Minnesota made new strides for clean energy last week (May 24, 2018), becoming the third midwest state in the last three years to adopt wholesale reforms to their interconnection procedures – creating a more transparent and effective process for customers to connect to the electric grid.
After more than two years, the updated rules are the result of work at the Minnesota Public Utilities Commission (PUC), by IREC, Fresh Energy and the Environmental Law & Policy Center (ELPC). In May 2016, the three organizations jointly petitioned the PUC to initiate a proceeding to establish new interconnection standards that better align with the current market for distributed generation, and to achieve greater consistency with national best practices.
The state’s early challenges connecting community solar gardens projects to the grid led to major backlogs and increased delays, and costs for consumers and communities. This prompted the three organizations to request an overhaul of the state’s interconnection rules to improve the process. They were also looking to streamline the interconnection process for rooftop solar systems, which constitute the vast majority of interconnection applications in the state.
“Interconnection standards are an integral component to a strong market and key to sustaining clean energy growth,” according to Sara Baldwin Auck, regulatory director for IREC, an independent national organization working to accelerate clean energy for more than 35 years.
“Minnesota’s interconnection standards were some of the first to be adopted in the country, but they have not been significantly updated since 2004,” adds Sky Stanfield, who represented IREC in the state proceeding through Shute, Mihaly & Weinberger LLP. “Given the state’s upward growth trends in renewable energy, and with new prospects for energy storage and smart inverter adoption on the horizon, the timing for these improvements is important,” says Stanfield.
“With this interconnection standard, Minnesota has laid the groundwork for our transition to clean energy, and will help drive the Minnesota market forward by bringing certainty and transparency,” adds Laura Hannah, senior policy associate at Fresh Energy, an independent nonprofit that provides in-depth policy analysis on energy issues across Minnesota. “The utilities will be much more prepared for increasing volumes of applications and modern technologies.”
Hannah adds: “The partnership was ideal with IREC’s national experience, ELPC’s regional perspective, and Fresh Energy’s local expertise. It was a big lift to overhaul the standards and accomplish what we did as a working group. A key win is recognition from the commission that we can’t let another 12 years go by without updates.”
“With the commission’s decision last week, Minnesota joins a growing list of midwest states adopting common sense standards to streamline their interconnection process,” says Brad Klein, senior attorney at the Environmental Law & Policy Center, the midwest’s leading public interest environmental legal advocacy organization. “We hope this decision encourages the remaining states – including Michigan and Wisconsin – to step forward to join Minnesota, Illinois, Iowa and Ohio.”
The recently adopted reforms (ref. Docket E999/CI-16-521) replace existing state rules with new procedures based on a national model established by the Federal Energy Regulatory Commission (FERC), known as the Small Generator Interconnection Procedures (or SGIP), along with some additional national best practices.
While these improvements create greater consistency across all Minnesota utilities, which will translate to cost- and time-savings for project developers, consumers and utilities, the Minnesota PUC declined to adopt some important best practices and deferred some critical decisions to a later point in the process.
Some key elements of the decision:
- Rules Aligned with National Models: Minnesota adopted interconnection rules based on a 2014 Federal Energy Regulatory Commission model. The use of a more nationally recognized model helps decrease the learning curve for interconnection customers and should facilitate updates in the future as innovations emerge from states using similar frameworks.
- A Formal Screening Process for Mid-Size Systems: The new rules adopt a fast track and detailed supplemental review process that allows mid-sized projects to be reviewed using a two-tier screening process, rather than requiring all projects to go through a full study process. The value of this change will increase as distributed generation penetration increases. The fast track screens follow the FERC SGIP model but contain a few Minnesota specific modifications; i.e., adopting a more conservative eligibility limit that may send some larger projects to full study unnecessarily.
- Improved Application and Review Process for Smaller Systems: One of the most important changes allows small rooftop solar projects to use a simplified application and review process. This helps streamline the interconnection process for projects smaller than 20 kW. However, if the current 11-week timeline (average 4 weeks for small systems in other states) is left as is, it could add substantial costs and delays to residential and small commercial customers. The PUC deferred decision on this timeline, so opportunity for change remains.
- Addition of Energy Storage: The new rules include energy storage systems in the definition of eligible projects, creating a more clear process for energy storage customers to connect their projects to the grid. Considerably more work needs to be done to streamline this process.
- Adoption of a Pre-Application Report: The new rules allow interconnection customers to request a pre-application report from their utility, which provides details on the state of the grid at the proposed point of interconnection. This preliminary information allows customers to get a sense early in the process – before they make a large investment of time and money – whether a given project is likely to integrate into the grid at that location, without triggering major upgrades.
- Reporting on Interconnection: The PUC required utilities with more than 40 applications a year to publish a public interconnection queue that enables customers to track the progress of interconnection projects. It also adopted some temporary annual reporting requirements, which while not comprehensive, are a start to providing enhanced visibility into how well the new interconnection process improvements are working.
With these improvements adopted, the PUC will turn its attention to updating the technical standards document to include smart inverter settings, the requirements for energy storage, and the other deferred issues noted above.
As parties to this involved process, IREC, Fresh Energy and ELPC commend the PUC for the time and energy invested to improve this foundational clean energy policy and look forward to continuing efforts to ensure effective implementation of these rules in 2019.