QUEUE UPDATE: After years of delays, NYISO wants shorter transition to new cluster studies

After years of study delays, New York ISO is preparing to file a plan with federal regulators that will transform its interconnection queue process and provide a more reliable runway to construction for renewable projects in the state of New York, according to Kevin Lanahan, who leads government relations for the grid operator.

Required by the Federal Energy Regulatory Commission’s (FERC) Order No. 2023, the full compliance filing will eliminate the standalone feasibility and system impact studies that precede its Class Year Studies, and fold elements of both into one comprehensive cluster study process. The filing is due in early April.

NYISO is also looking to abbreviate a 360-day transitional cluster study proposed by FERC down to “a couple of months” and move straight into the first true cluster study this summer, Lanahan said. NYISO was already designing a transition approach before the Final Order last summer, he said.

The compliance order will detail its proposed transition outline, which is likely to include longer windows for application and customer engagement, per a NYISO presentation on implementation and compliance.

A January 25 order from FERC retroactively approved NYISO’s interim transition rules, which the grid operator began implementing at the end of November. For the first week of December, developers at various steps along the traditional interconnection process were given a choice: continue along to next steps in what is now a transitional serial process, stay in the queue and wait for the cluster study, or withdraw.

The system reliability study “tends to bog things down,” but some developers “felt that maintaining the current (study process) was important to them, and they wanted to do that,” Lanahan said.

A spokesperson for NYISO said he did not have access to information about when the transitional serial process started, when it will end, or how many developers elected to join.

NYISO has been looking to alleviate study delays since at least early 2022, when it made a filing with FERC attributing setbacks in part to the proximity of projects and technical issues at proposed Points of Interconnection (POI), a glut of new interconnection requests and staffing shortages.

Originally designed to handle fossil fuel plants, which tend to be large, few in number and located close to load centers, interconnection queues around the country have struggled to keep up in recent years with ballooning amounts of new requests by renewable developers, whose projects tend to be smaller and in more remote areas, complicating studies and leading to delays. PJM was the first to reach a breaking point and started a multi-year process to fix the issue in July.

“I think everybody across the country is facing some of this in some way,” Lanahan said. “There were projects that, as we were going through our Class Year process, were for one reason or another slowing down the rest of the group.”

FERC issued a Notice of Proposed Rulemaking in June 2022 and set about studying the issue with the aim of proposing universal reforms that “address interconnection queue backlogs, improve certainty, and prevent undue discrimination for new technologies.”

The final order, released in July, requires grid operators to move from the traditional serial study process, often described as first-come, first-served, and adopt a cluster study process, often described as first-ready, first-served.

Among other reforms, the order also requires developers to show site control at the time of request and commercial readiness deposits to counter speculative positions. Study costs have to be allocated by ISOs on a “pro rata and pro capita basis.” Transmission providers will have to allocate network upgrade costs using a “proportional impact method” and can impose withdrawal penalties on developers who drop from the queue.

The total cluster study process, from the opening of the application window until the completion of studies, will take 569 days, or 1.6 years, which falls within FERC’s recommended timeline of 495 to 585 days. Clusters would begin every 18 months and include some “slight overlap, but not overlap that would cause rework or inefficiencies,” according to the presentation shared with NPM.

In the traditional serial queue, a drop out can force the staff to reconfigure their reliability studies and cost estimates, adding time across the board. Under the new system, if an individual project gets to a milestone and is delayed, “the rest of the group continues to move forward and make progress,” Lanahan said.

The changes are meant to give developers in the process definitive markers and timing certainty. Delays have become endemic in recent years. Intended to take roughly 12 months, the Class Year Study that kicked off in the spring of 2021 did not wrap up until last February. Lanahan, a year ago, said half of the participants dropped out once presented with their upgrade costs, causing delays. The issue seems to be worsening. NYISO has not seen dropouts “of that magnitude” before, he said.

The most recent class year study to conclude got underway last March with between 80 and 90 projects ready to be analyzed. The class year group entered the last thirty days numbering around 53, but only 27 made it until the end, according to Lanahan.

“We were able to complete it by the end of January, but I think in retrospect, it's fair to conclude that we may have been able to shave some time and a lot of that extra effort off if we knew that there were certain projects in the last 30 days that just weren't, for one reason or another, going to choose to accept cost estimates,” he said.

Developers have noted staffing and procedural issues that contribute to the problems. Awaiting entry into Class Year 2023 and fed up with delays, several developers last year had to petition FERC for an exemption from the requirement to have a reliability study in hand before entering the system impact study.

The ISO is now adding new planning engineers to bolster the study process, Lanahan said, plus additional staffing to stakeholder services, its “first frontline interaction with customers and developers.”

*This story was originally published exclusively for NPM subscribers last month.

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