Power Policy Spotlight - September

It’s back to school and back from summer break for everyone, and policy makers are also back to figuring out the complex challenges of reaching our clean energy future. A significant obstacle to building clean energy distributed projects is the process of interconnecting projects to the electric distribution grid. Our electric grid was built to accommodate centralized electricity generation, usually from large power plants utilizing fossil fuels. An increasingly decentralized and distributed power grid is possible with renewable energy resources such as community solar, and utilities have to ensure that those projects can safely operate. However, the rising costs and construction timelines associated with interconnecting those projects can kill many projects, even as states aim for bigger decarbonization targets.?

Long Term System Planning

A key component to the process is strategic planning. Most utilities implement a policy where the upgrades required to interconnect new generators are paid for by the interconnecting project. This policy is broadly called “cost causation”. While this may be a reasonable policy for small, incremental generation growth, the wholesale transformation that is necessary for the grid of the future requires strategic improvements for both load growth through electrification, and increased distributed energy resources.

In Massachusetts, the Department of Public Utilities (DPU) took a big step forward with the approval of the Electric Sector Modernization Plans filed by National Grid, Eversource, and Unitil. These plans were filed following the passage of the 2022 Climate Law, and a months-long stakeholder process led by the Grid Modernization Advisory Council.?

The approval of these plans extends the provisional planning program that has been underway with the review and approval of individual Capital Investment Projects (CIPs), authorizing proactive system upgrades to create additional capacity for future distributed generation. It also directs the utilities to convene a stakeholder group by October 1, 2024 to finalize a plan for a Long Term System Planning Program, with a report due early next February. Through proactive planning, the Commonwealth is continuing its investment in the clean energy transition and the grid of the future.?

Interconnection Tariff Improvements

While system planning is a critical foundation for future success, as with so many things, the details are critical. Those details are found in utility specific interconnection tariffs. In Delaware, the Public Service Commission staff have initiated an exploratory docket to review the Delmarva Power and Light interconnection tariff.

The community solar program opened in Delaware in 2021, and we still do not have a single operational project. This fact is one of many that staff highlight as their reasoning for opening this investigation. Improvements in the process can increase transparency for project developers, and hasten Delaware’s progress toward its clean energy goals.?

Many factors contribute to the successful development and deployment of distributed clean energy resources, but interconnection is one of the most critical. Utilities have a responsibility to ensure that projects connect and operate safely, but we all have a responsibility to expeditiously transition away from our reliance on fossil fuels. Public service commissions play a critical role in ensuring that we maintain our forward momentum, and both the Massachusetts DPU and the Delaware PSC are making critical decisions to continue our clean energy transition.