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March 19, 2024 |  By: Robert Zullo - Missouri Independent

New scorecard rates nation’s grid managers on connecting renewables

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By Robert Zullo - Missouri Independent

Across the country, electric demand is growing and could explode if green goals like electrifying home heating, industry and transportation come to fruition. At the same time, many states, utilities and businesses have pledged to decarbonize, helping push older coal and gas power plants that have struggled to stay economically competitive into retirement.

Yet in the queues run by the organizations that manage the electric grid in much of the nation, more than two million megawatts of potential new power sources, chiefly solar, wind and batteries, are languishing awaiting interconnection studies.

That dynamic prompted Advanced Energy United, a trade group representing clean energy businesses, to publish a first-of-its-kind scorecard grading how well the seven regional transmission organizations, which coordinate the flow of electricity for roughly two thirds of American electric customers, are doing at getting new projects approved to connect to their grids.

The short answer? Not so great. But some regions have been better than others, according to Caitlin Marquis, managing director at AEU. Both the Electric Reliability Council of Texas and the California Independent System Operator, organizations that manage the grid in most of their respective states, got Bs. The other five organizations got grades of C-  or lower.

“Grid managers have moved too slowly to adapt to changing market conditions, allowing the process of connecting new electricity to the transmission grid to become dysfunctional,” she said in a statement. “Without urgent improvement, the U.S. grid may struggle to keep up with growing energy demands, threatening our ability to keep the lights on and reach our climate goals.”

Grid operators push back on ratings

In many regions, interconnection – the usually multi-year process to connect new power generators to the transmission system, including studies of any upgrades needed to ensure reliability – has been a well-known problem for years.

Last summer, the Federal Energy Regulatory Commission issued new rules intended to help clear the backlogs. And indeed, some grid operators questioned the point of the scorecard, which uses data that in some cases is several years old. They said the problems have long been acknowledged and that they’ve been working to overhaul their interconnection processes.

“The report is an assessment of conditions and practices that no longer exist,” said Jeff Shields, a spokesperson for PJM, the nation’s largest grid operator with a service area that includes 65 million people. “PJM and its stakeholders acknowledged those issues over three years ago and reformed our interconnection process.” PJM got a D- on the scorecard.

Mary Cate Colapietro, a spokesperson for ISO New England, which got a D+ from AEU, also questioned the merits of the exercise.

“It is not clear what the value of such a report is given that ISO New England and other regional system operators are in the process of developing significant changes to the interconnection process,” she said.

Both PJM and MISO, the grid operator for a large swathe of the central U.S., pointed out in their responses that thousands of megawatts’ worth of new energy projects have made it through their queues but haven’t been built because of financing, siting and supply chain problems.

“This is the challenge we need to confront as an industry rather than looking back on problems that have been largely addressed,” Shields said.

Brandon Morris, a MISO spokesperson, said more than 50 GW of new generation facilities have  been approved by MISO, “but many are not going into service on schedule due to supply chain issues and permitting delays that are beyond MISO’s control.”

Nonetheless, AEU says the report is an important baseline that will help gauge how well the grid operators implement the fixes federal regulators have mandated.

“This report reflects the challenges that project developers and engineers are dealing with not just a few years ago, but right now,” Marquis told States Newsroom. “While reforms are being planned, and in some cases implemented, they don’t address all the concerns outlined in the report, and they aren’t yet fully in effect. One thing the report demonstrates is that even when procedures work on paper, they don’t always work so well in practice.”

Rob Gramlich, an electric grid expert and president of Grid Strategies, a consulting firm that helped prepare the scorecard, pointed out that the 12 interviews conducted with generation developers and engineering firms are all people who are going through the interconnection process now. The grades were determined by considering six factors, two of which were customer perspectives on timeline and costs. The others are speed and certainty, number of interconnection agreements signed, average costs and cost certainty.

“We would expect all of them to improve somewhat if we did it in a year or two,” Gramlich said. “We were just looking at a snapshot today.”

Southwest Power Pool

Southwest Power Pool, the regional transmission organization for an area that covers more than half a million square miles and includes about 18 million people in 14 member states, has processed new interconnection applications “very slowly,” the report found, noting that it takes between two and four years to move through the queue.

“This is considerably longer than SPP’s official timeline, which estimates the process should take less than a year and a half,” the scorecard notes. “Today’s backlog is five years and growing, with interconnection agreements in 2018-2020 coming to a virtual standstill.”

SPP got a C- grade, also as a result of what the scorecard described as a transmission planning process that “lacks a focus on creating opportunities for new generators.”

“A positive note is that schedule estimates provided by SPP are relatively accurate, perhaps due to the adoption of automation,” AEU wrote. “Unfortunately, this schedule consistency is undermined by the quality of the studies. Several interconnection customers noted that they have received study results with significant errors, and that SPP provides slow responses to inquiries about those errors.”

In a statement, David Kelley, SPP’s vice president of engineering, said planning and running the electric grid have become increasingly complicated as the power generation fleet becomes more weather dependent and demand becomes less predictable.

“Recognizing the critical role that generator interconnection plays in electric reliability and resource adequacy, and to address a backlog of interconnection study requests, SPP created a FERC-approved generator interconnection backlog mitigation plan to reduce study timelines,” he said, adding that SPP has made “significant progress” in reducing its backlog.

Last year, the organization exceeded its annual record by over 250%, with 93 interconnection agreements signed totalling 17 gigawatts.

“We’re on track to clear our backlog by the end of 2024, and we have continued to identify opportunities for efficiency in expediting the generator interconnection queue study process,” Kelley said.

PJM

The nation’s largest grid operator, PJM’s service area includes 65 million people in all or parts of 13 states and the District of Columbia. It has long been the poster-child for interconnection queue reform, according to critics, and it got the worst grade from AEU, a D-.

“The most frustrated interconnection customers note that PJM’s interconnection study process for new projects has come to a full stop, with the hope that projects from 2019 may complete the process six years later in 2025,” the report says. “One interconnection customer has ceased developing projects in PJM, and other interconnection customers are uncertain whether their projects are getting studied or not.”

It added that some customers report that the organization has “no regard for reasonableness and decorum when it comes to communicating deadlines.”

Shields, the PJM spokesperson, said the grid operator implemented new rules last year that are speeding up processing, specifically moving from a first-come, first-served process to a “first-ready, first-served” approach. By mid-2025, PJM expects to process about 72,000 MW in projects and 230,000 MW over the next three years, Shields said. Nearly all of those are  renewable or storage.

“That is real progress,” he said. “PJM realizes that further reforms will likely be needed to meet the needs of the energy transition, and we will consider additional potential interconnection policy reforms with PJM members.”