Explainer on the Interconnection Notice of Proposed Rulemaking

Improvements to Generator Interconnection Procedures and Agreements, Docket No. RM22-14-000 )[i]

On June 16, 2022, the Federal Energy Regulatory Commission (FERC or Commission) issued a Notice of Proposed Rulemaking (NOPR) aimed at reforming the Commission’s standard generator interconnection procedures and agreements,[ii] which establish how utilities and transmission providers integrate new generation projects into the existing transmission system.  Lengthy backlogs for projects seeking to connect to the transmission grid often lead to long waits for interconnection customers to complete the generator interconnection process.  The proposed reforms are intended to reduce these backlogs, improve certainty in the interconnection process, and ensure access to the transmission grid for new technologies.  A copy of the NOPR is available at this link:  FERC Proposes Interconnection Reforms to Address Queue Backlogs.

Among other things, the NOPR proposes a new approach to processing interconnection requests.  Specifically, this approach seeks to streamline and modernize the interconnection process by focusing on three key areas:  (1) implementing a first-ready, first-served cluster study process; (2) increasing the speed of interconnection queue processing; and (3) incorporating technological advancements into the interconnection process.

First, the Commission is proposing to replace the existing process for how interconnection requests and transmission-related impacts are studied and assessed.  Rather than look at projects one at a time as done in the current serial approach, the NOPR requires utilities and transmission providers to group interconnection customers together by using a “first-ready, first-served cluster study process.”  Aiming to discourage “speculative” interconnection requests (ones that are not likely to result in built generating facilities), the proposed cluster study process would also include greater financial commitments and other requirements for demonstrating that a proposed project can successfully reach commercial operation.  This cluster study process is expected to shorten the overall time it takes for transmission providers to study proposed generating facilities.

Second, the reforms proposed in this NOPR also intend to increase the speed of interconnection queue processing by clarifying the interconnection study process for neighboring regions, establishing penalties for delayed interconnection studies, and better accommodating state energy goals by offering a resource solicitation study process.

Third, the reforms proposed in this NOPR would allow interconnection customers and transmission providers to incorporate technological advancements into the interconnection process, such as alternative transmission and grid-enhancing technologies that improve the way that the existing transmission system operates and the addition of storage resources to other types of generating facilities.

The NOPR seeks comment on the proposed reforms and encourages commenters to identify enhancements that could further improve the generator interconnection process.  Comments on the NOPR are due 100 days after publication in the Federal Register and reply comments (i.e., replies to filed comments) are due 130 days after publication in the Federal Register.  In this case, that means that comments are due on October 13, 2022.  Reply comments were extended to December 14, 2022.

Comments may be filed electronically via the Internet in Docket No. RM22-14-000.  Instructions are available on the Commission’s website at this link:  FERC Online Systems

Q.  What is a Notice of Proposed Rulemaking or NOPR?

A.  A NOPR is a document issued by FERC describing proposed changes to its current rules and regulations that are under consideration.  A NOPR also contains detailed explanations of the reasons for proposed reforms.

Through a NOPR, the Commission invites comments on the proposed rules and related issues that are discussed in the document.  A NOPR is not a final determination.  After the public comment period closes, FERC reviews all comments received and conducts an analysis to decide on what, if any, of the changes it proposed in the NOPR are adopted.  A subsequent publication of a final rule will be issued once the Commission has made a decision.

Typically, NOPRs are published in the Federal Register (FR) and made publicly available on-line.  The public can also access NOPRs, as well as other FERC proceedings and documents, using FERC’s eLibrary records information system. 

Q.  Can the public comment on a NOPR?  What are the dates?

A.  Yes, the Commission encourages interested parties including members of the general public to provide comments on the NOPR.  The Commission seeks comments on the entirety of the NOPR.  Below, this explainer highlights particular areas in which the NOPR seeks public comment.  In this case, comments are due on October 13, 2022, with reply comments due December 14, 2022.  Reply comments give commenters a chance to respond to each other, including the opportunity to emphasize, refute, or otherwise address the comments of others.  If you have questions regarding the NOPR process or if you need assistance with filing comments or accessing the Commission’s administrative record, please contact OPP by e-mail at OPP@ferc.gov or by phone at (202)502-6595.

Q. What is interconnection?

A. Before a generating facility, such as a set of solar panels in a field, or wind turbines, can supply electricity, a project developer must apply to interconnect to the transmission system (sometimes known as the “grid”).  The transmission grid must be able to receive the power from the new generating facility and send it along paths on the grid that ultimately reach consumers.  As such, the interconnection process focuses on how to effectively integrate new generating projects to the existing transmission grid, which requires studying the reliability impacts of the proposed generating facility’s interconnection and determining the costs of any new transmission facilities needed to mitigate those impacts.  As with streets, roads and highways, you have to make sure you do not create traffic jams or overwhelm the road capacity. 

Q. How does a developer begin the interconnection process?

A. The interconnection process begins as developers research, gather information, and evaluate where they would like to build a new generating facility or if they would like to modify an existing generating facility.  Once a developer has determined that they intend to build a generating facility that needs to interconnect to the transmission system, the developer submits an “interconnection request” and becomes an “interconnection customer.”  See diagram below.

Q. How are interconnection requests evaluated?

A. Following a developer’s submission of an interconnection request, utilities or regional transmission organizations/independent system operators (RTOs/ISOs)[iii] that run the transmission grid in the area (referred to generically as “transmission providers”), evaluate the impact of the proposed generating facility on the safety and reliability of the transmission grid.  At this stage, transmission providers carry out “interconnection studies” to determine what new transmission equipment, upgrades, and retrofits may be needed before a proposed generating facility can connect to the system, as well as the costs of that equipment and what party is responsible for those costs, known as “cost allocation.”

In particular, the interconnection process distinguishes between the different kinds of facilities and retrofits that are needed to facilitate connecting new generating facilities to the transmission grid.  “Interconnection facilities” are located between the interconnection customer’s generating facility and the transmission provider’s transmission system, whereas “network upgrades” include facilities at or beyond the point where the interconnection customer’s generating facility interconnects to the transmission system.  This distinction is important because the determination of who is ultimately responsible for the cost of a facility can depend on whether that facility is an interconnection facility or an interconnection-related network upgrade.

Q. What are interconnection queues?

A. The list of generating projects that have not been built and are waiting to be studied by the transmission provider is often referred to as an “interconnection queue.”  As noted above, the Commission’s interconnection process requires projects in an interconnection queue to be studied serially according to the order in which interconnection requests are received.

Q: What happens when the interconnection studies are complete?

A: Upon completion of the final interconnection study, the transmission provider gives the interconnection customer a draft “interconnection agreement” that both parties review.  The interconnection agreement is a contract between the transmission provider and the generating developer that establishes operational terms and cost responsibilities, including responsibilities for the construction and funding of any new or upgraded facilities identified during the interconnection study process.  

Q.  What, specifically, is this NOPR seeking to address?

A.  The NOPR lays out FERC’s proposed plan to improve the processes used by transmission providers to facilitate the interconnection of new generating facilities to the power grid.  The growth of new resources seeking to interconnect to the transmission system coupled with the existing serial first-come, first-served interconnection study process has created large interconnection queue backlogs and uncertainty regarding the cost and timing of interconnecting to the transmission system, potentially increasing costs for consumers.  Backlogs in the generator interconnection queue have caused market uncertainty and could result in reliability issues as new generating facilities are unable to reach commercial operation in an efficient and timely manner.  Accordingly, the NOPR proposes reforms to revise generator interconnection processes and agreements.  In doing this, the Commission aims to increase the speed and efficiency of interconnection queue processing.

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FIRST KEY AREA: Transitioning from a First-Come, First-Served Serial Process to a First-Ready, First-Served Cluster Study Process

Under the proposed first-ready, first-served cluster study process, transmission providers would conduct interconnection studies encompassing numerous proposed generating facilities, rather than separate studies for each individual generating facility.  To ensure that only ready projects can enter and proceed through the queue, transmission providers also would impose additional financial commitments and readiness requirements on interconnection customers.

Major components include:

Facilitating Interconnection Information Access 
An option for interconnection customers to request a limited number of informational studies from the transmission provider.  These studies would be conducted at the requester’s expense and would provide information to prospective interconnection customers that can help them to make an informed decision about whether or not to enter the interconnection queue.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether the optional informational interconnection studies would provide sufficient and timely information to inform decision-making prior to submitting an interconnection request;
• Whether transmission providers should be required to establish a limited timeframe each year within which potential interconnection customers can request an optional informational interconnection study, rather than allowing requests for informational studies at any time throughout the year;
• The potential burdens of conducting informational studies and whether other options might strike a better balance of providing interconnection customers with useful information while making efficient use of transmission providers’ resources; and
• Whether there are any security risks associated with requiring more public information on interconnection, and whether the types of information described in the NOPR are appropriate.

Cluster Study Replaces Serial Study 
As described above, a serial-based, first-come first-served study process works such that an interconnection customer must wait its turn for its request to be studied.  This approach can cause interconnection queue backlogs and long wait times to process an interconnection customer’s request.  Additionally, concerns have been expressed that the serial study process may also result in inefficiencies.  For example, the project-by-project identification of network upgrades may be an inefficient process compared to identifying fewer network upgrades that are able to accommodate multiple interconnection requests in a similar area.

Further, under the current serial system, large upfront network upgrade costs may force interconnection customers to withdraw from the interconnection queue.  The next project in the queue in the same area may also be reluctant to take on these large upgrade costs, and thus a domino effect can arise with projects dropping out one-by-one.  As projects withdraw, it may also trigger the need to re-study other interconnection requests because the assumptions necessarily change about what generating is being built and what upgrades will be needed.  Commonly referred to as “cascading” re-studies, they too are costly and time-consuming.

So again, to increase the efficiency of the interconnection process, the NOPR proposes to group interconnection requests into clusters for study.  Cluster studies would be the required interconnection study method and all transmission providers would need to eliminate the serial first-come, first-served study process and instead use a first-ready, first-served cluster study process.  This process has already been successfully adopted in some transmission planning regions.  For example, in RTOs/ISOs, MISO, CAISO, SPP, and ISO-NE group projects in such a way when studying interconnection requests.  Further, in thinking about how to deal with possible project withdrawals under this new process, the NOPR establishes a process for clustered re-studies where an interconnection customer in the cluster or a higher-queued cluster withdraws its interconnection request.  To ensure that this process is transparent, the transmission provider would post on its website all requests to be studied as part of a given cluster.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether transmission providers should be required to study subgroups of interconnection customers based on geographic location and electric relevance (i.e., a facility’s electrical relationship to other facilities on the transmission system), and how cluster areas should be defined in ways that ensure transparency;
• In cases where a given cluster needs to be re-studied (for example, due to a major project dropping out of the queue), whether the Commission could adopt certain measures to improve the efficacy of the re-study process, such as limiting the transmission provider to two re-studies per month in a 150-day cluster restudy period; and
• Whether any interconnection requests could be processed outside of the main cluster study process, and the details of how such an alternative would work.

Allocation of Cluster Study Costs 
The NOPR’s proposal to establish a cluster study process requires transmission providers to establish a method to allocate the cost of the single, shared cluster study among the interconnection customers participating in the cluster group.  The NOPR proposes to allocate 90% of cluster study costs to customers on a pro-rata basis based on the amount of generating, and the remaining 10% on a per capita basis based on the number of requests in the cluster. 

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether a different cost allocation approach for study costs is needed, or whether each transmission provider should be given additional flexibility to propose a cost allocation approach.

Allocation of Cluster Network Upgrade Costs
Beyond the costs of studies, the NOPR addresses how the cluster process defines who pays and how much they pay for transmission upgrades and other retrofits to accommodate the new generating being studied.  The NOPR proposes to allocate some network upgrade costs to interconnection customers within a cluster using a “proportional impact method,” which is a technical analysis that takes into account the share of energy that flows through the transmission infrastructure going from generating facilities to the points where the energy is demanded.  This cost allocation method thus shares network upgrade costs among several interconnection customers that may benefit from - and cause the need for - certain network upgrades.  This method is described in more detail on page 71 of the NOPR.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether there are benefits and drawbacks to the proportional impact method that the Commission should consider; and
• Whether there are alternative ways to allocate the cost of network upgrades in a cluster.
• Shared Network Upgrades – Network upgrades paid by interconnection customers in one cluster could impact projects in the same cluster or other clusters that are reviewed at a later date.  In particular, individual interconnection customers may be reluctant to move forward with an interconnection request if they have no opportunity to recover some of the costs for upgrades that are likely to benefit others in future cluster studies.  The NOPR proposes to mitigate this problem by making sure that certain interconnection customers in subsequent clusters who benefit from a particular network upgrade pay a fair share for the costs through a one-time, lump sum payment.

Increased Financial Commitments and Readiness Requirements
An overall aim of the NOPR is to ensure that interconnection queues are made up of generating facilities that will likely be built.  Concerns have been raised that, under current practices, an interconnection customer can proceed through the generator interconnection process without having to show sufficient evidence of clear intentions to develop its projects, or that projects have a high chance of reaching commercial viability - such as owning all the land for their generating facility or having a buyer for their energy.  Requiring greater proof of financial soundness and operational control is expected to curb interconnection customers’ submissions of multiple, speculative interconnection requests that can result in withdrawals and trigger rounds of re-studies, as well as enabling viable interconnection requests to progress more quickly through a less-congested queue.

The four main ways that the NOPR tackles this issue is by (1) increasing study deposit amounts, (2) requiring demonstration of site control, (3) requiring proof of commercial readiness, and (4) establishing payment of withdrawal penalties.

Increasing Study Deposit Amounts

The interconnection customer is obligated to pay the transmission provider a certain deposit for carrying out studies at various points of the interconnection process.  Higher financial commitments associated with each phase of the interconnection process may result in fewer speculative interconnection requests and associated withdrawals.  As such, by moving away from relatively smaller amounts for conducting studies, the NOPR proposes a tiered approach with larger study deposit fees to be collected at each stage of the new cluster study process. These amounts can be found on page 84 of the NOPR.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether the proposed study deposit amounts accurately reflect the costs of conducting cluster studies; and
• Whether the Commission should adopt additional provisions or a different framework that would require larger generating facilities to provide a higher deposit amount due to their size.  

Demonstration of Site Control

Site control is generally defined as evidence that demonstrates that the interconnection customer has the right to develop the land or site where its generating facility will be built.  Examples of site control include documentation that shows that the interconnection customer owns or has the option to purchase a lease at the site, or that the interconnection customer has a business relationship with the entity having the right to sell, lease or give the interconnection customer the right to possess or occupy the site.  Less stringent site control requirements can contribute to late-stage withdrawals and projects that lack viability lingering in the queue.

The NOPR proposes that securing the exclusive land rights necessary to construct a proposed generating facility (or for co-located resources, demonstration of shared land use) is sufficient evidence of the interconnection customer’s commitment to construct the generating facility.  Exclusive land rights include an interconnection customer’s right to develop, construct, operate, and maintain its generating facility, or, where facilities are co-located, to demonstrate a shared land use right.  For situations in which interconnection customers cannot document site control due to regulatory limitations outside of their control, the NOPR proposes that interconnection customers instead submit an initial deposit amount of $10,000 per MW, subject to a floor of $500,000 and a ceiling of $2,000,000, which would be applied toward any interconnection studies or withdrawal penalty.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether there are other situations in which the Commission should accept a deposit in lieu of proof of site control;
• Whether the definition of “site control” should be broadened or refined to accommodate other contexts or regulatory environments. For example, the NOPR points to the siting and permitting of offshore resources in bodies of water and/or submerged land, as well as sites owned or physically controlled by a state or federal government entity in which there may be a need to craft a different site control requirement that acknowledges that the interconnection customer, who has to also comply with these additional requirements, may not be able to demonstrate site control as proposed in this NOPR until later;
• At what stage of development of sites owned or physically controlled by a state and/or federal government entity should an interconnection customer’s request be considered non-speculative, and are there are substantive differences among interconnection customers developing sites owned or physically controlled by a state and/or federal government entity;
• Whether the Commission should allow transmission providers to accept demonstrations of less than 100% site control in the initial phases of the interconnection study process; and
• Whether the Commission should instead adopt provisions that allow a deposit in lieu of site control to enter the interconnection process and be evaluated under the first-ready, first-served cluster study process described above but require interconnection customers to demonstrate site control to enter the facilities study stage (i.e., the stage in which the transmission provider identifies the physical infrastructure and equipment needed to integrate the proposed project).

Demonstration of Commercial Readiness

In the interconnection context, commercial readiness generally means that an interconnection customer has carried out some form of off-take agreement, such as a contract for the sale of electricity, or capacity.  The NOPR proposes that interconnection customers provide either (1) demonstration of firm contractual obligations for the sale of the generating facility’s energy, capacity, or ancillary services, or the sale of the constructed generating facility itself; or (2) a commercial readiness deposit based on the interconnection customer’s place within the cluster study process, which is returned if the interconnection customer demonstrates commercial readiness later on.  Additional acceptable demonstrations can be found on page 99 of the NOPR.  These options aim to provide flexibility for interconnection customers to pursue different business models while urging non-viable projects to leave the queue. 

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether the Commission should also establish further alternative ways to demonstrate commercial readiness.  Additional options to show proof of commercial readiness could include providing evidence of a commitment to participate in an RTO/ISO market, a site-specific purchase order for generating equipment, or a statement signed by an officer or authorized agent of the interconnection customer attesting that the generating facility is to be supplied with major electric generating components (such as wind turbines) with a manufacturer’s blanket purchase agreement.

Establishing Withdrawal Penalties

When properly structured, penalties for withdrawing during the interconnection process can decrease the number of late-stage withdrawals, mitigate potential harm to other interconnection customers, and prompt interconnection customers to decide whether to drop out or press on with a proposed generating facility.  Thus, the NOPR requires transmission providers to assess penalties to interconnection customers that choose to withdraw during the interconnection study process.   Exceptions to the withdrawal penalty include if the withdrawal does not harm other interconnection customers or if the withdrawal follows a significant unanticipated increase in network upgrade cost estimates.  The withdrawal penalty would increase as the interconnection customer moves through the study process and would also increase if a commercial readiness deposit is provided in lieu of a demonstration of commercial readiness.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• How to define the circumstances in which a withdrawal is judged to have delayed the timing or increased the cost of network upgrades for other proposed generating facilities in the same cluster, including what criteria should be used to determine whether the withdrawal caused the delay or increased cost;
• Whether to establish a threshold for when a delay or increase in cost will trigger a withdrawal penalty (and if so, what that threshold should be);
• Whether the Commission should consider exceptions to the proposed withdrawal penalties beyond those proposed in this NOPR; and
• Whether withdrawal penalties that increase with proposed generating facility size (as measured by MW) would more effectively deter withdrawals that cause the greatest harm, and whether a correlation exists between the size of a withdrawing facility and the relative level of harm (in terms of delays and increased costs) to other interconnection customers.

Transition Process
Since the NOPR represents a big change to how transmission providers process interconnection requests, the Commission proposes to require transmission providers to offer existing eligible interconnection customers two options to ease the switch to the new requirements.  Current interconnection customers will be able to enter into either a transitional serial interconnection facilities study or a transitional cluster study with commercial readiness requirements based on certain criteria.  These transition options would make most projects already in queues subject to the new studies and requirements that result from the NOPR, while allowing certain late-stage projects to complete the interconnection process under existing rules.  Besides the two transitional study options, current interconnection customers that do not choose a transitional study can withdraw without penalty.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether certain interconnection customers with a pending interconnection request prior to the issuance of a final rule should be allowed to forgo the transition process;
• Whether FERC should require transmission providers to accept any additional commercial readiness demonstrations for entry into the transition process;
• Whether existing interconnection customers should be permitted to enter the transitional cluster study process by posting a deposit in lieu of demonstrating commercial readiness; and
• Whether the $5 million deposit required for entering the transitional cluster study process is a reasonable amount.

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SECOND KEY AREA | Increase the Speed of Interconnection Queue Processing

The NOPR proposes to impose firm deadlines and establish penalties if transmission providers fail to complete interconnection studies on time, with certain exceptions.  Additionally, the NOPR proposes a more detailed process for studying the impacts of proposed interconnections on neighboring transmission systems (called “affected systems”), including a specific modeling standard and pro forma affected system agreements.  The NOPR also proposes reforms to require transmission providers to, upon request, perform informational studies of interconnection requests that are all related to the same state-authorized or state-mandated resource solicitation.

Major components include:

• Elimination of the Reasonable Efforts Standard – Transmission providers are currently required to use “reasonable efforts” to complete the interconnection process, but there are no financial consequences if a transmission provider fails to meet those deadlines.  Interconnection study data reported by transmission providers to the Commission further indicate that interconnection study deadlines are routinely missed by transmission providers.  The NOPR proposes to eliminate the reasonable efforts standard and instead impose firm deadlines and establish penalties that would apply when transmission providers fail to meet these deadlines.  

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• What are the impacts of imposing penalties, and will those penalties be effective in speeding up the interconnection process, including exceptions, penalty levels, communication protocols, and public reports on the status of the queue in each transmission territory; and
• Whether Commission staff should issue periodic reports summarizing the status of transmission providers’ queues and timeliness of interconnection studies, and whether this periodic report should be in addition to or a substitute for the proposed monetary penalties.
• Affected Systems – As noted above, affected systems studies are used to study the impact of proposed interconnection requests on neighboring transmission systems.  Interconnection customers whose requests have safety or reliability impacts on affected systems may be responsible for additional network upgrades costs to mitigate those impacts, which can lead to late-stage project withdrawals when identified late in the process.  Yet, affected system studies are conducted inconsistently.  To ensure the involvement of affected systems from the outset, the NOPR proposes firm deadlines for transmission providers to provide initial notice to the affected system, along with cost allocation procedures and requiring the sharing of study results and assessments.

The NOPR further proposes standardizing affected systems agreements.  These standardized agreements are meant to provide consistency, as well as greater transparency and more timely information concerning costs, during the interconnection process.

The Commission seeks comment on the proposed affected system study process, pro forma affected system study agreement, and pro forma facilities construction agreement.

• Optional Resource Solicitation Study – The NOPR further attempts to modify the interconnection process to better accommodate state energy planning processes.   Some transmission providers operate in states, or across several states, that take a portfolio approach to resource planning.  In such situations, state or local entities develop resource plans and procure an entire portfolio of diverse resources that all need to interconnect to the transmission system on approximately the same schedule.  Common examples include renewable portfolio standards (RPS) or mandates, which have been enacted by many states to increase their use of renewable energy sources.

The NOPR proposes a new optional resource solicitation study, in which a resource planning entity can facilitate and organize interconnection requests consistent with their policy objectives.  This reform is a way for state agencies to gather information about potential interconnection costs that could affect state-level energy initiatives.

While the primary focus of this reform is described above, the Commission is also interested in seeking feedback on the following related issues:

• Whether state agencies that are required to develop a resource plan or conduct a resource solicitation process should be considered a “resource planning entity;”
• Whether and under what conditions other entities should qualify as resource planning entities and therefore be able to request initiation of an optional resource solicitation study;
• Whether the proposed optional resource solicitation study raises any confidentiality concerns, including whether the optional resource solicitation study report could be posted on the transmission provider’s OASIS (i.e., sites where transmission providers manage service requests and post FERC-directed information and data) before the qualifying solicitation process has concluded; and
• What, if any, challenges multistate transmission providers—in particular, those RTOs/ISOs that serve large, multi-state areas—may face regarding study timing, multiple concurrent studies, or other issues in offering an optional resource solicitation study option, and any proposals to mitigate such challenges.

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THIRD KEY AREA | Reforms to Incorporate Technological Advancements in the Interconnection Process:

In addition to focusing on clusters, the NOPR also seeks to create efficiencies for resources able to locate on the same site.  The NOPR proposes to require transmission providers to allow projects to co-locate on a shared site behind a single point of interconnection and share a single interconnection request, removing barriers for co-located resources by creating a more efficient standardized procedure for these types of configurations.  The NOPR also proposes to allow interconnection customers to add a generating facility to an existing interconnection request without automatically losing their position in the queue because of changes to the original request.  In addition, the NOPR proposes to require transmission providers to consider alternative transmission solutions if requested by the interconnection customer.

Further, recognizing the impacts of nonsynchronous generating facilities (e.g., wind, solar, and battery storage resources) on transmission conditions and operations, the NOPR proposes that they provide more granular and accurate modeling data and follow performance standards to ensure system reliability.

Major components include:

• Increasing Flexibility - Historically, interconnection requests have been limited to a single generating facility seeking to interconnect to the transmission system.  However, given advancements in energy technologies – particularly storage technologies - the NOPR proposes to require transmission providers to allow more than one resource to co-locate on a shared site behind a single point of interconnection and share a single interconnection request. This would clarify the process for different types of generating facilities that may prove complementary, such as solar combined with electric storage, wind combined with solar, or natural gas combined with wind and electric storage.
• Incorporating Alternative Transmission Technologies – The NOPR requires transmission providers, upon request of an interconnection customer, to evaluate alternative transmission solutions such as advanced power flow control, transmission switching, dynamic line ratings, static synchronous compensators, and static VAR compensators.[iv]  The NOPR preliminarily finds that alternative transmission technologies can provide substantial benefits, as they can be deployed both more quickly and at lower costs than other network upgrades.  As a result, such alternative transmission technologies may reduce interconnection costs by providing lower cost transmission solutions to interconnect new generating facilities.
• Modeling and Performance Requirements for Non-Synchronous Generating Facilities –Non-synchronous generating facilities predominantly use grid-following inverters that can react quickly to small voltage and frequency changes.  This sensitivity can make them less able to “ride through” system disturbances without tripping offline, which in turn impacts the reliability of the transmission grid.  The NOPR proposes a variety of changes regarding modeling and assumptions used in interconnection studies to, for example, more accurately model non-synchronous facilities.  The NOPR also proposes certain performance requirements for those facilities once they are interconnected.

Q.  Why does the Commission think these proposed changes in interconnection procedures and processes are important? 

A.  Backlogs and long processing times have prevented needed generating, often renewable technologies, from supplying electricity to the transmission grid.  The current process has also encouraged speculative projects that may never be constructed to claim and hold a queue position ahead of needed new generation, which further aggravates these problems.  As the Commission has recognized before, “relatively small deposit amounts, coupled with the incentives produced by a first-come, first-served approach to allocating capacity, provides an incentive for developers to secure a place in the queue even for projects that may not be commercially viable.”[v]  The NOPR hopes to streamline the interconnection process and ensure that new generation, especially generation represented by new technologies, can connect to the transmission system.  Efficient interconnection queue processes will promote just and reasonable rates, terms, and conditions for transmission service under the Federal Power Act.