13 States Flunk This Standard Test — Episode 188 of Local Energy Rules

Mari Hernandez:

One, I mean this is the first thing and we’ve seen a lot more states do this. You have to say that energy storage is an eligible technology under the rules to inter to be able to interconnect. That’s number one. So that’s kind of your basic low hanging fruit. If you’re a state that hasn’t updated your rules in a while, just making sure that storage can interconnect. But then we want states to go well beyond that so that it can actually be utilized to its full capacity. So those are provisions related to controlling power exports and looking at technical review that takes into account how the system will actually be operated.

John Farrell:

If the high voltage transmission system is like a network of increasingly congested freeways for moving electrons, then interconnection is the potential relief valve. Like unleashing trains, buses, bikes, or scooters as transportation alternatives to congested roads, good interconnection rules and regulations let clean local energy thrive to meet our electricity needs. Interconnection needs a lot more attention, suggests a new report from the Interstate Renewable Energy Council or IREC. Joining me in July, 2023 report author Mari Hernandez, assistant director of the regulatory program at IREC, talks about freeing the grid and how we need action in many states to unlock the full clean energy potential of our electricity systems. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance. And this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system. Mari, welcome to Local Energy Rules.

Mari Hernandez:

Thank you so much for having me.

John Farrell:

I’d like to start off with all of my guests and ask just sort of a intro question about like what motivated you to get into clean energy and climate work, cuz we’re gonna dive into a really deep and interesting subject of interconnection, but how did you get there? What got you to something for many people as complex as interconnection of clean energy resources?

Mari Hernandez:

Yeah, so my interest in the environment and sustainability actually started from a young age, but it really didn’t click for me professionally until I went to grad school. So I started out in social work after undergrad, so not the traditional <laugh> path and the energy. And then I decided to go back to school to work specifically on social policies. But then once I got to grad school and started looking at the different classes that were available in different projects, I was, I immediately drawn to any classes that involved clean energy or environmental issues. So I actually ended up getting my specialization in natural resources and the environment.

So I got a public policy master’s degree with that specialization, the LBJ school at UT University of Texas at Austin calls it the Master’s of Public Affairs, which is a little different than some other schools. And then while I was there, one of the research projects I got to work on was actually with Austin Energy, the Muni municipal utility in Austin, Texas. So that was actually really fascinating because it touched on some of the short and long-term planning considerations, related to different types of energy resources and their operating characteristics. So with this kind of newer interest in sustainability and clean energy, I knew I wanted be, wanted to be working on energy related issues and I’ve basically done that since then. I’ve done clean energy policy analysis and research in organizations before now and now at IREC for more than six and a half years.

John Farrell:

That’s great. I love the level of intentionality because I was just thinking about when I went back to graduate school, my concentration is called social policy and my master’s thesis was on out-of-home placement for juvenile delinquents in the justice system, which is related to a job I had at the time. So the pivot to energy for me became, it was a professional one, it was, I got this job and it was like, ooh, I better start learning about how the energy system works because I have no idea.

Mari Hernandez:

<laugh>

John Farrell:

I wanna just start off then with there’s so many different pieces to the clean energy transition that people pay attention to. Probably the two that most broadly reach folks is renewable energy, right? Wind power, solar power, changing our electricity system over to be cleaner. Now people are paying attention to electric vehicles, but just an entirely different thing or maybe not as unrelated as we think, but can you talk about what makes interconnection so plugging these things into the grid such a crucial aspect of the clean energy transition. Why, why should we care about this? Why should we care that you’re publishing a report to help us understand how interconnection works in all of the different places?

Mari Hernandez:

Yeah, I really think this is kind of the key to unlocking all of that renewable energy. So especially as you have things like the Inflation Reduction Act and other big policies that we basically are saying we are putting a high value, high importance on transitioning to clean energy and what do we need to get there? It’s not just that financial side of that. That’s where interconnection comes in and that is the real practical side of getting to a hundred percent clean energy. So we really see interconnection as a very foundational policy to get us there. So interconnection for someone who like me, seven years ago, before I came into IREC and didn’t fully understand, it really lays out the processes, timelines, cost, the technical requirements for connecting these new resources, distributed energy resources like solar energy storage to the grid in a safe manner and one that is providing for reliability on the grid as well. So they’re really important rules for, for getting new resources onto the grid and so that’s why we put so much of an emphasis on it and that’s why we focus so much of our work on interconnection because of how important we believe it to be.

John Farrell:

In the report you describe interconnection policies as sort of the rules of the road that have to be followed by both the people who are applying to connect their thing to the grid and the utility companies and that they, like you say, they play this really essential role then in getting all this clean energy online so that we can use that solar energy, that wind energy, et cetera. I think one of the, one of the things that is interesting for me as an observer broadly of the energy system and the work that we do at the Institute for Local Self-Reliance is that it feels like the grid system, when you talk about the rules of the road, it feels like it’s a little bit like a road system, but where we have sort of a private police force, right? You have investor-owned utilities that serve two thirds roughly of American electricity consumers and the grid though that they operate on and that they police when it comes to having the right to interconnect stuff. They’re a private company and they are overseen by public regulators. So I don’t know is a private police force and accurate metaphor, is there a way that you think of trying to describe to people the relationship between the utility company and the user and how it might differ from some of these other things that are treated more like public assets, like the roads?

Mari Hernandez:

So I think it depends on the state. I think like you’re talking about in regulated markets, the idea is that the state regulator would be the one setting and enforcing the rules for regulated utilities. But if the state doesn’t require those utilities to have interconnection rules, then yes, that responsibility of setting them may fall to the utilities or they may not have to set them at all and they, it may just be something like a case by case, you know, someone tries to interconnect and they deal with it as each project comes up versus having some publicly available type of rules that might be what you’re alluding to.

But even in states that do require interconnection rules from each of their regulated utilities, if there’s a lack of enforcement of the rules or a lack of accountability measures, you can see how that could be perceived as self-policing. So that would play more into that metaphor.

I hadn’t really kind of followed through the metaphor, you know <laugh> so I love that you were like trying to do that. I think one of the reasons we like that metaphor is because it, there’s a parallel between a slow moving grid connection process and bumper to bumper traffic. So it’s easy for anyone to visualize road congestion and most people can relate to the frustrations of that and especially if something that shouldn’t be moving as slow as it is. And then the other parallel is for both the grid and roads having rules that are clear and that help to keep things running smoothly are really critical. So I think there’s a couple of different parallels there, but I hadn’t actually taken it any further than that. But I did wanna go back to my point about accountability.

So one thing that’s really important here is reporting on interconnection and we do include this in Freeing the Grid. I know I’m getting a little bit ahead of some more specific things about the actual report, but we don’t know whether a state is meeting any timelines that are set for the different steps of the process, which are usually included in the rules in some way. There’s usually like you have to do this part of the process within this amount of time, but if you don’t know whether those are actually being met, it’s really difficult to ensure utility accountability and ultimately to improve the process not only for customers but for utilities. And some states are actually starting to recognize the need for this type of information and starting to require utilities to report on interconnection timelines and to a much more limited degree, we’re also starting to see some limited cost reporting. So what are the cost of interconnection look like in terms of upgrade costs and those kinds of things.

So this type of reporting can help regulators and stakeholders understand whether the process is moving along efficiently and cost effectively, or if there are changes that need to be made to streamline interconnection and address cost barriers. So when you start to see months long, years long delay, if you have these kinds of reporting requirements, you may be able to figure that out before you get to that point. So I, I guess the point is like this could help us have transparency into the process before it gets to a breaking point. That kind of transparency and visibility into the process is really a key component of interconnection rules that states should consider when they’re updating their procedures.

John Farrell:

We could spend like all day probably going around on the road metaphor. I think the congestion one is particularly apt and as you said, something people can relate to, right? Like you’re trying, you’re going down the on ramp to the freeway and it’s like oh my gosh, it’s just stuck and we’re going nowhere and really understand like if clean energy is stuck in that traffic jam then we’re not gonna get to where we want to go, right? We have cost effective energy that’s not getting on the grid system so we’re gonna pay more and it’s gonna be dirtier and we’re gonna suffer the health consequences and the environmental consequences. I think there’s some other parts to it and I don’t want to go into it now, but maybe as we go through talking about your report, which I really want to get to around this idea of like ownership and policing and accountability, which is why I was throwing my ideas out there about this idea of policing around who is responsible for this.

And so it’s interesting that you already mentioned that states are starting to think about this issue of accountability around cost and timeline. We’re gonna get more into that though. So let me actually instead just intro this report Freeing the Grid which you’ve just recently released. I just wanna first of all say that it is such an essential overview of state interconnection policy. It was frankly your report and the website was one of the inspirations for ILSR community power map which was designed to track what’s the env, you know, what the environment was like supporting local clean energy at the state level. And interconnection has been a piece of that ever since we first published it and a really essential one cuz it is the means by which all of these solar and wind and and other clean energy projects get onto the grid. So you have this new report, it’s an update from 2017 so it’s been a number of years. I guess I just wanna start off and say only one state got an A and I would guess that most people who are listening to this would probably not even get it in their first five guesses. So how did you grade the states in Freeing the Grid over their interconnection policies? What the heck did New Mexico do to get an A?

Mari Hernandez:

<laugh> Well the simplest way to describe it is that we combed through each state’s interconnection procedures and compared those to the best practices that we had identified in freeing the grid. So I do wanna point out here that if you’re looking at the website for freeing the [email protected], you can find a lot of the more specific information to the criteria in the criteria section. It’s broken up into different tables and this is a good way to see, you know, what we actually graded each state on. So that will, that answers that question, how do we grade the state? So we compare them to those best practices in freeing the grid, the grades are based just on what is included in the procedures so they don’t account for discrepancies and how utilities may have implemented the rules or if there have been updates that have been adopted outside of the rules.

New Mexico received an A because it adopted a large majority of the best practices from our scoring criteria. That’s the easiest way to say it I guess. But the adoption of these best practices in New Mexico was a result of a stakeholder engagement process that began with a working group and then moved into a regulatory proceeding in which the commission approved new rules just last year. So that was really exciting. This is a newer rule and it was not only a complete overhaul of the previous rule which had not been updated in over a decade, but it was also a simplification of how the rules were communicated previously. So before the update they had both the interconnection rules that were in the state administrative code and a separate interconnection manual. So in the rule update process they actually combined the two into just the rules that are published in the administrative code. So that creates just one central document, which is nice and simple and we like that.

And more importantly, state regulators and commission staff took into account stakeholder input on best practices from IREC and other states and in particular ensured that the process for interconnecting energy storage was improved through new provisions related to allowing for those systems to control the amount of power that gets sent back to the grid and making sure storage systems get reviewed based on how they would be operated rather than assuming that they will be exporting at their full capacity all of the time. Part of New Mexico’s success was also good timing. So last year IREC worked with other organizations, I’m sure you’ve heard about this, John, through a project funded by the Department of Energy called BATRIES or building a technically reliable interconnection evolution for storage. So we partnered with a bunch of other groups, with other organizations with a couple of utilities and in March of last year our project team released a report on addressing barriers to energy storage interconnection and then IREC took the solutions that we proposed in the report and recommended them in the New Mexico regulatory proceeding.

So I just, I wanna provide one example here because I think this is really cool. So through research that EPRI, the Electric Power Research Institute did as part of the batteries project, we developed a new technical review screen that evaluates inadvertent export impacts. So the idea here is that as storage deployment grows and more systems use export control means, so more systems control what they send back to the grid, utilities need to understand whether inadvertent export events could impact the grid and if so, how they should be accounted for when evaluating storage projects that control that power being exported to the grid. New Mexico’s the first state to adopt that screen after we had released the report last year. So that was really exciting for both the IREC team and for the other organizations that worked on the batteries project.

John Farrell:

That’s so great cuz it kind of gets at another question I’m gonna ask you in a minute about what has been changing since the last time you did this report. But it sounds like overall like what you’re looking at when you’re doing this screen in terms of the criteria is to what degree do states map out clearly the procedure for connecting to the grid and like reasonable timelines for doing so, such that interconnection can happen quickly and cost effectively and that this new iteration also includes not just sources of electricity generation like rooftop solar or wind turbines, but also energy storage and how you might deal with that.

Mari Hernandez:

Exactly. Yeah.

John Farrell:

You sort of alluded to this in my question about the policing earlier you mentioned that some states don’t really detail their interconnection policy that it might be left to the utilities discretion or it be kind of like on a case by case basis. Is there much difference between someone who say, does that doesn’t have a written policy at all, sort of a case by case basis and a policy that is maybe really out of date in terms of the scoring? Like is it worse to not have something written down at all or could it be worse actually to have a policy that has really bad timelines or like bad cost estimates?

Mari Hernandez:

I would say definitely to not have a policy at all. I think a lot of what you’ll see throughout Freeing the Grid on the interconnection grades are that one of our goals is really to promote transparency and to help set expectations for both customers and utilities. I think it sets those expectations on both sides cuz in a lot of states you’ll also see that there are expectations on the customer side as well. You have this amount of time to sign this document to send this back to us to resubmit this application if you’re missing information, those kinds of things. And I think every stakeholder in that process needs that information upfront.

And it’s also, we talk about this too, it’s also really important for when something goes wrong you have something to point to, you have some rule that says it’s supposed to work like this. I’m pointing to this specific thing, you know, and, and we like rules in this country, right? Like <laugh>, we like to have something to say this is how it should be, you need to give me this, this is what you said you would do. And so that’s why we point so much at the rules and that’s what we focused on them in Freeing the Grid, not that implementation or interpretation isn’t also important. So it’s not to discount how a state is actually doing its interconnection, which in some cases could be better. Which we do call out Hawaii on that. And then in other cases it may be worse and I’m not calling out any states for that, but there may be issues in other states where maybe a utility is interpreting something in a more conservative way than what was meant in the rules.

So there are different ways that that can go. That is the reason we prefer having something versus not having anything at all and not and having it be in that case it could just be a case by case where if I’m coming in as a customer and I just don’t know how the process is going, I have nothing to compare it to. I have, I have no idea what I’m looking at. I have no idea the amount of time it’s going to take. I have no idea the amount of cost. That’s why we think having something more transparent there is really important.

John Farrell:

It seems to tie really nicely into to what you were saying earlier about accountability, that if there’s nothing in writing right, there’s no way to hold someone accountable to that. So you have these broader measures of accountability and IREC has been working on these and you can actually listen to some other podcasts that we have on this topic. The one we did with the folks at the Solar and Storage Industries Institute and the Solar Energy Industries Association. We were petitioning the federal government – energy and information administration to gather more data on interconnection timelines and costs cuz because they already collect information from all the distribution utilities that are responsible for it.

So you’ve got that side of things of like performance side accountability, but also, like you say here, it seems so useful to have sort of the like procedural accountability as well. Like are people following the rules that are set forth? Are people meeting the timelines that are in the law? Is there anything by which we can measure whether this process is working the way that it’s supposed to or not? So that’s helpful to understand that that in your terms of scoring it’s, it’s useful to have those written rules in some ways even more so than only having measures of performance. So I wanted to ask you, we kind of alluded to this earlier, you, you know, you talked about the BATRIES project from the Department of Energy and kind of the growing role that energy storage is playing as a compliment to energy generation. Are there other things that have been changing about interconnection since your last update in 2017 technology-wise or otherwise that you’ve had to take into account in terms of developing your current analysis?

Mari Hernandez:

Yeah, so a lot has changed compared to when we last released Freeing the Grid. I like the data side of things. So I went back and counted the number of scoring criteria that remained the same from our last release of the interconnection grades and now, and it was just 13 criteria out of the 42 criteria that we initially had that stayed the same. So the rest were either modified or removed entirely and then we added 32 new criteria. So now we have a total of 56 criteria. So that’s just to show how much of an overhaul we did on the scoring this year. And that’s why it’s also hard to do like a little bit of an apples to apples comparison with the previous grade. So that’s why we didn’t even attempt to do that because they would, they were very different. But some of the changes you actually mentioned a couple of in and just the way that we’re thinking about this.

So I’m gonna kind of just mention a few things that have changed and then maybe we can get more into it later. But some of the changes have to do with process efficiency, which you had talked about look, so looking at which projects can qualify for faster and less costly review processes. So which projects can actually get through the more expedited review tracks versus having to go through the longer study processes that usually cost quite a bit more too. And then there are changes related to transparency, which we’ve touched on a little bit. So requirements around data and information that utilities are required to provide that can help and design or redesign projects before and during the application process. And we’ve added criteria on cost sharing and group studies, which are a couple of big ones that states are starting to look at and adopt energy storage we just talked about. So that’s definitely a big one.

And then there’re also new and updated technical screening processes that we’ve added in. So those are the reviews that determine whether a project can move forward based on a set of technical evaluation criteria or whether they need to be studied further to determine if there will be adverse grid impacts. And then we’ve also identified a couple of new dispute resolution practices that states should consider including an interconnection forum that could be held on a regular basis to help resolve ongoing technical and policy issues. So that’s kind of a, an overview. So some of the like broader topics and then ending on a more specific dispute resolution topic.

John Farrell:

If you could give me an example of what is the kind of project that you would hope in a state’s interconnection rules would get expedited review or would be more likely to move through the process of interconnection quickly? Is there a certain kind of project that you’re like, oh, you know, a rooftop solar project on a house should be able to go through expedited review or something like that? Or is there more nuance to it than like a particular kind of project?

Mari Hernandez:

There’s definitely more nuance than just one type of project, but on the whole, yes, I would say that we want smaller projects to move through more quickly. So that’s typically called your simplified or level one projects. So those can be anywhere from 10 kilowatts to 25 kilowatts to now what we’re a best practice is looking at what is the export capacity of that project. So if it’s a solar plus storage system, look at the export capacity only, don’t look at the full nameplate capacity of both the solar and the storage systems. So we’re starting to see, you know, so maybe we, we think about export capacity in that review and so that can still go through that simplified review process. So definitely we want those smaller projects to be able to move through quickly because they’re more likely to not cause issues on the grid.

Beyond that, we do look at an expedited process or a level two process traditionally through IREC’s model rules that would go up to, we say five megawatts that’s changed based on the distance from the substation and the line capacity. And so it may not always be five megawatts, but based on those other two factors, it could, could go down from there. And then if that could also be based on export capacity, then you’re, you’re talking about a greater number of projects that could move through. They have more review than just the simplified projects or the level one projects, but they can still move more quickly through that expedited process rather than having to go into full study. So I think we kind of look at, look at it pretty nuanced. I am not a super technical or I’m not an engineer so I don’t know all of those differences in those different, you know, like looking at the line capacities and how that affects everything or the distance to the substation. But those are some of the factors that we look at for those different sized systems, especially once you start getting into those more megawatt sized systems.

John Farrell:

Thanks, that’s super helpful. I wanna ask you about something else that came up for me in the report that I thought was really interesting. So I’m gonna read this quote from the report here. It says “though some states may have the same letter grade and or numerical score, no two states have exactly the same rules, meaning there’s a lack of standardization and consistency across state lines and even across electric utility territories that may be spread out over different states and regions.” So I’m just picturing what this looks like in the, in the real world. So if you’re a solar developer that works in neighboring states, so like Iowa and Illinois, right? And maybe they have similar interconnection grades, I don’t know if that’s actually true, so don’t quote me on that part. You know, the process of the connecting to the grid in those two states could actually be really different even if they have similar grades. So if we go back to our roads metaphor, which I really enjoy, it’s like I’m driving from Illinois to Iowa and suddenly the process for getting on and off the freeway isn’t the same. So first of all, is that really, are we really that balkanized when we set internet connection policy, it’s like at a state level or even a sub-state level. And I guess that is the other question you grade at the state level, but are there variations within states as well?

Mari Hernandez:

Yeah, so the simple answer for both is yes, unfortunately. I wanna talk about this as a nonprofit since that’s what we are and then I’ll go into your developer question too. But sometimes our team at IREC talks about the amount of effort and expense and expertise required to participate just in the states where there are ongoing regulatory proceedings on interconnection. So we’re a public interest intervener and being able to work across all of the states is so expensive and takes so much of our time and capacity, you know, it makes it really difficult to do that.

So just one thinking about it from a policy perspective, it’s, you know, if we’re working in all states and territories and, and if a lot of them had interconnection procedures or proceedings come up, it just makes it where we can’t be everywhere and we’re the only IREC that focuses specifically on interconnection. And a lot of the organizations we work with work on a lot of different other issues as well, like ILSR and Vote Solar, they all, you know, we all have multiple issues that we’re working on. So it’s, it’s really hard to be in all of these states and I know that interconnection policy doesn’t always move that quickly. And by that I mean not that states are going back to their rules or revising them all the time. But as a small nonprofit, as you likely know, it can be difficult to commit to multiple months or years long processes that are happening at the same time. So this just kind of goes back to why we do things like Freeing the Grid and why we do things like our model connection procedures is because we’re, we’re not able to intervene in every state due to resources, but we still want the states to be able to see what lessons we’ve learned across the country and learn, you know, from that work. And, and then we also try to share our best practices through assistance work as well when we’re not able to actually formally intervene as a party.

But I did wanna talk about too, just on the developer question. So yes, if you wanna work in multiple states, you have to navigate varying and sometimes lengthy procedures and requirements in different states. So you may get to understand how those processes work in different states by doing a couple of different projects, right? Like, all right, I’m getting the hang of this. But then say one of the states updates its rules, so then you have to ensure you’re tracking those updates, even if they’re just small changes are, do you know when those are happening? And because they impact your business as a developer, you may actually wanna be involved before the new rules are updated. So you wanna have a policy person that can work in that state or across multiple states so you, it really can require a decent amount of effort to ensure that you’re following the rules and then staying up to date on any changes.

And yes, there can be variations within states. So I know one of the things you mentioned in that quote is a lot of variations across states and, and I’m, I pulled out the like, you know, utility territories aren’t always just in one state, so they’re across states. But then there’s also the idea of if a state, as we talked about doesn’t have statewide procedures, then you can have variations within states that way. But then the other thing that we haven’t talked about is if the utility isn’t regulated by the state regulatory commission where you would have to work with the local co-op utility, then you would be dealing with whatever their rules are, whether they have them listed on their site, whether you have to contact them to understand what those rules are. It will just depend. Or if you’re in a city and you wanna put in a project and you have to work with a municipal utility. So you, you would definitely, you could definitely see some variations, especially if sometimes municipal utilities may be regulated by the state but most times they’re not. So you’re definitely gonna see some variations within states as well.

John Farrell:

I just wanna take a moment here to recognize the interview I did with Sky Stanfield who I know works with IREC on that state-based intervention that you were talking about. So for folks who are interested in kind of the regulatory and policy implementation side of things, that was a really good interview in terms of getting some insight there.

Thanks for that overview of kind of like how this could be in different states. It’s just, it’s crazy to me to think about how different those rules can be in different places, how challenging it must be to be in that business. But I really appreciated you giving that perspective on the nonprofit advocacy side of things. I think there’s this vision that organizations like ILSR have as well of like if we create a model and an understanding, then at least that information is out there.

But the truth is, you know, these regulatory proceedings are often decided by those who show up, right? And to not have the capacity to participate in every state means that a lot of these states are gonna go through rules revisions and they’re not gonna read Freeing the Grid and they’re not gonna use the model interconnection procedures. And the result is that their market for clean energy is gonna be hindered, right? To go back to that road metaphor, there’s gonna be more congestion, higher prices, all of the things to the disadvantage of the states that are pursuing clean energy goals and maybe don’t even realize that that is such an important component of that process.

John Farrell:

We’re going to take a short break. When we come back, we discuss special awards IREC gave to select states, what is meant when we talk about equitable interconnection, and what to do now you’ve realized interconnection is key to the success of local clean energy. You are listening to a Local Energy Rules podcast with Mari Hernandez, assistant director of the regulatory program at the Interstate Renewable Energy Council.

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John Farrell:

I was hoping to ask you about badges. So you give some badges or some special recognition to some states for some best practices. I was hoping you could talk about what some of those best practices were that you were recognizing.

Mari Hernandez:

Thank you for that. Yeah, so on badges we really wanted to call out these specific topics to highlight the importance of some newer provisions that have come up that add clarity around energy storage and technical requirements as well as improve transparency for applicants through increased data sharing and reporting. So some of this we’ve already talked about, so I won’t go through each thing like in too much detail because I know we’ve already talked about each of these a little bit. Mostly storage and transparency. So what we wanted to do is create these, I guess markers of which states are actually doing these really well.

So for energy storage we looked at which criteria would fall under this. We talked about one, we know that storage can add flexibility to the grid cuz it can both import and export power onto the grid at different times of the day. But the only way you’d be able to actually add that flexibility is if those unique capabilities were taken into account in the rules, which a lot of states haven’t done yet. So we looked at how do you enable that? You have to of course incorporate provisions related to one. I mean this is the first thing and and we’ve seen a lot more states do this. You have to say that energy storage is an eligible technology under the rules to inter to be able to interconnect. That’s number one. So that’s kind of your basic low hanging fruit. If you’re a state that hasn’t updated your rules in a while, just making sure that storage can interconnect. But then we want states to go well beyond that so that it can actually be utilized to its full capacity. So those are provisions related to controlling power exports and looking at technical review that takes into account how the system will actually be operated.

So only New Mexico and Illinois received this energy storage badge. So we were had hoped that it would be more states than that, but that’s all we have right now. But we really want to encourage states to look at the, these specific best practices that can really unlock what storage is capable of doing on the grid. So that was the first and that was the reason we, we wanted to do that for energy storage just because it’s, it’s so important. And then we also wanted to look at states that were incorporating IEEE 1547™-2018 in a more meaningful way. So not just do they reference IEEE 1547™-2018, but do they actually give a compliance state for when systems have to be updated to that standard? That was one of the criteria that we looked at there. And then we also wanted to look at how are they allowing for more efficient review processes.

John Farrell:

Lemme just interrupt for a second and ask you about this standard. So I have some passing familiarity with this as standards around like solar panels and inverters and how they interface with the grid. Could you just explain a little bit about what this standard is and why it would be important to interconnection?

Mari Hernandez:

Yeah, so I will try again. I’m not the most technical person here. So I will say that what IEEE 1547™-2018 is trying to do is really it’s updating and clarifying the technical requirements for distributed energy resources to connect to the grid. So updated technical standards like 1547-2018 really play a critical role in ensuring that new projects are connected to the grid safely and reliably. And also making sure that, you know, they kind of set, they add some new settings for some of the equipment that you use when you connect a project. So like smart inverters. So some of those new settings, if your state, and this is actually one of the best practices that we include, is that you update some of your default settings. Again, this is, I’m not a technical person, but you update those, you know, kind of settings within the rules, those technical requirements to make sure that those systems can operate in a way that is really is much more efficient and unlock some of the capabilities of the different systems and actually make the grid run a little smoother.

So I think that’s the ultimate goal with some of these standards is that you’re looking at how to improve the technical require requirements for these systems on the grid. So, and then what they do ultimately, which is this is what we would see as non-engineers is what the hope is, is that these new standards would allow for more efficient review processes because the standards process enables utilities to trust device performance on the grid. So that can actually minimize the amount of customized review that may be necessary otherwise. So if you have a new piece of equipment or new device, the utility is obviously gonna wanna know can that be trusted? Will that still be able to be safely operated on the grid? How do we make sure of that? So we, they would, they would do a customized review but when you have the standards process actually you know, does all the testing for that, those different types of settings and different requirements so then you don’t have to worry as much about that customized review. So I think that’s the ultimate goal. I hope that that explains some of it.

John Farrell:

Just to draw a comparison, I remember when in Minnesota, and I know other states still do this, they would do emissions testings for cars and the idea was to find those cars where, you know, there was an inordinate amount of pollution coming off of them. At some point they suspended that testing and part of the rationale I remember hearing about it was, well the equipment in most modern catalytic converters and modern car emission systems was good enough that it, like the chances you were gonna find anything were really small. So it was like way more effort than it was worth to do all this testing of all the vehicles like make everybody go and get an emissions test cuz you were really only gonna find it in a very small fraction of cases. So, you know, minimal harm. And I guess that’s what I’m hearing here is that as this equipment gets smarter, and if it’s used appropriately to that standard, it makes it much less likely that it’s gonna cause any harm on the grid, which means hey, let’s go ahead and move this project forward knowing that it’s likely to do little harm but also to potentially provide more benefit.

Mari Hernandez:

Yeah, yeah, exactly.

John Farrell:

Let me move on and just ask you about this idea of equitable interconnection. So I’ve heard this phrase a little bit more so now in the past couple of years and it reminded me of a study in Michigan that was done recently showing that the weakest parts of the electric grid tended to be in communities with a disproportionate share of low income folks or Black and brown folks. Do you feel like addressing these marginalized communities is the intention of equitable interconnection? And is any state really successfully doing that?

Mari Hernandez:

Yeah, so equitable interconnection is definitely an emerging topic, as you said and including, it was really our way of signaling that states should be thinking about how equity should be brought into the interconnection policy space. So as I’m sure you’ve seen, we have traditionally included it in discussions around financing or incentivizing clean energy investments, but we’ve been recently having conversations with Vote Solar, IREC has and other stakeholders about the ways in which we can incorporate equity within the interconnection process itself. So this is definitely a newer way of thinking about interconnection. So we’re still working on specifics.

So what we did in Freeing the Grid is include a criterion on it’s, it’s more of a catchall for now that would capture any provision that addresses interconnection barriers that may impact underserved or disadvantaged communities. And New Mexico is the only state that we found that had any type of provision that met this since it has in its cost sharing provision a clause about increasing access to subscribers who are low income or underserved being a determinant for whether the project is deemed as having a public benefit and therefore qualifying for cost sharing, which that cost sharing would either be among other projects and that same that are using the same distribution facilities or spreading the costs among other rate payers.

So rate basing, that’s just one way to think about this, but we’re, we’re trying to come up with other options. We’re currently working on this, you know, and want to figure out how to address equity within interconnection policy. So that’s, that’s what this is getting at. It’s just like, here’s something to think about, but it’s a really broad and a little bit more vague way to, you know, that we, we included it in here but we think it’s a really important space in interconnection and that we should continue to think about it and figure out the best practices there. I think that’s where, that’s where we are. Let’s, let’s figure this out and try to come up with some really good ideas that states can move forward.

John Farrell:

That’s great, thank you. You mentioned in the report there’s a couple of resources around interconnection policy that people who wanna dive deeper can do. So one is the federal small generator interconnection procedures and then of course you have IREC’s model interconnection procedures. What’s the difference between the two? What would people find in one and not the other?

Mari Hernandez:

Well the major difference is that IREC’s rules have been updated much more frequently to the last time FERC’s small generator interconnection procedures had a substantial update was 2013. So it’s been a decade as I shared before, you know, when I went through all of the different criteria that had changed just since 2017, we’ve seen so many changes throughout the interconnection process and what is considered a best practice. So, and we actually do wanna compare SGIP, the small generator interconnection procedures to the best practices in frame the grid so that we could actually do a deeper comparison. But I haven’t done that yet. But what we do know is that many states have incorporated elements of SGIP into their interconnection standards and it’s a little bit hard. So aside from just looking at the language used in both SGIP and IREC’s model rules, IREC use levels as its review tiers, SGIP uses fast track and then other names for its different review tiers.

It’s really hard to say the number of states that have based their rules entirely off of one model since some have incorporated elements of both. And then you have California’s Rule 21, which other states have used to incorporate some elements, you know, from there. So it’s a little bit hard to say which states have used which rules, but again, I kind of digress from your actual question, which is what are some of the main differences? So one thing that we point out is SGIP it was really kind of geared around larger projects and even though it goes down to the smaller project level, it kind of as an appendix has a small inverter based projects that are 10 kilowatts or less like in an appendix. So that isn’t quite as a simple process than that we would like to see. So I think in ours that’s, that’s a little bit of a difference. I think it’s, it’s a little bit more streamlined in the IREC model procedures.

John Farrell:

That covers two really big things though I think for our listeners in terms of understanding like, you know, that IREC has updated its procedures much more frequently and is probably better taking into account technological change. But it also says a lot that when something like a quarter of the solar that comes on the grid every year is in that bucket of small solar, that it’s a big chunk of that is in the appendix for the SGIP federal rules. And so if people are really caring about the smaller scale stuff, that that IREC rules are gonna be more helpful. Why don’t we take it out of the realm of like comparing specific model policies here all the way back to the top level, which is what is one thing you really want readers of Freeing the Grid to take away?

Mari Hernandez:

This kind of goes back to what I was saying about interconnection upfront, but interconnection, what we want people to get from this is interconnection is fundamental to achieving a clean energy future. So it’s a really critically important policy to get right and then continually revisit to ensure that your state’s rules are keeping up with the latest best practices. This is where Freeing the Grid interconnection grades and best practices and also IREC’s model interconnection procedures come in. We really want states to use these resources to improve their interconnection rules to ensure that they promote a transparent, fair and efficient interconnection process.

John Farrell:

I was struck in the interview that I did with Sky Stanfield, you know, who often works with IREC. She said interconnection is not something you can just do and leave on the shelf for 10 years. So if thinking about someone from like Sierra Club or an environmental defense, I’m a member of that. I really care about clean energy, I wanna help improve the solar market with interconnection policies. What should I do? Like should I be talking to a legislator? Should I be trying to hire IREC and, and your limited resources to come and to do intervention at before the public utilities commission? Like how do I take this information and actually do something with it?

Mari Hernandez:

I think a good starting place is to figure out the status of interconnection in the state where you’re working. So I think Freeing the Grid is a good place to start looking at, you know, so that you’re working in a particular state, what are the interconnection rules look like and how do they stack up against best practices? And then it’s important to look at is there an ongoing or an upcoming proceeding or working group that you can participate in? If not, how long has it been since the state updated its rules? And then what are the current barriers customers and developers are facing in terms of interconnecting projects. And so that might involve some actually reaching out to um, developers to figure that out. But IREC does provide some technical assistance to stakeholders to help think through the issues and then we can help to provide guidance on solutions as obviously identify best practices from around the country.

And you know, we really love to work with other stakeholders and state regulatory commissions and really want to provide our input and provide assistance. So especially since we, as I mentioned before, we’re not always able to intervene as a formal party in every state. We still haven’t figured out the unlimited funding thing just yet. I don’t know if you have it ILSR, but you know, that’s what we’d like to work on. But we’re always happy to be a resource as we’re able. So anyone should feel free to reach out to us if you have questions about Freeing the Grid, please reach out to us. We’re happy to help out.

John Farrell:

Well Mari, thank you so much for taking the time to walk me through Freeing the Grid and its implications and help people understand the really crucial role the interconnection is gonna play in our clean energy future. I think it’s been under discussed frankly, and when you look at the scores and Freeing the Grid, it obviously there’s a lot of work to do to make sure that states are best prepared to create thriving solar and wind and other clean energy markets. So thank you for your work on this and thanks again for taking the time with me.

Mari Hernandez:

Thank you so much, John. This has been great.

John Farrell:

Thank you so much for listening to this episode of Local Energy Rules with Mari Hernandez, assistant Director of the regulatory program at the Interstate Renewable Energy Council, speaking about freeing the grid by improving interconnection procedures for local clean energy projects. On the show page, you’ll find links to the Freeing the Grid map and report also at freeingthegrid.org as well as my prior interconnection related interviews, episode 179 on federal interconnection data collection with Justin Baca and David Gaul and episode 177 with Sky Stanfield, where we talked about how we can use interconnection to accelerate clean energy progress. We’ll also have links to the Department of Energy BATRIES Project and the Michigan study on inequitable grid capacity. And you can always find ILSR’s Interactive Community Power Map featuring several policies states can improve on to make clean energy easier, including interconnection, at ilsr.org. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.