Development heads share mixed reactions to FERC interconnection reform; "needed a home run and FERC hit a single"
In a series of interviews with NPM, developers and stakeholders are sharing reactions to FERC’s newly passed interconnection reforms.
The reforms were approved by FERC on July 27 and include a series of new rules governing how grid operators approve interconnection requests. The new reforms include the prioritization of first-ready projects, mandating cluster studies, and imposing new financing and progress deadlines for interconnection applicants. These new rules must be met by all public utility transmission providers, RTOs, ISOs as well as the utilities within these regions.
Contrasting with reactions to the MISO queue reform introduced just a week prior to the FERC reforms, developer reactions to the FERC decision have been notably more positive.
Pine Gate’s VP of Regulatory Affairs Brett White tells NPM he ultimately believes the new ruling will help clear backlogged interconnection queues. ENGIE’s Michael Clingan said the firm was pleased FERC had made “significant and necessary reforms a priority,” specifically highlighting study process reforms, increased financial commitment requirements and the imposition of firm deadlines.
BrightNight Chief Development Officer Ron Kiecana called the ruling “long overdue” and says the firm supports “balancing the need for more timely application processing and certainty while maintaining a healthy, competitive renewable energy and energy storage market.” BayWa r.e. Solar CEO Fred Robinson said he thinks the first-ready, first-served approach "promises to expedite the interconnection process."
White said he was particularly thankful FERC had listened to stakeholder feedback and removed the previously proposed commercial readiness demonstrations for interconnection projects, which White says “would have represented arbitrary and burdensome barriers for new projects coming online.”
Caitlin Marquis, Managing Director at Advanced Energy United, agreed that the final order “indicated some promising progress over the original proposal.” In particular, Marquis said she was pleased to see the commission step back from “problematic non-financial readiness requirements that were unworkable” and to see important provisions regarding transmission provider accountability and accommodation of advanced energy technologies included in the final rule.
That said, Marquis disagreed with White’s assessment that the reforms would clear out current queue backlogs.
"The final rule unfortunately leaves important stones unturned," Marquis said. "It does not address some of the root causes of mounting interconnection costs and delays including an unnecessarily protracted and inefficient study process and unexpectedly high costs of transmission system upgrades, which are ultimately passed through to consumers."
R Street Institute’s Energy and Environmental Program Director Devin Hartman echoed Marquis’ concerns about whether FERC went far enough through this ruling.
“We commend FERC for taking productive steps to reduce regulatory barriers to generator interconnection, however, the new status quo will still leave years worth of interconnection backlogs, keep grid costs at multiples of what is necessary, and delay new supply needed for grid reliability and clean transition,” Hartman said. “Interconnection reform needed a home run and FERC hit a single.”
Virtually all of the developers interviewed by NPM agreed that the federal regulator would need to go further to fully address ongoing interconnection issues, which are causing some offtakers to run into trouble finding affordable projects through RFPs.
White says FERC chairmen Phillips and Clements are “absolutely correct to acknowledge that FERC will need to go even further if our regulatory framework is going to keep pace with the energy transition,” while Kiecana said BrightNight sees the ruling as a “great first step.” Robinson said he still sees an opportunity for "further enhancements on long-term transmission planning." Meanwhile, Hartman says stakeholders may have to start looking elsewhere if FERC is unwilling to go far enough to address the widespread issues.
“FERC must prioritize supplemental efforts to resolve the unfinished business in interconnection reform,” Hartman said. “If not, Congress should.”
*This story was originally published exclusively for NPM subscribers in July.
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