Dive Brief:

• The California Independent System Operator’s proposal to offer an expedited interconnection track for “emergency” resources could harm applicants already in the grid operator’s interconnection queue, according to Vistra Energy.

• California Democratic Gov. Gavin Newsom’s May budget proposal includes $5.2 billion to support 5,000 MW of emergency capacity, suggesting CAISO may soon be inundated with requests for emergency interconnection, Vistra said in a June 23 filing at the Federal Energy Regulatory Commission. 

• “Without appropriate safeguards, an emergency interconnection process may allow state-selected resources to receive preferential access to interconnection capacity and deliverability, thereby bolstering the competitive position of these resources relative to other customers that have gone through the normal interconnection process,” Vistra said.

Dive Insight:

Like other grid operators, CAISO has seen a surge in requests from generating and storage projects to connect to the grid. And like the PJM Interconnection, CAISO has been working with stakeholders to reform its interconnection review process.

In a practice being adopted by other grid operators, CAISO studies interconnection requests in annual clusters, instead of on a first-come, first-served basis. Even so, the grid operator has been working with stakeholders to further refine its review process.

Earlier this month, CAISO proposed at FERC an initial set of interconnection reforms that would affect its ongoing study of “Cluster 14,” which includes an unprecedented 373 interconnection requests compared with an average of 113 per cluster over the previous decade. CAISO intends to develop additional long-term changes to its interconnection process, with a goal of presenting a proposal to the grid operator’s board in October, according to a staff memo to the board.

Some of the changes in the phase one proposal include requiring interconnection customers to show they control the site where their project will be built earlier in the process and giving interconnection customers more data to help them progress while in the queue.

Vistra generally supports CAISO’s proposal, which the company said may make it easier to address the grid operator’s power supply shortfalls that are partly driven by increasingly frequent and severe weather.

However, the company is balking at proposed provisions that would govern reviews for emergency power supplies.

“CAISO’s proposal to create a separate route to interconnection for resources identified by the state as necessary to address emergency conditions — effectively allowing these resources to circumvent the ordinary interconnection process — represents an exceptional step that does not wholly align with commission policy,” Vistra said.

The proposal could have “profound consequences” for the CAISO interconnection process and interconnection customers, according to Vistra, which has projects in the grid operator’s interconnection queue.

“The commission must remain mindful that unintended consequences, like queue disruptions and delays, could frustrate rather than advance resource adequacy ... goals, because existing interconnection customers — like emergency interconnection customers — can bring relief to meet supply shortages,” Vistra said.

CAISO failed to give FERC enough information for the commission to evaluate whether the proposal will meet the objectives of minimizing disruptions to other interconnection customers, ensuring that the emergency interconnection process is not unduly discriminatory or preferential, and avoiding a scenario where the emergency process becomes a path for queue jumping, Vistra said.

Southern California Edison told FERC it supports the proposal, saying it will “advance the CAISO’s goal of designing its procedures for efficiency and equity.”