Dive Brief:
The California Independent System Operator board on Wednesday approved a proposal to revamp the grid operator’s interconnection process, aiming to clear out a massive queue by favoring projects that it believes are most likely to succeed.
Under what it calls the “transformational reforms,” which federal regulators must approve, CAISO will assess three criteria — commercial interest, project viability and system need — when determining whether a project should move into the interconnection study phase, according to a CAISO staff memo to its board.
“This package of reforms is essential for the ISO to adapt to the increased levels of need and competition for new interconnections to the ISO grid, and to ensure the ISO’s continued demonstrated ability to interconnect large quantities of new generation to the grid to meet near-term reliability needs and longer-term policy requirements,” Neil Millar, vice president of infrastructure and operations planning, said in the memo.
Dive Insight:
Like other grid operators, CAISO’s interconnection queue has mushroomed. In May 2023, the grid operator had 185 GW in its interconnection queue, according to the memo. It has another 347 GW from “Cluster 15,” its most recent annual interconnection window.
The pending interconnection requests make up more than three times the capacity California will need to meet its 2045 clean energy goals, according to CAISO.
If the reforms are approved by the Federal Energy Regulatory Commission, CAISO plans to use its new interconnection process when it starts studying Cluster 15 in October, Millar said. Cluster 15 is currently on hold to give CAISO time to work through Cluster 14.
The interconnection reforms are part of California’s effort to more closely align its resource planning, resource procurement and transmission planning processes.
“The ISO’s goal is to accelerate progress toward execution of interconnection agreements and commercial operation for the most viable and competitive projects, in areas that align with local and state resource plans,” Millar said.
The interconnection reforms, for example, include targeting grid connections at specific zones in the state with available or approved transmission capacity.
As part of the zonal approach, CAISO will provide information to help project developers identify areas with available transmission capacity, Millar said in the memo. The information will include updated queue reports, an interconnection heat map, interconnection area reports from each cluster study and a review of non-California Public Utilities Commission jurisdictional load-serving entity resource plans, he said.
The grid operator will score proposed projects, with 30% of each score related to commercial interest, 35% to project viability and 35% to system need. “The highest-ranking projects will advance to the study phase in descending order of project score, until the available and planned transmission capacity for each constraint is filled to 150% of that capacity,” Millar said.
The reforms build on requirements set by FERC’s new interconnection rules, according to Millar.
CAISO’s plan garnered mixed reviews. Its scoring process discriminates against “greenfield projects and brownfield projects that are not expansions, short lead time resources, resources that provide system or flexible capacity, independent power producers, and corporate buyers,” the Solar Energy Industries Association said in a May 29 letter to the board.
The Independent Energy Producers Association contends the reforms favor utilities and other load-serving entities. The trade group urged the board to direct CAISO’s market monitoring unit to monitor load-serving entity procurements for anticompetitive behavior when they choose self-build projects.
Pacific Gas & Electric and Southern California Edison support the reforms, saying they strike a reasonable balance of perspectives among stakeholders.
CAISO plans to launch another stakeholder process to consider several remaining interconnection reform issues, with a goal of implementing them in March.
