Massachusetts may revamp solar and distributed generation interconnection process

Thursday, August 25, 2011

Being able to interconnecting electricity generating units to the grid is almost always necessary.  Even islands - literal or figurative - often have their own microgrids to which new generation must be interconnected, but usually the electric grid in question is run by a public utility.

Despite federal and state policies designed to promote the development of solar energy projects and other renewable and efficient distributed generation, many utilities are failing to process interconnection applications within the timelines required by their tariffs.  (As I previously wrote, regulators in the Canadian province of Ontario are currently wrestling with this problem as well.)  A recent filing by the energy office of the Commonwealth of Massachusetts appears likely to trigger reforms to the process for interconnecting new distributed generation to the grid.
The Massachusetts Department of Energy Resources’s filing consists of a consultant's report commissioned by DOER and the Massachusetts Clean Energy Center, coupled with a formal petition requesting that the Department of Public Utilities open an investigation on interconnection procedures.
Prepared by consulting firm KEMA, the report provides a snapshot of the current interconnection process, as well as offering recommendations for improvements.  The report is based on surveys of distributed generation developers and utilities.  The report’s key findings include:
  • Significant Increase in New Distributed Generation:  Recent years have brought a significant increase in the volume of applications for interconnection of distributed generation in Massachusetts.  The volume of interconnection applications reviewed grew by a factor of 7 between 2004 and 2010 - a significant increase in interconnection requests.
  • Current Process Can't Handle the Volume:  A very high percentage of utility reviews of interconnection requests have missed key deadlines.  For example, in 2009, 100% of the interconnection application review conducted under utilities’ standard process exceeded the timeline specified in the utility’s tariffs.  Currently, utilities face no penalty for missing these deadlines.  As the report notes, “There is no consequence to the utilities for delays, even though there are consequences – often significant – to the DG applicants.”
  • Interconnection Costs Cause Frustration:  While current application fees and witness test costs may be reasonable, the report notes that applicants are generally dissatisfied with the costs of the interconnection facilities upgrades and equipment required by utilities.  Disputes over the nature and cost of new and upgraded facilities increase costs, add delays, and further chill distributed generation development through increased uncertainty.
The report notes that these failings come despite significant policy support for distributed generation:
In summary, the meta-message of this report rests at the intersection of several trends.  Massachusetts has created a vibrant policy environment for DG, underpinned by one of the best interconnection processes in the country, a process which has generally worked well for most DG applicants since its introduction in 2004. Over the last seven years, however, and particularly under the Patrick Administration, the growth in DG volume has grown significantly.

Yet, our survey showed that 79% of Expedited applicants and 75% of Standard applicants are “Somewhat dissatisfied” or “Very dissatisfied” with a process they describe as long, inconsistent, and “too complicated to comment”. . . .

We define a successful process as one that meets its customer demand with high quality outcomes, within acceptable parameters of time and cost. This review demonstrates that – seven years after its introduction – the current process by which DG is interconnected in Massachusetts is no longer meeting the demands of three-quarters of its customers.
Based on these findings, the report offers recommendations to remedy the system's failure, including proceedings before the State Department of Public Utilities to redesign the interconnection process to be better suited to high-volume penetration of distributed generation.
The DOER’s petition was filed on August 18, 2011.  The Department of Public Utilities is expected to respond to the petition by opening an investigation on interconnection along the lines suggested in the report.  How that proceeding affects the experiences of utilities, distributed generation owners or developers, and ratepayers remains to be seen.

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