An Arizona Public Service proposal to revise its interconnection process should be rejected, partly because it fails to follow the Federal Energy Regulatory Commission’s just-issued rule on grid interconnection, according to RWE Clean Energy and renewable energy trade groups.
In mid-July, APS proposed shifting to a first-ready, first-served cluster study process from a first-come, first-served process that reviews interconnection requests one-by-one. The approach is broadly similar to FERC’s grid interconnection Order 2023 rule issued late last month
Like other transmission providers, APS faces a backlog with its interconnection queue, the Pinnacle West Capital subsidiary said. APS has 224 projects totaling about 78 GW seeking to connect to its system, according to the Phoenix-based utility.
APS’s proposal includes requirements for interconnection study deposits, site control, commercial readiness and withdrawal penalties.
“APS believes that by implementing these reforms, it will be able to address the backlogs more effectively in its interconnection queue and reduce study time by discouraging speculative interconnection projects and better aligning study timelines,” the utility said.
However, some of the requirements go beyond Order 2023 and pose a major barrier for renewable energy developers, renewable energy trade groups and RWE Clean Energy said in filings at the agency Friday.
“APS’s proposed commercial readiness requirements set impossible standards for independent power producers to meet,” the Solar Energy Industries Association said.
Also, APS’s proposed non-financial commercial readiness requirements are flawed, according to the trade group. The utility, for example, proposed that an interconnection customer show it had project financing before receiving an interconnection agreement, SEIA said. A lender wouldn’t agree to finance a project before the interconnection agreement was in place, the trade group said.
APS proposed that an interconnection customer could post a $7.5 million deposit instead of meeting commercial readiness requirements. SEIA said that level is “excessive” and unjustified.
APS’s proposal is inconsistent with FERC’s Order 2023 in significant ways and should be rejected, according to the Interwest Energy Alliance.
“Interwest requests that the commission reject the transition cluster provisions, the allocation of withdrawal penalties and a number of the proposed commercial readiness requirements to avoid unjust and unduly discriminatory impacts on interconnection customers currently in the queue, and to promote investments in an expanded grid,” the trade group said.
The APS proposal represents “significant and much-needed progress,” but needs changes, according to RWE.
Among other things, APS’s proposed penalties for withdrawing from the interconnection queue should be lower, the transition period to the new process may be inadequate and the site control requirements should be definite and included in APS’s Open Access Transmission Tariff, the RWE Group subsidiary said, noting it supports the SEIA and Interwest filings.
RWE expects to file additional comments when APS files its plan to comply with FERC’s Order 2023. Those plans are due 90 days after the order is published in the Federal Register.
