By Sara Baldwin Auck
IREC Regulatory Program Director
Joint Motion Filed by IREC,
Environmental Law & Policy Center and Fresh Energy
Minnesota has been under a looking glass of late, as is true of many states planning for the modernization of outdated electric grids to handle more distributed renewable energy. Among the numerous energy issues to be addressed, one paramount challenge is updating its interconnection policies, widely regarded as a critical component of any state’s policy toolkit.
Yesterday (May 12, 2016), IREC joined Fresh Energy and the Environmental Law & Policy Center to file a joint motion with the Minnesota Public Utilities Commission, which includes a proposal that would help the state implement interconnection changes based on a compilation of best practices and lessons learned from other states. If implemented, the changes would allow for fair, expedited interconnection of clean renewable energy for more Minnesota consumers – while ensuring the safety and reliability of the distribution grid.
The joint motion formally requests that the commission reopen its 2004 interconnection order and adopt new interconnection procedures based on this ready-to-adopt proposal. This motion is in response to problems with the interconnection process in Minnesota that were exposed during the launch of Xcel Energy’s Community Solar Gardens program. It also comes on the heels of specific calls by the commissioners to address interconnection in their comments on grid modernization.
The proposal submitted by the three groups – representing local, regional and national perspectives – reflects a collection of the best vetted practices from across the country, modified to meet specific needs in Minnesota and presented in an “all-in-one” format so it can most easily be implemented by Minnesota.
Importantly, the three groups worked diligently to develop a robust proposal built on tried-and-true practices that will enable the resource-constrained commission in Minnesota to adopt new procedures in an expedited manner. The current procedures are now over a decade old and in need of a retrofit to keep pace with state policy goals and consumer demand for clean energy. Fortunately, there has been enormous progress in other leading renewable energy states from which Minnesota can learn.
“The time is right for Minnesota to update its interconnection procedures to further the goals of its Grid Modernization Initiative and prepare Minnesota for a more integrated, diversified distribution grid with higher levels of distributed generation,” said IREC Regulatory Director Sara Baldwin Auck.
Interconnection standards specify the process that customers and utilities must abide by when a customer seeks to connect a distributed generation resource, often a renewable-energy system, to the electric grid. They specify technical engineering requirements, timelines, fees and standardized procedures for conducting utility studies to determine whether particular systems can be safely interconnected.
“Strong interconnection standards can provide predictable, streamlined, expedited, and cost-effective processes for all involved parties: the end-user energy consumer, the developer, and the utility.” Auck adds:
- For utilities with higher volumes of interconnection requests, good standards can help them manage the processes effectively and efficiently, while still maintaining grid reliability and safety.
- Inadequate or poor standards, on the other hand, can lead to costly delays and unnecessary fees and requirements that ultimately impact the economic viability of projects, as well as the consumer experience and investor confidence.
More states are increasingly adopting procedures based on the FERC Small Generator Interconnection Procedures (SGIP) model and IREC Model Rules. This proposal seeks to align the state’s interconnection procedures with this emerging national consensus, while also being responsive to local realities.
The impact of such an update would be broad, as the recommended procedures protect energy customers from avoidable and unreasonable costs. And available data suggests that Minnesota interconnection customers are experiencing delays and related costs in the current interconnection process.
The model rules:
- Provide consistency and ease of access to distributed generation project developers who often operate in multiple states.
- Limit the administrative and regulatory burden for developers, allowing them to install projects and work with consumers in a streamlined fashion, bringing down administrative costs and minimizing inhibitory lag in the application review process, to the benefit of Minnesota customers.
- Help avoid delays and unnecessary project costs that inhibit continued growth in small generating facilities and cause unnecessary costs to be passed on to consumers.
Why does MN need updated interconnection standards now?
State and national markets for distributed generation, particularly distributed solar, have seen transformational growth in the 12 years since the commission adopted Minnesota’s interconnection procedures.
- In 2004, there were 235 distributed qualifying facilities on distribution utility systems in Minnesota, according to utility reporting to the Department of Commerce.
- By the end of 2014, there were 2,463 projects, with significantly more projects in the pipeline. These growth trends reflect much broader changes in the national industry.
- In 2015, solar PV deployments in the U.S. reached an all-time high of 7,260 megawatts, up 16 percent over 2014 and 8.5 times the amount installed five years earlier.
- There were just 1,000 solar installations in the country in 2001, the year the Minnesota legislature directed the commission to establish standards. This year, the U.S. surpassed one million solar PV installations, and projections indicate two million before the end of 2018, according to the Solar Energy Industries Association.
In the Midwest region, Ohio, Illinois and Iowa, have all recently taken action to update their interconnection standards based in part on the updated SGIP. In addition, Colorado’s rules for small generator interconnection procedures are based on SGIP, thus Xcel Energy is familiar with other states’ adaptations of SGIP for non-federal projects. Developers who operate in multiple states are also familiar with SGIP, and adopting procedures that are based on SGIP will help increase regional consistency.
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