13 States Flunk This Standard Test — Episode 188 of Local Energy Rules

So I got a public policy master’s degree with that specialization, the LBJ school at UT University of Texas at Austin calls it the Master’s of Public Affairs, which is a little different than some other schools. And then while I was there, one of the research projects I got to work on was actually with Austin Energy, the Muni municipal utility in Austin, Texas. So that was actually really fascinating because it touched on some of the short and long-term planning considerations, related to different types of energy resources and their operating characteristics. So with this kind of newer interest in sustainability and clean energy, I knew I wanted be, wanted to be working on energy related issues and I’ve basically done that since then. I’ve done clean energy policy analysis and research in organizations before now and now at IREC for more than six and a half years.

But even in states that do require interconnection rules from each of their regulated utilities, if there’s a lack of enforcement of the rules or a lack of accountability measures, you can see how that could be perceived as self-policing. So that would play more into that metaphor.

I hadn’t really kind of followed through the metaphor, you know <laugh> so I love that you were like trying to do that. I think one of the reasons we like that metaphor is because it, there’s a parallel between a slow moving grid connection process and bumper to bumper traffic. So it’s easy for anyone to visualize road congestion and most people can relate to the frustrations of that and especially if something that shouldn’t be moving as slow as it is. And then the other parallel is for both the grid and roads having rules that are clear and that help to keep things running smoothly are really critical. So I think there’s a couple of different parallels there, but I hadn’t actually taken it any further than that. But I did wanna go back to my point about accountability.

So one thing that’s really important here is reporting on interconnection and we do include this in Freeing the Grid. I know I’m getting a little bit ahead of some more specific things about the actual report, but we don’t know whether a state is meeting any timelines that are set for the different steps of the process, which are usually included in the rules in some way. There’s usually like you have to do this part of the process within this amount of time, but if you don’t know whether those are actually being met, it’s really difficult to ensure utility accountability and ultimately to improve the process not only for customers but for utilities. And some states are actually starting to recognize the need for this type of information and starting to require utilities to report on interconnection timelines and to a much more limited degree, we’re also starting to see some limited cost reporting. So what are the cost of interconnection look like in terms of upgrade costs and those kinds of things.

So this type of reporting can help regulators and stakeholders understand whether the process is moving along efficiently and cost effectively, or if there are changes that need to be made to streamline interconnection and address cost barriers. So when you start to see months long, years long delay, if you have these kinds of reporting requirements, you may be able to figure that out before you get to that point. So I, I guess the point is like this could help us have transparency into the process before it gets to a breaking point. That kind of transparency and visibility into the process is really a key component of interconnection rules that states should consider when they’re updating their procedures.

And so it’s interesting that you already mentioned that states are starting to think about this issue of accountability around cost and timeline. We’re gonna get more into that though. So let me actually instead just intro this report Freeing the Grid which you’ve just recently released. I just wanna first of all say that it is such an essential overview of state interconnection policy. It was frankly your report and the website was one of the inspirations for ILSR community power map which was designed to track what’s the env, you know, what the environment was like supporting local clean energy at the state level. And interconnection has been a piece of that ever since we first published it and a really essential one cuz it is the means by which all of these solar and wind and and other clean energy projects get onto the grid. So you have this new report, it’s an update from 2017 so it’s been a number of years. I guess I just wanna start off and say only one state got an A and I would guess that most people who are listening to this would probably not even get it in their first five guesses. So how did you grade the states in Freeing the Grid over their interconnection policies? What the heck did New Mexico do to get an A?

New Mexico received an A because it adopted a large majority of the best practices from our scoring criteria. That’s the easiest way to say it I guess. But the adoption of these best practices in New Mexico was a result of a stakeholder engagement process that began with a working group and then moved into a regulatory proceeding in which the commission approved new rules just last year. So that was really exciting. This is a newer rule and it was not only a complete overhaul of the previous rule which had not been updated in over a decade, but it was also a simplification of how the rules were communicated previously. So before the update they had both the interconnection rules that were in the state administrative code and a separate interconnection manual. So in the rule update process they actually combined the two into just the rules that are published in the administrative code. So that creates just one central document, which is nice and simple and we like that.

And more importantly, state regulators and commission staff took into account stakeholder input on best practices from IREC and other states and in particular ensured that the process for interconnecting energy storage was improved through new provisions related to allowing for those systems to control the amount of power that gets sent back to the grid and making sure storage systems get reviewed based on how they would be operated rather than assuming that they will be exporting at their full capacity all of the time. Part of New Mexico’s success was also good timing. So last year IREC worked with other organizations, I’m sure you’ve heard about this, John, through a project funded by the Department of Energy called BATRIES or building a technically reliable interconnection evolution for storage. So we partnered with a bunch of other groups, with other organizations with a couple of utilities and in March of last year our project team released a report on addressing barriers to energy storage interconnection and then IREC took the solutions that we proposed in the report and recommended them in the New Mexico regulatory proceeding.

So I just, I wanna provide one example here because I think this is really cool. So through research that EPRI, the Electric Power Research Institute did as part of the batteries project, we developed a new technical review screen that evaluates inadvertent export impacts. So the idea here is that as storage deployment grows and more systems use export control means, so more systems control what they send back to the grid, utilities need to understand whether inadvertent export events could impact the grid and if so, how they should be accounted for when evaluating storage projects that control that power being exported to the grid. New Mexico’s the first state to adopt that screen after we had released the report last year. So that was really exciting for both the IREC team and for the other organizations that worked on the batteries project.

And it’s also, we talk about this too, it’s also really important for when something goes wrong you have something to point to, you have some rule that says it’s supposed to work like this. I’m pointing to this specific thing, you know, and, and we like rules in this country, right? Like <laugh>, we like to have something to say this is how it should be, you need to give me this, this is what you said you would do. And so that’s why we point so much at the rules and that’s what we focused on them in Freeing the Grid, not that implementation or interpretation isn’t also important. So it’s not to discount how a state is actually doing its interconnection, which in some cases could be better. Which we do call out Hawaii on that. And then in other cases it may be worse and I’m not calling out any states for that, but there may be issues in other states where maybe a utility is interpreting something in a more conservative way than what was meant in the rules.

So there are different ways that that can go. That is the reason we prefer having something versus not having anything at all and not and having it be in that case it could just be a case by case where if I’m coming in as a customer and I just don’t know how the process is going, I have nothing to compare it to. I have, I have no idea what I’m looking at. I have no idea the amount of time it’s going to take. I have no idea the amount of cost. That’s why we think having something more transparent there is really important.

So you’ve got that side of things of like performance side accountability, but also, like you say here, it seems so useful to have sort of the like procedural accountability as well. Like are people following the rules that are set forth? Are people meeting the timelines that are in the law? Is there anything by which we can measure whether this process is working the way that it’s supposed to or not? So that’s helpful to understand that that in your terms of scoring it’s, it’s useful to have those written rules in some ways even more so than only having measures of performance. So I wanted to ask you, we kind of alluded to this earlier, you, you know, you talked about the BATRIES project from the Department of Energy and kind of the growing role that energy storage is playing as a compliment to energy generation. Are there other things that have been changing about interconnection since your last update in 2017 technology-wise or otherwise that you’ve had to take into account in terms of developing your current analysis?

So I’m gonna kind of just mention a few things that have changed and then maybe we can get more into it later. But some of the changes have to do with process efficiency, which you had talked about look, so looking at which projects can qualify for faster and less costly review processes. So which projects can actually get through the more expedited review tracks versus having to go through the longer study processes that usually cost quite a bit more too. And then there are changes related to transparency, which we’ve touched on a little bit. So requirements around data and information that utilities are required to provide that can help and design or redesign projects before and during the application process. And we’ve added criteria on cost sharing and group studies, which are a couple of big ones that states are starting to look at and adopt energy storage we just talked about. So that’s definitely a big one.

And then there’re also new and updated technical screening processes that we’ve added in. So those are the reviews that determine whether a project can move forward based on a set of technical evaluation criteria or whether they need to be studied further to determine if there will be adverse grid impacts. And then we’ve also identified a couple of new dispute resolution practices that states should consider including an interconnection forum that could be held on a regular basis to help resolve ongoing technical and policy issues. So that’s kind of a, an overview. So some of the like broader topics and then ending on a more specific dispute resolution topic.

Beyond that, we do look at an expedited process or a level two process traditionally through IREC’s model rules that would go up to, we say five megawatts that’s changed based on the distance from the substation and the line capacity. And so it may not always be five megawatts, but based on those other two factors, it could, could go down from there. And then if that could also be based on export capacity, then you’re, you’re talking about a greater number of projects that could move through. They have more review than just the simplified projects or the level one projects, but they can still move more quickly through that expedited process rather than having to go into full study. So I think we kind of look at, look at it pretty nuanced. I am not a super technical or I’m not an engineer so I don’t know all of those differences in those different, you know, like looking at the line capacities and how that affects everything or the distance to the substation. But those are some of the factors that we look at for those different sized systems, especially once you start getting into those more megawatt sized systems.

So just one thinking about it from a policy perspective, it’s, you know, if we’re working in all states and territories and, and if a lot of them had interconnection procedures or proceedings come up, it just makes it where we can’t be everywhere and we’re the only IREC that focuses specifically on interconnection. And a lot of the organizations we work with work on a lot of different other issues as well, like ILSR and Vote Solar, they all, you know, we all have multiple issues that we’re working on. So it’s, it’s really hard to be in all of these states and I know that interconnection policy doesn’t always move that quickly. And by that I mean not that states are going back to their rules or revising them all the time. But as a small nonprofit, as you likely know, it can be difficult to commit to multiple months or years long processes that are happening at the same time. So this just kind of goes back to why we do things like Freeing the Grid and why we do things like our model connection procedures is because we’re, we’re not able to intervene in every state due to resources, but we still want the states to be able to see what lessons we’ve learned across the country and learn, you know, from that work. And, and then we also try to share our best practices through assistance work as well when we’re not able to actually formally intervene as a party.

But I did wanna talk about too, just on the developer question. So yes, if you wanna work in multiple states, you have to navigate varying and sometimes lengthy procedures and requirements in different states. So you may get to understand how those processes work in different states by doing a couple of different projects, right? Like, all right, I’m getting the hang of this. But then say one of the states updates its rules, so then you have to ensure you’re tracking those updates, even if they’re just small changes are, do you know when those are happening? And because they impact your business as a developer, you may actually wanna be involved before the new rules are updated. So you wanna have a policy person that can work in that state or across multiple states so you, it really can require a decent amount of effort to ensure that you’re following the rules and then staying up to date on any changes.

And yes, there can be variations within states. So I know one of the things you mentioned in that quote is a lot of variations across states and, and I’m, I pulled out the like, you know, utility territories aren’t always just in one state, so they’re across states. But then there’s also the idea of if a state, as we talked about doesn’t have statewide procedures, then you can have variations within states that way. But then the other thing that we haven’t talked about is if the utility isn’t regulated by the state regulatory commission where you would have to work with the local co-op utility, then you would be dealing with whatever their rules are, whether they have them listed on their site, whether you have to contact them to understand what those rules are. It will just depend. Or if you’re in a city and you wanna put in a project and you have to work with a municipal utility. So you, you would definitely, you could definitely see some variations, especially if sometimes municipal utilities may be regulated by the state but most times they’re not. So you’re definitely gonna see some variations within states as well.

Thanks for that overview of kind of like how this could be in different states. It’s just, it’s crazy to me to think about how different those rules can be in different places, how challenging it must be to be in that business. But I really appreciated you giving that perspective on the nonprofit advocacy side of things. I think there’s this vision that organizations like ILSR have as well of like if we create a model and an understanding, then at least that information is out there.

But the truth is, you know, these regulatory proceedings are often decided by those who show up, right? And to not have the capacity to participate in every state means that a lot of these states are gonna go through rules revisions and they’re not gonna read Freeing the Grid and they’re not gonna use the model interconnection procedures. And the result is that their market for clean energy is gonna be hindered, right? To go back to that road metaphor, there’s gonna be more congestion, higher prices, all of the things to the disadvantage of the states that are pursuing clean energy goals and maybe don’t even realize that that is such an important component of that process.

Hey, thanks for listening to Local Energy Rules. If you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes. As you’ve probably noticed, we don’t have any corporate sponsors or ads for any of our podcasts. The reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, our listeners. Your donations not only underwrite this podcast, but also help us produce all of the research and resources that we make available on our website and all of the technical assistance we provide to grassroots organizations. Every year ILSR’s small staff helps hundreds of communities challenge monopoly power directly and rebuild their local economies. So please take a minute and go to ilsr.org and click on the donate button. And if making a donation isn’t something you can do, please consider helping us in other ways. You can help other folks find this podcast by telling them about it, or by giving it a review on iTunes, Stitcher, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this podcast and ILSR’s other podcasts, Community Broadband Bits and Building Local Power. Thanks again for listening. Now, back to the program.

So for energy storage we looked at which criteria would fall under this. We talked about one, we know that storage can add flexibility to the grid cuz it can both import and export power onto the grid at different times of the day. But the only way you’d be able to actually add that flexibility is if those unique capabilities were taken into account in the rules, which a lot of states haven’t done yet. So we looked at how do you enable that? You have to of course incorporate provisions related to one. I mean this is the first thing and and we’ve seen a lot more states do this. You have to say that energy storage is an eligible technology under the rules to inter to be able to interconnect. That’s number one. So that’s kind of your basic low hanging fruit. If you’re a state that hasn’t updated your rules in a while, just making sure that storage can interconnect. But then we want states to go well beyond that so that it can actually be utilized to its full capacity. So those are provisions related to controlling power exports and looking at technical review that takes into account how the system will actually be operated.

So only New Mexico and Illinois received this energy storage badge. So we were had hoped that it would be more states than that, but that’s all we have right now. But we really want to encourage states to look at the, these specific best practices that can really unlock what storage is capable of doing on the grid. So that was the first and that was the reason we, we wanted to do that for energy storage just because it’s, it’s so important. And then we also wanted to look at states that were incorporating IEEE 1547™-2018 in a more meaningful way. So not just do they reference IEEE 1547™-2018, but do they actually give a compliance state for when systems have to be updated to that standard? That was one of the criteria that we looked at there. And then we also wanted to look at how are they allowing for more efficient review processes.

So I think that’s the ultimate goal with some of these standards is that you’re looking at how to improve the technical require requirements for these systems on the grid. So, and then what they do ultimately, which is this is what we would see as non-engineers is what the hope is, is that these new standards would allow for more efficient review processes because the standards process enables utilities to trust device performance on the grid. So that can actually minimize the amount of customized review that may be necessary otherwise. So if you have a new piece of equipment or new device, the utility is obviously gonna wanna know can that be trusted? Will that still be able to be safely operated on the grid? How do we make sure of that? So we, they would, they would do a customized review but when you have the standards process actually you know, does all the testing for that, those different types of settings and different requirements so then you don’t have to worry as much about that customized review. So I think that’s the ultimate goal. I hope that that explains some of it.

So what we did in Freeing the Grid is include a criterion on it’s, it’s more of a catchall for now that would capture any provision that addresses interconnection barriers that may impact underserved or disadvantaged communities. And New Mexico is the only state that we found that had any type of provision that met this since it has in its cost sharing provision a clause about increasing access to subscribers who are low income or underserved being a determinant for whether the project is deemed as having a public benefit and therefore qualifying for cost sharing, which that cost sharing would either be among other projects and that same that are using the same distribution facilities or spreading the costs among other rate payers.

So rate basing, that’s just one way to think about this, but we’re, we’re trying to come up with other options. We’re currently working on this, you know, and want to figure out how to address equity within interconnection policy. So that’s, that’s what this is getting at. It’s just like, here’s something to think about, but it’s a really broad and a little bit more vague way to, you know, that we, we included it in here but we think it’s a really important space in interconnection and that we should continue to think about it and figure out the best practices there. I think that’s where, that’s where we are. Let’s, let’s figure this out and try to come up with some really good ideas that states can move forward.

It’s really hard to say the number of states that have based their rules entirely off of one model since some have incorporated elements of both. And then you have California’s Rule 21, which other states have used to incorporate some elements, you know, from there. So it’s a little bit hard to say which states have used which rules, but again, I kind of digress from your actual question, which is what are some of the main differences? So one thing that we point out is SGIP it was really kind of geared around larger projects and even though it goes down to the smaller project level, it kind of as an appendix has a small inverter based projects that are 10 kilowatts or less like in an appendix. So that isn’t quite as a simple process than that we would like to see. So I think in ours that’s, that’s a little bit of a difference. I think it’s, it’s a little bit more streamlined in the IREC model procedures.

And you know, we really love to work with other stakeholders and state regulatory commissions and really want to provide our input and provide assistance. So especially since we, as I mentioned before, we’re not always able to intervene as a formal party in every state. We still haven’t figured out the unlimited funding thing just yet. I don’t know if you have it ILSR, but you know, that’s what we’d like to work on. But we’re always happy to be a resource as we’re able. So anyone should feel free to reach out to us if you have questions about Freeing the Grid, please reach out to us. We’re happy to help out.