Commissioner James Danly Dissent Regarding SunEnergy1, LLC

Commissioner James Danly Statement
July 2, 2021
Docket No. ER21-1832-000

I dissent from today’s order granting SunEnergy1, LLC (SunEnergy) a waiver of PJM Interconnection, L.L.C.’s (PJM) interconnection queue deadlines.  SunEnergy requested a retroactive waiver of the applicable deadline that the Commission has no statutory authority to grant, as I have explained on numerous occasions.[1]

I have another concern with today’s order as well.  As I have written previously, transmission providers can provide useful insights as to the validity of claims regarding interconnection queue waiver requests and, more importantly, as to the effects of the waiver request on queue management.[2]  I was gratified to see that PJM provided us with its views in this case, submitting a protest that went into detail as to why SunEnergy’s waiver request failed to satisfy any of the four factors that we consider in evaluating waiver requests.

Unfortunately, the Commission gave no real weight to PJM’s position and dismissed its arguments out of hand.  I find two of the Commission’s findings particularly troublesome.

First, the Commission finds that SunEnergy satisfied the good faith prong of our test because “it believed in good faith that the feasibility studies for all five of its projects contained material errors that rendered the feasibility studies incomplete and it also believed that the deadlines were not applicable for the Waiver Projects.”[3]  While I do not question SunEnergy’s good faith belief that there were errors in the feasibility studies, PJM points out that its queue deadlines are clearly delineated in its Tariff and do not provide for automatic extensions of a deadline when a project developer disputes the results of a feasibility study.  “SunEnergy does not provide a reasoned explanation or any Tariff support for its unilateral decision to deem the Feasibility Studies incomplete and thereby relieve them of the obligation to provide the executed agreements and pay the deposits.”[4] 

PJM also notes that the Commission requires a waiver applicant to demonstrate, in order to demonstrate good faith, that it “worked diligently and exerted its best efforts to satisfy the tariff requirement for which it is requesting a waiver.”[5]  Here, SunEnergy made no effort, much less a diligent effort, to determine prior to the deadlines whether in fact PJM had determined that the feasibility studies were erroneous.  Instead, SunEnergy attempts to place the blame for its failure to meet the deadline on PJM for not responding to the claimed errors prior to the deadlines.[6]  But it is SunEnergy, not PJM, that bears the responsibility for ensuring that it complied with the applicable deadlines.  Assigning this responsibility to SunEnergy is appropriate, given that PJM is overtaxed with managing interconnection requests, spending over 240,000 hours processing such requests in 2020.[7]  If PJM failed to respond to SunEnergy’s requests in a timely fashion, SunEnergy was obligated to comply with the Tariff deadlines. 

I do not share the Commission’s reliance on SunEnergy’s assertion that it was reluctant to execute SIS agreements it believed had incorrect points of interconnection, incorrect capacity values, and/or other serious errors.[8]  If in fact SunEnergy was correct that PJM’s studies had been incorrectly performed, PJM undoubtably would have amended the SIS agreements after the studies were revised and the correct points of interconnection and other technical details identified.  In any event, nothing in PJM’s Tariff contemplates that a good faith belief that a PJM feasibility study is flawed excuses a project developer from submitting an executed SIS agreement.

Nor do I understand how the Commission could make the finding that SunEnergy in good faith “believed that the deadlines were not applicable for the Waiver Projects.”[9]  This finding runs directly contrary to SunEnergy’s concession that it “had no way of knowing whether or not PJM would conclude that any of the perceived errors were or were not material, and accordingly whether the studies were complete and whether the deadlines under Section 204.3 were applicable, until after receiving responses from PJM.”[10]  Given that it had “no way of knowing” whether the deadlines were applicable, SunEnergy could not have had a good faith belief that the deadlines were not applicable.  SunEnergy’s failure to confirm its belief regarding the tariff deadlines in light of this uncertainty cannot constitute a diligent effort to comply with those deadlines.

I find PJM’s arguments to present a convincing case that SunEnergy’s failure to comply with the deadline, in the absence of confirmation from PJM that there were material errors in the feasibility studies, cannot be found to have satisfied our good faith standard.  But the Commission fails to address most of PJM’s arguments, and gives almost no weight to those arguments it does acknowledge. 

Even more troublesome is the Commission’s curt dismissal of PJM’s arguments regarding the harm that will result from granting SunEnergy’s waiver request.  As the entity responsible for managing its interconnection queues, PJM is in the best position to know if granting a waiver of a deadline will harm its administration of those queues.  And PJM went into great detail as to the harm that granting the waiver will have on its queue management capability.[11]  This included the effect of reinserting three SunEnergy projects into the queue on “PJM’s ability to progress with studies for other Interconnection Customers,” and the fact that allowing project developers to “determine unilaterally whether the studies performed for its project are complete and whether a particular deadline applies . . . would utterly erode PJM’s authority and with it, PJM’s ability to manage its interconnection queue.”[12]  I find these points, made by the entity that actually has to deal with hundreds of interconnection requests, to constitute a convincing demonstration of harm.

Given the significant interconnection queue backlogs, the Commission should have afforded some deference to PJM’s views on the effect of a waiver on those backlogs.  Instead, the Commission simply repeats the irrelevant truism that “[t]he interconnection customers in other queue positions will be in the same position as they would have been had the Waiver Projects’ queue positions not been withdrawn.”[13]  This of course ignores that SunEnergy did miss its deadline, and other customers in fact are harmed by granting the waiver. 

The Commission also acknowledges PJM’s concerns that granting a waiver in these circumstances would “interfere with PJM’s ability to manage the queue and create the need for re-studies.”[14]  But rather than respond to this concern, the Commission simply mischaracterizes PJM’s argument as claiming that SunEnergy took “dubious actions” to delay the tariff deadline.[15]  That was not PJM’s point at all, but rather that the interconnection queue process cannot help but be harmed if SunEnergy and other project developers are permitted to unilaterally decide that PJM’s interconnection queue deadlines do not apply to them without confirming their conclusion with PJM.

I find it ironic that the Commission concludes its order by noting that it is “concerned by the large, and seemingly increasing, number of requests for waivers of PJM interconnection queue-related deadlines,” and that “something may be amiss with the PJM Tariff, its administration by PJM, or with interconnection customers’ approach to complying with these deadlines.”[16]  There is no need to wonder what is causing this problem.  The primary reason there is a large and increasing number of requests for waivers of PJM’s interconnection queue deadlines is that the Commission keeps granting them while ignoring the harm that they cause.  In the past the Commission could rely upon the excuse that PJM did not oppose the waiver and did not indicate that granting the waiver would have an adverse effect on its queues.  Here, we do not have that excuse.  PJM does oppose the waiver and we are granting it over PJM’s objections and identification of resulting harm. 

Something certainly is amiss, and that is our willingness to grant unlawful and unsupported waivers of interconnection queue deadlines.  The only possible consequence of our order today is that the number of waiver requests will continue to increase, perhaps even more rapidly, if the Commission continues to ignore the concerns expressed by PJM as to the harmful consequences of granting those requests. 

For these reasons, I respectfully dissent.