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Rule 21 Enhances Renewable Energy Distribution in California

The California Public Utilities Commission (CPUC) last week handed developers of mid-sized, wholesale renewable energy systems, primarily solar, an important revision to its interconnection procedures, known as Rule 21.

The unanimously approved revision, say stakeholder participants in the year-long process, establishes several new national best practices, and removes barriers to continued growth of the state's renewable energy market.   

The new Rule 21 is, in effect, a settlement between California’s three major investor-owned utilities — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric Company — and 11 other stakeholders, including the Clean Coalition and Interstate Renewable Energy Council, Inc. (IREC). 

“It is, by far and hands down, the best interconnection tariff in the country,” says IREC attorney Sky Stanfield of Keyes, Fox & Wiedman, who helped draft portions of the revised tariff language with her colleague Kevin Fox.  “We made it clearer in almost every way, adding timeframes and explanations of what’s happening. We came to fast track screens, made a more robust Supplemental Review, and it is the first tariff where utilities have accepted 100% minimum load as the standard for determining whether a full study is required.” 

Under the previous Rule 21 procedures, Stanfield explains, the utilities made all renewable energy projects that represented 30 percent of the minimum load (or 15% of peak load) in their geographic area go through a full approval process.

Now, she says, projects with a 30% minimum/15% peak load can get Fast Track approval through a quick, initial review. “If they fail the 15 percent screen, they will go to Supplemental Review, which used to be totally unclear,” she continues.  “It didn’t explain what it would study or what it would cost. Previously, not a lot of projects could get through that process and there was no pressure on the utility to get projects through Supplemental Review.”  

In the new Supplemental Review, projects that are below 100% of minimum load and pass two screens on safety and reliability can still get Fast Track approval, she said.  The adoption of the higher penetration screen is significant for solar projects because it is more relevant than the 15 percent of peak load screen.  “We were getting more and more systems in California, and many systems were failing the 15% screen, so we had to move the bar up,” she says.

Ted Ko, associate director of stakeholder Clean Coalition, says critically important issues of cost allocation and certainty remain to be resolved, but, acknowledges that it is the best revision possible in the given time frame. “We were pushing to get it done really fast. We did get more transparency, more definition, more timelines, and better clarification of the rules,” he said.  One of the most useful wins, he said, is the Pre-Application Report.  “Now you can get a report from the utility telling you how much it will cost to plug in to a location before you even apply. It cuts down on the number of non-viable apps the utilities have to deal with,” he said.

Rule 21’s interconnection procedures had become untenable following the passage of two landmark pieces of renewable energy legislation--California Senate Bill 32 on curtailing greenhouse gas emissions and Assembly Bill 1613 on connecting combined heat & power systems to the grid. “The driving reason we had to move forward was SB32, which expands the feed-in tariff program that requires expedited procedures, and no path was available under Rule 21, because they were wholesale systems,” says Stanfield.

Indeed, says Ko, those bills specifically targeted the market for wholesale distributed generation systems trying to connect to the grid and sell to the utilities.  “SB32 said that systems up to 3 MW, we have to get them into the grid quickly, not just leave them hanging,” he said. “There has been a spike in interconnections of this type in the last 3-4 years; it has jumped by factor of 10. SCE has hundreds of megawatts of solar waiting to connect.” See the chart below.

 

Saying it supports the CPUC’s decision, SCE said, “The Rule 21 Settlement will benefit renewable developers and increase the eligibility limit for Fast Track evaluation to 3 MW from 2 MW. The revised tariff should also improve the efficiency of the interconnection process by replacing the one-at-a-time study process with a group study process and by adding deadlines that apply to both generators and SCE.”

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