Milestone decision by Calif. regulators approves DER schedules to avoid interconnection upgrades

california-state

The California Public Utilities Commission just issued a significant decision allowing renewable energy systems to be approved to interconnect to the electric grid using an energy export schedule (known as a Limited Generation Profile or LGP) that is designed to avoid grid impacts. This approach, which leverages California’s public grid data, can reduce the need for costly infrastructure upgrades and support higher levels of renewables on the grid.

The decision is the first of its kind in the U.S. and is a major milestone in enabling distributed energy resources (DERs), like solar PV and energy storage, to operate in flexible ways that align with conditions on the grid. The decision was significantly shaped by recommendations from the Interstate Renewable Energy Council (IREC), an independent nonprofit that has been actively engaged for over a decade in reforming California’s interconnection policies to enable more efficient clean energy development while maintaining grid safety and reliability.

At any given time, the electric grid can accept a finite amount of power export from generating systems without needing grid upgrades. This amount, known as hosting capacity, varies throughout the day and year based on grid conditions. In California, utilities are required to produce detailed hourly models of the hosting capacity for each node on their distribution system (known as the “Integration Capacity Analysis”). Under the Commission’s decision, clean energy developers can use the Integration Capacity Analysis to design an LGP to ensure that a project stays within hosting capacity limits, rather than paying for grid infrastructure upgrades that would otherwise be required. As defined in the order, “Limited Generation Profiles specify the maximum amount of electric generation a DER system will export to the grid at different times throughout the year, ensuring that the project is responsive to fluctuating grid constraints at different times.”

In addition to ruling that utilities in California must allow project developers to use LGPs based on the Integration Capacity Analysis in the interconnection process, the commission resolved other key issues in its decision including:

  • the kinds of control systems that can be used to control the export of power from a system;
  • the allowable format of LGPs, including how many times per year a project can change its output;
  • and the instances in which a utility would be permitted to curtail the output of a system in ways that differ from the originally approved LGP.

The Commission ruled that certified power control systems, devices that electronically control the power output of generating facilities, will be the primary option that developers can use to manage the LGPs of interconnecting systems. The LGP option will become effective nine months after UL includes the scheduling function in its certification standard for power control systems. 

Another key issue addressed in the decision concerns the format of the LGPs, specifically how many different export levels a renewable energy system would be allowed to have throughout the year, and how often those levels may change (referred to as an “LGP configuration”). The decision approves using a 24-value configuration recommended by IREC, in which a system’s export levels can vary up to 24 times per year. As IREC stated in comments cited by the Commission, “This approach will allow projects to design configurations that take advantage of the specific daily and seasonal peak periods that arise at the project’s proposed location on the grid.” This stands in contrast to a competing proposal put forth by utilities that would have limited LGP configurations to no more than one different value per month, which would have failed to capture the important peak load periods during the day, and would have rendered the LGP of limited value to DER developers.

The commission adopted three different formats of 24-value configurations; customers can choose the format that makes the most sense given the conditions at their project site. It is unfortunate, however, that the Commission passed up on the opportunity to ensure the 24-value formats align with the precise time periods reflected in the time of use rate it has adopted (for example allowing blocks from 4 to 9 pm). It would be ideal if project developers could also propose custom schedules (still limited to 24 changes per year) to better align with local grid conditions and time-of-use rates. Nevertheless, IREC commends the decision overall, as it is a significant advancement for enabling the flexibility and grid support benefits that DERs can provide.

A third, critical issue addressed in the decision pertains to instances in which utilities would be permitted to permanently curtail the power output of a renewable energy system (outside of emergency situations) in ways that deviate from the agreed-upon LGP due to changing grid conditions. Utilities expressed concerns that if grid conditions changed in the future grid, grid upgrades might be required after an LGP project is interconnected to allow it to continue to export power at the levels agreed upon in the LGP.

If such a case arose, utilities wanted permission to permanently curtail power generation from affected LGP-interconnected systems or to require the project developer to pay for the cost of needed upgrades. Aligning with recommendations from IREC, the Commission limited the instances in which long-term or permanent curtailment would be allowed, thus better protecting project developers from financial risk. Such curtailment may only be done in instances when there is a “sustained load reduction.” The Commission additionally asserted that the utility is responsible for upgrades to avoid such situations. In exceptional cases, a utility may “apply for a tariff deviation to request permission for permanent curtailment if they believe that undertaking an upgrade is not a reasonable use of ratepayer funds or is unreasonably costly…”

IREC believes that this outcome is a satisfactory resolution that mitigates risk for project developers while providing reasonable assurances for ratepayers. The Commission also ordered the collection of data to track the prevalence of required curtailments and grid upgrades for LGP facilities, and it left open the possibility of making future changes to this policy.

California’s forthcoming adoption of Limited Generation Profiles in the interconnection process leads the way for more innovative interconnection approaches that unlock the full capabilities of DERs. For additional detail on this decision, visit https://irecusa.org/blog/irec-news/california-regulators-open-the-door-for-ders-to-avoid-interconnection-upgrades/

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