Environmental Defense Fund
Casey Horan is an attorney at Environmental Defense Fund who specializes in the legal and policy aspects of EV-readiness and utility regulation. In her role, she works to support medium- and heavy-duty charging infrastructure, grid modernization and climate resilience. She also collaborates with stakeholders and decision makers to maximize opportunities for EV deployment and speed progress toward state climate and decarbonization goals.
The new era of electric load growth is here, with electric vehicles, electrified buildings, and data centers all expected to drive additional electricity consumption in the coming years. While data centers may be the headline challenge today, at the distribution level, vehicles and buildings are driving many grid upgrade needs.
To ensure these new large loads get connected to the distribution grid quickly and without driving up costs for customers, some utilities are beginning to design and implement flexible interconnection programs that provide partial service to customers as a temporary or long-term solution where the grid cannot handle full interconnection today.
These programs can come in many different shapes and sizes, and utilities implementing them must consider the tradeoffs involved in their design. This is the focus of a new white paper from Environmental Defense Fund exploring policy solutions for utilities designing flexible interconnection programs.
The term flexible interconnection refers to a range of methodologies for optimizing use of existing grid infrastructure when connecting customers to the grid by managing customers’ peak load. Flexible interconnections can be achieved through:
Hardware, where physical infrastructure is put in place to limit a customer’s maximum demand; and/or
Casey Horan: These two pilots highlight some of the tradeoffs inherent to flexible interconnection program design: a more sophisticated communications-based system may offer better grid visibility, utility control, and reduced risk, whereas a less complex autonomous system may be cheaper and simpler to implement.
Software, which relies on digital controls on the customer’s load and can adjust the maximum allowable demand based on a fixed schedule or actively communicated signals.
Three Key Questions
EDF’s white paper details three key questions for utilities to consider in designing flexible interconnection agreements: Is the load limit static or dynamic? Is the customer’s system autonomous or communications-based? How is the load limit enforced?
The answers to each of these questions are far from binary. Rather, different options lie along a spectrum of complexity, and what works for one utility might not work for another, as each type of flexible interconnection regime should be tailored to match the needs of the local utility, its customers, and the distribution system. Different design components may be mixed and matched to create a regime that is best suited to meet the technical, operational, and economic goals of the utility, its customers, and its regulators.
If designed well, flexible interconnection policies can help bring down utility’s capital costs by optimizing use of existing grid infrastructure and deferring grid upgrades. Closing the gap between what the grid can accommodate and the scale of distributed energy resources that can be connected will benefit both utilities and customers.
Customers can connect new loads like electric vehicle chargers more quickly and utilities can free up capital that can go toward other high-needs projects. These policies can also help meet state climate and transportation goals by facilitating greater end-use electrification. A handful of states and utilities across the country are already designing or implementing flexible interconnection programs to make these benefits a reality.
Utility Pilot Comparisons
In California, Pacific Gas & Electric and Southern California Edison have both introduced flexible interconnection pilots for customers subject to long interconnection wait times. Southern California Edison has deployed a Load Control Management System pilot that currently uses pre-programmed limits and operates independently without real-time communication with the utility to manage customers’ power usage.
In contrast, Pacific Gas & Electric’s FlexConnect pilot represents a more complex flexible interconnection regime. FlexConnect relies on a Distributed Energy Resource Management System (DERMS)-based communication system to monitor grid conditions and relay adjusted load limits to customers on a day-ahead basis.
These two pilots highlight some of the tradeoffs inherent to flexible interconnection program design: a more sophisticated communications-based system may offer better grid visibility, utility control, and reduced risk, whereas a less complex autonomous system may be cheaper and simpler to implement.
Dynamic load limits also allow customers to access more grid capacity at more hours, limiting constraints to actual peak periods, while static or fixed-schedule limits can require narrower limits on grid access but give customers more predictability around when they’ll have that access.
Utilities in Illinois are earlier in their flexible interconnection journeys, with Commonwealth Edison and Ameren Illinois committing in December 2024 (as part of their re-filed Integrated Grid Plans; ICC Docket No. 22-0486/24-0181 and Docket No. 22-0487/24-0238, respectively) to work with stakeholders to develop flexible interconnection plans for implementation this year.
ComEd has already filed an initial document outlining the questions it is seeking to answer, including the customer use cases where flexible interconnections are viable, the types of agreements that will work for these use cases, and the technical and operational challenges to implementing them.
In response to a large number of distributed solar projects waiting to interconnect, ComEd is beginning this work by focusing on developing the DERMS-based flexible interconnection agreements it sees as most useful for these customers. Other utilities developing these programs will similarly need to consider the customer use cases that are highest priority in their service territory, and work with those customers to overcome their interconnection challenges.
In Colorado, the Powering Up Colorado Act passed in 2024 and included a directive that Xcel Energy develop both flexible interconnection and phased interconnection options for customers. While many forms of flexible interconnection agreements can be in place indefinitely, under a phased interconnection agreement, a customer agrees to similar limits on their maximum load temporarily, while the utility completes the grid needed for a full-capacity interconnection for that customer.
Both flexible and phased agreements can be a tool for utilities facing grid constraints and a high volume of interconnection requests to get customers connected to the grid faster. But while phased agreements can be useful for some customers expecting to grow their load over time – like a fleet adding a few EVs at a time – the tradeoff is that the utility still needs to complete the grid upgrade to provide full service to the customer and may not create the cost savings of a flexible agreement that continues to manage that customer’s load into the future.
Looking Ahead
In sum, flexible interconnections offer a tool to help overcome the challenge of meeting growing electric demand from transportation electrification in a sustainable, scalable manner. EDF’s new white paper can help utilities understand important considerations for designing flexible interconnection programs.
The wide range of available options triggers the need for utilities and customers to carefully consider the technical, operational, and economic components with which to build a successful flexible interconnection program. Understanding the implications surrounding the structure of the load limit, the communications style, and enforcement mechanism will help stakeholders begin to design and test working programs. This way, states can ensure continued progress toward decarbonization and electrification goals without sacrificing the safety and reliability of the grid.
