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Federal Interconnection Standards: Putting DG in a Box

Is FERC overstepping its jurisdiction and attempting to force a standard into a one-size-fits-all category?
Fortnightly Magazine - April 1 2003

procedures- "fill in the blank" is an apt description of NARUC's model. This contrasts markedly with the highly detailed and prescriptive standard molded by the joint coalition in the FERC process. Not surprisingly, the NARUC model implies that states are in the best position to address interconnection standards and could easily tailor the NARUC model based on local needs and preferences. NARUC continues to urge FERC not to disregard the NARUC model, stating in its comments to the ANOPR, "Any NOPR that FERC develops based on this ANOPR process should allow states to implement the NARUC model." NARUC further states, "The NARUC Model was compiled from the 'best practices' of States that have previously held fully open, inclusive and fair proceedings to address interconnections of distributed energy resources."

California, Texas, and New York have issued interconnection standards, and several other states plan to do so as well. In California, Southern California Edison has processed approximately 1,400 interconnection applications. However, the presence of interconnection standards alone may not be the catalyst to prompt widespread DG development. In Texas, only about 40 DG units have been installed over two years using the new Texas interconnection requirements. Moreover, the absence of before-and-after data makes such a comparison difficult. Industry experts suggest electric rates and DG costs are more compelling reasons for less-than-robust levels of DG penetration in some states than the absence of interconnection standards.

Richard Brent, director of government affairs at Solar Turbines, has been actively involved in DG regulatory issues for almost a decade. He stated, "Technical interconnection standards are important so as to capture the latent value of DG, but so are the commercial and economic elements that are embodied in rate design. Fair, reasonable, and nondiscriminatory rate design that recognizes the value of DG is the next great challenge, and arguably just as important."

Other states are beginning to build up steam in developing interconnection standards. The Massachusetts Technology Collaborative (MTC), the state's development agency for renewable energy and administrator of the Renewable Energy Trust, is supporting the Massachusetts DG Interconnection Collaborative. The recent successful collaborative efforts in Massachusetts to develop an interconnection standard illustrate how states may be in a better position to develop interconnection standards. Massachusetts achieved consensus in just four months, versus a year or longer in other states and by FERC. Arguably, the Massachusetts standard is as comprehensive as the ANOPR and agreements issued thus far. Ironically, the MTC DG collaborative includes many of the same stakeholders (albeit far fewer participants) that participated in the FERC process.

Though states can quickly develop standards geared to state policy goals and utility-specific factors, DG providers recoil at the idea of having to master a haphazard array of standards promulgated in different states. In fact, differences in screening criteria, DG rating thresholds, and dispute resolution procedures found in states with formal standards, offer merit to the idea of a national standard. Partly offsetting this concern is the flexibility that states have to later modify their own standards to respond to DG concerns.

What National Standards Are in Place?

The Massachusetts