Minnesota has been under a looking glass of late, as it turns its attention to planning for the modernization of an outdated electric grid to handle growing amounts of distributed renewable energy. Among the numerous energy issues to be addressed is updating its interconnection policies, which are widely regarded as a critical component of any state’s policy toolkit.
IREC and two respected partners – the statewide Fresh Energy and regional Environmental Law & Policy Center– decided to join efforts and late last week put a proposal into the hands of the Minnesota Public Utilities Commission that would help the state implement interconnection changes based on a compilation of best practices and lessons learned from other states.
If implemented, the changes would allow for fair, expedited interconnection of clean renewable energy for more Minnesota consumers – while ensuring the safety and reliability of the distribution grid.
The approach was rather unique. A joint motion was filed requesting that the commission reopen its 2004 interconnection order and adopt new interconnection procedures based on an accompanying ready-to-adopt proposal. Drawing from IREC’s extensive national experience on interconnection, the proposal reflects vetted best practices compiled from our work on this issue in states across the country. Importantly, the proposal is customized to meet specific needs in Minnesota and presented in an “all-in-one” format so it can most easily be implemented.
This action wasn’t out of the blue. It stems from the considerable challenges with Minnesota’s interconnection process exposed during the launch of Xcel Energy’s Community Solar Gardens program. It also comes on the heels of specific calls by the commission to address interconnection in their comments on grid modernization.
The time is certainly right for Minnesota to update its interconnection procedures. Its current procedures are over a decade old and in need of a retrofit to keep pace with state policy goals and consumer demand for clean energy. Our collective goal is to enable the resource-constrained Minnesota commission to adopt the best new procedures in an expedited manner.
Sky Stanfield, who represents IREC in regulatory matters and has worked with a number of states to facilitate meaningful interconnection reform, was deeply involved in the process. She has this to say about last week’s action.
“States with high penetrations of distributed energy often experience very similar interconnection growing pains as their market expands. It makes sense to follow the best practices that have been developed and tested by other states. Learning from the experience of others results in safer and more efficient processes and also results in a more efficient regulatory process where each issue does not have to be relearned.”
“Minnesota has been a leader among Midwest states in looking to develop its solar potential,” says Brad Klein, senior attorney with the Environmental Law & Policy Center. “Together, we’re working to advance the policy framework to allow that solar vision to become a reality.”
And Holly Lahd, director of energy markets at Fresh Energy adds this: “Our current interconnection process slows down new solar projects for customers, businesses, and utilities. Improving the way we connect those projects to the grid will help save everyone time and money.”
Why are interconnection standards so important?
They specify the process that customers, developers and utilities must abide by when a customer seeks to connect a distributed generation resource, often a renewable energy system, to the electric grid. They specify technical engineering requirements, timelines, fees and standardized procedures for conducting utility studies to determine whether particular systems can be safely interconnected.
So, strong interconnection standards can provide predictable, streamlined, expedited, and cost-effective processes for all involved parties: the end-user energy consumer, the developer and the utility.
- For utilities with higher volumes of interconnection requests, good standards can help them manage the processes effectively and efficiently, while still maintaining grid reliability and safety.
- Inadequate or poor standards, on the other hand, can lead to costly delays and unnecessary fees and requirements that ultimately impact the economic viability of projects, as well as the consumer experience and investor confidence.
More states are increasingly adopting procedures based on the FERC Small Generator Interconnection Procedures (SGIP) model and IREC Model Rules. The proposal submitted to Minnesota would align its interconnection procedures with this emerging national consensus, while also being responsive to local realities.
The impact of such an update would be broad, as the recommended procedures protect energy customers from avoidable and unreasonable costs. And available data suggests that Minnesota interconnection customers are experiencing delays and related costs in the current interconnection process.
The model rules also provide consistency and ease of access to distributed generation project developers who often operate in multiple states.
Why does MN need updated interconnection standards now?
State and national markets for distributed generation, particularly distributed solar, have seen transformational growth in the 12 years since the commission adopted Minnesota’s interconnection procedures.
- In 2004, there were 235 distributed qualifying facilities on distribution utility systems in Minnesota, according to utility reporting to the Department of Commerce.
- By the end of 2014, there were 2,463 projects, with significantly more projects in the pipeline.
In the Midwest region, Ohio, Illinois and Iowa, have all recently taken action to update their interconnection standards based in part on the updated SGIP. Not just a Midwest phenomenon, states across the country are tackling interconnection with increasing fervor: New York, North Carolina, and South Carolina have recently adopted updates to their state standards. Arizona, California and Maine are working through active proceedings, and IREC expects several more states will turn their attention to this paramount issue in the years to come.