clean energy companies and others, including interconnection study delays and the lack of certainty around upgrade costs that generators must pay to bring their projects online, Dennis said.

The “first-ready, first-served” approach should help reduce delays in the interconnection process, he said.

In some cases, generators submit interconnection requests to help them understand what the upgrade costs would be, according to Dennis.

“Effectively, you have to enter the queue as a way to get information and then you come out of the queue and that creates delays and increases costs for everyone,” Dennis said.

FERC proposes extreme weather standards, reports

With references to the 2021 Winter Storm Uri and a recent North American Electric Reliability Corp. report warning large parts of the U.S. face reliability risks this summer, partly due to drought, FERC proposed measures to help transmission owners prepare for extreme weather.

“I don’t care if you believe in climate change,” Glick said. “We know that we’re experiencing extreme weather, and it’s getting worse, and it’s certainly having an impact on grid reliability. Whether it’s heat, cold, drought, wildfires, Category Five hurricanes, torrential rain, wildfires … these are challenges that are growing by the day.”

To help FERC understand the problem, the agency proposed ordering RTOs and other transmission providers to submit one-time reports describing their current or planned policies and processes for conducting extreme weather vulnerability assessments and mitigating those risks.

The proposal builds on a technical conference on climate change, extreme weather, and grid reliability FERC held a year ago.

FERC also proposed directing NERC to update its reliability standards to address transmission system planning for extreme heat or cold weather events that affect the bulk-power system. Among other things, the proposal would require transmission providers to study extreme heat and cold conditions, including the expected resource mix’s availability during those conditions.

In a concurrence, FERC Commissioner Allison Clements said the agency should consider other steps to address extreme weather, such as requiring more transfer capacity between regions and improved coordination in non-RTO regions.

But the threat the extreme weather poses to grid reliability is a “red herring,” according to Commissioner James Danly.

“The much more relevant question is whether current system operations and tariff and market design are adequate to maintain reliability,” Danly said in a concurrence, adding that “misguided” government policies are the root cause of the reliability challenges.

Extreme weather is just one of multiple challenges facing the transmission system and policymakers, according to Glick.

“We’re facing a changing electric resource mix, a need for greater flexible generation resources, and a need for more infrastructure … to satisfy this transition that’s taking place to the ground,” Glick said.

The demand for electricity is growing and will increase more as the building and transportation sectors electrify, according to Glick.

“The changes are occurring, and we need to stand up and address those challenges and hopefully improve the reliability of the grid. It’s our top priority,” Glick said.

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