Seven States Where IREC Has Improved Clean Energy Policy Since 2023

California: Limited Generation Profiles Now Provide a Path for Clean Energy to Support the Grid and Avoid Costly Upgrades

In March of 2024, we were thrilled to see a regulatory change in California that our team has been working incrementally towards for over ten years! This win also represents the achievement of a policy objective that is often discussed in the clean energy sector but until now has never been implemented at the state level.

When utilities review requests for energy systems to connect to the electric grid, they consider how much power that system could potentially send to the grid, and whether the energy export could cause any reliability or safety issues that might mean that grid upgrades are needed before the system is approved.

Since the electric grid is dynamic, with more or less energy produced by power plants or demanded by customers at different times, what this often means is that a few hours of the year can make the difference in whether or not a utility requires a clean energy customer to pay for costly grid upgrades in order to interconnect.

Now, in California, when applying for permission to interconnect, clean energy customers can propose to operate their systems on a predetermined schedule called a "limited generation profile," to ensure energy exports match what the grid can accept. This can allow them to save tens or even hundreds of thousands of dollars they might otherwise have to pay for grid upgrades. It can also allow the grid to accept more clean energy systems in areas that would otherwise have capacity constraints.

IREC was one of the leading architects behind this policy, having laid the groundwork for this development over nearly a decade. This kind of scheduling would not be technically feasible without our work to enable publicly accessible, dynamic grid data (hosting capacity analyses) in California, work we began in 2013. Our work also contributed to a 2022 policy change requiring utilities to use HCA data in the interconnection process, to make it more streamlined for some projects. In this ruling, we also offered guidance that helped shape the available schedules projects can adopt, and submitted many other comments and testimony that influenced the final ruling.

You can dig into the details of this first-of-its-kind policy improvement-including insights on the years of IREC work that made this decision possible-in our related blog post.

Maine: Interconnection Rule Updates Support Transparency, Streamlined Review, and Energy Storage Integration

Last year IREC served as an expert consultant to the Maine Public Utilities Commission, informing a number of improvements to the state's interconnection rules, adopted in November 2023.

IREC's recommendations are reflected in several key improvements:

• Avoiding prohibitive costs for clean energy systems to connect to the grid: The commission set a flat fee of $150 to cover grid upgrades for Level 1 customers¹and a $25/kW fee for larger, Level 2 systems up to 250 kW that serve to offset on-site load; total costs for those Level 2 customers are capped at $10,000, with some limited exceptions. These pooled costs will be used by utilities to support grid upgrade costs.
• Maintained streamlined review processes for clean energy systems. The Commission initially proposed reducing the Level 2 system size threshold from 2 MW to 1 MW, meaning that projects larger than 1 MW would need to go through longer and more costly review processes. Though the Commission declined to adopt an IREC-recommended approach that ties size eligibility for Level 2 review to grid characteristics at a proposed location, it took into account comments from IREC and other stakeholders in its decision to maintain a more streamlined review process for projects up to 2 MW.
• Greater transparency for clean energy customers. When a clean energy project fails to pass an interconnection "screen" (a review utilities do to assess if the system can safely interconnect without upgrades), it's important for customers to have access to information about why they failed, so they can make changes if they choose to reapply. Based on recommendations from IREC and other commenters, Maine utilities must now share additional data about their screening determinations with customers.
• Interconnection improvements for energy storage systems. Energy storage systems have some important differences from other types of clean energy, which merit it being handled differently in the interconnection process in some cases. The Commission adopted clarifications on how energy storage systems should be evaluated in the interconnection process-particularly recognition that ESS systems use controls to prevent exporting more than a certain amount of power-and acceptable ways for systems to limit how much power is exported. The Commission's ruling draws upon recommendations from IREC and its partners in the BATRIES Toolkit, a report that developed guidance on interconnection best practices for energy storage.

You can read the final rule from the Maine Public Service Commission, including references to IREC's contributions, here.

Minnesota: Improvements to Utility Grid Investment Planning

In an effort led by the Environmental Law & Policy Center, IREC and several other public interest groups participated in a Minnesota rulemaking on Xcel Energy's Integrated Distribution Plan. Integrated Distribution Plans are the capital investment plans created by electric utilities that outline how they will use ratepayer dollars on new infrastructure to maintain or enhance grid reliability.

These are crucially important proceedings because they have significant impacts both on costs for customers, as well as how clean or dirty the utility's grid will be and how much clean energy it will be able to accommodate.

Contributions by IREC and our partners led to positive developments in several areas. While we await publication of the written rule, the Commission shared its decisions in a meeting on July 2, 2024. Key outcomes include:

1. Increased reporting requirements to ensure that utilities' grid investments are appropriate. The Commission required utilities to develop a proposal for how they will measure the impacts of different investments on ratepayers, capacity, reliability, equity, and more.

1. Requirements for utilities to improve their approach to forecasting changes on the electric grid, such as changes in load (i.e., the amount of customer demand for electricity) as a result of electrification. The Commission also required utility Xcel Energy to work with stakeholders to inform these improvements.

The Commission ordered the establishment of a working group that will develop a framework for assessing proactive grid upgrades by utilities. Proactive grid upgrades refer to upgrades to increase the capacity of different sections of the grid in anticipation of future DER growth, rather than waiting until an upgrade is triggered by a project proposing to interconnect.

The Commission instructed the working group to ensure that the framework addresses key topics such as: how the costs of these upgrades will be allocated, how to ensure upgrades are distributed equitably, and how to prioritize where upgrades are needed based on forecasted clean energy adoption and load electrification (among other things).

Mandate for utilities to engage in stakeholder outreach regarding flexible interconnection solutions, such as export scheduling (see Chapter IV of the BATRIES Toolkit for more information) and Distributed Energy Resource Management Systems. This will ensure that Minnesota utilities accelerate the adoption of these solutions through a cost-effective, incremental process that benefits both consumers and grid reliability.

New Mexico: Aligning Utilities' Smart Inverter Requirements with Best Practices

In late 2022, New Mexico adopted updated interconnection rules-heavily informed by IREC recommendations-that were a major win for New Mexico communities, clean energy developers, and the environment. Those updates, the first in over a decade for the state, aligned New Mexico's interconnection rules with national best practices and paved the way for greater use of energy storage and smart inverters in the state-two technologies that can help the grid accept higher levels of renewable energy. In 2023, IREC continued its work in New Mexico by informing utilities' technical requirements for the use of smart inverters, resulting in new policy wins.

The 2022 ruling required that by March 28, 2023 all new interconnecting DERs used smart inverters that comply with IEEE 1547-2018, a related technical standard. Some of the Technical Interconnection and Interoperability Requirements (TIIRs) initially proposed by New Mexico utilities had major flaws, including misalignment with IEEE 1547-2018 on certain settings, such as the simultaneous activation of mutually exclusive smart inverter voltage regulation functions. Following IREC's recommendations, the TIIRs were revised, and the appropriate smart inverter requirements were approved by the Commission in December 2023. The smart inverter default settings were adopted on February 1, 2024.

Oregon: Streamlined and Modernized Interconnection Practices for Clean Energy and a Path for Smart Inverters

A March 2024 ruling by the Oregon Public Utilities Commission significantly improved the state's interconnection rules by incorporating best practices for the review of renewable and energy storage projects, including an array of recommendations proposed by IREC. The ruling is noteworthy for several reasons, including that it:

• Streamlines and modernizes how clean energy projects are screened for potential grid impacts when requesting interconnection;
• Recognizes that some clean energy projects limit the amount of power they export to the grid, or do not export at all, and tailors review processes accordingly and specifies the acceptable methods for systems to limit their export;
• Adopts a pathway to incorporate updated standards for the use of smart inverters into Oregon's interconnection rules, and a deadline by which interconnecting systems will need to use smart inverters. This is important because smart inverters offer grid support benefits that enable the grid to accommodate higher levels of renewable energy with fewer equipment upgrades.

In addition to modernizing Oregon's interconnection rules and bringing them in line with national best practices, the ruling was notable for the high level of agreement between the diverse parties that contributed to the revision process, including utilities, clean energy industry groups, and IREC, an independent public interest intervenor.

Learn more about how we helped improve Oregon's interconnection policies in our related blog post!

Virginia: Fighting Against Unnecessary Utility Requirements Hurting the Mid-Sized Solar Market

In Virginia, IREC intervened to address an onerous requirement for midsize solar projects that Virginia utility Dominion Energy began requiring in December 2022, raising costs for affected clean energy systems by 20 to 40 percent. Dominion argued that its new "direct transfer trip," or DTT requirements-a method for automatically disconnecting a system from the electric grid-were necessary for safety. However, the requirement was at odds with what other utilities require for similarly sized systems.

DTT involves laying a dark fiber optic transmission line to a substation at a cost of $150,000 to $250,000 per mile and in some cases adding a relay panel that runs $250,000. IREC, along with other parties, successfully asserted that these requirements were not necessary to ensure safety and reliability because there are less expensive alternatives available. In August 2023, the Commission stuck down Dominion's direct transfer trip requirement for the newly affected systems, in part based on IREC's comments. (Read more about this win, and IREC's contributions, in this article from Utility Dive.)

Unfortunately, in September 2023, Dominion filed a motion to be granted temporary permission to establish and implement interconnection requirements, including DTT. In November, the Commission approved Dominion's request allowing it to once again institute these requirements, while additional comments are accepted and working group meetings are held. There is no deadline for a final decision by the Commission.

The Washington Post recently profiled the devastating impacts this policy has had on the state's mid-size solar market, quoting IREC's Shay Banton, who spearheaded our engagement on this issue, regarding the availability of alternative technologies. IREC continues to engage in Virginia on this issue and hopes for a positive final ruling later this year.

Vermont: Increased Interconnection Data Access, Clarified Storage Rules, and Oversight of Group Study Policies

In May 2023, Vermont adopted updated interconnection rules. While IREC made additional recommendations and would have liked to see more extensive updates from the Commission to align with current best practices, there were several positive developments for clean energy customers that IREC contributed to:

The Commission updated allowable "export controls," based on IREC's recommendations. These are approaches that can be used to limit how much power a system sends back to the grid.

In order for utilities to switch the interconnection review process from current approaches to a group study process (in which several projects are studied together) utilities must propose for Commission consideration a detailed tariff that establishes key details such as: how the study groups will be determined, how the group studies will be conducted, cost allocation, and how the transition to a group study process would be managed.

This ruling ensures that there will be oversight before such a policy is implemented, increasing the likelihood that it is implemented in a way that benefits utility customers.

Utilities must include available load data in "pre-application reports." These reports can be requested by prospective interconnection customers before they apply for interconnection. They provide key information on current grid conditions which can help project developers design their systems to maximize their likelihood of approval to interconnect.