Policy & Regulation

California ISO approves interconnection reforms

California ISO approves interconnection reforms
The CAISO control room (Credit: CAISO)

A package of reforms meant to accelerate the interconnection of new generating resources to the grid was approved Wednesday by the California Independent System Operator’s (CAISO) Board of Governors.

The interconnection process changes, which must also be approved by the Federal Energy Regulatory Commission (FERC) before taking effect, were crafted during more than a year of engagement with stakeholders. Designed to increase reliability and help keep down costs, CAISO said the changes were needed because it had become “impossible” to process and analyze in a timely and meaningful manner the hundreds of interconnection applications that poured into the ISO each of the past several years.

“We’ve seen explosive growth in the number of applications for grid interconnection studies the past three years and we need a new and improved process to prioritize and determine which projects are the most viable and which will meet our resource adequacy and reliability needs in a timely manner over the next 20 years,” Jan Schori, chair of the ISO Board of Governors, said after the unanimous vote.

Did you know the Department of Energy is hosting a CAISO interconnection workshop on the first day of GridTECH Connect Forum? Join us later this month, June 24-26 at the Hyatt Regency in Newport Beach, CA to learn all about the latest interconnection reforms in California.

The Board approved the interconnection proposal at a meeting scheduled to give stakeholders extra time to comment on a recent addendum by ISO staff. Before the vote, the Board heard from supporters and others voicing concern over some elements of the proposal. Board members said the ISO is committed to continue working with stakeholders to monitor the reforms’ impacts and explore additional refinements if necessary.

Under new protocols approved by the Board, ISO staff would evaluate interconnection applications with an emphasis on alignment with local and state resource and transmission planning and project readiness while continuing to maintain open access to the transmission grid.

Interconnection requests for projects coming into the ISO during an annual application window would be scored based on commercial interest, project viability, and system need. The projects would then be ranked for their ability to advance to the study process, where they would be more fully evaluated.

The ISO would study projects up to 150% of available transmission capacity, which it says would increase the likelihood that the “most viable and cost-effective projects” can advance without being delayed by the volume of less feasible projects. The reforms also include a path forward for projects if they aren’t in a geographic area with existing or planned transmission.

“The ISO, participating transmission owners, load-serving entities, and industry need a reformed process to advance the most viable projects toward interconnection and commercial operation, and to prevent stagnant projects from hindering the progress of viable projects in the queue,” Neil Millar, vice president of infrastructure and operations planning, wrote in a June 6 memorandum to the Board.

Reforms approved by the Board build on requirements established last July by FERC Order No. 2023, which set new standards for interconnection processes around the country. The ISO submitted a compliance filing with FERC for that order in May and is layering additional reforms onto the federal requirements.

To address outstanding interconnection issues, another track of enhancements will begin this summer focused on deliverability allocations and more acute challenges created by recent “superclusters” which CAISO said have seen an unprecedented volume of interconnection requests.

“Importantly,” Millar wrote, “the ISO believes that the final proposal will enable the most viable and needed projects to advance through the study process based on a series of meaningful indicators to ensure sufficient resource availability and diversity in the queue” for interconnection applications.

Earlier this month, CAISO posted a final revised addendum to the Interconnection Process Enhancements 2023 final proposal to the initiative’s webpage. It clarified the final proposal for stakeholders, based on the most recent round of comments, and addressed the following issues:

  • Clarification of the implementation of the zonal approach, and how available transmission capacity will be assessed for each cluster.
  • A commitment to monitoring the results of various components of the interconnection request intake process and coordinating with the California Public Utilities Commission (CPUC), local regulatory authorities, and stakeholders to adjust any necessary components for Cluster 16 and future clusters.
  • A requirement that load-serving entities (LSEs) opt-in to the LSE allocation process and post-selection criteria and contact information on a publicly-accessible website, to improve the transparency and rigor of the LSE allocation process while respecting oversight of LSE procurement activities.
  • Clarifications to the scoring process, and recommendations to stakeholders on the LSE allocation process.
  • Further clarification of the treatment of mixed-fuel resources such as hybrid and co-located solar and storage projects.
  • Clarifications to the engineering design plan scoring criterion.
  • Context and rationale for the final proposal’s treatment of Energy Only resources.

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