New York State Modifies Standardized Interconnection Requirements
NY PSC’s Order Should Ease Burdens on Distributed Generation Developers
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Standardized Interconnection Requirements (SIR) Modified: On March 18, 2016, the New York State Public Service Commission (PSC) issued an Order Modifying Standardized Interconnection Requirements. The SIR, which has been amended a number of times since its inception in 1999, provides a mechanism, including a standardized interconnection contract, for simplifying the interconnection application and review process for distributed generation (DG) projects, but is not limited to projects eligible for net metering.
The incentive for the recent modifications was driven by several factors. The number of interconnection applications has increased dramatically: in 2011 there were 2,000 interconnection applications; by 2015, there were 11,000 applications. The process had also become weighed down by an increased number of large solar project applications. Department of Public Service Staff proposed modifications to the SIR “intended to improve the interconnection process so that [DG] developers may interconnect their systems without undue delays, while enabling the utilities to better process and analyze large numbers of DG applications in a timely and efficient manner.”
Key Changes to SIR: Several aspects of the SIR were modified:
- The PSC increased the threshold for eligibility for SIR from 2 MWs to 5MWs. Many commenters wanted the threshold increased to 20 MWs, but the Commission demurred, noting that “projects of larger sizes, above 5 MW, are often connected to the transmissions system and handled by the transmission owners and the New York Independent System Operator interconnection process.”
- The PSC amended the review process in several meaningful ways, most notably to screen projects for viability early on. For example, the SIR allows an applicant to obtain a pre-application report from the utility within 10 business days. The reports should provide readily available information to “reduce the number of non-viable interconnection applications submitted to the utilities in areas where installation of DG is not favorable due to circuit characteristics and conditions.” As the PSC explains, “[t]he goal of the pre-application report is providing customers/developers with more information about the viability of the project and location up front.”
- The modified SIR also incorporates a technical screening process designed to further improve the efficiency of the overall process.
- The SIR now requires only 25% of the utility’s estimated interconnection costs upfront, with an understanding that utilities would not procure any equipment or begin construction until full payment is received. This change reflected a compromise between the interests of developers and utilities and more realistic alignment timelines for securing financial commitments.
Developers of microgrid projects should be well situated to benefit from these changes. The PSC directed regulated utilities to amend their electric tariffs to incorporate the modified SIR. The Long Island Power Authority, which is not directly subject to this Order, presumably will be urged to follow suit. The PSC has recognized that this area will continue to evolve, and has committed to facilitate further discussions to improve the SIR process.
PSC REV Initiative and Clean Energy Standard: The PSC’s modified SIR Order reflects the changing landscape of power generation and distribution in New York State, and is an outgrowth of New York’s Renewing the Energy Vision (REV) Initiative. Many of the Commission’s multi-pronged efforts to achieve REV’s goals are being developed in its Case No. 14-M-0101 proceeding, but not exclusively. The PSC has also undertaken an effort to develop a Clean Energy Standard to achieve the 2015 State Energy Plan’s goal that by 2030, 50 percent of all electricity used in New York State be generated from renewable energy sources. Department of Public Service Staff issued a White Paper in January 2016, recommending elements for the Clean Energy Standard. The process is ongoing.
Beveridge & Diamond counsels private and municipal clients on environmental review and local, state and federal permitting and regulatory compliance requirements associated with the siting and development of renewable energy and fossil fuel generating facilities and transmission lines. For more information, please contact the authors.