New CA Approach Aims to Resolve Interconnection Disputes Faster
By Gwen Brown & Sky Stanfield
After 5 years of work, in late April 2022, the California Public Utilities Commission announced the launch of a new process for resolving disputes that arise during the interconnection of distributed energy resources, like solar and energy storage, to the grid.
While time will tell how the process plays out in practice and how effective it ultimately is, it offers the promise of faster, more effective resolution of interconnection disputes. And, if successful, this approach could offer a model for other states.
Over the last several years, IREC provided comments on the process to help improve and refine it. In this article, we explore the new mechanism, why it’s expected to be better than historic approaches to dispute resolution, and what to look for going forward.
What’s wrong with interconnection dispute resolution today?
When a developer of a clean energy project, like a solar PV system, requests to interconnect it to the grid, the utility evaluates whether the project can be accommodated on the grid with the current equipment at the location, or whether upgrades may be required to ensure safety and reliability.
In this process, a customer may sometimes have concerns or disagreements with how the utility has determined the need for upgrades or the cost of those upgrades. These concerns could include questions about the accuracy of certain studies or engineering decisions, whether requested equipment upgrades are really necessary, and/or whether there are lower cost alternatives.
A typical approach for resolving an interconnection dispute, in California and other states, involves some direct conversations between the utility and the customer to try to resolve their differences. If that fails, there may be an option for the parties to pursue mediation by mutual agreement. If mediation fails or is not agreed to, the customer has the option of filing a formal complaint with the Commission. While this process is technically available to either the utility or the customer to pursue, in reality, utilities typically have almost complete control over the interconnection process and thus rarely pursue dispute resolution.
From there, the process typically takes many months before the Commission will reach a resolution. Because the complaint path is so time- and cost-intensive, and because customers fear the Commission will always defer to the utility’s technical expertise, interconnection applicants rarely pursue formal complaints. In many cases, the customer may simply withdraw the project, slowing clean energy deployment.
Thus, improved/expedited processes are needed to give customers a path to resolution in a reasonable time period. A bill was passed in the California legislature in 2016 to require the Commission to adopt an expedited dispute resolution process to resolve this concern (Assembly Bill 2861 (Ting, 2016)).
California’s New Approach to Resolving Interconnection Disputes
The new California process, Expedited Interconnection Dispute Resolution or EIDR, aims to address this problem by establishing a more expedited timeline for resolution. With a target resolution timeline of 60-70 days, the new approach aims to resolve disputes relatively quickly.
The new approach also addresses a key challenge that has plagued prior attempts to improve dispute resolution: the need for arbiter(s) with technical expertise.
The Technical Expertise Challenge
Commissions tend to provide a great deal of deference to utilities on “technical” issues. This has made it more difficult in the past to develop a process by which an independent third party could help resolve the disputes—as IREC recommends. The lack of an objective arbiter with technical expertise is often flagged as the biggest challenge for Commissions in evaluating the disputes.
IREC’s 2019 Model Interconnection Procedures recommend Commissions appoint an ombudsperson to help facilitate dispute resolution. Ideally, that person would have technical expertise; however, in practice, that has not been the case in the few states that have an ombudsperson (Massachusetts and New York for example).
Minnesota tried to develop a process with technical experts in the past, but it found that it was both hard to find qualified and objective experts, and many of the decisions by the technical expert still then appealed to the Commission. That process was abandoned as a result. (This article from 2018 detailed that initiative while it was active.)
California’s new approach creates a panel of technical experts that will review and evaluate the technical issues. The decision of the panel will be reviewed by the Executive Director of the Commission, after which she will issue an order resolving the dispute. Interested parties have 10 days in which to submit an appeal to the Commission.
The standing 10-person panel is made up of technical experts from the state’s investor-owned utilities as well as non-utility panelists. For each dispute, a 4-member sub-panel consisting of two utility engineers and two non-utility engineers is chosen to review the dispute. The utility members of the subpanel will not be from the utility involved in the dispute.
Other Key Elements of the Process
Not all interconnection disputes are eligible for this process. In particular, issues that already have a clear answer in California’s interconnection rules (Rule 21), will not be eligible. Instead, those must be addressed through proposed changes to the rules or the normal complaint process.
The stages of the process and their required timelines are outlined in this graphic from the CPUC:
The IREC team is glad to see this expedited resolution process finally implemented and looks forward to seeing whether or not it will be successful in both moving disputes along expeditiously and resulting in better outcomes. The success of the process will heavily depend on the ability of the sub-panel to weigh in on disputes objectively and with the necessary technical expertise.
One, perhaps counterintuitive, indicator of the program’s success may be more disputes being pursued. While more disputes may sound like a bad thing, it could in fact be reflective of a process that provides customers with greater confidence that their dispute will be resolved fairly and efficiently.