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Group studies can solve some, not all, interconnection headaches, study finds

Group studies can solve some, not all, interconnection headaches, study finds
(Photo by American Public Power Association on Unsplash)

Authors advise against over-reliance on emerging methodology

In its tireless pursuit of simplifying and standardizing Distributed Energy Resource (DER) interconnection, The Interstate Renewable Energy Council (IREC) has published a report making recommendations for states considering group studies.

Thinking Outside the Lines: Group Studies in the Distribution Interconnection Process intends to assist clean energy stakeholders in determining whether group studies are the way to go in their respective jurisdictions.

Ultimately, IREC determines the emerging practice of lumping potential interconnection candidates together for study to be useful in some cases, but not all.

“Group studies are not a silver bullet for all interconnection challenges,” cautions Laura Beaton of Shute, Mihaly & Weinberger LLP, counsel for IREC and the lead author of the paper. “But they can frequently be helpful in managing queues and fairly allocating costs.”

A quick history lesson

Historically, DER interconnection requests were reviewed one at a time, in the order received, to determine the safety and cost of connecting to the grid. The cost-causer paid for any incurred upgrades.

“That can be unfair because those ahead in line got the benefits of upgrades that already existed but consumed capacity, and could benefit future projects further down the line,” explains Beaton.

Conversely, group studies look at similar or corresponding potential interconnections and evaluate them together. If an upgrade is triggered, the group splits the bill. Beaton says that could make the study more economical and the upgrades more affordable.

Although common at the transmission level, group studies have only recently begun to gain traction at the distribution level, as more projects come online and available grid capacity dwindles in some areas. IREC believes longer queue delays and higher upgrade costs are also fueling interest in the method.

“A group study is a good way to address these issues,” asserts Beaton, who identifies a lack of publicly available information on the topic. “Our goal is to provide information specific to group studies, not at the transmission level.”

A map indicating the six states selected by IREC for distribution group studies research. California, Oregon, Minnesota, Maine, North Carolina, and South Carolina are highlighted.
A map indicating the states selected by IREC for distribution group studies research. California, Oregon, Minnesota, Maine, North Carolina, and South Carolina are highlighted. Courtesy: IREC

The research and findings

IREC examined the approaches and methods in six states, highlighted in the graphic above (California, Oregon, Minnesota, Massachusetts, North Carolina, and South Carolina). While able to speak with many developers, the paper’s authors lamented the fact that utilities didn’t seem to want to talk to them; indeed, only one (in California) was willing to answer questions.

“Once we identified the states, we reviewed procedures and docket materials to understand the arguments and motivations behind policies,” explained Beaton.

The paper provides the necessary components for a group study process and walks through options for addressing each part. It discusses various approaches through case studies, analyzing corresponding successes and failures while providing additional recommendations.

Beaton identifies two key findings. One is that group studies may have more limited value where DER penetration and upgrade needs are already high.

“They can alleviate queue challenges in some places,” she contends. “But it depends on the situation on the ground.”

“It may be necessary to look beyond group studies to address these challenges,” admitted Beaton in a webinar sharing her findings. “Group studies are not a cure-all. They are one tool in the toolbox.”

The other conclusion is that design processes should be context-specific and tailored to each jurisdiction’s needs. There is not (nor will there be) a one-size-fits-all approach.

“This paper is not going to provide a roadmap of exactly how to do it,” she added, with a nod to the Department of Energy’s i2X Transmission Roadmap. “This is so context-dependent.”

IREC identifies the first steps for any group study: initial assessment and queue management. Courtesy IREC

The process and timelines

“Even if a group study process is something your jurisdiction is interested in, (the publication) is essential to make sure the process functions correctly and whether or not you adopt it,” notes co-author and fellow attorney at Shute, Mihaly & Weinberger LLP Peter Damrosch.

According to Damrosch, distribution-level interconnection studies are typically grouped by their expected timelines or by geographic proximity and shared infrastructure. Some states follow a fixed schedule of once or twice per year, while others take an as-needed approach to triggers or conditions. California combines the two, evaluating groups every six months or as they come together, allowing for some flexibility. This method is favored by the paper’s authors.

IREC's suggested timelines for interconnection
IREC’s suggested timelines for DER interconnection. Courtesy: IREC

IREC shares common timelines (pictured) for major steps in the interconnection process and encourages all vested parties to find ways to save time by tackling steps concurrently. Damrosch notes that the Federal Regulatory Energy Commission’s Order 2023 focuses on timeline accountability at the transmission level, and believes that should be happening for DG in some form as well.

However, timelines can be tough to stick to since DER interconnection candidates must consider impacts at both the distribution and transmission levels. And since group projects are often larger than anything looked at in an individual study, they are more likely to trigger a transmission system review.

In some cases, projects may withdraw from a group for a litany of understandable reasons, whether financial or timeline-related. That will have some downsides, like potentially needing to restudy the impacts of the project, but Damrosch contends that sometimes a dropout or two isn’t a bad thing.

“Sometimes the group as a whole reduces the needs for certain upgrades,” he explains.

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FERC Order 2023 also adopts financial commitments that projects will have to shell out at various stages of the cluster study process (the transmission-level verbiage), meant to deter speculation and encourage leaving earlier rather than later if necessary.

At the distribution level, Damrosch finds heavy withdrawal penalties to be rare. “No one seems to be clamoring for them either,” he says, concluding such policies may not be needed for DER interconnection.

As far as project modifications are concerned, it’s a balancing act between accommodating those that may be beneficial with those that may be detrimental and trigger a need for restudy. Damrosch believes most jurisdictions haven’t thought through their project modification process in enough detail. For example, he says, Massachusetts has a cumbersome procedure in which the applicant must get approval from everyone in the group, but there aren’t good systems for that in place. California, on the other hand, has defined a list of allowable modifications.

“This is one of those areas where there aren’t clear best practices and there’s room for thought and experimentation,” notes Damrosch.

“One developer described the problem as death by a thousand cuts.”

Peter Damrosch on upgrade costs triggered by large group study projects

Some grid upgrades are uneconomical, even when split by a group, and this speaks volumes of DER interconnection’s ongoing headaches. For example, according to the paper’s authors, every project in every Minnesota group study has ultimately had to back out over upgrade costs.

“If groups are defined quite large, projects may only be minimally responsible for the part they’re paying for,” explains Damrosch.

IREC lays out other measures to address interconnection challenges outside of group studies. Courtesy: IREC

Other options

Thinking Outside the Lines: Group Studies in the Distribution Interconnection Process recommends integrated distribution system planning as a holistic approach to DER interconnection. It’s necessary to identify constraints on the system, plan for upgrades, and construct them before major queue crises develop. The authors note an interesting approach in Massachusetts, where Eversource and National Grid have been tasked with identifying full-penetration areas and directing capital investment plans toward figuring out what upgrades would be needed.

Massachusetts is also proposing methodologies for planning and funding upgrades, seeking to assign costs to past, present, and future members of an interconnection group. This will lead to a single per-KW fee for connecting in a given area, which will in a roundabout way cover the cost of upgrades while increasing reliability and capacity for ratepayers.

Last year, Massachusetts established DPU 20-75, a provisional framework for planning and funding such upgrades. Several group studies have been filed by Eversource and National Grid, which are the predominant investor-owned utilities in the region. One has already been approved: DPU 22-47. The rest are expected to be ruled upon in early 2024.

An example of public interconnection queue visibility in California.
An example of a publicly available interconnection queue in California. Courtesy: IREC

Damrosch says another companion to group studies should be expanded visibility into grid capacity. “It’s pretty vital for developers to find areas where there’s capacity,” he decrees. Transparency was highlighted as a key success factor for interconnection at IREC’s Vision Summit 2023.

In states with fixed windows for reviewing interconnection requests, there’s often little visibility into what other projects have applied in that window.

“It’s not known to anyone until the groups are formed,” says Damrosch. “That can lead to developers making misinformed choices. They don’t know which areas of the queue are experiencing high demand or delays.” Some states do allow limited visibility into queues, like California (pictured above).

Final thoughts

“I don’t know that anyone got everything right,” determines Peter Damrosch when considering the states IREC studied. “There were definitely elements that seemed strong and promising,” he added, recognizing California’s study timeline policies and Massachusetts’ innovative investment plans. “But in most interviews, there were different features of the experience on the ground that it was pretty clear still needed to be reviewed.”

Beaton liked how Duke Energy in North and South Carolina clearly laid out its group studies and provided opportunities for interaction between developers and utilities.

“It can’t be like a black box where results are just spat out,” she declared. “Communication is key to ‘right size’ the group and the projects.”

“Providing those opportunities to restudy and allow the group to iterate- to give projects a chance to leave or modify even if it does amount to restudy- those provisions are a good way to balance and make sure the group study process turns out well,” Beaton concluded.