Good morning.
Last year we took a step forward with Order No. 2023. The most important aspect of that order was to change the basic principle of managing the interconnection queues from “first come, first served” to “first ready, first served.”
Now we need to build on that principle of “first ready, first served” by looking at the crucial issue of prioritization, which basically means identifying those generation resources waiting in the queue that need to move to the front of the queue, and quickly.
But as we consider the question of which interconnection applicants to prioritize, it is extremely important to remember the real purpose of interconnection reform: To ensure reliable power service to consumers. Ensuring reliable power at just and reasonable rates ought to drive everything we do on interconnection.
So with reliability as the overriding goal of interconnection, that means prioritizing those generation resources that can be built quickly and efficiently, and that give us the most generation capacity as quickly as possible at the least burden to customers.
It is undeniable that we are heading towards a reliability crisis, for three major reasons:
- First, the far too rapid loss of existing dispatchable resources;
- Second, rapidly rising demand largely driven by data centers and other hyperscale users;
- Third, the inability to bring online those new generation resources that can give us a lot more capacity and quickly. So we need to identify and prioritize those generation resources for interconnection as quickly as possible.
To do that, some new ideas need to be seriously considered that would not have been considered in the past when most RTOs, like PJM, were what was called “long on capacity,” meaning they had excess capacity and plenty of it.
One idea in which I am particularly interested is one I have discussed on several occasions with Eric Blank, Chairman of the Colorado Public Utilities Commission, who spoke on yesterday’s panel on prioritization.
That proposal is to enable state utility regulators to designate those generation resources in their states awaiting interconnection that are critical to reliability. Such state designations would move those resources to the front of the queue. State regulators know which resources are needed to keep the lights on in their states; that expertise should justify prioritization. I see no problem with this form of prioritization in terms of Order No. 888’s open access requirements, but if necessary, we should be prepared to amend 888 to allow such prioritization, given its critical importance to reliable power service.
I also agree with Chairman Blank’s suggestion that when an existing generator retires, a generation resource locating at the same site, where transmission facilities already exist and do not need to be planned or built, should be prioritized. Given the threat to reliability that we are facing from disorderly and rapid retirements of existing resources, especially dispatchable, it just makes sense to prioritize generators who are locating at the same site as the retiring generator. And, to promote reliability, we should prioritize those generators that offer the same or more capacity value as the retiring generator.
I look forward to hearing more ideas about how we can prioritize getting the generation resources we desperately need built and interconnected quickly. As we lawyers say in drafting legal documents, time is of the essence. There is no time to waste because the reliability crisis is coming soon.
Thank you and I look forward to reviewing other prioritization ideas from this conference.