The California Energy Commission (CEC) began an investigation in April 2004 via a diverse working group to explore a variety of issues associated with the deployment of distributed generation (DG) including interconnection rules – formally referred to as Rule 21. Implementation of California’s standardized interconnection rules issued in 2000 have been an important priority for California because it eliminated a significant barrier to the safe and cost-effective deployment of DG in the State.
According to the tracking web page of Rule 21, since the interconnection standards were adopted, 336 DG projects have been interconnected totalling 456.5 MW of capacity [statistics are for PG&E, San Diego Gas & Electric and South California Edison only]. Net metered projects for the three major investor owned utilities have grown each year since January 2001 for a total of 596 projects totalling 25.1 MW. The net metered projects have also been boosted with generous state tax incentives and rebate programs.
A group of people from all segments of DG, referred to as the Rule 21 Working Group, came together to develop the initial DG interconnection rules for California. The group now meets to address any complex issues that arise and to improve the interconnection process. The Energy Commission oversees and supports the Working Group’s activities and contracted technical support is funded by the CEC’s Public Interest Energy Research program. To date, approximately $1.2 million of public funding has been used to support the Rule 21 effort.
The latest working group report focuses on five key interconnection issue areas:
For in-depth discussions of the issues, see the Working Group’s final report for comment that was issued on January 6, 2005.
The issue of metering, specifically net energy metering, was the most contentious issue that the working group addressed. The working group found that current metering requirements at the site of a net metered customer have limited benefits and can be a significant barrier to the economics of a smaller DG project. The City of San Diego commented on this issue and summed it up nicely saying, “requiring redundant meters or more expensive revenue-quality meters burdens DG developers with unnecessary costs that could render otherwise economic DG projects uneconomic.”
The Energy Commission will consider adopting the recommendations of the Final Report at their February 2, 2005 business meeting. Once adopted, the recommendations will be submitted to the California Public Utiilties Commission (CPUC) for their docket R.04-03-017. A final CPUC decision will follow before any of the changes take effect.
The working group found that Net Generation Output Metering (NGOM), essentially a separate meter recording the DG unit’s capacity and energy output over time, should only be required when the customer receives publicly-funded incentives or tariff exemptions [these programs often require detailed reporting and by extension more sophisticated metering]. The group also recommends a relaxing of requirements relating to metering saying that the need for billing-grade or utility-owned meters is not always necessary.
Dispute Resolution Process
The group recommends tighter timelines for review and resolution of problems that arise during the interconnection process. They also propose utilities be required to provide more detailed technical justification, rather than simply relying on a general assertion of a need to protect safety and ensure reliability. The work group is also asking that information regarding disputes be made public [without exposing confidential information] for the purposes of learning and reducing frequencies of similar disputes in the future.
Initial/Supplemental Interconnection Review Fees
The group recommends that changes to the fee structure are not needed at this time. They also recommend that tracking system be established that provides detailed data on interconnection costs and assist regulators in making informed decisions regarding the future allocation of interconnection review costs.
Net Metering for Systems with “Combined” Technologies
The group recommends that preventing export from the net energy metered (NEM) generator while a non-NEM generator is operating at the same site is inappropriate.
The group also found that fees and the costs associated with grid infrastructure improvements should be the responsibility of the utility, with the cost recovered from all ratepayers through the distribution component of utility rates.
Interconnection Rules for Network Systems
The group recommends the development of rules to facilitate interconnection of DG projects on utility network-distribution systems by December 2005.