Fortifying Procedures
Gwen Brown is Vice President of Communications at the Interstate Renewable Energy Council.
As data centers and other loads like building electrification drive increased demand for electricity at a rate unprecedented in recent decades, utilities and regulators face a challenge to deploy more electricity generation quickly while avoiding or limiting rate increases for customers.
Distributed energy resources (DERs) are emerging as a key solution to this challenge because they can be constructed quickly compared to other sources of generation (such as natural gas power plants). They also have the added benefit for utility customers of offering a way to control energy costs.
In this context, it is all the more important to ensure that DERs can interconnect to the grid efficiently and that interconnection policies do not create unnecessary barriers to their timely and affordable connection. A recent report from the Interstate Renewable Energy Council (IREC) offers a starting point for regulators evaluating options to strengthen their states’ interconnection procedures.
The State of DER Interconnection in the U.S.
In May, IREC released the latest issue of its “Freeing the Grid” interconnection grades, which evaluates the quality of each U.S. state’s interconnection rules against current best practices for DER interconnection.
“Freeing the Grid” includes a report card for each state. A state’s overall grade highlights how well its interconnection rules perform against current best practices, while its report card details performance across ten different categories of evaluation criteria that the grade is based on. The report card also provides specific recommendations for how the state’s rules can be improved.
Since the last release of “Freeing the Grid” in 2023, four states made interconnection policy improvements that were significant enough to earn higher grades, with the most notable improvements in New Jersey, Oregon, and Maine, followed by Wisconsin. As in 2023, New Mexico received the sole “A” in the report, having adopted a majority of current best practices in its interconnection rules.
“Freeing the Grid” finds that most states have significant room for improvement in their interconnection procedures to ensure that they do not create unnecessary barriers to DER interconnection. A large majority of states scored a “C” or below, including a quarter of all states that lack statewide interconnection rules altogether.
The good news is that there are many resources available that provide a strong starting point for adopting stronger interconnection procedures, including model rules and the recommendations in “Freeing the Grid.”
‘Freeing the Grid’ Methodology & Resources
The evaluation criteria IREC uses to grade each state’s interconnection procedures are informed by stakeholder discussions and best practices currently being adopted through state regulatory proceedings. There are 56 criteria worth up to 63 points.
The criteria span ten categories: Rule Applicability, Streamlined Review, Modifications, Timelines & Efficiency, Interconnection Costs & Requirements, Updated Standards & Export Provisions, Initial Review Screens, Supplemental Review Screens, Data Sharing & Reporting, and Dispute Resolution. Some of the key practices assessed include:
Whether a state’s interconnection procedures provide clarity on the types and sizes of generators that are allowed to connect under the procedures, such as whether energy storage systems are explicitly identified as an eligible technology (Rule Applicability category);
Whether interconnection procedures require faster processing times for systems below a certain size (Streamlined Review);
Whether the interconnection procedures specify timeframes for certain process steps and require efficient timelines for the review of interconnection applications (Timelines and Efficiency);
Inclusion of provisions that help lower interconnection costs, such as reasonable fees and requirements that improve cost certainty for applicants (Interconnection Costs and Requirements);
Whether the interconnection procedures incorporate IEEE Standard 1547™-2018 (Updated Standards and Export Provisions);
And whether the interconnection procedures have incorporated new and updated practices related to the assessment of grid impacts in initial review screens (Initial Review Screens).
Unlocking More Generation with Interconnection Reform
Already rapid load growth is anticipated to further accelerate, with ICF projecting a 21 percent increase in total U.S. electricity demand by 2030 and a 39 percent increase by 2035, compared to 2026 levels.
Regulators looking to ensure sufficient generation can come online fast enough to meet growing demand in their jurisdictions while limiting cost increases may want to start by looking at their interconnection procedures and whether they enable efficient and affordable interconnection of DERs while maintaining grid safety and reliability.
A review of your state’s “Freeing the Grid” interconnection grade is a great place to start in establishing your current baseline against the latest best practices for streamlined DER interconnection. From there, IREC’s Model Interconnection Procedures can also facilitate easier rule reform with model language based on what leading states are already adopting.
While load growth trends present challenges, there are corresponding opportunities to ensure this demand is met with clean, flexible sources that help keep costs down for consumers.
